McKissack v. McKissack


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Docket Number: 2009-CA-00259-COA
Oral Argument: 06-16-2010
 

 

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Court of Appeals: Opinion Link
Opinion Date: 10-12-2010
Opinion Author: Griffis, J.
Holding: Affirmed in part, reversed and remanded in part.

Additional Case Information: Topic: Divorce: Irreconcilable differences - Marital property - Family-use doctrine - Periodic alimony
Judge(s) Concurring: King, C.J., Lee and Myers, P.JJ., Irving, Barnes, Ishee, Roberts, Carlton and Maxwell, JJ.
Procedural History: Bench Trial
Nature of the Case: CIVIL - DOMESTIC RELATIONS

Trial Court: Date of Trial Judgment: 11-10-2008
Appealed from: LOWNDES COUNTY CHANCERY COURT
Judge: H. J. "Jim" Davidson, Jr.
Disposition: GRANTED DIVORCE, DIVIDED MARITAL PROPERTY, AND AWARDED WIFE PERIODIC MONTHLY ALIMONY
Case Number: C.A.2006-0350-D

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Billy Stephen McKissack




MARC DARREN AMOS, KRISTEN WOOD WILLIAMS



 
  • Appellant #1 Brief
  • Appellant #1 Reply Brief

  • Appellee: Terri McKissack JAK MCGEE SMITH  

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    Topic: Divorce: Irreconcilable differences - Marital property - Family-use doctrine - Periodic alimony

    Summary of the Facts: Billy Stephen McKissack and Terri McKissack agreed to a divorce based on irreconcilable differences. They submitted the issues of property division and support to the chancellor. The chancellor entered a final judgment of divorce, which gave Terri ownership of a certificate of deposit in the amount of $500,000. The other certificate of deposit in the amount of $42,000 was awarded to Steve. This division was part of a larger property division. Terri was awarded assets valued at $1,234,035.35. Steve was awarded assets valued at $1,080,812.05. Steve retained ownership of his separate nonmarital property – the shares of State Termite valued at $1,000,000 and an apartment complex valued at $212,500. Terri was awarded $6,000 per month in periodic alimony. Steve appeals.

    Summary of Opinion Analysis: Issue 1: Family-use doctrine Steve argues that the chancellor misapplied the family-use doctrine to find that the certificates of deposit had been converted to marital property. He argues that the chancellor should have looked to see whether the certificates of deposit had been commingled with other marital assets because commingling is the proper analysis, not the family-use doctrine. To equitably divide property, the chancellor must classify the parties’ assets as marital or separate, value those assets, and equitably divide the marital assets. There is a presumption that assets acquired or accumulated during the course of a marriage are subject to equitable division unless it can be shown by proof that such assets are attributable to one of the parties' separate estates prior to the marriage or outside the marriage. Steve claimed that three assets were his separate property: State Termite, two apartment complexes, and the certificates of deposit. The chancellor classified the company as Steve’s separate property because Steve had gained ownership of the company through inheritance and gift. Importantly, Steve’s ownership was not acquired until the last six or seven years of marriage. The chancellor next found that the two apartment complexes were Steve’s separate property. Steve testified that he withdrew approximately $900,000 from the company as part of a stock repurchase in which he had sold some of his stock back to the company. He then loaned approximately $600,000 to Millie Rollins to remodel some apartments that she owned. Rollins later repaid the entire loan plus four percent in interest. The chancellor determined that the apartments were separate property because the funds came solely from State Termite, which was separate property. No marital funds were used in the loan to Rollins, and Terri was not involved in the transaction. Sometime after Rollins had repaid the loan, Steve created the certificates of deposit totaling $542,000. The chancellor found that the certificates of deposit had been converted to marital property through the family-use doctrine. Numerous cases have used the family-use doctrine to convert a separately owned marital home to marital property. The trend in Mississippi has been to apply the family-use doctrine to physical assets such as the family home, furniture, antiques, china, silver, and jewelry. Here, Terri argues that the chancellor properly applied the family-use doctrine to cash or a cash equivalent such as a certificate of deposit. Terri claims that because Steve used a substantial portion of the $900,000 withdrawn from the company on family expenses, then the remainder of the asset, or here the certificates of deposit, was also converted to marital property. Terri argues that Steve used a “substantial amount” of the $900,000 withdrawn from State Termite on family purposes, such that the family-use doctrine converted the remainder of the withdrawn funds, which were now held in the certificates of deposit, into marital property. There is no doubt that the real and personal property (automobiles, lake house, etc.) that Steve purchased with this cash, and which was used by the family, was properly determined to be marital property and divided as such in the chancellor’s division of marital assets. However, the family’s use of those assets alone was not enough to pull the remainder of the $900,000, held separately by Steve in the certificates of deposit, into the marital estate. The source of the funds at issue was a $900,000 distribution – a withdrawal or “drawdown” – from State Termite to Steve. The payment from State Termite to Steve was deposited in Steve’s separate account. Steve does not dispute that he loaned a portion of the funds to Rollins, but that in itself did not commingle the funds with marital property. Steve testified that he spent approximately $350,000 of the $900,000 on family expenses. Thus, the assets purchased with the $350,000 were properly classified as marital property. The issue is whether the $542,000 remaining in the certificates of deposit was transmutated, from separate to marital property, by commingling as a result of the approximately $350,000 spent on family expenses. Commingled property is a combination of marital and non-marital property, which loses its status as non-marital property as a result. Here, there is no marital asset with which Steve’s separate funds were commingled. Because the $542,000 held in the certificates of deposit were not commingled with marital funds, the certificates of deposit remain a part of Steve’s separate estate and should not have been included in the chancellor’s equitable distribution of marital property. Issue 2: Alimony Steve argues that the chancellor should have awarded Terri rehabilitative alimony instead of periodic alimony because Terri is a college graduate capable of supporting herself. Alternatively, Steve argues that the chancellor’s alimony award of $6,000 per month was excessive in light of the amount of liquid assets awarded to Terri. If there are sufficient marital assets which, when equitably divided and considered with each spouse's nonmarital assets, will adequately provide for both parties, no more need be done. If the situation is such that an equitable division of marital property, considered with each party's nonmarital assets, leaves a deficit for one party, then alimony based on the value of nonmarital assets should be considered. Terri is fifty-one years old and has a college degree. But she has virtually no work experience during the marriage. Currently, she has a monthly income of approximately $800 from her part-time employment as an interior designer. The chancellor noted the wide disparity in the parties’ incomes and their ability to earn income. Specifically, the chancellor found that the property Terri received in the equitable distribution would produce some income, but not enough to maintain Terri’s lifestyle. In contrast, the property awarded to Steve, including several rental houses, would earn much more income. Thus, there is substantial evidence to support the chancellor’s award of periodic alimony.


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