Tony Lee Szcygiel v. Susan Kaye Szcygiel ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
TONY LEE SZCYGIEL, UNPUBLISHED
October 24, 2017
Plaintiff/Cross Defendant-
Appellant,
v No. 333227
Tuscola Circuit Court
SUSAN KAYE SZCYGIEL, LC No. 15-028642-DO
Defendant/Cross Plaintiff-Appellee.
Before: BORRELLO, P.J., and MURPHY and RONAYNE KRAUSE, JJ.
PER CURIAM.
Plaintiff appeals of right from a judgment of divorce. On appeal, he challenges the trial
court’s finding that real property received by defendant during the marriage was not marital
property. He also challenges the spousal support award and the division of marital property. For
the reasons discussed below, we affirm.
I. FACTS
The parties were married in 1980. The marriage produced two children who are now
adults. The marital home was on a one-acre parcel, located at 3915 S. Plain Road in Kingston,
Michigan, that the parties purchased from defendant’s parents for $1,000. Defendant’s parents
resided on a 62-acre parcel of land, located at 3925 S. Plain Road (the property or the 3925 Plain
Road property), adjoining the parties’ parcel. The parties testified to doing yardwork on the
3925 Plain Road property throughout their marriage. It was established that plaintiff performed
“renovations” on defendant’s parent’s home, such as reroofing the home and renovating a
bedroom. Defendant’s brother disputed some of the “projects” plaintiff claimed to have
completed on the property. He also explained that all family members “chipped in” and
performed work on the property.
In 1999, defendant’s father passed away. In 2005, plaintiff started a construction
business, TLS Enterprises. Plaintiff renovated a “pole barn” on the 3925 Plain Road property
and used it as a “shop” for the business. The renovations included the construction of a storage
loft and a stairway. Plaintiff also claimed that he installed “underground electrical” to the barn.
Plaintiff did not pay his mother-in-law any money for use of the barn.
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In 2008, defendant’s mother permanently moved to a medical care facility. In October
2013, she executed a quitclaim deed which conveyed the 3925 Plain Road property to herself,
and, upon her death, to defendant. In the spring of 2014, the parties’ son and his wife began
living in the home previously occupied by defendant’s parents. In connection with the son
moving in, plaintiff completed numerous projects in the home, including installing countertops, a
dishwasher, and a garbage disposal. The parties’ son worked for plaintiff and as part of his
compensation, he was allowed to live at the home without paying rent. Plaintiff also paid the
home’s utilities and “insurance” as part of his son’s income.
In August 2014, defendant’s mother passed away and defendant obtained title to the
property. Defendant explained that plaintiff paid the 3925 Plain Road property taxes after her
mother’s passing. It appears that the status quo of plaintiff using the barn on the property for his
business and the parties’ son living on the property continued uninterrupted.
Plaintiff filed a complaint for divorce in January 2015 and defendant filed a counter-
complaint for divorce shortly thereafter. Following a trial, the trial court ruled that the 3925
Plain Road property was defendant’s separate property. In dividing the marital estate, the court
awarded defendant the marital home and plaintiff TLS Enterprises. The court also awarded
defendant $1,400 per month in spousal support.
II. STANDARD OF REVIEW.
We review for clear error the trial court’s factual findings, including “whether a particular
asset qualifies as marital or separate property.” Woodington v Shokoohi, 288 Mich App 352,
357; 792 NW2d 63 (2010). “Findings of fact are clearly erroneous when this Court is left with
the definite and firm conviction that a mistake has been made.” Id. The trial court’s
dispositional rulings, such as the division of the martial estate and an award of spousal support,
must be affirmed unless we are left with a firm conviction that the decision was inequitable.
Pickering v Pickering, 268 Mich App 1, 7; 706 NW2d 835 (2005); Korth v Korth, 256 Mich App
286, 288; 662 NW2d 111 (2003).
III. MARITAL PROPERTY
Plaintiff first argues that the trial court erred in finding that the 3925 Plain Road property
was not marital property. We disagree.
“[T]he trial court’s first consideration when dividing property in divorce proceedings is
the determination of marital and separate assets.” Reeves v Reeves, 226 Mich App 490, 493-494;
575 NW2d 1 (1997). “Marital assets are those that came ‘to either party by reason of the
marriage . . . ’ ” Woodington, 288 Mich App at 358, quoting MCL 552.19. “Generally, marital
assets are subject to division between the parties, but the parties’ separate assets may not be
invaded.” McNamara v Horner, 249 Mich App 177, 183; 642 NW2d 385 (2002). “Normally,
property received by a married party as an inheritance, but kept separate from marital property, is
deemed to be separate property not subject to distribution.” Dart v Dart, 460 Mich 573, 584-
585; 597 NW2d 82 (1999). In this case, defendant obtained ownership of the 3925 Plain Road
property following the death of her mother in August 2014. The deed that effectuated that
conveyance was made in exchange for $1. Regardless of whether defendant’s receipt of the
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property is characterized as a gift or an inheritance, property that is transferred in this manner is
generally considered separate from marital property. Dart, 460 Mich at 585.
“After properly recognizing the parties’ separate estates and the marital estate, the [trial]
court may consider whether invasion of [a party’s separate] estate is necessary.” Reeves, 226
Mich App at 497. “[A] spouse’s separate estate can be opened for redistribution when one of
two statutorily created exceptions is met.” Id. at 494. The two statutory exceptions “to the
doctrine of noninvasion of separate estates” are found at MCL 552.23 and MCL 552.401. Id. at
494-495. MCL 552.23 allows a court to invade a party’s separate property “if after division of
the marital assets ‘the estate and effects awarded to either party are insufficient for the suitable
support and maintenance of either party . . . ’ ” Id. at 494, quoting MCL 552.23(1). Plaintiff does
not argue that this exception is applicable. Instead, plaintiff argues that trial court erred in ruling
that MCL 552.401 did not apply in this case. That statute provides in relevant part as follows:
The circuit court of this state may include in any decree of divorce or of
separate maintenance entered in the circuit court appropriate provisions awarding
to a party all or a portion of the property, either real or personal, owned by his or
her spouse, as appears to the court to be equitable under all the circumstances of
the case, if it appears from the evidence in the case that the party contributed to
the acquisition, improvement, or accumulation of the property . . . [MCL
552.401.]
Under this statute, “[w]hen one [spouse] significantly assists in the acquisition or growth
of a spouse’s separate asset, the court may consider the contribution as having a distinct value
deserving of compensation.” Reeves, 226 Mich App at 495. In this case, plaintiff does not
contend that he contributed to the acquisition or accumulation of the property and the court
found generally that “[t]here were no proofs presented that indicated that plaintiff’s work had
actually resulted in an increase to the value of the property”, so the issue is whether he
contributed to the improvement of the property. MCL 552.401.
“[A] reviewing court defers to the trial court’s credibility determinations, and the trial
courts factual findings should be affirmed unless the evidence clearly preponderates in the
opposite direction.” Pierron v Pierron, 486 Mich. 81; 782 NW2d 480 (2010). Furthermore
“Findings of fact are to be reviewed under the ‘great weight’ standard, discretionary rulings are
to be reviewed for ‘abuse of discretion,’ and questions of law for ‘clear legal error.’ Fletcher v
Fletcher, 447 Mich. 871, 877; 526 NW2d 889 (1994). Under this standard, “a reviewing court
should not substitute its judgment on questions of fact unless they ‘clearly preponderate in the
opposite direction.’” Id. at 878, 526 NW2d 889, quoting Murchie v Std Oil Co., 355 Mich. 550,
558, 94 NW2d 799 (1959). Additionally, a reviewing court should defer to the trial court’s
credibility determinations. Berger v Berger, 277 Mich. App. 700, 705; 747 NW2d 336 (2008).
The trial court determined the property to be separate from the marriage and used the
testimony throughout the trial, determining credibility and which party met their burden of proof,
to come to this conclusion. As the trial court indicated “Defendant presented testimony through
witness, Mark Britton (defendant’s brother) that the Farmell Tractor and implements had long
been equipment used on the farm, long predating the marriage of the parties herein.” From
defendant’s testimony alone the court found that the burden of proof was met. On the contrary
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the trial court now found it the burden of the plaintiff to prove otherwise; by showing that one of
the statutory exceptions was indeed met. The trial judge, in response to MCL 552.401 statutory
exception, claimed that “Certainly, maintaining the property is not the same as “improving” the
property. There were no proofs presented that indicate that plaintiff’s work had actually resulted
in an increase to the value of the property.” Concluding that “[t]he plaintiff failed to sustain his
burden of establishing that the items of property were not separate” finding “the Farm” and
equipment to be separate property. Based on the lower court’s findings the judge made a
credibility determination and we must only review for ‘clear legal error’ or ‘abuse of discretion’.
Thus we must defer to the trial court’s decision that neither exception was met nor that plaintiff
failed to meet his burden of proof in this case.
Furthermore while plaintiff presented estimates on the amount of money he spent on the
projects, it does not follow that the property’s value was increased equal to those amounts. As
mentioned, defendant’s brother testified that “my mom and dad would always pay for everything
that was done to the home”, and some of the projects occurred when defendant’s parents were
alive. In any event, because plaintiff did not present proofs that would have allowed the court to
discern a distinct “value deserving of compensation,” Reeves, 226 Mich App at 495, the court did
not err in finding that MCL 552.401 was inapplicable.
IV. DIVISION OF MARITAL PROPERTY
Plaintiff also argues that the division of marital property was inequitable. Specifically, he
argues that he should have been awarded a part of the marital home. We disagree with the
plaintiff, and the de facto distribution of defendant receiving the Plain Road properties and
plaintiff receiving the construction business was an equitable result. Since this Court has
affirmed that the trial court did not err in finding that the 3925 Plain Road property was not part
of the marital estate, it is not included in the division of marital property and not considered by
this Court. Therefore, we find that the trial court did not err in the division of marital property
and that the decision was indeed equitable.
“The goal in distributing marital assets in a divorce proceeding is to reach an equitable
distribution of property in light of all the circumstances.” Berger v Berger, 277 Mich App 700,
716-717; 747 NW2d 336 (2008). “An equitable distribution of marital assets means that they
will be roughly congruent.” Jansen v Jansen, 205 Mich App 169, 171; 517 NW2d 275 (1994).
“The trial court need not divide the marital estate into mathematically equal portions, but any
significant departure from congruence must be clearly explained.” Berger, 277 Mich App at
717.
Trial courts may consider the following factors in dividing the marital estate: (1)
the duration of the marriage, (2) the contributions of the parties to the marital
estate, (3) the age of the parties, (4) the health of the parties, (5) the life situation
of the parties, (6) the necessities and circumstances of the parties, (7) the parties’
earning abilities, (8) the parties’ past relations and conduct, and (9) general
principles of equity. [Id.]
“When dividing marital property, a trial court may also consider additional factors that are
relevant to a particular case.” Id.
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Plaintiff argues that “[i]n the face of the ruling on the Plain Rd. Farm, the trial court was
required to award half of the equity in the marital home to the plaintiff”. Because plaintiff does
not cite authority for that argument, this Court could consider this issue abandoned. See
Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959) (“It is not enough for an appellant
in his brief simply to announce a position or assert an error and then leave it up to this Court to
discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments,
and then search for authority either to sustain or reject his position.”)
As for the court’s division, the court implicitly found that the marital home had an equity
value of about $77,000. The 3925 Plain Road property was appraised at $215,000. Despite
numerous requests from defendant, there was a dearth of information relating to TLS
Enterprises; plaintiff maintained that he provided all the information available to him. Yet, the
trial court was incredulous that “there is no accounts receivable” for the business. With the
limited information provided to the court, it found that the physical property of the corporation
had a value of at least $100,975, with liabilities on that property totaling almost $52,000. The
court was also aware, however, that plaintiff’s construction business grossed $512,185 in 2014,
and, based on the deposits to plaintiff’s bank account from January through September 2015, that
the business was on pace to surpass that mark in 2015. Although “[a] trial court must make
specific findings of fact regarding the value of each disputed piece of marital property awarded
to each party in the judgment,” Woodington, 288 Mich App at 364, defendant conceded that the
business should be awarded to plaintiff. Therefore, the corporation was arguably not in dispute.
Under these circumstances, a “roughly congruent” distribution, Jansen, 205 Mich App at
171, is accomplished by awarding defendant the 3915 Plain Road property and the Chevy 2012,
and plaintiff TLS Enterprises, including “its equipment, accounts receivable, work in progress
and related indebtedness.” Because we are left with a firm conviction that the trial court’s de
facto distribution of the marital estate was equitable, we must affirm. See Reeves v Reeves, 226
Mich App 490, 497; 575 NW2d 1 (1997).
V. SPOUSAL SUPPORT
Finally, plaintiff argues that the spousal support award was excessive. We disagree.
“The main objective of alimony is to balance the incomes and needs of the parties in a
way that will not impoverish either party.” Moore v Moore, 242 Mich App 652, 654; 619 NW2d
723 (2000). The following factors are relevant to spousal support determinations:
(1) the past relations and conduct of the parties, (2) the length of the marriage, (3)
the abilities of the parties to work, (4) the source and amount of property awarded
to the parties, (5) the parties’ ages, (6) the abilities of the parties to pay alimony,
(7) the present situation of the parties, (8) the needs of the parties, (9) the parties’
health, (10) the prior standard of living of the parties and whether either is
responsible for the support of others, (11) contributions of the parties to the joint
estate, (12) a party’s fault in causing the divorce, (13) the effect of cohabitation on
a party’s financial status, and (14) general principles of equity. [Olson v Olson,
256 Mich App 619, 631; 671 NW2d 64 (2003).]
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Relying on Healy v Healy, 175 Mich App 187; 437 NW2d 355 (1989), plaintiff argues
that the trial court improperly imputed income to him. In Healy, we affirmed the trial court
when it determined the spousal support award by imputing to the defendant the income he
received before he voluntarily reduced his income in response to the divorce proceedings. In this
case, plaintiff argues that there was no evidence that he voluntarily reduced income. But
plaintiff fails to recognize that the trial court did not impute income to him; rather, it simply
found that his income was greater than what he maintained it to be.
Plaintiff’s income tax returns showed that his construction business grossed $363,086,
$471,825, and $512,185, in 2012, 2013, and 2014, respectively, but that his “net profits” in those
years were substantially less. The trial court found that plaintiff pays “for all of his expenses,
both business and household through his business account,” which plaintiff does not dispute on
appeal.
To determine plaintiff’s actual income, defendant retained a certified public accountant to
ascertain how much plaintiff needed to make in order to pay his monthly expenses. The
accountant testified that plaintiff’s “cash basis business income,” i.e., the amount needed to pay
his expenses, was $62,192. After trial, plaintiff did not object to the accountant’s methods,
calculations, or the need to determine what his actual income was. Instead, he suggested that his
average net profits from the previous three years should be averaged with the accountant’s
estimate, which would result in an average annual income of about $41,590. The court declined
that invitation and instead found that plaintiff’s annual disposable income was $62,192. Plaintiff
does not argue that the court’s finding was clearly erroneous, nor does he suggest that the trial
court erred in relying on the accountant’s testimony. Accordingly, we are not convinced that the
trial court’s finding was clearly erroneous.
Plaintiff argues that trial court erred in finding that “there was no evidence presented by
which the Court could conclude that the plaintiff is not capable of continuing to earn similar
income going forward.” Plaintiff points to his testimony that his business was declining and that
numerous health conditions would prevent him from continuing to work as much as he had in the
past. It is clear that the trial court did not find plaintiff’s testimony credible. “Special deference
is given to the trial court’s findings when they are based on the credibility of the witnesses.”
Woodington, 288 Mich App at 355. Plaintiff presented no corroborating evidence of his health
conditions. As for his business, plaintiff’s income tax returns showed that his gross income
increased substantially each year from 2012 to 2014. As indicated, he was on pace for a record
year in 2015. For those reasons, we are not convinced that the trial court erred in determining
plaintiff’s income.
In awarding defendant spousal support, the court considered many of the factors found in
Olson, 256 Mich App at 631. Specifically, the court was cognizant that this was a 34-year
marriage and that defendant undisputedly has health conditions such as type 2 diabetes and
fibromyalgia. Despite her health, defendant continues to work. Given the circumstances, the
trial court thought it should try to equalize the parties’ respective incomes with the spousal
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support award. We are not “left with a firm conviction that the decision was inequitable.”
Korth, 256 Mich App at 288.
Affirmed.
/s/ Stephen L. Borrello
/s/ William B. Murphy
/s/ Amy Ronayne Krause
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