PAMELA N. HOSKINS (now Rudd) v. H. KEVIN HOSKINS
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RENDERED: MARCH 31, 2000; 10:00 a.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002777-MR
PAMELA N. HOSKINS (now Rudd)
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE WILLIAM E. MCANULTY, JUDGE
ACTION NO. 89-CI-009031
v.
H. KEVIN HOSKINS
APPELLEE
OPINION
REVERSING AND REMANDING
* * * * * * * * * *
BEFORE:
BARBER, BUCKINGHAM, and COMBS, Judges.
BUCKINGHAM, JUDGE.
Pamela N. Hoskins (Pam) appeals from an order
of the Jefferson Circuit Court which awarded her a common-law
judgment against her ex-husband, H. Kevin Hoskins (Kevin), for
$7,500 pursuant to their property settlement agreement and
divorce decree but awarded her interest only from the date of the
judgment.
Because we believe the trial court erred, we reverse
and remand for further proceedings.
Pam and Kevin separated in November 1989.
On October
10, 1990, they entered into a property settlement agreement which
provided in part that “Kevin agrees to pay Pam the sum of Seven
Thousand Five Hundred Dollars ($7,500.00) within three (3) years
of the date of this Agreement, and it is understood that Pam will
utilize such sum towards the down payment of a home to be chosen
by Pam and their daughter, Brenna.”
On January 18, 1991, the
trial court entered the divorce decree which provided in part
that “[t]he agreement between the parties filed herein on the 4th
day of December, 1990, is incorporated and made a part of this
Decree by reference and the parties are ordered to perform the
terms of the Agreement.”
The decree also awarded Pam the primary
physical custody of the child, and Kevin was awarded visitation.
Within two months from the entry of the divorce decree,
Kevin filed a motion to change the custody of the child to him
because of Pam’s relationship with a man who was under a criminal
indictment and who was also alleged to have abused prior spouses.
On April 3, 1992, the court awarded custody of the child to Kevin
due to Pam’s relationship with the other man.
had not paid Pam the $7,500 payment.
Meanwhile, Kevin
Under the terms of the
agreement and the decree, he was required to make the payment by
October 10, 1993.
On April 10, 1995, Pam moved the court for an order
compelling Kevin to pay her $7,500 pursuant to the terms of the
agreement.
On May 7, 1996, the court granted Pam’s motion and
ordered Kevin to pay the money.
This court affirmed the trial
court’s order.
On May 28, 1998, Pam moved the court to grant her a
common-law judgment for the amount of $7,500 plus interest at the
annual rate of 12% from October 10, 1993.
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On October 7, 1998,
the trial court granted Pam’s motion and awarded her a judgment
in the amount of $7,500.
However, the court awarded interest at
12% from the date of the judgment forward and did not award
interest from October 10, 1993.
The trial court held that
“[t]here is no question that there is not currently a judgment
against Petitioner.”
The court also stated that “[i]n
considering all of the surrounding circumstances, the Court is of
the opinion that interest has not accrued from 1993 and fairness
to both parties dictates that interest at the rate of 12% shall
accrue from the date of this judgment.”
Pam’s appeal herein
followed.
Pam argues that she was entitled to interest as a
matter of law from October 10, 1993, and that the trial court
erred in only awarding interest from October 7, 1998.
She
contends that Kentucky Revised Statute (KRS) 360.040 requires
that interest at the rate of 12% be awarded on a judgment and
that the judgment in this case became enforceable on October 10,
1993, the date the $7,500 payment from Kevin was due.
Alternatively, she argues that should this court determine the
date of judgment to be October 7, 1998, she should at least be
awarded prejudgment interest at the annual rate of 8% pursuant to
KRS 360.010 from October 20, 1993, because the judgment was on a
liquidated debt.
See Nucor Corp. v. General Electric Co., Ky.,
812 S.W.2d 136 (1991), which held that prejudgment interest
follows as a matter of course on liquidated damages.
Id. at 141.
On the other hand, Kevin argues that the decree itself is not a
judgment within the meaning of KRS 360.040, and he cites
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Courtenay v. Wilhoit, Ky. App., 655 S.W.2d 41 (1983), in support
of his argument.
He also asserts that Pam obviously believed the
decree was not a judgment since she later moved the trial court
for the entry of a common-law judgment.
In Courtenay, the property settlement agreement that
was incorporated into the divorce decree ordered the husband to
pay the wife $140,000 in 121 equal monthly installment payments
for her share of the property division.
Both the agreement and
the decree were silent with respect to interest.
The wife later
moved the court to award her interest on the amount from the date
of the agreement.
The court held that the interest statute
applied to the separation agreement incorporated into the divorce
decree, “but not until a judgment comes into being via a
delinquent payment.”
Id. at 42.
In other words, the husband was
not required to pay interest unless he missed a payment.
The
court held that since the husband had kept his payments current,
there was no judgment to which KRS 360.040 could apply.
Id.
Under the principles of Courtenay, the provision in the
property settlement agreement and decree ordering Kevin to pay
Pam $7,500 within three years from the date of the agreement
became an enforceable judgment when the payment became delinquent
at the end of three years.1
Furthermore, KRS 403.180(5) provides
that “[t]erms of the agreement set forth in the decree are
enforceable by all remedies available for enforcement of a
1
See also Pegram v. Pegram, 310 Ky. 86, 219 S.W.2d 772
(1949), wherein it was held that a property settlement agreement
that was incorporated into a judgment of divorce actually merged
into the judgment and lost its contractual nature. Id. at 219
S.W.2d 774.
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judgment, including contempt, and are enforceable as contract
terms.”
Thus, we conclude that the trial court erred in its 1998
order when it stated that there was no judgment in effect until
that time.
Pam was therefore entitled to interest under KRS
360.040 at the annual rate of 12% from October 10, 1993, unless
such an award would be inequitable.
Courtenay, 655 S.W.2d at 42.
See also Stone v. Ky. Ins. Guaranty Ass’n, Ky. App., 908 S.W.2d
675, 677 (1995); Guthrie v. Guthrie, Ky., 429 S.W.2d 32, 36
(1968); Young v. Young, Ky., 479 S.W.2d 20, 22 (1972); Hardin v.
Hardin, Ky. App., 711 S.W.2d 863, 865 (1986).
Although the trial judge in this case construed the
issue as one of prejudgment interest rather than post-judgment
interest, he did indicate that interest from 1993 should not be
allowed because of “fairness.”
For this reason, we believe the
order of the trial court should not merely be reversed but should
be remanded for a determination of whether an award of interest
from 1993 would be inequitable.
Thus, the order of the Jefferson Circuit Court is
reversed, and this case is remanded to the trial court with
directions to award Pam post-judgment interest from October 10,
1993, on Kevin’s $7,500 delinquent debt unless the court finds
such an award to be inequitable.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Frank P. Campisano
Louisville, KY
Kirk Hoskins
Louisville, KY
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