MCCOY (REBECCA JOY) VS. MCCOY (DANIEL JASON) NOT BE PUBLISHED AND MCCOY (DANIEL)
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RENDERED: AUGUST 27, 2010; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-002427-MR
REBECCA JOY MCCOY
v.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE O. REED RHORER, JUDGE
ACTION NO. 06-CI-00853
DANIEL JASON MCCOY
AND
APPELLEE
NO. 2008-CA-002428-MR
DANIEL MCCOY
v.
CROSS-APPELLANT
CROSS-APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE O. REED RHORER, JUDGE
ACTION NO. 06-CI-00853
REBECCA MCCOY
CROSS-APPELLEE
OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
** ** ** ** **
BEFORE: CLAYTON AND NICKELL, JUDGES; LAMBERT,1 SENIOR
JUDGE.
NICKELL, JUDGE: Rebecca Joy McCoy appeals from an order of the Franklin
Circuit Court modifying a property settlement agreement. Rebecca argues the trial
court erred in: (1) ignoring a provision in the agreement prohibiting modification;
(2) failing to require Daniel McCoy to reimburse her for various expenses for their
child in accordance with the agreement; and (3) requiring her to reimburse Daniel
for funds used from their joint checking account. On cross-appeal, Daniel argues
the trial court erred in: (1) refusing to allocate the marital credit card debt; (2)
refusing to require a complete reimbursement of funds from the joint checking
account; and (3) failing to require full reimbursement for the value of personal
property. We affirm in part, reverse in part, and remand.
Daniel and Rebecca were married in 1991. One minor child was born
of the marriage. Daniel filed a petition seeking dissolution of the marriage in
2006. The trial court entered a temporary order on October 18, 2006, requiring
Rebecca to satisfy the parties’ marital debts from their joint checking account. The
parties subsequently entered into a property settlement agreement. The trial court
found the agreement was not unconscionable and incorporated the agreement into
the final decree of dissolution which was entered on March 19, 2007.
1
Senior Judge Joseph E. Lambert 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.
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On December 27, 2007, Daniel filed a motion to modify the
separation agreement regarding the division of the parties’ retirement accounts.
Paragraph 14 of the agreement states as follows:
Retirement Plans. The parties have agreed that the
difference between the Petitioner’s retirement account
and the Respondent’s retirement account will be
calculated as of March 1, 2007, and the difference, or
$16,000.00 (whichever is greater) will be paid to the
Respondent upon the sale of the marital residence.
On December 28, 2007, Rebecca filed a motion to comply with the
decree and a motion for release of funds from the sale of the marital residence held
in escrow. Paragraph 21 of the agreement states:
Incorporation Agreement. Both parties agree that this
document, in the event a decree of dissolution is granted
by the Franklin Circuit Court, shall be incorporated by
reference into said decree and that there shall be no
modification or alteration of its terms except for terms
concerning child custody, support, and visitation, or by
written documents signed by both parties.
Rebecca also filed a motion for sole custody of the child and child support.
The trial court held a hearing on the issues and entered findings of
fact, conclusions of law, and an order modifying the separation agreement.
Pertinent to this appeal, the trial court ordered: (1) equal division of the retirement
benefits as of March 1, 2006, rather than March 1, 2007; (2) Rebecca shall
reimburse Daniel in the amount of $1,413.51, which she spent in violation of the
temporary order; and (3) Rebecca shall return Daniel’s personal property in her
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possession and reimburse him in the amount of $1,200.00 for the value of clothing
she intentionally destroyed. This appeal and cross-appeal followed.
Rebecca first argues the trial court erred by modifying the separation
agreement provision relating to the retirement accounts because the agreement
contained a provision prohibiting modification. We agree.
KRS 403.180(6) states:
Except for terms concerning the support, custody, or
visitation of children, the decree may expressly preclude
or limit modification of terms if the separation agreement
so provides. Otherwise, terms of a separation agreement
are automatically modified by modification of the decree.
This statute permits parties to “settle their affairs with a finality beyond the reach
of the court's continuing equitable jurisdiction elsewhere provided.” Brown v.
Brown, 796 S.W.2d 5, 8 (Ky. 1990).
In the present case, the separation agreement expressly prohibited
modification and was incorporated into the decree of dissolution. The trial court
found the separation agreement was not unconscionable. Daniel testified he
entered into the separation agreement voluntarily and read all of the terms. The
separation agreement was prepared by Daniel’s attorney.
Daniel argues KRS 403.250(1) permits the modification of separation
agreements notwithstanding KRS 403.180(6). KRS 403.250(1) states:
Except as otherwise provided in subsection (6) of KRS
403.180, the provisions of any decree regarding
maintenance or support may be modified only upon a
showing of changed circumstances so substantial and
continuing as to make the terms unconscionable. The
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provisions as to property disposition may not be revoked
or modified, unless the court finds the existence of
conditions that justify the reopening of a judgment under
the laws of this state.
In relying upon KRS 403.250(1) to modify the separation agreement, the trial court
ignored KRS 403.180(6). The well-established rule of statutory construction is
“when two statutes deal with the same subject matter, one in a broad, general way
and the other specifically, the specific statute prevails.” Land v. Newsome, 614
S.W.2d 948, 949 (Ky. 1981). KRS 403.180(6) specifically permits parties to
preclude modification of separation agreements. KRS 403.250(1) does not
specifically refer to separation agreements, rather KRS 403.250(1) deals with the
modification of property divisions in general. We conclude the trial court erred by
modifying the retirement account provision of the agreement. Therefore, we
reverse the modification of the agreement regarding the retirement accounts and
remand for proceedings consistent with this opinion.
Rebecca next argues the trial court erred by failing to require Daniel
to reimburse her for various expenses for their child as required by the separation
agreement. Provision 5 of the separation agreement states:
Child Support. The parties agree that, under the present
circumstances, no child support will be paid by either
party. In the event that employment status of either
changes, the subject of child support will be subject to reevaluation at that time.
The parties agree that Matthew’s expenses for high
school, college/higher education, extracurricular
activities, clothing, entertainment, etc. will be shared
equally.
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Provision 7 states:
Health Insurance. Petitioner shall maintain health
insurance for Matthew until he completes college. Any
costs for medical expenses not covered by insurance will
be divided equally.
The trial court found that Daniel would be required to pay child support because
the child now lives primarily with Rebecca. The court further found that some of
the claimed expenses were not contemplated by the separation agreement and
Daniel had not been reimbursed for expenses he had paid. The court ordered that
the legitimate expenses Rebecca claimed were offset by the amounts Daniel had
paid since entry of the decree.
CR2 52.01 provides that “[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 witnesses.” A judgment is not “clearly
erroneous” if it is “supported by substantial evidence.” Owens-Corning Fiberglas
Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998). Substantial evidence is
“evidence of substance and relevant consequence having the fitness to induce
conviction in the minds of reasonable men.” Id.
Rebecca has not demonstrated that the trial court’s findings were
clearly erroneous. While she lists the various expenses for which she claims she is
entitled to reimbursement, we cannot discern anything in the record contradicting
the trial court’s finding that there were no receipts for many of the claimed items
2
Kentucky Rules of Civil Procedure.
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and that some of the items were not contemplated by the separation agreement.
Regarding the offset of expenses, Rebecca states that if the offset included amounts
Daniel paid for health insurance, then the offset was in error. However, the trial
court did not specify the amounts of particular payments that were offset and
Rebecca did not file a motion for additional findings. The failure to move for
additional findings of fact in writing constitutes a waiver. Cherry v. Cherry, 634
S.W.2d 423, 425 (Ky. 1982). Thus, because Rebecca did not file a motion for
additional findings on this issue, we conclude the issue was waived under Cherry.
Rebecca next argues the trial court erred in requiring her to reimburse
Daniel in the amount of $1,413.51 for payments she made for her personal benefit
out of the parties’ joint checking account. On cross-appeal, Daniel argues the trial
court erred by failing to require Rebecca to reimburse him in the amount of
$4,239.01 for payments she made out of the joint checking account.
When there is conflicting evidence and testimony, an appellate court
should not substitute its judgment for that of a trial court. Wells v. Wells, 412
S.W.2d 568, 571 (Ky. 1967). Due regard should be given to the trial court’s
opportunity to judge the credibility of the witnesses and the weight of the evidence
presented. CR 52.01.
Neither party has demonstrated a lack of substantial evidence to
support the trial court’s findings. Our review of the parties’ citations to the record
reveals conflicting evidence on this issue. As stated above, it is not our function to
weigh the evidence. Further, Daniel’s citation to Turley v. Turley, 562 S.W.2d 665
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(Ky. App. 1978), is inapplicable because that case dealt with the valuation of
marital and non-marital property under KRS 403.190, which is not at issue here.
There was no error.
Next, Rebecca argues the trial court erred by requiring her to
reimburse Daniel in the amount of $1,200.00 for clothing she destroyed. On crossappeal, Daniel argues the trial court should have awarded him $2,715.00 for the
clothing. Both parties cite Callahan v. Callahan, 579 S.W.2d 385 (Ky. App.
1979), in support of their positions. In Callahan, this Court held it was error for
the trial court to value household furnishings at $500.00 and an automobile at
$100.00 when the only evidence produced was the appellant’s valuation of
$2,000.00 for the furnishings and at least $650.00 for the automobile. Rebecca
further cites Jones v. Jones, 245 S.W.3d 815 (Ky.App. 2005), however, this case is
inapplicable because it dealt with lay opinions of real property rather than personal
property.
This case is distinguished from Callahan because Daniel’s valuation
of the property was not the sole evidence on this issue in the record. Daniel
testified his destroyed clothing was worth $2,715.00, but he fails to take into
account Rebecca’s testimony that she replaced much of the wardrobe she
destroyed. Again, there is conflicting evidence on the issue and we will not disturb
the trial court’s findings. Wells, supra.
On cross-appeal, Daniel argues the trial court erred in failing to
allocate the marital credit card debt to Rebecca. The temporary order stated:
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Marital Debts: The parties agree that the Petitioner shall
continue to deposit his earnings from the City of
Frankfort into the parties’ joint checking account. The
Respondent shall be responsible for paying all of the
parties’ joint marital debts during the pendency of this
case, and she shall provide the Petitioner a monthly
accounting of the bills and amounts paid. The parties
agree to close all joint credit card accounts to eliminate
any additional joint marital debt and to secure individual
credit card accounts for which they will be solely
responsible. The Petitioner reserves the right to have this
provision reviewed by the Court if necessary due to the
fact that he is depositing all of his primary income into
the parties’ joint account.
Provision 15 of the separation agreement states:
Debts. All debts incurred during the parties’ marriage
will be divided equally, and the parties have established
the outstanding indebtedness and agreed to equal
payment of same. Each party will be responsible for any
debts incurred in their individual name and will hold the
other harmless on said debts.
As Daniel points out, the trial court made findings concerning the marital debt, but
failed to apply those findings in its conclusions of law and order. This issue was
preserved for review by Daniel’s motion to alter, amend, or vacate the judgment.
CR 54.01 states:
A judgment is a written order of a court adjudicating a
claim or claims in an action or proceeding. A final or
appealable judgment is a final order adjudicating all the
rights of all the parties in an action or proceeding, or a
judgment made final under Rule 54.02. Where the
context requires, the term “judgment” as used in these
rules shall be construed “final judgment” or “final order.”
The trial court made findings on the marital debt issue, but failed to apply the
findings to its conclusions of law and judgment. Without order language, the claim
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for marital debt was not fully adjudicated. CR 54.01. Upon remand, the trial court
shall order the allocation of marital debt in accordance with the separation
agreement.
Accordingly, the order of the Franklin Circuit Court is affirmed in
part, reversed in part, and remanded for proceedings consistent with this opinion.
ALL CONCUR.
BRIEFS FOR APPELLANT/
CROSS-APPELLEE:
BRIEF FOR APPELLEE/CROSSAPPELLANT:
Paul F. Fauri
Frankfort, Kentucky
Michael L. Hawkins
Frankfort, Kentucky
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