Hudson v. Hudson

757 S.E.2d 727, 408 S.C. 76, 2014 WL 1491606, 2014 S.C. App. LEXIS 79
CourtCourt of Appeals of South Carolina
DecidedApril 16, 2014
DocketAppellate Case No. 2012-212690; No. 5217
StatusPublished
Cited by3 cases

This text of 757 S.E.2d 727 (Hudson v. Hudson) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudson v. Hudson, 757 S.E.2d 727, 408 S.C. 76, 2014 WL 1491606, 2014 S.C. App. LEXIS 79 (S.C. Ct. App. 2014).

Opinion

SHORT, J.

In this divorce action, H. Eugene Hudson (Husband) appeals the family court’s equitable distribution award to Mary Lee Hudson (Wife). Husband argues the family court erred in the following rulings: (1) finding a prenuptial agreement (the Agreement) was unconscionable; (2) awarding an equitable interest in the increase in value of allegedly nonmarital property; (3) exercising jurisdiction over allegedly nonmarital property; (4) failing to make specific findings of fact; and (5) requiring Husband to pay a portion of Wife’s attorney’s fees. We reverse.

FACTS

The parties began dating in 1995 or 1996 and became engaged in November 1999. Husband was a licensed attorney, but he was no longer practicing. Husband owns his own business, Myrtle Beach Lifeguards, Inc. (Lifeguards), and he has numerous profitable investments. Wife has an Associate’s degree in fashion merchandising, and she has spent most of her career in networking and marketing. The marriage was Husband’s second and Wife’s first. No children were born of the marriage. At the time of the marriage, Husband was sixty-three years old and Wife was forty-one years old. The parties separated on October 19, 2008.

[79]*79The parties entered into the Agreement on February 4, 2000, and were married on February 19, 2000. The Agreement provides in relevant part:

7. The Husband hereby waives, discharges, releases, and quit-claims any and all right, title or interest whatsoever which he may claim in the property now owned, or hereafter acquired, of Wife by reason of this marriage.
8. The Wife hereby waives, discharges, releases, and quitclaims any and all right, title or interest whatsoever which she may claim in the property now owned, or hereafter acquired, of Husband by reason of this marriage.
9. Each party waives, discharges, and releases any and all claims and rights that he or she may acquire by reason of the marriage, including, but not limited to, the following:
d. any claim for alimony, support, any interest in any asset in the name of the other party, or any other name arising from the marriage....

Husband filed this divorce action. The family court bifurcated the final hearing to first determine the validity of the Agreement and to then take testimony on the remaining issues.

Husband testified he believed the Agreement would protect Lifeguards and all income derived therefrom. He understood “if the marriage didn’t work out that it would place the parties back where they were.” Wife testified she believed the Agreement’s purpose was to protect Husband’s family property, including a flea market. The family court found the parties intended to protect the “lifeguard service.”

Husband’s attorney drafted the Agreement. Husband testified he recommended Wife take the Agreement to an attorney, Steven Solomon, with whom he had once shared an office building. Solomon and Husband were allegedly close friends and colleagues. Wife testified Husband called her on February 4 to sign the Agreement. He allegedly told her she could not use her attorney of choice, Alan Clemmons, but she had to use Solomon. Wife did not understand she could not use Clemmons because he was employed with Husband’s lawyer’s firm at the time.

[80]*80Wife testified she never saw the Agreement prior to arriving at Solomon’s office, and she never read it. She and Solomon talked for about an hour while Solomon flipped through the Agreement. Wife testified she expressed concern to Solomon about the Agreement and told him she had not read it. She also expressed her belief the Agreement’s purpose was to protect Husband’s family’s flea market property because Husband was concerned about it. Solomon allegedly discussed the family property with her, and told her she was protected and the Agreement was fair. According to Wife, Solomon discussed portions of the Agreement, but he never explained she was waiving alimony, inheritance rights, or marital earnings. Rather, Solomon told Wife that Husband was a “fine individual, he’d known him for a very long time.” Wife went from Solomon’s office to Husband’s attorney’s office and signed the Agreement with Husband present on February 4, 2000.1 Neither Husband nor Wife paid Solomon a fee.

Wife testified the wedding plans were in full force, the wedding was in two weeks, she had sold her vehicle, and she had quit her job at the time she signed the Agreement. She explained that under the circumstances, she would have signed the Agreement regardless of whether it was fair, unless she knew it was fraudulent.

Dr. Douglas Ritz, a clinical psychologist, testified he evaluated Wife. Ritz noted the two-week time frame between Wife signing the Agreement and the date of the wedding added a heightened sense of urgency to Wife. He further agreed Wife had so much confidence and trust in Husband that “she would do most anything he requested.” Dr. Ritz concluded Wife was not under the legal definition of duress when she signed the Agreement. However, he believed she would have been devastated to walk away from the relationship and the impending wedding at the time. Dr. Ritz opined Wife was capable at the time the Agreement was signed, but she was emotional and trusted Husband. He concluded Wife would not have been able to understand the Agreement in the short period of time she was with Solomon.

[81]*81Husband admitted Wife was a good wife; shopped for groceries and cooked; and paid for renovations to the home. Wife testified she also helped Husband at Lifeguards, including computerizing the business, entertaining the lifeguards, and setting up and taking down umbrellas and chairs.

Husband omitted the flea market property and a franchise fee agreement from his financial declaration attached to the Agreement. Husband claimed he omitted the flea market property because at the time the Agreement was signed, his mother had a life estate in the property, and he had a remainder interest. He claimed he omitted the franchise fee agreement because although the franchise agreement was in his name, he leased it to Lifeguards for $50,000 per year and considered it Lifeguards’ asset.

Wife’s financial expert, Jeffrey E. Kinard, concluded the marital portion of Husband’s earnings during the marriage was $551,878. Kinard also conservatively estimated the value of Lifeguards at $1.1 million and attributed $500,437 to a “marital allocation.”

The family court issued an order filed January 12, 2012, and it held a hearing on both parties’ motions to reconsider. In its amended final order, filed June 21, 2012, the family court found Wife was not under duress at the time she signed the Agreement. As to unconscionability, the family court made the following findings:

This Court does not find that the [A]greement is unconscionable as far as it deals with alimony and support. However, as it deals with equitable division of marital property-in other words, the earnings, marital earnings or increase in value of non-marital property, I do find that to be unconscionable in this action.

Thereafter, the court found Kinard was the only expert witness who testified as to the valuation of Husband’s business holdings, and it found his work and conclusions “to be entirely credible and believable.” The court equitably divided the “marital estate” by finding net marital earnings of $552,378.

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Related

Hudson v. Hudson
Supreme Court of South Carolina, 2015
Slack v. Slack
62 V.I. 366 (Superior Court of The Virgin Islands, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
757 S.E.2d 727, 408 S.C. 76, 2014 WL 1491606, 2014 S.C. App. LEXIS 79, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudson-v-hudson-scctapp-2014.