Marriage of Reed, In re

• Decision Date: 28 November 1988
• Docket Number: Nos. 15366,15378,s. 15366
• Citation: 762 S.W.2d 78
• Parties: In re Marriage of REED. William C. REED, Petitioner, v. Bobbie J. REED, Respondent.
• Court: Missouri Court of Appeals

Page 78

762 S.W.2d 78

In re Marriage of REED William C. REED, Petitioner, v. Bobbie J. REED, Respondent.

Nos. 15366, 15378.

Missouri Court of Appeals,

Southern District,

Division Two.

Nov. 28, 1988.

C. Ronald Baird, Dorr, Baird and Lightner, P.C., Springfield, for petitioner.

Loren R. Honecker, Sherwood, Honecker & Bender, Springfield, for respondent.

HOGAN, Judge.

These appeals are taken from the classification and distribution of property, the award of maintenance and the refusal to award attorneys' fees in an action for dissolution of marriage.

Appeal No. 15366 is respondent Bobbie J. Reed's appeal. The substantive and dispositive questions presented on Bobbie's appeal are: 1) whether the trial court erred in classifying William Reed's professional corporation as separate property, and 2) whether the trial court abused its discretion in refusing to award Bobbie attorneys' fees.

Appeal No. 15378 is petitioner William Reed's appeal. The essential and determinative question presented on William's appeal The standard of review governing the appeal is that declared in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976). We must sustain the trial court's decree unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law or unless it erroneously applies the law. Hoffmann v. Hoffmann, 676 S.W.2d 817, 822 (Mo.banc 1984); Sturgis v. Sturgis, 663 S.W.2d 375, 379 (Mo.App.1983).

is whether the trial court erred in awarding Bobbie the sum of $1,000 per month as maintenance for an indefinite time. Other points have been briefed and they will be noted, but the essential issues are those we have just stated.

The parties to this action are mature, well-educated persons. At the time of trial, William was 56 years of age and had been engaged in the practice of podiatry for some 26 years. ¹ Bobbie was 52 years of age at trial time. She has completed three years of college study, working toward a degree in business administration. She has also been employed as a clerk in an elementary school, has worked as a secretary and has taught typing at a vocational school at night. The parties have both been married before; both have grown children.

William practiced podiatry in Chicago for approximately 10 years. In 1968, he left Chicago and located in Springfield, Missouri, where he continued to practice his profession. William's first marriage was dissolved in 1973.

William and Bobbie were introduced at some sort of religious seminar in 1976. About 6 months after they became acquainted, they were married in the State of Washington. Thereafter, they established a residence at Elkland, in Webster County.

William continued to practice podiatry in Springfield. Bobbie kept house at Elkland. In 1980, William had to discharge an unsatisfactory employee, and Bobbie went to work in his office. William maintained that Bobbie was not a very competent bookkeeper, but in any event Bobbie worked in William's office from 1980 to 1984, at which time William discharged her. During the time she worked in William's office, Bobbie was quite handsomely compensated. William maintained Bobbie was unreasonably jealous of other female employees, particularly Carla Kennedy. Bobbie acknowledged that she and William had a good many marital differences, but maintained that their marriage broke down because William "started having an affair" with Carla Kennedy.

If the parties' marriage was not a happy marriage, it was, by community standards, a very prosperous one. The parties acquired real estate, automobiles and other assets valued at $274,267. The trial court's decree classifying and distributing the parties' property is attached as an appendix.

I

(a)

We have first to consider whether the trial court erred in classifying William's stock in his professional corporation as separate property. Bobbie also maintains that the division of marital property was so heavily and unduly weighted in William's favor as to constitute an abuse of discretion, but for reasons which will presently become clear, that point cannot be reached on this appeal.

William's counsel specifically requested findings of fact determining that all the shares of stock in William's professional corporation were his separate property. The court's finding was as follows:

"1. The court finds that all stock in the corporation known as William C. Reed, D.P.M., P.C. is non-marital property of the petitioner because he was practicing podiatry before this marriage, owned all the assets transferred into the corporation in exchange for stock, he was the only key employee of the company who made it grow, [and] his wife was fully compensated during the time of the marriage for her employment and work in connection with said business from late 1980 to 1984." (Emphasis supplied.)

We direct our attention specifically to the finding that William "owned all the assets transferred into the corporation in exchange for stock." We take this finding as an adjudication that the assets which William transferred for stock in the professional corporation were separate or nonmarital property. Our inquiry, therefore, is whether William had proof which would warrant such a conclusion.

(b)

It is conceded that William Reed had a podiatric practice before he married Bobbie. William attended the Illinois College of Surgery in Chicago, Illinois, from 1954 to 1958. He then entered practice in Chicago, and he remained in Chicago until 1968. William then sold his practice and moved to Springfield, where he set up an office at 837 South Glenstone Avenue. William was divorced in 1973, and he "receive[d] the assets of the podiatry practice." From 1968 to 1981 William conducted his practice as a sole proprietorship. He used his earnings "to live on" and as operating capital for his business.

In 1981, William incorporated his practice. He testified that only business assets were transferred to the corporation in exchange for stock at that time. The transfer, or more properly, exchange of assets, was a so-called "351 stock transfer." ² Although we have none of the details of the incorporation before us, the name of William's corporation is William C. Reed, D.P.M., P.C., and the corporation does business under the name "Foot Clinic of Springfield." William testified that he was at all times the corporation's sole shareholder. The corporation's initial tax return, before us as respondent's exhibit F, covers the period from December 24, 1981, to September 30, 1982 (the corporation's first fiscal year) and indicates that the value of the common stock is $11,000. This return also indicates the corporation owned a building valued at $9,193, an x-ray processor purchased for $2,400 and furniture and fixtures acquired at a cost of $29,686. However, and to reiterate, no corporate records were offered in evidence.

It is apparent from William's description of his practice that various instruments and machines are used, and that the services he renders are a specialized form of medical service. To illustrate, William testified that he ordinarily conducted his practice with the assistance of three employees. One was a phlebotomist and "nursing lab person." This employee "draws blood and sets up appointments and scrubs in with [William], and sterilizes the instruments, and draws up injections, and treats the patient with ... physical modalities like with--take x-rays, plus ultrasound and diathermy and those particular things." The second employee is a licensed practical nurse; she performs duties which are very similar to those performed by the first employee. A third employee keeps medical records, attends to insurance claims and acts as a receptionist.

There was also evidence that a house and lot at 608 South Pickwick in Springfield was purchased by the parties so William would have a place to conduct his practice. This house on Pickwick has been converted from a residence to a business office. All in all, the evidence shows unmistakably that William's "business" requires a considerable investment in quarters and equipment.

(c)

Since Missouri adopted its version of the Uniform Marriage and Divorce Act in 1973, Laws of Mo.1973, H.B. 315, it has been required that in a dissolution proceeding, the trial court "... set apart to each spouse his property and ... divide the marital property in such proportions as the court deems just...." Section 452.330, RSMo 1986. ³ Section 452.330 has been the subject of much discussion, and we deliberately forego any general discourse upon the subject of property division in a dissolution proceeding. ⁴ The initial question before us is whether the trial court erroneously classified William's professional corporation as separate property, and in resolving this question, we must look first to § 452.330.2 and § 452.330.3, which state:

"2. For purposes of sections 452.300 to 452.415 only, 'marital 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 agreement of the parties; and

(5) The increase in value of property acquired prior to the marriage.

3. All property acquired by either spouse subsequent to the marriage and prior to a decree of legal separation is presumed to be marital property regardless of whether title is held individually or by the spouses in some form of coownership such as joint tenancy, tenancy in common, tenancy by the entirety, and community property. Each spouse has a common ownership in marital property which vests not later than the time of commencement by one spouse against the other of an action in which a final decree is entered for...