Court Opinion

ID: 4691095
Source: CourtListenerOpinion
Date Created: 2021-05-28 14:08:26.297847+00
Date Added: 2024-06-11T08:05:05.633201
License: Public Domain

RENDERED: MAY 21, 2021; 10:00 A.M.
                         NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                              NO. 2020-CA-0910-MR

JOSEPH WILLIAM LUSTER                                                 APPELLANT

                  APPEAL FROM WARREN CIRCUIT COURT
v.               HONORABLE DAVID A. LANPHEAR, JUDGE
                         ACTION NO. 16-CI-00755

SHARON BIGAY LUSTER                                                     APPELLEE

                                 OPINION
                            AFFIRMING IN PART
                          AND DISMISSING IN PART

                                  ** ** ** ** **

BEFORE: COMBS, LAMBERT, AND MCNEILL, JUDGES.

COMBS, JUDGE: This case involves a post-decree dispute arising from a

dissolution of marriage. Joseph William Luster (Bill) appeals from an order of the

Warren Circuit Court sanctioning him for failing to comply with the terms of a

property settlement agreement. That agreement was incorporated into the court’s

decree dissolving Bill’s marriage to Sharon Bigay Luster (Sharon). Bill argues that

the court erred by concluding that he violated the terms of the decree and,
consequently, by imposing sanctions. In the alternative, he challenges the sanction

itself, contending that it bears no relation to the alleged breach of the terms of the

parties’ property settlement agreement. After our review, we affirm in part and

dismiss in part.

             Bill and Sharon were married in Simpson County, Kentucky, in

September 2009. In July 2016, Sharon filed a petition for dissolution of the

marriage. Three years later, the parties reached a settlement agreement with

respect to the division of their real and personal property. Each party was

represented by counsel throughout the proceedings -- including mediation of the

property issues.

             Pursuant to the provisions of Article IV of the parties’ agreement,

Sharon was to receive as her separate property: several bank and investment

accounts; the Land Rover and Porsche SUVs; the couple’s marital home in

Bowling Green, its contents, and an adjacent vacant lot; one-half of the

compensation paid to Bill under his consulting agreement with Puracap

Laboratories, LLC; one-half of the proceeds of her employment agreement with

Puracap Laboratories, LLC; one-half of the proceeds of the sale, assignment, or

transfer of certain tax credits awarded by the Puerto Rican government; the

proceeds of her retirement account; and all accounts held in her name alone. Bill

was to receive as his separate property: the parties’ home outside Nashville and its

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contents; an office building in Bowling Green; a Porsche 911 and a Denali SUV; a

catamaran fishing boat; every interest in Blue Caribe, Inc.; every interest in Blu

Pharmaceuticals, LLC; every interest in JHL Pharmaceuticals, LLC; a BB & T

bank account; one-half of the compensation paid to him under his consulting

agreement with Puracap Laboratories, LLC; one-half of the proceeds of Sharon’s

employment agreement with Puracap Laboratories, LLC; one-half of the proceeds

of the sale, assignment, or transfer of certain tax credits awarded by the Puerto

Rican government; and all accounts held in his name alone.

            Additionally, Bill agreed to pay Sharon $385,000 within 30 days.

Finally, the debt associated with each real estate interest was assigned to the party

receiving the property. The parties specifically agreed to “make reasonable efforts

to remove the other Party’s name from said debt within 180 days of the execution

of the Mediation Agreement (July 22, 2019) and indemnify and hold the other

harmless for the same.” The parties executed the settlement agreement on July 25,

2019. The agreement was approved by the court and incorporated into its decree

of dissolution entered on the following day.

             A few weeks later, Sharon filed a motion requesting that Bill be

ordered to provide to her information regarding his efforts to refinance the

Nashville home loan. She filed a separate motion requesting that Bill be ordered to

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provide information related to the equalization payment to her of $385,000 due on

August 21, 2019.

             On January 30, 2020, Sharon filed a motion requesting that Bill be

ordered to comply with the court’s decree by removing “her name from any

financial obligation to the [Nashville] property” and that he be fined $100 per day

until proof is provided that he has done so. Bill responded and indicated that he

had specifically bargained for -- and that Sharon had specifically agreed -- that he

“make reasonable efforts” to have Sharon released from her obligation with respect

to the home loan. Moreover, the court’s decree had incorporated that language.

He contended that the parties’ settlement agreement did not require that the loan be

refinanced by a date certain. Sharon argued to the court “you gotta set a deadline.”

             During its hearing, the court reiterated the parties’ agreement that Bill

make “reasonable efforts” to remove Sharon’s name from the home loan within

180 days of July 22, 2019. The court remarked that it was not “stretching it to say

that [Sharon] has some reasonable [basis] to expect that this should be

accomplished within six months.” It conceded that the agreement, incorporated

into the court’s decree, “doesn’t say that exactly.” Nevertheless, through its order

entered March 5, 2020, and without the benefit of an evidentiary hearing, the

circuit court granted Sharon’s motion. The court construed the terms of the

settlement agreement incorporated into its decree and concluded that the parties

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had a “reasonable expectation that [Sharon’s] financial obligation to the

[Nashville] property would be removed in the six-month timeframe, which expired

January 18, 2020.” The court ordered Bill to refinance the $1.2 million Nashville

home loan by noon on February 28, 2020. Failing to do so, Bill was to be assessed

a sanction of one penny to be doubled each day until he did so. The court

expressly denied that it intended to modify the terms of the divorce decree and

indicated that Bill could file a motion to amend the sanction order if it appeared

necessary.

                Three weeks later, on March 26, 2020, Bill filed a motion for relief

pursuant to the provisions of CR1 60.02. Bill indicated that he had made extensive

efforts to refinance the debt associated with the Nashville property to no avail.

Nevertheless, pursuant to the court’s order of March 5, 2020, Bill’s “fine” was

expected to exceed the amount of the outstanding home loan very shortly. Bill

contended that the court’s sanction was unfounded and that it bore no relation to

any injury that Sharon could claim she had suffered. His attorney represented that

Bill was actively working to leverage other assets in order to satisfy the Nashville

home loan in full.

                Following a hearing conducted remotely, the circuit court conceded

that the terms of its order of March 5, 2020, might be viewed as an abuse of

1
    Kentucky Rules of Civil Procedure.

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discretion. In a final order entered on March 30, 2020, the court “retracted” the

sanctions previously levied. The court now ordered Bill to pay a “$500 per day

fine. . . beginning February 28, 2020 to be levied each day at 12:00 Central Time

until such time as [Sharon] is removed from the [Nashville] mortgage.” Several

days later, Bill authorized a wire transfer of $1.2 million to pay off the loan tied to

his Nashville home.

             On April 21, 2020, Bill filed a motion “to determine sanction.” He

explained that while he had transferred funds sufficient to pay off the Nashville

home loan on April 2, 2020, the bank had not applied those funds until April 14,

2020. Because of a dispute concerning outstanding bank fees of $140, the

mortgage had not been released as anticipated. Nevertheless, Bill contended that

he “should be assessed fines only until April 2, 2020” -- $17,500. Sharon argued

that based on the number of days between February 28 and April 14, 2020, the

sanctions against Bill totaled $23,500.

             In an order entered on June 26, 2020, the Warren Circuit Court fixed

the sanction against Bill at $20,500. Bill was ordered to pay this amount within

three days. Bill filed his notice of appeal to this Court on July 21, 2020; Sharon

did not cross-appeal.

             On appeal, Bill argues that the family court erred by imposing any

sanction against him because there is no evidence to show that he violated the

                                          -6-
terms of the agreement incorporated into the court’s decree or that Sharon had

suffered some harm or prejudice as a result of the delay in paying off the Nashville

home loan. In the alternative, he contends that the court abused its discretion by

setting the sanction at $20,500, as this sum is not reasonably related to the

seriousness of the alleged violation.

             In his notice of appeal, Bill designated the court’s order of March 30,

2020 (establishing sanctions at $500 per day beginning February 28, 2020) and the

court’s subsequent order of June 26, 2020 (fixing the resulting sanction at $20,500)

as those he wished to appeal. However, the appeal of the court’s order of March

30, 2020 is clearly untimely.

             CR 73.02 provides that the notice of appeal shall be filed within 30

days after the date of notation of service of the judgment or order under CR

77.04(2). Pursuant to the provisions of CR 77.04, the circuit court clerk noted

service of the court’s order on March 30, 2020. Because it was filed more than

thirty days after service, the appeal of the March 30 order must be dismissed

pursuant to the provisions of CR 73.02. As a consequence, we may not review the

decision of the trial court to sanction Bill at $500 per day (beginning on February

28, 2020) “until such time as [Sharon] is removed from the [Nashville] mortgage.”

             However, we may consider the appeal of the court’s decision fixing

the sanction against him at $20,500. Having done so, we conclude that the court

                                         -7-
did not err by assessing this sanction. There is no disputing the fact that Sharon

remained obligated with respect to the Nashville home loan until at least April 14,

2020, when the payoff proceeds were applied to the loan by the bank. According

to the bank, the parties’ home loan secured by a mortgage on the Nashville

property was not paid off until that date. The trial court rejected in part Bill’s

argument that he should not be held responsible for the bank’s untimeliness in

applying the payoff and that his authorization of a wire transfer on April 2, 2020,

should have ended his daily sanction. In light of the clear mandate provided in the

court’s order of June 26, 2020 -- in terms drafted by Bill’s counsel, we cannot

agree that it was bound to do so.

             We AFFIRM the court’s order of June 26, 2020. We DISMISS as

untimely the appeal of the court’s order entered on March 30, 2020.

             ALL CONCUR.

 BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEE:

 Christopher T. Davenport                   Casey A. Hixon
 Bowling Green, Kentucky                    Bowling Green, Kentucky

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