Short v. Short

• Decision Date: 25 October 2011
• Docket Number: No. ED 95663.,ED 95663.
• Citation: 356 S.W.3d 235
• Parties: Kathleen SHORT, Petitioner/Appellant/Cross–Respondent, v. Howard N. SHORT, Respondent/Respondent/Cross–Appellant.
• Court: Missouri Court of Appeals

356 S.W.3d 235

Kathleen SHORT, Petitioner/Appellant/Cross–Respondent,
v.
Howard N. SHORT, Respondent/Respondent/Cross–Appellant.

No. ED 95663.

Missouri Court of Appeals, Eastern District, Division Three.

Oct. 25, 2011.Motion for Rehearing and/or Transfer to

Supreme Court Denied Dec. 12, 2011. Application for Transfer Denied Jan. 31, 2012.

[356 S.W.3d 238]

Samuel J. Hais, Amarilis L. Dennis, Clayton, MO, For Petitioner/Appellant/Cross–Respondent.

Jerome F. Raskas, Peter H. Love, St. Louis, MO, For Respondent/Respondent/Cross–Appellant.

SHERRI B. SULLIVAN, J.Introduction

Kathleen Short (Wife) appeals from the trial court's May 21, 2010 Judgment (original judgment) dissolving her marriage to Howard N. Short (Husband) and its two Amended Judgments entered September 20, 2010 on Wife's and Husband's Motions to Amend Judgment, respectively. Husband cross-appeals from the original judgment and from the trial court's denial of his motion to amend one of the September 20, 2010 Amended Judgments to include an order of interest on his award of marital property. We affirm in part and reverse and remand in part.

Factual and Procedural Background

Husband and Wife were married on August 9, 1978. The parties had discussed and eventually signed a prenuptial agreement on August 8, 1978. On January 25, 2008, after thirty years of marriage, the parties separated. The trial court dissolved their marriage on May 21, 2010. In its Judgment of dissolution, the trial court found the prenuptial agreement to be valid and enforceable. The trial court determined and divided the parties' separate and marital property with a balance of 60% of the marital property to Wife and 40% to Husband.

The dissolution proceeding mainly involved the division of assets, as the parties' three children are emancipated. However, the validity and fairness of the prenuptial agreement was put at issue by Husband; its terms and coverage were put at issue by Wife; and the proceedings were further complicated by the length of the marriage and the extent of the parties', particularly Wife's, substantial and varied assets. The parties also disputed the classification and expert valuation of their separate and marital property; whether proceeds from Wife's separate properties were correctly categorized as marital or separate and, if separate, whether such income had been commingled with marital assets in multiple bank accounts over 30 years of marriage; and attorney's fees and interest. Additional facts will be set out as considered necessary later in this opinion.

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Points on Appeal

In her first point, Wife contends the trial court erred in not awarding her separate property to her, because Missouri courts cannot selectively enforce parts of an antenuptial agreement, in that it overlooked paragraphs 4, 5(a), and 5(c) of the ante-nuptial agreement, which sets off to “each party ... all property ... now or hereafter acquired by him or her in any manner whatsoever,” which was not ambiguous.

In her second point, Wife maintains that the trial court erred in classifying the liquidating distributions ($5,548,328) Wife received from Sieben, Inc. (Sieben) as marital property, because when a spouse owns separate property stock in a dissolving corporation and receives distributions of liquidated assets, those distributions remain the stockholder's separate property, in that after the plan of complete liquidation was adopted, Sieben distributed the remainder of its assets to its shareholders in exchange for and cancellation of all the issued and outstanding shares of the company. Wife claims her stock ownership of Sieben was acquired prior to the marriage and is separate property and since the liquidating distributions were paid in exchange for her stock ownership, the funds she received as liquidating distributions from Sieben are also Wife's separate property.

In her third point, Wife asserts the trial court erred in its acceptance of Husband's estimated $8,000,000 value of Wife's minority stock ownership in Capitol Coal and Coke Company (CCC) because a proper valuation requires an extensive appraisal which was not performed by Husband's expert.

In her fourth point, Wife states the trial court erred in finding that all of the accounts in the name of Wife or her revocable trust have been transmuted by commingling such that they are now marital property because Wife never intended to transmute or commingle her separate property, in that she was able to trace her separate accounts throughout her marriage and never placed Husband's name on any of her accounts.

In her fifth point, Wife declares the trial court erred in not ordering Husband to pay her attorney's fees, because (1) Husband committed marital misconduct in squandering large sums of marital money in risky investments that Wife did not approve; and (2) Husband prolonged the litigation by taking meritless positions.

In her sixth point, Wife avers the trial court erred in not ensuring that the values of the accounts attributed to Wife were reasonably proximate to the date of the amended dissolution judgment.

Points on Cross–Appeal

In his first point, Husband maintains the trial court erred in holding the prenuptial agreement valid and enforceable because the court erroneously applied the law by failing to consider the circumstances surrounding the execution of the agreement and because the court's ruling is not supported by substantial evidence and is against the weight of the evidence, in that the evidence established the agreement was not entered into freely, fairly, knowingly, understandingly, and in good faith and with full disclosure.

In his second point, Husband argues the trial court erred when it denied his motion to amend the September 20, 2010 Judgment because it erroneously declared the law, in that a dissolution of marriage judgment does not bear interest unless the judgment specifies that it bears interest and the trial court failed to specify the amount of the judgment that shall bear interest.

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In his third point, Husband avers that the trial court abused its discretion when it denied Husband's request that it order Wife to pay his attorney's fees because the weight of the evidence was that Wife had twice Husband's income and more than 250 times more separate property than Husband and Wife's conduct in the litigation required the expenditure of otherwise unnecessary attorney's fees.

Standard of Review

The standard of review in a dissolution case is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo.banc 1976). This Court will sustain the trial court's judgment unless it lacks substantial evidentiary support, is against the weight of the evidence, or erroneously declares or applies the law. Redlinger v. Redlinger, 111 S.W.3d 413, 414 (Mo.App. E.D.2003). When determining the sufficiency of the evidence, we will accept as true the evidence and inferences from the evidence that are favorable to the trial court's decree and disregard all contrary evidence. Brennan v. Brennan, 955 S.W.2d 779, 782 (Mo.App. E.D.1997). We give due regard to the opportunity of the trial court to have judged the credibility of witnesses. Id. A trial court is free to believe or disbelieve all, part, or none of the testimony of any witness. Id. We exercise the power to set aside a decree or judgment on the ground that it is against the weight of the evidence with caution and a firm belief that the decree or judgment is wrong. Id.

Additional standards of review for particular points on appeal are set forth correspondingly.

Discussion

For organizational purposes, the parties' points on appeal are addressed out of order, grouped according to subject matter, to-wit: (1) prenuptial agreement; (2) property, marital and separate; (3) attorney's fees; and (4) interest.

I. Prenuptial Agreement a. Validity and Enforceability—Cross Point I

It is well-settled law that a prenuptial agreement contemplating the dissolution of a parties' marriage is not against public policy and can be valid. Potts v. Potts, 303 S.W.3d 177, 187 (Mo.App. W.D.2010). In Missouri, to be valid and enforceable a prenuptial agreement must be entered into freely, fairly, knowingly, understandingly, and in good faith with full disclosure. Id. This requirement has been interpreted by the courts to involve a subjective evaluation of the fairness surrounding the execution of the agreement. Id. Factors which courts have considered relevant include the parties' access to independent counsel; the amount of time available to revise the agreement; the bargaining positions of each spouse in terms of age, sophistication, education, employment, and experience; and whether their assets were fully disclosed. Id. The fairness of the agreement must be determined as of the date of the agreement. Id.

In the instant case, the parties entered into the prenuptial agreement on August 8, 1978, the day before the wedding. Husband was a 26–year–old third-year medical student, and Wife was a 26–year–old nurse. Husband had access to independent counsel. Husband says the attorney he contacted to review the agreement was too expensive, asking for a fee of $5,000, and Husband only had access to $3,000. However, Husband produced a list of his assets for the prenuptial agreement which reported he had a net worth of approximately $180,000 to $200,000. Husband also does not explain why he did not

[356 S.W.3d 241]

seek out a less-expensive lawyer or seek to borrow funds. Rather, the record indicates that Husband testified in his deposition that he decided he did not need an attorney because he loved Wife and just wanted to marry her.

In terms of the amount of time available to revise the prenuptial agreement, Husband was presented with the actual agreement the day before the wedding. However, the parties did meet to discuss the agreement in detail four days earlier, on August 4, 1978. Therefore, Husband had four days to review the agreement, as well as access to independent counsel to...