REBECCA BAKER (NOW HAYS) v. RICKY BAKER
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RENDERED: DECEMBER 27, 2002; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 2001-CA-001444-MR
REBECCA BAKER (NOW HAYS)
APPELLANT
APPEAL FROM CLAY CIRCUIT COURT
HONORABLE R. CLETUS MARICLE, JUDGE
CIVIL ACTION NO. 99-CI-00358
v.
RICKY BAKER
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUIDUGLI, HUDDLESTON and JOHNSON, Judges.
HUDDLESTON, Judge:
Rebecca Hays appeals from a Clay Circuit Court
order overruling her objections1 to the report of the court’s
domestic
relations
commissioner
(DRC)
and
adopting
the
DRC’s
recommendation to grant Ricky Baker’s motion “to reopen and for
modification of tax dependency exemption” and modifying the decree
1
In the instant case and commonly throughout this
jurisdiction, the term “exception” or some variation thereof is
used to describe the procedure by which a party obtains trial court
review of the report of a domestic relations commissioner pursuant
to Ky. R. Civ. Proc. (CR) 53.06. In actuality, CR 53.06 does not
contain the term “exception” but rather speaks of “objections.” To
maintain consistency with the rule, we will use the term
“objection” throughout this opinion.
so as to grant Ricky the income tax dependency exemptions for the
parties’ minor children.
Rebecca and Ricky were married on May 17, 1991, and
separated on August 5, 1999.
marriage.
On
October
6,
Three children were born to the
1999,
Ricky
filed
a
“petition
for
dissolution of marriage and the care, custody [and] control of
three infant children.”
In his petition, Ricky sought custody of
the children with visitation for Rebecca.
Because the parties
wished “to reach an amicable resolution of the differences” which
resulted in the petition being filed, on October 28, 1999, they
entered
into
a
separation
and
property
settlement
agreement
“resolving all issues of this action.”
Pursuant to the separation agreement, Rebecca and Ricky
were to share joint custody of the children with Rebecca being the
primary
residential
custodian
and
Ricky
having
“liberal
and
reasonable visitation.” Ricky was to pay $62.80 per week in child
support, consistent with the statutory guidelines.
In addition,
Ricky was “entitled to claim the children as dependency exemptions
for income tax purposes for all years” and Rebecca was to maintain
health insurance for the children.
By its terms, the agreement
could “not be modified by the parties or by the Court, except
concerning those provisions governed by [Kentucky Revised Statutes]
KRS
403.180(6),
custody,
visitation
and
child
support.
Any
modification shall be made only by like written agreement or Court
order.”
However, on November 3, 1999, the parties entered into an
amended agreement which “superseded any and all prior agreements
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entered into by the parties.”
The custody arrangement was altered
in that the parties’ roles were reversed — Ricky became the primary
residential custodian, Rebecca was given “reasonable and liberal
visitation,” agreed to pay $65.00 per month to Ricky as child
support consistent with the statutory guidelines and was “entitled
to claim the children as dependency exemptions for income tax
purposes for all years.”
maintaining
health
Ricky assumed the responsibility of
insurance
for
the
children.
Rebecca
was
unemployed at the time both agreements were executed but agreed to
advise the court if her employment status changed.
With the exception of the foregoing alterations, the
amended agreement closely parallels the initial agreement — the
provision governing modification is identical.
In a decree of
dissolution entered on January 7, 2000, the circuit court dissolved
the marriage between Ricky and Rebecca, specifically finding that
the settlement agreement is “not unconscionable”2 and “is hereby
incorporated into and made part of this Decree in each element as
if fully set forth herein and each provision thereof is adopted by
this Court as the Judgment of the Court.”
Subsequently, Ricky filed the aforementioned motion to
reopen and modify the decree, citing Rebecca’s alleged failure to
2
In the present context, unconscionable has been defined
as “‘manifestly unfair or inequitable;’” a “bad bargain and
unconscionability [are] not synonymous.”
Shraberg v. Shraberg,
Ky., 939 S.W.2d 330, 333 (1997)(citations omitted).
Upon determining that an agreement is unconscionable, the
trial court is vested with the authority to “request submission of
a revised agreement or make its own determination as to disposition
of property, support, and maintenance.”
Id.
In cases of this
nature, great deference is afforded to the view of the trial court
as it is in the ‘”best position to evaluate the circumstances
surrounding the agreement.’” Id. (citation omitted).
-3-
regularly pay her child support as grounds and arguing that he
“needs the tax exemptions in order to be able to afford to raise
the children.”
On January 25, 2001, the DRC conducted a hearing
on the matter, ultimately concluding as follows: “. . . [Ricky] is
[c]ustodian of the children, is employed, and is providing more
than
50%
of
the
support
for
such
children.”
Rebecca
filed
objections to the DRC’s report, refuting the allegation that she
had failed to regularly pay the child support ordered by the court
and arguing that the separation agreement as amended precludes
modification
exemptions.
DRC’s
of
the
with
regard
to
the
dependency
On the same document, i.e., “order,” containing the
recommendation,
objections
decree
by
the
inserting
a
circuit
court
notation
to
overruled
that
effect
Rebecca’s
above
his
signature, simultaneously adopting the recommendation of the DRC,
albeit implicitly.3
On June 13, 2001, Rebecca filed a motion for extension of
time in which to file a notice of appeal, in which her counsel
requested that the court “consider the fact that he was not served
with a copy of the Court’s order overruling exceptions as excusable
neglect for his failure to timely file a notice of appeal.”
Following a short hearing on the matter, the court exercised its
“broad discretion” in deciding that counsel’s failure constituted
excusable neglect and, on August 6, 2001, granted Rebecca an
extension of one day from July 5, 2001, in which to file a notice
3
The DRC’s recommendation was filed on February 23, 2001,
while the order overruling Rebecca’s objections was entered on May
4, 2001.
-4-
of appeal.
As Rebecca complied with that order, the case is now
ripe for decision.4
On the present facts, our standard of review is well
established.
“Since this case was tried before the court without
a jury, its factual findings ‘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 the witnesses.’”5
If a
factual finding is supported by substantial evidence, it is not
clearly
erroneous.6
“Substantial
evidence
is
evidence
of
substance and relevant consequence sufficient to induce conviction
in the minds of reasonable people.
‘It is within the province of
the fact-finder to determine the credibility of witnesses and the
weight to be given the evidence.’”7
Under Kentucky Rule of Civil Procedure (CR) 52.01, “to
the extent that the court adopts them,” the findings of a DRC
“shall be considered as the findings of the court.”
With respect
to the report of the DRC, however, “the court may adopt, modify or
reject it, in whole or in part, and may receive further evidence or
may recommit it with instructions.
In sum, the trial court has the
4
Ricky has failed to submit a brief as required by CR
76.12(1). Although CR 76.12(8)(c) authorizes this Court to invoke
one of three penalties in the event that an appellee fails to
comply with this requirement, we decline to do so in this instance
as our decision will necessarily impact the lives of three young
children. However, we take this opportunity to reiterate that such
a blatant disregard for the civil rules is not acceptable and, in
most cases, we will not hesitate to invoke the available penalties.
5
Cole v. Gilvin, Ky. App., 59 S.W.3d 468, 472 (2001).
6
Id. at 472-473.
7
Id. at 473.
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broadest possible discretion with respect to the use it makes of
reports of [DRCs].”8
Further, the circuit court is entitled to reevaluate the
evidence and reach a different conclusion than the DRC.
actions
before
the
court
without
intervention
of
a
“While
jury
are
governed by CR 52, et seq., it seems apparent that on matters
referred to a commissioner pursuant to CR 53.03, the specific
provisions of the rules relating to commissioners prevail.”9
function,
then,
substantial
is
evidence
limited
to
to
support
ascertaining
the
circuit
whether
court’s
there
Our
is
factual
findings, i.e., that Ricky “is the [c]ustodian of the children, is
employed, and is providing more than 50% of the support for such
children,” and determining whether the circuit court abused its
discretion in modifying the amended separation agreement based on
those facts.
Here, the relevant facts are undisputed and there is no
allegation that the circuit court did not make sufficient findings
to support its determination, nor is that the case — limited as the
findings might be, they are adequate for present purposes.
On
appeal, the sole issue raised by Rebecca is whether the “circuit
court erred in modifying the amended separation agreement of the
parties and thereby granting [Ricky] the ability to claim the
children as dependency exemptions for income tax purposes.”
analysis will focus on the merits of that dispositive issue.
8
Eiland v. Ferrell, Ky., 937 S.W.2d 713, 716 (1997).
9
Id.
-6-
Our
KRS
403.180(1)
explicitly
authorizes
separation
agreements such as the one at issue, providing in relevant part as
follows:
“. . . parties may enter into a written separation
agreement containing provisions for maintenance of either of them,
disposition of any property owned by either of them, and custody,
support and visitation of their children.” Promoting the “amicable
settlement of disputes between parties to a marriage attendant upon
their separation or the dissolution of their marriage” is the
rationale
behind
this
provision.
Further,
KRS
403.180(2)
specifically provides that the terms of a separation agreement,
“except those providing for the custody, support, and visitation of
children, are binding upon the court” unless it finds “that the
separation agreement is unconscionable” after “considering the
economic circumstances of the parties and any other relevant
evidence produced by the parties, on their own motion or on request
of the court.”
Pursuant to KRS 403.180(6), “the decree may expressly
preclude or limit modification of terms if the separation agreement
so provides,” with the exception of “terms concerning the support,
custody, or visitation of children.” By expressly doing so, as the
parties did here, “the parties may settle their affairs with a
finality beyond the reach of the court’s continuing equitable
jurisdiction
exceptions.
elsewhere
provided,”10
with
the
aforementioned
Otherwise, modification of a decree automatically
modifies the terms of a separation agreement.
Thus, there is no
question that the court retains control over child custody, support
10
Brown v. Brown, Ky., 796 S.W.2d 5, 8 (1990).
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and visitation and is not bound by the parties’ agreement with
respect to those issues.11
In Hart v. Hart,12 this Court was confronted with the
question of “what effect, if any, does 26 [United States Code]
U.S.C. § 152(e)[] have on the trial court’s ability to allocate the
income tax exemptions for dependent children of divorce?”
That
provision of the Internal Revenue Code “entitles the custodial
party to claim the exemption unless that parent signs a written
waiver that he or she will not claim the children as dependents.”13
Ultimately, we concluded that Congress, in amending the section at
issue, did not, either expressly or by implication, prohibit state
courts from allocating the exemption.14
In so doing, we observed
that the allocation of the exemption “has, or at least should have,
a bearing on the amount of money available as child support,”
emphasizing that trial courts “should allocate the exemption so as
to maximize the amount available for the care of the children.”15
It
is
with
that
guiding
principle
in
mind
that
we
evaluate the propriety of the circuit court’s order modifying the
separation agreement at issue.
Here, the circuit court’s decision
to modify the provision of the agreement regarding entitlement to
the dependency exemptions, i.e., to reallocate the exemption,
amounts to an implicit acceptance of Ricky’s argument that he
11
Tilley v. Tilley, Ky. App., 947 S.W.2d 63, 65 (1997).
12
Ky. App., 774 S.W.2d 455, 457 (1989).
13
Id.
14
Id.
15
Id.
-8-
“needs the tax exemptions in order to be able to afford to raise
the
children.”
While
it
is
true
that
Rebecca
and
Ricky
specifically addressed this issue as well as that of modification
in an otherwise binding agreement, terms relating to “the support,
custody, or visitation of children” are an exception to the general
rule of enforcing such agreements as written for policy reasons so
intuitive that elaboration is unnecessary.
Apparently,
the
circuit
court
concluded
both
that
allocation of the exemption is inextricably intertwined with the
issue of child support and that the reallocation of that exemption
was necessitated under the present circumstances in order to
“maximize the amount available for the care of the children.”
Neither conclusion can properly be characterized as unreasonable,
let alone as an abuse of discretion.
Contrary to Rebecca’s
assertion, the circuit court did not “exceed its authority, in
contravention of the express terms of KRS 403.180(6) and the
amended agreement itself” in modifying the decree — quite the
opposite, as the court fulfilled its duty to allocate the exemption
consistent with the aforementioned directive.
In modifying the
decree
implicates
as
to
a
provision
which
necessarily
child
support, the circuit court acted well within its authority.
Because the court’s decision was based on specific factual findings
which are not only sufficient but unrefuted, its order is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
NO BRIEF FOR APPELLEE
Allen B. Roberts
McKee, Kentucky
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