Court Opinion

ID: 9890515
Source: CourtListenerOpinion
Date Created: 2023-10-13 14:07:19.641318+00
Date Added: 2024-06-11T13:26:21.708465
License: Public Domain

RENDERED: OCTOBER 6, 2023; 10:00 A.M.
                        NOT TO BE PUBLISHED

                 Commonwealth of Kentucky
                           Court of Appeals
                              NO. 2022-CA-1305-MR

MICHAEL VINCENT LUSARDI                                                APPELLANT

                  APPEAL FROM BOONE CIRCUIT COURT
v.               HONORABLE JENNIFER R. DUSING, JUDGE
                        ACTION NO. 19-CI-00296

SARAH LEE LUSARDI                                                        APPELLEE

                                     OPINION
                                    AFFIRMING

                                   ** ** ** ** **

BEFORE: CETRULO, KAREM, AND MCNEILL, JUDGES.

CETRULO, JUDGE: Appellant Michael Vincent Lusardi (“Michael”) appeals a

decree of dissolution of marriage from Appellee Sarah Lee Lusardi (“Sarah”). On

appeal, Michael argues that the family court erred in valuing the marital residence

and abused its discretion in the division of the marital residence sale proceeds.

After review, we affirm.
                             I.    BACKGROUND

            Michael and Sarah were married in 2007, and during the marriage

they built a home in Verona, Kentucky (“marital residence”). In May 2019, Sarah

moved out of the marital residence, and Michael remained in the home. In June

2020, the Boone Family Court entered a bifurcated Decree of Dissolution of

Marriage that did not address the sale of the marital residence. On September 15,

2020, the family court entered Supplemental Findings of Fact and Conclusions of

Law (“2020 Distribution”) and a Supplemental Decree of Dissolution.

            The 2020 Distribution included a thorough discussion of the marital

residence, including reference to two appraisals. Both appraisals included values

of comparable homes, and each appraiser viewed the home both inside and outside.

Sarah’s appraisal – from a local appraiser – valued the home at $525,000;

Michael’s appraisal – from an out-of-town appraiser (Frankfort) – valued the home

at $463,000. The appraisers used different methods when making site adjustments,

and the family court heard testimony from the appraisers as to their methods. The

2020 Distribution stated:

            This Court finds [Sarah’s appraiser’s] testimony to be
            more credible and objective based on his experience in the
            Boone County area, and his consistency in valuing
            adjustments, whereas [Michael’s appraiser’s] valuations
            appear to be based more on subjective factors as to what
            she personally may prefer in a property, as well as
            inconsistent in the vast fluctuations in adjustments. The
            Court finds the value of the [marital property] is $525,000.

                                        -2-
               The 2020 Distribution applied the formula set forth in Brandenburg v.

Brandenburg, 617 S.W.2d 871, 872 (Ky. App. 1981) and considered the marital

and non-marital contributions of the parties, balanced with the appraisal value and

mortgage balance at the time of separation. The family court determined that the

total equity in the marital residence was $208,164.84; however, only $140,293.47

was marital.

               In prioritizing purchasing rights, the family court offered the first right

of purchase to Michael because he was currently residing in the marital residence.

The family court stated in the 2020 Distribution that

               if [Michael] is able to refinance the home to remove all
               liability from [Sarah] and pay [Sarah] her share of equity
               in the amount of $126,812.67 (which indicates her
               nonmarital claim of $56,665.93 + ½ ($140,293.47)),
               within ninety (90) days of entry of the Supplemental
               Decree of Dissolution herein, then [Michael] shall be
               awarded the marital residence and shall be entitled to sole
               and exclusive possession of the [marital residence] and all
               remaining equity. Upon closing of the refinance on the
               [marital residence] and payment to [Sarah] of her share of
               equity, [Sarah] shall sign a Quitclaim Deed to [Michael].
               [Michael] shall remain solely responsible for all expenses,
               insurance, taxes and liabilities associated with the marital
               residence.

               If [Michael] chooses not to remain in the home or is unable
               to refinance the [marital residence] and pay [Sarah] her
               share of the equity within ninety (90) days of entry of the
               Supplemental Decree of Dissolution herein, [Sarah] first
               has the option to buyout [Michael] by refinancing and
               paying [Michael] his total share of equity in the amount of
               $81,352.18 (which indicates his nonmarital claim of

                                            -3-
             $11,205.44 + ½ ($140,293.47)). If [Sarah] chooses not to
             buyout [Michael] or is unable to refinance and pay his
             share of equity, the [marital residence], within thirty (30)
             days of notice from [Sarah], shall be listed for sale with an
             agreed upon realtor at a sale price agreed upon by the
             parties or recommended by the realtor if an agreement
             cannot be reached. Both parties shall cooperate with the
             sale of the home and accept any reasonable offers. Both
             parties shall equally divide any agreed upon expenses or
             improvements as recommended by the realtor for the
             prompt sale of the [marital residence].

             Shortly thereafter, Michael decided it was not financially feasible for

him to retain the marital residence and told Sarah he did not wish to refinance the

mortgage. In October 2020, both Sarah and Michael hired separate real estate

agents and discussed the sale of the marital residence. In December 2020, Sarah

informed Michael that she would be exercising her option to refinance the marital

residence and would be buying him out as permitted by the Supplemental Decree

of Dissolution. In January 2021, Sarah closed on the marital residence and

Michael signed a quit claim deed; in February 2021, she took possession; in March

2021, she made improvements, listed the home for sale, and accepted an offer the

next day; and in May 2021, she sold the marital residence for $685,000.

             In September 2021, the family court entered additional Findings of

Fact and Conclusions of Law and Order (“2021 Distribution”) to address numerous

pending motions; only a few matters discussed in those motions are relevant here.

First, the parties could not agree on the verbiage and dates for use in a retirement

                                         -4-
account Qualified Domestic Relations Order (“QDRO”). The family court

addressed the QDRO in part and reserved in part, ordering the parties to attempt to

resolve the remaining QDRO issues through counsel or mediation, if necessary.

Second, the family court noted an error made in the 2020 Distribution. The family

court admitted that it “neglected, by mistake, to address a credit to [Michael] for

the paydown of the mortgage balance since separation in the event of [Sarah]

buying out the property.” The family court corrected this error and awarded

Michael additional funds. Third, Michael requested an even distribution of the

actual sale proceeds.

             Michael argued the subsequent sale – without an equal distribution of

the sale proceeds – was unjust pursuant to Kentucky Rule of Civil Procedure

(“CR”) 60.02 and resulted in an inequitable division of property as required by

Kentucky Revised Statute (“KRS”) 403.190. Michael argued,

             [b]ecause [Sarah] did not intend to refinance the [marital
             residence] to remain in the home, the parties should have,
             consistent with the [Supplemental Decree of Dissolution],
             placed the property for sale with an agreed upon realtor at
             a sale price agreed upon by the parties and divided the
             proceeds of the sale as set forth within the [Supplemental
             Decree of Dissolution].

             ...

                   The Court intended within the Supplemental Decree
             of Dissolution to allow each party the opportunity to retain
             the marital home based upon the appraisal value, however,
             the Court also recognized that if sold, the value of the

                                         -5-
             home would be known. This Court ordered that if sold,
             the division of the asset would be performed in a manner
             to reflect the known value of the home at the time of the
             sale.

             However, the family court did not agree. The 2021 Distribution stated

that Sarah had “discussed moving her mother in and sharing the home, but upon

getting into the home her mother backed out and she determined it was not

emotionally healthy for her to remain in the home so she decided to place it on the

market.” Further, the family court noted that Michael was given the first

opportunity to buy Sarah out of the property but declined; Sarah was then offered

the same opportunity and chose to utilize it. The family court went on to state that

             [b]oth parties acknowledge that the Court’s [2020
             Distribution and the Supplemental Decree of Dissolution]
             does not indicate the length of time that either party is
             required to stay in the home upon refinance, but only
             requires that if [Michael] is unable or does not wish to
             refinance and buy [Sarah] out of her share that the
             opportunity be given to [Sarah].

                      Clearly the value in the [marital residence]
             increased from the time the appraisals were performed
             until the house was sold. Both parties were aware or
             should have been aware in late 2020 that the real estate
             market was a much stronger market than it had been in
             2019 when both of their appraisals had been completed.
             Both parties of course had the ability to re-appraise the
             property at any point in their decision-making process in
             late 2020/early 2021.             Additionally, the Court
             acknowledges that [Sarah] put a great [deal of] time and
             funds into improvements to the home prior to listing it for
             sale . . . and it is not known how much those improvements
             also increased the value of the property.

                                         -6-
                   The Court finds that [Sarah] abided by the terms in
             the [Supplemental Decree of Dissolution] and that it
             would not be proper or appropriate to change the terms of
             the [Supplemental Decree of Dissolution] based on a
             change in circumstances that occurred in the value of the
             property after the [Supplemental Decree of Dissolution]
             was entered.

                   [Michael] testified that if [Sarah] had taken a loss to
             the home when she placed it back on the market, he would
             not be asking to be responsible for half of that debt.

As such, the family court denied Michael’s motion as it related to the distribution

of the sale proceeds, remaining consistent with the 2020 Distribution.

             In October 2021, Michael appealed. However, in March 2022, a

panel of this Court dismissed the appeal because the matter had not reached

finality. This Court determined that because the issue pertaining to the QDRO was

still outstanding, “it does not appear that all the rights of the parties have been

adjudicated. As such, the order is interlocutory, and the Court lacks jurisdiction to

consider the merits of the appeal.”

             On October 3, 2022, the family court entered the final QDRO order.

On November 1, 2022, Michael again filed a notice of appeal to this Court.

                         II.    STANDARD OF REVIEW

             Michael appeals both the 2020 Distribution and the 2021 Distribution,

challenging a finding of fact – the value of marital residence – and conclusions of

law – the equitable distribution of marital residence sale proceeds. The 2021

                                          -7-
Distribution addressed open matters in the dissolution litigation, but also acted as a

denial of Michael’s CR 60.021 motion.

               Findings of fact are reviewed pursuant to CR 52.01 which provides

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 of a probative

value. Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003) (citation omitted).

               KRS 403.190 governs the disposition of marital property in a

dissolution of marriage. Family courts have broad discretion in dividing marital

property, and this Court may not disturb a family court’s ruling on the division of

marital property unless it has abused its discretion. Smith v. Smith, 235 S.W.3d 1,

6 (Ky. App. 2006) (citation omitted). “The test for abuse of discretion is whether

the trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by

sound legal principles.” Commonwealth v. English, 993 S.W.2d 941, 945 (Ky.

1999) (citations omitted). Similarly, we review denial of a CR 60.02 motion for an

abuse of discretion. Age v. Age, 340 S.W.3d 88, 94 (Ky. App. 2011) (citing

Richardson v. Brunner, 327 S.W.2d 572, 574 (Ky. 1959)). “The decision as to

1
 CR 60.02 states, in relevant part, “On motion a court may, upon such terms as are just, relieve a
party or his legal representative from its final judgment, order, or proceeding upon the following
grounds: . . . (e) the judgment is . . . no longer equitable that the judgment should have
prospective application; or (f) any other reason of an extraordinary nature justifying relief.”

                                               -8-
whether to grant or to deny a motion filed pursuant to the provisions of CR 60.02

lies within the sound discretion of the trial court.” Id. (citation omitted).

                    CR 60.02 “is designed to provide relief where the
             reasons for the relief are of an extraordinary nature.” A
             very substantial showing is required to merit relief under
             its provisions. Moreover, one of the chief factors guiding
             the granting of CR 60.02 relief is the moving party’s
             ability to present his claim prior to the entry of the order
             sought to be set aside.

Wilder v. Wilder, 294 S.W.3d 449, 451 (Ky. App. 2009) (quoting U.S. Bank, NA v.

Hasty, 232 S.W.3d 536, 541-42 (Ky. App. 2007)).

                                  III.   ANALYSIS

             On appeal, Michael argues that the family court erred in its valuation

of the marital residence because it did not reassess the value after the house was

sold. As a result, Michael argues, the family court abused its discretion in the

division of the marital residence sale proceeds. He admits that an equitable

distribution of marital assets need not be equal, but “the division should not be so

disproportionate to give one party a windfall over the other.”

             Sarah argues the house valuation was not an error and that Michael

cannot meet his burden of showing that the family court’s division of the marital

                                          -9-
residence was arbitrary, unreasonable, unfair, or unsupported by sound legal

principles due to the “extensive, detailed findings” in the 2021 Distribution.2

               A. Value of Marital Residence

               In the 2020 Distribution, the family court walked through a thorough

analysis before reaching the marital residence value, therein discussing each

appraiser, his and her regional experience, and their approaches to valuating. The

family court noted the approximate timeframe of the appraisals and the number of

comparable sales in each analysis, as well as the varying acreage listed in each

appraisal and the appraisers’ differing methods when making site adjustments.

The family court stated that it found Sarah’s appraiser’s testimony to be “more

credible and objective” than Michael’s appraiser’s testimony and, therefore,

accepted Sarah’s appraiser’s price of $525,000 as the home value.

               In his motion challenging that finding, Michael argued that the value

of the marital residence should be changed to reflect the sale price of the property.

However, in the 2021 Distribution, the family court did not agree that such a

change would be proper. The family court acknowledged that the marital

2
  Sarah also argues that Michael’s appeal is not timely, but we do not agree. As this Court noted
in its order dismissing Michael’s first appeal, we must have jurisdiction through a final order or
appealable order before appellate review is permissible. See Wilson v. Russell, 162 S.W.3d 911,
913 (Ky. 2005). CR 54.01 defines a final or appealable judgment as “a final order adjudicating
all the rights of all the parties in an action or proceeding, or a judgment made final under Rule
54.02.” Finality was not reached here until the family court entered the QDRO in October 2022.
This appeal is timely.

                                              -10-
residence value had increased “from the time the appraisals were performed until

the house was sold” but that “[b]oth parties were aware or should have been aware

in late 2020 that the real estate market was a much stronger market than it had been

in 2019 when both of their appraisals had been completed.” Both parties could

have submitted updated appraisals but chose not to do so. Also, the family court

noted that Sarah improved the home prior to the sale, and “it is not known how

much those improvements also increased the value of the property.”

             Next, Michael argues that changing the value of the marital residence

to reflect the sale price is appropriate because the 2021 Distribution made another

substantive change to the marital residence assessment. However, the two

“changes” he requested are very different requests. The family court corrected an

“inadvertent” mistake made in the 2020 Distribution: its failure to address the

reduction in the principal balance of the mortgage from date of separation until

closing. As a result, the 2021 Distribution corrected this mistake, recalculated the

Brandenburg formula, and ordered Sarah to pay Michael the difference in his share

of the equity. However, the original value of the marital property at $525,000 was

not a mistake that necessitated change, but rather, it was a finding of fact based on

testimony and evidence. Michael cited no precedent that mandated the family

court “update” a prior finding of fact that was rooted in substantial evidence. The

                                         -11-
family court’s findings were supported by substantial evidence; therefore, its

valuation of the marital residence was not clearly erroneous.

             B. Division of Marital Residence Sale Proceeds

             Michael argues that the family court’s failure to re-value the marital

residence after Sarah sold the property resulted in an inequitable division of the

marital property. He notes that – after selling the home less than two months after

taking possession – Sarah received approximately three times the amount Michael

received from the marital residence distribution. He asserts the family court

abused its discretion by ordering an unjust, inequitable division of the couple’s

most valuable asset and erroneously denied his CR 60.02 motion. More

specifically, Michael asserts that – pursuant to CR 60.02(e) – the 2021 Distribution

is no longer equitable and – pursuant to CR 60.02(f) – the discrepancy in the

distribution of the marital residence proceeds justifies extraordinary relief.

However, we do not agree.

             CR 60.02(e) allows for a court to relieve a party of a judgment if it is

“no longer equitable that the judgment should have prospective application[.]”

However, this “prospective application” applies to judgments that “involve the

supervision of changing conduct or conditions and are thus provisional and

tentative.” Raisor v. Burkett, 214 S.W.3d 895, 907 (Ky. App. 2006) (quoting

Alliant Hospitals, Inc. v. Benham, 105 S.W.3d 473, 478 (Ky. App. 2003)) (internal

                                         -12-
quotation marks omitted). Here, the family court made final adjudications, only

reserving on one issue, the QDRO matter in the 2021 Distribution. With the

exception of the QDRO, the family court substantively finalized the distribution of

the marital assets and did not make the adjudications conditional, provisional, or

tentative. See Estate of Mills v. Mills, 473 S.W.3d 94, 98 (Ky. App. 2015) (Noting

that a decree of dissolution, like other civil judgments, becomes final ten days after

the order is issued.). As such, Michael is not entitled to relief under CR 60.02(e),

and the family court did not abuse its discretion in denying this motion.

             CR 60.02(f) is a “catchall provision” that applies “only if none of that

rule’s specific provisions applies.” Alliant Hospitals, Inc., 105 S.W.3d at 478

(citing Commonwealth v. Spaulding, 991 S.W.2d 651, 655 (Ky. 1999)).

             After determining that CR 60.02(a)-(e) do not apply,
             courts must consider two more factors: (1) whether the
             moving party had a fair opportunity to present his claim at
             the trial on the merits, and (2) whether the granting of CR
             60.02(f) relief would be inequitable to other parties.

Snodgrass v. Snodgrass, 297 S.W.3d 878, 884 (Ky. App. 2009) (internal quotation

marks and citations omitted).

             Here too, the family court properly found Michael was not entitled to

relief under CR 60.02(f) because he had a fair opportunity to present evidence of

an updated value for the marital residence prior to the 2021 Distribution. In his

CR 60.02 motion, Michael admitted to hiring a real estate agent in October 2020.

                                         -13-
It was not until December 2020 that Sarah informed him that she intended to

purchase the marital residence by refinancing the mortgage. The later sale by

Sarah, represented a missed opportunity by Michael, not an error in the division of

marital assets. The family court stated in the 2021 Distribution that the real estate

market had changed since the original appraisals and both parties could have

submitted new appraisals for the property. The family court did not abuse its

discretion in denying this motion.

             Next, Michael argues the failure to more evenly divide the marital

residence proceeds resulted in an inequitable division of marital assets pursuant to

KRS 403.190. Even though Sarah’s sale earned a large profit, that does not prove

the 2020 Distribution and 2021 Distribution were inequitable. The 2021

Distribution noted that Michael was given the first opportunity to buy out Sarah

but declined to take that option. Moreover, he testified that if Sarah had taken a

loss, he would not have shared that deficit. We find no abuse in the family court’s

distribution. “[A] trial court is not obligated to divide the marital property equally.

Rather, a trial court need only divide the marital property ‘in just proportions.’”

Smith, 235 S.W.3d at 6 (citations omitted). The marital residence was divided

equitably based on the known value at the time of the distribution. As the law

favors finality, we cannot accommodate a regret that came to fruition after an

equitable distribution of marital assets.

                                            -14-
             We find no abuse of discretion as to the division of the marital assets

within the 2020 Distribution and 2021 Distribution, nor with the denial of

Michael’s CR 60.02 motion because Michael did not show that the family court’s

distribution of marital assets was arbitrary, unreasonable, unfair, or unsupported by

sound legal principles.

                              IV.    CONCLUSION

             Therefore, finding no error nor an abuse of discretion, we AFFIRM

the Boone Family Court.

             ALL CONCUR.

BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEE:

Delana S. Sanders                         Jennifer B. Landry
Crescent Springs, Kentucky                Ft. Mitchell, Kentucky

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