Opinion
NO. 2016-CA-001484-MR
10-19-2018
MARTIN JOSEPH NIENABER APPELLANT v. MARY COLLEEN GILDAY APPELLEE
BRIEF FOR APPELLANT: Darrell A. Cox Covington, Kentucky BRIEF FOR APPELLEE: Mary Colleen Cauhorn (f/k/a Gilday), pro se Covington, Kentucky
NOT TO BE PUBLISHED APPEAL FROM KENTON CIRCUIT COURT
HONORABLE CHRISTOPHER J. MEHLING, JUDGE
ACTION NO. 08-CI-01838 OPINION
AFFIRMING
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BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND JONES, JUDGES. JONES, JUDGE: Martin Joseph Nienaber ("Husband") appeals an order of the Kenton Circuit Court finding him in contempt of court and ordering him to pay $20,141.55 to Mary Colleen Gilday ("Wife") for Husband's violation of the parties' separation agreement. Following review of the record and applicable law, we AFFIRM.
I. BACKGROUND
Husband and Wife were married in January of 1992. A decree of dissolution dissolving their marriage was entered on May 18, 2009. Husband and Wife had executed a separation agreement (the "Agreement") on March 27, 2009, which was incorporated into the divorce decree. As relevant to this appeal, a portion of the Agreement provided that "[t]he parties shall file a joint federal and state tax return for 2008. Any and all tax liabilities shall be equally divided between them, along with any and all tax refunds, tax stimulus checks, and/or tax incentives." R. 31. It is undisputed that the parties did not file a joint tax return for 2008. Instead, Husband filed his 2008 tax return using the Married Filing Separately filing status. Wife, under the apparent belief that Husband had filed a joint 2008 tax return, did not file a tax return for 2008.
Over the next several years, both Husband and Wife filed numerous motions to hold the other in contempt for violation of the Agreement. On August 24, 2012, the circuit court entered an order that, among other things, ordered the parties to file an amended 2008 joint tax return. Following mediation, an Agreed Order was entered by the circuit court on January 17, 2013 (the "Agreed Order"). In pertinent part, the Agreed Order stated that "[t]he parties shall have the 2008 tax return amended by Randy Railey within seven (7) days and shall be equally responsible for any tax liability as a result of that amendment." R. 131.
Issues concerning the 2008 tax return had not been raised by either party in any of the previous motions to hold the other in contempt. Presumably, the issue was raised in one of the hearings that were not made a part of the record on appeal.
On December 23, 2015, Wife filed a motion to hold Husband in contempt for his violation of the Agreement regarding the parties' 2008 tax return. Therein, Wife alleged that she had prepared a joint tax return for 2008 and given it to Husband for him to sign and submit. Because Husband had failed to do so, opting instead to file a single return, Wife had incurred $5,676.59 in state tax liability and $16,472.50 in federal tax liability. Wife stated that Mr. Railey had prepared an amended joint 2008 tax return for the parties; however, the amended return was not accepted as the deadline for submitting amended returns had passed. The amended return, had it been accepted, would have resulted in a $4,072.00 refund on federal taxes; the parties would have owed $2,034.00 in state taxes. Documents from the IRS and the state Department of Revenue showing Wife's tax liability, as well as a copy of the amended 2008 joint tax return, were attached to Wife's motion. On April 14, 2015, Wife amended her motion to include as an exhibit a letter from the IRS, dated September 23, 2013, indicating that the amended 2008 joint tax return had been received but was being disallowed as untimely.
The circuit court heard a hearing on the motion on August 12, 2016. Husband testified that he had filed his 2008 tax return prior to entering the Agreement in March of 2009. He believed that nothing in the Agreement required him and Wife to file a joint tax return for 2008. However, Husband stated that before he had filed his 2008 tax return, he had repeatedly asked Wife to give him the information needed to file a joint 2008 tax return and she had failed to do so. Husband testified that Mr. Railey had prepared an amended joint tax return for 2008, but that Wife had failed to sign the return and it had never been submitted. Because the amended return had not been submitted, Husband believed that the issue was resolved.
Wife testified that she did not discover that Husband had not filed a joint tax return for them until 2012, when she received notice of her tax liability. Wife indicated that she had prepared a joint 2008 tax return for Husband and herself, and had given that return to Husband for him to sign and send in. Wife testified that she had asked Husband about the refund they were to receive at some point, but that she could not remember what his response was. Wife stated that she knew that the amended tax return had been submitted and rejected because she had received a letter from the IRS indicating as such. On cross-examination, Wife acknowledged that the parties did have mediation concerning the 2008 tax liability, which resulted in the Agreed Order.
Mr. Railey testified that he had prepared an amended 2008 joint tax return for the parties. He recognized the amended 2008 tax return when it was shown to him, acknowledged that he had prepared it, and acknowledged that the parties were due a refund under that return. Mr. Railey had no recollection of Husband's coming in and signing the amended tax return. From his recollection, Mr. Railey believed that the time to file an amended return had already passed at the time Husband and Wife asked him to complete the amended tax return for them.
At the close of all testimony, the circuit court found that Husband had violated the Agreement by filing his 2008 tax return separately; accordingly, Husband was found in contempt of court. The circuit court found that Husband should reimburse Wife for the liability she had incurred as a result of Husband's failure to file a 2008 joint tax return and pay Wife the money she would have received had the parties filed a 2008 joint tax return. Looking to the documentation submitted by Wife, the circuit court found that Wife was due $16,472.50 for liability incurred for federal taxes, $3,433.50 for liability incurred for state taxes, and half of the amount the parties would have received as a refund had they filed their 2008 taxes jointly.
On August 24, 2016, the circuit court entered an order holding Husband in contempt of court and ordering him to pay Wife a total of $20,141.55. Husband filed a motion to reconsider that same day. Therein, Husband contended that the issue of the 2008 tax liability had already been resolved by the Agreed Order. Husband's motion to reconsider was denied by the circuit court on September 16, 2016.
This appeal followed.
II. STANDARD OF REVIEW
"A trial court has inherent power to punish individuals for contempt, and nearly unfettered discretion in issuing contempt citations." Crowder v. Rearden, 296 S.W.3d 445, 450 (Ky. App. 2009) (citing Newsome v. Commonwealth, 35 S.W.3d 836, 839 (Ky. App. 2001); Smith v. City of Loyall, 702 S.W.2d 838, 839 (Ky. App. 1986)). "We will reverse a finding of contempt only if the trial court abused its discretion in imposing the sentence." Id. (citing Meyers v. Petrie, 233 S.W.3d 212, 215 (Ky. App. 2007)). "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999) (citing 5 AM. JUR. 2D Appellate Review § 695 (1995)). "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." CR 52.01.
Kentucky Rules of Civil Procedure. --------
III. ANALYSIS
Civil contempt is "the failure . . . to do something under order of court, generally for the benefit of a party litigant." Commonwealth v. Burge, 947 S.W.2d 805, 808 (Ky. 1996). "Thus, courts have inherent power to impose a sanction for a civil contempt to enforce compliance with their lawful orders." Crowder, 296 S.W.3d at 450 (citing Blakeman v. Schneider, 864 S.W.2d 903, 906 (Ky. 1993)). In the instant case, Husband was held in contempt for his non-compliance with the Agreement, as incorporated into the decree of dissolution, by filing a 2008 tax return under the Married Filing Separately status.
On appeal, Husband contends that the issue of the parties' 2008 tax return has already been fully resolved by the Agreed Order entered in January of 2013. Husband contends that the circuit court abused its discretion by holding him in contempt and requiring him to pay the full amount of Wife's tax liability. He argues that, pursuant to the Agreed Order, he should only be responsible for paying half of Wife's tax liability. We disagree.
The Agreed Order expressly states that "[t]he parties shall have the 2008 tax return amended . . . and shall be equally responsible for any tax liability as a result of the amendment." R. 131 (emphasis added). Thus, Husband is correct that the Agreed Order contains language to the effect that the parties would split tax liability; however, it clearly indicates that what is being split by the parties is any liability resulting from the amended 2008 tax return. In fact, in his brief to this Court, Husband acknowledges that "[t]he Agreed Order required the parties to amend their 2008 tax return and evenly split any liability that was generated as a result of the amended tax return." Appellant Br. 2 (emphasis added). Nowhere in the Agreed Order does it state that Husband and Wife would split liability resulting from Husband's failure to abide by the original Agreement. Because the amended 2008 tax return was not accepted, there was no liability resulting from it and nothing to split.
Husband admitted that he had not complied with the Agreement. Husband's testimony that he had already filed his 2008 tax return at the time he signed the Agreement is no excuse. At the time he signed the Agreement, he was aware that he would need to amend his tax return and submit a joint tax return. The circuit court ordered the parties to amend the 2008 tax return twice—first on August 24, 2012, and then in the Agreed Order. Had Husband's tax return been amended, Wife would not have suffered any tax liability for 2008; in fact, the parties would have split a refund. Accordingly, we cannot find that the circuit court abused its discretion by holding Husband in contempt and ordering him to reimburse Wife for her tax liability.
IV. CONCLUSION
Based on the foregoing, we AFFIRM the order of the Kenton Circuit Court.
ALL CONCUR. BRIEF FOR APPELLANT: Darrell A. Cox
Covington, Kentucky BRIEF FOR APPELLEE: Mary Colleen Cauhorn (f/k/a Gilday),
pro se
Covington, Kentucky