Smith v. Smith
| Decision Date | 19 September 2018 |
| Docket Number | Appellate Case No. 2015-002455,Opinion No. 5597 |
| Citation | 819 S.E.2d 769,425 S.C. 119 |
| Court | South Carolina Court of Appeals |
| Parties | Robin Carr SMITH, Respondent/Appellant, v. James Rory SMITH, Appellant/Respondent. |
David J. Brousseau, of McIntosh, Sherard, Sullivan & Brousseau, of Anderson, for Appellant/Respondent.
David A. Wilson, of Wilson & Englebardt, LLC, of Greenville, for Respondent/Appellant.
In this domestic relations matter, James Rory Smith (Husband) appeals the family court's divorce decree, arguing the family court erred in (1) imputing minimum wage income to Robin Carr Smith (Wife) and awarding Wife permanent periodic alimony; (2) in the alternative, if alimony was appropriate, not ordering rehabilitative alimony; (3) awarding Wife a larger allocation of the marital estate; and (4) awarding Wife primarily income-producing assets while awarding Husband primarily deferred-compensation assets. On cross-appeal, Wife asserts the family court erred in (1) failing to include Husband's bonus in the marital estate; (2) allocating payment of the 401(k) mortgage loan to Wife; (3) finding that the parties' 208 Wescott property transmuted into marital property; (4) in the alternative, if the 208 Wescott property is marital property, failing to expressly consider Wife's "special equity" regarding Wife's nonmarital funds used to acquire the property; and (5) unfairly apportioning the marital estate. We affirm in part and reverse in part.
Husband and Wife married on February 28, 2003. The parties had twins—a son and a daughter—who were ten years old at the time of the divorce hearing. This was the second marriage for both parties, and Husband had two adult children from his previous marriage. Wife received a high school education and Husband attended two years of college.
After getting married, the parties lived in Wife's premarital home in Roswell, Georgia, where Wife worked in the insurance-claims industry, earning an income of approximately $66,000. Husband maintained stable employment with Duke Energy. Husband's starting salary with Duke Energy in 2004 was $92,821; however, after receiving substantial pay increases throughout the marriage, Husband earned $182,128.10 in 2014 as a senior nuclear reactor operator. Husband's 2014 income included his annual incentive pay bonus of $21,522.03 and overtime pay of $20,369.64.
In 2005 Wife sold her premarital home in Georgia, and the parties moved to South Carolina where they built their current residence at 208 Wescott. Upon selling Wife's premarital home, Wife deposited the sale proceeds into the SunTrust bank account that Husband also deposited his income. The parties utilized $90,000 of the sale proceeds in the SunTrust account as a down payment on 208 Wescott. However, the mortgage and title for 208 Wescott were solely in Wife's name. When the parties moved into 208 Wescott, they agreed Wife would quit her job to become a stay-at-home mother for their newborn twins, resulting in Wife's unemployment for a majority of the marriage. Accordingly, Husband's income was the parties' sole income at the time and was used to pay for the 208 Wescott mortgage and later improvements to the property.1 In subsequent years, the parties purchased six income-producing rental properties with Husband's income.
Throughout the marriage, Wife managed the rental properties, which brought in a net income of $1,095 per month after the mortgage payment.
Wife testified that, in 2008, she discovered Husband placed and answered ads soliciting extra-marital relations on Craigslist and dating websites. When Wife confronted Husband and asked him to participate in counseling, Husband refused. Wife further testified that, in 2012, she discovered Husband was still engaged in extra-marital relations, and Husband and his paramour solicited third parties on Craigslist to engage in group sex. Husband admitted he committed adultery with numerous women throughout the marriage and engaged in unprotected sex twice; however, Husband denied he engaged in group sex. Husband testified he began committing adultery in 2008 due to Wife's "severe lack of affection."2
On December 27, 2013, Wife filed an action in family court, seeking a divorce on the grounds of adultery, custody of the minor children, alimony, equitable division of the marital estate, attorney's fees and costs, and related relief. Husband answered and counterclaimed, seeking separate support and maintenance, equitable division of the marital estate, resolution of all issues related to the parties' minor children, attorney's fees and costs, and related relief. On April 16, 2015, the family court issued a final divorce decree, granting Wife a divorce on the ground of Husband's adultery.
The family court determined it was not reasonable for Husband to sustain earning his 2014 overtime pay of $20,369.64, but it was reasonable for Husband to earn at least $12,000 in overtime pay. Based on $12,000 in overtime pay, the court determined Husband's annual earning capacity was $174,000. The family court imputed minimum wage income to Wife, noting the court "did not have sufficient evidence on which to base a determination of Wife's earning potential." The family court awarded Wife 57.2% and Husband 42.8% of the $1,018,9093 gross marital estate; $12,000 for attorney's fees and costs; custody of the parties' two minor children; specified visitation for Husband; and granted Wife's request to relocate with the minor children to Jefferson, Georgia. The family court ordered Husband to pay $1,500 per month to Wife in permanent periodic alimony and $1,345 per month in child support. The family court also awarded Wife five of the parties' six rental properties, including 504 E. College, which had a debt of $33,742 owed to Husband's 401(k) account, and ordered "Wife shall be solely responsible for the indebtedness of the properties she is awarded." However, the family court awarded Husband his 401(k) account and ordered that Wife's alimony payment be reduced by $340 per month, which reduced Husband's monthly alimony payment to $1,160, until Wife paid the loan on the 401(k) in full.
Both parties filed motions to reconsider. On November 2, 2015, the family court issued an order modifying the divorce decree. The modifications increased Husband's share of the marital estate to 45.7% and decreased Wife's share to 54.3%. The amended order also awarded Husband the parties' 2014 tax refund and modified Husband's monthly alimony deduction for the 401(k) loan from $340 to $400 per month, which reduced Husband's alimony payment to $1,100 per month until Wife paid the 504 E. College loan in full. This cross-appeal followed.
The appellate court reviews decisions of the family court de novo. Stoney v. Stoney , 422 S.C. 593, 596, 813 S.E.2d 486, 487 (2018) (per curiam). In a de novo review, the appellate court is free to make its own findings of fact but must remember the family court was in a better position to make credibility determinations. Lewis v. Lewis , 392 S.C. 381, 385, 709 S.E.2d 650, 651–52 (2011). "Consistent with this de novo review, the appellant retains the burden to show that the family court's findings are not supported by a preponderance of the evidence; otherwise, the findings will be affirmed." Ashburn v. Rogers , 420 S.C. 411, 416, 803 S.E.2d 469, 471 (Ct. App. 2017). On the other hand, evidentiary and procedural rulings of the family court are reviewed for an abuse of discretion. Stoney , 422 S.C. at 594 n.2, 813 S.E.2d at 486 n.2.
On appeal, Husband argues the family court erred in (1) imputing minimum wage income to Wife and awarding Wife permanent periodic alimony; (2) in the alternative, if alimony was appropriate, not ordering rehabilitative alimony; (3) awarding Wife a larger allocation of the marital estate; and (4) awarding Wife primarily income-producing assets while awarding Husband primarily deferred-compensation assets.4
Husband first argues the family court erred by imputing minimum wage income to Wife, and as a result, awarding Wife alimony. We disagree.
"Alimony is a substitute for the support normally incidental to the marital relationship." Crossland v. Crossland , 408 S.C. 443, 451, 759 S.E.2d 419, 423 (2014). "Alimony should ordinarily place the supported spouse, as nearly as is practical, in the same position he or she enjoyed during the marriage." Hinson v. Hinson , 341 S.C. 574, 577, 535 S.E.2d 143, 144 (Ct. App. 2000) (per curiam). The family court has a duty to formulate an alimony award that is "fit, equitable, and just if the claim is well[-]founded." Allen v. Allen , 347 S.C. 177, 184, 554 S.E.2d 421, 424 (Ct. App. 2001). In making an alimony award, the family court must consider the following statutory factors: (1) the duration of the marriage; (2) physical and emotional health of the parties; (3) educational background of the parties; (4) employment history and earning potential of the parties; (5) standard of living established during the marriage; (6) current and reasonably anticipated earnings of the parties; (7) current and reasonably anticipated expenses of the parties; (8) marital and nonmarital properties of the parties; (9) custody of children; (10) marital misconduct or fault; (11) tax consequences; (12) prior support obligations; and (13) any other factors the court considers relevant. S.C. Code Ann. § 20-3-130(C) (2014).
Specifically, Husband argues the family court should have imputed more than minimum wage income to Wife based on Wife's ability to earn: (1) a minimum of $50,0005 in the insurance industry prior to becoming a stay-at-home mother to the parties' twins, (2) the $40,000 gross annual rental income of the five rental properties awarded to Wife in the equitable distribution, and (3) the monthly child support obligation of $1,430 based on a $90,0006 annual gross income. Husband...
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