Neely v. Neely

• Decision Date: 05 May 2020
• Docket Number: NO. 2018-CA-01517-COA,2018-CA-01517-COA
• Citation: 305 So.3d 164
• Parties: Keith Lee NEELY Appellant v. Cynthia L. NEELY Appellee
• Court: Mississippi Court of Appeals

305 So.3d 164

Keith Lee NEELY Appellant

v.Cynthia L. NEELY Appellee

NO. 2018-CA-01517-COA

Court of Appeals of Mississippi.

May 5, 2020

Rehearing Denied September 1, 2020

ATTORNEYS FOR APPELLANT: RICHARD SHANE McLAUGHLIN, Tupelo, LUANNE STARK THOMPSON, Aberdeen

ATTORNEY FOR APPELLEE: CARRIE A. JOURDAN

BEFORE CARLTON, P.J., GREENLEE AND McCARTY, JJ.

CARLTON, P.J., FOR THE COURT:

¶1. Keith Neely and Cynthia Neely agreed to an irreconcilable-differences divorce, with the Clay County Chancery Court deciding property division, alimony, and attorney's fees. The chancellor ultimately determined that the marital home was part of Cynthia's separate estate. The chancellor declined to award alimony to Keith and held that each party was responsible for his and her own attorney's fees.

¶2. Keith now appeals from the chancery court's judgment regarding the contested matters, specifically: (1) whether the chancellor erred in determining that the marital home was separate property; (2) whether the chancellor erred by declining to award alimony; (3) whether the chancellor erred by failing to conduct an on-the-record analysis of the Armstrong¹ factors; and (4) whether the chancellor abused her discretion by inequitably distributing the marital property.

¶3. After our review, we find the chancellor did not abuse her discretion in classifying the marital home as Cynthia's separate property or in declining to award alimony. We therefore affirm the chancellor's judgment.

FACTS

¶4. Keith and Cynthia were married in November 1976. The marriage produced two children, who were emancipated at the time of the divorce. The parties separated in May 2015. On May 22, 2015, Cynthia filed for a divorce on the grounds of habitual cruel and inhuman treatment, and/or in the alternative, irreconcilable differences.

¶5. On June 17, 2016, Keith and Cynthia entered into an agreed temporary order where Cynthia was awarded the exclusive temporary use and possession the marital home, subject to Keith's rights to ingress and egress to the shop and shed located on the property where Keith maintained tools and supplies related to his work.

¶6. In December 2016, Cynthia filed an emergency motion for contempt and modification of the temporary order. In her motion, Cynthia claimed that Keith continually harassed and threatened her and exhibited destructive behavior at the marital home. On December 12, 2016, the chancellor entered an order awarding Cynthia the sole use and possession of the former marital home, shop, and surrounding land. The order provided Keith twenty-four hours to remove any equipment from the shop that he needed to operate his business and prohibited him from thereafter going on the property or harassing Cynthia.

¶7. A trial was held on April 24, 2018. Prior to the trial, the parties informed the chancellor that they were consenting to an irreconcilable-differences divorce and submitting the issue of equitable distribution to the chancellor; specifically: (1) whether the marital home was part of Cynthia's separate estate, (2) whether Cynthia was to reimburse Keith for certain veterinarian bills associated with the death of one of Keith's dogs,² (3) whether Keith was entitled to alimony, and (4) attorney's fees.

¶8. In his final judgment entered on August 13, 2018, the chancellor determined that the marital home was part of Cynthia's separate estate. The chancellor explained that "[t]he record is clear that the marital home was not owned by the parties during the majority of the marriage." Cynthia's stepmother, Carolyn Lott, testified that she and Cynthia's father purchased the home in 1993 so that Keith and Cynthia would have a place to live. Cynthia's parents maintained title to the home, and Keith and Cynthia were "lessees" during this period. In June 2013, Cynthia alone was deeded the marital home pursuant to her father's will. After being deeded the property, Keith and Cynthia continued to reside in the marital home as a family for two years prior to separating in May 2015. The chancellor ultimately determined that the marital home was not converted to marital property and remained Cynthia's separate estate. The chancellor observed that from the time Cynthia's parents purchased the home and after Keith and Cynthia's separation, "the parties clearly lived by the premise that ‘what's mine is mine,’ NOT ‘what's mine is yours.’ "

¶9. The chancellor found that the equitable division of marital assets adequately provided for the future income needs of both Keith and Cynthia, and she therefore declined to award alimony. The chancellor also held that each party was responsible for his and her own attorney's fees.

¶10. Cynthia filed a motion for reconsideration, and Keith filed a motion to amend the judgment or, alternatively, for a new trial. The chancellor denied both motions. This appeal followed.

STANDARD OF REVIEW

¶11. "When reviewing a decision of a chancellor, this Court applies a limited abuse of discretion standard of review." Castle v. Castle , 266 So. 3d 1042, 1048 (¶24) (Miss. Ct. App. 2018) (quoting Mabus v. Mabus , 890 So. 2d 806, 810 (¶14) (Miss. 2003) ). Where the chancellor's opinion is supported by substantial evidence, we will not disturb the opinion "unless the chancellor abused [her] discretion, was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied." Id . at 1048-49 (¶24).

DISCUSSION

I. Classification of Marital Home as Separate Property

¶12. Keith first argues that the chancellor erred by classifying the marital home as Cynthia's separate property. Keith maintains that Cynthia acquired the marital home during the marriage and that the parties lived together in the home during the marriage, and therefore the home is marital property under Mississippi law. Keith asserts the chancellor incorrectly concluded that because Keith and Cynthia paid separate bills, and because the home was in Cynthia's parents’ names for most of the marriage, the home was Cynthia's separate property. Keith argues that under Mississippi law, inherited property can be commingled like any other property.

¶13. We recognize that in Mississippi, there is "a general presumption that property acquired during a marriage constitutes marital property." Allgood v. Allgood , 62 So. 3d 443, 447 (¶12) (Miss. Ct. App. 2011). The Mississippi Supreme Court has clarified that "assets acquired or accumulated during the course of a marriage other than assets attributable to a spouse's separate estate either prior to the marriage or outside the marriage" is marital property, and "gifts and inheritances received during marriage constitute the separate property of a spouse." Id . (citing Hemsley v. Hemsley , 639 So. 2d 909, 915 (Miss. 1994), and Ferguson v. Ferguson , 639 So. 2d 921, 928 (Miss. 1994) ); see also Rhodes v. Rhodes , 52 So. 3d 430, 441 (¶40) (Miss. Ct. App. 2011) ("Property acquired in a spouse's individual capacity through an inter-vivos gift or inheritance is separate property, even if such property is acquired during the marriage."). However, "[s]pouses may convert separate property to marital property through actions of the owning spouse ... through the following actions: conversion by implied gift, family use, or commingling." Allgood , 62 So. 3d at 447 (¶13) (footnote omitted) (citing Yancey v. Yancey , 752 So. 2d 1006, 1011 (¶20) (Miss. 1999) ). The supreme court has held that "[a]ssets [that] are classified as non-marital, such as inheritances, may be converted into marital assets if they are commingled with marital property or utilized for domestic purposes, absent an agreement to the contrary." Boutwell v. Boutwell , 829 So. 2d 1216, 1221 (¶20) (Miss. 2002).

¶14. Because of the presumption that assets owned by a spouse are marital property, "the party seeking to classify property as separate, or non-marital, bears the burden of tracing the asset to a separate-property source." Allgood , 62 So. 3d at 447 (¶13) (citing Deborah H. Bell, Bell on Mississippi Family Law § 6.05[2] (1st ed. 2005)). A spouse asserting a separate ownership interest in property may maintain that separate interest "by tracing the commingled separate funds[.]" Id . However, "the supreme court has generally refrained from allowing separate ownership to be established in this fashion as to certain assets such as the family home, where the family-use doctrine would apply." Id . We recognize, though, that "the case law in this area has not always been consistent ." Id . Significant to the case before us, we acknowledge that "the family-use doctrine will almost always convert a separately owned ‘marital’ home to marital property." Faerber v. Faerber , 13 So. 3d 853, 861 (¶28) (Miss. Ct. App. 2009) ; see also Palmer v. Palmer , 121 So. 3d 260, 263 (¶9) (Miss. Ct. App. 2013) ("Although the home was clearly [the husband's] separate property prior to his marriage to [the wife], the parties lived in the home as a married couple. As such, the home was converted into a marital asset."); McDuffie v. McDuffie , 21 So. 3d 685, 691 (¶17) (Miss. Ct. App. 2009) (affirming a chancellor's finding that the family home was marital property because it "was brought into the marriage by [the husband], but it was converted to a marital asset because it was used by the family").

¶15. On appeal, Cynthia maintains that she satisfied her burden of tracing the marital home to a separate property source, so the home is her own separate property. Cynthia asserts that she inherited the property in June 2013 after her father passed away. Cynthia's father's estate deeded the marital home to Cynthia, and the warranty deed is only in Cynthia's name. Cynthia asserts that after acquiring the property, she made all tax and insurance payments related to the property from her own separate checking account.

¶16. In the final judgment, the chancellor discussed the marital home and classified it as Cynthia's separate estate, explaining:

Taking into consideration the facts as set forth as well as the prior case

...