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Foster v. Foster

Supreme Court of Arkansas

December 15, 2016

CHRISTOPHER FOSTER APPELLANT
v.
LEAH FOSTER APPELLEE

         APPEAL FROM THE GARLAND COUNTY CIRCUIT COURT [DR-2013-835] HONORABLE MARCIA HEARNSBERGER, JUDGE

         AFFIRMED; COURT OF APPEALS' OPINION VACATED.

          Gill Ragon Owen, P.A., by: Sharon Elizabeth Echols and Christopher L. Travis, for appellant.

          Q. Byrum Hurst, P.A., by: Q. Byrum Hurst, for appellee.

          COURTNEY HUDSON GOODSON, Associate Justice

         This case, which presents an issue of first impression regarding rehabilitative alimony, is before us on a petition for review from the Arkansas Court of Appeals pursuant to Arkansas Supreme Court Rule 1-2(e). Appellant Christopher Foster appeals the divorce decree entered by the Garland County Circuit Court awarding rehabilitative alimony and attorney's fees and costs to appellee Leah Foster. For reversal, Christopher argues that (1) the circuit court erred in its interpretation of the rehabilitative-alimony statute when it applied the factors relevant to permanent alimony to support the award of rehabilitative alimony to Leah; (2) the circuit court abused its discretion by deciding that Leah's proffered plan of rehabilitation supported an award of $408, 000 in alimony payable over ten years; and (3) the circuit court abused its discretion by awarding attorney's fees and costs in addition to rehabilitative alimony. We affirm the circuit court.

         Christopher and Leah Foster were married on February 12, 2002, and three children were born of their marriage: A.F. (age eleven); E.F. (age seven); and F.F. (age five). Christopher filed a complaint for divorce in September 2013, alleging general indignities. Leah answered and counterclaimed for divorce, requesting alimony, child support, and an unequal distribution of marital assets.

         The parties reached an agreement with respect to child custody, visitation, and the disposition of the marital residence, and a hearing was held on March 19, 2014, on the issues of the remaining marital property, child support, alimony, and attorney's fees. Testimony by both parties established that Christopher was the primary source of income for the family, while Leah was the primary caregiver to the children. Christopher testified that he was an independent contractor for a company that sells employee-benefit plans to small businesses. He introduced into evidence his 2011 and 2012 tax returns, which reflected that his average gross income for those years was approximately $163, 000. Christopher indicated that his income is around $3, 000 per month after all of his expenses are paid and that with the addition of his anticipated child-support payments, he could not afford to pay alimony to Leah. He further stated that Leah had a real-estate license and claimed that there was no reason why she could not work.

         On cross-examination, Christopher agreed that Leah transported the children to and from school each day and stayed home with them when they were sick. Christopher explained that the family lived in Hot Springs but that his office was in Little Rock, and he testified that he commuted to Little Rock each day and also traveled throughout the state for work. Thus, he indicated that he was typically unable to take the children to their extracurricular activities as well. With regard to the monthly expenses listed on his affidavit of financial means, Christopher stated that the family's monthly expenses were approximately $11, 000 each month, while his expenses, alone, totaled around $7, 000. He agreed that Leah would have additional expenses when she took over the marital residence, including mortgage payments, taxes, insurance, and yard maintenance.

         Leah testified that she and Christopher had both agreed that she would be a stay-at-home mother so that the children did not have to attend day care full time. She had graduated from high school but did not have a college degree. While Leah stated that she had obtained her real-estate license in 2004, she indicated that the license had been inactive during much of her marriage due to the births of her children. According to Leah, even when her license was active, she had sold only one or two houses per year, primarily to friends and family members. Information from the parties' 2011 and 2012 joint tax returns indicated that Leah's taxable income from selling real estate was $8, 552 and $4, 500, respectively. Leah testified that Christopher had paid all of the family's expenses during their marriage and that her income was used only to supplement his income and to pay for vacations. She stated that she had maintained the home, cared for the children, and transported them to and from school and various extracurricular activities. Leah testified that she did not ask Christopher to stay home with the children when they were out of school because he told her that was her job. She further stated that Christopher had told her that she would be on welfare if she were not married to him.

         Leah testified that she was asking for spousal support because the child support would not be adequate to support the family's monthly expenses of $6, 615 as reflected in her affidavit of financial means. She stated that there was an economic imbalance between her earning ability and Chris's, indicating that she would be unable to earn a substantial income as a realtor at the present time. According to Leah, the spousal support awarded would need to be higher for the first several years because the children were not old enough to stay at home by themselves, and she would be limited in her employment opportunities. She requested $5, 000 per month for the first three years, followed by $2, 500 for the next couple of years, when she would have her career started and would be earning more income, and then $2, 000 for several more years, at which time the alimony would terminate. She attempted to introduce a written rehabilitative alimony plan; however, Christopher objected to its admission. The circuit court allowed Leah to proffer the plan and to testify about it. She indicated that the $5, 000 per month she was requesting in alimony was not even half of his income and that it would be easier for her to grow her real-estate business or to look for other employment as the children got older. She further stated that she had considered extending her education in the future.

         In addition to alimony, Leah testified that she was asking Christopher to pay her outstanding legal fees because she could not afford to do so. She introduced an itemized list from her attorney, which included $14, 190 in attorney's fees and $647.18 in expenses for the court reporter and for postage.

         On cross-examination, Leah agreed that she had a responsibility to earn an income sufficient to provide for her children. However, she indicated that it was difficult for her to sell real estate in her current situation, even on evenings and weekends when Christopher had the children, because she still had to pick up the children from school on weekdays and care for them until Christopher got home from work. In addition, on weekends, Leah stated that both parents had to work together to juggle the children's activities.

         Paul Burge, who worked with Leah at Hot Springs Realty, testified that the real-estate market in Garland County had declined in value over the past seven or eight years. He indicated that realtors who had been selling real estate for ten to twenty years could make a good income but that it was very difficult for realtors who were starting out due to the time it takes to develop contacts and referrals. Burge further testified that realtors at Hot Springs Realty must pay their own monthly dues, advertising expenses, signage, and transportation-related expenses. According to Burge, the real-estate business is not a nine-to-five job, and it requires odd hours. He indicated that only one agent out of thirty-four agents at Hot Springs Realty had earned more than $100, 000, and that occurred six years ago.

         Following the hearing, the parties submitted proposed findings of fact and conclusions of law at the circuit court's request. Both Leah and Christopher stated in their proposed findings that Leah was requesting $5, 000 per month in alimony for the first three years following the divorce, $3, 000 per month for the next three years, and $2, 500 per month for the last four years. These were also the same amounts that were set forth in Leah's proffered rehabilitative plan, although she had mentioned slightly different amounts in her testimony at the hearing.

         The circuit court entered the divorce decree on July 28, 2014. By agreement of the parties, Leah was awarded primary custody of the children, with Christopher receiving three weekend visits with the children each month and one overnight visit each week. The court calculated Christopher's average monthly income as $10, 363, which resulted in a monthly child-support obligation of $2, 477. The circuit court also approved the parties' settlement agreement regarding the disposition of the marital residence and the parties' personal property. Per this agreement, Leah was granted the marital residence as her separate property after paying Christopher $35, 000 for his share of the equity in the home. The circuit court found that the parties' IRAs were marital property and divided them equally. Christopher was awarded his brokerage accounts in the amount of $219, 262.66 as his separate property, while Leah was awarded her bank stock valued at $204, 052 as her separate property.

         With respect to alimony, the circuit court found that there was an economic imbalance between the parties and that Christopher had been the main source of income for the family. The court stated that Leah had been unable to generate significant income from her occupation as a realtor due to the downturn in the real-estate market and due to her status as the primary caregiver to the children. The court found that the parties had enjoyed a good standard of living while they were married and that Christopher had deposited approximately $12, 000 each month into the parties' checking account to pay for the family's monthly expenses. While both parties owned pre-marital property, the circuit court noted that Leah's bank stock was in both her name and her father's name and found that she had no other sources of income, while Christopher had a large income as well as a large amount of easily accessible funds.

         Based on the evidence set forth above, the circuit court found that an award of rehabilitative alimony was appropriate under Arkansas Code Annotated section 9-12-312(b) (Repl. 2015). The circuit court also found that Leah's proposed ten-year rehabilitative plan was reasonable in terms of its duration because it allowed her to transition into the workplace as the children became older and more independent. However, the court stated that Leah's requested amount of alimony was unreasonable. The court thus awarded her a lesser amount of alimony for the first three years in the amount of $4, 500 per month, finding that this amount, when combined with child support, was sufficient to sustain her regardless of how much income she was able to generate as a realtor or from a different job. For the following three years, the court awarded Leah $3, 500 in alimony, noting that by that time, she should have acquired employment to supplement her income. The court then awarded Leah $2, 500 for the final four years. The circuit court concluded that this plan was reasonable in both duration and amount because it allowed Leah to support herself and her household while she established sufficient income as the children grew older and required less immediate care.

         In addition to alimony, the circuit court awarded Leah $14, 190 in attorney's fees and $647.18 for expenses incurred in litigation. The court found that Leah was not in a financial position to pay her attorney's fees and that Christopher had liquid funds to do so.

         Christopher timely appealed the circuit court's award of alimony and attorney's fees to the court of appeals, which affirmed. Foster v. Foster, 2015 Ark.App. 530, 472 S.W.3d 151. Christopher then filed a petition for review with this court, alleging that this appeal raises issues of first impression and substantial public interest concerning an award of rehabilitative alimony after the enactment of Act 1487 of 2013. We granted the petition for review on this basis. When we grant a petition for review, we treat the appeal as if it had been originally filed in this court. Moore v. Moore, 2016 Ark. 105, 486 S.W.3d 766.

         In his first point on appeal, Christopher argues that the circuit court erred in its interpretation of Act 1487 because it applied the factors applicable to permanent alimony to support the award of rehabilitative alimony to Leah. This is an issue of first impression, as we have not previously had an occasion to interpret the 2013 amendment to Arkansas Code Annotated section 9-12-312(b). We review issues involving statutory interpretation de novo on appeal, as it is for this court to determine what a statute means. Moore, supra. However, unless it is shown that the circuit court erred, we will accept its interpretation as correct. Holbrook v. Healthport, Inc., 2014 Ark. 146, 432 S.W.3d 593.

         An award of permanent alimony is authorized under Arkansas Code Annotated section 9-12-312(a) (Repl. 2015), which states that when a divorce decree is entered, the circuit court may enter an order concerning alimony as is "reasonable from the circumstances of the parties and the nature of the case." Prior to 2013, section 9-12-312(b) also authorized an award of temporary alimony "under proper circumstances to either party in fixed installments for a specified period of time ...


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