Opinion
No. 2007-CA-000561-MR and No. 2007-CA-000596-MR.
March 27, 2009.
Appeal from Whitley Circuit Court, Honorable Jerry D. Winchester, Judge, Action No. 99-CI-00194.
K. David Kersey, Corbin, Kentucky, Brief for Appellant/Cross-Appellee.
Marcia A. Smith, Corbin, Kentucky, Brief for Appellee/Cross-Appellant.
Before: CLAYTON, MOORE, and STUMBO, Judges.
OPINION
Kenneth E. Mobley appeals the order of the Whitley Circuit Court awarding Dora Leigh Mobley a fixed sum of his retirement account. Dora appeals the circuit court's order denying her request for interest and requesting attorney's fees. After a careful review of the record, we affirm in part, reverse in part, and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
After nearly thirty years of marriage, Dora filed a Petition for Dissolution of Marriage from her husband Kenneth. The parties entered into a Property Settlement, Child Custody, and Child Support Agreement that provided:
The parties briefly reconciled the relationship but separated again. Thereafter, Dora filed an Amended Petition for Dissolution of Marriage.
Respondent shall receive one-half of Petitioner's employer retirement funds upon her retirement or when Petitioner attains the age of sixty-two (62) and Petitioner shall receive one-half of Respondent's employer retirement funds upon his retirement or when Respondent attains the age of sixty-two (62). Said division shall be as of July 1, 1999.
A final Decree of Dissolution was entered on October 4, 1999, incorporating the Property Settlement, Child Custody and Child Support Agreement.
In 2005, Kenneth retired and received a partial lump-sum payment from his retirement account in the amount of $153,554.76. He also began receiving a monthly benefit of $3,267.27. Dora moved for one-half of the value of Kenneth's retirement account. On January 11, 2006, the court ordered both Kenneth and Dora to pay the portion of their retirement funds as ordered in the Decree of Dissolution.
The option to receive a partial lump-sum payment did not exist as of July 1, 1999. Had Kenneth retired at that time, he would have only been entitled to take a one-time lump-sum payment. Choosing the one-time lump-sum payment would have made Kenneth ineligible to continue receiving a monthly benefit. The partial lump-sum payment option allowed an individual to take a one-time lump-sum payment, yet also receive a reduced monthly retirement allowance.
A Retirement Benefits Analyst of Employee Services for the Kentucky Retirement Systems provided an affidavit affixing the value of a onetime lump-sum payment of Kenneth's retirement account in July 1, 1999, at $113,085.79. Dora provided documentation stating that the value of her own retirement account as of July 1, 1999, was $12,808.40.
Regarding the retirement accounts, the family court made the following findings of fact and conclusions of law:
The parties agreed in open court that the amount to be paid to Dora Leigh Mobley was to be based upon the value of Kenneth E. Mobley's retirement plan as of July 1, 1999. The amount of Kenneth E. Mobley's retirement plan which was furnished by Robert Sircy, Retirement Benefits Analyst with Kentucky Retirement Systems, was $113,085.79 and the value of Dora Leigh Mobley's retirement plan was $12,808.40, therefore, pursuant to the agreement of the parties, Dora Leigh Mobley is entitled to $50,138.70. . . .
Kenneth filed a motion to alter, amend or vacate the judgment challenging Dora's share of the retirement funds. Kenneth asserted that at the time of dissolution, Kentucky Revised Statutes (KRS) 61.565 and KRS 61.575(4) required that employee contributions to a retirement account be maintained separately and could not be matched by the Commonwealth's funds until a retirement condition, as defined in KRS 61.590, occurred. Kenneth argued that because a retirement condition had not occurred on July 1, 1999, he would have only had access to his own contributions to the retirement fund; therefore, Dora was only entitled to half of Kenneth's contributions to the retirement fund. He provided an affidavit from a different Retirement Benefits Analyst providing that Kenneth's own contribution to his retirement account as of October 31, 1999, was $62,606.97. Kenneth maintained that Dora should only be entitled to half of this amount. The court overruled his motion to alter, amend or vacate. Kenneth now appeals the family court's decision.
Dora moved the family court to award her prejudgment interest on the amount due to her since Kenneth's retirement. She also moved the court to order that Kenneth pay the attorney's fees she incurred in compelling Kenneth to provide her the retirement account funds as required by the Property Settlement, Child Custody and Child Support Agreement. The court ordered that Kenneth pay Dora $50,138.70 with interest at the legal rate from the date of the judgment. The final judgment does not mention any award of attorney's fees. Dora now appeals the final judgment, asserting that she should have been awarded prejudgment interest and attorney's fees.
II. ANALYSIS
KRS 403.190 provides for the separation of property in a proceeding for dissolution of marriage or for legal separation. While Kenneth does not dispute that his retirement account is subject to distribution, he maintains that Dora is only entitled to half of the value of his own contributions toward his retirement account as of November 4, 1999. He argues that she is not entitled to half of his employer's contributions towards his retirement account because those funds are held in a separate account until a designated retirement event occurs.
Kenneth asserts that Dora is only entitled to half of the value of his individual contribution to the account as of the date of dissolution. Kenneth states that the decree of dissolution was entered on November 4, 1999; however, the record indicates that the decree of dissolution was entered on October 4, 1999.
Kentucky courts do not distinguish between contributory pensions (where employees contribute to the pension fund) and noncontributory pensions (where only employers contribute to the pension fund) for purposes of dividing pensions in divorce proceedings. Foster v. Foster, 589 S.W.2d 223, 294 (1979). Moreover, Kentucky courts are willing to divide both vested and nonvested pensions. Poe v. Poe, 711 S.W.2d 849, 856 (1986).
An assessment of the record reveals that the parties' own agreement controls the division of Kenneth's retirement account. KRS 403.180 demonstrates that the parties' agreement can control their rights during the dissolution of marriage. KRS 403.180(2) provides that the terms of the agreement are binding on the court unless it finds that the agreement is unconscionable. Additionally, KRS 403.180(5) states that the terms of an agreement are enforceable both as a contract and as a judgment. A family court's reasonable interpretation of a separation agreement will be affirmed. See Hollingsworth v. Hollingsworth, 798 S.W.2d 145 (Ky.App. 1990).
In the present case, the Property Settlement, Child Custody, and Child Support Agreement incorporated by the Decree of Dissolution provided that Dora would receive one-half of the value of Kenneth's employer retirement funds upon his retirement as valued in 1999. Thus, it is evident that this meant she would receive one-half of whatever Kenneth received upon retirement, as valued in 1999. It would be an error for this court to read anything more into this agreement. The agreement did not specify that Dora would be entitled to only half of Kenneth's individual contribution to his retirement fund. The agreement also did not specify that Dora would only be entitled to half of Kenneth's members' contribution account, as defined by KRS 61.575.
While Kenneth argues that Dora was only entitled to half of $62,606.97, this was the amount of his personal contribution to the retirement account as of October 31, 1999. This amount is improper because it limits the value of the account to Kenneth's personal contributions, which does not reflect the language of the agreement. Furthermore, this amount is incorrect because it reflects the value of a portion of the account on October 31, 1999, rather than July 1, 1999. The family court properly relied on the affidavit by the Retirement Benefits Analyst assessing that the value of Kenneth's retirement account on July 1, 1999, was $113,085.79. The court then subtracted the value of Dora's own retirement and allowed her to take half of the remaining amount. As a result, the court did not err in awarding Dora $50,138.70.
Dora argues that the family court should have awarded prejudgment interest and attorney's fees. She moved the court for attorney's fees, claiming that she was entitled to receive these amounts because she was required to return to court in order for Kenneth to abide by their settlement agreement. However, in the final judgment, the family court did not rule on her request for attorney's fees.
According to CR 52.04, a final judgment shall not be reversed or remanded because of the trial court's failure to make a finding of fact on an essential issue unless a motion requesting the court to make such a finding of fact is made before the trial court. A "motion for additional findings of fact [is required] when the trial court has failed to make findings on essential issues. 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).
Kentucky Rules of Civil Procedure.
When the trial court failed to rule specifically on the issue of attorney's fees, Dora did not file a postjudgment motion for additional findings of fact regarding this issue. She only filed a cross-appeal claiming it was error for the trial court not to award her these fees. Pursuant to CR 52.04, the issue of attorney's fees is not properly before this court.
Dora also claims that the family court erred in failing to award her prejudgment interest. The family court ordered that Dora be awarded interest at the legal rate from the date of the judgment until paid. KRS 403.180(5) specifies that the terms of separation agreements "set forth in the decree are enforceable by all remedies available for enforcement of a judgment, including contempt, and are enforceable as contract terms." Kentucky law holds that prejudgment interest is awarded as a matter of right on a liquidated demand. 3D Enterprises Contracting Corp. v. Louisville and Jefferson County MSD, 174 S.W.3d 440, 450 (Ky. 2005). Liquidated claims are "of such a nature that the amount is capable of ascertainment by mere computation, can be established with reasonable certainty, can be ascertained in accordance with fixed rules of evidence and known standards of value, or can be determined by reference to well-established market values." 22 Am. Jur. 2d Damages § 469 (2004).
In the case at hand, Dora can, with certainty, establish the amount of interest owed. The court determined the value of the retirement account as of July 1, 1999. Furthermore, the date that Dora should have received half of Kenneth's retirement account is certain because Dora was entitled to half of the value of Kenneth's retirement account on the day he retired. Therefore, this Court concludes that the family court erred in failing to award Dora prejudgment interest.
For the foregoing reasons, the final judgment of the Whitley Circuit Court is affirmed as to the issue regarding the value of the retirement account, but is reversed regarding the prejudgment interest issue and remanded for further proceedings.
ALL CONCUR.