Teresa Allen v. Chad P. Allen
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DIVISIONS I, II and III
CA 06-823
June 20, 2007
TERESA ALLEN
APPELLANT
APPEAL FROM THE LONOKE
COUNTY CIRCUIT COURT
[NO. DR-03-293]
V.
HONORABLE
PHILLIP
WHITEAKER, JUDGE
CHAD P. ALLEN
APPELLEE
T.
REVERSED AND REMANDED
SARAH J. HEFFLEY, Judge
Appellant Teresa Allen appeals from a post-decree order holding that she has no
marital interest in appellee Chad Allen’s full retirement benefits that vested during the
marriage. We agree that the trial court erred and reverse and remand.
The parties’ seven-year marriage ended with the entry of a divorce decree that was
filed of record on August 30, 2004. The decree contained several interrelated provisions
regarding the division of marital property. As pertinent to this appeal, the decree fixed
appellee’s marital interest in appellant’s business at $40,000.
Appellant was entitled,
however, to deduct from that sum her marital share of equipment appellee had sold and her
share of appellee’s retirement benefits. Specifically, the decree provided:
5. The parties have agreed that the [Appellant] shall retain
her business, All For Pets Veterinarian Clinic, as her sole and
separate property free from any right, title or claim by the
[Appellee]. The [Appellant] shall assume all debt associated
with the business and shall refinance any debt which is held
jointly by the parties. The [Appellant] shall hold the [Appellee]
harmless on the debt associated with the business.
The [Appellant] shall pay the [Appellee] the sum of $40,000
for his marital interest in the business. The [Appellant] shall
have the right to make the payment after the sale of the marital
residence from the proceeds from the sale of the residence.
The parties further agree that the [Appellant] shall be entitled
to use as a set-off her one-half of the sale proceeds from the
equipment and her one-half interest in the [Appellee’s]
retirement. After application of the sale proceeds from the sale
of the home and equipment and the retirement proceeds, if
there remains any money owed to [Appellee], the [Appellant]
shall pay the remaining amount at the rate of $500 per month
until paid in full.
6. The parties each have retirement. The parties shall divide
equally the retirement which accrued during the marriage.
Said retirement shall be divided pursuant to a Qualified
Domestic Relations Order.
Date of marriage August 23, 1997
Date of divorce June 24, 2004
7. The [Appellee] has sold certain items of equipment which
was marital property. The [Appellee] shall pay the [Appellant]
one-half of the sale proceeds from the sale of the equipment
upon entry of the decree.
The date-of-marriage and date-of-divorce recitals in paragraph six are in a font that
is different from the rest of the decree and were inserted and initialed by appellee’s attorney.
The date of divorce referred to in this insertion is the date that the divorce hearing was held,
June 24, 2004, rather than the date the divorce decree was entered, August 30, 2004.
Appellant’s attorney signed her approval of the decree.
After the decree was entered, the parties could not come to terms over the dollar
amount of the deductions appellant was allowed to subtract from the $40,000 that
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represented appellee’s interest in appellant’s business. This dispute prompted appellee to file
a “Motion to Enforce the Decree” on December 15, 2005. At the hearing held on March
2, 2006, appellee took the position that appellant was not allowed to calculate her half of
the equipment that was sold from the total proceeds of the sale. He contended that she was
only entitled to one-half of the net proceeds, after the debt on the equipment was satisfied.
Appellee also asserted that appellant was not entitled to share in his full retirement benefits.
Appellee put on evidence that, as of June 24, 2004, he was only vested in his retirement in
the amount of the contributions that he had made, but that it was not until July 1, 2004,
that he became fully vested in his retirement plan. Appellee argued that, because the decree
recited that the date of the divorce was June 24, 2004, appellant was not entitled to share
in the contributions made by his employer that vested on the subsequent date of July 1,
2004. At the hearing, appellee’s attorney candidly admitted that he had not disclosed the
vesting date to appellant prior to the divorce.
The trial court ruled in favor of appellee on both of his arguments. The trial court
permitted deductions of $13,000 for the equipment, representing appellant’s one-half share
of the net proceeds from the sale, and $5,721 for appellee’s retirement, as limited to one-half
of appellee’s contributions. After other deductions not relevant here, appellant was ordered
to pay appellee $16,283.25. Appellant appeals from the order setting out the trial court’s
decision, challenging only that part of the order concerning appellee’s retirement benefits.
We review traditional equity cases on both factual and legal questions de novo on
the record, but we will not reverse a finding by the trial court unless it is clearly erroneous.
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Crosby v. Crosby, ___ Ark. App. ___, ___ S.W.3d ___ (Feb. 7, 2007). We do not defer to
the trial court’s determinations of law. Pittman v. Pittman, 84 Ark. App. 293, 139 S.W.3d
134 (2003).
Appellant is entirely correct in her argument that marital property is to be divided
as of the time of the divorce. Skokos v. Skokos, 344 Ark. 420, 40 S.W.3d 768 (2001).
Moreover, the decree provided that the parties were to “divide equally the retirement which
accrued during the marriage.” Thus, we agree with appellant that the trial court clearly erred
in its decision. The decree erroneously recited June 24, 2004, as the date of the divorce.
However, that was the date of the divorce hearing, not the date of the actual divorce. It
is firmly established, both by rule and our case law, that a judgment or decree is not effective
until it is entered as provided in Ark. R. Civ. P. 58 and Administrative Rule 2. Price v.
Price, 341 Ark. 311, 16 S.W.3d 248 (2000); Standridge v. Standridge, 298 Ark. 494, 769
S.W.2d 12 (1989). See also Shackelford v. Arkansas Power & Light Co., 334 Ark. 634, 976
S.W.2d 950 (1998); Blaylock v. Shearson Lehman Bros., Inc., 330 Ark. 620, 954 S.W.2d 939
(1997); Clayton v. State, 321 Ark. 217, 900 S.W.2d 537 (1995); General Motors Acceptance
Corp. v. Eubanks, 318 Ark. 640, 887 S.W.2d 292 (1994); Nance v. State, 318 Ark. 758, 891
S.W.2d 26 (1994); Kelly v. Kelly, 310 Ark. 244, 835 S.W.2d 869 (1992); Filyaw v. Bouton,
87 Ark. App. 320, 191 S.W.3d 540 (2004); A-1 Bonding v. State, 64 Ark. App. 135, 984
S.W.2d 29 (1998); Morrell v. Morrell, 48 Ark. App. 54, 889 S.W.2d 772 (1994); Brown v.
Imboden, 28 Ark. App. 127, 771 S.W.2d 312 (1989).
A judgment, decree, or order is
“entered” when it is stamped or marked by the clerk. Price v. Price, supra; Adm. Order No.
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2. The purpose of this law is to provide a definite point at which a judgment, be it a decree
of divorce or other final judicial act, becomes effective. Standridge v. Standridge, supra. It is
also meant to eliminate disputes between litigants. Price v. Price, supra. It follows that, by
law, the parties’ marriage did not end until the decree was filed on August 30, 2004.
Consequently, appellant is entitled to share in all of appellee’s retirement benefits that
accrued prior to that date in accordance with paragraph six of the decree. In our view, the
settled law establishing a definitive point in time when a judgment or decree becomes
effective cannot be subverted by a recital in a decree. We thus reverse the trial court’s
order.
We also reject appellee’s assertion that acceptance of appellant’s argument violates the
provisions of Ark. R. Civ. P. 60 by modifying the decree past the rule’s ninety-day
deadline. Rather, our holding is an interpretation of the decree that is consonant with the
law and the undisputed facts of this case. Also, there is no improper modification at work
here. In Tyer v. Tyer, 56 Ark. App. 21, 937 S.W.2d 667 (1997), the case appellee cites, we
did hold that under Rule 60 the trial court lacked jurisdiction to modify a divorce decree
to include the distribution of marital property that was not mentioned in the divorce decree.
However, that holding presupposes that the decree of divorce was a final order. That is not
the case here.
For a judgment to be final, it must dismiss the parties from the court, discharge them
from the action, or conclude their rights to the subject matter in controversy. Roberts v.
Roberts, 70 Ark. App. 94, 14 S.W.3d 529 (2000). An order is not final and appealable
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merely because it settles the issue as a matter of law; to be final, the order must also put the
court’s directive into execution, ending the litigation or a separable branch of it. Morton v.
Morton, 61 Ark. App. 161, 965 S.W.2d 809 (1998). The amount of the judgment must be
computed, as near as may be, in dollars and cents, so as to be enforced by execution or some
other appropriate manner. Thomas v. McElroy, 243 Ark. 465, 420 S.W.2d 530 (1967). See
also, Hastings v. Planters & Stockmen Bank, 296 Ark. 409, 757 S.W.2d 546 (1989); Morton v.
Morton, supra; Meadors v. Meadors, 58 Ark. App. 96, 946 S.W.2d 724 (1997). Accord Office
of Child Support Enforcement v. Oliver, 324 Ark. 447, 921 S.W.2d 602 (1996); White v.
Mattingly, 89 Ark. App. 55, 199 S.W.3d 724 (2004).
In Thomas v. McElroy, supra, the supreme court discussed the formal requirements of
a judgment in the context of deciding what constituted a final judgment. There, McElroy
had filed suit against Thomas for unpaid rent. After a hearing, the trial court entered an
order finding that Thomas owed $40 a month during the period between December 9,
1963, and July 8, 1964. About a year later, the trial court entered an order that granted
judgment against Thomas in the amount of $760. Thomas argued on appeal that the first
order was a final judgment and that the trial court had no authority to modify it a year later.
The supreme court disagreed, enunciating the rule that to be final, a judgment for money
must state the amount that the defendant is required to pay. The supreme court thus held
that the trial court did not err by entering judgment at a later date because the first order
was not a final judgment since the amount owed for rent was not stated in dollars and cents.
See also Villines v. Harris, 362 Ark. 393, 208 S.W.3d 763 (2005) (holding that, although a
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previous order set out a formula for calculating damages, the order was not final because it
did not establish the amount of damages); Office of Child Support Enforcement v. Oliver, supra
(holding that an order was not final where an arrearage in child support was found but the
amount of the arrearage was not determined); Hastings v. Planters & Stockmen Bank, supra
(holding that an order of summary judgment was not final where the amount owed was not
specified in dollars and cents).
In this case, the decree provided that appellant owed appellee $40,000 for his interest
in appellant’s business, but that sum was to be reduced by set-offs in unstated amounts. The
decree was not self-executing, as it did not state with specificity the amount of money
appellant was required to pay. The decree was not a final order, and obviously so, since its
omissions and lack of certainty gave rise to further litigation.
We also disagree with appellee’s contention that appellant is guilty of unclean hands
because she did not pay what was owed under the decree. The clean-hands doctrine bars
relief to those guilty of improper conduct in the matter as to which they seek relief.
Nationsbanc Mtg. Co. v. Hopkins, 87 Ark. App. 297, 190 S.W.3d 299 (2004). As is evident
by our decision, the amount appellant owed was subject to legitimate dispute. We see no
basis for the application of the clean-hands defense here.
To conclude, we reverse and remand for proceedings consistent with this opinion.
Reversed and remanded.
H ART, G RIFFEN, M ILLER and B AKER, JJ., agree.
M ARSHALL, J., concurs in part and dissents in part.
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P ITTMAN, C.J., G LOVER and R OBBINS, JJ., dissent.
D.P. Marshall Jr., Judge, concurring in part and dissenting in part. I would reverse and
remand for the circuit court to explain why it construed this final, but ambiguous, decree
in the way it did.
David M. Glover, Judge, dissenting. I respectfully dissent from the majority opinion in this
case regarding the effect of paragraph 6 of the parties’ divorce decree, which included the
following provisions:
6. The parties each have retirement. The parties shall divide equally the retirement
which accrued during the marriage. Said retirement shall be divided pursuant to a
Qualified Domestic Relations Order.
Date of marriage August 23, 1997.
Date of divorce June 24, 2004.
The specific property addressed in paragraph 6 was retirement accounts, and, as
acknowledged in the majority opinion, the date-of-marriage and date-of-divorce recitals
inserted beside this paragraph were 1) typed in a different font and 2) inserted and initialed
by appellee’s attorney.
However, along with appellee’s counsel, appellant’s attorney
sometime thereafter signed her approval on the decree, which was then signed by the court
and entered on August 30, 2004. No appeal was taken from the decree, and neither was
a motion filed pursuant to Rule 60 of the Arkansas Rules of Civil Procedure. Instead, this
appeal arose from an April 25, 2006 order that was entered by the trial court following a
March 2, 2006 hearing on appellee’s motion to enforce decree.
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The majority concludes that the trial court clearly erred in holding that appellant had
no marital interest in appellee’s retirement benefits that vested after June 24, 2004, reasoning
that the decree provided that the parties were to “divide equally the retirement which
accrued during the marriage,” that marital property is to be divided as of the time of the
divorce, and that the divorce decree did not become effective until it was entered on August
30, 2004. Accordingly, the majority interprets paragraph 6 of the divorce decree as entitling
appellant to share in all of appellee’s retirement benefits that accrued prior to August 30,
2004, rejecting the June 24, 2004 date inserted into paragraph 6 by appellee, which was
agreed to by both parties and approved by the trial court. I disagree.
The majority characterizes the parties’ recitation of the June 24, 2004 date as error.
In my opinion, however, the reasonable inference to draw from this date is that it was
inserted for purposes of valuation of the retirement accounts. Arkansas Code Annotated
section 9-12-315(a) ties distribution of marital property to the time a decree is entered. The
statute does not prohibit valuation of marital property at an earlier, agreed upon date, which
occurred here.
Appellant’s counsel confirmed in her reply brief, though not referenced by the
majority opinion, her realization, albeit “after-the-fact,” that “[i]t is now clear why
Appellee’s trial counsel argued to put June 24, 2004 in the decree....” The majority opinion
notes that when the issue was first addressed (which was at the hearing on appellee’s motion
to enforce the decree), appellee’s attorney candidly admitted that he had not disclosed to
appellant the vesting date of the retirement account. The issue raised by appellant on appeal
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addresses the burden of disclosure. The admission of appellee’s counsel at the post-trial
hearing and the issue now raised by appellant together suggest the need for a review of what
relevant information was produced in the trial process. First, the appellate record before us
does not include any exhibits offered by appellant at the June 24, 2004 final hearing
confirming the dollar amount, accrued time, or vesting date of appellee’s retirement plan.
Neither does the record disclose that appellant utilized any standard discovery
techniques—depositions, interrogatories, and requests for admission and production of
documents—to obtain relevent information from appellee concerning his retirement
information.
What the record does include are three retirement-related exhibits, all
introduced at the March 2, 2006 post-divorce hearing, and only one of which was by
appellant, from which this appeal originated. Significantly, on March 2, 2006, appellant first
produced for consideration by the trial court some documentation of appellee’s entitlement
to retirement benefits. That sole exhibit, however, was the March 31, 2003 quarterly report
of appellee’s retirement account, disclosing only limited information about its value as of
that date.
P ITTMAN, C.J., and R OBBINS, J., join in this dissent.
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