Kentucky Case Law Review by Topic: March 1, 2025 through April 30, 2025

Rodriguez v. Rodriguez, Nos. 21-CI-500228, 2023-CA-1294-MR (Ky. App. 2025)

Civ. R. 59
Civ. R. 60.02: (fraud)(mistake)
Marital Property: debts, house, retirement benefits
Property Settlement Agreement: mutual mistake, Civ. R. 60.02, unconscionable
QDRO: equalization, tax liability

Dated: March 14, 2025
Affirming
Not to be Published

The parties married in 1995, separated in 2020, and began dissolution proceedings in 2021. Consequent to 04/18/2023 mediation, they reached and signed a 04/28/2023 agreement that the trial court entered with its 05/01/2023 decree of dissolution.

Under the terms of the parties’ agreement, Wife was awarded $130,000 from Husband’s 401(k) to equalize the marital estate. Upon such payoff and removal of Husband from any debt associated with the property, Husband’s legal interest in the property would be transferred wholly to Wife via separate written instrument(s). Husband’s name was not on the deed for the property.

In order to equalize division of the marital estate, [Wife] is awarded $130,000 from [Husband’s 401(k)]. [Husband] is awarded the remainder of the funds in the [401(k)], and all other retirement accounts in his name, free and clear from any and all claim by [Wife]. There are no other retirement plans.

While Husband’s previous Verified Disclosure Statement gave a balance of $272,000 for his 401(k), the parties’ agreement included no exact figures for any of the assets or debts divided therein, including the HELOC loan balance. From the Opinion, it appears that perhaps the parties (and Wife, after the 04/2023 agreement) were making payments of interest, only, since the balance of the loan from 2018-08/07/2023 remained unchanged: $124,693.14.

The trial court entered a QDRO (Editor’s Note: the Opinion dates this for 07/12/2022, though the timeline suggests 07/12/2023) awarding Wife $130,000 from Husband’s 401(k), and Wife filed a Civ. R. 60.02 motion wherein she alleged the parties’ intent to award her a ‘net’ amount of $130,000 and that her receipt of ~$104,000 (presumably after taxes were applied) yielded an unconscionable result. To correct this, Wife requested an amendment to the decree and agreement, awarding her “no less” than $130,000 from Husband’s 401(k), and for (a) entry of a second, additional QDRO for the shortfall amount, or (b) an order that Husband pay her the remainder himself. This motion, along with her subsequent Civ. R. 59.05 motion to amend the decree, was denied. Wife’s appeal followed.

Reviewing both the parties’ agreement—and the substance of her Civ.R. 60.02 motion—for abuse of discretion, the Court affirmed the trial court’s denials. Wife sought relief under Civ. R. 60.02 (a) and (f), which provides:

On motion a court may, upon such terms as are just, relieve a party or his legal representative from its final judgment, order, or proceeding upon the following grounds: (a) mistake, inadvertence, surprise or excusable neglect . . . or (f) any other reason of an extraordinary nature justifying relief.

Despite Wife’s arguments to the contrary, the trial court did not agree that the terms of the agreement were evidently mistaken. The agreement included no indication that Wife would use the QDRO award to pay off the HELOC debt, nor was its balance stated. The agreement did, however, contain acknowledgements by both parties that they fully understood its terms, had adequate access to counsel, and believed it to be fair and equitable.

Finding Wife failed to allege “mistake, inadvertence, surprise or excusable neglect,” the Court turned to Civ. R. 60.02(f) and again affirmed.

Landlocked by geography, but never in spirit.

To succeed on an application for relief under CR 60.02(f), a moving party must present a “reason of an extraordinary nature justifying relief.” “This type of relief is exceptional, to be granted cautiously, and only upon a very substantial showing of special circumstances that justify such relief.” Jolly, 698 S.W.3d at 431 (citing Copas v. Copas, 359 S.W.3d 471, 476 (Ky. App. 2012)). “What constitutes a reason of extraordinary nature is left to judicial construction.” Commonwealth v. Spaulding, 991 S.W.2d 651, 655 (Ky. 1999). Three factors influence this judicial construction: (1) whether relief under a different subsection of CR 60.02 is available or applicable; (2) “whether the moving party had a fair opportunity to present his [or her] claim at the trial on the merits[;]” and, (3) “whether the granting of CR 60.02(f) relief would be inequitable to other parties.” See Snodgrass v. Snodgrass, 297 S.W.3d 878, 884 (Ky. App. 2009) (citations omitted).

Wife’s appeal alleged that Husband misled her as to the nature of his 401(k), but failed—the Court found—to demonstrate the nature of such omissions and their impact on her award amount.

The Court further noted Wife’s apparent prior acceptance of the QDRO terms, whereunder she would be responsible for any taxes on her distribution (Editor’s Note: here and elsewhere the Opinion mentions penalties, though any early withdrawal penalties would typically not apply to a QDRO assignment to an alternate payee from a 401(k)). Finally, the Court turns to its 3rd factor enumerated above, and the potentially inequitable result of granting Wife’s motion, and imposing $20,000+ additional payments on Husband.

The Court thus rejected Wife’s appeal and affirmed the trial court decisions.

Salyer v. Salyer, Nos. 08-CI-01331, 2024-CA-0623-MR (Ky. App. 2025)

Civ. R. 60.02: (timely)
Marital Property: final hearing, laches, retirement benefits (military)

Dated: March 28, 2025
Affirming
Not to be Published

The parties married in 1991 and began dissolution proceedings in 2008. The trial court referred their case to a Domestic Relations Commissioner (DRC) for an evidentiary hearing, following which the DRC entered a report and recommendations.

The 2008 DRC report noted Husband’s pending retirement from the military, and current private employment. Relevant to the appeal, the DRC report wrote that Husband “acknowledges” Wife’s entitlement to his military pension benefits (which were not yet in pay). The report recommended the entry of an interlocutory decree of dissolution (to prevent dissipation and allow Husband to purchase a home), and the reassignment of the matter for a final hearing upon motioning of either party. Following the report’s recommendations, the trial court entered an interlocutory decree in December 2008, reserving the division of marital property for future determination.

A subsequent DRC hearing was cancelled, and neither parties moved to reschedule. In 2023, Wife sought Civ. R. 60.02 relief, requesting the case be reopened and her award of half of Husband’s military pension benefits. From 2008-2023, Wife had received a share of Husband’s pension, during which time she also relocated to her native South Korea. In 2023, Husband made an election that caused her benefit payments to cease. Wife claimed she had not fully understood the unresolved status of the matter, and assumed by her receipt of benefits that no further action was needed.

Husband countered that any payment to Wife should first take into account ~$120,000 in alleged dissipations by Wife. The trial court granted Wife’s motion and reopened the matter, and referred it to the DRC for a hearing. At the hearing, Wife alleged Husband’s 2023 election caused payments to her to cease, and Husband again countered that Wife’s previous alleged dissipation should be offset against any award of his military pension. Husband requested the denial of any further entitlement to Wife from his pension, or a belated hearing for a full accounting and distribution of the parties’ marital assets, with an award of child support to him.

In April 2024, the DRC entered a report and recommended the denial of the parties’ requests, noting their delay in raising these issues. Wife filed exceptions, which were overruled by the trial court, and the matter was once again closed. Wife’s appeal followed.

In her appeal, Wife alleged that the trial court erred when it failed to divide the parties’ marital assets, claiming that the decision not to further divide Husband’s pension was barred by the doctrine of res judicata.

Editor’s Note: The Court’s Opinion and footnotes in this case include interesting and timely admonishments to counsel for the use of non-existent citations, which the Court presumed stemmed from reliance on AI in their motion drafting. The Court also uses this case as an example for the pitfalls in failing to resolve all issues prior to decree.

As part of her appeal, Wife pointed to Husband’s 2008 acknowledgement in the DRC report of her entitlement to his pension. The Court disagreed, writing instead:

Implicit in the DRC’s statement is that [Wife] could be awarded one-half of [Husband’s] retirement benefit upon a full disposition of property, a disposition that did not occur. As the parties did not attend a final hearing for the disposition of property, there was no final distribution or allocation to which the court is bound. Regardless, a trial court is not bound by a DRC report.

Further, the Court noted, Wife’s failure to move the trial court for specific findings under KRS 403.190 precludes her raising the trial court’s alleged failure to make findings, on appeal. The Court further noted Wife’s failure to preserve a hearing record for appellate review. Wife’s argument, the Court wrote, might have been better founded in the “law of the case” doctrine, which “binds a court to previous final conclusions within the same lawsuit… res judicata binds a court to final conclusions in a prior action.”

Turning to Husband’s laches argument, the Court agreed. The parties were obligated to resolve the division of marital property issues, and their failure to do so in a timely manner barred Wife’s claims on appeal. Wife’s 13-year delay, the Court found, was unreasonable given her awareness that the final hearing was cancelled and never rescheduled, and the granting of her motion would be unfairly prejudicial to Husband.

This case, the Court continued, is distinct from matters where a trial court divides marital property, and the parties do not become aware of problems with said division until much later. The parties in this case were aware of their obligation to undertake resolution of marital property division, and failed to do so. The Court thus affirmed.

Harr v. Harr, Nos. 23-CI-00211, 2024-CA-0642-MR (Ky. App. 2025)

Maintenance: retirement
Marital Property: equitable division, house, retirement benefits

Dated: April 11, 2025
Affirming
Not to be Published

As part of the parties’ 2023 dissolution proceedings, the marital portion of Husband’s retirement account was divided, vehicles were mutually awarded, and the marital residence was ordered sold, with proceeds to be split between the parties. Wife was awarded maintenance of $1,000/month, though the trial court reserved the right to revisit this award after the home was sold. Husband’s motion to alter, amend, or vacate the maintenance award was denied.

The following year, Husband again sought to modify the maintenance award, citing the sale of the marital residence and Wife’s receipt of proceeds therefrom (as well as her awarded interest in his retirement account), and arguing that the continued payments caused him financial hardship.

Wife countered that—while she had lowered expenses by living with family—she still needed time to obtain sufficient employment to meet her needs. At a subsequent hearing, the trial court heard testimony concerning the parties’ respective incomes and expenses: Husband had remarried and benefitted from his new Wife’s income, and Wife had only recently purchased a property that was not yet ready for her to occupy. Her employment in hospice care afforded a minimal income compared to Husband’s $94,303 earnings the year before. The trial court thus denied Husband’s motion, finding that Wife remained unable to meet her reasonable needs, and ordered that Husband’s $1,000/monthly spousal support payments should continue an additional 4 years.

Husband appealed, arguing that the trial court abused its discretion when it failed to reduce or terminate the maintenance award. He argued that the award was unconscionable based on the short term of the marriage, and had not contemplated the parties’ standard of living during the marriage, for which no testimony had been offered. Husband argued that Wife’s earnings from her employment, his retirement, and the proceeds from the sale of the home, offered her sufficient means to cover her expenses. The continued maintenance obligation, Husband claimed, was unsustainable based on his current income and expenses.

The Court of appeals upheld the trial court’s decision. The short term of the parties’ marriage, the Court found, was not an adequate basis to modify or terminate the award. Husband’s income far exceeds Wife’s, whose reasonable monthly expenses totaled $3,800. Wife should not, the Court found, be required to deplete her awarded share of the retirement account to meet current needs. While Husband’s standard of living had substantially improved since the time of the modification hearing, Wife continued to struggle to meet her expenses. Thus, the Court affirmed the trial court’s decision.

Reed v. Estate of Gregory Hiles, et. al., Nos. 23-CI-000571, 2024-CA-0382-MR (Ky. App. 2025)

Marital Property: discovery, gift, property settlement agreement, survivorship
Property Settlement Agreement
Remand

Dated: April 25, 2025
Vacating and Remanding
Not to be Published

Following the death of Gregory Hiles (Decedent), it was discovered that Appellant had remained the named beneficiary on his retirement accounts, even though the parties’ marital settlement agreement had expressly barred her from any claim to the accounts. Following attempts by the Estate to collect the funds in the retirement accounts, the Estate was informed that an order directing transfer of the funds to the Estate or signed waiver from Appellant was necessary for distribution to the Estate. Appellant refused to sign the waiver.

Subsequent to this, the Estate filed a declaratory judgment action arguing that the parties’ agreement effectively waived any interest Appellant held and thus invalidated the beneficiary designations naming her. The Estate cited the agreement’s provisioning, stating Husband was: “to retain all retirement accounts and pensions plans currently titled in his name and [Appellant] shall not make any claim against [his] retirement.” The Estate requested an order from the trial court directing transfer of the funds to the Estate. In her answer, Appellant admitted to her waiver of marital interest via the agreement, but denied that its terms prohibited her receipt of the funds as a gift from Decedent. The Estate filed a motion for summary judgment, and Appellant responded that she had not been afforded sufficient time for discovery. Appellant sought copies of the signed beneficiary designation forms, which had not been provided. In additional responses on the Estate’s motion, Appellant cited Civ. R. 56.03, which presumes that discovery will be completed before summary judgment is granted. The trial court granted the motion for summary judgment, and Appellant’s appeal followed.

Appellant argued that the trial court prematurely granted summary judgment without affording her ample opportunity for reasonable discovery. The Court ultimately agreed, citing Civ. R. 56.03 and the Supreme Court of Kentucky’s own admonition to trial courts “not to take up [summary judgment] motions prematurely and to consider summary judgment motions ‘only after the opposing party has been given ample opportunity to complete discovery.’” Blankenship v. Collier, 302 S.W.3d 665, 668 (Ky. 2010) (quoting Pendleton Bros., 758 S.W.2d at 29).

In adjudicating on the motion, filed a mere 48 days after Appellant’s answer, the trial court could not have afforded Appellant proper time for discovery. Further, the Court found that the trial court’s conclusion that the beneficiary designations were immaterial was unsupported. It is possible that Husband re-designated Appellant following the divorce, which would make this matter factually distinct from the case law relied on in the Estate’s motion. Finding thus, the Court vacated the trial court’s judgment, and remanded the matter for further proceedings.

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