BRIEFS FOR APPELLANT: Joseph E. Lambert Mt. Vernon, Kentucky BRIEFS FOR APPELLEE: Martha Farmer Copeland Corbin, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM BELL CIRCUIT COURT
HONORABLE ROBERT COSTANZO, JUDGE
ACTION NO. 10-CI-08479
BEFORE: CAPERTON, COMBS AND DIXON, JUDGES. DIXON, JUDGE: Emanuel H. Rader appeals from an order of the Bell Circuit Court reducing his maintenance obligation from $700 per month to $440 per month. Emanuel contends he was entitled to termination of the maintenance obligation; however, we find no error in the court's decision and affirm.
In an unpublished opinion, Rader v. Rader, 2012 WL 6061748 (Ky. App. 2012)(2011-CA-001677-MR, 2011-CA-001678-MR), we reversed the trial court's order modifying maintenance and remanded the matter for the court to consider additional evidence of the parties' current income and resources. Our prior opinion stated, in relevant part:
On February 14, 1975, the Bell Circuit Court entered a decree dissolving the twelve-year marriage between Emanuel and Sammie Rae Cornett Rader. In pertinent part, the decree required Emanuel to pay Sammie alimony of $700 per month until her remarriage. This amount was based on a settlement agreement entered into by the parties and adopted by the trial court.Id. at *1-2. We concluded that, although Emanuel had established that his income had been reduced due to his retirement, he failed to produce evidence concerning his other assets. Id. at *3. We reversed and remanded the matter for the trial court to take additional evidence regarding the parties' current income and assets. Id.
Sammie has never remarried, and although Emanuel was required on two occasions to pay maintenance arrearages, he is current on his maintenance obligations. In 2008, Emanuel retired at the age of 70 from the full-time practice of medicine. In December 2010, Sammie retired from her full-time employment. Thereafter, Emanuel filed this motion seeking to terminate his maintenance obligation based on a change in circumstances attributable to a material reduction in his post-retirement gross income.
After conducting a hearing, the trial court entered findings and an order on the motion on July 25, 2011. The trial court found that Emanuel's income has been reduced from an average gross income of $250,000 per year to an annual gross income of $45,368 per year. This amount is comprised of $25,368 in Social Security income and $20,000 in part-time income. Based on these amounts, the trial court found that Emanuel has suffered an 82% reduction in his post-retirement income. The trial court further found that Emanuel's decision to retire was objectively reasonable under the circumstances. The trial court noted that Sammie did not present evidence of her pre-retirement income. However, Sammie stated that her current income is $1,885 per month, comprised of $319 in pension benefits, $866 in Social Security benefits, and $700 in maintenance payments.
After making these findings, the trial court concluded that Emanuel had a material and substantial change of circumstances which warrants a modification of his maintenance obligation. However, the court stated that these circumstances warranted only a reduction in that obligation, and not a termination of maintenance. The court noted that Emanuel had agreed to pay open-ended maintenance and that agreement has never been found to be unconscionable. Moreover, the trial court noted that Emanuel's post-retirement income is still greater than Sammie's to a significant degree. As a result, the court reduced Emanuel's maintenance to $350 per month. This appeal and cross-appeal followed.
In his direct appeal, Emanuel argues that he was entitled to a termination of his maintenance obligation based on the post-retirement change in his circumstances. In her cross-appeal, Sammie argues that Emanuel failed to prove that continuation of the prior level of maintenance was unconscionable.
On remand, the parties presented additional evidence regarding their post-retirement income and assets. The evidence established that Emanuel's gross income was $46,534 per year and that he had assets that included a home valued at $230,000, other real estate valued at $75,000, and $550,000 in retirement accounts. According to Emanuel, his monthly expenses exceeded his monthly income by $1,017. The evidence also established that Sammie's gross income was $22,020 and that her assets included a house valued at $52,000, as well as an IRA, CDs, savings account, and life insurance cash value, which together totaled approximately $183,000. According to Sammie, her monthly expenses exceeded her income by $284 if she did not receive any maintenance from Emanuel.
The trial court determined that the reduction in Emanuel's income constituted a substantial and continuing change in circumstances, which entitled him to a modification of the maintenance obligation. The trial court rendered a judgment reducing Emanuel's maintenance obligation to $440 per month. This appeal followed.
We review an order modifying maintenance to determine whether the court's decision was an abuse of discretion. Block v. Block, 252 S.W.3d 156, 159 (Ky. App. 2007). Further, we defer to the trial court's findings of fact unless they were clearly erroneous. Id.
Emanuel relies heavily on Daunhauer v. Daunhauer, 295 S.W.3d 154, 161 (Ky. App. 2009), wherein a panel of this Court stated that the goals of the maintenance statutes, Kentucky Revised Statutes (KRS) 403.200 and KRS 403.250, are "rehabilitation, self-sufficiency, and stability." Emanuel cites Daunhauer for the proposition that, once the person receiving maintenance becomes self-sufficient through education and employment, the maintenance obligation should be terminated. Id. Emanuel emphasizes that he paid maintenance for nearly forty years; consequently, he contends the court abused its discretion by failing to terminate his obligation.
We note that Emanuel's argument overlooks a significant and distinguishing provision of the separation agreement in Daunhauer. In that case, the parties' separation agreement, executed in 1987, included a specific provision that either party could request review of the maintenance obligation after a two-year period. Daunhauer, 295 S.W.3d at 155. As a result, this Court viewed the maintenance award as rehabilitative, reasoning that, "the parties' handwritten settlement agreement did not prohibit modification but instead presumed it. The most appropriate reason for such modification, and that anticipated by the policy behind KRS 403.200, is the ability of Elaine, through rehabilitation, to live independently of maintenance." Id. at 156. In contrast, Emanuel and Sammie's separation agreement, executed in 1975, expressly provided for the payment of maintenance as long as Sammie remained single.
In the case at bar, the court considered the principles of rehabilitation discussed in Daunhauer; however, the court concluded that Sammie was not financially independent. Based on our review of the record, substantial evidence supported the court's conclusion on that issue. Furthermore, in Rader, 2012 WL 6061748, we framed the analysis as follows:
Since the separation agreement did not preclude a reduction of maintenance, See KRS 403.180(6), the trial court had the authority to modify maintenance as set out in KRS 403.250(1). Woodson v. Woodson, 338 S.W.3d 261, 263 (Ky. 2011). In pertinent part, that statute provides that 'the provisions of any decree respecting maintenance may be modified only upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable.' This standard applies whether the original award was designated as alimony or maintenance. Wilhoit v. Wilhoit, 506 S.W.2d 511, 513 (Ky. 1974).Id. at *2-3.
. . . .
Moreover, the party seeking a modification of maintenance bears the burden of proof. Indeed, the Court in Bickel [v. Bickel, 95 S.W.3d 925 (Ky. App. 2002),] emphasized that the policy of the modification statute is to maintain relative stability. [Id.] at 927. Thus, even when retirement is objectively reasonable, any modification of maintenance is dependent upon the respective incomes and resources of each party. Id. at 928-29. See also Daunhauer v. Daunhauer, 295 S.W.3d 154 (Ky. App. 2009). Consequently, Emanuel was required to prove that the change in his post-retirement
circumstances is so substantial and continuing as to render the maintenance award unconscionable.
We are mindful that the trial court was in the best position to weigh the evidence and assess witness credibility. Kentucky Rules of Civil Procedure 52.01. The court heard testimony from both parties regarding their respective post-retirement finances. After considering all of the evidence, the court concluded, in relevant part:
[Sammie], although perhaps financially stable for the most part, has not demonstrated complete economic independence, nor has [Emanuel], as the party who bears the burden of proof, established or proven the continued award of maintenance to be unconscionable. Throughout the thirty-eight (38) years that this maintenance agreement/obligation has been ongoing, both [Emanuel] and [Sammie] have worked, and they are both now retired. The parties have within reason maintained the same economic disparity. The parties each have monthly incomes, retirement accounts, real estate holdings, and expenses. Each of the parties have now at their respective stages of their lives suffered a reduction in their income. The Court finds that [Sammie] continues the need of monthly maintenance payments to maintain financial sufficiency. The modified monthly maintenance obligation of $440.00 per month reflects [Emanuel's] substantiated and continuing change in income, assets, and expenses. As well, this modified amount takes into consideration [Sammie's] income, assets, and expenses. This obligation by operation of the parties' February 14, 1975, agreement would terminate should [Sammie] remarry.
After careful review, we believe the trial court's decision was well-reasoned, fully supported by the evidence, and did not constitute an abuse of discretion.
For the reasons stated herein, we affirm the judgment of the Bell Circuit Court.
ALL CONCUR. BRIEFS FOR APPELLANT: Joseph E. Lambert
Mt. Vernon, Kentucky
BRIEFS FOR APPELLEE: Martha Farmer Copeland