DENNIS R. PEACH V. LEE ANN PEACH
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RENDERED: April 15, 2005; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-001191-ME
DENNIS R. PEACH
APPELLANT
APPEAL FROM ANDERSON CIRCUIT COURT
HONORABLE WILLIAM F. STEWART, JUDGE
CIVIL ACTION NO. 01-CI-00247
V.
LEE ANN PEACH
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
MINTON AND TACKETT, JUDGES; HUDDLESTON, SENIOR JUDGE.1
MINTON, JUDGE:
Dennis Peach appeals from the circuit court’s
order that decided the issues of child custody and support,
division of property, maintenance, and attorney fees in a
bifurcated divorce proceeding.
We affirm the circuit court’s
order on all issues.
1
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.
Dennis and Lee Ann Peach were married on April 11,
1981, and divorced on August 2, 2002.
They had two children:
Kayla, who became emancipated while the divorce was pending, and
Ryan, who is still a minor.
A few months after the divorce case
was filed in 2001, the court entered an agreed order giving
Dennis the exclusive use of the marital home pending the outcome
of the case.
The agreed order also granted temporary joint
custody of both children.2
Lee Ann was designated as the primary
residential custodian throughout the school year, with Dennis
designated as primary residential custodian during the months of
June, July, and August.
The agreed order further directed
Dennis to pay temporary child support to Lee Ann while the
children were in her care, and Dennis was ordered to pay
temporary maintenance to Lee Ann.
Continuing disputes soon erupted over the temporary
joint custody arrangement.
And the court ordered Dennis and Lee
Ann to participate in family mediation.
By agreement of the
parties, Dr. John Kravic, a licensed psychologist and a licensed
marriage and family therapist, was designated by the court to
conduct the mediation.
On two separate occasions, Dr. Kravic
met with Dennis, Lee Ann, and the children.
Dr. Kravic’s report
to the court noted that “[w]hile each parent had some
disparaging remarks about the other during their joint
2
At the time of the order, Kayla was still a minor.
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interviews . . . Dennis and Lea [sic] Ann still whole-heartedly
concurred that joint legal and shared physical custody of their
children was the best plan.”
Dr. Kravic concluded:
In the final analysis, Mr. and
Mrs. Peach settled on the original schedule
of shared physical custody according an
alternating 8day/6day or 6day/8day schedule
depending upon whether the children are in
school or not. While I expressed my concern
that split physical custody arrangements
often are difficult and complicated for
children to manage, the Peach’s [sic] were
firm in their joint resolution for equal or
near-equal time with their children.
On August 8, 2002, the court granted the divorce,
reserving for a later determination all remaining issues, and
ordering Dennis and Lee Ann to “follow the recommendation of
Dr. John Kravic” and to “confer in an effort to settle as many
of the remaining issues as practicable . . . .”
Shortly after
that the court also ordered Dennis to pay Lee Ann child support
in the amount of $325.00 per month.
On April 4, 2004, the Domestic Relations Commissioner
tendered proposed findings of fact and conclusions of law.
Dennis and Lee Ann each filed exceptions to the DRC’s report.
The court ultimately confirmed the majority of the DRC’s report.
A few exceptions were noted in the court’s order, including the
amount to be paid in child support, the parent who could claim
the tax exemption for Ryan’s support, and the payment of Ryan’s
extraordinary medical expenses.
This appeal follows.
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CUSTODY OF RYAN PEACH
Dennis first argues that the court erroneously granted
Lee Ann primary residential custody of Ryan.
Specifically,
Dennis claims the court should not have adopted Dr. Kravic’s
recommendations.
He argues that the report is not a proper
“custody evaluation” but, rather, “a report addressing what the
parties had agreed on that particular occasion to do.”
Because
of his apparent disagreement with the court’s adoption of
Dr. Kravic’s report, Dennis asserts that “the parties were free
to and did modify that arrangement.”
Dennis further claims
that the court failed to take into account Ryan’s wishes when
making its custody decision and that the court erroneously chose
not to interview Ryan.
We disagree with Dennis on all of these
points.
Custody issues are primarily governed by KRS3 403.270.
The pertinent portions of that statute read:
(2)
The court shall determine custody in
accordance with the best interests of
the child and equal consideration shall
be given to each parent and to any de
facto custodian. The court shall
consider all relevant factors
including:
(a)
3
The wishes of the child’s parent
or parents, and any de facto
custodian, as to his custody;
Kentucky Revised Statutes.
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(b)
The wishes of the child as to his
custodian;
(c)
The interaction and interrelationship of the child with his parent
or parents, his siblings, and any
other person who may significantly
affect the child’s best interests;
(d)
The child’s adjustment to his
home, school, and community;
(e)
The mental and physical health of
all individuals involved;
(f)
Information, records, and evidence
of domestic violence as defined in
KRS 403.720.
It is within the court’s discretion to “seek the
advice of professional personnel” with regard to custody issues.4
Any advice provided to the court must be “in writing and made
available by the court to counsel upon request.”5
In contested
custody proceedings, “the court may order an investigation and
report concerning custodial arrangements for the child.”6
When
preparing a report for the court, the investigator “may consult
any person who may have information about the child and his
potential custodial arrangements”; both parties are permitted to
either call or cross-examine the investigator as a witness.7
4
KRS 403.290.
5
Id.
6
KRS 403.300(1).
7
KRS 403.300(1), (2).
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KRS 403.290 further provides that “[t]he court may
interview the child in chambers to ascertain the child’s wishes
as to his custodian and as to visitation.”
The decision whether
or not to interview a child is completely discretionary and
within the province of the trial court.8
When taking into
account the child’s desires, however, the court must note that
it is the welfare, not the wishes, of a child that controls.9
Joint custody arrangements necessarily require
cooperation by both parties to the agreement.
The “essence” of
joint custody “contemplates shared decision-making rather than
delineating exactly equal physical time with each parent.”10
When awarding joint custody, “the court must determine, based on
the child’s best interest, how the parents will share physical
custody of the child.”11
An equal division of time is not
required; rather, custody should be shared “in a way that
assures the child frequent and substantial contact with each
parent under the circumstances.”12
In joint custody situations, “the parties will often
agree, or the court will designate, that one of the parents will
8
Brown v. Brown, 510 S.W.2d 14, 16 (Ky. 1974).
9
Shepherd v. Shepherd, 295 S.W.2d 557, 559 (Ky. 1956).
10
Fenwick v. Fenwick, 114 S.W.2d 767, 777 (Ky. 2003).
11
Id. at 778.
12
Id.
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act as the ‘primary residential custodian.’”13
Although the term
“has not been statutorily defined in Kentucky, it is generally
employed by attorneys and courts alike to refer to the party
with whom the child will primarily reside.”14
In his report, Dr. Kravic mentioned the continuing
discord between Dennis and Lee Ann; he also noted that Ryan
seemed to “idolize” his father and “resent” his mother.
Nonetheless, he stated that the parties “whole-heartedly
concurred” that joint legal custody of their children was the
best plan.
This sentiment was later reiterated in the report
when Dr. Kravic observed that the Peaches had “settled on the
original schedule of shared physical custody according an
alternating 8day/6day or 6day/8day schedule depending upon
whether the children are in school or not.”
The custody
arrangement that Dr. Kravic ultimately recommended reflected the
Peaches’ previous agreement.
Dennis does not argue that the arrangement cited in
Dr. Kravic’s report failed to recite the agreement he and Lee
Ann made.
Rather, he claims that he and Lee Ann “did not follow
through with that arrangement”; therefore, he asserts that the
court’s order was erroneous.
13
Id. at 778-779.
14
Id. at 779.
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This assumption is flawed.
Although Dennis argues
that the decision to alter or ignore the court’s order was
mutual, Lee Ann suggests that Dennis unilaterally chose not to
follow the recommended report.
Regardless, parties may not
choose, either unilaterally or mutually, to disobey a court’s
order simply because they disagree with its terms.
The more
appropriate action would be to file a motion to modify or to
await the outcome of appellate review instead of choosing to
ignore the terms of the court’s order.
That said, after reviewing the entirety of
Dr. Kravic’s report, we do not find any error in the trial
court’s decision to adopt his recommendations.
Because of the
ongoing custody battle between Dennis and Lee Ann, the court
chose to seek Dr. Kravic’s advice.
In doing so, the court
properly followed the requirements of KRS 403.290 and 403.300.
Dr. Kravic appears to have investigated the situation thoroughly
and to have written a report that was made available to the
court and both parties.
The report filed by Dr. Kravic touched on the factors
relevant in KRS 403.270.
Although it was clear that there was
conflict in the family, Dennis and Lee Ann were agreed that
custody should be shared.
Accordingly, Dr. Kravic recommended
that the parties continue with the same joint custody
arrangement upon which they had initially agreed.
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Dr. Kravic
clearly thought that the continuation of this arrangement would
be in Ryan’s best interest, and we find no basis in the record
to disagree.
We further find no error in the circuit court’s
designating Lee Ann as Ryan’s primary residential custodian.
Based on the parties’ shared custody agreement, Lee Ann was the
primary custodian of Ryan 197.1 days per year, while Dennis was
primary custodian 167.9 days per year.
Although the difference
is slight, the “primary residential custodian” typically refers
“to the party with whom the child will primarily reside.”
Since
the court’s order requires Ryan to live with his mother for a
greater number of days each year, we cannot say that the
decision to designate Lee Ann as the primary residential
custodian was an error.
Finally, although Ryan’s alleged desire to live with
his father was not expressly taken into account, we note again
that a minor child’s welfare, not his wishes, is determinative.15
And although neither the court nor the DRC opted to interview
Ryan, this decision was discretionary.
either of these decisions.
16
We find no error with
Accordingly, Dennis’s arguments are
without merit.
15
Shepherd v. Shepherd, supra at 559.
16
Brown v. Brown, supra at 16.
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The scope of our review of custody determinations
focuses on deciding whether the circuit court’s factual findings
were clearly erroneous.17
Admittedly, the joint custody
arrangement in this case requires a level of cooperation that
the Peaches have never demonstrated during the pendency of this
case.
But we recognize that there is substantial evidence in
this record to support the trial court’s conclusion.
So we
affirm the decision regarding Ryan’s custody.
CHILD SUPPORT, TAX EXEMPTION,
AND EXTRAORDINARY MEDICAL EXPENSES
Dennis next argues that the court erroneously awarded
Lee Ann child support, ordered him to pay 63.35 percent of all
of Ryan’s extraordinary medical expenses, and awarded Ryan’s tax
exemption to Lee Ann.
We will discuss each argument separately.
Dennis first contends that the circuit court
erroneously ordered him to pay Lee Ann $192.00 per month in
child support.
Specifically, Dennis argues that the court
failed to take into account the fact that Ryan primarily lives
with him.
He also claims that the court miscalculated Lee Ann’s
monthly income.
The court found that Lee Ann’s yearly income
was $20,687.00 ($1,916.00 per month), while Dennis’s income was
17
Kentucky Rules of Civil Procedure (CR) 52.01.
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$34,283.00 ($2,654.00 per month).18
But Dennis argues that the
evidence shows that Lee Ann earned an additional $1,552.00 per
month from her part-time job as a grocery store cashier.
Therefore, Dennis claims the court should have ordered Lee Ann
to pay him $432.32 per month.
Dennis’s argument that he is “owed” child support
because Ryan spends more time with him is unfounded.
As
previously discussed, Dennis does not have the power to alter
unilaterally the court’s custody order.
And until the trial
court finds a reason to modify that order, Lee Ann remains
Ryan’s primary residential custodian.
The record lacks any evidence indicating that Lee Ann
makes $1,552.00 per month as a grocery store cashier.
A W-2 tax
form included with the parties’ exhibits does indicate that Lee
Ann made $1,307.25 at Smith’s Grocery.
However, as far as this
Court is aware, a W-2 reflects an individual’s income annually,
not monthly.
Lee Ann testified that she works approximately six
hours a week at Smith’s Grocery, making $6.00 per hour.
To make
the income estimated by Dennis, Lee Ann would have to work forty
hours a week as a cashier and make almost $10.00 per hour to net
$1,552.00 per month.
Considering the fact that Lee Ann already
holds another full-time position with the Anderson County PVA,
18
Both of these figures take into account the amount of maintenance
the parties either received or paid.
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Dennis’s argument is not credible.
Therefore, we reject
Dennis’s argument and find no basis for error in the circuit
court’s calculation of the parties’ incomes.
With regard to a determination of child support,
KRS 403.211(1) states that “[a]n action to establish or enforce
child support may be initiated by the parent, custodian, or
agency substantially contributing to the support of the child.”
When child support is initially established, the child support
guidelines19 “serve as a rebuttable presumption for the
establishment or modification of the amount of child support.”20
In a joint custody arrangement, support is calculated in the
following manner:
(a)
Two (2) separate child support
obligation worksheets shall be
prepared, one (1) for each household,
using the number of children born of
the relationship in each separate
household, rather than the total number
of children born of the relationship.
(b)
The nonresidential custodian with the
greater monthly obligation amount shall
pay the difference between the
obligation amounts, as determined by
the worksheets, to the other parent.21
Based on the child support guidelines, along with the
disparity in the parties’ income and the percentage of time Ryan
19
KRS 403.212.
20
KRS 403.211(2).
21
KRS 403.212(6).
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was ordered to spend with each parent, the court determined that
Dennis should pay Lee Ann $192.00 per month in child support.
The evidence supports this conclusion.
The circuit court concluded that Lee Ann’s income
accounted for 36.65 percent of the parties’ adjusted gross
income, while Dennis’s income accounted for 63.35 percent.
The
court further found that based on the custody arrangement, Ryan
spent 54 percent of his time with Lee Ann, and 46 percent of his
time with Dennis.
The actual amount of child support awarded to
Lee Ann was based on a schedule calculating Lee Ann’s presumed
basic child support obligation to be $418.00.
Because Ryan was
scheduled to spend 46 percent of his time with Dennis, the court
subtracted 46 percent of $418.00 from the amount of Lee Ann’s
obligation.
This resulted in a sum of $192.00.
error in this calculation.
There is no
So we affirm the circuit court’s
decision regarding the amount of monthly child support Dennis
must pay to Lee Ann.
Second, Dennis claims the court erroneously ordered
him to pay 63.35 percent of Ryan’s extraordinary medical
expenses.
Specifically, Dennis argues the court erred by not
allocating to Lee Ann “the payment of the first $100.00 of
[Ryan’s] medical expenses as mandated by KRS 403.211(8).”
KRS 403.211(8) states that “[t]he cost of
extraordinary medical expenses shall be allocated between the
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parties in proportion to their combined monthly adjusted
parental gross incomes.
‘Extraordinary medical expenses’ means
uninsured expenses in excess of one hundred dollars ($100) per
child per calendar year.”
The statute further defines
“extraordinary medical expenses” to include reasonably necessary
costs for services such as surgery and optometry, as well as
professional counseling or psychiatric therapy.
As previously established, the court found that
Dennis’s income accounts for 63.35 percent of the parties’
combined adjusted gross income.
So the court properly concluded
that Dennis was responsible for 63.35 percent of Ryan’s
extraordinary medical expenses.
The failure to state explicitly
that Lee Ann was responsible for payment of the first $100 of
Ryan’s medical expenses was not error.
The statute says that
“extraordinary medical expenses” are those expenses in excess of
$100.00.
The addition of language directing Lee Ann to pay the
first $100.00 would have been superfluous.
Thus, we find no
fault with the court’s allocation of Ryan’s extraordinary
medical expenses.
Finally, Dennis argues that the court erroneously
allocated Ryan’s income tax exemption to Lee Ann.
Dennis
contends that the court erred because Ryan primarily resides
with him and because Lee Ann is currently not paying any child
support.
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When apportioning a dependent’s tax exemption, the
court must “allocate the exemption so as to maximize the amount
available for the care of the [dependent].”22
Although the
allocation of the tax exemption is within the discretion of the
circuit court, it “is to be guided in the exercise of its
discretion by making an allocation which will best maximize the
benefit of the exemption . . . .”23
Considering the fact that Lee Ann was designated as
the primary residential custodian of Ryan, the court did not
abuse its discretion by allocating Ryan’s tax exemption to her.
Again, Dennis’s argument that he should receive the exemption
because Ryan spends more time with him is without merit.
Until
there is a court order to the contrary, Lee Ann is the primary
residential custodian of Ryan.
Therefore, the court’s decision
to allocate the exemption to Lee Ann was not an abuse of
discretion.
DENNIS’S NON-MARITAL INTEREST
IN THE PARTIES’ REAL ESTATE
Dennis’s third argument is that the court erred by
allocating to him only a $5,000.00 non-marital interest in the
parties’ real estate.
Rather, he claims the court should have
allocated a $12,000.00 non-marital interest to him.
22
Hart v. Hart, 774 S.W.2d 455, 457 (Ky.App. 1989).
23
Pegler v. Pegler, 895 S.W.2d 580, 581 (Ky.App. 1995).
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Before the marriage, Dennis owned a mobile home and a
tract of land.
The mobile home had an initial value of
$3,500.00; it was later sold for the same price.
land was initially appraised at $1,500.00.
a fair market value of $8,500.00.
The tract of
But the land now has
The court found that Dennis
was entitled to the sale price of the mobile home ($3,500.00),
plus the initial value of the land ($1,500.00), for a total of
$5,000.00 in recognition of his non-marital interest.
But
Dennis argues that the court should have awarded him the value
of the mobile home, plus the current value of the land
($8,500.00), for a total non-marital interest of $12,000.00.
We
disagree.
KRS 403.190 requires the court to utilize a three-step
process when dividing property:
“(1) characterizing each item
of property as marital or nonmarital; (2) assigning each party’s
nonmarital property to that party; and (3) equitably dividing
the marital property between the parties.”24
If property is
acquired subsequent to marriage, it is assumed to be marital.25
In Travis v. Travis,26 the Kentucky Supreme Court
discussed the process for dividing marital property when there
is an increase in the property’s value:
24
Hunter v. Hunter, 127 S.W.3d 656, 659 (Ky.App. 2003).
25
Id. at 660.
26
59 S.W.3d 904 (Ky. 2001).
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When the property acquired during the
marriage includes an increase in the value
of an asset containing both marital and
nonmarital components, trial courts must
determine from the evidence “why the
increase in value occurred” because “where
the value of [non-marital] property
increases after marriage due to general
economic conditions, such increase is not
marital property, but the opposite is true
when the increase in value is a result of
the joint efforts of the parties.”
KRS 304.190(3), however, creates a
presumption that any such increase in value
is marital property, and, therefore, a party
asserting that he or she should receive
appreciation upon a nonmarital contribution
as his or her nonmarital property carries
the burden of proving the portion of the
increase in value attributable to the
nonmarital contribution. By virtue of the
KRS 403.190(3) presumption, the failure to
do so will result in the increase being
characterized as marital property.27
It is undisputed that the parties built their marital
home on Dennis’s original tract.
And although Dennis argues
that “[i]t is well settled that the increased value of
[nonmarital] property acquired before the marriage remains
[nonmarital] if the increase is not the result of the parties’
efforts,” he fails to point to any evidence in the record that
the increase in the value of the land was solely attributable to
him.
In contrast, Lee Ann argues that the increase in value was
a joint effort since the parties “jointly borrowed funds,
jointly landscaped, jointly built a home, garage, driveway,
27
Id. at 910-911 (citations omitted).
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etc.” to transform the land from “the bare piece of western
Anderson County hillside once deeded.”
The circuit court agreed with Lee Ann’s assessment
that the increase in the land’s value was attributable to the
joint efforts of both parties; and because there is no evidence
in the record to support Dennis’s contention that the increase
in value was the product of his efforts alone, he failed to meet
his burden of proof.
Therefore, the circuit court’s findings
were proper.
DIVISION OF SPECIFIC PERSONAL PROPERTY
Fourth, Dennis contends that the circuit court
erroneously divided certain items of personal property.
Dennis
specifically claims the court erred by dividing the parties’
employment benefits and the payouts from the National Tobacco
Settlement as marital property and by failing to divide the
value of their motor vehicles.
With regard to the division of employment benefits,
Dennis argues that the circuit court abused its discretion
because it ordered the parties to divide equally “any and all
employment benefits.”
Because this Court has already held that
benefits such as vacation and sick days are not divisible as
marital property, Dennis contends the circuit court’s order was
erroneous.
We disagree.
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Dennis properly identifies our holding in Bratcher v.
Bratcher28 as expressly excluding items such as “accrued leave”
from marital division.
In Bratcher, we adopted the Maryland
court’s holding in Thomasian v. Thomasian29 that “accrued holiday
and vacation entitlement[s]” are not the same as “pension or
retirement benefits.”30
Because these benefits “replace[] wages
on days when the worker does not work,” they are “really only an
alternative form of wages.”31
And since they are “much more
difficult to value” and not “as tangible” as pensions or
retirement benefits, we held that they were not divisible as
marital property.32
Because of our holding in Bratcher, we believe the
more sensible interpretation of the phrase “any and all
employment benefits” necessarily excludes entitlements to
accrued vacation, holiday, and sick hours.
Clearly, Dennis’s
argument ignores the fact that “employment benefits” include
more than vacation and holiday hours.
It is well established
that other employment benefitssuch as retirement and pension
benefitsare divisible as marital property.
Although Dennis
28
26 S.W.3d 797 (Ky.App. 2000).
29
Id. at 800; 79 Md.App. 188, 556 A.2d 675 (1989).
30
Bratcher at 800, quoting Thomasian at 681.
31
Id.
32
Id.
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argues that his retirement benefits cannot be divided because
they are not vested, “Kentucky permits division as marital
property of both vested and nonvested retirement benefits.”33
Therefore, we find no error in the court’s decision to
divide the parties’ “employment benefits,” while excluding the
parties’ accrued vacation, sick, or holiday hours, and including
any retirement or pension benefits.
Dennis also argues that the court erred in holding
that “[t]he issue of the tobacco settlement and/or tobacco
buyout proceeds which derive from the years of the marriage is
hereby reserved until such time that there may a [sic]
resolution of such issue or the division is capable of being
determined and distributed.”
According to the record, Dennis’s
parents gave him a 300-pound tobacco allotment.
Dennis and Lee
Ann bought an additional 700-pound allotment during the
marriage.
The tobacco settlement, also referred to as the
“Phase II” settlement, stems from a “landmark” 1998 agreement
between the tobacco companies and the tobacco-growing states.34
The purpose behind the Phase II settlement was to compensate
“tobacco growers for losses they were expected to suffer under
33
Holman v. Holman, 84 S.W.3d 903, 907 (Ky. 2002).
34
“UPDATE: NC Judge: Tobacco Cos Freed From Farmer Payments,” The Wall
Street Journal, Dec. 23, 2004, available at: http://agpolicy.ky.gov/
Documents/article_041223_WSJ_JudgeRules.pdf.
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higher cigarette prices . . . .”35
The payments, which began in
1999, were to be paid to tobacco quota owners and tobacco
growers over a period of five years.
But in the fall of 2004,
the United States Congress approved a $10.1 billion federal
tobacco buyout; therefore, the tobacco companies argued they
should not be required to make the $189 million settlement
payment scheduled to be paid out to farmers in December 2004.36
The North Carolina Business Court agreed with the tobacco
companies and held that the companies did not have to make the
2004 settlement payments.
Moreover, the North Carolina court
held that the companies should get a refund on payments made
earlier in 2004.37
Because of the potentially far-reaching
financial impact of the North Carolina court’s decision, it is
assumed that the order will be appealed.
Dennis argues that the circuit court erred because Lee
Ann had already “protested the sums allegedly due to her under
the National Tobacco Settlement Program.”
Allegedly, the
parties appeared before the “Phase II National Tobacco
Settlement Board for Kentucky” and a “determination was
rendered” allowing both of them to begin “receiving their
35
Id.
36
Id.
37
Id; see also, State v. Philip Morris, et al., file no. 98 CVS 14377,
(N.C. 2004), available at http://www.ncbusinesscourt.net/ 120945/
2004%20NCBC%209.htm.
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appropriate shares as established by that board.”
There is no
evidence of this determination in the record.
In response, Lee Ann argues that because of the
speculative nature of any future tobacco settlements, the
circuit court properly delayed “assignment of tobacco settlement
or buyout proceeds until they are capable of division.”
Thus,
Lee Ann claims that if, when the amount of the settlements is
secured, “certain settlement proceeds derive from the years of
the marriage, the Court can give Lee Ann an equitable
apportionment.
To foreclose this possibility could very well
provide Dennis with a windfall . . . .”
Dennis has failed to provide proof that a
determination of the parties’ “appropriate shares” of the
Phase II settlement has already been made.
Therefore, we must
agree with Lee Ann that the nature of the tobacco settlements is
too speculative to be determined at this time.
Obviously, the
recent decision from the North Carolina Business Court makes
receipt of the payments even more speculative.
Because of the
provisional character of the settlement funds, we believe that
the circuit court properly reserved this issue for future
determination.
Dennis further argues that the circuit court did not
have jurisdiction over this issue because the Phase II
settlement is a “federal” issue that has not been enacted into
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state law.
Therefore, he claims the court’s decision to reserve
the issue for future determination was erroneous.
We reject this argument.
Regardless of whether the
tobacco settlement was created by state or federal legislation,
the court undeniably had jurisdiction over Dennis and Lee Ann.
The decision to reserve the issue of division of the settlement
monies until a later time did not require the court to exercise
power over the settlement itself but, rather, over when and how
the settlement will be divided between the parties.
Since
Dennis availed himself of the Anderson Circuit Court when he
filed his petition for dissolution, that court had power to
enter an order regarding the division of parties’ entire marital
estate.
Finally, Dennis argues that the trial court erred by
excluding their motor vehicles from marital division.
Again, we
note that the division of marital property is within the
province of the circuit court.
We will only set aside the
circuit court’s decision if it amounts to an abuse of
discretion.38
Moreover, the threshold requirement is that
marital property be divided equitably, not equally.39
The decision to exclude the parties’ motor vehicle
from division was not an abuse of discretion.
There is no proof
38
Russell v. Russell, 878 S.W.2d 24, 25 (Ky.App. 1994).
39
Id.
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that the overall distribution was inequitable; rather, the
record indicates that both Dennis and Lee Ann received a fair
share of the marital estate.
Thus, although we do not fully
understand the court’s rationale for excluding only the parties’
motor vehicles from marital division, we cannot say that the
decision to do so was clearly erroneous.
DISPOSITION OF INDEBTEDNESS
Dennis next argues that the circuit court erroneously
assigned him the liability for a $2,000.00 debt owed to his
mother, Marlene Peach.
The debt apparently stemmed from the
purchase of a Farmall tractor from Dennis’s parents.
Dennis
claims that because both he and Lee Ann listed this debt on
their financial disclosure statements, the court should have
divided it between them.
We disagree.
When a debt is incurred during a marriage, it is
“traditionally assigned on the basis of such factors as receipt
of benefits and extent of participation; whether the debt was
incurred to purchase assets designated as marital property; and
whether the debt was necessary to provide for the maintenance
and support of the family.”40
40
As with marital property, courts
Neidlinger v. Neidlinger, 52 S.W.3d 513, 523 (Ky. 2001) (citations
omitted).
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need not presume that “debts must be divided equally or in the
same proportions as the marital property.”41
The record indicates that the Farmall tractor was
purchased for Dennis and Lee Ann’s farming operation.
Both
parties assumedly participated in the purchase of the tractor,
but there is no evidence that the tractor was purchased “to
provide for the maintenance and support of the family.”
The
tractor was deemed to be marital property since it was purchased
after the parties’ marriage.
As with the division of marital property, the division
of marital debt is discretionary and within the province of the
circuit court.42
Considering the relevant factors and the fact
that Dennis’s financial resources exceed Lee Ann’s, we do not
believe the decision to assign the $2,000.00 debt to Dennis
constituted an abuse of discretion.
Therefore, we affirm.
AWARD OF MAINTENANCE
Dennis’s sixth point of contention is that the circuit
court erroneously ordered him to pay Lee Ann maintenance in the
amount of $500.00 per month for five years, or until Lee Ann’s
“death, cohabitation or remarriage . . . .”
Dennis claims that
because Lee Ann’s income exceeded her monthly expenses and
41
Id.
42
Id.
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because “Lee Ann’s conduct broke up the marital household and
caused this divorce while she took up with Jimmy Lee Hawkins,”
she does not deserve maintenance.
We disagree.
First, whether or not Lee Ann’s conduct “broke up the
marital household” is not to be considered in determining
whether to award maintenance.43
Second, although Dennis claims
that Lee Ann “took up with Jimmy Lee Hawkins,” he cites to no
evidence in the record which would support a finding of
cohabitation.
Without proof, we are unable to expound on the
merits of this allegation.
KRS 403.200 governs awards of maintenance.
The
statute states that “the court may grant a maintenance order for
either spouse only if it finds that the spouse seeking
maintenance:
(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 . . . .”
Factors to be taken into account in
determining the extent and amount of a maintenance award
include:
(a)
43
The financial resources of the party
seeking maintenance, including marital
property apportioned to him, and his
ability to meet his needs
independently . . . ;
See 16 Louise E. Graham & James E. Keller, KENTUCKY PRACTICE § 16.10
(2d ed. 1997).
-26-
(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.
Whether to award a party maintenance is within the sound
discretion of the trial court.44
The circuit court found that “given the standard of
living of the marriage, the duration of the marriage, in excess
of twenty years, the disparity of incomes of the parties, that
it is reasonable to award [Lee Ann] spousal maintenance in the
amount of $500.00 per month for 5 years (60 months).”
Dennis
argues this finding was erroneous because Lee Ann’s income
exceeds her monthly expenses.
This assumption is based upon
Dennis’s continued belief that Lee Ann secretly makes an
additional $1,550.00 per month working part time as a grocery
store cashier.
44
Weldon v. Weldon, 957 S.W.2d 283, 285 (Ky.App. 1997).
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As previously stated, there is no evidence in the
record to support Dennis’s estimation of Lee Ann’s income.
Rather, the court found that Lee Ann’s current gross income,
including maintenance, was $1,916.00.
The court further found
that her monthly expenses were $1,894.00.
We do not believe the
fact that Lee Ann’s income exceeds her monthly expenses by
approximately $20.00 proves that the court’s maintenance order
was erroneous.
Further, the circuit court did not abuse its
discretion when it determined that based on Lee Ann’s current
status, she was unable to provide for her reasonable needs and
sustain the standard of living enjoyed during her marriage.
Therefore, we affirm the trial court’s decision to award Lee Ann
maintenance in the amount of $500.00 per month.
AWARD OF ATTORNEY’S FEES
Finally, Dennis argues the court erroneously ordered
him to pay $6,500.00 of Lee Ann’s attorney’s fees.
We disagree.
KRS 403.220 states:
The court from time to time after
considering the financial resources of both
parties may order a party to pay a
reasonable amount for the cost to the other
party of maintaining or defending any
proceeding under this chapter and for
attorney’s fees, including sums for legal
services rendered and costs incurred prior
to the commencement of the proceeding or
after entry of judgment.
-28-
As with most other decisions relating to property settlement,
the assignment of attorney’s fees is within the discretion of
the trial court.45
The only requirement is that the court must
“consider the financial resources of the parties when ordering a
party to pay a reasonable amount in attorney’s fees.”46
Based on the totality of the evidence we have thus far
discussed, it is clear that Dennis’s financial resources
exceeded Lee Ann’s.
Because this is the only requirement that
the court must take into consideration, we believe the decision
to assign a portion of Lee Ann’s attorney’s fees to Dennis was
appropriate and supported by substantial evidence.
CONCLUSION
For these reasons, the May 18, 2004, order of the
Anderson Circuit Court is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Michael L. Judy
Frankfort, Kentucky
Susan Hanrahan McCain
Springfield, Kentucky
45
Neidlinger, supra at 519.
46
Poe, supra at 852.
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