Opinion
NO. 2013-CA-001984-MR
01-15-2016
MARK KENNETH HARRIS APPELLANT v. MARILYN YVETTE HOLMES; AND WESLEY DURHAM APPELLEES
BRIEFS FOR APPELLANT: Dawn Lonneman Blair Elizabethtown, Kentucky BRIEF FOR APPELLEE: C. Wesley Durham Radcliff, Kentucky
NOT TO BE PUBLISHED APPEAL FROM HARDIN CIRCUIT COURT FAMILY COURT DIVISION
HONORABLE PAMELA ADDINGTON, JUDGE
ACTION NO. 12-CI-01403 OPINION
AFFIRMING BEFORE: JONES, TAYLOR, AND THOMPSON, JUDGES. TAYLOR, JUDGE: Mark Kenneth Harris brings this appeal from a September 9, 2013, Findings of Fact, Conclusions of Law, and Judgment/Decree of the Hardin Circuit Court, Family Court Division, dividing marital assets, allocating marital debt, awarding maintenance, and awarding attorney's fees. We affirm.
Mark Kenneth Harris and Marilyn Yvette Holmes were married April 2, 1989. The marriage was dissolved by decree of dissolution of marriage entered in Alaska on October 16, 2001. On August 20, 2002, Mark and Marilyn married a second time, and subsequently, the parties moved to Kentucky.
Mark Kenneth Harris and Marilyn Yvette Holmes were married for approximately 24 years, except for the ten-month period between their first divorce on October 16, 2001, and their remarriage on August 20, 2002.
On July 25, 2012, Marilyn filed a petition for decree of dissolution of marriage in the Hardin Circuit Court, Family Court Division (Action No. 12-CI-01403). The family court entered an agreed order on September 12, 2012, awarding Marilyn 47 percent of Mark's military retirement. Marilyn subsequently filed a motion for temporary maintenance. Following a hearing, Marilyn was awarded the amount of $650 per month in temporary maintenance, effective August 1, 2012.
On June 13, 2013, a final hearing was conducted upon the disputed issues of division of equity in the marital home, allocation of debt, award of maintenance, and attorney's fees. Stipulations of fact were submitted by the parties. Therein, Mark and Marilyn stipulated to the fair market value of the marital residence ($169,537) and the amount of debt thereon ($162,900). Each of the parties stipulated to their income - Marilyn's adjusted gross income from her civil service employment was $2,402 per month or $28,828 per year. Mark's gross income from his civil service employment and retirement was $8,795 per month or $105,547 per year. With adjustment to the parties' incomes for the amount Marilyn receives as her marital share of Mark's retirement, Mark's yearly income was approximately $95,507.80 and Marilyn's was approximately $38,867.00.
Following the final hearing, the family court entered its findings of fact, conclusions of law, and judgment on September 9, 2013. The family court awarded the marital residence to Mark and allocated to him the indebtedness thereupon. To equalize the division of marital property, the court ordered Mark to pay Marilyn $2,000 representing her marital share of equity in the marital residence. The court also awarded Marilyn permanent maintenance of $850 per month and ordered Mark to pay $2,000 toward Marilyn's attorney's fees. This appeal follows.
Mark initially contends that the family court erred in its division of marital property. Specifically, Mark asserts that the court erred by awarding Marilyn $2,000 representing her equity interest in the marital residence in order to equalize the division of marital property. For the following reasons, we disagree.
Kentucky Revised Statutes (KRS) 403.190 governs the division of marital property and provides, in relevant part:
(1) In a proceeding for dissolution of the marriage or for legal separation, or in a proceeding for disposition of property following dissolution of the marriage by a court which lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, the court shall assign each spouse's property to him. It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors including:
Pursuant to KRS 403.190(1), the circuit court must equitably divide marital property in just proportions after considering all relevant factors. 15 Louise E. Graham and James E. Keller, Kentucky Practice - Domestic Relations Law § 15.4 (2015). It should be noted that an equitable division is not necessarily an equal division. Russell v. Russell, 878 S.W.2d 24 (Ky. App. 1994). And, the circuit court possesses wide discretion in its division of marital property, and its decision will not be disturbed on appeal absent an abuse of that discretion. Id. An abuse of discretion occurs where "the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Downing v. Downing, 45 S.W.3d 449, 454 (Ky. App. 2001).(a) Contribution of each spouse to acquisition of the marital property, including contribution of a spouse as homemaker;
(b) Value of the property set apart to each spouse;
(c) Duration of the marriage; and
(d) Economic circumstances of each spouse when the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children.
In this case, the parties stipulated that the fair market value of the marital residence was $169,537 and that the mortgage thereon was $162,900. From the evidence introduced, it is apparent that the family court had limited flexibility in dividing the parties' marital assets. Except for the parties' retirement funds, the only substantial marital asset available for division was the equity in the marital residence totaling approximately $6,600. The family court ordered Mark to pay Marilyn $2,000 representing her marital interest in the home's equity, well below half thereof. In consideration of these facts, we do not believe the family court abused its discretion by awarding Marilyn $2,000 representing a portion of the equity in the marital residence. See Russell, 878 S.W.2d 24.
Mark also contends that the family court erred in its allocation of the parties' debt. Mark specifically complains that several of the debts were marital and should not have been allocated solely to him. In the alternative, Mark argues that if he were allocated such debts he should not be ordered to pay maintenance to Marilyn. We will address the propriety of awarding maintenance to Marilyn later in this opinion.
Mark argues that the family court should have considered that he was ultimately responsible for the student loans of the parties' children in the amount of approximately $47,000 in its allocation of debt. Mark maintained that the student loans were "parent plus loans." The parties' son testified that the student loans were his responsibility and not his father's responsibility. Mark admitted he had not made any payments on the student loans, and he did not refute the son's testimony on this issue. Given Marilyn's testimony that Mark refused to take the proper steps for her or the children to use Mark's G.I. Bill benefits for their education, the circuit court obviously viewed Mark's credibility on the student loan issue as suspect.
In Kentucky, there is no presumption that a debt incurred during the marriage is marital. Allison v. Allison, 246 S.W.3d 898 (Ky. App. 2008). Instead, the allocation of debts that arose during the marriage is based upon many factors, such as extent of participation in acquiring the debt, receipt of benefits of the debt, and the "economic circumstances of the parties" to repay the debt. Neidlinger v. Neidlinger, 52 S.W.3d 513, 523 (Ky. 2001). And, the burden of proof regarding whether a particular debt is marital falls upon the party that incurred the debt. Allison, 246 S.W.3d 898. The court's decision upon allocation of debt will not be disturbed absent an abuse of discretion. Allison, 246 S.W.3d 898 (citing Neidlinger, 52 S.W.3d 513.
The following debts were allocated to Mark and are at issue:
| 2012 Kia | $ 13,436.00 |
| Healthnet | $ 50.86 |
| St. Francis Healthcare | $ 78.00 |
| One Main Financial | $ 13,785.00 |
| PNC Credit Card | $ 1,401.00 |
| Military Star Credit Card | $ 7,369.00 |
| IRS Taxes 2008 & 2011 | $ 6,612.92 |
| IRS Homeowners Credit | $ 6,500.00 |
| XM Radio | $ 224.95 |
Mark was awarded the marital residence and his vehicle. The parties stipulated that Mark would be allocated the debt upon the marital residence and his vehicle. Marilyn was awarded her vehicle and allocated the debt thereupon. The debt on Marilyn's vehicle was greater than the market value. Marilyn was also allocated the debt on the JCPenney credit card. At the hearing, there was extensive testimony regarding the debt on the 2012 Kia that belonged to the parties' adult son. The Kia was purchased for the son while he was attending college. The son testified that he gave Mark $3,000 to apply toward the purchase price of the vehicle. Mark did not apply the money toward the purchase but did make the car payment. After making the car payment for about one year, Mark announced that the car was a graduation gift from him to their son. Marilyn presented a separate graduation gift to their son. The debt to Healthnet was for their son's medical treatment. Marilyn testified that her insurance paid all but $50.86 and that Mark refused to turn the remainder into his insurance. The debt to St. Francis Healthcare for $78 was also for their son's medical treatment. It appears that the son paid this debt. Marilyn testified that was she was not even aware of the debt to One Main Financial or upon the PNC Credit Card. Marilyn's testimony is supported by bank records that indicated Mark routinely incurred debts and withdrew marital funds for nonmarital purposes, including funds spent on dating services and hotel rooms. There was also a debt upon a Military Star Credit Card. Marilyn testified that the debt to the IRS for unpaid taxed (for 2008 and 2011) was the result of Mark's unclaimed gaming winnings and his withdrawal of funds from an IRA account. The other debt to the IRS resulted from a tax credit the parties previously received as homeowners that they did not actually qualify for; thus, they were required to repay same at a rate of $500 per year. Considering the testimony presented that Mark incurred the majority of these debts or was otherwise responsible for the debts, we cannot say that the family court abused its discretion by allocating the above debts to Mark. See Allison, 246 S.W.3d 898. Moreover, the evidence indicated that Mark possessed the financial wherewithal to repay these debts. See Neidlinger, 52 S.W.3d 513.
Mark next asserts that the family court erred by awarding permanent maintenance to Marilyn. Specifically, Mark asserts that Marilyn is able to support herself through employment and is not entitled to an award of permanent maintenance.
The decision to award a party maintenance is an issue within the sound discretion of the circuit court. Browning v . Browning, 551 S.W.2d 823 (Ky. App. 1977). However, it is well-established that an award of maintenance must satisfy the statutory provisions of KRS 403.200(1)(a) and (b). Drake v . Drake, 721 S.W.2d 728 (Ky. App. 1986). To properly award maintenance pursuant to KRS 403.200, the court must find: (1) the spouse seeking maintenance lacks sufficient property, including the marital property apportioned to her, to provide for her reasonable needs; and (2) is unable to support herself through appropriate employment. And, an award of maintenance will not be disturbed on appeal unless "the findings of fact are clearly erroneous or that the trial court has abused its discretion." Perrine v. Christine, 833 S.W.2d 825, 826 (Ky. 1992).
In the case sub judice, the family court clearly considered the marital property awarded to Marilyn. Marilyn was not awarded a residence; rather, she was awarded $2,000 of the equity in the residence. Marilyn was awarded a vehicle but she was also allocated the debt on the vehicle. The debt on the vehicle was higher than the value of the vehicle. The family court also considered that Marilyn worked full time as a dental assistant earning $28,828 per year and worked a seasonal job that provided only a nominal amount of income. Mark's gross adjusted income, on the other hand, was $105,547. Mark argued that Marilyn had previously worked a third job and that income from the third job should be considered. Marilyn responded that due to a medical condition affecting her white blood cell count she was no longer able to work a third job. Mark offered no rebuttal testimony as to Marilyn's medical condition. Given these specific facts, we do not believe the family court's findings of fact are clearly erroneous or that it abused its discretion in its award of maintenance to Marilyn. There was substantial evidence that Marilyn lacked sufficient property to provide for her reasonable needs and was unable to adequately support herself through employment. See Drake, 721 S.W.2d 728. Thus, the family court's award of maintenance to Marilyn will not be disturbed by this Court. See Perrine, 833 S.W.2d 825.
Mark next argues that the family court erred as to the amount and duration of the maintenance awarded to Marilyn. Mark specifically argues that the court erroneously awarded permanent maintenance of $850 per month to Marilyn.
KRS 403.200(2) governs the amount and duration of maintenance and requires the court to consider "all relevant factors." The statute reads as follows:
(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, and after considering all relevant factors including:
(a) The financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
(b) The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
(c) The standard of living established during the marriage;
(d) The duration of the marriage;
(e) The age, and the physical and emotional condition of the spouse seeking maintenance; and
(f) The ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.
It is axiomatic that amount and duration of a maintenance award are within the sound discretion of the circuit court. Gentry v . Gentry, 798 S.W.2d 928 (Ky.1990). And, an award of maintenance may only be reversed where there has been a clear abuse of discretion. Combs v . Combs, 622 S.W.2d 679 (Ky. App. 1981). In this Commonwealth, maintenance is generally considered rehabilitative and, thus, limited in duration. Leitsch v . Leitsch, 839 S.W.2d 287 (Ky.App.1992). However, if rehabilitation of a spouse is not possible, the statutory scheme is intended to prevent a "drastic change in the standard of living" established during the parties' marriage. Id. at 290 (citation omitted).
From our review of the record, it is evident that the family court considered the factors set forth in KRS 403.200(2) when it awarded permanent maintenance of $850 per month to Marilyn. The family court recognized that despite the long-term marriage, the parties had accumulated limited marital property. As a result, the marital property awarded Marilyn was modest and not income producing. The family court also recognized that Marilyn's ability to support herself through employment was limited by her lack of education and work experience. Marilyn had a high school education and testified that during the marriage Mark would not permit her to attend college. Marilyn maintained that it was Mark's opinion they could not afford for her to pursue college, and he refused to take out a loan or execute the necessary paperwork for Marilyn to utilize his GI Bill. Mark's military career forced the family to relocate frequently, and Marilyn also stayed home to care for the parties' children. Both factors hindered Marilyn's ability to work outside the home. The family court also noted that Mark's income allowed him to meet his own needs while also assisting in meeting Marilyn's needs. Therefore, we conclude that the family court did not abuse its discretion as to the amount or the duration of the maintenance award to Marilyn. See Gentry, 798 S.W.2d 928.
However, we would note that since the family court awarded Marilyn permanent maintenance, the award is considered "open-ended" and, as a result, subject to future modification under KRS 403.250(1). See 16 Louise E. Graham & James E. Keller, Kentucky Practice - Domestic Relations Law § 16.21 (2015). An open-ended maintenance award can be modified by agreement pursuant to a separation agreement, which is not present in this case or by changed circumstances that are substantial, continuing, and make the award unconscionable. See KRS 403.250(1); Massey v. Massey, 220 S.W.3d 700 (Ky. App. 2007.)
Although unpreserved and not an issue before this Court on appeal, we observe that the family court did err in including cohabitation as a condition for automatic termination of maintenance in this case. Kentucky Revised Statutes (KRS) 403.250(2) sets out that the death or remarriage of the party receiving maintenance automatically terminates the maintenance obligation, unless the parties agree otherwise. Cohabitation is not listed in KRS 403.250(2), as a mandatory condition that terminates maintenance, although cohabitation could create a changed circumstance under KRS 403.250(1). See Combs v. Combs, 787 S.W.2d 260 (Ky. 1990). --------
Mark also maintains that the family court erred by awarding $2,000 in attorney's fees to Marilyn. Mark does not dispute that there is a disparity between the parties' income. Rather, Mark asserts that Marilyn has sufficient income to pay her own attorney's fees as demonstrated by the $2,000 payment she initially made to her attorney.
KRS 403.220 governs an award of attorney's fees in a dissolution of marriage proceeding and provides:
The court from time to time after considering the financial resources of both parties may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under this chapter and for attorney's fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court may order that the amount be paid directly to the attorney, who may enforce the order in his name.The decision to award attorney's fees in a dissolution proceeding is within the discretion of the family court. Tucker v. Hill, 763 S.W.2d 144 (Ky. App. 1988). Such decision will not be disturbed on appeal absent an abuse of that discretion. Id.
Marilyn testified that she did initially pay $2,000 toward her attorney's fees, but she was only able to do so while she was working three jobs and living with Mark. The record reveals that Mark's annual adjusted gross income after deducting the retirement paid to Marilyn was $95,507.80, and Marilyn's adjusted gross annual income, including her portion of Mark's retirement, was only $38,867. Marilyn's attorney submitted an affidavit that demonstrated Marilyn still owed $3,825 in attorney's fees. Considering the disparate financial resources of the parties, we do not believe the award of $2,000 in attorney's fees to Marilyn was an abuse of discretion. See Tucker, 763 S.W.2d 144.
Finally, Mark asserts that the family court erred by utilizing the proposed findings of fact, conclusions of law, and judgment tendered by Marilyn's attorney. Particularly, Mark argues that the court adopted Marilyn's proposed findings of fact, conclusions of law, and judgment "verbatim with the exception of changing the dollar amount of maintenance." Mark's Brief at 21. Mark asserts that by utilizing the proposed findings of fact, conclusions of law, and judgment as prepared by Marilyn's attorney, the court violated Kentucky Rules of Civil Procedure (CR) 52.01.
It is well-established that CR 52.01 requires:
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 trial court to judge the credibility of the witnesses. . . .A family court is not prohibited from delegating "the clerical task of drafting proposed findings of fact and conclusions of law under the proper circumstances." Bingham v. Bingham, 628 S.W.2d 628, 629 (Ky. 1982). However, the family court must exercise caution in its delegation to ensure that it "does not abdicate its fact-finding and decision-making responsibility under CR 52.01." Id. at 629. Simply put, unless it is demonstrated that the findings of fact, conclusions of law, and judgment are not the product of the family court's deliberation they are sufficient to satisfy CR 52.01 and will not be disturbed on appeal. Id.
In the case sub judice, the family court instructed both parties to tender proposed findings of fact, conclusions of law, and judgment. Both parties complied with this instruction and Mark's were some 26 pages in length. Upon review and deliberation, the family court rendered its findings of fact, conclusions of law, and judgment. Mark subsequently filed a motion pursuant to CR 59.05 to alter, amend, or vacate same. In the CR 59 motion, Mark did not argue that any of the family court's findings of fact were erroneous or that the conclusions of law should have been different. Rather, Mark merely argued that his testimony should have been given more weight and that the conclusions should have been different based upon his testimony. Therefore, we conclude that Mark has not demonstrated that the family court abdicated its fact-finding and decision-making responsibility in rendering its decision. See Bingham, 628 S.W.2d 628.
For the foregoing reasons, the Findings of Fact, Conclusions of Law, and Judgment/Decree of the Hardin Circuit Court, Family Court Division, is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: Dawn Lonneman Blair
Elizabethtown, Kentucky BRIEF FOR APPELLEE: C. Wesley Durham
Radcliff, Kentucky