Opinion
NO. 2013-CA-001333-MR
01-09-2015
JOHN CHARLES MURRAY APPELLANT v. NANCY A. MURRAY APPELLEE
BRIEFS FOR APPELLANT: Daniel J. Canon Catherine J. Kamenish Louisville, Kentucky BRIEF FOR APPELLEE: James L. Theiss James D. Theiss LaGrange, Kentucky
NOT TO BE PUBLISHED APPEAL FROM OLDHAM CIRCUIT COURT
HONORABLE TIMOTHY E. FEELEY, JUDGE
ACTION NO. 12-CI-00647
OPINION
AFFIRMING
BEFORE: DIXON, LAMBERT, AND TAYLOR, JUDGES. DIXON, JUDGE: John Charles Murray appeals from the final judgment of the Oldham Circuit Court, which resolved disputed property issues and dissolved his marriage to appellee, Nancy A. Murray. John contends the circuit court committed numerous errors in the disposition of marital and nonmarital property, and in its award of maintenance and attorney's fees. After careful review, we affirm.
John and Nancy were married in 2002, and it was the second marriage for both parties. Shortly after they married, Nancy left her job in interior design to take care of the marital home and the parties' blended family. During the marriage, John worked in corporate sales and earned an average annual income of $259,000. In August 2012, Nancy filed a petition to dissolve the marriage.
John and Nancy do not have any children together; however, they each have children (now emancipated) from previous marriages.
A bench trial was held on April 17, 2013. After hearing extensive testimony and receiving more than fifty exhibits, the court entered lengthy findings of fact, conclusions of law, and a decree dissolving the marriage. This appeal followed.
On appeal, we will not disturb the trial court's findings of fact unless they are clearly erroneous, bearing in mind that the lower court was in the best position to weigh the evidence and assess witness credibility. Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003). We review de novo the court's application of the law to the facts. Carroll v. Meredith, 59 S.W.3d 484, 489 (Ky. App. 2001).
The issues raised by John on appeal primarily concern the sufficiency of the evidence supporting several findings made by the trial court. The court heard conflicting testimony from John and Nancy on these issues, and the court rendered detailed findings based on the evidence presented.
Marital Residence
John argues the court erroneously awarded half of the equity in the marital home to Nancy because John owned the house prior to the marriage. Nancy asserts that John gifted half of the marital residence to her by executing a deed in both of their names shortly after they married. In its findings of fact, the court explained:
[John] made a nonmarital claim to the equity in the marital residence located at 6514 Park Place, Crestwood, Kentucky. Both Parties were in agreement that the property would be sold and the proceeds divided. The current balance on the mortgage is $96,406.77. The property was transferred by [John] into [Nancy and John's] joint names on December 10, 2002. It should be noted that [Nancy] also owned real estate at the date of marriage. [Nancy] testified that she acquired a 100% fee simple interest in real estate located at 3108 Stonington Court, Louisville, Kentucky from her previous marriage to Mr. Stickrod. [Nancy] sold that property after she married [John] on October 9, 2002. She received $69,623.32 from the sale of that property, which was used by both Parties for marital purposes during their marriage. As a condition to marrying [John] and moving into 6514 Park Place, [Nancy] testified that she and [John] agreed that she would be given an undivided one half interest in the property at 6514 Park Place. The Parties executed a deed to that effect on December 10, 2002. [John] did not offer any testimony or evidence to refute this testimony. The Court finds that it was the Parties' intention that by the transfer executed by quitclaim deed on December 10, 2002, the real estate at 6514 Park Place became marital property as a gift between spouses, therefore the equity in 6514 Park Place is entirely marital property.
John disputes the sufficiency of the evidence supporting the court's conclusion that Nancy obtained a one-half interest in the marital residence by gift. When determining whether a transfer was a gift, the trial court should consider: "the source of the money with which the 'gift' was purchased, the intent of the donor at that time as to intended use of the property, status of the marriage relationship at the time of the transfer, and whether there was any valid agreement that the transferred property was to be excluded from the marital property." O'Neill v. O'Neill, 600 S.W.2d 493, 495 (Ky. App. 1980).
We find no error in the court's conclusion. Nancy testified that when they married, John wanted Nancy and her children to move into his house in Crestwood. According to Nancy, once she agreed to move into John's home, she and John agreed that the house would become half hers, with her name on the deed. Three months after they married, John executed a deed conveying the property to himself and Nancy as joint tenants with right of survivorship. Although John testified that he did not remember executing the deed, he subsequently acknowledged that it appeared to be his signature on the deed.
The trial court was in the best position to weigh the evidence and assess the credibility of the testimony. Kentucky Rules of Civil Procedure (CR) 52.01. "The donor's testimony is highly relevant of the donor's intent; however, the intention of the donor may not only be expressed in words, actions, or a combination thereof, but may be inferred from the surrounding facts and circumstances, including the relationship of the parties, as well as the conduct of the parties." Sexton v. Sexton, 125 S.W.3d 258, 269 (Ky. 2004) (internal quotation marks and brackets omitted). Here, Nancy's testimony, along with the deed, was sufficient to show that John intended to give Nancy one-half of the house shortly after they married. We find no error in the court's determination that the house was martial property.
John also contends the trial court erroneously denied his nonmarital claim to the increased value of the residence arising from the addition of a deck during the marriage. John testified that he transferred his nonmarital ski boat, which he valued at $4,500.00, to a contractor as payment for the deck construction. The court denied John's claim, concluding that he failed to provide an expert opinion establishing the increase in value to the house attributable to the deck.
In Travis v. Travis, 59 S.W.3d 904 (Ky. 2001), the Kentucky Supreme Court explained:
A party asserting that he or she should receive appreciation upon a nonmarital contribution as his or her nonmarital property carries the burden of proving the portion of the increase in value attributable to the nonmarital contribution. By virtue of the KRS 403.190(3) presumption, the failure to do so will result in the increase being characterized as marital property.Id. at 910 (internal citations omitted).
Where, as here, a party claims a nonmarital interest in the increased value of a residence because nonmarital funds were used to improve the property, this Court has stated:
The holding in Travis requires more, however, than just proof of the expenditure of funds from a nonmarital source if the expenditure is for an 'improvement' or for the remodeling the asset as opposed to the acquisition of the asset.
The Travis holding requires that Middleton prove the portion of the increase in value of each of these residences attributable to the expenditures for 'improvements' and states that 'by virtue of the KRS 403.190(3) presumption, the failure to do so will result in the increase being characterized as marital property.'Maclean v. Middleton, 419 S.W.3d 755, 769 (Ky. App. 2014) (internal brackets omitted) (quoting Travis, 59 S.W.3d at 910-11). Further, "[t]o be qualified to express an opinion upon fair market value of real property, a witness, including the owner thereof, must possess some basis for a knowledge of market values." Jones v. Jones, 245 S.W.3d 815, 820 (Ky. App. 2008). In the case at bar, John did not present any evidence regarding an increase in value to the house attributable to the deck. We find no error in the court's determination on this issue.
Marital Personal Property
John next contends the court arbitrarily relied on the division of marital household goods and furnishings proposed by Nancy. Our review indicates John failed to preserve this issue for appellate review, as he did not request that the trial court make additional or more specific findings of fact. CR 52.04; Cherry v. Cherry, 634 S.W.2d 423, 425 (Ky. 1982). We decline to address this unpreserved issue.
Citibank Visa
John asserts the court abused its discretion by allocating the entire marital credit card debt to him. John contends, since both parties used the card during the marriage, Nancy should have been allocated a proportional share of the debt.
Nancy submitted credit card statements showing the activity on the account around the time the parties separated. The evidence showed that the card had been paid off in June 2012, and by November 2012, the card had a balance of $20,000.00. Nancy removed her name from the account in early October, and it was undisputed that John used the credit card to pay $7500.00 for inpatient alcohol rehabilitation. Upon considering all the evidence, the court found Nancy's testimony to be more persuasive and allocated the entire debt to John, concluding he was the party that received the primary benefit of the debt.
Although John believes it was unfair that he was allocated the entire debt, the trial court was free to exercise its discretion in allocating the debt, and the court was not obligated to divide the debt equally. Neidlinger v. Neidlinger, 52 S.W.3d 513, 523 (Ky. 2001). Based on our review of the trial and the evidence, we are not persuaded that the court's decision was an abuse of discretion.
Financial Accounts
John alleges the court erred in its division of assets from certain financial accounts, including a joint Wells Fargo investment account, his Wells Fargo IRA, and his Commonwealth Whole Life Policy.
The court heard exhaustive testimony indicating that the accounts contained commingled marital and nonmarital funds. Both parties tendered documentary exhibits to establish their respective nonmarital interests, and the court also heard testimony from their financial advisor at Wells Fargo, Rebecca Lovan. John's testimony was contradictory at several points during the hearing, and the court ultimately found Nancy's testimony to be more credible regarding the disputed commingled assets. In its findings, the court meticulously set forth the calculations and analyses supporting its allocation of the commingled marital and nonmarital assets. The court stated, in relevant part:
[John] also made a nonmarital claim to the joint investment account. In October 2006, [John] deposited $300,000 into the joint investment account. This amount came from stock options that [John] was required to exercise prior to his termination from Yum! in November 2006. [John] claimed the entirety of this amount as his nonmarital property. However, per [John's] trial exhibit '13,' it is clear that a number of the stock options which he exercised were granted and became vested during his marriage to [Nancy]. Furthermore, [John] was required to pay $214,508.30 from this amount to his former wife, Lissa Murray, on December 31, 2009. Pursuant to the marital settlement agreement [John] entered into with Lissa Murray, [John] was required to account to her for one-half of the after-tax value of these stock options when he exercised them. Lissa Murray brought an action against [John] to enforce this agreement while [Nancy and John] were married. In addition to paying Lissa Murray $214,508.30 for the value of the stock options to which she was entitled, [John] was also required to make a $10,000 contribution towards her attorney fees for the costs of having to enforce their marital settlement agreement. The $225,000 was transferred from the Wells Fargo joint investment account into the Parties' account at National City Bank. On December 31, 2009, two cashier's checks were remitted by [John] from National City Bank to David Vish (Lissa Murray's attorney) for $10,000 and to Lissa Murray for $214,508.30. Because the $225,000 taken out of the account went towards paying [John's] obligation from his first marriage, the Court finds that the $225,000 should be deducted from [John's] stock options which were granted and vested before his marriage to [Nancy]. The remaining $75,000 contribution is deemed his nonmarital property.
. . . .
[John's] Wells Fargo IRA had a balance at trial of $334,658.08. [John] opened his IRA with Wells Fargo in October 2007. Ms. Lovan testified that it had an opening balance of $183,636 in 2007. [John] testified that a portion of his IRA was accumulated from his work before the marriage. [John] introduced as his trial exhibit '16' a letter from ING stating that the balance of his Yum! 401(k) plan as of September 10, 2002 was $110,909.43. [John] also testified that his Yum! 401(k) was rolled over into his Wells Fargo IRA when that account was opened in 2007. [John] made marital contributions to his Wells Fargo IRA. For example, [John] was still participating in and contributing to his Yum! 401(k) as late as 2006, the year his employment with Yum! terminated. In August 2011, [John] rolled over $77,677 from his Franke 401(k) plan into the IRA. The entirety of [John's] tenure at Franke came during the marriage, so this rollover was also a marital contribution. As such, the Court finds that $110,909.43 from [John's] Wells Fargo IRA is to be restored to him as his nonmarital property; the balance of the account ($223,748.65) is marital property, to be divided in accordance with the directions to follow.
. . . .
[John] also has a Whole Life Insurance policy with Commonwealth Annuity. The policy had a cash surrender value of $6,236.09 as of April 6, 2013. Said plan was taken out on April 6, 1994, but the premiums are paid on a monthly basis. As such, 60% of the premiums were paid during the marriage and 40% were paid prior to the marriage. The plan had a cash surrender value of $21,163.02 as of January 31, 2013, but [John] took a $15,000 loan against the policy between that time and trial.
John now disputes the court's division of these three financial accounts, contending the determinations were clearly erroneous. To support these claims, John cites only his own self-serving testimony at trial. John bore the burden of proof regarding the portions of these accounts that he believed to be his nonmarital assets. See Travis, 59 S.W.3d at 910. Our review indicates that the court's division of the marital and nonmarital portions of the accounts was clearly supported by substantial evidence in the record, and John's arguments to the contrary are without merit.
Automobiles and Boat
John disputes the values assigned by the court to the parties' 2012 Lincoln Navigator and 2007 Acura TL. The parties presented conflicting evidence regarding the value of each vehicle. After considering the evidence and testimony, the court awarded the Lincoln to Nancy and the Acura to John. We have thoroughly reviewed the record, and we conclude the trial court's decision was supported by substantial evidence.
John also contends he had a marital interest in a portion of the value of a 2001 Toyota Solara belonging to Nancy's son. Nancy and her former husband, Kelly Stickrod, each paid Nancy's father $750.00 to purchase the car as a gift for their son in 2011. Although the vehicle was titled in Nancy's name, record title does not control ownership. See Sexton v. Sexton, 125 S.W.3d at 265. The trial court concluded that the Solara belonged to Nancy's son, and instructed Nancy to transfer the title to her son since he had turned eighteen. We are not persuaded the court abused its discretion on this issue.
John also takes issue with the value assigned to the parties' 2003 Crownline boat. The parties presented conflicting evidence regarding the value of the boat, trailer, and accessories. The trial court considered the evidence and determined the value was $25,080. Although John contends the court overstated the value, the court's decision was supported by substantial evidence.
Maintenance and Attorney's Fees
John contends the court abused its discretion by awarding Nancy monthly maintenance of $2200.00 for a period of thirty-six months.
The amount and duration of a maintenance award is within the sound discretion of the trial court. Gentry v. Gentry, 798 S.W.2d 928, 937 (Ky. 1990). On appellate review, this Court will not disturb the lower court's decision unless its findings were clearly erroneous or it committed an abuse of discretion. Perrine v. Christine, 833 S.W.2d 825, 826 (Ky. 1992).
In Russell v. Russell, 878 S.W.2d 24 (Ky. App. 1994), this Court explained:
It is appropriate to award maintenance when a party is not able to support themselves in accord with the same standard of living which they enjoyed during marriage and the property awarded to them is not sufficient to provide for their reasonable needs. Furthermore, where a former spouse is not able to produce enough income to meet their reasonable needs, it is appropriate to award maintenance.Id. at 26 (internal citations omitted).
The court heard lengthy testimony from the parties. John was earning between $112,000 and $150,000 annually, while Nancy was working in a seasonal/temporary position at a design firm earning $22.50 per hour. The trial court specifically considered the provisions of Kentucky Revised Statutes (KRS) 403.200 in awarding maintenance to Nancy. The court found that Nancy was unable to support herself through her employment and that she lacked sufficient property to meet her reasonable needs. The court noted that the parties enjoyed a very high standard of living during the marriage and that Nancy had not worked outside the home for the duration of the marriage. Although John disputes the court's conclusion that Nancy lacked sufficient resources to support herself, our review indicates that substantial evidence supported the court's decision. We conclude the court did not abuse its discretion by awarding maintenance to Nancy.
Finally, John asserts the court erred by ordering him to pay $8,000.00 toward Nancy's legal fees.
"KRS 403.220 authorizes a trial court to order one party to a divorce action to pay a 'reasonable amount' for the attorney's fees of the other party, but only if there exists a disparity in the relative financial resources of the parties in favor of the payor." Neidlinger, 52 S.W.3d at 519. In light of KRS 403.220, the trial court enjoys broad discretion in determining whether to award attorney's fees. Id.
Nancy introduced an itemized statement of her legal fees in the amount of $18,404.19. The court specifically considered the financial resources of both parties and concluded that Nancy was entitled to an award for a portion of her legal fees. Based on the record before us, we conclude the court did not abuse its discretion in awarding attorney's fees.
For the reasons stated herein, we affirm the judgment of the Oldham Circuit Court.
ALL CONCUR. BRIEFS FOR APPELLANT: Daniel J. Canon
Catherine J. Kamenish
Louisville, Kentucky
BRIEF FOR APPELLEE: James L. Theiss
James D. Theiss
LaGrange, Kentucky