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Sanders v. Passmore

Court of Appeals of Arkansas, Division II

August 31, 2016



          Smith, Cohen & Horan, PLC, by: Matthew T. Horan, for appellant.

          Jones, Jackson & Moll, PLC, by: Kathryn A. Stocks and Mark A. Moll, for appellee.

          LARRY D. VAUGHT, Judge

         In this division-of-property dispute, appellant A. Powell Sanders argues that the Sebastian County Circuit Court clearly erred in awarding appellee Ann Kay Passmore full interest in an account she held jointly with her mother; in finding that Passmore loaned him $40, 991.50 and ordering him to repay the loan; and in inequitably dividing the parties' personal property. On cross-appeal, Passmore contends that, if we reverse the trial court's distribution of the account she owned with her mother, then the trial court clearly erred in equally distributing the parties' six retirement accounts. On direct appeal, we affirm in part and reverse and remand in part. We hold that the cross-appeal is moot.

         The parties were married on June 7, 2003, and they had a son on May 26, 2006. The parties separated on April 3, 2012. On July 2, 2012, Sanders filed a complaint for divorce, and on July 16, 2012, Passmore filed an answer and a counterclaim for divorce.

         At a May 8, 2013 hearing, Sanders dismissed his complaint with prejudice, and the case proceeded on Passmore's counterclaim. Passmore, a plastic surgeon, testified that she and Sanders married when they were in their thirties. She said they each had their own accounts when they married and that they kept their accounts separate during the marriage. She stated that before their marriage, she and her mother were joint owners of a checking account and a savings account.[1] Passmore stated that during her marriage her income was deposited directly into the savings account and then transferred to the checking account from which she paid the family's expenses. Passmore requested that she be awarded all of these two accounts.

         Passmore further testified that prior to the marriage she and her mother were joint owners of a BKD Wealth Management Services account (BKD account). According to Passmore, she was an only child, her father was deceased, and her mother used her retirement to support Passmore through college, medical school, and a five-year residency. She testified that the BKD account was repayment to her mother for supporting her (Passmore's) medical education and that she wanted her elderly mother to have financial resources should her health deteriorate or if anything happened to Passmore. Passmore told the trial court that during the marriage she sporadically contributed to the account and that neither Sanders nor Passmore's mother contributed funds to the account. The value of the BKD account was $468, 561. Passmore requested that she be awarded all of this account.

         Passmore stated that before and during the marriage she contributed to her 401(k) plan valued at $509, 346.53 and her two IRA accounts valued at $98, 144.26. Additionally, she said that during the marriage she funded two IRA accounts for Sanders valued at $53, 568.22. Passmore said that Sanders did not contribute any funds to these accounts. Passmore requested that she be awarded full interest in her 401(k) and her two IRA accounts.

         Passmore also explained that she and Sanders owned a hobby farm that was not profitable. She asked that she be awarded the farm, horses, equipment, and any tax liability related to the business. She further sought repayment of loans that she claimed she had made to Sanders for his law firm totaling $43, 991.50. Finally, Passmore described various items of personal property owned by the parties and offered testimony concerning their value.[2]

         Sanders, a lawyer, testified that he contributed to the parties' lifestyle much more than Passmore described. He stated that he and/or his law firm contributed financially to the marriage by purchasing vehicles and paying for insurance and taxes on some of their vehicles. He said that he paid for dinners out; phone, internet, and cable bills; groceries; a TV and sound system; a wine cellar; farm improvements; and family vacations. He also bought lavish gifts for Passmore during their marriage, including five fur coats, jewelry, shoes, and a watch. Sanders said that he demonstrated significant support and advancement of Passmore's career and that he played an integral part in running the farm by setting up the corporation, traveling to purchase horses and equipment, and paying the farm manager's salary. Finally, Sanders stated that during the marriage he purchased a separate home for $47, 000 and spent money on his girlfriend by taking her on vacations, paying her utilities, and giving her cash and gifts. He also told the court that he spent tens of thousands of dollars in marital funds for a health coach in Dallas and a life coach in Florida.

         Sanders further stated that while married he contributed to his own IRA account valued at $7, 889.11. He requested one-half of the marital portions of Passmore's 401(k), her two IRA accounts, and the BKD account. He denied that Passmore's payments to his law firm were loans. And he also disputed the value of several of the items of personal property, claiming that there was debt associated with several of the items. He requested that the parties' personal property be sold and the proceeds divided equally.

         A divorce decree was entered by the trial court on May 28, 2013, granting Passmore a divorce based on general indignities, awarding her custody of the parties' child subject to Sanders's visitation rights, and ordering Sanders to pay child support. While the decree resolved several property issues between the parties, the trial court reserved ruling on issues concerning the retirement and bank accounts, personal property, the farm business, and notes receivable, affording the parties the opportunity to resolve the issues on their own.

         The parties were unable to agree, and on July 9, 2013, the trial court entered an order distributing and disposing of the remaining marital assets. Relevant to this appeal, the trial court found that Sanders's IRA account and the two IRA accounts that Passmore had funded on his behalf were marital property to be divided equally between the parties. The trial court also found that Passmore's 401(k) and two IRA accounts were partially nonmarital and marital property and awarded Sanders half of the marital portion of these accounts. The trial court next awarded Sanders $47, 531 as his marital portion of the BKD account. However, in the same order, the trial court found that the BKD account and the checking and savings accounts that Passmore jointly held with her mother were to be awarded to Passmore in full. As for the farm, the trial court awarded it and its associated debt to Passmore. Sanders was awarded sole ownership of the 2008 BMW, 2008 Harley Davidson, 2013 Yamaha four-wheeler, 1982 Datsun, and 2002 Honda VTX. Passmore was awarded the 2008 Dodge truck and the Kubota tractor. The trial court ordered that the remaining personal property (a 1992 MasterCraft boat, an Airstream trailer, a Great Dane trailer, and a Peterbilt tractor) be distributed via a private auction between the parties using a sealed bidding procedure. Finally, the trial court found that $40, 991.50 in payments from Passmore to Sanders were loans and ordered him to repay them. On July 18, 2013, the trial court, sua sponte, entered an amended order identical to the original order except it deleted the finding that Sanders was entitled to $47, 531 of the BKD account.

         Sanders filed a motion for new trial, which the trial court denied on August 20, 2013. Sanders appealed. Our court dismissed the appeal, holding that because there was no final order, we lacked jurisdiction. Sanders v. Passmore, 2014 Ark.App. 237. On remand, the parties each filed motions to enforce the divorce decree. After a hearing, the trial court entered a letter opinion finding that there was no compelling reason to change the distribution it had made in the ...

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