Reeves v. Reeves

• Court: Court of Appeals of South Carolina
• Decided: May 15, 2003
• Docket: 2003-UP-337
• Status: Unpublished

Opinion

Wife entered the marriage with a house

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

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Julius B. Reeves,        Appellant,

v.

Joan M. Reeves,        Respondent.

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Appeal From Lexington County
Richard W. Chewning, III, Family Court Judge

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Unpublished Opinion No. 2003-UP-337
Submitted March 10, 2003 – Filed May 15, 2003

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REVERSED and REMANDED

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Lori D. Hall, of West Columbia, for Appellant.

F. Glenn Smith, of Columbia, for Respondent.

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PER CURIAM: In this domestic action, Julius B. Reeves (“Husband”) appeals the family court’s order granting him a limited equitable interest in the marital residence and awarding his wife, Joan M. Reeves (“Wife”), $5,000 in attorney’s fees.  We reverse and remand.

FACTS

After twenty-one years of marriage, Husband and Wife separated in July of 2000.  Wife entered the marriage with a minor son from a previous marriage.  During the marriage, one child was born.  Both of these children were emancipated at the time of the parties’ separation.

Throughout most of the marriage, Husband worked outside the home as the primary wage-earner.  At the time of trial, Husband was sixty-two years old.  He was employed at the South Carolina Department of Transportation, and earned a gross monthly income of $3,041.00.  At the time of trial, Husband did not suffer from any serious or debilitating medical problems. 

Wife was forty-eight years old at the time of trial.  She is a high school graduate.  With Husband’s approval, Wife worked mainly as a homemaker during much of the marriage.  She began working outside the home on a regular basis approximately five years before the parties separated.  Her work experience has been limited to secretarial positions.  At the time of trial, she was employed as a legal secretary and earned a gross monthly income of $2,568.00.

It is undisputed that Wife suffers from a number of medical ailments, including seizure disorder, miscognitive tissue disorder, and recurrent bursitis.  She has also been diagnosed with possible Multiple Sclerosis, severe depression, anxiety disorder, chronic insomnia, chronic ulcerative dermatitis, chronic diffuse pain syndrome, and severe iron deficiency.

During the marriage, Wife received Social Security payments for the benefit of her son from a previous marriage, who was entitled to the benefits due to his father’s death.  The payments averaged $900.00 per month for 146 months, totaling $131,400.00.  The checks were made payable to Wife, but Husband admittedly forged her signature and cashed them without her knowledge or approval.

During the marriage, Wife borrowed funds to purchase a car for the parties’ son.  Husband later sold the vehicle and spent the proceeds but did not satisfy the $1,267.34 balance due on the car loan. 

The controversy on appeal centers on the residence owned by Wife prior to the marriage.  The house was valued at $30,000.00 at the time of the marriage and was encumbered by a first mortgage.  In 1983 or 1984, Wife conveyed the house to Husband so that he could obtain a credit rating sufficient to allow the parties to jointly purchase another home.  However, this never occurred, and according to Wife, Husband subsequently refused to transfer the house back to her.

During the marriage, Husband placed a second mortgage on the house to pay the college expenses of the parties’ son.  Prior to the separation of the parties, Wife paid off this second mortgage to avoid foreclosure of the property.  At the time marital litigation was commenced, the house was valued at $63,000.00 and was subject to a first mortgage of $8,619.00.

Husband filed this action in August of 2000.  By final order dated May 8, 2001, the family court reserved Wife’s right to claim alimony and split the parties’ personal property approximately 50/50.  As to the residence, the court ordered Husband to convey it to Wife by general warranty deed, free and clear of all liens except the original mortgage.  The court found the home had an appraised value of $63,000.00 and was subject to an $8,619.00 outstanding first mortgage balance.  The court determined the net equity in the house was $18,352.00.  This amount represented the value of the home at the time of trial, less the premarital value of the home, the outstanding balance of the first mortgage, and the amount Wife had paid to satisfy the second mortgage.  The court awarded Husband a one-half interest in this adjusted net equity, equaling $9,176.00.  The family court also ordered Husband to contribute $5,000.00 toward Wife’s attorney’s fees and costs.  Husband appeals the disposition of the residence and the award of attorney’s fees.

STANDARD OF REVIEW

An appellate court reviewing a family court order has the authority to correct errors of law and may find facts in accordance with its own view of the preponderance of the evidence. See Sharps v. Sharps, 342 S.C. 71, 79, 535 S.E.2d 913, 917 (2000) (holding an appellate court may find facts in accordance with its view of the preponderance of the evidence); McCuen v. McCuen, 348 S.C. 179, 181-82, 558 S.E.2d 926, 928 (Ct. App. 2002) (holding this Court “has the authority to correct errors of law and find facts in accordance with its own view of the preponderance of the evidence”); see also S.C. Code Ann. § 14-3-320 (Supp. 1983) (stating the Supreme Court’s scope of review in equity cases is to “review the findings of fact as well as the law”); S.C. Code Ann. § 14-8-200(a) (Supp. 1999) (stating this Court “shall apply the same scope of review that the Supreme Court would apply in a similar case”).

LAW/ANALYSIS

Husband argues the residence should have been declared marital property and the full equity divided equally between the parties. 

I. Division of the Marital Home

Before addressing equitable distribution, the family court must first identify the marital property. Johnson v. Johnson, 296 S.C. 289, 293, 372 S.E.2d 107, 110 (Ct. App. 1988) (holding the first step for the family court to take in making an equitable distribution is to “identify the marital property, both real and personal, to be divided between the parties”); see also S.C. Code Ann. § 20-7-473 (Supp. 1986) (stating the family court has no jurisdiction as to the division of nonmarital property); S.C. Code Ann. § 20-7-420(2) (Supp. 2002) (stating the family court has jurisdiction to divide marital property); S.C. Code Ann. § 20-7-473(5) (Supp. 1986) (stating the increase in the value of nonmarital property during the marriage, “to the extent that the increase resulted directly or indirectly from efforts of the other spouse during marriage,” is marital property); Calhoun v. Calhoun, 339 S.C. 96, 106, 529 S.E.2d 14, 20 (2000) (holding nonmarital property may be transmuted into marital property if it is utilized by the parties in a manner that indicates “an intent by the parties to make it marital property”).  In this case the final order does not address this issue, and we are unable to properly review the distribution for this reason.

The final order of the family court does not explain whether the house was considered marital property, with the disparate division based upon Husband’s financial misconduct, or nonmarital property in which Husband held a special equity.

The court seems to have treated Husband’s interest as a special equity by the manner in which it calculated the distribution because the court deducted the pre-marital value of the home, the first mortgage balance, and the second mortgage payout from the current value of the home, dividing the remaining equity between the parties. See S.C. Code Ann. § 20-7-473(5) (Supp. 1986) (providing for a special equity in any increase in the value of nonmarital property “to the extent that the increase resulted directly or indirectly from efforts of the other spouse during marriage”); Murray v. Murray, 312 S.C. 154, 159, 439 S.E.2d 312, 316 (Ct. App. 1993) (“A spouse has an equitable interest in appreciation of property to which she contributed during the marriage, even if the property is nonmarital.”).

However, under the facts of this case, the family court could have alternatively considered the property transmuted.

Nonmarital property may be transmuted into marital property if it is utilized by the parties in a manner that indicates “an intent by the parties to make it marital property.” Calhoun, 339 S.C. at 106, 529 S.E.2d at 20.  Transferring the title of property from one spouse to the other spouse is generally considered evidence of transmutation of property. Johnson, 296 S.C. at 295, 372 S.E.2d at 110-11; see also S.C. Code Ann. § 20-7-473 (Supp. 1986) (“Interspousal gifts of property, including gifts of property from one spouse to the other . . . , are marital property which is subject to division.”). 

During the marriage, Wife conveyed the house to Husband.  Although she states she did not really understand what she was signing, she undeniably conveyed the property to Husband in an effort to improve his credit.  Wife claims Husband defrauded her by devising the plan shortly after she received shock therapy and by convincing her to transfer the house to him without ever intending to buy another house.  However, Wife acknowledged she understood the nature of the plan and intended to hold out to third parties, presumably financial institutions, that the property was owned by Husband.  Thus, at least as to third parties, she intended to convey ownership to Husband.

Because the family court did not declare whether the residence was marital property and failed to adequately support its treatment of the residence, we are unable to discern the reasons for the court’s division of the residence.  We are reluctant to review the award because the issues may turn to some degree on credibility, a matter best left to the family court.  If the family court intended to limit Husband to a special equity, we must review this determination in light of the conveyance to Husband and the circumstances surrounding it.  On the other hand, if the court considered the house transmuted, but adjusted the award to reflect the court’s view of Husband’s financial misconduct, we must consider different issues on appeal.  In this regard, we note the family court found that Husband forged Wife’s name to checks totaling $131,400.00, and “utilized the checks.”  It is unclear from this language whether the court believed Husband’s testimony that he spent the money in support of the marriage or decided he misappropriated the funds for his own use.

Because we conclude the family court erred in dividing the residence without first finding the property to be marital or nonmarital, we reverse the division of the residence and remand the issue to the family court.  On remand, the family court should decide whether the residence was transmuted, and if so, apportion this asset in accordance with South Carolina Code Annotated section 20-7-472.  See S.C. Code Ann. § 20-7-472 (Supp. 1986) (detailing fifteen factors for the family court to consider in making an equitable distribution of marital property); Calhoun, 339 S.C. at 106, 529 S.E.2d at 20 (“When property is determined to have been transmuted, the entire property, not just a portion of the property, is included in the parties’ marital property which is thereafter apportioned by the family court using the criteria set forth in S.C. Code Ann. § 20-7-472.”).  The court should set forth its findings of fact and legal conclusions in support of its final determination.

II. Award of Attorney’s Fees

Husband next argues Wife should not have been awarded attorney’s fees.  In view of our disposition of the first issue, we remand this issue for further determination by the family court. See Donahue v. Donahue, 299 S.C. 353, 365, 384 S.E.2d 741, 748 (1989) (holding one of the factors for the family court to consider in making an award of attorney’s fees is the beneficial result obtained); see also S.C. Code Ann. § 20-3-130(H) (Supp. 1990) (stating in divorce proceedings, “the court, . . . after considering the financial resources and marital fault of both parties, may order one party to pay a reasonable amount to the other for attorney fees”).

CONCLUSION

For the foregoing reasons, the family court’s decision is

REVERSED and REMANDED. [1]

CURETON, STILWELL, and HOWARD, JJ., concur.

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[1] Because oral argument would not aid the Court in resolving any issue on appeal, we decide this case without oral argument pursuant to Rule 215, SCACR.