Shawn H. v. Elise H.

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
FILED
SHAWN H., September 4, 2024
Petitioner Below, Petitioner ASHLEY N. DEEM, CHIEF DEPUTY CLERK
INTERMEDIATE COURT OF APPEALS
OF WEST VIRGINIA
v.) No. 24-ICA-95 (Fam. Ct. Preston Cnty. No. FC-39-2023-D-103)

ELISE H.,
Respondent Below, Respondent

MEMORANDUM DECISION

Petitioner Shawn H.1 appeals the Family Court of Preston County’s final divorce
order entered on February 7, 2024, awarding Respondent Elise H. a share of the passive
appreciation of the parties’ marital home. Elise H. filed a response that included one cross
assignment of error, asserting that the family court erroneously held that the marital home
was Shawn H.’s premarital asset.2 Shawn H. filed a reply.

This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51-
11-4 (2022). After considering the parties’ arguments, the record on appeal, and the
applicable law, this Court finds that there is error in the family court’s decision, but no
substantial question of law. This case satisfies the “limited circumstances” requirement of
Rule 21 of the Rules of Appellate Procedure for resolution in a memorandum decision. For
the reasons set forth below, the family court’s decision is affirmed, in part, and remanded,
in part to the family court with directions as set forth herein.

The subject of this appeal is the equitable distribution of the parties’ marital home.
The home was purchased and titled in Shawn H.’s (“Husband”) name on October 19, 2017,
for $120,000. At the time of this purchase, the parties were not married but were
cohabitating. Husband made a $6,000 down payment and the remaining $114,000 was
secured by a mortgage. Husband proposed marriage to Elise H. (“Wife”) in February of
2018. Husband and Wife were married on September 28, 2019, after cohabitating in the
home for twenty-two months. For most of this twenty-two-month period, Wife paid

1
To protect the confidentiality of the juveniles involved in this case, we refer to the
parties’ last name by the first initial. See, e.g., W. Va. R. App. P. 40(e); State v. Edward
Charles L., 183 W. Va. 641, 645 n.1, 398 S.E.2d 123, 127 n.1 (1990).
2
Shawn H. is represented by John R. Angotti, Esq. Elise H. is represented by Amber
Urtso Sellaro, Esq.

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approximately one-half of the mortgage and utilities. The parties share one child, born in
2021.

The parties separated on May 10, 2023. The final divorce hearing was held on
February 6, 2024. At the hearing, Wife argued that the home was purchased in anticipation
of marriage. In support of her argument, she presented texts and pictures showing that she
actively participated in the home search and attended the closing. Husband, in contrast,
argued that Wife was shocked when he proposed marriage and that there was no
anticipation of marriage when the home was purchased. The family court found Wife’s
testimony more credible on this issue.

Regarding the twenty-two-month cohabitation period, Husband argued below that
he should be the sole beneficiary of the equity that accumulated during that time. Wife, on
the other hand, argued that she was entitled to one-half of the equity (minus the $6,000
down payment made by Husband) that accumulated during that time. Regarding the
timeframe during which the parties were married, Husband argued below that Wife’s
marital portion of equitable distribution should only include half of the reduction of
principal and that the home’s equity and/or passive appreciation should not be considered
marital property.

The family court entered its final order on February 7, 2024, holding the following:
(1) Wife had no claim to the twenty-two months of payments made during cohabitation;
(2) Wife had a claim to the forty-four months of payments made during marriage because
marital funds were used; (4) the parties agreed that the marital home was worth $211,000;
and (5) at the time of separation the parties owed $101,897 on the home.3 The home was
awarded to Husband, which means he received $63,354 in equitable distribution. Based on
the family court’s calculations, Wife was ordered to receive $31,054 from Husband as her
share of equitable distribution. It is from the February 7, 2024, order that Husband now
appeals.

When reviewing the order of a family court, we apply the following standard of
review:

When a final order of a family court is appealed to the Intermediate Court of
Appeals of West Virginia, the Intermediate Court of Appeals shall review
the findings of fact made by the family court for clear error, and the family

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In calculating Wife’s share of equitable distribution of the home, the family court
did the following: (1) by subtracting the home’s worth and the amount owed, the home had
$109,103 in equity; (2) the parties paid on the home while married for forty-four months
at $613.98 per month, which totaled $27,015; (3) the total paid on the home overall was
$46,523; and, (4) to calculate the marital portion of equity the family court used the
following formula $27,015 ÷ $46,523 x $109,103 = $63,354.

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court’s application of law to the facts for an abuse of discretion. The
Intermediate Court of Appeals shall review questions of law de novo.

Syl. Pt. 2, Christopher P. v. Amanda C., 250 W. Va. 53, 902 S.E.2d 185 (2024); accord W.
Va. Code § 51-2A-14(c) (2005) (specifying standards for appellate court review of family
court orders).

On appeal, Husband raises two assignments of error. First, he asserts that the family
court erred when it awarded Wife an interest in the passive appreciation of the marital home
based on the fact that marital funds were used to pay the mortgage on the property during
the parties’ marriage.4 We disagree. West Virginia Code § 48-1-233 (2001) defines marital
property as:

(1) All property and earnings acquired by either spouse during a marriage,
including every valuable right and interest, corporeal or incorporeal, tangible
or intangible, real or personal, regardless of the form of ownership, whether
legal or beneficial, whether individually held, held in trust by a third party,
or whether held by the parties to the marriage in some form of coownership
such as joint tenancy or tenancy in common, joint tenancy with the right of
survivorship, or any other form of shared ownership recognized in other
jurisdictions without this state, except that marital property does not include
separate property as defined in section 1-238; and

(2) The amount of any increase in value in the separate property of either of
the parties to a marriage, which increase results from: (A) an expenditure of
funds which are marital property, including an expenditure of such funds
which reduces indebtedness against separate property, extinguishes liens, or
otherwise increases the net value of separate property; or (B) work performed
by either or both of the parties during the marriage.

By contrast, West Virginia Code § 48-1-237 (2001) defines separate property as:

(1) Property acquired by a person before marriage;
(2) Property acquired by a person during marriage in exchange for separate
property which was acquired before the marriage;
(3) Property acquired by a person during marriage, but excluded from
treatment as marital property by a valid agreement of the parties entered into
before or during the marriage;

4
Passive appreciation is defined as increase “which is due to inflation or to a change
in market value resulting from conditions outside the control of the parties.” Mayhew v.
Mayhew, 205 W. Va. 490, 497, 519 S.E.2d 188, 195 (1999) (quoting Syl. Pt.1, Shank v.
Shank, 182 W. Va. 271, 387 S.E.2d 325 (1989)).

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(4) Property acquired by a party during marriage by gift, bequest, devise,
descent or distribution;
(5) Property acquired by a party during a marriage but after the separation of
the parties and before ordering an annulment, divorce or separate
maintenance; or
(6) Any increase in the value of separate property as defined in subdivision
(1), (2), (3), (4) or (5) of this section which is due to inflation or to a change
in market value resulting from conditions outside the control of the parties.

Most relevant to this assignment of error is West Virginia Code § 48-1-233(2)(A),
which defines marital property as “[a]n expenditure of funds which are marital property,
including an expenditure of such funds which reduces indebtedness against separate
property.” It is undisputed that marital funds were used to reduce the mortgage balance in
this case. Therefore, the family court did not err when it ruled that Wife was entitled to an
interest in the marital portion of Husband’s home. We also note that “West Virginia case
law generally indicates a marked preference for characterizing the property of married
persons as marital.” Richardson v. Richardson, No. 19-0862, 2020 WL 7222720, at *3 (W.
Va. Dec. 7, 2020) (memorandum decision). See also Syl. Pt. 2, Kapfer v. Kapfer, 187 W.
Va. 396, 419 S.E.2d 464 (1992) (per curiam) (“W. Va. Code § 48-2-1(e)(1) (1986) . . .
expresses a marked preference for characterizing the property of the parties to a divorce
action as marital property.”), quoting Syl. Pt. 3, Whiting v. Whiting, 183 W. Va. 451, 396
S.E.2d 413 (1990). See also Mayhew v. Mayhew, 205 W. Va. 490, 496, 519 S.E.2d 188,
194 (1999) (stating that the increased value resulting from spousal efforts becomes the
property of the marital partnership).

As his second assignment of error, Husband contends that the family court’s award
of passive appreciation to Wife was erroneous insofar as the formula utilized awarded Wife
an interest in the property’s fair market value increase from prior to the marriage and failed
to account for the increase in value from the purchase date through the date of marriage.
Upon review of the final order, we conclude that it lacks sufficient findings of fact and
conclusions of law in order to facilitate a meaningful appellate review for this issue. The
Supreme Court of Appeals of West Virginia has provided guidance on how to calculate
active and passive appreciation in Mayhew, as follows:

We further hold that the formula for an active or passive appreciation analysis
requires a determination of the following five-step test: (1) whether the
property, in general, is either separate or marital property; (2) placing a value
on the nonmarital property at the commencement of the action; (3) the value
of the nonmarital property, before it became subject to the active and passive
appreciation analysis; (4) the [family court] calculation of the property’s
value at the commencement of the action, in relation to its value on the
date(s) gifted; and (5) a determination as to what extent the increase in the
value of the nonmarital property is active appreciation or passive

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appreciation. The resulting amount due to active appreciation is marital
property and subject to equitable distribution.

Id. at 502, 519 S.E.2d at 200. In the instant case, the family court failed to engage in the
five-step analysis explained above in Mayhew. See generally W. Va. Code § 48-7-106
(2001) (“In any order which . . . determines the ownership . . . of any property, . . . the court
shall set out in detail its findings of fact and conclusions of law . . .”). Accordingly, we
remand on Husband’s second assignment of error for further proceedings consistent with
this decision so that it may analyze the evidence in relation to the five Mayhew steps and
the applicable burdens of proof as discussed in Mayhew.

In her response brief, Wife included one cross assignment of error. She asserts that
the family court erroneously rejected her argument that the home was purchased in
contemplation of marriage and should be categorized as a marital asset rather than a pre-
marital asset belonging to Husband. In support of her argument, Wife cites Hinerman v.
Hinerman, 194 W. Va. 256, 460 S.E.2d 71 (1995), which also involved a couple that
searched for a home together prior to their marriage. Upon their purchase of the home, it
was solely deeded in the husband’s name, and wife’s name was never added. However,
Hinerman dealt with a unique set of facts, whereby the husband indicated that he had
planned to include the wife’s name on the deed but neglected to do so after a lengthy
marriage. Additionally, in Hinerman, the parties married approximately one month after
they purchased the home. Here, the parties did not marry for approximately twenty-two
months and Husband gave no indication that he ever planned to add Wife’s name to the
home. Therefore, we conclude that the family court did not abuse its discretion in rejecting
Wife’s Hinerman argument. See also West Virginia Code § 48-7-111 (2001) which states,
“[a] court may not [. . .] order equitable distribution of property between individuals who
are not married to one another. . . .”

Accordingly, we affirm the family court’s ruling as to Husband’s first assignment
of error and Wife’s cross assignment of error. We remand to the family court for further
analysis regarding Husband’s second assignment of error.

Affirmed, in part, and Remanded, in part.

ISSUED: September 4, 2024

CONCURRED IN BY:

Chief Judge Thomas E. Scarr
Judge Charles O. Lorensen
Judge Daniel W. Greear

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