BARNETT (ANDREA) VS. LOVELY (KATHY)
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RENDERED: MARCH 26, 2010; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-000359-MR
ANDREA BARNETT
v.
APPELLANT
APPEAL FROM MAGOFFIN FAMILY COURT
HONORABLE JOHNNY RAY HARRIS, JUDGE
ACTION NO. 06-CI-00164
KATHY LOVELY, EXECUTRIX
OF THE ESTATE OF DONNIE RAY
BARNETT, DECEASED
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: KELLER AND VANMETER, JUDGES; GRAVES,1 SPECIAL
JUDGE.
GRAVES, SPECIAL JUDGE: Andrea Barnett appeals from a summary judgment
granted by the Magoffin Circuit Court to Kathy Lovely, the executrix of the estate
1
Retired Judge John W. Graves sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution.
of Donnie Ray Barnett, Andrea Barnett’s late ex-husband. At issue is whether an
antenuptial agreement executed by Donnie and Andrea is valid and enforceable.
Donnie and Andrea entered into the antenuptial agreement on October
15, 2003, the day before their marriage. The agreement provided that all property
owned by the parties would be characterized either as “separate property” or “joint
property.” The agreement provided that in the event of a divorce, “all separate
property shall be deemed nonmarital property, as defined by KRS Chapter 403,
and neither party shall assert any claim to the other’s separate property. All such
separate property shall be set aside to the owner thereof.” All property owned by
the parties at the time of the marriage was defined as “separate property” and
would remain so unless converted to “joint property.”
“Joint property” was defined as property acquired during the marriage
in the parties’ joint names, with or without rights of survivorship. Upon
termination of the marriage each party would receive an undivided one-half
interest in the jointly-owned property held with right of survivorship.
The agreement also provided that the parties waived maintenance and
spousal support in the event the marriage was dissolved.
An itemized disclosure of the couple’s assets was attached to the
agreement. Donnie listed assets totaling over $1.8 million, including numerous
business interests which he held in the form of limited partnerships. The
disclosure list contained the percentage of interest he held in each of these entities,
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and a specific valuation of that interest. Andrea’s stated assets totaled a little over
$110,000.00.
The couple separated about two years later, on January 5, 2006. On
October 17, 2006, the Magoffin Circuit Court entered a bifurcated findings of fact,
conclusions of law and decree of dissolution of the marriage which reserved for
future disposition the division of assets and debts. Donny died after the decree was
entered but before the assets were divided. By order of March 13, 2007, Kathy
Lovely, the executrix of Donnie’s estate and his first ex-wife, was substituted as
the petitioner in the dissolution action.
Following initial discovery, Andrea filed a motion for summary
judgment, arguing that the antenuptial agreement should be set aside because
Donnie had significantly understated the value of his assets. The deposition of
Donnie’s business manager was taken for the purpose of introducing audited
financial statements and income tax returns for each of Donnie’s business interests
for 2003 (the year the antenuptial agreement was executed). According to
Andrea’s expert, Terry Fyffe, a certified business appraiser, the records showed
that Donnie had understated the value of those assets by over $2.7 million, less
than one half of their actual value. Kathy filed a response and cross motion for
summary judgment. The circuit court entered a summary judgment in Kathy’s
favor on January 26, 2009. The order was made final on February 18, 2009, and
this appeal followed.
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The Kentucky Supreme Court has set forth the following criteria for
determining whether an antenuptial agreement is enforceable:
(1) Was the agreement obtained through fraud, duress or
mistake, or through misrepresentation or non-disclosure
of material facts? (2) Is the agreement unconscionable?
(3) Have the facts and circumstances changed since the
agreement was executed so as to make its enforcement
unfair and unreasonable?
Gentry v. Gentry, 798 S.W.2d 928, 936 (Ky. 1990).
Andrea argues that Donnie’s failure to disclose the full extent of his
financial assets rendered their antenuptial agreement unenforceable. She contends
that if Donnie had been more open and honest in his valuation, she would have
been able to make a better-informed decision regarding whether to sign the
agreement. According to Andrea, had she known the extent of Donnie’s assets,
she would not have executed the agreement or agreed to waive maintenance or
spousal support in the event their marriage ended in divorce.
In reviewing a trial court’s decision granting summary judgment, this
Court must determine “whether the trial court correctly found that there were no
genuine issues as to any material fact and that the moving party was entitled to
judgment as a matter of law.” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App.
1996); Kentucky Rules of Civil Procedure (CR) 56.03. “The record is viewed in a
light most favorable to the party opposing summary judgment, and all doubts are to
be resolved in his favor.” Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d
476, 480 (Ky. 1991).
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Even if the facts are viewed in the light most favorable to Andrea, as
they must be under the summary judgment standard, she has failed to allege facts
showing that the agreement was obtained through misrepresentation. Although our
case law stresses that “the wife must be fully apprised of the extent and nature of
the estate and value of what she is surrendering in the agreement[,]” Lawson v.
Loid, 896 S.W.2d 1, 2 (Ky. 1995), we fail to see how the knowledge that some of
Donnie’s assets were worth $4 million rather than $1.8 million would have caused
Andrea to refuse to sign the agreement. As the trial court aptly concluded, “based
upon the significant disparate income and asset ownership positions of the parties
at the time of entry of the Antenuptial Agreement, even when viewed in a light
most favorable to the moving party, the difference in values as claimed by
movant’s expert will not invalidate the agreement.”
Andrea also argues that she was not provided with sufficient time to
consult an attorney before signing the agreement. According to the record before
us, however, this argument was never raised before the trial court and cannot
therefore be raised for the first time on appeal. “The Court of Appeals is without
authority to review issues not raised in or decided by the trial court.” Regional Jail
Auth. v. Tackett, 770 S.W.2d 225, 228 (Ky. 1989).
Finally, Andrea argues that actions taken by Donnie since the
agreement was executed resulted in changed facts and circumstances that make its
enforcement unconscionable. Specifically, she points to the fact that immediately
upon entry of the bifurcated dissolution decree, Donnie transferred his one-half
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interest in the home he and Andrea had acquired during their marriage to his first
ex-wife, Kathy. Andrea did not learn of the transfer to Kathy until after Donnie
died. Donnie also built two apartment complexes and a residence during the
course of his marriage to Andrea and later transferred ownership in these
properties to Kathy. Andrea argues that these properties should be declared marital
property, and that she should receive a one-half undivided interest in each of them.
She also asserts that Donnie sold other real estate during their marriage for which
she received no monetary benefit. She contends that these property transfers are
evidence that Donnie schemed to defraud her, and hid and transferred assets in
such a way as to render the antenuptial agreement unenforceable. She contends
that if she had known he would take such actions, she would never have signed the
agreement waiving her claims to maintenance in the event of a divorce.
An antenuptial agreement will not be enforced if facts and
circumstances have changed so as to make its enforcement unconscionable.
Gentry v. Gentry, 798 S.W.2d 928, 936 (Ky. 1990).
Often there will be many years between the execution of
an antenuptial agreement and the time of its enforcement.
It is, therefore, appropriate that the court review such
agreements at the time of termination of the marriage,
whether by death or by divorce, to insure that facts and
circumstances have not changed since the agreement was
executed to such an extent as to render its enforcement
unconscionable.
Id.
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In reviewing an antenuptial agreement, the trial court must make a
finding that
that the circumstances of the parties at the time the
marriage is dissolved are not so beyond the
contemplation of the parties at the time the contract was
entered into as to cause its enforcement to work an
injustice.
Blue v. Blue, 60 S.W.3d 585, 590 (Ky. App. 2001).
In Blue v. Blue, during the course of a ten-year marriage, the
husband’s nonmarital property increased in value from $5 million to as much as
$77 million. The wife’s property was valued at about $190,000.00 at the
beginning of the marriage. Under the terms of the antenuptial agreement she was
left $650,000.00 in assets. This Court ruled that even the massive increase in the
husband’s assets was insufficient to render the agreement unconscionable as to the
wife. It further held that in order to set aside the agreement, the wife had to show
“that her position has suffered in a manner which was beyond the contemplation of
the parties when they signed the agreement.” Id. at 591. Andrea and Donnie’s
marriage was of far shorter duration that the marriage in Blue, and as in Blue, “the
parties’ financial situations were already disparate when they entered into the
agreement.” Id. at 590-91. Andrea’s allegations regarding Donnie’s transfers of
property to Kathy simply do not rise to the level of showing that Andrea’s position
had suffered in a manner that was beyond her contemplation when she signed the
agreement.
The summary judgment of the Magoffin Circuit Court is affirmed.
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ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Larry D. Brown
Prestonsburg, Kentucky
B.D. Nunnery
Prestonsburg, Kentucky
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