The Kentucky Supreme Court accepted discretionary review of one unpublished family law case, Noe v. Artrip. The issues are whether a thrift saving plan withdrawal is income for child support calculation and whether a non-custodial, non-disabled parent is entitled to a credit toward his/her child support based on the child's receipt of social security benefit paid on account of the other parent's disability.
Ex-Husband appealed from TC’s order assigning him additional marital debt subsequent to a marital settlement agreement (“MSA”), arguing that MSA was ambiguous and that TC erred by assigning him additional debt, which he alleged was unknown at the time of MSA. On cross-appeal, Ex-Wife argued that MSA was unconscionable.
After parties attended mediation with counsel, MSA was entered and incorporated into the decree of dissolution.MSA provided that Ex-Wife would receive several investment accounts worth over $100K but would assume indebtedness on real estate and balances owed on two credit cards; Ex-Husband was to pay “all other indebtedness.”It was later determined that there existed a margin loan account with a negative cash balance of $58,469.52, and this
debt was not reflected in MSA. This margin loan account was placed in Ex-Wife’s name as she received the asset securing the debt.Ex-Wife filed three motions: (1) to transfer the margin
loan account to Gary’s name; (2) to find MSA unconscionable; and (3) to alter, amend, or vacate the judgment. TC granted the motion to transfer the margin loan account. It denied the other two motions, specifically finding the motion to alter, amend or vacate untimely.
Ex-Husband argued that MSA is ambiguous regarding the assignment of the margin loan account and must be interpreted against Ex-Wife because her counsel drafted it.
CA found provision that Ex-Husband was to pay “all other indebtedness” unambiguous and that Ex-Husband must pay it per terms of MSA.
Ex-Husband next contended that, per CR 59.02 and 59.05, Ex-Wife’s motion to assign the margin loan account to him was untimely because it occurred more than 10 days after the decree of dissolution was entered. CA disagreed, finding that motion was filed to request enforcement of the terms of the agreement as written and therefore there was no time limit on TC’s jurisdiction to do so. On cross-appeal, Ex-Wife argued that MSA was unconscionable because the proportion of the property division is manifestly unfair.While noting that
An MSA initially approved by TC may be later modified if the party challenging MSA can demonstrate that it has become unconscionable because of changed circumstances, CA found that Ex-Wife did not allege a change of circumstances that rendered the agreement unconscionable and that a mere discrepancy in the amounts received by each party under a settlement agreement is not enough to render the agreement unconscionable. TC affirmed.
In divorce proceedings, the parties agreed on all issues, except for the division of husband’s military retirement.Husband served in the military for approximately 4 years prior to the parties’ approximate 14 year marriage.A hearing was held before a Domestic Relations Commissioner on the division of retirement benefits; however, there is no proof in the record that husband actually received notice of it, waived his right to participate in it, waived his right to have the hearing recorded, or waived any other right or protection on account of his military service.Husband was deployed overseas during the proceedings and unrepresented by counsel.The trial court adopted the DRC’s recommendations and awarded the wife 46% of husband’s retirement.No further activity took place on this matter for over six years.Eight months prior to husband’s retirement, the wife submitted a form to DFAS requesting 46% of husband’s disposable retired pay, with no distinction between marital and nonmarital portions.This translated to wife receiving 82% of the marital portion of the benefit and husband receiving 18%.It was not until his retirement that husband realized something was wrong.He hired counsel and filed a motion for relief pursuant to CR 60.02(f).Due to several procedural and substantive delays, husband’s motion was not heard for another year and a half.The trial court denied his motion, except it did prohibit the wife from receiving any portion of the benefit attributable to husband’s post-divorce increases in rank and pay.Husband appealed.
There are three factors that must be met in order to obtain relief under CR 60.02(f):1) none of the provisions of CR 60.02 (a)-(e) apply, 2) whether the moving party had a fair opportunity to present his claim at the trial on the merits, and 3) whether the granting of relief would be inequitable to other parties.COA found all three factors weighed in husband’s favor: 1) No evidence supports the applicability of CR 60.02 (a)-(e), 2) Husband lacked the opportunity to be present at the hearing, and 3) Granting relief would not be inequitable to wife because the court had already held that she is only entitled to a share of the marital portion of the retirement benefit and husband did not seek more than that.
The decree that originally awarded wife 46% of the retirement benefits contained no distinction between marital and nonmarital property.Therefore, the decree conflicted with the court’s order denying CR 60.02 (f) relief, which states that wife is only entitled to a share of the marital portion of the benefits, and must be corrected.The decree is also problematic since it did not explicitly first assign each spouse their nonmarital property before dividing the marital property.As a result, it is unclear what the decree intended the outcome to be for the division of military retirement benefits.The COA came up with four different possibilities, and narrowed it down to two using logic and the law: 1) the trial court intended to award wife 46% of the marital portion and 0% of the nonmarital portion, or 2) the trial court intended to award wife 46% of the benefit earned up to the point of divorce, but not what husband earned after the divorce.The COA remanded for the trial court to determine how the decree should be corrected and/or clarified.The COA referred the trial court to DFAS’s pamphlet entitled Uniformed Services Former Spouses’ Protection Act, Dividing Military Retired Pay for guidance and recommended language.When dealing with the division of military retired pay of an as-yet-ineligible service member, COA found the language in section IV.c. of the pamphlet regarding “hypothetical awards” to be consistent with Kentucky law.
Next, COA noted that although husband chose to proceed unrepresented by counsel, he was still protected by the Soldiers’ and Sailors’ Civil Relief Act of 1940.Thus, even when a service member does not ask for a stay in the proceedings, the Act requires that the trial court determine that the military service of the party would not have a material, adverse effect upon his rights before going forward.
Finally, COA did not find error in the fact that husband had not appealed the decree or that he waited years to file a CR 60.02 motion.The decree on its face seemed to accomplish what husband wanted and he only realized the error shortly before he retired.Husband promptly acted upon finding the error.
Money v. Money. Investment account had margin debt but agreement allocated account to wife and provided that husband pay all debt except mortgage and two credit cards. In enforcing agreement court assigned margin debt to husband and was affirmed.
Snodgrass v. Snodgrass. Trial court's denial of CR60.02(f) relief to restore nonmarital portion of military retirement pay was reversed.
Kimberly Joy Crowder, formerly Rearden, appealed from two orders, in which the trial court found her in contempt for failure to cooperate with the sale of the marital residence and for failure to pay her portion of the mortgage.The trial court sentenced her to thirty days in jail.She only served five days with work release and the remainder of the time was probated for two years.Crowder also appealed the denial of her motion to alter, amend or vacate the contempt orders.On appeal Crowder argued that 1) the court jailed her solely for nonpayment of the mortgage without determining her ability to pay, 2) her failure to comply with court orders was not the result of disrespect, but rather impossibility, and 3) the court did not require the husband to mitigate his damages.
COA affirmed, finding that the trial court was more than patient with Crowder and did not abuse its discretion in finding her in contempt for failing to obey multiple orders.Crowder was found in contempt for failure to comply with a myriad of court orders, not just nonpayment of the mortgage.The original order requiring her to pay the mortgage was based on a review of her finances as submitted in the mandatory case disclosure.Crowder never challenged that order and allowed it to become final.She also made three full mortgage payments on the residence.Thus, the record shows she had the ability to pay.
The Court found Crowder’s mitigation of damages argument ironic at best.She claims that the husband should have paid the mortgage to avoid having the house fall into foreclosure and damage his credit rating.She made the argument while offering no proof that the husband could access enough funds to pay the full mortgage himself, the same thing she criticized the trial court for doing when holding her in contempt.Crowder also failed to cite any case law that demonstrates a party is required to mitigate damages so a former spouse could avoid being held in contempt.
Crowder v. Rearden, decided last Friday, is still not on the minutes. We mention this because the link provided is to a scanned copy which will not automatically be updated. The Westlaw cite is 2009WL3231360. Digest to follow.
Update: The bill is now HB1 and is here. The link below no longer works.
Here is the link to the pre-filed bill, BR251, relating to a global positioning monitoring system amendment to Kentucky’s domestic violence statute. It would also permit a petitioner to request that the respondent be prohibited from going to certain designated places requested by the petitioner. Apparently respondents would pay the cost unless unable, in which case approved vendors would bear cost responsibility. The courts would be authorized to conduct a risk assessment to determine whether monitoring would deter future violence.
The parties divorced after approximately 6 months of marriage.No children were born during the marriage.Thus, the primary issues at trial and on appeal concerned the classification of assets as marital or non-marital property:
Down payment on marital residence:The trial court classified the husband’s pre-wedding down payment of $3000.00 from his personal money market account on the marital residence as marital.Following the Source of Funds Rule, the COA found that the down payment was an identifiable portion of the purchase price and it was made by the husband prior to the wedding.However, the husband could not trace the $526.87 refund received from the down payment during the marriage as a result of calculations in the closing documents.COA held that $526.87 refund was marital property and that the remaining $2473.13 was husband’s non-marital property.
The treadmill, dining room suite, and bed/mattress:The trial court classified these items as marital property since the husband could not sufficiently prove they were purchased with his non-marital funds.COA agreed. Husband purchased the items with his personal credit card, but paid some of the credit card transactions using funds from the parties’ joint account.The fact that the wife did not challenge husband’s testimony that he used non-marital funds to buy the items does not equate to an admission by the wife.Husband still had to meet his burden of proof.
Husband’s military retirement benefits:The trial court found that since the parties were married for 2 months of husband’s 270 months of service credit, wife was entitled to $8.08 per month for the remainder of husband’s life.Instead of requiring the husband to make such a small monthly payment to the wife, the court ordered husband to pay the wife a lump sum of $3000.The court did not give an explanation of how it arrived at the lump sum amount.COA agreed that the wife would be entitled to $8.08 per month for the rest of the husband’s life and that the trial court had discretion to convert the payments to a lump sum.COA reversed and remanded for an explanation of how the court arrived at $3000.00 as a fair calculation of the wife’s future interest.
The final issue on appeal concerned whether the trial court erred in not awarding the husband attorney fees after finding the wife to be in contempt of court more than once.COA affirmed, finding that the trial court is not authorized to consider any other factors beyond the financial positions of the parties when awarding attorney fees.COA also noted that the husband was awarded attorney fees in the companion appeal, specifically addressing the finding of contempt.
Rearden v. Rearden, concerning classification of marital/nonmarital property and award of fees in dissolution. A digest will follow. The case mentions a companion contempt appeal considered simultaniously, Crowder v. Readen, but we don't see that one posted in the minutes. We will follow up.