Morgan v. Ackerman, s. 69959

• Decision Date: 17 March 1998
• Docket Number: Nos. 69959,70058,s. 69959
• Citation: 964 S.W.2d 865
• Parties: Linda Taylor MORGAN, f/k/a Linda H. Ackerman, Petitioner/Respondent/ Cross-Appellant, v. Stephen M. ACKERMAN, Respondent/Appellant/ Cross-Respondent.
• Court: Missouri Court of Appeals

Page 865

964 S.W.2d 865

Linda Taylor MORGAN, f/k/a Linda H. Ackerman Petitioner/Respondent/ Cross-Appellant, v. Stephen M. ACKERMAN, Respondent/Appellant/ Cross-Respondent.

Nos. 69959, 70058.

Missouri Court of Appeals,

Eastern District,

Division Two.

March 17, 1998

David B. Lacks, Leigh Joy Carson, St. Louis, for appellant.

Linda Taylor Morgan, St. Louis, pro se.

RHODES RUSSELL, Judge.

Stephen Ackerman ("Husband") and Linda Taylor Morgan ("Wife") both appeal portions of the trial court's judgment dissolving their marriage. Husband appeals the provisions relating to division of property, child support, maintenance, attorney's fees, and a requirement he make annual accountings of assets he holds for the children. Mother appeals the finding that Ackerman Manufacturing Co., of which Husband was the sole shareholder, was Husband's separate property. We affirm in part and reverse and remand in part.

Husband and Wife were married on June 19, 1976, and lived together until they separated in September 1990. There were three children of the marriage: Robert Stephen, Elizabeth Morgan, and Andrew Moog. Throughout the marriage, a family-owned mattress business, Ackerman Manufacturing Co., provided the livelihood for the family.

On September 26, 1990, Wife filed a petition seeking dissolution of the marriage. The court appointed a guardian ad litem for the children. The parties subsequently reached, and the trial court entered a custody agreement granting Wife custody of the minor children on January 30, 1992. The cause was tried on fifteen days between May 1992 and April 1993. On October 21, 1993, the parties completed filing proposed findings of fact and conclusions of law. Thirty months after the close of evidence, on October 16, 1995, the trial court entered its judgment and decree of dissolution including findings of fact, conclusions of law, and other judgments and orders. The trial court's final amendment to the decree and disposition of other post-trial motions was entered on February 2, 1996. Husband and Wife both appealed.

We must affirm the trial court's decree unless there is no substantial evidence to support the decision, it is against the weight of the evidence, or it erroneously declares or applies the law. In re Marriage of Burns, 903 S.W.2d 648, 650 (Mo.App.1995); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). In addition, we defer to the trial court's determination of credibility, viewing the evidence and inferences therefrom in the light most favorable to the decree and disregarding all contrary evidence and inferences. Burns, 903 S.W.2d at 650.

Husband's first three points challenge the trial court's distribution of property and awards of child support and maintenance. Husband argues these awards, granted in the dissolution decree dated October 16, 1995, were erroneous because they were based on evidence that was stale.

The evidence in this case was adduced between May 1992 and April 1993. Approximately six months later, in October 1993, the parties completed filing their proposed findings of fact and conclusions of law and other post-trial motions. When the trial court entered the dissolution decree, some thirty months had passed since the last evidence was taken.

The trial court's judgment set aside to the parties their non-marital property. The court determined that an equitable distribution of the marital property was in the proportion of 70% to Wife and 30% to Husband, and distributed the marital property accordingly. The court found that application of the Form 14 child support amount would be unjust and inappropriate. The court ordered Husband to pay $1600 per month for each of the two minor children, and ordered him to provide the children medical insurance and to pay 65% of the children's educational expenses. The court further ordered Husband to pay Wife maintenance of $3000 per month.

Husband maintains that In re Marriage of Gustin, 861 S.W.2d 639 (Mo.App.1993), demands another hearing to determine the parties' economic circumstances at the time the division of property becomes effective. We agree. In Gustin, the trial court entered judgment eight months after accepting the valuation of marital property as calculated by the husband's CPA. On appeal, the Western District held that the eight month gap between the valuation and the decree becoming effective, dictated reversal of the division of property. The case was remanded for the trial court to receive evidence of the property's value and to consider the economic circumstances of the parties at the time the division of property was to become effective.

The Gustin court noted that in Taylor v. Taylor, 736 S.W.2d 388, 391 (Mo. banc 1987), the Supreme Court determined that the proper date of valuation of marital property is the date of trial. Gustin, 861 S.W.2d at 643. Section 452.330.1(1), RSMo 1994, ¹ however, mandates that the trial court must consider the economic circumstances of each spouse at the time the division of property is to become effective. The court, however, harmonized these directives, explaining:

These two concepts are not inconsistent. Valuation of property should be reasonably proximate to the date the division is to be effective. If the effective date of distribution is not reasonably proximate to the date of valuation, the court should hold another hearing to establish a valuation as close to the effective date of the division as possible.

Gustin, 861 S.W.2d at 644.

In In re Marriage of Burns, this court was faced with a case in which, in a previous appeal, we had vacated the dissolution decree and remanded the case for further proceedings. The vacation of the decree of dissolution therein also vacated the property division. On remand, after finding the marriage was irretrievably broken, the court proceeded to divide the marital property based on the evidence taken in the original hearing 16 months prior. We reversed and explained that the trial court should have considered the evidence of the parties' economic circumstances at the time of judgment after remand, when the marriage was actually dissolved. Its failure to do so was error. Burns, 903 S.W.2d at 652.

The effective date of distribution herein was some 30 to 40 months after the evidence valuing the property was received. "It cannot be said that distributions based upon stale valuations are based on value, for value is by no means a constant." Gustin, 861 S.W.2d at 643 (quoting Sutliff v. Sutliff, 518 Pa. 378, 543 A.2d 534, 537 (1988)). Market conditions and changing economic circumstances can render assets that had been valuable months or years earlier virtually worthless in the present, and vice versa. Id. To distribute property without regard to those fluctuations would be illogical. Id.

The marital and separate property herein included, inter alia, real estate, automobiles, bank accounts, and shares in Husband's closely-held corporation, all of which could have changed value significantly within the 30 months the case was under submission. The date of valuation herein is not reasonably proximate to the effective date of distribution. We reverse all judgments regarding the distribution of property and remand for the trial court to receive evidence of the value of the property and to consider the current economic circumstances of each spouse.

In addition to the division of property, Husband also appeals the judgments ordering him to pay child support and maintenance based on the evidence taken at least 30 months prior. We find, as the Gustin court did, that the awards of child support and maintenance should be reversed in order to allow the court on remand a full range of options in dividing the property. See Gustin, 861 S.W.2d at 645. The child support and maintenance awards must be recalculated when the court divides the property on remand, because the amount of property apportioned to Wife is considered in setting the amount of child support and maintenance, if any, awarded to her. Further, child support and maintenance awards also require consideration of current economic circumstances, therefore the child support and maintenance awards must be reversed. However, on remand the court is ordered to continue the present child support and maintenance awards in effect until a final judgment is entered. In establishing a final award, the court may consider the term during which the present award was in effect and make any appropriate adjustments.

The remainder of Husband's points on appeal are associated with the distribution of property and child support and maintenance awards. Due to our reversal and remand of those provisions, portions of the balance of Husband's appeal may be moot. However, we will address his points as these issues might arise on remand.

In his fourth point, Husband asserts that the trial court erred in providing for an automatic biennial change in the amount of child support based on changes in the cost of living. Husband argues that such an automatic change provision violates section 452.370.1's requirement that a substantial and continuing change of circumstances must occur as a prerequisite to modification of a dissolution decree. We agree.

Section 452.370.1 provides that "the provisions of any decree respecting maintenance or support may be modified only upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable." The decree herein states, at paragraph 240, "the Court concludes that the child support ordered herein shall contain a cost of living increase or decrease every two years based on a cost of living index with a base of June 30, 1995." The trial court's order does not require any showing of changed circumstances as a condition to adjustment in accordance with section 452.370.1.

While the trial court would be obliged under section 452.325.4(1) to enforce such a provision if it were included in a settlement agreement, the court may not award a...