HERMAN KEARNS v. JO ANN KEARNS
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RENDERED: December 11, 1998; 2:00 p.m.
ORDERED NOT PUBLISHED BY THE KENTUCKY
SUPREME COURT: August 18, 1999
C ommonwealth O f K entucky
C ourt O f A ppeals
No.
1998-CA-001835-MR
HERMAN KEARNS
v.
APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE THOMAS R. LEWIS, JUDGE
ACTION NO. 86-CI-0860
JO ANN KEARNS
APPELLEE
OPINION
AFFIRMING
* * * * * * * * * * * * * * * * * * *
BEFORE:
BUCKINGHAM, KNOPF, and SCHRODER, Judges.
BUCKINGHAM, JUDGE.
Herman Kearns (Herman) appeals from an order
of the Warren Circuit Court denying his motion to terminate or
modify his maintenance obligation.
For the reasons set forth
hereinafter, we affirm.
Herman and Jo Ann Kearns (Jo Ann) were married in 1955,
separated in 1986, and divorced in 1988.
The divorce decree
awarded Jo Ann maintenance in the amount of $400 per month “for
the remainder of her life, or until she remarries, whichever
event shall occur first.”
At the time of the divorce, Herman was
employed by Bada Corporation as a plant manager and earned
$60,000 to $80,000 per year.
In April 1990, Herman voluntarily left Bada Corporation
to start a competing business.
That business performed well for
the first few years of its operation, and Herman earned
approximately $80,000 per year as its president and general
manager.
However, in September 1995, the business became
insolvent.
In October 1995, Herman ceased making his maintenance
payments to Jo Ann and filed a motion to terminate or modify his
maintenance obligation.
Herman stated that he was unemployed and
unable to find work due to his age (59 at the time) and health
problems and that he had a negative net worth of $673,000, due in
part to his having personally guaranteed many of the business’s
debts.
No evidentiary hearing was held, but the domestic
relations commissioner (DRC) conducted a hearing at which he
considered the oral arguments of the parties’ respective
counsel.1
In a report which addressed each of the arguments
raised by Herman in his motion, the DRC recommended denial of the
motion to terminate or modify Herman’s maintenance obligation and
stated:
The Commissioner finds that, where one
who has an existing maintenance obligation
freely and consciously assumes a risk which
may bring him either financial success or
failure, one of the risks he faces upon
failing is that he still must make his
maintenance payments. Equity demands that
Joann [sic] not share the burdens of Herman’s
failure.
1
The DRC advised the parties that he would assume that all
of the allegations in Herman’s motion were true.
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The DRC stated in his report that “[t]he issue here is not
whether Herman had a bad motive, but whether Herman alone should
bear the burdens of the expectable consequences of the risks he
decided to assume or whether Joann [sic] should share the
financial burdens of those decisions.”
The DRC then recommended
that Herman’s motion should be denied even though his change of
employment was in good faith and his reduced income was merely
due to an unfortunate business failure.
When the trial judge
overruled Herman’s exceptions to the DRC report, Herman
appealed.2
Herman argues that the trial court erred in denying his
motion since the undisputed evidence was that his lack of income
and assets were the result of his good faith change of employment
and that there was no bad faith effort to be unemployed.
He
argues that a finding of bad faith should be required to deny a
motion to modify maintenance based upon reduction of income due
to change of employment.
In support of his argument, he cites
several cases from the appellate courts of Minnesota and
Illinois.
See e.g. Savoren v. Savoren, 386 N.W.2d 288, 291-92
(Minn. 1986); In re Marriage of Kowski, 463 N.E.2d 840, 843 (Ill.
App. 1984).
However, these foreign cases are not binding upon
2
Rule of Civil Procedure (CR) 53.06(2) provides that the
court could adopt, modify, or reject in whole or in part the
commissioner’s report. The order overruling Herman’s exceptions
to the DRC report indicated only that the exceptions were
overruled. We dismissed the original appeal as being one from a
nonfinal order. The trial court subsequently entered an order
adopting the DRC report, and Herman’s appeal from that order is
now properly before us.
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this court.
As there is no Kentucky case directly on point, this
is a matter of first impression in this state.
In Kentucky, modification of maintenance is governed by
Kentucky Revised Statute (KRS) 403.250.
KRS 403.250(1) provides
in pertinent part that “the provisions of any decree respecting
maintenance or support may be modified only upon a showing of
changed circumstances so substantial and continuing as to make
the terms unconscionable.”
We do not read this to require
maintenance modification where substantial and continuing changed
circumstances exist in the form of lesser income due to a good
faith change of employment.
Rather, maintenance modification is
required when the changed circumstances are so substantial and
continuing as to make the terms of the decree unconscionable.
In determining whether the terms of a decree
concerning maintenance have been rendered unconscionable by
substantial and continuing changed circumstances brought about
due to a good faith change in employment, we believe that the
proper standard for the fact finder to consider is the totality
of the circumstances.
This would include the motive of the party
changing employment, the ages and health of the parties, the
financial situation of each party, the parties’ earning
abilities, the ability of the payee spouse to provide for himself
or herself, the parties’ expectations, and the payee spouse’s
opportunity to live on reduced maintenance.
See Barbarine v.
Barbarine, Ky. App., 925 S.W.2d 831, 833 (1996), wherein this
court held that several similar factors were relevant to
determine whether maintenance modification was appropriate after
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the payor spouse elected early retirement.
Although a change of
employment for the purpose of seeking a reduction in maintenance
would constitute bad faith and would defeat a motion for
maintenance modification under the statute, a good faith change
of employment resulting in reduced income would be only one
factor for the court to consider in determining whether the
motion should be granted.
The trial court in this case held that “equity demands
that Joann [sic] not share the burdens of Herman’s failure.”
In
his report to the trial court, the DRC made findings noting that
Herman was aware of his continuing maintenance obligation when he
changed his employment, that the DRC did not accept Herman’s
contention that health problems caused his financial condition,
and that the DRC believed that it would be more equitable for
Herman to reduce his expenses than for Jo Ann to receive reduced
maintenance as a consequence of Herman’s risk-taking.
Although
the result might appear somewhat harsh to Herman, we find no
abuse of discretion in the denial of his motion to terminate or
modify maintenance as it appears that the trial court properly
reviewed the totality of the circumstances.
The judgment of the Warren Circuit Court is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Whayne C. Priest, Jr.
Bowling Green, KY
David F. Broderick
Kenneth P. O’Brien
Bowling Green, KY
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