Phyllis June Brown v. Billy Earl Brown

Phyllis June BROWN v. Billy Earl BROWN

97-646                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered March 12, 1998


1.   Divorce -- interpretation of decree -- decree not contract but
     order of court. -- Appellant's contention that the divorce
     decree was subject to two interpretations and should be
     construed against the party under whose auspices the decree
     was drafted was without merit; divorce decrees are not
     contracts but are orders of the chancery court; moreover, the
     decree did not specify the method to be used in calculating
     the appropriate shares of appellant's pension; hence, it was
     left to the chancellor to make that determination by
     subsequent order. 

2.   Divorce -- pensions -- distributed as marital property. --  
     Pensions are marital property and subject to distribution as
     such.

3.   Divorce -- pensions -- spouse entitled to postmarital
     enhancement of benefits. -- Divorced spouses are entitled to
     postmarital enhancement in benefits because enhancements to a
     retirement plan are often most dramatic in the later years,
     and it might be inequitable to allow a person who had
     supported his or her spouse through the lean years to be
     deprived of those later rewards; the chancellor has
     considerable discretion to divide marital property other than
     one-half to each party when it is equitable to do so.

4.   Divorce -- pensions and postmarital enhancement of benefits --
     chancellor's determination affirmed. -- The chancellor's
     decision granting the appellee a one half interest in
     appellant's pension and profit sharing, and his determination
     that appellee was entitled to benefit from any postmarital
     salary raises, even though appellee did not begin receiving
     his pension share until the appellant actually retired some
     seven years after their divorce, was affirmed. 

5.   Divorce -- postmarital enhancement of benefits -- increases in
     appellant's salary following separation and divorce
     constituted legitimate adjustments for retirement benefits in
     which appellee could participate. -- Appellant's contention
     that merit increases should not be included to increase
     appellee's share was without merit; the increases in
     appellant's salary following the separation and divorce
     constituted legitimate adjustments for retirement benefits in
     which appellee could participate; this was the chancellor's
     call under Ark. Code Ann.  9-12-315 (a)(1)(A), as is the case
     with all divisions of marital property.


     Appeal from Crawford Chancery Court; Harry A. Foltz,
Chancellor; affirmed.
     J. Patrick McCarty, for appellant.
     Rex W. Chronister, for appellee.

     Robert L. Brown, Justice.
     This appeal involves the distribution of a pension between
divorced spouses.  Appellant, Billy Brown, and appellee, Phyllis
Brown, were married in 1951.  In April 1981, Phyllis Brown began
working at Hiram Walker & Sons, Inc., in Fort Smith, and the
following year, she began to participate in the business's
retirement plan.  On March 17, 1988, the couple separated, and they
were eventually divorced on June 20, 1989.  The divorce decree
contained the following provision:
     The Defendant (Phyllis Brown) has currently obtained an
     interest in a pension and savings plan through her
     employment at Hiram Walker.  That the Defendant has been
     employed with this employer since April 20, 1981.  The
     court finds that the Plaintiff (Billy Brown) shall have
     a one half interest in those pension and profit sharing
     benefits up to March 17, 1988.
     There were, in fact, two pensions involved in the Browns'
divorce decree.  Billy Brown's military pension was also divided,
with Phyllis Brown being awarded a one-half marital interest in
ninety percent of his pension.  The Arkansas Court of Appeals later
held that her marital share included any postdecretal cost-of-
living increases which enhanced the amount of Billy Brown's
pension.  Brown v. Brown 38 Ark. App. 99, 828 S.W.2d 601 (1992).
     Phyllis Brown continued to work at Hiram Walker until she
retired in January 1996 at age 63.  At that time, she began to draw
retirement benefits in the amount of $978.72.  That same year, her
former husband filed this action in chancery court, seeking an
accounting and a contempt order against her for failing to pay him
the correct share of her pension benefits and refusing to provide
him with information of what his share should be.
     Phyllis Brown answered, and after receiving briefs and
supporting documents, the chancellor ultimately made several
findings in a modified order:
         that at the time of the divorce Phyllis Brown had accrued
          benefits in her retirement account in an amount which
          would allow her to receive approximately $414.00 per
          month if she continued to work at her current rate of pay
          until she retired on the normal retirement date of
          December 1, 1997;
         that between March 17, 1988, and the date she retired on
          January 1, 1996, Phyllis Brown received periodic merit
          increases in her monthly salary totaling $775.00;
         that these salary increases had the effect of raising her
          retirement benefits from $414.00 to $978.72 per month;
         that Phyllis Brown retired from Hiram Walker on January
          1, 1996, and began drawing retirement benefits in the
          amount of $978.72 per month.  
     The chancellor initially concluded that even though the 1989
divorce decree was drafted by Billy Brown's attorney, there was no
merit to Phyllis Brown's argument that the decree should be
interpreted strictly against her former spouse.  He next considered
Phyllis Brown's postmarital enhancement argument that Billy Brown
should not benefit from any increases in her salary following their
separation.  On this point, he concluded that Askins v. Askins, 288
Ark. 333, 704 S.W.2d 632 (1986), was controlling and that all
postmarital appreciation in benefits, including the salary
increases, should be included for purposes of determining Billy
Brown's share in her pension.  Accordingly, he awarded Billy Brown
a share in her benefits of $978.72 per month.
     On appeal, Phyllis Brown first contends that the divorce
decree is subject to two interpretations and should be construed
against the party under whose auspices the decree was drafted -- in
this case, Billy Brown.  She cites cases to support her contention,
but all of the cases she references involve the interpretation of
a contract as opposed to a divorce decree.  See Elcare, Inc. v.
Gocio, 267 Ark. 605, 593 S.W.2d 159 (1980) (interpreting a sales
contract and a "Care Agreement"); Sutton v. Sutton, 28 Ark. App.
165, 771 S.W.2d 791 (1989) (interpreting a separation agreement);
DaCosse v. Ahrens, 2 Ark. App. 61, 616 S.W.2d 777 (1981)
(interpreting a "Reconciliation Agreement").  We agree with the
chancellor that this argument is without merit.  Divorce decrees
are not contracts but are orders of the chancery court.  Moreover,
the decree did not specify the method to be used in calculating the
appropriate shares of Phyllis Brown's pension.  Hence, it was left
to the chancellor to make that determination by subsequent order,
which was done in this case.
     Phyllis Brown's second argument is that the chancellor erred
in concluding that Askins v. Askins, supra, required the chancellor
to include postmarital appreciation for purposes of calculating
Billy Brown's share in the pension.  In the alternative, she urges
that if we decide that the Askins case mandates such a ruling, we
reconsider our decision in that case.
     We have previously held that pensions are marital property and
subject to distribution as such.  Askins v. Askins, supra; Young v.
Young, 288 Ark. 33, 701 S.W.2d 369 (1986).  In the instant case, a
marital percentage was arrived at by using a numerator/denominator
formula.  Specifically, Phyllis Brown worked for 70 months while
she was married to Billy Brown before separation and for a total
time of 164 months, which included her years of marriage before
separation and the following months until her retirement as well. 
This results in a fraction of 70/164 or 42.68% of her pension that
was earned prior to separation.  Billy Brown was entitled to a
pension share based on one-half of the 42.68%, which is 21.34%. 
Both parties agree that this is the appropriate marital percentage
to be applied.
     The question for this court to decide is whether Billy Brown
is entitled to one-half of Phyllis Brown's accrued pension amount
at time of separation on March 17, 1988, or 21.34% of the accrued
pension amount, which is based in part on salary enhancements, in
1996.  The precise issue is whether Billy Brown is entitled to
benefit from any postmarital salary raises, when he did not begin
receiving his pension share until Phyllis Brown actually retired
some seven years after their divorce.
     The chancellor clearly agreed with Billy Brown that he was
entitled to base his pension share on the entire pension actually
received by his former spouse, beginning January 1, 1996.  Phyllis
Brown counters that his marital share should only apply to the
pension amount that she had earned at the time of their separation. 
She contends that the reason for this is any postmarital
enhancements after that date should not be considered marital
property because they were solely the result of her efforts.  The
amount of her pension against which the marital percentage of
21.34% should apply, according to Phyllis Brown, is $414.00 as
opposed to $978.72.
     We perceive the friction in this area to be the result of two
competing principles of equitable distribution.  On the one hand,
there is the principle which Phyllis Brown espouses that all
property acquired after divorce (or separation in this case) should
not be part of the marital-property mix.  On the other hand, there
is the principle subscribed to by Billy Brown that both parties are
entitled to increases in the value of marital property after
divorce and before distribution, particularly when the divorced
spouse does not begin receiving a share until some years after the
divorce occurs.
     We believe, as the chancellor concluded, that the issue of
postmarital enhancement in benefits has been fully answered by this
court.  In Askins v. Askins, supra, we declined to exclude
postmarital appreciation from the amount of the pension to be
divided between divorced spouses.  There, we first questioned
whether the issue was procedurally barred but went on to hold that
the chancellor operated within his discretion in dividing the
pension as marital property the way he did.  In our decision, we
relied on two primary considerations.  First, we recognized the
fact that enhancements to a retirement plan are often most dramatic
in the later years, and we indicated that it might be inequitable
to allow a person who had supported his or her spouse through the
lean years to be deprived of those later rewards.  Secondly, we
underscored that the chancellor has considerable discretion to
divide marital property other than one-half to each party when it
is equitable to do so.  See Ark. Code Ann.  9-12-315(a)(1)(A)
(Repl. 1993).  Those two principles guide us in affirming the
chancellor in the case before us, and we note that other
jurisdictions have reached the same conclusion.  See, e.g., In re
Marriage of Hunt, 909 P.2d 525 (Colo. 1995); Stoerkel v. Stoerkel,
711 S.W.2d 594 (Mo. Ct. App. 1986); Gemma v. Gemma, 778 P.2d 429
(Nev. 1989).  See also Hare v. Hodgins, 586 So. 2d 118 (La. 1991)
(approving the Askins approach while allowing for exclusion in
certain cases).
     We are aware that there is a dispute in this case over the
nature of Phyllis Brown's postmarital salary increases.  She
contends that the seven salary increases following her separation
were all merit increases.  In support of her position, she points
to her employer's notices which describe the increases as "merit"
increases.  Merit increases, she maintains, should not be included
to increase Billy Brown's share, and she cites a case from the
Louisiana Supreme Court as authority to support her argument.  See,
e.g., Hare v. Hodgins, supra.  Billy Brown answers this argument by
stating that in spite of the description on the notices, these
were, in fact, little more than cost-of-living or longevity
increases.  He adds that the chancellor did find in his modified
order that these were merit increases but declined to exclude them
as improper enhancements.
     We defer to the chancellor in this regard.  Here, he
considered the increases in Phyllis Brown's salary following the
separation and divorce and decided that they constituted legitimate
adjustments for retirement benefits in which Billy Brown could
participate.  We made it crystal clear in Askins that this is the
chancellor's call under  9-12-315 (a)(1)(A), as is the case with
all divisions of marital property.  We do not read the chancellor's
order in the instant case to say that the Askins case divested him
of all discretion in this area.
     Affirmed.