In re Marriage of Dolence

• Court: Missouri Court of Appeals
• Writing for the Court: Jeffrey W. Bates
• Citation: In re Marriage of Dolence, 231 S.W.3d 331 (Mo. App. 2007)
• Decision Date: 30 August 2007
• Docket Number: No. 27609.,27609.
• Parties: In re the MARRIAGE OF Frank Mathew DOLENCE and Beverly Ann Dolence. Frank Mathew Dolence, Petitioner-Respondent, v. Beverly Ann Dolence, Respondent-Appellant.

231 S.W.3d 331

In re the MARRIAGE OF Frank Mathew DOLENCE and Beverly Ann Dolence Frank Mathew Dolence, Petitioner-Respondent, v. Beverly Ann Dolence, Respondent-Appellant.

No. 27609.

Missouri Court of Appeals, Southern District, Division Two.

August 30, 2007.

Jeffrey Carl Goodnight, Springfield, MO, for appellant.

Linda Di-Anna Lott, Marshfield, MO, for respondent.

JEFFREY W. BATES, Chief Judge.

Beverly Ann Dolence (Wife) appeals from a judgment dissolving her marriage to Frank Mathew Dolence (Husband) and presents two points for decision. Wife contends the trial court erred by characterizing a Missouri farm as the separate, nonmarital property of Husband and by denying Wife maintenance. Finding no error, we affirm.

I. Standard of Review

In this court-tried case, our review is governed by Rule 84.13(d). In re Marriage of Denton, 169 S.W.3d 604, 606 (Mo.App.2005).¹ We must affirm the trial court's judgment unless it is not supported by substantial evidence, 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).² On appeal, we defer to the trial court's credibility determinations and the weight assigned to witness testimony. Youngberg v. Youngberg, 194 S.W.3d 886, 889 (Mo.App.2006). "The trial court is free to believe all, none, or part of the testimony of any witness." Id. We view the evidence and all permissible inferences from that evidence in the light most favorable to the judgment and ignore all contrary evidence. Mehra v. Mehra, 819 S.W.2d 351, 353 (Mo. banc 1991); McAllister v. McAllister, 101 S.W.3d 287, 290 (Mo. App.2003). The foregoing principles have been utilized in summarizing the facts presented at trial.

II. Factual and Procedural Background

Prior to the parties' marriage, Husband inherited a farm from his mother. In May 1994, Husband sold that farm and purchased a new farm in Ohio. (the Ohio farm), titling it in his name alone.³ Husband used the Ohio farm to operate a dairy.

Husband and Wife were married in Ohio on July 2, 1994. Wife had three children from a prior marriage: 14-year-old Matthew; 12-year-old Jenni; and 9-year-old Jason. Matthew lived in Colorado with his father. Jenni and Jason resided with Wife. Shortly after the parties married, Husband adopted the two younger children.

In July 1998, Jenni was shot by an unidentified assailant. In March 1999, Husband and Wife decided to sell the Ohio farm and relocate to Missouri to conceal their whereabouts from the person or persons who had harmed Jenni. It was Wife's idea to form a corporation and use the proceeds of the Ohio farm sale to purchase real estate in Missouri. By titling the property in the corporation's name, the family's identity would be concealed. Husband agreed and put the Ohio farm up for sale.

On April 27, 1999, Husband and Wife formed a Missouri S-corporation called Rosemont, Inc. (Rosemont).⁴ Each served as an incorporator of the corporation. Husband was named to be Rosemont's president, and Wife was the corporate secretary. By creating a corporation to own real estate in Missouri, Husband did not intend to make a gift to Wife, give her any ownership interest in the Ohio farm or give her any ownership interest in the corporation itself. Husband believed himself to be the sole owner of the corporation.

On June 16, 1999, Husband sold the Ohio farm to the Kiko family for $400,000. Husband did not want Wife listed as a grantor on the deed, but the buyers insisted because of the requirements of Ohio law concerning the conveyance of real property by married persons. Therefore, both Husband and Wife were named as grantors on the deed to the Kikos. The sale netted the sum of $233,911.37. The proceeds of the sale were disbursed via two checks at closing. Since Husband and Wife had signed the deed to the Kikos, each check was made jointly payable to Husband and Wife. One check in the amount of $83,911.37 was deposited into the parties' joint checking account at Farmers National Bank in Ohio. A portion of these funds was used to purchase a mobile home in which Wife's oldest son, Matthew, was to reside. The second check in the amount of $150,000 was deposited into an escrow account at a title company in Marshfield, Missouri.

On June 18, 1999, Rosemont purchased a 165-acre farm in Niangua, Missouri (the Missouri farm). Title to the property was taken in Rosemont's name. The purchase price of $210,000 came from two sources. The sum of $110,000 was withdrawn from the escrow account to use as a down payment.⁵ The remainder of the purchase price came from a $100,000 loan to Rosemont from Mercantile Bank. Husband and Wife signed the loan documents in their capacities as Rosemont's corporate officers. In addition, each was required to personally guarantee the loan. In May 2001, another house that generated $375 per month in rent was purchased. An additional $300 in rental income was being generated by the mobile home because Matthew no longer resided there.

For tax purposes, the income and losses of an S-corporation pass though to its shareholders. In re Marriage of Thomas, 199 S.W.3d 847, 864 (Mo.App.2006); § 143.471.⁶ After Rosemont was incorporated, Husband and Wife neglected to formally issue any shares of stock. Rosemont did file corporate tax returns, however, from 1999 through 2004. For each tax year, the return included a schedule K-1 form that was used to determine a shareholder's share of income, credits and deductions. During all six tax years, Husband was listed as the shareholder owning 100% of Rosemont stock on the corporation's K-1 schedules.

Prior to the parties' separation in 2002, Wife helped with the farm operations. She was able to mow hay, do herd checks, feed large round bales to the cattle and milk the cows when Husband was not there. Wife had been diagnosed with fibromyalgia and high blood pressure, which she treated with medication. She also had a prolapsed bladder condition that could be surgically corrected. After the separation, Husband stayed in Missouri and operated the farm. Wife moved back to Ohio and worked as a cashier at a fruit farm. Her wages ranged from $7.50 to $9 an hour, and she worked approximately 30 hours per week. Wife's net income was approximately $900 per month, and her living expenses were approximately $1,300 per month. While the parties were separated, Wife received seven $50 checks from Husband.

In April 2003, Husband filed the instant dissolution action. In February 2004, Rosemont was administratively dissolved for failure to file its annual report. In October 2005, Rosemont was joined as a party to this proceeding. Both parties appear to have agreed that, after classifying assets titled in Rosemont's name as separate or marital property, the court could award those assets directly to Husband or Wife.⁷ The case was tried in November 2005. At the time of trial, the Missouri farm was valued at $225,000 and was subject to a loan of $105,000.⁸

Judgment was entered in February 2006. The trial court decided the Missouri farm was nonmarital and should be awarded to Husband as his separate property.⁹ Husband was awarded marital property valued at $31,824. The marital property awarded to Wife was valued at $61,998. The award to Wife included the mobile home and the rental house, which the court determined to be marital property. The court divided the parties' debts by ordering Husband to pay the $105,000 loan on the Missouri farm and Wife to pay approximately $1,700 in medical bills. The court gave the following explanation of how it divided the parties' property:

The non-marital property has been considered in the division of all property and debt and the Court specifically finds that [Husband] had significantly more property (both real and personal) going into the marriage and contributed significantly more financially throughout the marriage than did [Wife]. [Wife] is receiving a larger portion of the marital property. . . . [T]he division of property is not necessarily intended to be equal but finds it is an equitable division of property under the circumstances.

The court awarded Wife $1,800 in temporary maintenance and gave Husband a credit of $350 for amounts already paid. The court denied Wife's request for periodic maintenance, however, because the court decided that "[Wife] is able to meet her reasonable needs through appropriate employment and by marital property awarded to her." This appeal followed.

III. Discussion and Decision

Wife's first point challenges the trial court's determination that the Missouri farm, titled in Rosemont's name, should be awarded to Husband as his separate property. Wife contends this determination was unsupported by the evidence, against the weight of the evidence and constituted a misapplication of the law. According to Wife, the court should have found the Missouri farm to be marital property because: (1) Rosemont was incorporated after the parties married; (2) the Missouri farm was titled in Rosemont's name; and (3) the facts and circumstances show that Husband intended to gift the real estate to the marriage.

Section 452.330.1 requires the trial court to determine what property is separate and what is marital, set apart to each spouse each spouse's non-marital property, and divide the marital property as it deems just. McAllister v. McAllister, 101 S.W.3d 287, 293 (Mo.App.2003). Subsection 2 of § 452.330 defines "marital property" in the following way:

"[M]arital property" means all property acquired by either spouse subsequent to the marriage except:

(1) Property acquired by gift, bequest, devise, or descent;

(2) Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;

(3) Property acquired by a spouse after a decree of legal separation;

(4) Property excluded by valid written agreement of the parties; and

(5) The increase in value of...