Rhodus v. Mckinley

• Decision Date: 08 February 2000
• Citation: 16 S.W.3d 615
• Parties: (Mo.App. W.D. 2000) David K. Rhodus, Respondent, v. Leslie R. McKinley, Appellant. WD57133 and WD57289 0
• Court: Missouri Court of Appeals

16 S.W.3d 615 (Mo.App. W.D. 2000)

David K. Rhodus, Respondent, v. Leslie R. McKinley, Appellant.

WD57133 and WD57289

Missouri Court of Appeals Western District

02/08/2000

Appeal From: Circuit Court of Clay County, Hon. James E. Welsh

Counsel for Appellant: Richard Koury, II

Counsel for Respondent: David Holdsworth

Opinion Summary: David K. Rhodus and Leslie R. McKinley cross-appeal the circuit court's judgment dividing property and awarding attorney fees pursuant to their divorce.

AFFIRMED IN PART; REVERSED AND REMANDED IN PART WITH INSTRUCTIONS.

Division holds:

The circuit court did not err in awarding McKinley her share of money Rhodus used to pay off a loan for his separate property. The circuit court did not abuse its discretion by awarding McKinley the proceeds from two cows, as calves born during the marriage to cattle owned as separate property, and their proceeds, are marital property. The circuit court did err in overstating the number of cows in McKinley's herd at the time of trial because the weight of the evidence contradicted the court's finding; the cause is remanded with instructions to reduce the value. The circuit court did not err in valuing and distributing McKinley's bonus plans.

Rhodus' request for attorney fees was timely. The circuit court did not abuse its broad discretion to award attorney fees. McKinley did not produce evidence to prove the existence or amount of undistributed marital property.

Paul M. Spinden, Judge

AFFIRMED IN PART AND REVERSED AND REMANDED IN PART WITH INSTRUCTIONS.

David K. Rhodus appeals the circuit court's judgment dividing marital property in its decree dissolving his marriage to Leslie R. McKinley. McKinley cross-appeals the circuit court's valuation of bank accounts and the award of attorney fees to Rhodus. We affirm the circuit court's judgment in part and reverse in part.

On September 22, 1995, Commissioner Michael W. Walker issued a recommended judgment to the circuit court. Rhodus filed a motion for rehearing in circuit court. On February 14, 1996, Commissioner Walker "reopened" the case to reconsider division of the couple's property and Rhodus' request for attorney fees. On December 30, 1996, Commissioner Walker entered a recommended order awarding four items of property to McKinley and awarding $3100 and attorney fees of $20,506.78 to Rhodus. The circuit court issued judgments in which it adopted and confirmed Commissioner Walker's decisions of September 22, 1995, and of December 30, 1996. Rhodus and McKinley file cross-appeals.¹

Although we are doubtful that a family court commissioner has authority to "reopen" a case to grant rehearing once the circuit court has adopted and confirmed the commissioner's findings and recommendations, we do not address the issue in this case. The circuit court, which did have authority to grant rehearing, adopted Commissioner Walker's second decision after the rehearing as its own when the circuit court still had jurisdiction.

In reviewing the circuit court's judgment, we recognize that the circuit court has broad discretion in dividing marital property. We will disturb the circuit court's decisions in dividing marital property only when they are so "heavily and unduly weighted in favor of one party as to amount to an abuse of discretion." Allen v. Allen, 961 S.W.2d 891, 893 (Mo. App. 1998) (quoting Dodson v. Dodson, 904 S.W.2d 3, 6 (Mo. App. 1995)). The circuit court's obligation is to divide the marital property fairly according to the factors enumerated in section 452.330.1.² Carter v. Carter, 940 S.W.2d 12, 16 (Mo. App. 1997).

Rhodus first disputes the circuit court's decision that his using $53,500 from the sale of calves to "pay down" a debt of a cattle and grain business created "a $53,500 marital interest in [Rhodus'] cattle business." Rhodus does not contest that he used the proceeds from the 1995 sale of calves to discharge $53,500 of the business' debt or that the calves sold were marital property. Central to his complaint is that he did not realize a profit from the gross sale proceeds, so, he argues, "the award of the 'pay down' in the amount of $53,500 to [Rhodus] as marital property was an error which actually penalizes [Rhodus] for operating his business." His point is without merit.

Section 452.330.2 defines marital property as "all property acquired by either spouse subsequent to the marriage." Calves born to cattle owned as separate property by a husband or wife should be deemed to be property acquired subsequent to marriage. Elder v. Elder, 824 S.W.2d 520, 521 (Mo. App. 1992); In re Marriage of Williams, 639 S.W.2d 236, 237 (Mo. App. 1982). Because the calves were produced and sold after Rhodus' marriage to McKinley, the circuit court correctly deemed them to be marital property.

That the business was not profitable is of no consequence. Rhodus used money that he held jointly with McKinley to pay a business debt. To the extent that the business remained his separate property, as Rhodus maintains, his using jointly-held money to pay a business debt, in effect, gave McKinley an interest in the business.

Rhodus asserts that the circuit court treated the business as marital property. We disagree. By applying all of the calf sale's proceeds to pay his business debt, Rhodus used marital property to pay a nonmarital debt. If property acquired before marriage is subject to a loan, "the property becomes marital property to the extent marital funds are used to pay off the loan." Mika v. Mika, 728 S.W.2d 280, 282 (Mo. App. 1987).³ The circuit court found that Rhodus created a marital interest in his business to the extent that he used marital funds to increase the value of his separate property. The payment erased $53,500 of his business debt and increased his business' value by the same amount. The circuit court did not err by including the payment in his share of marital property and in ordering him to execute a promissory note to McKinley for her share of the $53,500.

Rhodus complains in his next point that the circuit court included in the couple's marital property the proceeds from two cows belonging to McKinley because he used the proceeds to cover the costs of rearing McKinley's calves. For the same reason as the previous point--that calves born to cows separately owned by a spouse after marriage should be deemed marital property--we find no merit in his contention.

Rhodus next contends that the circuit court erred in designating "[McKinley's] herd" (the cows that had not been sold before the trial) as containing 19 cows, nine heifers, seven steers, and 16 calves. Rhodus maintains that he sold the nine heifers and seven steers at the Mo-Kan sale barn; therefore, the decree already accounted for them as a separate item. In December 1994, James Hertzog appraised the cattle before the sale and the cattle remaining at Rhodus' farm and testified:

[COMMISSIONER WALKER]: Now, first of all, in your appraisal, which is [E]xhibit 21, you list 19 four to five year old cows, 9 heifers, and 7 steers.

JAMES HERTZOG: Uh huh.

Q: And you were asked the question, ["H]ow many of those were sold on [E]xhibit 7,["] and you said[, "A]ll of them.["]

I thought the sale on [E]xhibit 7 [was] calves out of those 19 four to five year old cows.

A: No, I[--]well, maybe I didn't make myself clear; all the calves were sold.

Q: All right.

A: And two cows.

Q: These that were sold on [E]xhibit 7 are calves out of these 19 cows? A: Correct[, a]nd they're itemized out down there with 9 heifers and 7 steers.

Along with other evidence, this evidence supported Rhodus' claim that the calves sold at Mo-Kan sale barn in December 1995 were the nine heifers and seven steers to which Hertzog referred in the appraisal. They did not remain in McKinley's herd of cattle at trial, nor did the two cows also sold at the sale barn. Rhodus stipulated to the existence of 17 of McKinley's cows on his property at the time of trial, and that confirms that the circuit court overstated the number of livestock remaining in McKinley's herd. The decree, in effect, credited these calves twice in Rhodus' share of marital property. The circuit court's judgment as to the value of McKinley's remaining herd of cattle was against the weight of the evidence, so we reverse it.

Hertzog estimated that the remaining 17 cows' value with their calves was $700 a pair. We remand this case to the circuit court with instruction that it reduce the value of "[McKinley's] herd" from $20,895 to $11,900, and that it reduce Rhodus' promissory note to McKinley by $8995 to $33,205.

Rhodus' next point is that the circuit court erred in not determining the value of McKinley's "gain-sharing plan and production incentive plan," which the circuit court awarded to McKinley. This point has no merit because Commissioner Walker's recommended judgment of December 30, 1996, assigned a value of $8716.73 to the production incentive plan and $15,492.20 to the gain-sharing plan.

We assume that Rhodus objects to the valuations because Commissioner Walker set the values based on evidence of the bonuses' worth on dates other than the date of trial. "Because of the untold number of 'pension plans' which appear to have their own singular and unique requirements for meeting 'vesting' and 'maturing' provisions, it is imperative that trial courts be authorized to apply a flexible approach to accommodate the particular facts of each case." Kuchta v. Kuchta, 636 S.W.2d 663, 665 (Mo. banc 1982). The two bonus plans in question share...