Fallin v. Fallin
2016 Ark. App. 179
Ark. Ct. App.2016Background
- Tommy and Leanne Fallin executed a written property-settlement agreement (PSA) dated May 9, 2012, allocating real estate, business interests (awarding Fallin Tractor to Tommy), spousal support ($2,000/mo), health insurance, and other items.
- Leanne filed for divorce in May 2012 and attached the PSA and Tommy’s signed waiver of service/entry of appearance. Tommy later withdrew the waiver, retained counsel, and contested enforceability.
- Leanne moved to enforce the PSA and alleged Tommy sold/transferred Fallin Tractor shares to his father and disposed of marital assets; Tommy denied intent to defeat marital property and argued duress and incompleteness.
- At the final hearing the circuit court initially ruled the PSA unenforceable but later issued a letter changing course and, in a December 29, 2014 decree, enforced the PSA (with a minor modification), found Tommy engaged in deceptive conduct (including intentionally failing to pay his father), and awarded Leanne $10,000 in attorney’s fees.
- Tommy appealed, arguing the PSA was unenforceable because it failed to comply with Ark. Code Ann. § 9-12-315 equitable-division requirements, used improper valuation, was incomplete/ambiguous, and thus alimony and other provisions were invalid.
Issues
| Issue | Fallin (Appellant) Argument | Leanne (Appellee) Argument | Held |
|---|---|---|---|
| Whether court must apply § 9-12-315 equitable-division factors to enforce a PSA | PSA must satisfy § 9-12-315; if not, it cannot be enforced | Courts may enforce valid written separation agreements; § 9-12-315 applies only if court refuses to enforce agreement | Court: PSA need not comply with § 9-12-315 to be enforceable; § 9-12-315 governs court-made divisions when agreement is not enforced |
| Valuation standard for businesses | Court used book value; appellant contends fair-market-value required under § 9-12-315 | Agreement governed parties’ allocation; court’s valuation was not outcome-determinative here | Court: did not decide valuation-standard issue (unnecessary because PSA enforcement not governed by § 9-12-315); appellant had admitted Fallin Tractor’s value exceeded other assets at execution |
| Whether PSA is incomplete or ambiguous (inability to effectuate terms) | PSA is incomplete (omitted some accounts, personal property undivided, unclear $80,000 default mechanics); ‘‘sole owner’’ language impossible because others held shares | Parties intended to allocate interests they actually held; statute permits partial agreements; contract language is enforceable as written | Court: PSA enforceable despite partiality and language; interpreted according to parties’ intentions and plain terms; partial settlement agreements are permissible |
| Award of attorney’s fees | Fee award improper because underlying property division/alimony unenforceable | Trial court properly exercised discretion given income disparity and that appellant’s deceptive conduct increased litigation | Court: affirmed $10,000 attorney’s-fee award as within trial court’s discretion given findings about income disparity and deceptive conduct |
Key Cases Cited
- Rutherford v. Rutherford, 81 Ark. App. 122, 98 S.W.3d 842 (2003) (trial court may accept, modify, or reject parties’ settlement and applies § 9-12-315 only if it does its own property division)
- Sutton v. Sutton, 28 Ark. App. 165, 771 S.W.2d 792 (1989) (separation agreements construed by ordinary contract principles and parties’ intent)
- Coble v. Sexton, 71 Ark. App. 122, 27 S.W.3d 759 (2000) (clear, unambiguous contractual language controls interpretation)
- Tiner v. Tiner, 2012 Ark. App. 483, 422 S.W.3d 178 (2012) (trial court has broad discretion to award attorney fees in domestic-relations matters)