Kentucky Case Law Review by Topic: April 1, 2021 through May 31, 2021

“When I look in your eyes, Daniel, it’s like falling and being caught at the same time. I love you.”
-Henry Clay

Saville v. Saville, Nos. 2019-CA-0875-ME, 2019-CA-1604-MR (Ky. App. 2021)

Maintenance: retirement benefits
Marital Property: abuse of discretion, burden of proof
Witness: credibility

Dated: April 2, 2021
Affirming

In the two separate appeals addressed by this decision, Husband argued firstly that the trial court erred when it assigned 82 shares of stock (or their value) he claimed to no longer have. He argued this based on the parties’ 2016 tax return, which noted the sale of 244 such shares.

[Wife’s] counsel cross-examined [Husband] about a document showing that the parties had possessed about 408 P&G shares at the end of December 2014, despite the parties’ tax return for the 2016 tax year showing that about 244 shares had been sold in 2016. Addressing [Husband’s] assertion that there were no remaining P&G shares held by the parties, counsel asked [Husband] about when other shares had been sold… [Husband] testified that he did not know since, according to [Husband], his wife had taken records from his office, but he suggested that maybe the other shares had been sold in 2014.

Reviewing for abuse of discretion, the Court affirmed the trial court’s decision to award half of the 164 unaccounted for shares (or their value) to Wife, asserting, “We must give due regard to the family court’s unique opportunity to assess the credibility of witnesses under CR 52.01. So, we cannot say that the family court was compelled to believe [Husband’s] testimony that no P&G shares remained in the parties’ possession.” The Court further noted Husband’s inability to produce documentation evincing the sale of the remaining stock during the marriage.

In his second and third assignments of error, Husband argued against the trial court’s decision to award maintenance and child support to Wife. Citing her retained marital property, retirement assets, temporarily rent-free housing, benefits of family employment, and arguing she had claimed ‘fraudulent expenses,’ Husband sought reversal of the awards (which included an arrearage of $9,000 in back maintenance due). In affirming the trial court’s decision, the Court noted the parties’ disparate respective incomes, the tax consequences borne on Wife (were she to use retirement monies for monthly expenses), and Wife’s candor in admitting she had not yet paid rent in the trial court proceeding.

After discussing in detail what accounts (and other assets) [Wife] retained as either non-marital property or received as her share of marital property, the family court found that [Wife] should not be required to suffer tax consequences of liquidating her IRAs to support herself. We construe this statement as more generally finding that [Wife] lacked sufficient property to provide for her reasonable needs, thus satisfying KRS 403.200(1)(a).

In his last assignment of error, Husband argued the trial court had erred in its denial of his motion to modify maintenance. The Court again noted Husband’s significantly higher income, and while his expenses had increased following a move and purchase of a house and vehicle, these were decisions he had made in full awareness of his support obligations. The trial court’s decision was affirmed.

Editor’s Note #1: An EZ QDRO Law shout-out to the attorney who successfully argued for Wife/Appellee in this case (and whose cross-examination is excerpted above): Mike McMain!

Editor’s Note #2: I reviewed and blogged about two Kentucky Court of Appeals decisions [CLICK HERE and HERE], wherein the Court did not require the payee spouses to deplete retirement to reduce the amount of spousal maintenance required for to meet their reasonable needs.

Robinson v. Robinson, No. 2019-CA-1465-MR (Ky. App. 2021)

Marital Property: burden of proof, tracing

Dated: April 9, 2021
Not to be Published
Affirming

In her appeal, Wife argued the trial court erred when it -in its amended findings of fact, conclusions of law, and decree of dissolution- deemed two real estate properties and the parties’ pontoon boat marital, and ordered their sale and the splitting of the proceeds.

The standard of review on appeal for a question involving the characterization of whether property is marital or nonmarital is two-tiered. Factual findings of the circuit court are reviewed under the clearly erroneous standard of CR 52.01, but the circuit court’s legal conclusions are reviewed de novo as an issue of law. Smith v. Smith, 235 S.W.3d 1, 6-7 (Ky. App. 2006).

In affirming the trial court’s rulings on all three assets, the Court noted the dearth of evidence presented by Wife to back up her claims that they were or had been purchased using her nonmarital assets. One property was purchased with a down payment of $40,000 from the parties’ joint account, and Wife alleged this money came from the sale of her nonmarital property. Another was purchased prior to the marriage, but with the parties’ joint account.

For the same reason as the Mills Spring Property, the circuit court found [Wife] did not trace the funds back far enough to demonstrate she purchased the property with nonmarital funds. The tracing stopped with the parties’ joint checking account. We cannot say the circuit court erred in ruling the property marital because the documentation suggests otherwise.

The Court went on to affirm the trial court’s orders concerning the parties’ jet ski (and tools Wife alleged belonged to her father), citing the lack of evidence presented to support Wife’s claims.

Livers v. Livers, Nos. 2017-CA-1691-MR & 2017-CA-1721-MR (Ky. App. 2021)

Civ. R. 52.01: findings of fact
Marital Property: appreciation (passive), burden of proof, retirement benefits, tracing

Dated: April 30, 2021
Affirming

The parties separated in 2014, and the trial court entered an order of dissolution and findings of fact in July and August, 2017. Following a ruling on the parties’ motions to alter, amend, or vacate the orders, Wife filed an appeal, and Husband a cross-appeal.

Wife argued the trial court abused its discretion by not requiring that Husband trace funds in his children’s bank accounts to prove that their increases in value were nonmarital. While Husband testified that the accounts were funded by social security benefit payments related to his first wife’s death, Wife provided nothing to counter this assertion, and the Court thus affirmed the trial court’s decision.

Wife also asserted that the trial court erred when it did not assign her a portion of the increase in value of the marital home, and that she was denied the opportunity to have it appraised. Citing the duration of the dissolution and its proceedings, and the extent of litigation over the parties’ assets, the Court rejected this claim, writing: “[Wife] had ample time to gather the information she needed to meet her burden of proving her theory of the home’s current market value.” The Court further noted that the trial court had included a $5,000 increase in its valuation of the home, and consideration thereof as part of Husband’s retained assets.

Wife made similar arguments related to the division of two other properties, and the trial court’s decision not to award her attorney’s fees. The Court, however, affirmed each of these decisions. Finally, Wife also argued that the trial court judge should have recused himself, and that she could not receive an impartial trial because Husband’s former attorney was now his law clerk. The Court noted Wife had failed to file the required affidavit for such concerns, and that the trial court judge had sought and was provided an advisory opinion from the Judicial Ethics Commission. “[Wife] points to nothing in the record which indicates anything other than strict adherence to this advisory opinion has taken place.”

In his cross-appeal, Husband argued that the trial court erred in assessing the nonmarital value of Wife’s retirement account, and that the increase in value of the account during the marriage should have been treated as marital property. Noting that the trial court had included marital contributions in its assessment, and calculated or estimated growth thereon, the Court affirmed.

Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.