Paulk v. Paulk

Citations: 97 So. 3d 753; 2012 Ala. Civ. App. LEXIS 9; 2012 WL 29180Docket: 2100345

Court: Court of Civil Appeals of Alabama; January 5, 2012; Alabama; State Appellate Court

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Charles Lance Paulk appeals the Winston Circuit Court's judgment granting divorce from Vickie Gail Paulk. The wife initiated the divorce on January 9, 2009, citing marriage on April 15, 2006, and separation on December 6, 2008. No children were born during the marriage, and the parties sought only property and debt division. An ore tenus hearing occurred on June 24, 2010, but the transcript ends abruptly, and no further testimony was given. Both parties submitted written summaries of their testimonies after the hearing. The trial court's judgment on October 26, 2010, awarded each party their pre-marital real property and associated debts. The husband received personal property he owned before the marriage and was responsible for its debts, while the wife was awarded the farm and its personal property, along with any debts on the farm.

The husband filed a post-judgment motion under Rule 59, challenging the trial court's decision regarding personal property at the farm and lack of interest in the farm itself. This motion was denied, prompting his appeal. He contends the trial court improperly limited his ability to present ore tenus testimony and cross-examine the wife. The wife counters that these arguments cannot be considered on appeal since the husband did not raise objections during the trial. The court notes that issues not preserved at trial cannot be addressed on appeal, referencing established case law. The husband also claims that the property division was inequitable due to exclusion from the farm's interest. Before addressing this claim, the court must establish the standard of review, given that the only testimony was a partial examination of the wife, with the remainder being exhibits and written testimonies.

In Hospital Corp. of America v. Springhill Hospitals, Inc., the trial court received live testimony from a single witness, which was incomplete, preventing the defendants from cross-examining the witness. The case was subsequently submitted based on briefs, depositions, and exhibits. The court analyzed the appropriate standard of review and noted that, typically, a presumption of correctness is granted when evidence is taken ore tenus, where at least one witness is fully examined. However, since the trial court only heard a partial direct examination without cross-examination, and the case relied predominantly on depositions and exhibits, the ore tenus rule did not apply, eliminating the presumption of correctness for the trial court's findings.

Consequently, the appellate court would review the case de novo instead of deferring to the trial court's findings. The record showed that prior to the marriage, the wife owned a mortgage-free lake house, while the husband owned multiple properties. During the marriage, they purchased a property known as 'the farm,' which consisted of three seven-acre parcels. The wife inherited one parcel and invested $15,000 for buildings on it, while they bought the other two parcels from her siblings for $42,000 total, financed through the husband's equity line of credit. They later took out a $91,500 mortgage using the wife’s lake house as collateral, which allowed the wife to reimburse the husband for the land purchase, pay her mother, and settle her vehicle loan, with the remaining funds placed in a joint account.

Construction of a home on the farm property began in fall 2007, with both parties presenting evidence of their monetary and nonmonetary contributions toward the mortgage and property improvements. The house remained unfinished at trial. The husband contends the trial court erred by denying him any interest in the farm despite his substantial financial contributions, while the wife claims sole equitable ownership due to inheritance and repayment of the husband's $42,000 contribution toward the farm's purchase. She argues that her contributions to the husband's rental property justify the court's decision not to award him interest in the farm.

The trial court’s judgment did not clarify whether it viewed the husband's rental property as part of the marital estate, nor did it specify the status of the lake house or farm concerning marital or separate property. The wife received the lake house, with mortgage responsibilities, and the farm, valued between $155,000 and $200,000. The husband received a rental house and vacant lot, but without assigned values. He argues he should have been awarded interest in the farm because he used proceeds from a prior home sale for its construction. 

Additionally, the husband contested the court's award of "any and all personal property" at the farm to the wife, as he had personal property valued at approximately $11,000 located there, plus property valued at $21,500 that was owned before marriage. The ambiguity regarding whether this property was jointly owned or part of the husband’s separate estate complicates the equitable division analysis. Consequently, the court remands the case, directing the trial court to clarify the division of personal property and explicitly outline what constitutes the marital estate versus separate estates.

The trial court is required to submit its findings within 28 days, and the wife's request for attorney’s fees on appeal is denied. The case is remanded with specific instructions. The Winston Circuit Court has complied by issuing an order stating: 1) the rental property owned by Charles Lance Paulk is deemed his separate property, not part of the marital estate; 2) the lake house owned by Vickie Gail Paulk is considered her separate property; 3) the 'farm' is treated as the wife’s separate property; 4) the trial court intends to award the husband all personal property listed in his exhibits, regardless of location; and 5) the wife is to receive all other personal property not included in the husband's exhibits that is located at the farm.

The husband argues the trial court erred in classifying the farm as part of the wife's separate estate, citing evidence of marital accumulation and his contributions to its improvement. The wife contends she is the sole equitable owner due to inheritance and the husband's limited residency at the farm. To address the husband's claim of inequitable property division, a detailed review of the facts is necessary.

At trial in 2010, the husband was approximately 57 years old; the wife's age is unspecified. She earned about $2,600 monthly as an elementary school teacher, while the husband, who retired in September 2008 with a $40,000 annual salary, began receiving disability benefits of $2,078 monthly after a lump sum award of $9,351. Throughout their marriage, they lived apart for significant periods. The husband asserts he visited the wife weekly, while she claims they cohabited at the farm for about eight months of their two-and-a-half-year marriage. The parties agreed that misconduct was not to be considered in property division. They secured a $91,500 mortgage against the wife’s lake house to purchase the farm, from which the wife repaid the husband $42,000, her mother $15,000, and settled her car loan, with remaining funds placed in a joint account.

The wife utilized a joint account to make mortgage payments in January and February 2007 before the parties separated and she closed the account. Following the separation, the wife began paying the mortgage from her individual account. After reconciling in December 2007, they reopened a joint account, into which both parties deposited their paychecks, alongside the husband’s significant lump-sum contributions. Mortgage payments were made from this joint account until the couple separated again in December 2008, after which the wife resumed payments from her separate account. By July 2010, the mortgage debt had decreased by about $30,000, leaving a balance of $61,500, with the wife claiming only 12 payments totaling $9,265.56 were made from the joint account.

The husband claimed to have contributed around $90,000 from various sources, including the sale of his home and disability payments, but noted recovering $16,851 post-separation. He also indicated that substantial contributions were made shortly before their final separation. During the marriage, they financed improvements and paid various expenses related to the husband’s rental property from their joint account. The husband sold his pre-marriage home for $54,000 in equity, which contributed to construction at the farm, further investing $40,600 and putting in $12,000 worth of labor.

The wife, in turn, reported paying approximately $47,000 from her individual account for farm-related expenses and improvements, while they lived in a barn on the property during construction. The farm was valued by the husband at $155,000 to $200,000, but the wife did not provide an estimate. The trial court ruled that the farm was the wife's separate property, rendering it non-divisible as a marital asset. The standard of review for this case is de novo, meaning the trial court's factual findings do not carry a presumption of correctness. The husband argued that the property division was inequitable due to not receiving any interest in the farm.

The husband contests the trial court's finding that a farm is part of the wife's separate estate but does not dispute the classification of other properties as separate. Under Alabama law, failure to raise an issue on appeal is considered a waiver, leading the appellate court to focus solely on the trial court's conclusion regarding the farm's classification. A separate estate consists of property with exclusive control by one spouse, excluding benefits to the other from the marital relationship, encompassing assets owned prior to marriage and those received as gifts or inheritance. 

The wife claims the farm is her separate property due to inheritance, yet evidence shows that two of the farm's parcels were purchased from her siblings during the marriage and jointly conveyed to both spouses. The third parcel was gifted to both spouses by the wife’s mother, classifying it as an inter vivos gift rather than an inheritance. Consequently, all parcels of the farm were obtained jointly during the marriage, making the farm marital property.

The trial court's equitable division of property must consider various factors, including the parties' earning capacities, future prospects, ages, health, marriage length, and the nature of the marital property. An equitable division does not require equality but falls within the trial court's discretion.

In Robinson v. Robinson, the court awarded the wife the marital farm, valued between $155,000 and $200,000, with an associated mortgage responsibility of $61,500. Consequently, her equity in the farm ranged from $93,500 to $138,500. Additionally, she received all personal property at the farm not detailed in exhibits provided by the husband, including a tractor, lawn mower, wood stove, and kitchen furnishings, totaling $6,650 in value. Thus, her total award for real and personal property amounted to between $100,150 and $145,150.

The husband claimed personal property listed in exhibits 1 and 1(a) as his separate property, valued at $11,290 and $21,685 respectively. The court concluded that, except for one item, this property was not regularly used for the couple's mutual benefit during the marriage, affirming it as separate property. The exception was a washer, dryer, and refrigerator worth $1,000, which were deemed marital property due to their use by the wife.

The husband had removed $900 in joint property from the farm at separation, leading to a total marital property award for him of $1,900. The court noted the parties had similar earning capacities, and misconduct was not a factor in asset division. Although the husband contributed to the joint account, there was insufficient evidence to equate these contributions with his interest in the farm. Additionally, funds he withdrew from a savings account shortly before separation were primarily derived from disability payments, and the court found no justification for the husband's disproportionate property award compared to the wife's.

The husband contributed $22,000 from the sale of his residence and approximately $40,600 from his separate bank account to the construction of the farm house. The divorce judgment did not award him any interest in the farm, which is deemed inequitable based on precedent that favors equitable property division. The trial court's judgment is reversed, and the case is remanded for equitable property division. 

During the ore tenus hearing, there was an off-the-record discussion where the trial judge instructed attorneys to submit a written decision, although this is not reflected in the appeal record, which cannot be altered by appellate briefs. The wife's siblings sold their land to the couple in September 2006, and her mother conveyed an additional parcel in October 2006. 

The wife testified that after paying off her car loan, $66,216.50 remained from a $91,500 mortgage, which implies she used part of that amount for her vehicle. Exhibits presented by the wife regarding joint funds used on the husband’s rental property were not admitted as evidence, and the trial court deemed them merely advisory. 

The court noted that the evidence showed the wife could inherit property from her mother, who was alive at the time of trial, although the couple paid her $15,000 for structures on the property. At trial, it was confirmed that the mortgage debt had been reduced by $30,000, with $9,000 paid from the joint account and $25,000 from mortgage proceeds for the wife's car loan. The remaining mortgage debt stood at $61,500, only slightly less than the total amount used for the property purchase and improvements.