Case Name: Lorraine C. CRAFT v. Jay Douglas CRAFT
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 2002-06-06
Citations: 825 So. 2d 605
Docket Number: No. 2000-CA-02101-SCT
Parties: Lorraine C. CRAFT v. Jay Douglas CRAFT.
Judges: Before McRAE, P.J., DIAZ and CARLSON, JJ.
Reporter: Southern Reporter, Second Series
Volume: 825
Pages: 605–615

Head Matter:
Lorraine C. CRAFT v. Jay Douglas CRAFT.
No. 2000-CA-02101-SCT.
Supreme Court of Mississippi.
June 6, 2002.
Rehearing Denied Sept. 19, 2002.
William R. Wright, W. Benton Gregg, Jackson, Deborah H. Bell, University, Attorneys for Appellant.
David Alan Pumford, Jackson, Erik M. Lowrey, Robert R. Marshall, Hattiesburg, Attorneys for Appellee.
Before McRAE, P.J., DIAZ and CARLSON, JJ.

Opinion:
DIAZ, J.,
for the Court.
¶ 1. On February 19, 1999, Lorraine C. Craft filed for divorce against Jay Douglas Craft on the ground of irreconcilable differences. Lorraine amended her complaint on April 12, 2000, and alleged that Jay committed adultery with her best friend. In his answer, filed on June 19, 2000, Jay admitted to both grounds for divorce. The matter was heard before the Chancery Court of Lamar County, Missis sippi on August 29, 2000. The chancellor issued his Memorandum Opinion on November 7, 2000, and entered his Final Judgment of Divorce on December 18, 2000. The chancery court granted a divorce to Lorraine on the ground of adultery. Lorraine appeals the property distribution, contending that the chancellor erred in classifying Jay's partnership with his brother as non-marital property.
FACTS
¶ 2. Lorraine and Jay were married for about 12 years. The couple had no children together, although Jay has a son, Matthew, who lived with Jay and Lorraine from the age of five. It was undisputed that Lorraine contributed significantly to Matthew's upbringing. Lorraine's niece testified that Lorraine did a lot of the cooking and helped Matthew with his homework. She also testified that Jay did some cooking.
¶ 3. In 1979 Jay and his brother, Brad Craft, entered into a partnership to operate a used car business in Hattiesburg, Mississippi under the name of Craft Auto Sales. This partnership existed prior to Lorraine and Jay's marriage on May 30, 1987. Although Brad and Jay did not formalize the partnership until 1994, the brothers have filed tax returns as a partnership since 1980. The partnership agreement also provided for a $500,000 life insurance policy on the life of each partner with the beneficiary being the surviving brother. The proceeds would be paid to the decedent's estate which would effect a transfer of the total interest in the partnership to the surviving partner. Sometime after the marriage, Brad and Jay started acquiring real estate properties with some of the earnings from the dealership. This real estate was considered an asset of the partnership. Craft Auto Sales paid the property taxes. All of the property was acquired equally by Brad and Jay as joint tenants or tenants-in-common.
¶ 4. The value of the dealership and of the real estate investments increased during Jay and Lorraine's marriage. The real estate holdings grew to a value of $2,000,000. Jay's interest in the partnership was valued at approximately $1.16 million, according to Lorraine's expert, $850,000 according to Jay's expert, and $750,000 according to Jay himself as owner of half of the interest of Craft Auto Sales.
¶ 5. Both Lorraine and Jay were employed throughout their marriage. In 1996 Lorraine was a loan officer for UC Lending where her income was about $33,000 per year. She was promoted to office manager, and her income increased in 1998 to about $64,500 per year, not including "large bonuses" she received up until May of 1999, a company car, fully paid health insurance, and an allowance on company credit cards. Lorraine testified that she changed jobs in May of 1999 due to the stress of the divorce. She now works for a different loan institution. Her current base salary is $44,000 per year. Jay's income is approximately $128,000 per year. In the years that Lorraine and Jay lived together, they had combined earnings of $850,800, with Jay contributing approximately $588,000 and Lorraine contributing approximately $262,700. These figures were undisputed. The chancellor found that Lorraine was in good health, had no children, and was capable of earning an income of $65,000 to $75,000 a year.
¶ 6. Of the marital assets, Lorraine was awarded the marital home, valued at $225,000, subject to the mortgage, but with equity of $94,000. Sometime after Jay and Lorraine separated, she withdrew $80,000 cash from the marital funds. She used $30,000 of the withdrawn funds to purchase a 1999 Mazda automobile. She was awarded the automobile, as well as the $80,000 she had withdrawn. She was also awarded a $15,000 retirement account. She was awarded $7,000 to contribute to her attorney's fees. Furthermore, after the separation, and when Jay moved out, on or about February 5, 1999, Jay voluntarily paid Lorraine $500 per week, plus $50 per month for her cellular phone and $50-70 per week for the maid service. He continued the voluntary payments until April, after which time the chancery court ordered Jay to continue with the payments. Jay made the payments on a timely basis throughout the separation.
¶ 7. Of the remaining marital assets, which were classified as Jay's non-marital property according to the exhibit, Jay was left with a little over $10,000, not including a stock account valued at $35,000 which he purchased in March of 2000, after the marital estate was settled. As for Loraine's non-marital assets, she has a one-third future interest in her father's life estate in Lamar County, which consists of 129 acres. This asset was not included on her list of financial assets submitted to the chancery court. Also relevant to the division of marital assets, the chancery court established that Jay sustained net gambling losses of approximately $67,000 over a three to four year period.
¶ 8. As for Lorraine's contention that Jay's half of Craft Auto Sales should be classified as marital, Lorraine testified that, during the early years of their marriage, when Jay and Brad would rotate Saturdays running the business, she helped Jay with some general clerical work for the partnership on his Saturday rotation. She also stated that she was involved with the business when she once helped Jay to audit Regal Financial Services, a lending company started by Jay, Brad, and two other partners. She testified that she encouraged Jay and Brad to invest in real estate. Jay's testimony, on the other hand, was that Lorraine did not do any work for Craft Auto Sales and that when she was there, she "just mainly hung around" and that she had not been there on a Saturday at all for the past 7 to 8 years.
¶ 9. At trial, Loraine requested $504,153.29 in lump sum alimony or real estate and $3000 per month in permanent periodic alimony. The chancery court classified Jay's interest in the partnership as a non-marital asset. The court equitably distributed the marital assets and awarded Lorraine $175,000 in lump sum alimony, as well as periodic alimony in the amount of $2000 per month for twenty-four months. The chancellor determined that when dividing the marital assets, which totaled slightly less than $350,000, there remained a marked deficit on the part of Lorraine. Therefore, the chancellor awarded the lump sum and periodic alimony as an adjunct to the equitable distribution of the marital estate. The primary contention on appeal is the division and classification of assets. Jay's interest in the partnership and in the real estate was not included in the marital assets. Lorraine contends that those assets should have been classified as marital. The following issues are now before this Court:
I. Whether the court erred in determining the ownership and classification of assets.
II. Whether the court erred in not awarding Lorraine an interest in the business and real estate assets.
III. Whether the court erred in finding Lorraine had not contributed to the appreciated value of the assets.
IV. Whether the court erred in finding that Jay's brother would have to be joined before equita ble distribution of the marital assets.
V. Whether the court erred in failing to grant Lorraine permanent or long-term periodic rehabilitative alimony.
DISCUSSION
¶ 10. This Court's scope of review in domestic relations matters is limited. Montgomery v. Montgomery, 759 So.2d 1238, 1240 (Miss.2000). Absent an abuse of discretion, this Court will uphold the decision of the chancellor. Hollon v. Hollon, 784 So.2d 943, 946 (Miss.2001). This Court will not disturb the findings of a chancellor unless the chancellor was manifestly wrong, clearly erroneous or an erroneous legal standard was applied. Henderson v. Henderson, 757 So.2d 285, 289 (Miss.2000).
I. WHETHER THE COURT ERRED IN DETERMINING THE OWNERSHIP AND CLASSIFICATION OF ASSETS.
¶ 11. According to this Court's ruling in Johnson v. Johnson, 650 So.2d 1281, 1287 (Miss.1994), the first step before division of the assets is for the chancellor to characterize the parties' assets as marital or non-marital. This Court also ruled, in Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss.1994), that assets accumulated during the marriage are marital assets and are subject to equitable division unless it can be proven that such assets are attributable to one of the parties' separate estates either prior to the marriage or outside of the marriage. The second step is for the chancellor to equitably divide the marital property according to the guidelines set forth in Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss.1994). In Johnson, this Court stated that "[i]f there are sufficient marital assets which, when equitably divided and considered with each spouse's marital assets, will adequately provide for both parties, no more need be done." Johnson, 650 So.2d at 1287. Where there is a deficit left for one of the parties, "then alimony based on the value of non-marital property should be considered." Id. Lorraine does not dispute the division of the stipulated marital property. She does, however, dispute the chancellor's finding that Jay's one-half interest in Craft Auto Sales is not marital property.
¶ 12. Lorraine contends that she is entitled to one-half of Jay's interest in Craft Auto Sales, while Jay contends that the property of the partnership is not a marital asset. The chancellor found that the partnership existed several years prior to the marriage and that it remained outside of the marriage. The chancellor found that Lorraine was never a significant contributor to the partnership. She took no active part in the business, did not participate in business decisions, and did not invest or contribute money to its ongoing operations. The chancellor found that Lorraine was merely present to drop Jay off a few times to repossess a car or to go with him to observe an auction, or to go with him to the office to simply be with him. There was no commingling of partnership money and affairs with personal money and affairs. See Pearson v. Pearson, 761 So.2d 157, 164 (Miss.2000). The chancellor ultimately concluded that Lorraine's active contributions to the business were negligible.
¶ 13. As for Lorraine's economic and domestic contributions to the marital estate, this Court has held that "the contributions and efforts of the marital partners whether economic, domestic, or otherwise are of equal value." Hemsley, 639 So.2d at 915. On the other hand, it is well-established that a spouse is not automatically entitled to an equal share of property accumulated through the contributions of both parties. Brown v. Brown, 574 So.2d 688, 691 (Miss.1990). Furthermore, this Court has stated that the "[appreciation of the value of any non-marital asset may be taken into account to arrive at a fair division to the extent the non-titled spouse had made a contribution toward the appreciation of value." Carrow v. Carrow, 642 So.2d 901, 907 (Miss.1994).
¶ 14. Property may not always be easily classified as either strictly marital or non-marital. As far as classifying Jay's one-half interest in the partnership as non-marital property, the business portion and ownership of the partnership did remain non-marital in character during the course of Jay and Lorraine's marriage. However, while Lorraine may not be entitled to one-half of Jay's interest in the partnership, she is entitled to an equitable distribution of the accumulated portion or the increase in value of Jay's one-half interest, as per Hemsley. The accumulated portion of Jay's one-half interest in the partnership would be considered marital property. Therefore, this Court must decide whether the chancellor properly considered the accumulation of assets when dividing the marital estate. This Court finds that the chancellor did ultimately consider Lorraine's indirect contributions to the increase in value of Jay's interest in the partnership. Lorraine was awarded the majority of the marital assets, as well as a significant amount of lump sum and periodic alimony.
¶ 15. If the trial judge committed any error at all, it was only in failing to recognize that the accumulated or increased value of Jay's interest in the partnership should be labeled marital property subject to equitable division. Neither party could establish with any degree of accuracy how much Jay's one-half interest in the business had increased from the time Jay and Lorraine were married up to the time they separated. Lorraine testified that the partnership was worth very little when Jay and Lorraine got married. On the other hand, the partnership did operate for at least 6-7 years prior to the marriage, and Jay was at least able to verify that his income from the partnership in 1987 was $16,000. The value of Jay's interest in the partnership increased to somewhere between $750,000 and $1.16 million and the value of the real estate holdings of the partnership increased to about $2 million; so, while we do not know the difference of the increase, we can at least conclude that Lorraine's indirect contributions to the accumulation of assets are worth some significant amount.
¶ 16. The chancellor stated that the marital estate was worth a little less than $350,000, of which Jay contributed approximately two-thirds. Despite the fact that Jay was only awarded a little more than $10,000 out of the marital assets, the chancellor stated that there remained a marked disparity when considering the non-marital property, namely, Jay's interest in the partnership. The chancellor implicitly considered the accumulated value of Jay's interest in the partnership when he equitably divided the marital estate, evidenced by the award of nearly all of the marital estate to Lorraine.
¶ 17. Additionally, based on Johnson, the chancellor also awarded lump sum and period alimony to account for the remaining disparity created by the accumulated value of Jay's interest in the partnership. Had the chancellor determined beforehand that the accumulated value of Jay's one-half interest in the partnership and real estate was marital property, he may not have found a disparity at the end. Ultimately, the chancellor reached a fair distribution of the entire estate. Lorraine's indirect contributions to the accumulation of assets in the partnership were satisfied through the lump sum alimony, periodic alimony, and through the award of the nearly the entire marital estate. This Court will not disturb the chancellor's discretionary determination of the value of Lorraine's interest in the accumulation of the partnership and real estate. It is clear, based on the record, that "fairness [was] the prevailing guideline in [this] marital division." Ferguson, 639 So.2d at 929.
II. WHETHER THE COURT ERRED IN NOT AWARDING LORRAINE AN INTEREST IN THE BUSINESS AND REAL ESTATE ASSETS.
¶ 18. This issue is closely related to the first issue. Lorraine is not entitled to an interest in the business and real estate assets of the partnership. However, she is entitled to an equitable distribution of the accumulated value of Jay's interest in the partnership and of Jay's interest in the real estate holdings. This Court finds that Lorraine did receive an equitable portion from her indirect contributions to the partnership in the form of alimony and in the award of the bulk of the marital estate.
III. WHETHER THE COURT ERRED IN FINDING LORRAINE HAD NOT CONTRIBUTED TO THE APPRECIATED VALUE OF THE ASSETS.
¶ 19. This issue was considered along with the first issue. This Court finds that the chancellor considered the appreciated value of the partnership and real estate in his final distribution of the marital assets and in the awards of alimony.
IV. WHETHER THE COURT ERRED IN FINDING THAT JAY'S BROTHER WOULD HAVE TO BE JOINED BEFORE EQUITABLE DISTRIBUTION OF THE MARITAL ASSETS.
¶20. Under M.R.C.P. 19, joinder of parties is only necessary if complete relief cannot be accorded among those who are already parties to the suit. Craft Auto Sales was not joined as a party in this lawsuit. This issue is not relevant to a final resolution of the case, since this Court finds that the accumulated value of Jay's interest in the partnership and in the real estate was considered in the overall distribution of assets.
V.WHETHER THE COURT ERRED IN FAILING TO GRANT LORRAINE PERMANENT OR LONG-TERM PERIODIC REHABILITATIVE ALIMONY.
¶ 21. Lorraine's main contention was that she should be awarded more alimony because she believed Jay's interest in Craft Auto Sales should be included in the marital assets. Jay's interest in the partnership, as discussed in issue I., was considered by the chancellor. However, this Court has considered the following factors when awarding alimony:
1) the income and expense 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 determinations;
9) the tax consequences of the spousal support order;
10) fault or misconduct;
11) wasteful dissipation of assets by either party; or
12) any other factor deemed by the court to be "just and equitable" in connection with the setting of spousal support.
Pearson, 761 So.2d at 165.
¶ 22. Lorraine has a separate income with the capacity to earn more. Lorraine was 39 years old at the time of the divorce, and Jay was 42. The chancellor stated that there was nothing to detract from Lorraine's employability and that she was in good health. The marriage lasted about 13 years. Any direct assistance in the husband's business was negligible. The fault of Jay in committing adultery, his dissipation of assets due to the gambling, and the standard of living of the parties were properly considered in determining the equitable division of the marital assets, as well as the award of alimony, which amounted to $175,000 in lump sum and $2,000 per month in periodic alimony for 2 years. The chancellor has considerable discretion in determining the amount and type of alimony. Id. This Court sees no reason to disturb that discretion in this case.
CONCLUSION
¶ 23. Based on a review of the record, we find that the chancellor was fair in his determination of the amount of alimony to award to Lorraine. Furthermore, we find that the chancellor considered the accumulation of Jay's interest in the partnership and in the real estate when equitably dividing the marital estate. The chancellor, using his discretion, awarded an overall fair amount of alimony based on the total estate. Therefore, the judgment is affirmed.
¶ 24. AFFIRMED.
McRAE and SMITH, P.JJ., EASLEY, CARLSON and GRAVES, JJ., CONCUR. COBB, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY PITTMAN, C.J., and WALLER, J.