SAMMYE SHAREN WALDEN PURSLEY V WILLIAM HOYNE PURSLEY
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RENDERED: SEPTEMBER 23, 2004
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2001-SC-0936-DG
SAMMYE SHAREN WALDEN
PURSLEY
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ON REVIEW FROM COURT OF APPEALS
1999-CA-2559, 2000-CA-0516 & 2000-CA-0532
LOGAN CIRCUIT COURT NO . 91-CI-00433
WILLIAM HOYNE PURSLEY
APPELLEE
OPINION OF THE COURT BY JUSTICE KELLER
REVERSING
I. ISSUES
Under the parties' Settlement Agreement ("Agreement"), William Hoyne
Pursley ("William Pursley") agreed to pay child support greatly in excess of the
Kentucky Child Support Guidelines and of his children's reasonable needs. For that
reason alone, the Court of Appeals held that the Agreement's child support
provisions were unconscionable . Are child support provisions in a settlement
agreement unconscionable solely because they require support greatly in excess of
the Guidelines or the children's reasonable needs? Because we hold that parents
may agree to provide child support beyond their legal obligations, we reverse the
Court of Appeals and uphold the trial court's finding that the Agreement's child
support provisions are not unconscionable and, thus, enforceable .
The trial court ruled that Sammye Sharen Walden Pursley ("Sharen Pursley")
is not entitled to prejudgment interest on child support and maintenance arrearages
owed by William Pursley . The Court of Appeals agreed, ruling that the trial court
acted within its discretion in denying prejudgment interest . Was the allowance of
interest on the arrearages within the discretion of the trial court? Because we hold
that prejudgment interest on child support and maintenance payments accrues from
the day each payment becomes due under the Agreement or under the trial court's
temporary support and maintenance order-making the award of interest not
discretionary-we reverse the Court of Appeals and remand to the trial court with
directions to award interest on the arrearages .
II. BACKGROUND
In 1991, William Pursley filed a petition for dissolution of his marriage to
Sharen Pursley . With the assistance of a lawyer, William and Sharen Pursley ("the
Pursleys") negotiated an agreement settling the disposition of their property,
maintenance, custody of their two children, support, and visitation. The trial court
incorporated the Pursleys' Agreement into a decree of dissolution entered later that
year. Under the Agreement, Sharen Pursley was awarded custody of the parties'
children, and William Pursley agreed to pay "30% of all of his income from his salary
and bonuses as evidenced by his federal income tax return . . . as child support for
the minor children of the parties." The payments for the children would continue until
such time as they turned eighteen (18) or graduated from college or graduate
school, whichever was latest. He also agreed to pay the cost of undergraduate and
graduate educations for the children at any school that they may choose in the
United States . Additionally, he agreed to maintain the children's medical and health
insurance and to pay any medical and dental expenses not paid by insurance . The
Agreement also provided that William Pursley would pay 10% of his income as
maintenance to Sharen Pursley for life, unless she remarried . The Agreement
stated that the total of William Pursley's salary and bonus at that time was
$135,000 .00 and that child support would be "30% of the net proceeds."
William Pursley made some payments in accordance with the Agreement. In
1992, however, Sharen Pursley sought relief from the trial court for William Pursley's
failure to pay child support and maintenance due under the Agreement . In 1993 and
obviously in response to Sharen Pursley's efforts to enforce the payment of child
support and maintenance, William Pursley challenged the validity of the Agreement
on the grounds that the trial court did not have jurisdiction when it entered the
decree because neither of the parties had lived in the Commonwealth for 180 days
prior to its entry.' This issue was not resolved until 1996 when the trial court, having
decided it had lacked jurisdiction to enter the decree in 1991,2 voided the decree3
and entered a decree nunc pro tunc as of May 1992, reasoning that the jurisdiction
requirement had been satisfied by that date .
KRS 403.140(1)(a).
2 But see Clements v. Harris , Ky ., 89 S .W.3d 403, 405 (2002) ("[T]hough the
trial court acted erroneously in finding Leroy to be a resident of Kentucky, the decree
of dissolution is not void .").
3 The trial court had personal jurisdiction over the Pursleys when the 1991
decree was entered, and William Pursley's motion to void the decree only
questioned the trial court's jurisdiction to dissolve the marriage, but not its authority
to award custody and child support . Regardless, the trial court voided the decree as
well as its approval of the Agreement .
4 Although certainly questionable, the issue of whether it was proper for the
trial court to enter the decree nunc pro tunc is not raised in this appeal . Cf. Benton
v. King , 199 Ky . 307, 250 S .W . 1002, 1003 (1923) ("The office of a judgment nunc
pro tunc is to record some act of the court done at a former time which was not
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In the interim, William Pursley sporadically complied with his support
obligations under the Agreement and Sharen Pursley continued to pursue
enforcement proceedings . In 1995, the trial court entered a temporary maintenance
and support order directing him to pay $1,600.00 per month (support of $1,200 .00
and maintenance of $400 .00). William Pursley also failed to fully comply with the
temporary order. The trial court dismissed the case in 1998 for inactivity the
previous year, but reinstated it at Sharen Pursley's request later in 1998.
The matter finally proceeded to trial in the summer of 1999, and the trial court
found that the Agreement was not unconscionable and, therefore, enforceable . In
later proceedings, the trial court found that William Pursley was in arrears in his child
support and maintenance payments in the amount of $348,535 .86 (a calculation
based on his net income from his tax returns), but that the arrearages would bear
postjudgment interest only.
Although the Court of Appeals agreed with the trial court that the arrearages
should only bear postjudgment interest, it found that the child support provisions of
the Agreement were unconscionable . We disagree . We uphold the trial court's
finding that the Agreement is conscionable, but we also hold that the award of
interest was not within the trial court's discretion. Accordingly, we reverse the Court
of Appeals .
carried into the record, and the power of the court to make such entries is restricted
to placing to record evidence of judicial action which has been actually taken . It may
be used to make the record speak the truth, but not to make it speak what it did not
speak but ought to have spoken . Hence a court in entering a judgment nunc pro
tunc has no power to construe what the judgment means, but only to enter of record
such judgment as had been formerly rendered, but which had not been entered of
record as rendered .").
III. ANALYSIS
A. Separation Agreement
In 1991, when the trial court first entered the decree dissolving the parties'
marriage, William Pursley did not contest the conscionability of the Agreement and
the trial court made a perfunctory finding that the Agreement was "not
unconscionable ." But the trial court set aside this finding when it later voided the
1991 decree. When William Pursley contested the conscionability of the Agreement,
the trial court, after considering depositions and other evidence, including the
testimony of the lawyer who prepared the Agreement, made extensive findings of
fact and concluded that the Agreement was "not unconscionable ." The trial court's
findings show that it was familiar with the parties' economic circumstances, and in
support of its conclusion, the trial court noted (1) that William Pursley is "an
educated and sophisticated businessman who had the strong desire to meet his
moral and legal obligations to his wife and children" ; (2) that the lawyer assisting the
Pursleys "explained to [William Pursley] that . . . child support . . . [was] beyond what
would be required by law" ; (3) that the Agreement was the result of negotiations that
"spanned some three weeks during which [William Pursley ] insisted on deletion of
some proposed provisions" ; (4) that his decision was not the result of fraud,
coercion, or overreaching ; and (5) that the terms of the Agreement are not
"manifestly unfair and unreasonable ." The trial court ruled that William Pursley had
the burden "to show that [the Agreement] was unconscionable," and "[a]bsent such
proof the [A]greement must be upheld ." The trial court found that William Pursley's
proof was insufficient to support a finding that the Agreement was manifestly
unreasonable and unfair and, therefore, unconscionable .
Relying on Downing v. Downing , 5 the Court of Appeals held that "any decision
to set child support above the guidelines must be based primarily on the child's
needs, as set out in specific supporting findings" by the trial court. It then "[found]
that the amount and duration of child support under the agreement so greatly
exceed[ed] the children's reasonable needs6 as to render the terms
unconscionable[,]" and remanded the case "to the trial court with instructions to set
child support anew based upon [Kentucky Child Support Guidelines] ."' We disagree
both with the Court of Appeals's holding and with its finding of unconscionability .
The Agreement's child support provisions are not unconscionable just
because the child support exceeds either the Guidelines or the children's reasonable
needs . The Guidelines, themselves, allow parents to agree to child support in
excess of the Guidelines .$ Additionally, we hold that a parent has a right to do more
for his or her children than the law requires . 9 And, even though a trial court is not
5 Ky.App ., 45 S.W.3d 449 (2001).
6 Actually, the children's reasonable needs were not shown by William
Pursley, and the Court of Appeals either equated the children's reasonable needs
with the highest presumptive child support shown under the Guidelines for two
children, or it merely concluded that such high child support exceeded the children's
reasonable needs.
We would note that with the exception of one year, 1995, William Pursley's
annual gross income, alone, for the years now in question, 1992-98, greatly
exceeded the Guidelines . Accordingly, the Guidelines do not apply for those years,
KRS 403 .211(3)(e),(g), and the court would use its discretion in determining child
support. KRS 403.212(5) .
8 KRS 403.211(3)(f) ("The parents of the child, having demonstrated
knowledge of the amount of child support established by the Kentucky child support
guidelines, have agreed to child support different from the guideline amount.") ; see
Klein v . Klein , 500 N .W .2d 236, 241-42 (S .D. 1993) ("The trial court has authority to
deviate from the guidelines in situations involving agreements between the parties .").
s In re LaBelle's Trust , 223 N .W.2d 400, 409 (Minn . 1974) ("The petitioner had
a right to do more for his children than the law required of him, whether or not the
agreement was part of a negotiated over-all property settlement agreement
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independently empowered to award child support in excess of the Guidelines or a
child's reasonable needs, it may do so when the parent knowingly agrees thereto . 1o
Here, William Pursley knew that his child support obligation under the Agreement
was in excess of his legal obligation ; thus, he knowingly agreed to child support
beyond his children's needs and the Guidelines .
Like the Court of Appeals, William Pursley relies on Downing v. Downing " in
support of his argument that the child support amount is beyond the children's needs
and thus unreasonable . But he overlooks an important difference between the
present case and Downing . Here, the parties set the amount of child support by
agreement, and the trial court approved the Pursleys' Agreement only after finding
that William Pursley knew the child support exceeded his legal obligation . In
Downing , the court independently set child support . Essentially, Downing imposes
limitations on the trial court when setting child support in cases where the parties'
gross income exceeds the child support guidelines and the parties have not agreed
to child support . Downing does not similarly restrict the parties when agreeing to
child support . There is no public policy in this jurisdiction which prevents parents
from being as generous to their children as they wish, 12 and when parents are
occasion[ed] by and incident to the divorce. It is not for us to frustrate a father's wellintentioned generosity for his children .") .
10 Id.
11 Ky .
App., 45 S .W.3d 449 (2001) .
12
§ 309, 9A U .L.A. 585 n. 12 (1998)(citing
Guzman v. Guzman, 854 P.2d 1169 (Ariz. Ct . App. 1993)) ("[P]arties to dissolution
proceeding may enter into binding contractual agreement for support payments that
are not required by law.") ; see also Anderson v. Anderson, 307 S .E .2d 483 (Ga.
1983); Hay v . Hay, 730 N .E.2d 787 (Ind . Ct. App. 2000); Ross v . Voiers , 490 S.E.2d
244 (N .C. App . 1997) ; Stanaland v. Jamison , 268 S .E .2d 578 (S .C. 1980) ; Matter of
Marriage of Olsen , 600 P.2d 690 (Wash . Ct . App. 1979) .
UNIF. MARRIAGE & DIVORCE ACT
determining child support, as opposed to the court, parents may agree to child
support obligations that exceed their legal obligations . In recognition of this aspect
of settlement agreements, "[a] majority of jurisdictions allow the court to incorporate
and enforce, as terms of the decree, agreement terms that the court would have no
independent power to order." 13
With respect to the child support guidelines," "[c]ourts will generally grant a
deviation [from child support guidelines in a situation where the parties agree to an
amount in excess because] the parties may contract to provide support in excess of
their legal obligations . "15 One of the primary goals in enacting child support
13 PRINCIPLES OF THE LAW OF FAMILY DISSOLUTION : ANALYSIS AND
RECOMMENDATIONS § 7.10 cmt. b (Am . Law Inst. 2000) ; see Kathleen Conrey Horan,
Postminority Support for College Education - A Legally Enforceable Obligation In
Divorce Proceedings , 20 FAM . L . Q . 589 n . 17 (1987) (citing 27B C.J.S . Divorce §319
(1985)) ("'A husband may by agreement incorporated in the divorce decree . . .
become obligated to provide a college education for his child even though the
performance required by the decree may extend beyond the minority of the child ."') ;
Brett R . Turner, Construction and Enforcement of College Tuition Provisions in
Separation Agreements , 11 No. 2 DIVORCE LITIGATION 21, *2 (1999) (States
which follow the majority rule that divorce courts have no power to order parents to
pay college tuition, "will enforce private agreements in which a parent agrees to pay
college support ."); Solomon v. Finley, 808 P .2d 294, 297 n .2 (Ariz. 1991) ("[A]
growing majority of the states will enforce an agreement . . . even if . . . [it] provides
for support beyond minority . . . and even though their statutes recognize that a
parent is not responsible for support of adult children and . . . [a] court cannot order
[such support] . . . . . ) .
14
KRS 403.212.
15 LAURA W. MORGAN, CHILD SUPPORT GUIDELINES : INTERPRETATION AND
APPLICATION § 4 .09(c) (Aspen Law & Business ed ., 2001) (citing Amodio v. Amodio ,
743 A .2d 1135 (Conn . App . Ct. 2000) (where court need not make detailed findings
regarding deviation when court adopts agreement of parties which provides support
in excess of guidelines) ; Dowie v. Dowie, 668 So.2d 290 (Fla. Dist. Ct . App. 1996)
(where parents may agree to child-support obligation that exceeds duty imposed by
law) ; Dring v. Dring, 956 P.2d 1301 (Haw. Ct. App. 1998) (where written agreement
can provide for more than guidelines amount, but not less); In re Marriage of
Handeland , 564 N.W .2d 445 (Iowa Ct. App. 1997) (where in computing wife's child
support obligation, court appropriately deviated based on agreement of parties, and
fact that wife not receiving alimony) ; O'Callaghan v. O'Callaghan , 515 N.W .2d 821
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guidelines was to "increase the adequacy of child support awards . 06
Unquestionably, Kentucky took a giant step towards this goal when it enacted the
Guidelines . 7 And the purpose of the Guidelines is not offended, but rather is aided
by allowing divorcing parents to agree to provide greater support for their children .
The Guidelines do not constitute the maximum support that a parent may agree to
provide for his or her children . Although, as a rule, it is not in the best interest of the
children when their parents agree to an amount of child support below the
Guidelines, no one can convincingly argue that the best interests of the children are
not served when their parents agree to support in excess of the amount established
by the Guidelines . Although a court is not bound by such agreements, 18 when
parents wish to provide or agree to provide more support than required by law, the
Guidelines should not act as a barrier . Furthermore, when the trial court reviews the
parties' agreement that requires child support in excess of the Guidelines , it is only
required to find that the parents, "having demonstrated knowledge of the amount of
child support established by the [Guidelines], have agreed to child support" in
excess of the Guidelines .' 9
(N .D. Ct. App . 1994) (where stipulation by parents to pay what amounted to support
in excess of guidelines should be approved by court); Moreno v. Moreno, 481 S .E.2d
482 (Va . Ct. App. 1997) (where parties agree to amount well in excess of guidelines'
amount, court does not have to figure exactly the presumptive award)) .
16
LAURA W . MORGAN, CHILD SUPPORT GUIDELINES: INTERPRETATION AND
APPLICATION § 1 .02(e) (Aspen Law & Business ed ., 2001) .
" _Id . at § 1 .02(f) ("Doug Smith, Child Support Director for the Commonwealth
of Kentucky, announced that in the fiscal year ending June 30, 1999, child support
collections were up 11 % from the previous year, and 300% more than what was paid
in 1989 .") .
' 8 KRS 403.180(2); Pegram v. Pegram , Ky., 219 S .W .2d 772 (1949) ; Tilley v.
Tiller , Ky. App ., 947 S .W .2d 63 (1997) .
19
KRS 403 .211(3)(f).
The Pursleys' Agreement also extends support past the age of majority
should the children wish to pursue a college education, including graduate school .
We point out that it is not uncommon for parents to agree to provide for their children
while they pursue an education ,2° and William Pursley would not be the first parent,
or the last, to provide for his children through graduate school . It clearly is not
against public policy to provide such an education for your child.
William Pursley was informed that the duration and amount he agreed to pay
was beyond what was required by law. Nevertheless, he executed the Agreement,
which remained unchallenged for approximately a year thereafter. Though he has
had a change of heart, "[a] property settlement agreement should not be disregarded
simply because one spouse has second thoughts ." 22 The Agreement is an
20
See, e Stevens v. Stevens , Ky., 798 S .W.2d 136 (1990) ; Wilhoit v.
.g_,
Wilhoit, Ky., 521 S.W .2d 512 (1975); In re Marriage of Mulry, 732 N .E.2d 667 (III .
App . Ct. 2000); Rohn v. Thuma , 408 N .E.2d 578 (Ind . Ct. App. 1980) ; Kirby v. Kirby,
741 A .2d 528 (Md . Ct. Spec. App . 1999) ; Wood v . Wood , 667 N .W.2d 235 (Neb.
2003); Jack v. Jack, 745 N.E .2d 1101 (Ohio Ct. App. 2000); Bryan v. Leach, 85
S.W.3d 136 (Tenn . Ct. App. 2001) ; Richardson v. Richardson , 598 S.W.2d 791
(Tenn . Ct. App . 1980) ; ; Ferguson v. Ferguson, 578 P.2d 1274, 1275 (Utah 1978)
("Ordinarily, a parent will be more than willing to aid and assist an adult child in
securing a college education . . . .") ; E. Le Fevre, Annotation, Education as Element
in Allowance for Benefit of Child in Decree of Divorce or Separation, 56 A .L.R.2d
1207 (2004) ; 24A Ann . JUR . 2D Divorce & Separation § 1035 (2003) ; Brett R. Turner,
Construction and Enforcement of College Tuition Provisions in Separation
Agreements , 11 No. 2 DIVORCE LITIGATION 21, *1 (1999) ("[C]ollege support
provisions are appearing in negotiated agreements with unprecedented frequency.") .
21
See Brett R. Turner, Construction and Enforcement of College Tuition
Provisions in Separation Agreements , 11 No . 2 DIVORCE LITIGATION 21 (1999)
(Graduate school expenses are payable when expressly provided for in the property
settlement agreement) .
22
UNIF. MARRIAGE & DIVORCE ACT § 306, 9A U.L.A. 268 n . 43 (1998) (citing In
re Marriage of Black, 477 N .E .2d 1359 (III . App. Ct. 1985) ; In re Marriage of Kloster ,
469 N .E.2d 381 (III. App . Ct. 1984) ; Horwich v. Horwich, 386 N.E.2d 620 (lll. App . Ct.
1979)) ("Fact that wife changed her mind after entering into settlement agreement
did not render the settlement agreement invalid .") .
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enforceable contract between the parties ,23 and it is not the place of courts to disturb
it absent some showing of fraud, undue influence, overreaching or manifest
unfairness .24
William Pursley argues that the Agreement is unconscionable because it
could be interpreted to require child support throughout his lifetime as his children
may wish to remain in schoo1 . 25 Aside from the fact that he cannot be called on for
compliance with this provision of the Agreement at this time, and thus the provision
presents no issue to this Court, the fact that some aspects of the Agreement may
23
KRS 403.180(5) ; Peterson v. Peterson , Ky. App ., 583 S .W .2d 707 (1979);
Wilhoit y. Wilhoit , Ky., 521 S .W .2d 512 (1975) ; 15 LOUISE E. GRAHAM & HON . JAMES
E . KELLER, KENTUCKY PRACTICE § 9.7 (2d ed. 1997) ("KRS 403.180(5) states that the
terms of the agreement set forth in the decree of separation are enforceable both as
a contract and as a judgment . . . ."); cf . Edwardson v. Edwardson , Ky., 798 S .W .2d
941, 945 (1990) ("[O]ur statutes encourage parties involved in domestic litigation to
enter into separation agreements ."); see also Robinson v. Robinson , 953 P.2d 880
(Alaska 1998) ; Morrison v. Morrison , 781 P.2d 745 (Kan . Ct. App . 1989) ; McLendon
v. McLendon , 847 S.W .2d 601 (Tex . Ct. App. 1992) ; Rodriguez v. Rodriquez , 334
S .E.2d 595 (Va . Ct. App. 1985) .
24
Rupley v. Rupley, Ky. App., 776 S .W .2d 849 (1989); McGowan v.
McGowan , Ky. App., 663 S .W .2d 219 (1983) ; Peterson v. Peterson , Ky . App., 583
S .W.2d 707 (1979).
25
Brett R. Turner, Construction and Enforcement of College Tuition
Provisions in Separation Agreements , 11 No . 2 DIVORCE LITIGATION 21 (1999)
("In the real world, most institutions insist that an undergraduate education be
completed at a reasonable pace . . . .").
26
One of the parties' children has turned eighteen and does not appear to
have enrolled in college; the other child is now fifteen and has not graduated from
high school .
27
See Richardson v. Richardson , 598 S .W.2d 791 (Tenn . Ct. App . 1980) :
The children are at this time minors, 16 and 17
years of age, respectively, and still in secondary schools.
The plaintiff cannot be called on for compliance with the
terms of this provision unless and until one or more of the
children qualify for and enter upon a college education,
and until such time, and some demand therefor made
upon the plaintiff, there is no justiciable issue before the
Court for determination . The Court will not render
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be subject to interpretation at a later date does not make it unconscionable because
the parties are free to mutually modify the child support provisions or seek a courtordered modification .28 It is not uncommon for parties to seek modification of child
support provisions in separation agreements as changes occur-the right to do so is
expressly provided by statute .29 The Agreement is currently workable 30 and as any
issues arise, the parties should be able to resolve them either on their own or with
Until such time, it presents no issue to this Court.
the assistance of the trial court .31
"[A] bad bargain and unconscionability [are] . . . not synonymous ."32 Although
we recognize that William Pursley provided Sharen Pursley generous child support,
we must give great deference to the trial court because in "`cases of this nature the
trial court is in the best position to evaluate the circumstances surrounding the
agreement . -33 "Parties to a divorce action often have perfectly valid motives for
agreeing to what appear to be bad bargains ." 34 Here, ostensibly, William Pursley
wanted to provide generous support for his children and to ensure their future
advisory opinions or consider matters which may or may
not occur in the future.
Id. a t 795.
28 KRS 403 .250(1) ; Brown v. Brown, Ky., 796 S .W.2d 5 (1990); see also
James T . Tucker, Annotation, Family Court Jurisdiction to Hear Contract Claims 46
A.L .R. 5th 735 (2004) .
29 KRS 403 .213 .
30
In re Marriage of Stadheim , 523 N .E .2d 1284 (111. App. 1988) (Trial court's
finding that family support provisions of marital settlement was "unworkable" was
insufficient to vacate provision of settlement agreement incorporated into dissolution
decree in absence of unconscionablility.) .
31
32
grown, 796 S.W .2d 5 .
Shraberg v. Shraberg, Ky ., 939 S.W .2d 330, 333 (1997).
Id. (citing Peterson v. Peterson , Ky. App ., 583 S .W.2d 707 (1979)) .
33
34
Id . at 334 (Cooper, J ., concurring) .
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education . And, perhaps, he had cathartic reasons for agreeing to such generous
child support . "if so, what appears on the surface to be a bad bargain may not be so
bad after all . In such a case, it is not manifestly unfair or inequitable to let a party lie
in the bed he or she has freely made ."35 Although for William Pursley the Agreement
appears to be a bad bargain on its face, we would note that he still retains the
majority of his income .
The trial court found that the Agreement's child support provisions were not
"manifestly unfair and unreasonable" and accordingly "not unconscionable ." We
hold that the trial court's findings were not clearly erroneous, and therefore, the
Pursleys' Agreement is enforceable .
B. Net Income
The trial court held that William Pursley's income for the purpose of
determining his child support obligation was "[his] gross income as defined for
Federal Income Tax purposes less Federal Tax, State Tax, FICA Tax, Medicare Tax,
and any other payments required to be paid by [William Pursley] to the state or
federal governments ." The Court of Appeals agreed with the trial court's ruling . But
Sharen Pursley argues that it is William Pursley's income minus only deductions
from his 401 K that will be used for the children's education . We disagree .
The Agreement provided that William Pursley's federal income tax returns
would be used to determine his income, and then after stating his salary and bonus,
it provided that "the children shall be entitled to receive 30% of the net proceeds
from the said salary and bonus." So logically, William Pursley's income for the
purpose of calculating his child support obligation is his salary and bonus as shown
35
Id .
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on his federal income tax return less deductions therefrom, or in other words, his
"net income ." 36 The trial court ruled that William Pursley is entitled to deduct any
required tax payments in calculating his net income, but not any voluntary payments,
such as 401 K contributions . We find that this is a reasonable interpretation of the
parties' Agreement .
C. Prejudgment Interest
In awarding Sharen Pursley a judgment for the maintenance and child
support arrearages, the trial court determined that the arrearages were subject only
to postjudgment interest and declined to award prejudgment interest. It reasoned
that arrearages were unliquidated until the judgment for the arrearages was entered .
The Court of Appeals agreed with the trial court's ruling, but we disagree and hold
that Sharen Pursley was entitled to interest at the legal rate of eight percent (8%) per
annum 37 from the date that each payment was due and remained unpaid.
Accordingly, we reverse the Court of Appeals .
Past due payments for child support and maintenance become vested when
due. Each payment is a fixed and liquidated debt which a court has no power to
th ed . 1999) ("net income. Total income from all
sources minus deductions, exemptions, and other tax reductions .").
36
BLACK'S LAw DICTIONARY (8
37
KRS 360.010 .
38 Dalton v . Dalton , Ky., 367 S .W .2d 840, 343 (1963) ; Heisley v. Heisley ,
Ky.App., 676 S.W .2d 477 (1984); Whitby v. Whitby , 306 Ky. 355, 208 S .W.2d 68, 69
(1948) ("We perceive that no distinction can be made between a judgment based
upon a claim for alimony or maintenance and a judgment based upon any other
legal right. After the judgment is entered, although it may be subject to modification
at a subsequent date, it is binding and final until modified ; and any payments which
may have become due previous to such modification constitute a fixed and
liquidated debt in favor of the judgment creditor against the judgment debtor.");
Stewart v. Raikes , Ky., 627 S .W.2d 586, 589 (1982) ("[E]ach installment of child
support becomes a lump sum judgment, unchangeable by the trial court when it
becomes due and is unpaid .").
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modify39; therefore, Sharen Pursley was entitled to prejudgment interest as a matter
of law from the date that each payment was due.
IV. CONCLUSION
We reverse the Court of Appeals's holding that the child support provisions of
the Pursleys' Agreement were unconscionable and not enforceable, and
accordingly, we reinstate the trial court's approval of the Agreement . We affirm the
Court of Appeals's ruling concerning the calculation of child support and
maintenance under the Agreement ; however, we reverse its ruling that Sharen
Pursley was not entitled to prejudgment interest on unpaid child support and
maintenance payments .
All concur.
39 Stewart, 627 S .W .2d at 589.
40 Nucor Corp . v. General Elec. Co. , Ky., 812 S .W .2d 136, 141 (1991) ("When
the damages are `liquidated,' prejudgment interest follows as a matter of course .");
Middleton v. Middleton , 287 Ky. 1, 152 S.W .2d 266, 268 (1941) ("We are of the
further opinion that it was not error to allow interest on Mrs. Middleton's claim . It was
definite and certain both as to time and amount. The rule is that interest runs as a
matter of right on a liquidated demand . . . .").
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COUNSEL FOR APPELLANT :
David Lewis Williams
PO Box 666
Burkesville, Kentucky 42717
COUNSEL FOR APPELLEE :
B . Mark Mulloy
400 North First Trust Centre
200 South Fifth Street
Louisville, Kentucky 40202
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