Opinion ID: 1663248
Heading Depth: 1
Heading Rank: 3

Heading: Although MVG's and Schatzie's Claim In This Case Is Moot, The Trial Court Could Join MVG and Schatzie As Parties To This Case In Order To Enforce Its Dissolution Decree.

Text: The Court of Appeals denied MVG's and Schatzie's writ of prohibition in a four-sentence order, finding that since the petitioners fall under the `alter ego' rule, the trial court had jurisdiction over the corporations and could appoint a receiver to manage them. We initially note that even in writ cases originating in the Court of Appeals, an appellate court is prohibited from infringing on the fact-finding role of the trial court. Commonwealth v. Deloney, 20 S.W.3d 471, 473-474 (Ky. 2000). Here, the trial court made no mention of the alter-ego theory in its detailed, forty-page findings of fact and conclusions of law. Although there is some evidence in the trial court's findings demonstrating that Dr. Dudee frequently paid personal expenses through his corporate accounts, the trial court relied on this evidence neither to justify its authority over the corporations nor to support an alter-ego theory. [6] Rather, the trial court referenced the testimony involving Dr. Dudee's co-mingling of his corporate assets only in the context of assigning a monetary value to MVG and Schatzie as part of the marital estate. [7] Thus, the Court of Appeals engaged in improper fact-finding when it determined that MVG and Schatzie were Dr. Dudee's alter-ego. Turning to the issue of mootness, an appellate court is required to dismiss an appeal when a change in circumstance renders that court unable to grant meaningful relief to either party. Brown v. Baumer, 301 Ky. 315, 321, 191 S.W.2d 235, 238 (Ky.1945). Unless there is an actual case or controversy, this Court has no jurisdiction to hear an issue and is prohibited from producing mere advisory opinions. Commonwealth v. Hughes, 873 S.W.2d 828, 829 (Ky.1994); Ky. Const. § 110. In this case, because the trial court has discharged Mr. Gardner as the receiver of MVG and Schatzie, Dr. Dudee is now in sole control of MVG. With Dr. Dudee again in control of MVG, this Court would not be able to grant meaningful relief to either party in deciding whether the trial court did or did not have jurisdiction to appoint a receiver. Granting the writ would be futile because the receiver no longer exists and the trial court is not imposing any judicial control over Dr. Dudee's business entities. Similarly, denying the writ would be meaningless because again, the trial court has already discharged the receiver. Therefore, the question of whether the trial court had jurisdiction to appoint a receiver to oversee MVG and Schatzie is moot and this Court does not have jurisdiction to consider it. [8] Despite this finding of mootness, we note that there is most likely a continuing question in this case as to whether the trial court can exercise control over Dr. Dudee's business entities in order to effectuate the dissolution decree. Because this issue could arise again in this case, we briefly acknowledge the authority provided to trial courts in divorce proceedings by KRS 403.150(6). As this Court recognized in Lewis LP Gas, Inc. v. Lambert, 113 S.W.3d 171, 173, n. 1 (Ky.2003), overruled on other grounds by Hoskins v. Maricle, 150 S.W.3d 1 (Ky.2004), KRS 403.150(6) states that in a dissolution proceeding, the trial court may join additional parties proper for the exercise of its authority to implement this chapter. Given the facts and circumstances of this case, it would be proper for the trial court to join MVG and Schatzie under KRS 403.150(6) so that it could ensure that Ms. Dudee receives the property judgment to which she is entitled. Two factual elements present in this case entitle the trial court to invoke KRS 403.150(6) and join MVG and Schatzie as additional parties. The first element is Dr. Dudee's continued failure to abide by the trial court's orders requiring him to pay Ms. Dudee child support, maintenance, and the $1,299,038 property settlement. As noted, since the entry of the dissolution decree in February 2006, Dr. Dudee has refused to pay any amount of the property settlement to Ms. Dudee. Furthermore, Dr. Dudee stopped paying his monthly maintenance requirements in February 2007, even though the trial court ultimately held that he had the resources and the ability to make these payments. The second element is the fact that MVG is solely-owned by Dr. Dudee, and Schatzie is owned jointly by Dr. Dudee and Ms. Dudee. This is not a case where innocent third-party shareholders would be harmed if their corporation were joined as a party to a divorce proceeding. The only owners of the corporations are already parties to the dissolution action and, moreover, both Dr. Dudee and Ms. Dudee consented to the trial court's original appointment of the receiver. It was not until the trial court ordered the receiver to prioritize payments to Ms. Dudee over the regular business expenses that MVG challenged the court's jurisdiction. Although joining corporations under KRS 403.150(6) will not be appropriate in every divorce proceeding where spouses own corporate assets, because of the facts of this case, joining MVG and Schatzie as additional parties is a proper way, and perhaps the best way, for the trial court to enforce its dissolution decree.