Sergio F. Soto v. Katherine Soto

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

SERGIO F. SOTO

APPELLANT

V.

KATHERINE SOTO

APPELLEE

CA04-65

SEPTEMBER29, 2004

APPEAL FROM THE POPE COUNTY CIRCUIT COURT

[NO. E 2001-80]

HON. RICHARD E. GARDNER, JR.,

CIRCUIT JUDGE

AFFIRMED

Josephine Linker Hart, Judge

Sergio F. Soto appeals from an order of the Pope County Circuit Court in a post-divorce proceeding in which he and the appellee, his ex-wife Katherine Soto, sought to enforce certain provisions in their July 5, 2001, divorce decree. On appeal, Sergio argues that the trial court erred in: 1) awarding $2,796.44 to Katherine because the decision was not supported by a preponderance of the evidence and it erred in denying his Rule 59 motion; 2) requiring Katherine to pay only one-half the value of the inlaid chest that she "destroyed"; and 3) finding that there was insufficient evidence that Katherine had damaged his grandfather clock. We affirm.

Both parties filed motions and amendments seeking to enforce portions of their divorce decree. All together, Katherine asked the court to enforce its award of a print and a lamp to her and to require Sergio to pay income taxes as ordered. Sergio sought to compel Katherine to turn over certain items of personal property awarded to him by the decree and requested compensation for an inlaid wooden chest, a grandfather clock, and a marble-top dresser that Katherine had allegedly damaged prior to relinquishing possession.

Additionally, although not raised in either party's pleadings, one final issue germane to this appeal emerged during the October 29, 2002, hearing on the motions. The divorce decree declared all real estate to be marital property and ordered the parties to list it with a realtor within 120 days. However, the parties agreed to allow Sergio's medical practice, Soto Cardiology, Inc., to buy the building in which it was located along with an adjacent lot. Katherine's share was to be one-half of the sale price, less the mortgage indebtedness at the time of sale. However, deducted from the gross proceeds was $5,582.88, represented on the HUD settlement statement as repayment of an unsecured bank loan. When questioned about it at the hearing, Sergio testified that the deduction was to repay a line of credit for his practice. Sergio's trial counsel stipulated that the divorce decree did not contemplate such a deduction. During closing arguments, Katherine's trial counsel asked the trial court to allow her to recoup half of the amount of the loan repayment as marital property.

The trial court found, in pertinent part, that the $5,582.88 deduction was not authorized by the divorce decree and awarded Katherine half, which was $2,796.44. Katherine was cited for contempt for damaging the inlaid chest and marble-top dresser, and the court ordered her to reimburse Sergio $3,465, which was half the value of the chest and the repair cost of the dresser. The court found that there was insufficient evidence concerning the damage to the grandfather clock and denied Sergio any relief as to that item. Similarly, the court found that Sergio could not produce the lamp and print that Katherine was seeking, but denied Katherine damages for those items.

Two days after the trial court made its ruling from the bench, Sergio filed a motion under Rule 59 of the Arkansas Rules of Civil Procedure, alleging that seven of the eight enumerated grounds for relief under the rule existed.1 Attached to the motion was an affidavit executed by Sergio in which he stated that he "now realize[d]" that the $5,582.88 loan repayment was not for a line of credit for his practice, which was his testimony at the hearing, but rather to pay off the purchase price of an adjacent lot that was sold along with the office building. A second affidavit, executed by Regions Bank vice-president Jeanna Eddleman, corroborated Sergio's explanation of the deduction. The motion was deemed denied, and Sergio appealed.

Sergio first argues that the trial court's decision to award $2,796.44 to Katherine was clearly erroneous because Katherine never requested the relief; the fact that the parties agreed to a buy-out rather than listing the property with a realtor constituted an out-of-court settlement that was "independent of the Decree"; and Katherine presented "absolutely no evidence that would support setting aside the parties' agreement" because she needed to prove fraudulent misrepresentation. We disagree.

First, we cannot accept Sergio's assertion that Katherine received relief that she had not requested. Although it was not raised in the motion or amendments that she filed, Katherine's supplemental abstract clearly shows that her trial counsel requested that relief in closing arguments. Furthermore, Sergio's trial counsel responded in his closing argument to Katherine's contention that the deduction for what was then believed to be a line of credit for Sergio's cardiology practice was improper. Finally, the evidentiary basis for the requested relief came through the testimony of Sergio himself, which was elicited by Katherine's trial counsel without objection.

Rule 15(b) of the Arkansas Rules of Civil Procedure states in part:

When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended in its discretion. The court may grant a continuance to enable the objecting party to meet such evidence.

Rule 15 vests broad discretion in the trial court to permit amendment to the pleadings, and the exercise of that discretion by the trial court will be sustained unless it is manifestly abused; one seeking reversal on that ground must show the manifest abuse of discretion. Wingfield v. Page, 278 Ark. 276, 644 S.W.2d 940 (1983). Here, we believe that the parties implicitly agreed to try this issue, and we hold that the trial court did not abuse its discretion in hearing it and rendering a decision.

Second, concerning Sergio's argument that the fact that the parties agreed to a buy-out rather than listing the property with a realtor made the transaction an out-of-court settlement that was "independent of the Decree," we are unable to see where this argument was raised to the trial court. Accordingly, because the abstract does not demonstrate that Sergio made this argument to the trial court, we will not address this argument on appeal. Webber v. Webber, 331 Ark. 395, 962 S.W.2d 345 (1998).

Finally, Sergio's contention that the settlement statement needed to be set aside for the court to provide the relief in question is simply a straw-man argument. We note that all Katherine signed was a "Certification" which recited:

I have carefully reviewed the HUD-1 Settlement Statement and to the best of my knowledge and belief, it is a true and accurate statement of all receipts and disbursements made on my account or by me in this transaction. I further certify that I have received a copy of the HUD-1 Settlement Statement.

We cannot agree that such a statement may be construed to relieve Sergio of any of the obligations imposed on him by the divorce decree. Significantly, Sergio's trial counsel stipulated that the divorce decree did not provide for a deduction of what Sergio testified was a business line of credit from the sale of marital property. Accordingly, we hold that setting aside the settlement statement was not a procedural predicate for the trial court's award of the relief in question.

Sergio further argues that the trial court erred in denying his Rule 59 motion because four of the eight grounds listed in the rule were present in this case. First, he contends that the "proceeding was irregular" in that the court awarded Katherine relief that she did not request, there was no notice that the issue was before the court before the court announced its ruling, and he did not have an opportunity to present evidence on the issue. Second, he argues that the same "reasoning" applies to surprise in that he was "surprised when the court announced its ruling granting relief that had not been requested." Third, he argues that the court erred in assessing the amount of recovery because the amount awarded was not requested. Forth, Sergio asserts that the award of $2,796.44 was contrary to the evidence. These arguments are without merit.

When we review a trial court's denial of a motion for a new trial, this court must determine whether the trial court abused its discretion. Swindle v. Lumbermens Mut. Cas. Co., 315 Ark. 415, 869 S.W.2d 681 (1993). Rule 59 of the Arkansas Rules of Civil Procedure provides in pertinent part:

(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the claim on the application of the party aggrieved, for any of the following grounds materially affecting the substantial rights of such party: (1) any irregularity in the proceedings or any order of court or abuse of discretion by which the party was prevented from having a fair trial; . . . (3) accident or surprise which ordinary prudence could not have prevented; . . . (5) error in the assessment of the amount of recovery, whether too large or too small; (6) the verdict or decision is clearly contrary to the preponderance of the evidence or is contrary to the law

For the reasons discussed previously, we summarily reject Sergio's contention that the "proceeding was irregular" and that the court erred in assessing the amount of the recovery because it is based on the faulty premise that the court awarded Katherine relief that she did not request. Also, as discussed above, we hold that Sergio's contention that the award of $2,796.44 was contrary to the evidence, is factually untenable. We reiterate that Katherine did not need to present evidence to set aside the settlement statement. Finally, regarding Sergio's allegation of "surprise," we hold that it also is without merit, but for a different reason. In Swindle v. Lumbermens Mutual Casualty. Co., supra, the supreme court reaffirmed the long-standing principle that both an objection and a request for a continuance are prerequisites to appellate review of a claim of surprise in civil cases. See also Thorne v. Magness, 34 Ark. App. 39, 805 S.W.2d 95 (1991). Here, Sergio neither objected to the testimony that he was required to give on the matter, nor asked for a continuance to secure the type of evidence that he later provided in the affidavits that were filed with his Rule 59 motion. Accordingly, we hold that the trial court did not abuse its discretion in refusing to grant a new trial.

We are not unmindful of the fact that if the affidavits are accurate, the deduction for the indebtedness on the adjacent lot would likely have been proper. However, we again note that it was Sergio's testimony at the hearing that misidentified the loan repayment as related to a line of credit for the cardiology practice and that his trial counsel stipulated that such a deduction was not allowed under the divorce decree. An appellant may not complain on appeal that the trial court erred if the appellant has induced, consented to, or acquiesced in the decision. Anderson v. Anderson, 60 Ark. App. 221, 963 S.W.2d 604 (1998).

Sergio next argues that the trial court erred in requiring Katherine to pay only one-half the value of his inlaid chest that she "destroyed." He acknowledges that there was testimony presented at the hearing from two experts, Billy Flannery and Aaron Skelton. Sergio correctly notes that Flannery set the value of the inlaid chest at $6,700.00 without the damage and opined that in its present condition he "doubt[ed] you'd get anything for it." He also acknowledges that Skelton, who had spent far less time in the furniture-repair business than Flannery, opined that the chest could be repaired, but urges us to discount that testimony because Skelton's opinion was only based on viewing the photographs of the damage. Sergio also notes that Skelton was only questioned on direct examination concerning repairs to the marble-top dresser, and that his opinion testimony concerning repairs to the inlaid chest was beyond the scope of direct, but does not directly challenge the trial court's ruling to admit that evidence in this appeal.

We review traditional equity cases de novo on the record and will not reverse a finding of fact by the trial judge unless it is clearly against the preponderance of the evidence. Williams v. Williams, 82 Ark. App. 294, 108 S.W.3d 629 (2003). In reviewing the trial judge's findings, we give due deference to the judge's superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. 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. Skokos v. Skokos, 344 Ark. 420, 40 S.W.3d 768 (2001). In order to demonstrate that the trial 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. Id.

This issue largely turns on a credibility determination made by the trial judge. Obviously, he found Billy Flannery's assessment that the damage made the inlaid chest worthless was not credible. The trial judge instead found more compelling the testimony of Aaron Skelton, who opined that the chest could be repaired. In this situation, we defer to the superior position of the trial judge. We further note that the trial judge had before him several color photographs that clearly show the extent of the damage to the chest. Contrary to what Sergio asserts, we believe that they provided an adequate basis for an expert witness to determine whether the damage could be repaired, as well a means by which the trial judge, sitting as the finder of fact, could evaluate the true condition of the chest. Moreover, we have the same pictures that the trial judge had before us, and based on our independent viewing of them, we cannot agree that the chest was "destroyed" or worthless. Accordingly, we hold that the trial court's award of one-half the value of the chest was not clearly erroneous.

Finally, Sergio argues that the finding of the trial court that there was insufficient evidence to show that Katherine damaged the grandfather clock was against the preponderance of the evidence. He claims that the clock was in good working order when it was left in the marital home in the possession of Katherine, and it was found to be damaged after he placed it in his home after he retrieved it from storage. Further, he notes that the clock repairman testified that the damage appeared to have been intentionally caused and was not the type of damage that would occur by moving the clock, and that the evidence established that Katherine "intentionally" damaged other items of his furniture.

As with Sergio's argument concerning the inlaid chest, this argument, to a large degree, turns on the credibility of witnesses. The record reveals that Katherine testified unequivocally that she did not intentionally damage the clock and that she had encountered some problems with the clock before the divorce. We are mindful that Katherine's behavior during the pendency of the divorce and its aftermath was at times reprehensible. Most egregious was her repeatedly ramming Sergio's BMW with her S.U.V. She also left a wooden book shelf outside in the yard and scarred the ornate inlaid chest, as discussed previously. However, we note that Katherine admitted to much of her disturbing conduct, and she also confessed that she damaged the marble-top dresser. Under these circumstances, we believe that the deference that we customarily afford a trial judge to resolve matters of witness credibility is applicable here.

Furthermore, Sergio presented relatively limited evidence concerning the condition of the clock when he picked it up from Katherine's residence, how it was moved, and how it was stored. It was established at the hearing that three individuals were hired by Sergio to remove his personal property, which included the grandfather clock, from the former marital residence. However, only one of the three movers, Rusty Reynolds, appeared at trial. Significantly, Reynolds testified that he did not remember moving a clock, and that if one was moved, he would have required the owner to "break it down." Indeed, Sergio testified that he did so. By so doing, we cannot say that the clock was completely under Katherine's control prior to Sergio's discovery that it was damaged. Finally, in finding that Sergio had failed to offer sufficient proof that Katherine had damaged the clock, we believe that the trial court was imposing the same standard of proof that it required when it rejected Katherine's claim for the lamp and the print. Under these circumstances, we cannot conclude that the trial court's ruling was arbitrary or groundless. Skokos v. Skokos, supra.

As a final note, Katherine has requested costs and attorney fees in accordance with Arkansas Supreme Court Rule 4-2(b)(1) (2003), for her expense in supplementing the abstract. While it is true that arguments of counsel are not evidence, in light of Sergio's oft-stated contention that the trial court provided relief relative to the loan repayment that had not been requested, we hold that Katherine's supplemental abstract was vital to the understanding of this issue on appeal, and Sergio's failure to include it in his abstract made it flagrantly deficient. Accordingly, we direct the appellee to Rule 4-2(b)(1) to make the appropriate filings in this court to recover costs for supplementing the abstract in this case. Affirmed.

Stroud, C.J., and Vaught, J., agree.

1 Sergio conceded that the ground concerning excessive damages given under the influence of passion or prejudice was not applicable.