Opinion
NO. 2017-CA-001878-ME NO. 2018-CA-000449-ME
12-07-2018
SHAWN KWIATKOWSKI APPELLANT v. KELLY KWIATKOWSKI APPELLEE
BRIEF FOR APPELLANT: C. Wesley Durham Radcliff, Kentucky BRIEF FOR APPELLEE: NO BRIEF FILED
NOT TO BE PUBLISHED APPEALS FROM HARDIN FAMILY COURT
HONORABLE PAMELA ADDINGTON, JUDGE
ACTION NO. 14-CI-01916 OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
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BEFORE: KRAMER, J. LAMBERT AND NICKELL, JUDGES. KRAMER, JUDGE: Shawn Kwiatkowski appeals from two orders of the Hardin Family Court wherein the court resolved issues regarding a certain marital debt and child support. The family court also awarded attorney's fees to Kelly Kwiatkowski. After careful review of the record and applicable law, we affirm in part, reverse in part, and remand.
Shawn and Kelly were married in 2005 and have two minor children of the marriage. In August 2016, the family court entered a decree of dissolution which incorporated a mediated separation agreement executed by the parties. Relevant to this appeal, the separation agreement provided for the care, custody, and control of the minor children; payment of child support; and distribution of marital assets and debts. Specifically, the agreement provided that the parties would enjoy joint custody of the children, and Shawn would pay child support to Kelly. Both parties agreed that they wished to deviate from the Kentucky Child Support Guidelines.
Thereafter, the parties had multiple disputes regarding their rights and duties under the separation agreement. The first dispute involved child support. Shawn's only form of income is social security disability income (SSDI). At the time the parties executed the agreement, Shawn received three monthly checks through SSDI--one for his personal disability and two for his biological children, for a monthly total of $1,678. In the separation agreement, the parties agreed that Shawn would pay $289, which constituted half of the SSDI he received for the two children. When Shawn had a third child in 2017, SSDI started sending him four checks--one for his personal disability and three for his biological children, for a monthly total of $1,679. However, the amount he received per child was reduced from $289 to $193. At that time, Shawn began paying $193, instead of the agreed upon $289.
Kelly is not this child's mother.
Eventually, Kelly moved the family court to hold Shawn in contempt for paying less than the agreed upon amount and to pay his child support arrearage. Shawn responded to the contempt motion and stated he lowered the monthly payments in good faith; therefore, he should not be held in contempt. Additionally, he moved to modify child support. Shawn wanted his child support reduced to $193 a month, which is half the amount of his SSDI checks he received for the two children he shared with Kelly. A hearing was held in September 2017. The family court found Shawn not to be in contempt but denied his motion to modify child support. Shawn appealed from the portion of the order denying his motion to modify child support in Appeal No. 2017-CA-001878-ME.
While the first appeal was pending, another dispute arose between the parties. The dispute arose when Kelly moved the family court to order Shawn to pay for multiple items he was refusing to pay for at the time. Relevant to this opinion is a dispute that revolved around a repossessed vehicle that the parties jointly owned and previously defaulted on prior to their separation. Both parties failed to include this debt in the settlement agreement. This matter came before the family court in November 2017. At that time, Kelly's paychecks were being garnished by debt collectors to satisfy the parties' debt from the repossessed vehicle. Despite the separation agreement's clause releasing either party from further obligations to one another, the family court found Shawn to be equally responsible for the debt. The court ordered him to pay half the amount that was already garnished from Kelly and to begin making monthly payments to Kelly until the debt was satisfied. Additionally, the family court ordered Shawn to pay $750 in attorney's fees to Kelly within 120 days. Shawn then timely filed his notice of appeal in Appeal No. 2018-CA-000449-ME. Shawn's two appeals were consolidated by an order entered by this Court in August 2018.
This is possible because of the concurrent jurisdiction the family court maintains while other disputes between the same parties are pending on appeal.
At the outset, we note that Kelly did not file a brief in either appeal. Pursuant to CR 76.12(8)(c), "a range of penalties . . . may be levied against an appellee for failing to file a timely brief." St. Joseph Catholic Orphan Soc'y v. Edwards, 449 S.W.3d 727, 732 (Ky. 2014). This Court may "(i) accept the appellant's statement of the facts and issues as correct; (ii) reverse the judgment if appellant's brief reasonably appears to sustain such action; or (iii) regard the appellee's failure as a confession of error and reverse the judgment without considering the merits of the case." Id. at 732; CR 76.12(8)(c). For purposes of this appeal, we accept Shawn's statement of the facts, subject to our own independent review of the entire record on appeal. We shall now address Shawn's allegations of error.
Kentucky Rule of Civil Procedure.
On appeal, Shawn argues that the family court erred when it: (1) denied his motion to modify child support; (2) ordered him to pay half of the debt from the repossessed vehicle; and (3) ordered him to pay Kelly's attorney fees. We will address each argument in turn.
This Court reviews the denial of a modification of child support obligation for abuse of discretion. Plattner v. Plattner, 228 S.W.3d 577, 579 (Ky. App. 2007). "The test for abuse of discretion is whether the trial court's decision was 'arbitrary, unreasonable, unfair or unsupported by sound legal principles.'" Wilson v. Ingles, 554 S.W.3d 377, 381 (Ky. App. 2018) (quoting Downing v. Downing, 45 S.W.3d 449, 454 (Ky. App. 2001)). "'[G]enerally, as long as the trial court gives due consideration to the parties' financial circumstances and the child's needs, and either conforms to the statutory prescriptions or adequately justifies deviating therefrom, this Court will not disturb its rulings.'" Id. (quoting Van Meter v. Smith, 14 S.W.3d 569, 572 (Ky. App. 2000)).
Regarding the family court's denial to modify child support, Shawn makes three arguments. First, he argues he experienced a material change in circumstances that warranted a modification of child support. KRS 403.213(1) provides in pertinent part that "[t]he provisions of any decree respecting child support may be modified . . . only upon a showing of a material change in circumstances that is substantial and continuing." It is Shawn's position that when his SSDI checks were modified following the birth of his third child, he experienced a material change in circumstances. We disagree.
Kentucky Revised Statute. --------
The family court stated that children born post-decree are not relevant to prior born children's support calculations. This adheres to the ultimate purpose of child support, which is "to benefit the children not the parents." Smothers v. Baptist Hosp. E., 468 S.W.3d 878, 884 (Ky. App. 2015) (quoting Ciampa v. Ciampa, 415 S.W.3d 97, 101 (Ky. App. 2013)). Shawn provides no statute or caselaw that indicates the contrary. Therefore, we will only address the monetary changes testified to at the September 2017 hearing.
At that hearing, Shawn testified that his SSDI checks for his children were reduced from $289 per child to $193 per child following the divorce decree. However, because he had a third child, his total monthly income increased by one dollar. Shawn further testified he knew that his girlfriend was pregnant with the third child at the time he signed the separation agreement, which his attorney drafted. In that agreement, Shawn agreed to pay $289 monthly in child support to Kelly. Kelly testified that she now makes $9.50 an hour, instead of the $10.75 per hour she made at the time of the divorce decree. Therefore, the post-decree changes for Shawn, other than the third child's birth, were: One more dollar a month from social security for a monthly income of $1,679. The post-decree changes for Kelly were: $1.25 decrease in hourly pay for an approximate monthly income of $1,646. This is not a "material change in circumstances" as contemplated by KRS 403.213(1). Therefore, the family court did not abuse its discretion when it found Shawn did not experience a material change in circumstances.
Shawn's second argument regarding the family court's denial to modify child support is that "the agreed to child support payment is the sum of an equation and not a defined amount." Shawn is referencing the paragraph of the parties' separation agreement that determines his child support obligation. In pertinent part, that paragraph states: "[Shawn] shall pay to [Kelly] the sum of $289.00 per month (which constitutes one half of the disability amount that the children receive on behalf of [Shawn] at this time)[.]" In Shawn's view, the portion in parenthesis is the operative language regarding the payment amount; not the phrase "sum of $289.00 per month." We disagree.
"The terms of a settlement agreement set forth in a decree of dissolution of marriage are enforceable as contract terms." Money v. Money, 297 S.W.3d 69, 71 (Ky. App. 2009). Further, "'a written instrument will be enforced strictly according to its terms,' and a court will interpret the contract's terms by assigning language its ordinary meaning and without resort to extrinsic evidence." Wehr Constructors, Inc. v. Assurance Co. of America, 384 S.W.3d 680, 687 (Ky. 2012) (quoting Frear v. P.T.A. Indus., 103 S.W.3d 99, 106 (Ky. 2003)). There is no "or" in the above-quoted child support paragraph. The ordinary meaning of that sentence is that Shawn is obligated to pay child support in the monthly sum of $289. The parenthetical is simply an explanation of how the parties calculated that number. Therefore, this argument fails.
Shawn's third argument regarding the family court's denial to modify child support is that a deviation from the child support guidelines is not in the best interest of the children. Therefore, the family court erred in denying his motion to modify. This argument lacks merit.
First, Shawn and Kelly agreed to deviate from the guidelines in the separation agreement. The agreement expressly states, "[t]he parties state that they are aware of the Kentucky Child Support Guidelines and wish to deviate from said guidelines." Second, Shawn moved the family court to lower his monthly support obligation. Simply put, this argument also fails.
In sum, in denying Shawn's motion to lower his child support obligation, the family court did not abuse its discretion when it determined that: (1) Shawn did not experience a material change in circumstances; (2) the language of the separation agreement was a set amount and not a working formula: and (3) it was in the best interest of the children to not lower Shawn's monthly obligation. We therefore affirm the family court's judgment in Appeal No. 2017-CA-001878-ME.
Shawn's second assignment of error is that the family court erred when it ordered him to pay one-half of the debt of the parties' repossessed vehicle. In his view, the family court lacked jurisdiction to enter a post-judgment order adjudicating the joint debt. Shawn asserts the settlement agreement, which was incorporated by reference into the divorce decree, fully settled all past and future disputes regarding property division and debts between himself and Kelly. We agree.
Kentucky Revised Statute 403.180(2) provides that the terms of a separation agreement, "except those providing for the custody, support, and visitation of children, are binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties . . . that the separation agreement is unconscionable." (Emphasis added). Furthermore, after the decree is entered, the final property and debt division in the separation agreement is not modifiable by the family court unless the agreement itself explicitly allows the modification. Williams v. Williams, 789 S.W.2d 781 (Ky. 1990). Here, the family court did not find the agreement unconscionable when it incorporated it in the divorce decree, and Kelly did not move the court to find the agreement unconscionable in the instant appeal. Nor did she file any CR 60.02 motion to set aside the decree. Therefore, if both parties intended the settlement agreement to be a final settlement of the property rights between them, and there is no clause in the separation agreement allowing the agreement to be modified upon the discovery of a debt such as the repossessed vehicle, the family court lacked authority to vacate or modify the parties' agreements. Richey v. Richey, 389 S.W.2d 914, 917-18 (Ky. 1965) ("If the agreement . . . is meant as the final settlement of the property rights and claims of the parties, . . . the court is without authority to vacate such agreement and disturb the property rights thereby gained."); see also Williams, 789 S.W.2d at 782 (holding that a separation agreement that did not provide for post-decree modification and was intended to be a full and final settlement of the parties' property rights was not modifiable).
The separation agreement executed by Shawn and Kelly intended to address all issues concerned in the dissolution proceeding. The agreement consisted of twenty-one numbered paragraphs, which addressed issues relating to child custody and support; payment of medical bills and insurance for the children; marital property; marital debts; personal property; and several other items. The paragraphs relevant to the repossessed vehicle debt state as follows:
ITEM (3) MUTUAL RELEASES
That except as herein otherwise provided, each party release and discharges completely and forever the other from any and all rights of past, present and future support, division of property, right of dower or courtesy, right to act as administrator or executor in the estate of the other, right of distributive share in the other's estate. right of exemption in the estate of the other, or any other property rights benefits or privileges accruing to either party of said marriage relationship, or otherwise, and whether the same are conferred by the statutory law of the Common Law of Kentucky, of any other State or of the United States. It is the understanding between the parties that this contract, except as otherwise provided herein, forever and completely adjusts settles disposes of, and completely terminates, any and all rights, claims privileges and benefits that each now has, or each may have reason to believe each has against the other, arising out of said marriage relationship or otherwise, and whether the same are conferred by the laws of the Commonwealth of Kentucky, of any other state, of the United States or of any foreign country, and which are now, or which may hereafter be in force and effect.
ITEM (4) FULL UNDERSTANDING
That each party fully understands all of the terms herein set forth and that all of said terms represent and constitute the entire understanding between them, and that each has read this contract and finds the same to be fair, just, and proper, and no undue influence, duress or coercion has been exerted on either party, and this instrument is executed in accordance with his and her understanding; that each does hereby voluntarily execute this contract and affix his and her signature hereto in the presence of the authorized officer indicated below.
Reading these two paragraphs, there can be no question Shawn and Kelly intended the separation agreement to be a full and final settlement of the parties' claims against each other whether they arose out of the "marriage relationship or otherwise." Furthermore, in the "maintenance" paragraph of the agreement, there is the following statement:
Although the parties agree that there shall be no alimony/maintenance payments paid by either party to the other, the parties agree that any obligations they have made to each other to hold each other harmless for certain debts are a form of support, are a form of alimony/maintenance, and although the benefit derived by the party to be held harmless shall not in any way be taxable to the party being held harmless, said agreements to hold harmless are crucial to this agreement and the future standard of living and self-support of each party.(Emphasis added). This statement provides further evidence that the parties intended to release one another from any debt-related claims arising in the future. Therefore, the next question is whether the parties agreed in the separation agreement to allow a post-decree modification of the agreement upon the discovery of this type of debt.
There are two paragraphs concerning "vehicles" and "debts" in the separation agreement. However, neither reference the particular debt at issue in this appeal. Nor do those paragraphs allow for the modification of the agreement upon the discovery of unnamed/unlisted vehicle or debt. To be sure, in the agreement's preamble there is the following clause about setting aside this agreement: "Upon motion by either party upon finding there has not been full disclosure of assets, this agreement may be set aside." (Emphasis added). Simply put, an asset is not a debt. There is no similar statement regarding debts in the entirety of the separation agreement. Therefore, the parties did not intend the agreement to be modifiable upon the discovery of a mistakenly undisclosed debt, and the family court erred in ordering Shawn to pay one-half of the repossessed-vehicle debt. Kelly was not entitled to what we can best construe as a post-decree modification simply because she may have made a bad bargain. Thus, reversal is required; and that portion of the order entered March 6, 2018, should be modified upon remand.
Shawn's final assignment of error takes issue with the family court's award of attorney's fees to Kelly. The attorney's fees were awarded to Kelly because she had to move the family court to order Shawn to comply with the separation agreement. Shawn and Kelly agreed to this type of award in the separation agreement. Shawn argues that because the family court did not hold him in contempt for failing to pay $289 a month in child support he should not be required to pay attorney's fees. In Shawn's view, because the family court based its contempt decision on his "good faith belief" that the settlement agreement allowed him to pay less than the agreed upon amount, the award of attorney's fees is improper. We disagree.
The fees portion of the separation agreement states:
ITEM (7) LEGAL FEESTherefore, if Shawn "default[ed] in the performance of any term" of the separation agreement, and Kelly found it necessary to hire an attorney to compel Shawn's performance, the family court was within its discretion under the agreement to award attorney's fees.
(a) That except as herein otherwise provided, neither the husband nor the wife shall be responsible for the payment of any legal services rendered to or on behalf of the other in any action for divorce now pending or hereafter instituted, and,
(b) That if either the husband or the wife should default in the performance of any term or provision of this contract, and the non-defaulting party should deem it necessary to engage counsel and institute legal proceedings to effect or compel performance of any provisions of this contract, then and in that case, the court hearing such proceeding shall be fully empowered and authorized to order the defaulting party to pay the reasonable attorney fees to such complaining party in such proceeding.
Default is defined as, "[t]he omission or failure to perform a legal or contractual duty; [especially] the failure to pay a debt when due." BLACK'S LAW DICTIONARY (7th ed. 1999). Shawn had a contractual duty to pay a debt of $289 every month to Kelly. Despite this duty, Shawn began paying $193 a month from October 2016 through September 2017. The separation agreement did not specify that any default had to be in bad faith. If Shawn wanted to lower the monthly payments, the proper course was to move the family court to do so before paying less than the agreed upon amount. Unilaterally lowering the payment placed Shawn in default of his contractual duties under the separation agreement. Therefore, the family court was "fully empowered and authorized to order [Shawn] to pay the reasonable attorney fees[;]" thus, Shawn's final assignment of error fails.
In light of the foregoing, the family court's decision denying Shawn's motion to lower his child support obligation in Appeal No. 2017-CA-001878-ME is AFFIRMED. The family court's decision in Appeal No. 2018-CA-000449-ME is AFFIRMED with respect to its determination to award Kelly attorney's fees; however, its decision in that appeal to order Shawn to pay the repossessed vehicle debt is REVERSED, and that portion of the family court's order should be modified consistent with this opinion.
ALL CONCUR. BRIEF FOR APPELLANT: C. Wesley Durham
Radcliff, Kentucky BRIEF FOR APPELLEE: NO BRIEF FILED