KOONCE (ALICE) VS. KOONCE (JACKIE)Annotate this Case
RENDERED: OCTOBER 10, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
APPEAL FROM HENDERSON FAMILY COURT
HONORABLE SHELIA NUNLEY-FARRIS, JUDGE
ACTION NO. 05-CI-00623
AFFIRMING IN PART,
REVERSING IN PART, AND REMANDING
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BEFORE: CLAYTON, NICKELL AND TAYLOR, JUDGES.
CLAYTON, JUDGE: This action comes before us on an appeal of Findings of
Fact, Conclusions of Law, Judgment and Decree of Dissolution entered on
September 5, 2006, in the Henderson Family Court. The Appellant, Alice Koonce,
contends that the family court erred in the division of property in her divorce from
the Appellee, Jackie Koonce. She also takes issue with the family court’s findings
regarding dissipation of assets, division of debts and attorney’s fees.
Alice and Jackie were married on June 5, 1971, and had one (1) child
together. They physically separated in February of 2004. Prior to that date, Jackie
contends that they were leading separate financial lives by agreement. The family
court found Jackie’s testimony regarding the couple’s division of marital assets
prior to their physical separation to be credible and based its decision regarding the
division of marital property on that date. Alice, however, contends that there was
no agreement between her and Jackie regarding a division of finances at that point.
As a result, she argues that the family court judge erred when she divided the
marital property with this date in mind.
The family court judge found that the parties had the following
agreement as to a division of assets:
½ 401 K
Edward Jones IRA
½ Money Market
½ Money Market
She set forth that there was evidence in Alice’s own handwriting that
the money market account had not been equally divided. Rather than paying
Jackie half of the balance of the account ($42,500), Alice had transferred the
money to a Fifth Third Bank account in her name and paid him $25,000.
Both Alice and Jackie agreed that the stock was liquidated and that
they each received half of the proceeds. This occurred through three (3) separate
transactions in September, November and December of 2003. The family court
judge found that the “incomplete” parts of the above division of assets were “the
division of the 401K, delivery of the $10,000 to equalize the Edward Jones, and
payment by Wife of $50,000.00 for Husband’s interest in the marital residence.”
Order entered September 5, 2006, at p. 4.
STANDARD OF REVIEW
Kentucky Rules of Civil Procedure (CR) 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.” A judgment is not “clearly erroneous” if it is “supported by substantial
evidence.” Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414
(Ky. 1998). Substantial evidence is “evidence of substance and relevant
consequence having the fitness to induce conviction in the minds of reasonable
men.” Id., citing Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298,
308 (Ky. 1972). Questions of law, however, are subject to de novo review.
Western Kentucky Coca-Cola Bottling Co., Inc. v. Revenue Cabinet, 80 S.W.3d
787, 790 (Ky. 2001).
Alice first argues that the family court judge erred when she
designated August of 2002 as the date of separation of the parties. She contends
that, as set forth in the Petition for Dissolution of Marriage (“Petition”), February
7, 2004 is the date when the parties separated. She asserts that this same date is
reflected in the pre-trial compliance disclosures and income tax returns. Alice
argues that Jackie admitted this when he filed his Answer to her Petition.
The family court found that the parties had separated in 2002 based
upon an agreement they entered into whereby they would maintain separate
finances. Jackie contends that this came about after he discovered debt in his name
that Alice had incurred. Alice, however, contends they did not legally separate at
that point, consequently, she argues the date of separation should have been the
date they actually separated.
KRS 403.190(3) provides that,
All property acquired by either spouse after the
marriage and before a decree of legal separation is
presumed to be marital property, regardless of whether
title is held individually or by the spouses in some form
of co-ownership such as joint tenancy, tenancy in
common, tenancy by the entirety, and community
property. The presumption of marital property is
overcome by a showing that the property was acquired by
a method listed in subsection (2) of this section.
Subsection (2) provides that:
For the purpose of this chapter, “marital property”
means all property acquired by either spouse subsequent
to the marriage except:
(a) Property acquired by gift, bequest, devise, or descent
during the marriage and the income derived therefrom
unless there are significant activities of either spouse
which contributed to the increase in value of said
property and the income earned therefrom;
(b) Property acquired in exchange for property acquired
before the marriage or in exchange for property acquired
by gift, bequest, devise, or descent;
(c) Property acquired by a spouse after a decree of legal
(d) Property excluded by valid agreement of the parties;
(e) The increase in value of property acquired before the
marriage to the extent that such increase did not result
from the efforts of the parties during marriage.
Alice contends that there was no legal separation and we agree. The
family court judge looked to the date of August 2002 because she found that the
parties had “legally separated” at that point in their relationship. The judge relied
upon testimony by Jackie in making her decision. “Legal separation,” however,
requires more than the actions taken by the couple in this instance. “‘Separation’
means a legal one granted by a decree entered pursuant to KRS 403.140(2). The
language of the legislature is so definitive it not only does not require, but rather
prohibits, us from engrafting any exception based on mere ‘actual’ separation.”
Stallings v. Stallings, 606 S.W.2d 163-64 (Ky. 1980). There was no decree of
legal separation or any of the other enumerated exceptions listed in
In the present action, the family court incorrectly concluded that the
parties had legally separated in the summer of 2002. The correct date to be used
under the law was the date of the decree of dissolution of marriage which was
September 5, 2006. Thus, in making her property distribution, the trial judge
Next, Alice argues that the family court incorrectly found that she had
dissipated assets of the marriage. First, the trial judge found that the assets above
existed during the marriage of the parties. She also found that Alice had expended
funds in the amount of $112,000 from 2002 until the dissolution proceeding. This
was based on credit card debt, as well as liquidation of assets.
In Bratcher v. Bratcher, 26 S.W.3d 797, 799 (Ky. App. 2000), the
Court found that “[t]he evidence must only show dissipation occurred during a
separation or when dissolution was pending and that there was a clear intent on the
part of the dissipator to deprive the spouse of marital assets.” (citing Brosick v.
Brosick, 974 S.W.2d 498, 502 (Ky. App. 1998). The family court judge found that
Alice had “dissipated martial assets which were placed in her custody and control
after the parties’ division of property which occurred throughout 2002, 2003, and
2004.” Opinion at p. 7. This, too, must be remanded to the Henderson Family
Court for findings based upon the actual date of separation.
Alice next argues that the judge erred in her division of the debts of
the parties. The family court looked to the factors set forth in Neidlinger v.
Neidlinger, 52 S.W.3d. 513, 522 (Ky. 2001), in determining how the debts should
be divided. As set forth in Neidlinger, “[t]here is no statutory authority for
assigning debts in an action for dissolution of marriage.” Neither, “is there a
statutory presumption as to whether debts incurred during the marriage are marital
or nonmarital in nature.” Id. The family court judge went on to hold that factors
such as receipt of benefits, extent of participation, whether it was for marital
property, whether it was for the maintenance and support of the family and the
economic circumstances of the parties should be taken into account in dividing
debt incurred during the marriage. Id.
Using these factors, the judge held Alice responsible for the debt.
There is clearly evidence in the record which supports the judge’s decision on this
issue. There was testimony of elaborate vacations and shopping sprees as well as
the amassing of credit cards of which Jackie was unaware. Thus, we will affirm
the family court judge’s decision on the division of debts.
Finally, Alice contends that the judge erred when she awarded Jackie
payment of legal fees in the amount of $1,020. This was based on nine (9) hours
of legal services and $100 per hour plus $120 in “cost of service.” This amount
was based on a contempt motion regarding appraisal of personal property Alice
had in a storage locker.
KRS 403.220 provides that:
[A]fter considering the financial resources of both parties
[a court] may order a party to pay a reasonable amount
for the cost to the other party of maintaining or defending
any proceeding under this chapter and for attorney’s
The judge found that Alice’s action caused a delay in the appraisal of
the personal property and that Jackie’s contempt motion was a direct result of her
actions. Thus, we will uphold her award of attorney’s fees and affirm her decision
on this issue.
In summation, we reverse in part the judgment of the Henderson
Family Court and remand this case for a proper distribution of marital property
pursuant to KRS 403.190 and a reconsideration of the dissipation of assets issue in
accordance with Bratcher. The Henderson Family Court’s judgment regarding the
division of debts and awarding of attorneys’ fees is affirmed.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Zack N. Womack
Chad E. Groves