Shorb v. Shorb
Decision Date | 19 March 2007 |
Docket Number | No. 4218.,4218. |
Citation | 643 S.E.2d 124 |
Court | South Carolina Court of Appeals |
Parties | Andrea S. SHORB, Appellant, v. Patrick SHORB, Respondent. |
H. Michael Spivey, of Greenville, for Appellant.
Andrew G. Goodson, of Fountain Inn, for Respondent.
The family court ordered Patrick Shorb (Husband) to transfer certain stock options, which were unmatured and nonvested on the date of filing, to Andrea Shorb (Wife).1 It further ordered Husband to pay Wife a portion of the proceeds from options Husband exercised and sold before the date of filing. Husband appeals the family court's decision, claiming Wife was not entitled to the full award because only some of the options were marital property. We affirm in part and reverse in part.
Husband and Wife married on May 10, 1996. They had no children during their seven-year marriage. On the date of divorce, Husband was in a managerial position at Wal-Mart, and Wife worked as a private court reporter. Wife filed for divorce on October 27, 2003, citing Husband's adultery as the ground for divorce.
The court held a final hearing on November 30, 2004 and approved the parties' settlement agreement on December 15, 2004. Among other assets, the settlement agreement entitled Wife to fifty-five percent of Husband's Wal-Mart stock options. The parties agreed the family court would retain jurisdiction to determine what portion of the stock options was marital property. Both parties submitted briefs and affidavits supporting their positions.
On April 15, 2005, the family court entered a supplemental order relating to the stock options. It found that all stock options acquired during marriage, but prior to the filing of divorce, were compensation for Husband's employment at Wal-Mart and constituted marital property.
The court also correctly noted the stock options' vesting dates did not affect whether they were marital property; rather, the vesting dates affected the value of those options. In valuing the options Husband sold in July 2003, the family court held that pursuant to the agreement Wife was entitled to fifty-five percent of the net value of the stock options on the date of sale. The family court ordered Husband to transfer $24,099.17 to Wife within thirty days of the order.
The family court also determined Wife was entitled to fifty-five percent of all stock options held on the date of the final hearing, even though only a certain percentage of those options had fully vested.2 The family court ordered Husband to transfer 1,096 of the total 2,001 stock options to Wife within thirty days of the order. This appeal follows.
The apportionment of marital property is within the discretion of the family court and will not be disturbed on appeal absent an abuse of discretion. Wooten v. Wooten, 364 S.C. 532, 542, 615 S.E.2d 98, 103 (2005). In appeals from the family court, this Court may find facts in accordance with its own view of the preponderance of the evidence. Hatfield v. Hatfield, 327 S.C. 360, 363, 489 S.E.2d 212, 215 (Ct.App.1997). This broad scope of review does not require us to disregard the family court's findings. Bowers v. Bowers, 349 S.C. 85, 91, 561 S.E.2d 610, 613 (Ct.App.2002). Nor are we required to disregard the findings below or ignore the better vantage point the family court occupies in determining witness credibility. Cherry v. Thomasson, 276 S.C. 524, 525, 280 S.E.2d 541, 541 (1981). The burden is upon the appellant to convince this Court that the family court erred in its findings of fact. Dubose v. Dubose, 259 S.C. 418, 423, 192 S.E.2d 329, 331 (1972).
Husband first contends the nonvested stock options are non-marital property, which are not subject to equitable distribution.3 Further, Husband avers that he exercised certain vested stock options prior to the date of filing, which the family court erroneously included as part of the marital estate. Based on these assertions, Husband argues Wife was entitled only to the portion of currently held options that vested and were in existence on the date of filing. While we reject the first argument, we accept the latter.
Pursuant to Section 20-7-473 of the South Carolina Code (Supp.2006), marital property is "all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation . . . ." Section 20-7-473 also includes several exceptions to marital property; however, none of these exceptions explicitly mention vested or nonvested stock options.
We have yet to address in South Carolina whether employee stock options are marital property, subject to equitable distribution. In resolving this issue, we first look to how this State has characterized pension benefits, which are similar to stock options.4
Like stock options, the Code does not specifically define pension benefits as marital property, but this Court has consistently held that both vested and nonvested retirement benefits are marital property if the benefits are acquired during the marriage and before the date of filing. See generally Hickum v. Hickum, 320 S.C. 97, 99, 463 S.E.2d 321, 322 (Ct.App.1995) ; Hardwick v. Hardwick, 303 S.C. 256, 259-60, 399 S.E.2d 791, 793 (Ct. App.1990) ( ); Kneece v. Kneece, 296 S.C. 28, 33, 370 S.E.2d 288, 291 (Ct.App.1988) ( ); see also Ball v. Ball, 312 S.C. 31, 34-35, 430 S.E.2d 533, 534-35 (Ct.App.1993) ( ).
Moreover, vested pension benefits are a "joint investment of both parties" and "constitute an earned property right which, if accrued during the marriage, [are] subject to equitable distribution." Tiffault v. Tiffault, 303 S.C. 391, 392-93, 401 S.E.2d 157, 158 (1991); see also Hardwick, 303 S.C. at 260, 399 S.E.2d at 793 ( ). Even if the vested benefits have yet to mature, they are properly includable in the marital estate. See Kneece, 296 S.C. at 33, 370 S.E.2d at 291.
We find stock options to be comparable to pension benefits in that they are also employment benefits. Like pension benefits, the determinative factor for equitable distribution purposes is not when the options mature, but when the options are earned. See MacAleer v. MacAleer, 725 A.2d 829, 833 (Pa.Super.Ct.2001) (). Employers may grant options for a variety of reasons, which must be considered in deciding when the option is earned. Most jurisdictions determine the nature of stock options by whether the options are compensation for past services or are an incentive for future services. See, e.g., Hopfer v. Hopfer, 757 A.2d 673, 677 (Conn.App.Ct.2001) ( ); MacAleer, 725 A.2d at 835 ( ); In re Balanson, 25 P.3d 28, 32 (Colo. 2001) ( ).
In considering other jurisdictions' approaches, we believe the approach most consistent with this State's equitable apportionment scheme and with the purpose of stock options is to classify both vested and nonvested stock options as being earned when granted, and if granted during the parties' marriage, the options are marital property. See Bowman v. Bowman, 357 S.C. 146, 158, 591 S.E.2d 654, 660 (Ct.App.2004) (). One can argue that stock options serve a hybrid purpose in that they compensate an employee for past labor but also serve as an incentive to remain with the employer. Despite these competing functions, we believe the overriding purpose is to create a form of deferred compensation, which is exercisable at a determinate date in the future.
In our view, this approach parallels our position on pension benefits and is in accord with several other jurisdictions that have considered this same issue. These jurisdictions treat stock options as marital property regardless of when the right to exercise the options matures as long as the options are granted as compensation for services rendered during the parties' marriage. See Fountain, 559 S.E.2d at 32 ( ); Jensen v. Jensen, 824 So.2d 315, 319 (Fla.Dist.Ct.App.2002) ( ); Fisher v. Fisher, 564 Pa. 586, 769 A.2d 1165, 1168 (2001) (...
To continue reading
Request your trial-
Bojilov v. Bojilov
...For the family court to properly include property within the marital estate, two factors must coincide. Shorb v. Shorb , 372 S.C. 623, 632, 643 S.E.2d 124, 129 (Ct. App. 2007) ; see also S.C. Code Ann. § 20-3-630(A) (2014). "First, the property must be acquired during the marriage" and "[s]......
-
Thornton v. Thornton
...during the marriage." Mullarkey v. Mullarkey , 397 S.C. 182, 189, 723 S.E.2d 249, 253 (Ct. App. 2012) ; Shorb v. Shorb , 372 S.C. 623, 629, 643 S.E.2d 124, 127 (Ct. App. 2007) ("[T]his [c]ourt has consistently held that both vested and nonvested retirement benefits are marital property if t......
-
Reed v. Pieper
...court that the family court did not consider L.R.'s welfare and best interests in its custody decision. See Shorb v. Shorb, 372 S.C. 623, 628, 643 S.E.2d 124, 127 (Ct.App.2007) (“The burden is upon the appellant to convince this court that the family court erred in its findings of fact.”). ......
-
Divine v. Robbins
... ... See Shorb v. Shorb, 372 S.C. 623, 628, ... 683 S.E.2d 292 ... 643 S.E.2d 124, 127 (Ct.App.2007) ("The burden is upon the appellant to convince this Court ... ...
-
Chapter Seven Property
...included if ownership was improperly delayed. The Court of Appeals explained the reasoning behind this in Shorb v. Shrob, 372 S.C. 623, 643 S.E.2d 124 (Ct. App. 2007). The ownership prong can potentially raise troublesome issues if the family court overlooks assets which should rightly be i......
-
§ 7.11 Employee Stock Options
...564 Pa. 586, 769 A.2d 1165 (2001); Mac Aleer v. Mac Aleer, 725 A.2d 829 (Pa. Super. 1999). South Carolina: Shorb v. Shorb, 372 S.C. 623, 643 S.E.2d 124 (2007). Vermont: Golden v. Cooper-Ellis, 181 Vt. 359, 924 A.2d 19 (2007). Washington: In re Marriage of Short, 125 Wash.2d 865, 890 P.2d 12......