Court Opinion

ID: 9931436
Source: CourtListenerOpinion
Date Created: 2024-02-08 22:18:46.373981+00
Date Added: 2024-06-11T12:16:16.969541
License: Public Domain

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
                                                                               FILED
                                                                          February 8, 2024
HARLEY J. LEMASTERS
                                                                            C. CASEY FORBES, CLERK
Respondent Below, Petitioner                                             INTERMEDIATE COURT OF APPEALS
                                                                                OF WEST VIRGINIA

vs.) No. 23-ICA-142         (Fam. Ct. of Brooke Cnty. Case No. FC-05-2021-D-18)

REBECCA K. LEMASTERS
Petitioner Below, Respondent

                             MEMORANDUM DECISION

       Petitioner Harley J. LeMasters (“Husband”) appeals from the March 27, 2023, final
divorce order of the Family Court of Brooke County. Respondent Rebecca K. LeMasters
(“Wife”) filed a response and a cross-assignment of error.1 Husband filed a reply. The
issues raised on appeal relate to the family court’s rulings regarding the equitable
distribution of certain assets between the parties.

       This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51-
11-4 (2022). After considering the parties’ arguments, the record on appeal, and the
applicable law, this Court finds that there is error in the family court’s decision, but no
substantial question of law. Therefore, this case satisfies the “limited circumstances”
requirement of Rule 21(d) of the Rules of Appellate Procedure. For the reasons stated
below, this case is affirmed, in part, and remanded, in part.

        Husband and Wife were married on October 5, 2004. The parties stipulated that they
last cohabitated together on July 4, 2013. It was at this time that Wife left the marital home
and returned to her own premarital residence. Wife filed for divorce on February 26, 2021,
citing the grounds of irreconcilable differences, living separate and apart, and mental
cruelty. On March 17, 2021, Husband filed his answer, which denied irreconcilable
differences and mental cruelty, but admitted living separate and apart. Husband also raised
the affirmative defense of abandonment. The family court held a final hearing on August
12, 2022, and August 30, 2022.

       Through their testimony, the parties acknowledged that after July 4, 2013, they
continued to spend significant time together and were working on their relationship. They
also continued to maintain at least one joint bank account and file joint tax returns.

       1
       Husband is represented Paul J. Harris, Esq., and Wife is represented by Sharon N.
Bogarad, Esq.

                                              1
Essentially, the parties testified that they continued all aspects of their relationship except
for being sexually intimate and sleeping under the same roof. Wife testified that she left
the home on July 4, 2013, following a disagreement with Husband; that she did not take
any of her personal belongings; had not intended to divorce or separate; and that she left
because she needed time to “clear her head.” Wife testified that she ultimately filed for
divorce after it became apparent that certain issues in the marriage would never be resolved.

       Husband has amassed several million dollars in cash, stocks, property, and oil/gas
royalties. Husband testified that his wealth was garnered through investments he made
from inheritances that he received from his parents and upon the death of his first wife, in
addition to proceeds he received from a lawsuit settlement in the 1970s or 1980s. Husband
claims that most assets are separate property, and that during the marriage any income he
had was from premarital assets. Husband testified that he did not preserve any financial
documentation to substantiate any values of his assets.

        Key to this appeal are multiple Ameritrade and IMA investment accounts. Husband
testified that he did not have any knowledge of where all the money came from that he
deposited into his Ameritrade account where he traded stocks regularly and made
substantial profits during the marriage. Husband also stated that among his assets were
three IMA accounts, but he could not recall if these accounts were opened prior to the
marriage. However, Husband argued that the doctrine of laches should apply because Wife
waited eight years to file for divorce, making any proceeds obtained after Wife left the
home on July 4, 2013, his separate property. Wife testified that she was unaware of the
parties’ wealth until she obtained the full tax returns in the divorce proceedings. Wife
maintained that she never saw the complete tax returns during the marriage and was only
given a couple of pages to sign by Husband. Specifically, she testified that Husband
controlled the finances; that she was aware Husband traded stocks but that he had told her
there was no value due to a down market; and that she had no knowledge of Husband’s
various CDs, IRAs, and other investment accounts.

       In its fifty-nine-page order, the family court made several findings. First, the family
court found that the parties were entitled to a divorce on the grounds that they have lived
separate and apart for more than one year. See W. Va. Code § 48-5-202(a) (2001). While
Husband raised the affirmative defense of abandonment, the family court’s order made no
specific findings regarding that defense. It was determined that through the uncontroverted
testimony of the parties, they continued to hold themselves out as husband and wife for
eight years, which included the use of at least one joint checking account and filing joint
tax returns. Therefore, the family court determined that for the purposes of equitable
distribution, the date Wife filed for divorce, February 26, 2021, was the most appropriate
date for determining the value of the marital property. See W. Va. Code § 48-7-104(1)
(2001). On this issue, the family court found:

                                              2
       The Court FINDS that the uncontroverted testimony [is] that the parties have
       lived separately in their own residences since July 4, 2013. The testimony
       supports that the parties did not seriously contemplate divorce until the
       Petitioner filed the Petition for Divorce on February 26, 2021. The parties
       continued to “date,” continued to consider themselves married, continued to
       file joint tax returns[,] and continued to attempt to repair their relationship
       from July 4, 2013[,] until the filing of this divorce action on February 26,
       2021. The Court FINDS that the testimony supports that there was no
       significant change in the parties’ financial dealings after they began to live
       in separate residences in 2013. The parties maintained joint accounts but
       predominately utilized only the account to which they added the name of
       their spouse after marriage. [Wife] subsisted on her own earnings and/or
       social security payments, and [Husband] subsisted on all other funds. The
       parties continued to jointly file their tax returns. The Court FINDS that the
       appropriate date of separation for purposes of valuation will be February 26,
       2021, the date of the filing of the Petition for Divorce.

       The family court’s order briefly addressed Husband’s laches defense. In response,
the family court made the following finding:

       The Court FINDS that the testimony supports that both parties continued to
       actively attempt to repair their relationship, albeit unsuccessfully. Both
       parties had an equal ability to file for separation or divorce. The Court finds
       that [Wife] was largely unaware of the assets or monthly income that is the
       subject of these proceedings. The Court FINDS that [Husband] has failed to
       prove a lack of diligence on behalf of [Wife] in filing her action for divorce.

         With regards to equitable distribution, the family court found that the Ameritrade
and IMA accounts were marital property. Regarding the Ameritrade accounts, the family
court determined that at least one of the accounts was created prior to the marriage with an
initial investment of $55,000 and subsequent investments of $270,000 during the term of
the marriage. Husband could not recall where the money that he deposited into the
Ameritrade accounts came from, but believed it came from multiple sources, including oil
and gas proceeds that were paid to the joint name of the parties. The family court further
found that it was undisputed that Husband utilized his time and energy during the marriage
trading stocks, which increased the value of the Ameritrade accounts from the principal
investment of $325,000 to $2,193,693.68. It was determined that the $55,000 premarital
investment constituted 16.92% of the total principal investment. Thus, for the purpose of
equitable distribution, the family court reduced the total Ameritrade value by 16.92% and
designated the resulting $371,172.91 as a premarital asset of Husband with the remaining
$1,822,520.77 being deemed marital property.

                                             3
        As to the IMA accounts, the family court found Husband could not recall if the
accounts were established prior to the parties’ marriage. While the family court’s order
listed all these accounts as marital property, in its division of the parties’ marital assets, the
order does not provide for division of the IMA accounts between the parties. The family
court entered its final order on March 27, 2023, and this appeal followed. We apply the
following standard of review:

       “In reviewing . . . a final order of a family court judge, we review the findings
       of fact made by the family court judge under the clearly erroneous standard,
       and the application of law to the facts under an abuse of discretion standard.
       We review questions of law de novo.”

Syl., Carr v. Hancock, 216 W. Va. 474, 475, 607 S.E.2d 803, 804 (2004). Amanda C. v.
Christopher P., 248 W. Va. 130, 133, 887 S.E.2d 255, 258 (Ct. App. 2022); accord W. Va.
Code § 51-2A-14(c) (2005) (specifying standards for appellate court review of a family
court order). On appeal, Husband raises four assignments of error, and Wife raises a single
cross-assignment of error. We will address these in turn.

      First, Husband assigns error to the family court’s classification of the Ameritrade
accounts as marital property. Discussing the Ameritrade accounts, the family court found:2

       The Court FINDS that the Ameritrade Account was created just prior to the
       parties’ marriage with an initial premarital investment of $55,000.00 and a
       subsequent investment of $270,000.00 during the term of the marriage.
       [Husband] could not state specifically where the money came from that he
       deposited into the Ameritrade account, but believed it came from multiple
       sources, including oil and gas proceeds that were paid into the joint name of
       the parties. The testimony supports that the increase in value of the
       Ameritrade account was not passive appreciation. [Husband] would trade
       stocks regularly during the term of the marriage and through his efforts the
       Ameritrade accounts now have a combined value of $2,193,693.68. It is
       uncontroverted that [Husband] utilized his time and energy during the
       marriage to increase the value of this account from its principal investment
       of $325,000.00.

        Husband argues that because the accounts were first funded prior to the marriage,
the Ameritrade accounts are separate property. “The party seeking to exclude property from
the marital estate that is presumptively marital property, has the burden of persuasion on
that issue.” Syl. Pt. 4, in part, Mayhew v. Mayhew, 205 W. Va. 490, 493, 519 S.E.2d 188,

       2
        This finding refers to the Ameritrade account in singular form; however, the family
courts order lists multiple Ameritrade accounts, each with a separate account number.
Thus, we will refer to these accounts in plural form.
                                                4
191 (1999). As evidenced by the record, Husband failed to offer proof that the Ameritrade
accounts were separate property. The evidence shows Husband did not keep financial
records and could not recall the specific source of funding for the Ameritrade accounts.
Instead, the evidence established that albeit for the initial investment prior to the parties’
marriage, the Ameritrade account was subsequently funded from proceeds earned from
various investments, which included marital accounts.

       As our Supreme Court of Appeals has stated:

       [W]ith regard to the family court’s factual findings that underlie its equitable
       distribution order, this Court will not set aside findings of fact, whether based
       on oral or documentary evidence, unless they are clearly erroneous[.] A
       finding is clearly erroneous when, although there is evidence to support the
       finding, the reviewing court on the entire evidence is left with the definite
       and firm conviction that a mistake has been committed. However, a
       reviewing court may not overturn a finding simply because it would have
       decided the case differently, and it must affirm a finding if the [family]
       court's account of the evidence is plausible in light of the record viewed in
       its entirety. It is within the sole province of the family court, as fact-finder,
       to decide issues of credibility, and this Court will not disturb those
       determinations. Even where testimony is uncontroverted, a fact-finder is free
       to disregard such testimony if it finds the evidence self-serving, and not
       credible.

Mulugeta v. Misailidis, 239 W. Va. 404, 408-09, 801 S.E.2d 282, 286–87 (2017) (citations
and quotations omitted). Here, we find the family court’s rulings with respect to Husband’s
testimony and its ultimate equitable distribution of the Ameritrade accounts to be
reasonable considering the entire record. Accordingly, we decline to disturb the family
court’s determinations on this issue.

       Next, Husband contends that the family court erred by using February 26, 2021, the
date Wife filed for divorce, as the date of the parties’ separation for the purposes of
equitable distribution. It is Husband’s position that the family court was required to use
July 4, 2013, the date the parties stipulated that they last cohabited together. We are not
persuaded by Husband’s argument. When determining the value of marital property, West
Virginia Code § 48-7-104 (2001) states, in part:

       After considering the factors set forth in [West Virginia Code § 48-7-103],
       the court shall: (1) Determine the net value of all marital property of the
       parties as of the date of the separation of the parties or as of such later date
       determined by the court to be more appropriate for attaining an equitable
       result.

                                              5
(emphasis added).

        The family court determined that while the parties had lived separately since July 4,
2013, the facts of this case supported a finding that February 26, 2021, was the more
appropriate date of separation for equitable distribution. Specifically, the family court
found that because the parties continued their relationship for nearly eight years after their
separation, neither party had seriously contemplated a divorce prior to its filing, and
therefore, February 26, 2021, should control for the purposes of equitable distribution.
Upon review, we find that under the facts of this case, the family court did not err or abuse
its discretion in its application of West Virginia Code § 48-7-104, and that its imposition
of a separation date of February 26, 2021, for the purposes of equitable distribution is
supported by the record.

       As his third assignment of error, Husband avers that the family court erred by not
applying the doctrine of laches to find that the assets accumulated after July 4, 2013, were
his separate property. He also argues that the family court failed to fully address his laches
argument in its final order. “Laches is a delay in the assertion of a known right which
works to the disadvantage of another, or such delay as will warrant the presumption that
the party has waived his right.” Syl. Pt. 2, Bank of Marlinton v. McLaughlin, 123 W. Va.
608, 17 S.E.2d 213 (1941). In Carter v. Price, 85 W. Va. 744, 102 S.E. 685 (1920), our
Supreme Court of Appeals stated:

       Where a party knows his rights or is cognizant of his interest in a particular
       subject–matter, but takes no steps to enforce the same until the condition of
       the other party has, in good faith, become so changed that he cannot be
       restored to his former state if the right be then enforced, delay becomes
       inequitable, and operates as an estoppel against the assertion of the right. This
       disadvantage may come from death of parties, loss of evidence, change of
       title or condition of the subject–matter, intervention of equities, or other
       causes. When a court of equity sees negligence on one side and injury
       therefrom on the other, it is a ground for denial of relief.

Id. at 744, 102 S.E. at 686, syl.

        Here, Husband argues that he was irreparably harmed when Wife waited eight years
to file for divorce because the lapse of time caused many of his financial documents to
become unavailable, and that Wife’s unreasonable delay deprived him of substantial assets
that the family court erroneously found to be marital property. We are unpersuaded by
Husband’s argument for two reasons.

                                              6
        First, the doctrine of laches is an affirmative defense. However, we find that the
only affirmative defense raised by Husband’s answer was abandonment.3 West Virginia
Code § 48-5-403(a) (2001) sets forth that answers filed in divorce proceedings are
governed by the West Virginia Rules of Civil Procedure. In that respect, Rule 8(c) of the
West Virginia Rules of Civil Procedure requires: “In pleading to a preceding pleading,
party shall set forth affirmatively accord and satisfaction . . . laches . . . and any other . . .
affirmative defense.” (emphasis added). Moreover, the doctrine of laches is moot unless
the affected party raises it as a defense. See State Dep’t. of Health v. Robert Morris N., 195
W. Va. 759, 764, 466 S.E.2d 827, 832 (1995); Kinsinger v. Pethel, 234 W. Va. 463, 468
n.3, 766 S.E.2d 410, 415 n.3 (2014).

       Because Husband did not properly raise the defense of laches in his answer or by
separate motion, we find no error in the family court’s decision to not apply his laches
defense to the present case. Similarly, for these same reasons, we also find that the family
court was not required to fully address the doctrine of laches in its final order.

        Second, even if a laches defense had been properly raised, we conclude that the
defense of laches is not available to Husband in this case as a matter of law. The elements
of laches consist of (1) unreasonable delay and (2) prejudice. Province v. Province, 196 W.
Va. 473, 483, 473 S.E.2d 894, 904 (1996) (citation omitted). As previously noted, Husband
relies on the eight-year lapse of time between the parties’ separation and Wife’s filing for
divorce to support his laches defense. However, our case law states:

       [T]he controlling element of the equitable defense of laches is prejudice,
       rather than the amount of time which has elapsed without asserting a known
       right or claim . . . . The general rule in equity is that mere lapse of time,
       unaccompanied by circumstances which create a presumption that the right
       has been abandoned, does not constitute laches.

Kinsinger, 234 W. Va. at 467, 766 S.E.2d at 414 (quotations and citations omitted).

        We find that Husband cannot prove the element of prejudice based upon the facts
of this case. As the family court observed, both parties had an equal opportunity to file for
a divorce or legal separation at any time after the parties separated but did not do so.
Instead, both parties spent nearly eight years trying to reconcile their marriage, and it is
uncontroverted that Wife was unaware of Husband’s wealth throughout both the marriage
and the separation. Thus, we find the Husband has suffered no prejudice as a result of the
delay between the parties’ separation and Wife’s filing for divorce.

       3
        The family court’s order does not state when Husband first raised the doctrine of
laches as an affirmative defense. However, based upon our review of the record, the
defense was not raised until the final hearing when Husband’s counsel mentioned it in
passing during a colloquy with the family court.
                                                7
       Moreover, the family court granted the divorce based upon the uncontested ground
of living separate and apart for more than one year. This is significant because West
Virginia Code § 48-5-403(c) (2001) sets forth that when a divorce is sought on that basis,
“the affirmative defenses, including, but not limited to . . . lapse of time, shall not be raised.”
(emphasis added). Therefore, because Husband’s laches argument is couched as a lapse of
time defense, and because the parties’ divorce was granted based upon living separate and
apart, we find Husband’s defense was foreclosed by statute. As such, we find no error and
affirm the family court’s ruling on this issue.

        In his final assignment of error, Husband assigns error based upon the family court’s
failure to address his affirmative defense of abandonment in its final order. It is Husband’s
position that Wife abandoned the marriage when she left the marital home on July 4, 2013,
and never returned. While the family court’s final order is silent on this issue, when
considering the facts of this case, we find such error to be harmless. See State v. McIntosh,
207 W. Va. 561, 577, 534 S.E.2d 757, 773 (2000) (citation omitted) (“Error in evidentiary
ruling is ‘harmless error’ when it is trivial, formal, or merely academic, and not prejudicial
to substantial rights of party assigning it, and where it in no way affects outcome of trial.”)
As previously established, the nature of the parties’ continued relationship from July 4,
2013, until February 26, 2021, is uncontroverted. Therefore, because the parties maintained
their marriage despite living separate and apart, we find the record cannot support a finding
of abandonment. As such, we find the omission of a ruling on this issue in no way affects
the other rulings made by the family court in its final order. Accordingly, we find no error.

       The final issue before us is Wife’s cross-assignment of error. Wife argues that the
family court failed to allocate all the marital assets in its final order. Specifically, Wife
maintains that while the family court correctly found that the three IMA accounts were
marital property, its final order did not allocate the funds between the parties as required
by statute. We agree. As our state’s highest court has previously held:

       Equitable distribution [...] is a three-step process. The first step is to classify
       the parties’ property as marital or non-marital. The second step is to value
       the marital assets. The third step is to divide the marital estate between the
       parties in accordance with the principles contained in [W. Va. Code § 48-7-
       103].

Syl. Pt. 1, Whiting v. Whiting, 183 W. Va. 451, 452-53, 396 S.E.2d 413, 414-15 (1990).
The family court’s order classified and valued the IMA accounts, but the order does not
divide the assets between the parties. Therefore, we find that the family court failed to
complete the third step of the equitable distribution process by not dividing the three IMA
accounts between the parties in accordance with West Virginia Code 48-7-103 (2001).4 As

       4
        In his response to Wife’s cross-assignment of error, Husband argues that the family
court intended to treat the IMA accounts as separate property and that the family court
                                                8
such, we find that remand is necessary for the limited purpose of the family court
completing the equitable distribution as required by statute.5

       Accordingly, we affirm, in part, and remand, in part, the family court’s March 27,
2023, order. We affirm the family court with respect to all assignments of error raised by
Husband, and we remand this matter to the family court on Wife’s cross-assignment of
error for the limited purpose of completing equitable distribution, consistent with this
decision.

                                                  Affirmed, in part, and Remanded, in part.

ISSUED: February 8, 2024

CONCURRED IN BY:

Chief Judge Thomas E. Scarr
Judge Charles O. Lorensen
Judge Daniel W. Greear

mistakenly listed the IMA accounts among the marital property when they should have
been listed as separate property with his IRA accounts because the IRA and IMA accounts
are one in the same. The IMA and IRA accounts each have their own account numbers and
values and the family court’s final order makes separate detailed findings regarding these
accounts. Moreover, Husband failed to raise this issue as an assignment of error. Therefore,
we find no merit in his argument as it is unsupported by the record.
       5
         Our review of the family court’s final order also reveals that there is a “Premium
MMA” listed as marital property. However, there is no express finding in the order
classifying this asset as separate or marital property, but rather, the order merely mentions
this account in passing. We further note that if it is marital property, this account has not
been divided between the parties as required by statute. Although neither party raises this
issue on appeal, on remand, we encourage the family court to clarify its ruling on this
account for the benefit of the parties and the record.
                                             9