RENDERED: JULY 16 , 2021; 10:00 A.M. TO BE PUBLISHED 

# Commonwealth of Kentucky Court of Appeals

NO. 2020

- CA

- 0295

- MR JULIUS J. PAOLI, III APPELLANT

v. APPEAL FROM MARION CIRCUIT COURT

HONORABLE ALLAN RAY BERTRAM, JUDGE

ACTION NO. 17

- CI

- 00253

TERESA W. PAOLI APPELLEE

OPINION AFFIRMING
**   **  **
BEFORE: CALDWELL, JONES, AND TAYLOR, JUDGES. TAYLOR, JUDGE: J ulius J. Paoli, III , brings this appeal from a Property Division Order of the Marion Circuit Court entered on October 23, 2019

. 1 We affirm.

Julius J. Paoli, III , and Teresa W. Paoli were married December 27, 1980, in Lebanon, Marion County, Kentucky. After their marriage, t he parties

1 By order entered February 20, 2020, the Marion Circuit C ourt denied Julius J. Paoli, III’s, m otion to a lter, a mend, or v acate the October 23, 2019, Property Division Order. A decree dissolving the marriage was also entered on October 23, 2019, which is not at issue in this appeal.- 2

-

relocated to Pennsylvania

. Upon moving to Pennsylvania , for approximately eight
years, Teresa worked with Julius training thorough bred horses. After the parties’
first child was born in 1988 , Teresa became a stay

- at

- home mother ; their second child was born in 1990. Teresa subsequently homeschooled the parties’ two
children from preschool through high school

. After the children ’s education was completed , Teresa worked part

- time outside the home

. Teresa initially worked as a
pre - school aide and then as a physical therapy assistant

. 2 Throughout the marriage, Julius worked outside the home.

On June 28, 2017, the parties separated , and Teresa moved back to Marion County , Kentucky. Julius remained in the parties’ marital residence in Pennsylvania. Teresa filed a Verified Petition for Dissolution of Marriage on December 1, 2017

. Julius responded with a motion to dismiss the petitio n as it was filed before Teresa had resided in Kentucky for the requisite six

- month period

. Teresa subsequently filed a n Amended Verified Petition for Dissolution of Marriage on January 19, 2018

.

An evidentiary hearing was conducted by the circuit court on March 4, 2019. Teresa and Julius were the only witnesses to testify . Following the hearing, the parties submitted briefs setting forth their respective positions

2 Teres a W. Paoli was unable to continue working due to back pain and was subsequently deter mined to be permanently disabled as of December 1, 2018.- 3

-

regarding the unresolved property issue s . A Decree o f Dissolution of Marriage and a Property Division Order were simultaneously entered on October 23, 2019. T he Property Division Order restored each parties’ nonmarital property, divided the parties’ marital property, and denied Teresa’s request for spousal maintenance.
Julius filed a timely motion to alter, amend, or vacate the October 23, 2019, Property Division Order. An order was entered February 20, 2020, denying Julius’s motion to alter, amend, or vacate. This appeal follows.

We begin our analysis by noting that an evidentiar y hearing was conducted by the circuit court in adjudicating the contested issues in this divorce proceeding. 3 Accordingly, our review of the circuit court’s findings of fact will proceed pursuant to Kentucky Rules of Civil Procedure (CR) 52.01 , which
p rovides that “[f]indings of fact, shall not be set aside unless clearly erroneous[.]” A finding of fact is not clearly erroneous if supported by substantial evidence. Moore v. Asente , 110 S.W.3d 336, 354 (Ky. 2003)

. Any q uestions of law raised on appeal are reviewed de novo . Allen v. Devine , 178 S.W.3d 517, 524 (Ky. App. 2005)

. If the factual findings are supported by substantial evidence and the correct law was applied by t he court below, the court’s decision will not be

3 The evidentiary hearing was essentially a bench trial where the case was tried upon the facts without a jury. This requires the application of Kentucky Rules of Civil Procedure (CR) 52.01 in our review.- 4

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disturbed absent an abuse of discretion. M.C. v. Cabinet for Health and Family
Servs. , 614 S.W.3d 915, 921 (Ky. 2021).

Julius’s contentions of error in this appeal focus upon the circuit
court ’s di vision o f the parties’ marital property

. The di vision of marital property in a dissolution of marriage proceeding is governed by Kentucky Revised Statutes (KRS) 403.190

. Section (1) of KRS 403.190 provides that the circuit court must divide ma rital property in “just proportions considering all relevant factors” including the contribution each spouse made in acquiring the property, the value of the property each spouse is receiving, the duration of the parties’ marriage, and the
economic circums tances of each spouse once the property is divided. KRS
4 03.190(1) (a)

- (d) ; see McGowan v. McGowan , 663 S.W.2d 219, 223

- 24 (Ky. App. 1983)

. As KRS 403.190 merely requires “considering” all the factors relevant to a just or equitable division of marital property , the circuit court has wide discretion in its decision. Hempel v. Hempel , 380 S.W.3d 549, 553 (Ky. App. 2012)

. And,
t he circuit court’s division of marital property will not be disturbed on appeal absent an abuse of discretion. Muir v. Muir , 406 S.W.3d 31, 34 (Ky. App. 2013) (citation omitted).

Julius’s first contention of error is that the circuit court erred in its valuation and division of the parties’ personal property. In this regard , Julius asserts the circuit court : ( 1) erred in its valu ation of the marital items of personal- 5

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property divided among the parties ; ( 2) failed to offset the value of the pro per ty Teresa took when the parties separated a gainst Teresa’s award of personal property; and ( 3) erroneously classi fied a ho t tub as personal property.

In the October 23, 2019, Property Division Order , the circuit court assigned values to items of marital personal property remaining in the marital
residence after Teresa’s departure . The largest value assigned to a single item was the parties ’ hot tub . The hot tub was apparently located in the garage of the mar i t al residence and the circuit court valued it at $3,000. Julius argued that the hot tub was part of the real estate and not personalty. The other items valued by the court included various pieces of furniture, numerous household items, and miscellaneous tools and lawn care items. Other than two end tables and a coffee table, Julius was awarded all of the remaining personalty including th e hot tub. After assigning a value to each of the items, the circuit court then awarded Teresa one

- half of the total value of the personal property , or $4,815.

To begin, we note when the parties separated that Teresa had taken personalty from the residen ce by agreement of the parties. There was no evidence presented regarding the value of this personalty. Thus, any claim for offset for its value against the final property division was not properly preserved below.

Teresa testified she believed the personal property remain ing in the marital residence had a total v alue of between $8,000 to $10,000. Teresa’s- 6

-

testimony was subsequently summarized in her post

- trial memorandum and values

were assigned to each individual item of personal property

. Julius , on the other hand, failed to present any evidence r egarding the value of the items of personal property

. In fact, Julius only assign ed value s to the items of personal property in his motion to alter, amend , or vacate the court’s October 23, 2019, Property Division Order. At the hearing on the motion to alter, amend , or vacate , there was some discussion among counsel regarding whether Julius intended to sell the marital residence, and if so, whether the hot tub would be sold with the house. Regard less, the only evidence presented regarding the value for the hot tub was a $3,000 value provided by Teresa. There was no evidence to establish that the hot tub had become a fixture to the real estate. Accordingly, upon a thorough review of the record, w e believe there was sufficient evidence presented to support the
circuit court ’s valuation and division of the personal property , and we do not believe the court abused its broad discretion in the valuation and di vision of same.

Julius next specific ally c ontends the ci rcuit court erred in its division
of the cash located in the parties’ safe

- deposit box. There was conflicting evidence presented by the parties regarding the amount of cash Teresa withdrew from the safe

- deposit box

. Teresa testified there w as $10,000 cash in the safe

- deposit box
and that she took one

- half of the funds, or $5,000, and left the other $5,000 for
Julius. Julius testified there was no money left in the safe

- deposit box and claims- 7

-

Teresa removed the entire amount. Julius testifi ed a ledger was kept in the safe

deposit box and he produced a photocopy. Julius claimed the photocopy
demonstrated t hat all the cash ha d been withdrawn from the safe

- deposit box

. Teresa testified that the notations on the ledger were not authentic as they were not all in her handwriting. Teresa also pointed out that part of the ledger entries on the photocopy had been concealed by a sticky note placed on the ledger before it was copied. As noted, it is well

- s ettled in Kentucky that whe n conflicting e vidence is presented in an evidentiary hearing conducted without a jury, our review proceeds pursuant to CR 52.01

. CR 52.01 specifically provides that i n actions tried without a jury , the circuit court has the sole authority to judge the credibility of witnesses. And, “[r]egardless of conflicting evidence .

. . ‘ due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses ’ because judging the credibility of witnesses and weighing e vidence are tasks within the exclusive province of the trial court.” Asente , 110 S.W.3d at 354 (quot ing CR 52.01) ( footnotes omitted)

. As the credibility of the witnesses in a bench trial is within the sole province of the circuit court, we cannot say the court erred by accepting Teresa’s testimony that she only removed $5,000 from the safe

deposit box and left $5,000 for Julius.- 8

- Julius also asserts the circuit court erred in its division of the parties’
2017 joint income tax refund in the amount of $3 , 044. Julius contends that an equal division of the 2017 tax refund was i n error because the refund was generated solely from incom e he earned. Julius specifically claims that the equal division of such tax refund w as in contravention of KRS 403.190(1)(a) , which requires that the court consider the contribution of each spouse in obtaining the
asset. Julius essentially a rgue s that be cause he earned the income, he should get the entire tax refund.

It is well

- established that income earned during the parties’ marriage
is mar i t al property. Dotson v. Dotson , 864 S.W.2d 900, 902 (Ky. 1993). And,
p ursuant to KRS 403.190(1) a circuit court shall divide the parties’ marital property “ in just proportions considering all relevant factors [

. ] ” And, a mong the relevant factors is the “[c] ontribution of each spouse to acquisition of the marital property, including contribution of a spouse as homemaker [

. ] ” KRS 403.190(1)(a).

In the case sub judice , the circuit court was clearly cognizant that income earned during a marriage is generally marital property. Therefore, Julius’s
assertion that he is entitled to the entire tax refund because h e earned the income is without merit. The circuit court obviously considered the contribution of Teresa as- 9

-

a homemaker spouse and of Julius as the wage earner

. As such, w e do not believe the circuit court erred in its equal division of the parties’ 2017 income tax re fund

.

Julius’s next contention is that the circuit court erred in its equal division of Julius’s retirement accounts. Again, Julius’s assert ion is based upon the fact that the retirement accounts , which totaled approximately $400,000, were funded solely by income he earned during the marriage.

The same basic analysis applies here as set forth above regarding division of the parties’ 2017 joint income tax re f un d . The fact that Julius worked outside the home and generated the income to fund the retirement accounts is not dispositive of the issue . It is well

- established that retirement benefits are subject to division as marital property to the extent they were accumulated during the marriage. Tager v. Tager , 588 S.W.3d 183, 185 (Ky. A pp. 2019) (citation omitted)

. And, pursuant to KRS 403.190(1) , the circuit court must divide marital property in just proportions while considering all relevant factors including the contribution each spouse made in acquiring the property, the value of th e property each spouse is receiving, the duration of the parties’ marriage, and the economic circumstances of each spouse once the property is divided. KRS 4 03.190(1) (a)

- (d)

. In this case, t he circuit court properly consider ed Teresa’s contribution as the homemaker spouse , t he duration of the almost 39

- year marriage, and- 10

-

Teresa ’s economic circumstances , including her being disabled. See KRS
4 03.190(1) ; see McGowan , 663 S.W.2d at 223

- 24

. Teresa ’s only income was $223 per month in social security disability payments and $305 per month in SSI
benefits. The court denied Teresa’s request for maintenance , which is not an issue in this appeal. The court declined to award maintenance in part based on the equitable division of assets, including the retirement accounts. We find no legal error in this division and , thus , do not believe the ci rcuit court abused its discretion
in t he equal division of the retirement accounts between the parties

.

Julius’s final argument on appeal is that the circuit court erred in awarding Teresa one

- half of the equity in the mar i t al residence. The basis for
J ulius’s assertion is that despite being the sole wage earner during much of the marriage , Teresa was awarded one

- half of the retirement accounts; thus, Julius believes he is entitled to more than an equal division of the equity in the marital residence. In th is case, there was conflicting testimony regarding the value of the marital residence. Neither party introduced an appraisal of the residence at the evidentiary hearing. Julius acknowledged that the residence had been previously appraised for $220,000 ; however, he opined that without needed repairs it only had a value of $200,000. Julius testified that cost of necessary repairs would be $59,203 , but acknowledge d some of th os e repairs had since been performed. The- 11

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P ro perty V aluation A dministrator (PVA) assessed the value of the residence as $211,432. As of March 1, 2018, the balance on the parties’ mortgage was $129,063.67. The circuit court ultimately utilized the PVA value , then subtracted the outstanding mortgage , and calculated the parties’ equity in the marital residence as $82,368.3 3

. The circuit court ordered Julius to pay Teresa one

- half of the equity in the marital residence , or $41,184.17, if he ele cted to remain in the marital residence . However, if Juliu s elected to sell the marital residence, the court then ordered the parties to divide the net proceeds equally. We do not believe that an equal division of the equity in the marital residence was in erro r . If Julius was dissatisfied with the court’s determination of the equity, he could have opted for the circuit court’s second option, which was to sell the marital residence and equally divide the proceeds with Teresa. The court did not abuse its discretion on this issue. We further note that Juli us argues the cumulative effect of the alleged erroneous decisions by the court in the division of marital property is unjust and otherwise fails to divide the property in just proportions as required by KRS 403.190. Having concluded that the court’s ruli ngs were not in error, this argument must also fail.

For the foregoing reasons, the October 23, 2019, Property Division Order of the Marion Circuit Court is affirmed.- 12

- ALL CONCUR.
BRIEF S AND ORAL ARGUMENT FOR APPELLANT: Jonathan R. Spalding Lebanon, Kent ucky BRIEF AND ORAL ARGUMENT FOR APPELLEE: Dawn L. McCauley Lebanon, Kentucky