Thomas v. Thomas

• Court: Missouri Court of Appeals
• Writing for the Court: Thomas H. Newton
• Citation: Thomas v. Thomas, 196 S.W.3d 57 (Mo. App. 2005)
• Decision Date: 27 December 2005
• Docket Number: No. WD 64772.,WD 64772.
• Parties: Rosanne THOMAS, Respondent, v. Tom K. THOMAS, Appellant.

196 S.W.3d 57

Rosanne THOMAS, Respondent, v. Tom K. THOMAS, Appellant.

No. WD 64772.

Missouri Court of Appeals, Western District.

December 27, 2005.

COPYRIGHT MATERIAL OMITTED

James D. Boggs, Kansas City, MO, for appellant.

Dennis J. Campbell Owens, Kansas City, MO, for respondent.

Before: HAROLD L. LOWENSTEIN, P.J., JOSEPH M. ELLIS, and THOMAS H. NEWTON, JJ.

THOMAS H. NEWTON, Judge.

Mr. Tom K. Thomas appeals the trial court's dissolution judgment as it relates to the division of property. He specifically asserts that the trial court mischaracterized some of the property and divided the property in an inequitable manner.

FACTUAL AND PROCEDURAL BACKGROUND

Prior to marriage, Ms. Rosanne Thomas and Mr. Tom Thomas signed an antenuptial agreement (agreement). Ms. Thomas worked before marriage but quit to become a full-time homemaker after their two children were born. She returned to work in 1993 as a school bus driver, which allowed her to continue performing household duties and be available for the children. She has worked for the same company for eleven years but does not have a retirement plan. She earns about $15,000 annually. Ms. Thomas has deposited two-thirds of her paycheck into Farley State Bank joint-checking account that she maintains, and routinely has given the remaining one-third in cash to Mr. Thomas. Mr. Thomas has worked at his current employment since 1969. He has accumulated three employment benefits for his service: profit-sharing plan, thrift plan, and cash-balance-retirement plan. Both the profit-sharing and thrift plans were listed as separate property in the agreement. Mr. Thomas earns about $40,000 annually. Mr. Thomas has deposited his income in his Union Bank money market savings (savings)¹ and joint-checking accounts during the marriage.

The couple separated and Ms. Thomas moved out of the marital home leaving Mr. Thomas and her children. Ms. Thomas filed for divorce on June 10, 2002. At trial, she requested maintenance for five years and a fair and equitable division of all marital property. Mr. Thomas, in his answer and counter petition, requested that the property classification be consistent with the antenuptial agreement entered into between him and Ms. Thomas.² Ms. Thomas also filed a motion to set aside the antenuptial agreement on the grounds that it was invalid and unconscionable. The trial court found the agreement to be valid and not unconscionable. It further found all employment benefits accrued during marriage to be marital property. In the dissolution decree, the trial court found the Union Bank accounts to be marital property and awarded a majority of the marital property including Mr. Thomas's employment benefits to Ms. Thomas. Mr. Thomas appeals the judgment.

STANDARD OF REVIEW

This court reviews dissolution of marriage actions under the Murphy standard. Selby v. Selby, 149 S.W.3d 472, 482 (Mo.App. W.D.2004). Therefore, we will affirm unless we conclude that the trial court's judgment is not supported by substantial evidence, is against the weight of the evidence, or erroneously applies or declares the law. Adair v. Adair, 124 S.W.3d 34, 38 (Mo.App. W.D.2004). In addition, we can reverse the decision if the division of property is so heavily and unduly weighted in favor of one party as to amount to an abuse of discretion. Woodson v. Woodson, 92 S.W.3d 780, 785 (Mo. banc 2003) (citation omitted). Abuse of discretion occurs when the judgment is "so arbitrary or unreasonable that it indicates indifference and lack of proper judicial consideration." Id. "We view the evidence and reasonable inferences therefrom in the light most favorable to the decree and disregard all evidence to the contrary." Selby, 149 S.W.3d at 482.

LEGAL ANALYSIS

Characterization of Property

Mr. Thomas contends that the trial court erred in characterizing certain property as marital after a finding that the antenuptial agreement between Mr. Thomas and Ms. Thomas was valid. The trial court found that the Union Bank accounts and the increased value of his employment benefits that accrued during the marriage were marital property. Mr. Thomas claims that the antenuptial agreement designated those items as his sole and separate property. "The construction of contracts is a question of law. This court reviews declarations of law de novo." McGilley v. McGilley, 951 S.W.2d 632, 636 (Mo.App. W.D.1997) (citation omitted).

Section 452.330.2,³ defines marital property as all property acquired by either spouse during the marriage with five exceptions that rebut this presumption. The two exceptions that apply here are "[p]roperty excluded by valid written agreement of the parties" and "[t]he increase in value of property acquired prior to marriage or pursuant to subdivisions (1) to (4) of this subsection." Id. In this case, the written agreement is an antenuptial agreement, which is unique and must be strictly construed. McGilley, 951 S.W.2d at 637 (citation omitted). Antenuptial agreements are valid in Missouri and will be enforced on their terms. Id. A trial court cannot select which terms to enforce once it decides that the agreement is valid. Kester v. Kester, 108 S.W.3d 213, 224 (Mo. App. S.D.2003). The issue is whether the terms of the agreement characterize the Union Bank savings and joint-checking accounts and the increased value of the employment benefits as separate property.

First, the characterization of the appreciation of the profit-sharing and thrift plans listed in the agreement and the cash-balance-retirement plan as marital property is an erroneous declaration of the law. The increased value of separate property, absent a written agreement, is marital but only to the extent the increase is due to marital contribution including labor. The trial court implicitly found that the agreement failed to address the classification of the increase in separate property, and that the increase of the employment benefits was due to marital contributions.⁴ Ms. Thomas argues that the trial court did not err in its characterization because the agreement does not state that an increase in or appreciation of separate property belongs sole the owning party's property. According to Ms. Thomas's reasoning, a strict construction of the agreement requires inclusion of the words "increase" or "appreciation" before the court can find that the agreement excludes the increased value of separate property from marital property. The construction of a contract is the legal effect given to the agreement between the two parties. Phipps v. Sch. Dist. of Kansas City, 645 S.W.2d 91, 101 (Mo.App. W.D.1982) (stating that the interpretation of contract terms is distinct from the construction of a contract). It follows that the agreement be given conservative application to rebut the statutory presumptions set forth in section 452.330. Therefore, issues that are not expressly addressed in the agreement are decided according to section 452.330. Examples of strict construction include: King v. King, 66 S.W.3d 28, 35 (Mo.App. W.D.2001) ("Absent express language, the antenuptial agreement did not exclude from marital property income earned by Husband and Wife during marriage."); McGilley, 951 S.W.2d at 638 ("[T]he agreement contains no provision relating to the distribution of marital property . . . Therefore, . . . trial court must identify and divide all marital property in a fair and equitable manner. . . ."); Hawley by Cordell v. Hawley, 904 S.W.2d 584, 586 (Mo.App. W.D.1995) ("[W]e do not need to reach this issue because the [agreement] in this case does not expressly waive the maintenance sought. . . ."). Before the strict construction of an agreement, the trial court must determine the meaning of the agreement applying ordinary contract principles. McGilley, 951 S.W.2d at 637 (holding that it is the court's duty to determine the meaning and purpose employing the ordinary contract principles in its determination before a strict construction of the agreement).

In this case, a strict construction of the agreement compels that the classification of the appreciation of those listed assets and the cash-balance-retirement plan be separate property. Paragraph three of the agreement states that all property listed on the schedule remains "the sole and separate property of the person now owning said property or an expectancy in such property." While there are no phrases "increased value of separate property" or "appreciation of separate property" in the agreement, the agreement does expressly address this issue with the phrase "expectancy in such property." Neither the parties nor the trial court have defined "expectancy." The Missouri Supreme Court defines expectancy as "that which is expected or hoped for." Bell v. May Dep't Stores Co., 6 S.W.3d 871, 876 (Mo. banc 1999). The future growth of pension plans and retirement savings is that which is expected and hoped for in such property. The trial court should have defined the meaning of "expectancy" as used in the agreement to include the increased value, McGilley, 951 S.W.2d at 637, and should have subsequently excluded the increased value in all listed separate property from marital property. Accordingly, the trial court erred when it construed that the agreement did not preclude it from finding that the increased value of the employment benefits was marital property subject to division because paragraph three in the agreement expressly identifies such property as separate.

Second, the characterization of the Union Bank accounts as marital property is an erroneous declaration and application of the law. The trial court stated that these accounts were marital taking into consideration the source of funds. As a general rule, property acquired after marriage is presumed marital. § 452.330.3. "Property is ... acquired as it is paid for...." Comninellis v. Comninellis, 99 S.W.3d 502, 509 (Mo.App. W.D.2003); Hoffmann v. Hoffmann, 676 S.W.2d 817, 824 (Mo. banc 1984). This...