Sabatino v. Sabatino

• Decision Date: 13 July 2010
• Docket Number: No. WD 70441.,WD 70441.
• Citation: 314 S.W.3d 854
• Parties: Kathryn Lynn SABATINO, Respondent, v. Victor Robert SABATINO, Appellant.
• Court: Missouri Court of Appeals

314 S.W.3d 854

Kathryn Lynn SABATINO, Respondent, v. Victor Robert SABATINO, Appellant.

No. WD 70441.

Missouri Court of Appeals, Western District.

July 13, 2010.

COPYRIGHT MATERIAL OMITTED

Ryan J. McMillin, Kansas City, MO, for appellant.

James D. Boggs, Kansas City, MO, for respondent.

Before LISA WHITE HARDWICK, P.J., JAMES M. SMART, JR., and MARK D. PFEIFFER, JJ.

JAMES M. SMART, JR., Judge.

Victor Sabatino appeals the trial court's judgment in favor of Kathryn Sabatino on her petition for the dissolution of their marriage. He contends that the trial court erred in allocating marital debt and in assessing maintenance. The judgment is affirmed as modified.

Background

Victor Sabatino (Husband) and Kathryn Sabatino (Wife) were married in 1984. In August 2007, Wife filed a petition for dissolution of the marriage. She asked for maintenance, an equitable distribution of the marital property, and payment of her attorneys' fees. Husband filed a counter-petition and also asked for an equitable distribution of property. The couple's three children were emancipated.

The evidence at trial showed that Husband had owned a snack-food business during the first sixteen years of the marriage. During that time, the couple had a substantial income and accumulated considerable assets, including a million-dollar home. Except for a few months, Wife did not work outside the home. She testified that she and Husband had agreed that she would stay at home to raise the children.

In 2000, Husband's business failed. Thereafter, despite having significant debts, Husband remained unemployed. He was still unemployed at the time of trial, eight years later. Husband tried to start other businesses but was unsuccessful in doing so. These failed business attempts resulted in even more debt, amounting to almost $2 million by the time of trial. Eventually, the couple began selling their assets as a means of income.

In May 2007, after twenty-three years of marriage, the couple separated. Wife claimed that Husband's gambling and use of pornography, as well as the financial difficulties, had put a strain on the marriage. By the time of trial, neither Husband nor Wife was employed. The marital home had been lost to foreclosure, and both parties appeared to be living primarily off the charity of family and friends. The parties' respective statements of assets and debts confirmed that they had minimal assets and considerable debt. Wife's income and expense statement showed no income and $4,500 in monthly expenses. Husband reported no income and $4,000 in monthly expenses.

Wife testified that Husband had provided no support during the separation. She had been unable to find employment and was relying on her children and fellow church members for support. Her net worth consisted primarily of the clothes in her closet, she said. Wife requested maintenance of $1,500 per month and claimed that Husband was able to pay it. She introduced copies of Husband's bank statements from January 2007 through April 2008, which showed almost $43,000 in deposits. Wife testified that Husband never wanted to work for anyone else and, so, never tried to find a job doing so. She said she had supported Husband's attempts to open his own business and acknowledged that she had signed loans for those businesses. Wife stated that Husband had offered to be responsible for all of the couple's debt.

Husband, who previously had earned as much as $220,000 a year, testified that he had been unemployed since the demise of his snack-food business in 2000. He had been unsuccessful in finding employment in his field, he said, because those opportunities were limited. Husband also discussed various business ventures he had attempted. Since the foreclosure of the couple's home, Husband had been living with a friend. He explained that the deposits to his bank account came, in part, from the sale of an $8,000 piano. Husband also said he had allowed his friend, who was unable to open a bank account in his own name, to use his bank account for deposits and withdrawals.

The court dissolved the marriage. The court awarded Wife personal property valued at about $5,000 and awarded Husband personal property worth $22,950. The court ordered Husband to be responsible for all the marital debt of $1,735,000; for $290,000 in debts related to his new business ventures; and for all debts to his friends and family. The court found that Wife lacked sufficient property to provide for her reasonable needs and was unable to support herself through appropriate employment. The court found that Husband was currently unemployed but was capable of earning at least $40,000 per year. The court ordered him to pay Wife $1,500 per month in periodic, modifiable maintenance. The court also ordered that Wife be awarded a judgment of non-modifiable maintenance for the total amount of the debt on which both were liable, $1,735,000. The court ordered Husband to pay Wife's legal fees of $6,000.

Husband appeals.

Standard of Review

We will affirm the trial court's judgment unless it is unsupported by substantial evidence, is against the weight of the evidence, or erroneously declares or misapplies the law. In re Marriage of Taylor, 244 S.W.3d 804, 808 (Mo.App. 2008). "The party challenging the dissolution decree has the burden of demonstrating error." Id. We review the evidence in the light most favorable to the trial court's judgment. Id. "A trial court is free to believe or disbelieve all, part, or none of the testimony of any witness." Id. "We review the trial court's division of property, grant of maintenance, and award of attorney's fees for an abuse of discretion; thus, we will not disturb the trial court's decision unless it has abused that discretion." Schuh v. Schuh, 271 S.W.3d 35, 37 (Mo.App.2008).

Allocation of Marital Debt

Husband claims that the trial court's judgment ordering him to pay all the marital debts is against the weight of the evidence and a misapplication of the law.

The division of marital property is governed by section 452.330.1, RSMo.¹ "Marital debts are to be considered when establishing a fair distribution of the marital property." Jamison v. Jamison, 828 S.W.2d 377, 379 (Mo.App.1992). Section 452.330.1 provides that the court "shall divide the marital property and marital debts in such proportions as the court deems just after considering all relevant factors." The division need not be equal, but it must be fair and equitable under the circumstances of the case. Fisher v. Fisher, 278 S.W.3d 732, 736 (Mo.App.2009). The relevant factors here are: (1) the economic situation of each spouse when the property is divided; (2) each spouse's contribution to the acquisition of marital property, including Wife's contribution as a homemaker; (3) the value of non-marital property awarded to each spouse; and (4) the parties' conduct during the marriage. See section 452.330.1.² The trial court's division of marital property is presumed correct, and the party challenging the division has the burden of overcoming that presumption. Holmes v. Holmes, 878 S.W.2d 906, 912 (Mo.App.1994).

Here, the trial court found that the parties had $1,735,000 in marital debts. This included $450,000 in state and federal taxes, and the rest was apparently related to Husband's failed business. The court also found that Husband has incurred additional indebtedness of $90,000 and $200,000 related to attempted business start-ups; $10,000 in various bills; and $95,000 to friends and family. The court found that Wife had no debt. The court allocated all of the debt to Husband.

Husband contends that this allocation of debt was against the weight of the evidence. He says the evidence shows that the debts were jointly incurred during the marriage, that he had been unemployed for eight years and was unemployed at the time of trial, and that the parties had minimal assets to justify such an award.

Wife says the judgment was not in error because the evidence showed that she had no financial ability to pay the debts. She also says that the debt from unpaid taxes and Husband's business liabilities contributed to the "destruction of the marital estate" and that his failure to seek employment for eight years constituted "misconduct." There was evidence from which the court could have reached that conclusion.

At the time of trial, it appeared that neither party had the financial ability to pay the debts. However, the court imputed $40,000 worth of income to Husband. Thus, the court obviously concluded that he possessed at least some ability to pay the debts, while Wife had none. The court could note the $43,000 deposited into Husband's bank account, in a period of about fifteen months. The court did not have to believe that some of those deposits belonged to another person. The value of the assets awarded to each spouse here is dwarfed by the enormous debt. Also, as noted, there was evidence that Husband had told Wife he would be responsible for all the debt. On cross-examination, Husband's counsel asked Wife:

Q. Okay. Has Mr. Sabatino—There's obviously an amount of substantial debt here, correct?

A. That's correct.

Q. Okay. And Mr. Sabatino has offered to take that debt; is that correct?

A. That's correct.

Husband now says making him responsible for all the marital debt is unfair and inequitable and violates section 452.330.1. See Fisher, 278 S.W.3d at 735-36. As this court has explained, however, such a division of marital debt is "certainly within the court's authority." Al-Yusuf v. Al-Yusuf, 969 S.W.2d 778, 786 (Mo.App. 1998) (trial court had authority to allocate all marital debt to husband and order him to pay it to wife or directly to creditors). A trial court may assign one spouse the primary duty to pay off the debt and hold the other spouse harmless on it. Wright v. Wright, 1 S.W.3d 52, 60 (Mo.App.1999).

"The trial court is vested with broad discretion in determining how and in what manner marital debts...