Court Opinion

ID: 4641985
Source: CourtListenerOpinion
Date Created: 2020-12-11 15:06:16.414299+00
Date Added: 2024-06-11T08:00:27.151693
License: Public Domain

RENDERED: DECEMBER 4, 2020; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2020-CA-0111-MR

CHRISTINE M. MEEUSEN                                               APPELLANT

                 APPEAL FROM KENTON CIRCUIT COURT
v.               HONORABLE DAWN M. GENTRY, JUDGE
                        ACTION NO. 06-CI-01246

GARY C. KEMPHAUS                                                     APPELLEE

                                   OPINION
                                  AFFIRMING

                                 ** ** ** ** **

BEFORE: GOODWINE, MCNEILL, AND L. THOMPSON, JUDGES.

GOODWINE, JUDGE: Christine M. Meeusen (“Christine”) appeals from the

October 16, 2019 order of the Kenton Circuit Court, Family Division, denying her

motion to enforce the parties’ 2014 agreed order and for reimbursement of attorney
and expert fees and the order denying her motion to alter, amend, or vacate entered

on December 20, 2019.1 After careful review, we affirm.

                                    BACKGROUND

              Christine and Gary C. Kemphaus (“Gary”) were married in 1991.

Their marriage was dissolved in 2007. As part of the dissolution, the parties

entered into a property settlement agreement. In Article II of the property

settlement agreement, the parties agreed all material marital assets had been

disclosed and if, in the future, any material marital asset not previously disclosed

by a party is discovered, the other party would be entitled to the entirety of the fair

market value of the asset. Record (“R.”) at 106-07. Furthermore, Article II

requires either party to “at any time upon presentation from the other party sign a

release authorizing that party to view account statements for any account that can

be traced as having been in existence during the parties’ marriage and up to the

date of the agreement.” R. at 107-08. Article X of the property settlement

agreement allows the party seeking enforcement of the agreement to recoup

attorney fees and costs where “the court finds that the enforcement action was

proper and/or the other party is found to be in contempt of court[.]” R. at 123.

1
 The December 20, 2019 order was not attached to Appellant’s brief but was found at pages
727-28 of the record. It was also listed in the notice of appeal.

                                             -2-
                 After entry of the property settlement agreement, Christine engaged in

a years’ long search for marital funds hidden by Gary. This search included

several requests and subsequent orders for Gary to sign all financial releases

presented by Christine under Article II of the settlement agreement. In 2012,

Christine retained Terry Yoho, a certified public accountant specializing in

financial forensics, to uncover marital funds Gary did not disclose at the time of

divorce.

                 In 2013, in the United States District Court, Eastern District of

Kentucky, Gary pled guilty to a count of structuring transactions to evade reporting

requirements.2 Gary’s structuring scheme entailed numerous cash deposits of just

under $10,000.00 into Fifth Third Bank account *7168 (“Fifth Third *7168”) and

Fifth Third Bank account *5816 (“Fifth Third *5816”) throughout 2010 and 2011.

Gary then transferred these funds into PNC Bank account *6138, Charles Schwab

account *9318, and Discover Financial Services account *5137. As part of Gary’s

plea agreement, the Internal Revenue Service (“IRS”) seized $238,329.07 from the

PNC, Charles Schwab, and Discover accounts.

                 On August 1, 2014, rather than proceeding to trial, the parties entered

into an agreed order meant to be a “global resolution on all pending matters.” R. at

433-37. As part of the agreement, Gary disclosed all bank accounts under his

2
    31 United States Code (“U.S.C.”) § 5324(a)(3).

                                                -3-
name or held by a third party on his behalf as of July 22, 2014, in the attached

Exhibit 1. In relevant part, the parties also agreed to the following:

          1. [Gary] hereby acknowledges that all of the funds seized
              by the United States Government (approximate amount
              of $238,329) under case titled United States Government
              v. Gary C. Kemphaus in United States District Court,
              Eastern District of Kentucky (Northern Division at
              Covington), Case Number 2:12-CR-60-DLB-1; USM
              Number 17212-032 were funds that should have been
              disclosed under Article II of the Property and Custody
              Agreement filed with this Court on May 3, 2007.
              Pursuant to the terms of Article II of said Agreement,
              [Christine] is entitled to receive 100% of these funds as
              her property. [Christine] will be pursuing recovery of the
              funds seized by the United States Government. The
              parties hereto waive any claim against the other
              regarding these seized funds.
          ...
          5. [Gary] shall provide to [Christine] and her attorney
             within 45 days from July 31, 2014, all documentation to
             provide proof to [Christine] of all transactions and
             tracing of $207,424.58 that was deposited in Everbank
             under [Gary’s] name as of November 8, 2012 (or date
             near to said timeframe). This documentation shall
             include all statements from all financial institutions in
             which these funds were deposited into and withdrawn
             from. If a deposit of these funds went into an account
             that already contained a balance, the entire balance of
             said account shall be documented and traced to verify
             that the funds are part of the funds listed on Exhibit 1. If
             an account arises that is not listed on Exhibit 1 and/or a
             balance exists that is not listed on Exhibit 1, the entire
             funds not disclosed on Exhibit 1 shall immediately
             become [Christine’s] property and [Gary] shall forfeit the
             entire sum of funds (100% of all funds) over to
             [Christine] within five days. If the funds referenced
             herein are traced into a third party’s account, [Gary] shall

                                          -4-
             pursue and obtain all of the funds traced into said third
             party’s account and deliver those funds to [Christine].

         6. [Gary] shall provide [Christine] and her attorney within
            45 days from July 31, 2014, all documentation of all
            transactions and tracing of all funds that [Gary] held in
            Atlantic International Bank or bank located in Belize
            C.A. that received the funds referenced in [Gary’s]
            October 7, 2009 letter to Credit Suisse. This
            documentation shall include all statements from all
            financial institutions in which these funds were deposited
            into and withdrawn from. If a deposit of these funds
            went into an account that already contained a balance, the
            entire balance of said account shall be documented and
            traced to verify that the funds are a part of the funds
            listed on Exhibit 1. If an account arises that is not listed
            on Exhibit 1 and/or a balance exists that is not listed on
            Exhibit 1, the entire funds not disclosed on Exhibit 1
            shall immediately become [Christine’s] property and
            [Gary] shall forfeit the entire sum of funds (100% of all
            funds) over to [Gary] within five days. If the funds
            referenced herein are traced into a third party’s account,
            [Gary] shall pursue and obtain all of the funds traced into
            said third party’s account and deliver those funds to
            [Christine].
R. at 434-35.

             Gary filed a notice of compliance with the agreed order, providing, in

part, his Everbank and Atlantic International Bank statements. A subsequent order

required Gary to disclose additional information, including complete lists of his

accounts at Discover and PNC. Gary then filed two additional notices of

compliance providing letters from Discover regarding his accounts, a list of PNC

accounts, and authorizations for Christine to receive records from Everbank, PNC,

                                         -5-
and Discover. Christine repeatedly objected to the sufficiency of the

documentation provided by Gary.

                 In 2018, Christine filed a motion to enforce the 2014 agreed order.

Specifically, Christine alleged Gary failed to trace two transactions: a $179,225.00

check written from the Everbank account and a $26,777.00 withdrawal from the

Discover Bank account. In his response, Gary provided documentation of deposits

in the amounts of $179,225.00 and $26,777.00 into Bank of Kentucky account

*7830 (“Bank of Kentucky *7830”). R. at 600.

                 On September 26, 2019, the family court heard Christine’s motion to

enforce the 2014 agreed order. Christine presented the testimony of Ms. Yoho,3

who completed an undisclosed funds analysis on Christine’s behalf. Ms. Yoho’s

full report was entered into the record as Petitioner’s Exhibit 2. In preparing her

report, Ms. Yoho reviewed Gary’s account statements, checks, and deposits from

various financial institutions, the 2014 agreed order, and documents from the

criminal action, including the plea agreement and the affidavit from Robert

Wilson, a former IRS investigator who worked on Gary’s case.4 Ms. Yoho

testified she discovered at least $131,311.00 had been undisclosed by Gary and

3
    The parties stipulated to Ms. Yoho’s qualification as an expert witness.
4
 Mr. Wilson’s affidavit, as well as Gary’s plea agreement, are included as exhibits to Ms.
Yoho’s report.

                                                  -6-
was owed to Christine. Video Record (“V.R.”) at 9/26/19, 9:54:50. Ms. Yoho

reported this amount did not include the funds seized by the IRS.

               Ms. Yoho’s testimony and report primarily focused on funds

deposited into and withdrawn from Bank of Kentucky *7830, which she testified

had not been disclosed to Christine. First, she testified $200,000.00 was

transferred from Everbank into Gary’s Discover account and $26,777.00 was later

transferred from Discover into Bank of Kentucky *7830. Second, $179,225.00

was transferred directly from Everbank into Bank of Kentucky *7830. Ms. Yoho’s

report includes a chart showing $131,311.00 in undisclosed funds withdrawn from

Bank of Kentucky *7830 between October 2010 and July 2011. This amount does

not include funds traced to deposits into Fifth Third *7168, Gary’s brother’s

account, because they were seized by the IRS. Ms. Yoho was unable to trace the

$131,311.00 to any other bank account associated with Gary. Ultimately, Ms.

Yoho concluded the $131,311.00 she identified as undisclosed funds were not part

of the $238,329.07 seized by the IRS. She also testified to Gary’s statements from

the criminal case where he admitted to keeping $30,000.00 to $70,000.00 in cash

in his home.

               On cross-examination, Ms. Yoho admitted to preparing a version of

her report prior to entry of the 2014 agreed order. Although she appeared unsure

of what documents relating to the criminal case she reviewed in preparing the

                                         -7-
earlier report, she admitted she likely had Mr. Wilson’s affidavit from the criminal

case which discusses deposits into and withdrawals from Bank of Kentucky *7830.

When questioned about a number of deposits of just under $10,000.00 into Fifth

Third *5816, which occurred during June and July 2011 and were documented in

Gary’s plea agreement, Ms. Yoho testified those could not be traced back to Bank

of Kentucky *7830 because each withdrawal and deposit did not occur on the same

day. V.R. at 9/26/19, 11:48:33.

              As part of her case, Christine introduced more than forty

authorizations to release account information Gary signed between 2010 and 2013

which enabled her to examine his records from various financial institutions.

These included authorizations for Christine to gain access to Gary’s bank

statements from Discover, PNC, Everbank, Credit Suisse, and Atlantic

International Bank. Of particular note, Christine introduced releases for all

accounts in Gary’s “name and/or as a co-signatory, joint, trustee, etc.” held by

Fifth Third Bank and Bank of Kentucky signed by Gary on February 19, 2013.5

Furthermore, Christine introduced a document from Bank of Kentucky showing

Bank of Kentucky *7830 was opened in the name of BES Enterprise, LLC, a

company owned by Gary, with the business’ tax identification number (“TIN”).

5
  The record indicates BB&T, which acquired Bank of Kentucky, did not immediately release the
records for Bank of Kentucky *7830 despite being presented with a release signed by Gary.

                                            -8-
However, this document also lists Gary as the signatory on the account and

includes his name, birthdate, and Social Security number.

             Gary then testified. He claimed the $131,311.00 identified by Ms.

Yoho as undisclosed funds had been seized by the IRS. He admitted he hid funds

from Christine and the United States government. V.R. at 9/26/19, 12:34:15. He

testified Bank of Kentucky *7830 was not disclosed in Exhibit 1 to the 2014

agreed order because the account was closed in 2011. He also claimed to have

signed every release for his bank accounts provided by Christine between 2010 and

2013.

             Finally, Robert Wilson testified. Mr. Wilson seized the funds from

Gary’s accounts and interviewed him regarding his structuring of transactions. He

testified that, during the IRS investigation, he identified the withdrawals from

Bank of Kentucky *7830 as suspicious. He was able to trace the funds withdrawn

from Bank of Kentucky *7830 into Fifth Third *5816 despite approximately four

months passing between the last withdrawal and first deposit. According to Mr.

Wilson, it is not uncommon for someone who is engaging in structuring

transactions to withdraw funds, hold them for some time, and then deposit them

into another account. V.R. at 9/26/19, 2:05:08. He also confirmed Bank of

Kentucky *7830 was closed in 2011. Mr. Wilson concluded the funds deposited

into Fifth Third *5816 in June and July 2011 originated from Bank of Kentucky

                                         -9-
*7830 and were seized by the IRS because the IRS investigation uncovered no

other source for the funds.

                 In its October 16, 2019 order, the family court found Gary complied

with the terms of the 2014 agreed order. Specifically, the court found Mr.

Wilson’s affidavit, which discussed Bank of Kentucky *7830, and Gary’s plea

agreement, which referenced Fifth Third *7168, were available through the

criminal case and Christine’s expert relied upon them in preparing her report. The

court further found Gary signed releases for all accounts in his name in 2013.

Relatedly, the family court found that, although BB&T did not immediately release

Gary’s bank records based upon the authorization, Gary was the signatory on the

Bank of Kentucky account and the account included his Social Security number

and date of birth. Based upon the testimony of Mr. Wilson, the court determined

any undisclosed funds were seized by the IRS and Christine waived any claim

against Gary regarding the seized funds in the 2014 agreed order. The family court

also denied Christine’s motions for attorney fees and reimbursement for expert

fees. The court later denied Christine’s subsequent motion under CR6 59.05. This

appeal followed.

6
    Kentucky Rules of Civil Procedure.

                                          -10-
                            STANDARD OF REVIEW

             This Court will only set aside a family court’s findings of fact if they

are clearly erroneous. Moore v. Asente, 110 S.W.3d 336, 353-54 (Ky. 2003)

(citation omitted). Findings are only clearly erroneous where they are not

supported by substantial evidence. Id. at 354 (citation omitted).

             Substantial evidence is evidence 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 induce
             conviction in the minds of reasonable men. Regardless
             of conflicting evidence, the weight of the evidence, or the
             fact that the reviewing court would have reached a
             contrary finding, due regard shall be given to the
             opportunity of the trial court to judge the credibility of
             the witness because judging the credibility of witnesses
             and weighing evidence are tasks within the exclusive
             province of the trial court.
Id. (citations omitted).

                                    ANALYSIS

             On appeal, Christine raises three arguments: (1) the family court

abused its discretion when it incorrectly placed the burden for tracing of funds on

Christine; (2) the family court’s findings of fact are clearly erroneous and the court

abused its discretion when it failed to follow the terms of the 2014 agreed order;

and (3) the family court abused its discretion when it failed to award Christine

$131,311.00, attorney fees, and expert fees.

                                         -11-
                First, Christine asserts the family court abused its discretion by

placing the burden of tracing on her and failing to require Gary to prove the

undisclosed funds were either seized by the IRS or were in an account listed in

Exhibit 1. Christine is correct that the terms of an agreed order between the parties

are enforceable as contract terms. Cataga v. Cataga, 475 S.W.3d 49, 56 (Ky. App.

2015) (citation omitted). Regarding agreements on division of marital assets,

unless found to be unconscionable, the terms of the agreement are binding upon

the family court. KRS7 403.180(2). Herein, the parties agreed Gary would provide

all documentation to trace funds deposited into Everbank and Atlantic International

Bank. However, Christine then elected to hire Ms. Yoho to trace funds on her

behalf in addition to the tracing conducted by Gary. Because Christine chose to

trace the funds independently rather than being required to do so by the family

court, we cannot conclude the court erred.

                Next, Christine argues the family court abused its discretion in

disregarding Ms. Yoho’s tracing of the $131,311.00 withdrawn from Bank of

Kentucky *7830. The question before the family court was whether those funds

were seized by the IRS and the parties offered conflicting evidence. First,

Christine presented the testimony of Ms. Yoho and her corresponding report to

show $131,311.00 was undisclosed by Gary and owed to Christine under the 2014

7
    Kentucky Revised Statutes.

                                            -12-
agreed order. Ms. Yoho identified these funds as originating in the Everbank

account and being deposited into Bank of Kentucky *7830 before being withdrawn

over the course of several months in 2011. She was unable to trace those

withdrawals into any of Gary’s bank accounts. Specifically, she testified to being

unable to trace any funds from Bank of Kentucky *7830 into Fifth Third *5816

because each withdrawal and deposit did not occur on the same day.

             Mr. Wilson then testified to tracing funds withdrawn from Bank of

Kentucky *7830 into Fifth Third *5816. The funds were deposited into Fifth Third

*5816 during June and July 2011 in amounts just under $10,000.00. When asked

about the passage of four months between the withdrawals and deposits, he

indicated such practices were not uncommon for someone attempting to structure

transactions to avoid federal regulations. During his investigation, Mr. Wilson

could trace the funds deposited into Fifth Third *5816 to no source other than

Bank of Kentucky *7830. Those funds were later transferred into the accounts

from which funds were seized by the IRS.

             “[T]he family court is in the best position to evaluate the testimony

and to weigh the evidence[.]” L.D. v. J.H., 350 S.W.3d 828, 830 (Ky. App. 2011)

(citation omitted). Here, the family court was presented with conflicting evidence

relating to the seizure of the $131,311.00 and, after consideration of all of the

                                         -13-
evidence, was convinced by Mr. Wilson’s testimony that the funds were seized by

the IRS. We will not disturb this finding.

             Additionally, Christine specifically argues the family court erred in

disregarding Ms. Yoho’s tracing of funds from Everbank to the purchase of Gary’s

home and into Fifth Third *7168 by way of Bank of Kentucky *7830. Ms. Yoho’s

report and testimony indicate the funds Gary withdrew to purchase his home and

those traced into Fifth Third *7168 were excluded from the $131,311.00 Christine

claims she is owed under the 2014 agreed order. Furthermore, Ms. Yoho testified

the funds deposited into Fifth Third *7168 were excluded from her calculation of

funds owed to Christine because they were seized by the IRS. The family court is

in the best position to weigh the evidence presented at trial. Moore, 110 S.W.3d at

354 (citation omitted). Where Christine presented no evidence these funds were

included in the amount she claimed to be owed, we cannot say the family court

abused its discretion in declining to award them to her.

             Furthermore, it is evident from the record Christine had access to

relevant bank records, including those for Bank of Kentucky *7830 and Fifth Third

*5816, from the time Gary signed authorizations in 2013. Gary signed more than

forty such authorizations for numerous accounts and financial institutions between

2010 and 2013. Additionally, as found by the family court, prior to entry of the

2014 agreed order, Christine and Ms. Yoho had access to Mr. Wilson’s affidavit

                                        -14-
and Gary’s plea agreement from the criminal action, which reference the Bank of

Kentucky and Fifth Third accounts. On this basis, we cannot conclude the family

court’s finding that Gary complied with the terms of the 2014 agreed order was not

supported by substantial evidence.

             Finally, Christine claims the family court abused its discretion in

failing to award her $131,311.00, attorney fees, and expert fees. We have affirmed

the family court’s finding that the $131,311.00 was seized by the IRS above and

need not repeat the analysis. Furthermore, Article X of the parties’ property

settlement agreement allows a party to recoup attorney fees and costs only where

the family court “finds that the enforcement action was proper and/or the other

party is found to be in contempt of court[.]” R. at 123. No such findings were

made in this matter. As we have affirmed the family court’s findings that Gary

complied with the 2014 agreed order and the undisclosed funds were seized by the

IRS, we have no basis to disturb the court’s denial of Christine’s requests for fees.

                                  CONCLUSION

             For the foregoing reasons, we affirm the October 16, 2019 order of the

Kenton Circuit Court, Family Division.

             ALL CONCUR.

                                         -15-
BRIEFS FOR APPELLANT:         BRIEF FOR APPELLEE:

Ruth B. Jackson               Stephen D. Wolnitzek
Crestview Hills, Kentucky     Covington, Kentucky

                            -16-