Opinion
NO. 2014-CA-000485-MR
03-11-2016
COLLEEN SUMMERS APPELLANT v. JAMES M. SUMMERS APPELLEE
BRIEF FOR APPELLANT: J. Russell Lloyd Louisville, Kentucky BRIEF FOR APPELLEE: Alissa M. Domine Sandra Moon Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE JOAN STRINGER, JUDGE
ACTION NO. 12-CI-503927 OPINION
AFFIRMING BEFORE: JONES, MAZE, AND STUMBO, JUDGES. MAZE, JUDGE: Colleen Summers appeals from a December 2013 order dissolving her marriage to James Summer, restoring various non-marital property, and dividing various marital items and assets. Colleen challenges the trial court's decisions concerning more than a dozen of these assets as well as the trial court's allocation of attorneys' fees and costs.
We observe no error and no abuse of the trial court's discretion in the trial court's assignment, distribution, and valuation of the parties' various assets and liabilities. Therefore, we affirm.
Background
Colleen and James were married in Missouri on June 5, 2008. In May 2012, the parties relocated to Louisville, Kentucky to accommodate James's employment with Ford Motor Company. Shortly thereafter, Colleen quit her job and returned to Missouri by herself. James filed a petition to dissolve the marriage in Jefferson County in November 2012. Following Colleen's response and several motions, the trial court granted Colleen $1,500 per month in pendente lite maintenance and advanced her $750 in fees and costs. The court passed the remaining issues to trial.
Following an October 7, 2013 trial, the trial court entered Findings of Fact, Conclusions of Law, and Decree of Dissolution (hereinafter "the Decree"). In this Decree, the trial court assigned or divided the parties' marital and non-marital property as follows: In consideration for the fact that James was paying "all of the marital debts" listed in the order, the trial court fully restored a John Deere tractor and mower and James's Ford pension to James. The trial court held that a rudimentary cabin on James's non-marital property in Missouri was purchased prior to the marriage and would also be restored to James. The trial court awarded Colleen her Ford Focus and found there to be approximately $4,500 in equity in that vehicle. It also awarded James the couple's Honda ATV and his Ford pickup truck. The court found that there was $2,000 in equity in the pickup; however, the court valued the ATV at $5,150 and found that the parties owed $5,700 on it, a debt for which James would be responsible.
In addition to the parties' items of real and personal property, the trial court's order also divided or disposed of various assets and debts. The trial court made James and Colleen responsible for all debts held in their respective names. That parties owed nearly $48,000 on credit cards and a loan on James's Tax-Efficient Savings Plan for Hourly Employees (TESPHE). Though the parties worked toward repayment of this loan during the marriage, the trial court found that the remaining balance of more than $25,000 in James's TESPHE account was his non-marital asset and would be restored to him. Due to the marital debts James testified he had paid since separation, the trial court further found that his bonuses from Ford, totaling $15,000, and tax refunds of $5,456 had been depleted and would not be considered or assigned as part of the marital estate.
Finally, the trial court addressed the questions of maintenance and attorneys' fees. It held that Colleen was not entitled to maintenance or attorneys' fees in addition to those awarded in the temporary order. Among other factors considered in its decision, the trial court noted that Colleen was "able-bodied" and capable of working.
Ten days after entry of the Decree, Colleen moved the trial court to alter, amend, or vacate its order pursuant to CR 59.05. This motion alleged a litany of errors or oversights in the Decree. Of note, Colleen asked the trial court to address her previous request to be allotted a marital portion of a Bank of America account which held more than $14,000. The trial court denied this motion. Colleen now appeals from that order, as well as the December 16, 2013 Decree. We will raise further facts as they become relevant to our analysis.
Standard of Review
As with any matter tried outside the presence of a jury, we will not overturn the trial court's findings of fact unless they are clearly erroneous - that is, unsupported by substantial evidence. See CR 52.01. Furthermore, while we review the legal question of a trial court's classification of marital property de novo, we review its decisions concerning the value and division of marital assets for an abuse of discretion. See Young v. Young, 314 S.W.3d 306 (Ky. 2010), citing Heskett v. Heskett, 245 S.W.3d 222, 226 (Ky. App. 2008) and Armstrong v. Armstrong, 34 S.W.3d 83, 87 (Ky. App. 2000); see also Niedlinger v. Niedlinger, 52 S.W.3d 513, 523 (Ky. 2001). We also review the award and the amount of the trial court's award of attorneys' fees and costs for an abuse of discretion. See Neidlinger at 519 (citations omitted). To amount to an abuse of discretion, the trial court's decisions on these issues must be "arbitrary, unreasonable, unfair or unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
Analysis
Colleen makes ten allegations of error on appeal. We address all of these allegations; however, in the interest of efficiency, we do so in a slightly different order than she raises them.
I. Non-Marital and Marital Property
KRS 403.190(2) defines "marital property" as
all property acquired by either spouse subsequent to the marriage except:"All property acquired by either spouse after the marriage and before a decree of legal separation is presumed to be marital property .... The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (2) of this section." KRS 403.190(3). If property is found to have been acquired during marriage, the burden of proving that it was, in fact, non-marital lies with the party claiming it as such. McVicker v. McVicker, 461 S.W.3d 404, 417 (Ky. App. 2015), quoting Sexton v. Sexton, 125 S.W.3d 258 (Ky. 2004). This burden must be rebutted by clear and convincing evidence. See Sexton at 268; Underwood v. Underwood, 836 S.W.2d 439, 441-42 (Ky. 1992), overruled on other grounds by Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001).
(a) Property acquired by gift, bequest, devise, or descent during the marriage and the income derived therefrom unless there are significant activities of either spouse which contributed to the increase in value of said property and the income earned therefrom;
(b) Property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
(c) Property acquired by a spouse after a decree of legal separation;
(d) Property excluded by valid agreement of the parties; and
(e) The increase in value of property acquired before the marriage to the extent that such increase did not result from the efforts of the parties during marriage.
Once a trial court determines which property is marital and non-marital according to the above standards,
the court shall assign each spouse's property to him. It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors including:KRS 403.190(1). With this well-established law in mind, we turn to the various property in dispute on appeal.
(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.
A. The Missouri Cabin and John Deere Tractor and Mower
Colleen first contends that the trial court erred in characterizing the Missouri cabin and a portion of the John Deere tractor and mower as non-marital. She also argues that the trial court erred in its valuation of the marital Honda ATV. We affirm as to all three items.
Colleen points to a tax return which indicates James took physical possession of the cabin the year after he married Colleen, making it a marital asset. She concedes that James actually paid for the cabin prior to their marriage, but claims that this fact was insufficient to rebut the "presumption of marital property" pursuant to KRS 403.190(3). She also briefly argues that James failed to meet this burden as to the John Deere tractor and mower. We disagree.
There was substantial evidence to support the trial court's finding that the Missouri cabin and a portion of the John Deere tractor and mower were James's non-marital property. The tax return to which Colleen alludes and which is included in the record reflects that James listed the cabin as a "depreciable asset" which had been "placed in service" on March 15, 2009. This is consistent with his testimony that the cabin was placed on land he already owned in 2009 and that he actually acquired the cabin when he purchased it in 2007.
Regarding the John Deere tractor and mower, James submitted a document at trial which documented a trade-in of non-marital equipment toward the purchase of the tractor and mower. Therefore, the record showed that James had a non-marital interest of at least $3,750 in the tractor and mower which the trial court valued at $14,998.41. The financing documents also listed James as the sole debtor and May 28, 2008 as the date of the transaction - more than a week before James and Colleen were married.
James's testimony and documentary submissions each constituted evidence of substance demonstrating the purchase dates of the Missouri cabin and John Deere tractor and mower, respectively. While Colleen argues that James's testimony and documentation "[do] not overcome" the tax return she submitted concerning the cabin, the existence of conflicting evidence does not alter the degree of deference we must show the trial court. See Frances v. Frances, 266 S.W.3d 754, 758-59 (Ky. 2008); see also Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003). That the trial court did not find Colleen's evidence more persuasive did not constitute clear error. Hence, we do not reach the question of whether James successfully rebutted the presumption of KRS 403.190(3), as the record supports the trial court's conclusion that the cabin and at least a portion of the John Deere tractor and mower did not meet the definition of "marital property."
In the alternative, Colleen argues that the trial court should have considered the date she and James began to cohabitate, not the date of their marriage, for purposes of determining whether these assets were marital. She cites exclusively to Smith v. Smith, 497 S.W.2d 418 (Ky. 1973). In Smith, the Court of Appeals, then sitting as the highest court in Kentucky, held that a wife who lived with her husband for a significant time prior to their marriage had a "legally recognizable and enforceable interest at the time of the marriage." Id. at 419. Nevertheless, Colleen's emphasis upon the date of cohabitation is misplaced.
We agree with James that the critical facts in Smith are distinguishable from those in the present case, and they permit a different result. The parties in Smith cohabitated continuously for fifteen years before they married. By contrast, Colleen and James began cohabitating in 2004, separated in 2007, and reunited in 2008 before marrying. This distinction more than supports the trial court's reliance upon the date of marriage rather than the date James and Colleen first cohabitated.
B. The Value of the Honda ATV and Vehicles
Colleen contests the trial court's valuation of three vehicles she and James owned. She first argues that the trial court erroneously valued the marital Honda ATV at $5,150 - approximately half what Colleen asserted it was worth -and concluded that the parties still owed $5,700 toward its purchase. In essence, Colleen contends that it was error for the trial court to concur with James's testimony as to the ATV's value rather than with a printout she presented at trial showing the National Automobile Dealers Association (NADA) value of the ATV. Colleen also argues that the trial court's findings concerning the value and indebtedness on the parties' respective vehicles were erroneous. In its order, the trial court found that the parties owed more than $16,000 on James's pickup and more than $18,000 on Colleen's SUV, which the court valued at $23,000. Colleen argues that the trial court erred when it did not value the vehicles according to an NADA printout she provided and entered into the record. We disagree.
The trial court's findings concerning the ATV, James's pickup, and Colleen's vehicle were supported by substantial evidence of record. Namely, James provided testimony and documentary evidence, in the form of a Kelley Blue Book valuation, demonstrating that the ATV was worth $5,150. James also testified to the value of his truck, and he provided a Kelley Blue Book valuation of similar trucks. Colleen presented conflicting evidence regarding both the ATV and the pickup in the form of higher NADA valuations. However, Colleen's own testimony supported the trial court's finding that the parties owed $18,472.96 on her vehicle.
We reiterate that where there is conflicting evidence, we will show deference to the trial court's superior position to hear and weigh evidence. Though Colleen may disagree with the testimony and evidence James presented concerning the value and debt owed on these items, that evidence proved substantial. Hence, we cannot conclude that the trial court committed clear error in adopting the values and debts contained in James's testimony and documentary evidence.
C. James's Ford TESPHE Account
Colleen next challenges the trial court's holding that the remaining balance of James's TESPHE account was his non-marital asset. It is uncontested that James stopped placing money in this account prior to his marriage to Colleen, and the parties made no contributions to it during the marriage. Therefore, the initial balance in the account was indisputably his non-marital asset. However, during the marriage, the parties took loans on the account totaling $46,900 and were in the process of repaying those loans with marital funds at the time of their separation. At the time of trial, the outstanding balance on that loan was approximately $17,000, and the trial court assigned James that debt while finding the remaining balance in the account of $25,224.35 to be his non-marital asset. Colleen argues that restoration of the remaining balance was error because repayment of the loans with marital funds converted James's TESPHE account to a marital asset. We must once again disagree.
To repeat, marital property is defined as "all property acquired by either spouse subsequent to the marriage...." KRS 403.190(2). We repeat ourselves because it is crucial to make a distinction which Colleen fails to make on appeal: that the repayment of loans during the marriage did not cause the account to appreciate in value beyond what what it was on the date of the marriage. In other words, the repaid amounts were not "acquired." Rather, this repayment constituted repayment of funds James acquired prior to his marriage to Colleen.
Furthermore, we agree with James that even if a portion of the TESPHE account was marital, given the assignment of debt on the loans against that account to James, it likely would not constitute an abuse of discretion for the trial court to have distributed the property as it did and in "just proportions considering all relevant factors[.]" KRS 403.190(1). Therefore, the trial court did not err in finding that James's TESPHE account was his non-marital asset.
D. James's Ford Pension, Bonuses, and Tax Refunds
Colleen next argues that the trial court erred when it did not award her a marital share of James's retirement account. She contends that KRS 403.190 did not permit the trial court to award James the entirety of his retirement account in consideration of the debt he paid prior to trial and would be paying as a result of the Decree. Colleen further argues that the trial court erred in failing to award her a marital share of $15,000 in bonuses James received from Ford as well as tax refunds totaling $5,456, both of which the court found James had "depleted" to pay marital debts. We affirm the trial court's decision concerning these assets.
The basis for the trial court's decision to offset James's debt with the entirety of his pension was supported by substantial evidence and permissible under the law. KRS 403.190(1) permits a trial court to consider a party's "economic circumstances ... when the division of property is to become effective..." before dividing the marital estate in "just proportions[.]" The trial court did exactly that when it awarded James the entirety of his pension in consideration of the sizeable, documented debt he had paid during the dissolution action and which he would incur as a result of the trial court's final order. The trial court's reasoning was expressly similar when it found the funds from James's bonuses to be depleted, and in declining to consider them a divisible part of the marital estate. In both instances, this was a permissible consideration under KRS 403.190(1). Therefore, the trial court's conclusions did not constitute error.
E. Bank of America Checking Account
Colleen argues that she was entitled to a marital share of a Bank of America account which had a balance of more than $16,000 around the time of her separation from James. She states that the trial court failed to address this issue at trial or in response to her subsequent CR 59.05. This was not the case.
This was the estimated balance before Colleen withdrew $2,200 from the account around the time of separation. --------
The trial court ordered that "[e]ach party shall retain any bank accounts held in his/her name, free and clear of any claim by the other[.]" The Bank of America account was in James's name only when his relationship with Colleen began; and the record reflects that, while each party added the other's name to their respective pre-marital accounts, Colleen banked at Commerce Bank and James banked at Bank of America. Hence, the trial court addressed this issue, and it is properly before us on appeal.
Furthermore, the trial court did not abuse its discretion in awarding Colleen her Commerce Bank account and James the full amount of the Bank of America account. James's testimony at trial was that $11,200 of the $14,489 balance in the Bank of America account were funds borrowed and deposited from a loan on his TESPHE account so that he could pay marital bills. Given this, and the fact that James was solely responsible for the resulting debt, we cannot say that the trial court abused its discretion in awarding the entire balance to James.
II. The Parties' Unsecured Indebtedness
Colleen next takes exception to the trial court's distribution of debt, including respective unsecured debt she and James had at the time of their separation. From what we can glean from her brief, Colleen objects to the trial court's even division of indebtedness despite the fact that, according to her calculation, James made eighty-six percent of the couple's combined income.
James presented documentary evidence at trial that at least $47,918.11 of the parties' unsecured debts, in the form of credit card and other debt, resulted from the parties' attempts to meet their marital financial obligations. The trial court's order reflected this fact, as well as the fact that James was "solely responsible for the payment of ongoing marital bills and debts since the parties' separation...." While the trial court assigned Colleen the $4,959.66 in unsecured debts taken in her name alone, the court assigned James a majority of the above marital debt. Therefore, we agree with James that Colleen's argument that this was somehow unfair is strained at best. More relevant to our purposes, we observe no abuse of discretion in the trial court's division of the parties' unsecured debts.
III. Maintenance
Colleen next contends that the trial court erred in failing to award her maintenance in addition to the pendente lite award. However, we affirm the trial court's conclusion on this point.
KRS 403.200(1) states that a trial court
may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance:The proposed payor's ability to meet his own needs while paying spousal maintenance is also a factor a trial court must consider when deciding to award maintenance. See Dotson v. Dotson, 864 S.W.2d 900, 903 (Ky. 1993).
(a) Lacks sufficient property, including marital property apportioned to him, to provide for his reasonable needs; and
(b) Is unable to support himself through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
The trial court did not err in concluding that Colleen held sufficient property to provide for herself. The trial court's order awarded Colleen her automobile, personal bank accounts, and her personal property. The order also noted that Colleen had few living expenses at the time of trial. It was uncontroverted at trial that Colleen was able-bodied, capable of gainful employment, and was previously employed at a salary of nearly $58,000. Additionally, as we have already pointed out, the record reflects that both parties - but especially James - bore considerable debt as a result of the marriage and dissolution, and hence, a diminished ability to pay maintenance.
These facts constitute substantial evidence supporting the trial court's finding that the parties' circumstances did not meet the requirements of KRS 403.200(1). Therefore, it was not an abuse of the trial court's considerable discretion to refuse Colleen additional maintenance.
IV. Attorneys' Fees and Costs
Colleen's final argument is that the trial court erred in denying her attorneys' fees and costs in addition to the $750 advance the trial court awarded her prior to trial. Colleen argues that, given James's "control over the great majority of the parties' marital property[,]" the trial court abused its considerable discretion in failing to award her additional attorneys' fees and costs. We disagree.
Colleen concedes on appeal that a trial court possesses "great discretionary power in its determination to award or deny attorney fees." Hollingsworth v. Hollingsworth, 798 S.W.2d 145, 148 (Ky. App. 1990); see also Wilhoit v. Wilhoit, 521 S.W.2d 512, 514 (Ky. App. 1975), citing KRS 403.220. A trial court may make such an award where "there exists a disparity in the relative financial resources of the parties in favor of the payor." Neidlinger, 52 S.W.3d at 519 (citations omitted). Similarly, KRS 403.220 requires only that a trial court consider the parties' respective financial resources prior to making such an award. However, even where such a disparity exists, "[t]here is nothing mandatory about" an award of attorneys' fees. Moss v. Moss, 639 S.W.2d 370, 373 (Ky. App. 1982).
The trial court's decision to hold James and Colleen responsible for their respective attorneys' fees was not an abuse of discretion. On appeal, Colleen presents nothing to justify our invasion of the trial court's province concerning the necessity or the amount of additional attorneys' fees. While it is true that James exercised control over the majority of the parties' marital assets, this, alone, did not compel an award of attorneys' fees. Without more, we cannot conclude that the trial court's decision constituted an abuse of its considerable discretion over the matter.
Conclusion
Overall, the record contains evidence of substance to support all of the factual findings Colleen disputes on appeal. Additionally, the trial court did not abuse its discretion in dividing the marital estate and in denying Colleen's request for additional maintenance and attorneys' fees and costs. Therefore, the trial court's December 16, 2013 Findings of Fact, Conclusions of Law, and Decree of Dissolution is affirmed in its entirety.
ALL CONCUR BRIEF FOR APPELLANT: J. Russell Lloyd
Louisville, Kentucky BRIEF FOR APPELLEE: Alissa M. Domine
Sandra Moon
Louisville, Kentucky