NANCY M. BLEVINS v. GENE R. BLEVINS
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RENDERED: July 7, 2006; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-001043-MR
NANCY M. BLEVINS
APPELLANT
APPEAL FROM BOYD CIRCUIT COURT
HONORABLE C. DAVID HAGERMAN, JUDGE
ACTION NO. 99-CI-00596
v.
GENE R. BLEVINS
APPELLEE
OPINION
AFFIRMING IN PART, VACATING IN PART,
AND REMANDING
** ** ** ** **
BEFORE:
JUDGE.1
COMBS, CHIEF JUDGE; MINTON, JUDGE; HUDDLESTON, SENIOR
COMBS, CHIEF JUDGE:
This is an appeal from a series of orders
of the Boyd Circuit Court dividing the marital property of Nancy
and Gene Blevins in their action for dissolution of their
marriage.
Nancy contends that the circuit court committed
several errors:
in characterizing approximately $50,000.00 of
credit card debt as non-marital; in awarding Gene several tracts
of real property; in failing to award one-half of Gene’s pension
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.
to her; and in characterizing certificates of deposit worth
approximately $50,000.00 as marital property.
Gene filed a petition for dissolution of the forty-one
year marriage on September 15, 1999.
He was sixty-nine (69)
years of age, and Nancy was sixty-three (63).
The Boyd Circuit
Court dissolved the marriage on September 29, 2000, reserving
for later resolution the characterization and division of the
marital property.
The property issues were submitted to a Domestic
Relations Commissioner (DRC).
After reviewing the depositions,
documents, and exhibits submitted by the parties, the DRC filed
a Report and Recommendations on March 24, 2005.
The DRC
recommended that Nancy should be awarded the marital residence,
three income-producing rental properties, and certificates of
deposit worth $100,000.00.
Gene was to receive a farm and some
undeveloped land in Lawrence County and a residence in Ashland.
In an order entered on April 6, 2006, the trial court adopted
and confirmed the report.
Nancy quickly filed exceptions, which were overruled
in an order entered on April 12, 2005.
Gene filed one exception
to the report, contending that the DRC had committed a clerical
oversight resulting in Nancy’s receipt of some tracts of land
adjoining the marital residence that were Gene’s non-marital
property.
On April 14, 2005, he filed a motion to alter, amend,
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or vacate the order of April 12, 2005, asking that his exception
be sustained.
The trial court agreed and entered an order on
April 22, 2005, sustaining Gene’s motion and modifying the DRC’s
report to award to Gene two lots and a portion of a third lot
adjoining the marital residence.
On April 22, 2005, Nancy filed a motion to alter,
amend, or vacate the order of April 12, 2005, contending that
two aspects of the property settlement remained unresolved:
the
allocation of nearly $50,000.00 of credit card debt and the
characterization of Gene’s pension.
She argued that Gene should
be responsible for one-half of the credit card debt and that she
should be awarded half of his pension.
The court entered an order on April 29, 2005, ruling
that the credit card debt was a non-marital obligation for which
Nancy alone was responsible.
The court also awarded to Gene the
full amount of his pension benefits.
This appeal followed.
I. The Credit Card Debt
Nancy’s first argument concerns approximately
$50,000.00 in debt that accrued on ten credit cards.
Although
all ten cards were listed solely in her name, she contends that
the nature of the debt is marital and that it should have been
divided equally between the parties instead of having been
assigned entirely to her.
In arriving at its conclusion, the
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court relied primarily on Nancy’s own deposition testimony.
The
relevant portion of the order of April 29, 2005, provided as
follows:
In the testimony, it is established that
Respondent [Nancy] has opened as many as ten
credit cards in her separate name.
Petitioner [Gene] did not have knowledge of
these cards until after the parties’
separation, and Respondent [Nancy] cannot
state the amount that was charged on the
cards prior to the separation as opposed to
subsequent to the separation. In addition,
Respondent frankly admits that the charges
were for “pageant stuff” for the parties’
adult daughter. It appears from the
evidence that the parties’ adult daughter
was involved in various beauty pageants and
that large expenditures were made by
Respondent after the separation for expenses
related thereto. The Commissioner did not
make an express finding as to the allocation
of these debts thereby by implication
allocating same to Respondent. The court
now expressly holds that Respondent’s credit
cards in her separate name are her nonmarital obligation and she shall be solely
responsible therefor.
Nancy argues that there was insufficient evidence for
the trial court to conclude that the debts were incurred solely
for “pageant stuff” for couple’s daughter or that Gene did not
know about the debt until after the separation.
Nancy has correctly cited Neidlinger v. Neidlinger, 52
S.W.3d 513 (Ky. 2001) as the controlling case in matters of debt
allocation.
Adopting the reasoning employed by this court in
Bodie v. Bodie, 590 S.W.2d 895 (Ky.App. 1979), the Supreme Court
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held in Neidlinger that in the absence of a statutory provision,
the court should imply no presumption with respect to marital
debts.
Debts incurred during marriage are to be assigned on the
basis of various equitable factors, including:
the receipt of
benefits, the extent of participation, analysis as to whether
the debt was incurred to provide for the maintenance and support
of the family, and the economic circumstances of the parties
relative to their respective abilities to assume indebtedness.
Neidlinger, 52 S.W.3d at 523.
In her deposition, Nancy stated that she did not know
whether Gene had learned of the debt before or after the divorce
proceedings began.
She was unable to say how much of the debt
had been incurred after commencement of the action, nor was she
able to provide any records (such as credit card statements) or
other explanation as to what she had purchased with the credit
cards beyond assisting her daughter with “pageant stuff.”
No
evidence was presented to indicate that any of the money was
used for marital purposes or that any of the marital assets
distributed in the dissolution action had been acquired with the
credit cards.
In the absence of such information, it was
impossible for the court to apply the Neidlinger factors.
Therefore, it did not abuse its discretion in determining that
the debt was non-marital based on the state of the evidence
before it.
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II. The Lots Adjoining the Marital Residence
Nancy’s next assignment of error concerns several
adjoining tracts of real property in the Mount Adams subdivision
of Ashland, the location of the marital residence.
She contends
that the trial court erred in characterizing these lots as
Gene’s non-marital property.
The marital residence is located at 2751 Adams Avenue.2
The property on which the house stands is composed of several
adjoining lots, numbered 112, 113, 114, 115, and 116.
The house
is situated primarily on Lot 113, overlapping slightly onto Lot
112 and Lot 114.
Lot 113 and the easterly ten (10) feet of lot
114 were sold to Gene by his father for one dollar on June 20,
1959 (approximately one year after Gene’s marriage to Nancy).
The remainder of Lot 114 along with Lots 115 and 116 were sold
by Gene’s father to Gene and Nancy jointly for one dollar in
1964.
Gene and Nancy purchased a five-foot portion of Lot 112
from Harry and Mollie Greene in 1964.
For purposes of the property settlement, the entire
parcel of real estate was appraised at $55,000.00.
appraisal was broken down as follows:
the land was valued at
$12,000.00 and the house at $43,000.00.)
2
(The
The DRC found that Lot
Gene owns two other lots, numbers 150 and 151, located at 2756 and 2753
Adams Avenue, respectively. There is no dispute that they are his nonmarital property.
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113 was Gene’s non-marital property, noting that Nancy had
conceded this point.
(Although we are unable to find any
evidence of her alleged concession in the record, Nancy does not
dispute the issue on appeal).
The DRC further determined that
since the total value of the land was $12,000.00, each of the
four disputed lots was worth approximately $3,000.00.
Gene was
awarded $3,000.00 for the value of lot 113 as his non-marital
property.
The house and remaining tracts of land were
classified as marital property with an aggregate value of
$52,000.00.
In dividing the real property between the parties,
the DRC recommended that Nancy be awarded the marital residence.
The court adopted the DRC’S Report and Recommendations in their
entirety.
In his motion to alter, amend, or vacate the court’s
order of April 12, 2005, Gene claimed that the DRC had committed
a “clerical oversight,” which he explained as follows:
[T]he Commissioner recites that the
residence is built on multiple lots
including lots 113, 114, 115, and 116. The
lots are, as the Commissioner found, Mr.
Blevins’ non-marital property. . . . [T]he
Commissioner awards the residence at 2751
Adams Avenue to Mrs. Blevins. The finding
of fact is mistaken to the extent that it
indicates that the residence is built on
lots 113, 114, 115, and 116. In fact, the
residence is built on and there has been
segregated for lot 113 and ten feet of 114.
Thereafter, in order to secure the boundary,
the parties acquired five feet of lot 112.
Thus, to convey the marital residence and
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surrounding property to Mrs. Blevins, the
Commissioner’s report and this court’s
judgment should provide that she be awarded
lot 113 and the easterly ten feet of lot 114
. . . . [and] the five foot strip of lot
112[.] The remaining portion of lot 114 and
all of lots 115 and 116 are clearly the nonmarital property of Mr. Blevins and should
be awarded to him expressly. It is clear
that the Commissioner intended to award to
Mrs. Blevins the residence and the
surrounding grounds related to and award to
Mr. Blevins his clearcut non-marital
property. (Emphasis added.)
Contrary to Gene’s assertion, the DRC did not make a
finding that the lots (other than Lot 113) were Gene’s nonmarital property.
Nonetheless, the court entered an order
granting Gene’s motion, reciting that:
[Nancy] is awarded the property at 2715
Adams Avenue, Ashland, Kentucky consisting
in the marital residence, lot 113, the
easterly ten feet of lot 114 and five feet
of lot 112 . . . . Petitioner [Gene] is
awarded the remaining portion of lot 114 and
any and all interest in lots 115 and 116[.]
On appeal, Nancy contends that the court in effect
found that a portion of Lot 114 and all of Lots 115 and 116 were
Gene’s non-marital property.
Thus, the order of the court
substantially altered the DRC’s findings on this issue,
amounting to much more than the correction of a “clerical
oversight.”
She claims that there is no evidence in the record
to support the contention that Lots 115 and 116 were Gene’s non-
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marital property; she reiterates that the DRC made no such
finding.
Gene has responded that the DRC misperceived the
nature of the property as he believed that the house was built
on Lots 113, 114, 115, and 116; in fact, it occupies only Lot
113 and minor portions of Lots 112 and 114.
He also argues that
the court did not necessarily find that the undeveloped lots
were Gene’s non-marital property but that it was attempting to
effectuate the true intent of the DRC to award Nancy the
residence and only the property upon which it is actually
situated.
The DRC found that Lot 113 alone was Gene’s nonmarital property, setting apart an award of $3,000 for that lot
from the total property assessment.
As to the remaining four
lots, there is no indication that the DRC committed an
oversight, misunderstood the nature of the property, or intended
to award lots other than 113 to Gene.
“A party claiming that
property, or an interest therein, acquired during the marriage
is non-marital bears the burden of proof.”
Sexton v. Sexton,
125 S.W.3d 258, 266 (Ky. 2004); KRS3 403.190(3).
There was no
proof presented that the disputed lots were Gene’s non-marital
property; he did not assert a claim to these lots in any of his
prior pleadings and submissions to the court.
3
Kentucky Revised Statutes.
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We conclude that the court erred in adopting Gene’s
version of the DRC’s report rather than relying on the plain
wording of that report as supported by the evidence presented to
the DRC.
Therefore, we vacate the court’s order of April 22,
2005, and remand it to the court entry of an order reinstating
the DRC’s finding:
namely, reciting that Gene’s non-marital
interest in the residence is $3,000 (his compensation for Lot
113) and directing that Nancy be awarded the marital residence,
including Lots 113, 114, 115, and 116, and the five-foot portion
of Lot 112.
III. Gene’s Pension
During the course of the marriage, Gene worked for the
City of Ashland and earned a pension of $866.81 per month.
He
also has a pipefitters pension of $55.00 per month and receives
Social Security in the amount of $543.00.
Gene takes a salary
of $500.00 per month from his small lawn and garden business -although the corporation usually operates at a deficit.
Nancy does not have a pension.
She did work part-time
outside the home, but she was primarily a homemaker during the
course of the marriage.
In her deposition, she testified that
she receives $419.00 in Social Security and approximately $80.00
per month in interest from certificates of deposit.
She was
awarded several income-producing rental properties as part of
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the property settlement.
The three rental properties (valued at
a total of $126,000.00) assigned to Nancy generate a monthly
income of $1,525.00.
She argues that since the income from
these properties is uncertain and that she also bears the burden
of their maintenance, she should receive one-half of Gene’s
pension in order to have a guaranteed income.
A vested pension plan is a form of deferred
compensation earned during the marriage. Consequently, it is a
marital asset and subject to division by the court. Brosick v.
Brosick, 974 S.W.2d 498, 504 (Ky.App. 1998).
Assuming that Gene is able to pay himself the $500.00
salary, his monthly income under the DRC’s recommendations will
be approximately $2,000.00 -- which is roughly equivalent to
Nancy’s monthly income under the settlement.
This arrangement
is equitable to Nancy and does not warrant reversal simply
because there may be some degree of uncertainty connected with
her rental income.
As the trial court noted, Gene’s income is
based on the assumption that he can continue to operate his
business at his age, “which he does not intend to do and should
not be expected to do.”
The court carefully weighed the
circumstances of both parties and did not abuse its discretion
in refusing to award Nancy any portion of Gene’s pension.
IV. The Lawrence County Property
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Nancy’s next argument concerns several tracts of real
property located in Lawrence County.
She contends that the
court erred in characterizing the land as Gene’s non-marital
property when he admitted that it was marital in his answers to
her interrogatories.
There are three parcels of real property in Lawrence
County.
One of them is a farm composed of three tracts that
were gifts to Gene from his father.
These gifts were all
completed before Gene’s marriage to Nancy.
The DRC properly
found, therefore, that the farm is Gene’s non-marital property.
Since significant improvements had been made to the farm during
the course of the marriage, the DRC allotted $41,500.00 (the
value of the land alone) as Gene’s non-marital share and
$38,500.00 as the marital share; i.e., the barn, the house, and
the garage.
The two other parcels, which Gene characterized as
marital in his answers to the interrogatories, are not part of
the farm.
The record is unclear as to whether they adjoin the
farm.
One parcel consists of fifty-five (55) acres conveyed
to Gene from Billy Ray Hicks in 1963.
The DRC accepted the
appraiser’s valuation of this property at $2,750.00.
(The
rather low amount may be explained by the fact that it is
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landlocked.)
The DRC found the property to be marital and
awarded it to Gene.
The other parcel, acknowledged by Gene to be marital,
consists of approximately seventy (70) acres.
It is undeveloped
land that Nancy and Gene have owned jointly with another couple,
Kermit and Margaret Rice.
It is involved in a dispute, which we
will discuss in the following section of this opinion. The DRC
found this parcel to be marital property.
He recommended that
it be sold and that the proceeds be divided equally between Gene
and Nancy.
The DRC’s findings regarding the real estate in
Lawrence County are all fully supported by deeds in the record.
Nancy contends that portions of the farm land are marital
property.
She bases that contention on Gene’s admissions as to
the farm regarding the two other -- clearly distinct -- tracts
of land.
The DRC equitably allowed for her marital contribution
to the enhanced value of the farm.
We are not persuaded that
the DRC erred in any of his findings on any piece of the
Lawrence County real estate.
V. The $7,500.00 Payment
We shall now review the seventy (70) acres in Lawrence
County owned jointly with Kermit Rice.
1966.
It was purchased in July
On February 18, 1998, Gene, Kermit, and Kermit’s wife,
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Margaret, executed a deed to sell the property to James Limberis
for $15,000.00.
Nancy has refused to sign the deed to transfer
the property, alleging that the name “Kermit Rice” was
fraudulently added as a purchaser to the 1966 deed.
She demands
that Kermit Rice’s name should be removed from the deed and that
she and Gene should receive the entire $15,000.00 in proceeds
from the sale.
It is not the task of this court to evaluate the
evidence in order to determine whether Kermit Rice’s name was
fraudulently added to the deed.
That issue is separate and
distinct from the property division before us.
The DRC
recommended that the land be sold and that Gene and Nancy’s
share of the proceeds, $7,500.00, be equally divided between
them.
The trial court did not abuse its discretion in adopting
the DRC’s recommendation.
VI. The Certificates of Deposit
The last asset consists of several certificates of
deposit totalling more than $100,000.00.
The CDs were
accumulated in Kentucky Farmers Bank during the course of the
marriage.
Neither party disputes that those certificates were
held jointly by Nancy and her mother in accounts with a right of
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survivorship.
When Nancy’s mother died in 1982, the accounts
passed to Nancy.
The DRC found that one-half of the certificates were
marital property; nonetheless, he awarded the entire amount to
Nancy.
In dividing the real property between Gene and Nancy,
the DRC acknowledged that he created a disparity as to values
received.
Gene received approximately $96,250.00 while Nancy
received $178,000.00.
Although the DRC stated that he was
inclined to award sufficient funds from the CDs to Gene in order
to equalize the discrepancy, he noted:
“Mr. Blevins has
testified that he is content that Mrs. Blevins have the Kentucky
Farmers Bank accounts in the event that he is awarded the real
property interests which have been recommended to be divided
above.”
Accordingly, the DRC awarded Nancy the full amount of
$100,000.
Nancy believes that she was injured by the DRC’s
characterization of one-half of the CD’s as marital in nature -despite the fact that she was awarded the full amount.
She
contends that if the DRC had properly determined the entire
amount of the certificates to be her non-marital property, she
would have received a more equitable property settlement overall
rather than having the alleged marital nature of the CD’s
detract from her award as to other assets.
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In finding that one-half of the amount of the CDs was
marital property, the DRC explained as follows:
The burden is on the Respondent [Nancy] to
offer evidence of their non-marital
component. The Respondent has testified
that the accounts were held jointly between
the Respondent and her mother during the
course of the marriage in accounts with
right of survivorship. No evidence has been
tendered to indicate the source of the funds
contributed to the accounts. The Respondent
argues that the funds contributed to the
account were entirely her mother’s funds and
that consequently the passage of these
accounts to her by right of survivorship
constitute[s] inheritance and/or gift.
There is no evidence to support this
contention. The Commissioner finds that
fifty percent of these funds represent Mrs.
Blevins’ assets and fifty percent represent
her mother’s assets. Consequently, fifty
percent of all the accounts at Kentucky
Farmers Bank in the form of CD’s are marital
property.
The sole support for Nancy’s argument that the CDs are
non-marital derives from two admissions by Gene.
When he was
asked about the CDs in his deposition, he stated, “That’s hers.
I don’t have any CDs.”
In his answers to her interrogatories,
he did not include them as a marital asset.
Nancy contends that
Gene’s failure to list the CDs as a marital asset despite his
knowledge of them is an absolute and binding admission that they
are non-marital in character.
We disagree.
As we have already noted, a party claiming that
property acquired during the marriage is non-marital bears the
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burden of proof.
Sexton, 125 S.W.3d at 266.
Nancy provided no
documentary evidence to support her contention that the assets
in the accounts came entirely from her mother.
In light of the
uncertainty regarding the full origin of these assets, the court
did not abuse its discretion in determining that one-half of the
CD asset was devised to Nancy by her mother (and that it was,
therefore, non-marital) and that the other one-half was marital
as having been acquired by Nancy during the course of the
marriage.
Even if the DRC had determined that the entire amount
of the CD’s to be non-marital, the property settlement as it
stands would still be equitable.
Nancy has received real
property valued at more than $80,000.00 in excess of the real
property awarded to Gene.
The court labored diligently and
wisely in dividing the property in this case.
The judgment of the Boyd Circuit Court is affirmed in
major part and vacated only with respect to the order of April
22, 2005, concerning the lots surrounding the house.
We remand
that portion of the judgment with directions that the court
enter an order incorporating the findings of the DRC on this
issue.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
R. Stephen McGinnis
Greenup, Kentucky
Gordon J. Dill
Ashland, Kentucky
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