This is a divorce proceeding filed by the appellant-wife. In her complaint, she has requested, among other things, an equitable division of the appreciation during the parties’ marriage in the value of stock in a closely held corporation titled in the husband and received by him by gift and inheritance for the most part prior to the parties’ marriage. The superior court granted a motion for partial summary judgment filed by the appellee-husband, ruling that such stock appreciation is not subject to the wife’s equitable property-division claim. We granted her application for discretionary appeal. For reasons which follow, we affirm.
In addition to what has been stated in the preceding paragraph, the facts, as established by the evidence, are these: The parties were married in 1977, and there are no children of the marriage. The divorce complaint was filed by the appellant in 1985. In 1979, the appellee began working for Halpern Enterprises, Inc. (HEI), a real estate development corporation incorporated by the appellee’s father in 1972. HEI owns and manages certain shopping centers. The stock in this corporation is owned by the appellee, his sister, his mother, and his three brothers. All of these family members are officers of the cor *640 poration and all of them are corporate employees. The appellee owns somewhat less than 8 % of the common stock of the corporation and 4.8% of the voting stock. His responsibilities as a corporate employee are for repair and maintenance of corporate property. For this, he has received an income in excess of $100,000 per year. No dividends have been paid on the stock. At no time during the parties’ marriage has the appellee loaned the corporation any money or made any capital contributions to the corporation. The appellant has contributed no capital or services to the corporation, except that she was employed by the corporation in a single business transaction for which a company owned by her was paid. During the parties’ marriage, they have accumulated substantial marital property including a home, furnishings, two limited partnerships, and the appellant’s business.
In its order granting the appellee’s motion for partial summary judgment, the superior court ruled that the undisputed facts in this case show that the income received by the appellee for his services to the corporation constituted a reasonable income as compensation for such services. The court further ruled there was no evidence that appellee contributed to the appreciation in the value of HEI stock. The court concluded that any appreciation in the corporate stock during the parties’ marriage is not marital property. Held:
In
Stokes v. Stokes,
However, this is the first occasion we have had to address the question of whether the appreciation during the parties’ marriage in the value of property acquired by one spouse by gift or inheritance prior to or during the marriage is subject to equitable division. As to this question, we find to be persuasive the reasoning of the New York appellate court.
Where appreciation in the husband’s family business, managed by him before and during the marriage, was attributable to outside market forces, the appreciation was held not subject to equitable distribution.
Jolis v. Jolis,
We hold that the trial court did not err in granting the appellee’s motion for partial summary judgment, in that there is no evidence that any appreciation in the value of the corporate stock was caused by efforts of the appellee. It is not, therefore, a marital asset subject to equitable distribution.
Judgment affirmed.