Sullivan v. Sullivan

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In 1997, Husband began working for Envirotech Environmental Services, Inc., a closely-held Subchapter S corporation. In 1998, Husband purchased 150 shares of stock in Envirotech ($1.00 per share), and made an additional capital contribution. Three years later, Husband and Wife were married. During the next year, Husband sold 50 shares of his stock for a total purchase price of $11,800. Husband retained 100 shares of the 1,000 issued shares of stock. As a minority shareholder, Husband was apportioned K-1 income to be recorded on his tax return, but the actual cash was retained in the company. In 2011, Husband filed for divorce. At the bench trial of the issues remaining in the divorce action, Wife maintained that she was entitled to an equitable division of the appreciation of the value of Husband's 100 shares of Envirotech stock from the date of the parties' marriage to the date of their divorce. Husband asserted that the 100 shares of stock should not be considered to be marital property and should be awarded solely to him because they were acquired prior to the marriage, and any increase in value of the 100 shares that occurred during the course of the marriage was not attributable to Wife or the marital unit but to outside market forces. The superior court awarded the entirety of the 100 shares of stock and any appreciation to Husband. Wife appealed. Finding no reversible error, the Supreme Court affirmed. View "Sullivan v. Sullivan" on Justia Law