Faerber v. Faerber

• Decision Date: 21 July 2009
• Docket Number: No. 2008-CA-00236-COA.,2008-CA-00236-COA.
• Parties: April FAERBER, Appellant v. Robert Edward FAERBER, Appellee.
• Court: Mississippi Court of Appeals

13 So.3d 853

April FAERBER, Appellant v. Robert Edward FAERBER, Appellee.

No. 2008-CA-00236-COA.

Court of Appeals of Mississippi.

July 21, 2009.

William B. Jacob, Meridian, attorney for appellant.

Robert D. Jones, Brookhaven, attorney for appellee.

Before LEE, P.J., CARLTON and MAXWELL, JJ.

CARLTON, J., for the Court.

¶ 1. On January 14, 2008, the chancellor granted April and Robert (Bobby) Faerbers' divorce, after ten years of marriage, on the ground of Bobby's uncondoned adultery. April appeals, alleging that the chancellor erred when he: (1) failed to correctly apply the Ferguson factors in determining the equitable distribution of the couple's marital property; (2) considered the business, College Park Auto (CPA), as Bobby's separate property; (3) failed to award April permanent alimony; (4) failed to award April attorney's fees; and (5) reduced Bobby's child support obligations. Upon review, we find that the chancellor erred in his application of the law and abused his discretion in the manner that he: (1) classified April's and Bobby's property, (2) structured April's lumpsum alimony, and (3) determined Bobby's adjusted gross income for purposes of child support. Therefore, we reverse and remand.

FACTS AND PROCEDURAL HISTORY

¶ 2. April and Bobby were married on July 7, 1995. According to April, the couple separated on February 11, 2005, when she discovered Bobby had engaged in an affair. At the divorce trial on December 4-5, 2007, Bobby admitted that he had engaged in three adulterous relationships during the couple's marriage. On January 14, 2008, the chancellor granted April and Bobby a divorce on the ground of Bobby's uncondoned adultery.

¶ 3. April and Bobby have two children, Jenna and Landon. Bobby did not seek physical custody of either child. As a result, the chancellor granted April custody of both children and set a visitation schedule for Bobby. The focus in this case concerns the manner in which the chancellor classified the property at issue, structured April's lump-sum alimony award, and determined Bobby's adjusted gross income.

I. The Chancellor's Distribution of April's and Bobby's Property

¶ 4. The chancellor summarized the equitable division of the marital estate in that April would receive the following property: (1) equity in the former family home, $55,000; (2) furniture in the former marital home, $32,950; (3) 2002 Ford Expedition, $6,600; (4) 1992 GMC Z-71, $2,000; (5) April's jewelry, $7,000; (6) Roth IRA, $425; and (7) Honda ATV proceeds, $3,500. The chancellor determined that April's distribution of the marital estate totaled $107,475.

¶ 5. In turn, the chancellor awarded Bobby the following marital property: (1) equity in the former marital home, $55,000; (2) furniture in the former marital home, $3,600; (3) 1981 Ford Bronco, $1,500; (4) shotguns and rifles, $4,500; (5) tractor, $10,500; (6) lawnmower, $5,150; and (7) Roth IRA, $425. The chancellor determined that Bobby's distribution of the marital estate totaled $80,675.

¶ 6. The chancellor classified and valuated the following items as Bobby's separate property: (1) the family home; (2) CPA, $298,000; (3) furniture Bobby acquired after the couple's separation, $19,200; (4) 2002 Volkswagen Jetta, $8,750; and (5) one-half interest in a 2006 Dodge pickup truck, $14,500. The chancellor valued Bobby's total separate estate at $340,450. The chancellor found April owned no separate property.

¶ 7. In evaluating the chancellor's classification of the property and the factors he considered, we now turn to the chancellor's specific findings regarding CPA, alimony, attorney's fees, and child support.

A. The Business, CPA

¶ 8. The chancellor classified CPA as Bobby's separate property. The chancellor found that CPA constituted Bobby's separate property based on the following reasons: (1) on December 14, 1995, Bobby's father gave Bobby, via inter vivos gift, CPA and the real property on which CPA operates; (2) April did not directly contribute to CPA; (3) April did not work at CPA on a regular basis; (4) April did not prove that any appreciation in CPA's value during the marriage would have been divisible property; and (5) both April and Bobby considered CPA to be Bobby's separate property before the marriage.

¶ 9. As to CPA's valuation, the chancellor found that since the parties failed to present the business-evaluation expert's report as evidence, he was left with the testimony of the witnesses to determine the value of the business. The chancellor stated that Bobby had agreed on paper that his equitable interest in the business was approximately $298,000, which Bobby arrived at by valuing of all the business assets at $412,000 less $114,000 in debt.

¶ 10. The chancellor found that April had estimated that Bobby's equity in CPA amounted to $400,000, but the chancellor stated that April had failed to take into account the $114,000 in debt. The chancellor, finding no evidence to dispute Bobby's valuation of CPA, accepted Bobby's testimony that Bobby's equitable interest in CPA amounted to $412,000 less the $114,000 outstanding debt from Bobby's $183,377 loan for CPA — for a total value of $298,000.

B. Alimony

¶ 11. The chancellor ordered Bobby to pay April $55,000 in lump-sum alimony at a monthly rate of $1,000, until paid in full. However, the chancellor ordered that for every month April resided in the family home, Bobby would not be required to make his $1,000 monthly lump-sum alimony payment. Per the chancellor's order, April's lump-sum alimony, in the amount of $55,000, represented her share of the $111,000 of equity in the family home.

¶ 12. At trial, Bobby admitted that he fraudulently obtained a loan by having a girlfriend sign April's name to a $183,377 loan for CPA by using the $225,000 family home as collateral. April had refused to sign such a loan.¹ Despite Bobby's admission regarding the fraudulent nature of the loan, the chancellor calculated the equity in the family home by subtracting $114,000, which was the amount remaining on Bobby's $183,377 loan, against the family home's value of $225,000, to arrive at $111,000 in equity. Then, the chancellor divided this figure of $111,000 in half in determining that April's and Bobby's shares of the equity in the family home each amounted to $55,000.

¶ 13. However, as noted above, the chancellor determined that April's $55,000 of equity in the family home constituted her lump-sum alimony; however, Bobby's $55,000 of equity in the family home constituted his portion of the marital estate.

C. Attorney's Fees

¶ 14. The chancellor found that April's monthly income of $2,579, along with her distribution of the marital estate, provided April "ample resources with which to pay her attorney." The chancellor also noted that "Bobby has his own attorney to pay." As a result, the chancellor denied April an award of attorney's fees.

II. Child Support

¶ 15. Bobby did not seek custody of his two children. Therefore, the chancellor ordered Bobby to pay child support. The chancellor ordered Bobby to pay child support in the amount of $376 per month, which amounted to twenty-five and three/ tenths percent of his reported self-employment adjusted gross income of $1,880 per month. The chancellor also ordered Bobby to pay half of his children's medical expenses. The chancellor determined Bobby's adjusted gross income for purposes of child support solely upon the basis of what Bobby reported as his self-employment income.

STANDARD OF REVIEW

¶ 16. Generally, a chancellor's findings in domestic cases will not be reversed unless they are manifestly wrong clearly erroneous, or the proper legal standard was not applied. Smith v. Smith, 994 So.2d 882, 885(¶ 7) (Miss.Ct.App.2008).

DISCUSSION

I. Distribution of April and Bobby's Marital Property

¶ 17. Marital property consists of assets acquired or accumulated during the course of the marriage. Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss.1994). In contrast, separate property consists of property acquired before or outside of the marriage. MacDonald v. MacDonald, 698 So.2d 1079, 1082-83 (Miss.1997) (citation omitted).

¶ 18. In Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss.1994), the supreme court provided a number of guidelines for chancellors to follow in equitably distributing property. The chancellor must: (1) classify the parties' assets as marital or separate; (2) value those assets; and (3) equitably divide the marital assets pursuant to the Ferguson factors. Id. The Ferguson factors include the following:

1. [A spouse's] substantial contribution to the accumulation of the property. Factors to be considered in determining contribution are as follows:

a. Direct or indirect economic contribution to the acquisition of the property;

b. Contribution to the stability and harmony of the marital and family relationships as measured by quality, quantity of time spent on family, duties and duration of the marriage; and

c. Contribution to the education, training or other accomplishment bearing on the earning power of the spouse accumulating the assets.

2. The degree to which each spouse has expended, withdrawn or otherwise disposed of marital assets and any prior distribution of such assets by agreement, decree or otherwise.

3. The market value and emotional value of assets subject to distribution.

4. The value of assets not ordinarily, absent equitable factors to the contrary, subject to such distribution, such as property brought to the marriage by the parties and property acquired by inheritance or inter vivos gift by or to an individual spouse[.]

5. Tax and other economic consequences, and contractual or legal consequences to third parties, of the proposed distribution[.]

6. The extent to which property division may, with equity to both parties, be utilized to eliminate periodic payments and other potential sources of future friction between the parties[.]

7. The needs of the parties for financial security with...