McMillan v. McMillan

• Court: Court of Appeals of South Carolina
• Citation: 790 S.E.2d 216,417 S.C. 583
• Docket Number: Opinion No. 5426,Appellate Case No. 2014–002151
• Parties: Tina G. McMillan, Respondent, v. Jimmy D. McMillan, Appellant.
• Decision Date: 13 July 2016

417 S.C. 583
790 S.E.2d 216

Tina G. McMillan, Respondent,
v.
Jimmy D. McMillan, Appellant.

Appellate Case No. 2014–002151
Opinion No. 5426

Court of Appeals of South Carolina.

Heard June 6, 2016
Filed July 13, 2016

Bruce Wyche Bannister and Luke Anthony Burke, both of Bannister, Wyatt & Stalvey, LLC, of Greenville, for Appellant.

Christopher David Kennedy and N. Douglas Brannon, both of Kennedy & Brannon, P.A., of Spartanburg, for Respondent.

GEATHERS, J.:

417 S.C. 587

In this divorce action between Jimmy D. McMillan (Husband) and Tina G. McMillan (Wife), Husband appeals the family court's final order of divorce, arguing the family court erred in finding: (1) Husband's business that was created prior to the marriage was transmuted into marital property; (2) Husband's businesses that were created during the marriage were marital property; (3)

Husband did not have a nonmarital interest in his retirement accounts; and (4) Wife's jewelry that was acquired during the marriage was nonmarital property. Husband also argues the family court erred in equitably apportioning the marital estate without weighing the statutory factors and sealing the record without consideration of the necessary factors. We affirm in part, reverse in part, and remand.

417 S.C. 588

FACTS/PROCEDURAL HISTORY

Husband and Wife married on October 4, 1996. At the time of the final divorce hearing, Husband was sixty-six years old, and Wife was forty-eight years old. The parties did not have any children together. Wife left the marital residence on December 5, 2011. On December 31, 2011, Wife filed a complaint against Husband seeking an order of separate support and maintenance and requesting equitable division of their marital property. On January 23, 2013, Husband filed an amended answer and counterclaim seeking a divorce on the grounds of adultery.

790 S.E.2d 219

The family court held a hearing on November 12, 13, and 14, 2013. The parties presented evidence about several businesses Husband created with his partner Buddy Carter. In 1977, Husband and Carter started McMillan–Carter, Inc., a grading company. During the marriage, Husband and Carter formed Carmac, LLC in 1996 and Tractor Factor, LLC in 2001 as holding companies for McMillan–Carter's real estate and equipment. Husband and Carter also formed Reynolds Utilities, LLC in 2005; Peloton, Inc. in 2006; and Panacea Biofuels, LLC in 2008.

Husband testified he did not intend for McMillan–Carter or any of the other companies to be marital property. Wife testified they “always lived out of” the businesses during the marriage. The parties also presented evidence about their other real and personal property, including their marital home at 171 Tucapau Road, Husband's retirement account, and Wife's jewelry.

On March 5, 2014, the family court entered a final order granting the parties a divorce on the statutory ground of adultery. The family court found, “Throughout this marriage, [Husband] built his business holdings significantly to include multiple businesses and business properties. [Husband] worked on a regular and daily basis to expand his businesses and the marital estate. [Wife] worked in the marital businesses and cared for the home.” The family court identified four parcels of real estate owned by Husband's businesses; these parcels were appraised for a total of $1,571,000 with $580,140.17 of debt. Additionally, the family court identified certain personal property owned by the businesses that had

417 S.C. 589

marital value, including Husband's fifty percent share in business vehicles valued at $26,481 and oil containers valued at $125,000. The family court found, “The business properties listed above, both real and personal[,] are marital property and subject to equitable division.” The family court also found Wife's jewelry “[was a gift] and not subject to equitable distribution.” The family court found the total value of the marital estate was $1,629,468.41. It apportioned to Husband “possession and ownership of all of his business interests to include real and personal property identified at [the] trial.” After apportioning the parties' remaining real and personal property between Husband and Wife, it ordered Husband to pay Wife $595,263.20 to balance the equitable division of the marital estate. The family court further ordered that the record be sealed “[g]iven the vast amount of financial information that was introduced into evidence in this matter and the fact that much of this information deals with [Husband's] business partner [,] who is not a party to this action[,] and the fact that [Wife] is a sitting Magistrate Court Judge.”

On March 24, 2014, Husband filed a Rule 59, SCRCP, motion to alter or amend the family court's order, which the family court denied. This appeal followed.

ISSUES ON APPEAL

1. Did the family court err by finding the parties' work for Husband's companies constituted a basis for transmutation when they were properly compensated for their work?

2. Did the family court err by finding McMillan–Carter was transmuted into marital property when the company was created prior to the marriage and no marital funds or efforts were used to increase equity in the company?

3. Did the family court err by finding Carmac and Tractor Factor were marital property when the companies were acquired in exchange for nonmarital property?

4. Did the family court err by finding Reynolds, Panacea, and Peloton were marital property when the vast majority of funds contributed to the companies were nonmarital funds?

5. Did the family court err by finding Husband did not have a nonmarital interest in his retirement accounts when

417 S.C. 590

Husband presented evidence he had funds in the retirement accounts prior to the marriage and no contrary evidence was presented?

6. Did the family court err by finding Wife's jewelry acquired during the marriage was nonmarital property?

790 S.E.2d 220

7. Did the family court err by dividing the marital estate without giving weight to the fifteen statutory factors the court is required to consider for equitable division?

8. Did the family court err by sealing the record without the consent of the parties and without considering the factors required by the Rule 41.1(d) of the South Carolina Rules of Civil Procedure ?

STANDARD OF REVIEW

“In appeals from the family court, this [c]ourt reviews factual and legal issues de novo.” Crossland v. Crossland , 408 S.C. 443, 451, 759 S.E.2d 419, 423 (2014). “Thus, this [c]ourt has jurisdiction to find facts in accordance with its own view of the preponderance of the evidence; however, this broad scope of review does not require the [c]ourt to disregard the findings of the family court, which is in a superior position to make credibility determinations.” Id.

LAW/ANALYSIS

I. Marital Estate

A. Transmutation of McMillan–Carter

Husband first argues the family court erred by finding McMillan–Carter, a company he formed prior to the marriage, was transmuted into marital property because no marital funds were used to increase equity in the company.¹ Husband further argues he and Wife were appropriately compensated for their work in the company with salaries and their use of income from McMillan–Carter to support the marriage did not

417 S.C. 591

demonstrate intent to transmute the business to marital property. We agree.

“A party claiming an equitable interest in property upon divorce bears the burden of proving the property is marital.” Wilburn v. Wilburn , 403 S.C. 372, 382, 743 S.E.2d 734, 740 (2013). “If the party presents evidence to show the property is marital, the burden shifts to the other spouse to present evidence to establish the property's nonmarital character.” Id. “If the opposing spouse can show that the property was acquired before the marriage or falls within a statutory exception, this rebuts the prima facie case for its inclusion in the marital estate.” Pruitt v. Pruitt , 389 S.C. 250, 261, 697 S.E.2d 702, 708 (Ct. App. 2010).

Property acquired prior to the marriage is generally nonmarital property and not subject to equitable division. S.C. Code Ann. § 20–3–630(A)(2) (2014). “Even if property is nonmarital, it may be transmuted into marital property during the marriage.” Pruitt , 389 S.C. at 261, 697 S.E.2d at 708. “Transmutation occurs if the property is utilized in support of the marriage or in such a manner as to evidence an intent to make it marital property.” Id. “Transmutation is a matter of intent to be gleaned from the facts of each case.” Smallwood v. Smallwood , 392 S.C. 574, 579, 709 S.E.2d 543, 545 (Ct. App. 2011) (quoting Jenkins v. Jenkins , 345 S.C. 88, 98, 545 S.E.2d 531, 537 (Ct. App. 2001) ).

“The spouse claiming transmutation must produce objective evidence...