Whaley v. Whaley
261 So. 3d 386
Ala. Civ. App.2017Background
- Kennon W. Whaley (husband) and Rhonda W. Whaley (wife) obtained a divorce after extensive litigation; this is the second appeal following a prior opinion remanding part of the property division.
- The trial court initially imputed $8,500 monthly income to the husband, awarded the wife periodic alimony ($3,673/mo), alimony in gross ($610,000 payable immediately), substantial percentages/ownership of several LLCs and businesses (including 100% of K2 and 51% of Dixieland Metals-Alabama), and $150,000 in attorney’s fees.
- Many business interests were encumbered, in bankruptcy, under litigation, or had disputed values; some operating agreements limited transfer of membership interests.
- Husband testified most entities had no or negative equity; his only positive-equity asset was a 50% K2 interest in Eco-Green (valued ~$222,500) and limited cash and life-insurance value.
- Wife presented generalized higher valuations but failed to substantiate the full marital-asset values; parties declined a forensic accounting for cost reasons.
- On appeal the husband challenged the property division, alimony awards, and attorney-fee award; the court reversed and remanded on several points.
Issues
| Issue | Plaintiff's Argument (Whaley) | Defendant's Argument (Wife) | Held |
|---|---|---|---|
| Periodic alimony amount | Imputed income used by trial court is unsustainable given amended award of K2 to wife and husband's actual post-judgment income; cannot pay $3,673/mo | Wife relied on trial court's earlier imputation and need showing | Court: periodic-alimony award exceeded discretion because husband will no longer receive income from K2 (now awarded to wife) and thus cannot meet obligation |
| Alimony in gross ($610,000) | Exceeds value of husband’s present estate; wife failed to prove marital-asset values; husband lacks liquid assets to pay immediately | Wife claimed large marital estate values but did not produce reliable proof of present liquidity/value | Court: award exceeds payor’s present estate and trial court abused discretion; reversed |
| Transfer/award of K2 and business assets | Trial court erred by ordering transfer of non-transferable LLC assets and by awarding more than member’s transferable interest under Alabama LLC law | Wife argued division of interests and awarded assets were proper distribution | Court: trial court exceeded authority by ordering transfer/rights beyond a member’s transferable interest; cannot order LLC to transfer assets; reversed on that point |
| Attorney’s fees ($150,000) | Award improper: not pleaded, no evidence documenting reasonableness/hours, and husband cannot pay | Wife relied on pendente lite order, motions to enforce, and proof of amounts husband paid his counsel; argued issue was litigated by consent | Court: issue was tried with implied consent, but trial court failed to document fee reasonableness/hours and therefore abused discretion; reversed |
Key Cases Cited
- Whaley v. Whaley, 218 So.3d 360 (Ala. Civ. App.) (prior opinion remanding property division)
- Ex parte Drummond, 785 So.2d 358 (Ala.) (trial court discretion in alimony/property division)
- TenEyck v. TenEyck, 885 So.2d 146 (Ala. Civ. App.) (alimony in gross as property settlement payable from present estate)
- Redden v. Redden, 44 So.3d 508 (Ala. Civ. App.) (alimony-in-gross exceeding estate value is abuse of discretion)
- Rabb v. Estate of Harris, 953 So.2d 401 (Ala.) (burden to prove entitlement to attorney’s fees and document hours)