Stephenson v. Stephenson

• Decision Date: 01 June 1971
• Docket Number: No. 6219,6219
• Citation: 111 N.H. 189,278 A.2d 351
• Parties: Katherine Holman STEPHENSON v. Edwin Charles STEPHENSON. Katherine Holman STEPHENSON v. Edwin Charles STEPHENSON et al. Timothy D. STEPHENSON et al. v. Edwin Charles STEPHENSON.
• Court: New Hampshire Supreme Court

Page 351

278 A.2d 351

111 N.H. 189

Katherine Holman STEPHENSON v. Edwin Charles STEPHENSON.

Katherine Holman STEPHENSON v. Edwin Charles STEPHENSON et al.

Timothy D. STEPHENSON et al. v. Edwin Charles STEPHENSON.

No. 6219.

Supreme Court of New Hampshire.

June 1, 1971.

Orr & Reno, Ronald L. Snow and Leo B. Lind, Jr., Concord (Ronald L. Snow, Concord, orally), for plaintiffs.

Mussman & Shepatin, Littleton (Mack M. Mussman, Littleton, orally) for defendants.

GRIFFITH, Justice.

These cases are an action for divorce and two bills in equity to set aside as a fraudulent conveyance a transfer of certain assets of the defendant. The cases were tried together before Johnson, J., who made findings of fact and rulings of law and entered a decree in favor of the plaintiffs in all three cases. Defendants' exceptions to the findings of fact, rulings of law and decree of the court were reserved and transferred by the trial court.

The Stephensons were married April 24, 1964 and have two sons. They lived during their marriage on property owned by Ski-Pine Club, Inc., a corporation wholly owned by the defendant Edwin Stephenson. The property consisted of a nineteen room house and heated swimming pool located on 114 acres of land in Sugar Hill and Franconia.

The only occupation of the defendant since the marriage has been the occasional operation of the Ski-Pine Club, Inc., to furnish rooms and meals to skiers. The plaintiff assisted in these operations which the trial court found were at no time even remotely profitable. During the marriage the family expenditures of some eighteen thousand dollars a year were provided largely by gifts from the mother of the defendant.

On June 9, 1969, the plaintiff with the minor children left the defendant and brought the present action for divorce shortly thereafter alleging extreme cruelty and treatment such as seriously to injure her health. A report by a master on July 30, 1969 recommending temporary support of $100 per week was approved by Loughlin, J. A motion to modify the support order was denied by Grant, J., September 26, 1969. Defendant has never complied with this order but has paid $25 per week. Since the separation the plaintiff has lived in a house provided by her mother from whom she has received substantial monetary aid. Plaintiff left the family home with one of the family's two cars but this was retaken by the defendant and plaintiff claimed the cost of rental of a car up to the time of the final decree.

Counsel for the plaintiff had secured in January 1970 a court order permitting appraisal of the Sugar Hill property. In March of 1970 he telephoned defendant's counsel to arrange to have an appraiser visit the property. Defendant's counsel informed him that the property no longer belonged to the Ski-Pine Club, Inc., but had been transferred to a new corporation called Sugar Hill Manors, Inc. Plaintiff's counsel then learned that on March 2, 1970 defendant's counsel Mack Mussman had organized Sugar Hill Manors, Inc. with an authorized capital stock of 300 shares and an authorized issue of 226 shares. The incorporation papers filed showed that 75 shares were issued to Ski-Pine Club, Inc. for its transfer of the Sugar Hill property and 151 shares to Mack Mussman for $1000. The officers and directors of the new corporation were Mack Mussman, his law partner and Helen V. MacDonald. Plaintiff then instituted the two actions in equity on behalf of herself and her two children alleging the transfer to the new corporation was in fraud of her and her children's interests.

Defendant first objects that from the evidence the trial court could not find that the plaintiff had established a cause for divorce. The trial court granted the divorce on the grounds of extreme cruelty and treatment such as seriously to injure the health of the libelant. This presents the limited question of whether there was evidence to support the court's decree. Szulc v. Szulc, 96 N.H. 190, 72 A.2d 500 (1950); Buck v. Buck, 97 N.H. 178, 83 A.2d 922 (1951); Kuo v. Kuo, 108 N.H. 460, 237 A.2d 690 (1968). In contesting the granting of the divorce on the grounds of extreme cruelty the defendant relies on the fact that the evidence established only one assault by the defendant on the plaintiff. This, according to the plaintiff, was a blow with the back of defendant's fist which left her with a bruised jaw and three chipped teeth. In addition plaintiff testified that defendant drank excessively, had an obsession with firearms when drunk, terrifying plaintiff and her children, had a series of automobile accidents when drinking resulting in injury to the plaintiff, accused her of infidelity, threatened to disinherit her and the children and threatened and did on one occasion bar her from the home.

The above evidence was sufficient to support the decree for divorce. Acts of violence need not be many in number to authorize a divorce on this ground since it is granted 'to relieve the complaining party from apprehended danger.' Tibbetts v. Tibbetts, 109 N.H. 239, 240, 248 A.2d 75, 76 (1968). The testimony of the plaintiff of the emotional stress of the marital discord was supported by her physician who testified that such stress would be sufficient to cause the injury to her health that he found. The evidence supported the trial court's granting of the divorce on the additional ground of treatment so as to seriously injure the health of the libelant. Kotarba v. Kotarba, 97 N.H. 252, 85 A.2d 377 (1952).

Defendant has not briefed any objections to the decree of the trial court setting aside the conveyance of the Sugar Hill property from Ski-Pine Club, Inc. to Sugar Hill Manors, Inc., but counsel asserted in oral argument that this decree was not supported by the evidence.

Attorney Mussman testified that the transfer of the Sugar Hill property to Sugar Hill Manor Corporation was the first step in a plan he had devised to develop the property and to provide defendant with employment. He testified that it was proposed to renovate the building for use as a clubhouse and to sell the remainder of the property as house lots. A plan showing the proposed development with 131 prospective lots was presented in evidence by Attorney Mussman. He stated that he intended to invest $100,000 and had secured other investors who would make available an additional $200,000. Attorney Mussman testified at the hearing on the preliminary injunction that it was proposed to hire the defendant as manager at $10,000 to $15,000 salary per year. This was modified to $7,500 plus room and board at the hearing on the merits and the records of a corporate meeting held by the directors of Sugar Hill Manors, Inc., following the temporary injunction, show employment of the defendant for one year was voted at a mutually agreed upon salary.

Attorney Mussman stated that for tax purposes the investors of the $300,000 including himself would advance these sums by way of loans at 7 1/2 per cent to the corporation and that the total cash investment in the corporation would be $3,000 for three-fourths of the stock leaving one-fourth to the defendant. The plan envisioned an eventual board of directors made up of Mack Mussman and the other cash investors, excluding the defendant. The defendant and Sidney Wolf, one of the potential investors, in substance testified that their understanding of the proposal agreed with that of Attorney Mussman.

The trial court found on the issue of fraudulent conveyance as follows: 'At the time of the transfer of land to Sugar Hill Manors, Inc., there was no question but that the matter of a property settlement between the Stephensons would be a matter of controversy in the divorce proceeding. The Court finds that the purpose and intent of this transfer, under the circumstances, was to deprive Mrs. Stephenson of her right to have the Court make a meaningful property settlement. The Court finds it was clear to Mr. Stephenson that an award of stock (a minority interest) in Sugar Hill Manors, Inc. to Mrs. Stephenson would be a meaningless order, particularly in view of the looseness of the agreement with the investors, and hence the transfer was intended to defeat and defraud Mrs. Stephenson's rights.'

The testimony of Attorney Mussman alone clearly supported this finding. Attorney Mussman testified that transfer stamps indicating a value of $35,000 were attached to the deed from Ski-Pines, Inc., to Sugar Hill Manors, Inc. An expert for the defendant valued the property at $40,000 and an expert for the plaintiff valued it at $100,000. Defendant's wholly owned corporation thus...