Perry v. Perry

• Court: Arkansas Court of Appeals
• Writing for the Court: MIKE MURPHY, Judge
• Citation: Perry v. Perry, 2020 Ark. App. 63, 594 S.W.3d 126 (Ark. App. 2020)
• Decision Date: 29 January 2020
• Docket Number: No. CV-18-968,CV-18-968
• Parties: Shane PERRY, Appellant v. Brandie PERRY, Appellee

2020 Ark. App. 63

594 S.W.3d 126

Shane PERRY, Appellant

v.Brandie PERRY, Appellee

No. CV-18-968

Court of Appeals of Arkansas, DIVISION I.

Opinion Delivered: January 29, 2020

Rehearing Denied March 11, 2020

Kezhaya Law PLC, Bentonville, by: Matthew A. Kezhaya, for appellant.

Cullen & Co., PLLC, by: Tim Cullen, for appellee.

MIKE MURPHY, Judge

Appellant Shane Perry appeals from the decree of divorce granting appellee Brandie Perry a divorce. He asserts two points on appeal: (1) that the circuit court abused its discretion in imputing his income and setting his monthly child-support obligation at $3793; and (2) that the circuit court abused its discretion in awarding Brandie $167,236 representing one-half of the parties’ marital interest in GKS Properties. We affirm.

Shane and Brandie were married in July 2002 and divorced in July 2018. They have four children together. Relevant to this appeal, before Shane and Brandie were married, Shane owned an interest in a general partnership with his brother and father, GKS Properties. During the marriage, Shane and his brother purchased their father’s interest in GKS Properties for $275,000. At the time of the final hearing, GKS Properties had about $50,000 on deposit in a bank account. Also relevant to this appeal, after Brandie filed for divorce and before the final hearing, Shane lost his job at Walmart where he earned $250,000 a year. After a hearing at which the court heard testimony concerning the parties’ various business ventures and Shane’s employment, the court imputed income to both parties to calculate each parties’ child-support obligation to the other and offset those amounts. Shane was ordered to pay Brandie $3000 a month in child support.

The court further found that a substantial interest in GKS Properties had been acquired during the marriage with a represented value of $275,000 but that it would be impractical to divide that interest considering the nature of the partnership. The court ordered Shane to pay Brandie $167,236 out of his share of his 401k representing one-half of the parties’ marital interest in GKS Properties.

Shane now appeals, arguing that the court erred when it imputed his income to calculate child support and that it further erred when it found that any portion of GKS Properties was marital property.

I. Child Support

We review an appeal from a child-support order de novo on the record, but we will not reverse a finding of fact by the circuit court unless it is clearly erroneous. Fischer v. Fischer , 2018 Ark. App. 519, at 6, 563 S.W.3d 601, 604. In reviewing a circuit court’s findings, we give due deference to that court’s superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Id. As a rule, when the amount of child support is at issue, we will not reverse the circuit court absent an abuse of discretion. Id.

In determining an appropriate amount of child support, courts are to refer to the most recent revision of the family-support chart in Arkansas Supreme Court Administrative Order No. 10, which provides a means of calculating child support based on the basis of the payor’s net income. Ark. Code Ann. § 9-12-312(a)(3)(A) (Repl. 2015). There is a rebuttable presumption that the amount of child support contained in the family-support chart is the correct amount of child support to be awarded. Ark. Code Ann. § 9-12-312(a)(3)(B) ; Ark. Sup. Ct. Admin. Order No. 10(I). "Income" means any form of payment, periodic or otherwise, due to an individual, regardless of source, including wages, salaries, commissions, bonuses, workers’ compensation, disability, payments pursuant to a pension or retirement program, and interest, less proper deductions. Ark. Sup. Ct. Admin. Order No. 10(II)(a). The definition of "income" is "intentionally broad and is designed to encompass the widest range of sources consistent with this State’s policy to interpret ‘income’ broadly for the benefit of the child." Id. The affidavit of financial means shall be used in all family-support matters. Ark. Sup. Ct. Admin. Order No. 10(IV).

Shane first argues that it was error for the circuit court to calculate the child-support obligation by imputing income. Regarding imputed income, Administrative Order No. 10 provides that:

[i]f a payor is unemployed or working below full earning capacity, the court may consider the reasons therefor. If earnings are reduced as a matter of choice and not for reasonable cause, the court may attribute income to a payor up to his or her earning capacity, including consideration of the payor’s life-style. Income of at least minimum wage shall be attributed to a payor ordered to pay child support.

Ark. Sup. Ct. Admin. Order No. 10(III)(d).

Shane contends that his income was not reduced as a matter of choice—he was fired—thus, the circuit court had no authority to impute income. However, when there is a change in employment, the imputation of income is not automatic. Grady v. Grady , 295 Ark. 94, 97, 747 S.W.2d 77, 78 (1988). A court may, in proper circumstances, impute an income to a spouse according to what could be earned by the use of his best efforts to gain employment suitable to his capabilities. Langston v. Brown , 2016 Ark. App. 535, at 10, 506 S.W.3d 261, 268. Considering $250,000 was Shane’s salary before he lost his job at Walmart, it was not an abuse of discretion for the circuit court to use that as the benchmark for Shane’s earning capabilities. Here, the evidence demonstrated that Shane was capable of making that much annually, but Shane also testified that he was not open to moving outside of Northwest Arkansas for a job at the time because he wanted to maintain the flexibility to spend time with his children. Furthermore, Shane’s various affidavits of financial means introduced indicate that he has several business ventures including rental properties, a farm, and an interest in a liquor store; his own law practice; and substantial savings and assets. The decision whether to impute income depends on the circumstances of the case and is a matter that lies within the sound discretion of the circuit court. See, e.g. , Grady , supra ; Langston, supra. Accordingly, even though Shane lost his job at Walmart, given the circumstances in this case, it was not an abuse of discretion for the court to impute an income of $250,000 to Shane for the benefit of his children.

Shane contends that, under the Arkansas Family Support Chart, he should owe Brandie $25 a month, not $3000. As mentioned, the circuit court imputed an annual income of $250,000 to Shane. The circuit court imputed an annual income of $40,000 to Brandie. Using those figures, the court then calculated that Shane would owe a presumptive child support amount of $3793 a month to Brandie and Brandie would owe $793 a month to Shane. The circuit court then offset Brandie’s support obligation against Shane’s to arrive at a final chart-based order of child support for Shane of $3000 a month. This award was also consistent with the temporary order previously entered. Chart-based support is presumed to be correct and reasonable. Waldon v. Waldon , 34 Ark. App. 118, 122, 806 S.W.2d 387, 389 (1991). Offsetting the parents’ chart-based support obligation like the circuit court did here is consistent with common practice in joint-custody situations. See, e.g. , Grimsley v. Drewyor , 2019 Ark. App. 218, 575 S.W.3d 636. It was not an abuse of discretion for the circuit court to order Shane to pay $3000 a month in child support.

II. GKS Properties

For his second point, Shane challenges the unequal distribution of his 401k as a result of his acquisition of an additional interest in GKS Properties that was acquired during the marriage. At trial, Brandie specifically claimed a marital interest in the 17 percent stake in GKS that was acquired during the marriage. At the hearing, Shane explained that GKS bought out Shane’s father’s interest and that he had signed a promissory note. The court noted that there was no evidence of what effect this had on Shane’s interest. The court found that "a substantial interest in GKS Properties was acquired during the marriage with a represented value of $275,000." The court further found, however, that it would be inequitable and impractical to award Brandie an interest in the partnership. The court then made an unequal division of one of Shane’s retirement accounts after taking into consideration the statutory factors required by Arkansas Code Annotated section 9-12-315 (Repl. 2015).

Divorce cases are reviewed de novo. Kelly v. Kelly , 2011 Ark. 259, at 5–6, 381 S.W.3d 817, 822–23. With respect to the division of property, we review the circuit court’s findings of fact and affirm them unless they are clearly erroneous or against the preponderance of the evidence; the division of property itself is also reviewed, and the same standard applies. Id. 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. Id. In order to demonstrate that the circuit court’s ruling was erroneous, the appellant must show that the circuit court abused its discretion by making a decision that was arbitrary or groundless. Id.

On appeal, Shane argues that there was no evidence presented that he recognized a $275,000 gain in connection with the partnership, the transaction was funded by nonmarital property, and any gain of nonmarital property remains nonmarital; alternatively, Shane argues that the acquisition was a gift.

The circuit court noted that Shane failed to put on proof about the value of the newly acquired interest in GKS. At the hearing, Shane testified that in 2011, he and his brother purchased their father’s interest in GKS Properties for the sum of $275,000, "and we executed a promissory note that same day for that amount." That was the only figure with which the circuit court had to work. Shane argues that the new...