May v. O'Roark
| Decision Date | 18 January 2011 |
| Docket Number | No. WD 72254.,WD 72254. |
| Citation | 329 S.W.3d 410 |
| Parties | Amy Nicole MAY (Formerly "O'Roark"), Respondent, v. Michael Shane O'ROARK, Appellant. |
| Court | Missouri Court of Appeals |
Gary M. Steinman, for Appellant.
Philip F. Cardarella, for Respondent.
Before Division Two: KAREN KING MITCHELL, Presiding Judge, JOSEPH M. ELLIS, Judge and VICTOR C. HOWARD, Judge.
Michael O'Roark appeals the trial court's judgment in equity allocating undistributed marital property. On appeal, O'Roark claims that the trial court erred in: (1) granting equitable relief without evidence of fraud, mistake, or accident; (2) awarding $18,050.00 in damages to his ex-wife where there was no evidence to support such damages; and (3) granting judgment in favor of his ex-wife where she had contracted her right to the property at issue to O'Roark in the parties' dissolution proceedings. The judgment of the trial court is affirmed.
Michael O'Roark and Amy May married in 1997. During their marriage, they operated a Missouri limited liability company known as KC Motor Vehicle Sales, LLC ("the LLC"). In 2006, the parties filed an action to dissolve their marriage. After the action was filed, O'Roark excluded May from the operations of the LLC and operated the business for the first fewmonths of 2006 while it was being closed down. During the dissolution proceedings, O'Roark provided May a sworn statement of marital and non-marital property and liabilities. O'Roark listed the LLC as marital property, but because it was no longer operating, he listed the present value of the LLC as "gone." O'Roark listed no other assets relating to the LLC.
On November 21, 2006, the parties entered into a settlement agreement for the purpose of dissolving their marriage and dividing their marital property. The trial court entered a judgment dissolving the marriage, which incorporated the parties' agreement. As to the LLC, the judgment provided under the category "Indebtedness" that O'Roark was responsible for the tax preparation and any deficiency related to the LLC. Because the LLC was no longer in operation at the time, the LLC itself was not listed as an asset set aside to either party.
On May 31, 2007, O'Roark filed his 2006 federal income tax return. On Line 12 of the return, O'Roark identified a business loss for the LLC in the amount of $125,751.00. May learned of the loss when she received O'Roark's 2006 tax return as part of a proceeding to modify the parties' dissolution judgment. On July 9, 2009, May filed a petition seeking a judgment in equity allocating the business loss, claiming that it was an undistributed marital asset. After a trial was held on the matter, the trial court entered a judgment in favor of May. The court found that the deductible income tax loss related to the LLC was an undivided marital asset and that O'Roark was or should have been aware of the existence and value of the asset at the time of the dissolution but failed to disclose it to May. The court further found that the failure to distribute the asset resulted in $18,050.00 in increased tax liability for May. Therefore, the court awarded her that amount in damages. This appeal by O'Roark followed.
The judgment in a court-tried case will be affirmed on appeal 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. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We view the evidence in the light most favorable to the trial court's decision and disregard all evidence contrary to the judgment. Henning v. Henning, 72 S.W.3d 241, 245 (Mo.App. W.D.2002). Furthermore, the trial court is free to believe or disbelieve all, part, or none of a witness's testimony, and we defer to the trial court's determination of witness credibility. Cross v. Cross, 318 S.W.3d 187, 190 (Mo.App. W.D.2010).
Because O'Roark's first and fourth points address the same subject, we will address them together. In his first point, he contends that the trial court erred in granting May equitable relief because she failed to present evidence that O'Roark knew or should have known of the 2006 deductible loss prior to the judgment of dissolution. Similarly, O'Roark contends in his fourth point that the trial court erred in granting May equitable relief because there was no evidence of fraud, mistake, or accident.
Where marital property has been omitted from a trial court's judgment distributing property in a dissolution action and the judgment is final, the remedy is to bring a separate suit in equity to determine the proper disposition of the property. Ludlow v. Ahrens, 812 S.W.2d 245, 249 (Mo.App. W.D.1991). In such an action, " '[i]t is not sufficient merely to showthat marital property was left undivided in the dissolution decree; there must also be shown some ground for the exercise of the equitable powers of the court, such as fraud or mistake.' " Iverson v. Wyatt, 969 S.W.2d 797, 800 (Mo.App. W.D.1998) (quoting Culp v. Culp, 858 S.W.2d 819, 820 (Mo.App. W.D.1993)).
O'Roark claims that the trial court should not have utilized its equitable powers in the absence of evidence of fraud, mistake, or accident. He argues that there was no such evidence in that May failed to present evidence that he knew of or had reason to know of the deductible loss prior to the entry of the dissolution judgment. O'Roark bases his argument in part on the fact that his 2006 tax return was not filed until May 2007, approximately six months after the entry of the dissolution judgment. However, May provided evidence at trial from which the trial court could have reasonably found that O'Roark knew or should have known of the deductible loss prior to November 2006, when the parties' dissolution judgment was entered.
At trial, May's counsel read from O'Roark's deposition. O'Roark had testified that he operated the LLC during the first few months of 2006 while it was being closed down and that the approximate $125,000 loss reflected a loss that occurred during those months. May testified that during that time, O'Roark excluded her from the business and that as the owner and operator of the LLC, he was the only one privy to information relating to the liquidation of the LLC's inventory. Because the business was closed down and all the inventory was gone by at least six months prior to the entry of the dissolution judgment, May believed that O'Roark would have known, or at least should have known, if there had been a substantial loss. In light of the circumstances to which May testified, there was substantial evidence from which the trial court could have determined that O'Roark knew of or should have known of the existence of a substantial deductible loss.
There was also substantial evidence from which the trial court could have found that O'Roark, whether intentionally or by mistake,1 failed to disclose the loss to May. During O'Roark's deposition, May's attorney asked him what was left over after the business was closed down. O'Roark testified that the only assets left over were $17,000, which was used to buy May a vehicle, and five or six thousand dollars in cash, which O'Roark kept. Additionally, on the sworn statement of marital property, which he provided to May, O'Roark listed the LLC, crossed it out, and stated that the present value of the LLC was "gone." He...
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