OF JUDGMENT: 12/20/2016
LAUDERDALE COUNTY CHANCERY COURT HON. JERRY G. MASON, JUDGE
ATTORNEY FOR APPELLANT: DAVID BRIDGES
ATTORNEY FOR APPELLEE: MARK A. CHINN
After fifteen years of marriage, Mary and Jason Castle
separated as a result of Jason's adultery. The Castles
later consented to an irreconcilable differences divorce,
agreed on all issues related to custody of their three
children, and agreed that the chancery court would decide all
issues related to the equitable distribution of the marital
estate, alimony, child support, and attorney's fees.
After a three-day trial, the chancery court divided the
marital estate and awarded Mary an "equalization
payment" of $584, 608.41, lump-sum alimony of $1, 600,
000, periodic alimony of $6, 500 per month, and child support
of $3, 200 per month. On appeal, Jason argues that the
chancery court erred by classifying a house as a marital
asset. The house was intended to serve as the marital home
but was still under construction at the time of the
separation, and Jason argues that it was his separate
property. Jason also argues that the awards of lump-sum
alimony and periodic alimony are excessive. After review of
the record, we find the chancellor acted within his
discretion. Thus, we affirm.
AND PROCEDURAL HISTORY
Mary and Jason married in 1999 in Tuscaloosa, Alabama. At the
time, Mary was twenty-three years old, and Jason was
twenty-five. During their marriage, the Castles had a son
(born in 2001) and two daughters (born in 2002 and 2004).
Prior to the marriage, Mary had finished one semester of
community college and had worked at a daycare and as a clerk
at a video rental store. During the marriage, Mary was a
stay-at-home mother and did not work outside the home. The
Castles' daughters both have dyslexia and attend regular
tutoring outside of school. The daughters also have health
issues that require them to see out-of-town doctors. In
addition, all three Castle children are involved in
Jason began working for his father in the pipeline industry
when he was fifteen years old, and he went to work in the
industry full-time when he was eighteen years old. In the
early years of the parties' marriage, Jason worked for
several different pipeline construction companies operating
heavy equipment. Eventually he was promoted to foreman. In
2005, Jason began working for his father's company,
Progressive Pipeline Inc. (PPI), as a superintendent, and PPI
later promoted him to construction manager.
Jason's father, Mike Castle Sr., and two partners formed
PPI in 1999. PPI built transmission pipelines throughout the
southeastern United States. Eventually, Mike Sr. bought out
his two partners.
In 2008, Mike Sr. formed Progressive Pipeline Holdings LLC
(PPH), a holding company with seven subsidiaries. Mike Sr.
created PPH for estate planning purposes because his three
sons could not have afforded to purchase an interest in PPI.
At the time it was formed, PPH had little or no book value
because it had no significant assets or contracts. Mike Sr.
gave Jason and another son, Mike Jr., each a twenty-percent
non-voting interest in PPH. He gave his youngest son,
Zachary, a ten-percent non-voting interest. Mike Sr. retained
a fifty-percent voting interest.
In 2008 and 2009, PPI subcontracted many of its projects to
PPH so that PPH could establish a work history, obtain
bonding, satisfy state licensing requirements, and develop
client relationships. By 2012, PPH had essentially taken over
the operations of PPI. Jason worked as a construction manager
for PPH. Between 2010 and 2015, Jason's reported earnings
from salary and wages ranged from $148, 620 to $214, 575,
with an average of about $180, 000.
In addition to his base salary, Jason also received cash
distributions from PPH. As the only voting member of PPH,
Mike Sr. decides whether and when to make such distributions.
Jason received cash distributions from PPH of $1, 500, 000 in
2012; $1, 000, 000 in 2014; and $2, 000, 000 in 2015.
Jason's K-1 statements for those years show that his
share of PPH's ordinary business income was $8, 107, 749
in 2012, $3, 887, 401 in 2013, $2, 865, 024 in 2014, and $7,
343, 995 in 2015. PPH pays quarterly tax estimates for Jason
based on his share of PPH's income. Jason's share of
the PPH's income is reportable income to Jason. However,
Jason has no legal right to insist on distributions from PPH.
And most of Jason's PPH earnings remain with PPH as
retained earnings subject to distribution by his father but
nevertheless remaining Jason's property subject to
distribution by Mike Sr. At trial, Mike Sr. testified that
PPH would not make any distributions in 2016 because business
had slowed due to a drop in oil prices. From the $22, 204,
169 credited to Jason's PPH account for 2012 through
2015, he received distributions totaling $4, 500, 000 in
addition to the approximately $720, 000 he received in salary
for the four years leading up to and including the year of
separation and filing for divorce.
Jason and Mary agreed to appoint Annette Herrin to appraise
Jason's interest in PPH. Herrin is a certified public
accountant, and she testified at trial as an expert in
business valuation. Herrin testified that as of December 31,
2014, PPH's net value was $49, 429, 463, and PPH's
net income for 2014 was $34, 555, 828. Herrin valued
Jason's twenty percent non-voting interest in PPH at $5,
930, 000. Herrin testified that she discounted Jason's
interest in the company because it was a closely-held family
business controlled by Mike Sr.
In 2008, the Castles moved into a four-bedroom, three-bath
home in Collinsville. In 2011, Jason and his brother Zachary
formed Castle Holdings LLC to acquire 103.5 acres of land
near Meridian, where they planned to build homes. Mike Sr. or
PPI loaned Castle Holdings approximately $222, 525, which
covered most or all of the purchase price for the land. Mike
Sr. testified that he did not expect his sons to repay the
loan and considered the money a gift.
Both Jason and Zachary built homes on the property. Jason
first built a house at 209A Mt. Horeb Road (the 209A house).
The 209A house is a two-bedroom, two-bathroom house with
approximately 1, 800 square feet. Jason and Mary agreed that
the 209A house was worth $277, 884. At trial, Mary referred
to the 209A house as "the barn." She testified that
they built the 209A house primarily to store
"Jason's toys" and only intended to live in it
a short time while they built their "forever home"
nearby on the same property. The Castles moved into the 209A
house in 2012, at which point they sold their Collinsville
home for $365, 000.
In May 2014, Zachary signed a warranty deed conveying 56.6
acres of the Castle Holdings property to Jason and Mary as
joint tenants with full rights of survivorship. Jason
testified that he did know about the conveyance until after
Mary filed for the divorce. Zachary did not testify, and
there is no explanation in the record as to why the property
was conveyed from Castle Holdings to Jason and Mary at that
The same month that the property was conveyed to them as
joint tenants, Mary and Jason began construction of a second
home at 209B Mt. Horeb Road (the 209B house). The 209B house,
which was intended to be the Castles' "forever
home," is located only about 600 or 700 feet away from
the 209A house. The 209B house is an 8, 237-square-foot,
three-story, five-bedroom, seven-bathroom house with an
elevator. Mary and Jason agreed that the 209B house is worth
$1, 500, 000. Mary referred to the 209B house as "the
Mary testified that she spent almost two years planning and
designing the 209B house. According to Mary, she "picked
out almost every detail of the whole house," modified
some of the floor plan, and "made changes to [the]
layouts of some of the rooms." Mary testified that she
spent countless hours selecting brick, stone, cabinetry,
carpet, tile, stains, lighting, hardware, bathroom finishes,
and appliances for the home. She also designed an elaborate
staircase in the home.
Mary testified that Jason chose some of the floors, the roof,
and an air conditioner, designed a "safe room" for
his guns, and helped design a bar area in the basement.
However, Mary testified that she "did everything
else" as far as designing the home. She testified she
interacted with their contractor on an almost daily basis.
Jason agreed that Mary helped to design the house, but he
disapproved of many of her choices, which he considered
extravagant. Originally, the account used to pay for
construction of the 209B house was a joint account, and Mary
wrote most of the checks for the construction. The account
was funded with Jason's distributions from PPH.
In November 2014, Mary discovered that Jason was having an
affair. The Castles separated because of Jason's affair.
They briefly reconciled, but Mary later discovered that Jason
had not ended the affair. They separated again, and in April
2015 Mary filed for divorce on the grounds of adultery or, in
the alternative, irreconcilable differences.
In May 2015, the parties consented to an irreconcilable
differences divorce. They subsequently agreed to share joint
legal custody of their three minor children, that Mary would
have physical custody of all three children, and that Jason
would have visitation pursuant to an agreed schedule. They
also agreed that the chancery court would decide all issues
related to child support, equitable distribution, alimony,
and attorney's fees.
In May 2015, the chancery court entered an agreed temporary
order. The parties agreed and the order provided that Jason
would continue to pay the mortgage, insurance, taxes, and
utilities on the 209A house; maintain health insurance for
Mary and the children and pay all of their uninsured
healthcare expenses; continue to pay a number of other
expenses and bills for Mary and the children; and pay
"temporary family support" of $1, 000 per week to
Mary. In March 2016, the temporary order was amended to
increase the temporary family-support payment to $1, 300 per
After the couple separated, Jason continued to live in the
209A house with Mary and the children until December 2015.
Jason then moved into the "castle" at 209B in
January 2016. Mary and the children never lived in that
A three-day trial on all remaining issues was held in August
2016. Jason admitted to the affair during trial. On December
20, 2016, the chancery court entered a memorandum opinion and
final judgment, which granted the parties an