Pearson v. Pearson, No. 1998-CA-01583-SCT.

Decision Date01 June 2000
Docket NumberNo. 1998-CA-01583-SCT.
Citation761 So.2d 157
PartiesDebra Ann PEARSON v. James Leroy PEARSON.
CourtMississippi Supreme Court

John W. Christopher, Ridgeland, William W. Dreher, Jr., Gulfport, Attorneys for Appellant.

Brehm T. Bell, Bay St. Louis, Andrew M. Jones, Attorneys for Appellee.

EN BANC.

ON MOTION FOR REHEARING

WALLER, Justice, for the Court:

¶ 1. The motion for rehearing is granted. The original opinion is withdrawn, and this opinion is substituted therefor.

STATEMENT OF THE CASE

¶ 2. After filing for divorce, Debra Ann Pearson and James Leroy Pearson consented to a divorce on the ground of irreconcilable differences and agreed for an adjudication by the Chancellor regarding the issues of alimony and division of marital property. The Chancellor, in making an equitable distribution of marital property, ordered Debra to convey to James her title in three parcels of real property and a 1997 Suburban vehicle. The Chancellor awarded Debra $150,000 in lump sum alimony and in settlement of any rights to marital property to which she might have a claim. Debra raises three issues on appeal, and James has cross-appealed as to one issue:

I. Whether the Court committed manifest and reversible error in its finding that there were no marital assets and that all of the assets of the parties were the separate estate of James Pearson and thereupon ordered Debra Ann Pearson to convey unto James Pearson all of her right, title and interest in and to three parcels of real property and to transfer her title to a 1997 Suburban vehicle.
II. Whether the Court committed manifest and reversible error in failing to make an equitable division of marital assets.
III. Whether the Chancery Court's award of lump sum alimony in the sum of $150,000 was manifest error or an abuse of discretion. (Debra claims the amount is grossly inadequate, while James claims it is grossly excessive.)

STATEMENT OF THE FACTS1

¶ 3. Debra and James met in 1989 and lived together approximately six months before they were married on November 21, 1991. There were no children born of the marriage. In the 6½ years that the couple were married, they separated approximately 10 times. James claimed Debra left him each time the couple separated. Debra claimed she left James only four or five times and that she left him as the result of verbal or physical abuse. She could not recall how the other separations occurred. James admitted to having slapped Debra once in April of 1997 after she had punched him during a dispute. He claimed that Debra left him because she would get angry and irrational over trivial matters.

¶ 4. James was 49 years old at the time of trial and is retired from the sea-clamming business. He began clamming at age 13, working as a deck-hand for his father and others until he was 27. He then bought his first boat, using his savings as a down-payment, and went into business for himself. James was very successful in the clamming business and bought and sold several boats. In 1984, James formed a corporation with Warren Alexander known as "Alexander and Pearson," and the two of them purchased a number of large seagoing vessels to clam far offshore in the Atlantic Northeast. Shortly after the formation of the business, and prior to James and Debra's marriage, James was earning annual income of $200,000 to $250,000.

¶ 5. Pursuant to a new law effective in 1990, "Amendment 8 of the Magnusson Act," clam fishermen were awarded licenses known as "allocations" to clam a certain limit of bushels of clams. Allocations were based entirely on the history of a particular vessel in the clamming industry. James, who had enjoyed a long and fruitful career in the clamming business, was awarded, along with his partner, some 25% of the total allocations allowed.

¶ 6. From 1990 to 1993, James's income remained constant. However, in 1993, James and his partner decided to dissolve their corporation in a tax-free equal division of the assets. Pursuant to the dissolution agreement, James received allocations, a boat, and cash and other assets of around $4 million. James formed a corporation, Pearson Boys, Inc., to receive his share of the assets. From 1993 to 1997, James leased the boat and his share of the allocations back to Alexander for $125,000 quarterly, doubling his average annual income.

¶ 7. All of Pearson Boys' assets were acquired prior to James and Debra's marriage with the exception of approximately $354,000 worth of allocations purchased after the marriage but exclusively with Pearson Boys funds.

¶ 8. In January of 1997, James sold all of the assets of Pearson Boys and officially retired from the clamming business. Pearson Boys, of which James continued as sole shareholder, received $4.8 million in proceeds. James, through his company, paid $1.3 million in taxes, paid off all existing mortgages and other debts, built two commercial shrimp boats for his sons, acquired several vehicles, and made other miscellaneous purchases, leaving a balance of $1.8 million, still held in a Pearson Boys' account.

¶ 9. Debra was a bartender when she met James. She quit her job after she married James and has not held any steady employment since then. She claimed that James preferred that she not work, especially during the period of time (approximately a year and a half) that one of James's sons, who is mentally retarded and now lives at a school, lived with them. Debra testified that she looked after the boy while he lived with them. James, however, testified that Debra had little patience with the boy and that James was the primary caregiver, which was why he sent the boy to live at a school for children with special needs.

¶ 10. Debra further testified that she took care of business affairs, such as payroll duties, keeping ledgers, and correspondence with the accountant for Pearson Boys. James, however, claimed that Pearson Boys was a mere holding company and that Debra's responsibilities amounted to nothing more than paying personal bills and helping to collect documents in preparation for filing the annual tax return. This testimony was corroborated by his attorney who testified that he (the attorney) collected all of the allocations and performed any other duties relating to the clamming business.

¶ 11. According to testimony, three parcels of real property were identified as having been purchased during the marriage by James and titled jointly in the names of James and Debra: (1) a house and land in Grand Bay, Alabama; (2) a duplex in Spanish Fort, Alabama; and (3) a modular home in Odessa, Florida. No documentary evidence was offered at trial to prove the ownership of the listed property, but, as the Chancellor concluded, we assume that this property was indeed titled as presented in testimony. Likewise, there was no proof offered as to the value of the property, or whether any of the real property was claimed as homestead. There were also two vehicles, a 1997 Suburban and a 1997 Expedition, titled in her name. James drove the Suburban, and Debra drove the Expedition. All of these listed assets were purchased by Pearson Boys.

¶ 12. Debra took large sums of money from James on three occasions when she left him. Once she took $20,000 in cash and charged an additional $16,000 to his credit card. On another occasion, she took $19,000 in cash. On their final separation, Debra took $30,000 from the Pearson Boys account and $7,000 from the joint checking account. She also kept her 1997 Expedition, valued at $32,000, and other personalty.

¶ 13. The Chancellor found that there were no marital assets as Debra did not contribute financially to the marriage, and all of the couple's assets were derived from James's career in the clamming business. However, looking at this Court's precedents regarding commingled assets, or the income derived from non-marital assets, the Chancellor looked to the factors of equitable distributions. See Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss.1994)

. The Chancellor decided that Debra was not entitled to any of the assets except for the money and the vehicle she had taken, which James testified he wanted her to have. Therefore, the Chancellor ordered that Debra convey her title and interest to the three parcels of real property and the 1997 Suburban to James. Finding, however, that Debra should take something from the marriage for her "wifely, housekeeping, as well as what little business help, she provided during the marriage," the Chancellor awarded her lump sum alimony in the amount of $150,000, which the Chancellor further concluded would compensate Debra for any claims she might have to her husband's separate estate, in addition to the $24,000 that James was required to pay in temporary support.

STANDARD OF REVIEW

¶ 14. "Our scope of review in domestic relations matters is limited by our familiar substantial evidence/manifest error rule." Magee v. Magee, 661 So.2d 1117, 1122 (Miss.1995). An appellate court may reverse a chancellor's finding of fact only when there is not "substantial, credible evidence" justifying his finding. Williams v. Rembert, 654 So.2d 26, 28 (Miss.1995) (quoting Snow Lake Shores Property Owners Corp. v. Smith, 610 So.2d 357, 360 (Miss.1992)). "Our scope of review in domestic relations matters is limited under the familiar rule that this Court will not disturb a chancellor's findings unless manifestly wrong, clearly erroneous, or if the chancellor applied an erroneous legal standard." Johnson v. Johnson, 650 So.2d 1281, 1285 (Miss.1994) (citing McEwen v. McEwen, 631 So.2d 821, 823 (Miss. 1994)).

DISCUSSION

I. Whether the Court committed manifest and reversible error in its finding that there were no marital assets and that all of the assets of the parties were the separate estate of James Pearson and thereupon ordered Debra Ann Pearson to convey unto James Pearson all of her right, title and interest in and to three parcels of real property and to transfer her title to a 1997 Suburban...

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    • United States
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    ... ... See Pearson v. Pearson, 761 So.2d 157, 166 ( 27) (Miss.2000) (finding that there was no reason that a ... ...
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    ...of attorney's fees is inappropriate. Sarver v. Sarver, 687 So.2d 749, 755 (Miss.1997), overruled on other grounds by Pearson v. Pearson, 761 So.2d 157 (Miss.2000); see also Bell, at § 12.01[6] [b] (explaining that the chancellor should consider the parties' financial disparity). ¶ 25. In ad......
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