Russell v. Russell, 430 S.W.3d 15

Background

Randy Russell and Andrea Russell married in July 1996 and separated in July 2006; no children were born of the marriage.
During the divorce, the parties stipulated Randy owned a 99/300th interest in NRS (formerly ALSCOFS) and an agreement limited division of property; NRS was the marital asset in dispute.
The circuit court valued NRS at $3,028,000 and allocated Andrea’s 33% interest to Randy, offset by alimony to Andrea to balance the unequal division.
Former stepfather Glynn Colquitt’s personal goodwill was alleged to be the source of NRS’s value; testimony and documents showed substantial cash withdrawals by the owners, including Randy, from the business.
The circuit court awarded Randy the 33% NRS interest and ordered alimony to Andrea ($11,370/month for 24 months); Randy moved for a new trial contesting alimony as a ‘forced buy’ and the valuation method.
The Arkansas Supreme Court affirmed the circuit court’s decision, held the alimony as a complementary device was permissible, and found the valuation not clearly erroneous; it rejected Randy’s arguments that the decree was unlawful or that the evidence failed to prove fair market value independent of Glynn Colquitt’s personal goodwill.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the decree unlawfully required a ‘forced buy’ of NRS shares instead of in-kind property division	Randy contends §9-12-315(a)(4) limits division to in-kind or cash-settlement from existing property.	Andrea contends equity powers allow credits/setoffs to achieve a just result beyond a pure in-kind split.	No; court may use alimony/offsets to balance inequities in property division.
Whether the valuation of NRS was improper because it relied on Glynn Colquitt’s personal goodwill	Randy argues all value lay in Glynn Colquitt’s personal goodwill and is not marital property.	Valuation evidence acknowledged both enterprise goodwill and Glynn Colquitt’s role; not all value was personal goodwill.	Valuation supported by substantial evidence; not clearly erroneous to attribute some value to goodwill.
Whether Andrea offered competent evidence showing NRS had fair-market value independent of Glynn Colquitt’s goodwill	Andrea failed to prove fair-market value independent of Glynn Colquitt’s goodwill.	Andrea and her expert testified to value and business viability beyond personal relationships.	Record contains competent evidence of value with corroboration from experts.
Whether alimony award was appropriate as a complementary device to balance property division	Randy argues alimony is improper where there is no need or ability to pay.	Court used short-term alimony to offset unequal asset distribution and balance equities.	Affirmed; alimony deemed reasonable under the circumstances as a balance to property division.

Key Cases Cited

Hodges v. Hodges, 27 Ark. App. 250, 770 S.W.2d 164 (1989) (discusses limitations on forced sale and property division in divorce)
Belanger v. Belanger, 276 Ark. 522, 637 S.W.2d 557 (1982) (non-marital property issues in divorce context)
Holaway v. Holaway, 70 Ark. App. 240, 16 S.W.3d 302 (2000) (personal goodwill concepts in asset division)
Webb v. Webb, 262 Ark. 461, 557 S.W.2d 878 (1977) (alimony versus property allocation considerations)
Beasley v. Beasley, 247 Ark. 338, 445 S.W.2d 500 (1969) (short-term alimony as property allocation device)
Mulling v. Mulling, 323 Ark. 88, 912 S.W.2d 934 (1996) (needs vs. ability to pay in alimony decisions)
Harvey v. Harvey, 298 Ark. 308, 766 S.W.2d 935 (1989) (complementary use of alimony and property division)
Roberts v. Yang, 2010 Ark. 55, 370 S.W.3d 170 (2010) (credibility and weight of witness testimony in equity cases)
Williford v. Williford, 280 Ark. 71, 655 S.W.2d 898 (1983) (broad equity powers in marital property division)
Marshall v. Marshall, 285 Ark. 426, 688 S.W.2d 279 (1985) (crediting/offset mechanisms in property division)