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Hudspeth v. Hudspeth

Court of Appeals of Arkansas, Division IV

January 25, 2017

KIM HUDSPETH (NOW LEMONS), APPELLANT
v.
ROBERT HUDSPETH, ADMINISTRATOR OF THE ESTATE OF BRAD HUDSPETH, APPELLEE

         APPEAL FROM THE ST. FRANCIS COUNTY CIRCUIT COURT [NO. 62DR-2011-18-3] HONORABLE CHRISTOPHER W. MORLEDGE, JUDGE

         REVERSED

          John D. Bridgforth, P.A., Attorney at Law, by: John D. Bridgforth, for appellant.

          James A. Simpson, Jr., for appellee.

          RAYMOND R. ABRAMSON, Judge

         This appeal involves a dispute over the proceeds of a life insurance policy on the life of Brad Hudspeth, deceased. Brad and appellant Kim Hudspeth, now Lemons, were divorced by decree of the St. Francis County Circuit Court on August 30, 2011. Incorporated into the Hudspeths' divorce decree was a property-settlement and separation agreement. Brad Hudspeth died intestate on October 11, 2015.

         On January 4, 2016, Metropolitan Life Insurance Company (Met Life), the insurance carrier for Brad Hudspeth's life insurance policy, paid the policy limits of approximately $60, 000 to Kim Hudspeth, the named beneficiary of the policy. Appellee Robert Hudspeth, brother of Brad and administrator of the estate of Brad Hudspeth, filed a motion to enforce the divorce decree and for a temporary injunction, alleging that the property-settlement agreement precluded Kim from receiving life-insurance proceeds. The circuit court found that Kim had waived her right to the proceeds and awarded appellee the life insurance proceeds. Kim appeals from that decision, contending that the circuit court erred. We agree and reverse the circuit court's order.

         During the Hudspeth marriage and at the time of the divorce, both Brad Hudspeth and appellant were employed by the United States Postal Service. Brad carried a basic life insurance policy, and he designated Kim as the beneficiary. After the parties divorced, no change was made to the named beneficiary. However, after Met Life paid appellant the benefits, appellee filed a motion to enforce the decree and for a temporary injunction, arguing that pursuant to the parties' divorce decree and paragraph 8 of their property-settlement agreement, each of the parties relinquished any and all claims toward the other party's pension plan or any other benefits to which either party was entitled under the Federal Employees Retirement System. Appellee contended that each party specifically waived any right to claim any portion of the other party's basic benefit plans, special retirement supplements, or thrift savings plan.

         On March 3, 2016, the circuit court held a hearing on the matter and found that appellant had waived her right to claim the proceeds of her ex-husband's life insurance policy and therefore awarded the proceeds to appellee. An order entered on April 8, 2016, reflected its ruling. This timely appeal follows.

         Our standard of review on appeal from a bench trial is whether the circuit court's findings were clearly erroneous or clearly against the preponderance of the evidence. Foundation Telecomms., Inc. v. Moe Studio, Inc., 341 Ark. 231, 238, 16 S.W.3d 531, 536 (2000). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court, based on the entire evidence, is left with a firm conviction that an error has been committed. Mauldin v. Snowden, 2011 Ark.App. 630, at 2, 386 S.W.3d 560, 562.

         Appellant argues that the provision relied on by the appellee and the circuit court fails to specifically address the parties' life insurance policies. We agree. Paragraph 4 of the settlement agreement, which was incorporated into the couple's divorce decree, provides, in part, as follows:

4. Defendant's separate-non-marital property. Defendant owns certain property which he acquired prior to marriage or which is otherwise non-marital property. Defendant shall be entitled to the exclusive ownership of these items of property, and Plaintiff makes no claim toward these items of property. Defendant shall be entitled to the exclusive ownership of the following items of non-marital property:
(1) - (4) . . .
(5) The cash value of any and all life insurance policies ...

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