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Zink v. Zink

Commonwealth of Kentucky Court of Appeals
Mar 8, 2013
NO. 2011-CA-000707-MR (Ky. Ct. App. Mar. 8, 2013)

Opinion

NO. 2010-CA-002172-MR NO. 2010-CA-002208-MR NO. 2011-CA-000620-MR NO. 2011-CA-000707-MR NO. 2011-CA-000846-MR

03-08-2013

STEPHEN F. ZINK APPELLANT/CROSS-APPELLEE v. TERRI H. ZINK APPELLEE/CROSS-APPELLANT AND TERRI H. ZINK APPELLANT/CROSS-APPELLEE v. STEPHEN F. ZINK APPELLEE/CROSS-APPELLANT AND STEPHEN F. ZINK APPELLANT v. TERRI H. ZINK APPELLEE

BRIEFS FOR APPELLANT/ CROSS-APPELLEE; APPELLEE/ CROSS-APPELLANT; APPELLANT, STEPHEN F. ZINK: M. Thomas Underwood Louisville, Kentucky BRIEFS FOR APPELLEE/ CROSS-APPELLANT; APPELLANT/CROSS-APPELLEE; APPELLEE, TERRI H. ZINK: J. Baxter Schilling Louisville, Kentucky


NOT TO BE PUBLISHED


APPEAL AND CROSS-APPEAL FROM JEFFERSON CIRCUIT COURT

HONORABLE DOLLY WISMAN BERRY, JUDGE

ACTION NO. 04-CI-504478

OPINION

AFFIRMING IN PART, REVERSING

IN PART, AND REMANDING

BEFORE: KELLER, TAYLOR, AND VANMETER, JUDGES. VANMETER, JUDGE: This opinion addresses the following consolidated appeals from the underlying action dissolving the marriage of Stephen and Terri Zink:

(1) Stephen's direct appeal of the trial court's July 21, 2010, order following remand from the Court of Appeals and of the trial court's November 1, 2010, final order following remand from the Court of Appeals (2010-CA-002172); Terri's cross-appeal of those orders (2010-CA-002208);
(2) Terri's direct appeal of the trial court's December 9, 2010, order and the trial court's March 9, 2011, order on her motion to alter, amend and/or make additional
findings of fact relating to the December 9, 2010, order (2011-CA-000620); Stephen's cross-appeal of those orders (2011-CA-000707); and
(3) Stephen's direct appeal of the trial court's April 11, 2011, order denying his motion for CR 60.02 relief (2011-CA-000846).

Terri filed a notice of cross-appeal; however, her appellate brief simply responds to Stephen's claims of error on direct appeal. She does not raise any independent claims of error.

Kentucky Rules of Civil Procedure.

Stephen and Terri Zink were married on May 8, 1981. Three children were born of the marriage, none of whom remain a minor. During the course of the marriage, Stephen was employed at a closely held corporation in which he and his father were major stockholders. Terri and Stephen separated in June 2000, reconciled in April 2001, separated in August 2004, and on December 8, 2004, Terri filed a petition for dissolution of their marriage. A three-day trial was held in July 2006. Following the trial, the Jefferson Family Court entered findings of fact, conclusions of law, and a judgment and decree of dissolution of marriage on October 2, 2006. Both parties filed motions to alter or amend the judgment. The case was then appealed, Zink v. Zink, 2007-CA-000419-MR and 2007-CA-000563-MR, and 2007-CA-002402-MR (Feb. 27, 2009).

These appeals were addressed in one opinion by this court, 2009 WL 484963 (hereinafter referred to as "Zink I").

The estate which the trial court divided was considerable. It included several valuable tracts of real estate, bank and brokerage accounts, and stock in the corporation that employed Stephen. Previously on appeal, this court affirmed in part, reversed in part, and remanded the matter to the trial court for further proceedings (and reapportionment of the marital property if necessary) on the following issues: (1) the amount of Terri's marital share of properties located at 106 and 108 East Broadway; (2) whether the increase in value of the Business Office Supply Company, Inc. ("BOSCI")/Office Resources, Inc. ("ORI") stock was due to the significant efforts of either party; (3) the character of Office Resources, Inc. Acquisition ("ORIA") and AEON Legacy Partners, Inc. ("AEON") stock; (4) the portion of the Parthenon account which is marital property; (5) dissipation of marital assets; and (6) whether the educational expenses for the parties' child (who was then a minor) should be allocated between the parties and if so, in what proportion.

On remand, by order entered July 21, 2010, the trial court granted Terri one-half of the parties' interest in the East Broadway properties ($179,961.85), one-half of the increased value of the BOSCI/ORI stock ($486,344.05), and a share of the increased value of the Parthenon account ($329,816.52). The trial court reserved the issues of modifying child support, maintenance and allocation of educational expenses for a future hearing.

Both parties filed motions to alter, amend or vacate the July 21, 2010, order. By order entered November 1, 2010, the trial court denied their motions, finding: (1) Terri was not entitled to pre-judgment interest on the $989,572.42 awarded to her in the July 21, 2010, order; (2) Stephen was not entitled to an offset for previous maintenance and child support payments against the lump sum award to Terri on remand; (3) the increase in value of the Parthenon account was income and therefore marital property and the date of dissolution was the correct date to determine its value; and (4) Stephen's nonmarital share in the BOSCI/ORI stock was properly calculated and the increase in value of that stock was marital property.

On November 15, 2010, the trial court conducted a hearing on modification of child support, modification of maintenance, and the allocation of expenses for the child's private school education. On November 29, 2010, the trial court held a hearing on Stephen's motion for a reduction or elimination of post-judgment interest. By order entered December 9, 2010, the trial court (1) modified Stephen's monthly child support payment from $715.40 to $131, effective April 17, 2009, through June 15, 2010; (2) terminated maintenance to Terri, effective January 1, 2011; (3) ordered the parties to equally share the private school expenses for their child; as a result, Terri owed Stephen $13,501.50; (4) ordered Terri to reimburse Stephen $8,196.16 for child support paid after April 17, 2009; (5) denied Stephen's motion for a reduction or elimination of post-judgment interest; and (6) ordered Terri to reimburse Stephen for taxes incurred as a result of liquidating stocks to pay her. Terri moved to alter, amend and/or make additional findings of fact, which the trial court denied by order entered March 9, 2011.

The trial court's order also refers to this amount as $8,182.16 but since we reverse this portion of the order the discrepancy is immaterial.

On April 11, 2011, the trial court entered an order denying Stephen's CR 60.02 motion for relief from the portion of the July 21, 2010, and November 1, 2010, orders awarding Terri an additional $486,344.05. The trial court found that contrary to Stephen's assertion, it had not made a mathematical error in calculating the amount. These consolidated appeals followed.

Appeal Nos. 2010-CA-002172 and 2010-CA-002208

Stephen's appeal and Terri's cross-appeal are directed towards the trial court's characterization of certain property as marital and its distribution of marital property.

Statutory framework and standard of review

When disposing of property in a dissolution action, the trial court is required by KRS 403.190 to follow a three-step process: (1) characterize each item of property as marital or nonmarital; (2) assign each party's nonmarital property to that party; and (3) equitably divide the marital property between the parties. Travis v. Travis, 59 S.W.3d 904, 908-09 (Ky. 2001) (citation and footnotes omitted). KRS 403.190(3) creates a presumption that all property acquired after the marriage is marital property. Sexton v. Sexton, 125 S.W.3d 258, 266 (Ky. 2004) (footnotes omitted). Thus, the party claiming that property acquired during the marriage is nonmarital bears the burden of proof. Id. (citations omitted).

Kentucky Revised Statutes.

The classification of an asset as marital or nonmarital property "involves an application of the statutory framework for equitable distribution of property upon divorce and therefore constitutes a question of law subject to this Court's independent determination." Holman v. Holman, 84 S.W.3d 903, 905 (Ky. 2002) (citations omitted). On appeal, we review the trial court's findings of fact only to determine if they are clearly erroneous. CR 52.01. A factual finding is not clearly erroneous if it is supported by substantial evidence. Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998) (citations omitted). Substantial evidence is "evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men." Id. Though, a trial court's division of marital property and assignment of debts acquired during the marriage will not be disturbed absent an abuse of discretion. Neidlinger v. Neidlinger, 52 S.W.3d 513, 523 (Ky. 2001).

BOSCI/ORI stock

Stephen argues that the trial court erred by (1) determining that the increase in value of the BOSCI/ORI stock was due to the joint efforts of the parties, (2) calculating the value of the BOSCI/ORI shares at the time they were acquired, and (3) calculating their increase in value.

KRS 403.190(2)(a) provides, in pertinent part:

For the purpose of this chapter, "marital property" means all property acquired by either spouse subsequent to the marriage except:
(a) Property acquired by gift, bequest, devise, or descent during the marriage and the income derived therefrom unless there are significant activities of either spouse which contributed to the increase in value of said property and the income earned therefrom[.]

During the marriage, Stephen acquired stock in BOSCI, a company founded by his father and a few other individuals. BOSCI later merged with another company to form ORI, and Stephen's BOSCI shares were exchanged for ORI shares. Eventually, ORI was sold and Stephen invested a portion of his share of the proceeds from the sale in a new company, AEON. In its 2006 judgment, the trial court found that 74% of Stephen's BOSCI/ORI shares, and the assets they were used to acquire, were nonmarital property because Stephen received those shares as a gift from his father. The trial court further found that the increase in value of the shares was nonmarital property since the increase was not due to the significant activities of either spouse.

Previously on appeal, this court affirmed the trial court's decision that 74% of Stephen's BOSCI/ORI shares, and the assets they were used to acquire, were nonmarital property. However, with respect to the marital versus nonmarital character of the increase in value of the shares, this court remanded that issue to the trial court to make additional findings of fact. Specifically, this court instructed the trial court to make findings of fact relating to either spouse's contribution to the increase in value of the stocks from the time they were transferred to Stephen.

On remand, the trial court found that the value of Stephen's nonmarital shares of BOSCI/ORI stock at the time they were transferred to him was $456,199.64. The court found that the total value of all Stephen's stock assets at the time of entry of the decree was $1,930,929.32 (74% of which is $1,428,887.70). To obtain the increase in value, the trial court deducted the value of the BOSCI/ORI stock at the time Stephen obtained it ($456,199.64) from the value of his stock assets at the time of the decree ($1,428,887.69), for a sum of $972,688.10. The trial court then concluded that its previous finding that the increase in value of the stock was not attributable to the efforts of either party was clearly erroneous since Stephen was a pivotal participant in the growth of the companies whose stock is at issue, and Terri's efforts at home aided Stephen's ability to work.

The trial court valued the assets acquired by Stephen during the marriage that stemmed from his BOSCI/ORI stock as follows: ORI/AEON stock - $1,325,244.50; 25% interest in ORIA -$57,557; ORIA note - $475,000; ORIA earn-out - $73,127.82. The court found that the total value of these assets amounted to $1,930,929.32.

There are a few minor discrepancies in these figures in the trial court's order, but because the discrepancies are a matter of cents, we will disregard them.

a. Character of increase in value of BOSCI/ORI/AEON stock

Stephen argues that the trial court erred by determining that the significant efforts of the parties contributed to the increase in value of the BOSCI/ORI/AEON stock and related assets during the marriage. He contends that during his twenty-year employment with BOSCI, he held a majority interest for only two and a half years and that his father was the majority shareholder for the preceding twenty-five years. He submits that during the years in which he was a major shareholder, the book value of the company was no higher than in previous years. He asserts that similar results can be seen in his involvement with ORI. As a result, he claims that contrary to the trial court's reasoning, no correlation exists between his status as a major stockholder or officer and the increase in the value of the stock. Rather, he attributes the increase in value to a joint effort with other BOSCI/ORI shareholders, directors and officers, under the leadership of his father.

The general rule illustrated by Kentucky case law is that if an increase in value of nonmarital property is attributable to general economic conditions, the increase in value is deemed nonmarital. Goderwis v. Goderwis, 780 S.W.2d 39 (Ky. 1989). See also Daniels v. Daniels, 726 S.W.2d 705 (Ky. App. 1986) (gain in value of stocks purchased during marriage with nonmarital funds was not marital property where such increase did not result from efforts of the parties during marriage) (overruled on other grounds by Neidlinger, 52 S.W.3d 513). However, "[a]n increase in value of nonmarital property during marriage which is the result of a joint effort of the parties establishes the increase in value of the nonmarital property as marital property." Goderwis, 780 S.W.2d at 40.

Kentucky case law supports the trial court's decision that the increase in value of the BOSCI/ORI stock and related assets was income and marital property. See Mercer v. Mercer, 836 S.W.2d 897 (Ky. 1992) (interest earned from nonmarital funds deposited in a financial institution and accessible to the parties at any time is income to be treated as marital property); Goderwis, 780 S.W.2d 39 (increase in value of family business during marriage, which husband solely owned prior to marriage, was due to joint efforts of the parties and was marital property); and Sousley v. Sousley, 614 S.W.2d 942 (Ky. 1981) (profit made on sale of husband's nonmarital company stock was income and marital property, where both husband and wife worked to prepare business for opening and were employed in some capacity in the successful operation of business until husband sold the capital stock). In the present case, substantial evidence exists to support the trial court's finding that the significant efforts of both parties contributed to the increase in value of Stephen's BOSCI/ORI stocks and related assets and, thus, the court properly classified the increase in value as marital property.

In support of his argument, Stephen cites Smith v. Smith, 235 S.W.3d 1 (Ky. App. 2006), a case in which a wife was authorized to purchase stock in a company owned by her father, where her husband happened to work. Id. at 8. When the wife and husband divorced, the husband claimed that the increase in value of the company stock should be deemed marital property since the wife had no role in the company's affairs, while the husband served as the company's secretary and general counsel. Id. On appeal, this court affirmed the trial court's ruling that the increase in value of the stock was the wife's nonmarital property, on the basis that the husband "points to no specific evidence in the record to contradict the trial court's finding that '[t]here is no proof that [the husband] made any financial decisions or exerted any managerial discretion concerning the development and profitability of [the company]. Furthermore, [the husband] was paid a salary for his services to [the company].'" Id. Consequently, this court found that the husband failed to significantly contribute to the increase in value of his wife's company stock and thus the increase in its value was the wife's nonmarital property. Id.

We decline to discuss the other case Stephen cites in support of his argument, Schrecker v. Schrecker, 2006 WL 367273 (Ky. App., Feb. 17, 2006), since that case is not reported and not binding on this court pursuant to CR 76.28(4)(c).

The circumstances of the present case differ from those in Smith. Here, substantial evidence exists to support the trial court's finding that the significant efforts of both parties during the marriage contributed to the increase in the value of Stephen's BOSCI/ORI stock and related assets: Stephen was a major stockholder and officer of BOSCI and ORI; BOSCI's success stemmed in large part from Stephen's efforts; Stephen's efforts on behalf of the business during his marriage significantly impacted the value of the company, which in turn impacted the value of its stock; and Terri contributed to the success of Stephen's business ventures by maintaining the home and taking care of the children, thereby enabling Stephen to work long hours at his business throughout the marriage. The trial court concluded that because both parties' significant efforts contributed to the increase in value of the business and its stock, Terri was entitled to one-half of the increase in value (one-half of $972,688.10, or $486.344.05).

Mathematical calculations of BOSCI/ORI/AEON stock value

In its July 21, 2010, order following remand, the trial court found that the value of Stephen's nonmarital shares of BOSCI/ORI stock at the time they were transferred to him was $456,199.64 and at the time of dissolution had increased in value to the amount of $1,930,929.32. Since Stephen had a 74% nonmarital interest in the stock at the time of the divorce decree, amounting to $1,428,887.70, the trial court calculated the increased value of nonmarital property during the marriage to be $972,688.10 ($1,428,887.70 minus $456,199.64). The trial court then awarded Terri's one-half of the increase in value, amounting to $486,344.05.

Again, we will ignore the minor discrepancies in these figures contained in the trial court's order.

Stephen objects to the trial court's method of valuing the stock, arguing that the value of his nonmarital shares at the time they were transferred to him was $533,691.26 pursuant to the BOSCI Shareholder's Agreement formula, as opposed to $456,199.64. He claims that the total increase in value of his 74% nonmarital interest in the BOSCI/ORI/AEON stock was $895,196.43, rather than $972,688.10, resulting in Terri's receiving more than one-half in the trial court's award.

An appellate court will not disturb a trial court's method of valuation in a dissolution action unless the decision is contrary to the weight of the evidence because Kentucky law has not specifically adopted one method of valuation. Gaskill v. Robbins, 361 S.W.3d 337, 339-40 (Ky. App. 2012) (citing Clark v. Clark, 782 S.W.2d 56, 58 (Ky. App. 1990)). In calculating the base value of Stephen's stock, i.e., the value of the stock at the time of transfer, the trial court relied on BOSCI's financial statements introduced at trial. Based on these financial statements, the court found that the value of the stock at the time of transfer to Stephen was $456,199.64. Substantial evidence exists to support the trial court's findings and Stephen provides no authority in support of his claim that the trial court was bound by the valuation formula contained in the Shareholder's Agreement. Stephen also challenges the trial court's mathematical calculations in relation to his motion for CR 60.02 relief, which we will address later in this opinion under the section titled Appeal No. 2011-CA-000846.

Stephen also claims that the trial court failed to include in its calculation one share of BOSCI stock that Stephen received as a gift from his father on December 31, 1992; however, the record shows that on the same day Stephen received this share, he gifted it away. As a result, the court properly declined to include this share in calculating the total value.

Parthenon account

Stephen contends that the trial court erred by determining that (1) the entire increase in the Parthenon account during the marriage was income; (2) the parties' efforts during the marriage increased the income in the Parthenon account; and (3) the value of the Parthenon account to be divided between the parties was $721,363.84. In its 2006 judgment, the trial court found that Stephen had adequately traced the Parthenon account to his premarital E.F. Hutton account, which had a value of $63,730.80 at the time of marriage. The court originally concluded that the balance in the Parthenon account as of December 31, 2005, ($687,766.38) was Stephen's nonmarital property because the increase in value of the account during the parties' marriage did not result from the efforts of the parties during their marriage. The trial court found that Stephen had used professional money managers to manage the successive accounts for him, and that he had invested no additional funds in these accounts during the course of the marriage.

Previously on appeal, Terri argued that during the marriage, the Parthenon account generated income over $300,000 in the form of interest, dividends, and capital gains, which should be considered marital property. This court agreed, finding as follows:

The Parthenon account was traced by the trial court to an E.F. Hutton account owned by Stephen at the time of the marriage in 1981, when it contained $63,730.80. Stephen liquidated that account in 1983 and deposited the proceeds of $93,733.16 in a First National City bank account. He later used the proceeds to open an account at Hilliard Lyons. Finally, he transferred the balance of the Hilliard Lyons account into the Parthenon account in 1999.
Zink I, at *16-17. This court distinguished between income derived from nonmarital property and increases in the value of marital property, quoting the Kentucky Supreme Court as follows:
"There is a distinct and clear difference between the increase in value of a nonmarital asset and income earned from that nonmarital asset. There is a difference between an appreciation in the value of principal and the earning of interest on principal and the accumulation of that interest. Income may be used by the parties at any time. As an example, the amount of interest must be included in gross income for tax purposes, but when an asset increases in value, the amount of the increase in value is not necessarily used by the parties and is not included in gross income for purposes of taxation. Interest income is clearly income earned on a nonmarital asset and must be treated as marital property."
Zink I, at *18 (quoting Mercer, 836 S.W.2d at 899).

This court noted that income from the Parthenon account appeared on Stephen's and Terri's joint tax returns and that

the increase in value of the account was realized as income. Stocks were sold to realize a profit, and these gains were reinvested. Dividends and interest were similarly reinvested.
The situation is clearly distinguishable from that of Daniels v. Daniels, 726 S.W.2d 705 (Ky. App. 1986),
which involved an increase in the value of stock purchased by the husband with nonmarital funds. As the Mercer court explained,
"[t]hat increase in value was not income. The stocks were the same stocks but they simply were worth more in value because of change in economic conditions. The increase in value could not be realized or used as income until the stocks were sold." Mercer, 836 S.W.2d at 899.
Zink I, at *18.

This court held that the trial court erred as a matter of law in treating the increase in the Parthenon account as entirely an "increase in value," rather than as "income," and remanded the issue for further findings on what portion of the account was "income" and therefore marital property. Id. On remand, both parties submitted calculations to the trial court of the dividends, interest, and capital gains generated by the Parthenon account during the marriage. Terri argued that the income totaled $315,437. Stephen argued that the total income as of December 31, 2005, was no more than $273,010, and that the total income as of June 30, 2006, was no more than $281,463.

On remand, the trial court found that the difference between the original amount in the E.F. Hutton account ($63,730.80) and the amount in the Parthenon account on June 30, 2006, ($721,363.84) was entirely income and hence marital property. The court found that the increase in value was due to interest, dividends, and capital gains accumulated during the course of the marriage. The court further found that Terri was entitled to an equitable share of the martial portion of the account, which was valued at $659,633.04 ($721,363.84 minus $63,730.80) and awarded her $329,816.52 (one-half of $659,633.04).

Stephen moved the trial court to alter, amend or vacate its order, arguing that the increase in value of the Parthenon account was not solely due to income, pointing to the calculations submitted by both parties of the income that the account had generated during the marriage. Stephen also requested that the distribution from the Parthenon account be based on date of distribution, not the date of decree. In its final order following remand, the trial court denied Stephen's motion, citing this court's previous finding on appeal that "the increase in value of the account was realized as income. Stocks were sold to realize a profit, and these gains were reinvested. Dividends and interest were similarly reinvested." Zink I, at *18. The trial court found that all of the stock Stephen owned at the time of marriage was sold after the parties were married and that any profit realized at the time of sale was income to the parties, not an increase in value. The trial court further declined to use the date of distribution as the valuation date.

Stephen now argues that the trial court's decisions on remand were erroneous. Again, our standard of review is whether the trial court's findings were clearly erroneous, i.e., unsupported by substantial evidence. Golightly, 976 S.W.2d at 414. Based on the record and relevant authority, we find that the trial court's determination on remand that the entire increase in value in the Parthenon account was income is supported by the record. Stephen also argues that the capital gains created from the Parthenon account represent an increase in value of his nonmarital assets, not income; however, this court previously held on appeal that income generated by the account in the form of capital gains is marital property. This court's decision on this issue is the law of the case and we are without authority to disturb it. Ranier v. Kiger Ins., Inc., 998 S.W.2d 515, 518 (Ky. App. 1999) ("The law of the case doctrine essentially holds that a final decision of an appellate court is determinative of an issue, whether that decision is right or wrong, and a lower court is bound by the higher court's decision[]") (citations omitted).

Though the parties do not raise this issue, we note that the trial court's order contains a mathematical error, this time a considerable one. From our calculation, $721,363.84 minus $63,730.80 equals $657,633.04 (not $659,633.04), which divided by two equals $328,816.52 (not $329,816.52). We believe the difference of $1,000 is significant and direct the court on remand to adjust its award accordingly.

In summary, we affirm the portion of the trial court's order holding that the increase in the Parthenon account was entirely income. Further, since Stephen has failed to show that the trial court's use of the date of dissolution as the valuation date was contrary to the weight of the evidence, we also affirm the trial court's decision to use the date of dissolution as the valuation date (for a total value of $721,363.84), rather than the date of distribution. See Gaskill, 361 S.W.3d at 339-40 (appellate court shall not disturb a trial court's valuations in a dissolution action unless the decision is contrary to the weight of the evidence). However, we reverse the court's calculation of Terri's one-half interest and remand for the court to redistribute assets accordingly.

Maintenance - offsets and termination

Stephen argues that the trial court's award of one-half of the marital assets to Terri, in addition to ordering him to pay maintenance, child support, and other expenses, was inequitable. In deciding whether to award maintenance and in what amount, the trial court found in its 2006 judgment that the marriage had been one of long duration, with Stephen serving as the primary earner and that, as a result, Terri would need a period of time to adjust to her situation following the divorce. The court further found that although Terri had not worked outside of the home for an extended period of time, she had performed an equally valuable function in the parties' marriage, caring for their children, maintaining and renovating their home, and entertaining Stephen's clients. The court ordered Stephen to pay Terri maintenance in the amount of $1,750 per month, effective October 1, 2006, and continuing until further order of the court. The court noted that Terri had also been awarded one-half of the marital assets, valued in excess of two million dollars.

Previously on appeal, this court affirmed the trial court's award of $1,750 a month in maintenance to Terri. In its order following remand, the trial court awarded Terri an additional $989,572.42 in marital assets. In Stephen's motion to alter, amend or vacate that order, he claimed that this additional amount should be offset by the amount of maintenance and child support Stephen has paid Terri since the petition for divorce was filed, since those amounts were based on the assumption that Terri did not have the means to support herself or contribute equally to supporting the children. The trial court denied his motion in its final order following remand. After conducting a hearing, the trial court ordered that maintenance shall be terminated effective January 1, 2011. Stephen appeals the trial court's decision not to offset Terri's maintenance award, and to terminate maintenance effective January 1, 2011, rather than making such termination retroactive to the date he filed his motion for termination.

Terri argues that this court's prior decision on appeal affirming the trial court's award of maintenance is the law of the case and therefore Stephen is not permitted to attack it now. See Ranier, 998 S.W.2d at 518. However, Stephen's argument in the prior appeal was that Terri should not have been awarded any maintenance whatsoever; in the present appeal, he is claiming that the additional award of assets to Terri on remand should be offset against the prior award of maintenance. Because these two arguments are distinguishable, the law of the case doctrine does not prohibit us from addressing Stephen's current claim of error.

That being said, Stephen's claim is without merit. The award of maintenance (amount and duration) is within the sound discretion of the trial court and will not be disturbed on appeal unless the trial court abused its discretion, or based its decision on findings of fact that are clearly erroneous. Powell v. Powell, 107 S.W.3d 222, 224 (Ky. 2003). The trial court also has discretion to terminate maintenance and to apply such termination retroactively. Mudd v. Mudd, 903 S.W.2d 533, 534 (Ky. App. 1995). The test for abuse of discretion is whether the trial court's decision was "'arbitrary, unreasonable, unfair, or unsupported by sound legal principles.'" Cabinet for Health & Family Servs. v. Byer, 173 S.W.3d 247, 249 (Ky. App. 2005) (quoting Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000)).

Stephen has failed to cite any authority supporting his argument; the cases he does cite, Cochran v. Cochran, 746 S.W.2d 568 (Ky. App. 1988), Mudd, 903 S.W.2d 533, and Addison v. Addison, 2009 WL 484983 (Ky. Feb. 27, 2009), merely establish that the trial court has discretion with respect to maintenance awards. None of these cases sustain Stephen's claim that the trial court abused its discretion by denying his motion to offset his maintenance payments against the amount awarded to Terri, or by denying his motion to terminate maintenance retroactively to the date he filed his motion to terminate.

Appeal Nos. 2011-CA-000620 and 2011-CA-000707

Terri's appeal and Stephen's cross-appeal are directed towards the trial court's decisions on tax consequences, pre-judgment interest, child support, maintenance, allocation of educational expenses for the parties' minor child, and post-judgment interest. In its July 21, 2010, order following remand, the trial court directed the parties to contact the court to schedule a hearing to address the parties' pending motions to modify child support and maintenance, and allocation of educational expenses. On November 15, 2010, a hearing was held on Stephen's motion for a reduction in child support, Terri's motion for an increase in child support, and allocation of educational expenses. On November 29, 2010, a hearing was held on Stephen's motion for a reduction or elimination of post-judgment interest. In each of its orders, the trial court permitted Stephen to deduct taxes incurred in liquidating stocks to pay Terri's award.

Tax consequences

Terri argues that the trial court abused its discretion by denying her CR 59.05 motion to alter, amend or vacate the court's December 9, 2010, order holding her responsible for tax consequences incurred by Stephen in liquidating stock assets to pay her award of $989,572.42. Our review of a trial court's decision to grant or deny a CR 59.05 motion to alter, amend or vacate a judgment is limited to whether the court abused its discretion. Emberton v. GMRI, Inc., 299 S.W.3d 565, 579 (Ky. 2009) (citations omitted).

By orders entered July 21, 2010, November 1, 2010, and December 9, 2010, the trial court consistently ruled that Terri was to bear the tax consequences of any stock assets Stephen liquidated in order to satisfy the $989,572.42 awarded to her. The July and November orders were not final until entry of the December 9, 2010, order because the trial court reserved ruling on the issue of tax consequences until then. Contrary to Stephen's assertion, the trial court had jurisdiction to consider Terri's CR 59.05 motion. See Hook v. Hook, 563 S.W.2d 716, 717 (Ky. 1978) ("[w]here an order is by its very nature interlocutory, even the inclusion of the recitals provided for in CR 54.02 will not make it appealable[]") (citations omitted); Parsley v. Gray, 322 S.W.2d 123, 124 (Ky. 1959) (in determining finality, a court must determine whether the order grants or denies the ultimate relief requested or whether additional steps must be taken to adjudicate their claims) (citations omitted).

Moving to the substance of Terri's appeal, the record shows that on or about December 8, 2010, Stephen delivered a check to Terri in the amount of $855,680.07, in satisfaction of the $989,572.42 award, with $90,811.86 subtracted for taxes incurred in liquidating stocks and $43,080.50 subtracted for Terri's one-half share of tax on Accumulated Earnings and Profit ("AE&P"). By order entered December 9, 2010, the trial court reaffirmed its prior written orders that Terri was to be responsible for any tax consequences Stephen incurs as a result of liquidating any stocks to pay her. Terri's motion to alter, amend or vacate this order, or make additional findings of fact, concerned whether the liquidation of assets was necessary and accurate, which the trial court denied.

On appeal, Terri claims that the trial court's rulings on tax consequences violated the law of the case doctrine, were inconsistent, and improperly permitted Stephen to usurp judicial authority by unilaterally deducting $133,892.36 in tax consequences without showing evidence that this amount was actually incurred. Terri also claims that because Stephen had sufficient cash available to pay the $989,572.42 awarded to her, liquidating stock assets was not necessary and she should not be held responsible for the tax consequences incurred from liquidating those stocks. Lastly, Terri claims that Stephen was not authorized by the court to deduct $43,080.50 in taxes relating to AE&P and he failed to present any evidence of her liability for tax incurred on AE&P.

Terri maintains that the trial court's rulings violate the law of the case doctrine because this court did not authorize the trial court to consider tax consequences on remand, but the issue of tax consequences was not presented to this court previously on appeal and therefore was not ruled on by this court. The law of the case doctrine only applies when the appellate body has actually ruled on a specific issue. Ranier, 998 S.W.2d at 518. While this court did not specifically instruct the trial court to consider tax consequences on remand, neither did it prohibit it from doing so. Simply put, this court's order did not address tax consequences because it was not an issue on appeal.

That being said, we note that a "trial court should consider the tax consequences of its division of marital property." Atkisson v. Atkisson, 298 S.W.3d 858, 867 (Ky. App. 2009) (citations omitted). If not, "the payor spouse's share of the marital estate might be consumed by the taxes incurred to liquidate sufficient assets for the payee spouse's share." Id. In this case, the trial court's written orders permitted Stephen to deduct from the $989,572.42 awarded to Terri any tax consequences arising from the sale of any stock assets liquidated to pay her. The court reasoned that the majority of Terri's award consisted of the value of the stocks and upon their liquidation, Stephen alone would incur the tax consequences. To remedy the inequity, the trial court held Terri responsible for those taxes. We find this reasoning sound, equitable and in accordance with Kentucky law; to find otherwise would unjustly allow Terri to receive her share of the stocks tax-free while Stephen bore all of the tax consequences. In a similar vein, we find Terri's contention that Stephen had sufficient cash available in 2006 to pay her without selling any stocks to be without merit; Terri cites no authority which requires a party's share of marital stock assets upon division to be paid in cash. Thus, holding Terri liable for taxes incurred by Stephen's liquidating stocks was not an abuse of the trial court's discretion.

Terri further contends that Stephen's calculation of the amount to be deducted usurped the role of the judiciary. She maintains that Stephen should not have been allowed to unilaterally deduct that amount without the trial court conducting an evidentiary hearing and making attendant findings of fact. Terri emphasizes that Stephen's alleged tax consequences were never proven at trial and she disputes whether he owned in 2006 the stocks he sold to satisfy her award, and whether such sales were necessary given that he had sufficient cash reserves to pay her without liquidating any stocks. Terri also claims that Stephen was not authorized to deduct $43,080.50 in AE&P taxes.

Both parties present a plethora of financial documents for our review and ask us to determine the amount of tax consequences, if any, Stephen incurred and may deduct. However, as an appellate court, we are without authority to make findings of fact. A trial court's failure to make findings of fact on an issue essential to the judgment does not necessarily compel reversal of a final judgment, unless such failure is brought to the court's attention by a written request for a finding on that issue or by a CR 52.02 motion. Cherry v. Cherry, 634 S.W.2d 423, 425 (Ky. 1982). Here, Terri filed a motion to alter, amend or vacate and/or make additional findings of fact with respect to this issue, which the trial court summarily denied. We find the denial of her motion to be an abuse of the trial court's discretion and remand with directions for the trial court to make factual findings on this issue.

Terri also argues that the trial court's rulings on tax consequences were inconsistent, citing in support the trial court's oral ruling during the November 29, 2010, hearing that Stephen was not to deduct tax consequences incurred from the sale of any assets if he otherwise had cash resources available to pay the $989,572.42 award; however, "[w]hen there is a conflict between a court's oral statements and the written judgment, the written judgment controls." Machniak v. Commonwealth, 351 S.W.3d 648, 652 (Ky. 2011) (citations omitted). Here, the trial court's three written orders (July, November and December 2010) permitted Stephen to deduct tax consequences incurred from selling any stock assets to pay Terri; these written orders take precedence over any oral ruling to the contrary made during the November 29, 2010, hearing. Accordingly, Terri's claim of error fails.

Pre-judgment interest

Terri claims that the trial court erred by not awarding her pre-judgment interest on her $989,572.42 award since it is a liquidated amount. In the alternative, she claims that she is entitled to pre-judgment interest as a matter of discretion because the equities of this case demand it.

Terri also claims that, at a minimum, she is entitled to pre-judgment interest on her portion of the award attributable to the properties located at 106 and 108 East Broadway since there was "some certainty" that on remand the trial court would award her one-half of this marital property, a total liquidated value which she claims the parties agreed on at trial. However, our review of the record reveals that Terri did not present this issue for the trial court to adjudicate. As a result, we lack authority to review it on appeal. Ten Broeck Dupont, Inc. v. Brooks, 283 S.W.3d 705, 734 (Ky. 2009).

Pre-judgment interest is awarded as a matter of right when a demand is liquidated and is a matter within the trial court's discretion to award on unliquidated demands. 3D Enters. Contracting Corp. v. Louisville & Jefferson County Metro. Sewer Dist., 174 S.W.3d 440, 450 (Ky. 2005) (citing Nucor Corp. v. Gen. Elec. Co., 812 S.W.2d 136, 141 (Ky. 1991)). A liquidated claim is "'of such a nature that the amount is capable of ascertainment by mere computation, can be established with reasonable certainty, can be ascertained in accordance with fixed rules of evidence and known standards of value, or can be determined by reference to well-established market values.'" 3D Enters., 174 S.W.3d at 450 (quoting 22 Am.Jur.2d Damages § 469 (2004)). In determining whether a claim is liquidated or unliquidated, the court must examine the nature of the underlying claim, rather than the final award. 3D Enters., 174 S.W.3d at 450.

The division of marital property resulting in the award to Terri in the amount of $989,572.42 was clearly unliquidated. The award stemmed from the court's classification and division of property pursuant to KRS 403.190 and could not have been predicted with any amount of certainty. Additionally, the trial court did not abuse its discretion by denying Terri pre-judgment interest on the unliquidated amount because Stephen had no duty to transfer any equity in the assets at issue to Terri as of 2006, and Terri failed to show that Stephen wrongfully withheld her share of equity in the marital estate. In fact, the trial court found in its November 1, 2010, order that Stephen had complied with all court orders up to that point, had made timely maintenance and child support payments to Terri as ordered, and had done nothing to prevent Terri from receiving her fair share of the property. Based on our review of the record, we are unable to say the court abused its discretion by denying Terri's request for pre-judgment interest on the unliquidated claim.

Child support

At the November 15, 2010, hearing, the trial court addressed Stephen's motion for a reduction in child support (filed August 21, 2008) and Terri's motion for an increase in child support (filed April 17, 2009), concerning the parties' child who turned eighteen years old on July 1, 2009, and who graduated from high school on June 15, 2010. Child support was originally set at $715.40 a month in 2006, at a time when the parties did not have a definite parenting schedule but both anticipated having the child about fifty percent of the time.

In 2006, Stephen was imputed a monthly income of $7,343.76 (after deducting $1,750 in maintenance) and Terri was imputed a monthly income of $3,119.33 (including maintenance). Stephen's motion for a reduction in child support was based on a change in parenting schedule. He claimed that the child and Terri had a disagreement in April 2008, after which the child moved into his home and primarily resided there until about June 2009. Stephen testified that during this time, he provided all the financial support for the child. After June 2009, the parties resumed their equal parenting schedule. Stephen argued that his child support payments should be retroactively reduced for the period of time during which the child primarily resided with him. Terri contended that the child only primarily resided with Stephen from April 2008 through August 2008. Terri disputed that Stephen provided all the financial support for the child during that time.

Terri's motion to increase child support was based on the parties' increased combined incomes that now exceed the child support guidelines set forth in KRS 403.211. The record shows that Terri's adjusted gross income ("AGI") in 2009 was found to be $134,744, and in 2008 was $131,682. Stephen's AGI in 2009 was found to be $179,510, and in 2008 was approximately $513,571, which included a one-time ordinary dividend distribution of $381,357.

KRS 403.211 provides, in relevant part:

(2) At the time of initial establishment of a child support order, whether temporary or permanent, or in any proceeding to modify a support order, the child support guidelines in KRS 403.212 shall serve as a rebuttable presumption for the establishment or modification of the amount of child support. Courts may deviate from the guidelines where their application would be unjust or inappropriate. Any deviation shall be accompanied by a written finding or specific finding on the record by the court, specifying the reason for the deviation.
(3) A written finding or specific finding on the record that the application of the guidelines would be unjust or
inappropriate in a particular case shall be sufficient to rebut the presumption and allow for an appropriate adjustment of the guideline award if based upon one (1) or more of the following criteria:
. . . .
(e) Combined monthly adjusted parental gross income in excess of the Kentucky child support guidelines[.]

By order entered December 9, 2010, the trial court modified Stephen's child support payments from $715.40 a month to $131 a month, effective April 17, 2009, through June 15, 2010, to reflect the change in circumstances during the time period of April 2008 through June 2009, when Stephen claimed to provide all of the financial support for the child. The court also ordered Terri to reimburse Stephen $8,196.16 for child support paid after the effective date of modification.

On appeal, Terri contends that the trial court abused its discretion by reducing Stephen's child support payments and ordering her to reimburse him for child support overpayments.

In Kentucky, courts have broad discretion in evaluating a parent's assets and setting child support correspondingly. Downing v. Downing, 45 S.W.3d 449, 454 (Ky. App. 2001) (citation omitted). We review a trial court's decision in child support matters for an abuse of discretion. Id. (citation omitted). Though, "[t]he provisions of any decree respecting child support may be modified only as to installments accruing subsequent to the filing of the motion for modification and only upon a showing of a material change in circumstances that is substantial and continuing." KRS 403.213(1).

Here, the trial court's decision to reduce child support was an attempt to modify child support installments in violation of KRS 403.213(1) and thus constitutes an abuse of discretion. The trial court found that by the spring of 2009, the parties had returned to exercising fairly equal parenting time and were responsible for the child's expenses when he was in their possession. Therefore, from April 2009 through June 2010, the period of time during which the court reduced child support, there was no material change in circumstances as required by KRS 403.213(1) because the parties had resumed the parenting schedule originally contemplated when child support was set in 2006. As a result, the court's decision to reduce child support during this period of time was arbitrary and unsupported by the record.

Terri also claims that the trial court abused its discretion by not increasing child support. Our review of the record reveals that the trial court did not make a finding on this issue. We note that the trial court did find that at the time of Terri's motion to increase child support, there was a significant change in the parties' income, in excess of the Kentucky child support guidelines. As a result, we remand the issue of whether an increase in child support was warranted to the trial court to make specific findings.

In making this determination, we instruct the trial court to take into consideration its 2006 judgment, which ordered child support payments to continue until further order of the court or until the child turns eighteen years of age and graduates from high school. Terri's motion for an increase in child support was filed April 17, 2009, concerning the parties' child who turned eighteen years old on July 1, 2009, and who graduated from high school on June 15, 2010. Thus, per the court's 2006 judgment, the maximum amount of time child support could be increased would be from the date Terri filed her motion, April 17, 2009, until the date the child graduated from high school, June 15, 2010.

Maintenance

The trial court terminated Stephen's maintenance payments effective January 1, 2011. A modification of a maintenance award may occur if the party requesting the modification shows "changed circumstances so substantial and continuing as to make the terms [of the original award] unconscionable." KRS 403.250(1). When the trial court originally awarded Terri maintenance in the amount of $1,750 a month, the court imputed a monthly income to her in the amount of $1,369.33. At the time of the November 15, 2010, hearing, the court found that Terri was currently working and capable of earning $1,906.66 a month through employment. The court further found that Terri was earning (after expenses) $6,333.33 a month in income from rental properties she received as her share of the marital assets and that she typically receives some income from ordinary dividends. The court also found that Terri was going to receive $989,572.42 as her share of the marital assets that had not previously been allocated to her. The court noted that Terri may use this allocation, if received as capital, to pay off certain mortgages which would significantly decrease her monthly expenses and that she may receive some of this award in stocks, transfers of property, etc., which could produce additional income. Taking into account the award of $989,572.42 and the expected payoff of certain mortgages, the court found that Terri should be able to provide for her reasonable needs without financial support from Stephen and thereby granted Stephen's motion for modification of maintenance.

On appeal, Terri challenges the trial court's decision to terminate maintenance, first on constitutional grounds and then on substantive grounds.

Terri first claims that the trial court's decision to terminate maintenance violated her fundamental due process rights. She maintains that Stephen never filed a pleading seeking modification of the original $1,750 maintenance award. She claims that at the commencement of the November 15, 2010, hearing, she objected to the admission of any evidence on this issue since modification of maintenance was not properly before the trial court. Terri asserts that the trial court's consideration of this issue, without adequate notice and a hearing, violated her due process rights.

Our review of the record reveals that Stephen did not file a motion relating to modification of maintenance at any time following remand of the case. However, the record shows that on September 2, 2009, after issuance of this court's August 21, 2009, opinion, the parties entered into an agreed order whereby they resolved discovery issues relating to Stephen's (fictitious) motion to modify maintenance. Thereafter, by order entered July 21, 2010, the trial court directed the parties to contact the court to schedule a hearing on the motion to modify maintenance. On August 18, 2010, the trial court entered an order setting November 15, 2010, as the hearing date on the pending motions to modify maintenance, child support, and allocation of educational expenses. Clearly, the parties and the trial court proceeded on remand as if a motion for modification of maintenance was pending; as a result, Terri's due process claim that she lacked notice to address this issue is baseless. We further note that evidence regarding the change in the parties' income, a concern in a modification of maintenance determination, was introduced at the November 15, 2010, hearing and the trial court made findings on this issue. Finally, we note that KRS 403.250 does not require a separate hearing on modification of maintenance. In summary, Terri's due process rights were not violated.

Terri also claims that the trial court abused its discretion by terminating maintenance based on the fact that she received an additional award of $989,572.42 on remand. She alleges that the trial court failed to make a factual finding as to the income-producing value of the property awarded to her on remand as required by Wood v. Wood, 720 S.W.2d 934 (Ky. App. 1986). In Wood, this court held that the trial court had failed, on remand, to make factual findings regarding the income-producing capacity of the wife's marital and nonmarital property. Id. at 935-36. However, Wood is distinguishable; here, the trial court found that Terri was receiving rental income, as well as income from ordinary dividends, in addition to the $989,572.42 awarded to her in the division of marital assets. These findings demonstrate that the trial court considered the income- producing capacity of the property awarded to Terri, as well as the principal amount, in deciding whether to terminate maintenance. Based on the record and applicable law, the court's decision to terminate maintenance was not an abuse of its discretion.

Educational expenses

Terri contends that the trial court erred and abused its discretion by ordering her to pay one-half of the educational expenses associated with her child's attendance at Saint Xavier High School ("St. X"), a private school. She claims that she never signed the written contract regarding the child's attendance at St. X (only Stephen signed it) and, further, that a public school education was adequate.

The parties' failure to agree on the education of their minor child resulted in their abdication of that decision to the trial court. Under Kentucky law, the trial court's decision must be based on the best interests of the child; any factual findings on that standard are reviewed for clear error, and any decisions based upon these factual findings are reviewed for an abuse of discretion. Young v. Holmes , 295 S.W.3d 144, 146 (Ky. App. 2009) (citations omitted).

The issue of the parties' responsibility for private school expenses was remanded for the trial court to determine. In the December 9, 2010, order, the trial court found that Stephen had paid the child's tuition at St. X from July 2006 through May 2010 in the amount of $36,885, and had also paid for some additional school expenses for a total cost of $38,480. Stephen requested that Terri reimburse him half of this cost since the parties had mutually agreed to send their child to St. X. Terri admitted that all of their sons had attended St. X and that she wanted the child at issue to also graduate from St. X, and stated that she had paid private school expenses (books, school supplies, intramural fees, meal plan, etc.) amounting to $11,477.

The trial court found that Terri had agreed to keep this child enrolled at St. X by paying for his books, meals, etc. after the parties' divorce. The court found that the parties' agreement to keep the child at issue enrolled at St. X was proven by their behavior and that it would be equitable for them to share the expenses equally. Based on the parties' testimony, the court found that $49,957 had been incurred in educational expenses for the child and ordered each party to pay half. Because Terri had only paid $11,477, the court ordered her to pay Stephen $13,501.50.

On appeal, Terri maintains that absent a binding, enforceable written contract between her and Stephen, she cannot be compelled to pay for the child's private school education. She further asserts that no evidence was presented to show that a public school education was inadequate. In support of her argument, she cites the cases of Miller v. Miller , 459 S.W.2d 81 (Ky. 1970), and Smith v. Smith, 845 S.W.2d 25 (Ky. App. 1992), neither of which is on point.

In Miller, the Court held that a non-custodial parent was not obligated to pay for the child's private school education absent proof that the public schools were inadequate for educational purposes or that the child suffered a handicap which would make public schools unsuitable. Miller, 459 S.W.2d at 83. However, based on the limited facts in Miller, it does not appear that the parents in that case ever acquiesced to their child's attendance at a private school; rather, one parent favored private school education while the other did not. Id. Here, Terri's behavior indicated consent to the child's attendance at St. X.

In Smith, the court held that a father was not obligated to pay additional child support for his child's private school education since private music lessons do not justify a deviation from the child support guidelines under KRS 403.211's definition of "extraordinary educational needs." Smith, 845 S.W.2d at 26. The court interpreted "extraordinary educational needs" as "those things not ordinarily necessary to the acquisition of a common school education but which become necessary because of the special needs of a particular student." Id. Again, unlike Terri and Stephen, the parents in Smith did not mutually agree on the child's enrollment in private school; instead the mother in that case unilaterally enrolled the child in private music lessons. Id.

We decline to discuss at length the case of Young v. Holmes, 295 S.W.3d 144 (Ky. App. 2009), which Stephen cites, since the father in that case volunteered to pay the child's entire private school costs; the issue being whether the best interests of the child would be served by attending private versus public school, not whether one parent may be compelled to share in educational expenses.
--------

Here, all of Stephen and Terri's children attended St. X and Terri voluntarily paid for expenses such as books, meals, etc., for the child at issue after the parties separated. Unlike the cases of Miller and Smith, Stephen and Terri jointly made the decision to enroll the child at St. X. Additionally, Terri offers no legal authority in support of her contention that in order for her to be held responsible for a portion of the private school expenses, she must have entered into a written contract with Stephen. In conclusion, we find that the trial court did not abuse its discretion by splitting the educational costs of St. X equally between the parties; this was a marital debt which the court had the authority and discretion to divide.

Post-judgment interest

Stephen moved the trial court to reduce or eliminate the post-judgment interest that may result from the court's entry of its final order following remand, pointing out that the final order following remand did not specify whether post-judgment interest was awarded. After a hearing on the matter, the trial court denied his motion pursuant to KRS 360.040, which provides in relevant part:

A judgment shall bear twelve percent (12%) interest compounded annually from its date. . . . Provided, that when a claim for unliquidated damages is reduced to judgment, such judgment may bear less interest than twelve percent (12%) if the court rendering such judgment, after a hearing on that question, is satisfied that the rate of interest should be less than twelve percent (12%).

The Kentucky Supreme Court has held that "KRS 360.040 applies interest to an unliquidated judgment by the discretion of the trial court and prior to appeal, giving the appellant ample opportunity to contest the interest rate in a hearing." Emberton, 299 S.W.3d at 582 (citation omitted). In so ruling, the Supreme Court noted:

At common law judgments did not bear interest and the purpose of the statute was to place them upon the same footing as other liquidated demands and thus insure compensation to the creditor for the loss of the use of his
money during the period in which he was wrongfully deprived of it.
Id. at 583 (citations omitted). If, after conducting a hearing, the trial court decides to depart from the 12% rate of interest, that decision shall be reviewed for an abuse of discretion. Id. at 584 (citations omitted). Any departure "is to be guided by the peculiar equities of the case before it." Id. (footnote and citations omitted).

Stephen contends that the post-judgment interest rate should be reduced or eliminated due to the equities of this case. He asserts that he had every intention of timely complying with the trial court's final order following remand, emphasizing that he had immediately paid Terri the undisputed amount he was ordered to pay under the 2006 judgment, and that he should not be penalized for disputing the amount due. He further asserts that since Terri had received a substantial sum, any benefit of her receiving 12% interest on that amount would be outweighed by Stephen's detriment of having to pay such an exorbitant rate in addition to transferring the substantial amount. However,

the fact that a trial court could have chosen to impose a lower interest rate does not necessarily mean that its decision to impose a higher rate was an abuse of discretion. Moreover, the fact that a twelve percent interest rate in today's economic climate may be well above the marketplace norm is a matter properly to be considered by the General Assembly because that body has the power and discretion to lower the de facto legal interest rate contained in KRS 360.040.
Morgan v. Scott, 291 S.W.3d 622, 644 (Ky. 2009). Here, we are unable to say that the equities of this case required the trial court to reduce or eliminate the de facto rate of interest set forth in KRS 360.040. We further note that Stephen's argument for deviation from the statutorily prescribed 12% interest rate is better suited for our legislature to address, rather than this court.

Appeal No. 2011-CA-000846

In Stephen's motion for CR 60.02 relief, he argued that because Terri had already received $344,563.57 attributable to BOSCI/ORI and related assets in 2006, she was now overcompensated because on remand the trial court awarded her an additional $486,344.05 attributable to BOSCI/ORI and related assets. Stephen argued that the trial court must have inadvertently, or mistakenly, overlooked the fact that Terri had already received $344,563.57 attributable to BOSCI/ORI and related assets, and that the court had awarded her more than one-half of the marital value of these assets. The trial court denied his motion, finding that Stephen and Terri were awarded approximately one-half of the marital estate, not necessarily one-half of each asset, and that while the court may have apportioned to Terri more than one-half of the marital value of BOSCI/ORI and related assets, the court awarded Stephen comparable assets.

On appeal, Stephen argues that the trial court's calculation of the BOSCI/ORI and related assets to be divided was mathematically incorrect.

However, we decline to reach the merits of Stephen's argument since this issue was not timely presented to the trial court for consideration and is procedurally deficient. Instead of including this issue in his motion to alter, amend or vacate the trial court's July 21 and November 1, 2010, orders, Stephen waited until March 4, 2011, to move for relief from the orders pursuant to CR 60.02, which is designed to relieve a party from a judgment "where regular avenues of relief are foreclosed." Young v. Richardson, 267 S.W.3d 690, 697 (Ky. App. 2008). The purpose of CR 60.02 is to bring errors before a court which had not been put into issue and which could not have been known or discovered by the moving party through the exercise of reasonable diligence in time to have been presented. Young v. Edward Tech. Group, Inc., 918 S.W.2d 229, 231 (Ky. App. 1995) (emphasis added) (citing Davis v. Home Idem. Co., 659 S.W.2d 185 (Ky. 1983)). The alleged mathematical error could have been known by Stephen when he filed his motion to alter, amend or vacate and he should have raised the issue at that time and then on direct appeal to this court. As a result, this claim of error is not a basis for relief under CR 60.02 and though the trial court denied Stephen's motion on substantive grounds, the denial of his motion was nevertheless proper. See Emberton, 299 S.W.3d at 576 ("an appellate court may affirm a lower court's decision on other grounds as long as the lower court reached the correct result[]") (citations omitted).

Conclusion

The trial court's decisions are affirmed in all respects except for the following:

(1) The trial court's calculation of Terri's one-half interest in the Parthenon account is mathematically incorrect and is reversed. On
remand, the trial court shall recalculate this amount and redistribute assets accordingly.
(2) The trial court's decision not to calculate the amount of tax consequences for which Terri is responsible is reversed. On remand, the trial court is directed to consider the evidence contained in the record pertaining to this issue and make specific findings as to the amount of tax consequences Terri shall bear. If a hearing is necessary for the court to make this determination, the court shall conduct an evidentiary hearing.
(3) The trial court's decision to reduce Stephen's child support payments and to order recoupment of child support overpayments is reversed. On remand, the trial court is directed to make specific findings, based upon the evidence, on whether Terri is entitled to an increase in child support for the period of time between April 17, 2009, and June 15, 2010.

The orders of the Jefferson Circuit Court are affirmed in part, reversed in part, and this case is remanded to that court for further proceedings in accordance with this opinion.

ALL CONCUR. BRIEFS FOR APPELLANT/
CROSS-APPELLEE; APPELLEE/
CROSS-APPELLANT;
APPELLANT,
STEPHEN F. ZINK:
M. Thomas Underwood
Louisville, Kentucky
BRIEFS FOR APPELLEE/
CROSS-APPELLANT;
APPELLANT/CROSS-APPELLEE;
APPELLEE,
TERRI H. ZINK:
J. Baxter Schilling
Louisville, Kentucky


Summaries of

Zink v. Zink

Commonwealth of Kentucky Court of Appeals
Mar 8, 2013
NO. 2011-CA-000707-MR (Ky. Ct. App. Mar. 8, 2013)
Case details for

Zink v. Zink

Case Details

Full title:STEPHEN F. ZINK APPELLANT/CROSS-APPELLEE v. TERRI H. ZINK…

Court:Commonwealth of Kentucky Court of Appeals

Date published: Mar 8, 2013

Citations

NO. 2011-CA-000707-MR (Ky. Ct. App. Mar. 8, 2013)

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