WEBER (LEE J.) FRANKLIN VS. WEBER (RHONDA S.)
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RENDERED: DECEMBER 30, 2009; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-000125-MR
LEE J. WEBER
v.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE O. REED RHORER, JUDGE
ACTION NO. 06-CI-01796
RHONDA S. WEBER
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE: CAPERTON AND STUMBO, JUDGES; KNOPF,1 SENIOR JUDGE.
STUMBO, JUDGE: Lee J. Weber appeals from the Findings of Fact, Conclusions
of Law and Order of the Franklin Circuit Court distributing marital property in a
dissolution of marriage action filed by his now former wife, Rhonda S. Weber.
Lee maintains that the circuit court erred in failing to order the restoration of his
non-marital interest in the parties’ marital residence. Because Lee was entitled
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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 KRS 21.580.
to the restoration of this interest, we reverse the Order on appeal and remand the
matter for additional Findings of Facts and Conclusions of Law on this issue.
Lee and Rhonda were married on December 31, 1999, in Franklin
County, Kentucky. The marriage produced two children, who are now 9 and 10
years old. Rhonda and Lee separated in 2006. In 2008, Rhonda filed a petition in
Franklin Circuit Court seeking to dissolve the marriage. At the time of the filing,
Lee was about 41 years old and was employed as an electrician. Rhonda worked
as a teaching assistant.
The matter proceeded in Franklin Circuit Court, and on November 17,
2008, the court rendered Findings of Fact, Conclusions of Law and Order
dissolving the marriage and addressing custody issues and property division. Of
relevance to the instant appeal, the circuit court made a finding that prior to the
marriage, Lee purchased an unimproved parcel of real property upon which the
marital residence was later constructed. The court found that the unimproved lot
was valued at $38,500 at the time of the marriage, and was encumbered by a
$30,800 mortgage which also pre-dated the marriage. The court also found that
Lee borrowed $24,000 from his 401(k) retirement plan to aid in the construction of
the residence, and that this loan also pre-dated the marriage.
After making these and other findings, the circuit court awarded
Rhonda the marital residence, in part for the benefit of the minor children. The
court ordered the parties to divide the cost of the monthly mortgage payment and
maintenance. It also held that when the children reached the age of majority, the
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residence would be sold and any profit or loss would be divided equally between
the parties. Lee’s subsequent Motion to Alter, Amend or Vacate was denied after a
hearing conducted on December 23, 2008. In denying the motion, the court stated
that it “considered the equitable division of all assets and debts and the relative
position of the parties in making its determination in the Court’s Order of
November 17, 2008.” This appeal followed.
Lee now argues that the Franklin Circuit Court erred in failing to
order the restoration of his non-marital interest in the marital residence. He notes
that the circuit court expressly found that he had a $7,700 interest in the real
property prior to the marriage, and also found that he made a contribution of
$24,000 in non-marital assets to the construction of the residence. Lee directs our
attention to KRS 403.190 and its supportive case law, which he argues requires the
trial court to assign to him his non-marital property upon dissolution. He
maintains that there is no dispute as to the non-marital nature of the assets at issue,
and it is clear that the court is required to return those assets to him upon
dissolution. As such, he seeks an Opinion reversing the Order on appeal and
restoring to him the $7,700 and $24,000 non-marital assets. In contrast, Rhonda
maintains that Lee never demonstrated that he purchased the unimproved real
property with $7,700 in non-marital funds. She also contends that Lee failed to
provide the trial court with the balance that was due on the $24,000 note, and
whether any marital assets were used to pay the note.
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KRS 403.190 addresses the division of marital and non-marital
property. It states that,
(1) In a proceeding for dissolution of the marriage or for
legal separation, or in a proceeding for disposition of
property following dissolution of the marriage by a court
which lacked personal jurisdiction over the absent spouse
or lacked jurisdiction to dispose of the property, the court
shall assign each spouse’s property to him. It also shall
divide the marital property without regard to marital
misconduct in just proportions considering all relevant
factors including:
(a) Contribution of each spouse to acquisition of the
marital property, including contribution of a spouse as
homemaker;
(b) Value of the property set apart to each spouse;
(c) Duration of the marriage; and
(d) Economic circumstances of each spouse when the
division of property is to become effective, including the
desirability of awarding the family home or the right to
live therein for reasonable periods to the spouse having
custody of any children.
(2) 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;
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(c) Property acquired by a spouse after a decree of legal
separation;
(d) Property excluded by valid agreement of the parties;
and
(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.
(3) 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.
Thus, the Legislature has determined that: 1) non-marital property
includes property acquired before the marriage, as well as property acquired in
exchange for property acquired before the marriage; and 2) “the court shall assign
each spouses’ property to him.” KRS 403.190. This directive has been integrated
into the case law. See generally, Kleet v. Kleet, 264 S.W.3d 610 (Ky. App. 2007),
which, together with its predecessor cases, requires a spouse asserting a nonmarital interest in property to demonstrate that interest by “tracing” it to its origin.
Id.
In the matter at bar, the Franklin Circuit Court made findings that
prior to the marriage, Lee purchased the unimproved realty upon which the marital
residence was later built; and, that it was valued at $38,500 and was encumbered
by a note and mortgage in the amount of $30,800. The court also found that prior
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to the marriage, Lee borrowed $24,000 from his 401(k) retirement plan to aid in
the construction of the residence. Rhonda has not appealed from the entry of these
findings, and as such they may properly be regarded as conclusive.
In applying KRS 403.190 and its progeny to these findings, we must
conclude that Lee was entitled to have any non-marital assets restored to him at
such time the marital residence is sold. We base this conclusion on the
Legislature’s unambiguous statutory requirement that upon dissolution, “the court
shall assign each spouse’s property to him.” KRS 403.190(1). The circuit court,
having found that Lee was vested with non-marital property at the time of
marriage, was therefore required to order the return of those assets upon
dissolution.
We recognize that the circuit court properly undertook to make an
equitable division of all assets and debts based on the relative positions of the
parties at the time of dissolution. The factors the court considered, for example,
included the disparity in the parties’ incomes, and the fact that Rhonda was
designated as the primary residential custodian of two children with special needs.
The equitable division of assets, however, is only applicable to marital assets,
which the Legislature has determined must be divided “in just proportions.” KRS
403.190, supra. Marital assets must be divided justly, but not necessarily equally.
Wood v. Wood, 720 S.W.2d 934 (Ky. App. 1986). Non-marital assets, however,
must be returned to the spouse who brought them into the marriage. KRS 403.190,
supra. Because the circuit court found that Lee brought non-marital assets into the
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marriage, but it did not expressly restore those assets to him, we must reverse and
remand on this issue. On remand, the Franklin Circuit Court shall make any
additional findings necessary to supplement its determination that Lee brought
non-marital assets into the marriage, and shall expressly restore those assets to him
at such time the marital residence is sold. Because the Order on appeal made no
distinction between marital and non-marital assets, and in light of our
determination that Lee is entitled to the restoration of his non-marital assets, the
circuit court may adjust, if necessary, its division of marital assets to ensure that
the division comports with the “just proportions” provision of KRS 403.190.
For the foregoing reasons, we reverse the Findings of Fact,
Conclusions of Law and Order of the Franklin Circuit Court, and remand the
matter for proceedings consistent with this Opinion.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Kevin P. Fox
Frankfort, Kentucky
Michael L. Judy
Frankfort, Kentucky
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