Maddox v. Maddox

• Decision Date: 08 November 2004
• Docket Number: No. S04F1380.,S04F1380.
• Citation: Maddox v. Maddox, 278 Ga. 606, 604 S.E.2d 784 (Ga. 2004)
• Parties: MADDOX v. MADDOX.
• Court: Georgia Supreme Court

604 S.E.2d 784

278 Ga. 606

MADDOX v.MADDOX.

No. S04F1380.

Supreme Court of Georgia.

November 8, 2004.

Stephen B. Wallace, II, Jonesboro, for appellant.

Allen W. Bodiford, Martin C. Jones, Stockbridge, for appellee.

BENHAM, Justice.

This appeal is from a final judgment and decree of divorce.¹Central to the litigation in the trial court was the equitable division of the value of three properties: the marital home in Hapeville, two undeveloped lots on the Chattahoochee River in Habersham County, and an undeveloped lot in Hilton Head, South Carolina.Based on a jury verdict, the trial court awarded Ms. Maddox equitable interests in all three properties, attorney fees, and costs.Mr. Maddox contests on appeal the award of equitable interests in the Habersham County and Hilton Head properties and the award of attorney fees.

1.In an enumeration of error contending the trial court erred in denying his motion for new trial, Mr. Maddox asserts that Ms. Maddox failed to present sufficient evidence on which an equitable division of the value of the Habersham County and Hilton Head properties could be based.²In reviewing a trial court's denial of a motion for new trial on the ground there was no evidence to support the verdict, this Court examines the record to determine whether there is any evidence to support the verdict.Cook v. Huff,274 Ga. 186(1), 552 S.E.2d 83(2001).

The testimony and stipulations of the parties authorized the following to be found as facts.The parties were married in 1990 and the judgment of divorce in this case was entered in 2002.The Habersham County property was purchased in 1994 for $44,000 with Mr. Maddox's non-marital funds.In 1995, the property was used as collateral for a $45,000 loan, the proceeds of which were used in a business venture.Between 1995 and 1998, the balance of the loan was reduced to $30,000 by payments from Mr. Maddox's income earned during the marriage, and that balance was paid in 1998 with the proceeds of a loan using the marital home as collateral.At the time of the divorce, the property had a value of $100,000, the increase of which is attributable solely to market forces.Ms. Maddox was awarded $27,700 as her equitable interest in the property.The Hilton Head property was purchased by Mr. Maddox in 1988 for $80,000, of which $20,000 was paid as a down-payment.The balance owed was reduced in 178 even installments during the ensuing years, continuing through the duration of the marriage, to $20,000.The value of the property at the time of the divorce had increased to $170,000 due solely to market forces.Ms. Maddox was awarded $33,928 as her equitable interest in the property.

The method of equitable division utilized at trial is the "source-of-funds" rule which provides that a spouse contributing non-marital property is entitled to an interest in the property in the ratio of the non-marital investment to the total non-marital and marital investment in the property.Thomas v. Thomas,259 Ga. 73, 76, 377 S.E.2d 666(1989).The remaining property is characterized as marital property and its value is subject to equitable distribution.Id.Thus, the spouse who contributes non-marital funds, and the marital unit that contributes marital funds each receives a proportionate and fair return on their investment.Id.

As to the Habersham property, Mr. Maddox asserts that in order to use the source-of-funds rule, the value as of the date marital funds were first invested in the property had to be shown (seeHorsley v. Horsley,268 Ga. 460, 490 S.E.2d 392(1997)), and that Ms. Maddox did not make that required showing.However, that value can be calculated from the evidence submitted by using the method set out in Snowden v. Alexander-Snowden,277 Ga. 153, 587 S.E.2d 54(2003).In that case, where one party brought the property into the marriage, this Court calculated the total increase in value by subtracting the value at acquisition from the value at the time of trial, then divided into that amount the number of years from acquisition to trial in order to determine the amount of yearly appreciation.With that figure, the value at the time of the marriage could be calculated by multiplying the number of years from acquisition to marriage by the amount of yearly appreciation and adding that amount to the value at acquisition.In the present case, the value at acquisition was shown to be $44,000, which yields, when subtracted from the value at the time of trial, $100,000, an appreciation of $56,000.Dividing the total appreciation by the 8 years from the time of acquisition (1994) to the time of trial (2002) yields a yearly appreciation of $7,000.Since marital funds began to be invested in the property in 1995, one year's appreciation is added to the initial value to produce a value $51,000 at the time marital funds began to be invested.Thus, contrary to Mr. Maddox's contention, sufficient evidence was presented to the fact finder to permit calculation of the value at the time the property's value began to include an element of marital property.

Mr. Maddox further contends with regard to the Habersham property that any marital component of the value of the property would be limited to the appreciation of the amount by which the debt was reduced by marital funds.SeeThomas v. Thomas,supra.Accepting that argument, we note that although Mr. Maddox contributed the entire purchase price from non-marital assets, he subsequently withdrew slightly more than that amount from the value by encumbering the property to borrow money for a business venture.The marital unit subsequently returned that value to the property by paying off the loan with marital funds in the form of money earned by Mr. Maddox during the marriage (seeSnowden v. Alexander-Snowden,supra) and money taken from the marital home, the character of which as a marital asset is not challenged here.Thus, virtually the entire amount of appreciation in the value property is marital property available for equitable division.There being evidence from which the jury could calculate the factors necessary for equitable division, the trial court did not err...