Payson v. Payson

• Decision Date: 17 September 2001
• Docket Number: No. S01A1117.,S01A1117.
• Citation: 552 S.E.2d 839,274 Ga. 231
• Parties: PAYSON v. PAYSON.
• Court: Georgia Supreme Court

552 S.E.2d 839

274 Ga. 231

PAYSON v. PAYSON.

No. S01A1117.

Supreme Court of Georgia.

September 17, 2001.

David A. Webster, Atlanta, for appellant.

Chambers & Knight, Eugene P. Chambers, III, Steven T. Welch, Atlanta, for appellee.

BENHAM, Justice.

Appellant Judith Fernandez Payson and appellee Stanley Leon Payson were married in September 1991 and separated in April 1999. On September 8, 2000, at the close of a bench trial on their cross-complaints for divorce, the trial court issued an oral ruling in which it granted the divorce, distributed property, and resolved the issues of child custody, support, and visitation. The final judgment and decree of divorce incorporating the trial court's oral pronouncement was filed October 20, 2000. In its equitable division of marital property, the trial court awarded Mrs. Payson a stock account which contained Home Depot stock Mrs. Payson had owned prior to the marriage, Home Depot stock she had received after exercising stock options that had vested prior to the marriage,¹ Home Depot stock that was marital property,² and the appreciation on the entire account. Contesting the trial court's classification of this account as marital property subject to equitable division, Mrs. Payson obtained discretionary review of the trial court's judgment in this Court. In granting review, we stated we were particularly concerned with

[w]hether the trial court erred in classifying Wife's appreciated shares of Home Depot stock as a marital asset for purposes of the equitable division of property. See Bass v. Bass, 264 Ga. 506, 507, (1994); Yates v. Yates, 259 Ga. 131, (1989); Thomas v. Thomas, 259 Ga. 73, 77, 377 S.E.2d 666 (1989); Halpern v. Halpern, 256 Ga. 639, (1987).

1. The equitable division of property is an allocation to the parties of the assets acquired during the marriage, based on the parties' respective equitable interests. Byers v. Caldwell, 273 Ga. 228, 229, 539 S.E.2d 141 (2000). The purpose behind the doctrine of equitable division of marital property is "to assure that property accumulated during the marriage be fairly distributed between the parties." Campbell v. Campbell, 255 Ga. 461, 462, 339 S.E.2d 591 (1986). Only property acquired as a direct result of the labor and investments of the parties during the marriage is subject to equitable division. McArthur v. McArthur, 256 Ga. 762, 353 S.E.2d 486 (1987). A property interest brought to the marriage by one of the marriage partners is a non-marital asset and is not subject to equitable division since it was in no sense generated by the marriage. Campbell v. Campbell, supra, 255 Ga. at 462, 339 S.E.2d 591. See also Moore v. Moore, 249 Ga. 27(2), 287 S.E.2d 185 (1982). It is a question of law for the court whether a particular category of property may legally constitute a marital or non-marital asset, but whether a particular item of property actually is a marital or non-marital asset may be a question of fact for the trier of fact. Franklin v. Franklin, 267 Ga. 82(2), 475 S.E.2d 890 (1996); Janelle v. Janelle, 265 Ga. 116(1), 454 S.E.2d 133 (1995); Bass v. Bass, 264 Ga. 506, 448 S.E.2d 366. The appreciation in value of a non-marital asset during the marriage is a marital asset subject to equitable division if the appreciation is the result of the efforts of either spouse or both spouses, but to the extent the appreciation is only the result of market forces, it is a non-marital asset and therefore not subject to equitable division. Bass v. Bass, 264 Ga. at 508, 448 S.E.2d 366. Whether the appreciation in value of the non-marital asset is due to market forces or to the individual or joint efforts of the spouses is a question of fact. Id.

(a) Mrs. Payson's property interest in the Home Depot stock she brought to the marriage and the Home Depot stock she received after exercising her pre-marital stock options was not marital property subject to equitable division since it was not generated by the marriage or accumulated during the marriage. As a matter of law, non-marital assets are not subject to equitable division, and the trial court erred when it treated the non-marital property as marital property subject to equitable division. Yates v. Yates, 259 Ga. 131, 377 S.E.2d 677 (1989); Thomas v. Thomas, 259 Ga. at 75, 377 S.E.2d 666.

(b) Whether the appreciation in value of Mrs. Payson's Home Depot stock during the marriage is marital property subject to division or is her separate, non-marital property is a question of fact for the trial court which served as the fact-finder in this case. Bass v. Bass, supra, 264 Ga. at 507, 448 S.E.2d 366. In order for the fact-finder to come to the conclusion, reached in the case at bar, that all the appreciation on non-marital property is marital property subject to equitable division, the fact-finder must determine that all the appreciation is attributable to the individual or joint efforts of the spouses and none of the appreciation is due to market forces, since any appreciation found to be attributable to market forces is not a marital asset subject to equitable division. Id. at 508, 448 S.E.2d 366. There is no dispute that some of the appreciation in value of Mrs. Payson's stock was due solely to market forces, making it error to include all the appreciation in value as marital property. See id.

Since the trial court erroneously considered as marital property Mrs. Payson's Home Depot stock, her exercised stock options, and the appreciation in the value of the stock brought about by market forces, we must reverse the trial court's equitable division of property and remand the case to the trial court in order that it might re-consider the allocation of marital property, including a determination of the amount of appreciation in value that is due to market forces and the amount due to the efforts of one or both parties to the marriage.

Mr. Payson suggests that the trial court's error was harmless since Mrs. Payson was awarded the stock. We disagree. Our invalidation of a portion of the factfinder's allocation of marital property "works a change in matter of substance" regarding the allocation of marital property and requires the factfinder to re-examine its equitable division of marital property. Jones v. Jones, 264 Ga. 169, 170, 441 S.E.2d 745 (1994). See also Griggs v. Griggs, 260 Ga. 249(2), 392 S.E.2d 11 (1990), where this Court ruled that if a trial court grants a motion for new trial due to an error in the distribution of property, even if the error is limited to one item of property, the factfinder's allocation of economic resources must be determined de novo. This is so because a party's non-marital property is a factor that may be considered in assessing the equities of the division of marital property. Yates v. Yates, supra, 259 Ga. at 132, 377 S.E.2d 677. Furthermore, in Yates, we rebuffed the argument that the trial court's error in awarding non-marital property to the non-owning spouse was harmless since the trial court could have awarded the non-marital asset to the other spouse as alimony, because to endorse that position would erode the distinctions between marital and non-marital property and between equitable division of property and alimony. Id. We reiterate that position here: marital and non-marital property are afforded different treatment in the division of property upon divorce and it is important that the distinction between the two types of property not be blurred.

2. Following the equitable division of property in paragraphs 10 and 11 of the final judgment and decree of divorce is a separately-numbered paragraph in which the trial court ordered Mrs. Payson to pay Mr. Payson $100,000 within thirty days of the entry of the judgment. The paragraph went on to state that Mr. Payson would be solely responsible for the payment of federal and state income taxes brought about by the 2000 sale of Home Depot stock in Mr. Payson's name. Mrs. Payson contends the $100,000 constitutes an award of alimony to Mr. Payson which must be reversed since Mr. Payson had not sought alimony. Mr. Payson contends the $100,000 is part of the equitable division of marital property and suggests that the award was a court-ordered repayment of marital funds earmarked for payment of taxes that Mrs. Payson had put to her personal use. The trial court's judgment contains no findings of fact, so we are unable to discern the trial court's rationale. In a separate but related enumeration of error, Mrs. Payson contends the trial court erred when it denied her motion which sought the inclusion of findings of fact and conclusions of law in the final judgment pursuant to OCGA § 9-11-52(a). The trial court denied Mrs. Payson's motion because it deemed the motion untimely since the motion had not been made prior to the trial court's oral pronouncement of its ruling. The motion had been filed six days after the trial court's oral pronouncement of its decision and 36 days before the written judgment was entered. We must determine whether the trial court's determination regarding timeliness is error.

A trial court presiding over a bench trial or ruling on an interlocutory injunction in a court of record is statutorily required to make findings of fact and conclusions of law "upon [the] request of any party made prior to such ruling...." OCGA § 9-11-52(a). When the request for findings is made after judgment is entered, a trial court may make the findings. OCGA § 9-11-52(c). The question is whether Mrs. Payson's motion for findings of fact and conclusions of law, filed after the trial court orally announced its decision but before the trial court issued its written judgment, was made "prior to such ruling" so as to require the trial court to make findings of fact. Mr. Payson contends that "ruling" in § 9-11-52(a) refers to the trial court's oral pronouncement of its decision, making Mrs. Payson's request untimely since it was filed six days after the oral...