Opinion
NO. 2017-CA-000566-MR
07-27-2018
JOHNNY STINSON BRYANT APPELLANT v. MARY LOU BRYANT APPELLEE
BRIEF FOR APPELLANT: Sharon Bowles Howard Edmonton, Kentucky BRIEF FOR APPELLEE: Jack W. Flynn Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FRANKLIN CIRCUIT COURT FAMILY DIVISION
HONORABLE SQUIRE N. WILLIAMS III, JUDGE
ACTION NO. 13-CI-00831 OPINION
AFFIRMING
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BEFORE: JOHNSON, SMALLWOOD, AND THOMPSON, JUDGES. JOHNSON, JUDGE: Johnny Stinson Bryant appeals a judgment of the Franklin Family Court classifying a home deeded to him by his employer as marital property subject to distribution pursuant to Kentucky Revised Statutes ("KRS") 403.190. After reviewing the record in conjunction with the applicable legal authorities, we affirm the judgment of the Franklin Family Court.
BACKGROUND
This matter involves the deeding of a home to Johnny and Mary Lou Bryant by Dora Rowe and Anna Rowe McMurtrey. After the Bryants sought a divorce, the issue became whether the home should be treated as a marital asset (belonging to both) or a nonmarital asset (belonging to Johnny alone). This is the second time the matter of the proper characterization of the property has been before our Court. In the first appeal, we reversed and remanded the matter back to the family court for additional findings. Bryant v. Bryant, No. 2015-CA-000971-MR, 2016 WL 7324262 (Ky. App. Dec. 16, 2016). In that opinion, we directed the family court to make findings as to the donative intent of the Rowes and as to Johnny's intent in directing that Mary Lou's name be on the deed. The family court reviewed the record and issued its second opinion on March 14, 2017.
Upon remand, the family court determined that the conveyance of the home was a gift but "did not . . . find from the evidence that the gift was intended, at the time of the conveyance, to be a gift solely to Johnny." While acknowledging that the manner in which a property is titled "is not dispositive of the matter," the family court nevertheless ruled that "Johnny's request that Mary Lou's name be in the deed at the time of conveyance, and the fact that Mary Lou's name was included in the deed are demonstrable facts that indicate that all parties intended for the conveyance to be to both of them." Although the Rowes testified that they intended the gift to be to Johnny alone, the family court did not find their testimony to be credible. On the basis of its finding that the property was a gift to both Johnny and Mary Lou, the family court concluded that the property is marital and subject to division under KRS 403.190. This appeal followed.
STANDARD OF REVIEW
Under Kentucky Rules of Civil Procedure ("CR") 52.01, in an action tried without a jury:
"[f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses. . . ." A factual finding is not clearly erroneous if it is supported by substantial evidence. Substantial evidence is evidence, when taken alone or in light of all the evidence, which has sufficient probative value to induce conviction in the mind of a reasonable person. An appellate court, however, reviews legal issues de novo.Hunter v. Hunter, 127 S.W.3d 656, 659 (Ky. App. 2003) (citations omitted). "The question of whether an item is marital or nonmarital is reviewed under a two-tiered scrutiny in which the factual findings made by the court are reviewed under the clearly erroneous standard and the ultimate legal conclusion denominating the item as marital or nonmarital is reviewed de novo." Smith v. Smith, 235 S.W.3d 1, 6 (Ky. App. 2006).
ANALYSIS
Johnny contends in this appeal that the family court erred in its determination that the house was marital property, arguing that the evidence compels a finding that the property was a gift to him alone and is thus a non-marital asset, not subject to division under KRS 403.190. The clear directives of KRS 403.190 and well-established caselaw guide us in determining the character of property acquired by gift.
We commence our analysis with the KRS 403.190(3) presumption that "[a]ll property acquired by either spouse after marriage and before a decree of legal separation is presumed to be marital property, regardless of whether the title is held individually or by the spouses in some form of co-ownership . . . ." This presumption may be overcome by demonstrating that the property was acquired by one of the methods listed in subsection (2) of the statute. Pertinent to this appeal is subsection (2)(a) which provides:
(2) For purposes of this chapter, "martial property" means all property acquired by either spouse subsequent to the marriage except:KRS 403.190(2)(a)(emphasis added.)
(a) Property acquired by gift, bequest, devise, or descent during the marriage . . . .
In Hunter, supra, this Court set out several factors to be considered in determining whether third-party gifts should be classified as marital or nonmarital, including: "the source of the money used to purchase the item, the intent of the donor, and the status of the marriage at the time of the transfer." 127 S.W.3d at 660. However, the Hunter court also noted that "the intent of the purported donor is considered the primary factor in determining whether a transfer of property is a gift." Id. (emphasis added). In Sexton v. Sexton, 125 S.W.3d 258, 267 (Ky. 2004), the Supreme Court of Kentucky emphasized that "a party claiming that property is nonmarital by reason of the gift exception has the burden to prove it." Accordingly, in this case, Johnny bore the burden of establishing that the house was a gift solely to him.
In attempting to meet his burden, Johnny offered testimony that the Rowes intended the house to be a gift to him alone. Mary Lou, however, insists that other factors must be considered. In Sexton, the Kentucky Supreme Court acknowledged that donor intent is the primary factor in determining whether property is marital or nonmarital, but cautioned that donor testimony alone is not dispositive of the property's character:
even though title is not determinative of whether a transfer to a party is a gift, nevertheless, it is evidence for the trial court to consider. Clearly, the donor's intent is the primary factor in determining whether a transfer of property is a gift, and we likewise hold that the donor's intent is also the primary factor in determining whether a gift is made jointly to spouses or individually to one spouse. The donor's testimony is highly relevant of the donor's intent; however, the intention of the donor may not only be "expressed in words, actions, or a
combination thereof," but "may be inferred from the surrounding facts and circumstances, including the relationship of the parties [,]" as well as "the conduct of the parties[.]" The determination of whether a gift was jointly or individually made is a factual issue, and therefore, subject to the CR 52.01's clearly erroneous standard of review.Id. at 268-69 (citations and footnotes omitted)(alterations in original).
Although the Rowes testified that they intended the property to be a gift for Johnny alone, their conduct, as well as the surrounding facts and circumstances, suggest that their intent at the time of the deeding of the property was that the house and land go to both Johnny and Mary Lou Bryant. As the family court stated in its decision on remand: "Johnny's request that Mary Lou's name be in the deed . . . and the fact that [her] name was included in the deed are demonstrable facts that indicate that all parties intended for the conveyance to be to both of them. This intent is further evidenced by the donors' and donees' signatures on the deed." In finding that the donors' testimony lacked candor, the family court stated that "[w]hile ... [the Rowes] testified at the hearing that they intended for the gift to be only to Johnny, the court did not find their testimony to be credible on this point." The family court was convinced that the circumstances surrounding the transfer of the property to both parties outweighed the donors' testimony as to their intent. Given the family court's wide latitude in assessing the credibility of witnesses and assigning weight to the evidence before it, we find no basis upon which we might disturb its conclusion that the donors' intent was to gift the house to both Johnny and Mary Lou.
In other words, the family court's finding that the property was intended by the Rowes to be given to Johnny and Mary Lou jointly was supported by substantial evidence. As emphasized in Hunter, "[a] factual finding is not clearly erroneous if it is supported by substantial evidence." 127 S.W.3d at 659. The act of preparing the deed with Mary Lou's name on it supports the family court's finding that it was the Rowes' intent to provide a home for Johnny, Mary Lou, and their family, just as the Rowe family had done for many years. In addition, it appears that the Rowes' placed Mary Lou's name on the deed at Johnny's request. Based upon the family court's findings, we conclude that Johnny failed to meet his burden of proving that the property was a gift to him alone, exempt from the statutory presumption that it was marital. We perceive no error in the trial court's determination that the house was intended to be a gift to both parties and is therefore subject to division under KRS 403.190.
CONCLUSION
Based upon the foregoing, we affirm the judgment of the Franklin Family Court.
ALL CONCUR. BRIEF FOR APPELLANT: Sharon Bowles Howard
Edmonton, Kentucky BRIEF FOR APPELLEE: Jack W. Flynn
Frankfort, Kentucky