Anne Callaway Sweat Thompson v. Allen Hale Thompson
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2003-CA-00223-COA
ANNE CALLAWAY SWEAT THOMPSON
APPELLANT
v.
ALLEN HALE THOMPSON
DATE OF TRIAL COURT JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEYS FOR APPELLANT:
ATTORNEYS FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
CERTIORARI FILED:
MANDATE ISSUED:
APPELLEE
9/9/2002
HON. CEOLA JAMES
WASHINGTON COUNTY CHANCERY COURT
LEE DAVIS THAMES
J. MACK VARNER
FRITZIE LOUISE TONEY ROSS
JOEL J. HENDERSON
CIVIL - DOMESTIC RELATIONS
DIVORCE JUDGMENT, INCLUDING
DISTRIBUTION OF ASSETS AND CHILD
SUPPORT
REVERSED AND REMANDED: 09/14/2004
EN BANC.
GRIFFIS, J., FOR THE COURT:
¶1.
Anne Callaway Sweat Thompson and Allen Hale Thompson were granted an irreconcilable
differences divorce by the Chancery Court of Washington County. The parties agreed that the chancellor
would decide the equitable division of marital assets, award of alimony, and award of child support. Anne
appeals the chancellor’s decision.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
¶2.
Anne and Allen were married on January 29, 1989. They had three children: Bett was born on
November 6, 1989, May was born on May 4, 1991, and Grace was born on September 7, 1993.
¶3.
At the time of their marriage, both Anne and Allen had completed medical school. Allen completed
medical school in 1985 and received his medical license in 1986. At the time of their marriage, Allen was
employed as a physician with the Mississippi State Hospital.
¶4.
In approximately March of 1989, Anne and Allen moved to Greenville. Allen began to practice
internal medicine with the Greenville Clinic, P.A. Allen eventually acquired an equity interest in the
Greenville Clinic. Allen also acquired an equity interest in various businesses and entities that were affiliated
with the Greenville Clinic, including the Greenville Clinic Equipment, Inc. and the Greenville Clinic
Properties, Inc. In addition, at the time of their divorce, Allen owned an equity interest in Colorado Land
Company, LLC; Colorado Land Company II, LLC; Greenville Ambulatory Surgical Center Holding
Company LLC; and Mississippi Delta IPA, LLC. Allen’s assets also included retirement accounts that he
obtained from his earnings at the Greenville Clinic.
¶5.
Upon Bett’s birth, Anne discontinued residency training and assumed the role of a full-time
homemaker and stay-at-home mom. As a result of this decision, Anne did not complete her medical
training required to practice in a specialized field of medicine.
¶6.
When Bett turned one, Anne began to work part-time at the Delta Health Center. After taking a
short maternity leave after the birth of May and Grace, Anne returned to her part-time employment. At
all times, however, Anne retained her role as the primary caregiver for their children. Anne’s assets
consisted of a small retirement account she acquired during her employment with Delta Health Center.
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¶7.
In June of 2001, Anne filed for divorce. She alleged as grounds for divorce habitual, cruel, and
inhuman treatment and, in the alternative, irreconcilable differences. Allen counterclaimed for divorce on
the same grounds.
¶8.
Anne filed a motion for temporary relief and support. The chancellor awarded Anne temporary
custody of the children, but did not award her any temporary child support or spousal support. The
chancellor ordered both parties to remain in the marital house, with Allen paying all bills. These
arrangements failed. Anne and the children moved to Johnson City, Tennessee. Without an appropriate
order granting temporary relief, Anne incurred substantial credit card debts to support herself and the
children.
¶9.
On September 20, 2001, the parties withdrew their fault based grounds and agreed to an
irreconcilable differences divorce. After hearing the contested issues, the chancellor executed a
memorandum opinion and judgment of divorce.
¶10.
The chancellor awarded Anne custody of the three children and $400 a month per child in child
support. The chancellor denied periodic alimony, but awarded Anne $50,000 in lump sum alimony. The
chancellor noted that Anne had accumulated $17,000 in credit card debt, while caring for the children since
the parties' separation, and ordered Allen to pay this amount. The chancellor allowed Allen to claim one
of the children on his income tax returns. The chancellor removed Anne as custodian of education accounts
the couple had set up for their children.
¶11.
Allen and Anne each received a half interest in the marital home. Allen and Anne received their
retirements, valued at $178,653 and $11,655, respectively. Allen's retirement assets included his 401k
at the Greenville Clinic, valued at $137,371, and an individual retirement account, valued at $41,282. Allen
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retained full ownership of all his equity interests in the companies previously identified and all of his
investments.
¶12.
Anne appeals and asserts that the chancellor erred in (1) equitably distributing the marital assets,
(2) awarding alimony, (3) awarding child support, (4) granting Allen an income tax exemption, and (5)
removing Anne and replacing Allen as the custodian of the children's education accounts. Finding error,
we reverse and remand for further proceedings consistent with this opinion.
STANDARD OF REVIEW
¶13.
This Court will not disturb the findings of a chancellor unless the chancellor was manifestly wrong,
clearly erroneous, or applied an erroneous legal standard. Flechas v. Flechas, 791 So. 2d 295, 299 (¶7)
(Miss. Ct. App. 2001). We are required to respect the chancellor's findings of fact that are supported by
credible evidence and not manifestly wrong. Sandlin v. Sandlin, 699 So. 2d 1198, 1203 (Miss. 1997).
Nonetheless, if manifest error is present or a legal standard is misapplied, this Court will not hesitate to
reverse. Tilley v. Tilley, 610 So. 2d 348, 351 (Miss. 1992).
ANALYSIS
I.
II.
¶14.
The chancellor manifestly erred in her attempt to equitably distribute the
marital assets.
The chancellor manifestly erred and abused her discretion regarding alimony.
In the dissolution of a marriage, the division of property and the award of alimony are to be
considered together. Burnham-Steptoe v. Steptoe, 755 So. 2d 1225, 1233 (¶25) (Miss. Ct. App. 1999).
The chancellor must follow certain guidelines for: (a) the equitable division of assets, Ferguson v.
Ferguson, 639 So. 2d 921, 928 (Miss. 1994); (b) an award of periodic alimony, Armstrong v.
Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993); and (c) an award of lump sum alimony, Cheatham v.
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Cheatham, 537 So. 2d 435, 438 (Miss. 1988). Proper application of these guidelines will allow the
chancellor to “conclude the parties’ legal relationship, leaving each in a self-sufficient state.” Ferguson,
639 So. 2d at 929.
¶15.
The chancellor’s consideration begins with the equitable division of marital property followed by
the consideration of an award of lump sum and/or periodic alimony. King v. King, 760 So.2d 830, 83536 (¶18) (Miss. Ct. App. 2000). Anne claims that the chancellor failed to equitably divide the couple’s
assets. Specifically, she asserts that the chancellor failed to consider Allen's investments and retirement
accounts as marital property, and this decision resulted in an inequitable distribution of the marital assets.
¶16.
On the equitable division of assets, the chancellor opined:
The parties have represented to the Court that all furniture and household goods have been
divided. It appears from the testimony that the parties own a house and lot located at 111
Bayou Road in Greenville. The Court directs that the house be sold and the equity divided
between the parties. The Court observed that [Anne] had approximately $17,000 in credit
card bills. The Court directs that [Allen] pay the balance of [Anne’s] credit card bills
within ninety (90) days from the date of this order. There was a great disparity in income
prior to [Anne] obtaining her new job, and [Anne’s] credit card balances were greatly
increased for a period of time that she did not receive any support from [Allen]. A division
need not be equal, but equitable. Love v. Love, 687 So. 2d 1229 (Miss. 1997). The
goal is to leave each party in a self sufficient state. Bullock v. Bullock, 699 So. 2d 1205.
In equitable distribution, the division of liabilities is also included, Gambrell v. Gambrell,
650 So. 2d 517 (Miss. 1995).
Identical language was included in the judgment of divorce.
¶17.
The evidence revealed that Anne and Allen jointly owned their residence and household furnishings.
During the marriage, Allen acquired an equity ownership interest in seven entities: (a) Greenville Clinic; (b)
Greenville Clinic Equipment, Inc., which owned and leased medical diagnostic equipment to the Greenville
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Clinic; (c) Greenville Clinic Properties, Inc., which leased medical equipment to the Greenville Clinic; (d)
Colorado Land Company, LLC; (e) Colorado Land Company II, LLC; (f) Greenville Ambulatory Surgical
Center Holding Company LLC; and (g) Mississippi Delta IPA, LLC. Allen also contributed to two
separate retirement accounts through his employment with the Greenville Clinic valued at $178,653.
Allen’s financial statement, introduced through his certified public accountant, indicated that his net worth
was $302,226. Anne owned one asset, her Delta Medical Center retirement account, valued at $11,655.
¶18.
In Lauro v. Lauro, 847 So. 2d 843, 847 (¶¶9-10) (Miss. 2003), the Mississippi Supreme Court
held:
In making an equitable distribution of the marital estate, the property should be classified
as a marital or a non-marital asset. Id. See also Hemsley v. Hemsley, 639 So.2d 909,
914-15 (Miss.1994). Assets accumulated during the course of a marriage are subject to
equitable division unless they are characterized as separate property. Johnson, 823 So.2d
at 1161. "Mississippi courts 'assume for divorce purposes that the contributions and efforts
of the marital partners, whether economic, domestic, or otherwise are of equal value.' " Id.
(quoting Hemsley, 639 So.2d at 915).
The chancellor failed to make specific findings as to how the marital property was classified
and divided. Therefore, this case is reversed and remanded for clarification consistent with
prior case law.
¶19.
Here, the chancellor’s specific findings were deficient. The chancellor failed to classify the assets
and failed to render written findings on the Ferguson factors. Thus, based on Lauro, we reverse and
remand this case to “make specific findings as to how the marital property was classified and divided.” Id.
¶20.
A review of the evidence indicates that all of Anne’s and Allen’s assets were acquired or
accumulated during their marriage. Thus, under Hemsley, the chancellor should have first classified their
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assets as marital property, subject to equitable division, and their contributions should have been considered
of equal value. Hemsley, 639 So. 2d at 915.
¶21.
According to the evidence, Anne and Allen married prior to Allen's employment with the Greenville
Clinic. Allen offered no proof that any of his assets or investments were separate or non-marital property.
Thus, it was clearly erroneous for the chancellor to not consider all of Anne’s and Allen’s assets in the
equitable division of assets. Reviewing the chancellor’s findings of fact and conclusions of law, it is clear
that the chancellor failed to equitably divide their marital assets. Likewise, the chancellor’s failure to
consider Anne’s contributions to be equal value was clearly erroneous. Accordingly, we reverse and
remand this case for the chancellor to equitably divide the parties’ assets consistent with the principles
announced in Hemsley and Ferguson.
¶22.
We now turn to the chancellor's decisions on alimony and child support. In Lauro, the supreme
court determined that since the case was remanded for further consideration of equitable division, the
chancellor should be “instructed to revisit the awards of alimony and child support after [s]he has properly
classified and divided the marital assets.” Lauro, 847 So.2d at 850 (¶ 17). On remand, the chancellor
will have all of the tools of marital dissolution available: equitable division, lump sum alimony,1 periodic
alimony,2 and child support. The chancellor should not construe our opinion as to favor one over the other.
1
Although we do not discuss the chancellor’s ruling on lump sum alimony in detail, we again
note that the chancellor’s opinion and judgment failed to address the factors necessary to consider an
award of lump sum alimony. See Cheatham v. Cheatham, 537 So. 2d 435, 438 (Miss. 1988). On
remand, the chancellor is required to consider each of these factors.
2
The chancellor’s ruling on periodic alimony failed to address the factors necessary to consider
periodic alimony. See Armstrong v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993). Although, the
amount of periodic alimony is largely left to the sound discretion of the chancellor. The chancellor's
opinion indicates that she did not consider each of the appropriate factors in rendering her opinion. We
do not have sufficient information to determine how the chancellor considered these factors and arrived
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Indeed, the chancellor may correct the error by granting an appropriate equitable division of assets, an
appropriate award of lump sum alimony, or an appropriate award of periodic alimony, or any combination
thereof. The chancellor’s opinion and judgment shall be required to provide specific findings.
III.
¶23.
Whether the chancellor manifestly erred in awarding child support.
As previously stated, since this case is remanded for further consideration of equitable division, the
chancellor should be “instructed to revisit the awards of alimony and child support after [s]he has properly
classified and divided the marital assets.” Lauro, 847 So.2d at 850 (¶ 17).
¶24.
Mississippi Code Annotated Section 43-19-101 (Rev. 2000) establishes guidelines for the
determination of child support. Based on the number of children, the statute provides for a percentage of
the non-custodial parent's adjusted gross income to be paid in child support. Miss. Code Ann. § 43-19101 (1) (Rev. 2000). However, when the adjusted gross income exceeds $50,000, the court shall make
a written finding in the record as to whether or not the application of the guidelines is reasonable. Miss.
Code Ann. §43-19-101(4) (Rev. 2000).
¶25.
Allen's adjusted gross income exceeded $50,000. However, the chancellor’s opinion and
judgment contained no written findings as to whether the statutory guidelines were reasonable or whether
a departure was appropriate. Thus, we have no guidance as to how the chancellor arrived at child support
in the amount of $400 per month, per child. The chancellor clearly erred in failing to reveal her findings as
to the needs of the children or the amount of salary upon which the child support award was based.
¶26.
On remand the chancellor should consider the statutory guidelines and make a written determination
of whether the guidelines are reasonable given the facts of this case.
at her decision.
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IV.
¶27.
Whether the chancellor erred in granting Allen an income tax exemption.
Anne contends that the chancellor erred in allowing Allen, the non-custodial parent, to claim one
of the children on his income tax return. The chancellor in her original opinion ordered Allen to claim two
of the children on his return and Anne to claim one of the children. In the chancellor's order on rehearing
she directed Anne to claim two children and Allen to claim one. The chancellor noted that Anne's income
had substantially increased, and that she had custody of all three children. On appeal, Anne asserts that
since she was awarded custody of all three children, she should be able to claim all three children on her
income tax returns.
¶28.
In Louk v. Louk, 761 So. 2d 878, 884 (¶17) (Miss. 2000), the court noted that the factors to be
included in determining whether to award an income tax exemption to a non-custodial parent included (1)
the value of the exemption at the marginal tax rate of each parent, (2) the income of each parent, (3) the
age of the children, (4) the percentage of the cost of supporting the children borne by each parent, and (5)
the financial burden assumed by each parent under the property settlement in the case. The court
concluded that since the custodial parent was not gainfully employed and the non-custodial parent was
paying well above the statutory guidelines for support, the chancellor's decision to allow the non-custodial
parent tax exemptions was not manifestly erroneous. Id. at 883 (¶15).
¶29.
Consistent with our earlier holding, the chancellor may consider the appropriate allocation of the
tax exemptions on remand.
V.
¶30.
Whether the chancellor erred in removing Anne and replacing Allen as the
custodian of the children's education accounts.
Anne argues that the chancellor erred in placing Allen as the sole custodian of the children's
education accounts. She cites Allen's testimony that Anne had not inappropriately spent any money from
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the accounts during the time that she had been custodian. Anne notes that no safeguards were placed on
the accounts to ensure the proper use of the money. Because no safeguards were placed on the accounts,
Anne asserts that the money can be used in any way, effectively making the accounts part of Allen's own
estate.
¶31.
The chancellor, in placing Allen as custodian of the accounts, found that Allen set up the accounts
and provided the funding for the accounts. The chancellor noted Anne's testimony that Allen sometimes
withdrew money from the accounts, but ruled that the duty to provide college funding is not absolute.
¶32.
On remand, the chancellor will again be able to consider this question. Of concern to us, however,
is that the chancellor consider the appropriate uses of these funds. If indeed Allen may use the funds for
any purpose other than the children’s education, the custodial accounts may, or possibly should, be
classified as marital property subject to equitable distribution. We do not make such finding but instruct
the chancellor to consider the appropriate use of such funds.
¶33.
In conclusion, by remanding this case for further consideration, the chancellor will have all of the
tools of marital dissolution available: equitable division, lump sum alimony and/or periodic alimony. Our
opinion does not favor one over the other. Indeed, the chancellor may grant an appropriate equitable
division of assets, an appropriate award of lump sum alimony, or an appropriate award of periodic alimony,
or an appropriate combination.
¶34.
In King v. King, 760 So. 2d 830, 835-36 (¶ 18) (Miss. Ct. App. 2000), we detailed the proper
procedure:
First, the chancellor is to classify the parties' assets as marital or non-marital based on the
court's decision in Hemsley v. Hemsley, 639 So. 2d 909 (Miss. 1994). Second, the
chancellor is to value and equitably divide the marital property employing the Ferguson
factors as guidelines, in light of each party's non-marital property. However, "[p]roperty
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division should be based upon a determination of fair market value of the assets, and these
valuations should be the initial step before determining division." Ferguson, 639 So. 2d
at 929. Third, if the marital assets, after equitable division and in light of the parties' nonmarital assets, will adequately provide for both parties, then "no more need be done."
Finally, if an equitable division of marital property, considered with each party's non-marital
assets, leaves a deficit for one party, then alimony should be considered. Kilpatrick v.
Kilpatrick, 732 So. 2d 876 (¶16) (Miss. 1999).
On remand, this procedure should be followed.
¶35.
For the above stated reasons, we reverse and remand this case for further consideration by
the chancellor.
¶36. THE JUDGMENT OF THE CHANCERY COURT OF WASHINGTON COUNTY IS
REVERSED AND REMANDED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLEE.
KING, C.J., BRIDGES AND LEE, P.JJ., IRVING, MYERS, CHANDLER AND
BARNES, JJ., CONCUR.
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