V. McKay v. D. McKay

• Decision Date: 20 January 2000
• Docket Number: 99-617
• Citation: 8 S.W.3d 525
• Parties: Verlon McKAY v. Debra McKAY 99-617 ___ S.W.3d ___ Opinion delivered
• Court: Arkansas Supreme Court

Verlon McKAY v Debra McKAY

99-617 ___ S.W.3d ___

Opinion delivered January 20, 2000

Supreme Court of Arkansas

Appeal from Saline Chancery Court; Robert W. Garrett, Chancellor; affirmed in part and reversed in part.

1. Appeal & error -- petition for review -- grant of. -- When the supreme court grants a petition to review a case decided by the court of appeals, it reviews the case as if it was originally filed in the supreme court.

2. Appeal & error -- chancery cases -- standard of review. -- The supreme court hears chancery cases, including division of property cases, de novo on the record, but will not reverse a finding of fact by the chancellor unless it is clearly erroneous; the evidence on appeal, including all reasonable inferences therefrom, and the findings of fact by a judge must be reviewed in a light most favorable to the appellee; the supreme court will defer to the superior position of the chancellor to judge the credibility of witnesses.

3. Divorce -- alimony or attorney's fees -- grant discretionary. -- A grant of alimony or attorney's fees are issues within the sound discretion of the chancellor and will not be disturbed on appeal absent an abuse of discretion.

4. Divorce -- marital property -- presumption. -- Arkansas Code Annotated section 9-12-315 (Repl. 1998) defines "marital property" as all property acquired by either spouse subsequent to the marriage, subject to certain exceptions; there is a presumption that all property acquired during a marriage is marital property.

5. Divorce -- marital property -- tracing used to determine. --Once property is placed in both spouses' names, there is a presumption that the property is held in tenancy by the entirety; this presumption is strong, and it can be overcome only by clear and convincing evidence; in determining whether property remains under the control of one spouse upon divorce, or is the property of both spouses, "tracing" may be used by the court; tracing of money or property into different forms may be an important matter, but tracing is a tool, a means to an end, not an end in itself; the fact that one spouse made contributions to certain property does not necessarily require that those contributions be recognized in the property division upon divorce.

6. Witnesses -- credibility -- deference to trial court. -- On appeal, the supreme court defers to the trial court's credibility assessments.

7. Divorce -- appellant's testimony believed by trail court --finding as to account funds not clearly erroneous. -- The trial court chose to accept the testimony of the appellant that he alone controlled the expenditure of funds from the joint account funded by his disability income and that the appellee had agreed to this arrangement; the trial court's ruling that appellant provided clear and convincing evidence that the account funds remained his separate property despite the account existing in both names was not clearly erroneous.

8. Divorce -- marital property -- no error in finding houseboat constituted. -- The chancellor found that while the money used to purchase the houseboat could be traced to an inheritance, appellant made a gift to appellee of an interest in the property; appellant failed to rebut the presumption that once the property was placed in both his and the appellee's names, the property was then held as tenants by the entirety; the supreme court could not say that the trial court clearly erred in finding that the houseboat was marital property.

9. Divorce -- alimony -- award discretionary. -- An award of alimony is not mandatory but is a question that addresses itself to the sound discretion of the chancellor; fault is not a factor in the award of alimony unless it meaningfully relates to need or ability to pay.

10. Civil procedure -- issues tried by express or implied consent -- claim need not be pleaded in writing. -- Rule 15(b)of the Arkansas Rules of Civil Procedure allows issues that were tried by express or implied consent to be treated as if they were raised in the pleadings and these amendments relate back to the date of the original pleading; Rule 15(b) does not require that the claim be pleaded in writing at the time the parties actually try the issues.

11. Civil procedure -- amendment of pleadings. -- Arkansas Rule of Civil Procedure 15(b) provides that if the evidence is objected to at trial on the ground that it is not within the issues made by the pleadings, the trial court may nonetheless permit amendment of the pleadings in its discretion.

12. Divorce -- desire for alimony clear -- grant of appellant's motion to set aside award of alimony constituted error. -- Where, throughout the proceeding below, the parties litigated the case with full knowledge of appellee's desire for alimony, and the trial court originally awarded temporary alimony at a temporary hearing held months before the actual divorce, with no objection from appellant, the trial court had before it adequate facts upon which to make a determination of appellee's entitlement to alimony and so erred in granting appellant's motion to set aside the award of alimony.

13. Attorney & client -- attorney's fees discretionary -- no abuse of discretion found. -- A chancellor has considerable discretion to award attorney's fees in a divorce case; in determining whether to award attorney's fees, the chancellor must consider the relative financial abilities of the parties; the chancellor did not abuse his discretion by declining to award appellee attorney's fees and costs.

Meredith Wineland, for appellant.

Virginia (Ginger) Atkinson, for appellee.

Lavenski R. Smith, Justice.

This is a domestic-relations case involving property division and alimony incident to a divorce and comes before this court on a Petition for Review from the Arkansas Court of Appeals. Appellant Verlon McKay ("Verlon") originally appealed the Saline County Chancery Court's decision in the divorce action, and Appellee Debra McKay ("Debra") cross-appealed. The Arkansas Court of Appeals issued a decision in this matter on May 12, 1999, in McKay v. McKay, 66 Ark. App. 268, 989 S.W.2d 560 (1999), affirming the chancellor in part and reversing in part. Debra petitioned this court for review. We accepted the case for review pursuant to Supreme Court Rule 1-2(e).

Facts Verlon and Debra were married on June 8, 1991, and divorced on March 12, 1998, by order of the Saline County Chancery Court. There were no children born of the marriage, but Debra had custody of two sons by a prior marriage. At trial, the parties gave conflicting testimony regarding their property. In particular, they disputed the appropriate disposition of a checking account to which both were signatories and a houseboat purchased in 1997. Following a hearing, the chancellor made the following specific findings. He found that the joint account, which had been solely Verlon's before marriage, remained separate property because all the funds deposited in the account derived from federal disability checks Verlon received from the Veterans Administration and the Social Security Administration.¹ Additionally, the court found that although the account was held in joint names, Verlon controlled the funds. Accordingly, the court also assigned to Verlon all property purchased through that account. With respect to the houseboat, the court found that it constituted marital property based upon a bill of sale issued in the name of both parties. The court did so even though Verlon purchased the boat with money he received by inheritance. The court found that the bill of sale was evidence of a gift by Verlon to his wife. The court also ordered that the stove, refrigerator, and dishwasher belonged to Debra, and that Verlon could either return those items to Debra or pay her $2,000 within the week. In addition, the court found that the parties would keep their own vehicles and would be responsible for their own payments. Finally, the court ordered that Verlon should continue paying alimony in the amount of $100 per week for the remainder of 1998, approximately nine months, and that the parties should each pay their attorney's fees.

Subsequent to the hearing and the final order filed on March 13, 1998, Verlon entered a Motion for Reconsideration claiming that the chancellor erred in awarding the temporary alimony because Debra never requested alimony in her complaint. As such, Verlon argued, the court had no jurisdiction to enter the alimony award. Debra answered, and also moved to show cause because Verlon had not only failed to pay alimony, but he had also failed to pay the $2,000 or return the appliances ordered by the court in the divorce decree. Upon consideration of the motion, the court set aside its order for alimony, agreeing with Verlon that Debra did not request the award in her pleadings, and that the court could not grant such an award on its own action.

Verlon then filed his Notice of Appeal on April 13, 1998, and Debra cross-appealed in a timely fashion. Specifically, Verlon argued on appeal that the trial court erred in ordering that the houseboat constituted marital property because he had adduced clear and convincing evidence that he did not intend to make a gift of the property. In her appeal, Debra argued that the trial court erred in ruling that none of the personal or real property acquired during the marriage through the joint checking account was marital property. Furthermore, Debra argued that the trial court erred in setting aside its original motion on the award of rehabilitative alimony, and that the court erred in failing to award payment of her attorney's fees.

In a decision dated May 12, 1999, the court of appeals affirmed the chancellor's determinations regarding the houseboat and the joint checking account. However, the court of appeals reversed the chancellor's order granting the Motion for Reconsideration regarding Verlon's alimony payments. The court based its holding on Rule 15 of...