Cite as 2016 Ark. App. 172
ARKANSAS COURT OF APPEALS DIVISION II No. CV-15-702
MARK BROWN Opinion Delivered MARCH 16, 2016 APPELLANT APPEAL FROM THE PULASKI V. COUNTY CIRCUIT COURT, FIFTEENTH DIVISION [NO. 60DR-13-1871] CONNIE BROWN APPELLEE HONORABLE RICHARD MOORE, JUDGE
REVERSED AND REMANDED
DAVID M. GLOVER, Judge
This appeal concerns the division of property and debts in Mark and Connie Brown’s
divorce. Mark argues that the trial court erred in dividing the parties’ marital property when
it failed to value a corporation owned by the parties, when it considered leasehold
improvements as an asset of the corporation, and when it divided the parties’ marital property
unequally without stating its reasons for doing so. Mark makes valid points with regard to the
trial court’s failure to value the corporation and the failure to state its reasons for dividing the
marital property unequally in the divorce decree; therefore, we reverse and remand this case
for further findings.
Facts
The parties, who were married almost forty years, owned Pine Valley, Inc., which
operated Pine Valley Golf Course (Pine Valley) in Pulaski County, Arkansas. Pine Valley did Cite as 2016 Ark. App. 172
not own the land on which the golf course was located; it was owned by WKB, LLC, of
which Mark and his two brothers each owned a one-third nonmarital interest. Over time,
Pine Valley, which opened in 1986 with only the golf course and a caddy shack, added
buildings, including a pro shop, a maintenance building, a pavilion, and other structures, in
addition to cart paths on the golf course. There was testimony that while Pine Valley had
been profitable in the 1990s and early 2000s, it was not as profitable in the last few years and
had in fact recorded a loss in 2013. At the final hearing, Mark stated that Pine Valley still had
employees, including him and the parties’ son, and that he intended to continue to operate
Pine Valley Golf Course. In addition to requesting he be awarded one-half of the proceeds
from the sale of the marital home, Mark asked the trial court to award him Pine Valley, Inc.,
stating he would assume responsibility of all debt associated with Pine Valley.
The trial court wrote a letter opinion setting forth in great detail its decision regarding
the division of marital property. It noted both parties were involved in improving the golf-
course property by not only adding buildings, equipment, and inventory, but also through
Connie’s work keeping the books and managing various aspects of the golf-course business.
It further stated Mark had not shared with Connie the last twelve to fourteen months’
information concerning the financial state of Pine Valley. The trial court also note that Mark
continued to have some of his expenses paid by Pine Valley, which was a benefit Connie no
longer enjoyed. The trial court determined, in consideration of the proper factors, that an
award of alimony to Connie was justified, but that Mark contended he was unable to pay such
alimony. Therefore, in lieu of alimony, the trial court, in its letter opinion, awarded Mark
2 Cite as 2016 Ark. App. 172
Pine Valley, Inc., and its assets, which would provide him a business for a future source of
income, employment, and personal benefits, while avoiding the obligation of continued
spousal support. The trial court found the valuation of Pine Valley, Inc., with its present
assets and projected income, equalized the highest value of a one-half interest in the marital
home. Connie was awarded the marital home and any debt associated with it.
The divorce decree was not nearly as specific as the letter opinion, and the letter
opinion was not incorporated into the divorce decree. Regarding the corporation and the
residence, the decree provided, in pertinent part, that Pine Valley, Inc., was a marital asset that
was awarded to Mark, along with ownership of all “land, property, inventory, intangibles,
accounts receivables, debt, credit accounts, etc., associated with Pine Valley, Inc.,” free and
clear of any claim from Connie; that any debt associated with Pine Valley, Inc., was Mark’s
sole responsibility; that Mark would retain the use and possession of the WKB land, together
with the improvements, as well as the WKB accounts as his sole and separate property; and
that Connie retained the use and possession of the marital home and would be entitled to any
and all equity in the marital home at the time it was sold.
Standard of Review
Divorce cases are reviewed de novo, giving due deference to the trial court’s superior
position to determine witness credibility and the weight to be given each witness’s testimony.
Dew v. Dew, 2012 Ark. App. 122, 390 S.W.3d 764. The findings of fact of the trial court
with respect to the division of property in a divorce case are affirmed on appeal unless those
findings of fact are clearly erroneous. Dial v. Dial, 74 Ark. App. 30, 44 S.W.3d 768 (2001).
3 Cite as 2016 Ark. App. 172
Discussion
In accordance with Arkansas Code Annotated section 9-12-315(a)(1) (Repl. 2015), at
the time of entry of a divorce decree, the trial court shall equally distribute all marital property
one-half to each party unless it is determined that such a distribution would be inequitable;
if the property is not divided equally, then the trial court must state the reasons and bases for
not doing so. Factors to be considered by the trial court in the event that the marital property
is not divided equally include the length of the marriage; the age, health, and station in life
of the parties; the occupation of the parties; the amount and sources of income available to
each party; vocational skills; employability; the estate, liabilities, and needs of each party and
opportunity of each for further acquisition of capital assets and income; contribution of each
party in acquisition, preservation, or appreciation of marital property, including homemaker
services; and the federal income tax consequences of the court’s division of property. Ark.
Code Ann. § 9-12-315(a)(1)(A). Marital property does not include the increase in value of
property acquired prior to marriage. Ark. Code Ann. § 9-12-315(b)(5). All nonmarital
property shall be returned to the party owning it prior to marriage unless the trial court makes
another division it deems equitable, after taking into consideration the factors set forth in
subsection (a)(1) and stating in writing its basis and reasons for not returning the property to
the party who owned it at the time of the marriage. Ark. Code Ann. § 9-12-315(a)(2).
If corporate stock makes up part of the marital property, the trial court shall designate
which party is entitled to the stock, or after determining the fair-market value of the
securities, may order and adjudge that the securities be distributed to one party on condition
4 Cite as 2016 Ark. App. 172
that one-half of the fair-market value of the securities in money or other property be set aside
and distributed to the other party in lieu of division and distribution of the securities. Ark.
Code Ann. § 9-12-315(a)(4). Here, the trial court did not assign a value to the shares of Pine
Valley, Inc., when it awarded the stock to Mark. In Farrell v. Farrell, 2013 Ark. App. 23, 425
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Cite as 2016 Ark. App. 172
ARKANSAS COURT OF APPEALS DIVISION II No. CV-15-702
MARK BROWN Opinion Delivered MARCH 16, 2016 APPELLANT APPEAL FROM THE PULASKI V. COUNTY CIRCUIT COURT, FIFTEENTH DIVISION [NO. 60DR-13-1871] CONNIE BROWN APPELLEE HONORABLE RICHARD MOORE, JUDGE
REVERSED AND REMANDED
DAVID M. GLOVER, Judge
This appeal concerns the division of property and debts in Mark and Connie Brown’s
divorce. Mark argues that the trial court erred in dividing the parties’ marital property when
it failed to value a corporation owned by the parties, when it considered leasehold
improvements as an asset of the corporation, and when it divided the parties’ marital property
unequally without stating its reasons for doing so. Mark makes valid points with regard to the
trial court’s failure to value the corporation and the failure to state its reasons for dividing the
marital property unequally in the divorce decree; therefore, we reverse and remand this case
for further findings.
Facts
The parties, who were married almost forty years, owned Pine Valley, Inc., which
operated Pine Valley Golf Course (Pine Valley) in Pulaski County, Arkansas. Pine Valley did Cite as 2016 Ark. App. 172
not own the land on which the golf course was located; it was owned by WKB, LLC, of
which Mark and his two brothers each owned a one-third nonmarital interest. Over time,
Pine Valley, which opened in 1986 with only the golf course and a caddy shack, added
buildings, including a pro shop, a maintenance building, a pavilion, and other structures, in
addition to cart paths on the golf course. There was testimony that while Pine Valley had
been profitable in the 1990s and early 2000s, it was not as profitable in the last few years and
had in fact recorded a loss in 2013. At the final hearing, Mark stated that Pine Valley still had
employees, including him and the parties’ son, and that he intended to continue to operate
Pine Valley Golf Course. In addition to requesting he be awarded one-half of the proceeds
from the sale of the marital home, Mark asked the trial court to award him Pine Valley, Inc.,
stating he would assume responsibility of all debt associated with Pine Valley.
The trial court wrote a letter opinion setting forth in great detail its decision regarding
the division of marital property. It noted both parties were involved in improving the golf-
course property by not only adding buildings, equipment, and inventory, but also through
Connie’s work keeping the books and managing various aspects of the golf-course business.
It further stated Mark had not shared with Connie the last twelve to fourteen months’
information concerning the financial state of Pine Valley. The trial court also note that Mark
continued to have some of his expenses paid by Pine Valley, which was a benefit Connie no
longer enjoyed. The trial court determined, in consideration of the proper factors, that an
award of alimony to Connie was justified, but that Mark contended he was unable to pay such
alimony. Therefore, in lieu of alimony, the trial court, in its letter opinion, awarded Mark
2 Cite as 2016 Ark. App. 172
Pine Valley, Inc., and its assets, which would provide him a business for a future source of
income, employment, and personal benefits, while avoiding the obligation of continued
spousal support. The trial court found the valuation of Pine Valley, Inc., with its present
assets and projected income, equalized the highest value of a one-half interest in the marital
home. Connie was awarded the marital home and any debt associated with it.
The divorce decree was not nearly as specific as the letter opinion, and the letter
opinion was not incorporated into the divorce decree. Regarding the corporation and the
residence, the decree provided, in pertinent part, that Pine Valley, Inc., was a marital asset that
was awarded to Mark, along with ownership of all “land, property, inventory, intangibles,
accounts receivables, debt, credit accounts, etc., associated with Pine Valley, Inc.,” free and
clear of any claim from Connie; that any debt associated with Pine Valley, Inc., was Mark’s
sole responsibility; that Mark would retain the use and possession of the WKB land, together
with the improvements, as well as the WKB accounts as his sole and separate property; and
that Connie retained the use and possession of the marital home and would be entitled to any
and all equity in the marital home at the time it was sold.
Standard of Review
Divorce cases are reviewed de novo, giving due deference to the trial court’s superior
position to determine witness credibility and the weight to be given each witness’s testimony.
Dew v. Dew, 2012 Ark. App. 122, 390 S.W.3d 764. The findings of fact of the trial court
with respect to the division of property in a divorce case are affirmed on appeal unless those
findings of fact are clearly erroneous. Dial v. Dial, 74 Ark. App. 30, 44 S.W.3d 768 (2001).
3 Cite as 2016 Ark. App. 172
Discussion
In accordance with Arkansas Code Annotated section 9-12-315(a)(1) (Repl. 2015), at
the time of entry of a divorce decree, the trial court shall equally distribute all marital property
one-half to each party unless it is determined that such a distribution would be inequitable;
if the property is not divided equally, then the trial court must state the reasons and bases for
not doing so. Factors to be considered by the trial court in the event that the marital property
is not divided equally include the length of the marriage; the age, health, and station in life
of the parties; the occupation of the parties; the amount and sources of income available to
each party; vocational skills; employability; the estate, liabilities, and needs of each party and
opportunity of each for further acquisition of capital assets and income; contribution of each
party in acquisition, preservation, or appreciation of marital property, including homemaker
services; and the federal income tax consequences of the court’s division of property. Ark.
Code Ann. § 9-12-315(a)(1)(A). Marital property does not include the increase in value of
property acquired prior to marriage. Ark. Code Ann. § 9-12-315(b)(5). All nonmarital
property shall be returned to the party owning it prior to marriage unless the trial court makes
another division it deems equitable, after taking into consideration the factors set forth in
subsection (a)(1) and stating in writing its basis and reasons for not returning the property to
the party who owned it at the time of the marriage. Ark. Code Ann. § 9-12-315(a)(2).
If corporate stock makes up part of the marital property, the trial court shall designate
which party is entitled to the stock, or after determining the fair-market value of the
securities, may order and adjudge that the securities be distributed to one party on condition
4 Cite as 2016 Ark. App. 172
that one-half of the fair-market value of the securities in money or other property be set aside
and distributed to the other party in lieu of division and distribution of the securities. Ark.
Code Ann. § 9-12-315(a)(4). Here, the trial court did not assign a value to the shares of Pine
Valley, Inc., when it awarded the stock to Mark. In Farrell v. Farrell, 2013 Ark. App. 23, 425
S.W.3d 824, our court remanded to the trial court when it failed to expressly assign a value
to the husband’s interest in what was referred to as “the Texas ventures,” in accordance with
Arkansas Code Annotated section 9-12-315(a)(4). Pursuant to our holding in Farrell, this case
is remanded for the trial court to determine the value of the Pine Valley, Inc., stock.
Additionally, Mark argues that the trial court distributed the parties’ marital property
unequally and failed to set forth its reasons for doing so. We agree. As we discussed above,
the trial court failed to value the stock of Pine Valley, Inc., and it also awarded Connie the
marital home and all of the equity therein at the time the home is sold. While the trial court
set forth in detail its reasoning for making the distribution in its letter opinion, the letter
opinion was not incorporated into the divorce decree, and the decree did not repeat the trial
court’s detailed findings for the division of the marital property that had been stated in the trial
court’s letter opinion. In Farrell, our court held:
A letter opinion that has not been incorporated into the judgment is not the equivalent of a written order. The decisions, opinions, and findings of a court—including those expressed in a letter opinion—do not constitute a judgment or decree, but are merely the bases upon which the judgment or decree is subsequently to be rendered and are not conclusive unless incorporated in the judgment.
2013 Ark. App. 23, at 9–10, 425 S.W.3d 824, 831 (citations omitted). Because the decree
does not set forth the trial court’s reasoning for the distribution of marital property, this case
5 Cite as 2016 Ark. App. 172
must be remanded for the trial court to satisfy the requirements of the statute.
Mark further argues that the trial court improperly considered leasehold improvements
to WKB’s real property (of which he owns an undivided one-third nonmarital interest) as
assets of Pine Valley, contending that tenants of property are not entitled to compensation for
improvements to leaseholds unless the lessee and lessor specifically agree upon such an
arrangement. This argument is likely to arise again on remand. We note in Moore v. Moore,
2016 Ark. 105, ___ S.W.3d ___, an opinion handed down on March 10, 2016, our supreme
court overruled its line of cases holding that the “active appreciation” of nonmarital property
was presumed to be marital property. However, the Moore opinion did not negate the
statutory provision of Arkansas Code Annotated section 9-12-315(a)(2) that vests the trial
court with the authority to distribute both marital and nonmarital assets in an equitable
fashion, provided that the trial court takes into consideration the factors set forth in subsection
(a)(1) and states in writing its basis and reasons for doing so. We make no determination of
the propriety of such a consideration in this particular case; however, we direct the trial court
to consider Moore when it values and divides the parties’ assets on remand in accordance with
Arkansas Code Annotated section 9-12-315(a).
Reversed and remanded.
KINARD and HOOFMAN, JJ., agree.
Kamps & Stotts, PLLC, by: Adrienne M. Griffis and David W. Kamps, for appellant.
Hilburn, Calhoon, Harper, Pruniski & Calhoun, Ltd., by: Lauren Ballard and Sam Hilburn, for appellee.