Watson v. Watson, No. 0842

CourtCourt of Appeals of South Carolina
Writing for the CourtCURETON
Citation351 S.E.2d 883,291 S.C. 13
PartiesTheodore A. WATSON, Appellant-Respondent, v. LeAnn O. WATSON, Respondent-Appellant. . Heard
Docket NumberNo. 0842
Decision Date15 October 1986

Page 883

351 S.E.2d 883
291 S.C. 13
Theodore A. WATSON, Appellant-Respondent,
v.
LeAnn O. WATSON, Respondent-Appellant.
No. 0842.
Court of Appeals of South Carolina.
Heard Oct. 15, 1986.
Decided Dec. 15, 1986.

Page 885

[291 S.C. 15] David H. Wilkins and John W. Kittredge of Wilkins, Wilkins, & Nelson, Greenville, for appellant-respondent.

J.D. Todd, Jr., of Leatherwood, Walker, Todd & Mann, Greenville, for respondent-appellant.

CURETON, Judge.

The husband Theodore A. Watson instituted this action against the wife LeAnn O. Watson for a divorce on the ground of adultery, custody of a minor child and an equitable distribution of marital assets. The wife denied adultery and counterclaimed for alimony, custody of the child, child support, educational expenses for the children and an equitable division of marital assets. At a pendente lite hearing, the wife was awarded pendente lite alimony. At the merits hearing, the trial judge granted the husband a divorce based on the wife's adultery, divided the marital assets, awarded the wife attorney fees, and awarded custody of the minor child to the wife together with child support. The husband appeals the pendente lite order. Both parties appeal provisions of the decree. We affirm in part, reverse in part, modify and remand.

The parties were married in 1951 and three children were born to them. Only one of the children was a minor at the time of the divorce. The first years of their marriage were happy, the husband having received a substantial inheritance from his father, the wife being a former beauty queen from the University of North Dakota, and the husband a bright young physician. In the later years of the marriage the husband drank excessively and is now a recovered alcoholic. The wife provided the matrimonial glue that held the family together. Along with the husband's return to sobriety [291 S.C. 16] and the maturing of the children, the marriage failed. The wife left the marital abode in January 1984. At the time of the divorce hearing, the wife was a medical technologist at North Greenville Hospital, and the husband was a successful physician in the Greenville area earning approximately $183,000.00 per year.

I.

HUSBAND'S APPEAL

The husband appeals several aspects of the divorce decree dealing with: (1) the inclusion of his profit sharing plan in the marital estate; (2) the amount of property awarded the wife; (3) the amount of attorney fees awarded the wife; (4) the award of temporary alimony to the wife; and (5) certain evidentiary matters. We will first address those matters regarding the equitable division award.

Page 886

A.

The husband owns a ninety-eight percent interest in Piedmont E.N.T., P.A. The other two percent is owned by his partner. The P.A. established a profit sharing plan into which it has deposited up to fifteen percent of the husband's income each year. According to the husband's financial declaration, the plan was worth $304,474.00 at the time of the divorce. As we view the evidence, the funds in the plan were fully vested in the husband but not available for distribution until he reached age sixty. Under cross-examination, the husband acknowledged that as a ninety-eight percent owner of the P.A., he has sole discretion as to the amount of his salary diverted into the plan. The trial judge included the profit sharing plan in the marital estate, noting that "[t]his is a retirement fund established wholly by the voluntary personal contribution of the [husband]."

In the cases of Bugg v. Bugg, 277 S.C. 270, 286 S.E.2d 135 (1982), Brown v. Brown, 279 S.C. 116, 302 S.E.2d 860 (1983), and Haynes v. Haynes, 279 S.C. 162, 303 S.E.2d 429 (1983), our Supreme Court held that military retirement benefits are not subject to equitable distribution. Further, in Carter v. Carter, 277 S.C. 277, 286 S.E.2d 139 (1982), and Anderson v. Anderson, 282 S.C. 162, 318 S.E.2d 566 (1984), that Court concluded that civil service retirement was also [291 S.C. 17] not subject to division. Additionally, this Court has held that a spouse's non-contributory retirement account is not marital property subject to equitable distribution. Johnson v. Johnson, 288 S.C. 270, 341 S.E.2d 811 (Ct.App.1986); Smith v. Smith, 280 S.C. 257, 312 S.E.2d 560 (Ct.App.1984). Smith declined, however, to address the divisibility of contributory plans, stating "whether a retirement fund established either in whole or in part by voluntary personal contributions can be treated as marital property is not before us." While a national publication sharply criticized Smith as a "bad" decision, 1 we feel that the decision was mandated by the Supreme Court decisions noted above.

We are called upon to decide first whether the husband's retirement plan was a voluntary contributory plan. The complicating factor in this case is the claim of the husband that his plan was a non-contributory plan because his professional association made all contributions to the plan. We reject this argument. It is clear under the facts of this case that the P.A. is the alter ego of the husband. The husband acknowledged that as an owner of ninety-eight percent of the P.A.'s assets, he had sole authority to make decisions regarding the P.A. and to determine what monies went into the fund. Additionally, there is also evidence that he could utilize the retirement account without the consent of a third party. According to the husband's financial declaration, he owes the P.A. over $66,000.00 in loans. We therefore hold that the P.A. was merely a conduit through which the husband paid funds into his profit sharing fund and thus his contributions were both voluntary and contributory. We would note parenthetically that had the husband not elected to place fifteen percent of his salary into his profit sharing plan, those funds would have been available to acquire other marital property.

We next address the unanswered question in Smith of whether a contributory retirement plan may be divided upon divorce. We note first that most of the states that have considered this question have made no distinction between contributory and non-contributory plans and have held that the source of the funds was irrelevant. [291 S.C. 18] See, e.g., Blitt v. Blitt, 139 N.J.Super. 213, 353 A.2d 144 (1976). 2 As we view this subject, the inequitable circumstance that family court judges must be cognizant to address is the situation where a spouse

Page 887

voluntarily diverts family income into essentially a savings or investment account designated as a pension or profit sharing plan, and then, at the time of divorce, claims that the fund is separate property and not subject to division. This type of voluntary contributory fund, in our opinion, must be scrutinized to determine whether equity demands its inclusion in the marital estate. We are not prepared to state, however, that mandatory retirement funds, where an employee is required to contribute as a condition of his or her employment, should be included in equitable division. Therefore, the sole fact that a retirement fund is contributory does not determine whether the fund should be included in the marital estate. 3

In dealing with the question of whether a plan is marital property, we prefer to leave it to the sound discretion of the family court judges to scrutinize the facts in each case and make a determination whether the plan in a specific case should be included in the marital estate. In an effort to furnish some guidance to the bench and bar on this subject, the following factors should be considered by family court judges in making such a determination: (1) whether the pension plan is mandatory for all employees of the spouse's employer; (2) whether the spouse has control over the amount of funds placed in the plan; (3) whether funds in the plan are vested; (4) whether the funds are readily accessible to the spouse; (5) whether the spouse has control over the plan's investments; (6) whether the spouse has personally dealt with the plan, i.e., lent it money or borrowed from it; (7) whether a third party makes independent judgments regarding the spouse's dealings with the plan on such matters as loans from the plan or the use of its property; (8) whether the spouse uses assets of the plan [291 S.C. 19] without adequate compensation for their use; and (9) whether the plan meets the requirements of a qualified plan under provision of the Federal Internal Revenue Code.

Although presumably the civil service retirement plans in both Carter and Anderson were contributory, it is implicit from the opinions that the employee spouse, unlike the husband here, had no control over the administration of the plans. We therefore find no abuse of discretion in the family court's inclusion of the husband's profit sharing plan in...

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19 practice notes
  • Griffith v. Griffith, No. 2890.
    • United States
    • Court of Appeals of South Carolina
    • October 12, 1998
    ...bar to all alimony under section 20-3-130(A), and requires the reimbursement of court-ordered temporary spousal support. Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 (Ct.App.1986). This response is further mandated by the family court's ruling that by invoking her privilege against self-in......
  • Johnson v. Johnson, No. 1212
    • United States
    • Court of Appeals of South Carolina
    • March 14, 1988
    ...to marriage). 5 See Morris v. Morris, 268 S.C. 104, 232 S.E.2d 326 (1977) (household contents acquired during marriage); Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 (Ct.App.1986) (contribution of spousal income to voluntary pension plan); Trimnal v. Trimnal, supra (reduction of mortgage i......
  • State v. Caldwell, No. 4392.
    • United States
    • Court of Appeals of South Carolina
    • May 15, 2008
    ...of the public at the time of the alleged actions, they were not "on or about the premises of another." Id. 662 S.E.2d 486 at 12-13, 351 S.E.2d at 883. Here, Caldwell clearly was not on public We do not read into the statute, as does Caldwell, that an accused must be unlawfully upon the prem......
  • Smith v. Smith, No. 1069
    • United States
    • Court of Appeals of South Carolina
    • December 7, 1987
    ...alimony as a basis for enhancing her share of the marital property. This Page 409 contention, therefore, lacks merit. Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 4. Sale of Marital Home The husband also charges the trial court abused its discretion in apportioning the marital property bec......
  • Request a trial to view additional results
19 cases
  • Griffith v. Griffith, No. 2890.
    • United States
    • Court of Appeals of South Carolina
    • October 12, 1998
    ...bar to all alimony under section 20-3-130(A), and requires the reimbursement of court-ordered temporary spousal support. Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 (Ct.App.1986). This response is further mandated by the family court's ruling that by invoking her privilege against self-in......
  • Johnson v. Johnson, No. 1212
    • United States
    • Court of Appeals of South Carolina
    • March 14, 1988
    ...to marriage). 5 See Morris v. Morris, 268 S.C. 104, 232 S.E.2d 326 (1977) (household contents acquired during marriage); Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 (Ct.App.1986) (contribution of spousal income to voluntary pension plan); Trimnal v. Trimnal, supra (reduction of mortgage i......
  • State v. Caldwell, No. 4392.
    • United States
    • Court of Appeals of South Carolina
    • May 15, 2008
    ...of the public at the time of the alleged actions, they were not "on or about the premises of another." Id. 662 S.E.2d 486 at 12-13, 351 S.E.2d at 883. Here, Caldwell clearly was not on public We do not read into the statute, as does Caldwell, that an accused must be unlawfully upon the prem......
  • Smith v. Smith, No. 1069
    • United States
    • Court of Appeals of South Carolina
    • December 7, 1987
    ...alimony as a basis for enhancing her share of the marital property. This Page 409 contention, therefore, lacks merit. Watson v. Watson, 291 S.C. 13, 351 S.E.2d 883 4. Sale of Marital Home The husband also charges the trial court abused its discretion in apportioning the marital property bec......
  • Request a trial to view additional results

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