SHEILA HODGE V DARRELL PARKS (Authored Opinion)

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STATE OF MICHIGAN COURT OF APPEALS SHEILA HODGE, Plaintiff-Appellant/Cross-Appellee, v FOR PUBLICATION January 2, 2014 9:10 a.m. No. 308726 Genesee Circuit Court LC No. 09-288659-DO DARRELL PARKS, Defendant-Appellee/CrossAppellant. Before: METER, P.J., and CAVANAGH and SAAD, JJ. SAAD, J. In this divorce action, plaintiff appeals the trial court s order on issues of property division, spousal support, and marital debt. Defendant appeals the same order on the issue of property division. For the reasons stated below, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion. I. FACTS Plaintiff and defendant were married in 1998, when plaintiff was 45 and defendant was 61 years old. Defendant has owned a post-tension steel business for over 40 years, while plaintiff worked for General Motors and also served as an officer of defendant s company. Their relationship soured in 2004, when plaintiff filed for divorce, but the parties reconciled after signing a postnuptial agreement that specified certain property divisions and mandated that the parties receive marital counseling. But the reconciliation did not last and plaintiff filed this divorce action five years later. The trial court issued an order in 2011 on the contested issues of property division, spousal support, and marital debt. Neither party is totally pleased with the order, as each appeals some aspect of the property division. Plaintiff claims that the trial court: (1) erred when it found that the balance of defendant s Raymond James account was defendant s premarital asset; (2) erred when it held that a sailboat was the separate property of defendant; and (3) made an inequitable division of property. Defendant asserts that the trial court misclassified a monetary transfer from plaintiff to her children as a gift, and that the property distribution was inequitable in plaintiff s favor. -1- We reverse the trial court s holding that the sailboat was the separate property of defendant. An enforceable postnuptial agreement provided that the boat is marital property. The trial court erroneously invalidated the agreement, and therefore we remand this issue to the trial court for a determination of the proper equitable distribution of the boat. We affirm the trial court s holding in all other respects, and dismiss plaintiff s and defendant s remaining claims. II. ANALYSIS A. PLAINTIFF S APPEAL 1. THE RAYMOND JAMES ACCOUNT In a divorce case, this Court reviews for clear error a trial court s factual findings on: (1) the division of marital property, and (2) whether a particular asset qualifies as marital or separate property. Cunningham v Cunningham, 289 Mich App 195, 200; 795 NW2d 826 (2010); Woodington v Shokoohi, 288 Mich App 352, 357; 792 NW2d 63 (2010). Findings of fact are clearly erroneous when this Court is left with the definite and firm conviction that a mistake has been made. Woodington, 288 Mich App at 357. Special deference is afforded to a trial court s factual findings that are based on witness credibility. Id. at 358. This Court further reviews whether a trial court s dispositional rulings are fair and equitable in light of the trial court s findings of fact, but this Court will reverse only if definitely and firmly convinced that the disposition is inequitable. Id. at 365 (citations omitted). Here, plaintiff asserts that the trial court wrongly classified the Raymond James account as defendant s premarital asset, and instead argues it should be considered a marital asset. Her theory is one of free association: because plaintiff worked for defendant s business, and the Raymond James account was used to fund defendant s business, her labor commingled with defendant s money to convert the Raymond James account into a marital asset. See Cunningham, 289 Mich App at 201 202 ( [m]oreover, separate assets may lose their character as separate property and transform into marital property if they are commingled with marital assets and treated by the parties as marital property ) (citations omitted). As an initial matter, plaintiff waived this argument at trial and therefore cannot assert this claim on appeal. During cross-examination at trial, plaintiff testified: Q. So, is it your position this $210,000 [in the 3177 account] is marital or premarital? A. I really don t know. I know we made a lot of money together, but Q. No. I m asking you are you asking the Court to divide this money? A. He can have that money. Q. He can have the $210,000. Okay. A. But wasn t it worth $437,000 before this year? -2- Q. It was, but it s not now. A. Well, it was $437,000 last year. Q. Is there anything else you want to tell the Court before I ask you another question? A. I was just going to say the $437,000 he can have. Q. Okay, but there s not $437,000 there. A. I don t know what he has. *** Q. So, you re okay with him keeping what remains as this marital [sic] 3177 account, $210,000, and you re okay with him keeping the $229,000 in his IRA, right? A. Yes. [Emphasis added.] A party cannot stipulate to a matter and then argue on appeal that the resulting action was erroneous. Glen Lake-Crystal River Watershed Riparians v Glen Lake Ass n, 264 Mich App 523, 532; 695 NW2d 508 (2004). A party who waives a right is precluded from seeking appellate review based on a denial of that right because waiver eliminates any error. The Cadle Co v City of Kentwood, 285 Mich App 240, 255; 776 NW2d 145 (2009). Plaintiff agreed at trial that defendant could keep the $210,000 remaining in the 3177 account. This consent constitutes a waiver that eliminates any error underlying the award of the $210,000 in the account to defendant. In any event, were we to address her claims, plaintiff s argument is not convincing. The Raymond James account functioned as a short-term borrowing device for defendant s business, where defendant borrowed and repaid capital through withdrawals and deposits to the account. Plaintiff fails to show that defendant s actions constitute a commingling of assets namely, she offers no authority that a properly accounted-for loan from, or repayment to, a premarital account transforms that premarital account into marital property. Nor has she demonstrated that her mere status as defendant s employee suffices to transform a premarital, business-related asset into martial property. A party cannot simply announce a position and expect the court to search for authority to sustain or reject his position. State Treasurer v Sprague, 284 Mich App 235, 243; 772 NW2d 452 (2009). 1 1 Although plaintiff suggests that defendant s social security income was commingled with the funds in the Raymond James account, plaintiff fails to develop an argument on this point or to identify evidence to support this contention. She has thus abandoned that issue by failing to brief it. Sprague, 284 Mich App at 243. -3- Further, the trial court examined defendant s financial records, and determined that he had fully accounted for all the money located in the Raymond James account at the time of marriage.2 Nor did the account s value appreciate during the marriage. Further, the trial court stressed defendant s age (74) and held that it would be inequitable to treat the premarital funds in the Raymond James account as marital property, when the court awarded plaintiff the premarital funds in her retirement accounts. The trial court made a thorough and sound analysis of this issue and plaintiff, who waived this issue, has also offered no basis to challenge its determination. 2. THE TRITON SAILBOAT This Court reviews de novo a trial court s interpretation of a contract and its resolution of any legal questions that affect a contract s validity, but any factual questions regarding the validity of the contract s formation are reviewed for clear error. Wright v Wright, 279 Mich App 291, 297; 761 NW2d 443 (2008). Under Michigan law, a couple that is maintaining a marital relationship may not enter into an enforceable contract that anticipates and encourages a future separation or divorce. Id. If the state were to enforce such agreements, it would encourage separation or divorce, which is not an appropriate public policy. Id., citing Randall v Randall, 37 Mich 563, 571 (1877). As such, post-nuptial agreements calculated to leave [one party] in a much more favorable position to abandon the marriage will not be enforced. Id.3 Nonetheless, post-nuptial agreements are not invalid per se, because some postnuptial agreements may be intended to promote harmonious marital relations, and keep the marriage together. Rockwell v Estate of Rockwell, 24 Mich App 593, 596 597; 180 NW2d 498 (1970). In 2 The Raymond James account was initially held with another financial organization that was subsequently purchased by Raymond James. At the date of the marriage, the predecessor account contained approximately $253,000 less than the $210,000 held in the account at the time of trial. In addition, plaintiff notes that before trial, defendant was at one point held in contempt for failing to return some funds that had been removed from the 3177 account. However, in its opinion and order issued after trial, the court, after fully reviewing the financial records, determined that defendant had adequately accounted for all of the money at issue. Again, plaintiff identifies no evidence to dispute this finding. 3 The postnuptial agreement at issue in Wright, which the court found void, was particularly egregious: In the case at bar, the trial court correctly determined that the postnuptial agreement at issue was calculated to leave plaintiff in a much more favorable position to abandon the marriage. The contract plainly had, as one of its primary goals, defendant s total divestment of all marital property in the event of divorce. The couple was not separated at the time and had never separated during the marriage, but plaintiff filed for divorce roughly eight months after defendant signed the agreement. [Wright, 279 Mich App at 297.] -4- such situations, the public policy objection to post-nuptial contracts pointed out by the court in [Randall] . . . . do[] not arise. Id. at 597. In sum, if a postnuptial agreement seeks to promote marriage by keeping husband and wife together, Michigan courts may enforce the agreement if it is equitable to do so. Here, plaintiff seeks to enforce an agreement that the parties signed in 2005 when they agreed to dismiss their prior divorce action filed in 2004. It states in its entirety: Ground Rules (30 days 60 day [sic]) 5-6-05 1) Intensive counseling (joint) w/counselor of our mutual choice (David Hall) (Amy Taylor) 2) Avalanche joint title. Will be brought back to house. 3) Boat ours equally to be used by both without stating it is mine, because I pd for it. The boat is our boat owned by both Darrell & Sheila. Should be titled by both. [Emphasis added.] 4) Sit together to do a budget putting on table all assets between both. 5) Kids not to interfere w/our marriage or relationship to allow us to grow as a couple. 6) Treat each other w/love & respect and no rehashing of old issues. No fowl [sic] language directed at each other period. 7) Both names on house joint-ownership. Add l assets to be added later. By: Darrell Parks [and] Sheila Hodge [signatures.] [Emphasis added.] This agreement is thus akin to the one described in Rockwell it is intended to keep the marriage together, not to encourage separation. Nothing in the agreement itself or the record suggests that the parties contemplated a separation in the near future when they signed the agreement. On the contrary, the agreement was made in connection with the dismissal of their prior divorce action. And the agreement reflects the parties intent to reconcile, by requiring them to engage in intensive counseling, treat one another with love and respect, and not allow their respective children to interfere with their marriage or relationship. Further, unlike the agreement in Wright, nothing in this document encourages separation by leaving one party in a much more favorable position if the marriage ended. In fact, the agreement is relatively balanced: it effectively treats both defendant s premarital boat and plaintiff s premarital house as marital assets and requires both parties to work together to improve their relationship, marriage, and finances. The trial court thus erred, as a matter of law, when it held that the agreement could not be enforced. Accordingly, we reverse the award of the Triton to defendant and remand the case to the trial court to determine an equitable disposition of this marital asset. See Cunningham, 289 Mich -5- App at 201 ( [o]nce a court has determined what property is marital, the whole of which constitutes the marital estate, only then may it apportion the marital estate between the parties in a manner that is equitable in light of all the circumstances ); Woodington, 288 Mich App at 365 ( [w]hen dividing marital property, a court is not required to award mathematically precise shares ). 3. THE PROPERTY DIVISION The goal in distributing marital assets in a divorce proceeding is to reach an equitable distribution of property in light of all the circumstances. The trial court need not divide the marital estate into mathematically equal portions, but any significant departure from congruence must be clearly explained. Berger v Berger, 277 Mich App 700, 716 717; 747 NW2d 336 (2008) (internal citations omitted).4 In making its determination, the trial court may consider a party s attempt to conceal assets . . . but it is only one of many facts that the court must weigh. Further a judge s role is to achieve equity, not to punish one of the parties. An attempt to conceal assets does not give rise to an automatic forfeiture. Sands v Sands, 442 Mich 30, 36 37; 497 NW2d 493 (1993). Separate assets may be invaded when a party demonstrates that the property awarded is insufficient for his suitable maintenance and support, or when a party significantly assists in acquiring or growing the other party s assets. Skelly v Skelly, 286 Mich App 578, 582; 780 NW2d 368 (2009), citing MCL 552.23, MCL 552.401. We are not left with a definite and firm conviction that the trial court s ultimate property division was inequitable. To the contrary, the trial court s property division appears equitable. Though plaintiff suffers from multiple sclerosis (MS), earns income only from social security disability, and has debts totaling $217,000, her debt is comprised primarily of her mortgage and home equity loan of $160,000, which she obtained herself. Further, plaintiff has a pension, a 401(k), and an individual retirement account (IRA), the combined premarital portions of which amount to $446,000. Plaintiff is only required to divide with defendant the marital portions of those retirement assets, which comprise an additional $449,000. And, as discussed above, 4 Berger goes on to list the factors a trial court may consider . . . in dividing the marital estate : (1) the duration of the marriage, (2) the contributions of the parties to the marital estate, (3) the age of the parties, (4) the health of the parties, (5) the life situation of the parties, (6) the necessities and circumstances of the parties, (7) the parties earning abilities, (8) the parties past relations and conduct, and (9) general principles of equity. When dividing marital property, a trial court may also consider additional factors that are relevant to a particular case. The trial court must consider all relevant factors but not assign disproportionate weight to any one circumstance. [Berger, 277 Mich App at 717 (internal citations and quotation marks omitted).] -6- plaintiff is also entitled on remand to an equitable distribution of the Triton, which will further increase the amount of money she receives from the property division.5 Defendant is in his mid-70s and testified that his business is worse than it has been in 40 years. He claims that his only current income is from social security, and he has approximately $44,000 in credit card debt. Although the trial court concluded that defendant s business had minimal or no value due to the depressed economy and the Internal Revenue Service s assertion of $200,000 in back taxes, penalties and interest for prior tax years the court nonetheless reserved the issue of spousal support. The court also ordered defendant to submit his personal and business income tax returns in 2012, 2013, and 2014, in the event that his business improves. And the court awarded plaintiff attorney fees in the amount of $7,500, to be paid by defendant to plaintiff s counsel. On balance, far from being inequitable, the overall property division seems quite fair.6 We accordingly affirm the trial court s overall property division, save for its holding on the Triton sailboat discussed above.7 B. DEFENDANT S CROSS-APPEAL Defendant s claim that the trial court misclassified a monetary transfer from plaintiff to her children as a gift, and that the divorce judgment was inequitable in plaintiff s favor, lacks merit. The trial court did not clearly err when it found that the funds contributed by plaintiff to her children constituted a gift. Plaintiff assisted her sons in the 2002 purchase of a Florida 5 Indeed, to the extent plaintiff s argument on this issue hinges on the fact that the trial court treated the Triton as defendant s separate asset plaintiff s brief refers to the Triton as the parties most prized possession our conclusion that the Triton is actually a marital asset to be distributed equitably on remand arguably renders moot plaintiff s argument that the trial court s overall property division is inequitable. See Skelly, 286 Mich App at 585. 6 Our conclusion is not altered by defendant s purported transfer of some assets to his children. The trial court found that both parties had sometimes failed to be entirely honest in the years leading up to and during this divorce action, and the court listed specific examples of each party s conduct that sought to conceal information or assets from the other party. Because both parties engaged in this conduct, and because concealment does not require automatic forfeiture, Sands, 442 Mich at 36 37, defendant s asset transfers do not make the trial court s property division inequitable. 7 Plaintiff fails to establish that defendant s separate assets should be invaded, because she is unable to show that the property awarded is insufficient for her suitable maintenance and support. She receives social security disability income, will receive an equitable share of the Triton sailboat on remand, and possesses equity in her home, vacant land in Charlevoix, two boat slips, a classic Corvette, personal property including jewelry, and over one-half million dollars in retirement funds. In addition, it is possible she will receive spousal support. Nor has plaintiff demonstrated that she significantly assisted in the acquisition and growth of defendant s separate assets. -7- condominium, by making the $50,000 down payment. Plaintiff obtained the $50,000 through a loan against her 401(k) which existed before marriage and repaid the loan with money she earned during the marriage. One of plaintiff s sons testified that he and his brothers formed a corporation to manage the condominium, and that they do not intend to pay their mother back. The trial court therefore classified the monetary transfer as a gift (not a loan), and found that plaintiff does not own the condominium. Defendant s arguments that the trial court s decision on this matter is improper are unconvincing. Again, the trial court thoroughly analyzed this issue, noting that if plaintiff did own the condominium, general principles of equity would dictate that it should be awarded to her. Defendant has failed to establish that such a disposition is inequitable plaintiff suffers from MS and cannot work, has significant debts, claims social security disability benefits are her only income, and her primary assets are retirement funds for which she suffers a penalty for early withdrawals. Under the settlement, defendant retains significant assets, including the $210,000 in his Raymond James account, other accounts containing premarital funds, his equitable share of the Triton sailboat to be determined on remand, and his post-tension steel business, which, although currently of minimal value, has the potential to improve as economic conditions change. Although defendant contends plaintiff attempted to conceal the Florida condo from him, as noted earlier, the court found that defendant engaged in similar deceptive behavior regarding other assets. Therefore, the trial court made an equitable disposition regardless of the Florida condominium. III. CONCLUSION The trial court s order is reversed and remanded for further proceedings consistent with this opinion as to the disposition of the Triton sailboat. In all other respects, the trial court s order is affirmed. We do not retain jurisdiction. /s/ Henry William Saad /s/ Patrick M. Meter /s/ Mark J. Cavanagh -8-