Owen v. Owen, No. 1999-CA-01077-SCT.

Citation798 So.2d 394
Decision Date01 March 2001
Docket NumberNo. 1999-CA-01077-SCT.
PartiesMargaret Lynn OWEN v. Kenneth Whiteside OWEN.
CourtUnited States State Supreme Court of Mississippi

C. Michael Malski, Amory, Attorney for Appellant.

Will R. Ford, Attorney for Appellee.

EN BANC.

SMITH, J., for the Court:

¶ 1. Margaret Lynn Owen ("Margaret") and Kenneth Whiteside Owen ("Kenneth") filed a Joint Complaint for Divorce in the Chancery Court of Union County, Mississippi, seeking a divorce on the ground of irreconcilable differences. Unable to agree on property settlement issues, the parties agreed to allow the chancellor to resolve those matters. The chancellor granted a divorce on the ground of irreconcilable differences and then ordered the couple's marital assets to be sold with Kenneth receiving 60% of the proceeds and Margaret 40%. Subsequently, Margaret moved the chancellor to reconsider the division of assets based upon the Ferguson factors and specifically requested that the chancellor equitably divide Kenneth's Employee Stock Ownership Plan ("ESOP") and 401(k) retirement funds. The chancellor denied Margaret's motion, and she has appealed that decision, raising the following assignments of error:

ISSUES
I. THE CHANCELLOR ERRONEOUSLY BASED DISTRIBUTION OF THE OWENS' PROPERTY UPON ONE FACTOR RATHER THAN ALL THE FACTORS OF FERGUSON v. FERGUSON.
II. THE CHANCELLOR ERRED IN FAILING TO INCLUDE IN THE MARITAL ESTATE, AND TO EQUITABLY DISTRIBUTE, KENNETH'S RETIREMENT BENEFITS ACCUMULATED DURING THE MARRIAGE.

¶ 2. We find that the chancellor erred in failing to specifically address all applicable Ferguson factors and in failing to include Kenneth's retirement plans in dividing the couples marital assets.

STATEMENT OF THE FACTS

¶ 3. Margaret and Kenneth married in 1987. The couple initially lived in Texas where Kenneth worked and Margaret attended college. While a full-time student, Margaret performed the household chores and held several part-time jobs, using her earnings to pay for school supplies, clothing, and groceries. Margaret's tuition was paid by both Margaret's father and Kenneth.

¶ 4. In 1992, the couple returned to New Albany, Mississippi. Margaret initially taught school and worked at a local clothing store. Later, Margaret started her own business as an artist. Margaret gave Kenneth all income she earned, and, in return, he wrote her checks for the amount transferred to him. In essence, Margaret kept whatever she earned, and these "transfers" were made apparently for tax purposes only. Meanwhile, Kenneth began working as an engineer for Master-Bilt, where he received retirement benefits in the form of an ESOP and a 401(k) plan, both of which are titled solely in his name. Kenneth's ESOP and 401(k) plan were valued in excess of $5,000 and $7,000, respectively, as of the date of divorce.

¶ 5. During the marriage, the couple purchased two homes. Margaret and Kenneth took title to the first home jointly, and both helped make extensive repairs on the home. The second home, in which Kenneth took sole title, was used as a rental house. Both parties participated in cleaning the second home and landscaping the yard, but Kenneth testified that he paid Margaret for the work she performed. All mortgage payments, taxes, and repair payments on both houses were made by Kenneth.

¶ 6. The couple also owned an investment account which contained a pre-divorce balance of $14,844. After the couple separated, Kenneth, who admitted that money had been accumulated during the marriage, withdrew $14,500 from that account out of concern that Margaret would spend the money.

¶ 7. The couple's tax returns show that Margaret never made more than $1,500 a year, but Kenneth indicated that she actually made more.1 Kenneth admitted, however, that he was "benefitted" from Margaret having a job as she was able to spend her income on her clothes and on other items such as groceries. Kenneth also admitted that Margaret made domestic contributions throughout the marriage. At the time of divorce, Margaret earned $1,250 in net monthly income and spent $2,766 in monthly living expenses, while Kenneth earned $3,107 in net monthly income and spent $2,651 in monthly living expenses.

¶ 8. The couple filed for divorce in 1998. After granting a divorce, the chancellor divided the couple's property. In reaching his decision, the chancellor noted the parties' ages and present incomes and noted that Kenneth had substantially contributed to Margaret's obtaining a college degree. The chancellor also pointed out that Margaret had worked only "spasmodically" during the marriage. Ultimately, the chancellor stated that, after having reviewed the Ferguson factors, the court "[found] as a matter of fact that Kenneth... [had] been the primary financial contributor to the assets of the marriage and that he should receive a greater percentage of any distribution of the marital assets." The chancellor found the couple's two homes and six vehicles to be marital property and ordered them sold with Kenneth receiving 60% of the proceeds and Margaret 40%. The chancellor also ruled that the couple's investment account was marital property and awarded Margaret 40% of the pre-divorce balance. Both parties also received a number of personal property items which the chancellor found to be separate assets. According to Kenneth's calculations, the items retained by Margaret had an estimated value of $38,250, while the items he received had an estimated value of $8,510. All other personal property not specifically listed was deemed marital property and was to be sold with Kenneth receiving 60% of the proceeds and Margaret 40%.

¶ 9. After the chancellor reached his decision, Margaret moved for a reconsideration of the division, specifically requesting that the chancellor consider the Ferguson factors and that he equitably divide Kenneth's ESOP and 401(k) retirement funds. The chancellor denied the motion, and Margaret has appealed to this Court.

STANDARD OF REVIEW

¶ 10. As with most matters appealed from the chancery court, this Court "employs a limited standard of review" of the division and distribution of property in divorces. Reddell v. Reddell, 696 So.2d 287, 288 (Miss.1997). Such division and distribution "will be upheld if it is supported by substantial credible evidence." Carrow v. Carrow, 642 So.2d 901, 904 (Miss.1994). This Court will not substitute its judgment for that of the chancellor "[e]ven if this Court disagree[s] with the lower court on the finding of fact and might ... [arrive] at a different conclusion." Richardson v. Riley, 355 So.2d 667, 668 (Miss.1978). The chancellor's findings will not be disturbed "unless the Chancellor was manifestly wrong, clearly erroneous or an erroneous legal standard was applied." Bell v. Parker, 563 So.2d 594, 596-97 (Miss.1990). When no specific findings appear in the record, this Court generally presumes that "the chancellor resolved all such fact issues in favor of the appellee." Maslowski v. Maslowski, 655 So.2d 18, 20 (Miss.1995). In cases where that presumption applies, the chancellor's decision will not be overturned if supported by substantial, credible evidence. Tedford v. Dempsey, 437 So.2d 410, 417 (Miss.1983).

DISCUSSION

I. DID THE CHANCELLOR ERRONEOUSLY BASE DISTRIBUTION OF THE OWENS' PROPERTY UPON ONE FACTOR RATHER THAN UPON ALL THE FACTORS OF FERGUSON v. FERGUSON?

¶ 11. Margaret alleges that the chancellor committed reversible error in basing the division of marital assets upon one factor—financial contributions to the accumulation of marital property—rather than upon all eight Ferguson factors. This Court finds that the chancellor's division of property did improperly focus only on Kenneth's economic contributions to the marriage, and accordingly we reverse the decision.

¶ 12. This Court has established equitable distribution of marital assets upon divorce as an automatic right and has delineated the following eight factors for consideration by the chancellor in equitably dividing such marital property:

1. Substantial contribution to the accumulation of the property. Factors to be considered in determining contribution are as follows: a. Direct or indirect economic contribution to the acquisition of the property; b. Contribution to the stability and harmony of the marital and family relationship as measured by quality, quantity of time spent on family duties and duration of the marriage; and c. Contribution to the education, training or other accomplishment bearing on the earning power of the spouse accumulating the assets;
2. The degree to which each spouse has expended, withdrawn or otherwise disposed of marital assets and any prior distribution of such assets by agreement, decree or otherwise;
3. The market value and the emotional value of the assets subject to distribution;
4. The value of the assets not ordinarily, absent equitable factors to the contrary, subject to such distribution, such as property brought to the marriage by the parties and property acquired by inheritance or inter vivos gift by or to an individual spouse;
5. Tax and other economic consequences, and contractual or legal consequences to third parties, of the proposed distribution;
6. The extent to which property division may, with equity to both parties, be utilized to eliminate periodic payments and other potential sources of future friction between the parties;
7. The needs of the parties for financial security with due regard to the combination of assets, income and earning capacity; and
8. Any other factor which in equity should be considered.

Ferguson v. Ferguson, 639 So.2d 921, 927-28 (Miss.1994). ¶ 13. Chancellors are to consider those factors on the record and are to "support their decisions with findings of fact and conclusions of law for appellate review." Id. at 928. This Court has reversed decisions where, even though the chancellor may have actually applied the Ferguson factors, the chancellor failed to make specific findings on the record....

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