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### STATE OF MICHIGAN

COURT OF APPEALS

FRANCES J. PERAINO,

Plaintiff-Appellant, UNPUBLISHED February 28, 2017

v No. 329746
Macomb Circuit Court VINCENT A. PERAINO, LC No. 2014-005832-DO

Defendant-Appellee.

Before: J ANSEN , P.J., and B ECKERING and G ADOLA , JJ.

P ER C URIAM

.

In this divorce action, plaintiff, Frances J. Peraino, appeals as of right the trial court’s judgment of divorce. Following a bench trial, the court conclu ded that a Merrill Lynch IRA held by defendant, Vincent A. Peraino, was separate property, refuse d to invade that separate property pursuant to statute, and awarded plaintiff $350 per month in sp ousal support. We affirm in part, reverse in part, and remand for fur ther proceedings consistent with this opinion.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

Plaintiff and defendant were married on May 20, 1995, when the y were in their mid-50s and after both of their first marriages ended. At the time of marriage, defendant had a Merrill Lynch IRA valued at approximately $800,000. After three years of marriage, due to a change of employment status, defendant stopped contributing to that IRA. Throughout the marriage, plaintiff obtained various reti rement accounts amounting to app roximately $120,000. In 2012, plaintiff’s son, David Connelly, died. Plaintiff was the benef iciary of David’s life insurance policy, which resulted in her receiving approximately $38,000. After an altercation between defendant and plaintiff’s other son, John Connelly, and plainti ff’s concern regarding defendant’s use of guns, plaintiff filed the instant suit for divorce. The case proceeded to a bench trial on the issues of property distribution and spousal support. At trial, plaintiff argued that defendant’s Merrill Lynch IRA, then valued at around $400,000, should be cl assified as marital property and divided equally between the par ties. Alternatively, plaintiff argued, if the IRA was separate property, the trial court should invade the asset for equitable distribution pursuant to MCL 552.23(1) or MCL 552.401. Plaintiff also argued that she was e ntitled to spousal support. Defendant urged the trial court to grant each party the propert y that was titled in his or her own name and to forego any spousal support award.-2- Following a bench trial, the court issued a written opinion an d order, concluding that defendant’s Merrill Lynch IRA was separate property and that pl aintiff had not established the requirements of either statutory ground to invade the separate asset. The trial court also awarded plaintiff spousal support of $350 pe r month, an amount lower th an what she requested.

II. PROPERTY CLASSIFICATION

On appeal, plaintiff first cha llenges the trial court’s decisi on to classify defendant’s Merrill Lynch IRA as separate property. We review a trial court’s factual findings in a divorce proceeding for clear error. Richards v Richards , 310 Mich App 683, 693; 874 NW2d 704 (2015). A factual finding is clearly erroneous if we are left with a definite and firm conviction
that the trial court made a mistake. Butler v Simmons-Butler , 308 Mich App 195, 208; 863 NW2d 677 (2014). When reviewing a trial court’s factual findin gs, we defer to the trial court on matters of witness credibility. Richards , 310 Mich App at 694. If we uphold a trial court’s factual findings, we must then “ decide whether the dispositive ruling was fair and equitable in light of those facts.” Sparks v Sparks , 440 Mich 141, 152; 485 NW2d 893 (1992). We will affirm a trial court’s dispositive ruling unless we are “left w ith the firm conviction that the division was inequitable.” Id.

“In any divorce action, a trial court must divide marital prop erty between the parties and, in doing so, it must first determine what property is marital a nd what property is separate.” Cunningham v Cunningham , 289 Mich App 195, 200; 795 NW2d 826 (2010). Property divisio n in a divorce proceeding is governed by statute. Korth v Korth , 256 Mich App 286, 291; 662 NW2d 111 (2003), citing MCL 552.1 et seq . Generally, “assets earned by a spouse during the marriage are properly considered part of the marital estate and are subject to division, but the parties’ separate assets may not be invaded.” Korth , 256 Mich App at 291, citing MCL 552.19. However, “there are occasions w hen property earned or acquired during the marriage may be deemed separate property.” Cunningham , 289 Mich App at 201. Further, “separate assets may lose their character as separate property and transform into ma rital property if they are commingled with marital assets and ‘treated by the parties as m arital property.’ ” Id ., quoting Pickering v Pickering , 268 Mich App 1, 11; 706 NW2d 835 (2005). The fact that prope rty is
titled in one individual’s name alone, or titled jointly, is no t necessarily dispositive. Cunningham , 289 Mich App at 201-202.

Plaintiff first argues that the t rial court improperly classif ied defendant’s Merrill Lynch IRA as separate property because she provided evidence that def endant commingled marital assets with the IRA and the partie s treated the IRA as marital property. We disagree.

The record demonstrates that defendant began contributing to h is Merrill Lynch IRA in the mid-1970s. When he married plaintiff in 1995, the value of the IRA was approximately $800,000. Defendant continued to contribute to the IRA until h is employer reclassified him as an independent contractor in 1998, which ended the employer con tributions to the account.
Defendant testified that he did not further contribute to the I RA after that reclassification.

Plaintiff testified that she received an $8,000 inheritance wh en her mother died, and she used half of that money to open a separate IRA in defendant’s n ame. According to plaintiff, defendant eventually rolled that separate IRA over into his Mer rill Lynch IRA. Plaintiff also-3- said she contributed to more than her share of marital bills an d made double mortgage payments
on their condominium in order to ensure that defendant did not have to remove funds from his Merrill Lynch IRA.

In its opinion, the trial court explained that it did not find credible plaintiff’s testimony that she contributed $4,000 of inherited money to defendant’s M errill Lynch IRA or that she contributed more heavily to marital expenses and made regular e xtra mortgage payments so that
defendant could maintain his IRA portfolio. Specifically, the trial court cited plaintiff’s inability to provide any documentary evide nce of her alleged activities a nd the fact that opening another IRA for defendant was illogical when she could have simply cont ributed the $4,000 directly into defendant’s Merrill Lynch IRA. As such, the trial court conclu ded that the only credible evidence on the record showed that defendant’s Merrill Lynch IR A predated his marriage to plaintiff and thus constitu ted separate property.

On appeal, plaintiff argues that the trial court clearly erred by refusing to credit her testimony. However, the trial court’s factual findings in this regard were based solely on plaintiff’s lack of credibility, and we defer to the trial cour t’s credibility determinations. See

Richards , 310 Mich App at 694. Plaintiff has not offered any evidence on appeal, other than her own testimony, to support her asse rtions that defendant’s Merri ll Lynch IRA was treated by the parties as a marital asset and commingled with marital property

. 1 Accordingly, we are not
convinced that the trial court’ s factual findings on this matte r were clearly erroneous.

III. INVASION OF SEPARATE PROPERTY

Alternatively, plaintiff argues that, even if defendant’s Merr ill Lynch IRA is separate property, the trial court erred by refusing to invade the asset pursuant to MCL 552.23(1) or MCL
552.401 because she both contribute d to the IRA and exhibited n eed. Again, we disagree.

Although a party to a divorce proceeding generally takes his o r her separate property from a marriage without that property being subject to invasion , “a spouse’s separate estate can be opened for redistribution when one of two statutorily create d exceptions is met.” Reeves v

Reeves , 226 Mich App 490, 494; 575 NW2d 1 (1997), citing MCL 552.23 a nd MCL 552.401. Under the first statutory exception, a trial court may invade a separate asset “if it appears from
the evidence in the case that th e party contributed to the acqu isition, improvement, or accumulation of the property.” MCL 552.401. “Invasion is allo wed under MCL 552.401 when one party ‘significantly assists in the acquisition or growth’ of the other party’s separate asset, in which case ‘the court may consider the contribution as having a distinct value deserving of

1 To the extent defendant agreed that he contributed to the IRA for the first few years after the parties’ marriage, plaintiff offered no evidence before the tri al court regarding the amount of those contributions. We further note that plaintiff attempts t o support her argument on appeal by providing documentary evidence that was not produced before the trial court. Not only is this evidence not properly before this Court because our “review is limited to the record established by the trial court,” Sherman v Sea Ra y Boats, Inc , 251 Mich App 41, 56; 649 NW2d 783 (2002), but it also provides no meritor ious proof of plaintiff’s claims

.-4- compensation.’ ” Skelly v Skelly , 286 Mich App 578, 582; 780 NW2d 368 (2009), quoting

Reeves , 226 Mich App at 495. A court is also permitted to invade a p arty’s separate property “if the estate and effects awarded to either party are insufficientfor the suitable support and maintenance of either party . . . .” MCL 552.23(1).

Plaintiff’s argument that invasion of defendant’s Merrill Lync h IRA was required pursuant to MCL 552.401 due to her financial contribution to th e account relies solely on her trial testimony, which, as discuss ed earlier, the trial court d iscredited. Apart from plaintiff’s testimony, there is no evidence demonstrating that plaintiff co ntributed in any manner to defendant’s Merrill Lynch IRA. Given the lack of evidence, pla intiff cannot show that she assisted in the growth of the account in a sufficient manner to warrant invasion of the separate property under MCL 552.401. 2

Plaintiff also argues that she demonstrated sufficient need to invade defendant’s Merrill Lynch IRA pursuant to MCL 552.23(1) . Plaintiff cites her testi mony that she requires $2,500 per month to maintain her standard of living. However, the trial c ourt refused to credit plaintiff’s testimony regarding her financial need, relying on the lack of documentary evidence provided by plaintiff to support her proposed budget. Further, the record reveals that plaintiff never provided clear or specific testimony regarding her costs of living. The only issue on which plaintiff specifically testified was that she included the purchase of a small condominium in her proposed budget, which she said would co st approximately $500 per month. Plaintiff did not testify regarding how she accounted for the remaining $2,000 in her pro posed budget. Rather, the only credible evidence on the record showed that plaintiff received $1,432 of monthly income from her own retirement accounts. The court also awarded plaintiff spousal support in the amount of $350 per month, which increased her monthly income to $1,782, a nd awarded plaintiff her retirement accounts, which amounted to approximately $120,000. Considering the lack of clear and specific testimony and documentary evidence supporting plai ntiff’s assertions that her needs exceeded her assets and monthly income, the trial court did not err by refusing to invade defendant’s IRA pursuant to MCL 552.23(1) to provide for plaint iff’s maintenance and support.

IV. SPOUSAL SUPPORT

Next, plaintiff challenges the trial court’s award of spousal support. We review for an
abuse of discretion a trial cour t’s decision to award spousal s upport. Gates v Gates , 256 Mich App 420, 432; 664 NW2d 231 (2003). “An abuse of discretion occ urs when a court selects an
outcome that is not within the r ange of reasonable and principl ed outcomes.” Carlson v Carlson

, 293 Mich App 203, 205; 809 NW2d 612 (2011). We review for clea r error a trial court’s findings of fact as they relate to an award of spousal support. Gates , 256 Mich App at 432. If the trial court’s factual findings are not clearly erroneous, w e must affirm a support award unless we are firmly convinced that it was inequitable. Id. at 433.

2 Even if the trial court had cr edited plaintiff’s testimony, a $4,000 contribution toward an IRA that was valued at $800,000 at the outset of the marriage would not amount to “significantly assisting” in the growth of the asset so as to warrant the inva sion of defendant’s separate property. See Skelly , 286 Mich App at 582.-5- “The object in awarding spousal support is to balance the inco mes and needs of the parties so that neither will be impoverished; spousal support i s to be based on what is just and
reasonable under the circumstances of the case.” Berger v Berger , 277 Mich App 700, 726; 747 NW2d 336 (2008). This Court has provided a list of 14 factors that a trial court should consider when determining if spousal suppor t is proper in a given case, which are as follows:

(1) the past relations and conduct of the parties; (2) the leng th of the marriage; (3) the abilities of the parties to work; (4) the source and the am ount of property awarded to the parties; (5) the parties’ ages; (6) the abilitie s of the parties to pay support; (7) the present situation of the parties; (8) the need s of the parties; (9) the parties’ health; (10) the partie s’ prior standard of living and whether either is responsible for the support of o thers; (11) the contributions o f the parties to the joint estate; (12) a party’s fault in causing the divorce; (13) the effect of cohabitation on a party’s financia l status; and (14) general pr inciples of equity. [ Woodington v Shokoohi , 288 Mich App 352, 356; 792 NW2d 63 (2010).]

On appeal, plaintiff argues th at the trial court improperly re duced her spousal support award on the basis of a clearly erroneous finding of fact regar ding plaintiff’s withdrawal of $26,500 from a joint savings account. We agree.

At trial, plaintiff testified that her son, David, died in 201 2. Plaintiff explained that she was the beneficiary of David’s life insurance policy, and when she initially received the life insurance payout of approximately $38,000, she deposited the mo ney in a Comerica Bank savings account that she shared with defendant. 3 Plaintiff then used some of the money to pay David’s funeral and probate expe nses. Plaintiff testified that , after a few months, she transferred the remaining proceeds of the life insurance policy from the jo int account into an account at Motor City Credit Union (MCCU) to secure a higher interest rate . According to plaintiff, she used the remaining funds to help pay her grandchildren’s colleg e tuition and to cover her legal
fees in the instant case.

A statement from the parties’ joint account, which was admitte d at trial, showed that a withdrawal of $26,500 was made between October 1, 2013, and Dec ember 31, 2013. Defendant did not provide any testimony regarding this withdrawal. State ments from plaintiff’s MCCU account, which were also introduced at trial, showed that as of January 31, 2014, plaintiff had

3 Property that is acquired by one spouse through inheritance or some other economic addition independent of the marriage generally constitutes separate prop erty. See Lee v Lee , 191 Mich App 73, 78-79; 477 NW2d 429 (1991). Plaintiff was named as the sole beneficiary of the life insurance policy of her son from a prior marriage, the proceeds of which constituted plaintiff’s separate property. “[S]eparate a ssets may lose their character as separate property and transform into marital property if they are commingled with marital asset s and treated by the parties as marital property.” Cunningham , 289 Mich App at 201 (quotation marks and citation omitted). Under the circumstances presente d in this case, we are satisfie d that plaintiff’s brief deposit of the life insurance proceeds into a joint account was not enough to transform their character from separate into marital property.-6- approximately $25,300 in her credit union account. According t o the statements, plaintiff made
several withdrawals during the pendency of this case and made s everal payments to Wayne State University, which is consistent with plaintiff’s testimony that she helped pay college tuition for her grandchildren and used funds f rom the account to cover her legal fees.

Despite plaintiff’s testimony and the corroborating documentar y evidence, the trial court found that plaintiff did not accoun t for the removal of the $26 ,500 from the joint account, concluding as follows:

Plaintiff acknowledges that she withdrew most of the funds from the joint Comerica savings account approximately one year prior to the ti me that she filed for divorce. These funds were never accounted for and there ap pears to be no evidence that they were spent in support of the marital estate. Plaintiff appears to have secreted these funds without defendant’s knowledge. The C ourt finds this to be a compelling factor in reduci ng the award of spousal support to plaintiff.

It is unclear from the record how the trial court reached its d ecision that plaintiff failed to account for the money that was removed from the joint account w hen she explicitly described how she initially deposited the proceeds from David’s life insu rance policy into the Comerica Bank joint savings account, then, after paying David’s funeral and probate expenses, transferred the remaining funds to her credit union account and used them t o pay for her grandchildren’s tuition and her legal fees. The trial court made no reference in its opinion to pl aintiff’s testimony on this matter. Specifically, the trial court never stated tha t it found plaintiff’s testimony on this point to lack credibility and never referenced any evidence or testimony from defendant that would contradict plaintiff’s testimony. Although defendant tes tified that he believed plaintiff spent marital funds on her children without discussing it with him, he never suggested that the funds spent by plaintiff came from the $26,500 withdrawal from their joint account.

Given the lack of evidence suppo rting the trial court’s findin g that plaintiff secretly disposed of the $26,500 from the parties’ joint account, as wel l as her clear and explicit testimony regarding her use of that money, we conclude that the trial court clearly erred when it made this finding of fact. 4 The trial court’s opinion indica tes that, absent this clearly erroneous factual finding, the court would have provided plaintiff with a larger spousal support award. Accordingly, we reverse the trial court’s award of spousal supp ort and remand the case to allow
the court to structure an awar d using the facts in the record.

V. JUDICIAL BIAS

Lastly, plaintiff argues that t he trial court exhibited bias a gainst her and she is therefore entitled to a new trial. Plaintiff failed to challenge the tri al court’s conduct below, so her argument is unpreserved and plai ntiff has not offered any unusu al circumstances that would

4 It is notable that this trans fer of funds occurred a full year before plaintiff filed for divorce,
which undercuts the trial court’s conclusion that plaintiff mad e the transfer in an effort to
“secret” the funds from defendant.-7- compel us to address her unpreserved claim. See Meagher v Wayne State Univ , 222 Mich App 700, 726; 565 NW2d 401 (1997) (explaining that a claim of judic ial bias premised on the trial court’s treatment of the parties during trial is not preserved if a party fails to object to the allegedly biased conduct); Peterman v Dep’t of Natural Resources , 446 Mich 177, 183; 521 NW2d 499 (1994) (explaining the general rule that, “absent unus ual circumstances, issues not raised at trial may not be raised on appeal”).

Nonetheless, even if we were to consider the substance of plai ntiff’s argument, we would find that it lacks merit. We presume that a trial judge is fai r and impartial, and a party challenging this presumption bears the heavy burden of proving otherwise. In re Susser Estate

, 254 Mich App 232, 237; 657 NW2d 147 (2002). “An actual showing of prejudice is required before a trial judge will be disqualified.” In re Forfeiture of $1,159,420 , 194 Mich App 134, 151; 486 NW2d 326 (1992). Plaintiff’ s allegations of judicial bias relate solely to the fact that the trial court interrupted her testimony on several occasions to ask her questions. During a bench trial, a court may ask ques tions “designed to clarify poi nts or to expand upon the path of inquiry in order to assist the court in its role of factfinder. ” In re Forfeiture of $53.00 , 178 Mich App 480, 497; 444 NW2d 182 (1989). A judge also has more discr etion to question witnesses during a bench trial because, unl ike a jury trial, “concern ove r the effect of the judge’s comments and conduct d[oes] not exist.” In re Forfeiture of $1,159,420 , 194 Mich App at 153. Our review
of the record in this case reveals that the trial court’s inter ruptions and questions were merely designed to clarify plaintiff’ s testimony. Therefore, plaintif f’s claim of judicial bias lacks merit.

Affirmed in part, reversed in part, and remanded for further p roceedings consistent with this opinion. We do not ret ain jurisdiction.

/s/ Kathleen Jansen /s/ Jane M. Beckering
/s/ Michael F. Gadola