Eric Ray Carr v. Maranda Lynn Carr

2019 Ark. App. 513

• Court: Court of Appeals of Arkansas
• Decided: November 6, 2019
• Status: Published

Opinion

Cite as 2019 Ark. App. 513 Reason: I attest to the accuracy and integrity of this document ARKANSAS COURT OF APPEALS Date: 2021-06-18 10:08:23 DIVISION III No. CV-18-1063 Foxit PhantomPDF Version: 9.7.5

OPINION DELIVERED: NOVEMBER 6, 2019 ERIC RAY CARR APPELLANT APPEAL FROM THE JOHNSON COUNTY CIRCUIT COURT [NO. 36DR-16-184] V. HONORABLE GORDON W. "MACK" MCCAIN, JR., JUDGE MARANDA LYNN CARR APPELLEE AFFIRMED

ROBERT J. GLADWIN, Judge

Appellant Eric Carr appeals the divorce decree entered by the Johnson County

Circuit Court in favor of appellee Maranda Carr on her counterclaim for divorce on the

basis of general indignities. Eric argues that the circuit court erred in unequally allocating

the marital liabilities, in awarding rehabilitative alimony to Maranda, and in failing to

consider the relevant factors in awarding her permanent alimony. We affirm.

I. Facts

The parties were married on September 2, 2000, and separated on August 15, 2016.

Eric filed for divorce on September·1, and on September 7, Maranda filed her answer and

counterclaim. Considering the length of the parties’ marriage, the parties’ financial

circumstances, and other factors, Maranda requested both temporary and permanent spousal

support from Eric. Prior to the hearing on January 24, 2018, counsel for the parties announced that the

parties had reached an agreement on all issues except alimony, attorney’s fees, and court

costs. The parties’ property-settlement agreement was read into the record with no

objection, and counsel stipulated that the property had been equally divided between the

parties. Eric’s counsel advised the circuit court that it would not need to look at the values

of the property when making its decision on alimony because everything was settled. The

parties’ agreement was filed on February 6.

During the hearing, the circuit court heard testimony from Doris Davis, a certified

public accountant, who testified as an expert for Maranda. Ms. Davis testified that she was

familiar with the parties’ respective earnings during the marriage, the tax consequences

concerning an award of alimony, the parties’ respective spendable incomes, and Eric’s ability

to pay alimony. Maranda testified as to her need for alimony, the standard of living to which

she had become accustomed during the parties’ sixteen-year marriage, and other factors

regarding her request for alimony. Eric testified that since 2011, his income was at least

twice that of Maranda’s, and in certain years, three times more.

The circuit court found that the property-settlement agreement was equal despite

Eric’s objections at the hearing that the division of liabilities was unequal. The circuit court

ordered Eric to pay Maranda permanent alimony of $265.35 a week based on Eric’s making

$885 a week and Maranda’s making $354.61 a week. The amount was to give both parties

an equal amount of $619.96 each week. Alimony was to be paid retroactively from the date

of separation until Maranda remarries, lives with someone tantamount to marriage, or dies.

2 Temporary rehabilitative alimony was awarded to Maranda for three years, to be

calculated at the end of the year by taking Eric’s net bonuses and subtracting Maranda’s net

bonuses and splitting the difference on a fifty-fifty basis. After the three-year period, the split

of the bonus difference will constitute permanent alimony, but at a reduced amount—23.49

percent—the same percentage as the difference between weekly incomes of each party. It

is to terminate upon the same conditions as permanent alimony.

The divorce decree was filed April 19, and Eric filed a timely notice of appeal on

May 21.1 On May 31, he also filed a notice of appeal from the May 2 deemed-denied ruling

on his motion to reconsider the divorce decree that was filed on April 1.2

II. Standard of Review and Applicable Law

Arkansas appellate courts review divorce cases de novo on the record. Moore v. Moore,

2019 Ark. 216, at 6, 576 S.W.3d 15, 20. The circuit court’s findings pertaining to the

division of property will not be reversed unless they are clearly erroneous or against the

preponderance of the evidence. Id. A finding is clearly erroneous when the reviewing court,

on the entire evidence, is left with a definite and firm conviction that a mistake has been

made. Id. at 7, 576 S.W.3d at 20. We also give due deference to the circuit court’s

determination of the credibility of the witnesses and the weight to be given to their

testimony. Id. This court will not substitute its judgment for that of the circuit court, which

1 The decree was entered on April 19—making the thirty-day deadline for appeal May 19. Because that was a Saturday, the notice of appeal was timely filed on May 21. 2 Eric filed an amended notice of appeal on June 11 correcting the filing date of his motion to reconsider from April 1 to April 2.

3 observes witnesses firsthand. Riddick v. Harris, 2016 Ark. App. 426, at 5, 501 S.W.3d 859,

865.

III. Discussion

A. Division of Marital Liabilities

Despite the previous entry without objection of the parties’ property-settlement

agreement and the parties’ initial statements that the property received by each was equal in

value, Eric protested several times at the hearing that the allocation of the marital liabilities

was unequal. Eric explained to the circuit court that “[i]n the Property Settlement, I took

most of the debt to be nice.” The parties testified as to their respective opinions regarding

the value of their own personal property throughout the hearing. Eric received the marital

home that had been appraised at between $110,000 and $130,000; however, there were two

mortgages attached to the property that totaled $105,000 at the time of the hearing. Eric

had made the payments on the property from several months before the separation up to

the time of the hearing in the amount of $750 a month plus insurance and taxes. He reduced

the mortgage by approximately $13,000 before the hearing. Based on these figures, the

house had no equity.

Eric claims that he took this responsibility because he built the home himself and had

a very special feeling toward it. Maranda, conversely, had wanted to sell the property. Eric

also received a 1979 Jeep, a Case knife case, a 2004 Ford, a television, his tools, two knives,

and two guns, all worth approximately $5,000. He received one-half of his retirement of

$116,000, and half of the Merrill Lynch accounts that consisted of his stocks and bonuses.

He assumed liability for a Visa card in the amount of $7,629.92.

4 Maranda received inherited property consisting of three lots—two of which have

houses on them. Testimony indicated that the rent is paid to her brother despite their

owning the property together; accordingly, the circuit court did not include rent in her

income. Maranda also received most of the household furniture, the Ducks Unlimited

artwork, the Beer pottery, a Case knife collection, a gun collection, a glass-bottle collection,

a 1981 CJ 5 Jeep, a Dixie mower, and a sixteen-foot trailer. These items were valued at

approximately $30,000. She received one-half of Eric’s retirement and half of the Merrill

Lynch accounts in the amount of $6,392.36. Maranda was awarded her 401k account in

full, currently valued at $18,946.79, and she waived her right to Eric’s bonuses in exchange.

The only liability Maranda assumed was a Discover card in her name in the amount of

$10,617.

Eric notes that he did not receive any liquid assets. He maintains that he purposely

entered into the property-settlement agreement so that the property received by both was

equal, yet he argues that his payment of the mortgage, insurance, taxes, and bills related to

the home should have been considered by the circuit court because he was ensuring that

Maranda was not burdened by liabilities and had adequate means to support herself.

We hold that the circuit court did not clearly err in enforcing the parties’ property-

settlement agreement. Both parties were represented by counsel, and the property-

settlement agreement clearly provides that each party entered into it

upon mature consideration and after a careful review of the provisions contained [t]herein; that the execution of this Agreement by them has not been obtained under duress, fraud, or undue influence of any person; that no representations of fact have been made by either party to the other except as herein expressly set forth; that Plaintiff and Defendant have adequate knowledge of the business and affairs of the other; and that this Agreement is fair and reasonable.

5 It is well established that when parties enter voluntarily into an independent

property-settlement agreement that is incorporated into a decree of divorce, it cannot

subsequently be modified by the court. Tiner v. Tiner, 2012 Ark. App. 483, at 8, 422 S.W.3d

178, 183 (citing Gentry v. Gentry, 327 Ark. 266, 938 S.W.2d 231 (1997)). Property-

settlement agreements, especially after approval by a circuit court, are considered binding

and final contracts between the parties. Id. The terms of the property-settlement agreement

were undisputedly agreed on by the parties, and the agreement was read into the record

without objection. It was filed with, and approved by, the circuit court. The fact that Eric

entered into an agreement that later appeared improvident to him is no ground for relief.

See id.

B. Alimony

A circuit court’s decision regarding alimony is a matter that lies within its sound

discretion and will not be reversed on appeal absent an abuse of that discretion. Chekuri v.

Nekkalapudi, 2019 Ark. App. 221, at 8, 575 S.W.3d 572, 578. An abuse of discretion means

discretion improvidently exercised, i.e., exercised thoughtlessly and without due

consideration. Id. The circuit court is in the best position to view the needs of the parties

in connection with an alimony award. Id.

An award of permanent alimony is authorized under Arkansas Code Annotated

section 9-12-312(a) (Repl. 2015), which provides that when a decree of divorce is entered,

the circuit court may enter an order concerning alimony that is reasonable taking into

consideration the circumstances of the parties and the nature of the case. An award of

rehabilitative alimony is set out in Arkansas Code Annotated section 9-12-312(b).

6 The purpose of alimony is to rectify the economic imbalance in the earning power

and standard of living of the divorcing parties in light of the particular facts of each case.

Nauman v. Nauman, 2018 Ark. App. 114, at 7, 542 S.W.3d 212, 216. The primary factors

are the financial need of one spouse and the other spouse’s ability to pay, but other factors

are the circumstances of the parties; the couple’s past standard of living; the value of jointly

owned property; the amount and nature of the income, both current and anticipated, of

both parties; the extent and nature of the resources and assets of each party; the amount of

each party’s spendable income; the earning ability and capacity of both parties; the

disposition of the homestead or jointly owned property; the condition of health and medical

needs of the parties; and the duration of the marriage. Williams v. Williams, 2018 Ark. App.

79, at 12–13, 541 S.W.3d 477, 484. There is no mathematical formula or bright-line rule

in awarding alimony because the need for flexibility outweighs the need for relative

certainty. Nauman, supra. If alimony is awarded, it should be an amount that is reasonable

under all the circumstances. Williams, supra.

1. Permanent alimony

The circuit court found that Eric’s weekly income was $885.30, and Maranda’s

weekly income was $365.94. The circuit court awarded her permanent alimony of $265.34

a week, thus equalizing their incomes at $619.95 a week. This payment was ordered

retroactive to the date of separation and to continue until Maranda remarries, lives with

someone tantamount to marriage, or dies. Eric argues that the circuit court’s award reduced

alimony to a mathematical formula to simply make the parties’ incomes equal and did not

7 consider any other factors as supported by case law. See Spears v. Spears, 2013 Ark. App.

535, at 6.

We hold that the circuit court did not simply calculate the award of alimony solely

on the basis of a mathematical formula. The record before us indicates that the circuit court

heard evidence of Maranda’s need, Eric’s ability to pay, the spendable incomes of the parties,

and Maranda’s standard of living to which she had become accustomed during the marriage,

as well as other evidence. The circuit court even recalled Ms. Davis, Maranda’s expert, to

ask questions specifically related to her area of expertise. The circuit court then took all the

information and used a percentage to calculate the amount of alimony Maranda would

receive from Eric. Although the circuit court did not note it was basing its award of alimony

on the evidence that was presented regarding the secondary factors, it was not mandatory

for the circuit court to even consider them. Trucks v. Trucks, 2015 Ark. App. 189, 459

S.W.3d 312. Rather, they are factors that a circuit court “may consider” in determining

whether to award alimony, and the circuit court was not required to set out the factors in

the decree of divorce. Id.

To the extent that Eric seems to argue that the parties’ circumstances could change

in the future, making the award of alimony unreasonable, we note that an award of alimony

can be modified when there is a change in circumstance of the parties. See id. If Eric

subsequently petitions the circuit court to modify the award of alimony, the circuit court

will hear evidence and determine whether the alimony should be modified or terminated.

8 2. Rehabilitative alimony

Arkansas Code Annotated section 9-12-312(b)(1) states “that alimony may be

awarded under proper circumstances concerning rehabilitation to either party in fixed

installments for a specific period of time,” and subdivision (b)(2) states that “when a request

for rehabilitative alimony is made to the court, the payor may request or the court may

require the recipient to provide a plan of rehabilitation for the court to consider in

determining (a) whether or not the plan is feasible, and (b) the amount and duration of the

award.”

Arkansas case law has defined rehabilitative alimony as “alimony payable for a short

but specific period of time which will cease when the recipient in the exercise of reasonable

efforts is in a position of self-support.” Rawls v. Yarberry, 2018 Ark. App. 536, at 9, 564

S.W.3d 537, 543. Our courts have analyzed the concept of rehabilitative alimony using the

same factors that apply to permanent alimony. Id. We have stated that the purpose of

alimony is to rectify the economic imbalances in earning power and standard of living in

light of the particular facts in each case. Id.

Eric first argues that the circuit court’s decision to award Maranda three years of

rehabilitative alimony is an error. First, pursuant to the property-settlement agreement,

Maranda waived her right to his bonuses, and he did not receive any of her 401k plan that

was then valued at $18,946.79. Maranda’s counsel read this fact into the record, but Maranda

later executed a “Qualified Domestic Relations Order” giving her one-half of the Merrill

Lynch accounts, which included Eric’s stocks and bonuses. Eric argues that by giving her

part of his bonuses as alimony, Maranda is receiving money again for what she has already

9 received. We disagree. Eric confuses the contractual provisions of the property-settlement

agreement—specifically Maranda’s waiving her right to an interest in a marital asset—with

the circuit court’s ability to consider factors such as earning ability and bonuses in its

calculation of alimony. We hold that the circuit court did not clearly err in its calculation.

Further, Eric submits that the award of one-half the difference between his bonus

and her bonus for three years is against the public policy behind the need for rehabilitative

alimony. That policy provides for such payment to help the other party further his or her

education or obtain training to reenter the workforce. Eric argues that because Maranda has

worked at Walmart for eighteen years, has some college education, and has worked as a

supervisor,3 she has the same opportunities to advance that he has. She receives bonuses and

cost-of-living increases in her current position. Eric argues that she can increase her hours

as an associate or apply for a new supervisor position. He claims that the award by the circuit

court gives her no incentive during the period in which she receives rehabilitative alimony

to obtain a better job or further her career.

Eric submits that there is no testimony that Maranda has any kind of plan to obtain

additional education or training to further her career. He maintains that she did not provide

a valid reason or need for rehabilitative alimony so that she can reenter the workforce or

further her employment opportunities. To the contrary, Eric notes Maranda’s testimony: “I

have stayed an hourly employee and have not been looking to move up where I used to be

3 Maranda worked at Walmart as a supervisor until she suffered a collarbone injury. She took a year off while Eric fully supported her, and then she returned to work as an associate working thirty-two hours a week.

10 because I like where I am even though it is lesser money.” Accordingly, Eric argues that the

award of rehabilitative alimony is against the intended purpose of assistance to reenter the

workforce or obtain education to become employed.

We disagree. Ms. Davis, the accountant who testified as an expert, stated that she

was familiar with the parties’ respective incomes, provided information on the parties’

respective spendable incomes, and opined regarding the benefit to Eric if he paid alimony

on the basis of the IRS tax code. Ms. Davis explained to the circuit court the figures that

Eric should pay and Maranda should receive in order to balance their incomes.

The evidence before us indicates a large disparity in the parties’ respective incomes.

Since 2011, Eric has earned more than double what Maranda has earned, and in multiple

years, Eric’s income tripled that of Maranda’s. Eric testified that for at least the past six years,

he received bonuses that sometimes amounted to as much as $18,000 a year. Evidence was

also presented as to the standard of living to which the parties were accustomed.

Moreover, we find no merit in Eric’s contention that the circuit court erred in

awarding rehabilitative alimony to Maranda because she failed to present a rehabilitative

plan containing concrete goals and requirements that she must meet in order to become

self-sufficient. Section 9-12-312(b) does not mandate that a rehabilitative plan be submitted

or approved; instead, the statute states that a plan “may” be requested by the payor or

required by the circuit court. See Foster v. Foster, 2016 Ark. 456, at 10, 506 S.W.3d 808,

815. However, like the appellant in Foster, Eric made no such request in this case.

Eric is asking this court to reweigh the evidence in his favor. It is not this court’s

duty to substitute its judgment for that of the circuit court. Trucks, supra. Rather, it is for us

11 to determine whether the circuit court abused its discretion in finding that Maranda was

entitled to the awards of alimony. Based on our standard of review, the discretionary nature

of alimony awards, and the evidence before the circuit court, we hold that the circuit court

did not abuse its discretion. Accordingly, we affirm.

Affirmed.

MURPHY and BROWN, JJ., agree.

Iris L. Muke, Inc., by: Iris L. Muke, for appellant.

Veach Law Firm, P.A., by: Robert M. Veach, for appellee.