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Mayhew v. Mayhew
IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 1999 Term
No. 25214
NANCY H. MAYHEW,
Plaintiff Below, Appellant,

V.
ROBERT E. MAYHEW,
Defendant Below, Appellee.

Appeal from the Circuit Court of Hampshire County
Honorable John M. Hamilton, Judge
Civil Action No. 93-C-166

REVERSED AND REMANDED
WITH INSTRUCTIONS

Submitted: November 10, 1998
Filed: July 14, 1999

Ward D. Stone, Jr.                                                                     J. David Judy, III
Spilman Thomas & Battle                                                          William H. Judy, III
Morgantown, West Virginia                                                      Judy & Judy
Attorney for Appellant                                                               Moorefield, West Virginia                                                                                                    Attorneys for Appellee
JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1.
"Passive appreciation of separate property of either of the parties to a marriage, or that increase 'which is due to inflation or to a change in market value resulting from conditions outside the control of the parties,' is separate property which is not subject to equitable distribution." Syl. Pt. 1, Shank v. Shank, 182 W. Va. 271, 387 S.E.2d 325 (1989).

2.
"Active appreciation of separate property of either of the parties to a marriage, or that increase which 'results from (A) an expenditure of funds which are marital property, including an expenditure of such funds which reduces indebtedness against separate property, extinguishes liens, or otherwise increases the net value of separate property, or


(B) work performed by either or both of the parties during the marriage' is marital property which is subject to equitable distribution." Syl. Pt. 2, Shank v. Shank, 182 W. Va. 271, 387 S.E.2d 325 (1989).
3.
To the extent Syllabus point 9 of Mayhew v. Mayhew, 197 W.Va. 290, 475 S.E.2d 382 (1996), imposes a dual burden of persuasion to determine to what extent the increase in value of the separate, nonmarital property is active appreciation or passive appreciation, it is expressly overruled.

4.
The party seeking to exclude property from the marital estate that is presumptively marital property, has the burden of persuasion on that issue. The party seeking to have the increase in value, if any, of the separate, nonmarital property deemed to be marital as a result of active appreciation, has the burden of persuasion on that issue.

5.
The formula for an active or passive appreciation analysis requires a determination of the following five-step test: (1) whether the property, in general, is either separate or marital property; (2) placing a value on the nonmarital property at the commencement of the action; (3) the value of the nonmarital property, before it became subject to the active and passive appreciation analysis; (4) the circuit court calculation of the property's value at the commencement of the action, in relation to its value on the date(s) gifted; and (5) a determination as to what extent the increase in the value of the nonmarital property is active appreciation or passive appreciation. The resulting amount due to active appreciation is marital property and subject to equitable distribution.



Davis, Justice :
        For a second time, this case is before the Court. Nancy H. Mayhew, appellant/plaintiff below, (hereinafter referred to as Ms. Mayhew) challenges the ruling of the Circuit Court of Hampshire County as the same relates to the disposition of 24 shares of corporate stock.See footnote 1 1 Specifically, Ms. Mayhew seeks reversal of the circuit court's apportionment and calculation regarding the active and passive appreciation in value of the 24 shares of stock of Mayhew Chevrolet -Oldsmobile, Inc. The stock in question was gifted to Robert E. Mayhew, appellee/defendant below (hereinafter referred to as Mr. Mayhew) by his father. Simply put, Ms. Mayhew asserts that all appreciation in value of Mr. Mayhew's 24 shares of stock was the direct result of active appreciation and therefore any increase in its value is marital property. In contrast, Mr. Mayhew argues that any increase in the stocks's value was the result of passive appreciation and therefore remains his separate property. Accordingly, Mr. Mayhew presents as a cross

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