Smith v. Shannon Cahill.

• Decision Date: 06 May 2011
• Docket Number: 2090469.
• Citation: Smith v. Shannon Cahill., 72 So.3d 692 (Ala. Civ. App. 2011)
• Parties: Antoinette Cahill SMITHv.Shannon CAHILL.
• Court: Alabama Court of Civil Appeals

72 So.3d 692

Antoinette Cahill SMITH

v.Shannon CAHILL.

2090469.

Court of Civil Appeals of Alabama.

May 6, 2011.

Randall W. Nichols of Massey, Stotser & Nichols, P.C., Birmingham, for appellant.Jeffrey P. Montgomery, Gadsden, for appellee.PITTMAN, Judge.

Antoinette Cahill Smith (“the former wife”) appeals from a judgment that, among other things, denied her request to enforce a claimed marital interest in an investment-equity account held by Shannon Cahill (“the former husband”).

The parties were married in March 1986 and were divorced by a judgment entered on July 30, 1993. That judgment incorporated an agreement of the parties in which custody of the parties' three minor children were awarded to the former wife, the former husband was ordered to pay child support, and the former husband was ordered to pay the former wife $10,000 “for any interest she has in the farm equipment and the chicken house equipment” and to pay, over 5 years, an additional $20,000 plus 6% interest for the former wife's interests in both the marital residence and the marital property awarded to the former husband. Beginning in 1988, the former husband had operated a poultry farm for Gold Kist and had participated in a Gold Kist cooperative program, also known as the “patronage equity program”; he continued that work following the parties' divorce. Around 2004, Gold Kist converted from a cooperative association to a for-profit corporation, eventually notifying the former husband that the account with the patronage equity program (“the equity account”) was worth $337,134.76 and that he was entitled to 36,472 shares of Gold Kist stock.

In 2005, the former husband filed a modification action seeking to lower his monthly child-support obligation; at trial the following year, the parties reached an agreement regarding custody, support, and health-insurance coverage for the children. On June 8, 2006, the trial court entered a modification judgment that incorporated the agreement of the parties on the issues of child custody, support, and health insurance.

In January 2009, the former wife filed an action seeking to obtain (1) previously unpaid child support and (2) a share of the equity account; she asserted that, throughout the parties' divorce proceedings and the modification litigation, the former husband had suppressed the existence and value of the equity account and had consistently understated his income in order to avoid paying appropriate child support. Subsequently, the former husband filed an answer; he also filed a counterclaim in which he requested custody of the parties' sole remaining minor child. At a pendente lite hearing in May 2009, that child's custody was awarded to the former husband. Before trial, the former husband filed a motion for a summary judgment as to the former wife's claims, but that motion was denied.

The trial court conducted an ore tenus proceeding on all pending matters over two days: October 22–23, 2009. The only witnesses were the parties and the three children, two of whom had reached the age of majority by the time of trial. The bulk of the testimony focused on the former wife's allegations that the former husband had lied about his income and assets and, therefore, that she had borne a larger share of the children's expenses than she should have. In addition, she adduced evidence tending to show that the equity account had been an existing marital asset that had not been divided in the parties' 1993 divorce judgment. Lastly, the parties' youngest child, who was 17 years old at the time of trial, testified that he was not comfortable around the former wife's new boyfriend and that he would rather live with the former husband until high-school graduation.

At the conclusion of the second day of trial, the trial court entered a judgment on partial findings as to the issues raised by the former wife. The parties' agreement regarding future child-custody, child-support, and postminority-support issues was read in open court, and that agreement was incorporated into a final judgment on October 26, 2009. The following day, the trial court entered an amended judgment to correct a clerical error regarding proper payment of child support. On November 20, 2009, the former wife filed a postjudgment motion. In January 2010, the trial court conducted a hearing on that motion and then denied the postjudgment motion. The former wife filed a timely notice of appeal. She challenges the trial court's judgment to the extent that it precludes her from claiming marital rights as to the equity account and from proceeding to trial against the former husband on claims of fraud and conversion relating to the equity account.¹

Alabama law is well settled that,

“ ‘when a trial court does not make specific disposition of an asset in a divorce [judgment], the parties are left in the same position relative to that asset as they were in before the divorce.’ Ex parte Davis, 495 So.2d 672, 673 (Ala.1986); McGuire v. Horton, 586 So.2d 9, 9 (Ala.Civ.App.1991); Lacy v. Lacy, 403 So.2d 251, 254 (Ala.Civ.App.1981); and Miller v. Miller, 391 So.2d 119, 120 (Ala.Civ.App.1980). The failure to divide each item of property does not render void an otherwise proper divorce judgment. Miller, 391 So.2d at 120.”

Brown v. Brown, 26 So.3d 1210, 1219 n. 2 (Ala.Civ.App.2007); see also Smith v. Smith, 892 So.2d 384, 389 (Ala.Civ.App.2003), and Hocutt v. Hocutt, 491 So.2d 247, 249 (Ala.Civ.App.1986). However, a divorce judgment dividing marital property between the parties is not subject to modification, except for clerical errors, after the lapse of 30 days from the entry of the judgment. See McGuire, 586 So.2d at 10 (citing Bromley v. Bromley, 449 So.2d 1252, 1254 (Ala.Civ.App.1984)); see also Clements v. Clements, 990 So.2d 383, 395–96 (Ala.Civ.App.2007).

The former husband asserts that the former wife is attempting to improperly modify the property-settlement provisions of the parties' divorce judgment, that her action is barred by the equitable defense of laches and by the doctrine of res judicata, that the former husband never concealed assets from the former wife, and that the equity account is a retirement account and not subject to division pursuant to § 30–2–51(b), Ala.Code 1975. For her part, the former wife insists that she has not improperly attempted to reopen the property-division aspects of the divorce judgment but that she is instead asserting a right to a claimed marital share of the equity that had accrued in the equity account during the parties' marriage ( i.e., from 1988–1993). She points out that the divorce judgment was silent as to that marital asset, and she claims that, therefore, her interest in that asset is the same as it was during the marriage. See Ex parte Davis, 495 So.2d at 673, and McGuire, 586 So.2d at 9.

At trial, the former wife adduced evidence indicating that the former husband had concealed the value of the equity account throughout the marriage and during the divorce proceedings; the former husband admitted that in 2004 his years of working with Gold Kist had resulted in an award of 36,472 shares of Gold Kist stock, the proceeds of which he had deposited into a brokerage account in March 2005. Although the trial court did not allow the former husband to testify as to the value of that stock at the time that he liquidated it, the former wife adduced evidence indicating that the market price of Gold Kist stock in May 2005 was $21.81 per share, for a total potential value of $758,951. The former wife used the former husband's accounting documents to show that, between 1988 and 1993, the equity account had accrued a value of $197,829.21. She offered a financial report that itemized equity earnings received from Gold Kist for the fiscal years of 1988–89 ($66,200.44); 1989–90 ($61,511.69); 1990–91 ($30,383.06); and 1992–93 ($39,734.02).² According to a financial statement provided at the time of Gold Kist's conversion from a nationwide cooperative of farmers to a publicly traded corporation in 2004, the equity account had increased in value to $337,134.76.

Although the former husband contends that the former wife had notice of the equity account during the marriage, he asserts that the equitable defense of laches and the doctrine of res judicata bar her from bringing this action now because her claim to the asset should have been asserted, at the latest, during the previous modification proceeding in 2005–06. In rebuttal, the former wife testified that the former husband had not included the equity account in the asset list he had prepared for the parties' original divorce proceeding; moreover, she noted that he had failed to accurately disclose his finances during the divorce proceeding or the modification proceeding. She offered as an exhibit a copy of the former husband's September 27, 2005, responses to discovery requests in that modification litigation in which he listed “every asset,” but that list did not include the brokerage account, the equity account, or the 36,472 shares of Gold Kist stock.

During that modification litigation, the former husband asserted on his CS–41 “Child–Support–Obligation Income Statement/Affidavit” form that his monthly income was $2,582; moreover, he testified at that proceeding that his total remaining assets were: “two homes, four chicken houses, a composter, 72 acres of land, chicken houses [two of which had been destroyed and had been rebuilt] for $70,000 and for $84,000 [respectively].... a new house [constructed] for $84,000 and insured ... for $115,000, [a c]omposter ... and $140,000 that [was] owed on those assets.” He also listed “[a]n RTV, a Kabota RTV, a Toyota pick-up truck, a tiller for cake in the chicken houses [having a] fair market value of $300, and a sprayer for $115.” In response to an interrogatory in the modification litigation, the former husband answered a request to disclose “each and every bank account, savings account, or checking...