Serio v. Serio, 2015-CA-00570-COA

• Decision Date: 18 October 2016
• Docket Number: NO. 2015-CA-00570-COA,2015-CA-00570-COA
• Citation: 203 So.3d 24
• Parties: Jose Hoss Serio, Appellant v. Melissa Serio, Appellee
• Court: Mississippi Court of Appeals

203 So.3d 24

Jose Hoss Serio, Appellant

v.Melissa Serio, Appellee

NO. 2015-CA-00570-COA

Court of Appeals of Mississippi.

October 18, 2016

ATTORNEYS FOR APPELLANT: R. KENT HUDSON, WILLIAM ABRAM ORLANSKY, SUSAN LATHAM STEFFEY

ATTORNEY FOR APPELLEE: DAVID BRIDGES

BEFORE IRVING, P.J., BARNES AND GREENLEE, JJ.

IRVING, P.J., FOR THE COURT:

¶ 1. On January 13, 2015, the Chancery Court of Adams County granted Jose Serio and Melissa Serio a divorce on the ground of irreconcilable differences and, after dividing the marital estate, awarded permanent alimony to Melissa. Feeling aggrieved, Jose appeals and asserts that the chancery court manifestly erred in (1) computing Jose's taxable income, (2) awarding Melissa permanent alimony, (3) classifying a bank account as nonmarital property, and (4) not classifying a tax liability as marital debt and requiring Melissa to bear a portion of the responsibility for its payment.

¶ 2. We find error in the chancery court's classification of the bank account as Melissa's separate property. Therefore, we reverse the judgment of the chancery court and remand for further proceedings.

FACTS

¶ 3. Jose and Melissa were married on August 18, 1995, in Baton Rouge, Louisiana.¹ They have two children together: Carmen Elise Serio, born February 23,1999, and Carrie Maria Serio, born September 5, 2001. During the first two years of their marriage, Jose and Melissa lived in Baton Rouge, where Jose worked at a rehabilitation hospital, and Melissa completed her licensed practical nurse (LPN) studies. In 1997, they moved to Natchez, Mississippi, where Jose worked nights and weekends while obtaining a master's degree and training to become a nurse practitioner. Jose became a licensed nurse practitioner in May 2001.

¶ 4. The couple separated in February 2013. On September 13, 2013, Melissa filed a complaint for divorce on the grounds of uncondoned adultery, habitual cruel and inhuman treatment, or, in the alternative, irreconcilable differences. Jose answered Melissa's complaint for divorce and filed a counterclaim for divorce on the grounds of adultery or, in the alternative, irreconcilable differences. In her response to Jose's counterclaim, Melissa denied that she had committed adultery but admitted that Jose was entitled to a divorce on the ground of irreconcilable differences.

¶ 5. On August 26, 2014, the parties entered a consent to divorce on the ground of irreconcilable differences. At that time, the parties also agreed for the chancery court to decide (1) all issues regarding the custody, care, visitation, and financial matters surrounding the minor children, (2) the equitable distribution of the parties' marital estate, and (3) the entitlement of either party to attorney's fees, alimony, and the amount thereof. During a three-day trial, occurring October 13-15, 2014, both Melissa and Jose testified.² The only other testimony came from Jose's expert witness and certified public accountant Sim Mosby. On November 17, 2014, the chancellor issued his letter opinion, which was later incorporated into the final judgment. In the final judgment, the chancellor awarded Melissa permanent alimony in the amount of $6,400 per month. The chancellor also classified Melissa's United Mississippi Bank account (UMB account) as her separate property and awarded the account to her. Additionally, the chancellor assigned responsibility to Jose for all taxes, penalties, and interest owed on Jose's 2013 tax return. Both parties filed post-judgment motions to alter and amend the judgment, which were denied. Jose has appealed.

DISCUSSION

¶ 6. "Our scope of review in domestic relations matters is limited. [Appellate courts] will not disturb the findings of a chancellor unless the chancellor was manifestly wrong, clearly erroneous or an erroneous legal standard was applied." Ferguson v. Ferguson, 639 So.2d 921, 930 (Miss. 1994) (internal citation and quotation marks omitted). However, "[appellate courts] review[ ] questions of law de novo. And, after review, if warranted, [appellate courts] will reverse the lower court because of an erroneous interpretation or application of the law." Brooks v. Brooks, 652 So.2d 1113, 1117 (Miss. 1995).

I. Jose's Income

¶ 7. Testimony revealed that Jose's income was derived from various sources. He had worked for Internal Medicine Associates (Internal Medicine) since 2003. In addition, he is a part-owner of two after-hours medical clinics, Natchez After-Hours Clinic (Natchez Clinic) and Oxford After-Hours Clinic (Oxford Clinic). He received income from these clinics, both as a moonlighting practical nurse and as a part owner. Jose testified that he has the following sources of income: (1) $6,000 per month in pre-tax salary from Internal Medicine; (2) an annual bonus from Internal Medicine, which equals eighteen percent of every dollar over $200,000 he collects for the fiscal year; (3) distribution checks from the Natchez Clinic, in which he owns a twenty-one and one-fourth percent stake; (4) income from moonlighting at the Natchez Clinic; and (5) distribution checks from the Oxford Clinic, in which he owns a twenty-two and one-half percent stake. Aside from a small amount that is distributed for the purposes of paying taxes, the distribution checks that Jose receives from the Oxford Clinic are currently being reinvested in the business to pay off the clinic's debt. In 2013, Jose received $10,000 from the Oxford Clinic to be utilized for taxes. The chancellor determined that "Jose's gross income [had] remained steady from 2012-14: between $22,036-[$]24,955 per month, on average" and that "Jose's after-tax income [had] likewise been reasonably steady during [that] time period and [at the time of trial was] approximately $15,700 per month plus the non-distributed income from [the Oxford Clinic]." During discussion of the alimony award, we will discuss in more detail the testimony, calculations, and projections involved in arriving at Jose's income, which forms the basis for the chancellor's award of alimony to Melissa.

II. Alimony Award

¶ 8. Jose argues that the chancellor's alimony award to Melissa, both in terms of the monthly amount and its permanent nature, constitutes manifest error. More specifically, Jose contends that Melissa should be receiving less than $6,400 per month and that the alimony, if any, should be rehabilitative instead of permanent. Jose asserts that the amount awarded for alimony was based on an erroneous factual finding as to his after-tax income and an improper application of the law to the evidence presented at trial.

¶ 9. In awarding alimony to Melissa, the chancellor followed the factors set forth in Armstrong v. Armstrong, 618 So.2d 1278, 1280 (Miss. 1993). The court found that Melissa had a gross monthly income of $3,503 and monthly net income of $2,853. The chancellor found that Jose's monthly net income was $15,700, not including his Oxford Clinic distributions.³ As stated, the chancellor found that Jose's gross income, ranging from between $22,036 to $24,955 per month, had remained steady from 2012 to 2014, and that his after-tax income had been "reasonably steady during that time period" at $15,700 per month—without adding the non-distributed income from the Oxford Clinic.

¶ 10. "Mississippi precedent establishes that the chancellor's award of alimony ‘is a matter primarily within the discretion of the chancery court because of its peculiar opportunity to sense the equities of the situation before it.’ " Flechas v. Flechas, 724 So.2d 948, 953 (¶ 14) (Miss. Ct. App. 1998) (quoting Tilley v. Tilley , 610 So.2d 348, 351 (Miss. 1992) ). A chancellor's award of alimony "will not be disturbed on appeal unless it is found to be against the overwhelming weight of the evidence or manifestly in error." Tilley, 610 So.2d at 351. "Under the standard of review utilized to review a chancery court's findings of fact, particularly in the areas of divorce, alimony and child support, [appellate courts] will not overturn the court on appeal unless its findings were manifestly wrong." Id. (internal citations omitted). Alimony should be considered when "an equitable division of marital property, considered with each party's nonmarital assets, leaves a deficit for one party." Johnson v. Johnson, 650 So.2d 1281, 1287 (Miss. 1994).

¶ 11. After analyzing the parties' living expenses, the chancellor found that Melissa's personal living expenses, excluding children's expenses, would equal $8,379.30. In addition, the chancellor determined that Jose would still have $2,690 available to him each month after paying all his obligations and expenses. The chancellor stated: "This award of alimony [in the amount of $6,400 per month] will not equalize the parties' income. Jose will still have significantly more after-tax income available to him than Melissa."

¶ 12. Jose argues that the amount of $6,400 monthly should be reversed because the chancellor erroneously based the award amount on Jose having an after-tax income of $15,700. Jose contends that the chancellor should have used his income at the time of trial, which was his prorated 2014 income, instead of his income from 2013, which was ten months earlier. He argues that his 2014 post-tax income was significantly lower than the $15,700-per-month figure on which the chancellor based his award. He also asserts that, even using Melissa's projected 2014 amounts—yielding a tax liability of $74,964.15, an annual income of $153,794.32, and a monthly income average of $12,816.19—would still place his financials roughly $3,000 less than the amount that the chancellor used to calculate his alimony obligation and would leave him with a $310 monthly deficit. Additionally, Jose notes that the chancellor's calculation does not include Jose's tax debt of approximately $76,000 for the tax year 2013. He further argues that the chancellor should have based his findings on Mosby's projections in arriving at a determination about Jose's future earnings because it is...