Opinion ID: 1713914
Heading Depth: 2
Heading Rank: 1

Heading: whether the court erred in determining the ownership and classification of assets.

Text: ¶ 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 wellestablished 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 [a]ppreciation 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.