Miller v. McGinty, Attorney Fees, Rules of Civil Procedure

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Miller v. McGinty, ___S.W.3d___(Ky. App. 2007)

Ex-husband appealed order of TC requiring him, pursuant to KRS 403.220 and CR 37, to pay $8,500 of attorney fees to Ex-wife, claiming that TC failed to consider the financial resources of both parties as required by KRS 403.320 and that CR 37 and the holding of Lampton v. Lampton, 721 S.W.2d 736, 739 (Ky. App. 1986) were inapplicable to the facts of his case.

When Ex-Wife initially filed her Petition for Dissolution, she was unaware of Ex-Husband’s address. She therefore attempted service through a Warning Order attorney. Darren resided in Utah, was a member of the Air National Guard, and unknown to Ex-Wife, was stationed in Iraq at the time she filed for divorce. The Warning Order Attorney filed his report and, subsequently, a default hearing was held, resulting in TC’s issuance of findings of fact, conclusions of law, and decree of divorce. Ex-Husband then filed a Motion to Alter, Amend or Vacate this Order on the basis that Ex-Husband had not been properly served. TC granted the motion, Ex-Wife served Ex-Husband through Secretary of State, and new trial was held. TC divided property and debts and ordered Husband to pay $8,500 of Ex-Wife’s attorney fees.

Ex-Husband first contended that TC failed to consider the financial resources of the parties before awarding attorney's fees to Ex-Wife. CA noted that although a trial court is not required to make specific findings on the parties' financial resources, TC must consider the financial resources of the parties before ordering an award of attorney’s fees. Further, KRS 403.220 requires a showing of an imbalance in the financial resources of the respective parties. In this case, TC expressly stated that no evidence was submitted concerning the parties' financial resources, requiring the court to make assumptions from evidence submitted regarding the financial circumstances at the time of the marriage as to the status of their financial resources at the time of trial, though the parties had been separated for over 3 years and divorced for 2 years. CA held that the financial situations of the parties during their marriage were too remote in time for the court to make such a finding based on this evidence, and TC abused its discretion in making award of attorney fees without first considering the parties' financial resources at the time that the court entered its order. CA vacated attorney fee award under KRS 403.220 and remanded issue to TC.

Ex-Husband next asserted that TC erred by basing the attorney fee award on the case law of Lampton and CR 37, as they are inapplicable to a party's failure to voluntarily submit to personal jurisdiction. CR 37, which is titled "Failure to Make Discovery; Sanctions," permits a court to award attorney's fees as a sanction against a party who fails to conduct discovery or abide by discovery rules. In Lampton, CA implied that an award of attorney's fees under CR 37 is appropriate if the award is motivated by the party's obstruction of and refusal to cooperate with discovery. In this case, TC provided that an award of attorney's fees under CR 37 was appropriate due to Ex-Husband’s irresponsibility with regard to the parties' financial matters. CA held that this reasoning had no connection to discovery proceedings in the case. Furthermore, Ex-Husband’s failure to submit to TC’s jurisdiction despite his knowledge of the case also held no connection to CR 37 nor merited an award of attorney fees under any rule or statute, as there is no requirement in Kentucky that a defendant submit to the court’s jurisdiction once he gains knowledge of the action. CA reversed any portion of the attorney fee award based on CR 37.

Ex-Husband also alleged that if TC had the authority to award attorney's fees in this case, the reasonableness of the fees awarded was improperly analyzed by TC. CA held this claim to be moot as it had vacated the award.
Digested by Michelle Eisenmenger Mapes, Diana L. Skaggs + Associates.

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