Kevin Howard v. Regina Howard

Cite as 2024 Ark. App. 566
ARKANSAS COURT OF APPEALS
DIVISION III
No. CV-23-587

Opinion Delivered November 13, 2024
KEVIN HOWARD
APPELLANT APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
THIRTEENTH DIVISION
V.
[NO. 60DR-20-2158]

REGINA HOWARD HONORABLE W. MICHAEL REIF,
APPELLEE JUDGE
AFFIRMED

WENDY SCHOLTENS WOOD, Judge

Kevin Howard appeals a divorce decree entered by the Pulaski County Circuit Court

on May 11, 2023. He argues that the circuit court erred in its award of rehabilitative alimony,

its division of the parties’ interest in WTH Development, LLC (“WTH”), and its

computation of child support. We affirm.

Regina Howard and Kevin married in 1999 and separated in December 2018.

Although they have three children, only one seventeen-year-old boy was a minor when the

final decree of divorce was entered. Regina is a computer-science teacher for the Little Rock

School District. Kevin is the director of housing for the City of Little Rock. Kevin is also a

real-estate developer and partial owner of WTH, and he wholly owns and operates Horizon

Realty of Arkansas, LLC (“Horizon”).
All three of Kevin’s points on appeal concern the circuit court’s findings regarding

the value of and income earned from WTH and Horizon. At the April 2023 divorce hearing

concerning the parties’ real-estate businesses, Kevin testified that WTH is a real-estate-

development company that owns parcels of land it develops into subdivisions. The parties

own 30 percent of WTH. Kevin said that Horizon is a construction and development

company that builds homes in these subdivisions.

The only evidence of the value of the owners’ equity in WTH was set forth in a

summary prepared by WTH’s accountant and attached to WTH’s 2021 tax return. It

provided that the total equity in WTH is $495,228. Regina testified that she obtained this

document in discovery from Kevin. Regina admitted on cross-examination that WTH was

not making money on the sale of lots but believed they had sold the “main parcel of land

where there was income” in October 2022. She also said that she did not know the

“balances,” “loans,” or liabilities of WTH because she had been “kept in the dark” regarding

the value of the property and about what had or had not been “paid off.”

Kevin prepared and introduced a “demonstrative exhibit” of WTH’s assets and

liabilities, identifying various tracts of land by parcel numbers and acreage. The exhibit did

not assign a value to any of the tracts. The liabilities included special-improvement-district

bonds and taxes, but the amount currently owed on either the bonds or the taxes was not

provided. Moreover, Kevin’s testimony failed to provide an exact amount for the fair market

value of the property owned by WTH or WTH’s equity in relation to its assets and liabilities.

Kevin admitted that the $495,228 amount set forth on WTH’s 2021 tax return was the

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“equity in the business” based on the initial value of the land, but he said WTH would not

be able to pay him 30 percent of that amount if he “walked away” from the business today.

He said that WTH no longer owns all the property and that the “monetary value” of WTH

is what is in its checking account, less expenses—about $102,000. He failed to explain why

the value of WTH did not also include the value of the real estate it owned less any

outstanding liabilities.

Regarding Horizon, Regina introduced the records from one of its multiple checking

accounts for 2021 and 2022 that Kevin had provided in discovery. She testified that she

reviewed the records to determine an approximate dollar amount of the personal spending

or benefit that Kevin derived from the business. She testified that she was conservative in

her review and did not include expenses for items that might have been “mixed use” or that

potentially could have been business expenses, such as charges from Walmart or gas stations.

She concluded that Kevin withdrew an average monthly amount of $3,192 for personal

expenses from the account. These included airline, Uber, and hotel charges for multiple trips

to Las Vegas, Texas, Washington, and Florida; tickets to sporting and other events; charges

for Amazon Prime Video, Cold Stone Creamery, nail salons, lingerie, and cigars; charges for

dining in local restaurants; a recurring monthly charge of $402; and cash withdrawals. She

testified that the trips included his attendance at the NBA summer league in Las Vegas with

the father of an NBA player. In addition to hotel and airline charges, these expenses included

UNLV merchandise and hookah bar purchases. She also testified that there were several

trips to Florida, one of which was potentially his annual golf trip.

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Kevin responded by stating that he was not underreporting his income as Regina

suggested or “just drawing money out to just pay myself a certain amount of money.” Rather,

he said that he used the Horizon account for “day-to-day business” expenses. He said that

the monthly recurring charge of $402 was used to pay the mortgage on one of the parties’

marital properties, which had been vacant for years. He claimed that most of the trips he

takes are business trips because he talks about real-estate business “pretty much wherever I

go.” He explained that the nail-salon expenses were for foot massages and nail trims before

he referees games. He said that the cash withdrawals were generally used to pay contractors.

Kevin did not introduce any invoices, receipts, or other documentation in support of his

testimony.

In the final divorce decree and relevant to this appeal, the circuit court awarded

custody to Regina subject to Kevin’s “reasonable un-specified visitation.” The court ordered

Kevin to pay monthly child support of $1,058, which would terminate in May 2024 when

the minor child graduated from high school. The court also ordered Kevin to pay spousal

support of $1,500 a month for a period of seven years. In calculating child support, the court

imputed additional gross monthly income of $2,000 to Kevin from Horizon because he used

the account for personal expenses. The court found that Kevin was in arrears under the

temporary decree for child and spousal support in the amount of $2,783.1 Finally, Kevin was

awarded ownership of the 30 percent interest in WTH and was ordered to pay Regina half

1
Under the temporary decree, Regina was awarded custody, child support of $908 a
month, and spousal support of $2,132 a month.

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of the 30 percent interest. The court found that the equity in the company was $495,228,

calculated Kevin’s 30 percent interest as $148,568.40, and ordered Kevin to pay Regina half

that amount: $74,284.20.

For his first point on appeal, Kevin argues that the circuit court erred in granting

“rehabilitative alimony” to Regina. Specifically, he contends that Regina could be earning

more if she used her skills in “corporate America” rather than in education. He points to

her testimony that she earned between $80,000 and $90,000 working for Verizon Wireless

until she was laid off in 2015 and her testimony that she did not want to work in the

corporate world because it was stressful. He claims that Regina is underemployed and has

the ability to achieve the standard of living to which she was accustomed if she chooses. He

also argues that the court did not “fully comprehend” the nature of the construction business

and the income he derives from it.

A decision regarding alimony is a matter that lies within the circuit court’s sound

discretion and will not be reversed on appeal absent an abuse of that discretion. Hiett v. Hiett,

86 Ark. App. 31, 158 S.W.3d 720 (2004). An abuse of discretion means discretion

improvidently exercised, i.e., exercised thoughtlessly and without due consideration. Webb v.

Webb, 2014 Ark. App. 697, at 3, 450 S.W.3d 265, 269. The circuit court is in the best

position to view the needs of the parties in connection with an alimony award. Rawls v.

Yarberry, 2018 Ark. App. 536, at 9, 564 S.W.3d 537, 543.

Arkansas Code Annotated section 9-12-312(a) states that the circuit court may enter

an order concerning alimony that is “reasonable from the circumstances of the parties and

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the nature of the case.” Ark. Code Ann. § 9-12-312(a) (Repl. 2020). The purpose of alimony

is to rectify the economic imbalance in earning power and standard of living in light of the

particular facts in each case, and the primary factors to be considered in determining whether

to award alimony are the financial need of one spouse and the other spouse’s ability to pay.

Foster v. Foster, 2016 Ark. 456, at 9, 506 S.W.3d 808, 814–15. The court should also consider

the following secondary factors: (1) the financial circumstances of both parties; (2) the

amount and nature of the income, both current and anticipated, of both parties; (3) the

extent and nature of the resources and assets of each of the parties; and (4) the earning ability

and capacity of both parties. Kuchmas v. Kuchmas, 368 Ark. 43, 45–46, 243 S.W.3d 270,

271–72 (2006).

Section 9-12-312(b) provides that a court may award rehabilitative alimony and may

require the recipient to provide a plan of rehabilitation for the court to consider in

determining whether or not the plan is feasible and the amount and duration of the award.

Our courts have defined rehabilitative alimony as “alimony payable for a short, but specific

and terminable period of time, which will cease when the recipient is, in the exercise of

reasonable efforts, in a position of self-support.” Foster, 2016 Ark. 456, at 10, 506 S.W.3d at

815. Our courts have analyzed the concept of rehabilitative alimony using the same factors

that apply to permanent alimony. Carr v. Carr, 2019 Ark. App. 513, at 10, 588 S.W.3d 821,

827.

Regina is a teacher whose monthly gross income is $5,640.12. She submitted an

affidavit of financial means that included expenses of $7,000 before including her significant

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credit-card debt. Regina did not request or submit a plan for rehabilitative alimony but asked

the court to continue monthly spousal support of $2,132—what had been ordered in the

temporary decree—for seven years.

Kevin is the director of housing for the City of Little Rock with a gross monthly

income of $10,389.51. He also owns and operates Horizon and, according to the circuit

court, uses the Horizon account for personal expenses. The court estimated these expenses

at $2,000 a month and imputed this amount to Kevin’s income for a monthly gross income

of $12,389.51.

The court did not mention in its order that the alimony award was rehabilitative. The

court simply awarded Regina alimony of $1,500 a month for seven years. In making this

finding, the court specifically recognized the disparity between the parties’ incomes, the

twenty-three-year duration of their marriage, and Kevin’s standard of living during their four-

year separation. The court noted that Regina was a teacher with limited potential to earn

more income and that Kevin had recently received a significant salary increase and has

significant income and potential income through his multiple business ventures.

Kevin is asking this court to reweigh the evidence in a manner that is more favorable

to him, which we will not do. It is not this court’s duty to substitute its judgment for that of

the circuit court. Baker v. Baker, 2023 Ark. App. 499, at 4, 678 S.W.3d 608, 613. We leave

all credibility determination to the circuit court. Williams v. Williams, 2019 Ark. App. 186,

at 19, 575 S.W.3d 156, 166. Giving consideration to our standard of review, the

discretionary nature of alimony awards, and the evidence before the circuit court, we hold

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that it did not abuse its discretion in awarding Regina alimony of $1,500 a month for seven

years.

Kevin’s second point on appeal is that the circuit court abused its discretion in

ordering him to pay Regina $74,284.20 as her one-half of the equity shown on WTH’s 2021

tax returns. The court found that the fair market value of WTH was $495,228, calculated

the parties’ 30 percent share in the company as $148,568.40, awarded Kevin the 30 percent

share, and ordered him to pay Regina $74,284.20. Kevin disputes the amount.

The circuit court is given broad powers to distribute both marital and nonmarital

property to achieve an equitable division, and the overriding purpose of the property-division

statute is to enable the court to make a division that is fair and equitable. Perser v. Perser, 2019

Ark. App. 467, at 5, 588 S.W.3d 395, 401. We review division-of-marital-property cases de

novo, but we will not reverse the circuit court’s findings of fact unless they are clearly

erroneous or against the preponderance of the evidence. Hernandez v. Hernandez, 371 Ark.

323, 327, 265 S.W.3d 746, 749 (2007). 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 made. Kelly v. Kelly, 2014 Ark. 543, at 5, 453 S.W.3d 655, 660.

Regina asserted that WTH had a fair market value of $495,228 based on a diagnostic

summary prepared by WTH’s accountant and attached to its most recent tax return that

showed the equity in WTH is $495,228. Kevin did not object to admission of this summary

into evidence nor did he dispute that he and Regina owned 30 percent of WTH. Instead, he

testified that some of the property included in the equity calculation had been sold. But he

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provided no documentation regarding what property had been sold, its value, or how this

affected either WTH’s fair market value or the parties’ equity. Kevin simply testified that he

would not be able to “walk away” with 30 percent of $495,228 and opined that the

“monetary value” of their interest was 30 percent of the funds currently held in WTH’s bank

account less expenses. His testimony regarding the current financial position of WTH was

obscure at best, and significantly, he provided no documentation to support a different

valuation for the company. In reviewing the circuit court’s findings, this court defers to the

circuit court’s superior position to determine the credibility of witnesses and the weight to

be given their testimony and the evidence. Jez v. Jez, 2016 Ark. App. 594, at 2, 509 S.W.3d

1, 3. We hold that the circuit court did not clearly err in ordering Kevin to pay Regina

$74,284.20 for her half of the parties’ 30 percent interest in WTH.

Kevin next argues that the circuit court erred in its computation of child support

because it erroneously imputed $2,000 a month in gross income to him. Our standard of

review for an appeal from a child-support order is de novo, and we will not reverse a finding

of fact by the circuit court unless it is clearly erroneous. Wright v. Wright, 2010 Ark. App.

250, at 4, 377 S.W.3d 369, 372. In a child-support determination, the amount of child

support lies within the sound discretion of the circuit court. Parnell v. Ark. Dep’t of Fin. &

Admin., 2022 Ark. 52, at 3, 639 S.W.3d 865, 867. A circuit court abuses its discretion when

it exercises its discretion improvidently or thoughtlessly and without due consideration.

Grynwald v. Grynwald, 2022 Ark. App. 310, at 3, 651 S.W.3d 177, 180.

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Our supreme court has said that the definition of income included in Administrative

Order No. 10 “is intentionally broad and designed to encompass the widest range of sources

for the support of minor children.” McWhorter v. McWhorter, 346 Ark. 475, 481, 58 S.W.3d

840, 844 (2001). Income includes perquisites or goods and services received in-kind and can

include meals, housing, personal use of vehicle, and travel. Ark. Sup. Ct. Admin. Order No.

10 (III)(2). “In general, the court should carefully review income and expenses from a parent’s

self-employment or operation of a business to determine actual levels of gross income

available to the parent. The court’s duty is to accurately determine a child-support obligation

in every case. This amount may differ from the determination of business income for tax

purposes.” Ark. Sup. Ct. Admin. Order No. 10 (III)(3)(c).

The circuit court made the following findings:

8. CHILD SUPPORT – Plaintiffs’ income was not disputed at trial. Defendant’s
income was in dispute at trial. Defendant had not completed an accurate Affidavit
of Financial Means prior to trial, but provided one that was prepared during a
Court recess. Defendant represented in his Affidavit of Financial Means and
testimony that his gross income was $4,500.00 bi-weekly ($117,000.00) per year.
He further testified that this income was from his salaried position with the City
of Little Rock. Defendant's March 31, 2023, paystub shows that in addition to his
salary, Defendant receives $33.24 in “longevity” per pay period, $31.15 “GTL”
per pay period, and $500.00 for “car tax” per month.

9. The Court finds the Defendant’s gross monthly income from the City of Little
Rock is $10,389.51.

10. It was undisputed that the Defendant also owns and operates a business, Horizon
Realty of Arkansas, LLC. Defendant claims to have no income from said business.
Plaintiff introduced monthly bank statements for the time period of January 2021
through December 2022 for one bank account for Horizon Realty of Arkansas,
LLC. Plaintiff asserted the Defendant utilized an average of $3,192.40 per month
from that bank account for personal use instead of business use. This spending

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did not include all potential personal benefits and only included one of multiple
bank accounts of the business. Defendant asserted that all spending from the
account was business in nature and that he received no income at all from the
business.

11. The spending that Plaintiff asserted was personal included transfers to
Defendant’s personal account, which Defendant admitted was used to pay a
mortgage for real estate in the Parties’ personal names. Defendant took numerous
trips that included Texas, California, Las Vegas, Hawaii, a family reunion, a trip
to the beach, and a golf trip to Florida, among other travels. Those travels included
numerous meals, and event tickets. Those travels also included cash withdrawals
for which the Defendant did not provide any documentation to support his claim
that the cash withdrawals were for business purposes. The Court recognizes that
it is undisputed that the Defendant made all of his support payments to Plaintiff
via cash deposits. This evidences that at least some of the cash he withdrew from
the business account was used for personal matters or that he has an additional
source of cash that has not been disclosed. Defendant testified that that at least
some of the personal spending was similar to a “bonus” a company provides to a
CEO.

12. For child support purposes, income is intentionally broad and designed to
encompass the widest range of sources consistent with the State’s policy to
interpret income broadly for the benefit of the child. Evans v. Tillery, 361 Ark. 63
(2005). Income includes perquisites or goods and services received in-kind;
including meals, housing, personal use of vehicle, and travel. Revised
Administrative Order 10, Section 111(2). Tax deductibility is not always relevant
to monies a parent should have available for child support. Revised Administrative
Order 10, Section III(3).

13. The Court finds that Defendant used the Horizon bank account for personal
expenses and imputes an average gross monthly income of $2,000.00 to
Defendant from Horizon Realty of Arkansas, LLC.

14. Defendant’s Affidavit of Financial Means claims that his health insurance
premium is $538.67 per month, with $409.76 of that premium being for the
minor child. The Defendant failed to provide any documentation to support that
claim. Defendant’s March 17, 2023 and March 31, 2023 paystubs do not support
his claim on this point as they reflect that Defendant actually pays $505.37 per
month in health insurance premiums. There are 4 people covered under this plan,
Defendant and his 3 children. Defendant did not offer any evidence to determine
what portion, if any, of the premium is attributable only to the minor at issue

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here. Without any evidence the Court cannot determine if Defendant pays any
additional amount to cover the minor child or pays one amount to cover all three
of his children. Since no evidence was introduced regarding the premium the
Court declines to deduct any of this amount from Defendant’s income.

15. Therefore, the Court finds that Plaintiff has a gross monthly income of $5,640.12
and Defendant has a gross monthly income of $12,389.51 for a total monthly
income of $18,029.63 as determined under revised Administrative Order 10
creating a basic level of support for the child of $1,540.00 per month. Plaintiff’s
income is 31.28% and the Defendant’s income is 68.72% of the combined
monthly income. It is therefore adjudged that the Defendant shall owe a duty of
child support to the Plaintiff in the amount of $1,058. This support obligation
shall begin effective May 15, 2023. This obligation shall automatically terminate
upon the child’s graduation from high school, expected to be in May 2024.

Here, the circuit court heard testimony from both parties concerning the funds Kevin

spent out of the Horizon bank account, and it made detailed findings about the expenses.

Although Regina testified that Kevin’s personal expenses averaged almost $3,200 a month

from the account, the court imputed only $2,000 in monthly gross income. We cannot say

that the court abused its discretion in its calculation of Kevin’s income.

Kevin also contends that the circuit court erred in determining that he was in child-

support arrears in the amount of $2,783.2 At trial, Kevin testified that the house in which

Regina lived had roof damage that cost “well over $25,000” to repair. He stated that their

insurance company “covered the majority of the total loss,” but there was “some part” of the

repairs that he paid, too. He said he could not state the exact amount he paid or to whom

he had paid it or when, and he did not introduce any receipts or other documentation

2
The court found that Kevin owed $25,714 for child and spousal support under the
temporary order and had paid only $22,931.

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demonstrating that he was entitled to be reimbursed for any such payments. Nevertheless,

when Kevin received a $5,771.29 check from the insurance company as a final payment for

the claim, he deposited it into the parties’ joint account and then withdrew $3,000 to

reimburse himself. He claims the remaining $2,771.29 should be credited against his child-

support arrearage.

It is undisputed that the insurance proceeds were from a policy of insurance on the

family home. The circuit court found that the insurance check was a joint asset, that Kevin

took approximately half and left half for Regina, and that Kevin was not entitled to a credit

for support payments that he owed Regina using her half of the insurance proceeds.

There is a presumption that all property acquired during a marriage is marital

property. McKay v. McKay, 340 Ark. 171, 8 S.W.3d 525 (2000). Once one party has shown

that property was acquired during the marriage, the burden shifts to the other party to prove

by clear and convincing evidence that the property is nonmarital. Ellis v. Ellis, 2017 Ark.

App. 661, at 5–6, 536 S.W.3d 166, 171. In light of the evidence presented, the court’s

finding that the property was a joint asset and that Kevin was not entitled to a credit towards

his support obligation is not clearly erroneous.

Affirmed.

KLAPPENBACH and THYER, JJ., agree.

Sheila F. Campbell, P.A., by: Sheila F. Campbell, for appellant.

LaCerra, Dickson, Hoover & Rogers, PLLC, by: Lauren White Hoover, for appellee.

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