Kentucky Case Law Review by Topic: May 1, 2023 through June 30, 2023

Ferguson v. Ferguson, Nos. 18-CI-00446, 2021-CA-1442-MR (Ky. App. 2023)

KRS 403.190: presumption increase in value is marital
Maintenance
QDRO: valuation date

Dated: May 5, 2023
Affirming in Part, Reversing in Part, and Remanding
Not to be Published

The parties married in 1994, separated in September 2018, and Wife filed a petition for dissolution the following month. By agreement of the parties, Wife was assigned $750 in monthly maintenance, and temporary residence in the marital home. In the months that followed, Wife’s first attorney passed away, and she hired/fired other counsel and sought continuances of the final hearing on different grounds. At a May 2021 hearing, the trial court bifurcated the matter and dissolved the marriage, while setting an October 2021 final hearing date for resolving the other matters.

Ahead of the October 2021 hearing, Wife filed a motion to “withdraw” her pro se representation of herself and requested a continuance to obtain other counsel. Wife’s motion was denied, and the trial court entered a final order the following month. Her appeal followed.

In her first assignment of error, Wife argued that her award of $750 monthly maintenance for 18-24 months was inadequate to meet her reasonable needs, and failed to consider both her disabled status, and her role in the marriage as a homemaker for 30 years. Finding the maintenance amount “baffling,” the Court agreed, writing:

While the appellate court is not free to simply substitute its judgment for that of the trial court, it is also not free to simply ignore the trial court’s own findings and ignore reasoned analysis and application of the relevant statute…

An award of maintenance of only $750 per month for a 27-year marriage, where the spouse needing maintenance was the homemaker, primary caregiver of the parties’ now grown children, and is otherwise disabled, is an abuse of discretion. That the award should terminate after 18 months, or 24 months if [Wife] applies for social security disability, is arbitrary and a further abuse of discretion.

The Court thus remanded Wife’s inadequate maintenance award back to the trial court to “enter an order of maintenance in an amount and duration that considers all factors of KRS 403.200(2).”

As to Wife’s second assignment of error, the Court affirmed the trial court’s 50% division of Husband’s pension, but reversed and remanded the trial court’s use of a December 2018 date for valuation of the pension, rather than the date of decree. Relying on Thielmeier, a recent Supreme Court of Kentucky case (EZ QDRO LAW blogged about here), and one already oft-cited by the Court of Appeals (even in just this single blog post, see below), the Court found that while a trial court must value retirement as of the date of decree, it may divide retirement accounts other than by ‘just proportions,’ so long as the reasoning is based on the factors enumerated in KRS 403.190(1).'

On remand, we direct the [trial] court to divide equally the pension as valued on the date of dissolution unless the [trial] court makes a finding why it is just to effectively divide the pension as of another date – such as explaining why it is just not to give [Wife] the benefit of [Husband’s] post-separation contributions to his pension with specific findings discussing KRS 403.190(1) factors.

The home of bourbon, hot browns, and Thielmeier.

Brown v. Brown, Nos. 18-CI-502191, 2022-CA-0274-MR (Ky App. 2023)

KRS 403.190: presumption increase in value is marital
Marital Property: abuse of discretion, appreciation, de facto date, separate property

Dated: June 9, 2023
Reversing and Remanding
Not to be Published

The parties married in 2016, and in March 2018, Husband filed a petition for dissolution of the marriage (the parties had not resided in Kentucky for the requisite period, so this was dismissed). Husband again filed for dissolution of the marriage in August 2018, and alleged in his petition that the parties had separated in January 2018. In her response, Wife denied the same.

During the pendency of the dissolution, Husband entered a highly lucrative contract with the Atlanta Falcons, and the May 2020 trial date was continued. Husband filed a motion in February 2020 requesting that the trial court establish either a January 2018 or August 2018 valuation date for the parties’ marital assets, and accused Wife of intentionally causing delays in order to gain from his March 2019 contract. Wife disputed this, and laid blame for the delays on Husband’s failures to respond to discovery requests. Wife also accused Husband of dissipating marital assets.

The trial court subsequently ruled in favor of Husband’s motion, in March 2020, and found that the parties’ estate should be valued as of January 2018 “without appreciation or increase in value of the marital estate attributable to events occurring after that date.” Wife filed a motion to have the order amended or vacated, or alternatively made final and appealable. The trial court denied the former, but amended its order to state it was final and appealable. Wife’s appeal was subsequently dismissed as stemming from an interlocutory order.

In May 2021, Husband filed a motion requesting the exclusion of his finances after January 2018 from the evidentiary record. Wife objected, arguing that Husband’s post-January 2018 financial information bore on and was necessary for calculation of maintenance, child support, and attorney fees. The trial court again found in Husband’s favor, and set a trial date for February 2022. The parties subsequently reached a settlement agreement which among other things stated that the parties had lived apart since January 2018, and reserved Wife’s right to appeal.

In her appeal, Wife argued that the trial court erred in broadly excluding any property acquired after January 2018 from the marital estate, despite the general presumption that property acquired prior to the date of decree is considered ‘marital.’ Relying on Thielmeier, a recent Supreme Court of Kentucky case (EZ QDRO LAW blogged about here), and one already oft-cited by the Court of Appeals (even in just this single blog post, see above), the Court agreed with Wife, finding: “[O]ur Supreme Court has long made clear that property acquired after an actual or physical separation (not a legal separation) is still presumed marital unless it fits one of the exceptions listed in KRS 403.190(2).”

Even if the parties indeed separated in January 2018, the trial court could not make blanket findings, excluding property which would be presumed marital, without finding an exception under KRS 403.190(2).

In her next assignment of error, Wife argued that the trial court erred in excluding any appreciation or increase in value of the marital estate after January 2018 which was not due to the parties’ joint efforts. The Court agreed, again remanding the matter back to the trial court to explain how the exclusion of any appreciation or increase in value fit within the exceptions under KRS 403.190(2).

Finally, the Court agreed that the trial court abused its discretion when it excluded Husband’s post-January 2018 finances from the evidentiary record.

As we previously discussed, excluding from the marital estate all property acquired or increase in value of assets since the alleged physical separation date of January 2018 without finding any KRS 403.190(2) exception was contrary to Kentucky law and thus unsupported by sound legal principles… Such information might also be necessary to resolve questions about discovery disputes or whether the family court’s status quo order was violated. Thus, the exclusion of all evidence about [Husband’s] post-January 2018 financial matters was contrary to law and unsupported by sound legal principles.

Heekin v. Heekin, Nos. 20-CI-501777, 2022-CA-0433-MR (Ky. App. 2023)

Attorney Fees
Maintenance
Marital Property: dissipation

Dated: June 30, 2023
Affirming in Part, Reversing in Part, and Remanding in Appeal No. 2022-CA-0433-MR; and Reversing and Remanding in Appeal No. 2023-CA-0180-MR
Not to be Published

The parties married in 2012 and separated in 2020, during which time they had two children whom Wife cared for. Following Husband’s filing of a petition for dissolution of the marriage, Wife was awarded temporary child support, but the trial court deferred on an award of temporary maintenance. Following a trial in 2022, the trial court issued findings on the division of marital property, custody, and child support. The trial court also found that both parties had made improper transfers of marital funds during the pendency of the dissolution, and made a finding of dissipation against Husband.

The trial court further found that Wife was unable to adequately support herself due to her caretaking duties, and awarded her $3,000 in monthly maintenance. Husband’s obligation to pay attorney fees to Wife was subsequently vacated by the trial court. Husband’s appeal and Wife’s cross-appeal followed.

Husband argued the trial court erred in finding he had dissipated marital funds, and debiting that amount against his share of marital property. Noting its clear error standard of review, the Court affirmed the trial court’s decision, with caveats:

It appears from the evidence that Husband spent most of the allegedly dissipated funds on his attorney fees. After considering the expenditures and the resources of both parties at the relevant times, the Family Court determined that Husband failed to prove that the expenses were justified. Although the evidence would have supported a different conclusion, we cannot find that the Family Court clearly erred by characterizing Husband’s actions as dissipation.

Next Husband argued that the trial court erred in the amount of, duration, and retroactive application of the maintenance award to Wife. Such retroactive application meant that Husband immediately faced a maintenance arrearage of $48,000, and the Court found the trial court’s explanation for its findings inadequate, thus remanding the matter for further explanation or a reduction in the arrearage. The Court affirmed the other aspects of Wife’s maintenance award, citing Husband’s high earnings and the additional care needed for the parties’ children.

In her cross-appeal, Wife argued that the trial court abused its discretion when it set aside the award of attorney fees to her counsel. The Court agreed, insofar as it remanded the matter back to the trial court for further evaluation and findings on the reasonableness of Wife’s attorney fees.

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