Christine Hebron v. Timothy Hebron , 2016 Mo. App. LEXIS 1288 ( 2016 )

In the Missouri Court of Appeals
Eastern District
DIVISION THREE
CHRISTINE HEBRON, ) No. ED104222
)
Respondent, ) Appeal from the Circuit Court
) of the City of St. Louis
vs. )
)
TIMOTHY HEBRON, ) Hon. James E. Sullivan
)
Appellant. ) Filed: December 20, 2016
OPINION
Timothy Hebron appeals from the decree of dissolution of marriage in the divorce action
brought by his wife, Christine Hebron. In particular, he appeals the circuit court’s finding that a
bank account held by himself and his wife as joint tenants actually belonged to Christine
Hebron’s mother, Claire DePalma, who was not a party to the proceedings. We reverse and
remand with instructions that the circuit court join sua sponte Claire DePalma as a necessary
party pursuant to its authority under Rule 52.04, 1 and conduct a new trial in accordance with this
opinion.
1
All rule references are to Supreme Court Rules 2015, unless otherwise indicated.
FACTUAL AND PROCEDURAL BACKGROUND
Timothy Hebron (“Husband”) and Christine Hebron (“Wife”) were married in February
of 1996. Ten months later, Wife’s mother, Claire DePalma, (“Mother”) opened a bank account at
Vanguard (the “Vanguard Account”) and titled it in the name of Husband and Wife as joint
tenants with rights of survivorship. Mother completed the forms necessary to create this account
and presented them to Husband and Wife for their signatures.
The following facts are undisputed. Mother made the initial deposit into the Vanguard
Account and she was the only person that ever made deposits into the account. Neither Husband
nor Wife ever withdrew any funds from the Vanguard Account. The account statements were
sent directly to Mother, and Husband and Wife never saw these statements. In fact, neither
Husband nor Wife was aware of the balance in the Vanguard Account at any time prior to the
divorce proceedings. The only act either Husband or Wife ever took in relation to the Vanguard
Account prior to the commencement of this divorce proceeding was their signatures on the forms
creating the account.
Although Husband and Wife claimed the capital gains from the Vanguard Account on
their income taxes, Mother actually paid for these taxes by giving Husband and Wife a check to
cover the expense at the end of every year. The only dispute is that Husband claimed the check
from Mother was not intended to cover the tax expenses of the Vanguard Account. Husband
admitted at trial that Mother gave them a check at the end of each year, but claimed this was a
Christmas gift.
At trial, Mother testified that she created the Vanguard Account to provide for her future
medical care, so that her children would have access to the funds necessary to pay for her
2
medical care. Mother clearly testified, “It was not a gift. It was for my care. . . . It was never
intended as a gift. It was always for my good.” Similarly, Wife testified that:
My mom set up the account to have funds available should she ever need them for
any kind of long-term care, any type of thing like that. The account was not to be
touched by [my Husband] nor I. It was, it's solely my mom's money set up for that
purpose.
There was also evidence that Mother set up similar accounts in the names of her other children
and their spouses. Each of the other children similarly testified that those accounts were also
intended to provide for Mother’s care and medical expenses, and not as gifts.
In May of 2015, Wife filed for dissolution of marriage. Husband and Wife agreed to a
settlement disposing of all issues regarding property settlement except for one, the division of
assets in the Vanguard Account. The circuit court conducted a bench trial on this issue alone.
After trial, the court issued findings of fact and conclusions of law, concluding that the Vanguard
Account was not subject to division in the divorce. The court found that Mother never intended
to gift the money in the Vanguard Account to Husband and Wife, therefore the property was
neither marital nor separate property because it was never acquired by them during the marriage.
The circuit court also noted in its findings that it was not fully informed of the circumstances of
the Vanguard Account, and that if it had been prior to trial, the court would have requested that
Mother intervene in the case.
The circuit court then issued a judgment dissolving the marriage and dividing the marital
property according to the Joint Stipulation to Division of Property and Debts agreed to by the
parties. The court also issued the following order:
Neither party shall withdraw, transfer, encumber, or alter in any form or fashion the
[Vanguard Account] currently titled in the name of Husband and Wife as joint
tenants with right of survivorship, until further order of Court.
3
After the judgment, Wife filed a motion requesting the court reopen the evidence to allow
Mother to join as a third-party intervenor. Husband opposed this motion and filed his own
motion to amend the judgment, raising the same issue as in this appeal. Mother filed a motion to
intervene pursuant to Rule 52.12. The court denied all post-trial motions. This appeal follows.
POINT ON APPEAL
Husband raises one point on appeal, arguing the trial court abused its discretion when it
failed to designate, set aside and divide the Vanguard Account as marital or non-marital property
as required by section 452.330, instead impermissibly holding that the Vanguard Account was
neither marital property nor the separate property of either Husband or Wife but the property of
Mother, who was not joined as a party to the litigation. We agree that the circuit court lacked
authority to enter a judgment that property belonged to an individual who was not a party to the
litigation, and that the court should have joined Mother as a necessary party prior to trial under
Rule 52.04(a).
DISCUSSION
Although neither party is currently arguing that Mother should have been joined as a
necessary party given her interest in the Vanguard Account, the trial court acknowledged that the
Mother should have been joined as a party, and Wife raised the issue in her post-judgment
motion to reopen the evidence. Additionally, the appellate court may raise the issue of failure to
join a necessary party sua sponte on appeal. Clark v. Fitzpatrick, 801 S.W.2d 426, 429 (Mo.
App. W.D. 1990).
As a general rule, all parties with a legal interest in the subject matter of litigation should
be joined as parties. Alvino v. Alvino, 659 S.W.2d 266, 269 (Mo. App. E.D. 1983). Rule 52.04(a)
governs the joinder of necessary parties, and provides that:
4
A person shall be joined in the action if: (1) in the person's absence complete relief
cannot be accorded among those already parties, or (2) the person claims an interest
relating to the subject of the action and is so situated that the disposition of the
action in the person's absence may: (i) as a practical matter impair or impede the
person's ability to protect that interest or (ii) leave any of the persons already parties
subject to a substantial risk of incurring double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest. If the person has not been joined, the
court shall order that the person be made a party. If the person should join as a
plaintiff but refuses to do so, the person may be made a defendant.
(emphasis added). In a dissolution of marriage proceeding, when an individual who is not a party
to the marriage has an interest in assets claimed by one of the spouses as marital property, that
individual is a necessary party to the litigation. Alvino, 659 S.W.2d at 269. In such
circumstances, the circuit court has power to join a necessary party sua sponte under Rule 52.06,
which provides, “Parties may be dropped or added by order of the court on motion of any party
or of its own initiative at any stage of the action and on such terms as are just.” Rule 52.06; see
also Alvino, 659 S.W.2d at 269.
Mother was a necessary party under the standards set forth in Rule 52.04(a). The sole
issue presented at trial was whether the Vanguard Account was property subject to division.
Wife’s sole argument was that this account belonged to her Mother. Thus, given the circuit
court’s finding that the assets in the Vanguard Account remained the property of Mother, Mother
clearly was a “person claim[ing] an interest relating to the subject of the action . . . so situated
that the disposition of the action in the person’s absence may . . . as a practical matter impair or
impede the person’s ability to protect that interest.” Rule 52.04(a)(2); see Alvino, 659 S.W.2d at
269. 2
2
Although we acknowledge the circuit court’s finding that Mother was the owner of the Vanguard Account, we
express no opinion on the merits of this finding. Our analysis is confined to the effect of this finding under the
circumstances, specifically that Mother’s claimed interest in the Vanguard Account rendered her a necessary party
whom the circuit court should have joined and allowed to participate in the proceedings prior to entering its
judgment purporting to award her ownership over this account. Given the issues presented at trial, Mother would be
a necessary party, and thus a new trial would be necessary, whether or not the court eventually found she owned the
Vanguard Account.
5
Here, the court concluded that the Vanguard Account was the property of Mother, yet the
court left this account titled in the names of Husband and Wife. The court further ordered both
Husband and Wife to refrain from accessing, transferring, or otherwise altering this account. If
this order is left to stand, the assets in the Vanguard Account will remain in a legal limbo where
Mother has no legal authority to access the account and the titled owners are also legally
prohibited from accessing the account. This is clearly a circumstance where the failure to join
Mother as a necessary party impaired and impeded Mother’s ability to protect her interest in the
Vanguard Account. In this case, we find that the trial court should have joined Mother as a
necessary party as mandated by Rule 52.04(a); see Alvino, 659 S.W.2d at 269. Given Mother’s
interest in the litigation and the court’s failure to join her as a necessary party, the proper remedy
is to reverse and remand for the trial court to join Mother as a necessary party and conduct a new
trial in accordance with this opinion. Id.CONCLUSION
This case is hereby reversed and remanded to the circuit court for a new trial with
instructions that the court join sua sponte wife’s mother, Claire DePalma, as a necessary party
pursuant to its authority under Rule 52.04.
_________________________________
Angela T. Quigless, P.J.
Lisa Van Amburg, J., and
Colleen Dolan, J., Concur
6