George F. Pitt v. Nancy A. Lueck

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

LARRY D. VAUGHT, JUDGE

DIVISION I

GEORGE F. PITT

APPELLANT

V.

NANCY A. LUECK

APPELLEE

CA02-390

May 7, 2003

APPEAL FROM THE BENTON COUNTY CIRCUIT COURT

E 99-1069-5

HON. DONALD R. HUFFMAN, JUDGE

AFFIRMED

This is an appeal from a Benton County Circuit Court order that included a contempt finding for appellant's failure to fund a trust as provided in the parties' property settlement agreement. The order also awarded attorney's fees to appellee's counsel related to an earlier hearing. Appellant raises two points on appeal: (1) that the trial judge erred in awarding attorney's fees for an earlier hearing in the case after the time for amending the order related to that hearing had passed; and (2) that the trial judge erred in considering the portion of the petition for citation for contempt related to funding a trust for the parties' children as the agreement upon which it was based was made in Arizona, and Arizona does not recognize contempt petitions related to property settlements.

Appellant George Pitt and appellee Nancy Lueck were divorced in Arizona on April 25, 1994. Subsequently, appellant moved to South Carolina, and appellee moved to Arkansas. On June 11, 1999, appellee filed a petition in Benton County, Arkansas, to register the Arizona divorce decree, along with the property settlement agreement incorporated therein, as an Arkansas order under the Uniform Registration of Foreign Judgments Act. The petition also sought a contempt finding against appellant based on the Arizona decree and property settlement agreement. On August 19, 1999, the trial judge entered a temporary order that, among other things, registered the Arizona decree as a Benton County order.

After hearing appellee's petition on March 13, 2000, the trial court entered an order on July 12, 2000. The order made no contempt finding, but in part required that appellant set up a trust to benefit the parties' children based on the parties' property settlement agreement. That order did not award any attorney's fees, despite a petition filed by appellee's attorney on April 12, 2000. Appellee's attorney again sought attorney's fees in a letter dated September 7, 2000.

On October 5, 2000, appellee filed a new petition for citation for contempt, alleging that appellant had not set up and funded the trust for the parties' children. After a hearing on July 24, 2001, appellant was found in contempt and incarcerated. He was subsequently released after making available a portion of the funds for the trust to set up an account on which he and appellee would be joint signatories. Appellant was ordered to continue payments to the "trust" account. Another order was entered by the trial court on October 11, 2001, related to the July 24, 2001 hearing. It contained a finding of contempt related to appellant's failure to fund a trust as provided in the parties' property settlement agreement. The order also awarded attorney's fees to appellee's counsel in two separate parts, one of which was related to the pre-April 11, 2000 litigation.

I. Award of Attorney's Fees

The standard of review applicable to the award of attorney's fees in this case is that of abuse of discretion. See Holmes v. McClendon, 349 Ark. 162, 76 S.W.3d 836 (2002). Appellant contends that the decision of the trial judge should be reversed in part, because Rule 60 of the Arkansas Rules of Civil Procedure provides that a judgment, order, or decree may be modified only within ninetydays of the order having been filed with the clerk. After that time, the trial court loses jurisdiction to alter or set aside an order. See Slaton v. Slaton, 330 Ark. 287, 956 S.W.2d 150 (1997). The responsibility of seeing to a modification, even when agreed to by the parties, lies with counsel or the court itself. Cigna Ins. Co. v. Brison, 294 Ark. 506-A, 744 S.W.2d 716 (1988). Failure to make such a modification within ninety days divests the trial court of jurisdiction to act.

The initial litigation in this matter concluded with a hearing on March 13, 2000, and an order was filed of record on July 12, 2000. In paragraph twelve of that order, the trial court specifically reserved the issue of attorney's fees. Appellant states that despite efforts by his then counsel, the trial court refused to modify the order. Appellee filed her motion for attorney's fees on April 12, 2000, and reminded the trial court of the request in a letter dated September 7, 2000. No order awarding attorney's fees was entered on or before October 10, 2000, which would have been the ninety day deadline from the date the original order was entered.

The petition which eventually resulted in this appeal was filed on October 5, 2000. The final order related to that petition is the one that awarded attorney's fees for the prior litigation in the amount of $4,693.70. That final order was entered on October 11, 2001, which appellant claims is one year and a day after the last date attorney's fees could have been added as a modification of the July 12, 2000 order. He states that it is clear that the attorney's fees relate to the original litigation, as the October 11, 2001 order specifies that the fees relate to the portion of the litigation in the case that occurred prior to April 11, 2000. He contends that because that portion of the October 11, 2001 order improperly modifies the trial court's July 12, 2000 order, it should be reversed.

Appellee contends that at trial, appellant failed to argue that the trial court was barred from ruling on her outstanding petition for attorney's fees on the basis of Ark. R. Civ. P. 60, and therefore we are precluded from addressing it on appeal. See Turnbough v. Mammouth Spring Sch. Dist. No.2, 349 Ark. 341, 78 S.W.3d 89 (2002). However, because appellant's argument challenges the trial court's jurisdiction, we will address this issue. See Tyler v. Talburt, 73 Ark. App. 260, 415 S.W.3d 431 (2001) (holding that the issue of subject matter jurisdiction is always an open one, even if not raised below, and may be raised by the appellate court on its own motion).

The issue is whether Rule 60 applies to: (1) a subsequent and separate order; or (2) a specific reservation of jurisdiction by the trial court. The trial court can modify a decree more than ninety days after entry, where the trial court expressly retains jurisdiction for "entry of other and further orders as may be necessary." See Cox v. Cox, 17 Ark. App. 93, 95, 704 S.W.2d 171, 173 (1986). Paragraph sixteen of the July 12, 2000 order states: "16. The court reserves jurisdiction to enforce the orders set forth herein and to determine the remaining issues as set forth." In addition, the trial court specifically reserved jurisdiction to rule on the issue of attorney's fees in paragraph twelve, which called for "each party [to] submit an Affidavit of Attorney Fees for consideration by the court." Rule 60 is inapplicable because the trial court expressly retained jurisdiction to determine the "remaining issues," which included attorney's fees, and the subsequent order awarding attorney's fees was not a modification of the previous order but rather a separate order in and of itself. We therefore affirm the trial court's award of fees.

II. Contempt Finding Related to Funding of Trust

Our review of civil contempt findings is limited to examining the findings of the trial court, and the trial court's decision will not be reversed unless it is against the preponderance of the evidence. Burns v. First National Bank, 336 Ark. 406, 985 S.W.2d 747 (1998). Appellant argues that the circuit judge erred in considering the portion of the petition for citation for contempt related to the funding of a trust for the parties' children because the agreement upon which it was based was made in Arizona, and Arizona does not recognize contempt petitions related to property settlements. See Danielson v. Evans, 201 Ariz. 401, 36 P.3d 749 (Ariz. App. 2001). He states that Arizona courts do not have jurisdiction in a situation where contempt proceedings are filed with respect to a property settlement agreement. Id. The issue of subject matter jurisdiction is always an open one, even if not raised below, and may be raised by the appellate court on its own motion. See Tyler v. Talburt, 73 Ark. App. 260, 415 S.W.3d 431 (2001).

Appellant argues that property settlement agreements are independent contracts between parties. See Houston v. Houston, 67 Ark. App. 286, 999 S.W.2d 204 (1999). He cites Heating & Air Specialists, Inc. v. Jones, 180 F.3d 923 (8th Cir. 1999), for its identification of two lines of cases involving conflicts of law as it relates to contracts. In that case the Eighth Circuit Court of Appeals discussed the four tests noted by the Arkansas Supreme Court in Cooper v. Cherokee Village Development Co., 236 Ark. 37, 364 S.W.2d 158 (1963): (1) the law of the state in which the contract was made, (2) the law of the state in which the contract is to be performed in its most essential features, (3) the law of the state which the parties intended to govern the contract, provided that state has a substantial connection with the contract, (4) the law of the state which has the most significant contacts with the matter in dispute, also known as the "center of gravity" test. In Cooper, supra, the court applied only the first three tests while explicitly rejecting fourth test. The second line of Arkansas cases discussed in Heating & Air Specialists, Inc., supra, reports a later trend in dealing with choice of law issues, as provided in Standard Leasing Corp. v. Schmidt Aviation, Inc., 264 Ark. 851, 576 S.W.2d 1818 (1979). There the supreme court failed to discuss Cooper or the tests established therein and simply adopted the center of gravity approach. It appears to be the current trend to apply the center of gravity approach, also referred to as the "significant contacts test," in circumstances where there is no specific provision in the contract as to the intended choice of law.

There is not a bright-line rule; however, appellant asserts that under the approaches applied in either Cooper or Standard, Arizona law would apply. He maintains that the contract was entered into in Arizona, was originally intended to be performed in Arizona, and was intended by the parties to be governed by the laws of Arizona (pursuant to paragraph 30 of the property settlement agreement); and that no other state has more significant contacts with the issue in dispute. Applying Arizona law, as urged by appellant, the court would have had no jurisdiction over the portion of the contempt petition related to the setting up of the trust for the parties' children, as that was part of the property settlement agreement. He contends that the related portion of the October 11, 2001 order should be reversed and remanded.

Appellee argues that the Arizona divorce decree and property settlement were properly registered in Arkansas, with appellant's consent, under the Uniform Enforcement of Foreign Judgments Act. See Ark. Code Ann. § 16-66-601 through § 16-66-608 (Supp. 2001). Accordingly, the Arizona orders are given full faith and credit under the United States Constitution. Once a judgment has been validly rendered in one state and is then authenticated and registered in another state court, the second state court may take whatever actions are necessary in order to enforce it.

The Uniform Enforcement of Foreign Judgments Act requires only that foreign judgments be regular on their face and duly authenticated to be subject to registration. May v. May, 57 Ark. App. 215, 944 S.W.2d at 550 (1997). Once a decree or judgment is accepted as proper for registration, then it becomes, in effect, an Arkansas judgment, and will remain on the judgment books to be enforced by Arkansas in the future. See Dodson v. Taylor, 346 Ark. 443, 57 S.W.3d 710 (2001); Nehring v. Taylor, 266 Ark. 253, 583 S.W.2d 56 (1979). Additionally, under the terms of the act, the court in which a foreign judgment is registered treats and enforces the judgment exactlyas it would a judgment originally rendered by it. See Nehring, supra; Holley v. Holley, 264 Ark. 35, 568 S.W.2d 487 (1978).

Appellee met all statutory requirements for registering her authenticated decree of dissolution of marriage from the state of Arizona in the Benton County Circuit Court in the state of Arkansas. Appellant was personally served with the summons and petition for registration in Arkansas. An agreed temporary order was entered on August 19, 1999, registering the divorce decree with the (then Chancery) Court in Benton County, Arkansas, with appellant voluntarily submitting to the jurisdiction of the state of Arkansas. At that time, he never questioned whether Arizona or Arkansas law would apply to interpreting and enforcing the decree.

Appellee reiterates that it was only after appellant's deliberate and intentional violations of the Arkansas order entered in July 2000, that the trial court exercised its contempt powers a year later as set forth in the July 2001 order. She asserts that the contempt order and judgment on appeal now is an Arkansas order, fully enforceable in the state of Arkansas, as this is the state in which it originated, and emphasizes that the law of Arizona is irrelevant.

The Arkansas court registered the Arizona decree which specifically, by its terms, requires the parties to comply with the terms of the property settlement agreement. The Arkansas court did not construe or interpret the terms of the contract; the language defining appellant's obligation to establish and fund a trust for the children was plain on its face. Arkansas does have jurisdiction to use its contempt powers to enforce that decree because through registration it became an order of an Arkansas court.

The Arkansas court adhered to the provisions of the Uniform Enforcement of Foreign Judgments Act in registering and enforcing the Arizona decree and property settlement agreement. The trial judge properly treated the judgment as the statutes require - as a judgment rendered in thisstate, and properly applied Arkansas law in enforcing its orders in the contempt proceedings following the initial registration. There were nine orders entered by the Benton County Circuit Court in this matter since the foreign decree was registered in 1999. All were in accordance with Arkansas law and served the purpose of subjecting both parties to Arkansas law, apparently without objection by appellant.

Affirmed.

Gladwin and Bird, JJ., agree.