Grunden v. Nelson
| Decision Date | 27 June 1990 |
| Docket Number | No. 16484,16484 |
| Citation | 793 S.W.2d 569 |
| Parties | Virgil A. GRUNDEN, Plaintiff-Respondent, v. Judith L. NELSON, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Abe R. Paul, Pineville, for defendant-appellant.
Richard J. Collins, Joplin, for plaintiff-respondent.
This is an equitable action filed in October 1988, in which respondent (herein referred to as "husband") sought an order of the trial court awarding him full ownership of real estate. The real estate had been the parties' marital home, but was not distributed by a decree entered in 1977 dissolving the marriage of husband and appellant (herein referred to as "wife"). The wife filed a counterclaim claiming that she was entitled to an undivided one-half of the real estate and sought partition of the same. The prayer for relief in wife's counterclaim requested that the real estate be sold "and the proceeds appropriated according to the respective rights of the parties." The real estate in question was sold by mutual agreement immediately before the trial. The parties proceeded to trial without amendment of the pleadings.
The trial court's order and judgment made the following findings: (a) upon entry of the divorce decree in 1977, the parties became owners of the real estate as tenants in common; (b) the value of the real estate, as of the time of the divorce decree, was $22,000.00; (c) the real estate was subject to a $14,653.28 deed of trust lien at the time of the divorce decree; (d) the equity in the real estate, at the time of the divorce decree in 1977, was $7,346.72; (e) ordered the husband to pay $3,673.36 to the wife as her full share and interest in the real estate, and (f) the wife was not entitled to recover any rent from husband because "the decree of divorce granted custody of two children to the Plaintiff who thereafter reared and provided for said children without material assistance from the Defendant until 1986...." Despite the fact that there was evidence adduced concerning post-divorce possession, repairs, and "fix-up" expenses, the trial court made no findings concerning those facts and did not rely upon such facts in rendering its decision.
Husband and wife were married in 1970; they were divorced in 1977. Custody of two children born of the marriage was placed with husband, and the children remained with husband until 1986, when they commenced living with wife. The marital home, financed with FmHA, was not divided, disposed of or mentioned in the decree of divorce. Husband lived in the house until May 1989, when it was sold by mutual agreement. 1 After payment of the deed of trust lien and closing costs, the equity remaining from the sale of the house was $25,368.36, one-half of which was received by the husband prior to trial, and the other one-half was left undistributed pending decision by the trial court.
After testifying that the real estate was not disposed of in the divorce decree, the husband testified as follows:
Q. Did you have any understanding or agreement with the defendant to what was going to happen to that property?
A. No, not really. Just never was any question that I was going to live there.
Q. Why was that?
A. Because she moved out.
Q. And there was never any issue between you and her as to who would have possession of the house?
A. No.
The husband testified he made some improvements on the house after 1977, including a new heating and air conditioning system, general remodeling, paper hanging, painting, woodwork, and "just redid the whole inside of the house." The husband also expended funds in 1989 to prepare the home for sale. The total repair and remodeling expense was $6,316.35. When asked about repair costs, the husband testified as follows:
Q. Mr. Grunden, as I understand it, the money that you spent for repairs was basically the result of the fact that the property was run down and basic wear and tear; isn't that correct?
A. That's true.
The wife testified that the repairs were necessary because the husband had allowed the house to run down while he was in possession. The husband's testimony about the condition of the house, as of the time of the divorce, was as follows:
Q. Now the condition of the home in February of 1977 when you all were divorced was good; isn't that true?
A. I would say--yeah.
Q. And you have lived there solely to the exclusion of your former wife since February of '77 until about last month; isn't that true?
A. Yes, sir.
Q. You have never paid her any rent?
A. No, sir.
Husband and wife agreed that the husband had made all monthly mortgage payments to FmHA from February 1977, until the property was sold in May 1989. From the record before this court, those payments totaled approximately $15,184.00. Husband had no opinion as to the fair market rental value of the house and offered no evidence of such rental value from any other source. The wife testified, without objection, that the fair market rental value of the home was $200.00 per month from February 1977 through 1980; $250.00 per month from January 1981 through 1984; and $300.00 per month from January 1985 through April 1989.
There was a conflict in the evidence about possession of the real estate after 1977. The husband testified as follows:
Q. Virgil, after the divorce, then you have lived in the house since that time?
A. Yes, sir.
Q. Up until what time?
A. Up until we closed on the new place just this month.
Q. Was that in May of 1989?
A. Yes.
Q. And so you lived continuously there during that period of time?
A. Yes, sir.
* * * * * *
Q. And you have lived there solely to the exclusion of your former wife since February of '77 up until about last month; isn't that true?
A. Yes, sir.
Q. You have never paid her any rent?
A. No, sir.
The wife's testimony on the possession issue was as follows:
Q. Then after you divorced in February of 1977, did you ever go back and live at the home from time to time?
A. Yes, I did.
Q. What period of time did you live there?
A. Off and on, I probably lived there a year or a year and a half at various different times since the divorce.
Q. But other than that, Mr. Grunden has had sole possession of the property; is that correct?
A. Yes, he has.
The wife appeals the trial court's judgment contending that the court erred: (a) in using the 1977 real estate value in making the division rather than the value at the time of the sale of the real estate; (b) in admitting testimony of a real estate appraiser as to 1977 real estate values without a proper foundation, and (c) in finding that the wife was not entitled to rent because the husband had raised the children from 1977 to 1986 without material assistance from the wife.
This court agrees with the wife's contention that the trial court erred in using 1977 real estate values as the basis for equitable division of sale proceeds derived from the 1989 sale of the real estate. Having so found, it will not be necessary to address the claimed error in admitting the real estate appraiser's testimony. In Sauer v. Newman, 666 S.W.2d 811, 815 (Mo.App.1984), the court held that an asset which had been a marital asset and was later divided in a separate equitable proceeding, brought after dissolution had been finally adjudicated, was properly valued as of the later date when the trial court finally divided the property between the parties rather than value it as of the date of divorce. No Missouri cases are found which are in conflict with that principle. Supportive of the Sauer decision is Ortmann v. Ortmann, 547 S.W.2d 226 (Mo.App.1977). In that case the trial court valued the husband's interest in the marital home at $5,000.00 but allowed the wife to continue in possession of the home until the daughter was emancipated, at which time the residence was to be sold and the husband was to get $5,000.00. The trial court's order was found to be in error and the order was modified for the following reasons:
In view of prevailing economic conditions, however, including the rising tide of inflation, the court erred in determining that upon the future sale of the residence property the husband's equity be paid him in a fixed sum or definite number of dollars. Instead, he is entitled to a percentage of the net proceeds of the sale of the residence property, after payment of all proper charges and expenses of sale.
Ortmann, at 230. The reasoning in Ortmann is as applicable to this suit in equity as it was to the court in dividing property under Chapter 452, Domestic Relations Law, particularly when the evidence here was that the property had a value, in 1977, of $22,000.00 and sold in 1989 for $38,000.00. The wife testified that the value of the real estate had increased substantially because of inflation. That testimony was not controverted by any evidence offered by the husband. The husband did claim that the increased value resulted from improvements he made, but that assertion flies in the face of his admission that he had neglected the property and that the neglect had necessitated most of the "fix-up" expenditures.
The court in Sauer, supra, reached its conclusion based upon a finding that the undivided property continued to be marital property after the divorce became final. This court does not believe it necessary to characterize the real estate as marital property, after the divorce decree is final, in order to reach the conclusion that the trial court erred in choosing the 1977 value as a basis for equitable division of the property. It has long been the law in Missouri that when title to real estate is held by husband and wife, as tenants by the entirety, upon entry of a decree of divorce, they each become owner of an undivided one-half interest in the real estate as tenants in common, Allan v. Allan, 364 S.W.2d 578, 582 (Mo.1963), and that either party is entitled to partition the same. Reed v. Reed, 516...
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