Opinion
NO. 2011-CA-001548-MR NO. 2011-CA-001576-MR
05-03-2013
CHASE AARON MILLS APPELLANT/CROSS-APPELLEE v. JESSICA ERIN MILLS APPELLEE/CROSS-APPELLANT
BRIEFS FOR APPELLANT/CROSS- APPELLEE: Theodore H. Lavit Lebanon, Kentucky Joseph R. Stewart Lebanon, Kentucky BRIEFS FOR APPELLEE/CROSS- APPELLANT: James L. Avritt, Jr. Lebanon, Kentucky
NOT TO BE PUBLISHED
APPEAL AND CROSS-APPEAL FROM MARION CIRCUIT COURT
HONORABLE DAN KELLY, JUDGE
ACTION NO. 10-CI-00285
OPINION
AFFIRMING
BEFORE: ACREE, CHIEF JUDGE; KELLER AND MAZE, JUDGES. MAZE, JUDGE: Appellant/Cross-Appellee, Chase Mills (hereinafter "Chase"), appeals the Marion Circuit Court's designation of his former wife, Appellee/Cross-Appellant, Jessica Mills (hereinafter "Jessica"), as primary residential custodian of their son. Jessica also cross-appeals from the trial court's order regarding the distribution of property. Finding no error or abuse of discretion in the trial court's order regarding custody and the distribution of assets, we affirm.
Judge Michelle M. Keller concurred in this opinion prior to her appointment to the Kentucky Supreme Court. Release of this opinion was delayed by administrative handling.
Background
The following facts are undisputed in this case. Chase and Jessica were married on August 8, 2008. Their only child had been born the previous October. Chase and Jessica separated on June 1, 2010, and a temporary custody order was entered on September 8, 2010, under which they shared time with their son. During their marriage, Chase purchased a pick-up truck for $23,000, using the proceeds of the sale of a non-marital vehicle, as well as a bank loan of $14,000. Using the proceeds of his subsequent sale of this truck for $29,000, Chase purchased a Jeep and paid off the balance of the bank loan. Chase eventually listed the Jeep for sale at a price of $12,500 and sold it on February 14, 2011 for $8,000 in cash. Also prior to the marriage, Chase purchased an all-terrain vehicle ("ATV") with bank-loaned funds in the amount of $7,085. In 2010, Chase sold the ATV for $5,000 and bought another for the same amount the same day.
The final hearing on the issue of custody was initially scheduled for February 15, 2011, but was continued and eventually held over two days in March 2011. At the hearing, the trial court heard extensive testimony from Chase and Jessica regarding the funds used to purchase vehicles and ATVs both prior to and during their marriage. Regarding the issue of custody, the trial court heard testimony on behalf of each parent. Both parents contended that they had been the child's primary custodian since his birth. Jessica's mother testified that she had assisted with the child's upbringing because of Jessica's and Chase's respective work schedules. No negative testimony regarding Chase was offered, other than his regular absence due to work or recreation. In their testimony, witnesses on Chase's behalf, including his parents with whom he lives, leveled accusations of drug use and abandonment against Jessica. While this was the first the court had heard of possible drug use by either party, the trial court ordered that both parents submit to drug tests prior to its final order. Both tests were negative.
The trial court's order found no grounds for any allegation of neglect or abandonment by either parent. The trial court found that, while Jessica was self-sufficient, employed and living on her own, Chase relied on and lived with his parents. The trial court also found Jessica and her son to have a very close relationship and that Jessica had primarily cared for her son since his birth. Regarding the issue of drug use, the court found evidence in the testimony of Jessica's past use of marijuana but that there was no evidence of her current use or use in the presence of her son.
As a result of these findings, the trial court concluded that it was in the child's best interest that Chase and Jessica maintain joint custody but that the child reside primarily with Jessica and that Chase have regular visitation. As a result, the court also ordered Chase to pay child support to Jessica pursuant to statutory guidelines. Regarding property, the court found there to be insufficient equity in the couple's home to repay Chase for his non-marital interest in the home. Accordingly, the home was awarded to Chase by agreement and the trial court awarded Jessica her marital share of Chase's retirement account proceeds, stock bonuses and the proceeds from sale of the Jeep, the latter of which totaled $1,700. The trial court permitted Chase to retain the 2010 ATV as his non-marital asset. The present appeal and cross-appeal follow.
Analysis
Chase appeals the trial court's order designating Jessica as the primary residential parent. Jessica cross-appeals from the trial court's order denying her marital interest in two vehicles and an all-terrain vehicle ("ATV") Chase purchased during their marriage. We address both the appeal and cross-appeal in turn.
I. Trial Court's Designation of Primary Residential Parent
In an appeal from a trial court's custody order, we will only disturb the trial court's decision if it is clearly erroneous. Kentucky Rules of Civil Procedure ("CR") 52.01; see also Cherry v. Cherry, 634 S.W.2d 423 (Ky. 1982). Our Supreme Court has stated that
since the family court is in the best position to evaluate the testimony and to weigh the evidence, an appellate court should not substitute its own opinion for that of the family court. If the findings of fact are supported by substantial evidence and if the correct law is applied, a family court's ultimate decision regarding custody will not be disturbed, absent an abuse of discretion. Abuse of discretion implies that the family court's decision is unreasonable or unfair. Thus, in reviewing the decision of the family court, 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) (citing to B.C. v. B.T., 182 S.W.3d 213 (Ky. App. 2005)).
In determining custody of a child, Kentucky law requires a judge to find what is in the best interest of the child. Kentucky Revised Statutes ("KRS") 403.270(2); see also Eviston v. Eviston, 507 S.W.2d 153 (Ky. 1974). In doing so, the trial court is to consider all relevant factors, including, but not limited to:
(a) The wishes of the child's parent or parents . . .;Id. Generally speaking, a trial court has broad discretion in determining what is in the best interest of children when making determinations as to custody. See Krug v. Krug, 647 S.W.2d 790 (Ky. 1983). While the trial court may consider evidence of misconduct by a parent, this Court has emphasized that "[t]he test for determining custody of a minor child is the best interest of the child, and not the most suitable person to have custody." Davis v. Davis, 619 S.W.2d 727, 729 (Ky. App. 1981) (citing to Casale v. Casale, 549 S.W.2d 805 (Ky. 1977)).
(b) The wishes of the child as to his custodian;
(c) The interaction and interrelationship of the child with his parent or parents, his siblings and any other person who may significantly affect the child's best interests;
(d) The child's adjustment to his home, school and community;
(e) The mental and physical health of all individuals involved . . .
Chase argues that the trial court "ignored" the strong evidence against Jessica's fitness as a parent; namely, that she routinely "dump[ed]" her child on others and "continually exposed [her child] to an unwholesome environment." Testimony of several witnesses gave rise to these allegations. Chase argues that the trial court was required to consider the effect on the child of such "misconduct" and did not have to "wait to see that the environment has adversely affected the child." See Krug v. Krug, 647 S.W.2d 790 (Ky. 1983).
Chase is correct in stating what the trial court has to consider. However, as we stated above, the trial court has many other factors to consider, both under statutes and other precedents; and there is no evidence that the trial court failed to consider or to properly apply this law in light of the facts presented at trial. While several witnesses testified that Jessica has used drugs in the past, taken her child to bars in the past and routinely left her child in the care of others, there was also evidence that Jessica and her family have a very close relationship with her son, that she provided him with a safe and stable home and with all the needs of a child his age - and that she had done so since his birth. The trial court's choice not to lend credibility to the negative testimony leveled against Jessica - what Chase calls "strong evidence" - was entirely within its discretion. In the absence of clear error by the trial court in weighing the factors we cite above, we decline to substitute our judgment of those witnesses' credibility for that of the trial court.
The trial court properly applied the relevant legal factors to the facts of this case as they were established at trial. Accordingly, we conclude that substantial evidence on the record supported the trial court's award of primary residential custody to Jessica and that the trial court committed no clear error and did not abuse its considerable discretion in doing so. Therefore, we must affirm its decision.
II. Trial Court's Distribution of Property
Jessica's cross-appeal represents a challenge to the trial court's determinations regarding distribution of certain property. We therefore review the trial court's ruling for an abuse of discretion. To amount to an abuse of discretion, the trial court's decision must be "arbitrary, unreasonable, unfair or unsupported by sound legal principle." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). The question of whether an item is marital or non-marital 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 non-marital is reviewed de novo. Smith v. Smith, 235 S.W.3d 1, 6 (Ky. App. 2006) (citing to Marcum v. Marcum, 779 S.W.2d 209, 211 (Ky. 1989)).
The final step for a trial court to conduct is the division and distribution of marital and non-marital assets, as well as the division of assets which possess both components. When the latter occurs, "a trial court must determine the parties' separate non-marital and marital shares or interests in the property on the basis of the evidence before the court." Sexton v. Sexton, 125 S.W.3d 258, 265 (Ky. 2004). Property acquired after the marriage is presumed to be marital; a presumption which may be rebutted by clear and convincing evidence. KRS 403.190(3); Browning v. Browning, 551 S.W.2d 823 (Ky. App. 1977).
When a party seeks to claim an asset as non-marital, he or she must employ the "source of funds" rule, which "simply means that the character of the property; i.e., whether it is marital, non-marital or both, is determined by the source of the funds used to acquire the property." Sexton at 265. The success of this method depends on a party's ability to "trace" or track "property's ownership or characteristics from the time of its origin to the present." Id. at 266. When tracing non-marital property, "the non-marital claimant must trace the previously owned property into a presently owned specific asset." Id.
Regarding the Jeep in question, the trial court made the following findings of fact:
(a) [Chase] owned a 2002 Chevrolet Z-71 prior to the marriageThese findings accurately relate the testimony Chase provided at trial. Chase testified that any proceeds from the above transactions were kept in a bank account that was his and his alone. Jessica testified to the same.
(b) Prior to the marriage, [Chase] sold the 2002 Chevrolet
(c) During the marriage, [Chase] used $9,000.00 acquired from the sale of the 2002 Chevrolet to purchase a 2007 Dodge 2500 truck for . . . $23,000.00.
(d) The 2007 Dodge truck was later sold during the marriage for $29,000.00, resulting in a profit of $6,000.00 less $1,400.00 paid in taxes on the Dodge.
(e) The proceeds from the sale of the Dodge were used during the marriage to purchase a 2002 Jeep Wrangler for $11,250.00.
(f) [Chase] sold the 2002 Jeep for $8,000.00.
Jessica contends that Chase has not met his burden of overcoming the presumption that the Jeep, which was bought during the marriage, is a marital asset. We disagree. While it is true that Chase presented no documentation of the above transactions, his extensive testimony constituted a detailed and complete tracing of assets from the non-marital Chevrolet Z-71 to the Jeep. Therefore, the trial court did not err in its findings, which are supported by the testimony on the record. Furthermore, the trial court correctly applied the "source of funds" rule in determining that Chase had a non-marital interest in the proceeds from sale of the Jeep and that Jessica had a limited marital interest in the profit realized during the marriage.
Jessica also argues that Chase failed to establish his non-marital interest in the ATV which was bought in 2010 for $5,000.00. Jessica claims Chase "failed to make any effort to trace the funds" used to purchase this ATV to funds or property acquired prior to their marriage. The record reflects otherwise.
Again, Chase did fail to provide documentation of purchases and sales; however, his testimony presented the court with a detailed and complete tracing of funds backwards from the ATV that Jessica claims is marital to the purchase of a 2004 ATV a week before their marriage. Unlike the Jeep, Chase realized no profit from these purchases and sales, as the 2010 ATV was bought for the exact amount, $5,000.00, which Chase received for the 2008 ATV. In the absence of evidence which refutes Chase's testimony to these facts - and Jessica provided none - we conclude that the trial court did not err in finding that the 2010 ATV was properly traced to property Chase acquired prior to his marriage to Jessica.
Jessica's final argument centers around Chase's sale of the Jeep in February 2011. Jessica argues that Chase wrongfully sold the Jeep for $3,250 less than its market value of $11,250, constituting dissipation; and that the trial court erred in awarding her less than half the market value, which was $5,625.00. Once again, based on the testimony before the trial court, we disagree.
To prove dissipation, the party claiming dissipation must prove, by a preponderance of the evidence, that dissipation occurred and the value of the property. Brosick v. Brosick, 974 S.W.2d 498 (Ky. App. 1998). Once the party alleging dissipation establishes a prima facie case, the burden . . . shifts to the party charged with the dissipation to produce evidence sufficient to show that the expenditures were appropriate." Id. at 502. If a party is proven to have dissipated marital assets, "the court will deem the wrongfully dissipated assets to have been received by the offending party prior to the distribution." Id. at 501.
Jessica fails to establish a prima facie case for Chase's dissipation of the marital portion of the Jeep proceeds. Chase's testimony at the hearing provided a sufficient basis for the $8,000.00 sale price. Chase testified that the Jeep needed new and expensive tires, new brakes and was in "rough" condition. He estimated that to repair the car to a value of $11,250, he would have had to spend between $3,000 and $4,000. In addition, Chase stated that the market for used cars at the time quickly forced him to lower his initial asking price of $12,500. Other than cross-examining Chase and citing to an unidentified and unfiled report listing the Jeep's NADA value as $11,250 at the time of sale, Jessica provided no additional documentation or testimony which tended to show Chase's decision to sell the Jeep for $8,000 was inappropriate. This is insufficient to meet even a preponderance standard. Therefore, we find that Jessica failed to meet her burden of establishing dissipation and the trial court properly calculated Jessica's marital interest in the Jeep accordingly.
Conclusion
In matters of child custody, a trial court enjoys broad discretion in determining the best interest of a child. The trial court in the present case committed no error and acted within that discretion in awarding Jessica primary residential custody of her son, while maintaining Chase's joint custody and visitation rights. Furthermore, the trial court did not err in distributing the marital and non-marital property at dissolution. Therefore, the order of the Marion Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT/CROSS-
APPELLEE:
Theodore H. Lavit
Lebanon, Kentucky
Joseph R. Stewart
Lebanon, Kentucky
BRIEFS FOR APPELLEE/CROSS-
APPELLANT:
James L. Avritt, Jr.
Lebanon, Kentucky