Opinion
NO. 2011-CA-000568-MR
02-01-2013
KEITH G. VAN BUSKIRK APPELLANT v. LINDA S. VAN BUSKIRK APPELLEE
BRIEF FOR APPELLANT: Mark E. Edison Shepherdsville, Kentucky BRIEF FOR APPELLEE: Bonita K. Baker Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM BULLITT CIRCUIT COURT
HONORABLE ELISE GIVHAN SPAINHOUR, JUDGE
ACTION NO. 10-CI-00473
OPINION AND ORDER
AFFIRMING IN PART, REVERSING IN PART,
AND REMANDING
BEFORE: CAPERTON, LAMBERT, AND MOORE, JUDGES. CAPERTON, JUDGE: Keith G. Van Buskirk appeals the trial court's judgment of February 3, 2011, whereby the court divided the parties' property, ordered maintenance and made an award of attorney's fees to Linda S. Van Buskirk in the dissolution of marriage proceeding. After a review of the parties' arguments, the record, and the applicable law, we affirm in part the trial court's order regarding the division of the parties' property and the award of attorney's fees; however, we reverse the award of lifetime maintenance to Linda and remand solely this issue to the trial court for further proceedings.
The facts of this appeal were presented to the trial court on February 8, 2011. The trial court's findings of fact, conclusions of law, and judgment was entered on March 3, 2011. Therein, the trial court found that Keith was 56 years old and employed as a plumber. The trial court utilized Keith's 2008 W-2 statement to find that Keith's monthly gross salary was $2836.30. Linda, at 53 years of age, was employed as a phlebotomist and earned $2035.95 per month in gross salary based upon her 2010 W-2 statement. The trial court, "in its discretion and in view of all circumstances" ordered lifetime maintenance in the amount of $200 per month for Linda until the death of either party, remarriage of Linda, or further order of the court, in accordance with Kentucky Revised Statutes (KRS) 403.250. The trial court then divided the parties' marital residence. Both parties claimed a nonmarital portion of the house based on separate inheritances. The court found that the parties commingled their inheritances in a joint account. Subsequently, the parties commingled these inherited funds to the marital residence in the form of improvements and mortgage reduction, but documentation specifically tracing this money is lacking.
We are perplexed as to why the trial court utilized Keith's 2008 W-2 and Linda's 2010 W-2 without an explanation. Keith presented evidence of his tax returns wherein his income had decreased from $29,259.00 in 2009 to $24,170.00 in 2010.
Based on the testimony of the parties the court found that Linda had contributed approximately $11,000 of her nonmarital property to improve the residence and that Keith had contributed at least $39,000 to improve the residence and reduce the mortgage. The residence was valued at $118,000.00 and was unencumbered by a mortgage. The court awarded the aforementioned nonmarital contributions to each party and divided the remaining $68,000 of equity evenly. The court noted that neither party provided evidence of appreciation of their respective nonmarital contributions and, thus, could not overcome the presumption that the remaining equitable interest was marital property. As Keith desired to stay in the martial residence, the court ordered him to pay Linda $45,000.00, the sum of her nonmarital contribution and the remaining equity.
Last, the court in its discretion and in view of all circumstances, the financial resources of the parties, and Keith's failure to comply with discovery, awarded Linda $2,000 in attorney's fees. It is from this judgment that Keith now appeals.
On appeal, Keith presents three arguments, namely: (1) the trial court committed reversible error in the division of the parties' property; (2) the trial court committed reversible error in awarding Linda maintenance; (3) the trial court committed reversible error in its award of attorney's fees. With these arguments in mind we turn to our applicable standard of review.
Linda disagrees with these arguments and additionally argues that Keith has failed to preserve his arguments. Linda's motion to dismiss this appeal was passed to this panel. After our review of the parties' arguments and the record we are ultimately in agreement with Keith that the issues on appeal have been properly preserved and, accordingly, deny Linda's motion to dismiss.
In dividing marital property a trial court has wide latitude, and absent an abuse of discretion, we shall not disturb the trial court's ruling. See Smith v. Smith, 235 S.W.3d 1 (Ky. App. 2006), and Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001). Similarly, in maintenance awards, the trial court is afforded a wide range of discretion, which is reviewed under an abuse of discretion standard. See Platt v. Platt, 728 S.W.2d 542, 543 (Ky. App. 1987). The amount of an award of attorney's fees is committed to the sound discretion of the trial court. Gentry v. Gentry, 798 S.W.2d 928, 938 (Ky. 1990). Abuse of discretion is that which is arbitrary or capricious, or at least an unreasonable and unfair decision. See Sexton v. Sexton, 125 S.W.3d 258, 272 (Ky. 2004). However, the trial court's conclusions of law are reviewed de novo. Stipp v. St. Charles, 291 S.W.3d 720, 723 (Ky. App. 2009).
As his first basis for appeal, Keith argues that the trial court committed reversible error in the division of the parties' property. Keith first contests the trial court's division of the marital residence.
The division of marital property, in this case the marital residence, is controlled by KRS 403.190 which states:
In a proceeding for dissolution of the marriage or for legal separation, or in a proceeding for disposition of property following dissolution of the marriage by a court which lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, 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:
(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.
Our courts have interpreted KRS 403.190 to require a three-step process. As stated in Hunter v. Hunter, 127 S.W.3d 656, 659-660 (Ky. App. 2003), "The trial court's division of property involves a three-step process: (1) characterizing each item of property as marital or nonmarital; (2) assigning each party's nonmarital property to that party; and (3) equitably dividing the marital property between the parties." (Internal citations omitted). The equitable division of property is not necessarily equal. See Lawson v. Lawson, 228 S.W.3d 18, 21 (Ky. App. 2007) (KRS 403.190 requires a court to divide the marital property in "just proportions" which is not necessarily equally.).
The party claiming that the property acquired during the marriage is nonmarital has the burden of proof and must establish this by clear and convincing evidence. Sexton at 266-267, FN 31. "Clear and convincing proof does not necessarily mean uncontradicted proof. It is sufficient if there is proof of a probative and substantial nature carrying the weight of evidence sufficient to convince ordinarily prudent-minded people." Rowland v. Holt, 253 Ky. 718, 70 S.W.2d 5, 9 (Ky.1934). This is accomplished with the concept of tracing.
Tracing allows the party claiming a nonmarital interest in property to prove its nonmarital character. The "source of funds rule" is often used to achieve tracing when the property before the court includes both marital and nonmarital components. See Travis v. Travis, 59 S.W.3d 904, 909 (Ky. 2001). "The source of funds rule simply means that the character of the property, i.e., whether it is marital, nonmarital, or both, is determined by the source of the funds used to acquire property." Travis at 909, FN 10 (internal citations omitted). Moreover, "[i]n the context of tracing nonmarital property, when the original property claimed to be nonmarital is no longer owned, the nonmarital claimant must trace the previously owned property into a presently owned specific asset." Sexton at 266.
Sexton explains that tracing "arises from KRS 403.190(3)'s presumption that all property acquired after the marriage is marital property unless shown to come within one of KRS 403.190(2)'s exceptions." Id. at 266.
The concept of tracing does not require mathematical certainty. Chenault v. Chenault, 799 S.W.2d 575 (Ky. 1990). Instead, the party claiming such an interest may persuade the family court through testimony how the property owned at the time of the dissolution had been acquired. Terwilliger v. Terwilliger, 64 S.W.3d 816 (Ky. 2002). This often requires showing that the nonmarital asset was spent in a traceable manner during the marriage. Kleet v. Kleet, 264 S.W.3d 610 (Ky. App. 2007).
Pertinent to the case sub judice, commingling of assets presents two related issues for the party claiming a nonmarital interest in the property to overcome. First, did the nonmarital property lose its exempt status; and, second, has the commingling of assets rendered tracing ineffective? See Bischoff v. Bischoff, 987 S.W.2d 798 (Ky. App. 1998), and Travis at 910. We are in agreement with the trial court that Keith did not overcome these two issues.
Keith argues that the trial court erred in dividing the marital residence as the evidence showed that Linda only received inheritance in the amount of $5,113.00 and a $5,000 life insurance payment from her father's estate but provided no receipts as to how this money was spent. Keith claims, in contrast, that his two inheritances from two different family members were deposited into the savings account and then were used to pay off the mortgage of the house and to remodel the house. Linda asserts that the evidence proffered by Keith is indecipherable and, thus, Keith did not sustain his burden of proof concerning nonmarital property under Sexton. As noted, the court found that the parties commingled these inherited funds to the marital residence in the form of improvements and mortgage reduction, but documentation specifically tracing this money is lacking. After our review we are in agreement with the trial court that Keith did not sustain his burden of proof concerning the asserted nonmarital property. Accordingly, we find no error in the trial court's division of the parties' martial residence.
Keith received $70,836.94 from his uncle and $97,000 from his mother.
Keith next contests the trial court's division of the parties' personal property. Specifically, Keith argues that the court's award of a 1974 Harley Davidson Motorcycle to Linda was actually a gift to Keith from Michael Steve Saho prior to his death; Keith asserts that the court erroneously awarded Linda the motorcycle because she has a sentimental attachment to it. Keith also contests the award of the 2004 Chevrolet Silverado to Linda. Keith asserts that the trial court failed to consider the nonmarital components of the Silverado, which was purchased by trading in his uncle's Cadillac, valued at $2,000, and by paying $14,000 in cash from his inheritance. Last, Keith argues that the trial court failed to divide the tools he purchased with inherited money and instead erred by dividing all the tools equally and ordering Keith to pay Linda one-half of their value.
Linda contests Keith's factual accounts of these assets. Linda testified that Keith purchased the motorcycle for $300 "out of our account" from Linda's father. Linda testified that the motorcycle did have sentimental value to her even though it did not run. As to the Silverado, Linda argues that Keith never presented any documentation that a Cadillac was traded to purchase the vehicle or that he even inherited a Cadillac from his uncle. As Keith also did not provide documentation that he paid for the Silverado with inherited money, Linda asserts that he did not sustain his burden of proof. Keith testified that he received numerous tools through inheritance or inherited money, and that Linda gave him a table saw as a gift, but did not provide any documentation to support his claims. Linda testified that during the marriage Keith purchased "a lot" of tools.
Keith submitted his uncle's probate records; Linda claims that the Cadillac was not reflected therein.
Keith's arguments concerning the division of the personal property condense into an issue of the parties providing varying factual accounts. The question before this Court is not whether we would have decided it differently, but whether the findings of the family court are clearly erroneous, whether it applied the correct law, or whether it abused its discretion. See B.C. v. B.T., 182 S.W.3d 213, 219-20 (Ky. App. 2005). See also Eviston v. Eviston, 507 S.W.2d 153 (Ky. 1974). The family court operating as finder of fact has extremely broad discretion with respect to testimony presented and may choose to believe or disbelieve any part of it. A family court is entitled to make its own decisions regarding the demeanor and truthfulness of witnesses, and a reviewing court is not permitted to substitute its judgment for that of the family court, unless its findings are clearly erroneous. Bailey v. Bailey, 231 S.W.3d 793, 796 (Ky. App. 2007). We cannot say that the trial court's findings are clearly erroneous in light of the evidence presented by the parties sub judice. Accordingly, we affirm the trial court on this ground.
Keith's second basis for appeal is that the trial court committed reversible error in awarding Linda lifetime maintenance. Linda argues that the trial court did not err in its award.
KRS 403.200(1) provides that a court may grant maintenance only if it finds the spouse seeking it: (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.
An award of maintenance is appropriate when a party is not able to support himself or herself in accord with the standard of living enjoyed during the marriage, and the property awarded upon dissolution of marriage is insufficient to provide for his reasonable needs. Russell v. Russell, 878 S.W.2d 24, 26 (Ky. App. 1994).
Once the trial court has decided that maintenance is appropriate, it must then consider all relevant factors in determining the amount and duration of maintenance pursuant to KRS 403.200(2). Such factors include the spouse's financial resources, the time needed to obtain sufficient education or training, the standard of living during the marriage, the duration of the marriage, the age and condition of the spouse seeking maintenance, as well as the ability of the paying spouse to meet his or her needs.
The trial court ordered maintenance in the amount of $200 per month for Linda until the death of either party, remarriage of Linda, or further order of the court, in accordance with KRS 403.250. We agree with Keith that such was error. KRS 403.200(1)(a) and (b) set out the required findings for an award of maintenance. "There must be a finding that the spouse seeking maintenance lacks sufficient property, including marital property, to provide for his or her reasonable needs; second, that spouse must be unable to support himself through appropriate employment according to the standard of living established during the marriage." Drake v. Drake, 721 S.W.2d 728, 730 (Ky. App. 1986). These specific findings are required so that the appellate court can determine the propriety of the award. See Qualls v. Qualls, 384 S.W.2d 326 (Ky.1964).
In addition to the statutorily required specific findings, the trial court is required to consider the statutory factors in KRS 403.200(2). See Gomez v. Gomez, 168 S.W.3d 51 (Ky. App. 2005). The terse order of maintenance precludes this Court from determining the propriety of the award under KRS 403.200(1) and from ensuring that the statutory factors enumerated were appropriately considered under KRS 403.200(2). As such, we reverse solely the portion of the court's judgment ordering maintenance and remand this matter for further proceedings regarding the propriety of maintenance.
Last, Keith argues that the trial court committed reversible error in its award of attorney's fees. The court in view of all circumstances, the financial resources of the parties, and Keith's failure to comply with discovery, awarded Linda $2,000 in attorney's fees. We do not find such an award to be an abuse of the court's discretion.
At issue, KRS 403.220 states:
The court from time to time after considering the financial resources of both parties may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under this chapter and for attorney's fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court may order that the amount be paid directly to the attorney, who may enforce the order in his name.Per statute a court may award attorney's fees, but must consider the financial resources of both parties.
An award of attorney's fees under KRS 403.220 is only supported by an imbalance in the financial resources of the parties. Lampton v. Lampton, 721 S.W.2d 736, 739 (Ky. App. 1986) (internal citations omitted). The trial court clearly considered the parties financial resources prior to awarding Linda attorney's fees. Additionally, the trial court noted Keith's failure to comply with discovery. In Lampton, supra this Court noted the inherent power of the court to assess attorney's fees under Kentucky Rules of Civil Procedure (CR) 37 in a dissolution of marriage proceeding:
While the parties earn similar amounts based on their tax returns, we note that Keith throughout the marriage inherited a substantial amount of money compared to Linda.
We note that the trial court awarded Linda less attorney's fees than what she sought.
An allowance of attorney's fees is authorized by KRS 403.220 only when it is supported by an imbalance in the financial resources of the respective parties. Sullivan v. Levin, Ky., 555 S.W.2d 261, 263 (1977). Accord, Bishir v. Bishir, Ky., 698 S.W.2d 823, 826 (1985). Since the resources of the parties here were approximately equal, an award of attorney fees under the statute was an abuse of discretion under the circumstances. However, the circuit court's award of attorney fees appears to have been motivated, at least in part, by appellant's obstruction of and refusal to cooperate with discovery. On remand, the circuit court should determine what portion of appellee's attorney fees were the result of such obstruction and make an appropriate award under CR 37.Lampton at 739.
We find Rearden v. Rearden, 296 S.W.3d 438, 444 (Ky. App. 2009), in which this Court stated "KRS 403.220 does not authorize a trial court to consider fault or willful disobedience, or anything beyond the financial positions of the parties..." to be distinguishable from the case sub judice. In Rearden, the appellant appealed from the denial of an award of attorney's fees arguing that the appellee's contempt of court entitled him to attorney's fees under KRS 403.220. This Court held that the only consideration of KRS 403.220 was the financial positions of the parties in awarding attorney's fees and not the fault of the parties. As the appellant was in a financially superior position to the appellee, the court correctly denied the motion for attorney's fees. This Court further noted that the appellant was actually awarded attorney's fees under the accompanying contempt proceeding and appeared to be attempting to "double-dip" and receive attorney's fees for both the contempt action and the dissolution of marriage action. In further support of the propriety of this award, see also Gentry v. Gentry, 798 S.W.2d 928, 938 (Ky. 1990), wherein the Kentucky Supreme Court discussed KRS 403.220 and CR 37.01:
The amount of an award of attorney's fees is committed to the sound discretion of the trial court with good reason. That court is in the best position to observe conduct and tactics which waste the court's and attorneys' time and must be given wide latitude to sanction or discourage such conduct....
We agree that many of the costs and fees were unnecessary in the sense that a good deal of the court's time and a substantial part of the costs and fees assessed could have been avoided by candor and cooperation. Under such circumstances, there is no abuse of discretion nor any inequity in requiring the party whose conduct caused the unnecessary expense to pay it. CR 37.01.
In Bishir v. Bishir, Ky., 698 S.W.2d 823 (1985), this court specifically held it was proper to award fees incurred by the wife in a post judgment CR 60.02 proceeding, even though, in that case, the wife's motion was overruled. The disparity of financial resources was sufficient grounds. In this instance, financial inequality justifies the award, KRS 403.220. Tom's obstructive tactics and conduct, which multiplied the record and the proceedings, justify both the fact and the amount of the award. KRS 403.220, CR 37.01.
As the trial court correctly noted an imbalance in the financial resources of the parties, we find no error in the award of attorney's fees to Linda and accordingly, affirm the award.
In light of the aforementioned, we affirm in part the trial court's order regarding the division of the parties' property and the award of attorney's fees; however, we reverse the award of lifetime maintenance to Linda and remand solely this issue to the trial court for further proceedings.
LAMBERT, JUDGE, CONCURS.
MOORE, JUDGE, CONCURS IN RESULT ONLY.
Michael O. Caperton
JUDGE, COURT OF APPEALS
BRIEF FOR APPELLANT: Mark E. Edison
Shepherdsville, Kentucky
BRIEF FOR APPELLEE: Bonita K. Baker
Louisville, Kentucky
Sexton v. Sexton, lists other considerations for a trial court: In addition to the parties' financial resources, the trial court should consider other relevant factors, including those set forth by our predecessor in Boden v. Boden: (a) Amount and character of services rendered. (b) Labor, time, and trouble involved. (c) Nature and importance of the litigation or business in which the services were rendered. (d) Responsibility imposed. (e) The amount of money or the value of property affected by the controversy, or involved in the employment. (f) Skill and experience called for in the performance of the services. (g) The professional character and standing of the attorneys. (h) The results secured. Additionally, "obstructive tactics and conduct, which multiplied the record and the proceedings" are proper considerations "justify[ing] both the fact and the amount of the award." Sexton v. Sexton, 125 S.W.3d 258, 272-73 (Ky. 2004) (internal citations omitted).