Opinion
NO. 2014-CA-001159-MR
05-26-2017
ANDREA BOONE DUNCAN APPELLANT v. KEVIN TODD DUNCAN APPELLEE
BRIEFS FOR APPELLANT: Katie Brophy Louisville, Kentucky Mike Kelly Louisville, Kentucky BRIEF FOR APPELLEE: Philip J. Castagno Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON FAMILY COURT
HONORABLE DONNA DELAHANTY, JUDGE
ACTION NO. 05-CI-500614 OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
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BEFORE: COMBS, J. LAMBERT AND THOMPSON, JUDGES. THOMPSON, JUDGE: Andrea Boone Duncan appeals from two post-decree orders entered after this Court remanded the matter to the family court to address specific issues regarding the division of marital property, maintenance and child support. Duncan v. Duncan, 2008-CA-000373-MR, 2010 WL 5343201 (Ky. App. 2010) (unpublished). Andrea frames the issues presently before this Court as follows: (1) whether the family court erred in quashing non-wage garnishments without entering a judgment for a sum certain; (2) whether the family court erroneously ordered Andrea to pay Kevin $25,000 as his interest in a Chicago Investment Group [CGI] account; (3) whether the family court erroneously failed to credit Andrea with various payments on the parties' 2006 tax liability; (4) whether the family court abused its discretion in refusing to consider an award of attorney fees; (5) whether the family court erred in not awarding Andrea any contribution to the appeal bond cost; (6) whether the family court modified a final lump sum child support order to a per child order; and (7) whether the family court erred in resolving Andrea's argument that she is entitled to be reimbursed tuition paid for the parties' three children to attend private schools. We conclude that to the extent any of the issues raised were resolved in prior orders entered after remand and not appealed, they may not be properly raised in a proceeding challenging the non-wage garnishments. We review the remaining issues on their merits.
Andrea and Kevin Duncan married in 1989. On November 15, 2006, the family court entered a decree of dissolution but reserved all other issues. The remaining issues included: the division of marital property, restoration of nonmarital property, allocation of debt, maintenance, child support and attorney fees.
On August 31, 2007, the family court's findings of fact, conclusions of law and judgment (the 2007 judgment) was entered resolving the remaining issues. Both Andrea and Kevin filed motions to alter, amend, or vacate. Certain modifications requested by each party were granted while others were denied. Andrea appealed and Kevin cross-appealed.
In her first appeal, Andrea argued that the family court abused its discretion by improperly adopting Kevin's proposed findings of fact "wholesale" and that the family court's classification of certain properties as nonmarital was error. Id. at 3. She also argued: (1) the division of marital property was erroneous; (2) the family court's award of maintenance was an abuse of discretion; (3) the family court did not make accurate findings concerning Kevin's income and the reasonable needs of the children; and (4) the family court abused its discretion by failing to award her attorney fees. Id. Kevin argued that the family court abused its discretion by awarding too much maintenance to Andrea and by failing to award him costs and attorney fees. Id. This Court reversed and remanded to the family court with instructions, including that it reconsider the parties' income tax liability for 2006 and their individual responsibility for its payment and child support. Id. at 19.
On remand, the family court conducted a hearing and issued a final and appealable order on August 10, 2012, addressing those issues remanded and/or reversed by this Court. Andrea and Kevin filed motions to alter, amend or vacate the August 10, 2012 order. On December 13, 2012, an order was entered ruling on the motions to alter, amend or vacate. No appeal was taken from either the August 10, 2012 order or the December 13, 2012 order and both became final.
On February 20, 2013, Andrea sought a non-wage garnishment for $77,960 seeking execution on the property awarded to her and, on the same date, sought a second non-wage garnishment for $566.24 for delinquent child support accruing in February 2013. On March 7, 2013, Kevin filed an affidavit to challenge execution.
A hearing was held at which the family court addressed Kevin's challenge to the non-wage garnishments and additional issues raised by Andrea regarding tuition reimbursement, post-judgment interest, child support and alleged child support arrearage. On December 4, 2013, the family court issued an order in which it found Andrea continued to owe Kevin an amount exceeding that sought to be garnished and ruled the garnishments were improper.
The family court rejected Andrea's contention that she did not owe Kevin $25,000, representing one-half an amount referred to in this litigation as "seed money." The $50,000 was invested in an account ear-marked for the payment of 2006 taxes and distributed to Andrea in 2006 prior to the hearing in the dissolution action. The family court ruled the issue was addressed in the 2007 judgment and that specific issue was not appealed.
Regarding Andrea's argument that Kevin owed her tuition for the parties' children's attendance at private schools, the family court found that pursuant to an agreed order entered on August 3, 2006, the parties were to share the private school tuition only if both agreed that the children would attend certain schools, including Assumption High School. Finding that Kevin provided sufficient notice that he did not agree for the children to attend Assumption, the family court only required Kevin to reimburse Andrea his one-half share of the tuition paid for the oldest daughter's freshman year.
The family court next considered whether Andrea satisfied a portion of her obligation for the 2006 tax liability of the parties by payment of capital gains taxes on liquidated assets assigned to her in the dissolution proceeding. The family court determined that the parties' respective tax liability was determined by this Court and the family court's order after remand, which was not appealed.
Kevin argued he overpaid child support, while Andrea argued he was in arrears. The family court concluded that in the August 10, 2012 order, it found an arrearage was created as a result of the new calculation of child support following remand by this Court. That amount, $3,360, remained unpaid.
The family court rejected Andrea's argument that Kevin owes her the appeal bond she posted when she filed her first appeal and fees and costs associated with that bond. The family court ruled that those amounts were solely Andrea's responsibility.
The family court concluded by expressing its frustration with the parties:
Several of the issues continue to be raised despite final judgment and the Court may begin imposing sanctions if the parties continue to be noncompliant with the orders of this Court.... This Court will not continue to hear the rehashing of long resolved issues.Finally, the family court ruled that the issue of attorney fees would be addressed in the future.
Andrea and Kevin filed motions to alter, amend or vacate the December 4, 2013 order. On June 27, 2014, the family court modified its December 4, 2013 order in several respects but rejected Andrea's contention that its order converted the child support award to a lump sum payment versus a per child amount as ordered in the judgment. The family court ruled that when it reconsidered the amount of child support as directed by this Court, it continued to operate under premise of the award being computed in a per child manner. The family court also rejected Andrea's contention that the modification of child support after the two oldest children became emancipated was improper.
Ultimately, the family court modified its December 4, 2013 order regarding the amount Kevin overpaid child support. It concluded that Kevin overpaid in the amount of $18,610.56 to be offset against any remaining amount owed.
The family court refused Andrea's request that it make specific findings regarding the "methodology" to employ to obtain the judgment proceeds she claimed. The family court stated:
This Court is not ... in the business of practicing a case for the parties or counsel involved therein. The Court set aside the garnishments as it was determined they were inappropriate at the time. The parties continue to dispute what sums are owed by and between them. In particular, the issue of child support remained much in dispute as the parties were diametrically
opposed as to whether an arrearage or overpayment had occurred. The Court has resolved said issue.
The family court then turned to Andrea's remaining claims including those with respect to the seed money and tuition reimbursement. The family court stressed that it made sufficient and specific findings regarding these issues and that Andrea was again attempting to relitigate many of the issues resolved by the judgment and subsequent orders. Again expressing its frustration, the family court advised as follows:
There appears to be no reason the parties cannot come to a final accounting of monies owed and satisfy same. If the parties cannot come to an agreement, they are to attend mediation or resolve this final issue before re-engaging the Court. As stated repeatedly through several Orders of this Court, the same issue continues to be raised and argued despite final judgment by this Court.Andrea appealed.
Kevin filed a motion to dismiss the appeal arguing that with the exception of the tuition issue, the issues presented are either prematurely raised or were litigated in the 2007 judgment and the August 10, 2012 and December 13, 2012 orders and may not be presented in this appeal because those orders were not timely appealed. To the extent Andrea raises issues resolved in the 2007 judgment and 2012 orders, we agree.
Two rules are relevant to the threshold question regarding whether each issue is properly before this Court. First, Kentucky Rules of Civil Procedure (CR) 73.02(1)(a) provides: "The notice of appeal shall be filed within 30 days after the date of notation of service of the judgment or order under Rule 77.04(2)." "Compliance with the time requirements of CR 73.02 is mandatory and jurisdictional." United Tobacco Warehouse, Inc. v. Southern States Frankfort Coop, Inc., 737 S.W.2d 708, 710 (Ky.App. 1987). Second, a party cannot collaterally attack the underlying judgment in a proceeding to enforce a final judgment or order. Orders entered pursuant to the court's enforcement powers "merely assure that the judgment is carried out and do not alter it in any way; such orders do not provide a means for attacking the original judgment." Young v. U.S. Bank, Inc., 343 S.W.3d 618, 621 (Ky.App. 2011). For the most part, Andrea attempts to relitigate issues previously litigated through this garnishment proceeding. We address each issue as presented in Andrea's brief.
Andrea argues that the family court erred when it did not enter a judgment for a sum certain and ordered that the parties either agree on the amount owed to each other or attend mediation. Intertwined with that issue, she argues she is entitled to post-judgment interest.
Although not precluded as an issue previously litigated and resolved by the earlier final orders, it is nevertheless an issue not properly before this Court. First, all courts, including family courts, have authority to do what is "reasonably necessary to 'aid in the disposition of the action' and to order the parties to mediation." Kentucky Farm Bureau Mut. Ins. Co. v. Wright, 136 S.W.3d 455, 459 (Ky. 2004) (quoting CR 16(1)(f)). Here, the family court did not "delegate" its duty to determine the amount owed by each party, but in hopes of finally resolving this seemingly open-ended dissolution action, ordered them to agree on the amounts owed or attend mediation before "re-engaging the court." Furthermore, no mediation has occurred and, therefore, there is no issue for this Court to resolve.
As to post-judgment interest, the family court correctly informed the parties that in accordance with the August 10, 2012 order, post-judgment interest would be awarded only after the offset of sums addressed and ordered to each party. It then urged the parties to "work together to finally resolve the issue of outstanding balances owed between the parties so the matter may be put to rest." Not only was the family court's ruling correct, but its advice was sound. With that said, we address each remaining issue raised by Andrea.
The money referred to as "seed money" has been the subject of controversy throughout this litigation. "Seed money" is merely a term used to refer to funds deposited in the CIG account during the parties' marriage that was earmarked for the payment of the parties' 2006 income tax liability and distributed to Andrea in 2006 but subject to reallocation at trial. In the 2007 judgment, Andrea was ordered pay Kevin one half that amount, $25,000.
The issue of the seed money was discussed in this Court's opinion in the context of the parties' 2006 tax liability but this Court did not decide whether Andrea was properly required to repay Kevin that amount. On remand, Andrea requested that the family court again address the seed money division. In its August 10, 2012 order, the family court expressly stated that "the issue of the 'seed money' was not before [it] for the limited purpose of this Order which was to address only those issue reversed/remanded by the Court of Appeals."
Andrea now argues that the issue was raised on appeal when she challenged the determination of her tax liability in the judgment. Even if correct, Andrea's remedy was to appeal from the orders entered in 2012 when the family court refused to consider the issue. Therefore, we do not consider the merits of her argument.
Andrea contends that the family court erroneously failed to credit her with payments on the parties' 2006 tax liability. The parties' 2006 tax liability has been the subject of prior orders of the family court as well as having been discussed in this Court's prior opinion. A detailed review of the facts relating to the parties' tax liability is provided in Duncan, 2010 WL 5343201. For the purpose of this appeal, we provide a less detailed version.
Prior to the decree of dissolution, the parties filed separate tax returns. Kevin paid the marital income tax liability on his personal return including his work income and capital gains associated with over one million dollars in stock he was required to split evenly with Andrea. In 2007, the family court heard evidence and issued findings as to the amount of joint marital tax liability owed by Kevin and ordered Andrea to pay one-third of that amount.
Upon review, this Court held that the family court failed to deduct an overpayment from the total marital tax liability and reversed and remanded to the family court. Addressing the issue on remand, in its August 10, 2012 order, the family court ruled as follows:
The remaining directive from the Court of Appeals was to subtract $ 42,845.00 which was overpaid to the IRS from the amount the Court determined to be the IRS debt. Subtracting $42,845.00 from $297,510, results in a total income tax owed for 2006 in the amount of $254,510.00. Said amount shall be divided with [Kevin] being assigned two-thirds (2/3) of the responsibility for this debt and [Andrea] being assigned one-third (1/3) of same.
Although the family court resolved the issue of the amount of Andrea's tax liability in 2012 and she did not appeal, Andrea continues to dispute the amount owed, arguing she is entitled to a credit for amounts paid on her personal taxes incurred on property received in the dissolution action. She now claims she is entitled to a credit of $45,104 toward the 2006 taxes. In support, she presents two federal and state returns. The original federal return shows an amount due after capital gains on the marital property received of $22,320 and, on the state return, an amount owed of $9,676. The taxable amount is then recalculated on a return without the gain showing she would have been entitled to a refund from the federal government of $11,770 and from the state of $1,338. These numbers combine to total the claimed amount of $45,104.
Again, Andrea argues an issue that was or should have been raised in 2012, when the family court considered the amount of taxes owed by each party after remand. If any credit is due, it was incumbent upon Andrea to present evidence in 2012 after remand from this Court and, if she believed the family court erred in its conclusions, to appeal.
Throughout this action, Andrea has requested attorney fees and was repeatedly informed by the family court that her motions were deficient because they did not detail the breakdown of attorney fees by issue. Because the time for appeal of those denials has long since passed, we do not discuss the orders pertaining to those motions. Again, the only issues that are possibly timely presented are those resolved in the family court orders of December 4, 2013, and June 27, 2014.
In its December 2013 order, the family court did not address the issue of attorney fees but stated that it "shall be addressed separately from the issues herein. The Court shall advise counsel and the parties at a future time as to how it intends to proceed regarding this issue and set the parameters of same." The attorney fee issue having not been resolved, there is nothing for this Court to review.
In addition to claiming attorney fees, Andrea claims Kevin should pay her over $8,000 as the cost of securing a supersedeas bond in her prior appeal. She refers to checks submitted in the record written to Tom Lease Insurance Inc., for the "annual premiums." First, we note that Andrea was not entirely successful on appeal. Moreover, there is no authority in this Commonwealth that success on appeal warrants an award of cost to the victor. Second, if the costs claimed are recoverable under Kentucky law, whether to award costs is a matter within the sole discretion of the family court. Gentry v. Gentry, 798 S.W.2d 928, 938 (Ky. 1990). Under the circumstance, we conclude there was no abuse of discretion.
The next issue is whether the family court properly found that Kevin has overpaid Andrea $18,610.56 in child support or if, as Andrea argues, Kevin has underpaid child support. Andrea contends the family court improperly modified a final lump sum child support order to a per child order.
In the 2007 judgment, the family court ordered that Kevin was obligated to pay child support in the amount of $1,800 or "$450.00 per month, per child, in child support." This Court did not disturb the per-child framework but remanded to the family court for further determination as to the amount of child support. Duncan, 2010 WL 5343201 at 18.
On remand, in its December 13, 2012 order, the family court reconsidered the issue of child support. At this point, two of the children had been emancipated and, upon motion by Kevin, child support as to those children was terminated by court order. The family court ruled that it erred in its 2007 judgment in that it did not allocate any portion of the child support amount to Andrea and ordered that Kevin's child support obligation is "$1,466.24" without reference to a per child basis or the emancipation of two children. However, the family court noted the reduction in child support potentially created an overpayment.
Andrea argues that when the family court modified Kevin's child support obligation in 2012, it modified the obligation to a lump sum rather than a per child obligation. If correct, the emancipation of each child would not decrease the child the support due, resulting in an arrearage owed by Kevin rather than an overpayment.
The family court rejected Andrea's contention that the 2012 order converted child support to a lump sum amount. It noted this Court did not disturb the child support award based on a per-child calculation but only the amount awarded. It further noted that the court modified Kevin's obligation twice, corresponding with the emancipation of the parties' two eldest children, which orders were not appealed and consistent with a per child support basis, his support was reduced by $366.56 per child. The emancipation orders were not appealed by Andrea.
Andrea's reliance on Guthrie v. Guthrie, 429 S.W.2d 32 (Ky. 1968) and Pecoraro v. Pecoraro, 148 S.W.3d 813 (Ky.App. 2004), is misplaced. In those cases, the child support obligor unilaterally reduced his child support upon emancipation of a child. In both cases, the Courts held that the obligor could not unilaterally reduce child support on a pro rata manner without a per child order of the court. Here, the 2007 judgment stated support was per child and, subsequently, the family court reduced the child support based on the emancipation of two of the four children. Andrea did not appeal either order. We conclude the family court did not err in its calculation of the credit owed Kevin.
In 2015, a third child was emancipated and, by court order, child support for that child was terminated. Andrea appealed but the appeal was dismissed. --------
Andrea argues that the family court erred when determining whether Kevin must reimburse her for tuition paid for the children's private schools. In addition to the 2007 judgment, an agreed order entered on August 3, 2006, is relevant.
In the 2006 agreed order, Kevin agreed to pay two-thirds of private school tuition for the 2006-2007 school year. The 2007 judgment addressed the tuition issue for future years as follows:
The Court finds that Kevin and Andrea shall consult with each other, each year to determine and agree upon the appropriate school for each child for the next school year and payment for the same if other than public school. Should the parties agree that the children continue in private school, each party shall contribute to the tuition costs proportionate to the parties' income or imputed income as set forth in this Opinion.
The family court found that Kevin refused to pay the last 2007 payment to Assumption for the parties' oldest daughter and the record reflects that Andrea paid the tuition payment in full. However, the family court erroneously ordered that the August 3, 2006 agreed order required that the tuition payment be shared equally instead of two-thirds by Kevin and one-third by Andrea. That portion of the family court's order is reversed and remanded for a judgment against Kevin in Andrea's favor for two-thirds of the 2006-2007 Assumption tuition with pre-judgment interest.
At the 2013 hearing, Kevin testified that after 2007, he disagreed with sending the children to private school and that he communicated his disagreement to Andrea. In those communications, he stated his reasons, including the children's poor academic performance. Under the facts, the family court found that Kevin had "no continuing obligation to pay tuition beyond completion of the oldest child's freshman year."
Under the terms of the 2007 judgment, Kevin was responsible for payment of tuition costs proportionate to his income only if the parties agreed that the children should continue in private school. Whether Kevin was in agreement was a question of fact. Our standard of review was aptly stated in McVicker v. McVicker, 461 S.W.3d 404, 415-16 (Ky.App. 2015) (quotation omitted):
CR 52.01 provides the general framework for the family court as well as review in the Court of Appeals: In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specifically and state separately its conclusions of law thereon and render an appropriate judgment[.] ... Findings of fact, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the family court to judge the credibility of the witnesses.A family court's findings based on substantial evidence will not be disturbed. Id. As explained in Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003) (footnotes omitted):
[S]ubstantial evidence" is "[e]vidence that a reasonable mind would accept as adequate to support a conclusion" and evidence that, when "taken alone or in the light of all the evidence, ... has sufficient probative value to induce conviction in the minds of reasonable men." Regardless of conflicting evidence, the weight of the evidence, or the fact that the reviewing court would have reached a contrary finding, "due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses" because judging the credibility of witnesses and weighing evidence are tasks within the exclusive province of the trial court. Thus, "[m]ere doubt as to the correctness of [a] finding [will] not justify [its]
reversal," and appellate courts should not disturb trial court findings that are supported by substantial evidence.
The family court heard the evidence and was in the best position to judge the credibility of the witnesses. The family court's finding that Kevin did not agree to send the children to private schools is supported by substantial evidence and, therefore, its conclusion that Andrea is not owed additional tuition expenses is affirmed.
Based on the foregoing, the orders of the Jefferson Family Court are affirmed except to the extent Kevin is required to reimburse Andrea for only one half the tuition she paid in full as final tuition to Assumption for the 2006-2007 school year. The case is remanded for a judgment against Kevin in Andrea's favor for two-thirds of that amount paid.
ALL CONCUR. BRIEFS FOR APPELLANT: Katie Brophy
Louisville, Kentucky Mike Kelly
Louisville, Kentucky BRIEF FOR APPELLEE: Philip J. Castagno
Louisville, Kentucky