594 S.W.3d 126
Ark. Ct. App.2020Background
- Shane and Brandie Perry married in 2002, had four children, and divorced in 2018; Brandie sought child support and a share of marital property.
- Prior to marriage Shane held an interest in GKS Properties; during the marriage Shane and his brother purchased their father’s interest for $275,000 and executed a promissory note.
- After Brandie filed for divorce Shane lost a Walmart job that had paid him $250,000/year. He also had multiple business interests, law practice, rental properties, and liquid assets.
- At the final hearing the circuit court imputed income to both parties ($250,000 to Shane; $40,000 to Brandie), used the family-support chart, and ordered Shane to pay $3,000/month child support (chart amounts of $3,793 and $793 were offset).
- The court found a marital portion of GKS valued at $275,000 but deemed it impractical to divide the partnership; instead it awarded Brandie $167,236 from Shane’s 401(k) as one-half of the marital interest.
- Shane appealed two rulings: (1) imputing income for child-support calculation and (2) treating the acquired GKS interest as marital and awarding Brandie a portion via unequal division of Shane’s 401(k).
Issues
| Issue | Plaintiff's Argument (Perry) | Defendant's Argument (Brandie) | Held |
|---|---|---|---|
| Whether the trial court erred by imputing income to Shane for child-support calculation | Imputation improper because Shane was fired (not voluntarily underemployed) and thus should not be charged $250,000 income | Court may impute income based on earning capacity and circumstances; Shane had prior $250k salary and other income sources | Imputation was not an abuse of discretion; court reasonably imputed $250,000 given prior salary, assets, and Shane’s testimony about job choices |
| Whether the interest in GKS acquired during marriage was marital and whether awarding Brandie $167,236 from Shane’s 401(k) was erroneous | GKS interest was acquired with nonmarital funds (or was a gift) and therefore not marital; court lacked basis to award Brandie half | Property acquired during marriage for value exchanged via a promissory note is marital; dividing partnership interest was impractical so award from 401(k) was equitable | Court correctly found a marital interest in the 275k transaction (note exchange), and an unequal division awarding Brandie funds from Shane’s 401(k) was not clearly erroneous |
Key Cases Cited
- Fischer v. Fischer, 563 S.W.3d 601 (Ark. App. 2018) (standard of review for child-support findings and deference to trial court).
- Grady v. Grady, 747 S.W.2d 77 (Ark. 1988) (court may impute income based on earning capacity).
- Langston v. Brown, 506 S.W.3d 261 (Ark. App. 2016) (imputation tied to spouse’s capacity and efforts to obtain suitable employment).
- Kelly v. Kelly, 381 S.W.3d 817 (Ark. 2011) (property acquired in exchange for a note during marriage is marital even if later paid with separate funds).
- McGahhey v. McGahhey, 567 S.W.3d 522 (Ark. App. 2018) (rejecting arguments that later separate funding converts note-exchanged property to nonmarital).
- Grimsley v. Drewyor, 575 S.W.3d 636 (Ark. App. 2019) (offsetting chart-based support in joint-custody contexts is proper).
- Waldon v. Waldon, 806 S.W.2d 387 (Ark. App. 1991) (family-support chart presumptively correct).
- Keathley v. Keathley, 61 S.W.3d 219 (Ark. App. 2001) (broad trial-court authority to make equitable, possibly unequal, property divisions).