Kathy (Lambert) Caple v. Jerry L. Lambert

ca01-863

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JOHN B. ROBBINS, JUDGE

DIVISION IV

KATHY (LAMBERT) CAPLE

APPELLANT

V.

JERRY L. LAMBERT

APPELLEE

CA 01-863

MARCH 20, 2002

APPEAL FROM THE CALHOUN

COUNTY CHANCERY COURT

[NO. E-99-79]

HONORABLE HAMILTON HOBBS

SINGLETON, CHANCERY JUDGE

AFFIRMED

Appellant Kathy (Lambert) Caple and appellee Jerry L. Lambert were married on February 15, 1997, and divorced on June 20, 2000. The divorce decree reserved issues pertaining to the division of property, and a hearing on these issues was held on March 20, 2001. At the hearing, Ms. Caple contended that she should be given credit for marital debts incurred in her individual capacity, and credit for contributions of her non-marital assets to improvements made to Mr. Lambert's non-marital real property during the marriage.

After the hearing, the chancery court entered an order that provided, in pertinent part:

After hearing the testimony from [Ms. Caple] as to her investment of non-marital property into the non-marital property of [Mr. Lambert], the Court finds that it cannot reimburse [Ms. Caple] since there has been no substantial proof or evidence as to the value of the improvements made to [Mr. Lambert's] separate property.

Therefore, the Court finds that [Ms. Caple] is entitled to no reimbursement for investments that she may have made to [Mr. Lambert's] non-marital property.

The Court further finds that there is no relevant evidence as to which debts were made by whom, the amounts, or relevant evidence as to the existence of the debts. Therefore, the Court finds that the debts will remain with the party who created those debts.

The double wide mobile home which is financed at Conseco Finance shall be the separate property of [Mr. Lambert] and he shall be responsible for all indebtedness remaining thereon.

Ms. Caple now appeals from the chancery court's order, arguing that its findings rejecting her proposed division of marital debts and failing to award her the value of her contribution of non-marital assets were clearly erroneous. We affirm.

On appeal, chancery cases, such as divorces, are reviewed de novo. Skokos v. Skokos, 344 Ark. 420, 40 S.W.3d 738 (2001). With respect to division of property in a divorce case, we review the chancellor's findings of fact and affirm them unless they are clearly erroneous. 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. Huffman v. Fisher, 343 Ark. 737, 38 S.W.3d 327 (2001).

Ms. Caple testified that, before the parties married, Mr. Lambert lived in a small travel trailer on a six-acre tract of land owned by him. After the marriage they financed a three-bedroom mobile home and made it their residence on the property.

Ms. Caple stated that Mr. Lambert "didn't have any credit" and that she incurred substantial debt in her sole name during the marriage. She further stated that she spent a large amount of non-marital funds, which included $34,000 from the sale of a house, $38,000 that she received from cashing a certificate of deposit, and an inheritance of more than $125,000.

Ms. Caple testified that she used her non-marital assets to make vast improvements to Mr. Lambert's real property. She indicated that these improvements included clearing the land, constructing a pond, landscaping, and erecting a fence with her lumber. She further stated that she paid for a pipe to drain the property, dog pens, and a barn that cost over $20,000.

The parties operated two trucking businesses during their marriage, which, according to Ms. Caple, were not very profitable. She testified that she used her non-marital assets for business expenses, as well as to pay debts that she incurred for the purpose of operating the businesses.

Ms. Caple represented that she has spent all of her non-marital funds and remains in debt from credit that she used to benefit both parties. She listed these debts in an exhibit as follows:

First State Bank of Warren 1943.04

First State Bank of Warren 7424.64

Sears Plus 574.94

Sears Premium 1878.67

Radio Shack 363.05

Discover 2589.04

American Express 165.04

MBNA Visa 3453.78

Fleet Visa 2168.18

John Deere Credit 1587.84

Dillards 381.24

South Ark Telephone 73.39

Ms. Caple acknowledged on cross-examination that she had no documented proof of the amounts of these debts or when they were incurred, but asserted that this was because Mr. Lambert cleared out the office and has the receipts.

Mr. Lambert testified that none of the debts listed by Ms. Caple were his, but that he knew she had a lot of credit cards. However, he asserted that he did not know of any time when she used a credit card for his benefit. Mr. Lambert did not believe that Ms. Caple used her credit to maintain their trucks, but acknowledged that she handled all of the business affairs and that he did not know how expenses were taken care of for the businesses. Mr. Lambert testified that the mobile home was financed in Ms. Caple's name, and that he has been making the monthly payments on the existing $40,000 debt and will continue to do so.

As for the improvements to his property, Mr. Lambert disputed that they were financed by Ms. Caple. He asserted that he paid a man with a bulldozer $1200 to clear his land, and that a friend with a back hoe dug a pond and that, "We did give him like $100 or $200 once in a while, probably $400 or $500 altogether for the whole deal." He acknowledged that the fence was built with Ms. Caple's lumber, but asserted it was at no cost because it was constructed by him and some friends. Mr. Lambert estimated that the barn cost $12,000 and testified:

We had accumulated the $12,000 and put [it] up ourselves from working to the best I understand. That's what she told me. We agreed to go ahead and build the barn, and when it came time to pay for it, she said, well, that money is gone, so maybe she went then-I don't know what she done [sic], but she handled all the money.

For reversal of the chancery court's order, Ms. Caple argues that the chancellor clearly erred in failing to give her credit for debts she incurred during the marriage, and in failing to award her the value of her non-marital assets that were applied to the improvement of Mr. Lambert's property. She asserts that during the marriage she contributed in excess of $190,000 to the parties' trucking businesses and property upgrade, as well as other marital affairs. While Mr. Lambert had no recollection as to her financial contribution to the marriage, Ms. Caple notes that he also stated that she handled all of their business affairs. Thus, she asserts, she provided the only relevant proof on the issues pertaining to division of property. In light of the proof of her non-marital contributions, Ms. Caple argues that this case should be reversed and remanded with instructions to award her at least half of the funds she expended.

In order to demonstrate that the chancery court's ruling was erroneous, an appellant must show that the trial court abused its discretion by making a decision that was arbitrary or groundless. Skokos v. Skokos, supra. Giving due deference to the chancery court's superior position to determine the credibility of witnesses, see Crismon v. Crismon, 72 Ark. App. 116, 34 S.W.3d 763 (2000), we hold that Ms. Caple failed to show that the chancery court's decision regarding the distribution of property was arbitrary or groundless, and we are not left with a definite and firm conviction that a mistake has been committed.

We have held that it is appropriate to recognize a spouse's contributions toward an increase in the other spouse's non-marital property when making a property division. See Smith v. Smith, 32 Ark. App. 175, 798 S.W.2d 442 (1990). However, in the case at bar therewas a lack of proof as to the increase in value that resulted from the improvements. There was not even lay testimony as to before-and-after values of the real property. The only testimony Ms. Caple gave that might have been relevant to the value of any improvement was during cross-examination when she stated that the barn cost her more than $20,000. However, Mr. Lambert recalled that the barn cost only $12,000, and that he contributed to its value by building the interior stalls. Ms. Caple did testify that she spent $34,000 from the previous sale of a house on improvements to the property, but had earlier testified that she invested that same money in the trucking business.

Moreover, there was conflicting testimony about the source of funds used to make the improvements, and the trial court was not obligated to believe Ms. Caple's testimony that they were funded by her non-marital assets. As for the expense of the barn, Mr. Lambert was under the impression that it initially was being covered by profits from the trucking business, and that he ultimately was unsure of how it was paid for. Nevertheless, the trial court did not clearly err in finding that Ms. Caple failed to establish an increase in the value of the non-marital property that resulted from any of her non-marital contributions, and thus refusing to recognize her alleged non-marital contributions in dividing the parties' property.

We have also held that a chancery court has the authority to consider allocation of debt responsibility in a divorce case. See Dalrymple v. Dalrymple, 74 Ark. App. 372, 47 S.W.3d 920 (2001). However, in the instant case, while Ms. Caple did compile a list of alleged debts, she failed to provide any documentation of the debts, when they were incurred, or for what purpose they were incurred. This was true despite Ms. Caple'stestimony that such documentation was in her attorney's vehicle during the hearing, and thus available to her. Under these circumstances, we find no clear error in the chancery court's determination that any debts were to remain with the party who created them, which was based on its finding that there was a lack of relevant evidence pertaining to the alleged debts.

Affirmed.

Hart and Baker, JJ., agree.