Opinion
NO. 2011-CA-000791-MR
11-22-2013
MICHAEL E. HENDREN APPELLANT v. ANN E. HENDREN APPELLEE
BRIEF FOR APPELLANT: William L. Hoge, III Annie O'Connell Louisville, Kentucky BRIEF FOR APPELLEE: B. Mark Mulloy Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM OLDHAM CIRCUIT COURT
HONORABLE KAREN A. CONRAD, JUDGE
ACTION NO. 03-CI-00387
OPINION
AFFIRMING
BEFORE: CAPERTON, MAZE, AND VANMETER, JUDGES. MAZE, JUDGE: Michael Hendren appeals from a judgment of the Oldham Circuit Court dividing marital property following the dissolution of his marriage to Ann Hendren. He argues that the trial court considered improper factors in its division of marital property and that it improperly deviated from the Child Support Guidelines in setting child support. On the former issue, we find that the trial court properly applied the statutory factors and its division of marital property was not an abuse of discretion. On the latter issue, the trial court adopted the parties' agreement regarding child support and Michael failed to preserve any objection to the existence of such agreement. Hence, we affirm.
The underlying facts and procedural history of this matter are not in dispute. Michael and Ann Hendren were married in Oldham County, Kentucky, on January 3, 1981. Each party had children by prior marriages. In addition, two children were born of this marriage; S.W.H. in 1989 and D.M.H. in 1996.
At the time of the marriage, Michael worked for a business forms company in Clearwater, Florida. Shortly thereafter, he accepted a position in Atlanta, Georgia. In 1983, Michael was transferred to San Antonio, Texas. Two years later, Michael accepted a position with Advanced Computer Communications, prompting the parties to move to Laguna Beach, California. Ann accompanied Michael on each of these moves, but she worked outside of the home only for the first three years of the marriage. Ann had primary custody of her son by a previous marriage, and Michael's two daughters frequently resided with them. With the birth of the parties' two children, Ann's primary contribution was as homemaker and caretaker of the children.
In July 1992, the parties mutually agreed to move back to Oldham County, Kentucky. Michael continued with his position in California. He traveled frequently for work, but returned to Kentucky approximately every other weekend to be with his family. In July 1994, he accepted a position with Ascend Communications, a communications technology company in California. He established a residence there and continued to return to Kentucky on a biweekly basis. In 1995, the parties purchased a residence in Oldham County, where Ann and the children resided.
This arrangement continued until June 1996, when the parties separated. The parties maintained a "dating" relationship after this time, but the relationship was strained due to the extensive time which Michael devoted to his work and because of his increasing abuse of alcohol. A petition for dissolution of the marriage was filed in 1999. However, the parties reconciled in 2000 and the petition was dismissed.
Also in 2000, Ascend Communications was acquired by Lucent Technologies. Michael was able to exercise stock options which he had earned with Ascend, and after taxes he realized more than $20 million from the transactions. After the sale of Ascend, Michael retired and the parties have lived on the income from their assets and investments.
However, the parties' relationship continued to be strained over money issues and Michael's drinking. The trial court noted that Ann also developed "addictive behavior." In 2003, Michael filed the current petition for dissolution of the marriage. The trial court entered a decree of dissolution on February 9, 2004, with the remaining issues of division of property and debt and child support and custody reserved for later adjudication.
Although the parties continued to have considerable assets, Michael accrued a significant amount of debt as a result of unsuccessful investments in businesses and real estate. Much of the investment was done through a line of credit with Bank One. At the time the petition was filed, the debt on that account was $3,046,135. The parties entered into an agreed order in August 2003 to liquidate a number of their real property assets to pay down this debt. Between 2003 and 2005, most of the proceeds from these sales were deposited into an escrow account. Those amounts which were deposited into escrow were used to pay either the Bank One line of credit or were distributed to the parties. However, there were proceeds from two accounts which Michael retained.
Because of the lengthy period required for liquidation and accounting for assets, the matter did not proceed to trial until May 27, 2008. Before taking proof on the issues regarding division of property, Ann's counsel stated that the parties had reached an agreement regarding custody and support of their minor son, D.M.H. The parties agreed to share joint custody of the child, with Ann as the primary residential custodian. Ann would continue to provide medical insurance coverage. In lieu of child support, Michael would pay 50% of the child's unreimbursed medical expenses, as well as 50% of the child's clothing, extracurricular activity fees, school tuition and other school-related expenses. Michael, appearing pro se, stated on the record that he was satisfied with this arrangement for child support.
Thereafter, the trial court took proof on the remaining issues regarding division of the marital estate. Following the hearing, the parties agreed to take the deposition of Bruce Lindsey, their financial advisor, and to submit his deposition to the court for consideration. After the taking of Lindsey's deposition, Michael requested an opportunity to impeach Ann with her previous deposition testimony. In addition, the trial court requested additional information about the parties' finances. Consequently, the trial court kept the proof open and continued the trial so that the parties could supplement the record with additional proof.
However, on September 6, 2008, Michael suffered from a traumatic brain injury as a result of a fall. Since that time he has been completely disabled and he requires extensive personal care. Since he was unable to represent himself, Michael obtained new counsel and additional evidence was presented to the court in 2009. The matter was then submitted to the court for adjudication based upon the evidence presented and arguments of counsel.
On February 9, 2011, the trial court entered findings of fact, conclusions of law and an order on the remaining property issues. The court's order set out in detail the previous liquidation of assets, as well as the prior distribution of proceeds to the parties. The court found that Michael was deemed to have previously received a total of $5,856,256.40, while Ann had received a total of $2,529,355.44 in assets. The court also discussed the status of the remaining assets which have yet to be liquidated.
After considering the contributions of the parties as well as Michael's current needs, the trial court concluded that Michael should be awarded 60% of the marital estate, with Ann receiving 40%. In order to bring Ann's share up to 40%, the court directed that she receive $1,374,815.49 from the remaining accounts prior to any further division. After that distribution, any additional funds in those accounts would be divided 60-40. Finally, the trial court adopted the parties' agreement regarding child support as set out at the May 28, 2008 hearing.
Thereafter, Michael filed motions for additional findings under Kentucky Rules of Civil Procedure (CR) 52.04 and to alter, amend or vacate under CR 59.05. He challenged the sufficiency of the evidence supporting the trial court's findings and its division of marital assets. He also argued that the trial court failed to make sufficient findings to justify its deviation from the Child Support Guidelines. The trial court denied the motions in an order entered on April 6, 2011. This appeal followed.
Michael primarily argues that the trial court erred in its division of the marital assets. Kentucky Revised Statues (KRS) 403.190(1)(b) directs the court to divide the marital property in "just proportions." The statute does not require an equal division of property. Lawson v. Lawson, 228 S.W.3d 18, 21 (Ky. App. 2007). Rather, it means only that the division should be accomplished "without regard to marital misconduct," and after considering all relevant factors, including:
(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.
The trial court has wide discretion in dividing marital property based upon a proper consideration of these factors, and we may not disturb the trial court's ruling on property division issues unless the trial court has abused its discretion. Davis v. Davis, 777 S.W.2d 230, 233 (Ky. 1989). Michael argues that the trial court abused its discretion by misapplying these factors.
Michael first contends that the trial court improperly considered marital misconduct in its division of property. He notes that the trial court repeatedly pointed out his drinking problem and his long absences from his family. Michael also notes that, while Ann has never made a claim for dissipation of assets, the trial court extensively discussed his failed investments and gifts to family. Based upon these discussions, he maintains that the trial court based its division of marital property, at least in part, on an improper factor.
We disagree. We find no indication in the record that the trial court improperly considered Michael's personal misconduct against him in its division of property. While the trial court did take note of Michael's drinking problem, poor spending habits, investment losses and gifts, it did not charge these losses or expenditures against him. At most, the trial court only deemed him to have received those assets which were not accounted for during the liquidation of marital assets. Thus, we find no abuse of discretion.
Michael next argues that the trial court improperly charged him with the risk of loss on business ventures. The record clearly refutes this contention. While the court noted Michael's failed business and real estate investments, the court did not charge these losses against him. Instead, the trial court postponed the division of property until these debts incurred from these losses could be paid through liquidation of marital assets. Once the Bank One line of credit was paid, the court then divided the remaining marital estate. In so doing, the trial court avoided the problem of placing the entire risk of loss on him and actually divided the losses between the parties.
Along similar lines, Michael contends that the trial court failed to value the assets as of the date of dissolution. Kentucky law does not clearly require that property should be valued as of date of dissolution. KRS 403.190(2) provides that all property acquired during the marriage is presumed to be marital. Conversely, property acquired after the date of dissolution is not marital. Stallings v. Stallings, 606 S.W.2d 163, 164 (Ky. App. 1980). Thus, marital property will generally be valued as of the date of dissolution.
In some cases, however, a trial court may have to account for the increase or decrease in the value of marital property occurring after the entry of the dissolution decree but prior to its distribution in the final judgment. In this case, the parties agreed to liquidate marital assets in order to pay off the large amount of debt which Michael had accrued. That process and other matters delayed the final judgment. Given this delay and other intervening events, the trial court's method of dividing the marital assets equally divided the risk of loss between the parties and most likely preserved a large portion of the marital estate. Indeed, Michael does not allege that he was prejudiced by the trial court's method of valuing marital property. Given the unique circumstances of this case, we find no clear error or abuse of discretion in this regard.
Michael next asserts that the trial court overvalued Ann's contribution as homemaker and caretaker of the children in determining her contribution to the acquisition of marital assets. We find this argument to be without merit. It is well-established that a court may consider a spouse's contribution as homemaker as equal to that of the earning contributions of an employed spouse. KRS 403.190(1)(a). See also Goderwis v. Goderwis, 780 S.W.2d 39, 40 (Ky. 1989), and Russell v. Russell, 878 S.W.2d 24, 25 (Ky. App. 1994). Although Michael disparages Ann's contributions as homemaker and mother, there was considerable evidence supporting the trial court's findings in this regard. We cannot find that the trial court abused its discretion in its consideration of this factor.
In his last challenge to the trial court's division of marital assets, Michael contends that the trial court failed to consider his current needs in dividing the marital assets. As noted above, Michael is completely disabled as a result of his fall in 2008. He presented evidence that he is incapable of independent living without a one-on-one attendant. He also presented evidence that the cost of providing for his medical and personal needs will be nearly $2,100,000 should he live to age 80. Given these extraordinary needs, Michael argues that the trial court should have allocated most of the remaining marital estate to him.
Again, we find no abuse of discretion. The trial court specifically recognized Michael's disability and his needs in its findings. And in fact, the trial court awarded him 60% of the remaining marital estate, resulting in a receipt of assets totaling $5,856,256.40. Michael makes no showing that this distribution was insufficient to allow him to meet his reasonable needs.
Finally, Michael argues that the trial court failed to make sufficient findings to justify its deviation from the Child Support Guidelines of KRS 403.213. While Michael acknowledges that he agreed to the stipulation regarding child support on May 27, 2008, he notes that he was not represented by counsel and could not make an informed decision without knowing what rights he was waiving. In the absence of a valid agreement, Michael asserts that the trial court was required to make specific findings to justify its deviation from the Child Support Guidelines.
However, Michael presents no evidence to challenge the trial court's finding regarding the parties' agreement. Michael verbally agreed to the agreement regarding child support at the May 27, 2008 hearing. KRS 403.211(3)(f) permits the trial court to deviate from the Child Support Guidelines based on an agreement of the parties. Michael submits no evidence to support his bare assertion that his acquiescence was not knowing and voluntary.
Furthermore, Michael did not raise this issue before the trial court. Although he was represented by counsel after September of 2008, he never indicated that child support remained a contested issue. Even in his 2011 motion to alter, amend or vacate, Michael did not challenge the trial court's finding regarding the parties' agreement; he only requested additional findings justifying the deviation from the Guidelines. It is unnecessary for the circuit court to make findings of fact regarding legal issues or arguments raised for the first time in a CR 59.05 motion if those issues and arguments could have been raised prior to the entry of judgment. Hopkins v. Ratliff, 957 S.W.2d 300, 301 (Ky. App. 1997).
Similarly, matters not precisely raised or adjudicated before the trial court cannot be considered when raised for the first time on appeal. Fischer v. Fischer, 197 S.W.3d 98, 102 (Ky. 2006); Combs v. Knott County Fiscal Court, 283 Ky. 456, 141 S.W.2d 859, 860 (1940). Our courts have stated on numerous occasions, "appellants will not be permitted to feed one can of worms to the trial judge and another to the appellate court." Elery v. Commonwealth, 368 S.W.3d 78, 97 (Ky. 2012) (citing Kennedy v. Commonwealth, 544 S.W.2d 219, 222 (Ky. 1976), overruled on other grounds by Wilburn v. Commonwealth, 312 S.W.3d 321 (Ky. 2010)). Therefore, we need not consider the issue further.
Accordingly, the judgment of the Oldham Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT:
William L. Hoge, III
Annie O'Connell
Louisville, Kentucky
BRIEF FOR APPELLEE:
B. Mark Mulloy
Louisville, Kentucky