Lautner v. Lautner

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Pamela Ann Lautner,       
Respondent,

v.

Jack Louis Lautner,       
Appellant.

Appeal From Greenville County

Timothy M. Cain, Family Court Judge

Unpublished Opinion No. 2004-UP-103

Submitted February 9, 2004 – Filed February
18, 2004

REVERSED AND REMANDED

Bruce W. Bannister, of Greenville, for Appellant

Pamela A. Forrest, of Fountain Inn, pro se.

PER CURIAM:  In this action, Jack
Lautner (Husband) appeals an order by the family court regarding the equitable
distribution of marital property owned by him and his wife, Pamela (Wife). 
He argues the family court erred in finding passive earnings on the nonmarital
portion of a retirement account to be marital property.  We reverse and remand.
[1]

FACTS

Husband and Wife were married in
1985 in Greenville County.  They separated on April 11, 2000, and this domestic
action followed.  At the time of the marriage, Husband worked for Hart Graphics,
Inc., which provided a 401(k) retirement account.

At the initial hearing, it was
agreed by the parties that portions of this account were earned prior to the
marriage and that other portions were marital property.  The parties agreed
that Wife would provide the court with appropriate records from the retirement
plan administrator as to the value of the account on the date of the marriage
and that Husband’s expert would calculate the amount of passive increases thereto. 
At the second hearing, however, neither party presented an official record as
to the exact amount of the account on the date of the marriage.  Husband informed
the court that he was unable to obtain this information from the plan administrator.

Notwithstanding the lack of official
records as to the value of the account on the date of the marriage, both parties
presented evidence concerning this non-marital portion and the passive increases
thereafter accumulated.  Wife’s expert was not present at trial and was not
subject to any cross-examination as to his qualifications or methods. All evidence
provided by him was in the form of a one-page report.  Husband’s expert appeared
at trial and seemed to base his testimony on additional data not considered
by Wife’s expert.  The judge found the report and evidence presented
by Husband’s expert to be the most reliable and allocated this report’s recommended
$16,606 as the pre-marital contribution amount.  The judge also found
that this amount has since earned passive increases of $64,485.  While
not waiving any claim to these passive increases, Wife’s counsel did stipulate
to the method of calculation of the value of the premarital portion of the account.

In his final order concerning the
equitable distribution of the property, the judge awarded Husband a credit for
the premarital contribution amount, but deemed all passive increases “marital
property” and divided this amount between the parties.  Husband appeals,
arguing that the judge erred in holding that passive earnings on the nonmarital
portion of the retirement account constituted marital property.

STANDARD OF REVIEW

In appeals from the family court, this
court has the authority to find facts in accordance with our own view of the
preponderance of the evidence.  Woodall v. Woodall, 322 S.C. 7, 10, 471
S.E.2d 154, 157 (1996).  This broad scope of review, however, does not require
us to disregard the findings of the family court judge, who saw and heard the
witnesses and was in a better position to evaluate their credibility and assign
comparative weight to their testimony.  McElveen v. McElveen, 332 S.C.
583, 591, 506 S.E.2d 1, 5 (Ct. App. 1998).

LAW / ANALYSIS

Under South Carolina law, it is clear
that a passive increase in the value of a pre-marital investment, unless the
investment is transmuted into marital property, remains nonmarital property
and is not subject to equitable division by order of the family court. 

The family court does not have jurisdiction or authority
to apportion nonmarital property.  See S.C. Code Ann. § 20-7-473 (Supp.
2003) (“The court does not have jurisdiction or authority to apportion nonmarital
property.”).  Marital property is statutorily defined as any property “acquired
by the parties during the marriage.” Id.  The statute also clearly states
that any “increase in value in nonmarital property, except to the extent that
the increase resulted directly or indirectly from efforts of the other spouse”
remains non-marital property.  Id. § 20-7-473(5); See also
Johnson v. Johnson, 296 S.C. 289, 294, 372 S.E.2d 107, 110 (Ct. App.
1998) (finding passive earnings on a nonmarital IRA account to be nonmarital
property).

In the case before us, the family court judge found,
and the parties agreed, that a portion of Husband’s retirement fund was nonmarital
property invested prior to the marriage.  This amount was stipulated and properly
credited to Husband.  The amount of earnings, however, that this amount had
accrued through no effort by either spouse was wrongfully split between Husband
and Wife.  Having determined at trial that $64,485 of the retirement fund was
attributable to passive earnings on nonmarital investments, it was then error
to divide this portion of the fund between the parties. Unless transmuted or
the result of efforts by the claiming spouse, any increase in the value of nonmarital
property is itself nonmarital property. See Johnson, 296 S.C.
at 294, 372 S.E.2d at 110; Calhoun v. Calhoun, 331 S.C. 157, 174, 501
S.E.2d 735, 744 (Ct. App. 1998), reversed in part 339 S.C.
96, 529 S.E.2d 14 (2000). 

In rather conclusory fashion, Wife claims for the
first time on appeal that the retirement account became marital property through
transmutation.  While in certain circumstances nonmarital property may be transmuted
into marital property, the spouse asserting this transmutation “must produce
[at trial, not on appeal] objective evidence showing that, during the marriage,
the parties themselves regarded the property as the common property of the marriage.”
Johnson, 296 S.C. at 298, 372 S.E.2d at 110-11.  Wife cites no such evidence,
nor can we find any, in the record on appeal. [2]

For the foregoing reasons, the order of the family
court, holding that passive earnings on the non-marital portion of the retirement
account constituted marital property, is

REVERSED.  We REMAND for a recalculation of the equitable distribution
award.

HEARN, C.J., ANDERSON and BEATTY, JJ., concur.

[1] We decide this case without oral argument pursuant
to Rule 215, SCACR.

[2] In her responsive brief, Wife also makes vague claims of collusion
and misrepresentations at trial. We deem these claims abandoned due their
conclusory nature and the fact they are not in any way supported by the record.
See Bowen v. Lee Process Sys. Co., 342 S.C. 232, 536 S.E.2d
86 (Ct. App. 2000) (holding that the failure to provide argument or supporting
authority for an issue renders it abandoned); Zaman v. South Carolina Bd.
of Med. Exam’rs, 305 S.C. 281, 408 S.E.2d 213 (1991) (holding that an
appellate court will not consider any fact which does not appear in the record
on appeal).