542 S.W.3d 212
Ark. Ct. App.2018Background
- Michael and Rene divorced; circuit court awarded Rene $2,500/month spousal support (after charging her $1,000/month imputable income) and substantial child support; alimony subject to review in four years.
- Michael moved to reconsider arguing the court failed to make findings on Rene’s financial need and impermissibly adopted an automatic alimony escalator; he also appealed the court’s division of Michael’s stock awards as marital property.
- Circuit court found Michael had ability to pay and that Rene had some need in light of impending cessation of child support, her role as primary caregiver, limited current earnings, and investment-return limitations.
- Court treated portions of Michael’s Brady stock awards as vested/marital to the extent they compensated past performance, allocating percentages for awards exercisable in 2016 and 2017 and declining to treat later awards as marital.
- Michael argued the awards were nonvested, contingent on continued employment and subject to employer modification/clawback, and that Rene failed to prove fair market value; the court rejected these arguments and affirmed a percentage-based division.
Issues
| Issue | Plaintiff's Argument (Michael) | Defendant's Argument (Rene / Court) | Held |
|---|---|---|---|
| Whether awarding alimony abused discretion | Court found no need; awarding alimony was improper | Court considered needs, upcoming end of child support, imputable income, and discretion to award alimony | Affirmed; no abuse of discretion |
| Whether four‑year review is an impermissible "escalator clause" | Four‑year review effectively mandates automatic increase when child support ends | Order permits petition for modification based on changed circumstances; does not relieve party of burden to prove need | Affirmed; not an automatic escalator |
| Whether stock awards vested/divisible as marital property | Awards are unvested/contingent on continued employment and employer policies, thus not divisible | Awards conferred during marriage, some rights nonforfeitable (e.g., pass to estate); portion compensates past performance and is marital | Affirmed; portions vested/divisible as marital property |
| Whether court erred by not determining FMV or allocating specific securities | Rene failed to present fair‑market valuation; court should have split value or designated securities | Stock options lack immediate ascertainable FMV; percentage division for future uncertain value is appropriate (analogous to contingency fees) | Affirmed; percentage allocation appropriate where value not presently ascertainable |
Key Cases Cited
- Burns v. Burns, 312 Ark. 61 (1993) (nonvested future retirement benefits are not property)
- Day v. Day, 281 Ark. 261 (1984) (expanded marital‑property concept; vested benefits that cannot be diminished by employer are marital)
- McDermott v. McDermott, 336 Ark. 557 (1999) (future contingently payable fees/contracts created during marriage can be marital property and divided by percentage)
- Hackett v. Hackett, 278 Ark. 82 (1982) (no vested distributive interest = not divisible)
- Pelts v. Pelts, 2017 Ark. 98 (2017) (interest contingent on continued employment is too speculative to be vested and divisible)
- Kelly v. Kelly, 2016 Ark. App. 272 (2016) (trial court erred by applying automatic escalator increasing alimony as child support abated)
- Cole v. Cole, 89 Ark. App. 134 (2005) (trial court did not abuse discretion when it properly considered need, resources, and earning capacity in denying permanent alimony)
Affirmed.