Kentucky Court of Appeals finds Jefferson Circuit Court did not err in reopening a divorce settlement agreement, but it did err in awarding additional attorney’s fees to one of the parties after reopening the case – Published Opinion from Kentucky Court of Appeals

Leslie Geralds v. Janie Geralds

No. 2021-CA-0667-MR

Jefferson Circuit Court

Leslie and Janice Geralds negotiated a property settlement agreement through a collaborative divorce process.  The property settlement agreement awarded Mrs. Geralds 40.62% of Mr. Geralds’ retirement plan.  Several years following the entry of the decree and property settlement agreement, Mr. Geralds retired and signed a noncompete agreement.  As a result, he received additional funds from his company that were not previously addressed in the divorce proceedings.  Thereafter, Mrs. Geralds moved to reopen their case as she believed the additional funds were part of the retirement plan and that she was entitled to receive a portion of those funds pursuant to the parties’ property settlement agreement. Mr. Geralds disagreed, claiming the additional funds were not part of the retirement plan, but rather, new income from him signing the noncompete agreement.

The trial court found that Mrs. Geralds was rightfully entitled to reopen the case because Mr. Geralds did not inform her of the additional funds he was receiving.  Further, the trial court determined the additional funds were in fact part of the retirement plan and that Mrs. Geralds was entitled to a portion of said funds.  Attorney’s fees were also awarded to Mrs. Geralds.  A timely appeal followed.

The Court of Appeals affirmed the trial court, in part, that CR 60.02(d) applied to this case and that Mr. Geralds intentionally did not disclose the additional funds.  By not doing so, the Court emphasized “[f]ailing to disclose assets to the court and [Mrs. Geralds] can be considered fraud affecting the proceedings,” thereby meeting a situation justifying reopening the case.  However, the Court disagreed with the trial court in that the additional funds were not part of Mr. Geralds’ retirement plan, but rather, funds he received after executing the noncompete agreement.  Therefore, the Court did not agree Mrs. Geralds was entitled to a portion of these funds because the funds were not marital property.  Finally, the Court reversed and remanded the case to address the attorney’s fee issue to determine if Mrs. Geralds was entitled to attorney’s fees in reopening the case due to Mr. Geralds failing to disclose an asset during the collaborative divorce proceeding and an unrelated hearing following his retirement.

Caitlin P. Kidd, Esq.

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