Thursday, March 10, 2016

Supreme Court upends precedent on divorce property division without being asked

Posted By on Thu, Mar 10, 2016 at 10:48 AM

click to enlarge TAKING CHARGE: Without being asked to do so, Justice Rhonda Wood led a Supreme Court majority that upended decades of precedent on division of property in divorce cases.
  • TAKING CHARGE: Without being asked to do so, Justice Rhonda Wood led a Supreme Court majority that upended decades of precedent on division of property in divorce cases.
The Arkansas Supreme Court today, with two special justices appointed by Gov. Asa Hutchinson in the majority, upended precedent on division of property in a divorce without having first been asked to do so.

This is news in domestic law. It  also sends a signal, I think, of court members', particularly those influenced by the governor and others with similar political outlook, intention to defer carefully to the legislature. That could have large implications across the statute books.

The court, in a case from Logan County pitting John Davis Moore against Nancy Moore, reversed a property division that considered the appreciation of the value of property in a mail hauling company the husband owned before marriage as marital property and thus to be equally divided. The majority opinion, which included votes from appointed Special Justices Chad Atwell and Dan Greenberg, said the past precedents on marital property departed from a clear reading of the statute that says property held prior to marriage was not marital property and not subject to division. Previous court rulings have said active participation in the increase in value could be taken into account and the legislature has made no effort over several decades to dispute this holding. In the Logan County case, the judge also cited the support from the wife in her husband's endeavor as supporting a finding it was marital property. The majority also rejected that finding.

The decision, written by Justice Rhonda Wood, said in part:

Additionally, some courts have confused the rule in Layman by weighing the efforts of the owning and nonowning spouse when determining whether nonmarital property should be reclassified as marital. Indeed, in this case the circuit court considered Nancy's contributions to the company, in addition to David's, in concluding that the increase in value in the company was a marital asset. This was erroneous even under Layman. 

Accordingly, we find it appropriate to return to the statute's plain language, which states that "the increase in the value of properry acquired prior to marriage" is nonmarital. Accordingly, to the extent that Layman, Farrell, and Brown redefined marital property through the "active appreciation" rule, which conflicts with section 9-12-315, we expressly overrule them.

Chief Justice Howard Brill and Justice Robin Wynne dissented from the part of the decision that overturned precedent. (They agreed on a technical argument on whether the lower court ruling was final.) Justices Courtney Goodson and Paul Danielson did not participate in the case. Brill and Wynne defended the importance of stare decisis, or adhering to past precedent.

Adherence to precedent is necessary to promote "stability, predictability, and respect for judicial authority," Brill wrote. Wood responded:

in this case, because the court has taken the statutory language and rewritten it to achieve a contrary result, we are compelled to serve justice by retuning to the statute's clear language.
Brill countered, while also noting that the majority had overruled precedent though those appealing the decision had not asked for it:

Under the separation-of-powers doctrine, the legislature has the power and responsibility to proclaim the law through statutory enactments, and the judiciary has the power and responsibility to interpret legislative enactments. lt was up  to the legislature to amend the statute if it disagreed with our interpretation declining to reverse our construction of the marital-property statute and leaving change, if any, in the word "property" to the General Assembly). The General Assembly has not done so, and this court should not act in its stead.


Brill, in his dissent, quoted from a law review article, "Playing Cod: A Critical Look at Sua Sponte Decisions by Appellate Courts." The case today was a sua sponte decision, or one taken up unbidden on the majority's own accord. 

Wynne's dissent noted explicitly that the husband had not only not sought to overturn precedent, but had differentiated his own case from the key precedent.

Wood did note that nonmarital property can be divided on an equitable basis after taking various factors into consideration, including the length of marriage, age, health, station in life, vocational skills and others.

Here, the circuit court did not make findings under section 9-12-315(a)(2) to justify a distribution of nonmarital property. Instead, the court considered it marital property. For these reasons, we reverse and remand for the circuit court to enter an order awarding David the growth of his business as his nonmarital property absent a specific statutory finding to justify any distribution to Nancy
John Moore had also challenged the judge's award of $5,000 monthly alimony until his ex-wife turned 65. The Supreme Court majority said this did not abuse discretion given factors cited, but said the lower court should reconsider alimony when it reconsiders property division because "property division and alimony [are] complementary devices that the circuit court may utilize in combination to make the dissolution of marriage equitable."

UPDATE: Alarms are already going out in domestic law circles and accountants are already devising ways for people to set up holding companies in advance of marriage into which subsequent creations can be moved to avoid future property divisions. More law will be made before this is over, but the tremors seem seismic.

Tags: , , , , , , , , , , , ,

Favorite

Speaking of...

Comments (13)

Showing 1-13 of 13

Add a comment

 
Subscribe to this thread:
Showing 1-13 of 13

Add a comment

More by Max Brantley

Readers also liked…

Most Shared

  • World leaders set to meet in Little Rock on resource access and sustainable development

    Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
  • Tomb to table: a Christmas feast offered by the residents of Mount Holly and other folk

    Plus, recipes from the Times staff.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Most Viewed

Most Recent Comments

Blogroll

 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation