Mulling v. Mulling

Kevin R. MULLING v. Teresa W. MULLING

95-333                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered January 16, 1996


1.   Divorce -- alimony -- chancellor can make award of alimony
     that is reasonable under circumstances. -- The chancellor can
     make an award of alimony that is reasonable under the
     circumstances.

2.   Divorce -- alimony -- purpose of -- primary factors. -- The
     purpose of alimony is to rectify economic imbalance in earning
     power and standard of living in light of the particular facts
     in each case; the primary factors to be considered in making
     an award of alimony are the need of one spouse and the other
     spouse's ability to pay.

3.   Divorce -- alimony -- chancellor did not abuse discretion in
     reserving award of alimony. -- Where the parties had been
     married for thirteen years and had three children; appellee
     had obtained a marketing degree but never worked after her
     marriage; appellee, after filing for divorce, was employed as
     a substitute teacher in elementary school and worked as a real
     estate agent; appellee, according to her testimony, earned
     $85.00 per month during the pendency of the divorce, while her
     monthly expenses amounted to $2,038.99; appellant was an
     engineer and had previously worked in that capacity;
     appellant, at the time the divorce action commenced, earned a
     base salary of $65,000.00 a year and an additional yearly
     amount of $10,000.00 in overtime but, at the time the parties'
     divorce was granted, was receiving unemployment pay in the
     amount of $256.00 per week and a monthly pension in the sum of
     $306.01, with monthly living expenses at about $735.00;
     appellant testified that he could not presently get a job in
     his industry but expected that he could find employment paying
     around $35,000.00 to $40,000.00 per year; the supreme court
     could not say that the chancellor abused his discretion in
     reserving an award of alimony, at least for a period necessary
     for appellee to re-enter gainful employment.

4.   Divorce -- alimony -- where spouse is unable to pay at time
     decree is entered, court may decline to award specific amount
     until such time as changed circumstances permit payment of
     alimony. -- Where either spouse is entitled to alimony, but
     circumstances prevent the spouse who is to pay from being able
     to do so, the chancellor may recite that fact and decline to
     award a specific amount until circumstances change in a way
     that will permit the payment of alimony, and the party who has
     been determined to be entitled to it petitions the court.

5.   Divorce -- alimony -- decree modified to reflect that
     appellant's unemployment prevented him from paying alimony at
     time of entry of decree. -- The supreme court affirmed the
     chancellor's intention to reserve the possible fixing of a
     specific and reasonable amount of alimony at a future time
     when the circumstances would permit it; the court, however, 
     modified the chancellor's divorce decree to reflect that
     appellant's unemployment prevented him from paying alimony at
     the time of entry of the decree, although his earning capacity
     would otherwise warrant such an award; the appellate court
     directed that the decree should be amended to reserve to
     appellee the right to petition the trial court to establish an
     alimony amount if circumstances change.

6.   Divorce -- alimony -- conflicting case law overruled. -- The
     supreme court overruled Ford v. Ford, 272 Ark. 506, 616 S.W.2d 3 (1981), to the extent that it conflcited with Grady v.
     Grady, 295 Ark. 94, 747 S.W.2d 77 (1988), noting that if a
     spouse shows a need for alimony, and the other spouse is shown
     to have the ability or earning capacity to pay alimony except
     for a circumstance at the time the parties' decree is entered,
     the chancellor may reserve jurisdiction, without assigning a
     nominal amount; this procedure would permit the spouse
     requesting alimony to petition for its payment after showing
     a change in circumstance.

7.   Divorce -- division of proceeds -- record supported
     chancellor's finding that parties had settled respective
     equity interests in house by agreeing to sell and divide
     proceeds. -- Where appellant argued that the chancellor erred
     in failing to award him the first $8,000.00 of the sales
     proceeds of the parties' house, the supreme court held that
     the record supported the chancellor's finding that the parties
     had settled their respective equity interests in their home by
     agreeing to sell and divide the proceeds.

8.   Property -- tenancy by the entirety -- rebuttable presumption
     of gift from party furnishing consideration. -- Where a
     husband and wife purchase property as a tenancy by the
     entirety, there arises a presumption of a gift from the party
     furnishing the greater part of the consideration to the other
     party, which, although rebuttable, is strong and can be
     overcome only by clear and convincing evidence; in the present
     case, the supreme court found no evidence to rebut the
     presumption that the $8,000.00 received by appellant from the
     sale of a house before his marriage and used by the parties to
     purchase property during their marriage was a gift.


     Appeal from Pope Chancery Court; Richard Gardner, Chancellor;
affirmed as modified.
     Dunham & Ramey, P.A., by: James Dunham, for appellant.
     William F. Smith, for appellee.

     Tom Glaze, Justice.






KEVIN R. MULLING,
                    APPELLANT,

V.

TERESA W. MULLING,
                    APPELLEE.



95-333

Opinion Delivered:  1-16-96

APPEAL FROM THE CHANCERY COURT
OF POPE COUNTY, ARKANSAS, NO.
E-94-134; HONORABLE RICHARD
GARDNER, CHANCERY JUDGE 


AFFIRMED AS MODIFIED




                  TOM GLAZE, Associate Justice

     Appellee Teresa Mulling filed suit for divorce against
appellant Kevin Mulling, and after a contested hearing, the
chancellor granted Teresa a divorce and awarded her custody of the
parties' three children.  Kevin, who had resigned his job during
the pendency of the action, was ordered to pay $117.00 child
support per week, which sum would be reduced to $107.00 per week
when Teresa commenced receiving one-half of Kevin's $306.01 monthly
pension.  The chancellor further ordered Kevin to pay $1.00 per
month alimony for a five-year period, but alimony would terminate
upon Teresa's remarriage or death.  The trial judge also approved
the parties' settlement concerning household effects, automobiles
and personal effects, including the already equally divided equity
from the sale of the parties' "jointly-owned" house.  Kevin appeals
from (1) the chancellor's award of alimony and (2) the judge's
failure to award Kevin the first $8,000.00 from the parties' equity
in the house proceeds.  In arguing his second point, Kevin argues
the $8,000.00 amount he seeks can be traced to his separate
property owned prior to marriage.
     Kevin first argues the evidence is insufficient to support an
alimony award.  This court has held that the chancellor can make an
award of alimony that is reasonable under the circumstances.  See
Harvey v. Harvey, 295 Ark. 102, 747 S.W.2d 89 (1988); Ark. Code
Ann.  9-12-312(a)(1) (Repl. 1993).  The court has also said that
the purpose of alimony is to rectify economic imbalance in earning
power and standard of living in light of the particular facts in
each case.  The primary factors to be considered are the need of
one spouse and the other spouse's ability to pay.  Id.; see also
Boyles v. Boyles, 268 Ark. 120, 594 S.W.2d 17 (1980), (where this
court listed illustrative factors courts have used when fixing the
alimony amount).
     In this case, the parties have been married thirteen years,
and Teresa bore three children during the marriage.  Although
Teresa had obtained a marketing degree from the University of North
Alabama, she never worked after her marriage to Kevin.  During
college and immediately prior to marriage, Teresa had worked as a
legal secretary and also as a health physics technician with the
Tennessee Valley Authority (TVA).  After filing for divorce, Teresa
was employed as a substitute teacher in elementary school and
worked as a real estate agent.  Her monthly income earned during
the pendency of the divorce was $85.00.  Teresa testified she has
no health or physical limitations, and she was trying to locate a
job that would permit her to be home at night and on the weekends
with the children.  Teresa testified that her monthly expenses
amounted to $2,038.99.
     Kevin, on the other hand, is an engineer and had previously
worked in that capacity at TVA and later with Entergy at Arkansas
Nuclear One in Russellville.  When this action commenced, his base
salary was $65,000.00 a year, and he earned an additional yearly
amount of $10,000.00 in overtime.  Sometime after the divorce suit
was filed, Kevin was apparently given the option to resign by
Entergy because Kevin had a "drinking problem."  When the parties'
divorce was granted, Kevin was receiving unemployment pay in the
amount of $256.00 per week.  He also received a monthly pension in
the sum of $306.01.  Kevin testified that he could not presently
get a job in his industry, but he otherwise expected he could find
employment paying around $35,000.00 to $40,000.00 per year.  Kevin
further listed his monthly living expenses at about $735.00.  At
the time the parties' divorce was granted, Kevin testified that he
had spent most of the proceeds he had received from the sale of the
parties' house to meet his monthly expenses plus his child support,
alimony, bills and insurance ordered under the trial court's
temporary order.
     From the foregoing evidence, we cannot say the chancellor
abused his discretion in reserving an award of alimony, at least
for a period necessary for Teresa to re-enter gainful employment. 
Teresa's needs are evident, since Kevin had been the family's sole
breadwinner during the parties' entire marriage.  Also, it is clear
Kevin has the capacity and ability to pay alimony based both on his
past employment history and his testimony concerning future
employment expectations.  However, we do have problems with the
manner in which the chancellor directed alimony payments be
reserved and paid.
     In Grady v. Grady, 295 Ark. 94, 747 S.W.2d 77 (1988), Dale
Grady, an attorney, had left his job, paying $1,900.00 a month, and
went into solo law practice, where his net income was only $81.00
per week.  There, this court held it is inequitable to hold that a
spouse who may be entitled to alimony is forever barred from
receiving it because the spouse who should pay it cannot do so at
the moment of entry of the divorce decree.  The Grady court further
concluded as follows:
          [I]f either spouse is entitled to alimony, the
     chancellor must comply with the statute by making that
     decision when the decree is entered.  If circumstances
     prevent the spouse who is to pay the alimony from being
     able to do so, then the court may recite that fact and
     decline to award a specific amount.  Thereafter, if
     circumstances change in a way that will permit the
     payment of alimony, the party who has been determined to
     be entitled to it may petition the court.  By following
     this procedure, the court will have complied with the
     statute without resorting to the sort of subterfuge
     inherent in awarding a nominal amount.
     In accordance with this court's holding in Grady, we affirm
the chancellor's intention here to reserve the possible fixing of
a specific and reasonable amount of alimony at a future time when
the circumstances permit it.  However, upon de novo review, we
modify the chancellor's divorce decree to reflect that Kevin's
unemployment prevents him from paying alimony at the time of entry
of the decree, although Kevin's earning capacity would otherwise
warrant such an award of alimony.  In accordance with Grady, the
decree should read to reserve to Teresa the right to petition the
trial court to establish an alimony amount if circumstances change. 
The five-year time constraint and other restrictions on alimony set
out in the decree remain in effect.
     Finally, we mention the case of Ford v. Ford, 272 Ark. 506,
616 S.W.2d 3 (1981), which was discussed in Grady.  In Ford, this
court overturned the chancellor's decision denying alimony "for the
time being, but retaining jurisdiction as to the possible future
needs of the wife."  While this court in Grady recognized that the
decision in Ford incorrectly held the chancellor had no power to
retain jurisdiction or to treat alimony as a matter "reserved for
future consideration," the Grady court did not overrule that
holding in Ford.  We do so now, at least to the extent the Ford
holding conflicts with Grady and today's decision.  In other words,
if a spouse shows a need for alimony, and the other spouse is shown
to have the ability or earning capacity to pay alimony except for
a circumstance at the time the parties' decree is entered, the
chancellor may reserve jurisdiction, without assigning a nominal
amount.  This procedure would permit the spouse requesting alimony
to petition for its payment after showing a change in circumstance.
     We next address Kevin's argument that the chancellor erred in
failing to award him the first $8,000.00 of the sale proceeds of
the parties' house.  Sometime after the chancellor's temporary
order granting Teresa possession of the parties' home, the parties
sold the home and split approximately $45,000 in proceeds equally. 
The parties' sale of their house was in keeping with the trial
court's temporary order reflecting their agreement to sell at a
private sale.    
     Kevin and Teresa agree they had originally purchased the house
in Russellville as husband and wife and held the property by the
entirety.  Kevin asserts, however, that before his marriage to
Teresa, he had owned a house which he sold and those proceeds,
$8,000, were used by Kevin and Teresa when purchasing several homes
(including the Russellville house) in both their names during their
marriage.  Because the $8,000.00 was his nonmarital property owned
prior to marriage, Kevin claims he is entitled to its return
pursuant to Ark. Code Ann.  9-12-315(a)(2) and (b)(1) (Repl.
1993).
     Teresa counters Kevin's argument, by stating (1) the parties'
Russellville home was held by the entirety, and accordingly, they
agreed to sell and split the proceeds equally which the chancellor
approved in the final decree; and (2) citing Lofton v. Lofton, 23
Ark. App. 203, 745 S.W.2d 635 (1988), once the parties, as husband
and wife, place property in their names without specifying the
manner in which they take the property, a presumption arises that
they own it by the entirety and it takes clear and convincing
evidence to overcome that presumption.  In this second instance,
Teresa states that Ark. Code Ann.  9-12-317 (Repl. 1993) is the
only authority for dividing estates by the entirety, and it
provides for equal division by the parties.  Warren v. Warren, 273
Ark. 528, 623 S.W.2d 813 (1981).
     We dispose of Kevin's second point, because the record
supports the chancellor's finding that the parties had settled
their respective equity interests in their home by agreeing to sell
and divide the proceeds.  At trial, Teresa's counsel objected to
Kevin's testimony concerning the sale of Kevin's premarital home
and the use of those sale proceeds in purchasing subsequent houses
in both parties' names.  Teresa's counsel pointed out to the
chancellor that without Kevin's mentioning premarital property or
asserting entitlement to $8,000.00, the parties made their own
settlement, agreeing to sell their house and to split the proceeds
in half.  While the chancellor allowed Kevin to present further
testimony on this point, the chancellor at the end of the hearing
specifically held that all the proceeds from the sale of the house
had been properly divided, and the chancellor in his decree
approved the parties' settlement and division of proceeds.  We also
note again the chancellor's earlier temporary order which
acknowledged that the parties had already agreed to sell their
home.  While no mention or distribution of the sale proceeds
appeared in the temporary order, the record reflects Kevin waited
until the final hearing, several months after selling the property,
to assert his $8,000.00 premarital property claim.  Because we
uphold the chancellor's approving the parties' settlement of their
equity interests in their home, we affirm.
     We should add that, regardless of the parties' decision to
sell their house and equally divide the proceeds, Kevin's argument
would still fail.  Case law has held that, when a husband and wife
purchase property as a tenancy by the entirety, there arises a
presumption of a gift from the party furnishing the greater part of
the consideration to the other party, which although rebuttable, is
strong and can be overcome only by clear and convincing evidence. 
Lyle v. Lyle, 15 Ark. App. 202, 691 S.W.2d 188 (1985); see also
McLain v. McLain, 36 Ark. App. 197, 820 S.W.2d 295 (1991); cf.
Canady v. Canady, 290 Ark. 551, 721 S.W.2d 650 (1986).  In the
present case, we carefully reviewed the record and find no evidence
to rebut the presumption of the $8,000.00 being a gift.
     For the reasons above, we affirm as modified.