STORY (LANA LEE) VS. STORY (STEPHEN DOUGLAS)
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RENDERED: OCTOBER 30, 2009; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-001301-MR
LANA LEE STORY
v.
APPELLANT
APPEAL FROM BOONE FAMILY COURT
HONORABLE LINDA R. BRAMLAGE, JUDGE
ACTION NO. 05-CI-01660
STEPHEN DOUGLAS STORY
APPELLEE
OPINION
AFFIRMING
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BEFORE: LAMBERT AND TAYLOR, JUDGES; HENRY,1 SENIOR JUDGE.
HENRY, SENIOR JUDGE: Lana Lee Story appeals from the Boone Family
Court’s Supplemental Decree and Supplemental Findings of Fact and Conclusions
of Law, both of which were entered on June 11, 2008. Lana raises two alternative
claims of error: (1) the family court erroneously valued her ex-husband’s Fidelity
Rollover Individual Retirement Account (IRA) as of the date the parties separated
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Senior Judge Michael L. Henry sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
(KRS) 21.580.
and stopped commingling funds – as opposed to the date on which the parties’
marriage was actually dissolved – for purposes of division; and (2) the family court
abused its discretion by failing to make sufficient factual findings and by failing to
properly apply the factors set forth in KRS 403.190(1) in dividing the IRA. After
our review, we find no error and therefore affirm.
Relevant Facts and Procedural History
Lana and Stephen Douglas Story were married on May 17, 1981, in
Covington, Kentucky. On September 8, 2005, Lana filed a Petition for Dissolution
of Marriage in the Boone Family Court seeking, among other things, distribution
of the parties’ marital property. On October 30, 2005, the parties separated by
moving into separate residences and by ceasing to comingle their funds. However,
the parties’ relationship was not legally severed until February 29, 2008, when the
family court entered a Bifurcated Decree of Dissolution of Marriage. Said decree
dissolved the parties’ marriage but reserved all other issues, including asset and
property division, for further consideration.
On June 9, 2008, the parties filed an Agreement that resolved nearly
all of the pending issues between the parties. The Agreement was incorporated
into a Supplemental Decree on June 11, 2008. Of particular note, in provision 6 of
the Agreement, the parties agreed to allow the family court to determine how
Stephen’s Fidelity Rollover IRA should be divided. Stephen took the position that
the value of the IRA should be divided as of the date the parties separated and
stopped commingling funds – October 30, 2005. Lana’s position was that the
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value of the IRA should de divided as of the date the Decree of Dissolution of
Marriage was entered – February 29, 2008 – and that she was entitled to one half
of the proceeds from the account. The difference between the parties’ positions
was of no small importance: The IRA was valued at $137,290 as of October 30,
2005, and $224,977 as of February 29, 2008.
The family court conducted a hearing on the matter on June 9, 2008.
Stephen testified that he opened the IRA in his name individually in 2004 and that
Lana did not have independent access to the account during the marriage. Lana
testified that she had asked Stephen to be allowed to access the account but that he
had repeatedly denied her requests. Stephen denied that this was the case and
indicated that Lana had never asked to participate in the management of the
account. Stephen further testified that while he had made no additional financial
contributions to the IRA and had not changed any of the eight mutual fund
holdings in the account between October 30, 2005 and February 29, 2008, he had
periodically shifted money within the account based on how each holding was
performing. He also indicated that he conducted internet research for purposes of
managing the account.
On June 11, 2008, the family court entered Supplemental Findings of
Fact and Conclusions of Law resolving the issue of how the IRA should be
divided. Of particular note, the court found that “even though there were no
contributions made by the Husband to his Fidelity IRA account after the parties
separated, the Husband actively participated in managing the account, without the
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assistance of the Wife.” Based on the evidence presented, the family court
concluded that “[p]ursuant to KRS 403.190(1)(a)-(d) and consideration of the
contribution of each spouse to the growth of the Fidelity account; the value of the
property to each spouse; duration of the marriage; and economic circumstances of
each spouse, the Court finds that it would be just to award the Wife one half of the
Husband’s Fidelity IRA account accumulated from the date of marriage, May 17,
1981 to October 30, 2005.” Thus, Stephen was awarded 100% of the value of the
IRA accumulated from October 30, 2005 to February 29, 2008. This appeal
followed.
Issues
Lana first argues that the family court erroneously failed to value
Stephen’s IRA as of the date the marriage was dissolved – February 29, 2008 – as
required under Kentucky law. She accordingly contends that the division of the
IRA based upon its value as of October 30, 2005 constitutes a manifest error of
law. Because this issue is one of law, we review it de novo. New v.
Commonwealth, 156 S.W.3d 769, 774 (Ky. App. 2005); Cinelli v. Ward, 997
S.W.2d 474, 476 (Ky. App. 1998).
In Stallings v. Stallings, 606 S.W.2d 163 (Ky. 1980), the Supreme
Court of Kentucky held that all property acquired during a period of “actual” (as
opposed to “legal”) separation is considered marital property unless it fits within
one of the exceptions set forth in KRS 403.190(2) and accordingly must be valued
as of the date of a dissolution decree. See id. at 164; Shively v. Shively, 233
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S.W.3d 738, 740 (Ky. App. 2007).2 Neither party has made a claim that any of the
exceptions set forth in KRS 403.190(2) applies in this case. Therefore, it is
apparent that Stephen’s IRA was marital property to be valued for purposes of
division as of the date of the parties’ dissolution decree – February 29, 2008.
With this said, while Lana argues that the family court erroneously
valued Stephen’s IRA and essentially deemed it to be non-marital property, we do
not believe that the record reflects such an error. The family court was clearly
aware of the date that the parties’ marriage was dissolved and of the IRA’s value as
of that date. The question was whether the family court believed that Lana should
be awarded any of the IRA’s value that accrued after the date on which the parties’
separated. Thus, the pertinent issue is not whether the family court correctly
valued the IRA but instead whether it divided it between the parties in an
appropriate manner pursuant to KRS 403.190(1).
This leads us to Lana’s second argument: that the family court abused
its discretion by failing to make sufficient factual findings and by failing to
properly apply the factors set forth in KRS 403.190(1) in dividing Stephen’s IRA.
KRS 403.190(1) sets forth, in relevant part, that:
In a proceeding for dissolution of the marriage . . . the
court shall assign each spouse’s property to him. It also
shall divide the marital property without regard to marital
misconduct in just proportions considering all relevant
factors including:
2
This rule of valuation applies to pensions and profit-sharing plans. See Perry v. Perry, 143
S.W.3d 632, 633 (Ky. App. 2004); Armstrong v. Armstrong, 34 S.W.3d 83, 86 (Ky. App. 2000);
Light v. Light, 599 S.W.2d 476, 479 (Ky. App. 1980).
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(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.
How property is divided is a matter within the sound discretion of the trial court
and can be overturned only for an abuse of that discretion. See Smith v. Smith, 235
S.W.3d 1, 14 (Ky. App. 2006); Cochran v. Cochran, 746 S.W.2d 568, 569-70 (Ky.
App. 1988). “An abuse of discretion exists when the reviewing court is firmly
convinced that a mistake has been made.” Overstreet v. Overstreet, 144 S.W.3d
834, 838 (Ky. App. 2003) (Citation omitted). “The test for abuse of discretion is
whether the trial judge’s decision was arbitrary, unreasonable, unfair, or
unsupported by sound legal principles.” Commonwealth v. English, 993 S.W.2d
941, 945 (Ky. 1999).
As noted above, the family court awarded each party a 50% interest in
the IRA as its value stood on the date the parties actually separated – October 30,
2005. However, the court awarded Stephen a 100% interest in the value
accumulated after this date up until the date the parties’ marriage was dissolved.
Kentucky law does not require that property acquired after the date of separation
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necessarily be divided in conformity with the division of property acquired prior to
the separation or that it be divided equally. Shively, 233 S.W.3d at 740. Instead, it
mandates that any post-separation marital property be divided in “just proportions”
pursuant to the factors set forth in KRS 403.190(1)(a)-(d). Id. Therefore, Lana is
not necessarily entitled to an equal share of the IRA’s post-separation value simply
because she was awarded an equal interest in the account’s pre-separation value.
While acknowledging this fact, Lana contends that in order for a trial
court to divide a marital estate in uneven proportions, it “must provide specific
factual findings that the unequal division of marital assets is based upon the factors
set forth in KRS 403.190(1)(a)-(d).” She specifically complains that the family
court here failed to make a factual finding as to the amount of appreciation in
Stephen’s IRA between October 30, 2005 and February 29, 2008 that was due
solely to his efforts and not the joint efforts of the parties or general economic
conditions. However, Lana did not adequately preserve her argument that the
family court failed to make specific findings on the factors set out in KRS 403.190
because she failed to file a motion pursuant to Kentucky Rules of Civil Procedure
(CR) 52.04.3 Accordingly, this error is waived. See Cherry v. Cherry, 634 S.W.2d
423, 425 (Ky. 1982).
This leaves Lana with her more general argument that the family court
abused its discretion in how it applied the factors set forth in KRS 403.190(1) in
3
CR 52.04 provides: “A final judgment shall not be reversed or remanded because of the failure
of the trial court to make a finding of fact on an issue essential to the judgment unless such
failure is brought to the attention of the trial court by a written request for a finding on that issue
or by a motion pursuant to Rule 52.02.”
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dividing Stephen’s IRA. While we perhaps would have divided the account
differently, we cannot say that we are “firmly convinced” that the family court
abused its discretion in dividing the account as it did. Overstreet, 144 S.W.3d at
838 (citation omitted). The court awarded Lana a 50% interest in the IRA up until
the point when the parties stopped commingling their funds and actually – if not
legally – separated even though the IRA was fully in Stephen’s name and any
management of the account was conducted solely by him. Stephen testified that
following the separation he routinely reviewed the mutual fund holdings within the
account, conducted his own research, and made fund transfers based on how each
holding was performing, thereby playing an active role in the management of the
account and in its growth. Moreover, while the family court did not necessarily
make ideal factual findings with respect to the factors set forth in KRS 403.190, it
did set forth that those factors were considered and the record provides no reason
to believe otherwise. Accordingly, we conclude that the family court did not abuse
its discretion or otherwise err in dividing Stephen’s Fidelity Rollover IRA in the
manner in which it did.
The judgment of the Boone Family Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Michael J. McMain
Florence, Kentucky
Holly A. Daugherty
Covington, Kentucky
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