Teeter v. Teeter
Teeter v. Teeter
Opinion of the Court
James Arthur Teeter, III (Husband) appeals the family court’s rulings regarding the valuation and classification of property in this divorce action. He also argues the family court erred in excluding information obtained from the e-mail account of Debra Teeter (Wife) regarding her relationship with another man. We affirm as modified and remand.
FACTS/PROCEDURAL HISTORY
Husband and Wife married in November 1996.
In 1998, Husband sold the Indian Creek property, and the parties bought their dream home (Bob White property). Husband generally made the mortgage payment on the property and paid for utilities and repairs, while Wife bought groceries and paid for childcare and other miscellaneous expenses. During the marriage, Husband purchased additional rental properties. The division of some of those properties is at issue on appeal, and the details of those transactions are set
The parties agreed that after the birth of their second child in 2001, they began to grow apart. After the parties separated in 2008, Husband suspected Wife was involved -with another man. He testified he saw Wife’s e-mail password written on a sheet of paper that was lying on top of her open purse while he was visiting the marital home to see the children. Husband also testified he installed spyware on Wife’s computer but indicated it did not produce any relevant information, only a couple of “garbled” screen shots. Husband read some of Wife’s e-mails, which revealed she had been in contact with a former colleague. In one series of e-mails from 2009, Wife attempted to convince the man to meet her in Myrtle Beach. Additionally, Wife admitted at trial she had lied to Husband about attending a class reunion in Nashville and instead went to see the former colleague in Arizona in 2010. Wife never admitted to committing adultery. Husband admitted to committing post-separation adultery.
The family court had previously granted the parties’ divorce based on one year’s continuous separation. With respect to equitable apportionment, the family court determined the division of marital assets should be 55%/45% in Husband’s favor. The family court excluded evidence of Wife’s e-mails and the evidence flowing therefrom on the basis that their interception violated the Electronic Communications Privacy Act. However, the family court emphasized that Wife’s alleged adultery had no impact on its division of assets.
The family court determined the Glenn Street properties, rental properties purchased by Husband during the marriage, were marital property. The court further determined Husband’s business was marital property and assigned it a value of $74,775.32 based upon a balance sheet prepared by Husband in 2011. The family court assigned equity of $12,600 to the Garner Lane property acquired by an LLC Husband created during the marriage to lease the property to Apex Investors. As part of the division of assets, the parties were to sell the Bob White property, where Wife had been living
STANDARD OF REVIEW
“In reviewing the decision of the family court, an appellate court has the authority to find the facts in accordance with its own view of the preponderance of the evidence.” S.C. Dep’t of Soc. Servs. v. Sarah W., 402 S.C. 324, 333-34, 741 S.E.2d 739, 744 (2013). “While this [c]ourt retains its authority to make its own findings of fact, we recognize the superior position of the family court in making credibility determinations.” Id. at 334, 741 S.E.2d at 744. “Moreover, consistent with our constitutional authority for de novo review, an appellant is not relieved of his burden to demonstrate error in the family court’s findings of fact.” Lewis v. Lewis, 392 S.C. 381, 392, 709 S.E.2d 650, 655 (2011). Therefore, “the family court’s factual findings will be affirmed unless appellant satisfies this court that the preponderance of the evidence is against the finding of the [family] court.” Id. (internal quotation marks omitted).
LAW/ANALYSIS
I. Exclusion of Emails
Husband contends the family court erred in concluding he violated the Electronic Communications Privacy Act, 18 U.S.C.A. § 2515 (2000), based on a lack of credibility in his testimony that he accessed Wife’s e-mails by means other than spyware.
Even if the family court erred in excluding evidence of the relationship, the court explicitly stated in its order that neither Wife’s conduct nor Husband’s post-separation adultery were considered in the equitable division of assets.
II. Glenn Street Properties
Husband argues the family court erred in determining the Glenn Street properties, purchased or created during the marriage, were marital assets. We disagree.
Husband purchased 951 Glenn Street in 1998 for approximately $60,000. He testified he used $11,726 in proceeds from the sale of the Indian Creek property as a down payment.
In March 2001, Husband mortgaged a nonmarital property (the Wellington property) and netted $29,524. Husband testified that in November 2001, he used those funds to subdivide 951 Glenn Street into two additional lots, 947 and 955, and make improvements to them. Husband made total improvements of $87,543 to the two new lots utilizing personal credit lines to pay for the remainder of the improvements. When the work was completed, Husband mortgaged 947 Glenn Street and 955 Glenn Street for $111,800. He paid off the credit lines with the mortgage loan and the rent generated covered the mortgage payments.
Generally, property acquired during a marriage is considered marital property regardless of how title is held. S.C.Code Ann. § 20-3-630(A) (Supp. 2012). Two exceptions to this general rule include property acquired before the marriage or property acquired in exchange for nonmarital property. Id. “The burden to establish an exemption under section [20-3-630] is upon the one claiming that the property is not marital property.” 13 S.C. Jur. Divorce § 57 (1992).
The nonmarital character of ... property may be lost if “the property becomes so commingled as to be untraceable; is utilized by the parties in support of the marriage; or is titled jointly or otherwise utilized in such manner as to evidence an intent by the parties to make it marital property.”
Myers v. Myers, 391 S.C. 308, 319, 705 S.E.2d 86, 92 (Ct.App. 2011) (quoting Hussey v. Hussey, 280 S.C. 418, 423, 312 S.E.2d 267, 270-71 (Ct.App. 1984)). “The phrase ‘so commingled as to be untraceable’ is important because the mere commingling of funds does not automatically make them marital funds.” Id. (quoting Wannamaker v. Wannamaker, 305 S.C. 36, 40, 406 S.E.2d 180, 182 (Ct.App. 1991)).
In this case, because the Glenn Street properties were purchased or created during the marriage, Husband bears the burden of establishing the properties were nonmarital. The family court concluded Husband failed to meet this burden because the nonmarital funds used to purchase and improve the properties were so commingled into Husband’s checking account as to be untraceable. Furthermore, the family court noted the properties were primarily acquired with debt incurred during the marriage.
We conclude the family court correctly determined 951 Glenn Street was a marital asset. Husband testified he used $11,726 from the sale of the nonmarital Indian Creek property as a down payment. The remainder of 951 Glenn Street was acquired through a mortgage on the property. While the record demonstrates the property generated enough income to cover the mortgage payment, the debt was incurred during the marriage and the rental income from the property was used to benefit both parties. Husband testified excess rental proceeds were used in support of the marriage, and the rental payments were always deposited into Husband’s general checking account. Therefore, we affirm the family court’s determination that 951 Glenn Street constituted marital property.
However, applying our de novo standard of review, we find Husband was able to establish nonmarital funds contributed to the initial purchase of 951 Glenn Street. His down payment of $11,726 was sufficiently traceable to the sale of the Indian Creek property. Wife did not dispute Husband’s testimony regarding his use of the Indian Creek funds, and the HUD statements from the closing of the Indian Creek
Although Husband is entitled to recognition of this nonmarital contribution, we decline to modify the family court’s equitable division ratio of the marital estate. Husband is not entitled to a “refund” of his down payment contribution.
With respect to the division and improvements that created 947 and 955 Glenn Street, we agree with the family court that Husband’s contribution from the Wellington property was not sufficiently traceable. The Wellington mortgage was secured six months prior to the expenditures on the Glenn Street lots, and the funds were routed through Husband’s single checking account. Furthermore, the remainder of the improvements was ultimately paid for with a mortgage on the properties themselves. Accordingly, we affirm the family court’s determination that all of the Glenn Street properties were marital property.
Next, Husband maintains the family court erred in determining the value of and equity in the Gamer Lane property. We disagree.
The Garner Lane property is a commercial space purchased by JJ & M, LLC, an entity formed by Husband for the purpose of purchasing the property. Husband’s business, Apex Investors, leases it for office space. JJ & M purchased the property for $129,900 in 2005. Wife testified she believed the current fair market value of the property at the time of the final hearing was $130,000. Husband testified the value of the property had gone down based on the declining real estate market and valued the property at $108,000. Neither party had the property appraised for trial because of the expense. We affirm the family court’s valuation of the Garner Lane property as it was within the range of values presented at trial. See Reiss v. Reiss, 392 S.C. 198, 205, 708 S.E.2d 799, 802 (Ct.App. 2011) (holding the family court may accept the valuation of one party over another, and the court’s valuation of marital property will be affirmed if it is within the range of evidence presented).
Furthermore, the family court found $12,600 in equity in the property. The parties do not dispute that rental payments from Apex Investors to JJ & M are what reduced the mortgage and created any equity in the property. However, Husband contends because his business was the tenant, he should be credited with the creation of that equity. This argument is without merit, and we affirm the family court’s ruling.
IV. Valuation of Husband’s Business
Husband contends the family court erred in valuing his investment business closer in time to the final hearing than the dating of filing. We agree.
“In South Carolina, marital property subject to equitable distribution is generally valued at the divorce filing date. However, the parties may be entitled to share in any appreciation or depreciation in marital assets occurring after a separation but before divorce.” Burch v. Burch, 395 S.C. 318, 325, 717 S.E.2d 757, 761 (2011) (citations omitted); see also
“It is fairer to value a passive asset at or near the time of the final hearing, because both parties are equally deserving to share in any increase or decrease---- [On the other hand,] active assets should be valued at the time of commencement [or filing] of the marital litigation, to enable the person who causes the change in value to receive the benefits of his or her labor and skills or, conversely, to prevent the person who controls the assets from manipulating the value downward during litigation.”
Id. at 326, 717 S.E.2d at 761 (alterations in Burch) (quoting Roy T. Stuckey, Marital Litigation in South Carolina 310 (3rd ed., 2001)).
Burch had not been published at the time of the final hearing in this action. However, the passive/active analysis generally applied by our courts prior to Burch and specifically adopted therein is the proper approach for valuing Husband’s business. The family court valued Apex Investors at $74,775.32 based upon a balance sheet prepared by Husband in 2011. Husband argues the correct valuation would have been reflected on the balance sheet he prepared at the time of filing in 2008, which showed a value of negative $784.56.
In determining whether using the 2011 figure was appropriate, we must consider whether the change in value of the business was passive appreciation or active appreciation
V. Credit for Occupying Marital Residence
Husband contends the family court abused its discretion in not crediting him with the value of Wife’s use and possession of the Bob White property. We disagree.
Prior to the family court’s final order, the parties had agreed Husband would pay $700 and Wife would pay $1,400 of the $2,100 monthly mortgage. At the final hearing, the family court determined the parties should pay the mortgage in the ratio of their equitable distribution. The parties agreed Wife would remain in the marital home. She pays the utilities and is responsible for making any improvements or changes recommended by the realtor to assist in selling the property. Additionally, Wife must maintain and make the home available for showings. Husband has substantially more income-generating assets than Wife and will be entitled to a larger equity in the proceeds from the sale of the home based on the 55%/45% distribution. Furthermore, Husband cites no authority to support his argument, rendering anything other than a gener
VI. Attorney’s and Detective’s Fees
Husband asserts the family court abused its discretion in awarding Wife $15,000 in attorney’s fees and in denying Husband’s request for attorney’s and detective’s fees. We disagree.
“The decision to award attorney’s fees is within the family court’s sound discretion, and although appellate review of such an award is de novo, the appellant still has the burden of showing error in the family court’s findings of fact.” Lewis v. Lewis, 400 S.C. 354, 372, 734 S.E.2d 322, 331 (Ct.App. 2012). In deciding whether to award attorney’s fees and costs, the court should consider the following factors: (1) the ability of the party to pay the fees; (2) beneficial results obtained; (3) the financial conditions of the parties; and (4) the effect-a fee award will have on the party’s standard of living. E.D.M. v. T.A.M., 307 S.C. 471, 476-77, 415 S.E.2d 812, 816 (1992).
The family court thoroughly addressed each factor in determining whether to award attorney’s fees. The record supports that Husband has the greater ability to pay attorney’s fees and absorb that cost into his standard of living. Wife successfully established the Glenn Street properties were marital in nature and prevented Husband from introducing evidence related to her alleged adulterous relationship. On appeal, Husband established the family court erred in valuing Apex Investors. However, this determination does not render the beneficial results between the parties so much in Husband’s favor that the decision on attorney’s fees should be disturbed. Accordingly, the family court did not abuse its discretion in awarding Wife a portion of her attorney’s fees and denying Husband’s request.
CONCLUSION
Based on our review of the record, we affirm the family court’s decision to exclude evidence of Wife’s alleged adultery
AFFIRMED AS MODIFIED AND REMANDED.
. Two children were born to Husband and Wife but all issues related to the children have been settled by agreement.
. Wife waived alimony prior to the final hearing.
. 18 U.S.C.A. § 2515 provides "[w]henever any wire or oral communication has been intercepted, no part of the contents of such communication and no evidence derived therefrom may be received in evidence in any trial, hearing, or other proceeding in or before any court....”
. See McCall v. Finley, 294 S.C. 1, 4, 362 S.E.2d 26, 28 (Ct.App. 1987) ("[WJhatever doesn’t make any difference, doesn’t matter.”).
. Wife did not contend at trial the Indian Creek property had been transmuted.
. See Barrow v. Barrow, 394 S.C. 603, 614, 716 S.E.2d 302, 308 (Ct.App. 2011) ("[A]ny special equity ... in the marital home was not to be apportioned separately but was to be considered as a factor in equitable distribution.” (citing Dawkins v. Dawkins, 386 S.C. 169, 173—74, 687 S.E.2d 52, 54 (2010), abrogated on other grounds by Lewis v. Lewis, 392 S.C. 381, 709 S.E.2d 650 (2011))).
. Neither Husband nor Wife presented expert testimony at trial as to the value of Husband's business.
. In his brief, Husband acknowledges the existence of a $5,000 note payable to shareholder that should be included in the 2008 value of the business. Therefore, the valuation of the business in 2008 would be $4,215.44.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.