Tammy Throckmorton v. Olen Wayne Throckmorton

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION II

TAMMY THROCKMORTON

APPELLANT

V.

OLEN WAYNE THROCKMORTON

APPELLEE

CA 04-190

FEBRUARY 9, 2005

APPEAL FROM THE WHITE

COUNTY CIRCUIT COURT

[NO. DR 02-975]

HONORABLE ROBERT CRAIG

HANNAH, JUDGE

AFFIRMED

John B. Robbins, Judge

Appellant Tammy Throckmorton appeals the October 28, 2003, decree of the White County Circuit Court granting her a divorce from appellee Olen Wayne Throckmorton and dividing the marital estate. On appeal, appellant challenges the circuit court's division of property, asserting that it erred by: (1) failing to find that appellee committed fraud when he removed $39,000 from marital accounts prior to appellant's complaint for separate maintenance; (2) improperly dividing the bank account funds acquired after the filing of appellant's complaint for separate maintenance; (3) improperly dividing appellee's pension benefits; and (4) improperly dividing the responsibility for payment of a debt owed by the parties' dissolved corporation. We affirm.

Our standard of review is well settled. We review domestic relations decisions de novo on the record. Nielsen v. Berger-Nielsen, 347 Ark. 996, 69 S.W.3d 414 (2002).

Although review is de novo, we will not reverse a finding of fact by the trial judge unless it is clearly erroneous. Norman v. Norman, 342 Ark. 493, 30 S.W.3d 83 (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. Nielsen, supra. In order to demonstrate that the trial judge'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, 344 Ark. 420, 425, 40 S.W.3d 768 (2001). Where an issue turns on the credibility of the witnesses, we give due deference to the trial judge's superior position to determine credibility and the weight to be accorded to testimony. See Banks v. Evans, 347 Ark. 383, 64 S.W.3d 746 (2002). Conclusions of law are not given the same deference because if the trial judge erroneously applies the law and an appellant suffers prejudice, the erroneous ruling should be reversed. Vowell v. Fairfield Bay Cmty. Club, Inc., 346 Ark. 270, 58 S.W.3d 324 (2001).

In order to apply the proper standard of review, we set forth the relevant evidence and testimony. The parties married on June 29, 1992, and separated on November 7, 2002. They had no children together during this marriage, but both had children from previous marriages. Initially, the parties contemplated a six-month trial separation. She worked as a medical technologist; he worked as a union organizer. Appellee moved to Texas, though his paychecks continued to be deposited in their marital account. On November 25, 2002, appellant filed a complaint for separate maintenance from appellee, eventually amending her pleadings to seek a divorce from appellee. On December 4, 2002, the circuit court entered a mutual restraining order that included a prohibition from either party disposing of or removing any property belonging to the parties "except in the ordinary course of business." This divorce proceeding focused on the division of their assets and debts. At thehearing conducted on August 7, 2003, appellant was age thirty-nine; appellee was age fifty-nine. Appellant testified that she had worked for the last two and a half years as a medical technologist for the University of Arkansas for Medical Sciences, during which she saved money in a pension plan. Her affidavit of financial means stated monthly expenses of $2,650.89. Though she had completed her education to work as a medical technologist early in the marriage, she changed her employment to operate a daycare they built in Bald Knob called Cradles to Crayons. The daycare was owned by them via a corporation they formed, but the corporation was dissolved prior to the divorce proceedings being initiated. The current lessee of the daycare was interested in buying the facility, but a deal had not been solidified. Both parties acknowledged that a letter had been sent to them by the Arkansas Employment Security Department stating that the daycare owed the State $5,563.42. Appellant's counsel stated that her client was disputing the debt, and both parties submitted the letter as a joint exhibit.

Appellant testified about appellee's work history, noting that early in the marriage, he worked for only a few months during each year as a pipeline welder and spent the rest of his time doing whatever he wanted and drawing unemployment. Then, in the year 2000, appellee took on the job of being a union organizer, which kept him away from home for the majority of the time. The parties kept in contact by telephone, and appellant paid all of their bills out of their commingled funds, which included monthly reimbursements that appellee received for expenses he incurred as a union organizer. Appellant prepared the monthly reimbursement requests for appellee until his employer provided a company credit card.

Appellant complained that beginning in April 2002, appellee made excessive and fraudulent withdrawals of money from their checking accounts. She presented their checking account information, showing exact dates and amounts in the thousands where appellee had taken money out of various accounts. Appellant demonstrated that the withdrawals from the joint account were as follows: April 15, 2002-- $5,000; May 21, 2002-$5,000; June 21, 2002-$1,000; July 2, 2002-$3,000; August 13, 2002-$5,000; September 26, 2002-$3,000; November 12, 2002-$2,000. There was also a $15,000 cash withdrawal from appellee's individual account on November 12, 2002. Appellant asserted that these withdrawals over eight months averaged $3,000 per month, whereas in the months preceding their discussions of divorce, he had withdrawn an average of $612 per month. Appellant requested to be awarded half of the $39,000 appellee withdrew from their marital accounts between April 15 and November 12, 2002. In addition, appellant requested that she be awarded half of the marital funds acquired after their separation.

Appellant agreed that appellee always liked to have money with him, generally around $2,000 at any given time. Appellant anticipated appellee explaining his excessive use of marital funds before she filed her suit as payment for gambling debts, but she did not believe that to be true. She stated that while they were together, she knew of her husband gambling twice, and he had told her that he did not like it and called it a waste of time. She believed that he was generally hiding money from her in preparation for the divorce.

Appellee testified that he had been a member of the union for the pipeline industry since May 1966, which provided a pension plan called the Pipeline Industry Benefit Fund. Appellee explained that he had been a pipefitter since 1961, he had been a union member since 1966, and he had become a union organizer in 2000. He had no details about contribution amounts, effective dates, or any other material terms regarding his retirement, but he knew he was vested. Appellee also thought that he might be eligible for another pension plan, but he was uncertain and confused about its status.

Appellee testified that he was not good with figures or accounting, and he preferred to deal in cash. He said that while they were married, he paid his wife to do his expense reports for monthly reimbursements until he was issued a company credit card. In discussing his income and expenses, appellee explained that he had an accountant prepare his affidavit of financial means and that he had insisted that she insert conservative estimates, which showed his monthly expenses to be $1,997. In particular, appellee pointed out that his $50 estimate in business expenses was low because not all expenses would be reimbursed, his $200 estimate for meals outside the home was low because he ate out so often, and his $200 estimate in entertainment was low because his employer did not always pay for his entertainment for clients. Appellee said that his actual expenditures varied monthly, so he planned to explain in better detail in court.

With regard to the accusations that he took excessive amounts of money out of their accounts in the months leading up to their separation, appellee did not deny accuracy of the bank records. However, he stated that he needed living expenses when he moved to Texas, and he became "hooked" on gambling in casinos and lost a substantial amount of money. Appellee stated that of the $15,000 he took out of his account in Texas, he gave $10,000 of it to his son because his son and grandson were in need of financial assistance. Because he usually dealt in cash, he had no supportive documents. Appellee denied that he moved cash to a lock box to keep it from appellant; he said that the lock box was empty. He added that he supported his wife and the family while appellant went to college for her medical technologist degree, and that he bought the lot and built the daycare for his wife to run, for which appellant had agreed to pay him back but had not. He also recalled that he had bought a vehicle for appellant's daughters to use. In sum, appellee's position was that he did notdefraud anyone, that both parties were employed and used money out of the accounts, and that appellant had additional income from child support received from her ex-husband.

The trial judge rendered findings orally at the conclusion of the evidence, granting appellant a divorce from appellee, and dividing evenly the value of the marital home, the value of the property and income generated by the daycare, the value of appellant's retirement plan with UAMS garnered solely during the marriage, and the value of a particularized list of items set for auction. Each party was awarded his or her own personal effects and equal division was made of various specific items not relevant to this appeal. The trial judge divided appellee's pension fund by finding that appellee had 446 months of participation at the time of the hearing, and the parties had been married for 133 of those months, awarding appellant half of that fractional share. With regard to appellant's allegation that appellee fraudulently removed $39,000 from their joint accounts prior to the filing of her complaint for separate maintenance, the trial judge found no proof to sustain that allegation. In dividing the monies in the bank accounts after their separation, the trial judge determined that each party should be credited for an arbitrary amount of $3,000 in monthly living expenses and, after calculating the amounts that each party exceeded those amounts per month, ordered appellee to pay appellant half of the difference between those figures. The trial judge found that the parties would each be responsible for half of the disputed tax debt owed to the State, if it resulted in liability. This appeal followed.

Appellant first argues that she proved that appellee systematically removed a total of $39,000 from two accounts (a joint account at Regions Bank and appellee's individual account in a Texas bank) between the time they had discussed getting divorced until appellant filed her complaint for separate maintenance, entitling her to an award of half of that amount from appellee. The trial judge found no evidence of fraud regarding these withdrawals that occurred before any divorce proceedings were begun, so he declined to grant appellant's request. She argues that this ruling was clearly erroneous.

Appellant's argument does not persuade on appeal. At the time these monies were spent, the parties were equally entitled to expend their marital funds, and no court order had been entered to limit those rights. This issue turned on credibility. We are not convinced that the trial judge clearly erred in his assessment that there was a failure to prove wrongdoing or fraud. We affirm on this point.

For her second point on appeal, appellant argues that the trial judge clearly erred in the manner of dividing the bank account funds accrued after the filing of the complaint in November 2002. In her brief, appellant argues that the trial judge erred by increasing the allowance for monthly expenses on appellee's behalf from $1,997 found in his affidavit of financial means to the admittedly arbitrary amount of $3,000 without any rational basis for doing so, resulting in an unfair "credit" to appellee.1 Appellant asserts that this erroneous $1,003 per month allowance over six months (December 2002 through May 2003) requires that appellant be awarded an additional sum of half of that amount, or $3,009. In addition, she asserts that martial property is all property acquired during the marriage, subject to exceptions not relevant to this issue, Ark. Code Ann. § 9-12-315 (Repl. 2002), and that all marital property must be divided equally between the parties. Gray v. Gray, 352 Ark. 443, 101 S.W.3d 816 (2003). We disagree with appellant that she has demonstrated reversible error.

Appellant correctly states that the Arkansas marital-property statute requires that marital property be divided evenly between the parties unless the circuit court finds that such a division would be inequitable. Ark. Code Ann. § 9-12-315(a)(1)(A) (Repl. 2002). Section 9-12-315 does not compel mathematical precision in the distribution of property; it simply requires that marital property be distributed equitably. Creson v. Creson, 53 Ark. App. 41, 917 S.W.2d 553 (1996). The trial court is vested with a measure of flexibility and broad power in apportioning the total assets held in the marital estate upon divorce in order to achieve an equitable distribution. Id.

The trial judge considered his mutual restraining order issued on December 4, 2002, which prevented either party from disposing of marital property "except in the ordinary course of business," as the threshold in determining how to divide the marital accounts. In our de novo review, we hold that while the trial judge erred in using, in his words, an "arbitrary" figure of $3,000 for monthly expenses for either party, the overall distribution is equitable. This is so because the figure used by the judge, which he called "arbitrary," actually resulted in an equal division of the marital accounts. Awarding half of the difference in the amounts taken out of the accounts rendered an award of equal amounts of monies to each party during the period of time in question. On de novo review, we are not persuaded that appellant should be awarded an additional $3,009.

Appellant next contends that the trial judge erred by finding that appellee had 446 months of participation in his retirement plan, corresponding to his joining the union in May 1966. Instead, appellant contends on appeal2 that she is entitled to an award of half of the value of his retirement for the 133 months they were married, without assigning a number of months or years to appellee's participation because there is no evidence upon which to do so. Appellee counters that with the evidence presented to the trial judge, he made a fair and equitable discretionary decision, using a long-approved method that should be affirmed.

Pension benefits based on contribution or services outside the period of the marriage constitute non-marital property, and an award of retirement benefits should reflect the correct proportionate share of each party. See Askins v. Askins, 288 Ark. 333, 704 S.W.2d 632 (1986); Marshall v. Marshall, 285 Ark. 426, 688 S.W.2d 279 (1985). However, if the retirement or pension benefits are garnered entirely during the marriage, then there should be an equal division. See id. Neither the statute regarding the division of marital property nor the court's opinion in Askins v. Askins, supra, was intended to tie the trial judge to any specific formula for dividing prospective retirement benefits. Cherry v. Cherry, 55 Ark. App. 178, 934 S.W.2d 936 (1996).

Both parties agree that in Arkansas there are three generally accepted methods for dividing the value of pension benefits acquired during marriage. See, e.g., Addis v. Addis, 288 Ark. 205, 703 S.W.2d 852 (1986). Appellant argues that the evidence before the court was not sufficient to permit the court to divide these benefits as it did on a percentage formula. We recognize that there was little evidence presented of just when appellee's participation in the union's pension plan began, however, he testified that he became a member of the union in 1966, and appellant did not compel production of further documentation. As was done in Addis v. Addis, supra, we hold that because the trial court could value the rights only upon the evidence presented, and it used an acceptable formula, his finding was not clearly erroneous.

For her last point on appeal, appellant argues that the trial judge clearly erred by assigning both parties to be equally responsible for the State debt "if any," related to their corporate operation of the daycare. Her argument is that because this was a defunct corporation, there was no evidence that either person would be required to repay the debt, such that there was no marital debt to divide. Appellee counters this argument by stating that this was an agreed resolution by both parties, simply enforced by the court. Appellee points to the discussion on the record where appellant's counsel told the judge that appellant was disputing the debt, and points out that the State's letter was entered as a joint exhibit. Appellee in his brief states that there was a subsequent contempt hearing during which appellant was ordered to repay appellee for half of the amount he paid to the State.3

We hold that the trial court did not err. If appellant is correct that there is no collectible debt, there is no resulting prejudice. See City of Lowell v. M & N Mobile Home Park, Inc., 323 Ark. 332, 916 S.W.2d 95 (1996). We do not reverse in the absence of prejudice. See id.

Affirmed.

Gladwin and Neal, JJ., agree.

1 While transactions occurring after the commencement of a divorce action may be subjected to a closer scrutiny, appellant cites no authority, and we know of none, to indicate that a married person's right to use and expend marital funds is somehow automatically terminated.

2 In her post-trial brief, appellant urged the trial court to find that appellee was entitled to actual service credits of 335 months, translating into a higher benefit to appellant for the 133 months of their marriage. There is no basis offered in her brief for the proposed 335 months.

3 The alleged contempt proceedings are not contained within the record before us on appeal.