Court Opinion

ID: 3158426
Source: CourtListenerOpinion
Date Created: 2015-11-26 08:05:28.667092+00
Date Added: 2024-06-11T12:09:32.511337
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

BRETT MATTHEW SCHIEBNER,                                            UNPUBLISHED
                                                                    November 24, 2015
               Plaintiff/Counter-Defendant-
               Appellee,

v                                                                   No. 321173
                                                                    Livingston Circuit Court
JESSICA LYNN SCHIEBNER,                                             LC No. 13-047392-DM

               Defendant/Counter-Plaintiff-
               Appellant.

Before: METER, P.J., and BORRELLO and BECKERING, JJ.

PER CURIAM.

         Defendant appeals by right an April 2, 2014, judgment of divorce. Defendant challenges
portions of the judgment dividing and distributing the parties’ property. For the reasons set forth
in this opinion, we affirm.

                                     I. RELEVANT FACTS

       The parties were married for 13 years. During the marriage they became involved in two
close corporations, Overhead Door of Lansing (OHD Lansing) and JLB of Whitmore Lake
(JLB), d/b/a Overhead Door Company of Whitmore Lake, both of which involve the installation
of overhead doors. It is undisputed that defendant’s father Milton Terry initially formed these
two corporations, however, there was conflicting testimony regarding how the ownership of the
corporations transferred from Terry.

        At some point, defendant owned four percent of OHD Lansing, and, in 2012, her parents
gifted the remainder of the company to her. The trial court determined that OHD Lansing was
defendant’s separate property and plaintiff does not dispute that finding on appeal.

       With respect to the transfer of JLB, plaintiff testified that, in 2007, he was working for
OHD Lansing as well as performing his duties in the National Guard. Plaintiff testified that in
2008, third parties who attempted to purchase JLB ran the company “into the ground,” and it was
returned to Terry. Plaintiff explained that when Terry reacquired JLB, plaintiff resigned from
the National Guard to work fulltime at restoring JLB to profitability. Plaintiff testified that he
and defendant purchased the assets of JLB in 2008 from Terry. According to plaintiff, Terry
asked the couple during a family vacation whether they wanted the company or whether they

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wanted to sell off the assets. Plaintiff told Terry that he would run the company and defendant
also told Terry that they wanted the company.

         According to plaintiff, the parties and Terry initially agreed that the business would be
majority owned by defendant in order to qualify for minority benefits and government contracts
as a woman-owned business. Plaintiff stated that the business was placed in defendant’s name
alone because, at the time, plaintiff was so busy running the business that he did not have time to
fill out the paperwork for the planned joint ownership. Plaintiff also stated that the couple was
going to use marital funds to purchase the company; however, he stated that defendant was
supposed to take care of that aspect of the transaction. Plaintiff did not know whether the funds
were ever paid, but believed they were not.

        Plaintiff stated that he thought he had seen a valuation of the business from
approximately that time that listed assets, accounts receivable, and raw materials of around
$280,000. Plaintiff testified that he signed guarantees for credit on JLB’s behalf in 2007. He
was not sure whether he was still a guarantor on any of JLB’s loans, although defendant was a
guarantor. The evidence showed that, following the transfer of the company, plaintiff was
actively involved in the daily operations of the company.

        Defendant and Terry offered testimony that conflicted with plaintiff’s assertion that Terry
transferred JLB to both plaintiff and defendant. Terry testified that it was his intent to gift JLB
to defendant and that he did not intend to gift any of the corporation to plaintiff. Terry denied
that he discussed with plaintiff whether plaintiff and defendant should purchase JLB from him.

         Defendant testified that no discussions occurred with her father about any purchase of
JLB, but that he always intended to gift the assets of the company to her. Defendant explained
that while she, her father, and plaintiff were on a family vacation in Jamaica, they did not discuss
what would happen to the company, nor were there any conversations that defendant should be
the majority owner for business purposes. However, she later provided contrary testimony and
admitted that plaintiff was part of these conversations. Defendant agreed that plaintiff had been
a cosigner on credit application documents for JLB. Defendant admitted that she gave plaintiff a
$50,000 bonus in 2011, equal to her own, and that the average bonus for other employees was
$7,000, with $15,000 for the manager of OHD Lansing. Defendant acknowledged that her
parents did not fill out a gift tax return for the alleged gift of JLB, although they did so for the
later transfer of OHD Lansing.

        Regarding the valuation of JLB, the parties agreed that JLB would be valued by Ray
Cooper, CPA. Cooper’s valuation apparently was $195,000, but plaintiff testified that the
valuation did not include sales or future sales, but only the capital assets of the company.
Plaintiff testified that he thought a fair price for the company was $480,000, which was
apparently the number reached by defendant’s first appraiser. Plaintiff further testified that JLB
owed OHD Lansing approximately $83,000. Defendant stated that she agreed that the present
value of the business was $480,000 as set out in her separate appraisal. She also testified that the
business owed $500,000 in accounts payable, but had more than that amount in accounts
receivable.

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        Regarding the disputed matters, the trial court found that JLB was a marital asset and
awarded it to plaintiff. Defendant was awarded OHD Lansing. The court directed that the
marital home be sold and that defendant and plaintiff would both have a right of first refusal if
they wished to purchase it. The marital portion of the parties’ investment accounts were to be
divided equally. The parties were awarded the automobiles currently in their possession and,
with certain exceptions, the remainder of the personal property was to be sold with the proceeds
divided equally. This appeal ensued.

                                         II. ANALYSIS

       On appeal, defendant argues that the circuit court erred in its distribution of property.

        “This Court reviews a property distribution in a divorce case by first reviewing the trial
court’s factual findings for clear error, and then determining whether the dispositional ruling was
fair and equitable in light of the facts.” Olson v Olson, 256 Mich. App. 619, 622; 671 NW2d 64
(2003).

              A finding is clearly erroneous if, after a review of the entire record, the
       reviewing court is left with the definite and firm conviction that a mistake has
       been made. This Court gives special deference to a trial court’s findings when
       they are based on the credibility of the witnesses. [Draggoo v Draggoo, 223
Mich. App. 415, 429-430; 566 NW2d 642 (1997).]

The trial court’s dispositional ruling is discretionary and will be affirmed unless we are left with
a firm conviction that the distribution was inequitable. Welling v Welling, 233 Mich. App. 708,
710; 592 NW2d 822 (1999).

       Defendant first argues that the trial court erred when it determined that JLB was marital
property and she maintains that JLB was gifted to her by her father.

        “[A]ssets acquired and income earned during the course of a marriage are generally to be
considered part of the marital estate.” Allard v Allard, 308 Mich. App. 536, 560-561; 867 NW2d
866 (2014). An exception to this general rule is that “property received by a married party as an
inheritance, but kept separate from marital property, is deemed to be separate property not
subject to distribution.” Dart v Dart, 460 Mich. 573, 584-585; 597 NW2d 82 (1999).

         In this case, the trial court did not clearly err in finding that JLB was an asset that the
parties acquired during the course of the marriage and therefore was part of the marital estate.
Allard, 308 Mich. App. at 560-561. Here, plaintiff testified that Terry asked both parties whether
they wanted JLB or wanted the assets of the company. Plaintiff explained that both he and
defendant informed Terry that they wanted to run the company. Thereafter, JLB was transferred
into defendant’s name, but plaintiff explained that this was done so that it would qualify as a
minority-owned business. Both plaintiff and defendant participated in the daily operations of
JLB and plaintiff dedicated his full-time efforts to the business. Although defendant initially
testified that plaintiff was not present when she and Terry discussed gifting the business,
defendant later recanted that testimony and agreed that plaintiff was present during the
discussion. Additionally, while Terry testified that he intended to gift the business exclusively to
defendant, unlike when Terry gifted the Lansing-OHD company to defendant, with respect to
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JLB, Terry did not record the transfer as a gift for tax purposes. Moreover, given that Terry
admitted to lying to the court with respect to a different issue, the trial court could have
concluded that Terry was not credible when he testified that he did not intend for plaintiff to
retain any interest in JLB. See Berger v Berger, 277 Mich. App. 700, 705; 747 NW2d 336 (2008)
(this Court will defer to a trial court’s credibility determinations). In short, the trial court did not
clearly err in finding that JLB was part of the marital estate; thus, defendant’s numerous
arguments concerning how division of the company should have been limited to its appreciation
under Reeves v Reeves, 226 Mich. App. 490, 496; 575 NW2d 1 (1997) are devoid of merit.

        Defendant argues that by awarding JLB to plaintiff, the trial court’s division of the
marital estate was inequitable.

        The goal in distributing marital assets in a divorce proceeding is to reach an equitable
distribution of marital property in light of all the circumstances. McNamara v Horner, 249 Mich
App 177, 188; 642 NW2d 385 (2002). The division need not be mathematically equal, but any
significant departure from congruence must be clearly explained by the trial court. Id. The trial
court’s disposition of marital property is intimately related to its findings of fact. Id. In reaching
an equitable division, the trial court should consider the following factors whenever they are
relevant to the particular case:

                (1) duration of the marriage, (2) contributions of the parties to the marital
       estate, (3) age of the parties, (4) health of the parties, (5) life status of the parties,
       (6) necessities and circumstances of the parties, (7) earning abilities of the parties,
       (8) past relations and conduct of the parties, and (9) general principles of equity.
       [Sparks v Sparks, 440 Mich. 141, 159-160; 485 NW2d 893, 894 (1992).]

        Notably, defendant does not challenge the ultimate distribution of all of the parties’
assets. As noted above, in general the trial court either divided the property roughly equally, or
required that it be sold and the proceeds then divided equally. An exception to this was the
distribution of JLB. In awarding JLB to plaintiff, the trial court found as follows:

                The plaintiff father shall be awarded all interest in the business known as
       JLB including but not limited to all contracts, leases, accounts receivable,
       materials, assets, equipment, tools, vehicles and good will as his sole and separate
       property free and clear of any claim of the defendant . . . . The defendant shall be
       awarded all interest in a business known as Over Head Door of Lansing free and
       clear of any interest of the plaintiff. This business was clearly a gift from her
       father . . . .

         Before reaching this conclusion, the court considered that the parties had children to care
for, it considered the duration of the marriage, that both parties worked and contributed to the
marital estate, that both were of similar age and in good health, that both parties had the same or
similar life status, and that both had similar necessities. The court also considered that plaintiff
left his employment in the National Guard to work full-time for JLB. The court noted that
defendant had a much greater earning potential because of her family’s businesses and that
defendant terminated plaintiff’s employment from JLB at one point, which left plaintiff
searching for employment. The court considered that defendant engaged in extramarital affairs,

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and “either participated in or did nothing to stop the obstructionist conduct of her father in efforts
to gain discovery as to the family business,” and noted that defendant lied to the court when she
stated that Terry was out of the country and unavailable for a deposition. The court also
considered that defendant lied during a portion of her testimony and violated a court order when
she refused to pay spousal and child support.

        Here, in light of all of the circumstances, we are not left with a definite and firm
conviction that the trial court’s award of JLB to plaintiff was inequitable. Welling, 233 Mich
App at 710. Both parties introduced Cooper’s valuation of $195,100 for JLB, although both
agreed the business was worth $480,000 at the time of trial and both parties agreed that JLB
owed a debt of $83,000 to OHD Lansing. While OHD Lansing was not part of the marital estate
as it was gifted to defendant, the trial court was free to consider all of the circumstances in
awarding JLB to plaintiff. Particularly, the court could have considered that defendant had OHD
Lansing as a means of earning a living and providing for the children of the marriage. The court
was free to consider that plaintiff’s only means of gainful employment was at JLB given that he
left the National Guard. In addition, the court could have considered that JLB owed OHD
Lansing $83,000 and that defendant’s corporation ultimately ended up with an additional
$83,000. By awarding JLB to plaintiff, plaintiff inherited both the assets and the liabilities
associated with the company. Thus, plaintiff inherited the $83,000 of debt still owed to OHD
Lansing. The court could have found that defendant’s ownership of OHD Lansing coupled with
the $83,000 debt balanced out the equities of awarding JLB to plaintiff.

        Defendant maintains that the trial court erred when it disproportionately relied on her
marital infidelity and her actions during the divorce proceedings to award JLB to plaintiff and to
“punish” her for her discovery violations. This argument lacks merit.

        Defendant is correct that “a judge’s role is to achieve equity, not to ‘punish’ one of the
parties.” Sands v Sands, 442 Mich. 30, 36; 497 NW2d 493 (1993). Defendant also correctly
notes that “an attempt to conceal assets does not give rise to an automatic forfeiture.” Id.
However, contrary to defendant’s arguments concerning fault, the trial court did not improperly
“punish” defendant for her discovery violations by awarding plaintiff more property than that to
which he was entitled. To the contrary, the trial court instead ordered defendant to pay $2,500 in
attorney fees to plaintiff because of “her conduct in delaying or interfering with the discovery
process.” Additionally, as discussed above, the court considered that both parties needed gainful
employment, that both parties needed to support the children, that plaintiff was more involved
with the daily operations of JLB, and that defendant had opportunities with her own business—
OHD Lansing. Thus, the court’s property division was not meant to punish defendant.
Moreover, even if the trial court did rely in part on defendant’s misconduct in its decision
concerning the division of JLB, “[a] party’s attempt to conceal assets is a relevant consideration”
as one of the “many facts that the court must weigh” in determining an equitable distribution.
Sands, 442 Mich. at 36.

        With respect to defendant’s infidelity, the parties agreed that defendant had been
unfaithful, and defendant acknowledges on appeal that this properly could be considered in the
property division. However, defendant ignores that there were other matters related to fault that
further demonstrate that the trial court’s award of JLB to plaintiff was equitable in light of all the
circumstances. During the beginning of the proceedings, plaintiff remained employed at JLB as

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its vice-president. Testimony indicated that plaintiff ended a 19-year career with the National
Guard shortly before he would have been eligible for long-term pension and other benefits, to
run JLB for the parties’ benefit. However, defendant terminated plaintiff’s employment with
JLB during the proceedings and the trial court found that defendant’s firing of plaintiff was
“vindictive and punitive,” and that her proffered reasons for doing so were invalid and a “ruse, or
subterfuge.” The trial court also noted that “plaintiff’s subsequent employment efforts have been
less than successful, due to what would be no fault of his own.” The trial court’s repeated
discussion of what it found to be defendant’s misconduct in this action, as well as its effect on
plaintiff’s future earning capacity demonstrate that its decision to award JLB to plaintiff was
based on “general principles of equity” in light of the facts. Sparks, 440 Mich. at 159-160.
Under the circumstances, we are not left with a firm conviction that awarding JLB to plaintiff
was inequitable.

       Defendant next cites Olson, 256 Mich. App. at 627, in support of her assertion that the trial
court erred when it failed to provide specific values for JLB, the parties’ home, and their
personal property. Defendant is correct that, when values are in dispute, the trial court must
ordinarily make such a factual finding. Id. However, in Olson, the Court also noted that such a
finding is not always necessary, stating:

       The actual value may not always be in dispute. A court could, for example, order
       the sale of a marital home (if that is an option in the case) without determining its
       value and splitting whatever equity exists in the house between the parties. [Id. at
       627 n 5.]

Here, defendant’s assertion that the trial court erred by failing to properly place a value on JLB is
without merit. As discussed above, Cooper’s valuation of $195,100 for JLB was introduced by
both parties and both parties subsequently agreed that the business was worth $480,000 at the
time of trial. Both parties also agreed that JLB owed a debt of $83,000 to OHD Lansing. Thus,
the value of the company was not in dispute.

        Defendant raises similar arguments concerning the valuation of the parties’ vehicles and
other personal property. However, defendant fails to mention the lengthy discussions between
the parties and counsel concerning admissions and agreements about the value of these items.
Similarly, the parties agreed upon the appraisal of the parties’ home. Therefore, consistent with
the principle that defense “[c]ounsel may not harbor error as an appellate parachute,”
Dresselhouse v Chrysler Corp, 177 Mich. App. 470, 477; 442 NW2d 705 (1989), defendant has
waived review of any claim that the trial court erred by failing to provide findings concerning the
value of the parties’ home and personal property. Moreover, given that the trial court ordered the
sale of the home and personal property and the proceeds to be split evenly, the actual value of
these items is not materially relevant.

        Next, defendant argues that the trial court erred in its distribution of the parties’
investment accounts. She maintains both that the trial court erred in failing to value the
accounts, and also erred in splitting the accounts equally without determining what portion of
these assets were premarital.

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       Appellant misreads the trial court’s order concerning these accounts. With respect to the
investment accounts, the trial court held:

               The investment/retirement accounts shall be split equally by the parties,
       and the appropriate orders shall be drafted and entered within 30 days of the date
       of this opinion, and the cost of preparing these orders shall be shared equally by
       the parties. The appropriate orders shall divide the accounts 50/50 of all of the
       contributions, and gains/losses accumulated during the term of the marriage. The
       date to be used in determining the value of the accounts shall be the date of the
       filing of the complaint for divorce.

The trial court further found that plaintiff was to replace one-half of the monies he removed from
the T. Rowe Price account during the divorce proceedings with proceeds from the auction of
other personal property. Therefore, contrary to defendant’s assertion, the trial court awarded the
parties only contributions, gains or losses accumulated during the marriage. The actual monies
in the accounts as of the date of the filing of the complaint were not questions of fact to be
determined by the court, unlike the value of other personal property. In addition, during trial the
parties appeared to agree on what was in the accounts, even as they disagreed about how the
appreciation in the accounts should be distributed and how plaintiff’s actions after the divorce
was filed should affect the division. The division itself was in keeping with defendant’s own
arguments concerning the appropriate division of separate property to which the parties
contributed during the marriage. In short, defendant has failed to show that the division of the
accounts was inequitable.

       Affirmed. Plaintiff having prevailed in full, may tax costs. MCR 7.219(A).

                                                            /s/ Patrick M. Meter
                                                            /s/ Stephen L. Borrello
                                                            /s/ Jane M. Beckering

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