RENDERED: SEPTEMBER 15, 2023; 10:00 A.M. NOT TO BE PUBLISHED 

# Commonwealth of Kentucky Court of Appeals

NO. 2022

- CA

- 1337

- MR
VALORIE LANEY APPELLANT

v. APPEAL FROM BOYD CIRCUIT COURT

HONORABLE GEORGE W. DAVIS, III, JUDGE

ACTION NO. 20

- CI

- 00983

DONALD LANEY, JR. APPELLEE

OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
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BEFORE: ACREE, DIXON, AND M C NEILL, JUDGES. DIXON, JUDGE: Valorie Laney (“Wife”) appeals from an order of the Boyd Circuit Court confirming the report and recommendations of the Domestic Relations Commissioner (“DRC”) in this dissolution of marriage proceeding.
After careful review of the record, briefs, and law , we affirm in part, reverse in part, and remand for proceedings consistent with this O pinion.- 2

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FACTUAL BACKGROUND AND PROCEDURAL HISTORY Donald Laney, Jr. (“Husband”) and Wife were married in January 2012. A divorce decree was entered on January 27, 2022, pursuant to Putnam v. Fanning , 495 S.W.2d 175 (Ky. 1973). The parties appeared for a hearing before the DRC on May 24, 2022, to distrib ute their assets and debts and to determine child support. The primary issue of contention was the parties’ farm. Husband
had a 401 k prior to the marriage that was cashed out in 2019, when the parties purchased the farm. Both parties testified all the 4 01 k funds went to ward the purchase and improvement of the farm, in addition to a loan for $10,000 that was

re paid prior to entry of the decree of dissolution. Husband expressed a desire to keep the farm with the understanding he would pay Wife for her sha re of the value.

The DRC determined the value of the farm to be $120,000 based on appraisals entered into evidence . This is not contested on appeal. Further, the
DRC calculated Husband’s nonmarital contribution toward the farm to be $50,172.32. She also calculated improvements to the farm based on a limited number of canceled checks admitted into evidence, despite the uncontroverted testimony of both parties that all of Husband’s 401 k , consisting of both marital and
nonmarital funds , went toward the farm. Ultimately, the DRC determined Wife was entitled to $19,877 as her portion of the farm. T his amount was then reduced- 3

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to account for the amount Husband was owed from Wife’s retirement account

. 1 Wife filed exceptions to the DRC’s report, but the circuit court ultimately adopted the DRC’s recommended order in its entirety , and t his appeal followed. Further facts will be developed as they become necessary. STANDARD OF REVIEW We will only set aside a circuit court’s findings of fact if they are clearly erroneous. Moore v. Asente , 110 S.W.3d 336, 354 (Ky. 2003) (footnote omitted) . A circuit court’s findings of fact are clearly erroneous if not supported by substantial evidence. Commonwealth v. Del o ney , 20 S.W.3d 471, 474 (Ky. 2000). Substantial evidence means “[e]vidence that a reasonable mind would accept as adequate to support a conclusion and evidence that, when taken alone or in the light of all the evidence

. . . has sufficient probative value to i nduce conviction in the minds of reasonable men.” Moore , 110 S.W.3d at 354 (internal quotation mark s and footnote s omitted).

Further, w e review a circuit court ’ s determinations of value and
division of marital assets for abuse of discretion. Armstrong v. Armstrong , 34 S.W.3d 83, 87 (Ky. App. 2000)

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1 Wife does not contest Husband’s entitlement to half of her retirement account.- 4

- LEGAL ANALYSIS We begin by noting that Husband failed to file a brief. While we would be well within our authority to regard Husband’s dereliction as a confession of error and reverse the circuit court, 2 we nevertheless address the merits of Wife’s arguments. Wife p resents two arguments on appeal. First, she claims the circuit court erred by not giving her a share of the value of the Harley Davidson motorcycle. Thi s argument is without merit and refuted by the record before us. At the outset of the hearing before the DRC, the parties entered several stipulations, including distribution of the motorcycle. Wife agreed on the record that Husband would keep the motorcycle and assume all associated debt. Accordingly , neither party presented evidence regarding either t he value or outstanding debt of the motorcycle. W e discern no error on the part of the circuit

court. Second, Wife contends the circuit court failed to properly apportion the tax withholdings to the marital and nonmarital funds of Husband’s 401 k , which

2 Pursuant to Kentucky Rules of Appellate Procedure ( RAP ) 31(H)(3): If the appellee ’ s brief has not been filed within the time allowed, the court may: (a) accept the appellant ’ s statement of the facts and issues as correct; (b) reverse the judgment if appellant ’ s brief reasonably appears to sustain such action; or (c) regard the appellee ’ s failure as a confession of error and reverse the judgment without considering the merits of the case.- 5

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r esulted in an inflated nonmarital credit toward the farm for Husband

. Wife’s arguments primarily focus on what she asserts were mathematical errors by the
DRC. Upon review, w e agree.

Husband’s 401 k had a value of $147,68 9 .38 in 2019. The parties did not dispute that Husband had a nonmartial interest of $50,172.32. The remainder
of the 401 k was marital property, which was also undisputed. 3 After tax withholdings, Husband received $113,480 ( approximately 23.16% was withheld in

taxes )

. Ho wever, the DRC failed to reduce Husband’s nonmarital portion in
accordance with the tax withholdings , leading to an inflated nonmartial
contribution to the farm . T h is error was compound ed in the DRC’s subsequent
calculations

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The circuit court also failed to consider the undisputed testimony of both parties that the entire amount of Husband’s 401 k , both nonmarital and marital, was spent on the farm. Rather, the DRC relied upon a limited number of
canceled checks admitted into evidence to concl ude that a total of $75,019.55 was spent on the purchase of and improvement to the farm, a majority of which the
DRC found was nonmarital. Although the canceled checks provide a partial

3 “An item of property will often consist of both nonmarital and marital components, and when this occurs, a trial court must determine the parties ’ s eparate nonmarital and marital shares or interests in the property on the basis of the evidence before the court.” Sexton v. Sexton , 125 S.W.3d 258, 265 (Ky. 2004) (internal quotation mark s and footnote omitted).- 6

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picture of what the parties spent on the purchase and improv ements , t hey do not tell the entire story . Husband testified that he spent “every dime” of his 401 k on the farm , and Wife agreed in her testimony. Both parties detailed purchases and improvements to the farm that were not shown in the canceled checks but were und isputed

. 4 The parties also agreed that they secured an additional $10,000 loan
to install water and utilities. This loan was re paid during the marriage but represents an additional marital contribution to the improvement of the farm.

The DRC did not address the distribution of H usband’s 401 k in her
recommended order . Although this suggests she recognized it was spent prior to entry of the decree of dissolution, she nevertheless failed to attribute the marital portion to the purchase and improvement of the farm, in contravention of the testimony of both parties. She also failed to consider the loan as a marital
contribution. On remand, the circuit court must reduce the nonmarital and marital portions of Husband’s 401 k to reflect the tax withholdings. The court must then proceed with its calculations to determine the nonmartial and marital interests pursuant to the uncontroverted evidence that Husband’s entire 401 k was spent on the farm.

4 Examples of improvements to the farm which are not represented in canceled checks, but which the parties testified were purchased with Husband’s 401 k , include a 40’ x 60’ barn, a bush hog, a tractor, and a utility trailer.- 7

- CONCLUSION Accordingly, the judgment of the Boyd Circuit Court is AFFIRMED IN PART, REVERSED IN PART, and REMANDED for further proceedings consistent with this Opinion.

ALL CONCUR

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BRIEF FOR APPELLANT: Sharon E. Rowsey Ashland, Kentucky NO BRIEF FOR APPELLEE

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