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Wyatt v. Wyatt

Court of Appeals of Arkansas, Division I

March 7, 2018



          Cullen & Co., PLLC, by: Tim J. Cullen, for appellant.

          Robert A. Newcomb, for appellee.


         Terry and Lorene Wyatt's divorce generated this appeal. Their divorce proceedings unfolded over several years and did not go smoothly. The litigation primarily focused on the division of their property. On appeal, Terry argues that the circuit court erred in how it divided the couple's property, its child-support calculation, and the award of attorney's fees to Lorene. We affirm the circuit court.

         I. Background

         Lorene and Terry married in December 1994, and three children were born of the marriage. Before and during the marriage, Terry was involved in several businesses-three of them are critical to this appeal. Terry formed A-1 Recovery, Inc., in 1992-before his marriage to Lorene. Two other corporations-A-1 Recovery Rental, LLC, and A-1 Recovery Towing & Recovery, Inc.-were formed during the marriage. Of great significance to this appeal is the fact that these various business entities owned most of the property used by the parties-including real estate and vehicles-and were used to pay many of the parties' personal expenses. For example, Terry used corporate funds to pay for household furnishings, personal property, personal legal fees, and food.

         Lorene filed for divorce on 17 August 2011, and Terry later counterclaimed for divorce. After Lorene filed for divorce, Terry caused to be filed of record a sales contract allegedly signed on 28 February 2011, wherein A-1 Recovery Rental, LLC, sold 56 Wyatt Lane-the house the parties lived in before their separation-to Billy Joe Studebaker.[1] And on 23 August 2011, Terry sold A-1 Recovery Rental, LLC, to Billy Joe Studebaker. On 4 September 2012, Terry sold A-1 Recovery Towing & Recovery, Inc., to Gerald Kennon. In a separate case before the same circuit court, Lorene attempted to have the conveyances of 56 Wyatt Lane and A-1 Recovery Rental, LLC, to Billy Joe Studebaker set aside as fraudulent. The circuit court refused to set aside those conveyances.

         On 24 May 2013, the circuit court entered a divorce decree that adjudicated custody and visitation of Lorene and Terry's minor child-the other two children, twin boys, were over eighteen. By consent and agreement of the parties, the circuit court reserved deciding all issues of property division "due to the unusual circumstances of the parties' property division."

         On 6 January 2016, three years after the circuit court had granted the parties' divorce, the circuit court entered a lengthy order and judgment that dealt with property, child support, spousal support, and attorney's fees. In dividing the parties' property, the circuit court valued the property as of their separation date in August 2011 finding it "impossible to arrive at a reliable value or composition of the marital estate after that date."

         Lorene successfully argued at trial that she was entitled to a portion of the value of A-1 Recovery, Inc-a corporation formed before the parties' marriage. Applying established precedent, the circuit court found that Lorene contributed to the growth of A-1 Recovery, Inc., and awarded her $412, 765, which represented one-half of the marital value of A-1 Recovery, Inc., and its wholly owned corporations. Additionally, the circuit court determined that Terry was operating the corporations as his alter ego and pierced the corporate veil. On child support, the circuit court imputed $12, 833.73 in monthly income to Terry when calculating his obligation. Finally, the circuit court awarded Lorene $31, 950 in attorney's fees. Terry timely appealed the circuit court's order and judgment.

         Here, Terry argues the circuit court erred by (1) failing to divide the marital property when the divorce was granted; (2) treating A-1 Recovery, Inc., as marital property; (3) valuing the marital property as of the parties' separation date; (4) piercing the corporate veil; (5) imputing income when calculating his child-support obligation; and (6) awarding attorney's fees to Lorene.

         II. Property Division

         We review divorce cases de novo. Moore v. Moore, 2016 Ark. 105, 486 S.W.3d 766. The circuit court's findings pertaining to division of property are affirmed unless they are clearly erroneous or against the preponderance of the evidence. Id. The division of property itself is also reviewed and the same standard applies. Id. A finding is clearly erroneous when the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. Skokos v. Skokos, 344 Ark. 240, 40 S.W.3d 768 (2001). Our court gives due deference to the circuit ...

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