Meservey v. Meservey

• Decision Date: 22 September 1992
• Docket Number: Nos. WD,s. WD
• Citation: Meservey v. Meservey, 841 S.W.2d 240 (Mo. App. 1992)
• Parties: Janice Sue MESERVEY, Respondent-Appellant, v. Ralph Warren MESERVEY, Appellant-Respondent. 45446, WD 45451.
• Court: Missouri Court of Appeals

Page 240

841 S.W.2d 240

Janice Sue MESERVEY, Respondent-Appellant, v.Ralph Warren MESERVEY, Appellant-Respondent.

Nos. WD 45446, WD 45451.

Missouri Court of Appeals Western District.

Sept. 22, 1992.

James P. Valbracht, Cleaveland, Macoubrie, Cox, Valbracht and Elliott, Chillicothe, for Janice Sue Meservey.

Richard N. Brown, Brown & Casey, Brookfield, for Ralph Warren Meservey.

Before HANNA, P.J., and FENNER and ULRICH, JJ.

ULRICH, Judge.

Ralph Warren Meservey appeals, and his former wife, Janice Sue Meservey, cross-appeals from portions of the decree dissolving their twenty-seven-year marriage.The points on appeal concern property distribution and the award of attorney fees.

The decree is modified in part, and affirmed as modified.

The Meserveys and their five children lived on a farm, and made their livelihood from farming.As a farm wife, Ms. Meservey planted and maintained a large garden, raised chickens, took meals to her husband and field workers, assisted in feeding the livestock, moved and drove farm machinery, and located parts for repairs.In addition to her farm duties, Ms. Meservey was principally responsible for rearing the five children, and for the cooking, cleaning, and washing.

Mr. Meservey worked with his brother, James Meservey, for Marshall Meservey Farms, Inc., a closely held corporation established by their parents.The company was a farming operation, and as a farmer, Mr. Meservey raised crops and livestock.

After the Meserveys separated in 1987, Ms. Meservey moved into a rental house in Chillicothe with two daughters, the couple's remaining unemancipated children.Ms. Meservey obtained employment with the Livingston County Memorial Library.She supplemented her income with seasonal work at J.C. Penney and by babysitting.She also attended college classes to complete an associate degree.The two daughters attended college and commuted to school while living with Ms. Meservey.

In the dissolution decree, the trial court found that each spouse had equally contributed efforts to the acquisition and maintenance of marital property.Noting that both Mr. and Ms. Meservey had engaged in inappropriate conduct at times, the trial court equally divided the spouses' marital property interests.After determining separate and marital interests, the trial court awarded the property to Mr. Meservey and money judgments to Ms. Meservey.The following chart summarizes the disposition of property:

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                --------------------------------------------------------------
                Property      Property              Total Value   Money
                Classifi-     Description           of Property   Judgments
                cation By                           Awarded To    Awarded To
                Trial Court                         Mr. Meservey  Ms. Meservey
                --------------------------------------------------------------
                Separate      Farm land, vehicle,   $396,291.52
                              certificates of
                              deposit
                --------------------------------------------------------------
                Marital       Vehicles, crops,       $98,777.47    $49,388.74
                              bank accounts
                              investment account
                              insurance policies;
                --------------------------------------------------------------
                Non"Marital   One-half interest      $18,140.00
                and           in                     (Separate)
                Marital       Ireland Farm;          $46,860.00    $23,430.00
                                                     (Marital)     (Marital)
                --------------------------------------------------------------
                Separate      Stock in Marshall     1,142,646.00   102,067.75
                Non"Marital   Meservey Farms, Inc.
                With Marital
                Interest
                --------------------------------------------------------------
                Totals                              1,702,714.99   174,886.49
                --------------------------------------------------------------
                --------------------------------------------------------------
                ----------
                

In additional findings, the trial court determined Ms. Meservey's gross annual earnings from her library job to be $10,404.The trial court found that Mr. Meservey had gross annual income of $70,140 from salary, bonuses, self-employment income, rental income, and interest income.Yet, the trial court recognized that, as a consequence of the property division, Mr. Meservey's income would drop to $57,890 per year.The trial court also ordered Mr. Meservey to pay to Ms. Meservey $600 as monthly maintenance, and her attorney fees.Placing custody of the two unemancipated daughters with Ms. Meservey, the trial court ordered Mr. Meservey to pay monthly child support of $400 per daughter to Ms. Meservey, to maintain health insurance for the daughters and to provide the daughters' college expenses.

Under the principles enunciated in Murphy v. Carron, 536 S.W.2d 30, 32(Mo. banc 1976), a contested portion of a dissolution decree must be affirmed if it is supported by substantial evidence, is not against the weight of the evidence, and neither erroneously declares nor applies the law.

I.Investment Account

Mr. Meservey argues that no substantial evidence supported finding the existence of the investment account that was classified as marital property and was valued at $38,476.He maintains that he inadvertently failed to disclose investments in interrogatory answers and that opposing counsel"put words in his mouth" at the dissolution hearing.

Contrary to Mr. Meservey's argument, the record sufficiently supports the existence of the investment account.Mr. Meservey's 1990 tax return revealed short term investments in stock of $38,476.At the hearing, Mr. Meservey admitted that he had invested as much as $50,000 in the stock market during the marriage.Mr. Meservey's point is denied.

II.Stock in Marshall Meservey Farms, Inc.

Both parties raise issues regarding the allocation of increase in value of the stock of Marshall Meservey Farms, Inc.

Mr. Meservey's parents, Marshall and Alpha Meservey, formed Marshall Meservey Farms, Inc., to implement their estate plan and to induce their children to continue the family farming enterprise.The elder Meserveys made gifts and bequests of the corporate stock to their three children, their children's spouses, and their grandchildren.After Marshall Meservey's death in 1978, Mr. Meservey and his brother, James Meservey, assumed responsibility for the daily operation and the management of the corporation.Upon Alpha Meservey's death in 1987, Mr. Meservey owned 453 shares of stock, representing a 31.72% ownership interest in the corporation; Ms. Meservey owned 18 shares, representing a 1.26% ownership interest.The stock was valued at $1,135.73 per share on Alpha Meservey's federal estate tax return.Although the corporation remained in good standing after the elder Meserveys' deaths, the Meservey brothers failed to comply with certain corporate formalities, and conducted business more like a family partnership.

At the dissolution hearing, the Meserveys presented expert testimony on the value of the Marshall Meservey Farms stock.Ms. Meservey called a certified public accountant who had reviewed Alpha Meservey's federal estate tax return, the income tax returns of Marshall Meservey Farms, Inc., from 1986 to 1990, discovery responses, and real estate appraisals.Using the balance sheet approach, the CPA determined that the value of each share at the close of 1990 to be $2,426.54.The CPA attributed the increase in value of the stock to the management efforts of Mr. Meservey and his brother.In calculating the amount of increase in value attributed to the Meservey brothers' management, the CPA disregarded increases in value of corporate land, and used various approaches: the book value method, the tax return method, the net increase method, and the balance sheet method.Under the various approaches, the increases in value per share ranged from $378.02 to $685.95, with an average of $538.74.

Mr. Meservey presented the testimony of a bank president who had examined the corporate tax returns for the two preceding years and the articles of incorporation.The banker valued the stock at $100 per share because the articles of incorporation set par value at that amount and because the articles required the seller of any outstanding shares to first offer them to the corporation for purchase at par value.According to the banker, no investor would be willing to purchase Mr. Meservey's minority interest in the closely-held corporation.In his own testimony, Mr. Meservey denied any increase in the value of the stock but attributed any corporate profits to favorable weather conditions.

In its findings, the trial court noted that during their marriage Mr. and Ms. Meservey had devoted themselves to preserving and improving the family farming operation, both corporate and non-corporate.The court also recognized the contributions of Mr. Meservey and his brother as skillful and intelligent farmers.The court determined the value of the stock to be $2,426 per share, and the increase in value from 1987 to 1990 to be $537.01 per share.According to the trial court's calculations, Mr. Meservey's shares increased in value by $243,265; Ms. Meservey's shares increased in value by $9,666.Characterizing one-half of the increase in each spouse's shares as marital property and one-half as separate property, the trial court divided the marital portion of the increase equally.The following chart shows the allocation of the stock after allowances for the increase in value:

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                                     MR. MESERVEY        MS. MESERVEY            TOTALS
                -----------------------------------------------------------------------
                SHARES OWNED              453                 18               471
                -----------------------------------------------------------------------
                VALUE OF             $1,098,978.00

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