RODGERS (CECIL R.) VS. RODGERS (EDWINA MAE)Annotate this Case
RENDERED: SEPTEMBER 5, 2008; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
CECIL R. RODGERS
APPEAL AND CROSS-APPEAL FROM CASEY CIRCUIT COURT
HONORABLE JAMES G. WEDDLE, JUDGE
ACTION NO. 81-CI-00033
EDWINA MAE RODGERS
AFFIRMING IN PART
VACATING IN PART AND REMANDING
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BEFORE: ACREE, DIXON AND TAYLOR, JUDGES.
ACREE, JUDGE: Cecil Rodgers appeals from an order of the Casey Circuit Court
entering a supplemental and final decree regarding division of property and child
support arrearages. Edwina Rodgers cross-appeals from that portion of the
supplemental decree awarding her only eight percent interest on child support
arrearages. We affirm in part, vacate in part, and remand for further proceedings.
The parties were divorced in 1982 after twenty-two years of marriage.
At the time of their divorce, the parties had two minor children and one adult child
who was a mentally handicapped dependant. Edwina sought and obtained custody
of the three and Cecil was ordered to pay $70.00 per week in child support and
provide their health insurance. The parties were ordered to divide their personal
property and sell their real property, with the proceeds to be equitably divided after
payment of existing marital debts. The circuit court’s order of July 7, 1982,
retained jurisdiction of the case until such time as all property had been sold or
divided between the parties. Further, the decree contained no recitation of finality,
pursuant to Kentucky Civil Rule (CR) 54.02.
Litigation between the parties continued for the next five and one-half
years, with disputes about the sale and division of property and the payment of
child support. Meanwhile, Edwina continued to live in the marital residence which
was never sold. Cecil lived in a house in Cincinnati, also jointly owned by the
parties. In 2001, Edwina obtained new counsel who began to try to finalize the
division of the parties’ marital property. Discovery was conducted through 2005,
and a supplemental and final order was not entered until May 1, 2007. The circuit
court ordered the parties’ homes to be sold, with the proceeds equally divided
between them, and divided personal property accumulated during the marriage
between them. Stock and dividends from stock owned during the marriage were
also ordered equally divided. Cecil was ordered to pay Edwina $28,480.00 for
child support arrearages and $35,818.31 in interest on unpaid child support. The
circuit court refused her request to set the interest rate at twelve percent per annum
and instead set the interest at eight percent. Cecil was granted credit for various
marital expenditures relating to the parties’ homes. The circuit court designated
this order as final and appealable, pursuant to the requirements of CR 54.02.
Cecil then filed a motion to amend, alter, or vacate the supplemental
decree. The circuit court issued an order on June 22, 2007, amending the decree to
reflect additional taxes paid by Cecil and relieving him of the obligation to provide
health insurance to the parties’ dependant, adult daughter. His remaining requests
were denied. The circuit court again included language designating the order as
final and appealable. This appeal and cross-appeal followed.
Cecil raises three issues on appeal. He first argues that the decree
entered in August 1982 was a final judgment and that Edwina’s motions filed in
2001 are barred by laches, the statute of limitations, and estoppel. We disagree.
Not only did the 1982 divorce decree not contain language designating it as final
and appealable under CR 54.02, the circuit court specifically stated that the case “is
to be retained on this Court’s docket until all property is sold or divided.” Even
when the supplemental decree was entered in 2007, the parties still owned marital
property which had yet to be sold or divided. We further note that Cecil has
completely failed to cite any statutes or cases which support his argument.
The case of Neal v. Neal, 122 S.W.3d 588 (Ky.App. 2002), does not
hold that a spouse is barred from seeking relief from a divorce decree after the
passage of fifteen years as claimed by Cecil. The spouses in Neal had only been
divorced for twelve years when the wife filed her first motion for relief under CR
60.02, but our opinion dealt with a second motion, filed fifteen years after the
divorce. The circuit court relied, in part, on the length of time since the divorce
decree when it refused to grant the requested relied. However, this Court’s opinion
was based on a determination that the wife failed to meet the requirements for
relief under CR 60.03 which allows independent actions seeking equitable relief.
The opinion is simply inapplicable to the situation at hand.
Cecil next contends that the circuit court erred in admitting a copy of
a child support order which may have been altered to replace a portion of the
record which was missing. The order in question was entered on June 30, 1986,
and increased Cecil’s child support obligation from $70.00 per week to $150.00
per week. Some time in the months that followed, the order was lost from the
court file. Upon learning of this, Edwina’s attorney instructed her to file her copy
of the order in the record. The clerk accepted Edwina’s copy and, after redacting
some personal notes which Edwina had written on the bottom of the page, filed it
in the official court record. This copy remained in the record without objection
from 1987 until the current controversy between the parties.
On appeal, Cecil argues that Edwina failed to prove the authenticity of
the 1986 order increasing his child support obligation. The circuit court held a
hearing in March 2005 and heard testimony regarding the entry of the order. Judge
Paul Barry Jones, who entered the 1986 order, was called as a witness in the action
below. Although he had no personal recollection of the hearing on Edwina’s
motion to increase child support, he did state that he recognized his signature on
the order and the date also was in his handwriting. Robert Bertram, Esq., who
represented Edwina in 1986, testified that he filed a motion to increase child
support on June 18, 1986, which was heard on June 23, 1986. After the motion
was granted, he drafted the order which the circuit judge subsequently signed and
entered. When he found out that the order was missing from the record, he asked
Edwina to give the circuit clerk a copy of the signed order to place in the file.
Bertram then used the copy of the order placed in the record as the basis for a
motion, filed in November 1987, to hold Cecil in contempt. He told the circuit
court that there had been no hearing to rescind or amend the 1986 order by the time
he withdrew from the case in 1988.
At the hearing Cecil testified that the 1986 order had, in fact, been
entered. His defense at that time was that the circuit court entered a subsequent
order rescinding the June 1986 order. In its supplemental decree, the circuit court
found that Cecil had made a judicial admission that the 1986 order was entered.
The circuit court further found that Cecil failed to prove that the 1986 order was
ever rescinded. CR 52.01 states, in part, 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.” We are required to affirm
the circuit court’s factual determinations unless they are clearly unsupported by the
evidence. Lawson v. Lawson, 228 S.W.3d 18, 21 (Ky.App. 2007). Since Cecil has
previously admitted the existence of the 1986 order and, further, failed to offer
concrete evidence that it was ever rescinded, we are bound to uphold the circuit
court’s determination that the order increasing his child support obligation was in
Cecil’s final argument on appeal is that the circuit court erred in
awarding Edwina any portion of the Proctor & Gamble stock which accumulated
subsequent to the 1982 decree dissolving the marriage. He contends that the
stock’s increase in value subsequent to the original divorce decree resulted from
his nonmarital efforts. The circuit court also took proof regarding this matter.
During the marriage, Cecil worked for Proctor & Gamble and acquired 808.001
shares of stock which were marital property. Before the original decree granting
the divorce was entered, Cecil sold the stock and invested the funds in a guaranteed
investment contract without consulting Edwina. The funds remained invested from
1982 through 1991, at which point they were converted to Proctor & Gamble
stock. In 1996, Cecil retired and transferred 3,560 shares of stock from his Proctor
& Gamble account into a new investment account with Merrill Lynch. Of those
shares, 1,616.002 were marital shares and 1,943.998 were Cecil’s nonmarital
Edwina introduced expert testimony from a stock broker showing how
many shares someone who owned 808.001 shares in shares in 1991 would own at
the time of the hearing in 2005 due to stock splits and the amount of dividends
such a holder would have been paid. Further, the circuit court had before it
deposition testimony from an employee of Proctor & Gamble which allowed it to
trace the proceeds from the marital shares into the current investment held by
Cecil. Finally, Cecil’s own account statements were introduced to show which
shares had been sold and how many marital shares remained in his possession at
the time of the hearing.
Although Cecil agrees that he purchased 808.001 shares of stock in
1991 with marital funds, he contends that the Merrill Lynch account also contained
stock purchased with nonmarital funds which Cecil accumulated after the original
divorce decree was entered. At the hearing, Cecil testified that he had previously
paid Edwina for her one-half interest in the guaranteed investment account.
However, he admits that he made no effort to track which stock was purchased
with marital funds and which stock came from nonmarital funds. He now claims
that it is impossible to trace the marital stock because it has been commingled with
his personal stock for fourteen years.
Based on the evidence before it, the circuit court made a factual
finding that Cecil had received $69,641.60 in dividends from marital stock and
ordered these dividends divided between the parties. In addition, the supplemental
decree contained a finding that
Edwina has successfully traced a “guaranteed investment
contract” owned at the date of the divorce into its current
form of 6,464 (actually now 6,200) shares of Proctor &
Gamble common stock presently held by Merrill Lynch
Pierce Fenner & Smith in an account in the name of
Cecil. This stock is marital to be divided in kind herein.
(Supplemental and final decree, entered May 1, 2007)(emphasis in original). Cecil
has not established on appeal that the circuit court’s findings were clearly contrary
to the evidence presented at the trial. Thus, we are bound to affirm the circuit
court. Lawson, 228 S.W.3d at 21.
Edwina argues on cross-appeal that the circuit court erred in setting
the interest rate on the child support arrearages at eight percent, rather than twelve
percent as she requested. She contends that the circuit court’s decision was
erroneous since, as a matter of law, she is entitled to twelve percent interest. (“A
judgment shall bear twelve percent (12%) interest compounded annually from its
date.” Kentucky Revised Statute (KRS) 360.040.)
The circuit court, citing Pursley v. Pursley, 144 S.W.2d 820 (Ky.
2004), concluded that “Edwina is entitled to simple interest at the rate of 8% per
annum upon each unpaid installment of child support from the date it became due.”
(Supplemental and final decree, entered May 1, 2007)(emphasis in original). We
note that the Supreme Court in Pursley did not address the effect of KRS 360.040.
Rather, in that opinion the issue was the noncustodial parent’s entitlement to
prejudgment interest, set by statute at eight percent. KRS 360.040(1). Further, this
Court has subsequently recognized that KRS 360.040 applies to child support
It is clearly discretionary with the court to award interest
on a child support arrearage; if there are factors making it
inequitable to require payment of interest it may be
denied. However, in this case, the trial court did not
make a finding of such inequity. . . .
The general rule is that interest should be allowed on
deferred payments of a fixed amount. KRS 360.040
contains the definitive formula for calculating interest on
child support arrearages. Once a payment becomes
delinquent, it becomes a judgment, and interest generally
runs from the payment's due date until it is paid. KRS
360.040 states, in pertinent part, “[a] judgment shall bear
twelve percent (12%) interest compounded annually from
its date.” The statute clearly and unambiguously requires
interest calculated therein to be compounded annually.
Gibson v. Gibson, 211 S.W.3d 601, 611 (Ky.App. 2006)(footnotes omitted).
As a consequence of our decision in Gibson, the circuit court’s
conclusion that Edwina would be entitled only to simple interest in the amount of
eight percent per annum was incorrect. Nonetheless, Edwina’s argument that she
is entitled, as a matter of law, to receive interest on the child support arrearages
owed to her is also incorrect. The circuit court has the discretion to deny a request
for interest on child support arrearages if it finds that imposing such interest on the
child support obligor would be inequitable. However, the circuit court failed to
make a determination in this case regarding the inequity of applying KRS 360.040
to Cecil’s unpaid child support obligation. Thus, we must vacate the portion of the
supplemental decree awarding Edwina interest at the rate of eight percent per
annum and remand the case for further proceedings.
For the foregoing reasons, this case is affirmed in part, vacated in part,
and remanded for further proceedings consistent with this opinion.
BRIEF FOR APPELLANT AND
BRIEF FOR APPELLEE AND
Edward D. Hays
Jerry L. Foster