author: RANDOLPH, Justice, KITCHENS, Justice, DICKINSON, Justice,

text:
    Drake L. LEWIS v. Tonia D. LEWIS.
    No. 2008-CT-01362-SCT.
    Supreme Court of Mississippi.
    Feb. 3, 2011.

      Thomas Wright Teel, Biloxi, attorney for appellant.
    Dean Holleman, attorney for appellee.
   ON WRIT OF CERTIORARI

RANDOLPH, Justice,

for the Court:

¶ 1. The Court of Appeals reversed and remanded the equitable distribution of a marital estate, as it found that the chancellor had made manifest errors. See Lewis v. Lewis, 54 So.3d 233 (Miss.Ct.App.2009). We agree with the Court of Appeals that the trial court erred regarding the evaluation and distribution of marital assets, but find that the Court of Appeals erred in its remand instruction. See id. at 239-41, 242-44. Thus, we remand the case to the trial court for further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 2. The Court of Appeals’ opinion sufficiently sets out the facts and issues on appeal, which need not be repeated. See id. at 234-35. The Court of Appeals affirmed in part, reversed in part, and remanded for further proceedings. Id. at 239-40, 243^4. Tonia raised two issues in her petition for certiorari: (1) Mississippi caselaw is in direct conflict with the Court of Appeals’ remand instruction on the valuation of a business; and (2) the Court of Appeals exceeded its authority, ignored the discretion given to a chancellor, and mistakenly found manifest error in the valuation and treatment of marital assets. This Court granted certiorari. Lewis v. Lewis, 42 So.3d 24 (Miss.2010). We find no error as to issue two and thus address only issue one.

ANALYSIS

¶ 3. Inter alia, the Court of Appeals instructed:

the chancery court should value Legacy using: (1) any real property owned by Legacy; (2) any other property owned by Legacy, such as vehicles or tools; (3) goodwill equity, if any, attributable to Legacy; and (4) any improvements that Legacy owns that are made to real property owned by parties other than Legacy. In making these determinations, the chancery court should consider “that price at which [the business] would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of the relevant facts.”

Lewis, 54 So.3d at 240 (emphasis added) (quoting Singley v. Singley, 846 So.2d 1004, 1011 (Miss.2002)). Error lies in not completing the above quote, for paragraph eighteen of Singley also unequivocally states “today we join those sister states who prohibit goodwill from inclusion in valuing a business for distribution as marital property in a domestic case.” Id. Singley was followed and further clarified by Watson and Yelverton. See Yelverton v. Yelverton, 961 So.2d 19 (Miss.2007); Watson v. Watson, 882 So.2d 95 (Miss.2004). Thus, Mississippi caselaw prohibits the inclusion of goodwill in valuing a business interest for distribution as marital property. “ ‘[G]oodwill,’ whether ‘personal goodwill’ or ‘business enterprise goodwill’ shall not be included in the valuation of [a car dealership].” Yelverton, 961 So.2d at 29. “[Goodwill is simply not property; thus it cannot be deemed a divisible marital asset in a divorce action.” Singley, 846 So.2d at 1011. Upon remand, the chancellor should value Legacy without considering goodwill.

¶ 4. While I expressed a similar concern as raised in Justice Kitchens’s dissent (see my dissent in Watson), that argument has been soundly rejected by this Court. See Watson, 882 So.2d at 111-12 (Randolph, J., dissenting). If Singley lacked clarity, this Court’s unanimous holdings in Watson and Yelverton are exceedingly clear and comprehensive. See Yelverton, 961 So.2d at 80; Watson, 882 So.2d at 105-06. To consider goodwill equity contravenes this Court’s precedent. Stare decisis demands this result.

¶ 5. At trial, the chancellor was presented with a sizable marital estate. One party provided evidence of dubitable reliability, albeit the best she could muster. The other party was recalcitrant and demonstrated a lack of credibility to the chancellor. The marital estate exceeded $2,000,000 and involved alleged transfers from trusts and section 1031 tax transfers. See 26 U.S.C. § 1031 (2009). A proper evaluation is indeed complex and may well require special knowledge or expertise. The chancellor recognized the complexity, for, after the close of evidence, he stated that each side had given him “way too much” in this “complicated matter financially.” Perhaps a special master skilled in evaluating a business would be of significant assistance. We recognize that reference to a master without the consent of the parties is the exception and not the rule. See Miss. R. Civ. P. 53(c); Trovato v. Trovato, 649 So.2d 815, 818 (Miss.1995). We recognize also that the cost of appointing a special master may be economically prohibitive in most cases. See Crowe v. Smith, 603 So.2d 301, 308 (Miss.1992) (“According to rule 53, the payment of a master is a cost, and thus falls under the ambit of rule 54.”); Miss. R. Civ. P. 53(a), 54(d). Here, where the marital estate is sizable, ownership and valuation are complex, and the evidence presented is of questioned reliability, combined with the litigants’ ability to pay, reference to a special master might afford the chancellor significant assistance.

¶ 6. “[W]here the finding to be made is of a complex, technical, non-legal nature, a person other than an attorney ... may be appointed.... ” Miss. R. Civ. P. 53(b). Any issue may be referred to a special master with the consent of the parties. Under Mississippi Rule of Civil Procedure 58(c), reference without the consent of the parties would require a finding by the chancellor of exceptional conditions. The chancellor is in the best position to make the determination of whether the conditions in this case are sufficiently exceptional to warrant the appointment of a special master. Should the chancellor discern that exceptional conditions exist, he may specify or limit the authority of a special master in the order of reference. See Miss. R. Civ. P. 58(d).

CONCLUSION

¶ 7. Upon remand, the chancellor shall cause the marital assets to be reevaluated consistent with the instructions of this opinion and those of the Court of Appeals, with the exception of considering goodwill equity.

¶ 8. THE JUDGMENTS OF THE COURT OF APPEALS AND THE CHANCERY COURT OF HARRISON COUNTY ARE AFFIRMED IN PART AND REVERSED IN PART. THIS CASE IS REMANDED TO THE CHANCERY COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.

WALLER, C.J., CARLSON AND GRAVES, P.JJ., LAMAR AND CHANDLER, JJ., CONCUR. KITCHENS, J., DISSENTS WITH SEPARATE WRITTEN OPINION. DICKINSON, J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION. PIERCE, J., NOT PARTICIPATING.

KITCHENS, Justice,

dissenting:

¶ 9. I respectfully dissent from the majority’s holding that goodwill may never be used as a factor in evaluating a business interest. I further note that this Court should decline to limit the discretion of the trial court regarding the appointment of a special master where, as here, the issue is not before this Court and the opinion of the Court of Appeals provides sufficient direction to the chancellor upon remand. Because the Court of Appeals did not err, its decision should be affirmed with respect to all issues.

¶ 10. The case law of this state has dealt with goodwill mainly in the context of valuing a professional practice and not a business enterprise jointly held by husband and wife. Singley v. Singley, 846 So.2d 1004 (Miss.2002), and its progeny are not applicable to the case at hand. While stare decisis likely bars reconsideration of whether goodwill may be used to value a professional practice in the property division phase of a divorce, it would be inequitable to hold that goodwill should not be taken into consideration where the marital asset is a business enterprise that either does not depend on the personal and irreplaceable efforts of one spouse or where the enterprise is jointly held by the spouses either as a partnership or as an incorporated entity. Furthermore, any distribution of the marital estate involving the business assets necessarily should take into account the personal goodwill attributable to each of the spouses to whatever extent, if any, that each participated in the operation of the enterprise and in the proportion to which value accrued to the enterprise as the result of their respective efforts. To say categorically that an evaluation of goodwill is prohibited could create a result that is inequitable to one of the parties.

¶ 11. The business asset in dispute is an enterprise founded by Drake and Tonia Lewis during the course of their marriage to develop residential real estate. Lewis v. Lewis, 54 So.3d at 236-37, ¶ 9 (Miss.Ct.App. Dec.8, 2009). The parties held the incorporated entity in equal shares and bought and sold numerous tracts of real property, with some of the parcels held by separate legal title by one or the other of the parties. Id. Tonia filed a complaint for divorce in 2006; Drake never filed a responsive pleading. Id. at 235, ¶ 4.

¶ 12. After the parties separated, Drake engaged in a eourse of conduct that included the diversion of corporate assets for his own use. Drake eventually set up Legacy Builders as a sole proprietorship during the litigation and operated that business using corporate assets. Drake failed to respond fully to Tonia’s demands for discovery with respect to the value of the various assets. Ultimately, the trial court made its ruling largely on the basis of documentation that Tonia had submitted and which she acknowledged was necessarily incomplete and out of date. Id. at 238-39,¶ 18. Drake’s only submission on the record regarding Legacy’s value was his testimony that it was essentially worthless. The chancellor assigned Legacy a value of $1,148,270 and awarded it entirely to Drake as part of a judgment that awarded Tonia assets with a net value of $855,747 and awarded Drake assets with a net value of $1,807,882. Drake appealed, and we assigned the case to the Court of Appeals, which affirmed in part and reversed in part, ruling, inter alia, that Legacy should be revalued using all relevant data, including all real and movable property owned by Legacy, any goodwill equity attributable to Legacy and any improvements made by Legacy to property owned by other persons. Id. at 240, ¶ 23. Tonia filed her petition for certiorari to this Court, which we granted.

¶ 13. Goodwill, or the value of a business that exceeds the combined physical assets of the business, is defined as:

the advantage or benefit which is acquired by an establishment beyond the mere value of the capital stock, funds, or property employed therein, in consequence of the general public patronage and encouragement which it receives from constant or habitual customers on account of its local position, or common celebrity, or reputation for skill, or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices.

Dodson v. McElreath, 210 Miss. 160, 48 So.2d 861, 864 (1950) (citing In re Brown, 242 N.Y. 1, 150 N.E. 581 (1926)).

¶ 14. Goodwill, along with other intangibles, can be considered as a factor in valuing a business enterprise according to generally accepted accounting principles. Financial Standards Accounting Board, Summary of Statement No. H2: Goodwill and Other Intangible Assets (Issued June 2001), http://www.fasb.org/summary/stsum 142.shtml (last visited January 28, 2011). Furthermore, goodwill is treated alongside other intangible assets such as patents, customer lists, or licenses under the Internal Revenue Code as a depreciable asset subject to taxation or as a deductible and amortizable cost. See 26 U.S.C.A. § 197 (2010). Goodwill, at its core, represents the excess value of a business enterprise after subtraction of the value of all other assets from its fair market value, and despite its seeming nebulousness as a term of art, is well recognized as an intangible business asset.

¶ 15. Goodwill may be differentiated as personal or professional goodwill, which, as the term implies, derives from the performance of the individual stakeholder in the business enterprise; or enterprise goodwill, which is considered an asset of the business, it “is based on the intangible, but generally marketable, existence in a business of established relations with employees, customers, and suppliers.” Watson v. Watson, 882 So.2d 95, 105 (Miss.2004) (quoting Yoon v. Yoon, 711 N.E.2d 1265, 1268 (Ind.1999) (internal citation omitted)). Enterprise goodwill attaches to a business entity and is separate from the reputation of the owners. It is “divisible in a dissolution to the extent that it inheres in the business, independent of any single individual’s personal efforts and will outlast any person’s involvement in the business.” Yoon, 711 N.E.2d at 1269. “It is not necessarily marketable in the sense that there is a ready and easily priced market for it, but it is in general transfer-rable to others and has a value to others.” Id. In the context of a professional practice, however, the goodwill that properly belongs to the enterprise may be so bound to the performance and identity of the professional that it is, for practical purposes, personal in nature. Watson, 882 So.2d at 101.

¶ 16. This Court dealt with the issue of goodwill in the context of distribution of marital assets as a matter of first impression in Singley v. Singley, 846 So.2d 1004 (Miss.2002). In that case, the asset in dispute was the husband’s dental practice, held as a solo professional practice. Id. at 1009. After examining decisions from several states dealing with professional goodwill, including Indiana’s decision in Yoon, the Court concluded that goodwill should not be considered in any dissolution action. Id. While the Court noted the distinction between professional goodwill and enterprise goodwill, it declined to make a distinction between the two. Contrary to generally accepted accounting principles, the Court held: “Goodwill within a business depends on the continued presence of the particular professional individual as a personal asset and any value that may attach to that business as a result of that person’s presence.” Id. at 1011. Singley thereby put this Court “in the company of only four other jurisdictions [that] take the position that neither personal nor enterprise goodwill in a professional practice constitutes marital property.” Watson v. Watson, 882 So.2d 95, 112 (Miss.2004) (Randolph, J., dissenting).

¶ 17. The Court revisited this issue in Watson v. Watson, 882 So.2d 95 (Miss.2004). Clarifying its holding in Singley, the Court held that, while it recognized a distinction between personal goodwill and business enterprise goodwill, neither should be used in evaluating a solo professional practice in the context of marital dissolution. Watson, 882 So.2d at 105-106. In Watson, the business asset in dispute was a veterinary practice owned and operated by the husband. Id. at 98. Treating the veterinary practice as a solo professional practice, the Court ruled that, as enterprise and professional goodwill were inextricably tied to the performance of the professional, neither would be appropriately considered in evaluating the practice as a marital asset. Id. at 105. However, the Court carefully noted that enterprise goodwill may be treated as property of the business, divisible on dissolution:

to the extent that it inheres in the business, independent of any single individual’s personal efforts and will outlast any person’s involvement in the business. It is not readily marketable in the sense that there is a ready and easily priced market for it, but it is in general trans-ferrable to others and has a value to others.

Id. at 105 (citing Yoon, 711 N.E.2d at 1268-69).

¶ 18. Watson therefore should be read to limit the blanket rule promulgated in Singley to those cases either involving a solo professional practice or those cases that are closely analogous. This rule is in line with the principle that a professional license held by a spouse is not itself marital property, even where the practice dependent on that license may be, depending on the particular facts of the case, a marital asset subject to equitable distribution. See Mace v. Mace, 818 So.2d 1130, 1133 (Miss.2002); Guy v. Guy, 736 So.2d 1042 (Miss.1999).

¶ 19. Finally, in Yelverton v. Yelverton, 961 So.2d 19, 29 (Miss.2007), this Court expanded its rule to hold that goodwill should not be applied as a factor when the asset in dispute is an interest in an automobile dealership and the shareholder is the managing partner. Citing Watson, 882 So.2d at 105, and Singley, 846, So.2d at 1011, the Court stated that, where the asset in dispute was the sole means of income for the purposes of calculating child and spousal support, goodwill could not be used in determining the value of the business asset. Yelverton, 961 So.2d at 29. The common thread in these cases is that the business interest at issue was either professional in nature, or at least proprietorial in the case of Yelverton. The relevance of Yelverton to the issue before us is dubious at best, in that it dealt with the income produced by an asset and not the value of the asset itself as it pertained to the marital estate. Id.

¶ 20. In this case, however, the business interest is a common business enterprise between the husband and wife, subject to their joint control and operation, at least up to the point of their separation, when Drake began using corporate assets to operate his separate business. Applying the rule from Singley and its progeny inappropriately restricts the chancellor’s discretion in assigning a fair value to the parties’ actual assets in this case, where the enterprise in question is not a professional practice and is not dependent solely on the efforts of one or the other of the disputants.

¶ 21. For the foregoing reasons, the decision of the Court of Appeals should be affirmed on all issues. Upon remand, the trial court should make a full determination of the market value of Legacy, including an evaluation of Legacy’s enterprise goodwill, as well as whatever personal goodwill, if any, is attributable to either or both of the parties.

DICKINSON, Justice,

concurring in part and dissenting in part:

¶ 22. I would remand for a new trial on the issue of property division.

      . Legacy is variously described as: (1) Legacy Holdings: (2) Legacy Holdings, Inc.; (3) Legacy Holdings, LLC; (4) Legacy Builders, Inc.; and (5) Legacy Builders, a sole proprietorship (formed after separation).

      . These factors are specific to the case sub judice and are neither inclusive nor exclusive factors for consideration by a chancellor, but rather, the determination of exceptional conditions must be on a case-by-case basis.

      . The Court of Appeals, citing the trial court’s judgment, states that the Drakes formed Legacy Builders, Inc., in 2001. The only registered business listed on the Mississippi Secretary of State’s website that lists either of the parties as officer or incorporator is Legacy Holdings, Inc., administratively dissolved on December 12, 2008.


source: Caselaw Access Project

author: RANDOLPH, Justice,

license: Public Domain

text:
    The LAMAR COMPANIES v. COCAJO TRUST; Clifton B. Clark, Sr., Trustor; Colin Ray Clark, Trustee for CoCaJo Trust; and Mary Clark.
    No. 2009-CA-01581-SCT.
    Supreme Court of Mississippi.
    Feb. 17, 2011.

      Mark D. Herbert, Jackson, attorney for appellant.
    Mack A. Bethea, Gulfport, attorney for appellees.
    Before GRAVES, P.J., RANDOLPH and PIERCE, JJ.
   RANDOLPH, Justice,

for the Court:

¶ 1. In December 2004, the CoCaJo Trust; Clifton B. Clark, Sr., Trustor; Colin Ray Clark, Trustee; and Mary Clark (collectively “the Trust”) filed suit in the Chancery Court of Harrison County alleging that Debbie R. Pitts, a/k/a Debbie R. Cuevas (“Pitts”), the former trustee of the Trust, had misappropriated property of the Trust. In 2005, after suit had been filed, Pitts entered into lease agreements with The Lamar Companies (“Lamar”) to place outdoor advertising structures, visible to travelers on Interstate 10, on the subject property.

¶ 2. In 2009, the Trust sent correspondence to Lamar asserting that Pitts did not own the subject property and was not authorized to execute the 2005 leases; and further notifying Lamar that a padlocked fence had been constructed around its advertising structures, as well as alleging monetary damages for willful trespass and breach of contract against Lamar. Shortly thereafter, Lamar filed a “Motion for Leave to Intervene” and attached as an exhibit its proposed “Intervener’s Complaint for Injunctive, Declaratory, and Interpleader Relief.” That proposed complaint sought that the chancery court declare “the rightful and true owner of the subject property[;]” determine “the validity of [Lamar’s] sign location leases[;]” and “identify] the party or parties to whom it should pay the rentals specified in said sign location leases.” The proposed complaint further asked that Lamar be permitted to interplead its rent payments into the court registry, and requested a temporary and permanent injunction to prevent the Trust from denying Lamar access to its sign structures. Thereafter, the chancery court granted temporary in-junctive relief, ordering the Trust to permit Lamar “access to its sign structures pending final disposition of this matter” and ordering Lamar to “interplead and deposit into the registry of this [c]ourt any rentals that are now due or which may become due under the terms of its lease agreements with [Pitts] until further order of this [c]ourt.” Approximately two months after having granted Lamar a portion of the relief it sought, the chancery court denied Lamar’s “Motion for Leave to Intervene,” concluding that Lamar’s interest would be “adequately protected” by Pitts. From that ruling, Lamar filed a notice of appeal.

FACTS

¶ 3. On October 9,1998, Clark, Sr. established the Trust for the “foremost purpose” of providing assistance to his three children “in furtherance of their education beyond the high school level....” Pitts was designated as the trustee. Between November 1998 and January 1999, Clark, Sr. conveyed several properties, as “res of the [Trust],” to Pitts, “in Trust.” On April 29, 2002, a “Special Warranty Deed” provided that Clark, Sr. “does hereby sell, convey, warrant specifically and deliver unto” Pitts the subject property located in Harrison County. This “Special Warranty Deed” made no reference to the conveyance being “in Trust.”

¶ 4. On December 17, 2004, the Trust filed a complaint against Pitts in the chancery court, alleging that she “refuses to return the parcels deeded to her in trust, ... has encumbered a parcel of said property, ... has retained rents and failed to pay said monies into the trust.” The complaint sought, inter alia, an “[o]rder that [Pitts] re-convey all real property to the trust....” That same day, a “Lis Pendens Notice” was filed, alleging that Pitts had “misappropriated” property from the Trust. Pitts’s answer acknowledged she “has refused to return the parcels of property. However, she denies they were deeded to her in trust.... ” According to Pitts, the subject property was conveyed to her, “individually, in fee simple,” by Clark, Sr. On March 16, 2005, the Trust filed a “Cancellation of Property Conveyances” against Pitts, “fully restoring] all legal rights of same to the duly appointed trustee of [the Trust].... ”

¶ 5. On May 19, 2005, Pitts entered into “Memorandum of Lease Agreements” with Lamar, “leasing a portion of’ the subject property for “an initial term of six (6) years.... ” On October 6, 2005, Pitts entered into twenty-year “Sign Location Leases” with Lamar for the placement of outdoor advertising structures on the subject property.

¶ 6. On April 7, 2009, counsel for Clark, Sr. sent a letter to Lamar which provided that Pitts “is not and has never been the owner of the property, nor has she had the authority to execute a lease with your company on behalf of [Clark, Sr.]; therefore, there should be no payment made to [Pitts] for the lease of the subject property.” The letter added that “my client has constructed a pad-locked fence surrounding the signs you have constructed on this property, and any individual caught on the property will be subject to arrest for trespassing.” On May 19, 2009, counsel for Clark, Sr. sent a second letter to Lamar which claimed that Lamar owed $123,766.49 in “damages as a result of the company’s willful trespass and breach of contract for the lease of the above-described property....”

¶ 7. On May 29, 2009, Lamar filed a “Motion for Leave to Intervene,” with its proposed “Intervener’s Complaint for In-junctive, Declaratory and Interpleader Relief’ attached as an exhibit. See ¶ 2 supra (regarding specific relief sought in the proposed complaint). According to Lamar, Pitts “has claimed ... ownership of the subject property by way of a special warranty deed from [Clark, Sr.] ... to [Pitts] ... dated April 29, 2002_ By way of this instrument, Lamar has a facially valid right to maintain its sign structures.... ” Thereafter, Pitts filed a “Response to Motion for Leave to Intervene and/or Alternative Relief’ in support of Lamar’s motion.

¶ 8. Although the document is not included in the record, the docket reflects that on July 9, 2009, a “Motion to Intervene/TRO” noticed by Lamar’s attorney was filed and heard. On July 21, 2009, the chancery court granted partial relief to Lamar by ordering:

the [Trust] and anyone acting for or on their behalf are hereby ordered to refrain from taking any actions to deny [Lamar] access to its sign structures pending final disposition of this matter by this [c]ourt. Included in this order is a requirement that the [Trust], or any party under their control, provide access through any fences that are now currently located on the property which prevent Lamar’s free and open access to its sign structures.
[Lamar] shall interplead and deposit into the registry of this [c]ourt any rentals that are now due or which may become due under the terms of its lease agreements with [Pitts] until further order of this [c]ourt.

¶ 9. A hearing on Lamar’s “Motion for Leave to Intervene” was held on September 16, 2009, at which the chancellor determined that “under Rule 24 ... the Lamar interest would be adequately protected by [Pitts] and her able counsel....” (Emphasis added.) The chancellor added that:

Lamar wasn’t necessary as a matter of discretion on my part. We’re having enough trouble getting this lawsuit started and finished as it is ... the validity or invalidity of the various instruments here insofar as conveyances to a trust or to [Pitts] individually is ultimately what the interest of Lamar turns on, and that is the position here of [counsel for Pitts] and [Pitts].

After the chancery court entered its order denying Lamar’s “Motion for Leave to Intervene,” Lamar filed a notice of appeal.

ISSUE

¶ 10. This Court will consider:

Whether the chancery court erred in denying Lamar’s “Motion for Leave to Intervene.”

ANALYSIS

¶ 11. When Lamar filed its “Motion for Leave to Intervene,” it attached a proposed “Intervener’s Complaint for Injunc-tive, Declaratory, and Interpleader Relief’ to the motion. This proposed complaint was provided in accordance with Mississippi Rule of Civil Procedure 24(c), which requires that a motion to intervene “be accompanied by a pleading setting forth the claim or defense for which intervention is sought.” Miss. R. Civ. P. 24(c). In the proposed complaint, Lamar requested that the chancery court declare the true owner of the subject property; determine the validity of Lamar’s sign location leases; and identify the party to whom Lamar should pay rent. Of import to this appeal, Lamar further asked that it be allowed to interplead its rent payments into the court registry, and requested a temporary and permanent injunction to prevent the Trust from denying Lamar access to its sign structures.

¶ 12. A hearing was noticed and, thereafter, the chancery court issued an order that partially granted the temporary relief sought by Lamar. Specifically, the chancellor enjoined the Trust from denying Lamar access to its sign structures, pending a final disposition of the matter, and ordered that Lamar interplead future rent payments into the court registry. Therefore, this Court finds that when the chancery court partially awarded the relief sought by Lamar, it effectively partially granted Lamar’s “Motion for Leave to Intervene.” In other words, by granting said relief, the chancery court exercised jurisdiction over all parties, including Lamar, and entered a de jure ruling which granted partial relief to Lamar. The chancery court’s subsequent, substantive analysis on the intervention issue might well have been correct, but for the fact that the die had already been cast by virtue of its July 21, 2009, order. Thus, Lamar should have been permitted to participate in the proceeding as a matter of law. Accordingly, this Court reverses the chancery court’s denial of Lamar’s “Motion for Leave to Intervene.”

CONCLUSION

¶ 13. Based upon the aforementioned analysis, this Court reverses the Chancery Court of Harrison County’s denial of Lamar’s “Motion for Leave to Intervene” and remands for further proceedings in harmony with this opinion.

¶ 14. REVERSED AND REMANDED.

WALLER, C.J., CARLSON AND GRAVES, P.JJ., DICKINSON, LAMAR, KITCHENS, CHANDLER AND PIERCE, JJ., CONCUR.

      . According to the Trust's amended complaint, Pitts "had a relationship with [Clark, Sr.], but never married him and between them one child was born....”

      . Among the properties conveyed were the “full legal [r]ights to three (3) Land Lease Agreements” created in December 1996 between Headrick Outdoor, Inc. and Clark, Sr. for "erecting and/or maintaining” advertising structures on the subject property. Lamar purchased Headrick Outdoor in 1996.

      .The leases commenced on June 15, 2005.


author: KITCHENS, Justice,

text:
    Larry SETZER v. STATE of Mississippi.
    No. 2009-KA-00752-SCT.
    Supreme Court of Mississippi.
    Feb. 17, 2011.

      T. Swayze Alford, attorney for appellant.
    Office of the Attorney General by John R. Henry, Jr., attorney for appellee.
    Before CARLSON, P.J., RANDOLPH and KITCHENS, JJ.
   KITCHENS, Justice,

for the Court:

¶ 1. Larry Setzer appeals his convictions of two counts of manslaughter by culpable negligence in violation of Mississippi Code Section 97-3-47, and one count of driving under the influence (DUI), resulting in permanent injury, in violation of Mississippi Code Section 63-11-30(5). Finding that the trial judge did not err by denying Setzer’s motion to suppress the results of his blood test, we affirm.

Facts and Procedural History

¶ 2. On the evening of April 17, 2007, Larry Setzer was driving east in a Ford F-250 pickup truck on Goodman Road in Southaven, Mississippi. As Setzer approached the traffic light at the intersection of Goodman Road and Airways Boulevard, his vehicle collided with a stationary Buick Park Avenue passenger car in the north turn lane of east Goodman Road. The pickup pushed the car into the intersection, causing a four-vehicle collision on the west-bound side of Goodman Road. Before coming to its final resting place, the Buick struck a Dodge Intrepid automobile in the south turn lane of west Goodman Road, which caused the Dodge to collide with an 18-wheeler (an over-the-road tractor with trailer in tow) in the inside lane of west Goodman Road. The Ford pickup truck overturned onto its passenger side and slid into the 18-wheeler before coming to a complete stop.

¶ 3. Setzer was the only occupant of the Ford pickup truck. As a result of the accident, he suffered two broken teeth, a head injury, a neck sprain, lacerations to his right elbow, and abrasions to his abdomen, back, chest, and neck. The Buick was occupied by its driver, Glyness Lan-nom, and passengers Phillip Bieselin, Jacob Lannom, and Zachary Lannom. Bieselin was left partially paralyzed, and Jacob and Zachary Lannom perished as a result of injuries they suffered in the collision. Glyness Lannom suffered serious injuries as a result of the collision. The driver of the Dodge suffered minor injuries that were treated at the scene of the accident. The driver of the 18-wheeler suffered no injuries.

¶ 4. Southaven Police Officer Jordan Jones was in charge of investigating the accident. After interviewing witnesses and viewing the physical evidence at the scene, Officer Jones found Setzer as he was being treated in a Southaven Fire Department ambulance. Officer Jones testified that the ambulance was still at the scene of the accident, that he was in uniform when he approached Setzer, that he advised Setzer of his Miranda rights in accordance with Miranda v. Arizona, 384 U.S. 436, 467-68, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), that he asked Setzer for his account of the accident, and that Setzer did not appear to be injured. Officer Jones said that Setzer appeared angry, aggressive, and uncooperative with the medical personnel who were attempting to treat him in the ambulance. Additionally, Officer Jones testified that Setzer had bloodshot eyes and slurred speech, which Officer Jones deemed to be indicators of intoxication. Officer Jones then administered a portable breath test to Setzer, which resulted in a reading of 000, ruling out the presence of alcohol. Setzer attributed his bloodshot eyes and slurred speech to his injuries.

¶ 5. Setzer was transported from the accident scene to Baptist Memorial Hospital-DeSoto, a distance of approximately one mile. Officer Jones followed the ambulance to the hospital, located Setzer in a private room of the emergency department, reintroduced himself to Setzer, and advised Setzer of his Miranda rights for a second time. Officer Jones testified that Setzer verbally acknowledged that he understood his Miranda rights. Setzer testified at the trial; however, Setzer gave no testimony with regard to whether he recalled Officer Jones’s advising him of his Miranda rights or whether Setzer had acknowledged and waived those rights.

¶ 6. While at the hospital, a nurse drew a blood sample from Setzer for investigative purposes. At the time of the blood collection, Setzer was not under arrest. Additionally, the record is clear that Set-zer never gave written consent for blood to be drawn for crime laboratory analysis. However, Officer Jones was adamant that Setzer twice gave Officer Jones verbal consent for the blood draw. Teresa Wind-ham, the nurse who extracted the blood from Setzer, testified that she did not recall whether Setzer had given his consent for the blood draw, but added that she would not have drawn Setzer’s blood at the request of the Officer Jones without consent from Setzer.

¶ 7. Officer Jones took the blood sample to Officer Jeff Logan, who still was at the accident scene. The blood sample was sent to NMS Labs to be tested. The report generated by NMS Labs said that Setzer’s blood had tested positive for al-prazolam in the amount of 73 ng/mL. The NMS Labs report also said that the therapeutic range for alprazolam is 10-50 ng/ mL.

¶ 8. On November 17, 2007, Setzer was indicted for two counts of DUI resulting in death and one count of DUI resulting in permanent injury, in violation of Mississippi Code Section 63-11-30(5) (Rev.2004).

¶ 9. On October 21, 2008, Setzer filed a motion to suppress all testimony and evidence regarding the sample of blood drawn from him, alleging that he had not consented to the blood draw, that he had not been under arrest at the time of the blood draw, that the State had not secured a search warrant for the blood draw, and that no probable cause and no exigent circumstances had negated the search-warrant requirement.

¶ 10. On February 12, 2009, the State offered to reduce the charges against Set-zer. On February 13, 2009, the State proceeded against Setzer upon a bill of information, charging Setzer with two counts of culpable negligence manslaughter under Mississippi Code Section 97-3-47, and one count of DUI assault under Mississippi Code Section 63-11-30(5). On that date, Setzer filed his “waiver of right to grand jury procedure and petition to proceed on information.”

¶ 11. Following a pretrial hearing, the trial judge denied Setzer’s motion to suppress. The court held that, based on the evidence before it, Officer Jones “had probable cause to believe that Setzer had committed the crime of DUI causing death and/or injury and that exigent circumstances existed which authorized his attempt to obtain a blood sample without a warrant.” Additionally, the trial court held that, based on the testimony of Officer Jones and Nurse Windham, “Setzer knowingly and voluntarily consented to the drawing of the blood sample.”

¶ 12. The State and Setzer also entered into a stipulation of facts. In that stipulation, Setzer agreed to waive the exercise of his right to a trial by jury and his right to confront witnesses against him; however, Setzer reserved his right to appeal the trial court’s denial of his motion to suppress evidence of the blood draw. The stipulation summarized the evidence that the State would offer at trial, and agreed that the evidence would be sufficient to meet the State’s burden of proof. In addition to the testimony of the eyewitnesses to the accident and Officer Jones, the stipulation of facts provided that the State would offer the testimony of Robert Camp, a limousine driver, who had observed Setzer driving in an erratic manner prior to the wreck. However, Setzer did not stipulate that the blood drawn and later tested was obtained with his consent or taken based on probable cause.

¶ 13. At the conclusion of a bench trial on February 13, 2009, the trial judge found Setzer guilty of two counts of manslaughter by culpable negligence and guilty of one count of DUI causing death or permanent bodily injury. Setzer was sentenced to serve fifteen years in the custody of the Mississippi Department of Corrections on count one; fifteen years, suspended, on count two, to run concurrently with the sentence for count one; and ten years’ post-release supervision on count three. Additionally, Setzer was ordered to pay a $1,000 fine, $100 to the Crime Victims’ Compensation fund, court costs, and $17,512.20 to the Office of the Attorney General. Aggrieved, Setzer appealed.

Issue

¶ 14. Setzer asks this Court to determine whether the trial court erred in denying his pretrial motion to suppress evidence of the blood test. Setzer maintains that he did not consent to the collection of a blood sample, that the State lacked probable cause to collect the blood sample, and no exigent circumstances were present which would have negated the requirement for a search warrant.

Standard of Review

¶ 15. “A circuit court judge sitting without a jury is accorded the same deference with regard to his findings as a chancellor, and his findings are safe on appeal where they are supported by substantial, credible, and reasonable evidence.” Trinity Mission Health & Rehab of Holly Springs, LLC v. Lawrence, 19 So.3d 647, 649 (Miss.2009) (quoting Par Indus., Inc. v. Target Container Co., 708 So.2d 44, 47 (Miss.1998)). “[W]e will not overturn findings of fact where they are supported by substantial evidence in the record unless there was abuse of discretion by the trial judge or the findings were manifestly wrong or clearly erroneous.” Morley v. Jackson Redevelopment Auth., 874 So.2d 973, 975 (Miss.2004). Moreover, “[t]his Court can reverse a trial court’s denial of a motion to suppress only: if the incorrect legal principle was applied; if there was no substantial evidence to support a voluntary, knowing, and intelligent waiver of Miranda rights; and if the denial was a result of manifest error.” Scott v. State, 8 So.3d 855, 861 (Miss.2008).

Discussion

¶ 16. “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.” U.S. Const, amend. IV. “The people shall be secure in their persons, houses, and possessions, from unreasonable seizure or search.” Miss. Const, art. 3 § 23. “A search made without warrant and not incident to a lawful arrest is not illegal per se, but if the fruits of the search are to withstand the exclusionary rule, the search must have been predicated on probable cause.” McDuff v. State, 763 So.2d 850, 854 (Miss.2000) (quoting Hailes v. State, 268 So.2d 345, 346 (Miss.1972)). Moreover, “[t]he degree of intrusion necessary in the taking of a blood sample is sufficient to require the presence of probable cause. The Fourth Amendment prohibition against unreasonable search and seizure applies when an intrusion into the body— such as a blood test — is undertaken without a warrant, absent an emergency situation.” Cole v. State, 493 So.2d 1333, 1336 (Miss.1986) (quoting Schmerber v. Cal., 384 U.S. 757, 770-71, 86 S.Ct. 1826, 1835-36, 16 L.Ed.2d 908, 919-20 (1966)). However, this Court has upheld the collection of a blood sample, absent the suspect’s arrest or consent, where probable cause existed for the search. Gibson v. State, 503 So.2d 230, 233 (Miss.1987).

¶ 17. Setzer contends that, based on the totality of the circumstances, it is clear that he did not consent to the collection of his blood for the purpose its being used in the State’s prosecution of him. Setzer made a similar argument in support of his motion to suppress. In that motion, Setzer averred that “[a]t the time the State seized Defendant’s blood, Defendant was not under arrest, he did not consent to his blood being taken, no warrant had been secured by the State, and the State’s discovery provides no evidence of probable cause that Defendant was under the influence or that an exigent circumstance existed that negated the requirement for a warrant.” The trial court denied Setzer’s motion to suppress, and in its written order found that:

a. Officer Jones properly responded to an automobile accident involving four (4) cars within his jurisdiction;
b. The officer determined that a serious accident had occurred and, upon viewing the scene closer, noted two (2) children who, based upon his experience, appeared to be deceased. He also noted another passenger who appeared to be seriously injured;
d. From his investigation, Officer Jones determined that the defendant’s vehicle had rear-ended the victim’s vehicle and pushed it through the intersection;
f. Officer Jones observed at this time that the defendant appeared angry, aggressive and uncooperative. Officer Jones stated that he observed bloodshot eyes and slurred speech which he deemed to be indicators of intoxication;
g. Officer Jones offered the defendant a portable breath test which the defendant took and passed, ruling out the presence of alcohol;
h. Testimony was presented as to the difficulty in time of obtaining a warrant and the fact that blood intoxication evidence would dissipate over time;
i. Officer Jones went to defendant Set-zer’s room in the Emergency Room at Baptist-Desoto hospital to request consent to draw Setzer’s blood. Officer Jones once again read Mr. Setzer his Miranda rights and Setzer said he understood these rights. Defendant Set-zer did consent to the drawing of his blood.
j. Officer Jones obtained the services of E.R. nurse, Teresa Windham, to draw the blood. Officer Jones stated he received consent again from Mr. Setzer in the presence of nurse Windham. Nurse Windham testified that she did not remember the officer asking for consent in her presence but did state that she would not have drawn the blood if the defendant had refused.

¶ 18. The trial court, relying on the rationale of Longstreet v. State, 592 So.2d 16 (Miss.1991), held that, based on these facts, Officer Jones “had probable cause to believe that Setzer had committed the crime of DUI causing death and/or injury and that exigent circumstances existed which authorized his attempt to obtain a blood sample without a warrant.” Additionally, the trial court found that Setzer “knowingly and voluntarily consented to the drawing of the blood sample.”

¶ 19. Regarding Setzer’s allegation that he had not consented to the blood draw, the trial judge was challenged with determining the credibility and veracity of the witnesses before him. See Mohr v. State, 584 So.2d 426, 431 (Miss.1991). Officer Jones testified that Setzer twice gave him verbal consent for the blood draw. Wind-ham, the nurse who extracted the blood from Setzer, testified that she did not recall whether Setzer gave consent for the blood draw, but added that she would not have drawn Setzer’s blood at the request of Officer Jones without consent from Set-zer. Although Setzer argues that he never signed a consent form, this Court has never held that written consent is required for a blood draw. Therefore, based on the testimony before the trial court, we cannot say that the trial judge erred in finding that Setzer had consented to the drawing of a sample of his blood.

¶ 20. Further, in Longstreet, 592 So.2d at 18, this Court held that “blood searches which are based upon probable cause are not illegal.” In this case, Set-zer’s vehicle collided with a stationary vehicle as he approached a traffic signal. Officer Jones had considerable reason to believe that Setzer was intoxicated. Specifically, Officer Jones observed Setzer’s being uncooperative with medical technicians who were attempting to treat him at the scene of the accident, and he testified that Setzer had slurred speech and bloodshot eyes. Consistent with the decision in Longstreet, the trial court did not err in holding that Officer Jones had probable cause to believe that Setzer had committed the crime of DUI causing death or injury. See also Wilkerson v. State, 731 So.2d 1173, 1176 (Miss.1999) (“Where the state is justified in requiring a blood test to determine the alcoholic content in a suspect’s blood, and the test has been performed, the state is entitled to the benefit of the test results.” (citing Longstreet, 592 So.2d at 21)); Green v. State, 710 So.2d 862, 865 (Miss.1998) (“[A]s long as there is probable cause to believe that the person is impaired by some substance ... the results of the blood alcohol concentration tests are admissible.”); Whitley v. State, 511 So.2d 929, 931 (Miss.1986) (blood-alcohol test was admissible where officer had probable cause to arrest Whitley and charge him with manslaughter); Cole v. State, 493 So.2d 1333, 1335 (Miss.1986) (“A search made without warrant and not incident to a lawful arrest is not illegal per se, but if the fruits of the search are to withstand the exclusionary rule, the search must have been predicated on probable cause.”); Ashley v. State, 423 So.2d 1311, 1313 (Miss.1982) (“At that time there existed probable cause for arrest and also probable cause to search appellant by requiring him to submit to the withdrawal of blood from his body to be tested.”).

Conclusion

¶ 21. The trial court did not abuse its discretion in finding that Officer Jones’s actions were supported by probable cause and in finding that Setzer had consented to the search, as those findings are supported by substantial, credible, and reasonable evidence. Trinity Mission, 19 So.3d at 649. Moreover, the trial court did not apply an incorrect legal standard to this case. Scott, 8 So.3d at 861. Thus, the convictions and sentences are affirmed.

¶ 22. COUNT I: CONVICTION OF CULPABLE NEGLIGENCE MANSLAUGHTER AND SENTENCE OF FIFTEEN (15) YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, AFFIRMED. COUNT II: CONVICTION OF CULPABLE NEGLIGENCE MANSLAUGHTER AND SENTENCE OF FIFTEEN (15) YEARS SUSPENDED, AFFIRMED. COUNT III: CONVICTION OF DUI CAUSING PERMANENT BODILY INJURY AND SENTENCE OF TEN (10) YEARS TO BE SERVED AS POST RELEASE SUPERVISION, WITH CONDITIONS, AFFIRMED. SENTENCES IN COUNTS I AND II SHALL RUN CONCURRENTLY.

WALLER, C.J., CARLSON AND GRAVES, P.JJ., DICKINSON, RANDOLPH, LAMAR, CHANDLER AND PIERCE JJ., CONCUR.

      . Alprazolam is also known by the brand names Niravam and Xanax. U.S. National Library of Medicine, http://www.ncbi.nlm.nih. gov/pubmedhealth/PMH0000807 (last visited Feb. 15, 2011).

      . The charges in the indictment were committed to the inactive files on February 17, 2009.

      . The stipulation provided that the State would offer testimony from eyewitnesses to the accident as well as testimony from Nurse Windham, a toxicologist from NMS Labs, and Officer Jones.

      . Setzer waived his right to trial by jury.


author: IRVING, J.,

text:
    Drake L. LEWIS, Appellant, v. Tonia D. LEWIS, Appellee.
    No. 2008-CA-01362-COA.
    Court of Appeals of Mississippi.
    Dec. 8, 2009.
    Rehearing Denied April 20, 2010.

      Thomas Wright Teel, Biloxi, attorney for appellant.
    Dean Holleman, attorney for appellee.
    Before KING, C.J., IRVING and CARLTON, JJ.
   IRVING, J.,

for the Court.

¶ 1. Tonia and Drake Lewis were divorced by the Harrison County Chancery Court after fifteen years of marriage. In its judgment, the chancery court made an equitable distribution of the marital estate. Feeling aggrieved, Drake appeals and asserts that the chancery court erred in classifying certain property as marital and in its equitable distribution as to multiple pieces of property.

¶ 2. Finding error, we affirm in part and reverse and remand in part.

FACTS

¶ 3. Tonia and Drake were married on March 2, 1991, in Missouri. Three children were born during the course of the marriage. In June 2006, Tonia and Drake separated due to Drake’s affair with a family friend. During the course of their marriage, Tonia and Drake formed and operated together a company called Legacy Holdings (Legacy). Multiple pieces of property were bought, improved, and either sold or rented by the parties on behalf of Legacy.

¶ 4. Tonia filed a complaint for divorce on August 30, 2006. No responsive pleading was filed by Drake. Trial was held in July 2007. At the conclusion of the trial, the parties were given the opportunity to submit proposed findings of fact and conclusions of law. Tonia submitted proposed findings, but Drake never submitted anything.

¶ 5. On January 11, 2008, the chancery court issued its judgment, wherein the court granted Tonia a divorce on the ground of adultery, and attempted to make an equitable distribution of the marital estate. At the outset, the chancery court noted that it had “the opportunity to observe the demeanor of the witnesses, and to judge their credibility!;, and] that [Drake] is not a credible witness. He made efforts to hide assets and income .... ”

¶ 6. Additional facts will be related, as necessary, during our analysis and discussion of the issues.

ANALYSIS AND DISCUSSION OF THE ISSUES

¶7. Our supreme court has discussed the appellate standard of review in divorce cases as follows:

“Our scope of review in domestic relations matters is limited by our familiar substantial evidence/manifest error rule.” Clark v. Clark, 754 So.2d 450, 458 [ (¶ 48) ] (Miss.1999) (citation omitted). “The equitable distribution of marital assets is committed to the discretion of the chancellor, whose findings will not be disturbed ... unless the chancellor was manifestly wrong, clearly erroneous or an erroneous legal standard was applied.” Arthur v. Arthur, 691 So.2d 997, 1003 (Miss.1997) (citation omitted).

Jones v. Jones, 995 So.2d 706, 712 (¶ 19) (Miss.2008). Drake contends that the chancery court erred in its distribution of numerous pieces of property; for clarity’s sake, we address each separately below. Despite the stringent standard of review applicable to this case, we find that the chancellor was manifestly wrong in his treatment of the marital assets.

1. Legacy Holdings

¶ 8. Drake contends that the chancery court “made its determination about Legacy Holdings based on Exhibits 1, 4, and 7, all of which were offered by ... Tonia.... Drake asserts that these three exhibits are contradictory, inaccurate, and unreliable.... ” Drake essentially contends that Legacy is worth almost nothing and that it holds no property other than some equipment and vehicles.

¶ 9. In its judgment, the chancery court stated the following about Legacy:

In 2001, the parties formed Legacy Builders, Inc. Its office was in the marital home from 2001 to 2003, after which time it acquired a separate office. Tonia and Drake each owned 50%. Legacy built speculation homes and custom built homes for others. Beginning in 2001, the parties derived most of their regular income from Legacy.
Tonia and Drake continued to invest in other real estate holdings, many times at the suggestion of Drake’s father. They purchased a lot in Livingston, Louisiana (Suma Hills) to build a speculation home. They purchased real estate with his father in Missouri (Richland Road)[,] and during the divorce litigation this land was sold with each receiving $132,000.00 net profit. They purchased other real estate with his father in Missouri (Grasslands)[,] and during the divorce litigation Drake and Tonia sold their interest for $93,000.00. They purchased more lots in Ocean Springs, Mississippi, (Pinehurst)[,] on which Legacy was building spec homes at the time of the trial.
# * * * * *
After being formed in 2001, Legacy’s business grew quickly. An analysis of its tax returns (Exhibit 8) and records shows a pattern of gross sales as follows:
2001-$612,699.00;
2002-$811,947.00;
2003-$2,491,294.00;
2004-$2,068,778.00; and
2005-$2,397,266.00.
Its “total assets” as shown on its tax returns’ balance sheets also is revealing:
2001-$1,950.00;
2002-$l,622,861.00;
2003-$l,621,603.00;
2004-$l,556,589.00; and
2005-$2,219,539.99.
The parties’ July 2006 Personal Financial Statement (Exhibit 4) showed as follows:
Total Other Assets-$1,756,645.88 (includes Legacy Holdings, Inc[.,] at $1,148,270.48);
Total Liabilities-$108,381.23; and
a net worth of $1,648,264.65.
At trial, Drake’s testimony painted a totally different financial picture of the status of Legacy’s sales and assets and the value of the marital estate. His testimony was substantially contradicted by the documentary evidence. Much of Drake’s posturing for a “poor” financial condition appears to be motivated by his own desire to abandon his marriage to Tonia....
* * * * * *
At the temporary hearing in September 2006, Drake presented his financial declaration (Exhibit 2) showing his sole income from Legacy of $4,300.00 per month (gross). Based upon these representations, the [c]ourt ordered Drake to pay Tonia $2,776.00 per month in support, her house note of $1,346.00, her car note of $544.00 per month, and her car insurance of $217.00 per month.
Following the temporary hearing, Drake began to surreptitiously draw an additional $4,300.00 per month from Legacy as a repayment by Legacy to Drake for loans they both had made to the company. The records show that Tonia and Drake had loan receivable balances from Legacy as follows:
Exhibit 2a-$156,555.10 as of July 2007;
Exhibit 7-Legacy Balance Sheet shows $147,855.00.
Drake failed to show this asset on his 2006 financial statement (Exhibit 2). Between September 2006 and April 2007 Drake drew $28,848.00 from Legacy as a loan receivable. (Exhibit 9). This money represented a marital asset belonging to both parties, to which he had no unilateral right.
Additionally, in furtherance of his attempts to control the cash assets of the parties and/or Legacy, Drake began doing business as Legacy Builders, a sole proprietorship in September 2006. Drake included Legacy’s ongoing work in this new sole proprietorship. He opened a new checking account under this name, purportedly so that Tonia could not get any of the money.
* * * * * *
The [c]ourt finds from the evidence that the following assets were owned by either or both of the parties at the time of the separation of the parties in June 2006:
* * * * * *

(Footnotes omitted).

¶ 10. It is clear from the chancery court’s judgment that it primarily considered exhibits one, four, and seven in reaching its determinations as to Legacy’s value. Exhibit one is Tonia’s financial declaration. Exhibit four is Tonia and Drake’s financial statement, dated July 1, 2006. Exhibit seven is the Legacy Builders/Holdings balance sheet, dated July 18, 2007. We examine the contents of these exhibits to ascertain the propriety of the chancellor’s valuation of Legacy.

a. Exhibit One, Tonia’s Financial Declaration

¶ 11. Exhibit one, Tonia’s financial declaration, included a statement of assets. The statement indicated that lots fifteen and sixteen of the “Grasslands subdivision” had been purchased by Legacy and then sold by Drake for $95,000. Tonia’s testimony confirmed that this property was sold “to an investor there in Columbia” for $95,000. Drake’s attorney then offered to stipulate that the Grasslands property had been sold, was marital property, and was worth “[ajbout [$]91,000,” rather than $95,000.

¶ 12. A “Richland Road” property in Missouri was also listed as having been purchased by Legacy and then sold, with each party receiving proceeds of around $182,000 from the sale. Tonia indicated that this property was sold to Drake’s father during the pendency of the divorce.

¶ 13. The statement indicated that lots one to four in the Pinehurst subdivision had been purchased by Legacy. The statement further indicated that the lots currently held an equity of $71,701. Tonia testified that these lots were purchased in order for Legacy to build “speculative homes on.” Tonia further testified that three of the houses had not been completed as of the time of trial. Tonia answered affirmatively when asked whether her statement provided “the value of those three parcels plus the dirt ... unimproved.”

¶ 14. Ten acres in “St. Martin” were listed as having been purchased by Legacy with “personal monies from sell [sic] of personal properties.” The St. Martin acreage was valued by Tonia as worth $200,000. Tonia testified that the St. Martin acreage was actually less than ten acres, although she did not indicate how much less. Tonia further testified that she and Drake discussed the purchase of the property before doing so, and that they had decided “to put duplexes on the properties and keep the duplexes as rental units.” Tonia indicated that she was involved with helping to prepare the property for the duplexes. When asked whether she knew where the money to purchase the St. Martin property came from, Tonia indicated that she did not, despite her financial statement, which indicated that the acreage was purchased by Legacy with “personal monies.” During cross-examination, as discussed in more detail later, Tonia admitted that the St. Martin acreage was acquired by exchanging it for a piece of property that was titled solely in Drake’s name.

¶ 15. Finally, Tonia’s statement valued Legacy itself as worth $1,064,778.76, as of a balance sheet dated June 30, 2007. Tonia testified that Legacy’s financial records “are kept in QuickBooks format.” She further testified that she went into Quick-Books “under the memorized reports [to] print off financial statements.” She stated that the total value of Legacy on her statement came from the “number off of the balance sheet that came from the office.” During cross-examination, Tonia admitted that her valuation of Legacy in exhibit one did not include any of Legacy’s liabilities, although Tonia stated that it was possible that the numbers that were used for the assets included their value minus liabilities. Essentially, Tonia did not know anything about what the number on her financial statement actually encompassed.

b. Exhibit Four, Tonia and Drake’s Financial Statement

¶ 16. Exhibit four, Tonia and Drake’s combined financial statement, is a one-page document that is dated “[a]s of 7/1/06.” This statement was offered into evidence by Tonia; she testified that she did not enter the information on it, and that she obtained it simply by printing it from the home computer. Tonia indicated that she believed that Drake had entered the information on the document, which values Legacy as worth $1,148,270.48. Tonia testified that she printed the statement from the computer shortly after her separation from Drake, because she was afraid that he would dispose of “monies.” During cross-examination, Tonia admitted that some property was not included that should have been, that some property was valued at an amount greater than it eventually sold for, and that, ultimately, exhibit four was not accurate in several respects. The value of Legacy on the sheet is stated without any explanation of how the amount was calculated, and nothing is shown to indicate what assets and liabilities of Legacy were considered in the calculation.

c. Exhibit Seven, Legacy Balance Sheet

¶ 17. Exhibit seven appears to include a pamphlet for Legacy Builders; a balance sheet for Legacy Builders dated July 18, 2007; and some stockholder documents related to Legacy. Neither the pamphlet nor the stockholder documents contain anything that could have been used to value Legacy. Therefore, we focus only on the included balance sheet. The balance sheet indicated that Legacy had total then-current assets worth $289,211.03, a figure that included bank accounts and the value of speculation homes, among other items. The balance sheet also indicated that Legacy had “other assets” worth $1,984,740.89, which included tools, rental income, and unimproved property, as well as other items. The balance sheet therefore showed total assets worth $2,273,951.92. The balance sheet also listed total liabilities of $1,209,711.74. The sheet finally noted equity worth $1,064,240.18, primarily from “Opening Bal Equity.”

¶ 18. At trial, Tonia testified that she obtained the Legacy balance sheet from Legacy’s office on July 18, 2007. Tonia testified that she used the equity from the balance sheet to value Legacy on her own financial statement. Tonia admitted, during voir dire, that the balance sheet is only as accurate as the information that has been put into it, and that no accountant had ever performed an audit of Legacy. During voir dire as to her ability to testify about the accounting software used at Legacy, Tonia further admitted that she did not enter the information on Legacy’s computer herself, and that she had not validated the information on the balance sheet:

Q. Excuse me. I didn’t mean to — this balance statement that appears in Exhibit Number 7 that says—
A. Yes.
Q. —Legacy Builders, have you gone back and validated any of these items that are listed here?
A. No. I have — I went in and I pulled up — the way that the information is entered into the computer, you go in, and there is a memorized report under financial statements, and it has been preset to what categories it pulls into that statement.

During cross-examination, Tonia admitted that exhibit seven’s figures were inaccurate. She specifically admitted that several properties were included as assets when they had, in fact, been sold prior to July 18, 2007. Tonia also admitted that the St. Martin acreage was not owned by Legacy at all, even though it was included in exhibit seven. She further admitted that, although the Richland Road property was included as an asset of Legacy worth $936,250, it had been sold prior to trial for approximately $264,000. She also admitted that the Richland Road property was not even really an asset that belonged to Legacy, as she and Drake had split the proceeds from its sale. Tonia further admitted that the marital home was included in exhibit seven, even though it was not owned by Legacy.

¶ 19. Having reviewed all of the aforementioned exhibits, it appears that the chancellor chose to use exhibit four as a valuation of Legacy’s worth, as the value that he assigned to Legacy is the same as the value of Legacy in exhibit four. We find that this decision was in error. First, Tonia admitted that this document, as well as her other submitted documents, was inaccurate in several respects. More troubling is the fact that exhibit four does not indicate, in any way, how the value of Legacy was determined. Of course, this would have been acceptable if Tonia was able to testify as to how the value was calculated. However, Tonia essentially testified that she did not enter the data in question; rather, she simply hit the “print” button on the family’s home computer to obtain exhibit four. Essentially, she did not know what the valuation of Legacy in exhibit four included or did not include. Despite the deference due to a chancellor’s findings, we find that the chancery court abused its discretion in using the valuation from exhibit four. For all intents and purposes, the value of Legacy in exhibit four was pulled out of thin air.

¶ 20. The valuation in exhibit seven suffers from similar deficiencies. Tonia presented the document but admitted that she had not entered the information on the balance sheet, that she did not know how accurate it was, and that she had simply hit the “print” button on the office computer to obtain the balance sheet. In fact, during cross-examination, Tonia admitted that multiple items on exhibit seven were inaccurate. We find that exhibit one, Tonia’s personal financial statement, was not any better, since Tonia testified that the value of Legacy on her financial statement was simply from the balance sheet that she had printed at the office. Had Tonia reviewed the balance sheet, she would have realized that it was not accurate. Essentially, neither exhibit one, exhibit four, nor exhibit seven present any information that could reasonably be used to value Legacy, yet the chancery court attempted to use them to do exactly that. On remand, the chancellor should not rely on these documents to value Legacy.

¶ 21. During cross-examination, Tonia admitted that Legacy has not made any money in the last five years. She also admitted that Drake has periodically had to make loans to Legacy. Tonia agreed that Legacy’s tax returns had shown losses for the five years preceding trial. Drake essentially testified at trial that Legacy had no assets other than some equipment. This testimony was contradicted by evidence that the parties considered multiple pieces of property that were owned by them to be held only for Legacy’s use, regardless of whose name was on the deed for the property.

¶ 22. Tonia urges this Court to find that the chancery court’s valuation is supported by Legacy’s federal income tax returns. This logic fails for multiple reasons. First, the chancery court’s judgment did not indicate that it was using the tax returns to value Legacy. Furthermore, Tonia urges us to look only at the assets claimed by Legacy, and not its tax return liabilities, which were often significant. Finally, the tax returns are no better in terms of explaining why Legacy was worth the amount claimed on the tax return. Without more support as to why Legacy was worth the amount claimed on the tax returns, we decline to find that they provide sufficient support for the chancellor’s valuation.

¶23. On remand, the chancery court should value Legacy using: (1) any real property owned by Legacy; (2) any other property owned by Legacy, such as vehicles or tools; (3) goodwill equity, if any, attributable to Legacy; and (4) any improvements that Legacy owns that are made to real property owned by parties other than Legacy. In making these determinations, the chancery court should consider “that price at which [the business] would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of the relevant facts.” Singley v. Singley, 846 So.2d 1004, 1011(¶ 18) (Miss.2002).

2. Marital versus Non-Marital Properties

1124. Drake next claims that multiple pieces of property were incorrectly considered as marital, rather than non-marital, property. We address each of these separately below.

a. Tigerbend Apartments

¶ 25. Drake first claims that the Tigerbend Apartments, which the chancellor awarded to Drake, is non-marital property that was purchased for Drake by his father. The chancellor found that: “The [d]eed offered into evidence shows Drake’s purchase of his interest, along with his siblings, from a third party.... There is no proof of a gift or of any trust being the grantor or donor of the property.” We find that substantial evidence supports the chancellor’s findings as to this asset. Tonia and Drake claimed rental income from the property on their joint tax returns for years. Drake acknowledged the rental incomes but claimed that he had never actually received the rentals as income, and that he did not know where the money had gone. Tonia also testified that she did not think that she and Drake had received the rental incomes. Drake hypothesized that the property’s mortgage might have been paid with rental proceeds. However, it appears that the amount paid on the mortgage exceeds the amount of rental proceeds that were earned. No other non-marital source of funds was suggested as having paid down the mortgage. Furthermore, Tonia testified that she had assumed that the Tigerbend Apartments belonged to her and Drake, and that she and Drake had had conversations to that effect.

¶ 26. Drake’s claim that the chancellor erred in finding that the Tigerbend Apartments is marital property is without merit.

b.Swam/p Road Acreage

¶ 27. Drake claims that this property was also property that was “originally owned by Drake’s parents, then was gifted to the children, with Drake getting a [one-half] interest.” The chancellor found that this acreage is marital property, and reasoned as follows: “The only evidence to support a non-marital status was Drake’s testimony that this was inherited by him and has a value of $15,000. Drake failed to offer any evidence of how the expenses related to the asset, e.g. property taxes, were paid.... Absent a showing beyond a mere demonstration of a non-marital status, this asset is marital and subject to equitable distribution.” At trial, Tonia appeared to know nothing about this property. She further ignores it in her appellate brief, except to state in a footnote that “Tonia makes no claim to the Swamp Road property!,] and the same was awarded to Drake.” While it is true that the property was awarded to Drake, if the property should not have been included in the distribution of the marital estate, its award to Drake does not solve that error.

¶28. Drake provided very little testimony about this property at trial, and it is true that there is no explanation of how expenses such as property taxes were paid. However, this Court is troubled by Tonia’s admission that she knew nothing about the property and “makes no claim” to it. On remand, the chancery court should reexamine the Swamp Road acreage and determine whether it was properly considered as marital property.

c. Shenandoah

¶ 29. Drake also contends that the Shenandoah property, which was awarded to Tonia, should not have been considered as a marital asset. Tonia admitted at trial that: “It was a piece of property that was originally purchased in the trust, and then I believe back in 2003, it was turned over to each of the children’s—each of the children got all the trust assets into their name, put into their names.” This property’s situation is almost identical to that of the Tigerbend Apartments. Drake and Tonia collected rental income from Shenandoah and reported it on their tax returns. However, Tonia indicated that the incomes that were reported on their tax returns were noting more than paper transactions, as Drake’s father actually kept the rental money. Regardless, the mortgage on the property was paid down during the marriage. Although Drake suggests that the rental incomes might have been used to pay down the mortgage, as with the Tigerbend Apartments, the rental income that was received appears to be less than the amount of the mortgage that was paid down. Drake provided no explanation for how the additional mortgage payments were made. As with the Tigerbend Apartments, Tonia testified that she and Drake had had conversations wherein they had discussed their joint ownership of Shenandoah. Substantial evidence supports the chancellor’s findings regarding the Shenandoah property.

d. Hickory Hills Lot 29

¶30. Drake does not explicitly raise Lot 29 of the Hickory Hills subdivision in the section of his brief claiming that the chancellor incorrectly categorized non-marital properties as marital. However, in the interest of thoroughness, we also address this property. There are two Hickory Hills lots at issue in this case: Lot 29 and Lot 13. Lot 13 we will discuss in more detail later in this opinion. Lot 29 was not separately addressed by the chancellor in his judgment.

¶ 31. The record indicates that Lot 29 was accumulated by the parties during their marriage. Tonia testified that she and Drake paid property taxes on Lot 29 during the marriage. Her financial statement indicated that Lot 29 was titled jointly in hers and Drake’s names; the chancellor also found that the property was titled jointly in Tonia’s and Drake’s names. Drake admitted at trial that the property was jointly owned by Tonia and him. A quitclaim deed, provided as an exhibit, showed that Lot 29 was deeded to Drake and Tonia jointly. The chancellor found that this property was marital property that had been accumulated during the marriage. We find that substantial evidence exists to support the chancellor’s determination that this was marital property.

3. St Martin Property Exchange

¶ 32. Drake next claims that the chancery court erred in treating Hickory Hills Lot 13 and the St. Martin acreage as separate property. In its judgment, the chancery court valued Lot 13 as worth around ten thousand dollars and awarded it to Drake. The chancery court valued the St. Martin acreage as worth two hundred thousand dollars and awarded it to Tonia. Drake claims that this was in error, because Lot 13 was traded for the St. Martin acreage in a 1031 tax exchange.

¶ 33. The chancery court appears to have predominantly based its decision regarding the exchange on the fact that the settlement statement provided by Drake regarding the 1031 exchange does not specify that Lot 13 of Hickory Hills was the property that was traded for the St. Martin acreage. Were there nothing else in the record, we might find that the chancellor was correct in finding that there were two separate pieces of property. However, the chancellor’s finding ignores Tonia’s own testimony. Tonia testified, in pertinent part, as follows during cross-examination:

Q. Okay. All right. Now, the — I want to talk to you a minute about the St. Martin property.
A. Yes.
Q. The 9.65 acres.
A. Yes.
Q. Do you even know how that property was acquired?
A. It was through — we sold some property, and I don’t recall if it’s the property from Missouri or if it was from the sale of the condo that we were living in and — actually I believe it was from the property-it went into an exchange for tax purposes, and I believe it was acquired that way.
Q. Do you know what a 1031 exchange is?
A. I have heard it [sic]. I don’t know details about it.
Q. Okay. Isn’t it a fact — and if you don’t know, you just tell me.
A. Okay.
Q. Isn’t it a fact that the St. Martin property was acquired in a 1031 exchange with trust property that was given to [Drake] solely? In other words, the trust gave [Drake,] solely in his name[,] deed to a piece of property that was exchanged in a 1031 exchange for the St. Martin property?
A. What trust piece of property are we talking about?
Q. Two acres in Hickory Hills. That was trust property that was given in his name only, correct?
A. It was in his name, yes.
Q. Okay. And isn’t it a fact that that two acres in Hickory Hills was exchanged, because it was in his name only, exchanged in a 1031 exchange for the St. Martin property?
A. I believe that’s how it was done.
Q. Your name was never placed on the Hickory Hills property, was it?
A. No, it was not.
Q. And your name was never placed on the St. Martin property?
A. It was not placed on the St. Martin property, no.

(Emphasis added). Although neither Drake’s attorney nor Tonia specifies that Lot 13 was exchanged for the St. Martin property, there are only two Hickory Hills properties that the parties have owned. Tonia claimed that Lot 29 was titled jointly in hers and Drake’s names. Her financial statement did not list Lot 13 at all-presumably because it had been swapped for the St. Martin acreage at that point. During direct examination, Tonia testified that she thought that the St. Martin acreage might have been purchased with proceeds from the sale of property in Missouri; however, this is belied by her later admission that the St. Martin acreage was gained through a 1031 exchange with a Hickory Hills lot that was titled in Drake’s name only.

¶ 34. Tonia’s own admission corroborates Drake’s testimony about how the St. Martin acreage was acquired. Therefore, we reverse and remand on this issue as well. On remand, the chancery court should equitably divide the marital estate without the inclusion of Lot 13, which Tonia admitted at trial no longer exists as a separate piece of property. The chancery court should also reconsider whether the St. Martin acreage is marital property, as Tonia testified that Lot 13, which was traded for the St. Martin acreage, was titled solely in Drake’s name. Tonia also admitted that the St. Martin property is titled solely in Drake’s name. In light of the 1031 exchange, the chancery court should reconsider whether this property is marital.

A Loan to Legacy

¶ 35. In his final contention of error, Drake claims that the chancery court erred in awarding him the value of a loan and in considering the repayment of the loan as income. The loan at issue was made by Drake and Tonia to Legacy; the chancellor valued it as worth $156,555. Drake’s gross income as reported on his financial statement is $4,730 per month; however, he claims that his “net income extrapolated from the child support amount would be $7,300 ($1,606 divided by 22 equals 1%, multiplied by 100), which sum adds into his income the loan repayment.”

¶ 36. Assuming that Drake’s calculations are correct, we still decline to find that the chancellor erred. We know of no provision of the law that states that income can only be considered if it is achieved from non-diminishing assets; Drake has provided no citation to the contrary.

¶ 37. Therefore, we find that this issue is also without merit.

5. Conclusion

¶ 38. On remand, the chancellor must revalue Legacy using all relevant data, rather than relying on Tonia’s admittedly inaccurate exhibits. The chancellor must also consider whether the Swamp Road acreage is marital property in light of Tonia’s statements regarding the property, and whether the St. Martin property is marital property in light of the 1031 exchange. After considering all of these things, the chancellor must address the proper value of the marital estate and then make an equitable distribution of the marital estate, taking into account the new value of Legacy and any other property which has undergone a change in marital status. In so doing, the chancellor must not consider Lot 13 of Hickory Hills, which both parties agreed is no longer owned by either party.

¶ 39. THE JUDGMENT OF THE CHANCERY COURT OF HARRISON COUNTY IS AFFIRMED IN PART AND REVERSED AND REMANDED IN PART FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED ONE-HALF TO THE APPELLANT AND ONE-HALF TO THE APPELLEE.

KING, C.J., LEE AND MYERS, P.JJ., GRIFFIS, BARNES, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ, CONCUR.

      . In denying Drake's posttrial motion to reconsider, the chancery court referenced Legacy’s tax returns. However, the court declined to alter its valuation of Legacy as a result, meaning, essentially, that the value of Legacy was still determined based on exhibit four.

      . We accept that the chancellor's treatment of the loan will most likely mean that the amount of child support will have to be adjusted in the future, once Drake has recouped the value of the loan.