Cite as 2024 Ark. App. 566 ARKANSAS COURT OF APPEALS DIVISION III No. CV-23-587
Opinion Delivered November 13, 2024 KEVIN HOWARD APPELLANT APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION V. [NO. 60DR-20-2158]
REGINA HOWARD HONORABLE W. MICHAEL REIF, APPELLEE JUDGE AFFIRMED
WENDY SCHOLTENS WOOD, Judge
Kevin Howard appeals a divorce decree entered by the Pulaski County Circuit Court
on May 11, 2023. He argues that the circuit court erred in its award of rehabilitative alimony,
its division of the parties’ interest in WTH Development, LLC (“WTH”), and its
computation of child support. We affirm.
Regina Howard and Kevin married in 1999 and separated in December 2018.
Although they have three children, only one seventeen-year-old boy was a minor when the
final decree of divorce was entered. Regina is a computer-science teacher for the Little Rock
School District. Kevin is the director of housing for the City of Little Rock. Kevin is also a
real-estate developer and partial owner of WTH, and he wholly owns and operates Horizon
Realty of Arkansas, LLC (“Horizon”). All three of Kevin’s points on appeal concern the circuit court’s findings regarding
the value of and income earned from WTH and Horizon. At the April 2023 divorce hearing
concerning the parties’ real-estate businesses, Kevin testified that WTH is a real-estate-
development company that owns parcels of land it develops into subdivisions. The parties
own 30 percent of WTH. Kevin said that Horizon is a construction and development
company that builds homes in these subdivisions.
The only evidence of the value of the owners’ equity in WTH was set forth in a
summary prepared by WTH’s accountant and attached to WTH’s 2021 tax return. It
provided that the total equity in WTH is $495,228. Regina testified that she obtained this
document in discovery from Kevin. Regina admitted on cross-examination that WTH was
not making money on the sale of lots but believed they had sold the “main parcel of land
where there was income” in October 2022. She also said that she did not know the
“balances,” “loans,” or liabilities of WTH because she had been “kept in the dark” regarding
the value of the property and about what had or had not been “paid off.”
Kevin prepared and introduced a “demonstrative exhibit” of WTH’s assets and
liabilities, identifying various tracts of land by parcel numbers and acreage. The exhibit did
not assign a value to any of the tracts. The liabilities included special-improvement-district
bonds and taxes, but the amount currently owed on either the bonds or the taxes was not
provided. Moreover, Kevin’s testimony failed to provide an exact amount for the fair market
value of the property owned by WTH or WTH’s equity in relation to its assets and liabilities.
Kevin admitted that the $495,228 amount set forth on WTH’s 2021 tax return was the
2 “equity in the business” based on the initial value of the land, but he said WTH would not
be able to pay him 30 percent of that amount if he “walked away” from the business today.
He said that WTH no longer owns all the property and that the “monetary value” of WTH
is what is in its checking account, less expenses—about $102,000. He failed to explain why
the value of WTH did not also include the value of the real estate it owned less any
outstanding liabilities.
Regarding Horizon, Regina introduced the records from one of its multiple checking
accounts for 2021 and 2022 that Kevin had provided in discovery. She testified that she
reviewed the records to determine an approximate dollar amount of the personal spending
or benefit that Kevin derived from the business. She testified that she was conservative in
her review and did not include expenses for items that might have been “mixed use” or that
potentially could have been business expenses, such as charges from Walmart or gas stations.
She concluded that Kevin withdrew an average monthly amount of $3,192 for personal
expenses from the account. These included airline, Uber, and hotel charges for multiple trips
to Las Vegas, Texas, Washington, and Florida; tickets to sporting and other events; charges
for Amazon Prime Video, Cold Stone Creamery, nail salons, lingerie, and cigars; charges for
dining in local restaurants; a recurring monthly charge of $402; and cash withdrawals. She
testified that the trips included his attendance at the NBA summer league in Las Vegas with
the father of an NBA player. In addition to hotel and airline charges, these expenses included
UNLV merchandise and hookah bar purchases. She also testified that there were several
trips to Florida, one of which was potentially his annual golf trip.
3 Kevin responded by stating that he was not underreporting his income as Regina
suggested or “just drawing money out to just pay myself a certain amount of money.” Rather,
he said that he used the Horizon account for “day-to-day business” expenses. He said that
the monthly recurring charge of $402 was used to pay the mortgage on one of the parties’
marital properties, which had been vacant for years. He claimed that most of the trips he
takes are business trips because he talks about real-estate business “pretty much wherever I
go.” He explained that the nail-salon expenses were for foot massages and nail trims before
he referees games. He said that the cash withdrawals were generally used to pay contractors.
Kevin did not introduce any invoices, receipts, or other documentation in support of his
testimony.
In the final divorce decree and relevant to this appeal, the circuit court awarded
custody to Regina subject to Kevin’s “reasonable un-specified visitation.” The court ordered
Kevin to pay monthly child support of $1,058, which would terminate in May 2024 when
the minor child graduated from high school. The court also ordered Kevin to pay spousal
support of $1,500 a month for a period of seven years. In calculating child support, the court
imputed additional gross monthly income of $2,000 to Kevin from Horizon because he used
the account for personal expenses. The court found that Kevin was in arrears under the
temporary decree for child and spousal support in the amount of $2,783.1 Finally, Kevin was
awarded ownership of the 30 percent interest in WTH and was ordered to pay Regina half
1 Under the temporary decree, Regina was awarded custody, child support of $908 a month, and spousal support of $2,132 a month.
4 of the 30 percent interest. The court found that the equity in the company was $495,228,
calculated Kevin’s 30 percent interest as $148,568.40, and ordered Kevin to pay Regina half
that amount: $74,284.20.
For his first point on appeal, Kevin argues that the circuit court erred in granting
“rehabilitative alimony” to Regina. Specifically, he contends that Regina could be earning
more if she used her skills in “corporate America” rather than in education. He points to
her testimony that she earned between $80,000 and $90,000 working for Verizon Wireless
until she was laid off in 2015 and her testimony that she did not want to work in the
corporate world because it was stressful. He claims that Regina is underemployed and has
the ability to achieve the standard of living to which she was accustomed if she chooses. He
also argues that the court did not “fully comprehend” the nature of the construction business
and the income he derives from it.
A decision regarding alimony is a matter that lies within the circuit court’s sound
discretion and will not be reversed on appeal absent an abuse of that discretion. Hiett v. Hiett,
86 Ark. App. 31, 158 S.W.3d 720 (2004). An abuse of discretion means discretion
improvidently exercised, i.e., exercised thoughtlessly and without due consideration. Webb v.
Webb, 2014 Ark. App. 697, at 3, 450 S.W.3d 265, 269. The circuit court is in the best
position to view the needs of the parties in connection with an alimony award. Rawls v.
Yarberry, 2018 Ark. App. 536, at 9, 564 S.W.3d 537, 543.
Arkansas Code Annotated section 9-12-312(a) states that the circuit court may enter
an order concerning alimony that is “reasonable from the circumstances of the parties and
5 the nature of the case.” Ark. Code Ann. § 9-12-312(a) (Repl. 2020). The purpose of alimony
is to rectify the economic imbalance in earning power and standard of living in light of the
particular facts in each case, and the primary factors to be considered in determining whether
to award alimony are the financial need of one spouse and the other spouse’s ability to pay.
Foster v. Foster, 2016 Ark. 456, at 9, 506 S.W.3d 808, 814–15. The court should also consider
the following secondary factors: (1) the financial circumstances of both parties; (2) the
amount and nature of the income, both current and anticipated, of both parties; (3) the
extent and nature of the resources and assets of each of the parties; and (4) the earning ability
and capacity of both parties. Kuchmas v. Kuchmas, 368 Ark. 43, 45–46, 243 S.W.3d 270,
271–72 (2006).
Section 9-12-312(b) provides that a court may award rehabilitative alimony and may
require the recipient to provide a plan of rehabilitation for the court to consider in
determining whether or not the plan is feasible and the amount and duration of the award.
Our courts have defined rehabilitative alimony as “alimony payable for a short, but specific
and terminable period of time, which will cease when the recipient is, in the exercise of
reasonable efforts, in a position of self-support.” Foster, 2016 Ark. 456, at 10, 506 S.W.3d at
815. Our courts have analyzed the concept of rehabilitative alimony using the same factors
that apply to permanent alimony. Carr v. Carr, 2019 Ark. App. 513, at 10, 588 S.W.3d 821,
827.
Regina is a teacher whose monthly gross income is $5,640.12. She submitted an
affidavit of financial means that included expenses of $7,000 before including her significant
6 credit-card debt. Regina did not request or submit a plan for rehabilitative alimony but asked
the court to continue monthly spousal support of $2,132—what had been ordered in the
temporary decree—for seven years.
Kevin is the director of housing for the City of Little Rock with a gross monthly
income of $10,389.51. He also owns and operates Horizon and, according to the circuit
court, uses the Horizon account for personal expenses. The court estimated these expenses
at $2,000 a month and imputed this amount to Kevin’s income for a monthly gross income
of $12,389.51.
The court did not mention in its order that the alimony award was rehabilitative. The
court simply awarded Regina alimony of $1,500 a month for seven years. In making this
finding, the court specifically recognized the disparity between the parties’ incomes, the
twenty-three-year duration of their marriage, and Kevin’s standard of living during their four-
year separation. The court noted that Regina was a teacher with limited potential to earn
more income and that Kevin had recently received a significant salary increase and has
significant income and potential income through his multiple business ventures.
Kevin is asking this court to reweigh the evidence in a manner that is more favorable
to him, which we will not do. It is not this court’s duty to substitute its judgment for that of
the circuit court. Baker v. Baker, 2023 Ark. App. 499, at 4, 678 S.W.3d 608, 613. We leave
all credibility determination to the circuit court. Williams v. Williams, 2019 Ark. App. 186,
at 19, 575 S.W.3d 156, 166. Giving consideration to our standard of review, the
discretionary nature of alimony awards, and the evidence before the circuit court, we hold
7 that it did not abuse its discretion in awarding Regina alimony of $1,500 a month for seven
years.
Kevin’s second point on appeal is that the circuit court abused its discretion in
ordering him to pay Regina $74,284.20 as her one-half of the equity shown on WTH’s 2021
tax returns. The court found that the fair market value of WTH was $495,228, calculated
the parties’ 30 percent share in the company as $148,568.40, awarded Kevin the 30 percent
share, and ordered him to pay Regina $74,284.20. Kevin disputes the amount.
The circuit court is given broad powers to distribute both marital and nonmarital
property to achieve an equitable division, and the overriding purpose of the property-division
statute is to enable the court to make a division that is fair and equitable. Perser v. Perser, 2019
Ark. App. 467, at 5, 588 S.W.3d 395, 401. We review division-of-marital-property cases de
novo, but we will not reverse the circuit court’s findings of fact unless they are clearly
erroneous or against the preponderance of the evidence. Hernandez v. Hernandez, 371 Ark.
323, 327, 265 S.W.3d 746, 749 (2007). A finding is clearly erroneous when the reviewing
court, on the entire evidence, is left with the definite and firm conviction that a mistake has
been made. Kelly v. Kelly, 2014 Ark. 543, at 5, 453 S.W.3d 655, 660.
Regina asserted that WTH had a fair market value of $495,228 based on a diagnostic
summary prepared by WTH’s accountant and attached to its most recent tax return that
showed the equity in WTH is $495,228. Kevin did not object to admission of this summary
into evidence nor did he dispute that he and Regina owned 30 percent of WTH. Instead, he
testified that some of the property included in the equity calculation had been sold. But he
8 provided no documentation regarding what property had been sold, its value, or how this
affected either WTH’s fair market value or the parties’ equity. Kevin simply testified that he
would not be able to “walk away” with 30 percent of $495,228 and opined that the
“monetary value” of their interest was 30 percent of the funds currently held in WTH’s bank
account less expenses. His testimony regarding the current financial position of WTH was
obscure at best, and significantly, he provided no documentation to support a different
valuation for the company. In reviewing the circuit court’s findings, this court defers to the
circuit court’s superior position to determine the credibility of witnesses and the weight to
be given their testimony and the evidence. Jez v. Jez, 2016 Ark. App. 594, at 2, 509 S.W.3d
1, 3. We hold that the circuit court did not clearly err in ordering Kevin to pay Regina
$74,284.20 for her half of the parties’ 30 percent interest in WTH.
Kevin next argues that the circuit court erred in its computation of child support
because it erroneously imputed $2,000 a month in gross income to him. Our standard of
review for an appeal from a child-support order is de novo, and we will not reverse a finding
of fact by the circuit court unless it is clearly erroneous. Wright v. Wright, 2010 Ark. App.
250, at 4, 377 S.W.3d 369, 372. In a child-support determination, the amount of child
support lies within the sound discretion of the circuit court. Parnell v. Ark. Dep’t of Fin. &
Admin., 2022 Ark. 52, at 3, 639 S.W.3d 865, 867. A circuit court abuses its discretion when
it exercises its discretion improvidently or thoughtlessly and without due consideration.
Grynwald v. Grynwald, 2022 Ark. App. 310, at 3, 651 S.W.3d 177, 180.
9 Our supreme court has said that the definition of income included in Administrative
Order No. 10 “is intentionally broad and designed to encompass the widest range of sources
for the support of minor children.” McWhorter v. McWhorter, 346 Ark. 475, 481, 58 S.W.3d
840, 844 (2001). Income includes perquisites or goods and services received in-kind and can
include meals, housing, personal use of vehicle, and travel. Ark. Sup. Ct. Admin. Order No.
10 (III)(2). “In general, the court should carefully review income and expenses from a parent’s
self-employment or operation of a business to determine actual levels of gross income
available to the parent. The court’s duty is to accurately determine a child-support obligation
in every case. This amount may differ from the determination of business income for tax
purposes.” Ark. Sup. Ct. Admin. Order No. 10 (III)(3)(c).
The circuit court made the following findings:
8. CHILD SUPPORT – Plaintiffs’ income was not disputed at trial. Defendant’s income was in dispute at trial. Defendant had not completed an accurate Affidavit of Financial Means prior to trial, but provided one that was prepared during a Court recess. Defendant represented in his Affidavit of Financial Means and testimony that his gross income was $4,500.00 bi-weekly ($117,000.00) per year. He further testified that this income was from his salaried position with the City of Little Rock. Defendant's March 31, 2023, paystub shows that in addition to his salary, Defendant receives $33.24 in “longevity” per pay period, $31.15 “GTL” per pay period, and $500.00 for “car tax” per month.
9. The Court finds the Defendant’s gross monthly income from the City of Little Rock is $10,389.51.
10. It was undisputed that the Defendant also owns and operates a business, Horizon Realty of Arkansas, LLC. Defendant claims to have no income from said business. Plaintiff introduced monthly bank statements for the time period of January 2021 through December 2022 for one bank account for Horizon Realty of Arkansas, LLC. Plaintiff asserted the Defendant utilized an average of $3,192.40 per month from that bank account for personal use instead of business use. This spending
10 did not include all potential personal benefits and only included one of multiple bank accounts of the business. Defendant asserted that all spending from the account was business in nature and that he received no income at all from the business.
11. The spending that Plaintiff asserted was personal included transfers to Defendant’s personal account, which Defendant admitted was used to pay a mortgage for real estate in the Parties’ personal names. Defendant took numerous trips that included Texas, California, Las Vegas, Hawaii, a family reunion, a trip to the beach, and a golf trip to Florida, among other travels. Those travels included numerous meals, and event tickets. Those travels also included cash withdrawals for which the Defendant did not provide any documentation to support his claim that the cash withdrawals were for business purposes. The Court recognizes that it is undisputed that the Defendant made all of his support payments to Plaintiff via cash deposits. This evidences that at least some of the cash he withdrew from the business account was used for personal matters or that he has an additional source of cash that has not been disclosed. Defendant testified that that at least some of the personal spending was similar to a “bonus” a company provides to a CEO.
12. For child support purposes, income is intentionally broad and designed to encompass the widest range of sources consistent with the State’s policy to interpret income broadly for the benefit of the child. Evans v. Tillery, 361 Ark. 63 (2005). Income includes perquisites or goods and services received in-kind; including meals, housing, personal use of vehicle, and travel. Revised Administrative Order 10, Section 111(2). Tax deductibility is not always relevant to monies a parent should have available for child support. Revised Administrative Order 10, Section III(3).
13. The Court finds that Defendant used the Horizon bank account for personal expenses and imputes an average gross monthly income of $2,000.00 to Defendant from Horizon Realty of Arkansas, LLC.
14. Defendant’s Affidavit of Financial Means claims that his health insurance premium is $538.67 per month, with $409.76 of that premium being for the minor child. The Defendant failed to provide any documentation to support that claim. Defendant’s March 17, 2023 and March 31, 2023 paystubs do not support his claim on this point as they reflect that Defendant actually pays $505.37 per month in health insurance premiums. There are 4 people covered under this plan, Defendant and his 3 children. Defendant did not offer any evidence to determine what portion, if any, of the premium is attributable only to the minor at issue
11 here. Without any evidence the Court cannot determine if Defendant pays any additional amount to cover the minor child or pays one amount to cover all three of his children. Since no evidence was introduced regarding the premium the Court declines to deduct any of this amount from Defendant’s income.
15. Therefore, the Court finds that Plaintiff has a gross monthly income of $5,640.12 and Defendant has a gross monthly income of $12,389.51 for a total monthly income of $18,029.63 as determined under revised Administrative Order 10 creating a basic level of support for the child of $1,540.00 per month. Plaintiff’s income is 31.28% and the Defendant’s income is 68.72% of the combined monthly income. It is therefore adjudged that the Defendant shall owe a duty of child support to the Plaintiff in the amount of $1,058. This support obligation shall begin effective May 15, 2023. This obligation shall automatically terminate upon the child’s graduation from high school, expected to be in May 2024.
Here, the circuit court heard testimony from both parties concerning the funds Kevin
spent out of the Horizon bank account, and it made detailed findings about the expenses.
Although Regina testified that Kevin’s personal expenses averaged almost $3,200 a month
from the account, the court imputed only $2,000 in monthly gross income. We cannot say
that the court abused its discretion in its calculation of Kevin’s income.
Kevin also contends that the circuit court erred in determining that he was in child-
support arrears in the amount of $2,783.2 At trial, Kevin testified that the house in which
Regina lived had roof damage that cost “well over $25,000” to repair. He stated that their
insurance company “covered the majority of the total loss,” but there was “some part” of the
repairs that he paid, too. He said he could not state the exact amount he paid or to whom
he had paid it or when, and he did not introduce any receipts or other documentation
2 The court found that Kevin owed $25,714 for child and spousal support under the temporary order and had paid only $22,931.
12 demonstrating that he was entitled to be reimbursed for any such payments. Nevertheless,
when Kevin received a $5,771.29 check from the insurance company as a final payment for
the claim, he deposited it into the parties’ joint account and then withdrew $3,000 to
reimburse himself. He claims the remaining $2,771.29 should be credited against his child-
support arrearage.
It is undisputed that the insurance proceeds were from a policy of insurance on the
family home. The circuit court found that the insurance check was a joint asset, that Kevin
took approximately half and left half for Regina, and that Kevin was not entitled to a credit
for support payments that he owed Regina using her half of the insurance proceeds.
There is a presumption that all property acquired during a marriage is marital
property. McKay v. McKay, 340 Ark. 171, 8 S.W.3d 525 (2000). Once one party has shown
that property was acquired during the marriage, the burden shifts to the other party to prove
by clear and convincing evidence that the property is nonmarital. Ellis v. Ellis, 2017 Ark.
App. 661, at 5–6, 536 S.W.3d 166, 171. In light of the evidence presented, the court’s
finding that the property was a joint asset and that Kevin was not entitled to a credit towards
his support obligation is not clearly erroneous.
Affirmed.
KLAPPENBACH and THYER, JJ., agree.
Sheila F. Campbell, P.A., by: Sheila F. Campbell, for appellant.
LaCerra, Dickson, Hoover & Rogers, PLLC, by: Lauren White Hoover, for appellee.