IN THE SUPREME COURT OF MISSISSIPPI

NO. 96-CA-01419-SCT

THOMAS A. TRAXLER

v.

MARTHA TRAXLER

DATE OF JUDGMENT: 10/28/96

TRIAL JUDGE: HON. DONALD B. PATTERSON

COURT FROM WHICH APPEALED: COPIAH COUNTY CHANCERY COURT

ATTORNEY FOR APPELLANT: F. ANDREW HOWELL

ATTORNEY FOR APPELLEE: OLEN C. BRYANT, JR.

NATURE OF THE CASE: CIVIL - DOMESTIC RELATIONS

DISPOSITION: AFFIRMED IN PART; REVERSED AND

REMANDED IN PART- 12/31/98

MOTION FOR REHEARING FILED:

MANDATE ISSUED: 3/3/99

BEFORE PITTMAN, P.J., ROBERTS AND SMITH, JJ.

SMITH, JUSTICE, FOR THE COURT:

STATEMENT OF THE CASE

¶1. Thomas and Martha Traxler were married on July 31, 1971 in Mississippi. Two children, Casey Anne

Traxler and Ty A. Traxler, were born of this marriage. The parties were separated in March of 1995. The

oldest child, Casey, was twenty-one years old at the time of trial and is emancipated. Ty is enrolled in

college at Copiah Lincoln Community College on a full athletic scholarship which includes an endowment of

$1,000.00 per semester over and above standard college costs and expenses.

¶2. The parties jointly purchased a home located at 119 Mathis Road, Crystal Springs, Mississippi

seventeen years ago, which at the time of trial had an approximate mortgage balance of $51,709.00 with

estimated equity in the amount of $33,290.00. The parties have no interest in any other real property.

¶3. Thomas earns approximately $56,400.00 annually from his employment at the Federal Small Business

Administration where he has worked for approximately 18 years. He has an adjusted gross monthly income

of approximately $3150.00. At the time of trial, the balance of his retirement account was $46,000.00,

which he is eligible to receive upon retirement. He is exempt from Social Security retirement benefits due to
his Civil Service Retirement System employment status.

¶4. Martha earns approximately $34,679.00 per year from her employment as a school counselor at

Copiah County Schools. She has an adjusted gross monthly income of approximately $2023.00. At the

time of trial, the balance of her retirement account was $19000.00. Martha has contributed into Social

Security during her years of employment and will be eligible for benefits upon her retirement. Martha has

been continuously employed throughout the marriage.

¶5. The parties have accumulated household furnishings and personal property throughout the twenty-five

years of marriage. There is dispute as to the actual value of the household furnishings and some personal

property.

¶6. Thomas maintained two whole life insurance policies that were purchased during the marriage with

marital assets. There is a Kansas City Life Insurance policy which contained a cash value of $2,049.00, and

Lamar Life Insurance policy with a cash value of $3,495.00. However, due to loans, their net cash value

was $1,817.00 at the time of trial. In dispute as a marital asset is a $50,000.00 Southern Farm Bureau Life

Insurance policy, owned by Thomas, but purchased for the benefit of his mother, Ms. Annette Traxler, for

estate purposes during the marriage. The approximate cash value of the policy, $25,000.00, and the

ownership was returned to Annette Traxler prior to trial. Thomas and Martha testified that the policy was

obtained for estate purposes. There is dispute as to how the premiums of the policy were paid.

¶7. During the marriage, Thomas managed four single family rental units owned by his mother that earned

the family extra income. The amount of the income was estimated to be $300.00 per month. After the

separation of the parties, Thomas moved to Brandon, Mississippi into a one bedroom apartment.

Subsequently, Annette began managing the rental units and retaining any profits.

¶8. Martha Traxler initiated this action by filing a Complaint on July 21, 1995, for Divorce in the Chancery

Court of Copiah County, Mississippi pursuant to Miss. Code Ann. Section 93-5-1 (Supp 1997). Martha

requested the custody of the minor child, child support and maintenance, title to the marital home, periodic

and lump sum alimony, payment of marital debt, and attorney fees. Thomas Traxler filed an Answer and

Counter Complaint for Divorce on September 7, 1995 alleging habitual cruelty and inhuman treatment and

requesting an equitable division of the marital property and attorney fees, pursuant to Miss. Code Ann.

Section 93-5-2 (Supp 1997).

¶9. On July 23, 1996, the question of monthly child support and maintenance as well as the division of

marital property and attorney fees were submitted via a signed Consent Agreement pursuant to Miss. Code

Ann. Section 93-5-2(3) (Supp 1997).

¶10. After a full hearing in open court and the parties submission of their respective Findings of Fact and

Conclusions of Law, the Chancellor made the following ruling:

1) Martha would receive $750.00 in monthly periodic alimony, all equity ($33,000.00) in the marital home

and the parties would divide all personal property contained in the house via an auction process unless

otherwise agreed. Additionally, Martha would receive title to the home and child support for the remaining

un-emancipated child in the amount of $225.00 per month, when the child remained with her for more than

any 30 day period. The parties would divide health care cost not covered by insurance and reasonable and

necessary college expenses for the child with Thomas paying 61% and Martha 39% of said costs.
2) The Court found both parties to have some ability to pay attorney fees and the total fees were combined

and Thomas was ordered to pay 61% and Martha 39% .

3) The Court found the oldest child, Casey Traxler, emancipated due to her age with no future obligation of

support but allowed her to obtain possession of the U.S. savings bonds, which were purchased during the

marriage, valued at $2000.00. Thomas was ordered to hold the remaining bonds in Ty Traxler's name in

trust, in the amount of $11,000.00, for educational purposes.

4) A life insurance policy through Southern Farm Bureau, purchased during the marriage for the benefit of

Thomas's mother, Annette Traxler was found not to be a marital asset. A $5000.00 loan from Annette

Traxler to Martha and Thomas Traxler was found not to be an enforceable debt in these proceedings.

¶11. Thomas Traxler filed a Motion for Reconsideration on November 12, 1996, and after a hearing on the

Motion, the Court denied the relief requested in an order entered November 27, 1996. A Notice of

Appeal was filed by the Appellant on December 27, 1996. Appellee thereafter filed a Notice of Cross

Appeal on January 9, 1997. Aggrieved by the decision of the lower court, Thomas appeals and raises the

following issues:

I. WHETHER THE LOWER COURT ERRED WHEN IT CONSIDERED ALL RETIREMENT

BENEFITS ACCUMULATED BY EACH PARTY AS MARITAL ASSETS, AND THEREFORE

SUBJECT TO EQUITABLE DISTRIBUTION.

II. WHETHER THE LOWER COURT ERRED WHEN IT ATTEMPTED TO CONSIDER ALL

RETIREMENT BENEFITS AS MARITAL ASSETS, BUT FAILED TO CONSIDER

MARTHA TRAXLER'S SOCIAL SECURITY FOR PURPOSES OF EQUITABLE

DISTRIBUTION.

III. WHETHER RENTAL INCOME RECEIVED BY THOMAS TRAXLER DURING THE

MARRIAGE BUT DISPENSED WITH PRIOR TO DIVORCE JUDGMENT, SHOULD HAVE

BEEN INCLUDED AS A MARITAL ASSET FOR PURPOSE OF EQUITABLE

DISTRIBUTION AND AWARDING PERIODIC ALIMONY.

IV. WHETHER AN AWARD OF $750.00 PER MONTH PERIODIC ALIMONY AWARD WAS

EXCESSIVE.

V. WHETHER THE LOWER COURT ABUSED ITS DISCRETION WHEN ORDERING

THOMAS TRAXLER TO PAY 61% OF COMBINED ATTORNEY'S FEES WITHOUT

PROOF OF HER INABILITY TO PAY.

¶12. Martha Traxler raises on cross-appeal the following issue:

I. WHETHER A LIFE INSURANCE POLICY CASH VALUE OWNED BY THOMAS

TRAXLER IS A MARITAL ASSET.

STANDARD OF REVIEW

¶13. The court's standard of review in domestic relations matters is limited. We will not disturb the findings

of a Chancellor unless the Chancellor was manifestly wrong, clearly erroneous, or an erroneous legal
standard was applied. Turpin v. Turpin, 699 So. 2d 560, 564 (Miss. 1997).

LEGAL ANALYSIS

I. WHETHER THE LOWER COURT ERRED WHEN IT CONSIDERED RETIREMENT

BENEFITS ACCUMULATED BY EACH PARTY AS MARITAL ASSETS, AND THEREFORE

SUBJECT TO EQUITABLE DISTRIBUTION.

and

II. WHETHER THE LOWER COURT ERRED WHEN IT ATTEMPTED TO CONSIDER ALL

RETIREMENT BENEFITS AS MARITAL ASSETS, BUT FAILED TO CONSIDER

MARTHA TRAXLER'S SOCIAL SECURITY FOR PURPOSES OF EQUITABLE

DISTRIBUTION.

¶14. Thomas contends that if he is required to rely on his federal retirement without the benefit of social

security he will be unable to maintain a decent standard of living under the terms of the divorce judgment

which would not be an equitable distribution. Thomas Traxler's retirement benefit is his federal retirement

account consisting of a balance of $46,000 at the time of trial. This amount reflects what he has contributed

over eighteen years of employment.

¶15. In his brief, Thomas cites Savelle v. Savelle, 650 So. 2d 476 (Miss. 1995) for the proposition that

one spouse has no vested right in the other's pension or retirement benefits.

¶16. Mississippi applies the doctrine of equitable distribution when deciding issues of marital assets.

Ferguson v. Ferguson, 639 So. 2d 921, 927 (Miss. 1994). Marital property is defined as, "any and all

property acquired or accumulated during the marriage". Assets so acquired or accumulated during the

course of the marriage are marital assets and are subject to equitable distribution by the chancellor.

Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994).

¶17. Thomas and Martha were married for 25 years. Thomas has worked for the U.S. Small Business

Administration for the last 18 of those 25 years. Thomas' retirement was accumulated during the marriage.

Retirement accumulated during the marriage is therefore subject to equitable distribution. Rennie v.

Rennie, No. 97-CA-00100- SCT. July 23, 1998.

¶18. Chancellor Patterson employed the following guidelines set in Ferguson, 639 So. 2d at 928, to effect

an equitable division of marital property:

1. Substantial contribution to the accumulation of the property. Factors to be considered in

determining contribution are as follows:

a. Direct or indirect economic contribution to the acquisition of the property;

b. Contribution to the stability and harmony of the marital and family relationships as measured by

quality, quantity of time spent on family duties and duration of the marriage; and

c. Contribution to the education, training or other accomplishment bearing on the earning power of the

spouse accumulating assets.
2. The degree to which each spouse has expended, withdrawn or otherwise disposed of marital

assets and any prior distribution of such assets by agreement, decree or otherwise.

3. The market value and the emotional value of the assets subject to distribution.

4. The value of assets not ordinarily, absent equitable factors to the contrary, subject to such

distribution, such as property brought to the marriage by the parties and property acquired by

inheritance or inter vivos gift by or to an individual spouse;

5. Tax and other economic consequences, and contractual or legal consequences to third parties, of

the proposed distribution;

6. The extent to which property may, with equity to both parties, be utilized to eliminate periodic

payments and other potential sources of future friction between the parties;

7. The needs of the parties for financial security with due regard to the combination of assets, income

and earning capacity; and

8. Any other factor which in equity should be considered.

¶19. It should be noted that although the chancellor followed the guidelines and included Thomas' retirement

as a marital asset, he adjudicated him to be the owner of his retirement free and clear of Martha.

¶20. Accordingly, the chancellor's decision to include Thomas' retirement as a marital asset and subject it to

equitable distribution is affirmed.

¶21. Thomas also contends that the chancellor's failure to consider Martha's Social Security benefits was

not an equitable distribution. He argues that since Martha has retirement plus the fact that she is eligible for

Social Security benefits then that should have been included with the marital assets. "One objective of

equitable distribution of property is a fair division based upon the facts of the case." Reddell v. Reddell,

696 So. 2d 287 (Miss. 1997); Ferguson v. Ferguson, 639 So. 2d 921, 929 (Miss. 1994). In a

determination of the division of marital property, both spouses' contributions during the marriage should be

thoroughly evaluated by the chancellor. Chamblee v. Chamblee, 637 So. 2d 850, 865 (Miss. 1994 ).

¶22. In response, Appellee argues that Social Security can in no way be considered a "vested" benefit to

the extent that it becomes a marital asset.

¶23. Martha has Social Security taken from her monthly income which enables her to be eligible for it upon

retirement. She is not receiving the benefits now, nor can it be determined that she will actually receive them

in the future. As stated above marital property is "any and all property acquired or accumulated during the

marriage". In his judgment, the chancellor listed all assets and debts with a known dollar figure but failed to

discuss the Social Security although it is presently being deducted from Martha's wages. Although this is an

error, it should be considered harmless because the overall distribution was equitable. The decision of the

lower court is affirmed.

III. WHETHER THE LOWER COURT ERRED WHEN IT MADE A FINDING OF FACT

BASED ON SPECULATION THAT THOMAS TRAXLER WOULD RECEIVE

SUPPLEMENTAL INCOME IN THE FUTURE AS A BASIS FOR AWARDING PERIODIC
ALIMONY AND EQUITABLE DISTRIBUTION.

¶24. The supplemental income that is in question is the rental income that Thomas collected from managing

rental property owned by his mother, Annette Traxler. Beginning in 1972, Thomas took over management

and administration of the rental property. During those years, the proceeds were used to supplement the

needs of the household. Thomas ceased management of the property after the divorce suit was filed.

¶25. The chancellor, in his decision, stated that the rental income that Annette Traxler was giving to Thomas

was a gift and non-marital property, but these funds were deposited in the joint account, thus converting

non-marital to marital property. Johnson v. Johnson, 650 So. 2d 1281, 1286 (Miss. 1994).

¶26. Thomas alleges that it was reversible error for the chancellor to find purely on speculation and

conjecture that subsequent to this litigation, the rental income would again be received based on his

relationship with his mother.

¶27. Thomas testified that he relinquished management because of his move to Brandon. However, no

evidence was offered to show that his mother demanded return of the management responsibilities. The

chancellor took into consideration the fact that this was extra money that contributed to the parties standard

of living and that it is not beyond belief that the money will be restored to him when this matter is finalized.

Although there are no facts to show that he will resume management, there is evidence that he managed it

for twenty-two years.

¶28. Thomas further argues that even if the court were to consider this income, Martha did not contribute

toward its procurement and she is due no equitable division. Watts v. Watts, 466 So. 2d 889, 891

(Miss.1985). This argument has no merit in that evidence shows that Martha helped clean, manage and

collect the rent over the twenty-two years.

¶29. Assets originally categorized as non-marital assets may be converted to marital assets by being used

for family purposes or commingled with marital assets. Heigle v. Heigle, 654 So. 2d 895, 897 (Miss.

1995). The chancellor had the most fundamental fairness in mind because each party walked away with an

even split. The decision to include rental income is affirmed.

IV. WHETHER THE AWARD OF $750.00 PER MONTH PERIODIC ALIMONY WAS

EXCESSIVE CONSIDERING MARTHA RECEIVED TOTAL EQUITY IN THE MARITAL

HOME, CHILD SUPPORT AND LIMITED MARITAL LIABILITIES.

¶30. Whether or not to award alimony and the amount of alimony is largely within the discretion of the

chancellor. A decision by the chancellor will not be disturbed unless it is found to be against the

overwhelming weight of the evidence or manifestly in error. Parsons v. Parsons, 678 So. 2d 701, 703

(Miss. 1996); Creekmore v. Creekmore, 651 So. 2d 513, 517 (Miss. 1995 ).

¶31. The following factors are to be considered by the chancellor in arriving at findings and entering

judgment for alimony:

1. Income and expenses of the parties;

2.The health and earning capacity of the parties;
3. The needs of each party;

4. The obligations and assets of each party;

5. The length of the marriage;

6. The presence or absence of minor children in the home, which may require that one or both of the

parties either pay, or personally provide child care;

7. The age of the parties;

8. The standard of living of the parties, both during the marriage and at the time of the support

determination;

9. The tax consequences of the spousal support order;

10. Fault or misconduct;

11. Wasteful dissipation of assets by either party;

12. Any other factor deemed by the court to be "just and equitable" in connection with setting spousal

support.

Parsons, 678 So. 2d at 703; Ethridge v. Ethridge, 648 So. 2d 1143, 1146 (Miss. 1995); Armstrong

v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993).

¶32. Thomas, at age 47, receives an annual salary of $56,000.00 and monthly gross of $4700.00. He

generally receives an annual cost of living increase of one and one half to two percent, which will increase

his annual and monthly gross. His disposable income is $3150.00. Thomas' monthly living expenses, per his

financial statement, total $1288.00 and his monthly obligations total $1000.00. The monthly obligations

were considered to be short term debts. Thomas has $46,000.00 in retirement, $25,000.00 in personal

property assets, and a cash value of $1817.00 on two life insurance policies. He is in good health.

¶33. Martha's assets were found to be $46,364.00 which includes her retirement of $19,000.00. The

chancellor combined the total of marital assets and came up with a figure of $121,622.00. He then split the

assets 50/50.

¶34. Thomas alleges that the award was excessive considering that Martha received total equity in the

marital home, will collect child support and has limited marital liabilities. Although she has the equity in the

home, she has to assume all of the mortgage payments of $655.00 per month. The chancellor ordered

Thomas to pay an amount of $225.00 child support for any thirty day period that the minor child will be in

the home. This decision was made considering the fact that Ty Traxler will be entering college and will be

away from the home the majority of the school year. Thomas fails in showing that he is left with a majority

of the marital liabilities since all assets and joint liabilities were split evenly. The chancellor's decision was

supported by credible evidence offered by both parties and is therefore affirmed.

V. WHETHER THE LOWER COURT ABUSED ITS DISCRETION WHEN ORDERING

THOMAS TO PARTIALLY PAY MARTHA'S ATTORNEY'S FEES WITHOUT PROOF OF

HER INABILITY TO PAY.
¶35. "Like other matters, awarding attorney's fees is entrusted to the chancellor's broad discretion." Boykin

v. Boykin, 565 So. 2d 1109, 1116 (Miss. 1990); Cheatham v. Cheatham, 537 So. 2d 435, 440 (Miss.

1988); Holleman v. Holleman, 527 So. 2d 90, 95 (Miss. 1988).

¶36. Thomas alleges that the chancellor abused his discretion when awarding Martha partial attorney fees

without a showing of an inability to pay. Martha demonstrated her inability to pay fees in that she borrowed

the money to pay the portion of the fees that had been paid. However it should be noted that the amount he

was ordered to pay, $2268.00, was offset by the amount Martha had to pay Thomas to equalize the

distribution of marital assets. The chancellor used sound discretion when awarding Martha partial payment

of attorney fees and is therefore affirmed.

¶37. On cross-appeal Martha raises the single issue:

VI. WHETHER A LIFE INSURANCE POLICY OWNED BY THOMAS DURING THE

MARRIAGE IS A MARITAL ASSET.

¶38. The Appellee contends that the chancellor incorrectly determined that the $26,500.00 cash value in a

life insurance policy was not a marital asset. Martha argues that the premiums were paid out of the joint

checking account.

¶39. The life insurance policy was purchased by Annette Traxler for the benefit of Thomas for estate

purposes. Annette Traxler testified that the premiums were deposited into Thomas' checking account by her

and subsequently paid out of that account. However, no other evidence was provided to show from which

account the premiums were paid. The Court finds that this issue is to be remanded to the lower court for a

determination as to from which account the premiums were paid.

CONCLUSION

¶40. This Court affirms all decisions of the lower court in including retirement benefits as a marital asset;

including rental income as a marital asset for equitable distribution; the awarding of $750.00 per month

periodic alimony; and the awarding of partial attorney's fees. However, the issue of the cash value of the life

insurance policy is remanded to determine from which account the premiums were paid.

¶41. AFFIRMED IN PART; REVERSED AND REMANDED IN PART FOR PROCEEDINGS

CONSISTENT WITH THIS OPINION.

PRATHER, C.J., PITTMAN, P.J., ROBERTS, MILLS AND WALLER, JJ., CONCUR.

McRAE, J.,DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SULLIVAN,

P.J., AND BANKS, J.

McRAE, JUSTICE, DISSENTING:
¶42. The Court holds that the Chancellor erred by failing to include Martha's Social Security benefits in the

equitable distribution hotchpot. But, the Court subsequently and unreasonably deems such error harmless as

it affirms the Chancellor's distribution. The Court further errs by stating the Chancellor split the assets 50-50

and by forcing Thomas to pay a portion of Martha's attorney's fees. Hence, I dissent.

¶43. The majority cites Rennie v. Rennie, 718 So. 2d 1091, 1095(Miss. 1998), as it states, "[r]etirement

accumulated during the marriage is therefore subject to equitable distribution." Yet, despite its temporal

wisdom, the majority proceeds to eschew its own statement. Indeed, the majority deems harmless the

Chancellor's failure to include Martha's 25 years of Social Security benefits in the equitable distribution

equation. The majority maintains such a perspective despite its own plain language and despite this Court's

statement in Reddell v. Reddell, 696 So. 2d 287, 288 (Miss. 1997) (citing Chamblee v. Chamblee,

637 So. 2d 850, 865 (Miss. 1994)): "[o]ur holding in Chamblee requires that, in a determination of the

division of marital property, both spouses contributions during the marriage be thoroughly evaluated by the

chancellor." See Id.

¶44. Because federal retirement is in lieu of social security and because federal retirement is being

considered, it is my view that social security must also be considered in deciding the issue of equitable

distribution in this case.

¶45. The "evident error" is not harmless because equitable distribution is unrealizednot all of the marital

assets were considered. Martha's contribution appeared to be less than it was, which proved detrimental to

Thomas because it appeared as if Martha commanded more assets and relative "support" than was actually

so. Martha benefitted from the error. Despite Martha's claims to the contrary, her Social Security

investment from years as a school counselor is vested, because she has paid in a sum of funds from which

benefit amounts are calculable. Hence, the Social Security funds are distributable assets which the

Chancellor erroneously failed to consider. Further, the Court says the Chancellor "split the assets 50/50."

Yet, how can such be so since the Social Security funds were not considered? It cannot.

¶46. As to the assignment of attorney's fees, Thomas was forced to pay a percentage of Martha's fees

despite the fact Martha failed to show an inability to pay. While the Court finds that Martha demonstrated

an inability to pay in that she borrowed funds to pay that which she did, the Court is conclusory because

such evidence is far from determinative of an overall inability to pay. Perhaps Martha simply did not have

sufficient cash flow at the time as she awaited her next pay check, or perhaps Martha had the funds but

borrowed because she preferred not to reduce her current level of such funds. The point is clearhow are we

to know from a simple act of borrowing that Martha was unable to pay the whole of her attorney's fees?

We are not so able.

¶47. The Court continues its justification of the Chancellor's decision by stating that Martha offset Thomas's

payment of attorney's fees with her payment to equalize the distribution of marital assets. Yet, such is a nonjustification because Martha was required to pay the distribution equalization regardless of whether she had

attorney's fees. By allowing Martha to only pay the full amount of the equalization while reducing her

obligation for her attorney's fees, Thomas again is harmed while Martha benefits. Yet, the Court certifies the

Chancellor's action. Given insufficient showing from which to rationally deem Martha unable to pay her

attorney's fees, reason and equity dictate that each party should pay that party's own attorney's fees. See

Cheatham v. Cheatham, 537 So. 2d 435 (Miss. 1988).
¶48. As aforementioned, the majority manifestly errs in not reversing to include Martha's vested Social

Security benefits, in declaring the Chancellor's split of assets to have been equal, and in not reversing to

have each party pay its own attorney's fee. Accordingly, I dissent.

SULLIVAN, P.J., AND BANKS, J., JOIN THIS OPINION.