Husband and Wife entered into a Marital Settlement Agreement in North Carolina. Wife had an attorney. Husband did not have an attorney, but participated in the five drafts of the document. Both parties moved to Kentucky after Husband’s retirement from the military. Wife filed a motion to ratify the Separation Agreement. Husband requested the family court set aside the Separation Agreement as unconscionable and made various motions to modify. The family court ratified the Separation Agreement and denied Husband’s motion to set it aside or modify it with exception of custody and the parties’ parenting time schedule. Husband appealed on multiple grounds.

The Court of Appeals first addresses Husband’s argument that the family court erred by failing to find that “he entered into the Separation Agreement as a result of duress, fraud, and undue influence.” The Court of Appeals affirmed the family court, as the court did not abuse its discretion. It properly found Wife’s testimony more compelling than Husband’s and Husband participated in the drafting process. The Court of Appeals noted it was clear Husband’s motive in signing the agreement was for Wife to “shut up” and go away.

The Court of Appeals next addresses Husband’s argument that the Separation Agreement is unconscionable. The Court of Appeals again affirmed the family court. While Husband may have made a bad bargain, the agreement does not render him destitute. He agreed to pay maintenance and child support in excess of the guidelines, but the amounts were not “shocking to the conscious” or outside of his “reasonable fiscal means.” He understood the terms of the agreement and anticipated changes in his employment.

Finally, Husband argues that the court erred in denying his motion to modify maintenance and to deduct maintenance for tax purposes. The Court of Appeals found that the family court erred when it denied Husband’s motion to modify maintenance based upon Wife’s alleged cohabitation holding nothing in the Separation Agreement or in Kentucky jurisprudence prevent the court from exercising its authority on these matters. Thus, the Court of Appeals reversed and remanded.

Digested by Elizabeth M. Howell

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 Questions Presented: Real Estate. Partition. Joint Tenancy with Right of Survivorship. Division of proceeds of sale of realty owned by unmarried cohabiting couple in joint tenancy with right of survivorship.

An unmarried couple owned real estate in joint names with a right of survivorship. Boyfriend made the majority of payments on the home mortgage and down payment over the parties’ fifteen year cohabitation. The couple’s relationship ended and the boyfriend filed a complaint asking the court to divide the equity in the home in proportion to each party’s contributions. The trial court found that the parties had no agreement as to the disbursement of the property and divided the equity equally between boyfriend and girlfriend. The Court of Appeals reversed the trial court’s order holding Kentucky law allows joint tenants to be reimbursed for payments towards encumbrances even without a contract or agreement between the parties. The Supreme Court granted discretionary review.

The Supreme Court majority affirmed the Court of Appeals holding “joint tenants are entitled to proportionate reimbursement for the payment of liens and other encumbrances.” An agreement between cohabitants is not required because a joint tenant who pays a lien on joint property is entitled to proportional reimbursement.

Justice Keller dissented from the majority opinion and was joined by Justice Hughes. Justice Keller argued the majority erred by ignoring the trial court’s findings of fact that were inconvenient to its holding. For example, that the parties had no agreement regarding the property and contributed in different ways throughout their relationship. Justice Keller also argued the majority erred by giving “effect to common law marriage” in violation of Kentucky case law by implicitly extending the rights of marriage to the parties in this case by making the division of property fair and equitable, factors that should only be considered in KRS 403 dissolution cases. Finally, Justice Keller argued the majority erred in analyzing the case as a “contract, family law, or partnership” case when it should have been analyzed as a “simple property case.” Thus, under Justice Keller’s analysis, the equity should have been divided equally between girlfriend and boyfriend as joint tenants.

Digested by Elizabeth M. Howell

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An unmarried couple owned a home in joint names with a right of survivorship. Boyfriend made the majority of payments on the home mortgage and down payment. The couple’s relationship ended and the boyfriend filed a complaint asking the court to divide the equity in the home in proportion to each parties’ contributions. The trial court found that the parties had no agreement as to the disbursement of the property and divided the equity equally between boyfriend and girlfriend. The Court of Appeals reversed the trial court’s order holding Kentucky law allows joint tenants to be reimbursed for payments towards encumbrances even without  a contract or agreement between the parties.

Digested by Elizabeth M. Howell

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Smith v. Smith, Nonmarital property might still be subject to division between parties where there is a partnership, joint venture, or profit sharing agreement. In this case, the parties cohabitated prior to marriage. While the property acquired during cohabitation was nonmarital, the nonmarital property was still a jointly owned asset by agreement of the parties subsequent to a joint venture. Thus, the property lost its nonmarital characterization. The court also concluded the appellant did not properly trace the additional properties she was claiming were nonmarital, therefore there was no clear error in the finding that they were marital property. In addition, the court found no clear errors in the Trial Court’s child support, property division, and debt assignment decisions.

On a procedural note, this case points out that certification of the record must include video recordings. The court cannot look to video recordings for evidence if they are not part of the record on appeal.

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There are no published family law opinions. Campell v. Hale is an interesting unpublished opinion affirming the circuit court's division of property acquired during cohabitation.

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From The Family Law Prof Blog: Italian Government Approves Bill to Grant Legal Rights to Cohabitants. Whether their parliment will pass it appears to be a coin toss.

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