MARILYN J KARAMANIAN V EDWARD KARAMANIAN
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STATE OF MICHIGAN
COURT OF APPEALS
MARILYN J. KARAMANIAN,
UNPUBLISHED
January 30, 2001
Plaintiff-Appellee,
v
No. 211876
Oakland Circuit Court
Family Division
LC No. 96-523829-DO
EDWARD KARAMANIAN,
Defendant-Appellant.
Before: Kelly, P.J., and White and Wilder, JJ.
KELLY, P.J. (concurring in part and dissenting in part.)
I concur with the majority’s holding that the trial court did not abuse its discretion in
awarding plaintiff attorney fees, but that its findings of fact regarding the amount of fees awarded
are inadequate and that this matter must be remanded to the trial court to make appropriate
factual findings regarding the amount of fees incurred by plaintiff as a result of defendant’s
conduct.
With regard to the majority’s conclusion that the post office property was part of the
marital estate, I respectfully dissent.
The trial court granted the parties a divorce in 1998, after thirty years of marriage.
Included in the marital estate was a parcel of property in which defendant has an interest. The
property (the “post office property”) had been leased to the Lathrup Village Post Office since
before defendant and his parents acquired it in 1972. Defendant’s father purchased the post
office property in 1972. The deed included defendant’s name, as well as his parents’ names.
However, payment for the property was made by defendant’s father. Until 1983, when
defendant’s father entered a nursing home, the income and expenses for the post office property
were included in defendant’s father’s tax returns. Until that time, the rental proceeds went into
an account that was in defendant’s father’s name. Defendant assumed responsibility for the rent
when his father entered the nursing home, putting his name on the bank account with his
mother’s name and reporting the income on the parties’ joint tax return. In 1987, the account
was in his name only. In 1996, defendant added his sister’s name to the account. Defendant
testified that he used the rental money to pay his parents’ bills, taxes and supplies. Over the
years, defendant gave his mother one or two hundred dollars a month out of the rental income.
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Defendant testified that, when his father became ill, defendant took over the management
responsibilities for the property. He denied any involvement by plaintiff. According to
defendant, plaintiff’s involvement with the property was minimal in that she would prepare the
tax bill. However, in more recent years, plaintiff did draft some correspondence.
According to plaintiff, defendant played a part in the purchase of the post office property,
although there is no indication that his role was financial. Plaintiff claims that she typed all
correspondence regarding the leases, which had five-year terms, and handled all the transactions
between the tenant and the family from the time the property was purchased. She completed
correspondence six or seven times a year.
Plaintiff testified that she and defendant used the funds from the post office rental income
for the children’s education, a trip to Europe, an addition of a sun room to their home and the
purchase of a boat. She admitted that these funds were kept in an account separate from the
family accounts. She also admitted that defendant gave his mother money from the rental
income.
The trial court included the post office property in the marital estate based on the
property’s appreciation during the marriage, the use of rental proceeds for marital expenses,
defendant’s management of the property with plaintiff’s assistance, and the inclusion of the rental
proceeds in the parties’ taxable income. Defendant claims on appeal that the trial court
erroneously considered this property a marital asset. I agree.
In a divorce action, this Court reviews a trial court’s factual findings for clear error.
McDougal v McDougal, 451 Mich 80, 87; 545 NW2d 357 (1996). A factual finding is clearly
erroneous if, after reviewing the entire record, this Court is left with the definite and firm
conviction that the trial court made a mistake. Welling v Welling, 233 Mich App 708, 709; 592
NW2d 822 (1999). The trial court’s dispositional ruling will not be disturbed unless the
reviewing court has a firm conviction that it was inequitable. McDougal, supra. In making a
property disposition in a divorce case, the trial court may divide all property that came “to either
party by reason of the marriage.” MCL 552.19; MSA 25.99. The property that may be
apportioned between the parties is the property that makes up the marital estate, and it is referred
to as “marital property.” Byington v Byington, 224 Mich App 103, 110; 568 NW2d 141 (1997).
Included in the marital estate are assets earned by a spouse during the marriage. Id. The trial
court’s goal in apportioning a marital estate is to divide the marital assets equitably in light of all
the circumstances. Id. at 114. The court should consider “increases in marital assets ‘that may
have occurred between the beginning and the end of the marriage.’” Reeves v Reeves, 226 Mich
App 490, 493; 575 NW2d 1 (1997).
Although defendant’s father purchased the property, with no financial assistance by
defendant or plaintiff, defendant was an owner of the property, as evidenced by his name on the
deed. Until his father’s death, the rental income was used by defendant’s father or was used to
provide for his father’s care. After the death of defendant’s father, defendant distributed some of
the rental income to his mother for her personal use. It is undisputed that some of the rental
income was brought into the parties’ marriage and used for marital expenses. The parties
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included the rental proceeds as taxable income. That same income was used to pay taxes on the
post office property.
The acquisition of the property by defendant’s father and his designation of defendant on
the deed convinces me that the interest in the post office property is a separate asset. That the
parties used the rental income for marital expenses and included that income on the joint tax
returns supports a finding that the income could be considered a marital asset. Indeed, the trial
court included the rental income account in the marital estate, awarding it to defendant. This
particular disposition has not been challenged. However, the use of the rental income does not
affect the nature of the separate asset: the ownership interest in the post office property. I would
find that this interest is defendant’s separate estate.
Next, plaintiff asserts that the post office property should be included in the marital
estate. Specifically, plaintiff argues that the post office property should be included in the
marital estate because she contributed to its acquisition, improvement or accumulation. I
disagree.
Plaintiff relies in part on Hanaway v Hanaway, 208 Mich App 278; 527 NW2d 792
(1995). In that case, this Court found the plaintiff wife was entitled to a portion of the defendant
husband’s separate asset of stock in his family’s corporation. The Court found that the plaintiff
administered the household and cared for the parties’ children. The defendant devoted himself to
the company, working long work weeks. The business prospered during the parties’ marriage.
This Court found that the financial yield and increased value of the interest in the corporation
“necessarily reflected [the] defendant’s investment of time and effort in maintaining and
increasing the business, an investment that was facilitated by [the] plaintiff’s long-term
commitment to remain at home to run the household and care for the children. Id. at 293. It
found that the company stock was a marital asset.
In Reeves supra, the defendant husband had an interest in a shopping center, which he
acquired before the parties’ relationship began. Despite the appreciation of the shopping center
during the parties’ relationship, the interest was passive. The evidence did not show that the
property appreciated because of the defendant’s efforts or that the plaintiff wife’s activities
facilitated the defendant’s efforts. The interest was found to be a separate asset, which should
not be included in the marital estate. Id. at 497.
Here, plaintiff argues that her work in relation to the post office property draws the
property into the marital estate. I disagree. Plaintiff’s performance of administrative
responsibilities was minimal. The evidence does not establish that defendant invested a great
deal of time and effort into the property to increase its value. In fact, this investment appears to
be more of a passive investment, such as that in Reeves. Unlike the plaintiff in Hanaway,
plaintiff did not assume responsibility for household and family matters in order to facilitate
defendant’s efforts to build this investment. Plaintiff did care for the home and children, but
there is no indication that she did this to support defendant’s efforts with regard to the post office
property.
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I would find that the trial court erred in considering the post office property part of the
marital estate. Accordingly, I would reverse in part and remand for reconsideration of the
division of the marital estate to achieve the equitable result intended by the trial court.
/s/ Michael J. Kelly
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