GLYN KERBAUGH v. LINDA CHERYL KERBAUGH
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RENDERED: June 25, 1999; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 1996-CA-003446-MR (DIRECT APPEAL)
NO. 1997-CA-000025-MR (CROSS APPEAL)
GLYN KERBAUGH
v.
APPELLANT/CROSS-APPELLEE
APPEAL FROM BOYLE CIRCUIT COURT
HONORABLE ROGER CRITTENDEN, SPECIAL JUDGE
ACTION NO. 93-CI-000482
LINDA CHERYL KERBAUGH
APPELLEE/CROSS-APPELLANT
OPINION AFFIRMING AND
ORDER DENYING MOTION TO DISMISS
** ** ** ** **
BEFORE:
GUIDUGLI, MILLER, AND DYCHE, JUDGES.
GUIDUGLI, JUDGE.
This is an appeal and cross-appeal from a
domestic relations order of the Boyle Circuit Court regarding the
issues of maintenance, property distribution, and retirement fund
distribution.
We affirm.
Glyn D. Kerbaugh (Glyn) and Linda Cheryl Kerbaugh
(Cheryl) were married on December 29, 1973.
They had three
children during their marriage. On December 29, 1993, Glyn filed
a petition to dissolve the marriage.
On April 24, 1995, a decree
dissolving the marriage was entered, reserving, however,
property, custody, child support, and maintenance issues.
The
case was referred to a Special Domestic Relations Commissioner
(DRC), and hearings were held in September and October 1995.
June 10, 1996, the DRC issued his recommendations.
On
Among other
things, the DRC determined that each parties’ retirement fund was
exempt from division; assigned the parties’ three percent
interest in United Warehousing Company to Glyn, the value of
which was determined to be negligible; accepted the value of
Glyn’s CPA firm as proposed by Glyn; and determined that Cheryl
was not entitled to maintenance.
The parties each filed exceptions to the DRC’s report
with a Special Judge assigned to the case.
Following arguments,
on October 30, 1996, the trial court entered an order
substantially accepting the DRC’s recommendations.
The only
modification to the DRC’s recommendations relevant to this appeal
is the trial court’s award of $1,200.00 per month in maintenance
to Cheryl. Following the trial court’s decision, Glyn appealed
and Cheryl cross-appealed.
The sole issue raised in Glyn’s appeal is the trial
court’s award of $1,200.00 per month in maintenance to Cheryl.
Glyn first contends that the trial court erred as a
matter of law because it failed to make the statutorily required
finding that Cheryl is unable to support herself through
appropriate employment as required by KRS 403.200(1)(b).
KRS 403.200(1) provides that a trial court may grant a
maintenance order only if it finds that the spouse seeking
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maintenance (a) lacks sufficient property, including marital
property apportioned to him, to provide for his reasonable needs;
and (b) is unable to support herself through appropriate
employment or is the custodian of a child whose condition or
circumstances make it appropriate that the custodian not be
required to seek employment outside the home.
Glyn correctly asserts that the trial court failed to
find that Cheryl is unable to support herself through employment
as required by KRS 403.200(1)(b).
Following the trial court’s
entry of its final order, however, Glyn did not request a finding
on that issue or otherwise bring the omission to the trial
court’s attention.
On November 3, 1997, Cheryl filed a motion
with this Court to dismiss Glyn’s appeal based upon his failure
to seek additional findings pursuant to CR 52.02.
The motion was
passed to this panel for disposition.
In the case at bar, the DRC set forth substantial
findings relating to maintenance issues.
The findings of a DRC,
to the extent adopted by the trial court, are to be considered
findings of the trial court.
CR 52.01.
The trial court did not
specifically reject the DRC’s findings and we construe this, to
the extent the trial court’s awarding of maintenance was not
inconsistent with the findings, as an adoption by the trial court
of the DRC’s findings.
Hence, the trial court, through its
adoption of the DRC’s findings, made findings relating to
maintenance issues.
Glyn contested this issue throughout the
proceedings and following the trial court’s award of maintenance
to Cheryl, he timely filed an appeal.
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We discern no basis to
dismiss Glyn’s appeal, and accordingly Cheryl’s motion to dismiss
is denied.
However, a final judgment shall not be reversed or
remanded because of the failure of the trial court to make a
finding of fact on an issue essential to the judgment unless the
failure is brought to the attention of the trial court by a
written request for a finding on that issue or by a motion
pursuant to CR 52.02.
CR 52.04.
Cheryl correctly states that
Glyn did not do this. Accordingly the trial court’s failure to
make the statutory finding relating to Cheryl’s ability to
support herself is not reversible error.
Glyn also argues that the trial court erred in awarding
maintenance to Cheryl because she is able to support herself
through appropriate employment and to maintain the standard of
living which she previously enjoyed during the marriage.
The relevant findings of the trial court, as adopted,
were as follows:
the parties were married for twenty-one years;
during the marriage Glyn was primarily the person employed and
earning the income; during the marriage Cheryl was a homemaker
taking care of the children; the parties had established a
relatively comfortable standard of living during the marriage;
Cheryl’s lifestyle was rather simple and she did not need a lot
of extras; Cheryl has an income of $30,000.00 from her job as a
school teacher; Cheryl’s income, while not an excessive amount,
will not place her in a situation of destitution; Glyn has a
gross income of approximately $135,000.00.
Since the trial court
awarded maintenance, it is obvious that the trial court rejected
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the following finding of the DRC: “Glyn, because of his
assumption of the marital debt, is in a very unfavorable
financial position and will be in such a financial position as
not to be able to pay maintenance over and above his child
support.”
The amount and duration of maintenance is within the
sound discretion of the trial court. Weldon v. Weldon, Ky. App.,
957 S.W.2d 283, 285-286 (1997);
878 S.W.2d 24, 26 (1994).
Russell v. Russell, Ky. App.,
Furthermore, in matters of such
discretion, "unless absolute abuse is shown, the appellate court
must maintain confidence in the trial court and not disturb the
findings of the trial judge."
Id. (emphasis original); See also
Clark v. Clark, Ky. App., 782 S.W.2d 56, 60 (1990); Platt v.
Platt, Ky. App., 728 S.W.2d 542 (1987); and
App., 639 S.W.2d 370 (1982).
Moss v. Moss, Ky.
“In order to reverse the trial
court's decision, a reviewing court must find either that the
findings of fact are clearly erroneous or that the trial court
has abused its discretion.” Perrine v. Christine, Ky., 833 S.W.2d
825, 826 (1992).
The findings of the trial court reflect that Glyn earns
$135,000.00 per year while Cheryl earns $30,000.00 per year.
These findings were not clearly erroneous as they are supported
by the testimony, financial schedules, and tax returns filed into
the record.
The trial court ordered Glyn to pay Cheryl
$1,200.00.00 per month, or $14,400.00 per year.
Considering the
nonmarital and marital property assigned to Cheryl, her annual
income, the standard of living established by the parties during
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their marriage, and the vast discrepancy in the incomes of the
parties, we cannot say that the trial court abused its discretion
in awarding Cheryl maintenance of $1,200.00 per month.
Glyn argues that he lacks the ability to satisfy the
marital indebtedness apportioned to him and pay maintenance to
Cheryl.
It is undisputed that the parties have endured financial
difficulties in the course of their marriage.
The trial court
apportioned $140,000.00 in debt to Glyn, and his debt service
obligation will undoubtedly hamper his disposable income.
“The
fact that appellee is "heavily indebted," however, does not
necessarily absolve him from the duty to pay maintenance.”
Carter v. Carter, Ky. App., 656 S.W.2d 257, 260 (1983).
In view
of Glyn’s level of income, we do not believe that the fact that
he has a high level of debt should absolve him from a maintenance
obligation.
In her cross-appeal, Cheryl argues that the trial
court’s decision to assign no value to the parties’ interest in
United Warehousing Company was clearly erroneous; that the
decision of the trial court to adopt in toto Glyn’s valuation of
his CPA practice was clearly erroneous; and that the trial court
erroneously refused to apply amended KRS 403.190(4) to the
division of Glyn’s retirement benefits.
During the marriage, the parties obtained a three
percent interest in United Warehousing Company.
Based upon an
appraisal filed into the record, the fair market value of the fee
simple interest in the real property as of December 20, 1993, was
approximately $5.7 million, with a debt of about $4.6 million.
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The trial court determined that this asset, while it might have
some value, was minimal at best and assigned the interest in
United Warehousing to Glyn; the trial court assigned no value to
the interest.
Based upon the surplus of the warehouses worth
over its debt,
Cheryl contends that the parties’ three percent
interest is worth approximately $33,000.
A trial court's valuation in a divorce action will not
be disturbed on appeal unless it is clearly contrary to the
weight of the evidence,
Heller v. Heller, Ky.
945, 947 (1984); Underwood v. Underwood, Ky.
439, 444 (1992).
App., 672 S.W.2d
App., 836 S.W.2d
In this case we cannot conclude that the trial
court was clearly erroneous in its conclusion to assign no value
to the interest in United Warehousing.
App., 587 S.W.2d 281, 283 (1979).
of the warehouse interest.
Roberts v. Roberts, Ky.
Glyn testified as to the value
In this regard, he testified that the
warehouse had some very unprofitable years; that the warehouse’s
largest customer, which accounted for sixty percent of its
business, was planning on moving out; and that the warehouse did
not have any value.
“Under CR 52.01, the Appellate Court's
review of the trial court's decision is limited to reversing only
clearly erroneous findings, keeping in mind that the trial court
had opportunity to hear evidence and observe witnesses so as to
judge credibility.” Chalupa v. Chalupa, Ky.
391, 393 (1992); Bealert v. Mitchell, Ky.
(1979).
App., 830 S.W.2d
App., 585 S.W.2d 417
In the case sub judice, the trial court heard
conflicting evidence and determined that the warehouse had
negligible value.
Disagreeing with a finding is not sufficient
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to rule the finding as clearly erroneous.
Hence we must affirm
the trial court’s disposition of the warehouse issue.
Glyn is a partner in the CPA firm Kerbaugh & Rodes.
Glyn’s expert, Dewitt Hisle, valued the CPA practice at $222,000,
while Cheryl’s expert, Tom Cooper, valued the business at
$406,000.
The trial court accepted the value determined by
Glyn’s expert.
Cheryl contends that the trial court’s acceptance
of the value of the CPA firm as determined by Glyn’s expert was
clearly erroneous.
We disagree.
As with our review of the trial court’s findings
relating to the value of the warehouse, our review of the trial
court’s valuation of the CPA firm is limited to whether the
valuation was clearly erroneous in that the valuation was
unsupported by substantial evidence.
“[T]he trial court's
judgment and valuations in an action for divorce will not be
disturbed on appeal unless it was clearly contrary to the weight
of evidence.”
Clark v. Clark, Ky. App., 782 S.W.2d 56, 58
(1990).
The parties each presented expert testimony regarding
the value of the CPA firm, and, in this battle of the experts,
the trial court chose to accept the valuation proposed by Glyn’s
expert.
Glyn’s expert used the capitalization of excess earnings
method for evaluating the goodwill of the practice.
This method
for valuing a business has previously been accepted by this
court.
See Clark, supra.
There is no indication from the
evidence in the case at bar that the trial court incorrectly
applied the capitalization of excess earnings method.
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The trial
court stated, “[i]t is clear to the Court that Dewitt Hisle’s
valuation has been throughly thought out and worked through in
this case.”
Cheryl contends that the valuation applied an
incorrect risk factor; however, this disagreement does not
persuade us that the trial court was clearly erroneous in
accepting the expert testimony valuing the CPA practice at
$222,000.00.
Cheryl’s final argument in her cross-appeal is that the
trial court erroneously refused to apply the July 15, 1996,
amendment to KRS 403.190(4) in considering the parties’
retirement accounts.
Prior to the July 1996 amendment, KRS 403.190(4)
provided, in all cases, that if the retirement benefits of one
spouse was excused from classification as marital property then
the retirement benefits of the other spouse must also be
excepted.
(1995).
Turner v. Turner, Ky. App., 908 S.W.2d 124, 125
The July 1996 amendment modified the KRS 403.190(4)
exception to provide that the level of exception provided to the
spouse with the greater retirement benefit shall not exceed the
level of exception provided to the other spouse.
The value of
Cheryl’s retirement plan at the time of the dissolution was
approximately $13,000.00, while Glyn’s plan was valued at
approximately $34,000.00. Cheryl contends that the July 1996
amendment requires the difference in value, approximately
$21,000.00, to be considered as divisible marital property.
The petition for dissolution was filed on December 29,
1993.
The marriage was dissolved on April 24, 1995.
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The DRC
entered his recommendations on June 10, 1996.
The amendment was
effective on July 15, 1996, and the trial court issued its
decision on October 30, 1996.
Cheryl’s retirement benefits were
earned pursuant to her employment as a school teacher.
Teacher
retirement benefits are exempted from treatment as marital
property.
KRS 161.700(2).
Accordingly, when the DRC entered his
recommendations, he excluded Glyn’s retirement benefits from the
divisible marital estate, and this recommendation was accepted by
the trial court.
Cheryl did not raise the July 1996 amendment
until after the trial court had entered its decision when she
filed a CR 59 motion to amend judgment.
The statute, as amended, is silent as to whether the
July 1996 amendment should have any retroactive application.
“No
statute shall be construed to be retroactive, unless expressly so
declared.” KRS 446.080(3).
“A statute will not have retroactive
effect unless such intent is clearly expressed in the statute.”
ITT Commercial Finance Corp. v. Madisonville Recapping Co., Inc.,
Ky.
App., 793 S.W.2d 849, 851 (1990);
Roberts v. Hickman County
Fiscal Court, Ky., 481 S.W.2d 279 (1972).
However, “[w]hen a statute is purely remedial or
procedural and does not violate a vested right, but operates to
further a remedy or confirm a right, it does not come within the
legal concept of retrospective law nor the general rule against
the retrospective operation of statutes.”
App., 918 S.W.2d 745, 747 (1996).
Miracle v. Riggs, Ky.
If the purpose of an amendment
is remedial and a claim was still pending at the time the
amendment became effective, the new version of the statute
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applies.
Thornsbury v. Aero Energy, Ky., 908 S.W.2d 109, 111
(1995).
Cheryl argues that the amendment was remedial and that
the amendment to the statute should therefore have been applied
in the case at bar.
In
We disagree.
Peabody Coal Co. v. Gossett, Ky., 819 S.W.2d 33
(1991), the Supreme Court explained the concepts of remedial and
retrospective legislation as follows:
A retrospective law, in a legal sense, is one
which takes away or impairs vested rights
acquired under existing laws, or which
creates a new obligation and imposes a new
duty, or attaches a new disability, in
respect to transactions or considerations
already past. Therefore, despite the
existence of some contrary authority,
remedial statutes, or statutes relating to
remedies or modes of procedure, which do not
create new or take away vested rights, but
only operate in furtherance of the remedy or
confirmation of such rights, do not normally
come within the legal conception of a
retrospective law, or the general rule
against the retrospective operation of
statutes. In this connection it has been
said that a remedial statute must be so
construed as to make it effect the evident
purpose for which it was enacted, so that if
the reason of the statute extends to past
transactions, as well as to those in the
future, then it will be so applied although
the statute does not in terms so direct,
unless to do so would impair some vested
right or violate some constitutional
guaranty. Quoting {73 Am.Jur.2d Statutes
Sec. 354 (1974)} (Footnotes omitted.) Peabody
Coal Co. v. Gossett, Ky., 819 S.W.2d 33, 36
(1991).
The correct date for valuation of marital assets is the
date of the dissolution decree.
S.W.2d 56, 62 (1990).
Clark v. Clark, Ky. App., 782
Trial courts often enter a bifurcated
dissolution decree, reserving the property distribution issues
for later adjudication.
Since all property acquired prior to the
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entry of the decree is presumed to be marital, Stallings v.
Stallings, Ky., 606 S.W.2d 163, 164 (1980), entry of the decree
serves to fix the rights of the parties as of that date.
Therefore, a retrospective application of the 1996 amendment to
KRS 403.190(4) would impair the vested rights of the parties.
In
summary, the amendment was not remedial, and, as there is no
applicable exception, KRS 446.080(3) bars retroactive application
of the July 1996 amendment to KRS 403.190(4).
For the foregoing reasons, the judgment of the Boyle
Circuit Court is affirmed, and Cheryl’s motion to dismiss Glyn’s
appeal is denied.
ALL CONCUR.
ENTERED: June 25, 1999
/s/ Daniel T. Guidugli
JUDGE, COURT OF APPEALS
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Ephraim Woods Helton
Danville, Kentucky
Deedra Benthall
Danville, Kentucky
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