Jefferson Circuit Court

Husband and Wife were married for 28 years. A divorce decree was entered in 2007, which divided the parties’ assets and provided a maintenance payment to Wife until Husband reached the age of 65 in 2017. Both parties appealed. In 2009, while their appeals were pending, the parties received notice that their funds held by West End Financial had been lost to a Ponzi scheme, resulting in a loss of over $1 million, $800,000 of which had been awarded to Wife as part of the decree. In 2016, Wife filed a Motion to Modify Maintenance, citing changed circumstances related to the loss of her $800,000 to the Ponzi scheme, Husband having returned to an active medical practice despite being disabled at the time of the 2007 divorce decree, and her loss of her own sums to the Ponzi scheme. The circuit court issued an order determining that the change in circumstances rendered the original maintenance award unconscionable, and later ordered that Wife receive a modified, increased maintenance award. The circuit court also ordered $46,000 in attorney’s fees to Wife’s attorney, payable directly to the attorney who could enforce the judgment in his own name.

Husband filed a notice of appeal and Wife filed a motion to dismiss for Husband’s failure to name Wife’s attorney as an appellee. The Court of Appeals concluded that the circuit court abused its discretion in granting Wife’s motion to modify maintenance, specifically disagreeing with the circuit court’s determination that the changes in circumstance rendered the original maintenance award unconscionable. Both parties filed motions for discretionary review in the Supreme Court, which reversed the Court of Appeals’ decision and remanded to the circuit court for reinstatement of the order modifying maintenance.

The Supreme Court addressed three issues: whether the circuit court erred in modifying the original maintenance award; whether the failure to name an attorney with an enforceable attorney’s fees award is fatal to an appeal; and whether the attorney’s fee award was proper.

First, the Supreme Court found that the Court of Appeals erred in reversing the circuit court’s modification of maintenance, because there was substantial evidence supporting its decision. Namely, the parties had been on equal financial footing at the time of the decree in 2007, but were not at the time of Wife’s motion to modify. The Court further opined that where there is a sufficient basis for the lower court’s conclusion, a reviewing court may not reverse simply because it would have decided the issue differently.

Second, the Court held that Husband’s failure to name Wife’s attorney as a party to the appeal was not a fatal error. The Court determined that though Husband had not strictly complied with the rules in adding the attorney as a party to the case, the attorney had adequate notice of appeal and the ability to protect his own interest in seeking affirmation of the attorney’s fee award, because he was named as Wife’s attorney on the first filing in the Court of Appeals and was included on the distribution list. The Court stated that under the new Rules of Appellate Procedure, the failure to name an indispensable party is no longer automatically fatal to an appeal.

Third, the Court held that the circuit court did not abuse its discretion in awarding attorney’s fees because the circuit court properly considered the parties’ financial resources, incomes, and other factors, and awarded attorney’s fees accordingly.

Carter Anderson

The post Kentucky Supreme Court Reverse Court of Appeals, Remands to Jefferson Circuit Court for Reinstatement of Order Modifying Maintenance Based on Changed Circumstances appeared first on Goldberg Simpson - Family Law Group.

The Family Court found Wife was cohabitating, summarily terminated Husband’s maintenance obligation upon a finding of cohabitation without determining whether continued maintenance was unconscionable pursuant to KRS 403.250, and retroactively terminated Husband’s obligation effective to the filing of the motion requesting termination, thus requiring Wife to reimburse Husband over $100,000. Wife first filed a motion to Alter, Amend, or Vacate, which was denied by the Family Court. She then filed this appeal.

The Court of Appeals vacated the family court order, holding that it failed to apply an appropriate definition of cohabitation and make appropriate findings, it erred in concluding the automatic termination clause in the decree was enforceable in the same way it would be were it part of a separation agreement, and it erred in failing to consider the controlling provisions of KRS 403.250(1) as interpreted by Combs v. Combs, 787 S.W.2d 260(Ky. 1990), to determine if such cohabitation resulted in continued maintenance being unconscionable.

Specifically, the Court of Appeals stated that the clause for termination upon cohabitation was not the result of a negotiated settlement between the parties and thus, to avoid running afoul of KRS 403.250, the Family Court first should have determined whether Wife and Boyfriend were cohabitating using a specified definition, and then whether that cohabitation rendered continued maintenance unconscionable because it constituted a new financial resource as contemplated by KRS 403.200(2)(a). Combs v. Combs, 787 S.W.2d 260, 262 (Ky. 1990).

The Court vacated and remanded with instructions for the Family Court to: 1) consider and state what definition of cohabitation should apply; 2) determine if such cohabitation occurred; 3) if cohabitation occurred, then evaluate the unconscionability provisions of KRS 403.250(1) to determine whether it would be unconscionable for Wife to continue to receive previously awarded maintenance. The third step necessary due to the imposition of the maintenance clause by the Family Court via its divorce decree rather than contained in the parties’ settlement agreement as a negotiated term.

The Court also vacated the Family Court’s order as to the retroactive termination to the date of Husband’s motion, stating that although trial courts have the discretion to decide whether orders modifying maintenance should be paid retroactively, such a decision should align with equity and fairness. The Court instructed the Family Court to consider the relevant facts and circumstances, such as Wife’s financial status and the reason for the lengthy delay in the Family Court’s issuance of a ruling, before deciding whether it is equitable for the termination to be made retroactive. 

Carter Anderson

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The parties entered into a Marital Settlement Agreement in which Former Husband agreed to pay maintenance to Former Wife for a period of years or until Former Wife remarried. Additionally, the Agreement precluded the modification of maintenance. Former Husband filed a motion to terminate his maintenance obligation due to a decrease of his income. In a second motion, Former Husband argued the Agreement should be set aside based on Former Wife’s cohabitation with her boyfriend.

The Trial Court denied Former Husband’s motions, reasoning that the Agreement expressly provided that maintenance was not subject to modification and that, under the terms of the Agreement, cohabitation was not grounds for termination of maintenance.

The Court of Appeals held that the trial court erred in finding that Former Wife’s cohabitation was not grounds to terminate maintenance under the terms of the Agreement, even though the Agreement expressly precluded modification for subsequent unconscionability. Additionally, the Court noted that in Combs v. Combs, 787 S.W.2d 260 (Ky. 1990), the Supreme Court of Kentucky held that, although KRS 403.250(2) provides for the termination of maintenance only upon the remarriage of the receiving party, the receiving spouse’s cohabitation can render continued maintenance unconscionable if it constitutes a new financial resource. The Court of Appeals remanded the case for additional findings of fact surrounding Former Wife’s cohabitation.   

Digested by: Emily T. Cecconi

The post Even though agreement says maintenance not modifiable, motion remanded for additional cohabitation findings – published opinion from Ky Court of Appeals appeared first on Goldberg Simpson - Family Law Group.

Wife appealed arguing that the family court did not have the authority to modify the maintenance award. The Court of Appeals agreed holding that “Changed circumstances rendering the terms of a maintenance award unconscionable is the only ground upon which a court has authority to modify any maintenance award. However, the clear language of KRS 403.250(1) prohibits a court from invoking this limited authority when the parties have a separation agreement pursuant to KRS 403.180(6) that expressly precluded subsequent modification of the terms of their separation agreement.”

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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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Husband’s maintenance obligation was established by a Tennessee Court. Husband filed a motion to modify his maintenance obligation in Kentucky. The Kentucky court denied his motion. Husband filed this appeal arguing the Kentucky trial court lacked subject-matter jurisdiction to make any order on spousal maintenance.

The Court of Appeals agrees with Husband holding that based on the “clear statutory scheme” between Tennessee and Kentucky, “Kentucky courts have no authority or subject-matter jurisdiction to modify a Tennessee court’s spousal maintenance order.” Although Husband raised this agreement after filing his appeal, subject-matter jurisdiction arguments cannot be waived and can be raised at any time. Thus the Court of Appeals reverses and remands to the trial court for an  order “for transfer to the original Tennessee court.” However, Kentucky  does have the authority to enforce the Tennessee order

Digested by Elizabeth M. Howell

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We do not usually post unpublished opinions from the Ky Court of Appeals but Geralds v. Geralds  is notable, giving guidance to the bench and bar about an issue that has perplexed us since Woodson v. Woodson in 2011.  Geralds holds that agreements for non-modifiable maintenance are enforceable. We don't know why the opinion was designated not to be published, but hope the court changes its mind. 

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Published: Reversing and Remanding

County: Jessamine

FACTS:

Chauncey J. Tudor v. Melanie K. Tudor, No. 2012-CA-000110-MR

Published: Reversing and Remanding

County: Jessamine

FACTS:

Husband and
Wife initiated divorce proceedings in 2009. After extensive hearings and a
trial, Husband was ordered the custodial parent and ordered to pay $1,700 per
month in maintenance for ten years. The divorce decree was entered in 2009.

In 2011,
Husband filed a motion seeking disclosure of financial documents and motions
for modification of child support and maintenance. The trial court’s findings
of fact and conclusions of law only addressed Husband’s maintenance obligation.
Relying primarily on the income of Husband’s new wife and citing expenses
relating to their marriage and the children of their marriage, the court
determined that the maintenance obligation should not be altered because the
payment amount was not unconscionable. Husband appealed.

ANALYSIS:

The issue
presented to the court was whether a new spouse’s income, and the couple’s ability
to provide for children of the new marriage, should be considered when
determining whether maintenance owed to the former spouse should be modified. KRS
403.250(1) states that maintenance obligations may be modified “upon a showing
of changed circumstances so substantial and continuing as to make the terms
unconscionable.” When a party seeks to modify maintenance obligations, the
court compares the parties’ current circumstances to the circumstances at the
time the decree was entered. Modification of maintenance looks solely to
whether the obligor’s circumstances have changed in a substantial and
continuing way such that the order is rendered unconscionable. 

The trial
court in this case determined that the Husband was earning $96,000 per year at
the time the decree was entered, and Husband earned only $48,000 per year when he
sought modification of the maintenance award. Rather than focusing on the
income of Husband’s new wife and expenses relating to his new children, the
trial court should have focused on whether the change in Husband’s income is
substantial and continuing such that the award is unconscionable. If the trial
court is determining whether the award should be reduced, the trial court may
consider the extent to which Husband’s relevant expenses have been reduced as a
result of his new marriage. Although not raised in this case, whether an
obligor is voluntarily underemployed or whether retirement, if applicable, was
reasonable could prevent the modification of a maintenance award.

Judge Maze
wrote separately, concurring in the judgment. The trial court misapplied the
facts to the law in this case because a spouse’s decision to remarry and start
a new family does not relieve the spouse of the obligation to pay maintenance
awarded to a former spouse. The new spouse has no obligation to contribute to
the former spouse’s support. However, other facts in the case could support the
trial court’s decision to deny the maintenance modification. The trial court
should examine further on remand whether Husband’s income resulted from
voluntary underemployment, general economic conditions, his own choices, or
some combination thereof. Evidence that Husband in the past found well-paying
employment in auto sales even during difficult economic and personal
circumstances could indicate that Husband failed to show that the change in his
circumstances is not likely to be substantial and continuing.

Digested by: McKenzie Cantrell, Attorney, of counsel, Diana
L. Skaggs + Associates

The post Applicability of New Spouse’s Income and Expenses for Children of New Marriage in Modification of Maintenance Award to Former Spouse, Case Digest, Tudor v. Tudor, Ky Court of Appeals appeared first on Goldberg Simpson - Family Law Group.

2010-SC-000053-DG

Published:  Reversing and Remanding

County: Jefferson

Overruling Dame v. Dame, SC held that “a maintenance award in a fixed amount to be paid out over a definite period of time is subject to modification under KRS 403 .250(1).” 

KRS 403 .250(1) states in part:

Woodson v. Woodson

2010-SC-000053-DG

Published:  Reversing and Remanding

County: Jefferson

Overruling Dame v. Dame, SC held that “a maintenance award in a fixed amount to be paid out over a definite period of time is subject to modification under KRS 403 .250(1).” 

KRS 403 .250(1) states in part:

"Except as otherwise provided in subsection (6) of KRS 403 .180, 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." (Emphasis added.)

In giving the statute its obvious meaning, all decrees ‘respecting maintenance’ are modifiable under certain circumstances. This is precisely the point that was made by Justice Clayton in his dissent in Dame.

"In saying farewell to Dame, we do not belittle the compelling need for finality in all divorce cases. The burden of proof to change maintenance orders is sufficiently strict to insure relative stability and finality. It requires the showing of ‘changed circumstances so substantial and continuing as to make the terms unconscionable.’ KRS 403.250(1). However, the statute does not divest trial judges of the discretion to decide when modification outweighs the virtue of finality in seeking fairness and equity in what many times may be dire consequences and complicated options.”

Digested by Michelle Eisenmenger Mapes, Diana L. Skaggs + Associates  

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There were no published family law opinions released by the Kentucky Supreme Court today.

The Court accepted discretionary review in Woodson v. Woodson, in which the Court of Appeals upheld the trial court as it lacked authority to rule contrary to Dame v. Dame. The Court of Appeals' unpublished opinion is here. So, the question is whether fixed payments of maintenance over a fixed period of time remain non-modifiable.

There were no published family law opinions released by the Kentucky Supreme Court today.

The post From The Kentucky Supreme Court This Month: Dame v. Dame to be Reviewed appeared first on Goldberg Simpson - Family Law Group.