RABE (PAIGE) VS. RABE (CHRISTOPHER)Annotate this Case
RENDERED: NOVEMBER 26, 2008; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE GREGORY M. BARTLETT, JUDGE
ACTION NO. 05-CI-03138
AFFIRMING IN PART,
REVERSING IN PART,
** ** ** ** **
BEFORE: ACREE, DIXON, AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Paige Rabe brings Appeal No. 2007-CA-001594-ME from a
July 6, 2007, Findings and Conclusions, and brings Appeal No. 2007-CA-002251ME from an October 11, 2007, Order of the Kenton Circuit Court dissolving the
parties’ marriage, awarding custody of the parties’ child, setting child support, and
disposing of marital and nonmarital property. We affirm in part, reverse in part,
Paige and Christopher Rabe were married November 29, 2003, and
divorced by decree of dissolution of marriage entered in the Kenton Circuit Court
on July 6, 2007. One child, Layne E. Rabe, was born of the marriage. During the
marriage, Christopher was the sole owner and operator of CRX Transportation,
LLC (CRX). CRX provided Christopher with an income of $350,000 to $400,000
per year. Paige has a Master’s Degree in Education and had previously been
employed as a teacher; Paige stayed home during the marriage to care for the
During the dissolution proceedings, there was substantial dispute
between the parties concerning child custody, child support, and disposition of
marital and nonmarital property. After hearing considerable evidence, the circuit
court entered its Findings and Conclusions on July 6, 2007. Therein, the circuit
court awarded the parties joint custody of Layne and designated Paige primary
residential custodian. Christopher was awarded visitation and ordered to pay child
support of $1,225 per month. The court also allocated certain nonmarital property
to each party and divided the parties’ marital property. Believing the circuit court
erred upon myriad issues, Paige brings these appeals.1
Paige initially contends that the circuit court erred by awarding the
parties joint custody of their minor child, Layne. Paige alleges that the circuit
By a November 20, 2007, order of this Court, Appeal Nos. 2007-CA-001594-ME and 2007CA-002251-ME were consolidated for appellate review.
court failed to make findings of fact concerning the best interests of Layne and
specifically failed to make findings of fact concerning whether Christopher’s acts
of domestic violence affected Layne.
Appellate review of a child custody determination focuses upon
whether the circuit court’s findings of fact are clearly erroneous. Moore v. Asente,
110 S.W.3d 336 (Ky. 2003); Reichle v. Reichle, 719 S.W.2d 442 (Ky. 1986). Of
course, a circuit court’s application of the law to the facts is reviewed de novo.
Allen v. Devine, 178 S.W.3d 517 (Ky.App. 2005).
Kentucky Rules of Civil Procedure (CR) 52.01 is applicable to
custody determinations and provides, in relevant part:
In all actions tried upon the facts without a jury . . .
the court shall find the facts specifically and state
separately its conclusions of law . . . .
The primary reason that CR 52.01 requires the circuit court to make specific
findings of fact is to provide a basis for adequate appellate review. Reichle, 719
S.W.2d 442. However, a circuit court’s failure to make adequate findings of fact
must be brought to the court’s attention by a motion for more definite findings
under CR 52.04 or the error is considered waived. Cherry v. Cherry, 634 S.W.2d
423 (Ky. 1982). This is distinguished from a case where the circuit court fails to
make any findings of fact upon an issue, which results in reversible error
regardless of a CR 52.04 motion. Brown v. Shelton, 156 S.W.3d 319 (Ky.App.
In the case at hand, the circuit court failed to make any findings of
fact concerning the best interests of Layne when determining child custody. In
fact, the court failed to even make the conclusory finding that joint custody was in
Layne’s best interests. Additionally, the circuit court did not make specific
findings concerning the relevant factors necessary to determine the best interests of
the child as delineated in KRS 403.270(2). In short, the circuit court neglected to
set forth any findings of fact as to Layne’s best interests. We regard such a
complete omission as reversible error. Upon remand, the circuit court shall
reconsider its award of custody and shall make specific findings of fact and
conclusions of law as to the best interests of the child in conformity with KRS
403.270.2 We further regard Paige’s contention of error as to visitation to be moot
considering our reversal of the circuit court’s child custody determination. See
Paige next contends the circuit court erred by failing to deviate from
the child support guidelines in calculating Christopher’s monthly child support
obligation. Paige points out that Christopher’s gross income totals more than
$30,000 per month; thus, his income “would be approximately $15,000 in monthly
income over the guidelines.”
The child support guidelines of this Commonwealth are codified in
Kentucky Revised Statutes (KRS) 403.212. KRS 403.211(2), specifically provides
We also note that Kentucky Revised Statutes (KRS) 403.270 would require the court to
consider the allegation of domestic violence and, if proven, its impact upon the child in awarding
that the guidelines are to “serve as a rebuttable presumption for the establishment
or modification of the amount of child support.” KRS 403.211(2); Downing v.
Downing, 45 S.W.3d 449 (Ky.App. 2001). Under KRS 403.211(2), the circuit
court may deviate from the child support guidelines upon making a “written
finding” that the guidelines’ application to a particular case would be unjust or
inappropriate. An appropriate adjustment of a guideline award may be made based
upon the existence of one of seven criteria found in KRS 403.211(3).
As an appellate court, we defer to the circuit court’s discretion in
setting the amount of child support. See Downing, 45 S.W.3d 449. The Court of
Appeals will not reverse the circuit court’s decision upon child support “[a]s long
as the trial court’s discretion comports with the guidelines, or any deviation is
adequately justified in writing.” Id. at 454. A circuit court’s decision on child
support would constitute an abuse of discretion only if it is “arbitrary,
unreasonable, unfair, or unsupported by sound legal principles.” Id. at 454.
In this case, it is uncontroverted that Christopher’s monthly gross
income well exceeded the upper level of the guidelines’ income table. In its July 6,
2007, Findings and Conclusions, the circuit court found that Christopher’s income
“ranges between $350,000.00 to $400,000.00 per year [which] clearly places the
parties beyond the child support guidelines contained in KRS 403.212.” In her
brief, Paige mainly focuses her argument upon the fact that Christopher’s monthly
gross income exceeded the guidelines and that the circuit court erred by failing to
deviate from the guidelines. She devotes only one sentence to the argument that
“her family’s expenses, lifestyle, and needs” also justify deviation from the
The mere fact that a parent’s monthly income exceeds the upper level
of the child support guidelines’ income table does not require the circuit court to
deviate from the guidelines. Downing, 45 S.W.3d 449. Rather, in a case where the
parent’s monthly income exceeds the guidelines, the decision to deviate and set the
amount of child support above the guidelines must be based upon the “reasonable
needs” of the child. Id. at 456. In defining this concept, the Court of Appeals has
noted its fluidity and focused upon several factors bearing upon “reasonable
Factors which should be considered when setting child
support include the financial circumstances of the parties,
their station in life, their age and physical condition, and
expenses in educating the children. The focus of this
inquiry does not concern the lifestyle which the parents
could afford to provide the child, but rather it is the
standard of living which satisfies the child's reasonable
and realistic needs under the circumstances. Thus, while
a trial court may take a parent's additional resources into
account, a large income does not require a noncustodial
parent to support a lifestyle for his children of which he
does not approve.
Id. at 457 (citations omitted).
In the case sub judice, the circuit court specifically concluded “there is
a lack of evidence as to any needs of the child that would require the Court to order
[Christopher] to pay beyond the maximum amount called for in the Guidelines.”
Likewise, in her brief, Paige has failed to identify any evidence in the record
demonstrating that the child’s reasonable needs require deviation from the child
support guidelines. Consequently, we hold that the circuit court did not abuse its
discretion by failing to deviate from the child support guidelines in setting child
Paige also argues that the circuit court erred by awarding Christopher
a nonmarital interest in the home on Prestwick Drive and in the home on Woodlyn
Hills. The Prestwick Drive home was purchased during the marriage and served as
the parties’ primary marital residence. As to this property, the record indicates that
Christopher initially paid $221,902 toward the purchase. This money originated
from two Fifth Third checking accounts, Account Nos. 3882 and 7968.3 The home
on Woodlyn Hills was purchased by Paige prior to the marriage and served as her
premarital residence. As to this home, the record reveals that during the marriage
Christopher paid off the mortgage on this property in the amount of $167,391; this
money was directly taken from Account No. 7968, after a substantial deposit into
that account from Account No. 3882.
Both Fifth Third checking accounts were in Christopher’s name and
were only accessible by Christopher, even after the parties were married. Account
No. 3882 was opened prior to the marriage and had a balance of $690,000
immediately preceding the marriage. Account No. 7968 was opened during the
marriage with a deposit of $374,532. The $374,532 was taken from a closed
The payment of $221,902 was actually comprised of $84,083 paid at closing from Fifth Third
Account No. 3882 and of $137,819 from a second mortgage. The second mortgage was
subsequently paid off with proceeds from Account Nos. 3882 and 7968.
securities account; the securities account had been funded with a deposit from
funds withdrawn from Account No. 3882.
In allocating Christopher a nonmarital interest in the marital home on
Prestwick Drive and in Paige’s premarital home on Woodlyn Hills, the circuit
court specifically stated:
Despite the voluminous records and the numerous
transactions undertaken by [Christopher] with his
financial accounts, this Court is satisfied and finds that a
substantial part of the pre-marital balance of $690,000.00
can be traced to marital property. Specifically, the Court
finds that $221,902.00 was paid towards the purchase of
the residence on Prestwick Drive and $167,000.00 was
paid to retire the mortgage on [Paige’s] home on
Woodlyn Hills Drive. As a result, those accounts will be
restored to [Christopher] as his non-marital property.
[Christopher] will be awarded his bank account
with Fifth Third, Account No. XXX-7968.
It is clear that the circuit court treated the payments of $221,902 toward the
purchase of the marital residence on Prestwick Drive and of $167,391 toward the
mortgage on Paige’s premarital home on Woodlyn Hills as nonmarital
contributions by Christopher. For the reasons hereinafter stated, we conclude that
the circuit court erred by characterizing the payments of $221,902 and $167,391 as
Christopher’s nonmarital contributions; instead, we hold that these payments
should be properly characterized as payments from marital funds. Because of the
convoluted record in this case, we will address the payments on these properties in
To properly allocate and divide property in a dissolution of marriage
proceeding, the court must: (1) classify the property as marital or nonmarital, (2)
assign each party his/her nonmarital property, and (3) divide marital property in
just proportions. KRS 403.190; Hunter v. Hunter, 127 S.W.3d 656 (Ky.App.
2003). The classification of property as marital or nonmarital is not open to the
circuit court’s discretion but, rather, is a question of law. Heskett v. Heskett, 245
S.W.3d 222 (Ky.App. 2008); Jones v. Jones, 245 S.W.3d 815 (Ky.App. 2008);
Holman v. Holman, 84 S.W.3d 903 (Ky. 2002). And, our review proceeds de
novo. Holman, 84 S.W. 3d 903; Heskett, 245 S.W.3d 222. On the other hand, the
division of marital property is left to the sound discretion of the circuit court and
will not be disturbed on appeal absent an abuse of that discretion. See Neidlinger
v. Neidlinger, 52 S.W.3d 513 (Ky. 2001).
In this Commonwealth, there exists a statutory presumption that all
property acquired during the marriage is marital. KRS 403.190(3). This
presumption may be rebutted by the party claiming a nonmarital interest. KRS
403.190(3). The party claiming a nonmarital interest carries the burden of proof.
Such burden must be proven by clear and convincing proof that the property is
nonmarital. Terwilliger v. Terwilliger, 64 S.W.3d 816 (Ky. 2002); Browning v.
Browning, 551 S.W.2d 823 (Ky. 1977).
In this case, the marital home on Prestwick Drive was acquired during
the marriage; thus, there exists a statutory presumption that the home is marital
property. However, the circuit court found that Christopher’s payment from Fifth
Third Account No. 3882 in the amount of $221,902 was from nonmarital funds. In
so finding, the circuit court concluded that Christopher had “traced” this payment
to his “pre-marital balance of $690,000.00” in the Fifth Third account.
The Kentucky Supreme Court has recently defined tracing as “[t]he
process of tracking property’s ownership or characteristics from the time of its
origin to the present.” Sexton v. Sexton, 125 S.W.3d 258, 266 (Ky. 2004)(citing
BLACK’S LAW DICTIONARY 1499 (7th ed. 1999)). It has been observed that tracing is a
judicially created concept arising from the marital property presumption of KRS
403.190(3). Id. To successfully rebut the marital property presumption and trace a
nonmarital property interest, a party must: (1) identify the property acquired
during marriage in which he/she asserts a nonmarital interest, and (2) trace or track
the nonmarital interest back to a specific nonmarital asset.
Here, Christopher adequately traced the $221,902 payment toward the
purchase of Prestwick Drive to Fifth Third Account Nos. 3882 and 7968.
However, during trial, Christopher testified that income he earned during the
marriage was routinely deposited into Account No. 3882. Moreover, the evidence
clearly demonstrates that such income was also either directly or indirectly
deposited into Account No. 7968.
It is well-established that income earned during marriage is generally
marital property. See Dotson v. Dotson, 864 S.W.2d 900 (Ky. 1993).
Thus, it is
clear that both Fifth Third checking accounts contained marital and nonmarital
funds that were comingled. As the burden was placed solely upon Christopher to
demonstrate his nonmarital property interest by clear and convincing evidence, we
think Christopher failed to adequately prove that the Fifth Third checking accounts
were purely nonmarital or that the $221,902 paid toward the purchase of the
marital residence on Prestwick Drive was solely derived from his nonmarital funds
of $690,000. Stated differently, Christopher traced the payment of $221,902
during the marriage to the Fifth Third accounts, but the accounts contained both
marital and nonmarital funds that were comingled. As such, it was then incumbent
upon Christopher to prove that the $221,902 was taken solely from the nonmarital
funds of $690,000. This he failed to do.
Similarly, Christopher failed to adequately trace his payment of
$167,391 on the mortgage of Paige’s premarital home on Woodlyn Hills. Like the
marital residence, this payment was made during the marriage and was directly
taken from Account No. 7968, after a transfer of funds from Account No. 3882.
As the payment of $167,391 was made during the marriage, there exists a
presumption that it was from marital funds and Christopher carries the burden to
rebut said presumption. See Travis v. Travis, 59 S.W.3d 904 (Ky. 2001). Allison
v. Allison, 246 S.W.3d 898 (Ky. 2008). As hereinbefore stated, both Fifth Third
accounts contained marital funds in the form of substantial income Christopher
earned during the marriage. As such, the Fifth Third accounts were comingled
with both marital and nonmarital funds. While Christopher traced his payment of
$167,391 directly to Account No. 7968 and indirectly to Account No. 3882, he
failed to prove that this payment was solely derived from nonmarital funds in the
In sum, we are of the opinion that the payments of $221,902 and
$167,391 made during the marriage for the benefit of the Prestwick Drive and
Woodlyn Hills properties constituted payments from marital property, and not
nonmarital contributions as erroneously concluded by the circuit court. On
remand, the circuit court shall divide the marital property pursuant to KRS
403.190, in light of our ruling on the payments made for the benefits of the
Prestwick Drive and Woodlyn Hills properties during the marriage.
Paige also alleges that the circuit court erred in awarding Christopher
“certain credits for mortgage payments, taxes, and insurance made” upon the
marital home on Prestwick Drive after entry of the decree of dissolution. In its
Findings and Conclusions, the circuit court held:
Effective August 1, 2007, if [Paige] continues to reside in
the home at Prestwick Drive pending sale of the property,
[Christopher] will be given credit for mortgage,
insurance, and tax payments made. Reimbursement for
these amounts will be made out of the sale proceeds.
In effect, the circuit court awarded Christopher a “credit” for the mortgage
payments, taxes, and insurance paid after entry of the decree. To the extent that
the circuit court ordered a dollar-for-dollar credit for mortgage payments, taxes,
and insurance paid by Christopher, the court erred. Christopher is only entitled to
a “credit” equal to the sum that the mortgage payments reduced the principal
mortgage indebtedness for the marital home on Prestwick Drive. See Gibson v.
Gibson, 597 S.W.2d 622 (Ky.App. 1980); Drake v. Drake, 809 S.W.2d 710
(Ky.App. 1991). Hence, we are of the opinion that the circuit court erred by
awarding Christopher a dollar-for-dollar credit for the mortgage, taxes, and
insurance payments made after entry of the decree. Rather, Christopher shall only
be entitled to receive credit for those payments to the extent the payments reduced
the principal mortgage indebtedness.
Paige next argues that the circuit court erred by awarding Fifth Third
Account No. 7968 to Christopher as his nonmarital property. The record reveals
that Account No. 7968 was opened during the marriage with funds from a
securities account, which was funded by a deposit from Fifth Third Account No.
3832.4 As hereinbefore stated, both marital and nonmarital funds were deposited
into Account No. 7968. As such, Account No. 7968 is not a purely nonmarital
asset. As it was opened during marriage, there exists a presumption that the
account is marital property and the burden is upon Christopher to rebut the
presumption. See Travis, 59 S.W.3d 904; Allison, 246 S.W.3d 898. Christopher
offers no evidence, by accounting or otherwise, to prove or separate the nonmarital
portion of the account from the marital portion. Since Christopher has failed to
rebut the statutory presumption that Account No. 7968 is marital property, we
conclude the circuit court erred by awarding this account to Christopher as his
nonmarital property. Rather, we hold that Account No. 7968 constitutes marital
property. Upon remand, the circuit court shall determine its value as of the date of
A deposit of $374,532 was made to open Account No. 7968. We also note that Account No.
3882 was closed by Christopher during the marriage.
entry of decree of dissolution of marriage and shall divide it in just proportions in
accordance with KRS 403.190(1).
Paige additionally contends that the circuit court erred by failing to
classify funds in the US Bank checking account as marital property. The circuit
court concluded that the “account balance is part of the business which has been
separately valued as part of [the] marital property” and that Paige was awarded
one-half of the increased value of CRX. The circuit court did not, however,
separately value or divide the US Bank account.
The record reveals that the US Bank account was in the name of CRX
and was used for business purposes. Moreover, Paige’s own expert witness
included the US Bank account in his valuation of CRX. Upon the whole, we do
not believe the circuit court erred in its classification and division of the US Bank
account as part of CRX.
Paige also argues that the circuit court erred in its valuation of CRX.
Christopher owned and operated CRX prior to the marriage and is the sole owner
of that business. During trial, both Paige and Christopher offered expert testimony
concerning CRX’s value and, more specifically, concerning the increase in value
of CRX during the marriage. Paige’s expert opined that during the marriage CRX
increased in value by $461,856. Conversely, Christopher’s expert opined that
CRX only increased in value by $148,718 during the marriage.
The circuit court viewed the approach utilized by Christopher’s expert
as “more accurate.” However, the circuit court slightly modified the approach by
using an earnings multiplier of two (rather than one) and by not discounting CRX’s
value by a 10 percent broker’s fee. Under this modified approach, the circuit court
determined that CRX increased in value by $204,937 during the marriage.
Paige specifically maintains that the circuit court erred by relying
upon the opinion of Christopher’s expert to value CRX. Paige states that the
valuation of CRX by Christopher’s expert was flawed because:
[T]he false representation of [Christopher] to the valuator
to [Christopher’s] business had a single customer that
made up nearly 80% of the company’s business and that
without this one customer the business would “fold.”
This is inaccurate. Additionally, [Christopher’s] expert
was not aware that [Christopher] had a sales agency
agreement with Target Logistics and that [Christopher]
has many customers that he supplies under this
contractual sales agency. . . . (Citations omitted.)
In this Commonwealth, there does not exist a “single best method” or
approach for the valuation of a corporation in an action for dissolution of marriage.
Clark v. Clark, 782 S.W.2d 56 (Ky.App. 1990). As an appellate court, our role is
limited to determining whether the circuit court’s approach “reasonably
approximated the net value” of the corporation. Id. at 59. And, the circuit court’s
valuation is a question of fact, which will only be disturbed on appeal if clearly
erroneous. CR 52.01; Lane v. Lane, 202 S.W.3d 577 (Ky. 2006); Brunson v.
Brunson, 569 S.W.2d 173 (Ky.App. 1978). A finding of fact is clearly erroneous if
it is not supported by substantial evidence. Substantial evidence is defined as
“evidence, when taken alone or in light of all the evidence, which has sufficient
probative value to induce conviction in the mind of a reasonable person.” Hunter
v. Hunter, 127 S.W.3d at 659.
During his testimony, Christopher’s expert stated that he did not
independently investigate the facts underlying his opinion as to the value of CRX.
Instead, Christopher’s expert relied upon CRX’s tax returns and information
supplied by Christopher concerning CRX’s operations. Relevant to this appeal, it
was the expert’s testimony that some 60 - 80 percent of CRX’s business was
generated by a single customer, Target. Moreover, it was the expert’s belief that
this one customer (Target) could terminate its business with CRX upon giving
thirty days notice. Because up to 80 percent of CRX’s business was with one
customer who could unilaterally terminate the business relationship, Christopher’s
expert opined that CRX’s existence was “fragile” and ultimately utilized a low
earnings multiplier of one.
As pointed out by Paige and later evidenced by Christopher’s
testimony, Christopher’s expert was mistaken concerning the business relationship
between CRX and Target. Rather than Target being CRX’s largest customer,
Christopher testified that CRX was an “agent” of Target pursuant to a franchise
agreement. Under this agreement, Target supplied no business to CRX; CRX
generated all of its business independently. CRX’s business relationship with
Target simply enabled CRX to obtain lower air-freight rates. Christopher also
testified that Target would ordinarily bill CRX’s customers directly and thereafter
remit a percentage of that amount to CRX.
It is clear that Christopher’s expert possessed a mistaken
understanding of CRX’s business operations and, in turn, relied upon patently
inaccurate information to form the basis of his opinion upon CRX’s value. An
expert’s opinion that is based upon patently inaccurate and erroneous facts cannot
constitute substantive evidence of a probative value. Indeed, such spurious expert
opinion could not induce conviction in the mind of a reasonable person.
In this case, the circuit court relied upon the opinion of Christopher’s
expert in its valuation of CRX but slightly deviated therefrom by utilizing an
earnings multiplier of two and by eliminating a broker’s fee. The circuit court,
however, failed to make any findings of fact concerning the reason for its deviation
from the expert’s valuation, including the court’s application of an earnings
multiplier of two. As the valuation of Christopher’s expert was based upon
inaccurate information and, thus, lacking in probative value, the circuit court’s
reliance upon this expert’s valuation was error in the absence of specific findings
justifying reliance thereupon. Stated differently, if a circuit court elects to rely
upon expert opinion founded upon inaccurate, mistaken, or false facts, it must set
forth the reasons justifying such reliance in specific findings of fact. Upon
remand, the circuit court shall reconsider its valuation of CRX. If it chooses to
again rely upon the valuation of Christopher’s expert, it shall set forth specific
findings of fact justifying such reliance, taking into consideration the matters
addressed by this Court above.
Paige next argues that the circuit court erred by failing to invoke the
equitable doctrine of unclean hands in its division of marital property. In
particular, Paige maintains:
[Christopher] has “unclean hands” due to his
dissipation of material assets, his concealment of marital
assets, overstated and fabricated liabilities, his
fraudulently filed affidavit, and his under reporting of
income to the IRS. The actions of [Christopher] bar any
relief under the clean hands doctrine. . . .
[Christopher] underreported his income, liquidated
marital assets to pay back non-marital taxes in an attempt
to prevent [Paige] from acquiring her equitable share of
the marital assets. He should not be allowed to benefit
from his wrongdoing. This is directly related to the
liquidation of the marital certificates of deposit in the
amount of $350,000.00. [Christopher] had these marital
monies stored in certificates of deposit, and when he
amended his tax returns, he liquidated some of the
certificates of deposit and secured loans collateralized by
other certificates of deposit to pay the non-marital tax
liabilities. When the remaining certificates of deposit
matured, he paid off the non-marital loans. [Paige] was
not given a set off or credit for her marital interest in
these monies that are clearly a [sic] marital assets.
Dividing property in the instant case requires the court to
invoke the clean hands maxim. (Citations omitted.)
Paige’s Brief at 22 – 24.
Under the “unclean hands doctrine,” a party is precluded from judicial
relief if that party “engaged in fraudulent, illegal, or unconscionable conduct” in
connection “with the matter in litigation.” Suter v. Mazyck, 226 S.W.3d 837, 843
(Ky.App. 2007). The unclean hands doctrine is an equitable doctrine and will not
be applied to produce an “inequitable result.” Id. at 843. And, a circuit court’s
decision to invoke the unclean hands doctrine rests within its sound discretion.
Petroleum Exploration v. Pub. Serv. Comm’n of Kentucky, 304 U.S. 209, 58 S. Ct.
834, 82 L. Ed. 1294 (1938).
In this case, we cannot say that the circuit court abused its discretion
by failing to invoke the unclean hands doctrine. Christopher testified that he relied
upon an accountant to file his tax returns for the years 2000 through 2005 and that
Christopher had not been charged with any criminal offenses relating to these tax
returns. Christopher also stated that certificates of deposits were cashed in order to
pay tax liabilities resulting from the amended tax returns. Considering the whole
of the record, we perceive no abuse of discretion.
Paige next maintains that the circuit court’s award of attorney fees and
costs was inadequate and constituted error. Paige points out that the circuit court
awarded only $21,000 in attorney fees and costs when she actually incurred some
$75,000 in attorney fees and costs. Paige argues that the circuit court should have
awarded her the entire amount considering the great disparity in the parties’
income and financial resources.
Under KRS 403.220, the circuit court may award a party a reasonable
amount of attorney fees and costs associated with a dissolution action. To justify
such an award, there must exists a disparity in the parties’ financial resources.
Neidlinger v. Neiglinger, 52 S.W.3d 513 (Ky. 2001). However, the award of
attorney fees and costs is not mandatory, and appellate review is limited to abuse
of discretion. Id.; Sexton v. Sexton, 125 S.W.3d 258 (Ky. 2004). An abuse of
discretion occurs when the circuit court’s decision was “arbitrary, unreasonable,
unfair, or unsupported by sound legal principles.” Com. v. English, 993 S.W.2d
941, 945 (Ky. 1999).
In the case sub judice, there did exist a disparity in the financial
resources of the parties. Christopher enjoyed an annual income between $350,000
to $400,000, while Paige was unemployed. The circuit court ordered Christopher
to pay a portion of Paige’s attorney fees and costs. While the circuit court could
have easily awarded more fees to Paige, considering the facts of this case, we are
simply unable to conclude that the circuit court’s award of $21,000 in attorney fees
and costs was arbitrary, unreasonable, unfair, or unsupported by legal principles.
Accordingly, we are of the opinion that the circuit court did not abuse its discretion
by awarding $21,000 in attorney fees and costs to Paige.
Finally, Paige contends that the circuit court erred by failing to award
her maintenance. KRS 403.200(1) states that maintenance may only be granted if
the court finds the spouse seeking maintenance lacks sufficient property, including
marital property apportioned to her, and is unable to support herself through
appropriate employment. As we have reversed part of the circuit court’s ruling on
the disposition of marital property and remanded for further review and action, on
remand we believe the circuit court must also reconsider the issue of maintenance.
See Brunson v. Brunson, 569 S.W.2d 173 (Ky.App. 1978).
As to remaining contentions raised by Paige in this appeal, we deem
them to be without merit.
For the foregoing reasons the orders of the Kenton Circuit Court are
affirmed in part, reversed in part, and this cause is remanded for proceedings not
inconsistent with this opinion.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Jeffrey J. Otis
Stephanie A. Dietz
Steven D. Jaeger