Byington v. Byington

568 N.W.2d 141, 224 Mich. App. 103
CourtMichigan Court of Appeals
DecidedJune 10, 1997
DocketDocket No. 181936
StatusPublished
Cited by70 cases

This text of 568 N.W.2d 141 (Byington v. Byington) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Byington v. Byington, 568 N.W.2d 141, 224 Mich. App. 103 (Mich. Ct. App. 1997).

Opinions

O’Connell, P.J.

In this divorce action, plaintiff appeals as of right the division of property. The bulk of the $12 million marital estate has been divided to the satisfaction of the parties, but they dispute whether one particular asset, earned by defendant after moving to another state and after plaintiff had filed for divorce, is a marital asset properly subject to division. The trial court, in a thorough and well-written opinion, concluded that it was not and awarded it entirely to defendant.

We believe that the court erred in holding that the asset was not a marital asset. While the facts that defendant earned the asset in issue largely without [106]*106contribution from plaintiff and after the parties had evinced an intent to lead separate lives are significant, their significance lies not in determining the bounds of the marital estate, but in determining how that estate should be apportioned. Accordingly, we vacate the division of property with respect to its treatment of the compensation package and remand for the court to determine the proper apportionment thereof.

The parties were married in 1961. At the time, defendant was launching what was to become a very successful career in the hospital supplies field. Defendant began a small business in the basement of his father’s pharmacy, and, in 1984, sold the business to a larger concern, the Hillman Company, for approximately five million dollars. He continued on with Hillman as a salaried employee.

In 1989, the Stuart Company acquired Hillman, and defendant moved to Pennsylvania to take an executive position with Stuart. Plaintiff had always been a supportive spouse, but had taken little or no direct role in defendant’s business pursuits. Because the two had a daughter who wished to complete her high school years at the school she had been attending, plaintiff remained in Michigan upon defendant’s move to Pennsylvania. The parties agree that there was no marital discord at this time and that the decision to have a “commuter marriage” was intended to be temporary.

Unfortunately, despite the parties’ frequent visits to one another, the marriage soon became troubled. Though the parties attempted to preserve their marriage, the two recognized during the summer of 1992 that divorce was likely.

[107]*107Plaintiff filed for divorce on August 10, 1992. In the fall of 1992, the parties began to work out a property division. To this end, they employed Thomas Scholler, an attorney and accountant, and agreed to have him assist them in arriving at an equitable division of property. In December 1992, Scholler submitted to the parties a detailed document entitled “Schedule of Allocated Asset Values” in which he addressed all the significant assets of the marital estate as it existed at that time, recommending a disposition of each. It does not appear that the parties ever adopted the December 1992 recommendation of Scholler.

Two events appear to have delayed an agreement regarding a property division. First, defendant was heavily involved in negotiations pertaining to the acquisition of Stuart by a still larger company. The acquisition fell through in February 1993. Second, in the spring of 1993, plaintiff decided to run for public office. To increase plaintiffs chance of success, and to minimize the possibility that the parties’ difficulties would be aired publicly, the two agreed that the divorce proceedings would be held in abeyance until plaintiff’s political campaign ended.

During this abeyance period, defendant entered into a new employment contract with Stuart. The disposition of the compensation due under the terms of this contract constitutes the focus of the parties’ dispute on appeal.

Soon after the acquisition had fallen through in February 1993, defendant tendered his resignation to Stuart. Stuart, anxious to have defendant remain with the company, offered him a more lucrative compensation package. The general terms were negotiated around March 23, 1993, and provided that, if various [108]*108contingencies came to pass, most notably the acquisition of Stuart by another entity, defendant would receive certain bonuses and incentives. Defendant also became eligible for a “phantom stock [option]” plan, the details of which are not relevant for purposes of this appeal, but which, in general, allowed defendant to benefit from an increase in the stock price of Stuart. Defendant accepted the offer and remained with Stuart. Defendant’s prior employment contract did not contain similar terms.

Plaintiff’s pursuit of political office was ultimately unsuccessful. Nevertheless, she soon obtained alternative governmental employment in an executive, well-paid capacity.

The parties resumed their settlement negotiations in the fall of 1993 and, in light of the intervening six months, agreed to use July 1, 1993, as the valuation date of their assets. Although defendant had not immediately disclosed his new terms of employment, he did so by June 24, 1993.

In December 1993, through the efforts of defendant and others, Stuart was purchased by another company and, consequently, defendant became eligible to receive certain contingent compensation provided for in his new employment agreement with Stuart. This compensation ultimately totaled approximately $2 million. Defendant received some or all of this compensation in 1994.

In summary, defendant moved to another state in 1989. The marriage became troubled, and plaintiff filed for divorce in 1992. Both parties concurred in a delay in the division of the marital estate. In February 1993, defendant resigned from his employment, but was lured back by the offer of a lucrative, contingent [109]*109bonus package. In December 1993, the contingencies set forth in defendant’s employment contract came to pass, due in part or whole to defendant’s efforts during the preceding nine months. At that time, defendant became eligible to receive the compensation now in issue.

On December 9, 1994, a judgment of divorce was entered. With respect to the $2 million compensation package, the court ruled that it was not part of the marital estate, stating:

The assets here in dispute were not only acquired by defendant well after, almost two years after, this case was started; those assets were earned by defendant without a contribution from plaintiff. An asset earned during a marriage, but received thereafter, is a marital asset. An asset actually generated, not merely received, after a marriage has broken down is not a product of that marriage. That is what happened in this case. [Citations omitted.]

The circuit court also stated, “the compensation package at issue is not a marital asset.” Accordingly, the court excluded the compensation package from the marital estate, awarding it entirely to defendant as separate property.

Plaintiff now appeals the circuit court’s decision as of right. We review the court’s findings of fact for clear error and then determine whether the ultimate dispositional ruling was fair and equitable in light of the facts, reversing the disposition only if we are left with the firm conviction that the distribution was inequitable. Sands v Sands, 442 Mich 30, 34; 497 NW2d 493 (1993).

Marriage is a status that legally terminates only upon the death of a spouse or upon entry of a judgment of divorce. Kurz v Kurz, 178 Mich App 284, 291, [110]*110n 1; 443 NW2d 782 (1989).

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Cite This Page — Counsel Stack

Bluebook (online)
568 N.W.2d 141, 224 Mich. App. 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/byington-v-byington-michctapp-1997.