Court Opinion

ID: 9908270
Source: CourtListenerOpinion
Date Created: 2023-12-08 15:06:09.955343+00
Date Added: 2024-06-11T12:49:04.379969
License: Public Domain

RENDERED: DECEMBER 1, 2023; 10:00 A.M.
                         NOT TO BE PUBLISHED

                  Commonwealth of Kentucky
                             Court of Appeals
                                NO. 2022-CA-1132-MR

JENNIFER CARR                                                              APPELLANT

                  APPEAL FROM JEFFERSON CIRCUIT COURT
v.                HONORABLE SHELLEY M. SANTRY, JUDGE
                          ACTION NO. 13-CI-502609

THOMAS CARR                                                                   APPELLEE

                                       OPINION
                                      AFFIRMING

                                     ** ** ** ** **

BEFORE: COMBS, DIXON,1 AND ECKERLE, JUDGES.

DIXON, JUDGE: Jennifer Carr appeals the order of the Jefferson Circuit Court,

entered April 25, 2022, enforcing the parties’ mediated settlement agreement.

After careful review of Jennifer’s brief, the record, and the law, we affirm.

1
 Judge Donna Dixon authored the Opinion before her tenure with the Kentucky Court of
Appeals expired on November 20, 2023. Release of this Opinion was delayed by administrative
handling.
            BACKGROUND FACTS AND PROCEDURAL HISTORY

                Asserting that Jennifer violated the parties’ 2013 settlement agreement

by claiming their daughter as a tax dependent, Thomas motioned the court to order

that she amend her 2021 filings. The court granted the motion, over Jennifer’s

objection, and denied her subsequent motion to amend. This appeal challenging

the court’s enforcement of the settlement agreement timely followed. We will

introduce additional facts as they become relevant.

                               STANDARD OF REVIEW

                As an initial matter, Thomas failed to file a brief. Accordingly, we are

permitted to: “(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.” RAP2 31(H)(3). Under

the facts of this case, we decline to enforce a penalty and will review Jennifer’s

brief on its merit.

                The “[t]erms of a settlement agreement are enforceable as contract

terms.” Nelson v. Ecklar, 588 S.W.3d 872, 878 (Ky. App. 2019) (citing Cagata v.

Cagata, 475 S.W.3d 49, 56 (Ky. App. 2015)). The review of a contract “must

2
    Kentucky Rules of Appellate Procedure.

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begin with an examination of the plain language of the instrument. ‘In the absence

of ambiguity, a written instrument will be enforced strictly according to its terms,’

and a court will interpret the contract’s terms by assigning language its ordinary

meaning and without resort to extrinsic evidence.” Kentucky Shakespeare

Festival, Inc. v. Dunaway, 490 S.W.3d 691, 694 (quoting Wehr Constructors, Inc.

v. Assurance Co. of Am., 384 S.W.3d 680, 687 (Ky. 2012)). “The interpretation of

a contract, including determining whether a contract is ambiguous, is a question of

law to be determined de novo on appellate review.” Id. at 695 (citing Abney v.

Nationwide Mut. Ins. Co., 215 S.W.3d 699, 703 (Ky. 2006)).

                               LEGAL ANALYSIS

             During the underlying dissolution of marriage proceedings, the parties

reached a mediated settlement agreement in 2013 resolving issues related to their

children. Relevantly, the agreement provides as follows:

             Tax Exemptions for Children

             The Parties will each claim one child as a dependent until
             only one child is available as an exemption. At that
             point, they will alternate the exemption with [Thomas]
             claiming odd numbered years, and Jennifer claiming
             even numbered years. Jennifer will claim [their son] and
             [Thomas] will claim [their daughter] commencing in
             2013 and continuing so long as the exemption is
             allowable.

             Jennifer contends, on appeal, that the court misinterpreted the above

agreement and thereby deprived her of a tax benefit to which she alone is entitled.

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Supporting its enforcement order, the court concluded that the parties intended to

share generally in the tax benefits associated with their children. Jennifer,

however, asserts that the agreement was unambiguously conditioned on the

availability of the dependent child exemption specifically and that the exemption

was suspended for tax year 2021 in favor of a child tax credit.3 Jennifer argues that

the agreement was, therefore, moot and the court’s order enforcing it must be

reversed. We are not convinced that the agreement excludes the admittedly

available child tax credit, which directly reduces a claimant’s tax obligation,4 given

that the exemption is ordinarily defined as the “state of being exempt,” and exempt

means to be “free or released from some liability or requirement to which others

are subject.”5 However, even accepting arguendo Jennifer’s interpretation of the

settlement agreement, her claim is without merit.

                Though the tax code was amended to reduce the exemption to zero for

tax years 2018 through 2025, the statute states specifically that this change “shall

not be taken into account in determining whether a deduction is allowed or

allowable” and continues to list the exemption as an allowed deduction. 26

3
    26 United States Code Annotated (U.S.C.A.) § 24(c) and 26 U.S.C.A. § 152(c) and (e).
4
  26 U.S.C.A. § 24. In comparison, the child exemption reduces a claimant’s taxable income.
See 26 U.S.C.A. § 63(b)(2).
5
 See exemption, MERRIAM-WEBSTER DICTIONARY, https://www.merriam-
webster.com/dictionary/exemption (last visited Nov. 14, 2023); Exempt, MERRIAM-WEBSTER
DICTIONARY, https://www.merriam-webster.com/dictionary/exempt (last visited Nov. 14, 2023).

                                               -4-
U.S.C.A. § 151(c) and (d)(5)(B). Consequently, the agreement is not moot, and

Thomas was entitled to claim the parties’ daughter for tax year 2021. The fact that

Thomas may receive a financial benefit from the child tax credit instead of the

exemption itself does not change this analysis as the issue is collateral to the

agreement. Additionally, Jennifer’s assertion that she is the only one qualified by

the tax code to claim the child as a dependent is unavailing since federal law has

long permitted a custodial parent to release their claim in favor of a noncustodial

parent. 26 U.S.C.A. § 24(c); 26 U.S.C.A. § 152(c) and (e).6

                                     CONCLUSION

               Therefore, and for the foregoing reasons, the order of the Jefferson

Circuit Court is AFFIRMED.

               ALL CONCUR.

    BRIEF FOR APPELLANT:                      NO BRIEF FOR APPELLEE.

    Katie M. Brophy
    Louisville, Kentucky

6
  See also Adams-Smyrichinsky v. Smyrichinsky, 467 S.W.3d 767 (Ky. 2015), for a discussion
about the role of release in allocating tax benefits between parents.

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