Court Opinion

ID: 4667176
Source: CourtListenerOpinion
Date Created: 2021-03-12 15:08:13.247083+00
Date Added: 2024-06-11T08:02:54.234931
License: Public Domain

RENDERED: MARCH 5, 2021; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                            NOS. 2018-CA-0783-MR
                                    AND
                              2019-CA-0226-MR

JEAN KLEINERT RUEFF                                                APPELLANT

               APPEAL FROM JEFFERSON CIRCUIT COURT
v.           HONORABLE DEANA “DEE” MCDONALD, JUDGE
                       ACTION NO. 14-CI-501193

ROBERT CHARLES RUEFF                                                 APPELLEE

                                   OPINION
                                  AFFIRMING

                                  ** ** ** ** **

BEFORE: CALDWELL, KRAMER, AND MAZE, JUDGES.

MAZE, JUDGE: These appeals arise from the same circuit court action and have

been designated to be heard together. We have therefore elected to dispose of the

two appeals in a single opinion. The issues advanced in Appeal No. 2018-CA-

0783-MR center upon the refusal of the family court to reopen the judgment
dissolving the parties’ marriage pursuant to CR1 60.02 to correct and/or set aside

portions of the settlement agreement incorporated into the decree. Appeal No.

2019-CA-0226-MR stems from the refusal of the family court to grant a motion to

supplement the appellate record with updated appraisals of the property at issue in

Appeal No. 2018-CA-0783-MR. Finding no reversible error in the arguments

advanced in either appeal, we affirm the decisions of the Jefferson Family Court.

                Both appeals stem from the same factual background. The 1985

marriage of the parties was dissolved by a decree entered in 2017. Incorporated

into that decree was a mediated settlement agreement executed on February 1,

2017. Pertinent to the matters before us, the settlement agreement: 1) equally

divided a joint account at Stock Yards Bank; 2) assigned appellant Jean Rueff

(Wife) as her sole property an $80,000 whole life insurance policy; and 3) divided

the parties’ real property. Several months after the entry of the decree, Wife

moved to reopen the judgment pursuant to CR 60.02 alleging: 1) that there was a

typographical error in the settlement agreement concerning the balance of the joint

account at Stock Yards Bank; 2) that appellee, Robert Rueff (Husband), failed to

provide her the whole life insurance policy as set out in the agreement; and 3) that

the parties’ agreement with respect to the real property assigned to Husband must

1
    Kentucky Rules of Civil Procedure.

                                         -2-
be set aside due to recently obtained information which was intentionally and

fraudulently withheld from her during settlement negotiations.

             Concerning the first of these contentions, Wife alleged that while the

agreement reported the value of the joint bank account as $1,600.00, she had since

learned the actual value of the account was $16,000.00. The family court found

that at the time of the agreement Husband provided Wife with copies of bank

statements showing that the value of the account was, in fact, $1,600.00. The

family court also noted that Husband had provided the court with a copy of a check

to Wife for $800.00 representing her interest in the account as provided for in the

agreement. The family court also found persuasive Husband’s argument that

because the account was joint, Wife had free access to all information regarding

the account if she questioned the information Husband had provided. On the basis

of these findings, the family court concluded that Husband had complied with the

terms of the agreement and denied Wife’s motion to reopen that portion of the

settlement agreement.

             Next, the family court considered Wife’s contention that Husband

failed to provide her the $80,000.00 life insurance policy provided for in the

agreement. Wife argued that Husband had tendered a check in the amount of

$69,758.89 rather than the $80,000.00 value listed in their agreement. Husband

alleged that the $69,758.89 figure represented the cash surrender value of the

                                         -3-
policy; that he had initially misunderstood that the cash surrender value was what

was required under the agreement; and that he had since executed all documents

necessary to transfer the policy to Wife. The family court concluded that the

agreement indicated that Wife was to receive ownership of the policy as well as its

entire cash value of $80,000.00. The family court ordered Husband to pay wife an

additional $10,241.11, the difference between the tendered amount of $69,758.89

and $80,000,00.

             Finally, the family court rejected Wife’s contention that the agreement

must be reopened to address Husband’s intentional and fraudulent withholding of

information concerning the true value of the real property surrounding his

business. Wife alleged that at the time of negotiations concerning their real

property, Husband was aware of an expected deal to build a new soccer stadium in

Butchertown close to the properties assigned to Husband in the agreement. In

response to this contention, Husband argued that the court had appointed an expert

to perform valuations on all properties owned by the parties and that the expert had

provided documentation concerning the value of the Butchertown properties to

both parties. The family court found Wife’s reliance upon newspaper articles

regarding the stadium printed after the parties’ agreement insufficient to support

her claims of intentional withholding of vital information. Specifically, the family

court found that while Wife had provided the court with information indicating that

                                         -4-
the real property in Butchertown might be enhanced by the building of the soccer

stadium, she failed to produce evidence supporting her claim that Husband, his

counsel, or the court-appointed expert had any knowledge of the proposed stadium

at the time the agreement was negotiated and executed. Accordingly, the family

court concluded that Wife had failed to meet the stringent standards for reopening

a judgment under CR 60.02.

             Thereafter, both parties moved to alter or amend the previous order.

Wife argued that the judgment should be reopened to revisit the division of realty,

contending that not only were the properties improperly valued at the time of their

agreement, but that three separate pieces of property were never assigned under the

agreement. Husband argued that he had complied with the agreement by tendering

the case value of the insurance policy and that the $10,241.11 difference had been

left “as a contingency plan for paying the premium for the policy.” The family

court denied Wife’s motion in its entirety and granted Husband’s motion to the

extent that if no premiums had been withdrawn for the monies remaining in the

account, he owed Wife no additional sums. However, the family court concluded

that Husband remained liable to Wife for any amounts which had been withdrawn

from the $10,241.11.

             Both parties moved to amend the order on the CR 59 motion. Wife

objected to what she perceived to be a statement that she had been represented by

                                        -5-
counsel during settlement negotiations. In denying Wife’s motion, the family court

clarified that it acknowledged that Wife no longer employed counsel at the time of

the second mediation and execution of the settlement agreement. However, the

court also emphasized that Wife had independent counsel available to her at times

during the litigation process and had the opportunity to engage new counsel if she

so chose.

             Husband’s motion to amend addressed a perceived misconception that

the Butchertown properties had not been assigned to him in the settlement

agreement and thus remained joint property. Relying upon Husband’s submission

of a quitclaim deed in which Wife relinquished her interest in the properties

pursuant to the settlement agreement, the family court amended its previous order

to clarify that the properties had been assigned to Husband under the agreement

and that Wife’s interest in those properties had in fact been conveyed to Husband.

Appeal No. 2018-CA-0783-MR followed entry of that order.

             While that case was pending in this Court, Wife moved the family

court pursuant to CR 75.08 to modify the record to reflect the most current

appraisals on the Butchertown properties. Wife argued that because the updated

appraisals were material to the issue before the appellate court, the record was

inaccurate or was being misstated unless they were included. The family court

disagreed, holding that it was improper to supplement the record with information

                                         -6-
not in existence at the time the matter was adjudicated and thus denied the motion

to supplement. Appeal No. 2019-CA-0226-MR followed the entry of that order.

We will discuss the issues advanced in each of these appeals separately.

                         APPEAL NO. 2018-CA-0783-MR

             Wife advances in this appeal essentially the same issues which she

argued in her motion to reopen: 1) that because she was misled as to the true value

of the Butchertown properties, the decree should be reopened and the properties

sold, with an equal division of the proceeds; 2) that the decree should be reopened

to correct a misstatement as to the value of the joint account at Stock Yards Bank;

and 3) that Husband should be required to return and restore the cash value of the

insurance policy to reflect his wrongful withdrawal of funds.

             Wife predicates her contentions regarding the Butchertown properties

on claims of overreaching by Husband, with emphasis on the fact that she was

without assistance of counsel during the negotiations and execution of the

settlement agreement. Like the family court, we fail to be persuaded that Wife’s

contentions merit reopening the judgment.

             We commence by reiterating that appellate courts review a trial

court’s denial of a CR 60.02 motion for abuse of discretion. Richardson v.

Brunner, 327 S.W.2d 572, 574 (Ky. 1959). The familiar test for abuse of

discretion is whether the trial court’s decision is “arbitrary, unreasonable, unfair, or

                                          -7-
unsupported by sound legal principles.” Commonwealth v. English, 993 S.W.2d

941, 945 (Ky. 1999). An appellate court will affirm the lower court’s decision on

appeal unless there is found a “flagrant miscarriage of justice[.]” Gross v.

Commonwealth, 648 S.W.2d 853, 858 (Ky. 1983).

             Turning to an application of those principles to the issues advanced in

this appeal, we perceive no “flagrant miscarriage of justice” to have occurred in

this case. Wife first argues that the family court abused its discretion in refusing to

reopen the decree to allow a reappraisal of the Butchertown properties reflecting

their true value at the time of the February 1, 2017 agreement. Citing Burke v.

Sexton, 814 S.W.2d 290, 292 (Ky. App. 1991), Wife insists that her lack of counsel

at the second mediation so undermined the fairness of the resulting agreement as to

result in an “unconscionable and lopsided division of the Butchertown properties.”

We are not so persuaded.

             The main thrust of Wife’s argument is that the settlement agreement

was the product of Husband’s overreaching and lack of full disclosure. As found

by the family court, the record simply does not bear that out. Of particular

pertinence in this regard, the court noted that the values for all properties owned by

the parties had been established by a court-appointed expert who provided the

documentation for his evaluations to both parties. Acknowledging that the

proposed soccer stadium may enhance the value of the Butchertown properties, the

                                          -8-
family court nevertheless emphasized no evidence had been produced that

Husband, his counsel, or the court-appointed expert had any knowledge of the

location of the proposed stadium at the time the agreement was negotiated and

signed.

             This brings us back to Wife’s contention that her lack of counsel

placed her in such a disadvantaged bargaining position as to render the agreement

unconscionable. During the dissolution proceedings, Wife had been represented

by four different attorneys, a forensic accountant, and a financial planner. While

the fourth of these attorneys had withdrawn prior to the execution of the settlement

agreement, Wife’s financial planner accompanied her to the final mediation,

utilizing spreadsheets and other materials prepared by her former counsel.

Importantly, there is no suggestion that Wife, an educated businesswoman, was

coerced into going to the mediation without counsel or that she was in any way

coerced into entering into the agreement.

             The facts of this case are a far cry from those found to be so lopsided

as to require a finding of “overreaching . . . to the point of unconscionability” as

described in Burke. Id. In Terwilliger v. Terwilliger, the Supreme Court of

Kentucky reiterated this Court’s conclusion that the facts at work in Burke fell

within the dictates of CR 60.02(d) as a fraud on the proceedings:

                   In Burke v. Sexton, Ky. App., 814 S.W.2d 290
             (1991), Mr. Burke’s attorney drafted a marital settlement

                                          -9-
             agreement, which Mrs. Burke signed without benefit of
             counsel. The agreement gave Mr. Burke essentially all of
             the couple’s assets, and relieved him of any child support
             or maintenance obligations. Mrs. Burke received a
             vehicle, custody of the couple’s minor child, and waived
             notice of further proceedings. After signing the
             agreement, Mr. Burke led his wife to believe that he was
             no longer pursuing a divorce, thus the divorce and
             property settlement became final without Mrs. Burke’s
             knowledge. Mrs. Burke subsequently brought suit to
             reopen the settlement, which motion was granted and the
             settlement was found to be unconscionable. On appeal
             by Mr. Burke, the Court of Appeals found this sort of
             situation to fall under CR 60.02(d) as a “fraud affecting
             the proceedings.” Burke does not differ significantly
             from the case at bar. While in both cases a fraud was
             perpetrated against a party to the dispute, the ultimate
             result was a fraud against the court. Both in the case at
             bar, and as noted by the court in Burke, allowing the
             original decree to stand would be a miscarriage of justice.
             Id. at 292.

64 S.W.3d 816, 819 (Ky. 2002). Thus, the Supreme Court made clear that CR

60.02 is designed to provide relief for reasons of an extraordinary nature.

Moreover, CR 60.02 “requires a very substantial showing to merit relief under its

provisions.” Ringo v. Commonwealth, 455 S.W.2d 49, 50 (Ky. 1970). Relief

under the rule is to be granted only upon a clear showing of extraordinary and

compelling equities. Webb v. Compton, 98 S.W.3d 513, 517 (Ky. App. 2002). See

also Gross, 648 S.W.2d at 856.

             Wife simply failed to make anything approaching such a showing in

this case. The fact that Wife may have made a bad bargain does not render the

                                        -10-
agreement unconscionable, Peterson v. Peterson, 583 S.W.2d 707, 712 (Ky. App.

1979), nor does the fact that she chose to proceed with only the advice of her

financial planner. In short, nothing in this record would allow this Court to

conclude that the family court’s denial of Wife’s request for CR 60.02 relief

constitutes a “flagrant miscarriage of justice[.]” Gross, supra at 858.

             Neither do we perceive an abuse of discretion in the family court’s

conclusion with regard to the parties’ joint account at Stock Yards Bank. Wife

claims that although the agreement stated that the balance of that account was

$1,600.00, she subsequently learned that the balance was in fact $16,000.00. The

family court concluded that CR 60.02 relief was unavailable based upon a finding

that, due to the joint nature of the account, Wife had free access to all account

information regarding the account and did not have to depend on Husband’s

disclosures concerning the balance. Thus, the family court concluded that

Husband complied with the terms of the agreement as written by his payment of

$800.00, representing Wife’s share in the account. Based upon the evidence in the

record, nothing in that conclusion constitutes an abuse of discretion.

             Concerning the account, the settlement agreement provides as

follows:

             d. Each party will retain as their sole asset, free and clear
             from any claim of the other, their individually held bank
             accounts. The parties have a joint checking account at
             Stock Yards Bank which has a balance contained therein

                                         -11-
             of approximately $1,600. The parties agree this account
             will be divided equally between them, and thereafter, the
             account will be closed.

In response to Wife’s questioning of the balance in the account based upon her

belief that the agreement contained a typographical error, Husband provided bank

statements showing that on December 14, 2015, the account balance was

$1,674.60; on May 5, 2016, the account balance was $1,674.82; and on February

13, 2017, the account balance was $1,675.21. Thus, while Husband produced

account statements showing the value of the account prior to and at the time of the

settlement agreement, Wife relied solely on her “belief” that the amount had been

recorded incorrectly in the agreement. Coupled with the fact that Wife had equal

access to account data by which she could offer evidence to support her “belief”

that the balance was actually $16,000.00, and failed to do so, Husband’s evidence

in the form of bank statements provided ample support for the family court’s denial

of Wife’s motion to reopen. Clearly, there is no basis for a conclusion that the

family court’s decision was “arbitrary, unreasonable, unfair, or unsupported by

sound legal principles.” English, supra at 945.

             Finally, Wife argues that Husband has failed to provide her the full

$80,000.00 value of the life insurance policy assigned to her in the settlement

agreement. The family court actually found in Wife’s favor on her contention that

the agreement required that she receive the policy as her sole property, free and

                                        -12-
clear of any claim or contribution of Husband. Although Husband mistakenly

tendered Wife the cash surrender value of the policy, the family court concluded

that Wife was entitled to full ownership of the policy and ordered Husband to pay

Wife the sum of $10, 241.11 in addition to the cash surrender value of $69,758.89

which he had previously paid. Again, we find no abuse of discretion in the trial

court’s conclusion that Wife would be made whole by the payment of the

additional $10,241.11. And, as Husband argues in his brief, Wife’s contentions

regarding a policy rider for the parties’ oldest son were not presented to the family

court and are thus not properly preserved for our review.

             In sum, our review of the record convinces us that the family court did

not abuse its discretion in refusing to reopen the decree to modify the parties’

negotiated settlement agreement.

                         APPEAL NO. 2019-CA-0226-MR

             The single issue advanced in this appeal is that the family court erred

in refusing to grant Wife’s CR 75.08 motion to correct or modify the record on

appeal with updated appraisals of the Butchertown properties at issue in Appeal

No. 2018-CA-0783-MR. We affirm.

             Wife argued to the family court that the record must be supplemented

with an updated appraisal of the Butchertown properties to prevent the record on

appeal from being misstated. Wife supported this contention by alleging that the

                                         -13-
settlement agreement executed on February 1, 2017, had been based upon a two-

year-old 2015 appraisal and thus did not properly reflect the property’s true value

at the time the agreement was entered. Wife also asserted that during the Court of

Appeals prehearing conference, the parties had agreed to update the appraisal and

that she had agreed to pay the $3000.00 cost associated with obtaining an updated

appraisal. While Husband acknowledges agreeing that Wife could obtain an

updated appraisal at her expense, he denies agreeing that the record could, or

should, be corrected to include the new appraisal.

             In denying Wife’s motion, the family court entered the following

findings:

                    The information which [Wife] now wishes to
             supplement the record with was not acquired until
             November 27, 2018 although it proposes to value the
             property as of February 1, 2017. This information was
             not in existence at the time the underlying issue was
             adjudicated nor was it a fundamental element of the
             finding of the Court. The Court concluded that the four
             corners of the agreement of the parties were controlling
             and there was insufficient evidence offered to support a
             reopening of the agreement. Thus, although the Court
             does have the authority to consider the motion to do so,
             this Court does not have authority to actually supplement
             the record pursuant to CR 75.08. There has been no
             misstatement or omission by this Court as the evidence
             proposed by [Wife] did not exist at the time the February
             2, 2018 Order [denying Wife’s motion to reopen] was
             entered.

                                        -14-
These findings and conclusions comport not only with the plain language of CR

75.08 but with settled caselaw.

             CR 75.08 provides:

                    It is not necessary for the record on appeal to be
             approved by the trial court or judge thereof except as
             provided in Rule 75.12, Rule 75.13, and Rule 76, but if
             any difference arises as to whether the record truly
             discloses what occurred in the trial court, the
             difference shall be submitted to and settled by that
             court and the record made to conform to the truth. If
             anything material to either party is omitted from the
             record on appeal by error or accident or is misstated
             therein, the parties by stipulation, or the trial court,
             either before or after the record is transmitted to the
             appellate court, or the appellate court, on a proper
             suggestion or of its own initiative, may direct that the
             omission or misstatement shall be corrected, and if
             necessary that a supplemental record shall be certified
             and transmitted by the clerk of the trial court. All other
             questions as to the content and form of the record shall be
             presented to the appellate court.

(Emphasis added.) Caselaw interpreting this provision consistently confines its

application to situations in which material considered by the trial court has been

inadvertently omitted or misstated.

             In Triplett v. Commonwealth, our Supreme Court offered the

following explanation as to the strict and limited application of the rule:

             New material not considered by the trial court is not
             admissible and should not be considered by us. At the
             time the motion was sustained to permit the inclusion of
             the material it was with the understanding that the
             material had been offered as evidence upon a hearing in

                                         -15-
             the trial court and had been inadvertently omitted from
             the record, which is the only situation in which our civil
             rules allow the record to be supplemented, CR 75.08.
             Such was not the case and as this new evidence was not
             a part of the record in the trial court it is stricken
             from the record here and the case will be reviewed
             only upon the material considered by the trial court.

439 S.W.2d 944, 945 (Ky. 1969) (emphasis added.) Similarly, in First National

Bank of Louisville v. First National Bank, Prestonsburg, this Court reiterated that

principle, emphasizing that:

             Civil Rule 75.08 provides that a record can be corrected
             only by the adding of materials or the correction of
             language which arose at the trial, but were omitted from
             the record by a mistake or oversight. This rule does not
             permit the correction of mistakes on the part of
             litigants in presenting their case before the trial court.

567 S.W.2d 316, 318 (Ky. App. 1978) (emphasis added).

             Thus, because the family court correctly interpreted and applied CR

75.08, its denial of the motion to correct or supplement the record is affirmed.

                                  CONCLUSION

             Finding no error in the decision of the Jefferson Family Court in

Appeal No. 2018-CA-0783-MR or in Appeal No. 2019-CA-0226-MR, its orders

denying CR 60.02 relief and the CR 75.08 motion to correct or supplement the

appellate record are hereby affirmed.

             ALL CONCUR.

                                        -16-
BRIEFS FOR APPELLANT:    BRIEFS FOR APPELLEE:

Harold L. Storment       Katherine A. Ford
Louisville, Kentucky     Louisville, Kentucky

                        -17-