Farnsworth v. Farnsworth

• Decision Date: 08 July 2003
• Docket Number: No. WD 61020.,WD 61020.
• Citation: Farnsworth v. Farnsworth, 108 S.W.3d 834 (Mo. App. 2003)
• Parties: Ronna E. FARNSWORTH, Respondent, v. Harold D. FARNSWORTH, Appellant.
• Court: Missouri Court of Appeals

Page 834

108 S.W.3d 834

Ronna E. FARNSWORTH, Respondent, v. Harold D. FARNSWORTH, Appellant.

No. WD 61020.

Missouri Court of Appeals, Western District.

July 8, 2003.

COPYRIGHT MATERIAL OMITTED

Hugh D. Kranitz, St. Joseph, MO, for appellant.

Ronald R. Holliday, St. Joseph, MO, for respondent.

Before ELLIS, C.J., BRECKENRIDGE and EDWIN H. SMITH, JJ.

PATRICIA BRECKENRIDGE, Judge.

Harold D. Farnsworth appeals from the judgment dissolving his marriage to Ronna E. Farnsworth. Husband challenges (1) the trial court's designation of a parcel of real property as non-marital; (2) the trial court's valuation of Husband's buy-out plan and vacation pay; and (3) the language in the judgment dividing Husband's retirement/pension plan. This court finds that the trial court erred in classifying certain property as non-marital property, but the erroneous classification did not result in prejudice requiring reversal of the property division. This court further finds that the trial court did not err in its valuation of Husband's buy-out plan and vacation pay proceeds, and the language the trial court used to divide Husband's retirement/pension plan was sufficiently definite to be enforceable. The trial court's judgment is affirmed, as modified.

Husband and Wife were married on April 7, 1977. At that time, Husband was age thirty-eight, Wife was age twenty-two, and they were both employed at the Quaker Oats factory in St. Joseph, Missouri. The first child born of the marriage, Barbara E., was born on March 17, 1979. Subsequently, in 1980, Husband and Wife mutually decided that Wife should quit her employment with Quaker Oats and stay at home as a full-time homemaker. The couple's second child, Corey L., was born on December 25, 1982.

On December 28, 2000, Wife filed her petition for dissolution of marriage. The couple separated that same day.

Husband retired from Quaker Oats on January 18, 2001, at the age of sixty-three, in conjunction with a plant shutdown. At that time, he received $27,000 from Quaker Oats as a result of a buy-out plan and $4,400 in vacation pay.

On January 22, 2002, the trial court entered its judgment dissolving the marriage and dividing the parties' non-marital and marital assets. In relevant part, the trial court awarded Wife a five-acre piece of property worth $31,000, of which it designated $24,000 as her non-marital property. The trial court also awarded Wife half of Husband's retirement/pension plan and half of the buy-out plan and vacation pay Husband received from Quaker Oats. Husband filed this appeal.

Standard of Review

"The trial court's decision in a dissolution proceeding will be upheld unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or it erroneously applies the law." DeMayo v. DeMayo, 9 S.W.3d 736, 739 (Mo. App.2000) (citing Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)). In reviewing the judgment, this court views the evidence and reasonable inferences drawn therefrom in the light most favorable to the decree and disregards all evidence and inferences to the contrary. Ward v. Ward, 34 S.W.3d 288, 291 (Mo.App.2000). "The appellant bears the burden of demonstrating error," and this court defers "to the trial court's decision, even if the evidence could support a contrary conclusion." Taylor v. Taylor, 25 S.W.3d 634, 638 (Mo. App.2000).

Error in Classifying Property Does Not Require Reversal

In his first point, Husband contends that the trial court erred in classifying as Wife's separate property a five-acre piece of property that was purchased by Wife prior to the couple's separation. Husband argues that, while the property was purchased with money that Wife had inherited, Wife transmuted that portion of her inheritance into marital property when she had the property deeded to both her and Husband as tenants by the entirety.

The record reflects that Wife inherited $40,000 from her father's estate in 1999. Wife used part of that money to pay off the mortgage on the marital home, a remodeling loan, and the loan on Husband's truck. In 2000, Wife also used $24,000 from her inheritance to buy five acres of land at 1106 South Highway 71 near Savannah, Missouri.¹ When she made that purchase, Wife had the deed titled to Husband and Wife as joint tenants. At trial, Wife testified that she had the property titled in this manner because she was trying to find something to keep the marriage together. Wife stated that she and Husband had planned to use the property to grow perennials to sell at a farmers' market. Wife stated that she put Husband's name on the property to make him feel a part of the business; she did not intend to "award a portion of it to him." She said that she had not "thought that far ahead," nor did she understand the law. Wife further testified that Husband did some remodeling work on the property before their separation.

In entering its judgment, the trial court valued the property at 831,000. The court designated $24,000 of the property as Wife's non-marital property and the remaining $7,000 as marital property. The court awarded the real property to Wife. On appeal, Husband challenges the trial court's designation of $24,000 of the real property as non-marital.

In classifying the real property as part marital and part non-marital, the trial court was apparently applying the `source of funds' rule. "Under the source of funds rule, whether property is marital or separate depends on the source of the funds that financed the purchase of the property." Williams v. Williams, 965 S.W.2d 451, 454 (Mo.App.1998). "Property is considered to be acquired as it is paid for, so proportionate shares in the value of an asset should be designated marital or separate according to the source of the payments made to acquire the asset." Id.

In characterizing property as marital or non-marital, however, Missouri courts must also consider, when properly raised, the application of the theory of transmutation, which allows a spouse to transmute a piece of separate property to marital property by express or implied agreement.² Id. Husband contends that Wife transmuted her $24,000 contribution to the purchase of the real property when she had the deed issued in both of their names, and that the trial court erred in determining that Wife's contribution remained a non-marital asset.

Indeed, "property acquired after marriage which is placed in joint names is presumed to be marital property, even if one spouse furnished all the consideration." Spidle v. Spidle, 853 S.W.2d 311, 314 (Mo.App.1993). Accordingly, when a spouse uses non-marital assets to purchase property, but causes the property to be jointly titled in both spouses' names, there is a presumption that a gift was intended to the other spouse and that the property has been thereby transmuted into marital property. Williams, 965 S.W.2d at 454-55; Spradling v. Spradling, 959 S.W.2d 908, 912-13 (Mo.App.1998). To rebut this presumption, the spouse claiming that the property should be designated non-marital must introduce clear and convincing evidence that he or she did not intend a gift to the other spouse. Williams, 965 S.W.2d at 455. "The clear and convincing evidence standard refers to evidence that instantly tilts the scales in the affirmative when weighed against the evidence in opposition, and the fact finder's mind is left with an abiding conviction that the evidence is true." In re Marriage of Jennings, 910 S.W.2d 760, 763 (Mo.App.1995).

While generally arguing on appeal that she satisfied her burden in this regard, Wife does not point to any evidence in the record that would support a finding that she did not intend to make a gift to Husband. In fact, Wife testified that the real property was purchased so that the couple could develop a business on it and that she intentionally had the property titled in both of their names in hopes that this gesture would improve the couple's relationship. If anything, Wife's testimony indicates that she intended to make a gift to Husband.³ Her statements that she did not intend to "award a portion of it" to her Husband and that she had not thought ahead and did not understand the law are not clear and convincing evidence that she did not intend a gift to Husband.⁴ Accordingly, the money used by Wife to pay for the five-acre tract would qualify as her separate property; her non-marital contribution toward the purchase of the property was transmuted into marital property when the deed was titled in the names of both Husband and Wife. See Spradling, 959 S.W.2d at 912-13; Williams, 965 S.W.2d at 455. Therefore, the trial court erred in finding that $24,000 of the real property's value was Wife's separate property instead of marital property.

"Error in classifying property is not necessarily prejudicial, however, unless it materially affects the merits of the action." Jennings, 910 S.W.2d at 765. "It is well settled that the mere erroneous declaration of what is or is not marital property, where the decree is nonetheless fair, will not require a reversal.'" Burk v. Burk, 936 S.W.2d 144, 145 (Mo.App.1996) (quoting In re Marriage of Garrett, 654 S.W.2d 313, 316 (Mo.App.1983)).

Husband's point relied on claims error in the trial court's classification of the real property as non-marital but asserts no prejudice resulting from such an error, nor does his point assert error in the trial court's distribution of assets.⁵ In the argument following this point, Husband merely conclusively states that the trial court's actions in classifying the property as non-marital and setting it off to Wife resulted in an inequitable and unjust distribution of the marital assets. Husband does not develop his claim of prejudice further.

On the record before this court, it does not appear that the reclassification of the real property as marital renders the trial court's distribution unfair, nor does this court believe that the...