Opinion
NO. 2013-CA-001243-MR
01-16-2015
MICHAEL DAVID DAVIS APPELLANT v. KASSANDRA DAVIS APPELLEE
BRIEF FOR APPELLANT: William F. McGee, Jr. Smithland, Kentucky BRIEF FOR THE APPELLEE: David L. Hargrove Mayfield, Kentucky
NOT TO BE PUBLISHED APPEAL FROM CALLOWAY FAMILY COURT
HONORABLE ROBERT DAN MATTINGLY, JR., JUDGE
ACTION NO. 10-CI-00527
OPINION
AFFIRMING
BEFORE: ACREE, CHIEF JUDGE; JONES AND NICKELL, JUDGES. JONES, JUDGE: This appeal arises out of a dissolution of marriage action between the Appellant, Michael David Davis ("Husband"), and Kassandra Davis ("Wife"). On appeal, Husband maintains that the family court erred when it denied his motion to set aside the parties' prior property settlement agreement. For the reasons more fully explained below, we AFFIRM.
I. Factual & Procedural Background
Husband and Wife were married on May 27, 2006. It is undisputed that at the time of the marriage Wife owned several acres of real property upon which an older house was located (hereinafter referred to as "the House"). Subsequent to the marriage, Husband and Wife partially rehabilitated the House.
Wife filed a petition for dissolution of marriage with the family court on October 14, 2010. The dissolution action was temporarily stayed by agreed order entered January 31, 2011, so that the parties could attend marriage counseling in hopes of reconciliation. The parties' reconciliation efforts failed. On March 12, 2012, the family court entered an interlocutory decree dissolving the parties' marriage. By way of the same order, the family court retained jurisdiction to determine, at a later date, the "parties' rights and responsibilities concerning the issues of the assignment of non-marital property, division of marital property and assignment of debts."
After several continuances, the family court conducted a final hearing as related to the property disposition on May 16, 2013. At the beginning of the hearing the parties agreed that other than a few items of moveable property (a four wheeler, race car, tractor, lawnmower and a few additional items), their main disagreement concerned whether the "improvements" the parties made to the House during their marriage increased its value. To this end, Husband stipulated that the House and the surrounding twelve acres were Wife's non-marital property. He claimed, however, that during the marriage the parties reduced the debt on the acreage by approximately $20,000 and made several thousand dollars worth of improvements to the House, which he maintained increased its value.
The evidentiary portion of the hearing focused almost entirely on the value of the House and the improvements the parties made to it during their marriage. Wife, Husband, and Mr. Ryan Stanger, a licensed appraiser, real estate agent, and builder testified at the hearing.
Wife testified that she acquired the acreage and the House well before the parties married. She testified that the House was not original to the property, but that she had it moved to the property sometime around 2001 or 2002. She testified that the House had never been lived in since she acquired it. With respect to the improvements/repairs to the House, Wife testified that she had some work performed prior the parties' marriage, but that the bulk of the work to the House took place during the parties' marriage. She estimated that as a married couple the parties spent approximately $32,000 on improvements and repairs to the House. She testified that they installed a metal roof, insulation, windows, and exterior doors; partially completed dry walling the interior; partially completed exterior vinyl siding; redid an interior fireplace; added a concrete porch; and partially outfitted the home for electricity. She testified, however, that much of the work the couple had performed was substandard and has caused additional damage to the House. She explained that the roof leaks, the windows are busted and do not fit properly, the insulation has molded due to water entering the House, the siding has come loose in many places, and the concrete porch has cracked. She also testified that because of the roof and window issues, birds have been able to get into the upstairs of the House causing additional mess and damage. She does not believe that the House is currently habitable.
Wife also called Mr. Stanger to testify. Stanger testified that he is a licensed real estate appraiser, real estate agent, builder, and a property manager. He testified that Husband's counsel contacted him and requested him to inspect the House, which he did on October 1, 2012. For reasons that are not entirely clear from the record, however, Stanger did not prepare a formal licensed appraisal of the House. Stanger testified that the House was likely originally built in the 1800s. He testified that he observed many problems as related to the roof, siding, foundation, windows, lack of plumbing, incomplete drywall, water damage, and lack of kitchen cabinets. He testified that the House was uninhabitable in its current state and that it would need approximately $40,000 to $80,000 of additional work to make it marketable. He further testified that there was a limited market for a house so old and in need of that much additional work. When questioned by the family court, he opined that the land was probably worth more without the House on it than it was with the House on it.
Wife attached several emails and an affidavit to her brief regarding the circumstances surrounding Mr. Stanger's engagement and testimony. These documents are not part of the record below. Accordingly, we have disregarded them. See Telek v. Daugherty, 376 S.W.3d 623, 626 (Ky. App. 2012).
After the testimony regarding the House concluded, the family court recessed during which time the parties, with the assistance of their counsel, entered into a property settlement agreement. Under the terms of the agreement: (1) Wife was awarded the zero-turn lawnmower, the sixteen-foot trailer used to transport the lawnmower, the House and property on Peach Orchard Road, five television sets purchased with Sears credit, and a Suzuki four wheeler handbook and title; (2) Wife was ordered to assume debts consisting of all mortgages associated with the residence and real estate, the Sears credit card, and any and all debts in her individual name; (3) Husband was awarded the engine hauler, antique tools gifted to him by a friend, the NAPA battery charger, jack stands, Mac Tools vise, Snapper diagnostic computer equipment, a box of automobile parts, a race car motor, and his 401K; and (4) Husband was ordered to assume any debts in his individual name.
The agreement was read into the record. The family court then questioned the parties to confirm that they did agree to the terms recited before the court. They both acknowledged to the family court that they had agreed to those terms and wished to move forward. Thereafter, the family court reduced the agreement to writing and on May 20, 2013, entered it as part of its supplemental findings and decree.
On May 30, 2013, acting with the assistance of new counsel, Husband filed a motion pursuant to Kentucky Revised Statutes ("KRS") 403.180 asking the family court to set aside the parties' agreement as unconscionable. The motion did not include any additional evidence. However, Husband asserted that his prior attorney was not adequately prepared for the hearing and improperly advised and pressured him to enter into the agreement. Husband intimated that with additional time he could produce evidence documenting how much money he spent on improvements to the House and could obtain a certified appraisal of the House's worth.
By order entered June 13, 2013, the family court denied Husband's motion. The family court's order provides:
The Respondent's motion to set aside the Order Adopting the parties' agreement is denied. The motion fails to state any facts that were unknown by the Respondent when he confirmed his agreement on the record at the May 16, 2013 hearing.
Contrary to the Kentucky Family Court Rules of Procedure and Practice and contrary to this Court's trial Order for Final Hearing entered on February 28, 2013; neither party timely filed their financial verified disclosure statement and when filed, the disclosure statements were incomplete. Neither party was prepared to produce a professional appraisal on the real estate at the final hearing. The Court granted the parties' request to continue the final hearing which was originally set for April 10, 2013. This case has been pending since October of 2010; the parties had ample time to prepare for the final hearing scheduled for May 2013.
This appeal followed.
II. Standard of Review
On appeal, we afford great deference to the family court. As explained by our Supreme Court,
Domestic relations cases allow broad discretion to the trial court which hears the cases without a jury. The legal standards a judge must apply in these cases demonstrate the need for such discretion: the best interest of the child, KRS 403.270, conscionability, KRS 403.180, application would be unjust or inappropriate because of an
extraordinary nature, KRS 403.211, to name some of the standards. Clearly, the court must make its judgment based on how it perceives the effect of the evidence on the question to be resolved. And, as we have often said, due deference must be given to the judgment of the court that hears the evidence, knows the facts of the case, and can judge the credibility of the witnesses.McFelia v. McFelia, 406 S.W.3d 838, 839-40 (Ky. 2013).
"The test is not whether the appellate court would have decided it differently, but whether the findings of the family court are clearly erroneous, whether it applied the correct law, or whether it abused its discretion." Coffman v. Rankin, 260 S.W.3d 767, 770 (Ky.2008) (quoting B.C. v. B.T., 182 S.W.3d 213, 219-20 (Ky. App. 2005)). A judgment 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). Substantial evidence is "evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men." Id. Our Supreme Court has defined "abuse of discretion" as a court's acting arbitrarily, unreasonably, unfairly, or in a manner "unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
III. Analysis
KRS 403.180 provides:
(1) To promote amicable settlement of disputes between parties to a marriage attendant upon their separation or the dissolution of their marriage, the parties may enter into a written separation agreement containing provisions for maintenance of either of them, disposition of any
property owned by either of them, and custody, support and visitation of their children.
(2) In a proceeding for dissolution of marriage or for legal separation, the terms of the separation agreement, except those providing for the custody, support, and visitation of children, are binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties, on their own motion or on request of the court, that the separation agreement is unconscionable.
(3) If the court finds the separation agreement unconscionable, it may request the parties to submit a revised separation agreement or may make orders for the disposition of property, support, and maintenance.
(4) If the court finds that the separation agreement is not unconscionable as to support, maintenance, and property:
(a) Unless the separation agreement provides to the contrary, its terms shall be set forth verbatim or incorporated by reference in the decree of dissolution or legal separation and the parties shall be ordered to perform them; or
(b) If the separation agreement provides that its terms shall not be set forth in the decree, the decree shall identify the separation agreement and state that the court has found the terms not unconscionable.
(5) Terms of the agreement set forth in the decree are enforceable by all remedies available for enforcement of a judgment, including contempt, and are enforceable as contract terms.
(6) Except for terms concerning the support, custody, or visitation of children, the decree may expressly preclude or limit modification of terms if the separation agreement so provides. Otherwise, terms of a separation agreement are automatically modified by modification of the decree.
At the outset, we observe that Husband's May 30, 2013, motion was the functional equivalent of one under Kentucky Rules of Civil Procedure ("CR") 59.05 to alter, amend or vacate a judgment. This is so because the family court has an obligation to determine whether the agreement is unconscionable prior to incorporating it into a decree. KRS 403.180(4)(a). Once the agreement has been reduced to a decree, it is considered a final judgment and can be enforced, set aside or modified only as permitted by statute and our Civil Rules.
First, the parties negotiate the agreement. Then, after an agreement is made as between the parties, a family court, under KRS 403.180(2), ascertains whether the agreement is conscionable. If it determines that the agreement is conscionable, the terms are binding after it is incorporated into the decree. The decree is a final judgment. Kidwell v. Mason, 564 S.W.2d 534, 535 (Ky.1978). After entry of the decree, a party can seek to have it set aside or modified only by way of motion under CR 59.05 or in accordance with the provisions of KRS 403.250.
In this case, on May 16, 2013, the parties presented evidence to the family court, reached their agreement during a recess, and then presented their agreement to the family court. The family court had an affirmative statutory obligation pursuant to KRS 403.180(2) to consider whether the agreement was conscionable before it incorporated it into the final decree. Thus, we presume that the family court determined that the agreement was conscionable by virtue of the fact that it entered the agreement as part of its May 20, 2013, order.
We now turn to the specific arguments set forth by Husband in support of his appeal. Although broken down somewhat differently in Husband's brief, we have identified three main alleged errors by Husband: 1) the family court's consideration of Stanger's testimony; 2) the family court's refusal to allow Husband to present additional evidence to support his motion to set aside; and 3) the family court's failure to make a finding in its order denying his motion to set aside as to whether the agreement was unconscionable.
With respect to Stanger's testimony, there is no evidence in the record that Husband objected to Stanger testifying at the hearing. Failure to object and provide the trial court with the opportunity to cure any error waives that error unless it will result in manifest injustice. See Dep't of Highways v. Stamper, 345 S.W.2d 640 (Ky.1961). Stanger is a licensed real estate agent, appraiser, builder, and property manager. He testified that he had inspected the property and based on his expert opinion as a real estate agent, builder, and appraiser, he believed that even in a completely finished condition there would be a very small market for the House. He further testified that given the substantial amount of work that remains to be done on the House, in his opinion, the land would be worth more without the House on it. Husband was aware Stanger had inspected the property because he requested him to do so. His counsel was given ample opportunity to question Stanger at the hearing and had more than sufficient time to gather evidence in support of his position. We do not believe any manifest injustice resulted from the family court's reliance on Stanger.
Husband's second argument is that the family court's failure to allow him to put forth additional evidence deprived him of the procedural safeguards KRS 403.180 was designed to prevent. We disagree.
KRS 403.180 clearly contemplates that the family court's decision as to whether the agreement is conscionable is to be made before entry of the decree. Thus, the time to present any such additional evidence to the family court was prior to May 20, 2013. Husband did not have a right to introduce additional evidence as part of his motion to set the decree aside after entry. "A party cannot invoke [CR 59.05] to raise arguments and introduce evidence that could and should have been presented during the proceedings before entry of the judgment." Hopkins v. Ratliff, 957 S.W.2d 300, 301 (Ky. App. 1997).
Wife filed the petition for divorce in October 2010. The family court conducted the disposition hearing in May 2013. Husband had well over two years to prepare his case for the hearing. Nothing appears to have stood in his way from obtaining an appraisal or gathering any other evidence to support this position prior to the hearing. Additionally, Husband did not include any additional evidence as part of his motion to set aside; rather, he alleged that with additional time he could obtain evidence to support his position. Husband failed to show why he was not able to obtain and produce this evidence prior to the entry of the decree. Accordingly, the trial court did not err in denying Husband's motion to set aside without an evidentiary hearing.
Finally, Husband complains that the family court did not make a written finding as to whether the agreement was unconscionable when it denied his motion. KRS 403.180 does not require a family court to make a written finding of conscionability. Rather, the family court's act of incorporating the agreement is tantamount to finding the agreement conscionable. Moreover, as a matter of preservation of error, the rules requires a party to move the family court for additional findings of fact when he believes the family court failed to make findings on an essential issue. "Failure to bring such an omission to the attention of the trial court by means of a written request will be fatal to an appeal." Vinson v. Sorrell, 136 S.W.3d 465, 471 (Ky.2004) (citing Cherry v. Cherry, 634 S.W.2d 423 (Ky.1982)).
There is nothing in the record to suggest that Husband asked the family court to render additional findings after it denied his motion to set aside. As such, Husband cannot now complain on appeal about the absence of such findings.
Having fully reviewed the record, we find no error in either entry of the decree or denial of the motion to set it aside. The parties had ample opportunity to gather evidence in support of their claims prior to the hearing. The evidence presented indicated that the improvements the parties made to the House during the course of their marriage, while costly, did not increase the value of the House. The House was worth essentially the same amount of money at the time the parties divorced as it was when they were first married. Accordingly, the record supports the trial court's conclusion that the parties' agreement awarding the House to Wife was not "manifestly unfair or unreasonable." Shraberg v. Shraberg, 939 S.W.2d 330, 333 (Ky. 1997).
IV. Conclusion
Based on the foregoing, we affirm the Calloway Family Court.
ALL CONCUR. BRIEF FOR APPELLANT: William F. McGee, Jr.
Smithland, Kentucky
BRIEF FOR THE APPELLEE: David L. Hargrove
Mayfield, Kentucky