E. CHANDLER DEAL, JR. v. LISA B. EBERLIN
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RENDERED: JULY 18, 2003; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2001-CA-000156-MR
E. CHANDLER DEAL, JR.
v.
APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE MARGARET R. HUDDLESTON, JUDGE
ACTION NO. 96-CI-00173
LISA B. EBERLIN
APPELLEE
OPINION
VACATING AND REMANDING
** ** ** ** **
BEFORE:
EMBERTON, CHIEF JUDGE; JOHNSON AND SCHRODER, JUDGES.
JOHNSON, JUDGE:
E. Chandler Deal, Jr., has appealed from the
decree of dissolution of marriage entered by the Warren Circuit
Court on January 4, 2001, which adopted the recommendations in
the Special Domestic Relations Commissioner’s report which
included an award of maintenance to Deal’s former wife, Lisa B.
Eberlin.
Having concluded that in making the maintenance award
the trial court failed to make sufficient factual findings after
the parties filed separate bankruptcy petitions, we vacate and
remand for further findings.
Deal and Eberlin were married on August 1, 1982, and
their marriage of approximately 14 years produced one child.
Deal and Eberlin separated on February 1, 1996, and Deal filed a
petition for dissolution of marriage on February 15, 1996.
Deal
is employed as a medical doctor and lives in Bowling Green,
Kentucky.
Eberlin is employed as a medical doctor and lives in
Los Angeles, California.
Their daughter, who was approximately
six years old at the time of the divorce, resides with Eberlin
in Los Angeles.
A trial was held before the Special Domestic Relations
Commissioner on February 6, 1997, February 7, 1997, March 15,
1997, April 24, 1997 and June 19, 1997.
The Commissioner’s
trial report was filed on February 11, 1998.
After considering
the objections filed by both parties, the trial court adopted
all of the Commissioner’s report, except that it remanded the
action to the Commissioner “only for the recalculation of debts
that might exist.”
The trial court awarded the parties joint custody of
their child, with Eberlin being the residential custodian.
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Deal
was ordered to pay child support of $1,125.00 per month, plus 25
percent of the child care expenses.1
The parties’ assets included various bank accounts,
investment accounts, and pension plans with a total value of
approximately $125,000.00.
Their marital residence sold for
$278,000.00, but it had a mortgage against it of approximately
$389,000.00.
One of the mortgages covered debts related to the
operation of the Vascular Center, a medical office established
by Eberlin in 1995.
The parties’ debts, including the balances
on the mortgages after the marital residence was sold and the
debts related to the Vascular Center, totaled approximately
$182,000.00.
When the trial court divided the marital assets
and debts, Deal was awarded approximately $43,854.00 in marital
property and approximately $60,792.00 in marital debts; Eberlin
was awarded approximately $80,454.00 in marital property and
approximately $120,773.00 in marital debt.
The trial court determined that Deal earned a gross
income of $21,000.00 per month, and Eberlin earned a gross
income of $15,000.00 per month, although “[h]er net income is
unknown at present.”
However, according to Eberlin’s employment
contract, she was to receive annual raises, “the first in
November 1997 to $210,000.00 per year and the second $240,000.00
in November 1998.”
Additionally, after these raises, Eberlin
1
The total monthly nanny expense at that time was $2,000.00, so Deal’s share
was $500.00 per month.
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was to be eligible for an interest in the partnership, resulting
in a significant increase in her income.
As to both parties’ reasonable needs, the trial court
found that Eberlin had expenses averaging approximately
$13,839.59 per month.
Her approximate take home pay, after
taxes, was between $10,000.00 and $11,000.00 per month.
The
trial court gave additional consideration to the satisfaction of
certain debts apportioned to Eberlin which were not listed in
her expenses.
These calculations resulted in Eberlin having a
budget deficit of $3,000.00 per month.
Evidence was presented that Deal’s expenses totaled
approximately $10,590.00 per month.
Deal testified that his
monthly take home pay, before his bonus, was approximately
$7,800.00 per month.
The trial court made a determination that
Deal would be able to meet his reasonably necessary expenses and
pay maintenance to Eberlin.
The trial court found that Eberlin was “not presently
able to support herself through suitable employment in the style
to which she and the parties’ child became accustomed during the
marriage and she lack[ed] sufficient property, including marital
property apportioned to her, to provide for her reasonable
needs.”
After considering the parties’ incomes, which included
income from both employment and property available for support,
their respective monthly expenses, and their reasonable needs,
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the trial court determined that Deal should pay Eberlin
maintenance of $3,000.00 per month, through the end of November
1997.
Thereafter, the maintenance would be reduced to $1,500.00
per month through the end of November 1998, then it would
continue at $500.00 per month for the next four years, after
which it would terminate.
Both parties filed objections to the Commissioner’s
report; and by order entered on March 18, 1998, the circuit
judge remanded the matter to the Commissioner “only for the
recalculation of debts that might exist.”
All other aspects of
the Commissioner’s report were confirmed.
After various hearings and supplemental filings, on
December 15, 2000, Deal filed a motion for entry of
interlocutory decree.
Included in the motion were allegations
that Deal had filed a Chapter 11 bankruptcy petition on March
15, 1999, and that Eberlin had filed a Chapter 7 bankruptcy
petition on June 2, 2000.
On January 4, 2001, the circuit court
entered its findings of fact, conclusions of law and decree of
dissolution of marriage.
The trial court adopted all provisions
of the Commissioner’s trial report, except those provisions that
related to debt division, which were “specifically set aside
pursuant to the Court’s prior Order of March 17, 1998.”2
The
trial court noted that the parties had filed for bankruptcy,
2
The order was signed on March 17, 1998, but entered on March 18, 1998.
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that Deal’s Chapter 11 plan of reorganization had been
confirmed, and that Eberlin’s Chapter 7 order of discharge of
debts had been entered.
The trial court then noted that “[i]n
neither bankruptcy proceeding did either party file any
objection to dischargeability of debts pursuant to 11 U.S.C.
523(a)(15) . . . [and that] [a]s a result, both parties are
stayed and/or enjoined from seeking an allocation of any debts
which existed pre-petition.”
The trial court concluded that
“any issue as to the allocation of debts is moot.”
This appeal
followed.
In his brief, Deal identified three issues:
(1) that
the trial court erred by finding that Eberlin did not have
sufficient property under KRS3 403.2004 to provide for her
3
Kentucky Revised Statutes.
4
A determination of maintenance involves the application of KRS 403.200,
which provides:
(1) In a proceeding for dissolution of marriage or
legal separation, or a proceeding for maintenance
following dissolution of a marriage by a court which
lacked personal jurisdiction over the absent spouse,
the court may grant a maintenance order for either
spouse only if it finds that the spouse seeking
maintenance:
(a)
Lacks sufficient property,
including marital property
apportioned to him, to provide for his
reasonable needs; and
(b)
Is unable to support himself
through appropriate employment or
is the custodian of a child whose
condition or circumstances make it
appropriate that the custodian not be required
to seek employment outside the home.
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reasonable needs, (2) that the trial court erred by finding that
Eberlin’s reasonable needs exceeded her available support, and
(3) that the trial court erred by not properly weighing those
factors provided under KRS 403.200 when determining the amount
of maintenance to award Eberlin.
All three issues involve the
trial court’s failure to consider the effect the parties’
bankruptcies had on the maintenance award.
We are of the
opinion that since all three of these issues are interrelated,
that this matter can best be addressed, in light of both parties
filing bankruptcy, by this Court determining whether the trial
(2)
The maintenance order shall be in such
amounts and for such periods of time as the
court deems just, and after considering all
relevant factors including:
(a)
The financial resources of the
party seeking maintenance, including marital
property apportioned to him, and his
ability to meet his needs independently,
including the extent to which a provision for
support of a child living with the party
includes a sum for that party as custodian;
(b)
The time necessary to acquire sufficient
education or training to enable the party
seeking maintenance to find appropriate
employment;
(c)
The standard of living established during
the marriage;
(d)
The duration of the marriage;
(e)
The age, and the physical and emotional
condition of the spouse seeking
maintenance; and
(f)
The ability of the spouse from whom
maintenance is sought to meet his needs
while meeting those of the spouse seeking
maintenance.
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court failed to make adequate findings of fact to support the
award of maintenance.
Our Supreme Court has held that under KRS 403.200,
the trial court has dual responsibilities:
one, to make relevant findings of fact; and
two, to exercise its discretion in making a
determination on maintenance in light of
those facts. In order to reverse the trial
court’s decision, a reviewing court must
find either that the findings of fact are
clearly erroneous or that the trial court
has abused its discretion.5
In order for an award of maintenance to be proper, the
elements of both KRS 403.200(1)(a) and (b) must be established.6
Thus, before awarding Eberlin maintenance, the trial court was
required to first find that she lacked sufficient property,
including marital property apportioned to her, to provide for
her reasonable needs, and that she was unable to support herself
through appropriate employment according to the standard of
living established during the marriage.7
After these required
findings are reviewed to determine whether they are supported by
substantial evidence, this Court “must consider whether the
amount awarded . . . constitutes an abuse of discretion.”8
5
Russell v. Russell, Ky.App., 878 S.W.2d 24, 26 (1994)(citing Perrine v.
Christine, Ky., 833 S.W.2d 825 (1992)).
6
Drake v. Drake, Ky.App., 721 S.W.2d 728, 730 (1986); Atwood v. Atwood,
Ky.App., 643 S.W.2d 263, 265 (1982)(citing Inman v. Inman, Ky.App., 578
S.W.2d 266, 270 (1979)).
7
Id. at 730 (citing Lovett v. Lovett, Ky., 688 S.W.2d 329, 332 (1985)).
8
Drake, supra.
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CR9 52.01 provides that “[f]indings of fact 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.”
Furthermore, “[t]he findings of
a commissioner, to the extent that the court adopts them, shall
be considered as the findings of the court.”10
“The amount and
duration of maintenance is within the sound discretion of the
trial court.”11
“The determination of whether to award
maintenance is highly discretionary with the trial court after
its consideration of the dictates of KRS 403.200.”12
Because the
trial court is in a better position than this Court to determine
maintenance, “the amount of the award of maintenance is within
the discretion of the chancellor and the exercise of that
discretion will not be set aside unless it is clearly
erroneous.”13
The trial court’s order entered on March 18, 1998,
confirmed all aspects of the Commissioner’s trial report except
it remanded the action only for the recalculation of debts that
9
10
Kentucky Rules of Civil Procedure.
CR 52.01.
11
Russell, 878 S.W.2d at 26 (citing Gentry v. Gentry, Ky., 798 S.W.2d 928,
937 (1990); Combs v. Combs, Ky.App., 622 S.W.2d 679, 680 (1981) (citing KRS
403.200(2)); and Browning v. Browning, Ky.App., 551 S.W.2d 823 (1977)).
12
Beckner v. Beckner, Ky.App., 903 S.W.2d 528, 530 (1995)(citing Browning,
supra).
13
Newman v. Newman, Ky., 597 S.W.2d 137, 140 (1980)(citing Ballard v.
Ballard, Ky., 411 S.W.2d 330 (1967)).
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might exist.
However, as noted by the trial court in its final
decree, “[n]o further hearings were held before the Domestic
Relations Commissioner as [Deal] filed a Chapter 11 bankruptcy
proceeding and [Eberlin] filed a Chapter 7 bankruptcy
proceeding. . . .”
The trial court further stated that “those
provisions as pertains to the division of debts . . . are
specifically set aside pursuant to the Court’s prior Order of
March 17, 1998.”
The trial court concluded by stating that “any
issue as to the allocation of debts is moot.”
On February 6, 2001, Deal filed a motion to terminate
maintenance, alleging that since the entry of the Commissioner’s
order, “both parties have filed a bankruptcy proceeding which
has substantially changed the parties’ respective debt load.”
In support of his motion, he attached his affidavit, wherein he
argued that as part of his bankruptcy plan, he was making
payments on debts for which Eberlin had been liable.
Deal
alleged that, to the best of his knowledge, all of Eberlin’s
debts, including debts that he was paying as part of his
bankruptcy plan, were discharged, and that she no longer had any
personal liability on those debts.
He claimed that since
Eberlin was earning substantially more income than she had
earned at the time the trial court entered its order, he should
not be required to pay maintenance.
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Deal’s motion to terminate maintenance was scheduled
to be heard on March 21, 2001, and then rescheduled to be heard
on May 16, 2001, and again rescheduled to be heard on July 6,
2001.
However, on June 11, 2001, Deal gave notice of withdrawal
of his motion to terminate maintenance.
CR 52.04 provides:
A final judgment shall not be reversed
or remanded because of the failure of the
trial court to make a finding of fact on an
issue essential to the judgment unless such
failure is brought to the attention of the
trial court by a written request for a
finding on that issue or by a motion
pursuant to Rule 52.02.
In his motion for entry of interlocutory order, Deal
alleged that issues of debt division, property division, and
maintenance remained for the trial court to decide; and that
these issues would be impacted by both his and Eberlin’s
bankruptcy proceedings.
Deal requested the trial court to
reserve ruling on the issues of debt division, property
division, and maintenance due to the parties’ respective pending
bankruptcy proceedings.
Deal has satisfied CR 52.04.
Through his motion for
entry of interlocutory decree, Deal brought to the trial court’s
attention his request for factual findings concerning a
recalculation of debts following the bankruptcy proceedings.
When determining Eberlin’s reasonable needs, the trial court by
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adopting the Commissioner’s findings gave consideration to “the
satisfaction of certain debts which are not listed in [her]
expenses.”
The parties’ financial situation
which created
Eberlin’s budget shortfall of $3,000.00 per month no longer
existed after both parties filed bankruptcy.
Thus, the trial
court’s failure to make sufficient factual findings to support
an award of maintenance after the parties filed separate
bankruptcy proceedings requires that the judgment be vacated and
this matter be remanded for additional factual findings.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Joy D. Denton
Bowling Green, Kentucky
David F. Broderick
P. Kevin Hackworth
Bowling Green, Kentucky
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