Rearranging the deck chairs

Posted Thursday, October 27th, 2011 by Gregory Forman
Filed under Equitable Distribution/Property Division, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

In August I blogged about an appellate loss by my friend and colleague, Thomas F. McDow, in the case of Pittman v. Pittman.  Last week the Court of Appeals modified its opinion, 395 S.C. 209, 717 S.E.2d 88 (Ct. App. 2011).  For reasons I assume are oversight this modified opinion did not appear in the October listing of published Court of Appeals opinions and it was only when this week’s advance sheets came out that the new opinion in Pittman was publicly noted.

This refiled opinion does not change the result but merely changes the explanation for why Husband’s premarital landscaping business was transmuted into marital property. The new reasoning (with citations omitted):

The family court found Pittman Professional Land Surveying had been transmuted into marital property “as evidenced by the intent of [Husband] to treat the same as a marital asset,” but made no findings as to Wife’s intent. Husband disputes the finding concerning his intent that to treat the asset as marital property, arguing (1) he never referred in any way to the business that would indicate that Wife had any interest in it; (2) Wife was only an employee of the business and received a salary for her services and, after she was discharged, unemployment benefits to which she would not have been entitled if she had an ownership interest in the business; and (3) an unlimited guarantee provided by Wife to help secure credit for the business had expired several years before the commencement of this action. We hold these arguments do not warrant reversal of the finding by the family court that Wife met her burden to prove transmutation.

Property acquired by either party before the marriage is considered nonmarital; however, it may be transmuted into marital property if(1) it becomes so commingled with marital property as to be untraceable; (2) it is jointly titled; or (3) it is utilized by the parties in support of the marriage or in some other manner so as to evidence an intent by the parties to make it marital property.  The spouse claiming transmutation must produce objective evidence showing that, during the marriage, the parties themselves regarded the property as the common property of the marriage.

We agree with Wife the record supports the family court’s finding that Husband intended to treat Pittman Professional Land Surveying as a marital asset. Wife was listed as secretary for the corporation. After the parties married in 2000, Wife, with Husband’s consent, reduced the hours she worked at her nursing job to work full-time in the business and thus contributed less to her 401K and retirement accounts. Most significantly, Husband and Wife agreed that the business would pay Wife a higher salary for her services than what her services warranted with the expectation that this business decision would benefit both parties during their retirement together. Under these circumstances, we decline to disturb the finding that Pittman Professional Land Surveying had been transmuted.

No doubt a petition for certiorari awaits.

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