Hamstead v. Hamstead, 16765

• Decision Date: 03 June 1987
• Docket Number: No. 16765,16765
• Citation: 178 W.Va. 23,357 S.E.2d 216
• Parties: Louise Maloy HAMSTEAD v. Richard Elbert HAMSTEAD.
• Court: West Virginia Supreme Court

Page 216

357 S.E.2d 216

178 W.Va. 23

Louise Maloy HAMSTEAD v. Richard Elbert HAMSTEAD.

No. 16765.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 4, 1987.

Decided March 18, 1987.

Rehearing Denied June 3, 1987.

Syllabus by the Court

1. W.Va.Code, 48-2-33 [1984], requires a full disclosure of one spouse's financial assets to the other spouse at the time of divorce, and contemplates a meaningful hearing on the subject of equitable distribution of property at which the spouse submitting financial data may be cross-examined concerning the nature, origin and amount of assets.

2. Under W.Va.Code, 48-2-1(e)(1) [1986], property and earnings acquired by either spouse during a marriage, except property specifically excluded by Code, 48-2-1(f) [1986], is "marital property" for purposes of equitable distribution at the time of divorce notwithstanding that the assets have been acquired by one spouse and "given" to the other.

Robert A. Yahn, Wheeling, for appellant.

Mike Magro, Jr., Magro & Magro, Morgantown, for appellee.

NEELY, Justice:

We granted this appeal to flesh out the requirements of W.Va.Code, 48-2-33 [1984], which governs the disclosure of financial assets upon divorce. Because we find that the circuit court failed to require sufficient disclosure to insure the development of a proper record for appellate review, we reverse.

Louise Maloy Hamstead and Richard Elbert Hamstead were married in 1974. In 1984 Mrs. Hamstead filed for divorce asking for alimony and equitable distribution of property. In July, 1984, Mrs. Hamstead filed a "motion for disclosure of assets," and the court ordered Mr. Hamstead to disclose all of his assets pursuant to W.Va.Code, 48-2-33 [1984]. This order specifically required Mr. Hamstead to provide Mrs. Hamstead with copies of individual federal income tax returns for the years 1973 through 1983; federal partnership returns for the years 1973 through 1979; federal corporate tax returns for Hamstead & Hamstead, L.C. for the years 1980 through 1983; and, a copy of the financial statement of Hamstead & Hamstead, L.C. for the first six months of 1984.

In October, 1984, the court granted a divorce on the grounds of irreconcilable differences, ordered Mr. Hamstead to pay $1,200 per month alimony until the issue of equitable distribution of property was resolved, and again ordered Mr. Hamstead to furnish Mrs. Hamstead with financial information. On 10 January 1985, Mrs. Hamstead filed another motion to compel Mr. Hamstead to furnish her with a schedule of investment assets of Hamstead & Hamstead, L.C., and on 11 March 1985 the court again ordered Mr. Hamstead to provide Mrs. Hamstead with a detailed analysis of the investments of Hamstead & Hamstead, L.C., of which he was the sole stockholder. This information was not furnished, and on 8 May 1985, Mrs. Hamstead filed a motion for contempt. However, without ruling on the contempt motion, the court entered a final order on 22 May 1985 providing for the equitable distribution of marital property. It is from that order that Mrs. Hamstead now appeals.

I

Mrs. Hamstead's primary assignment of error is that the court below erred by not compelling Mr. Hamstead to furnish her with a list of all of his assets as required by Code, 48-2-33(a) [1984]. In paragraph 17 of the trial court's findings of fact the court says:

The records of assets owned by the defendant as a result of inheritance, as well as those items transferred to his law firm, Hamstead & Hamstead, L.C., have been examined and the Court is satisfied as to their inherited origin as claimed, and are, therefore, exempted from being classified as marital property.

Paragraph 18 of the same order provides:

The retirement plan of Hamstead & Hamstead, L.C., was established after the parties' last separation of February 26, 1984, and is likewise satisfied that the defendant at this time has no vested interest in the same.

Mrs. Hamstead maintains that Mr. Hamstead conveyed all the assets and liabilities of Hamstead & Hamstead, a legal partnership, to Hamstead & Hamstead, a legal corporation, in 1980 in exchange for capital stock having a par value of $5,000, all of which was issued to Mr. Hamstead. Thereafter, Mr. Hamstead conveyed bank stock and other securities, which he had inherited from his father, to Hamstead & Hamstead, L.C., in exchange for a promissory note representing the market value of the securities conveyed. Part of the note has been repaid, and the balance sheet of Hamstead & Hamstead, L.C., as of 30 June 1984, shows the balance due on that note to be $180,335.76. The corporation shows a net worth of $423,898.41, all of which, according to Mrs. Hamstead, except the $5,000 capital stock, is earned surplus.

Mrs. Hamstead points out that the corporate tax return of Hamstead & Hamstead for 1983 shows a $97,690.00 expense deduction for a retirement plan. Because Mr. Hamstead is the sole stockholder and the largest wage earner of the corporation, he is also the largest beneficiary of that plan, and Mrs. Hamstead argues that part of his interest in the retirement plan is attributable to marital assets acquired during the course of the marriage that were retained in Hamstead & Hamstead in either its partnership or corporate form. Consequently, Mrs. Hamstead's position is that she is entitled to a part of Mr. Hamstead's accumulated interest in the retirement plan.

W.Va.Code, 48-2-33(a) [1984] provides:

In addition to any discovery ordered by the court pursuant to rule eighty-one of the Rules of Civil Procedure, the court may, or upon pleadings or motion or either party the court shall, require each party...