ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

CHIEF JUDGE JOHN F. STROUD, JR.

DIVISION IV

MICHAEL RAY WHITE

APPELLANT

V.

CATHY LYNN WHITE

APPELLEE

CA 00-474

January 17, 2001

APPEAL FROM THE BENTON

COUNTY CHANCERY COURT

[E-99-1063-1]

HONORABLE OLIVER LEE ADAMS, JR., CHANCELLOR

AFFIRMED

This is a divorce case. Appellant, Michael Ray White, and appellee, Cathy Lynn White, were married on August 22, 1986. They have two children. The chancellor awarded custody of the children and child support to appellee. For his sole point of appeal, appellant contends that "the trial court erred in making an unequal distribution of marital property." We disagree and affirm.

The essence of appellant's argument on appeal is that the chancellor, without reciting in the decree his bases, made an unequal distribution with respect to three types of marital property: 1) two life insurance policies, 2) income generated by the parties during the period of their separation, and 3) income tax penalties and interest for the tax years of 1992 through1995

. Appellee, in essence, counters that the distribution of property on the whole was not unequal and that consequently a recitation of the statutory factors was not required.

Arkansas Code Annotated section 9-12-315 (Repl. 1998) provides in pertinent part:

(a) At the time a divorce decree is entered:

(1)(A) All marital property shall be distributed one-half (½) to each party unless the court finds such a division to be inequitable. In that event the court shall make some other division that the court deems equitable taking into consideration:

(i) The length of the marriage;

(ii) Age, health, and station in life of the parties;

(iii) Occupation of the parties;

(iv) Amount and sources of income;

(v) Vocational skills;

(vi) Employability;

(vii) Estate, liabilities, and needs of each party and opportunity of each for further acquisition of capital assets and income;

(viii) Contribution of each party in acquisition, preservation, or appreciation of marital property, including services as a homemaker; and

(ix) The federal income tax consequences of the court's division of property.

(B) When the property is divided pursuant to the foregoing considerations the court must state its basis and reasons for not dividing the marital property equally between the parties, and the basis and reasons should be recited in the order entered in the matter.

"The chancellor is vested with a measure of flexibility in apportioning the total assets held in the marital estate upon divorce, and the critical inquiry is how the total assets are divided." Creson v. Creson, 53 Ark. App. 41, 48, 917 S.W.2d 553, 557 (1996). Appellate courts review chancery cases, including division of property cases, de novo on the record, but will not reverse a finding of fact by the chancellor unless it is clearly erroneous. McKay v. McKay, 340 Ark. 171, 8 S.W.3d 525 (2000).

Here, there were certain designated items of marital property that the chancellor ordered sold if the parties were not able to reach an agreement concerning their division. Those items are not at issue in this appeal. With respect to the items of property and debt that the trial court actually allocated between the parties, the assets totaled approximately $28,791, including the funds in the Bank of America account ($22,191), the cash value of the Proco life insurance policy ($6,000), and the cash value of the Prudential life insurance policy ($600). The parties' debts totaled approximately $44,284, including amounts owed to Discover ($8,093) and J.C. Penney ($457), First Bank Card ($5,228), Stage ($104), Dwight, Joyce and Randy Frame ($3,800), Bank of America ($16,192), Snap-On Tools ($1,047), O'Reilly Parts ($2,063), Dillard's Department Stores ($2,000), and the amount borrowed on the Prudential life insurance policy ($5,300). Thus, the parties' litigated debts exceeded their litigated assets by approximately $15,493. One-half of that amount is $7,746. It is appropriate that a chancellor consider the debts of the parties when deciding a divorce case. See Hackett v. Hackett, 278 Ark. 82, 643 S.W.2d 560 (1982); Warren v. Warren, 33 Ark. App. 63, 800 S.W.2d 730 (1990). It seems to us that this factor is even more important in a case where the amount of the debts exceed the value of the assets that are to be allocated rather than sold.

The chancellor's allocation of marital assets to appellee amounted to approximately $10,421, and the allocation of debts to her amounted to approximately $19,707, leaving her a net debt of $9,286. The chancellor's allocation of marital assets to appellant amounted to approximately $18,370, and the allocation of debts to him amounted to approximately$24,577, leaving a net debt of $6,207 for appellant. Accordingly, not only did appellant benefit from the chancellor's allocation of assets and debts, his allocated share of the net debt is actually less than one-half of the total.

The two life-insurance policy distributions that are specifically challenged by appellant are Prudential and Proco. The Prudential policy originally had a cash value of approximately $6,000, but appellee had borrowed over $5,000 from it in order to take a vacation with the children during the period of separation, leaving a cash value of approximately $600 at the time of the divorce. The Proco policy had a cash value of approximately $6,000 at the time of divorce. As noted previously, the chancellor allocated the Prudential policy to appellee, and he split the cash value of the Proco policy equally between the two parties, giving each $3,000. When viewed in the context of the chancellor's overall allocation of assets and debts between the parties, we cannot say that the chancellor erred in his distribution of these two life insurance policies.

Neither do we find error in the manner in which the chancellor handled the income generated by the parties during their period of separation prior to the divorce. In the decree itself, the chancellor did not mention the income of the parties. In the record of the court's findings, appellant's income was mentioned primarily with respect to child support and the distribution of the Bank of America account, while appellee's income was mentioned in the chancellor's findings in the following manner:

Regarding the Bank of America account opened January 26, four or five thousand dollars of that money was transferred from a joint account at Regions Bank. $5,000 came from the proceeds of the sale of an automobile purchased during themarriage for the benefit of Mr. White's daughter by a previous marriage which totals $10,000 with the Regions Bank amount. The deposits made to that account up to July, when Mrs. White became employed, were $13,642.11. I divide that by two and give Mrs. White $6,821.05 from the account. The balance goes to Mr. White as his income and Mrs. White keeps the balance of her income without accountability from the time she was employed at $31,000 per year.

(Emphasis added.)

If appellee, Mrs. White, had any funds remaining from her earned income at the time the divorce decree was entered, it was appellant's responsibility to establish such amount so it could be considered by the chancellor and by this court. It is an appellant's burden to bring forth a record that demonstrates error. Meny v. Norris, 340 Ark. 418, ____ S.W.3d ____ (2000). He did not do so.

Finally, appellant challenges the chancellor's "unequal distribution of property" in that the chancellor required that "appellant be responsible for all penalties and interest on any tax liability of the parties for the tax years 1992 through 1995." Again, we find no error. In the decree, the chancellor merely stated that "the defendant shall be solely responsible for any penalties and interest attributable to the taxes owed for those years." He gave no further explanation. In his findings, however, he explained that he believed "defendant [appellant] was responsible for not filing the return on those dates and equity demands that Cathy White [appellee] not be penalized for Michael White's willful misconduct." First, we note that Arkansas Code Annotated section 9-12-315 (Repl. 1998) provides for the distribution of marital property, not marital debts. While "it would be unrealistic for a chancellor to refuse to consider the debts of the parties in deciding a divorce case . . . that does not mean thechancellor must divide the debts." Hackett v. Hackett, 278 Ark. 82, 643 S.W.2d 560 (1982). Moreover, the chancellor "may leave the parties as he found them, obligated individually or jointly to the creditor who is not ordinarily a party to a divorce and cannot therefore be bound by an order regarding the parties' debts." Id. Second, the chancellor clearly credited appellee's testimony that appellant refused to file returns during those years, and that she filed separate tax returns for herself for 1996, 1997, and 1998. Accordingly, we find no error in the manner in which the chancellor allocated the possibility of such penalties and interest as between the parties.

Affirmed.

Robbins and Roaf, JJ., agree.