Mills v. Mills, 44971

• Decision Date: 20 December 1983
• Docket Number: No. 44971,44971
• Citation: Mills v. Mills, 663 S.W.2d 369 (Mo. App. 1983)
• Parties: Marilyn MILLS, Respondent, v. James F. MILLS, Appellant.
• Court: Missouri Court of Appeals

Page 369

663 S.W.2d 369

Marilyn MILLS, Respondent, v. James F. MILLS, Appellant.

No. 44971.

Missouri Court of Appeals,

Eastern District,

Division One.

Dec. 20, 1983.

Arthur Friedman, St. Louis, for respondent.

Richard C. Bresnahan, Clayton, for appellant.

SIMON, Presiding Judge.

Husband appeals from a decree of dissolution. ¹ He asserts trial court erred in the findings of fact and in provisions of the decree relating to the marital property, maintenance and attorney's fees and costs. The decree is affirmed.

The voluminous record establishes that the parties were married in April, 1973 and separated in November, 1978. Husband had custody of two minor children by a previous marriage, but there were no children born of this marriage.

Wife has a degree in education, had taught elementary school and worked as an administrative aid for a juvenile court in Florida prior to the marriage. During the marriage, she worked as a management recruiter in 1975 and earned between $7,000 and $10,000 a year. In 1978, she became 55% owner of a children's clothing store. At the time of trial, she was in the process of winding up its affairs and was unemployed. Wife received income dividends from shares of stock in F & F Corp., a closely held family corporation. In 1980, the dividends were $3,000.

In the beginning of the marriage, husband was employed by Tri Continental Leasing earning between $18,000 and $24,000 per year. During the first six months of 1975, he worked for the Bank of Virginia earning $20,000. In 1974, he and two other partners formed a Missouri corporation, Great American Financial Corporation, which was in the business of brokering equipment leases. Husband owned 45% of the stock. In mid-1975, he quit his position with the bank and began devoting his energies full time to this business. During the marriage, husband acquired the following interests in five other businesses: Great American Leasing (50% partnership interest); Midwest Resources (25% partnership interest); Great American Energy Corp. (25% interest) Pea Ridge Rock, Inc. (25% interest); and Missouri-Iowa Farms (25% partnership interest).

In 1980, after the parties separated, husband sold his interest in the Missouri-Iowa Farms partnership for $176,744.96. A portion of these proceeds, $72,000.00, was placed in a certificate of deposit which was pledged as collateral for a loan at the time of trial. At the time of trial, Pea Ridge Rock, Inc., Midwest Resources and Great American Energy Corp. were in Chapter 11 reorganization proceedings. Husband testified that Great American Financial Corp. had a gross income of $356,365.00 in 1978 and taxable income of $72,771.00. It had a gross income of $291,000.00 in 1979 and taxable income of $21,864.00. Financial figures were not available for 1980, but husband testified that business had not been good because of high interest rates and that its liabilities exceeded its assets. Husband valued his interest in all of these businesses at zero.

In 1977, husband had earnings of $82,625.00; in 1978, earnings of $81,500.00 and in 1979, earnings of $52,000.00. Husband was on salary of $40,000.00 per year at Great American Financial. At the time of trial husband was owed $24,500.00 in back salary and a total of $139,875.66 by the other business entities.

Both husband and wife presented evidence that the other had committed acts of marital misconduct.

After a lengthy hearing, comprising thirteen days of testimony over a seven month period, the trial court filed findings of fact and conclusions of law. The court set aside to wife separate property consisting of 18 shares of stock in F & F Corp. valued at $54,000.00, subject to a lien of $25,000.00; and furniture, furnishings, jewelry and silver valued at $30,000.00.

The court distributed to wife the following marital property: a 1979 automobile with a net value of $3,600.00; one-half of 1978 and 1979 income tax refund totaling $10,489.50; one-half of pension and profit sharing plan in Great American Financial Corp. valued at $3,000.00; household furnishings and personal property valued at $10,000.00; the family residence in Ladue valued at $152,000.00, subject to two deeds of trust totaling $88,000.00 which wife was required to assume; and one-half of a $32,897.00 long term capital tax loss carry forward.

Husband was awarded all interest in the Great American Financial Corp., Great American Energy Corp., Pea Ridge Rock, Inc., Midwest Resources and Great American Leasing, "all income producing property, net value o; " one-half of his pension and profit sharing plan in Great American Financial Corporation; a $72,000.00 certificate of deposit; a Bouvier dog named Xylo, valued at $500.00; a Fireman's Fund Insurance policy; the other half of the 1978 and 1979 income tax refund; the remaining half of the capital tax loss carry forward; all bank accounts in his name; and all clothing and jewelry in his possession.

Wife was required to pay a $25,000.00 loan secured by her F & F stock. Husband was ordered to pay $20,000.00 in loans and to hold wife harmless for the debts. Husband was ordered to pay wife the sum of $300.00 per month for maintenance for a period of two years and to pay $41,500.00 for attorney's fees and $2,406.84 for costs.

On appeal, the judgment must be affirmed if it is supported by substantial evidence, is not against the weight of the evidence or the trial court did not erroneously declare or apply the law. Rasmussen v. Rasmussen, 627 S.W.2d 117, 119 (Mo.App.1982). In addition, due regard must be given to the opportunity of the trial court to have judged the credibility of the witnesses. Rule 73.01.

Nine of husband's nineteen points relate to the disposition of marital property. Husband contends that the trial court erred in finding that a long term capital loss carry forward of $32,897.00 was marital property and that awarding one-half of it to wife violated Internal Revenue regulations. Husband asserts that the trial court's finding was not supported by substantial evidence because the evidence established the loss carry forward resulted from the sale of stocks which were his separate property.

Wife testified that the long term capital loss carry forward resulted from the sale of stock of various companies all acquired by husband during the marriage.

Pursuant to the provisions of 26 U.S.C.A. § 1212, only a portion of a long term capital loss can be deducted by the taxpayer each year. Any excess capital loss must be carried forward each year until exhausted. Wife's testimony established that the loss carry forward was generated from the sale of marital property. Husband produced no contrary evidence nor refuted wife's testimony. Consequently, the trial court did not err in finding the long term capital loss carry forward was marital property.

Husband further asserts that the court's order awarding wife one-half of the loss carry forward violates Treasury Reg. § 1.1212-1(c). It is well settled that a state court cannot override federal income tax regulations. Calia v. Calia, 624 S.W.2d 870, 873 (Mo.App.1981). We have examined the regulation and do not find that the trial court's order violates the regulation in any manner.

Next, husband alleges the trial court erred in assigning a value of $6,000 to husband's pension and profit sharing plan with Great American Financial Corporation and awarding one-half to wife. Husband testified that his interest in the pension and profit sharing plan at the time of trial was valued at $6,000. He further testified that it had been pledged to secure a loan and that it had been taken to satisfy the delinquent account. Husband introduced no documentation to support his claim that the asset no longer existed. The trial court apparently chose to disbelieve that portion of his testimony. Husband further complains that there was no evidence the pension plan was vested and therefore, the plan was not marital property, citing Delay v. Delay, 612 S.W.2d 391 (Mo.App.1981). However, that a spouse's interest in a pension plan is contingent or subject to divestment does not prevent it from being marital property. Kuchta v. Kuchta, 636 S.W.2d 663 (Mo. banc 1982). We find no merit to this point.

Husband asserts that the distribution of marital property was unjust and grossly disproportionate, because the trial court improperly valued the marital assets and failed to properly consider the factors set forth in § 452.330 RSMo 1978. Section 452.330 mandates that the court shall divide the marital property after considering: (1) the contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker; (2) the value of the property set apart to each spouse; (3) the economic circumstances of each spouse including the desirability of awarding the family home to the spouse having custody of any children; and (4) the conduct of the parties during the marriage.

The trial court is vested with considerable discretion in dividing the marital property. It is not required to make an equal division of the marital property, only a just division. Calia v. Calia, 624 S.W.2d 870 (Mo.App.1981). On appeal, the party challenging the division of marital property has the burden of overcoming the presumption of correctness of the order prescribing such division. Rasmussen v. Rasmussen, 627 S.W.2d 117 (Mo.App.1982). An appellate court will only interfere if the division is so heavily and unduly weighted in favor of one party as to amount to an abuse of judicial discretion. Metts v. Metts, 625 S.W.2d 896, 899 (Mo.App.1981).

Husband alleges that using the value of the marital property as found by the trial court, the result is an apparent 54% to 46% division of marital property in favor of wife. However, husband asserts the trial court valued the certificate of deposit awarded to him at $72,000, when in fact it was pledged as security for a loan and had a net value of zero. According to...