Opinion
NO. 2011-CA-000926-MR NO. 2011-CA-000977-MR
11-08-2013
CATHY VIVIAN APPELLANT/CROSS-APPELLEE v. TIMOTHY VIVIAN APPELLEE/CROSS-APPELLANT
BRIEFS FOR APPELLANT/CROSS- APPELLEE: William D. Tingley Louisville, Kentucky BRIEFS FOR APPELLEE/CROSS- APPELLANT: Allen McKee Dodd Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL AND CROSS-APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE DOLLY W. BERRY, JUDGE
ACTION NO. 01-FC-004305
OPINION
AFFIRMING
BEFORE: ACREE, CHIEF JUDGE; CAPERTON AND NICKELL, JUDGES. CAPERTON, JUDGE: The Appellant and Cross-Appellee, Cathy Vivian, appeals the judgment of the Jefferson Circuit Court setting aside the Tennessee judgment of divorce between herself and the Appellee/Cross-Appellant, Timothy Vivian. Timothy appeals the Jefferson Circuit Court's order of May 3, 2011, which addressed the finality of a hearing order dated October 4, 2007. Timothy now requests that this Court affirm in part and reverse in part the now-final order of the Jefferson Family Court. Upon review of the record, the arguments of the parties, and the applicable law, we affirm.
That order was previously appealed to this Court in Case Nos. 2007-CA-002205-ME and 2007-CA-002217-ME, and dismissed by this Court on July 11, 2008, as appeals from an interlocutory order. On May 2, 2011, the Jefferson Family Court entered an Order Re: Finality of Judgment, in which it incorporates the August 28, 2009, judgment previously found to be interlocutory. Thereafter, on May 3, 2011, the trial court entered an order which resolved the issues which this Court noted were outstanding in the order of July 11, 2008.
This matter stems from two motions filed by Timothy, one to set aside a marital dissolution agreement and the foreign divorce decree incorporating that agreement, and a subsequent motion to modify child support pursuant to KRS 403.212, the former of which was granted, and the latter denied. The Jefferson Family Court held a hearing and subsequently set aside the marital dissolution agreement and a portion of the divorce decree incorporating the agreement. In so doing, the trial court found Timothy had been coerced into signing it. In the same order, the court denied Timothy's motion to modify child support stating it had not received sufficient information to calculate Timothy's gross income as contemplated by KRS 403.212.
Kentucky Revised Statutes.
Timothy and Cathy were married on December 18, 1981, and three children were born of the marriage. The parties separated on July 17, 1999, while living in Clarksville, Tennessee. Cathy filed a complaint for absolute divorce on August 16, 1999, in the Chancery Court of Montgomery County, Tennessee, asserting irreconcilable differences. The marital dissolution agreement in question was signed on April 7, 2000, and a final decree incorporating same was entered on May 2, 2000.
The case was later transferred to the Jefferson Family Court in Kentucky, and the foreign judgment registration was filed on June 13, 2001. No objection to the foreign registration was made at the time it was entered and neither party disputed Tennessee's jurisdiction to enter the decree. Eighteen months later, however, on March 28, 2002, Timothy filed a CR 60.02 motion to set aside the Tennessee Decree. A hearing was held on that motion four years later, on August 30, 2006, and on October 4, 2007, the court entered an order vacating the portion of the Tennessee Final Decree of Absolute Divorce which incorporated the parties' Tennessee Marital Dissolution Agreement, finding Timothy had been coerced into signing the agreement.
See Exhibit 2 to Appellant/Cross-Appellee's Brief, September 29, 2007, "Hearing Order" of the Jefferson Circuit Court.
Kentucky Rules of Civil Procedure.
By way of further background information, Timothy asserts in the counterstatement of material facts set forth in his brief to this Court, that on April 7, 2000, he met Cathy at a hotel to discuss the divorce agreement, the day before he was to be assigned to the Mojave Desert for six weeks for a military training exercise. Timothy states he reviewed the agreement, found its provisions unconscionable, and refused to sign it, noting it was substantially different than the agreement the parties had previously discussed. Timothy states that when he refused to sign the agreement, Cathy asked Timothy for the name of his commanding officer, but did not tell him why. Timothy asserts that Cathy blackmailed him by insinuating she would report his relationship with an enlisted soldier (now his current wife, Dawn Vivian), to both of their commanding officers, information which could result in a court martial. The trial court noted Timothy's commanders knew of the situation, but standard practice was to "overlook such actions" unless "officially notified." The trial court ultimately found that Timothy signed the agreement because he felt threatened and had no option but to sign.
Timothy asserts that at the time the final divorce decree was entered in Tennessee, he was unable to challenge the court's judgment as he was in the Mojave Desert and was immediately deployed to Honduras for six months thereafter. Though still in Honduras at the time the decree was entered in Tennessee, the proceedings continued as if Timothy were in default, with no mention of the fact that he was deployed. Timothy acknowledged he was twice held in contempt between November 2001 and February 2002. However, Timothy asserts he was unable to adequately respond to Cathy's contempt motion as she failed to provide notice by intentionally serving the motion to the wrong address. The contempt orders were later vacated by the same order vacating the parties' original agreement.
Upon resigning from the military and securing legal representation in Kentucky, Timothy filed a motion to set aside the order registering the foreign decree pursuant to CR 60.02 on March 28, 2002. On October 26, 2004, Timothy moved for a hearing on that motion, or in the alternative, to modify child support. It is undisputed that at the time of that motion the parties' oldest child was emancipated and one of the parties' two remaining minor children was living with Timothy. In December of 2004, Cathy filed a motion seeking arrearages for child support, other child care costs, alimony and attorney's fees from Timothy. Timothy also moved to modify maintenance on June 1, 2006. A hearing on these motions was held on August 30, 2007, and the trial court initially ruled on these motions in its hearing order entered on October 4, 2007. Therein, the court vacated that portion of the Tennessee Final Decree of Absolute Divorce which incorporated the parties' Tennessee Marital Dissolution Agreement.
As previously noted herein, the trial court granted Timothy's CR 60.02 motion, finding that he was coerced into signing the agreement, but denied his motion to modify child support. In denying that motion, the court found that though Timothy argued that his financial circumstances had changed sufficiently to warrant modification, it did not have sufficient information to calculate Timothy's gross income based on what he asserted were his current earnings as contemplated by KRS 403.212. The parties jointly moved to alter, amend, or vacate the hearing order pursuant to CR 59.05, and for additional findings of fact and modification of the order pursuant to CR 59.01. Those motions were denied and both parties appealed. This Court refused to address those arguments on the merits after determining we did not have jurisdiction to review the trial court's decisions, as both the October 4, 2007, hearing order and the October 29, 2007, order were interlocutory in nature.
After attempting to settle outstanding issues through mediation, the parties filed a joint motion for a finding of finality. A hearing on that motion was held in August of 2009, and an order regarding that hearing was entered on August 28, 2009. At that hearing, the parties stipulated several facts, including: "neither party was requesting any change regarding property distribution or debt assignment," "neither would make a claim for maintenance," and, further, "the children are now emancipated [and] there are no existing claims for child support." The trial court ordered Cathy to submit an agreed order regarding finality.
The parties, however, were unable to come to an agreement regarding the finality of the October 2007 orders, and Cathy moved the court to enter a final order in the case. A final order regarding the finality of the court's judgment was entered on May 3, 2011. The order clarified the stipulations made by the parties at the August 23, 2009, hearing, and affirmed the court's October 2007 judgment, declaring it to be "final and appealable ... with no just reason for delay." The parties now appeal to this Court.
As her first basis for appeal, Cathy argues that the trial court erred when it permitted Timothy to collaterally attack the parties' Tennessee divorce decree. She argues that at no time during the course of the hearing before the court below did Timothy argue that the Tennessee Chancery Court lacked jurisdiction, nor did he assert that Cathy had obtained his signature on the document by fraud, which Cathy argues, pursuant to Strother v. Day, 279 S.W.2d 785, 789 (Ky. App. 1955), are the only two avenues for attack on a foreign judgment. Cathy argues that by permitting the collateral attack of the Tennessee divorce judgment on the basis of a finding of coercion, and not on lack of jurisdiction or fraud, the court committed error. Accordingly, she requests that we vacate the court's hearing order of August 28, 2009, and the Order re: Finality of Judgment entered on May 3, 2011, and reinstate the May 2000 Tennessee Decree of Absolute Divorce.
In response, Timothy asserts Cathy's arguments are flawed for two reasons: (1) Timothy's CR 60.02 motion was a direct attack on the decree; and (2) alternatively, even if Timothy's CR 60.02 motion was a collateral attack on a foreign judgment, the divorce decree became a Kentucky judgment upon its proper registration, and thus was no longer foreign.
First, Timothy asserts the CR 60.02 motion was a direct attack on the foreign judgment. In making this argument, he asserts his request for relief was a specifically authorized challenge in a case that had been transferred from Tennessee to Kentucky, and was in the nature of a direct attack addressing the merits of that judgment. Timothy argues his attack on the judgment was specifically authorized by CR 60.02, and to void the judicial proceeding in which the agreement was entered. Further, Timothy argues that the CR 60.02 proceeding was instituted for the specific purpose of setting aside the portion of the divorce decree that contained the agreement and he had no ability to address the case on the merits before his CR 60.02 motion because the divorce decree was entered as a default judgment against him.
Timothy further asserts that pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJA), the trial court's decision should stand, because the parties' properly registered divorce decree should have been treated in the same manner as any Kentucky judgment. He argues that even if his motion is viewed as a collateral attack, such attack was authorized by CR 60.02 because the judgment was converted from a Tennessee judgment to a Kentucky judgment. We agree.
In addressing whether Timothy's CR 60.02 motion was proper, we note that KRS 426.955, part of Kentucky's version of the UEFJA, explicitly states a foreign judgment is "subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a court of this state." Sub judice, the parties do not dispute that Tennessee had jurisdiction to enter the initial divorce decree, including the parties' marital dissolution agreement, nor do they dispute that the foreign judgment was properly registered in Kentucky. Thus, in the opinion of this Court, the determinative issue is whether Timothy's CR 60.02 motion would properly have been filed against a Kentucky judgment in a Kentucky court, not whether a challenge to a foreign judgment constitutes a collateral attack and is thereby disallowed. Indeed, as we have previously held, "the holder of a foreign judgment has the equivalent of a Kentucky judgment and may proceed accordingly." Sunrise Turquoise Inc. v Chemical Design, 899 S.W.2d 856, 857 (Ky. App. 1995).
Indeed, we note that pursuant to Strother alone, Timothy would have been required to challenge the Tennessee judgment in Tennessee. However the UEFJA was enacted subsequent to Strother and therefore is controlling.
Finding this to be the determinative issue, we turn now to an analysis of whether Timothy's CR 60.02 motion was both proper and timely. In addressing this issue, we note that CR 60.02 provides as follows:
On motion a court may, upon such terms as are just, relieve a party or his legal representative from its final judgment, order, or proceeding upon the following grounds: (a) mistake, inadvertence, surprise or excusable neglect; (b) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59.02; (c) perjury or falsified evidence; (d) fraud affecting the proceedings, other than perjury or falsified evidence; (e) the judgment is void, or has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (f) any other reason of an extraordinary nature justifying relief. The motion shall be made within a reasonable time, and on grounds (a), (b), and (c) not more than one year after the judgment, order, or proceeding was entered or taken. A motion under this rule does not affect the finality of a judgment or suspend its operation.In this Commonwealth, CR 60.02 relief is an available and applicable avenue for seeking relief from a judgment such as the one in the matter sub judice. Thus, it remains only for us to determine whether the court correctly granted Timothy's motion for CR 60.02 relief - that is, whether he established the existence of reasons of an extraordinary nature justifying relief, and whether he did so within a reasonable time as required by the rule.
See, e.g., McMurry v. McMurry, 957 S.W.2d 731 (Ky. App. 1997).
In addressing this issue, we note that as her second basis for appeal, Cathy argues the trial court erred by allowing Timothy's CR 60.02 motion to proceed to a hearing as it was untimely under both Kentucky and Tennessee law. She asserts that though the parties were divorced on May 2, 2000, Timothy did not file for relief pursuant to CR 60.02 until March 28, 2002, and did not request a hearing until April 14, 2005, almost five years after entry of the Final Decree of Absolute Divorce. She also asserts the doctrine of laches should have barred consideration of Timothy's motion, since he failed to assert his rights within a reasonable period of time.
For the reasons previously set forth herein concerning application of the UEFJA, we decline to apply Tennessee law to our consideration of this issue, and focus on the application of CR 60.02 to the facts sub judice.
Finally, Cathy argues Timothy should be estopped from attacking the Tennessee judgment collaterally and from asserting excuses not to follow previously entered agreements or to effectuate necessary filings. Specifically, she notes that in the parties' marital dissolution agreement, they agreed to "hereby waive all defenses which must be made within thirty days from the date of service." Cathy asserts that the trial court relieved Timothy from that obligation by granting his motion, and that doing so was in error.
Briefly, we note that we are not persuaded by this argument. Certainly, if the court found Timothy were coerced into signing this agreement, that coercion would also extend to this portion of the agreement. Thus, we do not find the time limit set forth in the agreement to be controlling.
Substantively, Timothy argues the trial court had sufficient grounds to grant his CR 60.02 motion. He argues the court properly noted that in Kentucky, a CR 60.02 motion is an "extraordinary procedure" whereby a judgment can be attacked upon specific grounds set forth in the rule, one of which is "any other reason of an extraordinary nature justifying relief." Timothy asserts the facts and circumstances of this case constitute grounds of an extraordinary nature justifying relief. Timothy asserts, as he did in his motion, that he was "blindsided" with the agreement Cathy presented to him at the eleventh hour, and he was blackmailed into signing it, lest he lose his job and military benefits if Cathy were to report his relationship with an enlisted soldier. Timothy further asserts these circumstances were made more extraordinary by the fact that he was scheduled to be deployed the next day and was unable to participate in any of the divorce proceedings. Timothy thus argues his inability to present his claim prior to the entry of the decree due to his deployment in conjunction with Cathy's "coercive" tactics, constitute "reasons of an extraordinary nature justifying relief." Likewise, Timothy argues that because of his military deployment, his CR 60.02 motion was timely, regardless of which state's procedural rules apply. We agree.
Under Kentucky law, what constitutes a reasonable time in which to file a CR 60.02 motion "is a matter that addresses itself to the discretion of the trial court." Gross v. Commonwealth, 648 S.W.2d 853, 858 (Ky. 1983). Having reviewed the opinion of the trial court and the record sub judice, we conclude that the trial court was well within its discretion in finding the motion was timely, due to the circumstances of his deployment.
Cathy's argument that Timothy's motion for a hearing was untimely because it was not made until three years after the CR 60.02 motion was filed is not convincing. The "reasonable time" requirement of CR 60.02 applies to the timeliness of filing the motion and not requesting a hearing. In any event, we are not persuaded. Based upon our review of the record, the delay in setting a hearing date was not the result of any actions taken by Timothy. Indeed, we note that Timothy filed within two years of the entry of the decree and this served to put Cathy on notice of his challenge to the decree. Insofar as the hearing is concerned, either party could have asked for a hearing at any time. Accordingly, the fact that the hearing was held five years after the entry of the decree was attributable to both parties.
Concerning the merits of the motion itself, we note that as an appellate court, "[w]e are constrained from overturning the findings of the trial judge unless they are clearly erroneous." Aton v. Aton, 911 S.W.2d 612, 615 (Ky. App. 1995)(abrogated on other grounds by Fenwick v. Fenwick, 114 S.W.3d 767 (Ky. 2003)). Upon review of the record and the arguments of the parties, the trial court, which was in the best position to do so, found the circumstances under which Timothy signed the agreement constituted coercion. In making this finding, the trial court considered the contents of the agreement itself, the threat made if Timothy did not sign it, and the time limits under which Timothy was forced to act. Upon review of the record, we cannot find that the trial court was clearly erroneous in making this finding. Accordingly, we are compelled to affirm. Having so found, we now turn to Timothy's sole basis for cross-appeal.
As his only basis for cross-appeal, Timothy argues that the family court erred in refusing to grant his motion to modify child support, and that the court had sufficient information to calculate his gross income pursuant to KRS 403.212. Timothy is self-employed, and he and his wife own a business in which Timothy is a physician's assistant and Dawn is the office manager. Timothy states that Dawn owns 100% of the business because Timothy is prohibited from any ownership because he is a physician's assistant. Timothy asserts he considers half of the income from the business to be his, and thus asserts that the court should have equally divided his and Dawn's joint income to determine his true income. Timothy argues the trial court clearly erred by refusing to consider his self-employment documents, tax records, bank statements, and the trial testimony of both Timothy and Dawn as evidence of Timothy's gross income to support his motion to modify child support. He asserts that because he was self-employed and submitted his bank statements and tax returns, including forms detailing his business's revenue and expenses, the record demonstrates the court had enough information to calculate his income using the straight-line depreciation method.
In response to Timothy's argument on cross-appeal, Cathy asserts Timothy failed to produce credible evidence of his 2004 and 2005 income, and the trial court did not abuse its discretion when it overruled his motion to modify. Cathy asserts Timothy simply did not provide sufficient information concerning his income to establish the change in circumstances necessary to satisfy the requirements for modification set forth in KRS 403.213. Cathy argues that Timothy failed to produce necessary bank statements or any other evidence that would have supported the income figures which he asserts necessitated a modification of his child support obligation. Accordingly she urges this Court to affirm.
In addressing this issue, we note that rulings on motions to modify child support motions are subject to an abuse of discretion standard of review, namely, whether the ruling was "arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Artrip v. Noe, 311 S.W.3d 229, 232 (Ky. 2010). We review this issue with this standard in mind.
As noted, after setting aside the parties' Tennessee Marital Dissolution Agreement, which included a child support order of $1,401.00 per month for three children, the trial court recalculated child support for every year from the time of the agreement to the date of its hearing order, except for the period of time from 2004 to 2005. For those years, after hearing the evidence and reviewing Timothy's tax returns, the court concluded it "did not receive sufficient information to calculate Mr. Vivian's gross income as contemplated by KRS 403.212, and therefore, Timothy's motion for modification is denied." Following the issuance of that order, Timothy did not file a motion under CR 52.04 for additional findings of fact on that issue, but rather, filed a motion pursuant to CR 59.01, asking the trial court to "modify" its October 4, 2004, hearing order. The court denied that motion, but reiterated that, "R [Respondent] may refile motion for modification. However, it is his burden to establish income & show change - insufficient E [evidence] submitted at trial. Motion Denied."
Resolution of this issue centers upon the proper interpretation of KRS 403.213(1) and (2), which set forth the criteria for modification of child support orders. KRS 403.213 reads, in part:
(1) The Kentucky child support guidelines may be used by the parent, custodian, or agency substantially contributing to the support of the child as the basis forKRS 403.213(1) and (2).
periodic updates of child support obligations and for modification of child support orders for health care. The provisions of any decree respecting child support may be modified only as to installments accruing subsequent to the filing of the motion for modification and only upon a showing of a material change in circumstances that is substantial and continuing.
(2) Application of the Kentucky child support guidelines to the circumstances of the parties at the time of the filing of a motion or petition for modification of the child support order which results in equal to or greater than a fifteen percent (15%) change in the amount of support due per month shall be rebuttably presumed to be a material change in circumstances. Application which results in less than a fifteen percent (15%) change in the amount of support due per month shall be rebuttably presumed not to be a material change in circumstances. For the one (1) year period immediately following enactment of this statute, the presumption of material change shall be a twenty-five percent (25%) change in the amount of child support due rather than the fifteen percent (15%) stated above.
Thus, under KRS 403.213(1), a child support order may be modified "upon a showing of material change in circumstances that is substantial and continuing." Further, KRS 403.213(2) sets forth two separate presumptions pertaining to modification of child support. KRS 403.213(2) initially creates a rebuttable presumption that a material change in circumstances exists if the amount of child support owed per month would be altered at least 15 percent as calculated under the child support guidelines in KRS 403.212. Conversely, subsection (2) of KRS 403.213 also creates a rebuttable presumption that no material change in circumstances exists if the amount of child support owed per month would not be altered at least 15 percent as calculated under the child support guidelines.
Upon review of the record and applicable law, this Court is ultimately in agreement with the trial court. Insufficient evidence concerning income was presented by Timothy to establish the necessary material change in circumstance required by statute. The record reveals the court attempted to obtain this information on more than one occasion, but ultimately did not obtain documentation sufficient to support the figures reported by Timothy in his tax return which served as the basis for his motion to modify support. Accordingly, we affirm.
Timothy asserts that the only evidence he had to indicate his income was his tax returns, and was unable to produce any bank statements or other records which would have further substantiated same.
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Wherefore, for the foregoing reasons, we affirm the Jefferson Circuit Court's order of May 3, 2011.
ACREE, CHIEF JUDGE, AND NICKELL, JUDGE, CONCUR IN RESULT ONLY. BRIEFS FOR APPELLANT/CROSS-
APPELLEE:
William D. Tingley
Louisville, Kentucky
BRIEFS FOR APPELLEE/CROSS-
APPELLANT:
Allen McKee Dodd
Louisville, Kentucky