Kentucky Case Law Review by Topic: August 1, 2024 through October 31, 2024

Jolly v. Jolly, Nos. 18-CI-00202, 2023-CA-1189-MR (Ky. App. 2024)

Civ. R. 60.02
Marital Property: equitable distribution, house
Property Settlement Agreement: regret, unconscionable

Dated: August 30, 2024
Affirming
To be Published

The parties married in 1997, and in 2018, Husband was indicted for financial crimes and Wife began divorce proceedings in which Husband chose to represent himself. As to his criminal action, Husband entered a guilty plea in November 2018, the terms of which included the seizure of numerous assets, while allowing Wife to retain the marital home. Husband signed a quitclaim deed of the home to Wife in February 2021. In 2022, while Husband was incarcerated, the parties entered a decree of dissolution and separation agreement signed by both parties.

Daniel tried not to show it, but when Henry said his paper garland “looked nice,” the indifference stung like a winter morning’s frost.

In 2023, Husband filed a Civ. R. 60.02 motion requesting that the trial court set aside the separation agreement based on his “excusable neglect” and mental state at the time of its signing, having made a recent suicide attempt, and the trial court’s alleged failure to appoint a guardian ad litem to protect his interests. Wife opposed Husband’s motion, which the trial court subsequently dismissed, finding that the agreement was neither unconscionable nor signed under duress. Husband appealed.

Noting its “clearly erroneous” standard of review, the Court ultimately affirmed the trial court’s decision. Husband’s argument, the Court wrote, failed to show that the agreement was unconscionable, and he could not claim to have waived his right to the home without proper consideration when he had already executed a quit claim deed to the same effect in 2021.

[Husband] failed to meet his burden by not asserting or submitting any proof that the Separation Agreement was a result of “mistake, inadvertence, surprise or excusable neglect.” CR 60.02(a). In fact, [Husband] did not show how the terms of the Separation Agreement were inconsistent with standard uncontested divorce language, nor did he show the contract was unfair, unreasonable, or inconsistent with the parties’ individual situations.

The Court similarly dismissed Husband’s request for relief under Civ. R. 60.02(f), noting that such relief is exceptional, and granted only under circumstances that justify its use. Husband argued that the trial court’s alleged failure to appoint a guardian ad litem constituted such circumstances, but the Court found these arguments unpersuasive. Husband’s decision to represent himself occurred prior to his incarceration, and he again expressly waived representation in the separation agreement.

Further, CR 17.04 requires appointment of a GAL if/when a prisoner “fails or is unable to defend an action[.]” Here – unlike the defendant in Davidson – [Husband] did not fail to defend. Criminal proceedings did not occur without his knowledge or involvement; no civil hearings were held without [Husband’s] presence; and no judgments were entered against him to which he did not contractually agree.

The terms of the parties’ agreement were consistent with the parties’ earlier agreement with the federal government, and thus Civ. R. 60.02(f) relief is not available to Husband, the Court found.

Halvorson v. Halvorson, Nos. 10-CI-00991, 2023-CA-0892-MR (Ky. App. 2024)

Marital Property: abuse of discretion
Property Settlement Agreement: ambiguity
Remand

Dated: September 6, 2024
Reversing and Remanding
Not to be Published

Under a 2013 addendum to the parties’ settlement agreement, Wife received the residual profits from the parties’ business, contingent on monthly payments to Husband of $10,000 and his ongoing receipt of disability benefits. Under the terms of the parties’ addendum, should Husband’s benefits decrease, receipt of the residual profits would instead revert back to him and Wife’s payments to him would cease.

In 2022, Husband filed a motion to enforce the reversion of the residual profits back to him, citing reductions to his disability payments due to his age from $13,300 to $800, and then $500. In response, Wife filed a motion for summary judgment, asserting that the reductions were anticipated when the addendum was executed, as they occurred due to Husband’s age under the policy terms, and not due to his receipt of income from the business, the latter of which had been the concern –Wife argued– when they executed the addendum.

The trial court subsequently granted summary judgment, and granted Wife’s motion. Husband’s motion to alter, amend, or vacate was also denied.

Finding that the trial court “did not limit itself to construction of the ‘four corners of the agreement,’” the Court found that the trial court’s order granting summary judgment relied on extrinsic evidence introduced by Wife, rather than a plain reading of the addendum.

In this case, there are two options: (1) either the terms of the Addendum are unambiguous, and so consideration of extrinsic evidence is inappropriate; or (2) the terms of the Addendum are ambiguous, and summary judgment is precluded.

The term “full disability payments” in the addendum, the Court wrote, was ambiguous, as it could reasonably mean either the maximum benefit previously received or the contractual benefit to which Husband was entitled. The Court thus found that summary judgment was inappropriate, and remanded the matter back to the trial court.

Williams v. Brown, Nos. 09-CI-500616, 21-CI-500342, 2023-CA-0635-MR (Ky. App. 2024)

Marital Property: retirement benefits (military), unjust enrichment
Property Settlement Agreement: enforcement

Dated: September 20, 2024
Affirming
Not to be Published

During the parties’ dissolution proceedings in 2009, they entered into a settlement agreement wherein the division or other issues related to their respective retirement benefits was reserved. The parties later, temporarily reconciled, from which they had another child. A custody action concerning the child was initiated in 2021, which the trial court consolidated with the 2009 matter, ordering that the 2009 agreement terms would remain in effect so long as they were not inconsistent with the trial court’s current order.

Husband retired in 2021, following which Wife moved the trial court to have the retirement benefits issue removed from abeyance. After some COVID-related delays, the trial court conducted a hearing on the retirement benefits, and issued a 07/08/2022 order compelling the division of the marital portion of Husband’s military pension, Wife’s FERS pension, and both parties’ TSP accounts. Wife was awarded 22.91% of Husband’s monthly benefit.

Wife began receiving payments from Husband’s military pension in January 2023. And in March 2023, Wife filed a motion requesting payment of arrearages she alleged Husband wrongfully received and withheld, from 03/01/2021-12/01/2022. Wife sought payment of her share of these benefits, discounted by the amounts she had received from her TSP account during the same period, and attached her calculation of the amount to an accompanying affidavit.

At a subsequent hearing on another matter, Husband’s attorney argued that Wife’s motion was an untimely attempt to reopen the trial court’s 07/08/2022, and Wife’s attorney countered that the payments subject to Wife’s motion were received while the issue was still pending and were thus subject to the 07/08/2022 order, and division therein. Husband requested a separate hearing to address Wife’s motion, to allow further arguments and consideration of the tax implications of his alleged receipt of Wife’s share of the military pension benefits.

In April 2023, the trial court entered an order awarding Wife $13,319 repayments from Husband, representing her share of the payments identified in her order, discounted for her receipt of TSP payments during the same period. Husband filed a motion to alter, amend, or vacate the April order, arguing that the trial court had failed to consider tax implications, and that the order improperly modified the 07/08/2022 order. Husband further argued that the trial court’s award amounted to ‘double dipping,’ since his previous child support payments had been based on his full payments’ receipt.

The trial court subsequently amended its order, adjusting the awards to both parties to be based on amounts currently being received. Husband appealed.

Noting its de novo standard of review, the Court was unpersuaded by Husband’s argument that the trial court had acted outside of its jurisdiction. The trial court’s 07/08/2022 order, Husband argued, precluded Wife’s receipt of payments he had already received. But he failed to support this assertion or direct the Court to pertinent text in the order.

The trial court’s 2023 order, the Court found, did not modify the 07/08/2022 order, but rather enforced and effectuated it.

The Court likewise rejected Husband’s assertion that Wife’s claims were barred by the application of res judicata, as such application relies on the premise the trial court modified the 07/08/2022 order, which the Court found it had not.

Finally, the Court rejected Husband’s arguments that the trial court erred when it failed to grant his request for an evidentiary hearing concerning Wife’s motion and his 03/01/2021-12/01/2022 receipt of payments. Noting the trial court’s broad discretion in handling its docket, and the lack of specific arguments as to any miscalculation or factual error in the trial court’s findings, the Court again rejected Husband’s arguments and affirmed.

Jesensky v. Jesensky, Nos. 21-CI-00207, 2023-CA-1394-MR (Ky. App. 2024)

Contempt
Marital Property: house
Property Settlement Agreement: enforcement, debt

Dated: October 4, 2024
Affirming
Not to be Published

Resultant from the parties’ 2023 settlement agreement, Wife was awarded the marital residence and ordered to obtain financing for the same following entry of the decree. When Wife failed to do so, Husband motioned the trial court concerning the sale of the residence, per the terms of the settlement agreement in such event.

Wife countered with a motion to hold Husband in contempt for his failure to sign a quitclaim deed, and that his inaction had blocked her attempts at refinancing. In a hearing on the motions, Husband testified to his receipt of notice of Wife’s failure to make the mortgage payments, following which he contacted the bank and paid a reduced amount to settle the debt.

Wife was unable to provide any proof of her efforts to refinance the home, or corroborate her claim of obstruction by Husband’s actions. Wife further admitted that her low credit score had impacted her efforts.

The trial court subsequently found Wife in contempt, and ordered the sale of the home. The trial court further ordered that Wife reimburse Husband for half of his negotiated payoff of the loan.

On appeal, Wife raised several arguments, including that the trial court erred in finding her in contempt. She contended that Husband’s failure to cooperate by signing the quitclaim deed was an obstacle to refinancing, and she also argued that the settlement agreement’s terms had been improperly modified. The Court disagreed, noting that Wife had not presented evidence that refinancing was impossible despite her credit issues and Husband’s actions. The Court emphasized that her uncorroborated testimony was insufficient to overturn the trial court’s judgment. Furthermore, the Court found no abuse of discretion in the trial court’s interpretation of the settlement agreement, which required Wife to pay her half of a loan even after it was paid off by Husband.

The Court also rejected Wife’s claim that she should not be required to repay the loan because it was no longer in default. The settlement agreement clearly stated that the parties agreed to equally divide the debt, and the Court found that Wife’s obligation to pay did not depend on whether the loan had been paid off by Husband. The Court thus affirmed.

Editor’s Note: Shout out to the ever-dapper John Berger, Esq., who not only crushes appeals but also sets the bar for courtroom couture—victory never looked so sharp!

Williams v. Williams, Nos. 20-CI-00137, 2023-CA-1029-MR, 2023-CA-0962-MR (Ky. App. 2024)

Attorney Fees
Civ. R. 60.02: (excusable neglect, fraud)

Dated: October 11, 2024
Affirming
Not to be Published

In 2020, Husband petitioned for dissolution, and in 2021 –after Wife largely refused to take part in the proceedings– the trial court entered a decree dividing the parties’ marital property. Wife obtained new counsel shortly thereafter, but did not file any motions to alter, amend, or vacate, or notice of appeal.

Months later, Wife filed a Civ. R. 60.02 motion to set aside the decree, citing mental health issues as the reason for her failure to participate in the divorce proceedings. She also claimed that certain assets were omitted or misallocated. Following several hearings, the trial court denied Wife’s motion and later awarded Husband attorney fees.

Wife’s appeal followed, wherein she argued that the trial court erred in denying her Civ. R. 60.02 motion. The Court disagreed, firstly on the basis her arguments could have been raised in a motion to alter, amend, or vacate, or appealed directly.

While [Wife] claims in her appellant brief that her mental breakdown prevented her from filing a CR 59.05 motion or appeal, she does not explain why her counsel did not.

The Court further noted Wife’s failure to identify which assets were not disclosed or misallocated. As for any failure to separately award her funds she alleged attributable to inheritance money she received, the Court found Wife’s actions, commingling, and withdrawals created substantial confusion.

As for Wife’s claim of excusable neglect under Civ. R. 60.01(a), and that her mental health difficulties qualified as grounds for extraordinary relief under Civ. R. 60.02(f), the Court again disagreed. Wife’s struggles, while serious, did not prevent her from participating in the dissolution, and are thus not grounds for relief.

Finally, noting the trial court’s discretion in awarding attorney fees, the Court also affirmed the award of the same to Husband.

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