James B. Yelverton v. Rhonda H. Yelverton ( 2004 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2004-CT-01684-SCT
JAMES B. YELVERTON
v.
RHONDA H. YELVERTON
ON WRIT OF CERTIORARI
DATE OF JUDGMENT: 04/29/2004
TRIAL JUDGE: HON. CARTER O. BISE
COURT FROM WHICH APPEALED: HARRISON COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT: MICHAEL J. MALOUF
MELISSA A. MALOUF
ATTORNEY FOR APPELLEE: DAMON SCOTT GIBSON
NATURE OF THE CASE: CIVIL - DOMESTIC RELATIONS
DISPOSITION: THE JUDGMENT OF THE COURT OF
APPEALS IS REVERSED AND THIS CASE IS
REMANDED TO THE CHANCERY COURT
FOR THE FIRST JUDICIAL DISTRICT OF
HARRISON COUNTY FOR FURTHER
PROCEEDINGS CONSISTENT WITH THIS
OPINION - 07/26/2007
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
CARLSON, JUSTICE, FOR THE COURT:
¶1. The Chancery Court for the First Judicial District of Harrison County entered a final
judgment granting Rhonda H. Yelverton (Rhonda) a divorce from James B. Yelverton 1 and
1
James B. Yelverton is also referred to in the record as Jim and Jimmy, but for
consistency we will refer to him as James.
ordering James to pay Rhonda lump sum alimony in the amount of $250,000 (with minimum
monthly payments of $5,000); child support in the amount of $2,500 per month; periodic
alimony in the amount of $2,500 per month; twenty-five percent of James’s annual adjusted
gross income above $150,000; and $10,000 in attorney’s fees. James appealed to us,
assigning five issues, and Rhonda cross-appealed, assigning one issue. We assigned this case
to the Court of Appeals, which affirmed the chancery court’s judgment in toto on both direct
appeal and cross-appeal. We granted James’s petition for writ of certiorari, and upon careful
consideration of the record and the applicable law, we find that the judgment of the Court of
Appeals must be reversed and this case remanded to the trial court for further proceedings
consistent with this opinion.
FACTS AND PROCEEDINGS IN THE TRIAL COURT
¶2. The Court of Appeals meticulously set out the relevant facts of this case, which we
thus present here verbatim:
James and Rhonda were married on September 7, 1988, and have three
children. At the time of the filing of the divorce in February of 2002, Jason
was nineteen,[2 ] Blake was eleven and Elizabeth was ten. The Yelvertons
lived in Hattiesburg, Mississippi[,] and Lafayette, Louisiana, prior to moving
to Gulfport, Mississippi[,] in 1992. James was a car salesman, and Rhonda
was a registered nurse. James took a job as the manager of Turan Foley
Mitsubishi, which he and Rhonda later purchased in 1996 for $488,000. Turan
Foley Mitsibushi then became Jim Yelverton Imports. In 2001, James sold
fifty-two percent of the business to Ed Wettach for $654,825.93. The two
executed a memorandum of agreement, that was introduced into evidence, and
explained that James retained forty-eight percent of the business and his silent
2
Jason is Rhonda’s child by a previous marriage, but after James’s marriage to
Rhonda, James adopted Jason.
2
partner, Wettach, held the remaining fifty-two percent. This sale became
complete in January 2001.
Since the time Elizabeth was born in January of 1992, Rhonda did not work.
She began working as a nurse part-time in April of 2002. In December 2002,
James and Rhonda purchased a residence referred to as the Magnolia property
as an investment. James and Rhonda separated on January 25, 2002, and
Rhonda filed for divorce on February 18, 2002, on the ground of habitual cruel
and inhuman treatment.[3 ] After the separation, James resided at the Magnolia
property, and Rhonda resided in the marital home with the children. On March
13, 2003, the chancellor entered a temporary order awarding the parties joint
legal custody of the children and Rhonda having sole physical custody and
James having visitation. The chancellor further ordered James to pay child
support in the amount of $4,000 per month and temporary alimony. Rhonda
was awarded use of the marital home and was responsible for the house note.
At the time, the chancellor appointed James Koerber to assess the worth of Jim
Yelverton Imports.
After the entry of this temporary order, James filed a motion for modification
listing debts which he had not previously mentioned. However, James violated
the temporary order, because he failed to pay both the court ordered child
support and alimony. Rhonda filed complaints for contempt against James for
his failure to pay both child support and alimony. A hearing was held on the
contempt matters on October 15, 2003. At that hearing, evidence was shown
that James had only paid Rhonda $11,286.90, when he had owed her over
$50,000 in child support and alimony. The chancellor reserved the contempt
issue for trial.
The trial took place on November 17, 2003, and January 20, 21, 23, and 26,
2004, in the Chancery Court of the First Judicial District of Harrison County.
Both James and Rhonda Yelverton testified along with other witnesses,
including James Koerber, who was appointed by the court to evaluate the
worth of Jim Yelverton Imports, and Ed Wettach, James’s silent partner.
Koerber reviewed the business documents of Jim Yelverton Imports and
3
After filing for divorce in February of 2002, Rhonda and James decided to reconcile.
During the reconciliation, the couple decided to purchase the Magnolia Property in
December 2002. Subsequent to purchasing the Magnolia Property, Rhonda followed
through with the complaint for divorce and in April 2004, a divorce was granted in favor of
Rhonda on the grounds of habitual cruel and inhuman treatment.
3
rendered his opinion that James’[s] forty[-eight] percent interest was worth
$490,974 after appropriate discounts. James along with the company
accountant, Ed Joe, argued that James and Wettach orally agreed that should
the stock of the corporation be sold, Wettach would receive $612,288 (his
investment in the company) first and then the two would split the remaining
proceeds. Koerber dismissed this agreement since there was no documentation
created when this transaction occurred in January of 2001, and it was not until
August 2003, after the divorce complaint was filed, that this agreement was
put into writing. The parties then agreed that the determination of the value
of James’s forty eight percent of the company should be left to the court.
The parties’ joint tax returns were admitted into evidence to prove the couple’s
income. In 2001[,] the parties[’] total income was $436,742 and in 2002 their
income was $873,408 even though Rhonda only began working again part-
time in August 2002. After reviewing these tax returns and hearing testimony
regarding the loan issue stated above from Wettach to Jim Yelverton Imports,
the chancellor found the value of James’s forty-eight percent to be $490,974.
The chancellor rendered his findings of fact and conclusion of law on April 13,
2004, and entered his judgment on April 29, 2004. The court granted Rhonda
a divorce on the grounds of cruel and inhuman treatment, awarded Rhonda
primary custody and control of the minor children, and awarded James
visitation after he and the children successfully completed counseling. The
court also ordered James to pay child support in the amount of $2,500 per
month and to provide medical and dental insurance for the minor children and
for the parties to divide non-covered expenses. James was also ordered to pay
college expenses for all three children. The court ordered the marital home
and the Magnolia property to be sold and the proceeds divided after paying off
the mortgage and loans.
The court awarded James ownership of Jim Yelverton Imports, but he was
ordered to pay Rhonda $250,000 in lump sum alimony to be paid in minimum
installments of $5,000 per month. The parties were ordered to each be
responsible for their own personal debt, and Rhonda was awarded $2,500 per
month in periodic alimony along with twenty-five percent of James’[s] income
over and above the annual adjusted amount of $150,000. Rhonda was also
awarded the automobile that she was driving.
The court found James in contempt for his failure to pay ordered child support
and spousal support and awarded Rhonda a judgment in the amount of
$40,771.83, which was to be paid within sixty days. Lastly, James was
4
ordered to pay Rhonda’s attorney’s fees in the amount of $10,000 and court
costs.
James filed a motion to reconsider on May 10, 2004. Rhonda filed another
contempt action on June 3, 2004. On July 1, 2004, the court heard both the
motion to reconsider and the contempt action. The chancellor amended his
judgment to require $25,000, which was represented by a deed of trust
between James and Jim Yelverton Imports to be paid to Jim Yelverton Imports
out of the sale of the Magnolia property before the parties split the equity.
Regarding the contempt action, James had only paid Rhonda $4,526.22
between April 1, 2004, and June 30, 2004. The court had ordered James to pay
$40,771.83 in arrearage, monthly amounts of $2,500 in child support, $2,500
in periodic alimony and $5,000 in lump sum alimony. He was to pay this
within sixty days of the judgment. Evidence also showed that James received
funds in the amount of $158,202.13 during this time period.
At this hearing, James testified that he had numerous credit card debts, a new
wife and baby to care for. However, evidence was presented that showed
while Rhoda and the two minor children had sold the marital home and moved
into an apartment as ordered by the court, James had gotten remarried,
purchased a Mercedes for his new wife and they were living at the Magnolia
property previously ordered to be sold by the chancellor. Therefore, the court
found James in wilful contumacious contempt.[4]
Yelverton v. Yelverton, 2006 Miss. App. LEXIS 613, **2-8, ¶¶ 4-13.
PROCEEDINGS BEFORE THE COURT OF APPEALS
¶3. On direct appeal, James argued that the chancellor erred in awarding Rhonda (1) lump
sum alimony in the amount of $250,000 (with a minimum payment of $5,000 per month);
(2) $2,500 in monthly child support; (3) $2,500 in monthly periodic alimony; (4) an
additional twenty-five percent of James’s income over $150,000; and (5) $10,000 in
attorney’s fees. Additionally, Rhonda cross-appealed alleging that, on the motion to
4
The contempt issue is not before this Court on appeal; thus, we will not address this
issue.
5
reconsider filed by James, the chancellor erred in directing that the proceeds of the sale of
the Magnolia Place property be applied to a $25,000 deed of trust to Jim Yelverton Imports.
¶4. The Court of Appeals affirmed the trial court on all issues. Today, we reverse the
judgment of the Court of Appeals, and remand this case to the trial court for further
proceedings consistent with this opinion.
DISCUSSION
¶5. In his petition for writ of certiorari, James asks us to consider whether the Court of
Appeals erred in (1) failing to reverse the chancellor’s judgment which ordered James to pay
Rhonda a monthly amount which exceeded his net monthly income; (2) failing to reverse the
chancellor due to his failure to make the required findings for the lump sum alimony award,
and in applying an erroneous legal standard; (3) failing to reverse the chancellor for his
failure to make the required findings to support the child support award; and (4) failing to
reverse the chancellor for factual findings which were manifestly in error as to the valuation
of Jim Yelverton Imports. Keeping in mind that pursuant to M.R.A.P. 17(h), we can “limit
the question on review” upon a grant of certiorari, we will restate these issues for clarity in
discussion.
¶6. When this Court reviews a chancellor’s decision in a case involving divorce and all
related issues, our scope of review is limited by the substantial evidence/manifest error rule.
R.K. v. J.K., 946 So. 2d 764, 772 (Miss. 2007) (citing Mizell v. Mizell, 708 So. 2d 55, 59
(Miss. 1998)). Therefore, we will “not disturb the findings of a chancellor unless the
chancellor was manifestly wrong, clearly erroneous or a clearly erroneous standard was
6
applied.” Id. Our case law in the area of divorce, child custody and support, alimony, and
division of property has evolved over the last three decades. See Albright v. Albright, 437
So. 2d 1003, 1005 (Miss. 1983) (factors to be considered in child custody cases); Cheatham
v. Cheatham, 537 So. 2d 435, 438 (Miss. 1988) (factors to be considered in lump sum
alimony cases); Hammonds v. Hammonds, 597 So. 2d 653, 655 (Miss. 1992) (factors to be
considered in periodic alimony cases); Armstrong v. Armstrong, 618 So. 2d 1278, 1281-82
(Miss. 1993) ( discussion of various awards incident to divorce – periodic alimony; lump sum
alimony; division of jointly accumulated property; and, award of equitable interest in
property); Ferguson v. Ferguson, 639 So. 2d 921, 928 (Miss. 1994) (factors to be considered
in equitable division of marital property); Hemsley v. Hemsley, 639 So. 909, 915 (Miss.
1994) (definition of marital property to aid chancellor in applying Ferguson factors);
Pearson v. Pearson, 761 So. 2d 157, 165-66 (Miss. 2000) (application of the Hammonds
factors with minor revised language, cited by the parties in today’s case); Lauro v. Lauro,
847 So. 2d 843, 846-50 (Miss. 2003) (discussion on application of Hemsley factors in
determining marital or non-marital assets, application of Ferguson factors in equitably
distributing marital assets, and application of Armstrong-Hammonds factors in determining
if an award of alimony is necessary so as to avoid one spouse suffering a deficit distribution);
Haney v. Haney, 907 So. 2d 948 (Miss. 2005) ( “Cheatham factors are really nothing more
than an earlier version of the Ferguson factors, and both are used for the same purpose.” Id.
at 954, see also, Id. at 955, ¶26). Likewise, since the legislative creation of the Court of
7
Appeals, effective 1994, that court also has issued numerous opinions on these subjects,
some of which will be hereinafter discussed.
I. WHETHER THE CHANCELLOR ERRED IN
AWARDING RHONDA LUMP-SUM ALIMONY IN THE
AMOUNT OF $250,000.
¶7. James asserts that the chancellor failed to apply the Cheatham factors with regard to
lump sum alimony. Cheatham v. Cheatham, 537 So. 2d 435, 438 (Miss. 1988). James
opines that Haney v. Haney, 788 So. 2d 862 (Miss. Ct. App. 2001) (Haney I)5 and Miller
v. Miller, 874 So. 2d 469 (Miss. App. 2004) now make it mandatory for a chancellor to make
specific findings of fact and conclusions of law regarding the Cheatham factors when
awarding lump sum alimony. James argues that had the chancellor applied such factors,
5
Haney I involved an appeal to the Court of Appeals as to the distinction between
equitable distribution of property and lump sum alimony. Haney I, 788 So. 2d at 865. The
trial court had applied the Ferguson factors to the Haney estate to determine each spouse’s
equal share, but classified the $104,974.77 award to Mrs. Haney as lump sum alimony. Id.
Thus, the Court of Appeals reversed and remanded to the trial court instructing the trial court
to apply the Cheatham factors instead of the Ferguson factors because the Cheatham
factors dealt explicitly with lump sum alimony. Id. After attempting to apply the Cheatham
factors, the trial court again awarded the sum of $104,974.77 to Mrs. Haney. Haney v.
Haney, 881 So. 2d 862 (Miss. Ct. App. 2003) (Haney II). Once more, the award was
appealed to the Court of Appeals in Haney II. Id. The Court of Appeals held that the
chancellor “failed to illustrate, analyze or explain how each Cheatham factor affected his
consideration and supported the award of lump sum alimony.” Haney II, 881 So. 2d at 866.
Thus, the Court of Appeals reversed and remanded back to the trial court. Id. at 867. Based
on the decision in Haney II, Mr. Haney petitioned for writ of certiorari, which was granted
by us. Haney v. Haney, 907 So. 2d 948 (Miss. 2005) (Haney III). While we determined
that no further analysis was necessary by the chancellor who had previously applied the
Ferguson factors as opposed to the Cheatham factors in Haney III, James’s argument that
a chancellor must make specific findings of fact and conclusions of law concerning the
awarding of lump sum alimony is still supported by the decision in Haney III.
8
lump sum alimony never would have been awarded. James likewise argues that the Court
of Appeals failed to reverse the trial court for failure to apply the Cheatham factors, but
instead listed the Cheatham factors and stated “All of these factors have been met.”
Yelverton v. Yelverton, 2006 Miss. App. LEXIS at *10, ¶16.
¶8. History reveals that this Court and the Court of Appeals have considered, at least in
part, the guidelines delineated in Cheatham, Haney II, and Miller. In Cheatham, this Court
outlined the four factors to consider:
1) Substantial contribution to accumulation of total wealth of the payor either
by quitting a job to become a housewife, or by assisting in the spouse’s
business. Tutor v. Tutor, 494 So. 2d 362 (Miss. 1986); Schilling v. Schilling,
452 So. 2d 834 (Miss. 1984);
2) A long marriage. Jenkins v. Jenkins, 278 So. 2d 446, 449 (Miss. 1973);
Tutor and Schilling, supra;
3) Where recipient spouse has no separate income or the separate estate is
meager by comparison. Jenkins, Tutor and Schilling, supra;
4) Without the lump sum award the receiving spouse would lack any financial
security. Abshire v. Abshire, 459 So. 2d 802, 804 (Miss. 1984).
A closer analysis of these cases, however, reveal[s] that the single most
important factor undoubtedly is the disparity of the separate estates.
Cheatham, 537 So. 2d at 438. Haney III clarified the Cheatham factors and stated, “the
Cheatham factors are really nothing more than an earlier version of the Ferguson factors.”
Haney III, 907 So. 2d at 954. In Haney III, we likewise stated that “the Cheatham factors
were simply an earlier attempt by this Court to provide a chancellor with guidelines for
awarding what today is called an equitable distribution of marital assets. . . . we see no
9
Ferguson factor which would be inappropriate in evaluating lump sum alimony” Id. at 955.6
That being said, James’s assertion is correct that the chancery court was obligated to apply
the appropriate factors necessary to determine whether Rhonda was entitled to lump sum
alimony, i.e., the Cheatham-Ferguson factors.
¶9. Since we have determined that the Cheatham factors are encompassed within the
Ferguson factors, the Ferguson factors should now be set forth and applied in all
appropriate situations:
1. Substantial contribution to the accumulation of the property (see Cheatham
factor No. 1).
2. The degree to which each spouse has expended, withdrawn or otherwise
disposed of marital assets and any prior distribution of such assets by
agreement, decree or otherwise.
3. The market value and the emotional value of the assets subject to
distribution.
4. The value of assets not ordinarily, absent equitable factors to the contrary,
subject to such distribution, such as [non-marital assets].
5. Tax and other economic consequences, and contractual or legal
consequences to third parties, of the proposed distribution.
6. The extent to which property division may, with equity to both parties, be
utilized to eliminate periodic payments and other potential sources of future
friction between the parties.
6
In fact, in Haney III, we did a “side-by-side comparison” of the Ferguson factors
and the Cheatham factors to illustrate how the Ferguson factors in essence consumed the
Cheatham factors. 907 So. 2d at 954-55.
10
7. The needs of the parties for financial security with due regard to the
combination of assets, income and earning capacity (See Cheatham factors
Nos. 3 & 4).
8. Any other factor which in equity should be considered (See Cheatham
factor No. 2).
Haney III, 907 So. 2d at 954-55. Thus, we turn now to the issue of whether the chancery
court appropriately applied these factors in considering the issue of lump-sum alimony.
¶10. In its final judgment entered consistent with very thorough findings of fact and
conclusions of law, the chancery court awarded lump sum alimony in favor of Rhonda in the
amount of $250,000. In doing so, the chancellor went to great lengths to explain James’s
misconduct. By way of example, “[t]he Court finds that [James] Yelverton, during the course
of the divorce, dissipated the assets of the parties, continued to accumulate debts, refused to
pay debts that were due and sold the property of the parties in violation of the Court’s Orders
and directives.” However, the trial court never set out or applied the Cheatham factors or
the Ferguson factors. On appeal, the Court of Appeals outlined the Cheatham factors, but
with little discussion. Yelverton v. Yelverton, 2006 Miss. App. LEXIS 613, ¶16.
¶11. Therefore, since the chancellor in today’s case failed to make adequate findings of fact
and conclusions of law as to the Ferguson factors, we are constrained to reverse the
chancellor on this issue and remand this case to the trial court to revisit this issue. See Lauro,
847 So. 2d at 847; Johnson v. Johnson, 823 So. 2d 1156, 1161 (Miss. 2002); Sandlin v.
Sandlin, 699 So. 2d 1198, 1204 (Miss. 1997). Upon remand, the chancellor should properly
apply the Ferguson factors to his findings of fact.
11
II. WHETHER THE CHANCELLOR ERRED IN
AWARDING RHONDA MONTHLY CHILD SUPPORT IN
THE AMOUNT OF $2,500.
¶12. James next contends that the chancellor failed to make findings to support his
deviation from the child support guidelines as required by Miss. Code Ann. § 43-19-101
(Rev. 2004) and Chesney v. Chesney, 910 So. 2d 1057 (Miss. 2005). According to Miss.
Code Ann. § 43-19-101:
(1) The following child support award guidelines shall be a rebuttable
presumption in all judicial or administrative proceedings regarding the
awarding or modifying of child support awards in this state:
Number Of Children Percentage Of Adjusted Gross Income
Due Support That Should Be Awarded For Support
1 14%
2 20%
3 22%
4 24%
5 or more 26%
(2) The guidelines provided for in subsection (1) of this section apply unless
the judicial or administrative body awarding or modifying the child support
award makes a written finding or specific finding on the record that the
application of the guidelines would be unjust or inappropriate in a particular
case as determined under the criteria specified in Section 43-19-103.
....
(4) In cases in which the adjusted gross income as defined in this section is
more than Fifty Thousand Dollars ($50,000.00) or less than Five Thousand
Dollars ($5,000.00), the court shall make a written finding in the record as to
whether or not the application of the guidelines established in this section is
reasonable.
¶13. The chancery court, in its findings of fact and conclusions of law, merely stated “[t]he
Court finds that based on [James]’s income, the needs of the children and their related
12
expenses, the statutory guidelines should not apply.” Subsection (4) of section 43-19-101
no doubt applies, since James’s adjusted gross income was unquestionably well above
$50,000; however, the chancellor’s findings in today’s case fell short of subsection (4)’s
requirement that “the court shall make a written finding in the record as to whether or not the
application of the guidelines established in this section is reasonable.” Likewise, subsection
(4) must be read in conjunction with subsection (2); therefore, in making this finding of the
inapplicability of the statutory guidelines, the chancellor failed to fully comply with Miss.
Code Ann. § 43-19-101(2) by making a “written finding or specific finding on the record that
the application of the guidelines would be unjust or inappropriate in a particular case as
determined under the criteria specified in Section 43-19-103.” Indeed, if a chancellor deems
it appropriate to deviate from the statutory guidelines, the chancellor must make a written
finding or a specific finding on the record that the application of the guidelines is “unjust or
inappropriate” as determined by the criteria set out in Miss. Code Ann. § 43-19-103 (Rev.
2004), which provides:
(a) Extraordinary medical, psychological, educational or dental expenses.
(b) Independent income of the child.
(c) The payment of both child support and spousal support to the obligee.
(d) Seasonal variations in one or both parents’ incomes or expenses.
(e) The age of the child, taking into account the greater needs of older children.
(f) Special needs that have traditionally been met within the family budget
even though the fulfilling of those needs will cause the support to exceed the
proposed guidelines.
(g) The particular shared parental arrangement, such as where the noncustodial
parent spends a great deal of time with the children thereby reducing the
financial expenditures incurred by the custodial parent, or the refusal of the
noncustodial parent to become involved in the activities of the child, or giving
due consideration to the custodial parent’s homemaking services.
13
(h) Total available assets of the obligee, obligor and the child.
(i) Any other adjustment which is needed to achieve an equitable result which
may include, but not limited to, a reasonable and necessary existing expense
or debt.
Stated differently, in order for this Court to affirm a chancellor’s award which deviates from
the guidelines of Miss. Code Ann. § 43-19-101(1), we must find from the record that the
chancellor was able to “overcome the rebuttable presumption that the statutory award is the
appropriate measure of child support by making an on-the-record finding that it would be
unjust or inappropriate to apply the guidelines.” Chesney, 910 So. 2d at 1061.
¶14. However, the chancellor determined that James was capable of earning at least
$12,000 per month after taxes. Applying the mandatory child support guidelines outlined
in Miss. Code Ann. § 43-19-101(1), James would be required to pay $2,400 per month. That
being said, the chancery court required James to pay an extra hundred dollars a month for
child support, which was a clear deviation from the guidelines.
¶15. In addition, as explained infra, the chancellor, on remand, will be required to re-
evaluate James’s net worth. Upon revisiting this issue, should the chancellor decide again
to deviate from the statutory guidelines, the chancellor must make a specific, on-the-record
finding which overcomes the rebuttable presumption. Because this issue has merit, we
reverse and remand to the chancery court.
14
III. WHETHER THE CHANCELLOR ERRED IN
A W A R D IN G R H O N D A M O N T H L Y PE R IO D IC
ALIMONY IN THE AMOUNT OF $2,500.
¶16. Based on the chancellor’s judgment, James is required to pay Rhonda $10,000 per
month as follows:
(1) Lump Sum Alimony - $5,000 per month for the next 50 months
(2) Child Support - $2,500 per month
(3) Periodic Alimony - $2,500 per month.
¶17. As stated, supra, the chancellor determined that James was capable of making $12,000
a month after taxes, but he also determined that James’s reasonable monthly expenses were
$6,429. As for Rhonda, the chancellor determined that the necessary expenses for Rhonda
and the children added up to $6,000, and that Rhonda currently earned $2,118.65 per month
working part-time as a nurse. The chancellor concluded, however, that Rhonda was capable
of working full-time, which would result in an increase in her monthly salary.
¶18. Thus, although recognizing that James had to spend $6,429 per month on his
expenses, the chancellor ordered James to pay Rhonda $10,000 per month. This award
would give Rhonda approximately $12,118.65 a month, although her monthly expenses
totaled only $6,000, and would leave James with a negative balance of $4,429 per month.
Such action by the chancellor leaves James destitute and in hopeless continuous contempt
of court. Furthermore the award is not equitable and fair and is per se unreasonable. See
Brooks v. Brooks, 652 So. 2d 1113, 1124 (Miss. 1995).
15
¶19. In Brooks, the husband was required to pay the wife more per month than he earned.
On appeal, this Court stated:
In order to achieve equitable and fair results incident to a divorce, awards of
alimony and any division of property should be considered together by a
chancellor. We have unequivocally stated that proposition, as follows:
All property division, lump sum or periodic alimony payment,
and mutual obligations for child support should be considered
together. . . .
....
In the final analysis, all awards should be considered
together to determine that they are equitable and fair.
652 So. 2d at 1124 (citing Ferguson, 639 So. 2d at 929). (Emphasis in original).
Additionally, a “chancellor should consider the reasonable needs of the wife and the right of
the husband to lead as normal a life as possible with a decent standard of living.” Brooks,
652 So. 2d at 1222 (citing Massey v. Massey, 475 So. 2d 802, 803 (Miss. 1985)). Thus,
Rhonda’s award of periodic alimony must also be reversed and remanded. Consistent with
Armstrong, 618 So. 2d at 1280-82, and its progeny, the chancellor should consider all
payments of support and division of property together to arrive at an equitable and fair result,
on this issue and all other issues.
IV. WHETHER THE CHANCELLOR ERRED IN
CALCULATING THE VALUE OF JIM YELVERTON
IMPORTS.
¶20. Finally, James asserts that the chancellor was manifestly wrong in his calculation of
the value of Jim Yelverton Imports. The chancellor determined that James and Rhonda
16
possessed only three assets at the time of their divorce: the car dealership (Jim Yelverton
Imports) in which Jim owned a 48 percent interest, the marital residence and adjoining lot,
and the Magnolia Place property. However, Jim Yelverton Imports is the sole source of
income for James. Thus, it is the only source from which James can make his court-ordered
payments.
¶21. Since we are remanding this case for other purposes, we need not enter into a lengthy
discussion on this issue; however, in an effort to lend guidance to the chancellor upon
remand, we state here that the chancellor should be mindful that “goodwill,” whether
“personal goodwill” or “business enterprise goodwill” shall not be included in the valuation
of Jim Yelverton Imports. See Watson v. Watson, 882 So. 2d 95, 105, ¶46 (Miss. 2004).7
“[G]oodwill is simply not property; thus it cannot be deemed a divisible marital asset in a
divorce action.” Singley v. Singley, 846 So. 2d 1004, 1011, ¶ 18 (Miss. 2002).
¶22. The chancellor determined that James’s 48 percent minority interest in Jim Yelverton
Imports amounted to $490,974 and that James was capable of earning $12,000 per month
after taxes. Based on these evaluations, the chancellor arrived at the specified court-ordered
payments. While the chancellor is given great discretion and we will not disturb his findings
“unless manifestly wrong, clearly erroneous, or if the chancellor applied an erroneous legal
standard[,]” we direct that on remand the chancellor should again re-evaluate James’s value
7
Watson is applicable here although Watson involved a “solo professional practice”
as opposed to Jim Yelverton Imports, which involves two share holders.
17
in Jim Yelverton Imports. Henderson v. Henderson, 703 So. 2d 262, 264 (Miss. 1997).
Consistent with our discussion, supra, this re-evaluation should exclude goodwill.
¶23. Because the above issues are intertwined with the value of Jim Yelverton Imports and
James’s income, the chancellor should take all factors into consideration when making an
equitable distribution and awarding support payments.
¶24. As we said in Lauro:
Equitable distribution is the first step in a divorce matter; therefore, upon
remand the chancellor must revisit his awards of alimony and child support.
Also upon remand, after the marital assets have been properly divided and
alimony and child support properly awarded, the chancellor may revisit his
award of attorney's fees to [the wife] in the event of any modifications in the
division of the marital assets and awards of alimony and child support.
847 So. 2d at 852.
CONCLUSION
¶25. In sum, for the reasons stated, we reverse the judgment of the Court of Appeals on the
issues discussed. We note that in his petition for writ of certiorari, James did not ask us to
consider the Court of Appeals’ affirmance of the chancellor’s $10,000 award in attorney’s
fees for Rhonda; however, as a result of our decision today, the chancellor is not restricted
from revisiting this issue, as well as all issues raised on appeal.
¶26. THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED AND THIS
CASE IS REMANDED TO THE CHANCERY COURT FOR THE FIRST JUDICIAL
DISTRICT OF HARRISON COUNTY FOR FURTHER PROCEEDINGS
CONSISTENT WITH THIS OPINION.
SMITH, C.J., WALLER AND DIAZ, P.JJ., EASLEY, GRAVES, DICKINSON,
RANDOLPH AND LAMAR, JJ., CONCUR.
18