Claud Loughridge v. Opal Ray Loughridge

ca03-119

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
DIVISION III

CLAUD LOUGHRIDGE

APPELLANT

V.

OPAL RAY LOUGHRIDGE

APPELLEE

CA 03-119

August 27, 2003

APPEAL FROM THE FRANKLIN

COUNTY CIRCUIT COURT

[E-2001-54]

HONORABLE RICHARD E.

GARDNER, JR., CIRCUIT JUDGE

REVERSED AND REMANDED

Chief Judge John F. Stroud, Jr.

The parties in this appeal were married on September 4, 1992, and divorced in October 2002. Appellant Claud Loughridge's sole point on appeal is that the circuit judge erred in awarding appellee, Opal Loughridge, a certificate of deposit that had been held jointly by the parties until September 2002, at which time Opal cashed the CD, placed the proceeds in the parties' joint checking account, and then removed $50,000 and placed it into a CD in her name only. We reverse and remand.

In this case, both parties had been previously married. At the time of the divorce, Claud was eighty-two and Opal was sixty-six. When the parties married, Opal sold her house for $37,000 and moved into the house Claud owned prior to the marriage. They put most of the proceeds of the sale of Opal's house, along with $20,000 from Claud, into a jointly held CD. Opal testified that had she not remarried, she would have received $300 per month in alimony until she reached the age of sixty-two, and that the $20,000 placed in the CD by Claud represented the amount of alimony that she forfeited due to her marriage to him. Claud testified that he agreed to put $20,000 in the bank until Opal reached the age of sixty-two so that if anything happened to him before she reached sixty-two, she would have the $20,000 in place of her alimony. However, Claud also testified that if nothing happened to him before Opal reached sixty-two, the $20,000 belonged to him. Opal also testified that it was her choice to commingle her non-marital funds with Claud's money in the CD because she thought that they "would be together forever," and Claud stated that as far as he knew Opal had willingly commingled the funds.

Claud also had three other CDs in his name only. One of the CDs was worth $100,000 at the time of the marriage, but was worth only $39,000 at the time of the divorce. The other two CDs had values of $10,000 each. During the marriage, Opal had also received $12,000 from her mother's estate, which was spent by the couple.

The jointly held CD matured in August of 2002, and in September, one month prior to the divorce hearing in October, Opal took that money, along with $5,000 from the parties' joint checking account, and purchased a $50,000 CD in her name only. At the divorce hearing, Opal asked the trial court to allow her to retain $49,000 of this CD as a reimbursement of the $37,000 she had received from the sale of her house and the $12,000 she had received as an inheritance from her mother's estate. Claud asked the trial court to divide the $50,000 CD as marital property and asked that he be allowed to retain the CDs that he owned prior to the marriage as his own separate property.

At the close of the hearing, the trial judge, among other things, gave the parties as their separate property the property that was titled in his or her own name, which included the $50,000 CD in Opal's name. When Claud's attorney inquired about the money transferred from the jointly held CD and the joint-checking account into the CD in Opal's name only, the trial judge replied, "It's in her name, Mr. Garrett. If it's in her name, it's going to stay in her name. If it's in Mr. Loughridge's name, it's going to stay in his name. And that's exactly what I meant when I said that." The decree of divorce provides:

Opal Ray Loughridge shall take as her sole and separate property all of the property which is in her possession, which includes, but is not limited to, . . . a Certificate of Deposit in the amount of $50,000 and any other savings or checking accounts that she possesses, . . . Claud Loughridge shall take as his sole and separate property all of the property which is in his possession, which includes, but is not limited to, . . . his three Certificates of Deposit and any other checking or savings accounts that he possesses. . . .

Claud now brings this appeal, arguing that the trial judge erred in awarding Opal the entire $50,000 CD.

The appellate courts review equity cases de novo and will not reverse a finding of fact by the trial judge unless it is clearly erroneous. Kelly v. Kelly, 341 Ark. 596, 19 S.W.3d 1 (2000). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. O'Fallon v. O'Fallon, 341 Ark. 138, 14 S.W.3d 506 (2000). We hold that this case must be remanded because we are unable to ascertain from the trial judge's comments or from the order whether he considered the funds that comprised the $50,000 CD to be marital funds or non-marital funds.

In Guinn v. Guinn, 35 Ark. App. 199, 816 S.W.2d 629 (1991), funds were removed from a joint checking account by Mr. Guinn, who testified that he had used the money he had taken from the account for living expenses and start-up expenses for housekeeping. The trial judge divided the money remaining in the joint checking account equally, but did not require Mr. Guinn to repay one-half of the money he had taken out of the account because it had been used for the payment of bills and the start-up costs for a separate household. Mrs. Guinn appealed that decision to this court. In affirming the trial judge's decision, this court held:

Before the money was withdrawn from the account it was held as tenancy by the entirety property and was subject to division under Ark. Code Ann. § 9-12-317 (1987). See Lofton v. Lofton, 23 Ark. App. 203, 745 S.W.2d 635 (1988). When appellee [Mr. Guinn] withdrew the funds they ceased to be a part of the estate by the entireties. See Jackson v. Jackson, 298 Ark. 60, 765 S.W.2d 561 (1989). It is clear, however, that the appellee [Mr. Guinn] could not, merely by the act of withdrawing the funds from the joint account, acquire title to the funds as against the appellant [Mrs. Guinn].

35 Ark. App. at 202, 816 S.W.2d at 631.

Although the act of withdrawing funds from a joint account does not automatically vest title to those funds in the person withdrawing the funds, that is not to say that a trial judge cannot make an unequal division of property, whether marital or non-marital. Arkansas Code Annotated section 9-12-315(a)(1) (Repl. 2002) governs the division of marital property and provides:

(a) At the time a divorce decree is entered:

(1) (A) All marital property shall be distributed one-half (½) to each party unless the court finds such a division to be inequitable. In that event the court shall make some other division that the court deems equitable taking into consideration:

The length of the marriage;

Age, health, and station in life of the parties;

Occupation of the parties;

Amount and sources of income;

Vocational skills;

Employability;

Estate, liabilities, and needs of each party and opportunity of each for further acquisition of capital assets and income;

Contribution of each party in acquisition, preservation, or appreciation of marital property, including services as a homemaker; and

The federal income tax consequences of the court's division of property.

(B) When property is divided pursuant to the foregoing considerations the court must state its basis and reasons for not dividing the martial property equally between the parties, and the basis and reasons should be recited in the order entered in the matter.

Non-marital property may also be divided between the parties. Arkansas Code Annotated section 9-12-315(a)(2) provides:

All other property shall be returned to the party who owned it prior to the marriage unless the court shall make some other division that the court deems equitable taking into consideration those factors enumerated in subdivision (a)(1) of [Ark. Code Ann. § 9-12-315], in which event the court must state in writing its basis and reasons for not returning the property to the party who owned it at the time of the marriage.

In the present case, we are unable to determine how the trial judge categorized the funds comprising the $50,000 CD because he failed to state his reasons for the distribution as mandated by Ark. Code Ann. § 9-12-315(a). The failure of the trial judge to address the categorization of the property and his reasons for dividing it as he did erroneously implies that the first person to access a jointly held account in contemplation of divorce could withdraw the funds and take sole title to such funds as against his or her spouse. Therefore, we reverse and remand this case to the trial judge for consideration of whether the $50,000 CD was marital property or non-marital property; whether it should be unequally divided; and if so, to state the reasons for the distribution as required by Ark. Code Ann. § 9-12-315(a).

Reversed and remanded.

Neal and Crabtree, JJ., agree.