FREDERICK CECIL DAMRON v. MARY DAMRON FOWLER
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RENDERED:
November 2, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-002406-MR
FREDERICK CECIL DAMRON
APPELLANT
APPEAL FROM BOYD CIRCUIT COURT
HONORABLE C. DAVID HAGERMAN, JUDGE
ACTION NO. 98-CI-00326
v.
MARY DAMRON FOWLER
APPELLEE
OPINION
AFFIRMING IN PART, REVERSING IN PART,
AND REMANDING
** ** ** ** **
BEFORE:
EMBERTON, MILLER, AND SCHRODER, JUDGES.
SCHRODER, JUDGE:
Frederick Damron (Fred) appeals the judgment of
the Boyd Circuit Court dividing the real and personal property
acquired by him and his former spouse, Mary Fowler (Mary).
He
further contends the court erred in awarding Mary $1,000.00 in
attorney fees.
Having reviewed the record and applicable law, we
adjudge the trial court neither abused its discretion nor
committed clear error on the allocation of property except the
assignment of one-half of Fred’s railroad retirement benefits
accrued during the parties’ marriage.
We further believe the
trial court acted within its discretion in the award of attorney
fees.
Hence, we affirm in part, reverse in part, and remand.
The parties were married on June 14, 1991, which
marriage was terminated by decree of dissolution entered on
May 22, 1998.
The portion of that decree effecting property
division was set aside by the court on June 5, 1998, and the
subsequent order allocating same is the subject of this appeal.
In 1980, Mary purchased the marital residence for
approximately $65,000, which at the time of the parties’ marriage
had a mortgage balance of approximately $42,000.
The outstanding
mortgage was satisfied during the course of the marriage;
however, another lien was placed upon same as security for the
purchase of real property on Midland Trail, which was purchased
by Mary and her business partner.
There was no testimony before
the trial court regarding the purchase price of this latter
property; however, bank records reflect that a $52,000 lien was
placed on the marital residence as additional security.
Following the parties’ separation in 1997, Mary
conveyed her one-half interest in the Midland Trail property to
Fred in exchange for his agreement to assume the monthly payments
on the promissory note and mortgage attendant thereto.
There is
no evidence that Fred tendered any such payments.
Fred was served with Mary’s petition for dissolution on
April 3, 1998.
On April 11, 1998, Fred conveyed his one-half
interest in the Midland Trail property to his mother1 for the
consideration of $1.00 and love and affection.
The bank, lien
holder, was not notified or consulted regarding this transfer.
1
Fred’s mother is a resident of Fort Gay, West Virginia.
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On July 17, 1998, Fred entered into a contract for the
purchase of real property located in Lakewood Village.
However,
this property was deeded to Fred’s mother following a full cash
sale.
Nonetheless, Fred executed the settlement statements on
this real estate transaction.
During the marriage, the parties acquired a 1992
Corvette and three (3) Toyota MR2 automobiles.2
Additionally,
the parties had purchased a 1993 Jeep which was totaled in June
1997, when Mary struck a deer while traveling at night.
At the
time of the accident the parties only maintained liability
insurance coverage on this vehicle and the lien holder
subsequently obtained a $9,000 deficiency judgment.
Following
Mary’s accident, Fred took over the operation of Boyd County
Tanning, a salon owned and previously operated by Mary.
Likewise, in April or May 1998, Fred purchased Carter County
Tanning.
Additionally, Fred purchased Campus Video, a video
rental store, a few days following the initial decree of
dissolution.
By the time of trial on the property issues, Fred
had failed or refused to provide any reliable documentation
concerning the income or expenses of these businesses.
He
further testified that he did not maintain any checking or other
bank accounts with respect to same, but apparently operated on a
cash basis.
The record reflects that Fred had a history of
providing his various employers with erroneous social security
numbers for purposes of payroll records, that is, he submitted
2
There were two (2) 1986 models and one (1) 1985 model.
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either Mary’s social security number or that of his son.
Likewise, the record contains the testimony of Mason Hainsworth,
the Director of Specialized Audits for Norfolk Southern
Corporation, one of Fred’s former employers.
Mr. Hainsworth
provided the court with his testimony regarding Fred’s dishonest
activities while a company employee, as well as his engagement in
subterfuge and other forms of illegal conduct and deceit with
regard to this employment.
In its order dividing the parties’ property, the court
affirmed the domestic relations commissioner’s (DRC’s)
recommendation that Mary receive the marital residence.
In
exchange therefor, Fred was awarded all marital interest in the
Lakewood Village property, the Carter County Tanning business,
and all income earned by the Boyd County Tanning business between
1997 and 1999.
The contents of Boyd County Tanning were,
otherwise, ordered sold with the proceeds to be applied to the
bank’s deficiency judgment on the Jeep.
Mary was awarded her vehicle (the Corvette) while Fred
was granted ownership of the three (3) MR2 automobiles.
Mary was
awarded all personal items in her possession with the exception
of those which Fred specifically requested.
Additionally, Fred
was assigned responsibility for the lien which was placed upon
the marital residence at the time the Midland Trail property was
purchased.
The DRC further recommended that Mary be awarded one-
half (1/2) of the railroad pension funds Fred accumulated during
the marriage and $1,000 in attorney fees.
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This appeal ensued.
Before this Court, Fred contends that all of the aboveidentified findings of the court are clearly erroneous.
Specifically, he argues that the trial court erred in the
division of real property, personal property, and marital debt;
that is, he claims Mary received all of the marital assets,
whereas he was assigned the associated debt absent any personal
property.
First, we note that as an appellate court, under CR
52.01, our review of the trial court’s decision is restricted to
only reversing clearly erroneous findings, keeping in mind that
the trial court is in the best position to view the evidence and
witnesses as to judge the credibility of same.
Chalupa v.
Chalupa, Ky. App., 830 S.W.2d 391 (1992).
In the matter sub judice, the trial court made clear
that it took Mr. Hainsworth’s testimony into account in making
its findings.
As discussed, supra, Mr. Hainsworth testified
regarding Fred’s lack of honesty, use of deception, and illegal
conduct while in the employ of Norfolk Southern Corporation.
Similarly, as noted by the court and reflected by the record,
Fred failed or refused to provide any records or other
documentation regarding his business transactions and the funds
used to finance his various businesses and/or other financial
ventures.
Further, during his deposition, Fred repeatedly
refused to answer any questions regarding his finances,
businesses, business employees, and the like while all along
claiming there were no records pertaining to such information.
Therefore, it is our opinion the court acted within its
discretion by questioning Fred’s veracity with respect to any
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sums of money in his possession, incomes available to him, and
property actually owned by him, albeit titled in either his
mother’s or another’s name.
Even if Fred’s testimony were clear
and uncontroverted, and it was neither, the court was not
compelled to believe it.
As such, the court’s findings cannot be
deemed clearly erroneous.
Rather, since the court discerned the
credibility of the witnesses and made its judgment according
thereto, we will not disturb its ruling.
CR 52.01.
Similarly, Fred contends the court erred in awarding
Mary $1,000.00 in attorney fees.
We disagree.
In tandem with
our above discussion regarding Fred’s lack of candor with the
court, the record reflects that Mary had remained unemployed
since receiving bodily injuries in the aforementioned automobile
accident.
Likewise, it was Mary’s testimony that she had no
access to any cash resources but was sustaining her livelihood
off the charity of friends and family.
Again, we believe the
court exercised sound discretion in making an award of attorney
fees and will not alter that decision.
KRS 403.220; CR 52.01.
The sole remaining issue raised by Fred in this appeal
remains the court’s allocation of fifty-percent (50%) of those
sums accumulated in his railroad retirement account during the
time of the parties’ marriage.
On this point Fred argues that
this Court’s holding in Elkins v. Elkins, Ky. App., 854 S.W.2d
787 (1993), controls in that Elkins states that railroad
retirement benefits are non-assignable pursuant to 45 U.S.C. §
231m(a).
However, we believe that application of Elkins is
limited to the qualifications identified in 45 U.S.C. §
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231m(b)(2) which prohibit equitable distribution of railroad
retirement benefits computed under 45 U.S.C. §§ 231b(a), 231c(a)
or (f).3
In March 1987, the Railroad Retirement Board
established regulations under 20 C.F.R. § 295.1 et seq. setting
forth a procedure by which the Board would recognize and honor a
court decree or property settlement involving benefits subject to
equitable distribution under 45 U.S.C. § 231m(b)(2).
In its
regulations the Board specifically enumerates those benefits
subject to 45 U.S.C. § 231m(b)(2)’s characterization as property
which may be divided upon dissolution as follows:
(b) Benefits subject to this part. Only the
following benefits or portions of benefits
under the Railroad Retirement Act are subject
to this part:
(1) Employee annuity net tier II benefits
component as provided under section 3(b) [45
U.S.C. § 231b(b)] of the Railroad Retirement
Act;
(2) Employee annuity vested dual benefit
component as provided under section 3(h) [45
U.S.C. § 231b(h)] of the Act;
(3) Employee annuity net proportionate share
of the annuity increases as provided under
section 3(f) [45 U.S.C. § 231b(f)] of the
Act; and
(4) Supplemental annuities as provided under
section 2(b) [45 U.S.C. § 231m(b)] of the
Act.
Here, the court did not characterize the nature of
Fred’s railroad retirement benefits.
As such, we reverse that
portion of the court’s judgment and remand this matter for a
3
The benefits addressed in Elkins were exempt from
distribution in that such were disability benefits.
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determination of whether the benefits in issue are subject to
division in accordance with 45 U.S.C. § 231m(b)(2).
Based on the foregoing discussion, the judgment of the
Boyd Circuit Court is affirmed in part, reversed in part, and
remanded for further proceedings consistent with this opinion.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Rodney S. Justice
Ashland, Kentucky
W. Jeffrey Scott
Grayson, Kentucky
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