Kentucky Case Law Review by Topic: January 1, 2024 through February 29, 2024

Maginnis v. Ninamary, Nos. 17-CI-500728, 2022-CA-0038-MR, 2022-CA-0903-MR, 2022-CA-1239-MR (Ky. App. 2024)

Civ. R. 54.02: final and appealable
Maintenance
Marital Property: findings of fact, goodwill, standard of review, unjust enrichment, valuation
Remand
Witness: expert

Dated: January 19, 2024
Affirming
Not to be Published

Editor’s Note: For a summary of a previous Appeals Court decision in this case, click here.

United we stand, divided we fall in the postseason.

On remand from a previous appeal, the trial court calculated what portions of the overall value of marital business were attributable to enterprise goodwill, and thus marital/equally divisible, and what portions were attributable to personal goodwill, and thus to be retained by Husband, only. Said business was valued at $284,414, of which 70% was deemed attributable to personal goodwill, and 30% enterprise goodwill. Based on this, Wife was awarded $85,324 for her one-half share of the enterprise goodwill value.

Tasked with reviewing the parties’ respective incomes and reasonable expenses, the trial court also found that Wife was impeded in her ability to earn income, whereas Husband earned a surplus of $6,858 beyond his monthly expenses. The trial court thus awarded Wife $3,100 monthly in maintenance. Both parties again appealed.

Wife’s appeal concerned the enterprise/personal goodwill valuation for the marital business, and her award from the former. Wife argued that the trial court erred in assigning any of the business’ value to personal goodwill.

However, this Court’s prior opinion held otherwise, specifically holding that the goodwill analysis in Gaskill is applicable to professional and non-professional businesses alike. Right or wrong, that holding is now [the] law of the case, and is binding on all parties, the Family Court, and this Court on subsequent appeal.

Thus, the Court’s review of the trial court’s decision primarily concerned whether it had complied with its directive on remand, and the Court would only disturb the decision if it were ‘clearly erroneous.’ In reaching the 70%/30% amounts, the trial court relied on the uncontested testimony of Wife’s expert. This was the same testimony on which the overall value of the business was assigned, and the Court thus affirmed the trial court’s determination.

Husband’s appeal concerned the trial court’s award of maintenance to Wife, and its determination of his monthly income. Husband argued that the trial court erred when it relied on gross receipts from his tax return and Wife’s assertion of his receipt of unreported cash payments. Noting its abuse of discretion standard of review, the Court again affirmed, finding that the trial court’s reliance on gross receipts was reasonable, and that neither party disputed that the business paid some of Husband’s expenses directly.

The Court likewise rejected Husband’s argument concerning Wife’s unjust enrichment, i.e., that the trial court erred when it refused to modify maintenance retroactively, based on the Court’s prior decision and remand.

In its prior opinion, this Court did not hold that the [trial court] abused its discretion by awarding maintenance in the 2019 judgment. Rather, the prior panel merely held that the award must be reconsidered in light of the more specific findings regarding [Husband’s] income and the new division of marital property.

Finally, Husband argued that the trial court erred in denying his motions concerning the parties’ marital home. While the marital home was originally ordered to be sold, after a series of delays, Wife eventually refinanced the mortgage and assumed its ownership. Husband argued the trial court erred when it granted Wife additional time to secure financing. Husband further argued that the trial court erred in denying his motion to deduct his mortgage payments from the maintenance obligation. The Court found both of these arguments untimely. The Court further found that Husband failed to demonstrate grounds for relief, or that the ultimate result of his ongoing mortgage payments was inequitable.

The remaining portion of Husband’s appeal concerned discovery issues, which the Court found it had no jurisdiction over, and thus declined to address.

Gibbs v. Gibbs, Nos. 21-CI-00934, 2023-CA-0246-MR (Ky. App. 2024)

Marital Property: burden of proof, disclosure, house, source of funds, tracing

Dated: January 26, 2024
Not to be Published
Affirming

As part of the parties’ 2022 dissolution, the trial court assigned respective interests of the parties in their marital home. During the proceedings, Husband asserted his nonmarital interest stemming from a $15,000 downpayment for the marital home, prior to the marriage, for which he had no documentary evidence. At trial, he was unable to provide any documentation, and Wife was unwilling to concede Husband’ nonmarital interest. Following a discussion of pretrial disclosures, and the absence of Husband’s nonmarital claim therein, Husband testified he was “fine not accepting,” and he “could not get paperwork.”

Subsequently, Husband obtained additional documentation, and filed a motion for post-judgment relief, which was denied. His appeal followed. The Court denied Husband’s appeal, however, finding that the trial court did not abuse its discretion. The Court found that Husband’s failure to provide documentation prior to trial, and failure to claim his interest in the parties’ Final Verified Disclosures, constituted a waiver of any alleged interest.

Bowers v. Bowers, No. 20-CI-00812, 2023-CA-0102-MR (Ky. App. 2024)

Attorney Fees
Maintenance
Marital Property: debts, equitable distribution

Dated: February 9, 2024
Not to be Published
Affirming

As part of the parties’ dissolution, Wife was awarded maintenance payments of $3,300/month, both parties were awarded their respective equity in various marital assets, Husband was assigned 85% of the parties’ overall debts, and Wife was awarded $15,000 in attorney fees in consideration of the parties’ disparate incomes.

Husband appealed, arguing that the trial court erred in its award of maintenance, and assignment of debts and attorney fees. Noting that maintenance awards are within the “sound and broad discretion” of the trial court, the Court affirmed the same, finding that trial court properly applied the statutory factors for such an award, and that its findings were supported by the evidence in the record.

The Court similarly affirmed the trial court’s division of marital debts, finding that their division was well within the trial court’s discretion:

Just as there is no presumption that all debt incurred during the marriage is marital, “there is no presumption that debts must be divided equally or in the same proportion as the marital property.” Smith v. Smith, 235 S.W.3d 1, 15 (Ky. App. 2006).

Finally, the Court found that Husband failed to demonstrate an abuse of discretion in the award of attorney fees to Wife. While Husband might have argued that the trial court failed to conduct an analysis of billed attorney fees from Wife’s counsel, he instead asserted that he should not have to pay any attorney fees at all. Finding no abuse of discretion, the Court again affirmed.

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