Holcomb Dunbar - North Mississippi Attorneys

Marital Property

Jonathan Masters Divorce and Child CustodyMarital Property – Comingling

When handling property in a divorce the Court will look very closely the couple’s assets to determine what is “marital property.” Marital property will be included in the marital estate and is subject to division in the divorce while separate property, usually property who acquired before the marriage is separate, is not included. This past week, the Mississippi Court of Appeals addressed this issue and how a home was converted from separate property to marital property through certain actions taken by the couple during the marriage, or sometimes called “comingling.”

At the divorce hearing the wife, Constance, testified that she lived in the home nearly thirty years. Husband, Stephen, moved into the home after they married in 1998. Constance testified that, prior to 1997, the deed to the home listed both of her parents’ names with a right of survivorship. In 1997, Constance’s father transferred his half of the deed to her. Constance’s mother died in 2001, which resulted in her part of the deed transferring back to Constance’s father based on the right of survivorship. Later that year, Constance’s father and Stephen signed a deed quitclaiming their interest in the home to Constance. Around this time, the couple used the home as collateral to obtain a loan from Central Sunbelt Federal Union. Both Constance and Stephen were listed as the loan borrowers.

With respect to this home, the Chancery Court Judge found:

The Court finds that the plaintiff owns real property, conveyed from her
parents, which serves as the marital domicile of the parties and the parties’
minor child . . . Said property is titled solely in the name of CONSTANCE JO
SIMS[,] and Defendant, STEPHEN SIMS, quitclaimed his interest therein to
[Constance] in 2001. However, because the parties jointly borrowed money
with the home as collateral, which loan benefitted both parties, and because
[Stephen] continued to reside at the home as the spouse of [Constance] for
[ten] years after executing a quitclaim deed to [Constance] and made payments
of $558.99 each month thereafter until his incarceration in satisfaction toward
the mortgage taken against the property, the Court finds the marital home to
be a marital asset.

On appeal, Constance sought to have the home deemed separate property and not counted as part of the marital estate. Constance argued that even if the parties commingled their nonmarital
assets, the quitclaim deed Stephen signed constituted an “agreement to the contrary” that preserved the home as a non-marital asset. The Court of appeals was unconvinced. The court sided with the lower court’s decision. It too was believed Stephen’s contribution to satisfy the mortgage debt on home, and the long period of time in which the family resided there were enough to classify the marital home as a marital asset and subject to equitable division of marital property. This despite the husband signing a deed which would indicate to the contrary.

The opinion appears to broaden the interpretation of marital property and the ease in which “non marital” property can be converted. Couples should be well aware that certain ways of handling property through the course of a marriage may very well effect who ultimately receives the property in the event of a divorce.
Here is the full Opinion:

 

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2013-CA-00885-COA

CONSTANCE JO SIMS                                        APPELLANT
v.
STEPHEN SIMS                                                   APPELLEE

The Covington County Chancery Court granted Constance Sims a divorce from
Stephen Sims on the ground of felony incarceration. The court also awarded physical
custody of the couple’s minor child to Constance and divided the marital property.
Constance appeals and argues that the chancery court erred: (1) in classifying the marital
home as a marital asset, and (2) in failing address Constance’s alternative request for alimony
in her motion to amend the final judgment. Finding no error, we affirm.

FACTS

¶2. Constance and Stephen married on August 15, 1998. The couple had one child
together, Devin Sims, born on August 28, 1998. The family resided together in Collins,
Mississippi, until Constance and Stephen separated in January 2011. Around the time of
separation, Stephen pled guilty to six counts of embezzlement. He served eighteen months
in the custody of the Mississippi Department of Corrections (MDOC) before being paroled
to the Hinds County Restitution Center. Constance and Devin continued to live in the home.

¶3. Constance filed for divorce on February 7, 2012, on the grounds of felony
incarceration and desertion. Miss. Code Ann. § 93-5-1 (Supp. 2013). Constance also
requested physical custody of Devin, child support, exclusive ownership of the home,
equitable distribution of the marital assets, and alimony.

¶4. The court held a hearing on September 17, 2012. Constance testified that she had
lived in the home nearly thirty years. Stephen moved into the home after they married in
1998. Constance stated that, prior to 1997, the deed to the home listed both of her parents’
names with a right of survivorship. In 1997, Constance’s father transferred his half of the
deed to her. Constance’s mother died in 2001, which resulted in her part of the deed
transferring back to Constance’s father based on the right of survivorship. Later that year,
Constance’s father and Stephen signed a deed quitclaiming their interest in the home to
Constance. This was the only deed admitted into evidence at the hearing.

¶5. Constance testified that the home was paid for when the quitclaim deed was signed.
Near the time Constance obtained the deed, she and Stephen used the home as collateral to
obtain a loan from Central Sunbelt Federal Union. Both Constance and Stephen were listed
as the loan borrowers. Stephen testified that he paid the monthly mortgage of $558.99 from
the time the loan was obtained to the time he was incarcerated.

¶6. Stephen was a resident at the Hinds County Restitution Center at the time of the
hearing. He testified that the MDOC prohibited him from seeking employment for the time
being, due to his poor health conditions. Constance testified that she had been doing several
different part-time jobs, but was struggling to find work. She also stated that she filed for
disability six weeks before the hearing.

¶7. In the judgement of divorce, the chancellor stated that Constance was entitled to a
divorce on the ground of felony incarceration. Miss. Code Ann. § 95-3-1 (Rev. 2013). In
regard to the marital home, the chancellor stated the following:
The Court finds that the plaintiff owns real property, conveyed from her
parents, which serves as the marital domicile of the parties and the parties’
minor child . . . Said property is titled solely in the name of CONSTANCE JO
SIMS[,] and Defendant, STEPHEN SIMS, quitclaimed his interest therein to
[Constance] in 2001. However, because the parties jointly borrowed money
with the home as collateral, which loan benefitted both parties, and because
[Stephen] continued to reside at the home as the spouse of [Constance] for
[ten] years after executing a quitclaim deed to [Constance] and made payments
of $558.99 each month thereafter until his incarceration in satisfaction toward
the mortgage taken against the property, the Court finds the marital home to
be a marital asset.

¶8. The chancellor granted Constance exclusive use and possession of the home and her
personal property within the home. In addition, the chancellor granted Constance ownership
of the home, subject to an $18,000 lien in favor of Stephen no sooner than when Devin
reaches twenty-one years of age. Constance was also held responsible for satisfying the
remainder of the debt secured by the home. The chancellor awarded Constance physical
custody of Devin, and Stephen was ordered to pay $125 per month in child support.
Constance was also awarded sole use and possession of the automobile she had shared with
Stephen.

¶9. Constance filed a motion to amend the judgment of divorce on October 29, 2012.
Constance requested the following pursuant to Mississippi Rule of Civil Procedure 52: (1)
the chancellor amend the findings of fact to state that the marital home is part of Constance’s
separate estate, as opposed to a marital asset; (2) in the alternative, the chancellor amend the
findings of fact to address alimony; and (3) the chancellor address the assignment of the
remainder of the marital debts. The chancellor issued an amended judgment of divorce,
upholding his decision to classify the marital home as a marital asset. Additionally, the
chancellor assigned responsibility for the listed marital debts. The chancellor did not address
Constance’s alternative request for alimony.

STANDARD OF REVIEW

¶10. “This Court employs a limited standard of review of property division and distribution
in divorce cases.” Bowen v. Bowen, 982 So. 2d 385, 393 (¶32) (Miss. 2008) (quoting Owen
v. Owen, 928 So. 2d 156, 160 (¶10) (Miss. 2006)). The chancellor’s distribution of the
marital assets will be affirmed as long as “it is supported by substantial credible evidence.”
Id. at 394 (¶32). In addition, “[a]limony awards are within the chancellor’s discretion and
will not be reversed by the Court on appeal absent manifest error or an abuse of discretion.”
Cosentino v. Cosentino, 912 So. 2d 1130, 1132 (¶8) (Miss. Ct. App. 2005) (citing Baker v.
Baker, 861 So. 2d 351, 353 (¶10) (Miss. Ct. App. 2003)).

DISCUSSION
1. Marital Home

¶11. Marital property is defined as “any and all property acquired or accumulated during
the marriage.” Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994). Such assets are
subject to equitable distribution by the chancellor. Id. Nonmarital assets may be converted
into marital assets if they are commingled with marital property or utilized for domestic or
familial purposes, absent an agreement to the contrary. Heigle v. Heigle, 654 So. 2d 895, 897
(Miss. 1995); Johnson v. Johnson, 650 So. 2d 1281, 1286 (Miss. 1994); see also Maslowski
v. Maslowski, 655 So. 2d 18, 20 (Miss. 1995). Further, commingled property, which has
become marital property, is subject to equitable distribution. See Maslowski, 655 So. 2d at
20; Heigle, 654 So. 2d at 897; Johnson, 650 So. 2d at 1286.

¶12. “An inheritance or gift made to one spouse during the marriage remains the separate
property of that spouse.” Allgood v. Allgood, 62 So. 3d 443, 447 (¶13) (Miss. Ct. App. 2011)
(citing Ferguson v. Ferguson, 639 So. 2d 921, 928 (Miss. 1994)). However, “[s]spouses
possessing separate ownership convert the property into marital property through the
following actions: conversion by implied gift, family use, or commingling.” Id. (footnote
omitted) (citing Yancey v. Yancey, 752 So. 2d 1006, 1011 (¶20) (Miss. 1999)).
¶13. The burden of proof is on the person claiming the assets to be nonmarital to
demonstrate their nonmarital character. A & L Inc. v. Grantham, 747 So. 2d 832, 839 (¶23)
(Miss. 1999). Constance contends that even if the parties commingled their nonmarital
assets, the quitclaim deed constituted an “agreement to the contrary” that preserved the home
as a nonmarital asset. Our supreme court has declared that the formal state of a title is “no
longer determinative in deciding a spouse’s rights to the property.” Maslowski, 655 So. 2d
at 21(citing Hemsley, 639 So. 2d at 914). In addition, Constance and Stephen lived in home
together for nearly ten years after the quitclaim deed was signed, using the home as collateral
for a joint loan. The chancellor stated in his bench ruling that these actions resulted in the
commingling of nonmarital and marital assets. After careful review of the record, we agree
with the chancellor’s finding.

¶14. “A chancery court has authority, where equity so demands, to order a fair division of
property accumulated through the joint contributions and efforts of the parties.” Brown v.
Brown, 797 So. 2d 253, 257 (¶9) (Miss. Ct. App. 2001) (citing Hemsley, 639 So. 2d at 915).
In explaining his equitable division of the marital property, the chancellor considered
Stephen’s contribution to satisfy the mortgage debt on the family home, and determined that
the equitable division of the parties’ property credited Stephen for that contribution. Finding
that the evidence presented in the record is consistent with the chancellor’s judgment, we
affirm both the chancellor’s classification of the marital home as a marital asset and the
equitable division of marital property.

2. Alimony

¶15. Constance also argues that the court erred by failing to address the issue of alimony
in the amended judgment of divorce. Specifically, she claims that the court was required to
make specific findings of fact and conclusions of law on her alternative request for alimony.
¶16. “Alimony and equitable distribution are distinct concepts, but together they command
the entire field of financial settlement of divorce. Therefore, where one expands, the other
must recede.” Ferguson, 639 So. 2d at 929. “If the equitable division of property leaves
neither spouse with a deficit with respect to having sufficient resources and assets to meet
his or her needs and living expenses, then no alimony award is appropriate.” Jackson v.
Jackson, 114 So. 3d 768, 777 (¶22) (Miss. Ct. App. 2013) (citations omitted). Constance
was awarded exclusive use and ownership of the marital home, as well as a majority of the
marital assets. The chancellor’s equitable division did not leave Constance with a deficit.
We agree with the chancellor that alimony was inappropriate. The question remains whether
the chancellor was required to address alimony based on Constance’s request under Rule
52(a).

¶17. 52(a) provides:
In all actions tried upon the facts without a jury the court may, and shall upon
the request of any party to the suit or when required by these rules, find the
facts specifically and state separately its conclusions of law thereon[,] and
judgment shall be entered accordingly.

Our supreme court has held that “where a trial court makes general findings of fact and
conclusions of law, it has complied with [Rule] 52.” Ill. Cent. R.R. Co. v. Acuff, 950 So. 2d
947, 957 (¶35) (Miss. 2006) (citing Century 21 Deep S. Props. Ltd. v. Corson, 612 So. 2d
359, 367 (Miss. 1992)). Here, the chancellor made general findings of fact and conclusions
of law for equitable distribution. The chancellor found alimony inappropriate. As a result,
specific findings of fact and conclusions of law regarding alimony were not necessary. We
find that the chancellor complied with the requirements of Rule 52. This argument is without
merit.

2018