Johnson v. Johnson

Decision Date21 December 1994
Docket NumberNo. 92-CA-00957,92-CA-00957
Citation650 So.2d 1281
PartiesKendall Wayne JOHNSON v. Laura Jane Smalley JOHNSON.
CourtMississippi Supreme Court

Michael P. Younger, Chapman & Younger, Brandon, for appellant.

Mark A. Chinn, Patricia E. Herlihy, Chinn & Associates, Jackson, for appellee.

Before PRATHER, P.J., and SULLIVAN and JAMES L. ROBERTS, Jr., JJ.

PRATHER, Presiding Justice, for the Court:

This domestic relations appeal concerns the awards of child support and property division that the chancellor awarded Laura Jane Smalley Johnson (hereinafter "Jane"), at the divorce from her husband, Kendall Wayne Johnson (hereinafter "Wayne"), on the uncontested grounds of Wayne's adultery.

I.

Wayne appeals the issues of (1) child support, (2) the mortgage note, (3) the retirement, savings plans and Employee Stock Ownership Plan (ESOP), and (4) attorney's fees. Wayne claims these financial awards are excessive beyond his ability to pay, and against the overwhelming weight of evidence which demonstrates Jane's independent, nonmarital assets. 1 Wayne seeks reversal and remand to the trial court for the purpose of balancing more equitably the estates of the parties.

This Court reverses and remands the chancellor's awards, in light of the discussion below.

II.

Kendall Wayne Johnson and Laura Jane Smalley Johnson married June 29, 1962. Three (3) children, Kendall, Jr., Kyle, and Kristin, were born of this marriage, two of whom were minors at the time of the divorce. At the time of trial Kyle, the oldest of the minor children, was eighteen (18) years of age and attended college while Kristin, the minor daughter, was a thirteen (13) year old high school student. Kyle will reach twenty-one (21), the age of majority, on April 9, 1995, while Kristin will reach majority on June 19, 2001.

Wayne is a fifty (50) year old executive with Mississippi Power and Light Company (MP & L). At the time of trial in July of 1992, Wayne was a "division director" earning a gross monthly salary of approximately $7,371, the equivalent of $88,450 annually.

Jane, Wayne's wife of thirty (30) years, is a fifty (50) year old homemaker who received a high school diploma and attended a year of music school. Jane worked as an office worker and bank teller for one or two years prior to the birth of her first child in 1968, but has not worked since that time. She has no professional training.

Kendall, Jr., the oldest son, was twenty-three (23) years old at the time of trial and lived in Madison. He has a history of mental problems necessitating lengthy and expensive hospitalizations. Unpaid medical bills for Kendall, Jr.'s treatment resulted in Wayne having a $113,000 judgment against him, plus attorney's fees, for a total indebtedness to the hospital of $142,000. Wayne has assisted Kendall by paying Kendall's car notes, medical insurance, medicine, and by giving him spending money.

During the marriage, Jane acquired nonmarital assets that she inherited from her parents. This included $50,000 in cash (held in a certificate of deposit in her own and her children's names), $3,200 in a checking account, a dwelling house in Purvis valued at $40,000, some timber land in Lamar and Forrest Counties worth approximately $98,000, and marketable timber valued at $95,000. Four timber cuttings over a 12 year period yielded $153,000.00 and Wayne used the proceeds to pay family expenses, to add to Wayne's savings account, and to purchase a 1984 van titled to Wayne. However, from 1989 to the time of the divorce hearing, Jane had borrowed $56,000 against her nonmarital assets with which to support herself.

There was a mutual decision by Wayne and Jane that Jane cease working after the birth of Kendall, Jr. in 1968 and devote her full time and energy to taking care of the children of the marriage. Wayne acknowledged that he and Jane made a family decision that there would be a division of labor in the marriage with Wayne as the "breadwinner" and Jane as the "caretaker" of the household and the family.

In addition to earning a gross monthly salary of $7,371 with Mississippi Power and Light, Wayne, at the time of the divorce, had a vested interest in an employee savings plan with MP & L valued at $45,415 as well as an employee stock ownership plan valued at $6,523. Wayne testified his retirement plan was funded entirely by MP & L and had no present cash value. There will be no benefits unless he reaches age 65.

The parties separated on June 4, 1990, and on February 27, 1991, Jane filed a Complaint For Divorce against Wayne, alleging she was entitled to a divorce and custody of the two minor children, child support, use and possession of the marital home and its furnishings, periodic and lump sum alimony, life and health insurance, use and possession of the 1984 van, and attorney's fees.

The chancellor awarded Jane $1,116 monthly in child support, and the sole use of the marital home, with Wayne paying the mortgage debt. The chancellor granted Wayne the option of discontinuing the mortgage payments upon the children's majority, upon granting Jane all equity in the property. Jane received a fifty percent interest in Wayne's retirement plan, his employee stock ownership plan, and his employee savings plan. Jane received title to the couple's 1984 van. The chancellor ordered Wayne to maintain medical insurance for the children during their minority and for Jane for three years. The chancellor ordered each parent to pay 50% of college expenses for attendance at a state-supported institution.

III.

Testimony from both Jane and Wayne established that, during the course of the thirty (30) year marriage, Jane made both monetary and domestic contributions to the marriage. Jane contributed $153,000 from her nonmarital assets toward expenses of the family. Wayne, who was in complete control of Jane's finances, replaced $66,000 of this amount. The chancellor found that Wayne had present and future "great earning potential" in his position as a supervisor at Mississippi Power and Light, as opposed to his wife, whose only anticipated income was the timber proceeds from logging and rental income of her inherited property.

The total amount of income tax refunds claimed by Wayne during the years 1983 through 1988 was $34,600 which is the equivalent of $5,766 per year or $480 per month. These large refunds were explained by John Campbell, a CPA, who was certified as an expert in accounting by the chancellor. Campbell analyzed the income tax returns filed by Wayne from 1983 to 1988 and compared Wayne's returns with the amount of money withheld each year. Campbell concluded that Wayne withheld too much money from his paychecks. If Wayne took the appropriate deductions during the year 1992, he would have a monthly after-tax income of $5,581 instead of $3,500 reflected on his financial declaration.

Campbell also analyzed the monthly budget prepared by Wayne and introduced as Exhibit 11. Campbell discerned that $1,956 was attributable exclusively to Wayne's living expenses. Based upon a comparison of Wayne's actual net take-home pay of $5,581 versus Wayne's actual personal monthly expenses of $1,956, Campbell concluded that Wayne had the financial ability to pay to Jane the amount of $3,300 a month and still provide a decent living for himself.

IV.

There are four issues at the crux of this appeal. First, Wayne asserts that the award of 1/2 interest in his various retirement and pension plans was error. He asserts that the disparity of the spouses' estates precludes such an award. Second, Wayne asserts his payments of child support are excessive and in manifest error. Third, Wayne asserts that the future release from payment of a house note, where his wife and children currently live, in exchange for total divestiture of his interest in the house, was error. He claims the chancellor was manifestly wrong in providing this option, arising after the children reached majority, and constructively taking away his equity. Fourth, Wayne claims that the chancellor's award of attorney's fees is manifestly wrong. He asserts that there was no finding in the record of Jane's inability to pay, precluding such an award.

Our scope of review in domestic relations matters is limited under the familiar rule that this Court will not disturb a chancellor's findings unless manifestly wrong, clearly erroneous, or if the chancellor applied an erroneous legal standard. McEwen v. McEwen, 631 So.2d 821, 823 (Miss.1994). Turning to the merits of the case, this Court will first address the property distribution concerning the division of Wayne's pension plans.

A. Property Division Issues

To determine whether there was an abuse of discretion in the award, this Court must first examine the proper legal classifications of the assets claimed by both parties. Only then can this Court determine whether the property division was equitable.

Wayne contends the chancellor was manifestly wrong in awarding to Jane a one-half interest of the present value in his retirement plan with MP & L, his savings plan with Entergy Corporation, and his employee stock ownership plan (ESOP). However, these assets accumulated during the marriage are, for the purpose of this divorce, marital property "subject to equitable division unless it can be shown by proof that such assets are attributable to one of the parties' separate estates prior to the marriage or outside the marriage." Hemsley v. Hemsley, 639 So.2d 909, 914, 915 (Miss.1994). Despite Wayne's assertions, under Hemsley these assets are marital property properly subject to equitable distribution. Id. Pursuant to Hemsley, this Court assumes that Jane's domestic contributions are equally as valuable as the contributions made by Wayne toward his retirement and savings plans. Id. at 915.

Jane inherited assets during the marriage and, at the time of the divorce, had allowed some of these assets, i.e., monies from timber sales, to be used for the...

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