Drinking husband loses the family farm partly to wife.

GOOD MORNING FLINT!
1/30/09
bY
Terry Bankert


The information following is intended for media distribution and is modified for that purpose. Please read the unmodified version at http://terrybankert.blogspot.com/ and consult an attorney before you rely on this information.

I am a Flint Divorce Lawyer or Attorney practicing Family Law in Flint Mi. The issues delt with are child custody, child support, parenting time, spousal support and grandparents rights in Flint Michigan. Every Saturday on WFLT 1420 AM Radio in Flint at 9 AM I host a show called " Know the Law".

This is a call in program 239-5733 (810) where often I discuss recently released Court of Appeals decisions taking the uniques issues and applying them to everyday situations in the Genesee County Family Court. You are invited to participate in this discussion.

The greater good is that through information familes are better equiped to confront the harsh issues facing their family in turmoil. It is sad that 50% of families face divorce in America. A word to the wise, the grass is seldom greener on the other side. Consult family, church and counselors before you make the decision to divorce. And always remember your children are watching, listening and hurting, conduct yourself accordingly.
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To day we talk about a recent unpublished Michigan Court of Appeals case.
The Issues are :
Divorce;
Property division; Sparks v. Sparks; Dart v. Dart;
Division of the farm property; Hanaway v. Hanaway; Reeves v. Reeves;
Division of farm rental income;
Attorney fees; Reed v. Reed; MCL 552.13; MCR 3.206(C); Smith v. Smith;
Alleged misconduct as a basis to sustain the award of attorney fees

Court: Michigan Court of Appeals (Unpublished)Case Name: Bowser v. Bowsere-Journal Number: 41617Judge(s): Per Curiam - Hoekstra, Whitbeck, and Talbot

The trial court did not err in concluding the farm was not separate property where it was clear both parties actively managed the farm and the proceeds were partly used for marital purposes.The parties did not dispute the 78 percent of the property at issue was a gift from the defendant-husband's parents and held in his trust.

Defendant argued the trial court erred in determining the whole of the farm was a marital asset subject to division, contending the record showed he maintained a separate 78 percent interest in the farm, which was not divisible as a marital asset.The court noted the farm was a fully operational business, first as a cow-milking operation and then for selling cash crops.

While the record showed a dispute about how much involvement the plaintiff-wife had, the case was analogous to the business in Hanaway.It was clear from the record the farm account, which was funded with proceeds from the farm's milking operation, cash crops, and rental income, was used to pay electricity, propane, and car insurance bills for the family, as well as for farm and property-related expenses.

The court also was not left with a definite and firm conviction the trial court's division of the farm rental income was inequitable.However, the court reversed and remanded the trial court's award of attorney fees to the plaintiff, concluding she did not meet her burden to show she was unable to cover her attorney fees and she did not establish the defendant was able to pay the fees as required by MCR 3.206(C)(2)(a).

Plaintiff also failed to demonstrate the fees she requested were incurred due to defendant's alleged misconduct.On remand, the trial court was instructed to make findings about plaintiff's financial needs and whether defendant's misconduct directly resulted in plaintiff incurring the fees she requested. Affirmed in part, reversed in part, and remanded.—

full case follows
S T A T E O F M I C H I G A NC O U R T O F A P P E A L S
MARGARET ANN BOWSER,Plaintiff-Appellee,
UNPUBLISHED
January 22, 2009v No. 279007Saginaw Circuit CourtTIM HOWARD BOWSER,LC No. 02-044743-DMDefendant-Appellant.Before: Hoekstra, P.J., and Whitbeck and Talbot, JJ.
E-journal 41617

[ I have added spacing. Parts of the opinion deleted will show as ... additions will be blocked in as here. Most BLOCK headlines are mine.-trb]

PER CURIAM.
Defendant Tim Bowser appeals from the parties’ judgment of divorce.
Tim Bowser’s issues on appeal involve the property division and an award of attorney’s fees to plaintiffMargaret Bowser.
We affirm in part [agree], reverse in part [disagree], and remand for further consideration ofcertain specified matters consistent with this opinion [the lower court has to do part of it over again because it was wrong.].
I. Basic Facts And Procedural History

MARRIED 1977, WIFE 16 , THREE ADULT CHILDREN
The parties were married in 1977. They met when Margaret Bowser was a little overfifteen years old. Margaret Bowser moved in with Tim Bowser a year before their weddingwhen she was seventeen. Three children were born during the marriage, all of whom are nowadults.

FARMER HUSBAND INHERITED A FARM
Tim Bowser’s father was a dairy farmer who inherited 40 acres from his father and thencontinued to add acreage until the property, known as Bowser Farms, was 288 acres and had twohouses on it. 100 percent interest in Bowser Farms Limited Partnership was held in the TimBowser Revocable Living Trust.

78 PERCENT OF THE FARM WAS INHERITED FROM HUSBANDS FAMILY
78 percent interest in the property was acquired by TimBowser’s trust as a gift from his parents.
Before 1995, it was a cow milking operation.
The cows were then sold and from then onward crops were grown to be sold.

THE FARM IS WORTH $600,000
The property was appraised twice: once in 2002 at $520,000 and once in 2005 at $600,000.
An annuity payable to Tim Bowser’s parents was set up in 1982 to buy a 16 percent interest in the limited partnership portion in the farm.
To pay the annuity, $1,320 was monthly taken out of a farm account intowhich farm proceeds were deposited and from which farm-operating expenses were paid.

FAMILY MONEY WAS USED TO PAY FOR THE FARM, WIFES NAME ON DOCUMENTS SHE THOUGH SHE WAS BUYING INTO THE FARM
Margaret Bowser was obligated by a promissory note for part of the annuity fund and issuedsome of the checks to the annuity fund for Tim Bowser’s parents.
Margaret Bowser testified that she believed that she and Tim Bowser were making annuity payments in order to purchase the whole farm and that they owned the farm jointly. Margaret Bowser, along with Tim Bowser and-2-his parents, signed a quitclaim deed in 1991, which released Margaret Bowser’s interest in theproperty and named Tim Bowser as sole trustee of the trust that held the property.

WIFE DID NOT KNOW SHE HAD SIGNED AWAY HER RIGHTS
Margaret Bowser testified that she did not read the deed before signing it, did not receive an advance copy of the document, and was not told the scope of the document.

WIFE ACTIVELY WORKED THE FARM
Margaret Bowser testified that she has been working on the farm ever since she met TimBowser. Margaret Bowser and her daughter, Lisa Montgomery, testified that Margaret Bowserhelped with the dairy farm, drove tractors, helped cultivate crops, kept the lawn, and did thebookkeeping. She did this work in addition to keeping the house, cooking, and raising thechildren. Tim Bowser testified that his parents, who worked the farm previously, worked rightalongside each other and that he would describe his work relationship with Margaret Bowser asthe same. Tim Bowser also testified that Margaret Bowser helped on the farm for five weeksduring the growing season and only occasionally worked an 11- or 12-hour day.

WIFE FILED FOR DIVORCE BECASUE OF THE HUSBANDS DRINKING
Margaret Bowser testified that she filed for divorce because of Tim Bowser’s drinkingproblems.

WIFE MOVED TO ANOTHER HOUSE ON THE PROPERTY
In June 2002, Margaret Bowser moved from the marital home to the second house onthe property with one of her daughters. Tim Bowser claims he paid almost $13,000 from thefarm account to have repairs done to that second house. In 2005, the net profit on the farm was$7,704 and an additional $2,193 was received from a government farm subsidy program. In2005, Margaret Bowser took $500 out of the farm account to reimburse herself for fixing a gasleak at the second house. Tim Bowser paid his car insurance from the farm account. During2004 and 2005, Tim Bowser paid both his and Margaret Bowser’s propane and electricity billsfrom farm proceeds. Replacement of tools and replacement of a tool shed after a fire were alsopaid from the farm account. Tim Bowser testified that Margaret Bowser left the second housewith significant damage.

HUSBAND STOPPED FARMING AND RENTED IT OUT
In 2004 and 2005, Margaret Bowser and Tim Bowser filed their taxes separately.Beginning in 2004, Tim Bowser decided to stop farming the property and he rented it out forabout $23,870 a year for two years. The proceeds from crops in 2004 and 2005 were included onTim Bowser’s income tax returns. Margaret Bowser testified that she did not pay any incometaxes on those proceeds.

THE FARM IS A MARITAL ASSET SUBJECT TO DISTRIBUTION HUSBAND DID NOT KEEP THE PROPERTY SEPARATE.
Regarding Bowser Farms, the trial court concluded as follows:The Court finds that the entirety of the real property comprising BowserFarms is a marital asset subject to equitable distribution. [Tim Bowser]’s claimthat 78% of the Farm is separate property fails, due to the fact that he failed tokeep any part of the [f]arm real property or farm business separate. All theevidence is that Bowser Farms was, during all times alluded-to [sic] in the record,maintained and operated as a single commercial enterprise.Tim Bowser now appeals.-3-II. Division Of Assets
A. Standard Of ReviewWe review the trial court’s factual findings for clear error.
1 "A finding is clearlyerroneous if this Court, on all the evidence, is left with a definite and firm conviction that amistake was made; the appellant bears the burden of showing that a mistake was made."2 If noclear error is found, we will uphold the trial court’s ultimate dispositional ruling unless we areleft with a firm conviction that the property division was inequitable in light of the facts.3

B. Division Of The Farm Property

Property that is received by one spouse as an inheritance but is kept separate from maritalproperty is generally deemed to be separate property that is not subject to division.4
However,the nature of a separate asset acquired by one spouse as a gift can change and become maritalproperty if the asset is managed actively and its proceeds are used for marital purposes.5
The parties do not dispute that the 78 percent of the property in question was a gift fromTim Bowser’s parents and held in Tim Bowser’s trust. But Tim Bowser argues that the trialcourt erred in concluding that the whole of the farm was a marital asset subject to division. TimBowser asserts that the record shows that he maintained a separate 78 percent interest in the farmthat was not divisible as a marital asset.
Tim Bowser relies on several cases to support his position.
In Hanaway v Hanaway, thisCourt concluded that because the plaintiff solely handled the child-rearing and household duties,thereby freeing the defendant to build his family’s company and increase the value of thecompany stock that had been gifted to him over the years by his father, the trial court erred intreating the company as the defendant’s separate property.6
In Reeves v Reeves, this Courtconcluded that the marital estate should include the appreciation in value of separate assets thatthe defendant actively managed during the marriage while other passive investments should beexcluded.7
The Supreme Court agreed with the rationale this Court applied in these cases in1 Sparks v Sparks, 440 Mich 141, 151; 485 NW2d 893 (1992).2 Berger v Berger, 277 Mich App 700, 723; 747 NW2d 336 (2008) (quotation and citationomitted).3 Sparks, supra at 152.4 Dart v Dart, 460 Mich 573, 584-585; 597 NW2d 82 (1999).5 See, e.g., Reeves v Reeves, 226 Mich App 490, 495-497; 575 NW2d 1 (1998); Hanaway vHanaway, 208 Mich App 278, 293-294; 527 NW2d 792 (1995).6 Hanaway, supra at 293-294.7 Reeves, supra at 495-497.-4-Dart v Dart: "We recognize that, in certain situations, a spouse’s separate assets, or theappreciation in their value during the marriage, may be included in the marital estate."8

WIFE AND HUSBAND MANAGED THE FARM, SHE EARNED HER INTEREST
Here, it is clear that both parties actively managed the farm, which was a fullyoperational business, first as a cow-milking operation and then for selling cash crops. The recorddoes reflect a dispute as to how much involvement Margaret Bowser had. Regardless, the assetwas actively managed, and, analogous to the business in Hanaway, the proceeds were partly usedfor marital purposes.

A TRUST DOES NOT KEEP IT FROM THE WIFE WHO ACTIVELY WORKED THE FARM
Tim Bowser focuses on the trust and the farm funds, asserting that theyremained separate property and were not co-mingled with marital property. However, it is clearfrom the record that the farm account, which was funded with proceeds from the farm’s milkingoperation, cash crops, and rental income, was used not only to pay farm and property-relatedexpenses, but also to pay propane, electricity, and car insurance bills for the family.
Thus, thetrial court did not err in concluding that the farm was not separate property, and it properly madefactual findings to support this conclusion.

C. Division Of Farm Rental Income
Tim Bowser contends that the division of the $47,740 in farm rental income from 2004and 2005 was improper because: (1) Margaret Bowser only had a 22 percent interest in the farmand (2) the money was not available for distribution to either party because it was spent on farmrelatedexpenses and the mutual support of the parties.
With respect to his first contention, Tim Bowser argues that, if this Court concludes thatthe 78 percent interest in Bowser Farms should not have been divided as a marital asset, then the78 percent of the income from renting the farm in 2004 and 2005 should also not be divided as amarital asset. This argument fails, however, because, as concluded above, the trial court did noterr in finding that the farm was not separate property.

Regarding Tim Bowser’s second contention, in concluding that $47,740 in rental incomewas part of the marital estate, consisting of $23,870 for each 2004 and 2005, the trial courtreasoned that the amount had a "solid basis in the evidence." Tim Bowser claims that the trialcourt clearly erred in this finding because the rental income received in 2004 and 2005 had beenspent on the farm and the parties’ expenses.

We disagree. First, Tim Bowser has not properlypresented this argument by failing to offer any authority in support of this claim.9 Second, thereis no dispute that the rental income for 2004 and 2005 was $47,740, and besides presenting a taxreturn form for calendar year 2004, Tim Bowser presented no documentary evidence to supporthis claims regarding the distribution of the rental income for 2005 or regarding how he spent anyof the rental income.10 Accordingly, we are not left with a definite and firm conviction that thetrial court’s division of the rental income was inequitable.
8 Dart, supra at 585 n 6.9 See In re Indiana Michigan Power Co, 275 Mich App 369, 376; 738 NW2d 289 (2007).10 See Ward v Conrail, 472 Mich 77, 85-86; 693 NW2d 366 (2005); M Civ JI 6.01.-5-III. Attorney Fees

WIFE WAS AWARDED ATTORNEY FEES
A. Standard Of Review
Tim Bowser appeals the award of attorney fees to Margaret Bowser, arguing that she iscapable of paying the fees herself because she will be awarded a large sum of money andbecause she has higher earnings than he does. We review the trial court’s grant of attorney feesfor an abuse of discretion.11 We review for clear error the findings of fact on which the courtbases its award of fees, and we review de novo any questions of law.12 "An abuse of discretionoccurs when a court selects an outcome that is not within the range of reasonable and principledoutcomes."13
B. Legal Standards
In general, attorney fees are not recoverable unless authorized by statute, court rule, orcommon law.14 In domestic relations cases, the granting of attorneys fees are authorized bystatute and by court rule.15 The requesting party must allege facts to show that he or she isunable to cover the expense of the court action and that the other party is able to pay or that thefees were incurred because the other party refused to comply with a court order.16 The partyshould not be required to invade assets being used for support to satisfy attorney fees.17
C. Application
Margaret Bowser first argues that the award should be sustained because the cashdistribution received from the divorce, which she asserts she relies on for support, cannot beinvaded to cover her attorney’s fees. However, evidence in the record showing that MargaretBowser will rely on those funds for support is scarce. It is true that neither party was awardedspousal support. But the record shows that in addition to the large cash distribution coming toMargaret Bowser, she has an earning capacity commensurate with her degree and that she isemployed.
Margaret Bowser testified at trial that she was then making $16.73 an hour andworking 72 hours a pay period. Margaret Bowser has not provided documentation of herinability to cover expenses. Thus, Margaret Bowser did not meet her burden to show that she isunable to cover her attorney fees. Moreover, Margaret Bowser did not show that Tim Bowserwas able to pay the fees as required by MCR 3.206(C)(2)(a).11 Reed v Reed, 265 Mich App 131, 164; 693 NW2d 825 (2005).12 Id.13 Borowsky v Borowsky, 273 Mich App 666, 672; 733 NW2d 71 (2007).14 Reed, supra at 164.15 MCL 552.13; MCR 3.206(C); Reed, supra at 164.16 MCR 3.206(C)(2); see also Smith v Smith, 278 Mich App 198, 207-208; 748 NW2d 258(2008).17 Smith, supra at 207.-
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MISCONDUCT BY BOTH PARTIES
Margaret Bowser’s second argument to sustain the award is based on Tim Bowser’salleged misconduct. Even if the party requesting fees does not require financial assistance, thetrial court may award attorney fees if there has been misconduct by the other party that directlyresulted in the amount requested.18 In the instant case, the record shows misconduct by bothparties regarding the court proceedings.

HUSBAND PAID HIMSELF
Tim Bowser paid himself wages in violation of thestipulated order regarding the farm account disbursements and the trial court had to reimburseMargaret Bowser for that amount.

HUSBAND STOPPED DOUCUMENTING FINANCES OF THE FARM
In addition, Tim Bowser stopped documenting and reportingon proceeds from the farm operations, ignoring subpoenas because "they came so numerously[he] got tired of taking time off from work to answer them." Tim Bowser also continued tomake payments from the account and did not account for them after April 2005, as required bythe order.

WIFE FILED A FRIVIOULS MOTION FOR SPOUSAL SUPPORT CLAIMING TO NOT BE WROKING WHEN SHE WAS.
Conversely, Margaret Bowser caused extra litigation by filing a frivolous motion forsupport in October 2004, claiming that she was unemployed. But employment records andMargaret Bowser’s 2004 tax return show that she had in fact been employed since July 2004.
The motion was later abandoned. Further, like the plaintiff in Reed v Reed, Margaret Bowser didnot establish that the fees she requested were incurred as a result of Tim Bowser’s misconduct.19
Under these circumstances, we reverse and remand the trial court’s award of attorneyfees. On remand, the trial court must make findings regarding Margaret Bowser’s financialneeds and whether Tim Bowser’s misconduct directly resulted in the incurrence of the feesrequested.
*Affirmed in part, reversed in part, and remanded for further proceedings consistent withthis opinion. No taxable costs pursuant to MCR 7.219, neither party having prevailed in full.We do not retain jurisdiction./s/ Joel P. Hoekstra/s/ William C. Whitbeck/s/ Michael J. Talbot18 Reed, supra at 165.19 Id.

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