Lead Opinion
In the judgment of divorce, the trial court divided the substantial marital estate, awarding $741,608 to plaintiff Ricky L. Gates and $395,775 to defendant. To equalize the award, the trial court ordered plaintiff to pay defendant $175,000, reducing plaintiffs award to $566,608, and increasing plaintiffs award to $570,775. The trial court also awarded defendant $200 a week in rehabilitative spousal support for a five-year period, as well as $5,500 in attorney fees.
Defendant first challenges the trial court’s valuation of the marital property. In reviewing a trial court’s property division in a divorce case, we must first review the trial court’s findings of fact. Draggoo v Draggoo,
The goal in distributing marital assets in a divorce proceeding is to reach an equitable distribution of property in light of all the circumstances. McNamara v Horner,
Defendant argues that the trial court’s valuation of certain assets was clearly erroneous and that the trial court’s dispositional ruling was inequitable. Defendant first argues that the trial court’s failure to consider her financial position in awarding the martial home to her was error. However, defendant’s contention is refuted by the trial court’s findings of fact on the record.
In awarding the marital home to defendant, the trial court stated:
Regarding the Fairfield Drive home, I have established as best I can a value of $44,000, and I’m going to award the same to the defendant. I came up with that number based upon both the appraisals that have been done of the property together with the potential sale that was available a year ago. I will address later in my decision some of the repairs that need to be done on themarital home to either allow the plaintiff [sic] and the boys at the present time to remain there or for her to sell it if she chooses to do so.
Our Supreme Court has held that the following factors are to be considered in the division of property, whenever relevant to the circumstances of 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, supra at 159-160.]
Our Supreme Court noted, however, that:
It is not desirable, or feasible, for us to establish a rigid framework for applying the relevant factors. The trial court is given broad discretion in fashioning its rulings and there can be no strict mathematical formulations. But, as we have recognized before, while the division need not be equal, it must be equitable. Just as the final division may not be equal, the factors to be considered will not always be equal. Indeed, there will be many cases where some, or even most, of the factors will be irrelevant. But where any of the factors delineated in this opinion are relevant to the value of the property or to the needs of the parties, the trial court shall make specific findings of fact regarding those factors. It is hoped that this requirement will result in greater consistency and provide for more effective and meaningful appellate review. [Id. at 158-159 (citations omitted).]
Contrary to defendant’s assertion, a review of the record indicates that the trial court considered the life status, earning abilities, and general principles of equity when dividing the marital property, and equitably distributed the property based on those considerations. In its opinion, the trial court noted the difficulty it had in equitably dividing the property: “Finding a way for Mr. Gates to stay in business and to continuing [sic] to generate the sort of income that has supported so well the parties and their children, while giving to Mrs. Gates a fair and certain portion of the estate, already is remarkably difficult.”
The trial court also found plaintiff at fault in the ultimate breakdown of the marriage, but declined to award defendant’s requested sixty percent of the marital estate. As an alternative, the trial court used defendant’s requested values where appropriate; required plaintiff to continue making the lease payments on defendant’s vehicle; and, to account for the monies spent by plaintiff on his girlfriend, made an adjustment in the amount plaintiff was required to pay defendant to equalize the property division.
As our Supreme Court noted in Sparks, supra at 162, “[t]he most effective appellate review obviously would result from more thorough fact finding . . . .” However, in the instant case, the trial court articulated its findings regarding four of the relevant factors, and equitably distributed the marital property in light of all of the circumstances of the case. The trial court’s findings of fact are not clearly erroneous, and we affirm its equitable distribution of the marital property.
Defendant next argues that the trial court erred in adjusting the value of Gates Ireland, Inc., because of postvaluation events, in contradiction of the parties’ stipulated value. Defendant further argues that the trial court erred in refusing to adjust the value and valuation date of stock and the Bay Harbor yacht and golf memberships. The parties stipulated that the value of Gates Ireland, Inc., was
By the time of trial, Acorn Window Systems had filed for bankruptcy, and plaintiff was uncertain whether Gates Ireland, Inc., would be able to collect the $366,000 debt. Plaintiff’s one-half interest in the $366,000 debt was $183,000. Plaintiff asked the court to adjust the stipulated $313,500 value of Gates Ireland, Inc., by the $183,000 owed by Acorn, with the proviso that he and defendant would equally share any amount collected from Acorn. The trial court granted plaintiff’s request and valued Gates Ireland, Inc., at $130,500 and awarded each party one half of the one-half share of the debt currently owed Gates Ireland, Inc., by Acorn.
Defendant argues that the trial court erred in adjusting the value of Gates Ireland, Inc., because of postvaluation events (Acorn’s bankruptcy), in contradiction of the parties’ stipulated value. This Court has held that “[s]tipulations of fact are binding, but stipulations of law are not binding.” Staff v Johnson,
Defendant also argues that the trial court erred in refusing to permit her to adjust the value and valuation dates of stock and the Bay Harbor yacht and golf memberships. We cannot discern to which “stock” defendant is referring; therefore, we will only discuss the yacht and golf memberships. Essentially, defendant argues that because the trial court adjusted the value of Gates Ireland, Inc., as requested by plaintiff, it should also adjust the valuations of other items, as requested by her. Defendant did not request a change in valuation dates or amounts at trial. The trial court declined to adjust the valuations of the yacht and golf memberships in its July 3, 2001, opinion and order. It is well settled that decisions regarding the time of valuation of property in a divorce action are matters within the discretion of the trial court. Burkey v Burkey (On Rehearing),
Defendant next argues that the trial court erred in awarding plaintiff the 77 Maple Lane residence at a value of zero. The parties stipulated that the value of the 77 Maple Lane property was “$0 or $58,559.” At trial, plaintiff testified that the 77 Maple Lane property was titled in the parties’ names, but that his brother, Toby Gates, and sister-in-law, Vicky Gates, five there. Plaintiff explained that his brother was unable to obtain financing for the house because he had filed for bankruptcy, so the parties financed the house in their names, with his brother providing the down payment and making all mortgage payments on the house.
In its oral opinion, the trial court stated:
The Court is going to determine that the property located at 77 Maple Lane was to some extent being held in trust by the parties here for Mr. Gates’ brother Toby and his wife Vicky- I willaward the property to the plaintiff but have attached no value to it as it would appear from the testimony the Court has heard, that all of the value in that property has been achieved through the payments of Toby and Vicky Gates.
Defendant argues that the trial court erred because it violated the statute of frauds, MCL 566.106, which precludes the creation of any interest in real property except by an appropriate written document, and that the trial court essentially awarded the property to a third party, which it had no authority to do. In the case defendant cites, Smela v Smela,
Defendant next argues that the trial court erred in awarding the New Century joint bank account to her at a value of $3,000. Throughout the pendency of the proceedings, both parties and their attorneys were confused about the value of the bank account. At the posttrial evidentiary hearings, the parties attempted to address the bank account, but further confused the issue. The trial court declined to adjust the award of the $3,000 joint bank account to defendant in its July 3, 2001, opinion and order, stating “[defendant was awarded $3,000 for this account. The Court now is persuaded that the actual balance at the time of trial, as [p]laintiff testified, was a negative $11,000, which [plaintiff subsequently reduced to $0. No adjustment will be made.” In light of the confusion surrounding the value of the joint bank account, the trial court’s valuation was not clearly erroneous. Moreover, the $3,000 joint bank account made up only 0.3% of the $1,137,383 total marital estate, and did not render the trial court’s dispositional ruling inequitable.
Defendant next argues that the trial court erred in awarding the parties’ furniture to her at a value unsupported by the record, and without consideration that the furniture was a not an income-producing asset. Plaintiff testified that the furniture in the martial home was appraised at a value of $34,275, but indicated that several items, totaling approximately $6,000, had not been included in the appraisal. Defendant accepted the values on the appraisal, with the exception of the dryer, refrigerator, and treadmill. The trial court determined “that the furnishings with the defendant, primarily in the marital home, are worth $40,000.”
Plaintiff testified that $50,000 was spent on furniture for the Bay Harbor condominium and that the value of the parties’ half-interest in the furniture was $25,000 or $25,500. Plaintiff testified that the majority of the furniture was delivered after July 1, 1999. Therefore, the furniture was less than a year old at the time of trial. Defendant testified that she and Arlene Ireland purchased the furniture for the condominium for $24,280.25 and that, therefore, the parties’ one-half interest in the furniture was $12,250. The trial court found that “[t]he furnishings in the condo, or one-half of the value of those, the Court
Defendant argues that the trial court erred in failing to consider the fact that the furniture awarded to her was not income-producing. However, nothing in the record indicates that the trial court did not consider the fact that the furniture awarded to defendant was not income-producing. The judgment of divorce awarded defendant $570,775, some of which included income-producing assets. Therefore, the trial court’s award of furniture to defendant was fair and equitable in light of the facts of the case.
Defendant next argues that when the trial court awarded her the marital home, the Bay Harbor golf membership, and the Wildwinds property, it erred in failing to require plaintiff to pay all debt past due on these properties consistent with the temporary order entered by the trial court before the judgment of divorce. In its July 3, 2001, opinion and order, the trial court stated:
On June 2, 2000 [p]laintiff was ordered, at his cost[,] to have certain repairs made or maintenance performed at the former marital home awarded to [defendant or she could have such services performed and the reasonable amounts incurred would be added to the money judgment. This Court determines that [p]laintiff either completed the required work or took the necessary and reasonable steps to do so. To the extent necessary to negotiate a check which recently was revealed as having been sent to settle an insurance claim for some of the work or consequential damages, [p]laintiff shall sign and relinquish all claims to the check.
The trial court’s determination that “plaintiff either completed the required work or took the necessary and reasonable steps to do so” is supported by the record, and is not clearly erroneous.
Defendant next argues that the trial court erred in failing to order plaintiff to pay $26,067 due on the Bay Harbor golf membership, comprised of approximately $22,500 in principal and interest payments, and $3,590 in club dues, due before June 2, 2000. After a review of the entire record, it cannot be said that the trial court’s determination that plaintiff is not responsible for the amount owing on the golf membership is clearly erroneous. The trial court recognized how the parties came to agree on the stipulated value of the golf membership and did not believe that an adjustment was necessary.
Defendant next argues that the trial court erred in failing to order plaintiff to pay $28,537 due on the Wildwinds lot owned with Mr. Spangler. After a review of the entire record, it cannot be said that the trial court’s determination that plaintiff is not responsible for the amount owing on the 4660 Wildwinds property is clearly erroneous. The trial court recognized defendant’s ten percent ownership interest and referenced defendant’s testimony that she requested the property and could “get along” with Spangler. The trial court did not err in determining that any expenses associated with the property are defendant’s responsibility.
After a review of the entire record, it is clear that the trial court’s valuation of particular marital assets was not clearly
Defendant next argues that the trial court erred by awarding her only rehabilitative spousal support in the amount of $200 a week for five years. Whether to award spousal support is in the trial court’s discretion, and we review the trial court’s award for an abuse of discretion. Korth v Korth,
Defendant first argues, on the basis of this Court’s decision in Staple v Staple,
Thus, under both Staple, supra, and MCL 552.28, because the spousal-support provision of the divorce judgment resulted from the trial court’s disposition rather than agreement of the parties, the judgment may not be interpreted to preclude defendant from seeking to continue spousal support, or, in other words, modify the spousal support award, at the end of the five-year rehabilitative period established by the trial court. Additionally, the precise language of the divorce judgment does not specify that spousal support will forever cease at the end of five years,
Defendant next claims that even if the trial court’s award of rehabilitative spousal support is modifiable, the five-year limitation on the award inappropriately shifts from plaintiff to defendant the burden of proving whether spousal support should continue beyond the five-year period. We disagree. The modification of an award of spousal support must be based on new facts or changed circumstances arising after the judgment of divorce. Moore, supra at 654. The party moving for modification has the burden of showing such new facts or changed circumstances. Ackerman v Ackerman,
Nothing in MCL 552.28 supports defendant’s contention that there is a statutory burden of proof imposed that, in effect, requires the trial court to make a permanent spousal-support award that cannot be modified unless the payer establishes the basis for modification. Defendant also cites no case law to support this claim. Accordingly, we reaffirm the principle that either party may seek a modification of an award of spousal support at any time, and that the party seeking the modification, whether upward or downward, bears the burden of proving the justification for the modified award. See Ackerman, supra at 302. Applying this principle to the instant case, we conclude that at the end of the five-year rehabilitative period, defendant may request that the trial court modify the spousal-support award to an amount justified by facts and circumstances that exist at the time of the request, but that were not, and could not have been, before the trial court at the time the original judgment was entered.
Defendant next argues that the amount of rehabilitative spousal support awarded by the trial court, $200 a week for five years, was not based on the required factors, and therefore is inequitable. The plain language of MCL 552.13 permits a trial court to award spousal support that it determines to be “just and reasonable.” Factors to be considered by the trial court in determining whether an award of spousal support is just and reasonable include:
(1) the past relations and conduct of the parties, (2) the length of the marriage, (3) the abilities of the parties to work, (4) the source and amount of property awarded to the parties, (5) the parties’ ages, (6) the abilities of the parties to pay alimony, (7) the present situation of the parties, (8) the needs of the parties, (9) the health of the parties, (10) the prior standard of living of the parties and whether either is responsible for the support of others, (11) contributions of the parties to the joint estate, and (12) general principles of equity. [Thames v Thames,191 Mich App 299 , 308;477 NW2d 496 (1991).]
The trial court’s June 2, 2000, opinion reflects that it considered all the relevant factors when it made its determination regarding the amount and duration of spousal support. Further, the trial court’s findings of fact are supported in the record and, therefore, are not clearly erroneous. Id.
However, the trial court’s dispositional ruling, awarding defendant rehabilitative spousal support in the amount of $200 a week for a period of five years, cannot be considered just and reasonable in light of the facts of the case. It is well settled that spousal support is intended “to balance the incomes and needs of the parties” so that neither party will be impoverished as a result of the divorce. Korth, supra at 289, citing Moore, supra at 654. “[Wjhere
While divorce proceedings were pending, the trial court awarded defendant $200 a week in interim spousal support and also ordered plaintiff to make payments of $7,355 a month to reduce the debt on the parties’ real property and bank notes. The judgment of divorce awarded plaintiff marital property and assets valued at $566,608, and awarded defendant marital property and assets with a value of $570,775. Plaintiff was not required by the judgment of divorce, however, to continue debt-reduction payments on properties awarded to defendant, despite the evidence that plaintiff’s gross annual income was at least three times that of defendant’s gross income, and that three of the properties awarded to defendant required monthly debt-reduction payments totaling $6,400. Furthermore, while the properties awarded to defendant have income-earning potential, the income produced by these properties is insufficient to offset the monthly debt obligations of the awarded properties.
We conclude from these facts that the $200 a week award of spousal support was unreasonable, and that in fashioning its spousal support award, the trial court placed inordinate weight on the value of property awarded to defendant, and insufficient weight on the disparate incomes of the parties and the fact that the income-earning potential of the assets awarded to defendant was insufficient to offset this disparity. As in Hanaway, we find that “]g]iven the length of the marriage, the magnitude of the marital estate, and [plaintiff’s] capital position and earning potential after the divorce, [defendant] should not be expected to consume her capital to support herself.” Id.
The trial court’s award of rehabilitative spousal support for a period of five years was modifiable and within its discretion, in accordance with MCL 522.28. However, the trial court’s dispositional ruling awarding defendant spousal support of $200 a week during the five-year rehabilitative period is inequitable in light of the facts of the case. We remand for a determination of an increased amount of spousal support.
Defendant next argues that the trial court erred in awarding only $5,500 of the $70,900 in attorney and appraisal fees she requested. We review a trial court’s decision to award attorney fees for an abuse of discretion. Stoudemire v Stoudemire,
We conclude that, considering the judgment as a whole, the trial court’s award of only $5,500 in attorney fees out of the $70,900 in fees and costs requested by defendant was an abuse of discretion and that remand is appropriate. Attorney fees in a divorce action are awarded only as necessary to enable a party to prosecute or defend a suit. Stoudemire, supra at 344. It is well settled that a
As we noted above, the amount of spousal support awarded to defendant by the trial court is inadequate. It is also apparent from the record that even accounting for the spousal support award of $200 a week, defendant’s income is insufficient to satisfy her considerable debt of attorney fees and costs, and that she would be required to invade the assets awarded her in the judgment of divorce in order to pay those fees.
Because plaintiff enjoyed a comparatively substantial income advantage following the judgment of divorce, we conclude that the trial court erred by making an award of attorney fees that requires defendant to invade her assets. On remand, the trial court’s award of attorney fees should reflect the extent to which its award of spousal support leaves the parties with assets and income comparable to one another. Ackerman, supra at 302; Hanaway, supra at 299.
Defendant also argues that we should remand this case for a determination of her appellate fees and costs to be paid by plaintiff, or order a specific amount of appellate attorney fees. Wiley v Wiley,
Defendant next argues that the trial judge should be disqualified. When reviewing a motion to disqualify a judge, we review the trial court’s findings of fact for an abuse of discretion; however, the applicability of the facts to relevant law is reviewed de novo. Armstrong v Ypsilanti Twp,
Disqualification of the trial judge is not warranted. Our Supreme Court has held that “[i]n order for disqualification pursuant to MCR 2.003(B)(1) to be proper, the judge must have shown actual bias against a party or a party’s attorney.” Cain, supra at 512 (emphasis deleted). In addition, “ ‘[a]s a general rule, a trial judge is not disqualified absent a showing of actual bias or prejudice.’ ” Armstrong, supra at 597, quoting People v Houston,
In the instant case, defendant appears to argue that the record demonstrates actual bias by the trial court because the trial court declined to disqualify itself as requested by defendant’s motion to disqualify, and later held the defendant in contempt for failure to comply with an order of the court. We disagree. “[JJudicial rulings, in and of themselves, almost never constitute a valid basis for a motion alleging bias, unless the judicial opinion displays a ‘ “deep-seated favoritism or antagonism that would make fair judgment impossible” ’ and overcomes a heavy presumption
Defendant also contends that because plaintiff’s firm, Gates Ireland, Inc., had been awarded a contract to renovate the Branch County Courthouse, an “appearance of impropriety” exists, warranting the trial court’s disqualification. Our Supreme Court has acknowledged that “there may be situations in which the appearance of impropriety on the part of a judge ... is so strong as to rise to the level of a due process violation,” Cain, supra at 512-513 n 48, and that a showing of actual bias is not necessary where “ ‘experience teaches that the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable.’ ” Crampton v Dep’t of State,
where the judge or decisionmaker
(1) has a pecuniary interest in the outcome;
(2) “has been the target of personal abuse or criticism from the party before him”;
(3) is “enmeshed in [other] matters involving petitioner . . .”; or
(4) might have prejudged the case because of prior participation as an accuser, investigator, fact finder or initial decisionmaker. [Crampton, supra at 351, quoting Withrow, supra at 47 n 15 and Johnson v Mississippi,403 US 212 , 215;91 S Ct 1778 ;29 L Ed 2d 423 (1971).]
None of the four exceptions to the actual-bias requirement is present in the instant case, and, accordingly, there is no appearance of impropriety warranting reversal of the trial court’s order denying defendant’s motion to disqualify.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Notes
The judgment does provide that the award of “rehabilitative support shall cease upon the remarriage of the defendant or the defendant’s death.” (Emphasis added.) Termination of spousal support on remarriage is, of course, expressly permitted by MCL 552.13, and defendant has not challenged this provision. Additionally, defendant has not claimed that the trial court’s order that spousal support would terminate upon her death is contrary to the trial court’s equitable authority under MCL 552.23 or that this provision renders the award of spousal support nonmodifiable contrary to the requirements of MCL 552.28.
Concurrence Opinion
(concurring in part and dissenting in part). I respectfully dissent from that portion of the majority’s decision that would reverse the trial court on the issues of alimony and attorney fees. As the majority acknowledged, we review the alimony award to determine if it is fair and equitable in light of the facts of the case and we should not reverse unless we are left with a firm conviction that the award is inequitable. See Sparks v Sparks,
As for the award of attorney fees, we review the trial court’s decision for an abuse of discretion. Kosch v Kosch,
For the above reasons, I would affirm the trial court on all issues.