Kester v. Kester

• Decision Date: 30 June 2003
• Docket Number: No. 24992.,No. 24993.,24992.,24993.
• Parties: Tracy KESTER, now Myers, Appellant/Respondent, v. David Lynn KESTER, Respondent/Cross-Appellant, and Kester Sales, Inc., Respondent/Cross-Appellant.
• Court: Missouri Court of Appeals

108 S.W.3d 213

Tracy KESTER, now Myers, Appellant/Respondent, v. David Lynn KESTER, Respondent/Cross-Appellant, and Kester Sales, Inc., Respondent/Cross-Appellant.

No. 24992.

No. 24993.

Missouri Court of Appeals, Southern District, Division One.

June 30, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Mark C. Fels & Gregory J. Smith, Smith & Fels, P.C., Springfield, for Appellant.

F. William Joyner, Lowther Johnson, LLC, Springfield, for Respondent.

Before MONTGOMERY, P.J., GARRISON and BARNEY, JJ.

PER CURIAM.

Appellant, Tracy Kester, now Meyers ("Wife"), appeals from an amended judgment and decree of dissolution of marriage entered by the trial court. She raises one point of trial court error premised on the trial court's erroneous failure to classify as marital property the reduction on a mortgage debt paid from rental income. Respondent/Cross-Appellant, David Lynn Kester ("Husband"), raises three points of trial court error in his cross-appeal premised on the trial court's erroneous classification of certain rental incomes and tax refunds as marital property; erroneous classification of his sole property as marital property; and improper division of marital property.

During litigation, the trial court consolidated an action brought by Respondent/Cross-Appellant, Kester Sales, Inc. ("Kester Sales"), against Wife with the dissolution of marriage action and entered summary judgment against Wife in favor of Kester Sales in the amount of $24,406.37.

In its sole point on appeal, Kester Sales maintains the trial court erred in failing to award it attorney fees against Wife because it was intended by the parties' antenuptial agreement that Kester Sales was a third-party beneficiary of the agreement and was entitled to enforce the agreement's attorney fee provisions against Wife.

Husband and Wife married on May 6, 1995, in Taney County, Missouri. The parties entered into an antenuptial agreement in which they agreed that certain individual assets held prior to their contemplated marriage would remain separate property. The agreement also directed how new property obtained during the marriage would be classified as marital or separate property. Neither party contests the validity of the antenuptial agreement.

Prior to and throughout the marriage, Husband was the sole shareholder of Kester Sales, a furniture company located in Springfield, Missouri, which does business as "The Furniture Broker." Husband also separately owned the commercial property upon which the business is located ("Sunshine property"). During the marriage, Husband began renting the Sunshine property to Kester Sales for $15,000 per month, which sum he deposited into the parties' joint checking account. Husband then made the monthly mortgage payment on the Sunshine property. At the time of the marriage, the Sunshine property was encumbered by a $642,000 mortgage. This amount had been reduced to $428,223.01 at the time of the dissolution.

The parties also maintained a joint checking account throughout their marriage. In October 1997, the parties transferred their account from another bank to Metropolitan National Bank, where they opened a joint checking account and a money market account. The parties used this joint checking account for most of their financial transactions. At this same time, Husband restructured the mortgage on the Sunshine property to reduce the monthly mortgage payments from $7,500 to $5,950.

On October 17, 1999, the parties separated. Husband continued to receive $15,000 per month in rent from Kester Sales and continued to make the monthly mortgage payment of $5,950 on the Sunshine property. Husband also continued to make payments on the parties' marital residence, an unsecured note, boat-related expenses, income taxes, and other expenses.

After a hearing by a court-appointed Special Master followed by a trial, the trial court ruled, in pertinent part, that the $213,776.99 reduction of the mortgage debt on the Sunshine property was not marital property and, therefore, was not an asset subject to division. However, the trial court classified as marital property the "net rental income" received from Kester Sales during the parties' separation and certain income tax refunds received by Husband during that time period. The trial court then awarded Wife one-half of the amount respectively received from each such source, i.e. $117,650 and $18,516. The court also classified a Colorado condominium and two boats as marital property.

"In a court-tried case, the decree of the trial court must be affirmed 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." Rivers v. Rivers 21 S.W.3d 117, 121 (Mo.App.2000). The trial court has broad discretion in identifying and valuing marital property. Farley v. Farley 51 S.W.3d 159, 164 (Mo.App.2001); Beckham v. Beckham 41 S.W.3d 908, 911 (Mo.App.2001). The trial court also is given broad discretion in dividing property and we will interfere with its decision only if the division is so unduly weighted in favor of one party that it amounts to an abuse of discretion. Kirkwood v. Kirkwood, 77 S.W.3d 675, 680 (Mo.App.2002); King v. King 66 S.W.3d 28, 32-33 (Mo.App.2001). The resulting division of marital property need not be equal, although it must be equitable after taking into account the factors enumerated in section 452.330.1 and any other relevant factors.¹ Kirkwood 77 S.W.3d at 680. The trial court abuses its discretion only when its ruling is "clearly against the logic of the circumstances and is so arbitrary and unreasonable as to shock one's sense of justice and indicate a lack of careful consideration." In re Marriage of Holden 81 S.W.3d 217, 225 (Mo.App.2002).

Furthermore, we review the evidence and inferences in the light most favorable to the trial court's decision and disregard all contrary evidence and inferences. Kirkwood 77 S.W.3d at 680; Love v. Love 72 S.W.3d 167, 171 (Mo.App.2002). "Judging credibility and assigning weight to evidence and testimony are matters `for the trial court, which is free to believe none, part, or all of the testimony of any witnesses.'" Love 72 S.W.3d at 171 (quoting In re Marriage of Haugh 978 S.W.2d 80, 82 (Mo.App.1998)). We presume that the trial court took into account all evidence and believed such testimony and evidence that is consistent with its judgment. Kirkwood 77 S.W.3d at 680. The party challenging the trial court's judgment in a dissolution of marriage has the burden of demonstrating error. Id.; King 66 S.W.3d at 33.

"In Missouri, to be valid and enforceable an antenuptial agreement must ... be entered into freely, fairly, knowingly, understandingly, and in good faith with full disclosure...." Rivers 21 S.W.3d at 122. "Prenuptial agreements will be upheld and will dispose of issues of property division unless found to be unconscionable." Sprock v. Sprock 882 S.W.2d 183, 186 (Mo.App.1994).

We first consider Wife's claim that the trial court erred when it classified as a non-marital asset the total pay-down amount of $213,776.99, which represented the amount the mortgage debt on the Sunshine property was reduced during the marriage.

Preliminarily, we observe there is a statutory presumption that all property acquired by either spouse during the marriage and before a legal decree of separation or dissolution is marital property, regardless of how that property is titled. § 452.330.3.² The presumption of marital property may be overcome and property will remain separate, however, by a showing that the property was obtained under one of the following exceptions set forth in section 452.330.2:

(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 property acquired prior to the marriage or pursuant to subdivisions (1) to (4) of this subsection, unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions.

Wife contends that section 452.330.2(4) does not apply because Husband deposited the $15,000 monthly rent payments into the parties' joint checking account. Wife claims this act co-mingled those payments with marital funds and when Husband made the monthly mortgage payment with funds drawn from that account, he did so with marital property. Wife argues that paragraph 8 of the parties' agreement allows for such co-mingling when it sets out that "[i]ncome derived from the parties' separate property shall be marital property only if said income is deposited to joint accounts of the parties or converted into or used to acquire jointly held property...." Therefore, Wife argues the amount constituting the reduction of the mortgage debt resulting from those payments should be classified as marital property.

In a divorce proceeding on appeal, this Court must view the evidence in the light most favorable to the trial court's decision. King 66 S.W.3d at 33.

The record shows the Sunshine property was acquired prior to the marriage and remained in Husband's name alone thereafter. The antenuptial agreement designated the property as a separate asset belonging to Husband.

While Wife correctly sets out that paragraph 8 of the parties' agreement provides that "Income derived from the parties' separate property shall be marital property only if said income is deposited to joint accounts of the parties," she fails to acknowledge the remaining portions of paragraph 8 defining what type of income can be considered marital property. Paragraph 8 also specifically provides that "[n]otwithstanding the foregoing, the parties agree that all ... net rental income,"...