Grider v. Grider

D. Franklin Arey, III, Judge.

The Cleveland County-Chancery Court granted appellant Margaret B. Grider a decree of separate maintenance on her counterclaim against the appellee, Grady Pat Grider. However, the chancellor declined appellant’s request that he enforce the separation and property settlement agreement previously entered into by the parties. On appeal, appellant contends the chancellor erred in failing to enforce this agreement. We agree that the chancellor had the power to enforce the agreement, so we reverse and remand this matter for further proceedings consistent with this opinion.

Appellant and appellee entered into a “Separation and Property Settlement Agreement” in February of 1996. The agreement noted the parties’ intent to live separate and apart for the rest of their lives, and purported to determine their rights and obligations during their separation. It divided the parties’ personal property and allowed appellant the use of the marital home. It specifically stated that it constituted an independent contract of the parties that would constitute a stipulation between them in any divorce action.

Appellee filed for divorce two months after the parties entered into the agreement. Appellant filed a counterclaim for separate maintenance. At trial, appellee failed to provide corroboration of the alleged grounds for divorce, so the chancellor granted a directed verdict against him. Since appellant proved her case, the chancellor entered a separate maintenance decree on her counterclaim.

Despite appellant’s request, the chancellor did not enforce the parties’ agreement. He believed that a decision on the agreement’s enforceability would be premature and inappropriate because no decree of divorce had yet been awarded in the proceeding.

We are asked to determine whether the chancellor has the power to enforce an agreement that divides the parties’ marital property in the course of a proceeding that results in a decree of separate maintenance. Appellee contends that the chancellor lacked jurisdiction to absolutely divide the parties’ property in the decree of separate maintenance. In her own words, appellant responds that she “is appealing the trial court’s decision that it lacked the power to enforce the [ajgreement between the parties, not its failure to proactively divide the property in its legal separation order.”

The chancellor did have the power to enforce the parties’ agreement, even though no decree of divorce was entered. “Courts of equity may enforce the performance of written agreements between husband and wife made and entered into in contemplation of either separation or divorce . . . .” Ark. Code Ann. § 9-12-313 (Repl. 1993). The agreement at issue indicates that it was “entered into in contemplation of. . . separation”; it determined the rights and obligations of the parties as to their marital property during their separation. Thus, section 9-12-313 provides the chancellor with the power to enforce the agreement.¹

This conclusion is supported by Strasner v. Strasner, 232 Ark. 478, 338 S.W.2d 679 (1960). In that case, no action for divorce was instituted by either party prior to our supreme court’s decision. At issue was an agreement between the husband and wife that divided their marital property, among other things. The wife brought an action in chancery court seeking specific performance of the agreement. The chancellor found that the agreement was valid, decreed specific performance of the property settlement agreement, and awarded the wife judgment for delinquent pay-merits. Id. at 480, 338 S.W.2d at 680. On appeal, the husband argued that the chancehor lacked subject matter jurisdiction to enforce the agreement because the wife had an adequate remedy at law for breach of contract. Our supreme court affirmed the chancellor’s jurisdiction, noting “that the Legislature settled the matter of jurisdiction by the passage of Act 290 of 1941 . . . .” Id. at 481, 338 S.W.2d at 681. Act 290 of 1941 is now codified as section 9-12-313.

Similarly, the enforcement of a separation and property settlement agreement was at issue in Rucks v. Taylor, 282 Ark. 200, 667 S.W.2d 365 (1984). The husband died after the parties entered into an agreement, but before a divorce decree was granted. The supreme court found that the language of the agreement at issue demonstrated an intent to terminate all property rights between the parties with the signing of the agreement.

While the agreement was to be incorporated into a divorce decree, if any, it was not contingent upon their obtaining a divorce. The chancellor has jurisdiction over such agreements even in the absence of a divorce action.

Rucks, 282 Ark. at 202, 667 S.W.2d at 366. The deceased husband’s widow sought to take a piece of property by virtue of her survivorship of an estate by the entirety with the deceased husband; our supreme court affirmed the chancellor’s enforcement of a provision of the agreement requiring a sale of the property and equal division of the proceeds. Id.

This line of cases supports the proposition that the chancellor had the power to enforce the parties’ agreement even though no divorce decree was entered. Therefore, entry of a decree of separate maintenance did not foreclose the chancellor’s exercise of jurisdiction to enforce the agreement.

The chancellor relied upon another line of cases for the proposition that marital property can only be distributed at the time a divorce decree is entered. See Kesterson v. Kesterson, 21 Ark. App. 287, 731 S.W.2d 786 (1987); Moore v. Moore, 21 Ark. App. 165, 731 S.W.2d 215 (1987); Coleman v. Coleman, 7 Ark. App. 280, 648 S.W.2d 75 (1983). The cases cited by the chancellor articulate the following rule:

We have been unable to find any case holding that property rights are to be adjudicated upon the rendition of a decree of separate maintenance. We held in the recent case of Mooney v. Mooney, 265 Ark. 253, 578 S.W.2d 195 (1979), that the property belonging to the parties could not be divided unless a divorce was granted.

Spencer v. Spencer, 275 Ark. 112, 114, 627 S.W.2d 550, 551 (1982). Similarly, we have read Arkansas Code Annotated section 9-12-315(a) (Repl. 1993) to mean “that marital property shall be distributed at the time the divorce decree is entered. A chancellor has no authority to dispose of property rights in an award of separate maintenance.” Moore, 21 Ark. App. at 169, 731 S.W.2d at 218.

These cases are distinguishable and do not prevent the chancellor’s exercise of power in this instance. They indicate that the chancellor cannot adjudicate marital property upon an award of separate maintenance. However, they do not prevent the chancellor from enforcing the parties’ agreement. Compare Ark. Code Ann. § 9-12-313 and Strasner, supra, with Moore, supra. Our holding in this case does not authorize the chancellor to adjudicate property rights; rather, pursuant to the statute, the chancellor is authorized to enforce the parties’ agreement “made and entered into in contemplation of . . . separation . . . .” See Ark. Code Ann. § 9-12-313.

Reversed and remanded for further proceedings consistent with this opinion.

Robbins, C.J., and Bird, Neal, and Meads, JJ., agree. Griffen, J., dissents.

1 The dissent highlights the following language in section 9-12-313: “. . . as are in conformity with rules and practices of courts of equity.” This language is cited as support for the dissent’s argument that a court of equity has no power to act in cases such as the one before us. We think the highlighted language modifies the “lawful ways and means” a court of equity may employ to enforce the agreement. It does not modify its power to act in the first instance. See § 9-12-313.