Moore v. Moore

2016 Ark. 105, 486 S.W.3d 766, 2016 Ark. LEXIS 82

• Court: Supreme Court of Arkansas
• Decided: March 10, 2016
• Docket: CV-15-180
• Status: Published

Opinions

RHONDA K. WOOD, Associate Justice

|, Appellant John David Moore (“David”) appeals a decree entered by the Logan County Circuit Court granting appellee Nancy Moore (“Nancy”) a divorce on the ground of general indignities. He argues that the circuit court erred in dividing the growth of his business as a marital asset, awarding Nancy alimony in the amount of $5,000 per month, and considering the division of property and alimony in isolation. We granted the parties’ joint petition for review of the court of appeals’ decision dismissing the appeal because the divorce decree was not a final, appealable order. We hold that the decree is a final order and reverse and remand as to the circuit court’s division of the growth of David’s business and the alimony award for an entry of an order consistent with our findings herein.

The parties, David Moore and Nancy Moore, were married on April 27, 2007. On June 18, 2012, Nancy filed for divorce. David answered and counterclaimed. The parties litigated the appropriate property distribution and alimony issues. Specifically, David ^requested an equal distribution of marital property. Nancy requested that the court also divide and award her half of the growth of David’s company, Moore U.S. Mail Contractor, Inc., which was a nonmarital business. She contended that the growth in value of the business was a marital asset to be divided between the- parties. David also contested the amount of alimony requested by Nancy.

On February 5, 2014, the circuit court entered a divorce decree. In it, the circuit court determined that David owned the company prior to the marriage, and therefore, it was nonmarital property. However, the circuit court found that the company’s increase in value was a marital asset because David spent a substantial amount of time during the marriage working to increase its value. The court also found that the company’s stock value increased as a result of Nancy’s participation in, and contributions to, the company. It concluded that the increase in the business’s value during the marriage was $556,365.05 and awarded Nancy one-half of that amount.

The circuit court also awarded Nancy $5,000 per month in alimony to be paid until she is sixty-five years old. The basis for this award was Nancy’s financial neéd and David’s income, as well as Nancy’s health, education, and prior work experience. Notably, in 2012, Nancy underwent surgery to remove a brain tumor. She and others testified that she had continuing medical complications as a result of the procedure, including short-term memory loss, weakness, difficulties with depth perception, and panic attacks. The circuit court noted that Nancy’s medical condition was the “most significant factor presented in support of her request.”

IsDavid appealed, arguing that the circuit court erred in awarding Nancy one-half of the growth of his business during the marriage and alimony of $5,000 per month until she is sixty-five years old. The court of appeals dismissed the appeal, finding that the divorce decree was not final for purposes of appeal, citing the following paragraph:

Plaintiffs Exhibits 37, 38, and 39 were three separate 'Warranty Deeds (legal description is attached as Exhibit “C”) which described a third tract of real estate .involved in, this case. Those deeds were from different grantors but did not convey all of those grantors’ interest in the same real estate to the Plaintiff and Defendant as tenants by the entirety. The court reduces the parties to tenants in common as to this tract of real estate and orders -the. same sold upon such terms and conditions as to which the. parties may agree. If the parties' are unable to agree upon the terms and conditions of sale after 180 days, then either party is free to petition to thé court to have the same sold by the clerk of this‘court. All proceeds after costs of sale shall be .divided equally between the parties.

Moore v. Moore, 2015 Ark. App. 115, at 1, 2015 WL 801993. The court of appeals noted that the decree directed the parties to come- to an agreement and, in the event that they could not reach an agreement, required them to return to the court for an order for the property to be sold by the clerk. Id. The court held that the decree was not final because it did not fully dispose of the parties’ property. Id. The court then dismissed the appeal without prejudice. Id. . The parties jointly filed a petition for review in this court, arguing that the court of appeals’ decision conflicted with prior holdings from this court, which we granted.'

I.Finality

The finality issue in this case is similar to that in Davis v. Davis, 2016 Ark. 64, 487 S.W.3d 803. For the same reasons recently expressed in Davis, we hold that the divorce decree is a final, appealable order. As in Davis, the decree in this case does not include language requiring, the parties to return to court for further judicial action. Rather, it allows for alternative methods of property distribution and gives the parties a specific period of time to work outjjtheir differences as well as an enforceable- judicial resolution if they are unable to reach an agreement within the time period set by' the court. As it adequately addresses every issue presented by the parties and reserves no issues for later determination, the order is final and appealable. Accordingly, we vacate the court of appeals’ opinion that the divorce decree is not a final, appealable order. Moreover, because this case involves a. significant issue concerning statutory construction and the overruling of precedent, which are the province of this court, we proceed to address the merits of the appeal.¹

II.Standard of Review

On appeal, divorce cases are reviewed de novo. Skokos v. Skokos, 344 Ark. 420, 40S.W.3d 768.(2001). We review the circuit court’s findings pertaining to division of property and alimony and affirm them unless they are clearly erroneous or against the preponderance of evidence. Id.] Taylor v. Taylor, 369 Ark. 31, 250 S.W.3d 232 (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 committed. Skokos, 344 Ark. at 425, 40 S.W.3d at 772. The appellant must show that the trial court abused its discretion by making a decision that was arbitrary or groundless. Id. We give due deference to the circuit judge’s position to determine the credibility of witnesses and the weight given to their testimony. Id. | ^Furthermore, when we grant a petition for review, we consider the appeal as though it had been originally filed in this court. Bohannon v. Robinson, 2014 Ark. 458, 447 SW.3d 585.

III.Property Division

For his first point on appeal, David claims that the trial court erred in finding that the increase in value of his business is a marital asset to be equally divided between the parties. David claims the circuit court wrongly interpreted the statute, and we review issues involving statutory interpretation de novo, as it is for this court to determine what a statute means. Dep’t of Human Services v. Howard, 367 Ark. 55, 238 S.W.3d 1 (2006).

David contends that the growth of a his nonmarital business remained nonmarital property under Arkansas Code Annotated section 9 — 12—315(b)(5) (Repl. 2015) and is not subject to division. He recognizes that this court has carved out an exception to the statute, but contends it was inapplicable to the facts in this case. In support of the property division, the circuit court utilized the “active appreciation” analysis we adopted in Layman v. Layman, 292 Ark. 539, 731 S.W.2d 771 (1987). . We do not assess whether the court correctly applied the “active appreciation” analysis to the facts because we find that this analysis directly conflicts with Arkansas Code Annotated section 9r-12-315. We find merit in David’s argument that the, growth of the business is nonmarital property according to section 9-12-315(b)(5). The circuit court relied on our precedent involving active appreciation when reaching its .decision, but our precedent conflicts with the statutory language.,

This issue, of property division deals squarely with the interpretation of section 9-12-315. The basic rule of statutory construction is to give effect to the intent of the legislature. Hose v. Ark. State Plant Bd., 363 Ark. 281, 213 S.W,3d 607 (2005). We construe the statute | rjust as it reads, giving the words their ordinary and usually accepted meaning in common language. Id. Where the language of a statute is plain and Unambiguous, we determine legislative intent from the meaning of the language used. Id. A statute is ambiguous only where it is open to two or more constructions, or where it is of such obscure or doubtful meaning that reasonable minds might disagree or be uncertain as to its meaning. Id. However, when a statute is clear, it is given its plain meaning, and this court will not search for legislative intent. Rather, that intent must be gathered from the plain meaning of the language used. Id. “This court is very hesitant to , interpret a legislative act in a manner contrary to its express language, unless it is clear that a drafting error or omission has circumvented legislative intent,”. Cave City Nursing Home, Inc. v. Ark. Dep’t of Human Servs., 351 Ark. 13, 89 S.W.3d 884 (2002).

In a divorce action, statutory law requires that all marital property be divided equally to each party, unless the circuit court finds the. division to be inequitable, in which case, the circuit court may make a division that it deems equitable. Ark.Code Ann. § 9-12-315(a). Section 9-12-315(b)(5) defines marital property as “all property acquired by either spouse subsequent to the marriage except ... the increase in value of property acquired prior to marriage_” Thus, under section 9-12 — 315(b)(5) the increase in value of property during a marriage is nonmarital, without exception, and should be returned to the owning party.

In Layman, this court added a caveat to the legislature’s determination that “the increase in value of property acquired pri- or to the marriage” is a nonmarital asset. 292 Ark. at 542-43, 731 S.W.2d at 773-74. It reasoned that when the appreciation in the value of separate property during the marriage is the result of efforts of the spouse owning the |7nonmarital property, the appreciation is a marital asset. Id. The court concluded that “when one spouse makes significant contributions of time, effort and skill which are directly attributable to the increase in value of nonmarital property, the presumption arises that such increases belong to the marital estate.” 292 Ark., at 543, 731 S.W.2d at 774 (emphasis added).

More recently, we applied this analysis in Farrell v. Farrell, 365 Ark. 465, 475-76, 231 S.W.3d 619, 626-27 (2006); see also Brown v. Brown, 373 Ark. 333, 284 S.W.3d 17 (2008). In Farrell, the parties were married for approximately twenty years. Prior to the marriage, Mrs. Farrell acquired stock in ARC, Inc., and the stock value increased during the course of the marriage, in part, as a result of her time and efforts within the company. 365 Ark. at 475, 231 S.W.3d at 626-27. We held that, while the stock was a nonmarital asset under section 9-12-315(b) because Mrs. Farrell purchased it prior to the marriage, the circuit court correctly concluded that the entire increase in the stock value was property of the marriage under the “active appreciation” analysis. Although the Farrell court determined that an unequal distribution was equitable based on the factors set forth in section 9-12-315(a), absent such a finding, the court could have divided the increase in value of the shares equally between the parties. Id.

Layman and its progeny clearly conflict with the statutory scheme. Our legislature, by enacting section 9-12-315, has defined marital property in ordinary terms and determined how property should be divided among spouses at the time of the divorce. This is a matter of policy with which the legislature, not this court, is almost exclusively tasked. See Hatcher v. Hatcher, 265 Ark. 681, 580 S.W.2d 475 (1979); McNew v. McNew, 262 Art 567, 559 8S.W.2d 155 (1977). The public policy of this state is best evidenced by its statutes, and because the legislature has plainly detailed how property is to be divided, we should apply the statute as written. See Hatcher, 265 Ark. at 687, 580 S.W.2d at 477. Not only does the “active appreciation” analysis of Layman write an exception into the statute, it clearly conflicts with the statute’s plain language. Section 9 — 12—315(a) provides our courts with broad discretion and flexibility to redistribute marital and nonmarital property to achieve an equitable distribution. Our courts should work within the confines of the statute to accomplish this goal.

Additionally, some courts have confused the rule in Layman by weighing the efforts of the owning and nonowning spouse when determining whether nonmarital property should be reclassified as marital. See Davis v, Davis, 79 Ark. App. 178, 84 S.W.3d 447 (2002). Indeed, in this case the circuit court considered Nancy’s contributions to the company, in addition to David’s, in concluding that the increase in value in the company was a marital asset. This was erroneous even under Layman. Accordingly, we find it appropriate to return to the statute’s plain language, which states that “the increase in the value of property acquired prior to marriage” is nonmarital. Accordingly, to the extent that Layman, Farrell, and Brown 'redefined marital property through the “active appreciation” rule, which conflicts with section 9-12-315, we expressly overrule them. Layman v. Layman, 292 Ark. 539, 731 S.W.2d 771 (1987); Farrell v. Farrell, 365 Ark. 465, 231 S.W.3d 619 (2006); Brown v. Brown, 373 Ark. 333, 284 S.W.3d 17 (2008).

The dissents ai-gue that stare decisis compels the opposite result. The policy behind stare decisis is to lend predictability and stability in the law. . However, we will overrule | ^precedent “when there has been a palpable error in legal analysis.” Ward v. State, 2015 Ark. 62, 4, 455 S.W.3d 830, 833. Similarly, in In re Guardianship of W.L. this court overruled precedent for almost the same reason as in the present case. 2015 Ark. 289, 467 S.W.3d 129. The court there stated that it was overruling precedent in order to “return to the statute’s plain language.” Id. at 7, 467 S.W.3d at 133. The court explained that the judiciary had created tests that had moved the law “too far from the statute.” Id. Likewise, in this case, because the court has taken the statutory language and rewritten it to achieve a contrary result, we are compelled to serve justice by returning to the statute’s clear language. The legal analysis behind Layman and its progeny, regarding the judicially created “active appreciation doctrine” contains a palpable error, and it is patently wrong to the extent we now must overrule-it in order to return to the statute’s plain language.

In this case, it is undisputed that David’s interest- in his company, Moore U.S. Mail Contractor, Inc., was-acquired before his marriage to Nancy. Therefore, it is a nonmarital asset and the circuit court erred by considering it marital property and awarding Nancy. half of the growth of the business. See Ark.Code Ann. § 9-12-315(a)(2).

We recognize that our property-division statute permits the division of non-marital property if the circuit court deems it equitable after taking into consideration several factors, including the following: the length of the marriage; age, health, and station in life of the parties; occupation of the parties; amount and sources of income; vocational skills; employability; 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 services as a homemaker; and |10the federal income tax consequences of the court’s division of property. Ark.Code Ann. § '9-12-315(a)(2). In such instances the circuit court must recite its basis and reasons for not returning the nonmarital property. Id.

Here, the circuit court did not make findings under section 9-12-315(a)(2) to justify a distribution of nonmarital property, Instead, the court considered it marital property. For- these reasons, we reverse and remand for the circuit court to enter an order awarding David the growth of his business as his nonmarital property absent a specific statutory finding to justify any distribution to Nancy.

IV. Alimony

David next argues that the circuit court erred in granting Nancy $5,000 per month in alimony until she reaches age sixty-five. The purpose of alimony is to rectify economic imbalance in the earning power .and standard of living of the parties to a divorce in light of the particular facts of each ease. Kuchmas v. Kuchmas, 368 Ark. 43, 45-46, 243 S.W.3d 270, 271-72 (2006). The primary factors that a court should consider in determining whether to award alimony.are the financial need of one spouse and the other spouse’s ability to pay. Id. The circuit court may also consider secondary factors, such as (1) the financial circumstances of both parties; (2) the couple’s past standard of living; (3) the value of jointly owned property; (4) the amount and nature of the parties’ income, both current and anticipated; (5) the extent and nature of the resources and assets of each of the parties; (6) the amount of income of each that is spendable; (7) the earning, ability and capacity of each party; (8) the property awarded or given to one of the parties, either by the court or the other party; (9) the disposition made of the homestead or jointly owned property; (10) the | ^ condition of health and medical needs of both husband and wife; (11) the duration of the marriage; and (12) the amount of child support (if applicable). Id.

At the hearing on the divorce petition, Nancy testified to the nature and amount of her income, both current and anticipated. She stated she had graduated from high school-and attended one semester of college. -Prior to-her marriage to David, she worked as an administrative assistant at a bank and had'been offered a position as a loan officer shortly before she began working for David at his mail-delivery business. In 2012, she underwent surgery to remove a brain tumor. Following the surgery, she suffered from ongoing medical problems, which - prevented her from returning to work as an administrative assistant. Several witnesses testified as to their personal observations of Nancy following the surgery.

■ David argues that the alimony award is erroneous because Nancy offered no medical testimony regarding her prognosis and ability to return to the workforce in the future. Because the circuit court undertook the proper analysis after hearing the parties’ testimony and reviewing the evidence, we hold that the alimony award was not an abuse of discretion.

The circuit court concluded that David could afford a sum of $5,000 per month'and considered Nancy’s health’ and medical needs in addition to her education, prior work experience, and other financial needs. The court noted its observations of Nancy during the hearing, including an unanticipated event which caused her to appear to suffer from a panic attack. He found her medical issues to be legitimate. While it considered Nancy’s health to be the most significant factor presented, the court analyzed and weighed all the relevant factors. Despite the short length of the marriage and the exceptional amount of alimony awarded, the circuit court was in the best position to view the parties, and we | ^repeatedly have held that we will not reverse a finding by the' circuit eourt in an equity case unless it was clearly erroneous. Taylor v. Taylor, 369 Ark. 31, 250 S.W.3d 232 (2007); McKay v. McKay, 340 Ark. 171, 8 S.W.3d 525 (2000). Nevertheless, because we consider property division and alimony complementary devices that the circuit, court may utilize in combination to make the .dissolution of marriage equitable, we remand this issue to the .circuit court to reconsider alimony when it redistributes the parties’ property. See Boyles v, Boyles, 268 Ark. 120, 594 S.W.2d 17 (1980); Davis, 79. Ark. App. at 185-86, 84 S.W.3d, at 451-52.

V. Property Division and Alimony

Finally, David asserts that the court considered the property division and award for spousal support in isolatioh, and as a result, issued an inequitable award. We cannot find any support in the record for this argument. In setting the amount of alimony, the circuit court fully considered the statutory factors, one of which is the distribution of assets. Appellant even acknowledged in his brief that the decree stated that alimony was determined after considering “the amount of assets [Nancy] is awarded herein.” We find no abuse of discretion.

Reversed and remanded; court of appeals’ opinion vacated.

Special Justices Chad L. Atwell and Daniel Greenberg join in this opinion. Brill, C.J., Wynne, J., concur in part and dissent in part.

Brill, C.J., and Wynne, J,, dissent.

Danielson and Goodson, JJ., not participating.

1 . The dissents contend that this case like Kelly v. Kelly, which also addressed the issue of finality, should be remanded to the court of appeals for reconsideration on the merits. 2016 Ark. 72, 483 S.W.3d 296. However, unlike in Kelly, the circuit court in this case relied on a faulty judicially created doctrine when dividing the parties’ property. If this court remanded, the court of appeals would be required to apply that doctrine as precedent, and we would be addressing this issue when the case returned to us on review. This suggested approach does not further efficient administration of justice.