DAUNHAUER (BRUCE A.) VS. DAUNHAUER (ELAINE)
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RENDERED: SEPTEMBER 4, 2009; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-000378-MR
BRUCE A. DAUNHAUER
v.
APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT
HONORABLE DONNA DELAHANTY, JUDGE
ACTION NO. 86-CI-002710
ELAINE DAUNHAUER
APPELLEE
OPINION
REVERSING
** ** ** ** **
BEFORE: ACREE AND NICKELL, JUDGES; KNOPF,1 SENIOR JUDGE.
ACREE, JUDGE: Bruce Daunhauer appeals from an order of the Jefferson Family
Court denying his motion to terminate his maintenance obligation created by the
order dissolving his marriage to his former wife, Elaine Daunhauer. The evidence
1
Senior Judge William L. Knopf sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statute (KRS)
21.580.
shows that Elaine, having received rehabilitative maintenance for more than twenty
years, is no longer dependent upon that maintenance to meet her needs. Her ability
to meet her financial needs with her own resources constitutes a change in the
parties’ circumstances so substantial and continuing as to render the continuation
of the maintenance obligation unconscionable. Therefore, we reverse.
The parties married in California in 1966 when Bruce was 27 and
Elaine was 21. They divorced in 1987, after twenty-one years of marriage, when
Bruce was 48 and Elaine 42. Income statements (Forms W-2) submitted by Elaine
for the year preceding the filing of the petition showed Bruce earned $22,248.47
from his dentistry practice. Elaine earned $8,853.87 as a secretary at the
University of Louisville Department of Family Practice, and $1,163.75 from a
second Louisville employer, Little Peoples’ Workshop, for a total income of
$10,017.62.
Before the decree was entered, Elaine relocated to California.2 Prior
to her leaving, the parties entered into a handwritten agreement addressing a
variety of issues, including maintenance. That agreement states in pertinent part:
Mr. D pays:
Maintenance of $400 mo. until June 30, 1987
Child support of $400 mo. until June 30, 1987
Effective July 1, 1987 – maint. of $400 mo.
– c/s of $200 mo.
Maint. shall be reviewable for either party Oct. 1, 1989.
2
The record indicates that, before marrying Bruce, Elaine resided in California with her family
and that her mother resided there until her death in 1999. During the parties’ separation, Elaine
returned to California and remained there after the divorce was final.
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The decree states “that the handwritten agreement is controlling.” Based on that
agreement, the trial court included the following language regarding maintenance:
[Bruce] shall pay to [Elaine] the sum of $400.00 per
month as maintenance until her death or remarriage,
whichever shall first occur. Maintenance shall be
reviewable at the request of either party after October 1,
1989.
By 1989, Elaine had obtained employment as a medical assistant at
the University of California at Irvine where she earned $25,571.52 that year.3
Bruce’s income had increased as well, but not as dramatically, to $35,874.24. In
February 1990, upon Bruce’s motion, the trial court reduced the maintenance
award to $200.00 per month.
In 1995, Bruce again moved for a reduction in maintenance. He had
remarried and had a stepdaughter. Though his annual income had increased to
$43,467.94, his expenses had increased, too. Elaine’s income had also increased to
$28,163.02. The trial court denied Bruce’s motion, however, finding the change in
circumstances insufficient to justify reduction in maintenance.
In 2006, at age 66, Bruce broke both his hip and his right arm. His
injuries necessitated a hip replacement and physical therapy. Consequently, he
made the decision to sell his single-practitioner dental practice and retire. Bruce
filed a motion to terminate spousal maintenance to Elaine. The family court found
Bruce’s retirement objectively reasonable but denied Bruce’s motion because the
parties’ circumstances had not sufficiently changed. This appeal followed.
3
Elaine also holds a degree in physical education; however, our examination of the record did
not reveal whether that degree was held at the time of the divorce or obtained thereafter.
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“The determination of questions regarding maintenance is a matter
which has traditionally been delegated to the sound and broad discretion of the trial
court, and an appellate court will not disturb the trial court absent an abuse of
discretion.” Barbarine v. Barbarine, 925 S.W.2d 831, 832 (Ky.App. 1996). This
Court “is not authorized to substitute its own judgment for that of the trial court
where the trial court's decision is supported by substantial evidence.” Id.
Our analysis of the family court’s decision in this case begins with the
original maintenance award. “Maintenance awards are governed by KRS 403.200
. . . [which] seeks to enable the unemployable spouse to acquire the skills
necessary to support himself or herself in the current workforce so that he or she
does not rely upon the maintenance of the working spouse indefinitely.”
Gripshover v. Gripshover, 246 S.W.3d 460, 469 (Ky. 2008). The goal of a
maintenance award is to facilitate one’s transition from dependence upon her
former spouse to independence. This is consistent with another goal of the
dissolution process which is to sever all ties as much as possible as soon as
possible. Light v. Light, 599 S.W.2d 476, 479 (Ky.App. 1980)(“Since ongoing
maintenance ties the parties together, it should be avoided except as circumstances
of need and fairness demand.”).
The original maintenance award here, while not specifically
denominated as rehabilitative, can only be viewed as such. Our Supreme Court
said that KRS 403.200 expresses “the statutory goal of rehabilitation[,]”
Gripshover, 246 S.W.3d at 470, and referred to rehabilitation as the “policy”
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behind an award of maintenance. Id., citing Powell v. Powell, 107 S.W.3d 222,
224 (Ky. 2003). Additionally, in this case, the parties’ handwritten settlement
agreement did not prohibit modification but instead presumed it. The most
appropriate reason for such modification, and that anticipated by the policy behind
KRS 403.200, is the ability of Elaine, through rehabilitation, to live independently
of maintenance.
However, Elaine argues that in some cases, such as Gripshover,
maintenance is never terminated. While it is true that maintenance awards
sometimes last indefinitely, the case before us is not such a case as Gripshover.
All that this case has in common with Gripshover is that the marriage in both cases
would be considered one of long duration by today’s standards. Even then, the
Gripshovers were married 36 years while the Daunhauers were married a little
more than half that long at 21 years. In Gripshover, the divorce occurred shortly
before the wife reached retirement age and therefore “the prospects for [Mrs.
Gripshover’s] self-sufficiency appear[ed] dismal[.]” Id., quoting Powell at 224.
Where such prospects are “dismal,” “the statutory goal of rehabilitation will not
always be attainable[.]” Id. at 470. That was not the future Elaine faced when she
and Bruce divorced. On the contrary, Elaine was sufficiently young and educated
to achieve financial self-support. The language of the handwritten settlement
agreement and the decree are evidence that the parties and the family court
recognized that the probability of Elaine’s rehabilitation was high. There is
nothing in the record to support a contrary view.
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In this case, KRS 403.250 entitles Bruce to have his maintenance
obligation modified or terminated if he demonstrates changed circumstances that
render his obligation unconscionable. And while “[t]he policy of the statute [KRS
403.250] is for relative stability[,]” Barbarine, 925 S.W.2d at 832, stability does
not mean or require permanence.
The changed circumstances requirement incorporates an
unconscionability test, but there is no need to prove
unfairness in the agreement’s making. Instead, the party
seeking modification must show that circumstances have
altered so that in the current situation it would be
manifestly unfair to require continued payment.
16 Louise Everett Graham & James E. Keller, Kentucky Practice - Domestic
Relations Law § 16:25 (3d ed. 2008); see also, Bickel v. Bickel, 95 S.W.3d 925,
927 (Ky.App. 2002)(“’Unconscionable’ means ‘manifestly unfair or
inequitable.’”).
The policy underlying KRS 403.200, rehabilitation, and that
underlying KRS 403.250, relative stability, are not at odds. When one previously
dependent upon a former spouse achieves self-sufficiency, both policies of
rehabilitation and stability are satisfied. With these policies in mind, we consider
the family court’s order denying Bruce’s motion to terminate his maintenance
obligation and the evidence upon which it is based.
As the order notes, the primary changes in circumstance that Bruce
addressed in his motion resulted from his voluntary retirement. Therefore, the first
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issue the family court had to address was whether Bruce’s voluntary retirement
was objectively reasonable. In general,
the trial court should examine the totality of the
circumstances surrounding the retirement to ensure that it
is objectively reasonable, the burden of proof being on
the party seeking a modification of the award.
Bickel, 95 S.W.3d at 929. If voluntary retirement is not found to have been
objectively reasonable, then the changed circumstances resulting from that
retirement are not taken into account. In other words, retirement that is not
objectively reasonable should be treated comparably to voluntary
underemployment. On the other hand, if voluntary retirement is objectively
reasonable, the changes in circumstances resulting from the retirement must then
be considered by the court. See Bickel at 930 (“if . . . decision to retire was
objectively reasonable, there [still must be] evidence to warrant termination of the
entire maintenance award.”).
Here, the family court found that Bruce met his burden of proof and as
a result determined that his retirement was objectively reasonable. Elaine did not
appeal this ruling. The changes in Bruce’s circumstances resulting from his
retirement, also being objectively reasonable, must therefore be considered. The
motion itself necessitates consideration of the changes in Elaine’s circumstances as
well. Therefore, we examine the family court’s consideration of those changes.
More than twenty years ago, Bruce and Elaine owned a home
together. Today, each has a new partner with whom they separately own and share
-7-
homes. Bruce and his current wife live in a house in Louisville they bought
together for $218,000. They have equity in their home of approximately $133,700.
Elaine and a gentleman friend reside together in a home they purchased in 1999 for
$245,000, with equity of approximately $47,000.4 Their home is located in Garden
Grove, California, a suburb of Los Angeles.
Elaine also keeps an apartment in her own name located in the
adjoining Los Angeles suburb of Los Alamitos. She sublets the apartment to her
brother, who, lacking the financial resources to obtain the apartment, was
dependent upon Elaine’s creditworthiness to secure the residence for his own use.
He pays Elaine’s monthly rent there of $1,100.
As one would expect, there have been changes in Bruce’s and Elaine’s
incomes as well. Though Bruce’s income had risen higher since its peak at
$22,248 during the marriage, he earned only $27,000 in 2006, the last year he
practiced dentistry.5 During the same period, Elaine’s income rose from $10,018
to $46,378. At the time of the 2007 hearing, Bruce’s gross monthly income (from
retirement) was $3,019 yielding a net income of $2,679.6 Elaine’s gross monthly
income (from her employment at the University of California at Irvine)7 of $4,171
4
Elaine testified that the current mortgage balance was $198,000.
The 2004 to 2006 federal tax returns Bruce jointly filed with his current wife showed additional
income from sources unrelated to Bruce’s practice but apparently resulting from his wife’s
activities as a property manager. We take the $27,000 figure from the family court’s order.
5
6
Bruce could have increased his monthly retirement plan payment, but he testified that he relied
on his financial planner to set the amount at a monthly rate that would assure he would not
exhaust his resources prematurely. This, too, must be considered objectively reasonable.
7
While the order indicates Elaine had been employed in her current position at UC-Irvine for
only four years, Elaine’s testimony and the record indicate she has been continuously employed
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was greater than Bruce’s, and her net income of $2,829 was also greater than
Bruce’s net income.
Bruce presented evidence that his monthly expenses exceeded his
income by almost $1,500. However, as the parties separately note, we do not
know how the income and expenses of Bruce’s current spouse (who is battling
cancer) impact his ability to offset that deficit, if at all. Elaine’s monthly expenses
are $2,969.30, or about $140 more than her net income. She testified that she
needed to continue receiving maintenance payments of $200 to be able to buy
groceries. But other portions of her testimony indicate otherwise.
Elaine testified that her expenses include $303 per month she spends
to rent a storage unit for the personal property that she and her brother inherited
when their mother passed away in 1999. She indicated that she has avoided
distributing or otherwise dispensing of the property because of the emotional issues
that doing so would summon. In effect, for nearly a decade, Bruce’s maintenance
payment has helped enable Elaine to avoid the emotions she must eventually face
in dealing with her mother’s estate. However, no matter how understanding this
Court wishes to be, we cannot characterize this $303 monthly expense as
necessary.
During their marriage, Elaine and Bruce had only one modest
retirement plan, an individual retirement account owned by Bruce valued at
$9,500. The court divided the account equally between the parties, and Elaine
at the university in different positions since at least 1989.
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rolled her share into a separate account. Since that time, each party obviously has
taken a more serious view of retirement saving. As of the hearing date on Bruce’s
motion, the parties’ relative retirement assets were as follows:
Bruce
Elaine
$314,083.39 (annuity)
$98,761.38 (UC Retirement
Savings
Program)
$ 76,406.23 (3 IRAs)
$49,951.44 (IRA)
By their nature, retirement programs are funded from resources which
the contributor deems more necessary for future needs than for current needs. The
relative sacrifices that either Bruce or Elaine chose to make, if any, in order to
establish these retirement accounts are not a part of the record. We do know,
however, that the parties’ separate retirement accounts were equal at the time of
the divorce and, beyond that date, their respective accounts were funded from
assets they independently acquired thereafter.
Similarly, since their divorce, each party has bettered his or her
circumstances through their own independent efforts to increase their personal
income and other assets. Nevertheless, today there is a disparity in the assets of
Bruce on the one hand and Elaine on the other.
In considering this evidence, the family court placed special emphasis
on three factors. First, the court noted that “[t]here is still a considerable disparity
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in income between the parties.”8 Second, “the maintenance payment itself is
relatively small.” Third, the court relied upon the general knowledge and prior
ruling of that court that “[t]he standard of living in California is much higher than
that in Kentucky.” Given the evidence of this case, such emphasis on these factors
is misplaced.
When the parties divorced in 1987, they provided for a family of four
on total income of $32,266.09, two-thirds of which Bruce earned. According to
the United States Department of Labor, Bureau of Labor Statistics’ Consumer
Price Index (CPI) Inflation Calculator,9 that 1987 income equates to $61,263.82 in
today’s dollars. Elaine’s own current salary approaches that figure. In view of the
fact that she benefits financially from sharing household expenses with a
gentleman friend and that her children are no longer dependents, it is clear that her
current standard of living meets or exceeds that enjoyed during her marriage to
Bruce. Under such circumstances, was it appropriate for the family court to place
emphasis on the disparity of the parties’ income and assets? For the following
reasons, we believe not.
8
We note that the family court’s order, on its face, shows that Elaine’s current income actually
exceeds Bruce’s individual income. This statement in the order can only be justified if one
presumes Bruce could increase his retirement distributions or if one includes all sources of
income shown on the joint income tax return Bruce filed with his spouse, including her
investments and income as a property manager.
9
This calculator is available at http://www.bls.gov/data/inflation_calculator.htm. Although
caution is called for in deciding to take judicial notice, particularly of information on the internet,
the CPI Inflation Calculator falls into the second category of Kentucky Rules of Evidence (KRE)
201, as indisputable facts derived from a source the accuracy of which cannot reasonably be
questioned. Polley v. Allen, 132 S.W.3d 223, 225-26, 225 fn.1 (Ky.App. 2004).
-11-
The question we ask when considering the family court’s first factor is
whether the parties’ independent, post-decree accumulations of assets or increases
in income should be considered in determining whether to modify or terminate
maintenance. We believe the answer is as follows: If Elaine has achieved selfsufficiency through rehabilitation as contemplated by KRS 403.200,10 post-decree
increases in Bruce’s income or assets are irrelevant. Stated another way, the fact
that Bruce has sufficient assets or income to continue maintenance payments is no
reason to require payment to one who no longer needs it. Only if Elaine has failed
to achieve self-sufficiency do the current assets and income of Bruce and Elaine
become relevant to determine the proper maintenance amount. We reach this
conclusion based on our analysis of Roberts v. Roberts, 744 S.W.2d 433, 436
(Ky.App. 1988), and the cases upon which it is based.
In Roberts, we reaffirmed that in determining the initial award of
maintenance under KRS 403.200, analysis of “the amount of the husband’s estate
and his ability to pay [maintenance] encompassed [consideration of] all of the
husband’s estate irrespective of the source.” Id. (citation and internal quotation
marks omitted). However, we alluded to a different approach when the issue was
not the initial award but whether to modify that initial award under KRS 403.250.
The specific post-decree asset at issue in Roberts was an inheritance Mr. Roberts
received after his second wife died.
10
That is, achieving more than the ability to “eke out a living.” Combs v. Combs, 622 S.W.2d
679, 680 (Ky.App.1981).
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[T]he fact that Mr. Roberts’ total estate should have been
considered at the time the original maintenance award
was set would not necessarily require us to conclude that
the inheritance he received from his second wife four
years after he and Mrs. Roberts divorced should be
considered in an appraisal of his ability to pay increased
maintenance under KRS 403.250.
Id. (emphasis supplied). In determining that Mr. Roberts’ post-decree increases
should be considered, we relied on an analogous situation involving child support
described in Daniels v. Daniels, 726 S.W.2d 705 (Ky.App. 1986). In Daniels, we
said it was appropriate to include a child-support obligor’s post-decree inheritance
when considering whether changed circumstances were sufficient to justify an
increase in child support. However, implicit in both Daniels and Roberts was the
fact that the payment recipients were still dependent upon financial support from
the obligor – a prerequisite to the consideration of post-decree assets and income.
In Roberts, we expressed our certain desire not to “foster an
atmosphere in which a long-parted spouse may . . . share the wealth with a former
spouse who has . . . bettered his position in life through his own hard work and
efforts.” Roberts, 744 S.W.2d at 436. Access to any portion of the obligor
spouse’s post-decree accumulation of wealth is limited to “the spouse who is [first]
determined to be in need of maintenance[.]” Id. (emphasis supplied). And while a
dependent former spouse “has some expectation that he or she will be supported
according to the standard of living established during the marriage[,]” we have
never said a former spouse is entitled to support according to a standard of living
established by the obligor spouse after the marriage. See Roberts at 436-37 (“the
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mere showing that Mr. Roberts received an inheritance would probably not alone
be enough to warrant a change in the maintenance award[.]”).
The parties’ retirement savings, incomes and other assets,
independently acquired or enhanced during the two decades since their divorce, or
even their disparity, should have had no impact on the family court’s analysis of
the changes in the parties’ circumstances. The more significant and fundamental
change that has occurred is Elaine’s self-sufficiency. The original maintenance
award was premised upon the finding that Elaine was not capable of selfsufficiency immediately after the divorce. Since that time, through two decades of
employment, education, and investment, Elaine has demonstrated her achievement
of the goals of KRS 403.200 and KRS 403.250 – rehabilitation, self-sufficiency,
and stability. Bruce has dutifully supplemented Elaine’s income for a longer span
of time than their marriage lasted. The record clearly shows that Elaine no longer
needs the financial support of her ex-husband, and it is time for the maintenance
obligation to end. To allow it to continue would not be rehabilitative, but punitive
and, therefore, unfair and inequitable.
The family court’s second factor, that the maintenance amount was
“relatively small,” is similarly irrelevant. Having achieved self-sufficiency
through rehabilitation, Elaine did not need further support from Bruce in any
amount, large or small. Furthermore, the maintenance amount is smaller, i.e., less
consequential, relative to Elaine’s income than to Bruce’s income.11
11
The $200 maintenance is 6.6% of Bruce’s gross income ($200/$3019) but only 4.8% of
Elaine’s ($200/$4171). It is 7.5% of Bruce’s net income ($200/$2679) and only 7.1 % of
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Finally, the higher cost of living in California is a deceptive concept
but meaningless in this context. The higher cost to live in California is offset by a
wage Elaine earns in that very economy. She has presented no evidence that her
California wage is not proportionately higher than she could earn in this state for
the same work. A higher cost-of-living differential may be significant when the
maintenance recipient is entirely or even largely dependent upon the maintenance
obligor to meet the demands of the more expensive economy. But this was never
Elaine’s situation. She elected to enter the California workforce and has remained
in it for two decades. Her California wage is commensurate with the demands of
the California cost of living. While earning a living in California she has not only
met her needs, she has attained a credit rating that allowed her to assist her brother
with his housing and has had sufficient discretionary income to maintain an
unnecessary expense of $303 per month since becoming responsible for the assets
of her mother’s estate.
In view of the foregoing, we conclude that the family court’s implicit
holding that Elaine is not self-sufficient and remains in need of rehabilitative
maintenance is not supported by substantial evidence; continuing Bruce’s
maintenance obligation under such circumstances constitutes an abuse of
discretion. The fundamental change in circumstance here is that Elaine has
achieved self-sufficiency through rehabilitation. Additionally, she has adequately
prepared for her retirement by twenty years of contributions both to an IRA and to
Elaine’s ($200/$2829).
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her employer-sponsored retirement savings program, to say nothing of the social
security benefits that she is or will soon be eligible to access.
For the foregoing reasons, the Jefferson Family Court’s order denying
Bruce’s motion to terminate maintenance is reversed and remanded for entry of an
order consistent with this opinion.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Rocco J. Celebrezze
Jennifer S. Begley
Louisville, Kentucky
Douglas E. Miller
Radcliff, Kentucky
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