Jennifer A. Hanna v. Michael A. Hanna ( 2014 )

In the Missouri Court of Appeals
Western District
JENNIFER A. HANNA, )
Appellant, )
v. ) WD76868 Consolidated with
) WD76951
MICHAEL A. HANNA, )
Respondent. ) FILED: November 4, 2014
APPEAL FROM THE CIRCUIT COURT OF JOHNSON COUNTY
THE HONORABLE WILLIAM B. COLLINS, JUDGE
BEFORE DIVISION ONE: THOMAS H. NEWTON, PRESIDING JUDGE,
LISA WHITE HARDWICK AND ANTHONY R. GABBERT, JUDGES
Jennifer Hanna ("Wife") appeals from the circuit court's judgment dissolving her
marriage to Michael Hanna ("Husband"). She raises ten points on appeal. In Points I
through VII, she challenges the court's interpretation of the parties' prenuptial
agreement and its classification of property pursuant to that agreement. She appeals
the court's denial of her request for maintenance in Point VIII and the denial of her
request to restore her maiden name in Point IX. Lastly, in Point X, she challenges the
court's entry of an amended judgment after it lost its authority to do so.
Wife's Points IX and X are meritorious, and Point IX requires a modification of the
judgment. Her remaining points lack merit, however, and a formal, published discussion
addressing those points would serve no jurisprudential purpose. Accordingly, we affirm
the circuit court's judgment as to Points I through VIII by summary order pursuant to
Rule 84.16(b). A memorandum explaining the reasons for our decision on those points
has been provided to the parties. This opinion addresses only Wife's Points IX and X.
FACTUAL AND PROCEDURAL HISTORY
The facts necessary to the disposition of Points IX and X are that Husband and
Wife were married on December 5, 1997. Wife filed her petition for dissolution of
marriage in November 2010. In her petition, Wife asked the court to divide their
property equitably, award her maintenance and attorney's fees, and restore her maiden
name to her. Husband filed an amended answer and counter-petition.
Trial was held on Wife's petition and Husband's counter-petition in February and
March 2013. The court entered its judgment in May 2013. In the judgment, the court
divided and classified the parties' property pursuant to the parties' prenuptial agreement
and denied Wife's claims for maintenance and attorney's fees.
Wife filed a motion to amend the judgment or, in the alternative, for a new trial.
Ninety-one days after Wife filed her motion to amend, the court entered an amended
judgment. Wife filed notices of appeal as to both the original judgment and the
amended judgment. We consolidated the appeals.
ANALYSIS
Validity of Amended Judgment
The first point we will address is Wife's Point X, as it concerns which judgment is
properly before us on appeal. In this point, Wife contends the circuit court erred in
entering an amended judgment because it was without jurisdiction to do so. She argues
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that, because the amended judgment was a nullity, the judgment that we should review
is the court's original judgment.
The court entered its original judgment on May 14, 2013. Wife filed a motion to
amend the judgment on June 13, 2013. Ninety-one days later, on September 11, 2013,
the court entered its amended judgment.
A motion to amend, if filed within thirty days after judgment is entered, is an
authorized after-trial motion that extends the circuit court's control over its judgment for
up to 90 days from the date the motion was filed. Rules 78.04 and 81.05(a)(2)(A);
Medlin v. RLC, Inc., 423 S.W.3d 276, 283 (Mo. App. 2014). If the court fails to rule on
the motion to amend within the 90-day period, the motion is deemed overruled by
operation of law. Rules 78.06 and 81.05(a)(2)(A). The judgment becomes final for
purpose of appeal on the ninetieth day, at which time the court is divested of jurisdiction
and loses its authority over the judgment. See Spicer v. Donald N. Spicer Revocable
Living Trust, 336 S.W.3d 466, 469 (Mo. banc 2011). An amended judgment entered
after the expiration of the 90-day period is a nullity. Adkins v. Hontz, 337 S.W.3d 711,
716 n.3 (Mo. App. 2011).
Husband contends that the 90-day time limit of Rule 78.06 does not apply in this
case because the court's original judgment was not a final judgment. In Gipson v. Fox,
248 S.W.3d 641, 643-44 (Mo. App. 2008), the court ruled that the time limits of Rule
78.06 did not apply because there was no final judgment, given that the court failed to
address all of the issues and left issues pending. Here, Husband argues that the
original judgment was not final because it did not address Wife's request to restore her
maiden name. Relying on Alliett & Williams v. Tri-City Constr. Co., 694 S.W.2d 287,
3
288 (Mo. App. 1985), Husband asserts that the court's silence in the original judgment
on Wife's request to restore her maiden name cannot be interpreted as a disposition of
that issue; therefore, the issue remained pending following the court's entry of its
original judgment.
The court's original judgment was not silent on Wife's request to restore her
maiden name. While it did not specifically refer to Wife's claim in her petition to restore
her maiden name, the original judgment provided, "All other claims for relief not
specifically granted are denied." Wife's request to restore her maiden name was a
claim that was not specifically granted. Thus, pursuant to this provision, it was denied.
The original judgment disposed of all of the issues in the case and was a final judgment.
Because the amended judgment was entered after the expiration of the 90-day
period, it was a nullity.1 The only valid judgment was the May 14, 2013 original
judgment. This is the judgment we will review. Point X is granted.
Restoration of Maiden Name
In Point IX, Wife contends the court erred in denying her request to restore her
maiden name. We agree. Where there is no evidence that the name change would be
detrimental to anyone, the circuit court's denial of a restoration of maiden name request
1
Husband asserts that, even if we find, as we have, that the original judgment was a final judgment, the
court could properly amend it under Rule 74.06(a). Rule 74.06(a) allows the court to correct clerical
mistakes in judgments "arising from oversight or omission" at any time. "An order nunc pro tunc merely
causes 'the record to conform to the true judicial determination of the parties' rights' by correcting a
clerical error." Johnson v. Brown, 154 S.W.3d 448, 452 (Mo. App. 2005) (quoting Pirtle v. Cook, 956
S.W.2d 235, 243 (Mo. banc 1997)). "'Clerical errors do not include judicial errors,'" however, and Rule
74.06(a) "'may not be used to enter a judgment different from that judgment actually made[,] even if the
judgment made was not the judgment intended.'" Id. (citation omitted). While the court stated in the
hearing on Wife's motion to amend that its failure to grant her request to restore her maiden name was an
oversight, the amended judgment, which granted her request, entered a judgment that was different from
the original judgment, which had denied her request. Moreover, the amended judgment added new
findings of fact on several other issues. Because the amended judgment attempted to correct judicial
errors, not clerical errors, Rule 74.06(a) provided no authority for its entry.
4
is error. Neal v. Neal, 941 S.W.2d 501, 503 (Mo. banc 1997); King v. King, 66 S.W.3d
28, 40 (Mo. App. 2001). Point IX is granted. The portion of the judgment denying
Wife's request to restore her maiden name is reversed. We need not remand this
matter to the circuit court, as Rule 84.14 affords us discretion to "give such judgment as
the court ought to give." Therefore, the judgment is modified to restore Wife's maiden
name of Hinton to her.
CONCLUSION
The judgment, as modified, is affirmed. A memorandum explaining our reasons
for denying the points not covered by this opinion has been provided to the parties
pursuant to Rule 84.16(b).
___________________________________
_
LISA WHITE HARDWICK, JUDGE
ALL CONCUR.
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In the Missouri Court of Appeals
Western District
JENNIFER A. HANNA, )
Appellant, )
v. ) WD76868 Consolidated with
) WD76951
MICHAEL A. HANNA, )
Respondent. ) FILED:
MEMORANDUM SUPPLEMENTING OPINION
AFFIRMING JUDGMENT PURSUANT TO RULE 84.16(b)
This memorandum is for the information of the parties and sets forth the reasons
for affirming the judgment.
THIS STATEMENT DOES NOT CONSTITUTE A FORMAL OPINION OF THIS COURT. IT
IS NOT UNIFORMLY AVAILABLE. IT SHALL NOT BE REPORTED, CITED OR
OTHERWISE USED IN UNRELATED CASES BEFORE THIS COURT OR ANY OTHER
COURT. IN THE EVENT OF THE FILING OF A MOTION TO REHEAR OR TRANSFER TO
THE SUPREME COURT, A COPY OF THIS MEMORANDUM SHALL BE ATTACHED TO
ANY SUCH MOTION.
Jennifer Hanna ("Wife") appeals from the circuit court's judgment dissolving her
marriage to Michael Hanna ("Husband"). She raises ten points on appeal. In Points I
through VII, she challenges the court's interpretation of the parties' prenuptial
agreement and its classification of property pursuant to that agreement. She appeals
the court's denial of her request for maintenance in Point VIII and the denial of her
request to restore her maiden name in Point IX. Lastly, in Point X, she challenges the
court's entering an amended judgment after it lost its authority to do so.
Wife's Points IX and X are meritorious, and Point IX requires a modification of the
judgment. We have addressed Points IX and X in a published opinion handed down
simultaneously with this memorandum. For reasons explained herein, we find that
Wife's remaining points lack merit. Accordingly, we affirm the circuit court's judgment as
to Points I through VIII.
FACTUAL AND PROCEDURAL HISTORY
Husband and Wife were married on December 5, 1997. At the time, Husband
was employed as a dentist, and Wife was a network engineer for Sprint. Both Husband
and Wife had been married before, and each had a child from their previous marriages.
Before they married, Husband directed his attorney to draft a prenuptial
agreement. Wife had her attorney review the prenuptial agreement, and the parties
signed the agreement on their wedding day. The prenuptial agreement contained
exhibits listing specific assets that each party owned at the time of the marriage, and it
stated that those assets would remain separate property. The parties agreed that "each
party shall become possessed of additional property, both real and personal in the
future which each party hereto shall separately own or have an interest in each said
party's own individual right." Additionally, the parties stated that it was their desire to "fix
and determine the rights of each of them in any and all property" that they owned or had
an interest in at the time of the marriage "or may acquire thereafter." With regard to
income from property, the agreement provided that "all income accrued by the parties
from earning, interest and proceeds of all property not otherwise designated as
separate in this Agreement shall be marital property."
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The parties added four amendments to their prenuptial agreement over the next
several years. The 1999 amendment contained a provision stating that each party
would be solely responsible for all expenses incurred from assets held individually or in
trust for the benefit of that individual. The 1999 amendment also modified the
classification of certain assets listed in the exhibits attached to the prenuptial
agreement. In the 2001 and two 2002 amendments, the parties memorialized
transactions between them involving lots that were part of one of the parcels of property
listed in the exhibits attached to the prenuptial agreement.
In 1999, Husband and Wife established separate trusts in their individual names.
They transferred the real property listed as Husband's separate property in the exhibits
attached to the prenuptial agreement into Husband's trust via warranty deeds, in which
Wife stated that she was "signing solely to release any marital rights which she may
have in the property." In 2009, Husband and Wife established a joint trust. They
transferred the marital residence, a duplex, and an apartment complex, all of which
were acquired during the marriage, into their joint trust.
During the marriage, Husband acquired an interest in several additional rental
properties and Wife acquired an interest in rental property. Husband and Wife titled
these properties in the names of their individual trusts and used rental income from the
properties to pay the mortgages on the properties.
Wife filed her petition for dissolution of marriage in November 2010. In her
petition, Wife asked the court to divide their property equitably, award her maintenance
and attorney's fees, and restore her maiden name to her. Husband filed an amended
answer and counter-petition, in which he asserted that the parties' prenuptial
3
agreement, including its amendments, governed the division of property and denied that
Wife was entitled to maintenance or attorney's fees. Husband also sought a declaration
that the prenuptial agreement was valid.
After a trial on Husband's declaratory judgment count, the court entered an
interlocutory order in August 2012 finding that the prenuptial agreement was valid and
would govern the court's disposition of property. In December 2012, the court granted
Wife's request for temporary maintenance and ordered Husband to pay Wife $2000 per
month.
Trial on the remaining issues was held in February and March 2013. The court
entered its judgment in May 2013. In the judgment, the court found that, consistent with
its interlocutory order, the prenuptial agreement was legally valid, enforceable, and
neither procedurally nor substantively unconscionable. The court determined that the
agreement contained a "future property clause" that fixed and determined the property
rights that each party would have to property acquired during the marriage and held in
their sole names. The court found that, during the marriage, each party acquired real
property in the name of their individual trusts that they intended to hold as separate
property. The court further found that the agreement designated the income from this
separate property to be separate property.
Thus, pursuant to the prenuptial agreement, the court determined that Husband's
net equity in his separate property was valued at $2,586,358, while Wife's net equity in
her separate property was valued at $204,500. The court set aside marital property
worth $775,196 to Husband and $891,897 to Wife, and the court ordered Husband to
pay Wife an additional $20,000 in cash. The court denied Wife's claims for
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maintenance and attorney's fees. The court also denied "[a]ll other claims for relief not
specifically granted."
Wife filed a motion to amend the judgment or, in the alternative, for a new trial.
Ninety-one days after Wife filed her motion to amend, the court entered an amended
judgment. Wife filed notices of appeal as to both the original judgment and the
amended judgment. We consolidated the appeals. As we have explained in the
published opinion, the only valid judgment was the court's original judgment, entered in
May 2013. Therefore, that is the judgment that we will review.
STANDARD OF REVIEW
Appellate review of a dissolution judgment is under the standard of Murphy v.
Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Jenkins v. Jenkins, 368 S.W.3d 363, 366
(Mo. App. 2012). We will affirm the circuit court's judgment unless there is no
substantial evidence to support it, it is against the weight of the evidence, or it
erroneously declares or applies the law. Id. at 366-67. We view the evidence and any
reasonable inferences therefrom in the light most favorable to the court's decision and
disregard all contrary evidence and inferences. Id. at 367. We will affirm the judgment
if the result was "correct on any tenable basis." Miller v. Miller, 309 S.W.3d 428, 429
(Mo. App. 2010).
Several of Wife's points allege error in the court's classification of the parties'
property. The circuit court has broad discretion to classify property in a dissolution
action. Torrey v. Torrey, 333 S.W.3d 34, 36 (Mo. App. 2010). We will not disturb the
court's decision absent an abuse of discretion. Id. Likewise, the circuit court has broad
discretion to award or deny maintenance, and we review its decision only for an abuse
5
of discretion. Sparks v. Sparks, 417 S.W.3d 269, 295 (Mo. App. 2013). "'An abuse of
discretion occurs when a trial court's ruling is clearly against the logic of the
circumstances then before the court and is so arbitrary and unreasonable as to indicate
indifference and a lack of careful judicial consideration.'" Torrey, 333 S.W.3d at 36
(citation omitted). "If reasonable persons can differ about the propriety of the circuit
court's action, it cannot be said that the court abused its discretion." Id.
ANALYSIS
For relational purposes, we will address some of Wife's points out of order.
Interpretation of Prenuptial Agreement
In Point I, Wife alleges error in the court's interpretation of the parties' prenuptial
agreement regarding the classification of property acquired during the marriage. Wife's
allegations of error are based upon her belief that the court interpreted the prenuptial
agreement as providing that property acquired during the marriage without the use of
separate funds was that party's separate property solely by virtue of being titled in that
party's name. Wife is mistaken, however, as both the judgment and the evidence
indicate that the court interpreted the prenuptial agreement as providing only that
property acquired during the marriage with separate funds and titled solely in one
party's name, plus any income from that property held as separate property and not
commingled with marital funds, was that party's separate property.
In general, property acquired during marriage, including income earned on
separate property, is presumed to be marital property. § 452.330.3, RSMo 20002; Short
v. Short, 356 S.W.3d 235, 242 (Mo. App. 2011). This presumption may be overcome by
presenting clear and convincing evidence that the property is non-marital because it
2
All statutory references are to the Revised Statutes of Missouri 2000.
6
falls into one of the exceptions listed in Section 452.330.2. In re Marriage of Fisher, 258
S.W.3d 852, 857 (Mo. App. 2008). Section 452.330.2 provides that property is non-
marital if it is:
(1) Property acquired by gift, bequest, devise, or descent;
(2) Property acquired in exchange for property acquired prior to the
marriage or in exchange for property acquired by gift, bequest, devise, or
descent;
(3) Property acquired by a spouse after a decree of legal separation;
(4) Property excluded by valid written agreement of the parties; and
(5) The increase in value of property acquired prior to the marriage or
pursuant to subdivisions (1) to (4) of this subsection, unless marital assets
including labor, have contributed to such increases and then only to the
extent of such contributions.
The court determined that the property that Husband acquired during the marriage fell
under subsection four, because the court interpreted the prenuptial agreement as
excluding this property from the parties' marital property.
As with any contract, the cardinal rule in interpreting a prenuptial agreement is to
determine the parties' intent and give effect to that intent. Short, 356 S.W.3d at 243.
We look to the plain language of the agreement to determine the parties' intent. See
TAP Pharm. Prods. Inc. v. State Bd. of Pharmacy, 238 S.W.3d 140, 143 (Mo. banc
2007).
With regard to separate property, Husband and Wife's prenuptial agreement
provided, in pertinent part:
IN CONSIDERATION OF the contemplated marriage of the above-
named parties and for other good and valuable consideration, the receipt
of which is hereby acknowledged by each of the parties hereto, it is
agreed and stipulated as follows:
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....
2. Each party hereto is possessed of property to which the
opposite party played no role in the accumulation thereof, and further,
each party shall become possessed of additional property, both real and
personal in the future which each party hereto shall separately own or
have an interest in each said party's own individual right.
....
4. In anticipation of their marriage, the parties desire to fix and
determine the rights of each of them in any and all property of every
nature and description and wheresoever located that the other of them,
may own or have an interest in at the time of such marriage, or may
acquire thereafter.
....
5. Each of the parties mutually desires to retain, manage or
dispose separately by gift, will or otherwise, all of his or her estate to the
same extent as if each of the parties remained single.
In consideration of mutual convenants contained herein, prospective
husband and prospective wife agree as follows:
(a) Each of the parties shall retain the title, management and control of
the estate now owned by each of them, whether real, personal or mixed,
and all increases or additions thereto, entirely free and unmolested by the
other party and may encumber, sell, dispose, give or provide by Will or
otherwise, for the disposition of any or all of such estates so separately
owned and possessed. A list of all said property is attached and set forth
in "EXHIBIT A-1/A-2" and EXHIBIT B-1/B-2" attached hereto.
....
(h) The parties hereto acknowledge that all income accrued by the
parties from earnings, interest and proceeds of all property not otherwise
designated as separate in this Agreement shall be marital property.
The plain language of these provisions indicates that, as to property that the parties
owned at the time of the marriage, the parties intended to keep as separate all of the
property that was listed as separate property on the exhibits attached to the agreement.
Further, the parties recognized that each of them would acquire separate property
8
during the marriage that they would hold solely in their own names, and they agreed
that they would keep this after-acquired property separate. Lastly, the agreement
indicates that the parties intended that income from property that the agreement
designated as separate would be separate property, as it states that all income from
property not designated as separate would be marital property. We find that the circuit
court interpreted the prenuptial agreement in accordance with the agreement's plain
language.
Wife contends this interpretation is contrary to a strict construction of the
agreement. Wife notes the principle of law that, when a prenuptial agreement purports
to inhibit remedies provided by statute, it should be strictly construed. King v. King, 66
S.W.3d 28, 35 (Mo. App. 2001). Wife argues that the agreement inhibited Section
452.330.3's rule that property purchased during the marriage without the use of
separate property is marital property, because it authorized Husband to purchase
property during the marriage without the use of separate funds and characterize the
property as either separate or marital based solely upon how he titled it.
This is not how the circuit court interpreted the agreement, nor is it how we
interpret the agreement. The plain language of the agreement allowed each party to
acquire separate property, with separate funds, during the marriage and title that
property in their individual names. Moreover, the plain language of the agreement
allowed the parties to keep as separate income from those separate properties. The
canon of strict construction "'should not be applied to force a conclusion that the
[parties] intended something other than what is expressed in the plain language of the
[contract].'" See BHA Group Holding, Inc. v. Pendergast, 173 S.W.3d 373, 381 (Mo.
9
Ohio App. 2005) (citation omitted) (applying this principle in the context of statutory
interpretation and noting that "strict construction 'does not mean that whenever a
controversy is or can be raised of the meaning of a statute, ambiguity occurs, which
immediately and inevitably determines the interpretation of the statute. Its proper office
is to help to solve ambiguities, not to compel an immediate surrender to them.'"
(citations omitted)).3
Wife also contends that the circuit court's interpretation was contrary to the
court's August 2012 interlocutory order.4 In the interlocutory order, the court stated that
"any property acquired after the marriage, not specifically delineated in the original
agreement or amendments as the sole and separate property of the parties, shall be
subject to division in these dissolution proceedings." Wife argues that this finding in the
interlocutory order limited the prenuptial agreement to exclude from marital property
only that property that was specifically inventoried and listed as separate property in the
exhibits attached to the agreement. While we do not agree with this interpretation of the
court's interlocutory order, even if the interlocutory order did conflict with the court's
judgment, the court was not bound by any of its findings in the interlocutory order.
Macke Laundry Serv. Ltd. P'ship v. Jetz Serv. Co., 931 S.W.2d 166, 176 (Mo. App.
1996). "An interlocutory order may be reconsidered, amended, reversed or vacated by
the trial court at any time prior to final judgment being entered." Id.
3
Wife also argues that the circuit court erred in interpreting the agreement to apply to the division of
property upon dissolution. She contends the parties intended that the agreement apply only upon one of
their deaths. In her testimony during the trial on Husband's declaratory judgment claim, however, Wife
admitted that, when she signed the prenuptial agreement, she "assumed it would apply in the event of
divorce."
4
The interlocutory order was entered by a different judge who retired in December 2012.
10
Wife next argues that, when interpreting the agreement, paragraphs two and four
cannot be considered because they are merely recitals and not part of the agreement.
Recitals, or "whereas" clauses, "are not strictly a part of the contract because they do
not impose contractual duties on the parties." State ex rel. Mo. Highway & Transp.
Comm'n v. Maryville Land P'ship, 62 S.W.3d 485, 492 (Mo. App. 2001). We note,
however, that their purpose is to "shed light on the circumstances the parties wished to
have considered in the interpretation of the contract." Id. Courts can consider recitals
"to determine the intent of the parties when the operative language is ambiguous,
uncertain, or indefinite." G.H.H. Invs., L.L.C. v. Chesterfield Mgmt Assocs., L.P., 262
S.W.3d 687, 694 (Mo. App. 2008). Thus, the language of paragraphs two and four can
be helpful in determining how the parties intended the prenuptial agreement to be
interpreted and applied.
Wife further argues that Husband was judicially estopped from asserting that any
of the property acquired during the marriage was his separate property because this
position was inconsistent with the position he asserted in a summary judgment motion
he filed almost two years before trial. "Under Missouri law, '[j]udicial estoppel applies to
prevent litigants from taking a position in one judicial proceeding, thereby obtaining
benefits from that position in that instance and, later, in a second proceeding, taking a
contrary position in order to obtain benefits from such a contrary position at the time.'"
Brock v. McClure, 404 S.W.3d 416, 420 (Mo. App. 2013) (citation omitted).
Wife mischaracterizes Husband's positions in both the summary judgment
proceedings and at trial, as the record indicates that he consistently argued that the
prenuptial agreement provided that property acquired during the marriage from separate
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funds and titled in one party's sole name was separate property and that all income from
such separate property remained separate. Additionally, the summary judgment
proceedings were not a different proceeding, but were part of this "single case in
process." Owens v. ContiGroup Cos., 344 S.W.3d 717, 727 (Mo. App. 2011).
Furthermore, Husband's summary judgment motion was denied, so he received no
benefit or resolution on the merits from his summary judgment pleadings. Id. Judicial
estoppel does not apply in this case.
Lastly, Wife argues that the court erred in treating Husband's brother, who is a
lawyer, as an expert and adopting his opinion as legal authority for the court's
interpretation of the prenuptial agreement. Wife asserts that the court must have relied
upon Jeff Hanna's testimony to interpret the agreement because the court cited "no
legal authority of its own" in the judgment. We reject this argument for several reasons.
First, the court was not required to make any specific findings or conclusions in
its judgment, as none were requested under Rule 73.01. Second, the record does not
support Wife's contention that the court treated Jeff Hanna as an expert. The first time
that Wife objected to Jeff Hanna's testimony on the basis that it was expert legal
testimony, the court stated that it would allow the testimony only for the limited purpose
of showing the factual background of a transaction. The other time that Wife objected
on this basis, the court sustained her objection. Third, it was Wife who solicited Jeff
Hanna's expert opinion on cross-examination, as she asked him for his "legal opinion"
as to how the prenuptial agreement should be interpreted. A party cannot invite error
and then complain on appeal that the invited error was made. Lau v. Pugh, 299 S.W.3d
740, 757 (Mo. App. 2009). Wife's contention has no merit. Point I is denied.
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Reliance on Extrinsic Evidence
In Point IV, Wife contends the court erred in relying on extrinsic evidence to
interpret the terms of the prenuptial agreement. She bases her argument on the court's
statements regarding the parties' conduct during the marriage. In the judgment, the
court stated:
Both [Wife] and [Husband] acknowledged the impact of their
prenuptial agreement through their conduct in a variety of ways throughout
their marriage. They acquired properties both in individual names and in
joint names. Knowing the nature and extent of all assets, they
apportioned them into separate trusts and a marital trust, understanding
those acts to be taken under their prenuptial agreement. They managed
their separate assets separately and did not commingle the funds earned
from those assets. This conduct by the parties is both an
acknowledgement of and affirmation by the parties of their agreements.
Substantial properties were treated as marital by the parties, and other
properties were treated as separate. Their actions are consistent with
their intent in executing the prenuptial agreement, with its plain language,
and the Court's rulings.
Wife argues that the court could not consider extrinsic evidence of the parties' conduct
because it did not first find the judgment to be ambiguous.
We do not believe the court relied on the parties' conduct to interpret the
agreement, however. The court's judgment indicates that it interpreted the agreement
according to its plain language and was merely noting that the parties' actions were
consistent with the agreement's plain language. This is not a case where the court
impermissibly relied on conduct inconsistent with the contract's plain language to find
that such conduct modified the contract. See, e.g., Melson v. Traxler, 356 S.W.3d 264,
272-73 (Mo. App. 2011). Point IV is denied.
Whether Agreement was Substantively Unconscionable
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In Point II, Wife contends the prenuptial agreement was invalid because it was
substantively unconscionable. "'Substantive unconscionability refers to an undue
harshness in the contract terms.'" Potts v. Potts, 303 S.W.3d 177, 187 (Mo. App. 2010)
(citation omitted). A prenuptial agreement is substantively unconscionable when "'the
inequality [is] so strong, gross, and manifest that it must be impossible to state it to one
with common sense without producing an exclamation at the inequality of it.'" Miles v.
Werle, 977 S.W.2d 297, 303 (Mo. App. 1998) (citation omitted). A prenuptial agreement
may be found unconscionable if it "attempts to totally take from one of the spouses his
or her presumed right to marital property." Id. However, "[w]here a spouse retains at
least a share of marital property in the antenuptial agreement, the agreement is likely
enforceable." King, 66 S.W.3d at 36.
Here, the prenuptial agreement provided that the separate property of the parties
was to remain separate, and that the income from those separate properties was also to
remain separate. These provisions did result in a great disparity between the separate
property set aside to each spouse. Because the agreement did not attempt to preclude
an award of marital property to Wife, however, it was not unconscionable. See id.
The prenuptial agreement in this case is distinguishable from the prenuptial
agreement found unconscionable in Potts, 303 S.W.3d at 188-90, the case upon which
Wife relies. While the agreement in Potts removed all assets generated in the future
from being marital, Husband and Wife's agreement protected as marital earnings from
employment, increases in the value of retirement accounts, increases in the value of
Husband's dental practice over $300,000, increases in the value of Husband's dental
business accounts, and the Walnut Hills Apartments rental property. The marital
14
residence and a duplex rental, both of which were acquired during the marriage, also
remained marital. Additionally, while the Potts agreement left both parties responsible
for debt, even when all earnings were shielded from becoming marital, the agreement in
this case provided that each party would separately bear the expenses of their separate
property. Husband and Wife's prenuptial agreement was not substantively
unconscionable. Point II is denied.
Classification of Property as Husband's Separate Property
In Points III and V, Wife contends the court erred in classifying certain property
as Husband's separate property. She argues that the property at issue was acquired
during the marriage without the use of separate funds and, therefore, should be
classified as marital property. In determining whether the circuit court abused its
discretion in classifying this property as Husband's separate property, we will consider
the evidence and inferences concerning the acquisition of the property in the light most
favorable to the judgment, ignoring all evidence and inferences to the contrary.
The first parcel of property at issue in Point III is College Place Apartments.
Husband and his brother each acquired a 50% interest in this property in 2003.
Husband's interest was held in the name of his individual trust. Husband and his
brother obtained a $2.1 million loan to buy the property. When they obtained the loan,
the lender required Wife to sign a waiver of interest. In the waiver of interest, Wife
waived any ownership or other interest in the property that she had at that time or might
have in the future, and the lender agreed that Wife would not be personally liable to
repay the indebtedness. During the marriage, Husband made capital contributions to
this property from one of his accounts listed as separate in the exhibits attached to the
15
prenuptial agreement, and he used rental income generated by the property to pay the
mortgage on the property. The court valued Husband's equity in College Place
Apartments at $543,712 and classified this as his separate property.
The court correctly classified Husband's interest in this property as his separate
property. Wife argues that, because a loan was used to acquire this property and
income from the property was used to pay down the loan, College Place Apartments
should be considered marital, citing Selby v. Selby, 149 S.W.3d 472, 485 (Mo. App.
2004). Although Husband did obtain a loan to acquire this property, Wife's waiver of
interest relieved her of any responsibility whatsoever for that indebtedness. That
Husband used income generated by the property to pay down the loan did not
transmute the property into marital property, as the prenuptial agreement specifically
provided that income from separate property was also separate property.
The second parcel of property at issue in Point III is Campus Apartments.
Husband and his two brothers each held a 28% interest in this property, and his parents
owned the remaining interest. Husband purchased his interest with a $100,000 loan
from his parents, who then forgave the entire loan in increments of five $20,000 gifts to
him. During the marriage, Husband used rental income generated by the property to
pay the mortgage on the property. The court valued Husband's equity in Campus
Apartments at $187,242 and classified this as his separate property.
The court correctly classified Campus Apartments as Husband's separate
property. Under Section 452.330.2(2), property acquired by gift is separate property.
Husband offered clear and convincing evidence that he acquired his interest in the
property through a series of monetary gifts from his parents. Pursuant to the prenuptial
16
agreement, the income that was generated by this separate property, which Husband
used to pay the mortgage on the property, was also his separate property.
The last parcel of property at issue in Point III is the commercial building on N.
Adams. In 2006, Husband acquired a 100% interest this building, which housed his
dental practice, when his parents deeded this property to his trust through a quit claim
deed. As part of this transaction, Husband signed a ten-year balloon promissory note,
payable to his parents, for $65,000. Husband offered evidence that his parents had
wanted to make an outright gift of the property to him but, for tax-planning purposes,
structured the transaction as a sale rather than a gift. Husband's evidence showed that
his parents had decided, from the outset, to forgive the note in its entirety when it
becomes due in 2016. The court valued Husband's equity in the N. Adams property at
$100,000 and classified this as his separate property.
The circuit court correctly classified this property as Husband's separate
property. Husband used no funds, let alone marital funds, to acquire his interest in the
property from his parents. In light of the evidence that the transaction was structured as
a sale merely for tax purposes, we defer to the circuit court's decision to accept
Husband's evidence that his interest in the N. Adams property was a gift from his
parents. Point III is denied.
In Point V, Wife asserts that the court erred in classifying the equity in the Vest
duplexes as Husband's separate property. Husband constructed the Vest duplexes on
property that the parties refer to as the "Bodenhamer property." Before the marriage,
Husband's parents had conveyed to him a 50% interest in the Bodenhamer property,
which was undeveloped at the time. In the prenuptial agreement, Husband and Wife
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agreed that "[e]quity of a value no less than $100,000" in the Bodenhamer property
would be Husband's separate property, and that any increases in the value of that asset
would become marital property.
In the 1999 amendment to the prenuptial agreement, the parties modified this
provision because the property was going to be platted into lots. The modification
provided that one-half of the sale prices of each lot would be deposited into Husband
and Wife's joint account, and the other half would belong to Husband's father. An
accountant was then to determine one-half of the initial cost of the land in each lot and
deposit that amount into Husband's separate account. The amount of the deposits was
to total $100,000 when the last lot was sold, in order to enable Husband to recoup his
initial $100,000 investment in the property. The amendment then provided that the
parties could sell the lots to family members at cost. Husband and Wife agreed that
they could purchase lots jointly but could not buy lots individually.
Two months after the 1999 amendment to the prenuptial agreement, Husband
signed a warranty deed conveying his 50% interest in the Bodenhamer property to his
individual trust. Wife also signed the warranty deed, in which she stated that she was
"signing solely to release any marital rights which she may have in the property."
In 2001, Husband's parents gifted one lot of the Bodenhamer property to Wife
and another lot Husband. Wife then sold her lot to Husband, who bought the property
with his separate funds. Husband's parents gifted two more lots directly to Husband. In
2002, Husband and Wife agreed to transactions that transferred two other lots to
Husband. The parties agreed that, as of October 16, 2002, Husband was "owed
nothing out of [his] original $100,000 investment."
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The end result of the transactions was that Husband's trust owned six lots of the
Bodenhamer property. Husband then used his separate funds and a bank loan to
construct the Vest duplexes on these lots. Husband used rental income generated from
the property to pay the mortgage on the property. The court found that the value of
Husband's equity in the property was $720,488 and classified this amount as his
separate property.
The court correctly classified the equity in the Vest duplexes as Husband's
separate property. In the amendments to the prenuptial agreement, the parties
expressly memorialized the transactions that culminated in Husband's separately
owning the platted lots on which the Vest duplexes were constructed. Husband used
his separate funds and a bank loan to construct the duplexes. Pursuant to the
prenuptial agreement, the income generated from this separate property, which
Husband used to pay the bank loan, remained separate. Point V is denied.
Failure to Include $134,000 in Marital Estate
In Point VI, Wife contends the court erred in refusing to restore to the marital
estate $134,000, which she claims were marital funds that Husband unilaterally
transferred to his separate account. In June 2006, shortly after Husband acquired his
interest in the N. Adams property from his parents, he began depositing $1600 per
month from his dental business accounts into one of his separate accounts. Wife
asserts that, by the time of the dissolution, these deposits totaled $134,000. Per the
1999 amendment to the parties' prenuptial agreement, Husband's dental business
accounts were joint marital property. Wife argues that the court erred in not restoring
the $134,000 to the marital estate.
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In response, Husband argues that the $134,000 constituted income from his
separate property. He notes that, before he acquired his interest in N. Adams, he and
his parents had a triple-net lease arrangement, in which the dental practice would make
payments of $1600 per month to cover the taxes, insurance, and repairs on the building.
According to Husband, he kept the triple-net lease arrangement in place after the
property was transferred to his trust. Instead of paying his parents, though, his dental
practice made the monthly $1600 payments to his trust.
The court did not err in failing to restore the $134,000 to the marital estate. The
$1600 monthly rental payments were a business expense of his dental practice, which
his dental practice would have had to pay to a third party if Husband's trust did not own
the building. Because Husband's trust did own the building, the monthly rental
payments to his trust constituted income from separate property. As Husband notes, if
he had rented the property to a third party, the prenuptial agreement would have
allowed him to keep the monthly payments as his separate property because they
would have been income generated from separate property. That it was Husband's
dental practice that rented Husband's separate property, instead of a third party, does
not change this result. Point VI is denied.
Incorrect Classification of Other Property
In Point VII, Wife contends the court erred in including Husband's dental
business accounts in the value of Husband's dental practice when it classified and
divided those assets. Wife argues that the dental business accounts and the dental
practice were distinct assets, one marital and the other having both marital and
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separate components; therefore, she asserts that they should not have been considered
together.
The 1999 amendment to the prenuptial agreement specifically listed Husband's
dental business accounts as joint marital property, while the exhibits attached to the
prenuptial agreement provided that only the first $300,000 of the value of Husband's
dental practice was Husband's separate property. Before trial, the parties stipulated
that the value of Husband's dental practice was $330,000 and that $300,000 of this
value was Husband's separate property. It was undisputed that the value of Husband's
dental business accounts was $12,424.
In its judgment, the court valued Husband's dental practice at $330,000 and
found that $300,000 of this value was Husband's separate property. The court found
that the remaining $30,000 value of the dental practice was marital property and that
this $30,000 included the value of the dental business accounts. The court awarded the
$30,000 to Husband. Wife argues the dental business accounts were distinct assets
and should not have been included in the $30,000 marital portion of the value of
Husband's dental practice.
At trial, Husband testified that he did not believe the dental business accounts
had a distinct value to be counted over and above the agreed-upon value of his dental
practice. We defer to the circuit court's decision to believe Husband's testimony.
Also in Point VII, Wife contends the court erred in not classifying as marital
$30,995 from the sale of a house on the Bodenhamer property in 1999. Husband had
transferred these proceeds into his separate account. Wife notes that, in the exhibits
attached to the prenuptial agreement, the parties agreed that the first $100,000 of equity
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in the Bodenhamer property was Husband's separate property. The amendments to the
prenuptial agreement indicated that Husband received his $100,000 in equity through a
series of transactions in which Wife transferred $100,000 in lots and cash to Husband.
The amendments provided that, as of October 2002, Husband was "owed nothing out of
[the] original $100,000." Wife argues that, because Husband's first $100,000 was
satisfied by virtue of the lot and cash transfers memorialized in the amendments, the
court should have included the $30,995 from the 1999 sale of a house on the
Bodenhamer property as marital property.
We need not decide whether the court erred in not classifying this $30,995 as
marital property because, even if the court did err, Wife fails to show that she was
prejudiced by the error. Wife received $891,897 of the marital property plus $20,000 in
cash from Husband, compared to Husband's award of $775,196 of the marital property.
Wife has neither alleged nor demonstrated that the court's failure to classify the $30,995
as marital property rendered this division of property unfair. Shaw v. Shaw, 413 S.W.3d
332, 337 (Mo. App. 2013); Burk v. Burk, 936 S.W.2d 144, 146 (Mo. App. 1996). Point
VII is denied.
Denial of Maintenance
In Point VIII, Wife contends the court erred in denying her request for
maintenance. "The goal of a maintenance award is to close the gap between a
spouse's income and his or her monthly expenses." Sparks, 417 S.W.3d at 295. The
court will award maintenance only if it finds that the party requesting maintenance "(1)
Lacks sufficient property, including marital property apportioned to him, to provide for
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his reasonable needs; and (2) Is unable to support himself through appropriate
employment[.]" § 452.335.1. Thus, in making this decision, the court first determines
the requesting party's reasonable needs and then determines whether the party can
meet those needs through appropriate employment. Sparks, 417 S.W.3d at 296.
The court denied Wife's request for maintenance after finding that Wife suffered
no physical limitations, was capable of employment, and was presently employed and
earning $29,000 annually. The court further found that Wife had income-producing
potential based upon the court's division of assets, as the court awarded her an
apartment complex and a duplex, both of which generated rental income and were
marital property. Additionally, the court set aside to Wife as her separate property a
rental house from which she was voluntarily forgoing rental income by allowing her
daughter to live there for free.5 The court noted that, since the parties were married in
1997, Wife had suffered no setback in her ability to support herself as a result of the
marriage but, instead, had acquired substantial marital interest in real property and
retirement funds that were set off to her. As for Wife's expenses, the court noted that
she had presented multiple expense statements throughout the case. Her monthly
expenses in these statements ranged from $3860 to $10,734 in her most recent
statement, which the court expressly rejected as not credible. The court concluded that
Wife's earnings from her employment and income-producing property "far exceed[ed]"
her reasonable needs and, therefore, she was not in need of maintenance.
Wife argues that the court erred in denying her maintenance because it failed to
make specific findings of fact regarding the amount of her reasonable needs and
5
The evidence favorable to the judgment was that Wife was forgoing approximately $10,800 per year in
rental income on this house.
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income. As noted supra, neither party asked for specific findings of fact on any issues
under Rule 73.01(c). Therefore, none were required on these issues.
Wife next asserts that the court erred in rejecting her most recent statement of
anticipated income and expenses, in which she claimed that her expenses were
$10,734. While the case was pending, Wife filed four income and expense statements
with the court. In those statements, she claimed that her monthly expenses were
$6640, $5240, $3860, and $10,734. In light of these varied amounts of claimed
expenses, the court could reasonably find that the $10,734 amount was not credible.
We defer to the court's credibility determination.
Wife further argues that the court erroneously based its decision to deny her
maintenance on its allocation of the marital rental properties to her, which she contends
have a variable and speculative cash flow depending upon rental levels. The evidence
favorable to the judgment was that, after the mortgages were paid, the marital rental
properties generated a cash flow of $24,595 in 2009 and $20,295 in 2010, and that this
amount could increase if Wife refinanced the mortgages upon removing Husband's
name. Although Wife testified that there was a possibility that not all of the units would
be rented and, therefore, her rental income would decrease, we defer to the circuit
court's decision to find otherwise. The court did not err in denying Wife's request for
maintenance.6 Point VIII is denied.
CONCLUSION
The court's judgment as to Points I through VIII is affirmed.
6
Wife also argues that the court erred in making its denial of maintenance non-modifiable. In support of
her argument, she notes the general rule that modifiable maintenance awards are preferable to non-
modifiable awards. While this is the general rule when the court grants maintenance, see, e.g., Sweet v.
Sweet, 154 S.W.3d 499, 509 (Mo. App. 2005), Wife cites no authority that this rule applies when the court
denies maintenance.
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