A July 1, 2020, Court of Appeals opinion in Swicegood v. Thomson determined that South Carolina code prohibited homosexual couples from forming the requisite intent to be married at common-law prior to the November 21, 2014, decision in Condon v. Haley, 21 F. Supp. 3d 572, 587 (D.S.C. 2014), which held the South Carolina Constitution’s probation on same-sex marriage was unconstitutional.

In March 2014, Swicegood filed an action in family court seeking an order recognizing the existence of a common-law marriage and for other relief. Swicegood alleged she and Thompson cohabited as sole domestic partners for over thirteen years until December 10, 2013, agreed to be married, and held themselves out publicly as a married couple. Thompson filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), SCRCP, alleging the family court lacked subject matter jurisdiction over Swicegood’s complaint because the parties were not married and lacked the capacity to marry.

The family court dismissed Swicegood’s complaint on May 7, 2014. It concluded it lacked subject matter jurisdiction because a common-law marriage was not legally possible pursuant to S.C. Code § 20-1-15, which reads, “A marriage between persons of the same sex is void ab initio and against the public policy of this State.” Swicegood appealed. During the pendency of that appeal the Supreme Court of the United States decided Obergefell v. Hodges, 135 S. Ct. 2584, 2604-05 (2015) in which it held “same-sex couples may exercise the fundamental right to marry,” and the state laws challenged in that case were “invalid to the extent they exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples.” In an unpublished opinion, the South Carolina Court of Appeals then remanded the case to the family court with instructions to “consider the implications of Obergefell on its subject matter jurisdiction.”

Upon remand, the family court determined the couple could not have formed a common-law marriage because section 20-1-15 was in place throughout the couple’s thirteen-year period of cohabitation, and they believed they lacked the legal right to be a married couple during that time. The court concluded the couple could not have formed the requisite intention and mutual agreement to be married. Additionally, the family court concluded that even assuming Swicegood and Thompson cohabited with an actual intent and mutual agreement to be married, section 20-1-15 acted as a legal impediment to the creation of a common-law marriage between them. Swicegood appealed.

The Court of Appeals affirmed. It concluded that Obergefell should apply retroactively. However it determined that because S.C. Code §20-1-15 remained in effect at least until Condon was decided, there existed an impediment to the couple marrying that was still in effect at the time this action was filed. While explicitly finding that code section unconstitutional, it found “the parties could not have formed a common-law marriage because they did not renew their agreement to be married after the removal of the impediment.” The Court of Appeals concluded:

Because the parties’ relationship ended before South Carolina’s prohibition of same-sex marriage was struck down, they could not have formed a common-law marriage as a matter of law. Moreover, because the parties acknowledge they knew they could not legally marry in this state during the entirety of their relationship, they could not have formed the intent and mutual agreement to enter a legally binding marital relationship.

I agree with the second sentence of that conclusion but not the first (Judge Huff, in his concurrence, appears to hold the same opinion). I don’t see how an unconstitutional impediment could be a legally valid impediment but agree that if the parties believed their was an impediment to their marrying, they could not be married at common-law.

Continuing a very recent pattern of appellate courts disregarding the family court’s credibility determinations, the December 31, 2019, Court of Appeals opinion in Bauckman v. McLeod reversed a family court finding of equitable estoppel.

In Bauckman, the parties reached a court-approved agreement in 2002 that Father would pay $399 per month in child support. In April 2008, Father began paying $240 per month and did not pay any child support for the summer months during which he had the child. In 2015, Father filed a complaint seeking to confirm he had no child support arrearage and to “increase” his child support to $399 per month. Mother counterclaimed for child support arrears, plus interest, and an increase in child support.

At trial, Father argued equitable estoppel as a defense to his child support arrearage, claiming he had reached an oral agreement in March 2008 with Mother to reduce his obligation, based upon his difficulty paying the court-ordered amount. The family court, noting that Mother had made no attempt to collect unpaid child support for a seven-year period, and finding Mother and her witness less credible on the issue of the alleged agreement, found equitable estoppel. However, rather than eliminating Father’s child support arrears, it reduced it from $17,430 to $14,310. Because it found equitable estoppel, it denied Mother’s request for judgment interest. It further found Mother had failed to demonstrate a substantial change of circumstances to support an increase in child support. Finally, it ordered Mother to pay child support some attorney’s fees. Mother appealed.

On appeal, the Court of Appeals reversed the finding of equitable estoppel. It noted, that S.C. Code § 63-17-310, holds that child support “modification is effective as to any installment accruing prior to filing and service of the action for modification.” While recognizing equitable estoppel as a defense to support arrears, the Court of Appeals also noted the doctrine is infrequently approved [that’s been my experience in both the family court and the Court of Appeals]. Where the family court found it noteworthy that Mother provided no written objection to the reduced child support, the Court of Appeals noted Father could produce no written evidence of the alleged agreement. It determined that Mother’s apparent acquiescence was insufficient evidence of an agreement. If further held that Father failed to demonstrate any detrimental change in position–a necessary factor in an equitable estoppel defense–based on this alleged agreement.

Because the Court of Appeals rejected Father’s equitable estoppel claim, it also reversed the award of attorney’s fees and granted Mother judgment interest.

The Court of Appeals affirmed the family court’s decision not to modify child support. It found that the parties’ remarriages and subsequent children were not bases to modify child support. It found that Mother had failed to prove Father’s income had increased or her income had deceased since 2002 [a reminder that financial declarations, or the lack thereof, remain vital to subsequent support litigation].

Equitable estoppel is hard to prove. Given the lack of evidence of detrimental reliance Father presented [or, at least, what the Court of Appeals alleges Father presented] I’m not surprised that the Court of Appeals reversed the family court’s finding. However, I remain surprised at how willing the appellate courts have recently been to disregard the family court’s credibility determinations. I never expected the de novo factual finding that Lewis and Stoney require would significantly invade such determinations. In 2019 they began doing so.

Argued first but decided second, the December 18, 2019 Court of Appeals opinion in Singh v. Singh confirms what a November 6, 2019 Court of Appeals opinion in Kosciusko v. Parham, 428 S.C. 481, 836 S.E.2d 362 (Ct. App. 2019), previously determined: the family court cannot enforce custody issues decided by arbitration. With no judges overlapping on the two three-judge panels, we have a unmistakable understanding of where the Court of Appeals stands on this issue. Whether the Supreme Court decides to grant certiorari in either of these two cases and provide us a definitive, and final, answer remains to be seen.

Singh cites somewhat different cases but reaches the same conclusion as Kosciusko: it violates bedrock state policy for anyone other than family court judges (subject to review by the appellate courts) to make binding determinations regarding the best interests of minor children. In Singh, the parties submitted Father’s custody modification request to binding arbitration, with this request being approved by an order of the family court. The operative order submitting these disputes to arbitration required the family court to accept the arbitrator’s award and imposed an immediate $10,000 penalty on any parent attempting to challenge the arbitration award. The arbitrator subsequently changed custody to Father and Mother filed five separation motions seeking to vacate the arbitration award as void pursuant to Rule 60(b)(4), SCRCP.

The family court denied these motions finding “(1) Mother was estopped from objecting to the arbitration because she procured and accepted a benefit from the Settlement Agreement and the consent order of dismissal, (2) she waived her right to object by participating in the arbitration proceedings, (3) her due process rights were not violated because parents have the right to make decisions for their children, and (4) she waived her constitutional rights by agreeing to the arbitration and failing to timely challenge the arbitration.

Undergoing the same analysis of ADR Rules 3 and 4 that the Kosciusko panel undertook, the Singh court determined there was no express authority to arbitrate children’s issues. The opinion further relies upon the doctrine of parens patriae, citing Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez, 458 U.S. 592, 600 (1982) (alteration in original) (footnotes omitted) (quoting Late Corp. of the Church of Jesus Christ of Latter-Day Saints v. United States, 136 U.S. 1, 57 (1890)).:

Parens patriae means literally “parent of the country.” The parens patriae action has its roots in the common law concept of the “royal prerogative.” The royal prerogative included the right or responsibility to take care of persons “who are legally unable, on account of mental incapacity, whether it proceed from 1st. nonage: 2. idiocy: or 3. lunacy: to take proper care of themselves and their property.” At a fairly early date, American courts recognized this common-law concept, but now in the form of a legislative prerogative: “This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature [and] is a most beneficent function . . . often necessary to be exercised in the interests of humanity, and for the prevention of injury to those who cannot protect themselves.”

The opinion further cites Ex parte Messer, 333 S.C. 391, 509 S.E.2d 486 (Ct. App. 1998), “[p]arties to a separation agreement may agree to submit all disputes, other than those involving their children, to arbitration and thus deprive the family court of its traditional powers of enforcement over those disputes” (emphasis added).

In supporting its holding, the opinion notes:

A court cannot be bound by an arbitration award and simultaneously act as parens patriae on behalf of a child. Therefore, although parties are free to agree to submit these issues to alternative dispute resolution, any agreement to limit the family court’s ability to review such an award is unenforceable.

Prohibiting courts from overseeing arbitration decisions that involve the best interest of a child infringes upon the public policy of this state. Our society has an inherent interest in every child. As we stated, family courts are charged with protecting that interest for every child. Arbitrators are not held to the same standards as family court judges, and the law does not impose upon them the same duty to act in the best interest of a child. According to the arbitration agreements Mother and Father entered into, the arbitrator usurped all of the decision-making authority of the family court but undertook none of the duties imposed upon the court. Under the arbitration agreements, this court would not have the ability to review the arbitrator’s decision regardless of whether it conflicted with the best interest of the children. This opens the question of whether family courts would have the ability to modify such arbitration awards should a change in circumstance occur after a final award.

Finally, the Singh court rejected Father’s equitable estoppel defense, while analyzing it as a waiver claim:

[T]his case involves the fundamental rights of children in a custody action and the court’s duty to protect the rights and interest of children. Thus, any waiver on the part of the parent cannot be found to abrogate the rights of the child or the duty of the court. …We acknowledge the parties made a conscious decision to include an arbitration provision in the Settlement Agreement and reaffirmed their desire to arbitrate those issues by entering into agreements to arbitrate, not once, but three times. A parent cannot waive the rights of any child or the duty of the family court.

Emphasis in original.

Since the only two opinions addressing this issue are from the Court of Appeals, we do not have a definitive answer on whether South Carolina parents can be bound by arbitrated custody determinations. However the analysis and holding of these two opinions is what I had expected and is consistent with prior caselaw and doctrine. Until and unless the Supreme Court tells us otherwise, South Carolina family court attorneys should treat arbitrated custody orders as void.

The November 13, 2019, Court of Appeals opinion in Tomlinson v. Melton continues the appellate court’s disfavor of joint custody.

In Tomlinson, the parties entered a custody agreement at the time of their 2011 divorce that gave Father primary physical custody and final decision making authority but gave Mother every other week from Wednesday to Monday during the school year (along with alternating holidays and week-on/week-off during the summer). It required Mother to pay nominal child support and authorized de novo review of custody when the child started kindergarten. At the time of this agreement Father lived in Kingstree and Mother lived in Sumter.

When the child started kindergarten, Father filed for full custody, and requested increased child support. Mother counterclaimed for custody and child support. The family court preserved the status quo at the temporary hearing. During the litigation period, Mother obtained employment and purchased land (with the intention of building her residence) in Kingstree. At trial, the family court modified custody to a week-on/week-off schedule during the school year, but left Father the final decision maker. It required Father to pay child support and some of Mother’s attorney’s fees. It denied Father’s request to have Mother’s child support arrears act as a setoff to his support obligation, holding that Father’s plea for child support did not encompass a claim for reimbursement of arrears. After his petition for rehearing was denied Father appealed.

The Court of Appeals reversed the family court. It found that Father’s complaint for child support encompassed a claim for reimbursement or setoff of arrears, especially as both parties had testified as to the arrears amount. It held that Father should be entitled to a $6,000 offset on his child support obligation.

It also reversed the award of week-on/week-off custody during the school year. It looked to the South Carolina Supreme Court opinion of Scott v. Scott, 354 S.C. 118, 579 S.E.2d 620 (2003), which required “exceptional circumstances” to award brief alternating periods of custody, holding, “the family court made no specific findings of exceptional circumstances to justify divided custody, nor do we find any from our de novo review.” It noted, “[w]eek-to-week divided custody will rarely be in the best interest of the child, especially during the school year.” As additional justification for reversing the family court, it held:

[T]he record reflects both Mother and Father have a divisive relationship and fail to communicate effectively. The record reflects over 4,500 text messages, calls, and emails from Mother to Father where she regularly and frequently requests changes to the schedule. Further, both parties think the other is a bad influence on Child.

Because the Court of Appeals reversed custody, it remanded issues of child support and attorney’s fees.

Judge McDonald, in a concurrence, urged the Supreme Court to reexamine its holding in Scott, noting:

[I]t is time for our supreme court to reconsider this language disfavoring joint custody—along with any requirement that our family courts find “exceptional circumstances” to justify joint custody awards—to alleviate any concerns our family courts may have regarding the circumstances in which they may award “joint or divided custody” pursuant to the legislature’s grant of jurisdiction in § 63-3-530(A)(42).

I believe Judge McDonald’s analysis is correct and that the Supreme Court errs in continuing to disfavor joint custody. As her concurrence notes, the legislature enacted S.C. Code § 63-3-530(A)(42) in 1996 to give the family courts jurisdiction “to order joint or divided custody where the court finds it is in the best interests of the child.” At the time it did so, Supreme Court decisions disfavored joint custody but this subsection did not. Further, her concurrence notes, “language suggesting ‘divided custody is usually harmful’ or requiring a finding of ‘exceptional circumstances’ appears incongruous with Section 63-5-30 of the South Carolina Code, which provides:”

The mother and father are the joint natural guardians of their minor children and are equally charged with the welfare and education of their minor children and the care and management of the estates of their minor children; and the mother and father have equal power, rights, and duties, and neither parent has any right paramount to the right of the other concerning the custody of the minor or the control of the services or the earnings of the minor or any other matter affecting the minor. Each parent, whether the custodial or noncustodial parent of the child, has equal access and the same right to obtain all educational records and medical records of their minor children and the right to participate in their children’s school activities unless prohibited by order of the court. Neither parent shall forcibly take a child from the guardianship of the parent legally entitled to custody of the child.

Whether the Supreme Court will use the Tomlinson case to reconsider its aversion to joint custody remains to be determined.

I would note that just yesterday I blogged on how the de novo standard of appellate review suggests the increased likelihood of getting beneficial results when appealing unfavorable custody and alimony determinations. Tomlinson is yet another data point supporting this hypotheses.

Many family law attorneys in the Charleston area were awaiting the Court of Appeals decision in Singh v. Singh, which was argued there this February. That appeal was supposed to determine whether child issues in family court could be arbitrated. While many family law attorneys were allowing such issues to be arbitrated, other family law attorneys refused to do so, believing that the family court could not enforce such arbitration awards.While we were waiting on a decision in Singh, a different Court of Appeals panel heard Kosciusko v. Parham, 428 S.C. 481 836 S.E.2d 362 (Ct. App. 2019), in October and issued its decision on November 6, 2019. Addressing the same issue as in Singh, the Kosciusko court held that family court orders approving arbitration awards regarding children’s issues are void ab initio. Assuming the Kosciusko opinion isn’t subsequently overturned, every provision of any arbitration order regarding child’s issues in family court within the State of South Carolina is now void.

In Kosciusko, the parties agreed to submit the issues of “right of first refusal, holidays, visitation schedule, vacations, and transfers/transportation” to binding arbitration and obtained a consent order incorporating the agreement. The order further provided that “the parties further agreed that such confirmation shall not require a hearing, but may be accomplished based on written application of either party.” Additionally, the order provided that the family court would retain continuing jurisdiction to modify the arbitration award or any order of the court. They then arbitrated these issues and the family court issued an order confirming the arbitration award without a hearing. Neither party appealed the order confirming the award.

Father then filed a contempt action against Mother alleging she had violated terms of the arbitration award. Mother moved to dismiss the contempt action, arguing the order was not valid. The family court agreed and dismissed the contempt action. After the family court denied Father’s motion for reconsideration, he appealed.

The Court of Appeals first found that “the submission of children’s issues to binding arbitration would be an improper delegation of the family court’s authority and violative of South Carolina law because the procedures mandated by the Uniform Arbitration Act would prevent the family court from determining whether an award is in the child’s best interest.” It found that, in the context of children’s issues in family court, the provisions of S.C. Code § 63-3-530(A)(39) override the provisions of South Carolina’s Uniform Arbitration Act, S.C. Code § 15-48-10, both because 63-3-530(A)(39) is more recent and more specific. That code subsection limits the family court’s jurisdiction for alternative dispute resolution (ADR):

The family court has exclusive jurisdiction: to require the parties to engage in court-mandated mediation pursuant to Family Court Mediation Rules or to issue consent orders authorizing parties to engage in any form of alternate dispute resolution [that] does not violate the rules of the court or the laws of South Carolina . . .

Father argued such arbitrations were authorized by Rule 3(a), SCADR, which allows parties to domestic relations case to “mediate, arbitrate or submit to early neutral evaluation at any time,” However the Court of Appeals noted Rule 4(d)(2), SCADR, specifically authorizes parties “may submit the issues of property and alimony to binding arbitration,” while Rule 4(d)(1), SCADR only authorizes mediation for custody and visitation issues. It further noted that Rule 4(d)(5), SCADR, states that “[i]n lieu of mediation, the parties may elect to submit issues of property and alimony to binding arbitration in accordance with the Uniform Arbitration Act…” and that this subsection did not grant a similar right to arbitrate custody and visitation issues. It thus held the ADR rules did not authorize arbitration for custody or visitation issues.

The Court of Appeals further noted that the Uniform Arbitration Act limited the family court’s authority to review arbitration awards in a manner inconsistent with the family court’s obligation to protect the best interests of children. Under the Uniform Arbitration Act “an inquiry into the substantive fairness of an agreement . . . would be inconsistent with the Arbitration Act and would severely undermine the finality of arbitration agreements.” Prior case law indicated that such circumscribed review was allowable for alimony and property division awards but had never been acceptable for child related issues. As the opinion notes:

Because the family court may not delegate its authority to ensure that issues regarding children are resolved in their best interest, our supreme court has provided that family courts have continuing jurisdiction to do whatever is in the best interests of the child regardless of what the separation agreement specifies. …Accordingly, we find that our state’s precedent precludes the submission of issues involving child custody and visitation to binding arbitration as such action would constitute an improper delegation of the family court’s authority to determine issues in the best interest of the child.

Father raised a number of additional grounds to uphold the arbitrated custody agreement, all of which the Court of Appeals refused to address because they were not preserved for appellate review and because subject matter jurisdiction cannot be waived.

Assuming Kosciusko is not subsequently modified, child custody, visitation, and child support issues cannot be arbitrated in South Carolina and all existing confirmed arbitration award on these issues are unenforceable.

The October 23, 2019, Court of Appeals opinion in Thornton v. Thornton mostly affirms the family court’s decision on issues of equitable distribution and fees.

In Thornton, Husband filed for an adultery divorce after he became suspicions of Wife’s relationship with a co-worker. Custody was highly contested and required the services of a guardian ad litem and forensic custody consultant. At trial, the family court granted Husband a divorce on the ground of adultery, awarded Husband primary legal and physical custody of the parties’ children, attempted to equitably divide the marital estate on a 50/50 basis, denied Wife’s requests for attorney’s fees, made Wife pay sixty-seven percent of the guardian’s and the forensic consultant’s fees, and made Wife reimburse Husband his private investigator fees. After her motion for reconsideration was denied, Wife appealed.

Except, potentially, on the division of Husband’s pension, Wife obtained minimal relief from the Court of Appeals on equitable distribution issues. Wife argued that a $27,000 loan which Husband had obtained around the time of their separation, but not told her about, should not be treated as a marital debt. The Court of Appeals affirmed the family court’s finding that this debt was marital, noting Husband had used the loan to pay down marital debts and had made payments on the loan during the litigation. It further noted Wife presented no evidence to rebut the presumption that the debt was marital.

Wife appealed the apportionment of Husband’s 401k. The family court equally divided the net value of the 401k but then made Wife responsible for half of the 401k loan. Wife correctly argued that this essentially debited her twice for the value of the loan and the Court of Appeals corrected the family court’s math error.

Wife appealed the family court’s valuation of a camper. At trial both parties testified to the value of the camper (Wife valued it at $16,955; Husband valued it at between $9,000 and $10,000) but presented no evidence to corroborate their valuations. In valuing the camper, the family court averaged the parties’ valuations. The Court of Appeals held that doing so was error but affirmed the valuation anyway as “within the range of evidence presented.” A simple question of Husband as to whether Wife could keep the camper at a $10,000 valuation might have gotten Wife more money but (at least from my reading of trial transcripts) few attorneys think to ask what I believe is an obvious question.

Wife argued the family court failed to divide the equity in the marital home and a debt to Verizon, but the Court of Appeals held that the family court’s final order did consider these items in its equitable distribution award.

Wife argued the family court should not have placed a fixed dollar value on Husband’s pension (and then award her half that value). The Court of Appeals held that the pension value could not be determined until the pension fully vested and awarded Wife one-half of the marital portion of the pension–apparently to be divided through a Qualified Domestic Relations Order.

Wife appealed issues related to custody and child support. However by the time of oral argument the children were emancipated and Wife acknowledged these issues were now moot.

Wife argued that the family court should not have granted Husband a fault divorce on the ground of adultery but should have granted her a no-fault divorce based upon one year’s separation. Wife argued that she had not committed adultery. However, from the Court of Appeals’ opinion, it appears her argument was actually that she didn’t begin committing adultery until after the parties’ separation. Further, from reading the opinion, it appears there was substantial evidence of inclination and opportunity–the Court of Appeals found this evidence “clear and positive.” Thus it affirmed the fault based divorce.

The Court of Appeals affirmed the family court’s denial of Wife’s attorney fee request. While Wife’s income was lower than Husband’s, Husband achieved beneficial results at trial. Further the Court of Appeals noted Wife sought custody despite the “unwavering desire” of what had to be older teens to live with Husband. The Court of Appeals found Wife’s pursuit of custody involved additional discovery and discovery motions, thus adding to the parties’ fees.

The Court of Appeals also affirmed the family court’s decision to make Wife pay sixty-seven percent of the guardian’s and forensic evaluator’s fees. It rejected Wife’s claim that the guardian’s fee was excessive and noted the guardian had given the parties a discount on some of her fees. Wife argued the guardian expended an unreasonable amount of time but also acknowledged that “the dispute was complex and contentious.” The Court of Appeals thus affirmed the amount of the guardian’s fees.

It further affirmed the sixty-seven percent apportionment of these fees. The Court of Appeals noted Wife’s unreasonable position regarding custody was a factor in the size of these fees. If further cited Wife’s uncooperative conduct towards the guardian and Wife’s own requests for the guardian to review numerous documents as increasing the guardian’s fee, were a basis to affirm this division.

Finally, the Court of Appeals affirmed the decision to make Wife reimburse Husband’s private investigator fees, as these fees were reasonably incurred in proving Wife’s adultery.

Thornton does not present any truly novel issues but there a few useful lessons to be gleaned. First, it appears an unequal apportionment of guardian’s fees and related fees will be affirmed if justified. Second, it appears defined benefit pensions cannot be divided by attempting to put a present value on the pension unless both parties agree to divide them this way. Finally, it appears the family court cannot merely average the parties’ uncorroborated valuations of personal property to come up with its own value–but the family court likely won’t get reversed if the valuation is reasonable.

The August 21, 2019 Court of Appeals opinion in Nelson v. Nelson, 428 S.C. 152, 833 S.E.2d 432 (Ct. App. 2019), demonstrates the problems of inaccurate or incomplete financial disclosure when resolving equitable distribution issues.

In Nelson both parties, but especially Husband, went to trial with incomplete or inaccurate information regarding the value of and their interest in various assets and debts, including real property. The family court attempted to value and equitably divide the assets. One of the assets, a property at 6 Judith Street in Charleston, was purchased by Husband and his cousins, but only his cousins were listed on the deed. During litigation Husband made multiple, and conflicting representations on his percentage interest in this property and on whether this property was mortgaged. In its final order, the family court valued Husband’s interest in the property at $300,000 and found there was no mortgage.

Subsequent to the entry of that order, Husband filed a motion to reconsider but failed to list the grounds for that motion. Shortly before the motion to reconsider hearing, Husband produced a memorandum in support of the motion. At the hearing Wife objected to consideration of the memo as prejudicial and untimely. The family court agreed and dismissed Husband’s motion because it failed to state with particularity the grounds therefor. Husband did not appeal this order but appealed the final order on equitable distribution.

Subsequent to that, Husband filed a Rule 60(b)(1) motion, arguing fraud or excusable neglect, and provided the family court proof of the existence of a mortgage on 6 Judith Street. Wife argued there was no evidence of fraud or excusable neglect because Husband had ample opportunity to present evidence of a mortgage throughout the course of litigation yet failed to do so. Accordingly, Wife asserted Husband’s failure to present this information did not amount to excusable neglect.

The family court found that although the mortgage information was knowable by Husband and he had a duty to disclose accurate information about the property on his financial declaration, there was excusable neglect on the part of both Husband and Wife for presenting incomplete evidence regarding the existence of a mortgage on 6 Judith Street. Accordingly, the family court granted Husband’s 60(b) motion and issued an amended final order including the newly discovered mortgage. After amending the final order and accounting for the refinanced mortgage, the family court found Husband’s net equity in the property was only $62,516. Wife appealed this order, and her appeal was consolidated with Husband’s appeal.

The Court of Appeals affirmed on all issues. It affirmed the granting of Rule 60(b) relief to Husband. Analyzing the factors for granting such relief set forth in Rouvet v. Rouvet, 388 S.C. 301, 696 S.E.2d 204 (Ct. App. 2010), it found the first factor, the promptness with which relief is sought, was close; although Husband could have discovered and disclosed the mortgage prior to or at trial by contacting to his partners or conducting a property records search, he timely moved for relief under Rule 60(b) when he discovered the existence of the new mortgage. Next, it found Husband’s failure to act promptly by obtaining and disclosing the mortgage information prior to or at trial weighed in Wife’s favor. However, it found the existence of the refinanced mortgage was a meritorious defense favoring Husband. Finally, it found that although Wife would suffer some prejudice due to Husband’s failure to produce the mortgage information at an earlier stage of litigation, not granting the Rule 60(b) motion would result in a windfall to Wife to which she would not otherwise be entitled. Therefore, it found this factor weighs in favor of Husband. As a whole, it found these factors, particularly the existence of a meritorious defense and limited prejudice to Wife, weighed in favor of granting relief.

The Court of Appeals affirmed the family court’s valuation of 6 Judith Street at $1,000,000, rejecting Husband’s contention that it should have been valued at $920,000. It found that he had failed to preserve the argument that his cousins should have been made parties to this action. It agreed with the family court’s conclusion that Husband was not credible in his trial valuation, as he misrepresented the condition of the property and had listed higher values in prior financial declarations. It also affirmed the family court’s finding that Husband had a 50% interest in this property. It noted his inconsistent testimony on his interest and agreed with the family court’s finding that he lacked credibility on this issue. Thus Wife’s testimony that Husband told her he had a 50% interest was sufficient to sustain the family court’s finding.

The Court of Appeals also affirmed the family court’s finding that Wife’s home at 109 North Shelmore in Mt. Pleasant had a value of $975,000. Both parties’ experts’ appraisals contained flaws. Wife’s expert valued the home at $875,000. However, at trial, he acknowledged understating the square footage of the home. Husband’s expert valued the property at $1.13 million. However he acknowledged that out of the seventy recent sales in the I’On neighborhood, no houses with similar square footage sold for over $1 million. Since the family court’s $975,000 valuation was within the range of evidence presented at trial, the Court of Appeals affirmed that valuation.

Husband appealed numerous issues on the valuation and apportionment of his debt. The Court of Appeals found many of these issues were not preserved for appeal. It affirmed the three remaining debt issues. It found that deficiencies Husband owed on two foreclosed properties were not subject to apportionment because these were non recourse mortgages. It found that Husband was not credible on the potential capital call on one of these properties, as he failed to provide any documentation of that potential liability.

The Court of Appeals affirmed the family court’s finding that Husband was only liable for $5,000 in debt on a Costa Rica property. The Court of Appeals affirmed the family court finding that Husband was not credible regarding this property’s cash flow, as Husband failed to produce evidence of rental income. It further found that absent evidence he was paying interest on a loan from his mother to obtain his interest in this property, the family court properly determined he was not liable for interest on this loan.

The Court of Appeals affirmed the valuation and apportionment of Husband’s tax debts. It determined that penalties and interest Husband incurred on these debts after the date of filing were not marital. It determined that much of what Husband claimed was capital gains tax for 2015 was actually penalties and interest or other tax liability. It affirmed the family court’s determination that the best evidence of this liability was from a schedule on his tax return.

The Court of Appeals also affirmed the family court’s use of the Wife’s valuations of personal property as Wife gave more realistic values to the personal property, was more credible, and had a better recollection of what happened to various pieces of personal property.

The Court of Appeals also affirmed the family court’s award of $35,000 in attorney’s fees to Wife. It disagreed with Husband’s position on beneficial results, and rejected his claim that neither party having an excess of income should alter the attorney fee analysis.

Nelson is one of those cases, quite common in published family law opinions, in which a failure to properly preserve error allows the appellate courts to summarily reject challenges to the lower court’s order. It is also an example of the common problem of alleging and proving valuation errors when one has provided the family court inconstant, inaccurate, or incomplete information on marital assets and debts. The importance of accurate financial disclosure cannot be stressed enough. Trials and appeals on financial issues are routinely lost on this basis.

The August 7, 2019 Court of Appeals opinion in Thompson v. Thompson, 428 S.C. 142, 833 S.E.2d 274 (Ct. App. 2019), holds that Rule 60(b)(5), SCRCP, does not give that family court subject matter jurisdiction to modify an equitable distribution order.

The Thompsons’ divorce decree approved a separation agreement providing “[a]s soon as she is able, Wife shall assume or re-finance all loans on [the Home] in her own name. . . . Wife must place [the Home] on the market for sale on or before June 1, 2025.” The Final Order also provided Husband and Wife would each be responsible for their own debts, indemnify each other against liability for those debts, and pay all accounts and obligations in a timely manner so as to not harm the other party’s credit. The Final Order made Husband responsible for all debts associated with Palmetto Tree and indemnified Wife from Palmetto Tree’s debts. Finally, the Final Order provided:

It is the intent of the parties that the provisions of [the Final Order] shall govern all rights and obligations of the parties as well as all rights of modification; and, further, that the terms and conditions of [the Final Order] . . . shall not be modifiable by the parties or any court without the written consent of Husband and Wife . . . . Neither the Family Courts of the State of South Carolina nor any other court shall have jurisdiction to modify, supplement, terminate, or amend [the Final Order] or the rights and responsibilities of the parties hereunder.

Subsequent to the divorce, Wife allowed Husband to take possession of the marital home. The parties then had a falling out, with a dispute as to who was to pay the mortgage. The house went into foreclosure and both parties allowed liens to attach to the home. Wife eventually got the house out of foreclosure but was unable to refinance it to get the mortgage out of Husband’s name. Husband filed a rule to show cause due to Wife’s failure to pay the mortgage and failure to get the home mortgage out of his name. He also sought relief, pursuant to Rule 60(b)(5), SCRCP, to order that Wife place the home for sale immediately.

At trial, the family court declined to hold Wife in contempt. However it found the parties’ agreement regarding the marital home was no longer equitable and ordered Wife to immediately list the home for sale. It also granted Husband attorney’s fees and denied Wife her request for fees. After the family court denied her motion for reconsideration, Wife appealed.

The Court of Appeals reversed the family court’s grant of Rule 60(b)(5) relief. Citing S.C. Code § 20-3-620(C), the court based the decision on a finding that the family court lacked subject matter jurisdiction to modify a final order of equitable distribution. The court noted that Rule 60(b)(5) was already in effect when it decided Hayes v. Hayes, 312 S.C. 141, 439 S.E.2d 305 (Ct. App. 1993) and that Hayes held that “[a] family court order can be modified only when jurisdiction was specifically reserved in the decree or if allowed by statute.” It interpreted Hayes’ holding as meaning that “[d]espite the existence of Rule 60(b)(5), this court indicated ‘[t]here is no statutory authority for modifying an order of equitable distribution.’”

Notwithstanding this holding that Rule 60(b)(5) cannot be used to modify an equitable distribution order, the opinion then discusses circumstances in which the appellate courts have allowed a Rule 60 motion to modify a final order of equitable distribution–specifically when there are clerical errors to be corrected or exceptional circumstances to warrant modification of the property agreement. The Court of Appeals noted that no clerical errors were alleged in Thompson and distinguished the few cases in which the appellate courts have found “exceptional circumstances” before determining that those circumstances did not exist in this case.

Because the Court of Appeals reversed the granting of Rule 60(b)(5) relief, it also reversed the award of attorney’s fees to Husband and remanded the matter of attorney’s fees for reconsideration by the family court.

I was Wife’s attorney both at the family court matter and on appeal (although not for the divorce). As the opinion notes, Wife did not specifically contest the family court’s subject matter jurisdiction to modify the Final Order. I am unclear how much the determination that the family court lacked subject matter jurisdiction rested upon the language in the parties’ agreement that purports to divest the family court of jurisdiction to modify their agreement. I am further unclear how much the Court of Appeals’ reversal is based upon a finding of a lack of subject matter jurisdiction, as opposed to a finding that no “exceptional circumstances” existed.

There is certainly a reading of Thompson that having language in separation agreements divesting the family court of jurisdiction to modify the agreement might be binding on matters of equitable distribution (and potentially alimony). This boilerplate language might be more powerful than I would have believed prior to this opinion.

Put Mr. Forman’s experience, knowledge, and dedication to your service for any of your South Carolina family law needs.

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