Preview:

Final Copy 287 Ga. 866 S10A1158. HOLLAND v. HOLLAND. NAHMIAS, Justice. We granted John Holland's application for discretionary appeal to review the trial court's post-divorce order setting forth how the profits from the sale of the parties' lake house should be calculated and distributed. We now affirm in part and reverse in part. The parties were married in 2003, and the lake house was purchased in July 2004 for $350,000. The lake house was titled solely in Mary Holland's name, and there was no outstanding loan against the house at the time of purchase. Mary took out a revolving line of credit for $150,000 in August 2004, with a maturity date of July 2007, using the lake house as collateral. Mary withdrew the entire $150,000 and used it as a down payment on the parties' former marital residence. In August 2005, under the same loan and account numbers, Mary extended the line of credit to $250,000, again using the lake house as security. She withdrew the additional $100,000 at that time and deposited it into an account for the parties' jointly owned business. The line of

credit now had a maturity date of July 15, 2008. In January 2006, the parties' entered into a post-nuptial agreement, and in May 2008, the parties were divorced, with the final decree incorporating the post-nuptial agreement. On July 21, 2008, Mary renewed the $250,000 line of credit with the same bank, under the same account and loan numbers. At that time, the account balance was $220,564. Mary made no further withdrawals on her line of credit after the $100,000 withdrawal in August 2005. The post-nuptial agreement awarded the lake house to Mary as her separate property, but Paragraph 7 (b) also provided for its later sale and the distribution of the proceeds. On June 9, 2009, the trial court ordered the parties to consummate the sale of the lake house, and it was sold to a third party for approximately $320,000. A dispute arose regarding the distribution of the proceeds. John sought a declaratory judgment on the proper interpretation of Paragraph 7 (b), which provides in relevant part as follows: If the Lake House is sold to a third party, the parties shall then divide any net profit (net of debt on the Lake House, if any, commission, costs of sale, and taxes) equally (50/50), and then from his 50% share of the net profits, [JOHN] shall reimburse MARY immediately at the closing of the sale for Ninety-Eight Thousand Dollars ($98,000.00), and less any improvements . . . made by MARY into the Lake House from her Separate Property . . . , which 2

represents MARY'S total separate investment in the Lake House. The parties agreed that certain sums should be deducted from the purchase price before distribution to them, but they disagreed about the pre-distribution deduction of other items, including the line of credit. The trial court ruled that the $220,564 balance of the line of credit should be deducted pre-distribution because the property was used as collateral for the loan. There was then a net profit of $67,911.10 left for distribution

Download S10A1158. HOLLAND v. HOLLAND.pdf

Georgia Law