Horton v. Horton

• Court: Arkansas Court of Appeals
• Writing for the Court: WAYMOND M. BROWN
• Citation: Horton v. Horton, 2011 Ark.App. 361, 384 S.W.3d 61 (Ark. App. 2011)
• Decision Date: 11 May 2011
• Docket Number: No. CA 10–874.,CA 10–874.
• Parties: Daniel Ray HORTON, Appellant v. Virginia Ruth HORTON, Appellee.

2011 Ark. App. 361

384 S.W.3d 61

Daniel Ray HORTON, Appellant

v.Virginia Ruth HORTON, Appellee.

No. CA 10–874.

Court of Appeals of Arkansas.

May 11, 2011.

Debra Joan Cheatham Reece, Russellville, for appellant.

John David Coulter, Little Rock, for appellee.

WAYMOND M. BROWN, Judge.

[Ark. App. 1]This appeal involves the division of property and debt after a divorce. Daniel Ray Horton brings this appeal from the Pulaski County Circuit Court's decree ending his marriage to Virginia Ruth Horton. For reversal, Mr. Horton contends that the circuit court erred by (1) denying his motion for a new trial because he was denied the opportunity for a fair trial and an opportunity to present his case; (2) finding that a home Mrs. Horton owned before the marriage was Mrs. Horton's separate property; (3) requiring him to pay all of the parties' 2008 tax liability and not addressing the parties' 2009 and 2010 tax liability; and (4) denying his motion for reconsideration because the parties' financial circumstances had changed due to the passage of time between trial and the entry of the decree. We disagree with all of Mr. Horton's points. Accordingly, we affirm.

[Ark. App. 2]Background

The parties separated in May 2007 after thirty-three years of marriage, and Mrs. Horton filed her complaint for divorce on October 14, 2008. A hearing was held on the divorce complaint on February 4, 2009. Mrs. Horton testified that she was seventy years old and had suffered a stroke in 2000. The stroke affected her speech and the right side of her body. She was unemployed because of her physical limitations, having last been employed in a clerical position in 1989. Mrs. Horton testified that she requires twenty-four hour care, which she had before moving into an assisted-livingfacility that costs approximately $2900 per month. Her medications cost $420 per month. Her sole source of income was $840 per month in Social Security benefits. Mr. Horton was paying her living expenses with a credit card or by withdrawals from a retirement account.

When the parties married, Mrs. Horton owned her own home. The home was sold in November 2008, netting $64,600 in profit. The parties paid off the mortgage together after their marriage in 1974. Mrs. Horton also said that the parties agreed to form a trust and that the house was transferred to that trust. She also testified about the parties' marital home. The home was sold in July 2008 and the net proceeds of $47,000 were placed in the parties' joint checking account. She withdrew $14,500 of the proceeds for her use. The parties also had two retirement accounts with Smith Barney that had a balance of approximately $146,000 as of January 31, 2009. Mrs. Horton testified that she never made withdrawals from these retirement accounts. The parties also had a joint checking account with a balance of [Ark. App. 3]approximately $5000, and another retirement account of which she did not know the balance. After saying that she had no interest in owning any of the parties' vehicles, Mrs. Horton proposed that she receive 58% of the parties' bank, retirement, and investment accounts. According to Mrs. Horton, Mr. Horton was still employed and did not have any physical limitations or significant health expenses. Mrs. Horton also acknowledged that Mr. Horton paid for her care and living expenses from marital funds. She also asserted her belief that Mr. Horton wasted marital assets in his use of credit cards.

Mr. Horton testified that he was living with his first wife, paying her $400 per month in rent. He was employed part-time as a project manager and had been with his employer for nineteen years. He earned $300 per day, plus expenses, on days he traveled and $400 per day for work days. Later in his testimony, Mr. Horton testified that his work was reduced to one week per month and that he was transferred to a different department. He stated that his net pay was reduced to $1100 per month.

Mr. Horton discussed his December 29, 2008 affidavit of financial means. His net take-home pay was $4400 per month. He also received $1550 in Social Security benefits, which increased to $1612 in 2009. He testified that his wages from the 2007 tax return were $50,303. He also had approximately $27,000 in his Social Security benefits. His 2008 income was similar. Mr. Horton testified that, although his doctor had not restricted his physical activities, he could no longer golf, jog, or do other things like he formerly could. He testified that the parties' tax returns showed distributions from the IRA of approximately $230,000 for [Ark. App. 4]the years 2005 through 2007. Another $75,000 was distributed in 2004. As of May 31, 2007, the balance of the IRA was approximately $345,000. By January 31, 2009, the balance had declined to $146,000. Although acknowledging that his deposition testimony was different, Mr. Horton denied gambling every chance he could. Mr. Horton's testimony was conflicting on the amount of money he lost gambling, both denying and admitting that he had lost thousands of dollars. He acknowledged that the money for his gambling came from marital funds. He said that he had won some money, but denied that he had lost $100,000. Mr. Horton also denied that his gambling had an effect on his finances.

Mr. Horton stated his belief that Mrs. Horton's home should be considered marital property because twenty years of mortgage payments were made out of marital funds. He also said that the house was conveyed into a trust where the parties agreed that they would share the property equally. Neither the trust documents nor the deed was introduced into evidence.

On February 27, 2009, Mr. Horton's attorney wrote a letter to the circuit court enclosing the credit card and bank statements that had been requested by the court. The statements covered the period of May 2007 through January 2009. Also included were the parties' 2008 federal and state tax returns. The attorney also requested a “short” hearing to present testimony and argument about Mr. Horton's gambling, the parties' tax debt, preservation of marital funds, the factors for the division of property, the value of the vehicles, and whether Mrs. Horton's house was converted to marital property.

On April 14, 2009, the circuit court, after receiving an April 10, 2009 letter from Mr. Horton's attorney, entered an order directing Mr. Horton to pay the parties' state and federal [Ark. App. 5]tax liability of approximately of $35,000 out of the proceeds from the sale of Mrs. Horton's home. The order also stated that the issues of whether the proceeds were marital property and the ultimate responsibility for the tax liability would be reserved for later determination.

On June 29, 2009, the circuit court issued a letter opinion announcing its decision in the case. The court found that, although Mr. Horton testified that he helped work on the house, he offered no details and did not provide any records tracing how the mortgage was paid or how he was responsible. Therefore, the court awarded the entire proceeds to Mrs. Horton. The court ordered that Mr. Horton be responsible for the entire amount of the parties' 2008 tax liability and that it be deducted from Mr. Horton's share of the parties' investment accounts. The court then found that the proceeds of the marital home should be divided equally between the parties. The court then made an unequal division of the parties' retirement and bank accounts so that Mrs. Horton received 58% and Mr. Horton 42%. This was based on the factors found in Arkansas Code Annotated section 9–12–315(a)(1)(A).¹ The court noted that the parties had been married for thirty-three years, that they were in their seventies, that Mr. Horton was still employed, and that Mrs. Horton was infirm and could not work.

[Ark. App. 6]On July 7, 2009, Mr. Horton filed a motion seeking to set aside the court's letter opinion and have another hearing to address certain unspecified issues. In his motion, he claimed that he had not had an opportunity to complete the presentation of his case and had not rested. Mr. Horton also objected to the court's division of marital property and the designation of Mrs. Horton's home as non-marital property.

Mrs. Horton's counsel submitted a letter dated July 8, 2009, in which he advised that a further hearing was not necessary for the court to resolve the outstanding issues. In a responsive motion, Mrs. Horton further asserted that Mr. Horton had not identified what issues Mr. Horton believed had not been addressed by the court's letter opinion. By order entered on July 13, 2009, the circuit court granted the motion to set a hearing. However, the court limited the hearing to the presentation of testimony concerning the documentary evidence submitted to the court.

The court held another hearing on November 16, 2009. Mr. Horton was the sole witness. According to Mr. Horton, the sale of Mrs. Horton's house resulted in approximately $48,000 of capital gains. The tax on the gain was approximately $9000. Mr. Horton stated his belief that the proceeds from the sale of the house were marital property and that the capital gains tax should be equally divided. If the house was not deemed marital property, he wanted the tax paid out of the sale proceeds. Mr. Horton offered to pay for all of the credit cards except for the Chase account in Mrs. Horton's name because Mrs. Horton was still making charges on that account. He would not admit withdrawing $225,000 from the retirement accounts since May 2007, but acknowledged he had withdrawn at least $190,000. Although [Ark. App. 7]Mr. Horton was not aware of exactly how much he had borrowed from credit cards for gambling, he estimated that the sum was between $8000 and $10,000 for the previous five years. He stated that it was impossible to get an accurate picture because the bank statements only showed the withdrawals he made, not his winnings. In 2008, Mr. Horton showed documented winnings...