RHONDA NELSON v. TIMOTHY R. NELSON
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RENDERED: JULY 21, 2006; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-000302-MR
RHONDA NELSON
APPELLANT
APPEAL FROM FLOYD CIRCUIT COURT
HONORABLE JULIE PAXTON, JUDGE
ACTION NO. 03-CI-00468
v.
TIMOTHY R. NELSON
APPELLEE
OPINION
AFFIRMING IN PART, VACATING IN PART,
AND
REMANDING
** ** ** ** **
BEFORE:
JUDGE.1
COMBS, CHIEF JUDGE; MINTON, JUDGE; HUDDLESTON, SENIOR
COMBS, CHIEF JUDGE:
Rhonda Nelson appeals from a final decree
of the Floyd Family Court which dissolved her marriage to
Timothy Nelson.
She contends that the family court erred in its
characterization, valuation, and division of the marital
property.
She also argues that the court improperly deviated
from the statutory guidelines in determining the amount of
1
Senior Judge Joseph R. Huddleston sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and KRS 21.580.
Timothy’s child support.
In addition to these allegations of
error, she appeals as well from an earlier order of the family
court which denied her motion for the trial judge to recuse
herself.
Timothy filed a petition to dissolve the marriage on
April 23, 2003.
At that time, the couple had been married for
fourteen (14) years and had two minor children:
1989; and Chase, born in 1991.
Waylon, born in
In October 2002, Timothy and
Rhonda had been involved in a domestic violence action before
the court, which resulted in the court’s granting temporary
custody of the children to Rhonda with visitation privileges for
Timothy.
On January 27, 2004, Rhonda filed a motion requesting
the trial judge to recuse herself pursuant to Supreme Court Rule
(SCR) 4.300, Canon 3E(1), which provides that “a judge shall
disqualify him or herself in a proceeding in which the judge’s
impartiality might reasonably be questioned[.]”
Rhonda
contended that the judge’s impartiality might be compromised
because a member of the judge’s staff (who was responsible for
scheduling the judge’s docket and performing other
administrative duties) was related to Timothy.
The motion was
denied on January 27, 2004.
Rhonda then filed an affidavit with the Supreme Court
of Kentucky, seeking to have the judge disqualified.
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The
Supreme Court entered an order on February 6, 2004, holding that
the affidavit had failed to demonstrate any disqualifying
circumstance which would require the appointment of a special
judge pursuant to KRS2 26A.020.
The request was denied without
prejudice to the right of any party to seek appellate review of
the issue after entry of a final judgment.
After conducting a hearing on the dissolution action
on May 6, 2004, the family court entered its findings of fact,
conclusions of law, and final decree on September 20, 2004.
On
September 21, 2004, Rhonda, who had not yet received a copy of
the final decree, filed a motion for the court to enter a final
decision and a motion for an order protecting the children.
In
support of her motions, she filed affidavits from herself and
from her attorney.
The motion for a protective order for the children and
the supporting affidavits alleged that Timothy had known the
specific terms of the final decree for several days even though
it had not yet been entered by the court.
Rhonda claimed that
on the basis of this knowledge, Timothy had informed the
children that they would be moving from their home in thirty
days -- greatly upsetting them.
On September 23, 2004, Rhonda
filed a motion for clarification regarding certain terms of the
decree as well as a motion to alter, amend, or vacate.
2
Kentucky Revised Statutes.
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The
latter motion was denied in an order which also addressed the
motion for clarification.
This appeal followed.
Rhonda first argues that the judge should have recused
herself because one of the judge’s staff members, Dovie Damron,
is Timothy’s second cousin.
Rhonda contends that Dovie’s
presence tainted the dissolution proceedings with the appearance
of impropriety.
In her affidavits, she attested that she
believed that Dovie might provide ex parte information about the
case to the judge and that she might influence the judge to make
rulings in Timothy’s favor.
In its order of January 27, 2004, the court provided
the following explanation for its decision to deny Rhonda’s
motion to recuse:
The Respondent [Rhonda] first came to
this court in a domestic violence action
wherein she filed a petition for emergency
protection against the Petitioner [Timothy].
This was on October 7, 2002. The parties
have appeared numerous times before this
court and this judge in the domestic
violence action as well as in the case at
bar. It is only following a dismissal of
domestic violence petitions of both the
Petitioner and Respondent that this motion
to recuse is filed.
The court finds this motion to be
brought in an attempt to “judge shop.” If
this had been a justifiable concern,
certainly the Respondent would have raised
same 1½ years ago prior to the multiple
appearances before this court and not
following a dismissal of the cross-domestic
violence petitions brought by the parties
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against each other. The court would note
that it was unaware of any relationship,
familial or otherwise, between either of the
parties and any court personnel until the
filing of Respondent’s motion.
The Respondent attaches ethics opinions
regarding recusal. The court would note
that those recusals deal with persons
married to (thus in an intimate relationship
with) persons appearing before the court,
not relatives as distant as second cousins.
We agree with the family court that there were
insufficient grounds to require a recusal.
“A party’s mere
belief that the judge will not afford a fair and impartial trial
is not sufficient grounds to require recusal.”
Commonwealth, 904 S.W.2d 226, 230 (Ky. 1995).
Webb v.
A trial judge is
required to disqualify himself in any proceeding “[w]here he has
knowledge of any . . . circumstances in which his impartiality
might reasonably be questioned.”
KRS 26A.015(2)(e).
Such
circumstances have not been demonstrated in this case.
Dovie’s
relationship either to Timothy or to the judge is too distant to
implicate the Supreme Court Rule requiring disqualification in
instances where:
the judge or the judge’s spouse, or a person
within the third degree of relationship to
either of them, or the spouse of such
person: (i) is a party to the proceeding, or
an officer, director or trustee of a party;
(ii) is acting as a lawyer in the
proceeding; (iii) is known by the judge to
have a more than de minimis interest that
could be substantially affected by the
proceeding; (iv) is to the judge’s knowledge
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likely to be a material witness in the
proceeding.
SCR 4.300, Canon 3E(1)(d).
Rhonda contends that Timothy had learned the terms of
the final decree several days before it was entered by the
court.
At the beginning of the final hearing, the judge offered
to remove Dovie from any contact with the case.
Although Rhonda
declined this offer, she now argues that she should receive a
new hearing because of Dovie’s alleged involvement as the source
of the suspected leaks.
As we find no error, we affirm the
denial of the motion to recuse.
Rhonda next argues that the court erred in its
characterization, valuation, and division of the couple’s
primary asset, the marital residence, a double-wide mobile home
located on property in Floyd County.
Hunter v. Hunter, 127
S.W.3d 656, 659-60 (Ky.App. 2003), sets forth the proper
procedure to be followed by a court in dividing marital
property:
Under KRS 403.190, the trial court’s
division of property involves a three-step
process: (1) characterizing each item of
property as marital or nonmarital; (2)
assigning each party’s nonmarital property
to that party; and (3) equitably dividing
the marital property between the parties.
Property acquired by either spouse
subsequent to the marriage is presumed to be
marital property, except for certain
enumerated types including property acquired
by gift. The party claiming property
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acquired after the marriage as his/her
nonmarital property through the gift
exception bears the burden of proof on that
issue.
The court determined that the property on which the
mobile home is located was a gift from Timothy’s parents, Thomas
and Earlene Nelson.
The deed in the record shows that the land
was sold by Thomas and Earlene to Timothy and Rhonda for $1.00
in 1994 when it was valued at $10,000.00.
Timothy testified
that Rhonda’s name was included on the deed in order to avoid
trouble; he stated that “it was my choice to have her put on
there so there wouldn’t be any ruckus.”
Upon questioning, he
stated that if they had not been married, he would not have put
her name on the deed.
The court found that although the
property may have been intended to be a gift to Timothy alone,
it was nonetheless Timothy’s deliberate intention to lead Rhonda
to believe that she had an interest in the property.
Therefore,
the court characterized the land as marital property, awarding
Rhonda $5,000.00 -- representing one-half of the value of the
land as of 1994.
With respect to the mobile home, the court determined
that it was obtained entirely with gifts of money from Timothy’s
father, Thomas.
The home was purchased in 2000 from Barker
Mobile Homes for $25,540.00.
The record contains copies of five
checks from Thomas, totalling $25,510.69.
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Two (in the amounts
of $1,328.23 and $3,796.35) were made out to Rhonda; the
remaining three checks were made out to Timothy.
The court
found that Rhonda had received the two checks solely by virtue
of her status as Timothy’s wife.
Therefore, it concluded that
the mobile home was entirely Timothy’s non-marital property.
The only current valuation of the property was
provided by a professional real estate appraiser, Norman Smith,
who was hired by Rhonda.
Smith assigned a fair market value to
the entire property (the land and mobile home combined) of
$80,000.00.
He did not assign separate values to the land and
the home, stating that he had not been asked to do so.
He also
explained that the land and mobile home would be more valuable
if they were sold together rather than separately.
The court
rejected Smith’s valuation as “uninstructive” because the values
of the home and the land were not assessed separately.
The court awarded the mobile home and the real
property to Timothy, reciting that “[t]he Court believes that
separating the mobile home from the real property would
materially impair the value of both.”
Timothy was ordered to
pay Rhonda her marital share of the value of the land ($5,000)
within ninety (90) days of the entry of the decree.
Rhonda was
given thirty (30) days thereafter to relocate.
Rhonda’s first allegation of error concerns
approximately $6,500.00 in proceeds that she and Timothy had
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received from the sale of their previous home, a single-wide
mobile home.
Timothy testified that the money was used as
partial payment for a car for Rhonda, which was awarded to her
by the court.
Timothy’s father had also testified by deposition
that the money was used for this purpose.
Rhonda, however,
contends that the money was applied to the purchase of the
second marital residence and that it was, therefore, marital
property.
Although standards for tracing have been somewhat
relaxed (see Chenault v. Chenault, 799 S.W.2d 575, 579 (Ky.
1990)), Rhonda has failed to offer any evidence to support her
contention.
We cannot agree that the court necessarily abused
its discretion in concluding that the proceeds from the sale of
the first mobile home had been used to purchase Rhonda’s car
based on the testimony of Timothy and his father.
There was
evidence upon which the court could base this finding, and it is
vested with the discretion of electing to believe this testimony
over Rhonda’s contentions.
We shall next consider the court’s determination that
the mobile home was bought entirely with gifts of money from
Timothy’s father and that it was entirely Timothy’s non-marital
property.
Rhonda alleges that discrepancies between the dates
of the checks and the dates of the payments for the mobile home
show that at least part of the home must have been financed from
marital funds.
Our review of the record confirms that these
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discrepancies do exist.
However, in her testimony at the
hearing, Rhonda acknowledged that Timothy’s father had given the
checks to them as a gift and that she and Timothy had used the
money to purchase the mobile home.
Rhonda emphasizes that the two checks made out to her
alone should be considered her non-marital property.
The court
found these two checks were intended to be a gift to Timothy
because there was no testimony to indicate that Rhonda had been
granted such a gift except for her status as Timothy’s wife.
Rhonda challenges this finding, pointing out that the checks
were made out specifically to her and were acknowledged as gifts
to her in Timothy’s mandatory case disclosure and affidavit.
The treatment of joint gifts in the context of marital
dissolution has recently been addressed in Hunter, supra, 127
S.W.3d 656, in which this Court attempted to resolve a disparity
between the holdings of two previous cases, Angel v. Angel, 562
S.W.2d 661 (Ky.App. 1978), and Calloway v. Calloway, 832 S.W.2d
890 (Ky.App. 1992).
In Angel, we held that a tract of land
conveyed without consideration to the divorcing parties by the
wife’s brother should have been treated as the wife’s nonmarital property “unless the trial court finds that [the
husband] was named as a grantee for a reason other than his
marriage to [the wife].”
at 665.
(Emphasis added.)
Angel, 562 S.W.2d
In Calloway, by contrast, we held that “gifts during
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marriage to both spouses shall be treated as marital property
upon dissolution.”
Calloway, 832 S.W.2d at 893.
The Hunter
court concluded that the apparent conflict between these two
holdings was more apparent than real since the underlying
principles in both cases focused on:
(1) effectuating the
actual intent of the donor and (2) furthering the legislative
intent of KRS 403.190(3) to look beyond documentary title alone
as conclusive.
Hunter, 127 S.W.3d at 662.
By deposition, Timothy’s father testified that he gave
the money to Timothy and Rhonda to buy a home:
“I gave Tim
Twenty Thousand Dollars gifted and give Rhonda Fifty-One Hundred
Dollars gifted.”
When he was asked whether there was any reason
for Rhonda’s name to have been on either of the checks or the
property other than the fact that she was married to Timothy, he
replied, “That’s all, no other reason.”
He further testified
that “they used it [the money] to purchase a doublewide.”
Rhonda contends that Thomas’s testimony was self-serving and did
not reveal his true intent at the time the gift was made.
Although the testimony by the parent of a party during
the course of dissolution proceedings may well be biased in
favor of his child, it is nonetheless a source of evidence
regarding intent.
As the finder of fact, the family court has
the prerogative to choose which evidence to believe and which to
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disbelieve.
Sroka-Calvert v. Watkins, 971 S.W.2d 823, 828
(Ky.App. 1998).
In Hunter, the husband’s parents had testified that
they intended to give the disputed real property to their son
and that they had included his wife on the deed solely because
of her marriage to him.
The Hunter court concluded that the
trial court had not erred in finding that the property was the
non-marital property of the husband.
The factual circumstances
of Hunter and Angel are highly similar to the case before us.
Accordingly, we hold that the family court did not clearly err
in characterizing the mobile home as entirely Timothy’s nonmarital property based on his father’s testimony indicating his
intent in making the gift.
Rhonda has argued that the mobile home became marital
property when it was attached to the land.
We disagree.
The
mobile home did not change its essential non-marital character
because its wheels were removed and concrete block skirting was
installed.
argument.
In addition, she cites KRS 132.750 to support this
Although it has now been repealed, that statute
nonetheless would not have been relevant to this issue because
it concerned the classification of mobile homes for taxation
purposes rather than for dissolution of marriage proceedings.
We do agree with Rhonda that the court erred in not
considering the appreciated value of the mobile home when
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apportioning the marital and nonmarital property.
In awarding
Rhonda $5,000.00 for her marital share of the real property
based on its value as of 1994, the court erroneously awarded to
Timothy the full amount of the appreciation both on the marital
and on the non-marital portions of the property.
Travis v.
Travis, 59 S.W.3d 904, 910-11 (Ky. 2001), directs that a court
must treat appreciated value as marital property subject to
equitable division:
When the property acquired during the
marriage includes an increase in the value
of an asset containing both marital and
nonmarital components, trial courts must
determine from the evidence why the increase
in value occurred because where the value of
[non-marital] property increases after
marriage due to general economic conditions,
such increase is not marital property, but
the opposite is true when the increase in
value is a result of the joint efforts of
the parties. KRS 304.190(3), however,
creates a presumption that any such increase
in value is marital property, and,
therefore, a party asserting that he or she
should receive appreciation upon a
nonmarital contribution as his or her
nonmarital property carries the burden of
proving the portion of the increase in value
attributable to the nonmarital contribution.
By virtue of the KRS 403.190(3) presumption,
the failure to do so will result in the
increase being characterized as marital
property. (Citations and quotation marks
omitted.)
In this case, the combination of the mobile home and
the land had increased $44,460.00 in value during the course of
the marriage from $35,540.00 to $80,000.00.
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As dictated by
Travis, the presumption is that the increase of $44,460.00 is
entirely marital property, and the burden to prove otherwise
rests on the party maintaining that it is non-marital.
The court heard testimony from both Timothy and Rhonda
regarding improvements that had been made to the mobile home,
such as carpeting, hardwood flooring, and painting.
Timothy
claimed that the improvements had been made by the seller of the
mobile home as part of their sales agreement.
He did testify
that they may have purchased a furnace separately.
Rhonda
testified that the improvements had been made after the sale.
Neither party provided any documentation to support his or her
testimony.
The court concluded that there was insufficient
evidence to show that any of the alleged improvements had
increased the value of the mobile home and essentially ascribed
the increase to general economic conditions rather than to joint
efforts by the parties.
The court found the increase to be both
marital (as to the land) and non-marital (as to the mobile
home).
In so ruling, the court failed to give proper weight to
the presumption that the appreciated value of the property was
marital in nature.
Travis, supra.
Neither party was able to
offer wholly persuasive testimony; Timothy did not meet his
burden to prove that the appreciated value should be
characterized as non-marital in nature.
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Accordingly, we hold
that the court clearly erred in failing to declare the
appreciated value to be marital and subject to equitable
division.
Brandenburg v. Brandenburg, 617 S.W.2d 871 (Ky.App.
1981), provides the proper formula for apportioning an increase
in the value of property that is comprised of marital and nonmarital components.
The formula is based on the principle that
“the interests of the parties [are] the same percentages as
their respective contributions to the total equity in the
property.”
Brandenburg, at 872.
The formula directs a court to
divide the value of the marital contribution by the total
contribution and then to multiply by the equity at the time of
distribution or dissolution.
Id.
The family court shall re-
visit Rhonda’s marital contribution of $5,000.00 according to
the Brandenburg formula to arrive at a proper figure
representing her share of the appreciated value of the property
-- both the land and the mobile home.
We vacate and remand for
entry of an order that awards Rhonda the proper amount as her
marital share in utilizing the Brandenburg formula.
Finally, Rhonda disputes the court’s reduction of
Timothy’s child support payments by twenty percent.
Finding
that Timothy had been voluntarily underemployed in 2003, the
court calculated his child support payments based on his gross
monthly income of $1335.00 for 2002.
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A literal application of
the Kentucky child support guidelines would require payments by
Timothy of $281.60 per month.
KRS 403.212.
However, the court
also found that Timothy kept the children for a longer time than
that which had been directed by the court’s visitation schedule;
i.e., for twenty percent more time than what had been designated
for him.
Thus, his child support payments were reduced by
twenty percent to $225.28.
Courts may deviate from the guidelines where
their application would be unjust or
inappropriate. Any deviation shall be
accompanied by a written finding or specific
finding on the record by the court,
specifying the reason for the deviation.
KRS 403.211(2).
Case law agrees with that statutory language:
“A
decision on whether to deviate from the guidelines is within the
trial court’s discretion.”
405, 407 (Ky.App. 1996).
Rainwater v. Williams, 930 S.W.2d
Therefore, we find no abuse of
discretion in the court’s decision to use Timothy’s income for
2002 to calculate his child support responsibilities.
Nor is
there error in its decision to reduce his payments by twenty
percent based on the altered visitation schedule.
decisions are properly supported by the record.
Both
We find no
basis for reversal.
The findings of fact, conclusions of law, and final
decree of dissolution of marriage entered by the Floyd Family
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Court are hereby affirmed except as to the award of $5,000 to
Rhonda as her share of the marital residence.
That portion of
the order is vacated, and this case is remanded for entry of an
order consistent with this opinion.
The order denying the
motion to recuse is also affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Earl M. McGuire
Prestonsburg, Kentucky
Clyde F. Johnson
Prestonsburg, Kentucky
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