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Sherman v. Boeckmann

Court of Appeals of Arkansas, Division I

November 30, 2016

JEANNIE SHERMAN APPELLANT
v.
RAYMOND BOECKMANN APPELLEE

         APPEAL FROM THE CROSS COUNTY CIRCUIT COURT [NO. 19-DR-12-81-4] HONORABLE KATHLEEN BELL, JUDGE

         AFFIRMED IN PART; REVERSED IN PART; AND REMANDED IN PART

          Ford & Cook, PLC, by: Paul N. Ford, for appellant.

          John D. Bridgforth, P.A., by: John D. Bridgforth, for appellee.

          BRANDON J. HARRISON, Judge

         This case is a companion case to Sherman v. Boeckmann, 2016 Ark.App. 567, also handed down today. These two appeals arise out of contentious and protracted divorce litigation between appellant Jeannie Sherman and appellee Raymond Boeckmann. In this appeal, Sherman argues that the circuit court erred in its rulings concerning her postdecree use of money awarded to her in the decree. We affirm in part, reverse in part, and remand in part.

         The circuit court entered its decree granting a divorce and dividing the marital property on 30 September 2013. Each party was awarded one-half of the stock in four family business corporations the parties agreed are marital property: B and L Properties, Inc. (B&L); L and K Properties, Inc. (L&K); Boeckmann and Sons, Inc. (Sons Inc.); and Logan Centers, Inc. (Logan or Logan Center). Prior to the litigation, Boeckmann owned 100 percent of the stock in Sons Inc; Sherman owned 100 percent of the stock in Logan Center; and each party owned 50 percent of the stock in L&K and B&L. The court also equally divided approximately sixteen banking accounts, including some owned by the parties' corporations. The court's decree was later amended to incorporate exhibits showing the total account balances of approximately $3.6 million as of the first day of trial. The two Logan Center accounts had a combined balance of $1.6 million.

         On 29 October 2013, Boeckmann filed a verified petition for contempt citation alleging Sherman had violated the mutual restraining order and the temporary order by withdrawing approximately $1.1 million from the Logan Center account for her personal use. Among the withdrawals was one for approximately $560, 000 paid to the Internal Revenue Service, a withdrawal of $126, 000 for payment of state taxes, and another withdrawal of $350, 000 to Sherman herself. Boeckmann sought a distribution of a like amount to himself, as well as one-half of the increase in value of an investment account solely in Sherman's name and valued at over $1 million. Sherman responded to the petition, asserting that the circuit court was without jurisdiction to control the actions of Logan Center because it was a separate entity and not a party to the action.

         On 20 November 2013, Boeckmann filed another petition for contempt citation contending that Sherman had failed to comply with the court's order amending the decree that required her to account for certain funds withdrawn from the Logan Center accounts and to pay Boeckmann approximately $94, 000 from the Logan Center accounts and her personal funds.

         The court held a hearing on November 25 addressing predecree petitions. The court also addressed some issues raised in Boeckmann's postdecree petitions.

         Boeckmann filed yet another petition for contempt on December 31, contending that Sherman had removed another $490, 000 from Logan Center accounts in Wynne banks and used the funds to purchase a certificate of deposit. Sherman was also alleged to have opened other accounts on behalf of Logan Center at a Batesville bank to which Boeckmann did not have access. It was also claimed that Sherman withdrew an additional $633, 000 from the Logan Center accounts for her own personal use or to place in another account. Boeckmann sought an accounting and access to any new Logan Center accounts.

         Sherman responded to this petition, again asserting that the court lacked jurisdiction to control Logan Center's activities, including limiting her salary from the corporation; that the court did not divide Logan Center's cash or other assets; and that Boeckmann's remedy was to bring a shareholder action instead of a contempt action in the divorce case.

         On 24 January 2014, Boeckmann filed still another contempt petition that overlapped with some of the allegations contained in the December 31 petition. There was an allegation that Sherman had removed approximately $638, 000 from a marital investment account and transferred it to a checking account in her sole name on 10 December 2013. Another allegation was that Sherman had increased her salary to $18, 000 per month, instead of the $12, 000 amount that the court had set in a temporary order during the pendency of the divorce.

         In her motion to dismiss the January 2014 petition, Sherman argued that the temporary order and the ex parte restraining order prohibiting either party from disposing of any property were superseded by entry of the divorce decree, which did not contain such an injunction. She further argued that she should not be held in contempt for transferring money from one Logan Center account at one bank to a new Logan Center account at a different bank. Responding to Boeckmann's allegations concerning her payment of salary to herself, Sherman argued that the court lacked authority to control the day-to-day activities of Logan Center and that, upon entry of the decree, there was no further order limiting expenses to the ordinary ...


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