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July 26, 1994


Appeal from Circuit Court of Woodford County. No. 92D79. Honorable Charles H. Frank, Judge Presiding.

Released for Publication August 24, 1994. As Corrected September 6, 1994.

Honorable Robert W. Cook, J., Honorable Carl A Lund, J., Honorable Frederick S. Green, J.

The opinion of the court was delivered by: Cook

JUSTICE COOK delivered the opinion of the court:

On October 5, 1993, the trial court entered a judgment dissolving the marriage and awarding the property of petitioner Ronald E. Smith and respondent Carol L. Smith. Respondent appeals, contending (1) the trial court erred in failing to consider dissipation of marital assets by petitioner; (2) petitioner failed to establish by the requisite clear and convincing evidence that the General Electric (G.E.) stock was nonmarital property; and (3) the trial court's ruling that the G.E. stock was nonmarital property was against the manifest weight of the evidence. We affirm in part, reverse in part, and remand.

Petitioner and respondent were married February 7, 1970. No children were born to the marriage, although respondent had two young children who were reared in the marital home. The parties separated August 23, 1993, and petitioner filed for divorce the next day.

At trial, the parties stipulated to the division of certain items of personal property, including furniture, clothing, tools, automobiles, and snowmobiles. The parties further stipulated they purchased the marital residence with $5,000 of petitioner's savings in contemplation of marriage and that two-thirds of a pasture which lay adjacent to the marital residence was marital property. The marital residence was currently appraised at $88,500, and the entire pasture was appraised at $5,500. The parties disagreed whether two other parcels of land which petitioner acquired from his parents were marital or nonmarital property. One of these properties was an 80-acre parcel known as the Metamora property; the other was a 25-acre parcel known as the Cruger property.

Respondent testified she was 49 years old, had a high school education, and was currently employed with the Woodford County Journal, where she was in advertising sales and performed secretarial-type work. Her annual salary was approximately $17,477. Respondent stated she planned to go to cosmetology school in the fall; the program would last 11 months and cost $5,800, plus the cost of uniforms. She indicated she would either like to open her own shop or go to work for a friend who had a shop. Respondent testified she did not want to receive the marital home but would need $350 to $400 a month to rent an apartment. She had been living in the marital home rent-free since the separation. She requested the court to order maintenance until such time as she completed her education and started working again.

Respondent further testified that when petitioner moved out of the marital residence, she withdrew $500 for her immediate needs and deposited another $14,500 from the parties' joint savings account into her personal account. She did so because when petitioner left, "he took the checkbook with him, and that left me with nothing." At the time of trial, respondent had $10,630 remaining in her personal account. Of the approximately $4,000 spent, respondent had taken $60 per week as court-ordered maintenance, paid for repairs for water damage to the house, and spent the remainder on general living expenses.

Petitioner was 53 years old at the time of trial and worked as an electrician at Caterpillar, earning an annual salary of approximately $46,000. He acknowledged he spent the $4,200 remaining in the joint savings account after respondent had withdrawn the $15,000. He also received approximately $2,000 from Caterpillar as a vacation check and $6,400 from income of a farm on one of the disputed parcels of land. At the time of trial, petitioner had a combined $401.81 in his checking and savings accounts. When asked how he had spent all this money, in excess of his take-home pay of approximately $400 per week, he indicated he made a $2,600 payment to the bank for his truck and tractor loan, spent approximately $900 on gifts for his stepchildren, and paid a substantial amount in taxes and for repairs on the house. Petitioner testified he spent the remaining $7,000 on living expenses and vacations. He owed the bank another $2,600 for his truck and tractor loans. Due to petitioner's unexplained expenditure of $7,000, respondent's counsel requested the court award respondent the $10,600 in her possession and require petitioner to pay the balance of his truck and tractor loan.

The trial court also heard evidence regarding G.E. stock. Petitioner testified he received shares of stock as one of his benefits while he was in management at G.E., prior to the parties' marriage. Respondent produced at trial 146 shares of G.E. stock held by petitioner and respondent in joint tenancy. Respondent claimed the shares were purchased through payroll deduction from petitioner's salary. She testified she was unsure whether some of the shares were purchased by petitioner before the marriage but asserted at least half of the shares were acquired due to a recent stock split. She was unsure whether she had purchased any of the shares.

Petitioner testified he thought there were 178 shares of stock but acknowledged respondent had produced only 146 shares. Although the certificates were all dated after 1970, the year the parties were married, petitioner thought that was due to stock splits. Petitioner indicated he left management before his marriage and did not receive any further shares after he was in management, although he continued to work for G.E. until 1972. After the marriage, he transferred the stock into joint tenancy with respondent "for convenience purposes" -- i.e., so that she would receive the shares if he died -- but he did not intend to make a gift to respondent at the time of the transfer. Respondent, however, testified the parties sometimes deposited the dividends in their joint savings account; other times, she stated, "we'd cash them and spend them. If we needed cash or he needed cash, they were just cashed."

The trial court found the Metamora property and the G.E. stock were petitioner's nonmarital property. The court then stated it believed an even split of the marital property would be appropriate. In order to equalize the distribution, the court ordered the marital home to be sold and respondent was to receive the first $37,000 of the proceeds, plus a one-time maintenance payment of $8,000 from those proceeds so she could attend cosmetology school. Any remaining proceeds from the sale of the home, after taxes and costs, were to be split equally between the parties.

On November 30, 1993, the trial court denied respondent's motion to reconsider the distribution of the parties' marital ...

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