CHRISTOPHER HUTCHINSON v. CYNTHIA HUTCHINSON AND MARY HALL SERGENT
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RENDERED:
DECEMBER 2, 2005; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-000367-MR
CHRISTOPHER HUTCHINSON
APPELLANT
APPEAL FROM BOYD CIRCUIT COURT
HONORABLE MARC I. ROSEN, JUDGE
ACTION NO. 01-CI-00133
v.
CYNTHIA HUTCHINSON
AND MARY HALL SERGENT
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER, DYCHE, AND MINTON, JUDGES.
BARBER, JUDGE:
This appeal stems from a dissolution of marriage
proceeding originating in Boyd County, Kentucky.
On February 7,
2001, Appellee, Cynthia Hutchinson (Cynthia) filed for a divorce
from Appellant, Christopher Hutchinson (Christopher).
The
parties had been married seventeen years and have two teenage
children.
Their divorce process has been an on-going battle.
The parties were continuously before the circuit
court, primarily concerning the financial obligations of
Christopher to Cynthia.
Christopher was found in contempt of
court orders on two occasions, December 28, 2001 and April 8,
2002.
A bifurcated decree 1 was entered January 27, 2003,
reserving all issues related to the distribution of property and
assignment of debt until a later date.
A lengthy final hearing was held before Hon. Anna H.
Ruth, Domestic Relations Commissioner (DRC), on August 26, 2002;
October 7, 2002; December 9, 2002; and December 16, 2002. 2
Christopher appeared at all final hearing dates pro se. 3
The DRC
issued her Report and Recommendation (Report) on June 20, 2003.
Christopher filed his exceptions to the report pro se June 30,
2003.
Cynthia filed her response to Christopher’s exceptions
August 15, 2003.
Subsequently, Judge Marc I. Rosen held a
hearing on Christopher’s exceptions August 15, 2003.
Following
the hearing, on October 30, 2003, an order was issued overruling
Christopher’s exceptions and adopting the DRC’s Report in its
entirety.
Christopher now appeals the DRC’s valuation of the
parties’ marital assets and distribution thereof, as well as the
DRC’s award of maintenance to Cynthia.
Christopher first argues that the circuit court failed
to make findings in compliance with Ky CR 52.01 and KRS 403.190
1
Issued in accordance with Putnam v. Fanning, 495 S.W.2d 175 (Ky.App. 1973).
2
Dates of final hearing according to the DRC’s Report and Recommendation. No
trial videos were made during any of the final hearings nor were transcripts
prepared.
3
Christopher had been represented by three (3) different attorneys prior to
the final hearing.
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in relation to the division of marital property.
Kentucky Rule
of Civil Procedure 52.01 states in pertinent part “In all
actions tried upon the facts without a jury or with an advisory
jury, the court shall find the facts specifically and state
separately its conclusions of law thereon and render an
appropriate judgment. . .”
In relation to the division of
marital property, KRS 403.190(1)(a)-(d) states in relevant part:
[The court] also shall divide the marital
property without regard to marital
misconduct in just proportions considering
all relevant factors including:
(a) Contribution of each spouse to
acquisition of the marital property,
including contribution of a spouse as
homemaker;
(b) Value of the property set apart to each
spouse;
(c) Duration of the marriage; and
(d) Economic circumstances of each spouse
when the division of property is to become
effective, including the desirability of
awarding the family home or the right to
live therein for reasonable periods to the
spouse having custody of any children.
We now turn to the Report and Recommendation of the
DRC adopted by the circuit court in its entirety to determine
what, in fact, were the DRC’s findings in relation to the
division of the parties’ marital property.
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The following portions of the DRC’s Report and
Recommendation are specifically related to the parties’ marital
property:
Findings
5. The parties’ “primary” corporation was
Early Warning Security, Inc. (formerly The
Security Group, Inc.) with related
businesses operating as LLC’s and
corporations. However, the primary
corporation now seems to be East Coast
Security, Inc., according to the parties’
testimony. (At a hearing held on May 13,
2002 it was determined that, due to
[Christopher] making numerous changes in
corporate names, moving bank accounts and
other actions, meaningful discovery was
almost impossible. Therefore, an Order was
entered which directed that there were to be
no changes in business names, no moving of
bank accounts, and all uses of funds were to
be meticulously documented with receipts for
all expenditures.) [Christopher] reportedly
then moved the business offices to 301 4th
Avenue, Huntington, W.V. on or about
September 2002. (Prior to the parties’
separation, the business was located at 3901
Brown Street, Ashland, KY. After the
parties’ separation and several fires at the
Brown Street property in November, 2001,
[Christopher] then moved the offices to the
2nd floor at 1200 Bath Avenue, Ashland, KY,
1401 Winchester Avenue, Ashland, KY,
employee Robert Hunt’s apartment on Woodland
Avenue, Ashland, and possibly in Lexington,
KY at one point.[)]
6. From the time of the parties’ separation
on or about January 15, 2001 until at least
the date of the portion of the final hearing
in October 2002, [Christopher] continued to
change bank accounts, dispose of items, buy
other items and use the marital business
assets as his personal funds. Numerous
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corporate names were used by [Christopher]
to buy items in an attempt to hide marital
assets. [Christopher] then subsequently
denied that he had any ownership (or
asserted that he had a minimal interest) in
many of these corporations.
. . .
The only listing for Skyview Properties
is Skyview Properties, LLC incorporated in
1998 with a principal office in Elsmere, KY
with no apparent connection to any of the
individuals, Robert Hunt and Julie Rase,
which were alleged by [Christopher] to be
the owners of the corporation. There is no
listing for a DBA in that name either.
. . .
7.
In late 2001 and the first part of 2002
[Christopher] used business assets as well
as other marital funds to buy furniture for
his then girlfriend, Julie Rase, as well as
kitchen cabinets, carpet, and other items to
remodel her home in Ohio. [Christopher]
then moved with Ms. Rase to an apartment
located at 6128 Skyline Drive owned by Joy
Fairchild Griffiths where he promptly
started remodeling the apartment and buying
more furniture, again using marital funds
from the business account.
“Skyview Properties” then entered into
an agreement on January 1, 2002 to purchase
the six (6) rental units from Joy Griffiths.
Although [Christopher] wrote a check to Ms.
Griffiths, he denied having any interest in
the property. [Christopher] testified that
Ms. Rase and Mr. Hunt were the owners.
However, Ms. Rase testified that it was
[Christopher] that wanted to purchase the
property and that she and Mr. Hunt were to
then convey their interest in the property
to [Christopher] in April 2002. Neither Ms.
Rase nor Mr. Hunt contributed any funds to
the purchase.
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Ms. Rase testified that she did not
know who was collecting the rental payments
for the other apartments (for a short period
of time she and [Christopher] were living in
one of the apartments) or who was making the
payments of $1,356.73 per month. (Ms.
Griffiths initiated an action against Mr.
Hunt and Ms. Rase and they ultimately
conveyed any interest they may have had back
to her.)
8. [Christopher] and Ms. Rase moved from
the apartment to a house on King Richard
Court in Ashland in mid January 2002. Ms.
Rase signed a purchase agreement on that
house on January 11, 2002. However,
[Christopher] actually provided the funds
for the $1,500 earnest money deposit and the
rental payments of $1,200 per month for the
time Ms. Rase and [Christopher] lived in the
house.
Ms. Rase had previously entered into an
agreement to purchase a house at 2430
Division Street in Ashland with an earnest
money deposit of $1,000 (also provided by
[Christopher]). The documents submitted
indicate that the money was refunded.
However, Ms. Rase testified that she did not
receive those funds and had no knowledge
concerning whether the funds were actually
refunded or not.
9. [Christopher] also paid for Ms. Rase to
take a class at Morehead State University,
provided a vehicle for her to drive, gave
her money for car insurance, paid for her
tennis lessons at the Ashland Tennis Center,
paid for personal items, took her on trips
and gave her cash. Ms. Rase testified that
she was never employed by East Coast
Security and denied that she had ever
submitted a credit application indicating
that she was employed by East Coast
Security. She also testified that she did
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have a joint bank account with [Christopher]
with her name listed as “Julie Hutchinson.”
. . .
11. [Christopher] also submitted and
allowed to be auctioned by Allen Auctions,
marital property including business property
that was marital. This occurred on August
3, 2001 after [Christopher] had been ordered
not to dispose of marital property. The
advertisement for the auction listed the
items as being owned by Southwest, Inc.
[Christopher] deposited approximately
$24,000 in checks from the auction with each
check made payable to Southwest, Inc.
[Christopher] added his name to each of the
checks.
12. [Christopher] purchased a 1998 Lincoln
Navigator, a 2001 Ford crew cab truck, a
Bose sound system, remodeled the Brown
Street property to add an apartment for his
use [sic] personal use prior to the first
fire there, wrote checks to businesses
allegedly owned by family and friends for
work done on the Brown Street property after
the fire, paid for extensive renovations to
the Bear Creek property where he lives
currently, traveled, etc. In addition, he
has transferred vehicles and cash to
relatives. There are several checks written
to family members with notations “loan
repayment,” checks made out to cash and
business checks written to family and
friends. Several of the family members and
friends that business checks indicate were
employees, testified that they had never
worked for the business and did not receive
the funds noted on the checks. Others
testified that they did not receive
compensation for work done on the Brown
Street property [or] the Bear Creek
property.
A review of the bank records, receipts,
cancelled checks and other documents that
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[Cynthia] introduced reflect that
[Christopher] spent in excess of $400,000 in
personal and business assets in a little
over a year to year and a half on himself,
his girlfriend or other nonbusiness related
purposes for which [Cynthia] received no
benefit.
. . .
14. There is quite simply no way to
determine with specificity the parties’
[marital] assets. [Christopher] moved money
in and out of numerous accounts in numerous
banks; bought, sold and traded items; and
transferred assets to friends and family.
It is unknown whether [Christopher’s]
actions were a show of bravado, an elaborate
shell game, a true attempt to hide assets or
some combination thereof. Regardless, the
[DRC] has the obligation to make a finding
as to the marital assets and make a just
division of those assets.
15. Based on all of the foregoing, the
[DRC] FINDS that [Christopher] had in his
control marital assets consisting of cash
and businesses valued at a minimum of
$400,000.
Recommendations
5.
[Christopher] shall have full ownership
and possession of the parties’ security
alarm business and bank accounts as well as
the responsibility for all debts, both
business and personal.
6.
[Christopher] shall pay to [Cynthia]
the sum of Two Hundred Thousand Dollars
($200,000), which represents her interest in
the parties’ business and bank accounts, on
or before June 30, 2003. Should it not be
paid by that date, [Cynthia] shall have a
judgment against [Christopher] for the
amount of $200,000. This award shall be in
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the nature of maintenance to [Cynthia] and
not dischargeable pursuant to 11 U.S.C. 523.
7.
Unless otherwise specifically noted,
each party shall have ownership of the
furniture, vehicles and personal items
currently in their possession.
The DRC was quite detailed in her Report to the court
as to her findings and what she felt was the appropriate
distribution of marital assets between the parties.
the Report complied with Ky CR 52.01.
We believe
While the Report did not
contain a separate section titled “Conclusions of Law”, which is
ideal, the DRC did state her conclusions of law within her
findings.
We now turn to whether the DRC properly considered
the factors of KRS 403.190(2)(a)-(e) in making her findings
related to division of the parties’ marital property.
Kentucky Rule of Civil Procedure 52.01 states in
pertinent part, for actions tried without a jury, “Findings of
fact shall not be set aside unless clearly erroneous, and due
regard shall be given to the opportunity of the trial court to
judge the credibility of the witnesses.
The findings of a
commissioner, to the extent that the court adopts them, shall be
considered as the findings of the court.”
As a result, when the
trial court adopts the recommendations of the Commissioner,
those recommendations fall under the same standard of review as
applied to a trial court’s findings.
See Greater Cincinnati
Marine Service, Inc. v. City of Ludlow, 602 S.W.2d 427, 429,
-9-
(Ky. 1980) and Wells v. Sanor, 151 S.W.3d 819, 822 (Ky.App.
2004).
Our court cannot disturb the findings of a trial court
in a case involving dissolution of marriage unless those
findings are clearly erroneous.
Cochran v. Cochran, 746 S.W.2d
568, 569-570, (Ky.App. 1988), (citing Johnson v. Johnson, 564
S.W.2d 221 (Ky.App. 1978)), see also Rife v. Fleming, 339 S.W.2d
650, 652, (Ky. 1960).
Findings of fact are not clearly
erroneous if supported by substantial evidence.
Black Motor
Company v. Greene, 385 S.W.2d 954 (Ky.App. 1964), (citing
Massachusetts Bonding & Insurance Co. v. Huffman, 340 S.W.2d 447
(Ky. 1960)). Substantial evidence has been conclusively defined
by Kentucky courts as that which, when taken alone or in light
of all the evidence, has sufficient probative value to induce
conviction in the mind of a reasonable person.
Secretary, Labor
Cabinet v. Boston Gear, Inc., a Div. of IMO Industries, Inc., 25
S.W.3d 130, 134, (Ky. 2000).
Evidence was submitted by each party in relation to
marital assets.
Relevant evidence submitted by Cynthia
consisted of copies of business bank records, copies of
cancelled checks, copies of receipts from various purchases made
by Christopher, and documents relating to the auction of marital
assets held by Christopher.
Evidence submitted by Christopher
consisted primarily of self-made ledger sheets of his income and
-10-
expenses as well as copies of alleged marital debts with no
additional authentication.
The DRC chose to rely upon the
documentation provided by Cynthia.
Following a review of the
record, we believe these DRC’s findings of the value of the
parties’ marital assets was equitable and supported by
substantial evidence.
Each party provided the DRC with testimony and
evidence as to their marital property.
The DRC could have
relied on Christopher’s testimony and evidence to reach a
different result.
The fact that the DRC chose not to does not
provide evidence of error warranting a reversal on appeal.
Because the DRC’s finding relating to the value of the parties’
marital property was supported by substantial evidence, the
findings fail to satisfy the clearly erroneous standard and must
be affirmed.
Further, we believe the DRC considered the factors
of KRS 403.190(1)(a)-(d) to the best of her ability considering
Christopher’s conduct throughout the proceedings.
We now turn
to Christopher’s second basis of his appeal.
Christopher next argues that the award of maintenance
must be reversed pending compliance with the property
distribution statute, KRS 403.190.
Christopher also argues that
the DRC did not adequately comply with the standard for awarding
maintenance in KRS 403.200, specifically that the DRC’s findings
were not complete or specific.
We have determined the DRC, in
-11-
fact, did comply with KRS 403.190.
Therefore, we now consider
whether the DRC complied with KRS 403.200.
A trial court’s decision regarding maintenance will
not be reversed unless the trial court abused its discretion or
based its decision on findings of fact that are clearly
Powell v. Powell, 107 S.W.3d 222, 224 (Ky. 2003).
erroneous.
Before awarding maintenance to either party to a dissolution,
the trial court must find that the party: (a) lacks sufficient
property, including marital property apportioned to him, to
provide for his reasonable needs; and (b) is unable to support
himself 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.
Gentry v. Gentry, 798 S.W.2d 928, 936-937 (Ky. 1990),
(citing KRS 403.200(1)).
Once this determination has been made,
the court is then required to consider the factors listed in KRS
403.200(2)(a)-(f) before ordering the amount and duration of
maintenance.
Gentry v. Gentry, 798 S.W.2d 928, 937 (Ky. 1990).
Kentucky Revised Statute 403.200(2)(a)-(f) states:
The maintenance order shall be in such
amounts and for such periods of time as the
court deems just, and after considering all
relevant factors including:
(a) The financial resources of the party
seeking maintenance, including marital
property apportioned to him, and his ability
to meet his needs independently, including
the extent to which a provision for support
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of a child living with the party includes a
sum for that party as custodian;
(b) The time necessary to acquire sufficient
education or training to enable the party
seeking maintenance to find appropriate
employment;
(c) The standard of living established
during the marriage;
(d) The duration of the marriage;
(e) The age, and the physical and emotional
condition of the spouse seeking maintenance;
and
(f) The ability of the spouse from whom
maintenance is sought to meet his needs
while meeting those of the spouse seeking
maintenance.
In her Report and Recommendation, the DRC stated the
following in relation to the award of maintenance to Cynthia:
Findings
2. At the time of the hearings [Cynthia] was 36,
resided at 1116 Highland Ave., Ashland, Kentucky
and had just become employed by ReMax Real
Estate.
[Christopher] was 37, resided at 11709 Bear
Creek, Catlettsburg, KY and was self-employed at
East Coast Security operating in Huntington, WV.
. . .
13. [Christopher] produced a summary of
financial information in which he claims that the
parties’ marital debts substantially outweigh the
parties’ assets. The listed debts include
several owed to the Internal Revenue Service.
Although the parties received nothing from the
sale of the former marital residence as the IRS
attached those funds ($71,832.00), given
[Christopher’s] penchant for creating his own
reality, the [DRC] is unwilling to accept the
submitted documents at face value without
independent verification of their accuracy. The
dates on many of the documents are several years
-13-
old and it was impossible to determine if there
are duplications of some of the claims.
Likewise, [Christopher’s] list of assets is
questionable. From the date of the parties’
separation [Christopher] had had control of all
of the parties’ assets with the exception of
their son’s Bronco, a Jeep purchased after the
separation and driven by [Cynthia] and furniture
and personal items.
17. [Cynthia] requests that [Christopher] pay
maintenance and pay her rent each month.
Prior to the parties’ separation, [Cynthia]
worked in the parties’ business. At one time she
also took classes to become a licensed real
estate agent. She also did some private
investigation. For a period of time after the
separation, [Cynthia] worked at minimum wage
jobs. As of the hearing date, she had become
employed by ReMax Realty with an approximate
income of $1,200 per month. 4
Previously, [Cynthia] submitted a budget
showing that her monthly expenses were $3,700 not
including rent of $600 and utilities. However,
included in that $3,700 figure was $678 for a car
payment on the Expedition, $600 for clothes and
$300 for gas for her vehicle and the parties’
son’s vehicle. After adjustments for no car
payment and further reductions for gas and
clothes but including rent and utilities,
4
Cynthia’s income was calculated by the DRC in paragraph 16 dealing with
child support. It stated in pertinent part, “[Cynthia] earns $7.00 per hour
at ReMax Realty or approximately $1,200 per month if she works forty (40)
hours per week.”
Christopher’s income was also calculated by the DRC in paragraph 16. The DRC
stated “At a temporary hearing in April 2001 [Christopher] testified that he
was earning $900 per week for $3,900 per month. However, on July 5, 2001
[Christopher] listed his income as $8,000 per month on a credit application.
A copy of a payroll check submitted with the application shows his weekly
salary to be $2,000 per week, with year to date earnings of $62,000 as of
June 24, 2001. On a credit application in November 2001, [Christopher]
listed his gross annual income as $75,000 and submitted a copy of a payroll
check showing that he earned $1,442.31 per week with year to date earnings of
$69,230.88 as of November 4, 2001. There was no testimony concerning his
current income. However, it is doubtful that he withdraws less than $6,000
per month from the business.”
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[Cynthia’s] monthly expenses are approximately
$3,200.
Assuming actual receipt of the monthly child
support obligation 5 (for the next two years),
[Cynthia] will have access to approximately
$1,900 per month before taxes or a net of
approximately $1,700 per month leaving a
shortfall of $1,500 per month.
Clearly when [Cynthia] receives her portion
of the marital assets she will have sufficient
funds to provide for her reasonable needs.
However, until such time as she actually receives
those funds, she cannot adequately support
herself with reasonable employment even including
[Christopher’s] child support obligation.
Based on all of the foregoing, the [DRC]
FINDS that [Cynthia] meets the qualifications for
an award of maintenance in the sum of $1,500 per
month until such time as she receives her portion
of the marital assets.
Recommendations
8. [Christopher] shall pay to [Cynthia] the sum
of $1,500 per month as maintenance, effective
June 30, 2003 until such time as he provides
[Cynthia] with a clear title to the 2000 Cadillac
Escalade and upon payment of $200,000 to
[Cynthia] also free of any possible attachments
from any creditors for any marital debts
resulting from the parties’ business or
personally.
Again, we believe the DRC considered the factors
stated in KRS 403.200(2) to the best of her abilities
considering Christopher’s conduct.
5
We will now determine
In paragraph 16, the DRC calculated child support in the amount of $721 per
month to be paid by Christopher, based upon monthly income of $1,200 for
Cynthia and $6,000 for Christopher.
-15-
whether the DRC’s findings were clearly erroneous or an abuse of
discretion occurred.
The DRC considered the evidence presented to her and
awarded maintenance to Cynthia to cover her needs until she
received her award of the marital property from Christopher.
The parties each submitted evidence related to their respective
financial conditions.
The DRC again chose to rely upon evidence
submitted by Cynthia rather than that of Christopher.
The DRC
clearly stated she was hesitant to believe any documentation
provided by Christopher without proper authentication due to his
continued improper behavior throughout the proceedings. 6
Based
on the record, we believe the DRC’s findings related to the
award of maintenance are supported by substantial evidence and
are not clearly erroneous.
Further, we are unable to
substantiate any abuse of discretion in the award of maintenance
to Cynthia which would warrant a reversal.
For the reasons set forth above, we believe the
findings by the DRC adopted by the circuit court in their
entirety related to the distribution of marital assets and the
award of maintenance are supported by substantial evidence and
6
Based on the record, Christopher consistently utilized marital assets for
his personal use despite numerous orders explicitly prohibiting the same.
The first order was an agreed order by the parties entered on February 23,
2001. A second order was entered by the court on August 27, 2001. A third
order was entered July 1, 2002. None of the orders appeared to have any
deterrent effect upon Christopher.
-16-
not clearly erroneous.
Therefore, we affirm the Boyd Circuit
Court.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
James W. Lyon, Jr.
Greenup, Kentucky
Mary Hall Sergent
Ashland, Kentucky
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