I. Marital vs Separate Property

Ayres v Ayres, unpublished opinion per curiam of the Michigan Court of Appeals, decided December 22, 2011 (Docket No. 297989), on appeal from Otsego County

Each party owned a piece of real estate at the time of the marriage, but each contributed to the other’s property and they invested in property together during the marriage. Wife was awarded her premarital property as her separate property and husband was awarded his, also as separate property. Husband sought a share of wife’s premarital property based on his contribution to it, and the lack of findings on the Sparks factors. The decision to award each their premarital property was not inequitable given the balanced contributions of each.

Zori v Zori, unpublished opinion per curiam of the Michigan Court of Appeals, decided December 22, 2011 (Docket No. 304153), on appeal from Oakland County

The Court of Appeals affirmed the trial court’s decision to classify the proceeds of the sale of a party store as marital property where the store was acquired during the marriage, purchased with marital funds and where, if wife had not been at home taking care of the children, husband could not have built a successful business.

Kirsch v Gonzalez, unpublished opinion per curiam of the Michigan Court of Appeals, decided October 27, 2011 (Docket No. 304036), on appeal from Oakland County

The Court of Appeals affirmed the trial court’s classification of property and held that  title to property acquired pre-marriage was in husband’s name does not make it his separate property. Their was evidence that showed  the parties had been commingling income for years before the property was acquired, maintained joint bank accounts and jointly contributed to the maintenance of the property.

Osterhout v Osterhout, unpublished opinion per curiam of the Michigan Court of Appeals, decided October 25, 2011 (Docket No. 296813), on appeal from Schoolcraft County

The Court of Appeals affirmed the trial court’s inclusion of credit card debt in the marital estate. After a joint bankruptcy in 2004, wife took numerous  credit cards, including some in husband’s name, without his knowledge or consent. $37,000 in total debt was involved. The trial court required each to pay half, saying husband could not be relieved of his share because he left all the financial responsibility to wife.  The court did not find evidence that any of the debt was not spent for the family. They lived a lifestyle that exceeded the parties income. the wife did get a slightly smaller share of the husband’s pension benefit in recognition that she was primarily responsible for the debt.

Golowic v Golowic, unpublished opinion per curiam of the Michigan Court of Appeals, decided October 18, 2011 (Docket No. 298973), on appeal from Jackson County

The Court of Appeals upheld the trial court’s finding that an oil and gas lease on husband’s premarital property was his separate property. The parties separated after 15–16 months of marriage. The husband  owned a 35 acre parcel prior to the marriage. The parties lived at the property, but no interest was conveyed to wife during the marriage. When husband entered into an oil and gas lease related to the property the lessee oil company required wife’s signature because she was his spouse. The trial court determined the lease was husband’s separate property and that no commingling had taken place by adding her signature to the lease  The court did hold that the trial court had not made findings of fact on the wife’s claim that the court should invade the separate property based on her contribution s so the cas was remanded to the court for a decision on this issue.

Anderson v Anderson, unpublished opinion per curiam of the Michigan Court of Appeals, decided September 15, 2011 (Docket No. 299486), on appeal from Kent County

The Court of Appeals affirmed the trial court’s decision that a cottage was marital property where the parties bought it jointly with the husband’s father (taking title as joint tenants with rights of survivorship) and treated it as an essential part of the marital estate.

The Court of Appeals reversed the trial court’s decision that all of the growth on husband’s investment account was marital. The account balance at the start of the marriage was $150,000.00 and had increased to $196,000 through interest accumulation during the marriage. The court found that there were no additions to the account during the marriage or that investment decisions had been made on the account during the marriage and as such the increase was passive, so was separate. The Court of Appeals remanded so that the trial court could consider whether invasion of husband’s separate property was warranted.

Roe v Roe, unpublished opinion per curiam of the Michigan Court of Appeals, decided July 19, 2011 (Docket No. 297855), on appeal from Gladwin County

The Court of Appeals upheld  trial court’s classification of property as marital. The parties to this 17 year marriage began commingling assets before marriage. Husband purchased property including a mobile home and 19 acres shortly before the marriage. He admits the home and 2 acres were marital but argued that the remaining 17 acres should be his separate property. There seemed to be a clear  indication  that the acreage was not treated as separate. A fact which supported this conclusion  was the taking of a mortgage on the entire 19 acres to build a new home on the property. Taxes and maintenance were also paid jointly and the land was referred to as “our” property. That title was never transferred to the parties’ jointly is not dispositive. The opinion does not say if there was just one parcel containing 19 acres or if there were two parcels on the records of the county.

Vertz v Vertz, unpublished opinion per curiam of the Michigan Court of Appeals, decided June 28, 2011 (Docket No. 294406), on appeal from Schoolcraft County

The Court of Appeals affirmed the trial court’s classification of appreciation in the value of the marital home as marital property even though husband owned it before the marriage. Premarital equity was returned to husband as his separate property, but the increase in its value was not wholly passive, at least partially due to the addition of a sunroom and pole barn to the home. Husband used pre-marital pension benefits to make these improvements. The court relied on cases that allow the court to treat pre-marital pension benefits as marital if necessary to do equity. Husband’s use of pension funds to improve the marital home during the marriage warranted considering those funds as marital in part because of the disparity in incomes between the parties.

Husband’s disability payments contributed to the marital home were marital.  The Court of Appeals determined that VA and social security benefits received during the marriage as replacement for earnings qualify as marital property.

Henderson v Henderson, unpublished opinion per curiam of the Michigan Court of Appeals, decided June 9, 2011 (Docket No. 295765), on appeal from Oakland County

The Court of Appeals reversed and remanded the trial court’s failure to include $8.2 million in appreciation in husband’s interest in his family business during their 8 year marriage in the marital estate. Husband was actively involved in the business; as a publisher, marketing manager, and co-CEO. There was testimony that husband did not have involvement with corporate growth, acquisitions and expenditures, some of which decisions he opposed. The main issue for trial was whether the appreciation was separate or marital. The trial court determined the appreciation was passive.

The Court of Appeals disagreed, finding the appreciation was not “wholly passive.” . Here, husband was not  one of many employees, but bore responsibility for many of the company’s major functions. The wife’s facilitation of husband’s contributions to the business by maintaining the home and taking care of the children was also noted by the court.

These cases discuss recent developments in the age old question of whether property is marital and can be divided in a divorce or separate and awarded to the party that owned the property prior to the marriage. This is a complicated area and it is best to discuss your options with an attorney. Call me on my cell phone 248.672.6112 or at the office if you would like to know what your rights are in this area. My name is John Bain and I have practiced family law for over 25 years in Wayne, Oakland, and Livingston County. I serve clients in many cities including Novi, South Lyon, Milford, Commerce, Brighton, Howell, Fowlerville, Plymouth, Northville,  and Canton.