JAMES DOUGLAS PEYTON v. HONORABLE CHARLES W. BOTELER, JR. JUDGE MARILYN E. PEYTON
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RENDERED: April 1, 2005; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-000544-MR
JAMES DOUGLAS PEYTON
APPELLANT
APPEAL FROM HOPKINS CIRCUIT COURT
HONORABLE CHARLES W. BOTELER, JR. JUDGE
CIVIL ACTION NO. 00-CI-00458
v.
MARILYN E. PEYTON
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER AND VANMETER, JUDGES; HUDDLESTON, SENIOR JUDGE.1
HUDDLESTON, SENIOR JUDGE:
James Douglas Peyton (Doug) appeals
from a Hopkins Circuit Court decree that dissolved his marriage
with
Marilyn
E.
Peyton.
The
decree
incorporated
in
their
entirety two reports and recommendations of the court’s Domestic
Relations Commissioner (DRC).
1
The DRC found that a property
Senior Judge Joseph R. Huddleston sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and KRS 21.580.
settlement agreement entered into by Doug and Marilyn prior to
the dissolution of their marriage was unconscionable, and she
recommended
an
alternative
disposition
of
the
that the circuit court approved and adopted.
marital
estate
Because we have
concluded that the DRC and the circuit court did not err in
finding the agreement unconscionable or in characterizing and
dividing the marital property, we affirm the decree.
Doug and Marilyn were married in 1971.
They began
their life together with few assets except for a mobile home and
a car.
By the time of their divorce, however, the marital
estate was valued at well over $2 million, primarily in the form
of bank accounts and real estate.
Most of these assets came
from the sale of Doug’s interest in a coal mine.
The interest in the coal mine was, according to Doug,
given to him by his brother Gary in 1974.
The brothers operated
the mine as a partnership, the Peyton Mining Company.
Doug was
employed full time at the mine, receiving a salary and sharing
in the profits.
Marilyn did not work outside the home except
for a brief period in 1977.
She spent her time housekeeping,
gardening and looking after the parties’ child, Jamie.
By
1981,
Doug
had
salary and mining royalties.
new mine, Deer Creek.
entire investment.
saved
over
$200,000.00
from
his
He testified that he invested in a
When the mine closed in 1985 he lost his
He continued to work at the Peyton Mining
-2-
Company.
In 1990, he sold part of his interest in that company
to Adwest for $1,130,000.00.
In 1991, Marilyn went to work for
her mother, who had opened a restaurant/delicatessen.
Marilyn
worked long hours at the restaurant until 1998 but received no
pay.
In 1998, Doug arranged to sell his remaining interest
in Peyton Mining to his brother Gary for $1 million.
For tax
reasons, the actual transaction was to take place early the next
year.
In the autumn of 1998, Doug and Marilyn began having
marital problems.
he
would
give
They discussed divorce and Doug told Marilyn
her
a
settlement
consisting
of
cash, a new house and a new Chevrolet Blazer.
$500,000.00
in
Doug testified
that he had arrived at these terms by multiplying the number of
days
they
had
been
amount ($60.00).
married
(approximately
10,000)
by
a
set
He also testified that he was aware that his
portion of the marital estate under this agreement was greater
than Marilyn’s, but he felt that he “was worth more because he
had worked.”
In early January 1999, Doug sold Gary his share in the
mine
and
received
the
agreed-upon
$1
million.
Shortly
thereafter, he bought the new Chevrolet Blazer for Marilyn.
He
also went with her to the bank to deposit $500,000.00 in her
account.
On
Doug’s
advice,
she
-3-
placed
$475,000.00
into
a
repurchase
agreement2
that
named
Doug
as
the
surviving
beneficiary, and the remaining $25,000.00 into a joint checking
account with Doug.
The couple then proceeded to Doug’s attorney’s office
on January 14, 1999, where Marilyn signed a settlement agreement
that memorialized the terms she and Doug had discussed.
Doug
had previously visited his attorney and directed him to draft
the agreement.
Marilyn was not represented by counsel at this
one-hour meeting.
Marilyn never consulted a lawyer about the
agreement, although Doug’s attorney informed her that she was
free to seek independent legal counsel.
Marilyn later testified that she was never informed of
the extent of the assets in the marital estate, nor was she told
what
percentage
constituted.
her
share
under
the
settlement
agreement
When she was asked why she signed the agreement,
she said, “I had always done what Doug told me to.”
She also
testified that she was upset at the meeting with the attorney
both
because
of
the
pending
dissolution
of
her
marriage
and
because the parties’ daughter Jamie was at that time involved in
a bitter custody dispute over her son.
After a failed attempt at reconciliation, Doug filed a
petition seeking dissolution of marriage on June 1, 2000, and
asked the court to incorporate the settlement agreement into the
2
A repurchase agreement is similar to a certificate of deposit.
-4-
final divorce decree.
Marilyn, who by that time had retained
counsel, argued against incorporation on the ground that the
agreement had been executed when she was under extreme emotional
distress.
Hearings were held into the matter of the settlement
agreement on April 27, 2001, and May 4, 2001.
that
both
the
circumstances
surrounding
the
The DRC found
signing
agreement and its terms rendered it unconscionable.
her
report
and
recommendation
on
May
18,
2001.
of
the
She filed
Doug
filed
exceptions, but the circuit court accepted the DRC’s report in
its entirety in an order entered on November 8, 2001.
A second set of hearings was held to determine the
content and disposition of the marital estate.
A fundamental
point of dispute was whether the highly lucrative interest in
Peyton Mining that was acquired by Doug in 1974, constituted a
gift
from
marital
his
estate
403.190(2).
brother
Gary
pursuant
to
that
could
Kentucky
be
excluded
Revised
from
Statutes
the
(KRS)
The DRC found that there was insufficient evidence
to show that Gary intended the share of the mine he transferred
to Doug to be a gift, so she included the proceeds of the sale
of the share in the marital estate.
division
of
the
marital
estate,
Under the DRC’s proposed
Marilyn
was
awarded
approximately 82% of the cash and Doug 88% of the real estate.
Each received about half of the marital estate.
-5-
Doug
filed
exceptions,
but
the
circuit
accepted the DRC’s report in its entirety.
DRC’s
recommendations
were
incorporated
court
again
The reports and
into
the
dissolution that was entered on March 2, 2004.
decree
of
This appeal
followed.
In
reviewing
the
circuit
court’s
decision,
we
are
mindful that, in an action tried without a jury, “[f]indings 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.”3
not
clearly
erroneous
if
it
is
A factual finding is
supported
by
substantial
evidence,4 that is, evidence, when taken alone or in light of all
the evidence, which has sufficient probative value to induce
conviction in the mind of a reasonable person.5
“When reviewing
the sufficiency of the evidence, we have often pointed out that
‘[a]ll evidence which favors the prevailing party must be taken
as true and the reviewing court is not at liberty to determine
3
Ky. R. of Civ. Proc. (CR) 52.01.
4
Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998).
5
Kentucky Racing Comm’n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972) citing
Blankenship v. Lloyd Blankenship Coal Co., 463 S.W.2d 62 (Ky. 1970).
-6-
credibility or the weight which should be given to the evidence,
these being functions reserved to the trier of fact.’”6
Doug’s first argument is that the circuit court erred
in setting aside the settlement agreement.
Although private
settlement agreements are encouraged, KRS 403.180 also provides
that
they
may
unconscionable.
(1)
To
be
set
aside
if
the
court
finds
them
The statute provides that:
promote
amicable
settlement
of
disputes
between
parties to a marriage attendant upon their separation or
the dissolution of their marriage, the parties may enter
into a written separation agreement containing provisions
for
maintenance
of
either
of
them,
disposition
of
any
property owned by either of them, and custody, support and
visitation of their children.
(2)
In
a
proceeding
for
dissolution
of
marriage
or
for
legal separation, the terms of the separation agreement,
except
those
providing
for
the
custody,
support,
and
visitation of children, are binding upon the court unless
it finds, after considering the economic circumstances of
the parties and any other relevant evidence produced by the
parties, on their own motion or on request of the court,
that the separation agreement is unconscionable.
6
Gordon v. NKC Hospitals, Inc., 887 S.W.2d 360, 363 (Ky. 1994), citing Lewis
v. Bledsoe Surface Mining Co., 798 S.W.2d 459, 461 (Ky. 1990) (citations
omitted).
-7-
(3)
If
the
court
unconscionable,
it
finds
may
the
request
separation
the
parties
agreement
to
submit
a
revised separation agreement or may make orders for the
disposition of property, support, and maintenance.
The DRC rejected the settlement agreement created by
Doug and his attorney on the ground that it was “manifestly
unfair and inequitable.”
The DRC also found that Marilyn signed
the agreement “under the undue influence and overreaching of
[Doug].”
Doug argues that the DRC’s rejection of the agreement
was
based
on
the
erroneous
principle
that
an
agreement
is
unconscionable simply because it does not apportion the marital
estate equally.
He contends that it is “contrary to law to hold
that
to
there
has
be
an
equal
distribution
of
the
marital
estate.”
In support of this argument, he cites to several cases
in
Kentucky’s
which
appellate
courts
have
upheld
settlement
agreements that did not evenly divide the marital estates in
question.7
There is no indication in this case, however, that the
DRC based her decision on the principle that there must be an
equal
division
of
the
marital
estate,
although
she
did
note
Doug’s testimony that he would receive two-thirds and Marilyn
7
See, e.g., Wood v. Wood, 720 S.W.2d 934 (Ky. App. 1986); Peterson v.
Peterson, 583 S.W.2d 707 (Ky. App. 1979); Russell v. Russell, 878 S.W.2d 24
(Ky. App. 1994).
-8-
but one-third of the total estate pursuant to the settlement
agreement.
Indeed, the DRC demonstrated a full awareness that
an agreement that does not evenly divide the marital estate is
not per se unconscionable.
v.
Peterson,
a
She acknowledged that under Peterson
settlement
agreement
cannot
be
held
unconscionable solely on the basis that it is a “bad bargain.”8
She
thereafter
distinguished
the
Supreme
Court’s
opinion
in
Shraberg v. Shraberg,9 which upheld a finding that an agreement
was unconscionable.
She stressed that even the dissenters in
that case, who had favored upholding the agreement, observed
that:
“proof
detrimental
that
to
an
one
agreement
party
creates
agreement is unconscionable.”10
the
settlement
Marilyn,
it
detrimental
agreement
was
to
‘lopsided’
a
and
presumption
clearly
that
the
Ultimately, the DRC found that
was
not
“lopsided”
Marilyn’s
is
simply
by
best
a
Doug’s
bad
interests.
for
admission
own
bargain
and
The
DRC
and
the
circuit court merely relied on the unequal division of assets as
one factor in determining that the agreement was unconscionable.
Doug
also
contends
that
under
challenging
a
settlement
agreement
relatively
high
burden
proof,
of
8
Supra, note 7, 583 S.W.2d at 712.
9
939 S.W.2d 330 (Ky. 1997).
10
Id. at 334.
-9-
on
and
Peterson,
appeal
that
the
should
such
an
party
have
a
agreement
should not be set aside unless there is some evidence of fraud,
undue
influence,
overreaching,
or
evidence
of
a
change
of
circumstances since the execution of the original agreement.11
More recently however, the Kentucky Supreme Court has
stressed
that
prerequisites
403.180.
fraud,
to
a
duress
finding
and
of
coercion
are
not
unconscionability
necessary
under
KRS
Rather, the trial court must determine whether the
agreement is manifestly unfair and unreasonable after examining
the economic circumstances of the parties and any other relevant
evidence produced by the parties.12
overreaching
are
identified
as
Fraud, undue influence, and
entirely
separate
grounds.13
There was no need for the DRC to make a finding of fraud in
order
to
invalidate
the
agreement.
Doug’s
argument
that
nondisclosure of assets does not constitute fraud is therefore
irrelevant.
Next, Doug denies that there was any “overreaching” on
his part.
Overreaching is defined as “[t]he act or an instance
of taking unfair commercial advantage of another, [especially]
by fraudulent means.”14
Doug defines it as “bad faith” or some
other “fundamentally unfair action on [his] part.”
11
Peterson, supra, note 7, 583 S.W.2d at 712.
12
Shraberg, supra, note 9, 939 S.W.2d at 333.
13
Id. (citation omitted.)
14
Black’s Law Dictionary 1129 (7th ed. 1999).
-10-
Doug insists
that he “felt” that the agreement was fair and provided Marilyn
with sufficient funds on which to live without being forced to
work.
He also points out that she had ample time in which to
renegotiate the terms of the settlement, or to seek the advice
of counsel.
He argues that her real motives in doing nothing
were fear that information that she was having an affair would
be exposed, that she knew the interest in the coal mine was a
gift to Doug from his brother and thus not part of the marital
estate,
that
it
would
be
discovered
that
she
allegedly
took
$300,000.00 from the marital estate, and her knowledge that she
had not contributed to the acquisition of marital assets.
Doug
argues that the DRC erred in failing to consider these factors.
We disagree.
These
alleged
motives,
most
of
which
are
purely
speculative, presuppose a familiarity with (and in one case a
profound
misunderstanding
of)
Kentucky
dissolution
law
on
Marilyn’s part for which there is no evidence in the record.
Although
Marilyn
may
have
feared
disclosure
of
her
alleged
affair, such a revelation would not have affected the division
of the marital estate.
policy,
KRS
403.190
Under Kentucky’s “no fault” dissolution
expressly
directs
that
the
court
“shall
divide the marital property without regard to marital misconduct
in just proportions considering all relevant factors[.]”
Even
if we assume that Marilyn was motivated to sign the agreement by
-11-
this
misplaced
conscionable.
fear,
it
does
not
render
the
agreement
Similarly, any fear she had that the fact she had
not worked for money outside the home meant that she was not
entitled to a fair share of the marital estate would have been a
mistaken belief because KRS 403.190(1)(a) specifically directs
the
court
to
consider
the
“[c]ontribution
of
each
spouse
to
acquisition of the marital property, including contribution of a
spouse as homemaker[.]”
As to the assets stemming from the sale of the Peyton
Mining Company, no evidence was provided by Doug to suggest that
Marilyn was aware of the terms of KRS 403.190(2) that provide
for the exclusion of gifts from the marital estate.
As the DRC highlighted in her summary of evidence, the
real cause for concern with this agreement was Doug’s unilateral
determination of the amount he felt Marilyn deserved coupled
with his lack of recognition of her contribution to the marital
estate; the evidence that although Marilyn wrote checks and was
aware of some of the assets of the marriage, she was not fully
informed as to the extent of the marital estate (for example,
she
was
not
aware
of
the
$200,000.00
Doug
had
saved
and
subsequently lost in the Deer Creek mining investment); that at
his suggestion, Doug was made the beneficiary of the repurchase
agreement and cosigner on the account created from Marilyn’s
share
of
the
estate
under
the
agreement
-12-
before
it
was
even
formally signed; that Marilyn was in a highly emotional state
when the agreement was signed; that Marilyn never consulted an
attorney and was not represented by counsel at the signing of
the agreement.
In the light of this substantial evidence that
the terms of the agreement were unfair and the conditions under
which it was signed were troubling, the circuit court did not
abuse
its
discretion
recommendation
in
adopting
rejecting
the
the
DRC’s
settlement
report
and
agreement
as
unconscionable.
Doug’s second principal argument concerns the division
of the marital estate by the circuit court.
Doug claims that
the circuit court erred in including as part of the marital
estate
those
properties
settlement agreement.
acquired
after
the
signing
of
the
He cites for support KRS 403.190(2) which
provides that all property is marital property but also provides
that
this
presumption
“[p]roperty
parties[.]”15
[was]
He
can
be
excluded
points
overcome
by
out
valid
that
the
by
showing
agreement
property
that
the
of
the
settlement
agreement excluded any property from the marital estate that was
acquired by either party after the signing of the agreement.
He
alludes specifically to houses built by Doug with his brother
Harold on Doug’s properties after the signing of the agreement.
He contends that they added approximately $480,000.00 to the
15
KRS 403.190(2)(d).
-13-
value of the estate.
showed
that
Marilyn
He claims that “[t]he evidence clearly
did
nothing
to
help
build
the
houses
acquired by Doug after the Agreement was entered into by the
parties, and it is not equitable to allow Marilyn to share in
Doug’s efforts from his work after signing the agreement.”
also
points
out
that
if
he
had
died
while
the
He
settlement
agreement was still in effect, Marilyn would not have inherited
these assets.
This argument is specious.
such
an
exclusion
of
assets
is
The statute provides that
permitted
agreement between the parties exists.
only
if
a
valid
The court here properly
found that the agreement was not valid.
Surely the DRC could
not be expected to rule that the agreement was unconscionable
and therefore invalid, yet thereafter treat it as being valid
for
purposes
of
excluding
certain
assets
from
the
marital
estate.
Doug’s next claim concerns the share in the Peyton
Mining Company transferred to him by his brother Gary.
Doug
maintains that the DRC improperly characterized the share and
all traceable assets stemming from it as marital property.
This
was obviously a key determination because the proceeds of the
sales of the interest in the mine exceeded $1.6 million.
Property
acquired
by
either
spouse
subsequent
to
the
marriage is presumed to be marital property, except for
-14-
certain
enumerated
gift.
KRS
types
including
403.190(2).
The
property
party
acquired
claiming
by
property
acquired after the marriage as his/her non-marital property
through the gift exception bears the burden of proof on
that issue.16
A
party
claiming
that
property
is
non-marital
by
reason of the gift exception has the burden to prove it by clear
and convincing evidence.17
“This Court has said on numerous
occasions
intent
that
the
donor’s
is
the
primary
factor
determining whether a transfer of property is a gift.”18
donor’s
intent
must
be
characterized
by
in
The
“disinterested
generosity.”19
Doug
mining
company
maintains
was
a
that
gift
the
because
partnership
share
it
contingent
was
not
in
the
on
anything nor was he expected to do anything in return for the
share.
He
also
disputes
the
DRC’s
finding
that
there
was
insufficient value established for the interest in the mine.
At the hearing, Doug’s brother Gary was reluctant to
discuss the partnership interest in the mine, and initially even
16
Hunter v. Hunter, 127 S.W.3d 656, 660 (Ky.App. 2003), citing Travis v.
Travis, 59 S.W.3d 904, 912 (Ky. 2001); Adams v. Adams, 565 S.W.2d 169 (Ky.
App. 1978).
17
Sexton v. Sexton, 125 S.W.3d 258, 267, n. 31 (Ky. 2004) citing Browning v.
Browning, 551 S.W.2d 823, 825 (Ky. App. 1977).
18
Underwood v. Underwood, 836 S.W.2d 439, 442 (Ky.App. 1992) (citations
omitted).
19
Id. at 443.
-15-
refused
to
disclose
why
he
transferred
it
to
Doug.
He
eventually testified that when he gave Doug the interest, he
expected Doug to “pull half the load.”
He also explained that
at the time of the transfer, he had just lost a foreman, and
that Doug had recently completed the training to be a mining
foreman.
He also testified that Doug is a good mechanic and
that he gave the share to Doug because he trusts him.
Doug
attempts
to
distinguish
these
facts
from
the
situation in Underwood v. Underwood, where a father gave his son
an
interest
in
an
insurance
employing the father.20
company
contingent
upon
the
son
In Underwood, we held that this element
of contingency meant that the transfer was not a gift.
Doug
points out that the transfer of the partnership interest from
Gary was not contingent on anything.
This
factor
(whether
the
transfer
is
contingent
some action by the recipient) is not dispositive.
on
Furthermore,
Gary’s testimony indicated that Doug was given the share based
on the expectation that he had the skills and the work ethic to
make
the
profit.
venture
a
success
from
which
both
brothers
could
These facts, coupled with the fact that Gary did not
file gift tax returns, support the finding that Gary’s intent
was not characterized by disinterested generosity.
20
Id.
-16-
Doug
stating
that
also
it
takes
appeared
exception
to
from
testimony
the
a
portion
of
that
decree
Doug
was
working at a reduced rate so that he could share in the profits
of
the
business
as
a
partner.
Doug
points
out
that
the
partnership paid him a generous weekly salary, his income taxes,
health insurance and expenses.
The evidence showed, however,
that he worked extremely long hours at the mine, and Doug notes
in his appellate brief that he worked very hard throughout the
marriage, “anywhere from 12 to 16 hours a day.”
He was able to
save at least $200,000.00 by 1981 that he subsequently lost in
another mining venture.
therefore
when
it
precisely
because
The circuit court did not clearly err
concluded
he
would
that
work
Doug
harder
was
given
than
a
the
share
conventional
employee and thereby increase the value of the partnership.
Finally, we agree with the DRC that even if the share
in
the
mining
company
was
a
gift,
insufficient
evidence
was
provided to establish the value of his non-marital interest.
Doug disagrees, arguing that a 1999 tax return shows that the
basis value of the mine in 1974 was $403,390.00.
The return
also indicates that the property was sold for $1 million with a
resulting capital gain of $596,010.00.
to
show
returns.
how
Doug
arrived
at
the
No evidence was offered
basis
entered
on
his
tax
Gary was unable to provide even an approximate figure
for the value of the mine at the time he allegedly gave it to
-17-
Doug.
The court did not err when it rejected the basis amount
shown on income tax returns for capital gains purposes, without
any
further
evidence
or
explanation,
establish the value of the asset.
as
insufficient
to
We agree with the court that
Doug failed to meet his evidentiary burden of establishing the
value of the property.
After
strenuously
arguing
that
the
court
erred
in
setting aside the settlement agreement because it did not divide
the
marital
attack
the
ground.
estate
court’s
in
equal
portions,
division
of
Doug
marital
next
property
proceeds
on
the
to
same
KRS 403.190(1) does not require the court to divide the
marital property equally (as Doug earlier pointed out in defense
of the settlement agreement), but in “just proportions” without
regard
to
marital
misconduct
and
in
light
of
the
following
factors: each spouse’s contribution to the acquisition of the
marital assets, including homemaking duties; the value of each
spouse’s non-marital property; the duration of the marriage and
the
economic
circumstances
of
each
spouse
at
the
time
of
discretion
in
distribution.21
Doug
maintains
the
court
abused
its
approving a division of the marital estate that essentially gave
Doug
approximately
18%
of
the
cash
(bank
accounts
and
certificates of deposit totaling approximately $300,000.00) and
21
KRS 430.190(1)(a)-(d); Polley v. Allen, 132 S.W.3d 223, 229-30 (Ky.App.
2004).
-18-
88% of the real property (valued by the court at approximately
$854,000.00).
Marilyn received 82% of the cash (bank accounts
and certificate of deposit totaling approximately $1 million)
and
12%
of
the
real
property
(valued
by
the
court
at
approximately $120,000.00).
Doug maintains that this division (a total of $1.167
million
for
Doug
and
$1.135
million
for
Marilyn)
was
unjust
because he worked long hours throughout the marriage whereas
Marilyn only worked outside the home for a few years without pay
and
therefore
estate.
made
This
no
argument
monetary
contribution
overlooks
the
fact
to
the
marital
that
the
statute
specifically directs the court to consider the contribution of a
spouse as homemaker.
the
windows
marriage
of
Doug testified that Marilyn did not wash
their
testified
that
home,
and
Marilyn
his
was
daughter
not
a
from
good
a
prior
housekeeper.
Undisputed evidence was also offered, however, that Marilyn did
cook, clean the family home, do the laundry and yard work, and
look
after
Jamie.
Evidence
also
showed
that
Marilyn
led
a
frugal lifestyle that included buying her clothes second hand
from St. Vincent de Paul.
The DRC concluded that Marilyn’s
efforts supported Doug and enabled him to work the long hours
that
led
to
the
accretion
of
monetary
almost thirty years of the marriage.
assets
throughout
the
The court did not abuse
its discretion in adopting this division of the marital estate.
-19-
Doug
further
argues
that
the
division
of
marital
property was unfair because he received the bulk of the real
property whereas Marilyn received primarily cash.
Under this
division, he contends that he will have to abandon his hope of
retirement and continue working to survive, or sell out at a
tremendous
loss,
considering
expenses
such
as
realtors’
commissions and capital gains taxes.
We acknowledge that the
potential
property
costs
of
selling
the
real
could
Doug’s share of the marital estate considerably.
diminish
Nevertheless,
the court’s rejection of this objection is based on substantial
evidence.
The court observed that:
[Doug]
fails
members
are
to
address
using
the
different
issue
that
properties
several
at
no
family
charge.
Certainly, he is welcome to use his property as he wishes,
but said assets are capable of producing income well above
what the cash assets could produce.
This Court also finds
that the petitioner is in a better position to manage said
properties
to
his
benefit,
and
is
capable
of
working
outside the home, whereas the respondent is untrained and
has been out of the workforce for a significant amount of
time in order to manage the household.
Therefore, it is
appropriate to award the respondent the assets that are
more readily available for use and this Court finds that
-20-
the commissioner’s recommendations concerning the same were
reasonable.
The court did not abuse its discretion when it determined that
the
income-producing
potential
and
the
potential
for
appreciation outweighed other concerns.
Doug next argues that brother Harold’s house, valued
at $57,750.00, should have been excluded from the marital estate
or classified as a marital debt. Doug testified that he gave the
house to Harold as a form of payment for work Harold had done
for him.
The record shows, however, that the house is still in
Doug’s name.
It was never deeded to Harold apparently because
Harold had credit and tax problems.
the
evidence,
consisting
only
of
We agree with the DRC that
Doug’s
testimony
and
some
calculations of debts between the brothers, is not sufficient to
establish
that
Harold
Doug’s
final
has
an
ownership
interest
concerns
in
Marilyn’s
the
residence.
argument
dissipation of the marital estate.
alleged
Dissipation has been defined
as “spending funds for a non-marital purpose . . . during a
period when there is a separation or dissolution impending, and
. . . where there is a clear showing of intent to deprive one’s
spouse of his or her share of the marital property.”22
Doug
claims that Marilyn systematically withdrew at least $300,000.00
22
Robinette v. Robinette, 736 S.W.2d 351, 354 (Ky.App. 1987)(citations
omitted).
-21-
from the couple’s joint accounts beginning in 1990.
There is
insufficient evidence, however, to support his allegation that a
separation or dissolution was impending when these withdrawals
began, nor does he offer any evidence that the money was spent
for
non-marital
expended
in
purposes.
anticipation
Doug
of
argues
the
that
the
dissolution
funds
were
because
the
withdrawals coincided with the time that Marilyn started working
long hours at her mother’s restaurant and began taking extended
horseback rides; however, Doug himself had worked long hours for
years but there was no suggestion that this was evidence that
the marriage was about to be dissolved.
In fact, the alleged
dissipation occurred over a period of approximately ten years.
It does not seem excessive for an individual in a marriage with
assets totaling $2.2 million to spend $30,000.00 per year.
The DRC also alluded to the fact that Doug himself had
spent large sums of money on race cars, that he had buried large
sums of cash, and had lost in excess of $200,000.00 on the Deer
Creek Mining Company.
Doug himself acknowledged that Marilyn
had little, if any, knowledge of his involvement with the Deer
Creek Mining Company or of the amounts of money invested and
lost in that venture.
court
agreed,
dissipation
of
that
The DRC recommended, and the circuit
neither
marital
party
assets.
discretion.
-22-
should
This
was
be
charged
not
an
with
abuse
of
Doug also argues that three houses with a total value
of
$231,000.00
that
are
currently
inhabited
by
Jamie
and
by
Doug’s two adult children from a previous marriage should not
have been included in the marital estate.
He argues that he and
Marilyn intended to provide homes for the children.
We agree
with the DRC that clear and convincing evidence was not adduced
to prove that the houses were gifts to the children.
The houses
were never deeded to the children nor formally transferred to
the children.
The court did not therefore err in including
these properties in the marital estate.
The circuit court neither erred when it adopted the
DRC’s
reports
containing
findings
of
facts
supported
by
substantial evidence nor did it abuse its discretion when it
divided
the
marital
estate
as
recommended
by
the
DRC.
Therefore, we affirm the decree dissolving the marriage between
James Douglas Peyton and Marilyn E. Peyton.
ALL CONCUR.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
William R. Whitledge
Madisonville, Kentucky
BRIEF FOR APPELLEE:
J. Christopher Hopgood
Stephen D. Gray
Henderson, Kentucky
ORAL ARGUMENT FOR APPELLEE:
J. Christopher Hopgood
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