Johnson v. Johnson

• Decision Date: 14 November 1985
• Docket Number: No. 0651,0651
• Court: South Carolina Court of Appeals
• Parties: Velva Jo Coyle JOHNSON, Respondent, v. Malcolm Cloud JOHNSON, Appellant. . Heard

Page 811

341 S.E.2d 811

288 S.C. 270

Velva Jo Coyle JOHNSON, Respondent, v. Malcolm Cloud JOHNSON, Appellant.

No. 0651.

Court of Appeals of South Carolina.

Heard Nov. 14, 1985.

Decided March 13, 1986.

Robert J. Thomas, and John Timothy Stack, of Tompkins, McMaster & Thomas, and Julius W. McKay, of McKay & Guerard, Columbia, for appellant.

Alice S. Moore, of Gertz & Moore, and Ronald G. Aaron, of Kirkland, Aaron & Alley, Columbia, for respondent.

BELL, Judge:

Velva Johnson commenced this action against her former husband, Malcolm Johnson, for a divorce on the ground of adultery. The family court issued a decree denying the divorce, but ordered alimony and property division. A separate decree awarded attorney's fees to Mrs. Johnson. Mr. Johnson appeals both decrees. We reverse and remand.

The parties married in October, 1943. At that time, Mrs. Johnson had a high school education and was working as a clerk. Mr. Johnson had a degree in electrical engineering and was an officer in the army. Following his release from service, Mr. Johnson returned to South Carolina Electric & Gas Company, where he had risen to the position of vice-president at the time of the separation. From 1945 to 1964, Mrs. Johnson was occupied as a homemaker and mother to their three children. All three children were emancipated by 1982. In 1964 Mrs. Johnson, with Mr. Johnson's assistance, established a business known as "Copies". The business, located in Columbia, was still in operation at the time of the hearing. Over the course of the marriage, the couple accumulated numerous assets in real estate and personal property.

Mrs. Johnson petitioned for a divorce in March, 1982. Mr. Johnson denied the adultery and any claim for alimony, attorney's fees, or special equity in property titled in his name. The court received testimony on November 30 and December 2, 1982. The issue of attorney's fees was reserved by the court.

The court subsequently granted a post-trial motion by Mrs. Johnson's attorney to appraise two properties. Mr. Johnson opposed this motion. Following receipt of the appraisals, the family court issued its decree in June, 1983, denying a divorce on the ground of adultery. The court, however, found the marriage to be broken and entered a decree for separate maintenance and support. The court made an equitable distribution of marital property and awarded alimony to Mrs. Johnson. When Mr. Johnson subsequently was granted a divorce on the ground of one years separation, the prior decree was merged into the final divorce decree.

The family court heard testimony on the issue of attorney's fees in December, 1983, and January, 1984. The court reserved a decision pending outcome of the appeal of the original support decree. Following a petition by Mr. Johnson, the Supreme Court ordered a determination on attorney's fees. In July, 1984, the family court awarded $35,000 as a reasonable fee to Mrs. Johnson's attorney, and ordered Mr. Johnson to pay half, or $17,500.

I.

We first consider the equitable distribution award. At the time of the separation the couple had accumulated assets in real and personal property worth approximately $844,000. The order identified and valued each property. It awarded to Mrs. Johnson property worth $471,950, and to Mr. Johnson property worth $372,489.

The family court erred in the equitable distribution award for the following reasons: 1) the award utilized appraisal values not in evidence, 2) the award distributed Mr. Johnson's nonmarital property, including certain inherited property and his retirement account, 3) the award incorrectly valued Mrs. Johnson's bank accounts, and 4) Mrs. Johnson was given an unidentified cash payment of $70,000. We will consider these errors separately.

1.

The primary evidence of the couple's property was a detailed schedule and valuation prepared by Mr. Johnson and his attorney. This list was introduced into evidence. Mr. Johnson valued a 863.5 acre tract in Cottageville at $332,000, and a Heritage condominium unit at $91,000. Mrs. Johnson testified only to the value of her business and certain items of personal property. She presented no evidence on the value of Mr. Johnson's property, and agreed to abide by his list as to the "status" of each property. Despite this stipulation, her attorney requested an appraisal of all properties at the conclusion of testimony.

The appraisal was ordered by the judge in March, 1983, pursuant to Mrs. Johnson's post-trial motion that the Cottageville and Heritage condominium properties be appraised. The appraisal valued the Cottageville property at $440,000 and the condominium at $125,000. These values exceed the trial proof by $87,900. It is evident from the record, and was conceded by Mrs. Johnson's counsel at oral argument, that the appraisals were never admitted into evidence.

The judge erred in using the appraisals in his decree where the appraisals were not introduced into evidence and the parties were not given an opportunity to cross-examine the appraiser. See Hultberg v. Hultberg, 259 N.W.2d 41 (N.D.1977), appeal after remand, 281 N.W.2d 569 (N.D.1979). A judge may not, after all testimony has been taken, receive additional contested evidence without reopening the case. See Sebrite Corp. v. Transouth Financial Corp., 272 S.C. 483, 252 S.E.2d 873 (1979). It was, therefore, error on the part of the judge to make a finding of fact as to value of these properties based on evidence from unsworn statements of the appraiser. See State v. Pacific Guano Co., 26 S.C. 610, 2 S.E. 265 (1887). That part of the decree based on the appraisal values is unsupported by the evidence properly presented at trial, and is, accordingly, in error. See Darden v. Witham, 263 S.C. 183, 209 S.E.2d 42 (1974) (a conclusion reached without factual support constitutes an abuse of discretion).

2.

The order awarded Mr. Johnson's inherited property on Margrave Street in Columbia to Mrs. Johnson. Mr. Johnson inherited a one-fourth interest from his aunt. The remaining heirs then deeded their interest to him. In recognition of her care and devotion to his aunt and uncle, Mr. Johnson gave Mrs. Johnson a three-eighths interest in the property.

Property inherited by a spouse is not property of the marriage subject to equitable distribution. Hussey v. Hussey, 280 S.C. 418, 312 S.E.2d 267 (Ct.App.1984). While it is possible for inherited property to lose its nonmarital character and become subject to distribution, the decree made no finding that Mr. Johnson's inheritance had acquired the character of marital property. After finding: "As this was inherited property, Mrs. Johnson has no interest in it except to the extent that Mr. Johnson gave her a three-eighths interest therein," the decree awarded the entire property to the wife as marital property. This was error.

The findings of fact also list Mr. Johnson's retirement account, valued at $40,000 to $50,000, as marital property. The decree awarded the retirement account to Mr. Johnson.

In South Carolina, a spouse's noncontributory retirement account is not marital property subject to equitable distribution. Haynes v. Haynes, 279 S.C. 162, 303 S.E.2d 429 (1983); Carter v. Carter, 277 S.C. 277, 286 S.E.2d 139 (1982). Furthermore, the court should not consider the value of either party's retirement plan in dividing the marital estate. Anderson v. Anderson, 282 S.C. 163, 318 S.E.2d 566 (1984). Inclusion of Mr. Johnson's retirement account as marital property was, therefore, error.

3.

The order made a factual finding that Mrs. Johnson had cash, checking, savings and certificates of deposit accounts worth $8,000 which constitute marital property. The court awarded Mrs. Johnson all bank accounts in her name. This finding is contradicted by her testimony and financial declaration. Mrs. Johnson's financial declaration lists $22,000 in certificates of deposit and savings accounts. She testified to a total of approximately $30,650 in certificates of deposit and other accounts. As a result, Mrs. Johnson actually received an additional $22,000 in the marital property distribution. That portion of the order which...