Hernandez v. Hernandez

• Decision Date: 15 April 2008
• Docket Number: No. WD 67889.,No. WD 67846.,WD 67846.,WD 67889.
• Citation: 249 S.W.3d 885
• Parties: Jacqueline M. HERNANDEZ, Respondent-Appellant, v. Robert A. HERNANDEZ, Appellant-Respondent.
• Court: Missouri Court of Appeals

249 S.W.3d 885

Jacqueline M. HERNANDEZ, Respondent-Appellant, v. Robert A. HERNANDEZ, Appellant-Respondent.

No. WD 67846.

No. WD 67889.

Missouri Court of Appeals, Western District.

April 15, 2008.

Lloyd Koelker, Kansas City, MO, for Appellant-Respondent.

Cynthia K. Wallace, Kansas City, MO, for Respondent-Appellant.

Before VICTOR C. HOWARD, C.J., LISA WHITE HARDWICK, and JAMES EDWARD WELSH, JJ.

JAMES EDWARD WELSH, Judge.

Robert Hernandez (Husband) appeals the circuit court's Judgment for Dissolution of Marriage. Jacqueline Hernandez (Wife) cross-appeals. We affirm.

Husband and Wife were married on October 7, 1994. Two children were born during the marriage in 1998 and 2000. The parties separated in May of 2005, and Wife filed an action to dissolve the marriage. Husband initially denied the marriage was broken and sought a legal separation but, eventually, joined in Wife's request to dissolve the marriage. When the trial commenced, all issues including property division, child custody, and child support were presented to the circuit court. However, after three days of trial, the parties announced that issues pertaining to the children's custody had been resolved. The circuit court heard evidence on the agreed parenting plan, approved the plan as in the best interest of the children, and discharged the guardian ad litem. An interlocutory order was entered adopting the joint parenting plan submitted by the parties and ordering them to abide by it.

The trial proceeded on the remaining issues. Husband asked the circuit court to find that certain apartment buildings were his non-marital property subject to a marital interest in Wife. Wife contended the apartment buildings were marital property. At the time the apartment buildings were purchased, the parties were residing together but not married. The apartment buildings were acquired in Husband's name alone. Husband testified he purchased the buildings using funds from a savings account that was in his name alone. Wife testified that the funds used to procure the buildings were a combination of both joint funds and separate funds of Husband. There is no dispute that the mortgage on the buildings was reduced by payments made during the marriage from marital funds.

Approximately four years after the marriage, in 1998, the parties formed R & J Rentals, LLC, a limited liability corporation. R & J Rentals is a party to these proceedings. Husband transferred title to the apartment buildings to R & J Rentals at the inception of the limited liability corporation. The corporation owned no other assets. The "R" and the "J" in the title of the limited liability corporation represented the initials of the first names of the parties. Husband and Wife were each listed as a "manager" of the corporation, and each was designated to receive fifty percent of the income from the corporation. The parties' tax returns reflected each party receiving fifty percent of the corporation's income. At or near the time of the formation of the corporation, Husband added Wife's name to the deed of another piece of residential property, which he had owned prior to the marriage. That property was identified as the house on Roger's Lane.

The circuit court determined that the apartment buildings titled in the limited liability corporation were marital property. Husband appeals.

During the trial (after the circuit court's interlocutory order approving the joint parenting plan but before the conclusion of the evidence on the property issues), Wife moved the circuit court to reopen the evidence concerning the children's issues. Wife alleged that Husband threatened her over the telephone that he would not permit her to see another man and alleged confrontations with Husband and his family at visitation exchanges. The circuit court denied the motion to reopen the evidence but ended up hearing evidence concerning these allegations anyway as it reflected on the alleged marital misconduct of Husband. The court found there was nothing contained in the motion, even assuming the allegations were true, that would lead it to change the parenting plan. Wife appeals. Wife also appeals the circuit court's disposition of an anticipated capital gains tax liability and the circuit court's division of the children's unreimbursed medical expenses.

Husband raises a single issue on appeal. Husband contends the circuit court erred when it found the apartment buildings were marital property. Our standard of review is well settled. The circuit court's judgment in a dissolution proceeding will be affirmed on appeal 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. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976); Childers v. Childers, 26 S.W.3d 851, 853 (Mo.App. 2000). A judgment will not be reversed unless it is against the weight of the evidence and then only with caution and a firm belief that the judgment is wrong. Kennedy v. Kennedy, 969 S.W.2d 310, 313 (Mo.App.1998). The "weight of the evidence" refers to the probative value of the evidence and not the quantity of the evidence. In re Marriage of Lewis, 808 S.W.2d 919, 922 (Mo.App.1991). The evidence in the record is reviewed in the light most favorable to the circuit court's decision, and all evidence contrary to the judgment is disregarded. Evans v. Evans, 45 S.W.3d 523, 526 (Mo.App.2001). "The burden of demonstrating error is on the party challenging the divorce decree." Childers, 26 S.W.3d at 853.

The circuit court has broad discretion in distributing property, and an appellate court will interfere with the circuit court's judgment only if the division is so unduly weighted in favor of one party as to constitute an abuse of discretion. Miles v. Werle, 977 S.W.2d 297, 301 (Mo. App.1998). The circuit court's decision regarding property division will not be reversed absent an abuse of discretion. Cohen v. Cohen, 73 S.W.3d 39, 53 (Mo.App. 2002). "An abuse of discretion occurs when a circuit court's ruling is clearly against the logic of the circumstances then before the court and is so arbitrary and unreasonable as to indicate indifference and a lack of careful judicial consideration." Id. If reasonable persons can differ about the propriety of the circuit court's action, it cannot be said that the circuit court abused its discretion. In re Marriage of Medlock, 990 S.W.2d 186, 189 (Mo.App.1999).

"`A trial court possesses broad discretion in identifying marital property.'" Beckham v. Beckham, 41 S.W.3d 908, 911 (Mo.App.2001) (citation omitted). "When characterizations of property as marital or separate rest on an assessment of witness credibility, this court defers to the trial court's determination of that credibility." Id. at 911-12.

It is undisputed that the apartment buildings were acquired by Husband prior to the marriage and acquired in his name alone. It is also undisputed that during the marriage all right, title, and interest in the apartment buildings were transferred to R & J Rentals, LLC. The circuit court found as follows:

R & J Rentals, LLC was joined as a party by agreement of Petitioner and Respondent on July 28, 2006. The Court finds that all of the value of the LLC is marital property, and all of the credible evidence leads the Court to believe that it was the intention of Respondent to transmute the real estate he originally owed, prior to the marriage, into marital property, first by titling the real property jointly and then by placing the real property into an LLC were [sic] both parties were equal members. It is not just the titling that convinces that Court that the LLC assets are marital. The parties conducted themselves during the marriage in all respects as if the real property owned by the LLC were a marital asset. Other factors considered by the Court in determining that the LLC is marital property are: (a) All credible evidence is that the parties treated their rental business as a joint marital enterprise. Statements to the contrary by Respondent are not credible. (b) Over $75,000 of marital money went to interest and to reduction of principle [sic]. (c) The parties treated the real estate for all tax purposes without fail, as if it were a jointly owned marital asset.

Viewing the evidence in the light most favorable to the circuit court's findings, we find the circuit court's findings amply supported by the record with a single exception. The record is devoid of evidence of a title transfer from Husband to Husband and Wife prior to the transfer of the apartment buildings to R & J Rentals, LLC. However, this in no way affects the circuit court's ultimate classification of the apartment buildings as marital property. As the circuit court's findings make clear, the court did not solely rely on that interim transaction in its determination that the apartment buildings were marital property. The circuit court's findings make clear that the creation of the LLC, with Husband and Wife as the sole members, and joint managers, sharing equally in the income of the enterprise, was determinative in its decision to find the apartment buildings had been transmuted from Husband's non-marital property to marital property. It is also persuasive that at or near this same time Husband added Wife's name to the deed of the Roger's Lane property that had previously been in Husband's name alone. This may have been the evidence misunderstood by the circuit court that led to the erroneous finding that the Wife's name had been added to the deed of the apartment buildings just prior to the creation of the LLC. At any rate, that evidence supports the circuit court's finding that, despite Husband's testimony to the contrary, Husband intended to transmute both the apartment buildings and the Roger's Lane property into marital property. The circuit court's finding that the apartment buildings were marital property is supported by substantial evidence and...