Dowell v. Dowell

• Decision Date: 17 October 2006
• Docket Number: No. WD 64640,WD 64640
• Parties: Sarah M. Dowell, Appellant v. Joseph J. Dowell, Respondent.
• Court: Missouri Court of Appeals

203 S.W.3d 271

Sarah M. Dowell, Appellant
v.
Joseph J. Dowell, Respondent

No. WD 64640

Missouri Court of Appeals, Western District.

October 17, 2006

Marilyn M. Shapiro, for Appellant.

Jeffrey S. Bay, for Respondent.

Before: Breckenridge, P.J., and Holliger, J.

Opinion

VICTOR C. HOWARD, Judge

Sarah M. Dowell appeals the trial court's division of property, apportionment of income tax liability and failure to award her maintenance in the judgment of dissolution of marriage from Joseph J. Dowell. We affirm in part, and reverse and remand in part.

Sarah Dowell and Joseph (Jack) Dowell were married on March 11, 1950. Two children were born of the marriage, Joseph Dean ("J.D.") and Vera. The family owned a farming operation, Dowell Farms, and in 1984, started a grass seed business, J&J Seed. J&J Seed raised grass seed on its property and harvested and custom cleaned the seed, and provided these services for other growers as well. Sarah Dowell worked in the office of J&J Seed, and received a weekly salary, which was most recently $400. The parties' children, J.D. and Vera, as well as their grandson, Trent Dowell, and granddaughter's husband, Edgar R. Chrisman, Jr. ("Jay"), also worked for the business. They received salary and other financial compensation, as well as access to and use of farmland, buildings and equipment. In March 2000, Joseph, Trent and Jay purchased 260 acres known as "Noah Farms," for the production of seed, each taking a one-third interest, with Joseph supplying the $43,000 down payment. The parties also rented additional property for soybean production. J.D., Trent and Jay also had their own farming operations, and cleaned, stored, inventoried and sold their crops through J&J seed. Vera started an associated company, Dowell Investments, at some time prior to 2000, as well as working in the office of J&J Seed.

Financial statements for Joseph and Sarah reflected a net worth, including the farming and seed operations, of $1,209,966 as of December 31, 1999; $1,598,256 as of December 31, 2000; and $1,523,607 as of October 31, 2002.¹ The Dowells' federal income tax returns reflected farming income attributable to J&J Seed and showed adjusted gross income after business expenses of $63,799 in 2000, $93,951 in 2001, which was increased to $212,286 after an amended return reflected $118,335 in additional income not previously claimed in the original return representing checks held or cashed by Joseph and Vera, and $345,549 in 2002.²

On August 28, 2002, Sarah filed for dissolution of marriage in DeKalb County. In her petition, Sarah asked to be awarded maintenance and an equitable portion of the marital property. In his counter-petition, Joseph contended that neither party was entitled to maintenance because adequate assets and income from the division of property existed for the parties to support themselves.³ About this time, J.D., Trent and Jay left J&J Seed, and started a competing seed business. Although not part of this appeal, the trial court consolidated with the divorce action, actions between Joseph, Trent, and Jay regarding settlement of farming business agreements related to the "Noah" property.

Sarah introduced a proposed settlement requesting three tracts of land, "Top of the Hill, Ramsbottom, and Noah" valued at $203,600, her automobile valued at $4,825, household goods valued at $14,000, a retirement account valued at $11,000, machinery valued at $97,465, one-half of any proceeds from litigation between Joseph and J.D. and Jay, and a cash equalization settlement in the amount of $566,399. She asked that she be held harmless for any debts, including the IRS debt.

Joseph's proposed settlement asked for three properties, "Ramsbottom, Top of the Hill, and the homestead with residence" valued at $288,000, his pickup valued at $18,042, equipment valued at $267,605, seed inventory of $122,440, crops in field valued at $25,000, a retirement account valued at $12,000, and the business of J&J Seed which he valued at $50,000. He accepted the debt of the businesses in the amount of $429,078, but requested that the tax obligations, including penalties and interest in the amount of $318,476, be divided equally between the parties.

On March 24, 2004, the circuit court ordered dissolution of the marriage and division of the marital assets. The trial court set aside the following property to Sarah: two parcels of real estate "Top of the Hill" and "Noah" valued at $141,600; a lake lot at $2,000; a car at $5,000; livestock at $1,500; personal property at $14,000; retirement account at $12,000; an amount recoverable from a judgment in settlement of seed operations between Joseph and other family members at $20,351, and a cemetery plot at $500. Combined with the business equipment valued at $86,585 and seed crop at $17,500, the value of the property distributed to Sarah totaled $301,036. The trial court did not order maintenance.

The trial court set aside the following property to Joseph: three parcels of real estate, including "Ramsbottom," "Eckelberry," and the marital home valued at $256,000; a truck at $18,042; personal property at $1,300; retirement account at $12,000; cash value of a life insurance policy at $280 and a cemetery plot at $500. Combined with the assets of $526,898 and debts of $429,078 of J&J Seed, the value of the property set aside to Joseph totaled $385,942. From this amount, Joseph was also ordered to pay Sarah a cash equalization award of $37,302. The property distribution amounts totaled $348,640 to Joseph and $338,338 to Sarah.

The trial court further ordered Joseph to pay $15,000 toward Sarah's legal fees. It ordered the parties to equally divide and become responsible for the income tax liability of $318,476. The court conditioned Sarah's receipt of half of the cash equalization award on her cooperation in signing the income tax forms.

Sarah appeals the judgment of the trial court, contending that the court erred in its valuation and division of marital property, erred in ordering Sarah to assume half of the income tax liability, and erred in failing to award her maintenance. Our review is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976), and thus, we affirm the trial court's decision "unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." Laffey v. Laffey, 4 S.W.3d 655, 658 (Mo. App. W.D. 1999) (citing Murphy, 536 S.W.2d at 32). Deference is given to the trial court with regard to its superior ability to view witnesses and determine the credibility of the testimony given. Id. "We defer to the trial court's decision, even if the evidence could support a different conclusion." Id.

I. Division of Marital Property

In her first point, Sarah contends that the trial court abused its discretion in dividing the couple's property and that the resulting division was inequitable. In six sub-points, she argues this is so because the trial court did not properly value J&J Seed, did not consider the value of certain assets either squandered or secreted by Joseph during the pendency of the divorce, did not consider business income unaccounted for and other cash advances made to the couple's daughter through the business, did not properly consider statutorily-defined requirements in the property division, gave too much weight to the credibility of Joseph's testimony as to the value and existence of property, and put inequitable stipulations on the equalization payment ordered that Joseph pay to Sarah.

The disposition of property in an action for dissolution of marriage is governed by Section 452.330, RSMo 2000, which directs that "the court shall set apart to each spouse such spouse's nonmarital property and shall divide the marital property and marital debts in such proportions as the court deems just after considering all relevant factors[.]" Because the parties to this action had no minor children, of the five factors specifically delineated in section 452.330.1, relevant to the trial court's consideration were:

(1) The economic circumstances of each spouse at the time the division of property is to become effective, . . .

(2) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;

(3) The value of the nonmarital property set apart to each spouse;

(4) The conduct of the parties during the marriage. . . . "

No set formula exists as to the weight accorded each of these factors, and the trial court "is vested with great flexibility in its division of marital property." Laffey, 4 S.W.3d at 659 (citing Woolridge v. Woolridge, 915 S.W.2d 372, 376 (Mo. App. W.D. 1996)). "The division need not be equal but must be fair and equitable given the circumstances of the case." Id. (citing Dardick v. Dardick, 670 S.W.2d 865, 869 (Mo. banc 1984)). The trial court should consider two main principles in arriving at its decision: that "the property division should reflect the concept of marriage as a partnership or shared enterprise, [and that] the division should be used as a means of providing for an economically dependent spouse." Id. (citing Holt v. Holt, 976 S.W.2d 25, 28 (Mo. App. W.D. 1998)).

In review of the trial court's ruling, we presume it is correct, and the party who challenges the division carries the burden of overcoming that presumption. Id. (citing Knapp v. Knapp, 874 S.W.2d 520, 524 (Mo. App. W.D. 1994)). Accordingly, "[t]his court will interfere only where the division is so unduly favorable to one party that it constitutes an abuse of discretion." Id. The fact that one party is awarded a higher percentage of marital property is not of itself an abuse of discretion. Id. (citing Gremaud v. Gremaud, 860 S.W.2d 354, 356 (Mo. App. E.D. 1993)).

A. Valuation of the Farming Business

In her first sub-point, Sarah contends that the trial court erred in valuing the goodwill value of the business at...