VIOLET A. HAZLETT (NOW ALBERS) v. ALBERT HAZLETT
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RENDERED:
August 22, 2003; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2001-CA-002394-MR
VIOLET A. HAZLETT (NOW ALBERS)
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE REED RHORER, JUDGE
ACTION NO. 00-CI-01415
v.
ALBERT HAZLETT
APPELLEE
OPINION
AFFIRMING IN PART, REVERSING AND REMANDING IN PART
** ** ** ** **
BEFORE:
DYCHE, AND McANULTY, JUDGES; AND JOHN WOODS POTTER,
SENIOR JUDGE.1
McANULTY, JUDGE:
Violet Albers appeals the circuit court’s
order denying her motion to amend, alter or vacate the court’s
findings of fact and conclusions of law on matters pertaining to
its interpretation of an agreed property settlement in an
uncontested divorce from Albert Hazlett.
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Violet Albers argues
Senior Judge John Woods Potter sitting as Special Judge by assignment of the
Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and
KRS 21.580.
that the trial court effectively set aside portions of the
agreed property settlement without first making a finding that
the agreement was unconscionable, as is required under KRS
403.180(2).
After considering the terms of the couple’s agreed
property settlement, we affirm in part and reverse and remand in
part.
Violet Albers, formerly Violet Hazlett (Violet), and
Albert Hazlett (Albert) married on September 21, 1999.
The
marriage was Violet’s eighth marriage and Albert’s third
marriage.
On December 5, 2000, the couple decided to get a
divorce and agreed to settle their property.
The couple had an attorney draft an Agreed Property
Settlement (Agreement) disposing of their property.
Violet
signed the Agreement on December 7, 2000, and Albert on December
8, 2000.
Later that day on December 8, 2000, the trial court
approved the Agreement and incorporated it by reference in the
court’s final decree entered December 8, 2000.
The property disposition from the Agreement is as
follows:
3. Real estate is divided as follows:
Husband is to keep his cottage at Lake
Cumberland. Wife is to keep her home
located at 116 Schenkelwood Drive,
Frankfort, Ky. The residence and business,
with all contents, located at 551 South Main
St., Lawrenceburg is to be to [sic] sole
property of the wife and husband agrees to
execute deed to said property to wife. In
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addition, Husband is to have his fishing
boat, his Ford Explorer, his bank account at
Farmers Bank, and all funds in a joint
account the parties maintained at Edward
Jones, at market value after December 14,
2000. Husband is restored to all personal
property he owned before the marriage and
all property he has removed from the
residence at 551 South Main St. at the time
of the signing of this agreement. Husband
and Wife promise to pay any outstanding
debts that are in their respective names,
and hold the other harmless from payment of
the same. The wife is to retain all funds
in bank accounts in her name as Violet
Hazlett and as Violet Albers. All other
property not listed herein is to be the
property of Violet Hazlett.
(Paragraph 3 of the Agreement).
At the time of the divorce, Albert was 74 years old
and was a retired contractor.
Violet was 55 years old and owned
and operated a wedding rental and florist business called
“Hazlett’s Wedding Center & Flowers by Violet.”
Subsequent to the final decree of dissolution and
after Violet received a credit card statement addressed to her
for charges in excess of $10,000, Violet filed a motion with the
trial court on April 19, 2001, to enforce certain provisions of
the Agreement.
Specifically, in pertinent part, she represented
to the court that Albert had a First USA Bank Visa account in
his name, and he transferred the balance to Violet’s name.
Violet believed Albert should pay the debt because it was
originally in his name.
In response to Violet’s motion, Albert
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filed a counter-motion for the court to order Violet to pay
Albert all the funds she received in a joint investment account
the couple started in November of 1999 with Albert’s initial
funds of $11,000.00.
The court heard testimony on the issues of the credit
card debt and the joint investment account on June 5, 2001, and
July 7, 2001.
At the hearings, Violet and Albert testified on
these issues, as did Danny L. Lamb, an investment broker with
Edward Jones, through whom the couple opened the investment
account.
Violet testified that in November of 1999, Albert and
Violet opened a joint investment account with Edward Jones Co.
The couple opened the account with a check for $11,000 drawn on
Albert’s checking account with Farmers Bank.
Albert had
deposited the funds the day prior after closing his savings
account with another bank.
Edward Jones Co. structured the
account as follows pursuant to the couple’s instructions:
$5,000 in an account with Investment Company of America; $5,000
in an account with New Economy; and the remaining $1,000 in a
money market account.
According to Violet, the Investment Company of America
account was her account, and she deposited $5,000 in Albert’s
Farmers Bank account to cover this amount as the initial deposit
in the investment account consisted of Albert’s non-marital
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savings.
In addition, Violet testified that she added a total
of $1,500 to the money market account during the marriage.
Moreover, as part of the opening of the Edward Jones Co.
investment accounts, the couple opened an Edward Jones Co. First
USA Visa (Visa) account in Albert’s name.
In order to prove
that the account was in Albert’s name only, Violet introduced a
Visa credit card with Albert’s name on it, which card was not
signed by Albert and which Violet had in her possession.
As evidenced by documents Violet introduced through
Danny Lamb, on the same day that Violet signed the Agreement,
December 7, 2000, she contacted Lamb and asked him to transfer
funds from the money market account totaling $1,500 to her and a
co-transferee named Shelia Hatfield.
In addition, Violet
instructed Lamb to transfer the assets in the Investment Company
of America account to Violet and Ms. Hatfield.
Later, on
December 11, 2000, Lamb transferred the remainder of the funds
in the money market account totaling $1,088.35 to Albert as well
as the assets in the New Economy Fund.
Both Violet and Albert
signed the letters of authorization which Edward Jones required
to complete the respective transfers.
On cross-examination, Violet admitted that she used
the Visa card to finance the expansion of her business.
Specifically, she purchased a computer for the business and
additional inventory on the Visa card.
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However, Violet would
not agree that the majority of the purchases were business
related; she said she also used the card to purchase groceries
and clothing for both Albert and Violet.
The debt on the credit
card was in excess of $10,000.
Finally, Violet further testified that she was unaware
that Albert could not read.
Accordingly, she did not know that
he had not read the Agreement prior to signing it.
Albert testified that he could not read.
Moreover, he
did not know about the Visa account and the debt in excess of
$10,000 that was allegedly in his name only.
Finally, Violet
did not deposit funds in his account with Farmers Bank to cover
the Edward Jones investment in the Investment Company of America
account.
The way he understood the couple’s Agreement, he was
to receive all of the funds in all of the accounts with Edward
Jones.
On the issue of the Visa account, after hearing the
testimony, the trial court found that Albert did not know of the
credit card debt in excess of $10,000 when he signed the
Agreement, nor did Violet tell him of the debt.
Moreover, the
court found that Violet incurred all of the debt, and she
incurred the vast majority of the debt in her florist/wedding
business.
Based on these findings, the court concluded that
Violet shall pay the Visa credit card debt.
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On the issue of the Edward Jones investment account,
the court found that Albert opened the account with money he
withdrew from his non-marital savings account the day prior.
Despite the fact that Albert signed documents around December
11, 2000, allowing Violet to receive $1,500 from the money
market account and all the assets in the Investment Company of
America account, the trial court concluded that the language of
the Agreement should prevail and Albert shall receive all of the
funds in the accounts which were purchased with his non-marital
property.
Violet filed a motion to amend, alter or vacate the
findings of fact and conclusions of law of the trial court as to
the Visa account and the investment account.
The trial court
denied her motion, precipitating this appeal.
On appeal, Violet argues that the parties’ Agreement
should be enforced as written as to the joint investment account
and the Visa debt.
Thus, the issue is whether the trial court
properly interpreted the parties’ Agreement.
Specifically, the
two questions we must answer are, under the language of the
Agreement, (1) was the trial court correct in deciding that
Violet should be obligated to pay the Visa account, and (2) was
the trial court correct in deciding that Albert shall receive
all of the funds in the Edward Jones investment accounts which
were purchased with his non-marital property.
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As the issues
here involve matters of contract interpretation, our review is
de novo.
See First Commonwealth Bank of Prestonsburg v. West,
Ky. App., 55 S.W.3d 829, 835 (2000).
In a petition for dissolution of marriage, “the
parties may enter into a written separation agreement containing
provisions for . . . disposition of any property owned by either
of them[.]”
KRS 403.180(1).
Moreover, the terms of the
agreement regarding any division of property are binding on the
court unless it finds that the terms are unconscionable.
KRS 403.180(2).
See
Finally, “[t]erms of the agreement set forth in
the decree . . . are enforceable as contract terms.”
KRS
403.180(5).
Accordingly, under principles of contract law, we need
to determine if the terms of the Agreement are ambiguous.
See
Central Bank & Trust Co. v. Kincaid, Ky., 617 S.W.2d 32, 33
(1981).
If we hold that they are ambiguous
then extrinsic evidence may be resorted to
in an effort to determine the intention of
the parties; if not, then extrinsic evidence
may not be resorted to. The criterion in
determining the intention of the parties is
not what did the parties mean to say, but
rather the criterion is what did the parties
mean by what they said. An ambiguous
contract is one capable of more than one
different, reasonable interpretation.
Id.
Moreover, in determining what the parties meant by what
they said,
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it is admissible in the construction of many
contracts that are on their face free from
ambiguity to consider their situation and
the circumstances and conditions surrounding
them at the time the contract was entered
into, -- not for the purpose of modifying or
enlarging or curtailing its terms, but to
shed light upon the intention of the
parties. And the intention of the parties
thus gathered will prevail unless it does
violence to the meaning of the contract as
written. In other words, if a written
contract, when viewed from the standpoint of
the parties at the time it was executed can
be made to carry out their intention as
expressed in the writing, the court will
adopt the construction that will accomplish
this end.
Lexington & Big Sandy Ry. Co. v. Moore, 140 Ky. 514, 131 S.W.
257, 258 (1910) (internal citations omitted).
Guided by the above principles, we begin our review
with the clause of the Agreement pertaining to the allocation of
debt, which reads “Husband and Wife promise to pay any
outstanding debts that are in their respective names, and hold
the other harmless from payment of the same.”
that this clause is ambiguous.
We do not believe
Albert is responsible for
payment of those debts for which he alone is legally
responsible; Violet is responsible for payment of those debts
for which she alone is legally responsible.
While this clause pertaining to individual debt
allocation is not ambiguous, the Agreement does not provide for
payment of joint debts for which both parties had legal
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responsibility, or debts which were in the name of both parties.
As is apparent from the trial court’s findings of fact and
conclusions of law, it chose not to believe Violet’s assertion
that the Visa debt was in Albert’s name only.
The trial court
treated the Visa debt as a marital debt and decided the issue
because the parties did not address the responsibility for joint
debts.
We review issues pertaining to the assignment of debts
incurred during the marriage under an abuse of discretion
standard.
(2001).
See Neidlinger v. Neidlinger, Ky., 52 S.W.3d 513, 523
“The test for abuse of discretion is whether the trial
judge’s decision was arbitrary, unreasonable, unfair or
unsupported by sound legal principles.”
Goodyear Tire & Rubber
Co. v. Thompson, Ky., 11 S.W.3d 575, 581 (2000).
Debts incurred during the marriage are assigned on the
basis of such factors as (1) receipt of benefits; (2) extent of
participation in incurring the debt; (3) whether a party
incurred the debt to purchase assets later designated as marital
property; (4) whether a party incurred the debt to provide for
the family; and (5) the economic circumstances of the parties
bearing on their respective abilities to assume the
indebtedness.
Neidlinger, 52 S.W.3d at 523.
In this case, the trial court considered the factors
listed above, specifically finding that Ms. Albers incurred all
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the debt.
Moreover, she incurred the debt to purchase assets
for the business that she kept after the divorce.
We hold that
the trial court did not abuse its discretion in deciding the
issue of the Visa debt in Albert’s favor and affirm the trial
court.
We now turn to the clause of the Agreement pertaining
to the Edward Jones account and further hold that the Agreement
is not ambiguous on this matter.
Considering the complete
language of the Agreement and the parties’ actions, we do not
believe that this settlement provision is capable of more than
one different, and, more importantly, reasonable interpretation.
The only specific mention of the Edward Jones account
in the Agreement is that Albert gets “all funds in a joint
account the parties maintained at Edward Jones, at market value
after December 14, 2000.”
Moreover, Violet gets all other
property not specifically listed in the Agreement.
In order to shed light on the intention of the parties
as to the ownership of the Edward Jones accounts upon
dissolution of their marriage, we consider the steps they took
regarding the accounts in the days surrounding the filing of
their joint petition.
Sometime around December 7, 2000, Violet
called Danny Lamb at Edward Jones and instructed him that she
and Albert wished to transfer the ownership of the joint
accounts.
In the next few days, Danny Lamb prepared the letters
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of authorization necessary to complete the transfers, and both
Violet and Albert signed the documents.
The letters show that
on December 11, 2000, Edward Jones completed the respective
transfers giving Violet $1,500 in a money market account and all
the assets in the Investment Co. of America account and giving
Albert $1,088.35 that remained in the money market account and
the assets in the New Economy Fund.
So, after December 14,
2000, the couple had split the accounts, Albert now having all
the funds plus interest that he originally deposited in the
money market account and the assets in the New Economy Fund.
Pursuant to the Agreement, Violet received the accounts now
listed in her name as property not specifically listed in the
Agreement.
To hold that Albert should receive all the funds
purchased with his nonmarital property would ignore the language
of the Agreement that reads “at market value after December 14,
2000.”
The parties inserted this language for a reason that may
be ascertained by their actions regarding the accounts during
the week they filed the joint petition for dissolution.
Albert argues that the phrase “at market value after
December 14, 2000” is of no consequence since Violet had already
taken independent steps to divide the account on December 7,
2000.
In addition, Albert asserts that the initial deposit of
$11,000 that funded the accounts were his non-marital funds.
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To the contrary, as discussed in the preceding
paragraph, we believe the phrase “at market value after December
14, 2000” is of consequence and must be considered in
conjunction with both Violet and Albert’s signatures on the
letters of authorization.
If the parties intended Albert to
have everything in the Edward Jones accounts, then there would
be no reason to add a qualifying date of December 14, 2000.
Moreover, Albert has made no allegation of fraud in signing the
letters of authorization.
Finally, no matter how the parties
initially funded the accounts, they both signed a property
settlement agreement to dispose of their property; therefore,
the terms of the agreement are enforceable as contract terms
absent a finding that the Agreement is unconscionable.
See KRS
403.180(2),(5).
On the issue of the joint investment accounts, we
reverse the trial court’s conclusions of law and remand for
entry of an order consistent with this opinion.
The Edward
Jones accounts shall remain as the parties designated them
pursuant to the Agreement and the letters of authorization they
signed around December 11, 2000.
For the foregoing reasons, the order of the Franklin
Circuit Court is affirmed in part and reversed and remanded in
part.
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ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Catherine C. Staib
Frankfort, Kentucky
James Dean Leibman
Leibman and Leibman
Frankfort, Kentucky
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