Court Opinion

ID: 6322285
Source: CourtListenerOpinion
Date Created: 2022-03-11 15:05:32.547797+00
Date Added: 2024-06-11T09:20:44.085439
License: Public Domain

RENDERED: MARCH 4, 2022; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-0486-MR

TIMOTHY O’KEEFE                                                    APPELLANT

                APPEAL FROM BULLITT CIRCUIT COURT
v.             HONORABLE MONICA K. MEREDITH, JUDGE
                       ACTION NO. 20-CI-00627

ANGELA MARIE O’KEEFE                                                APPELLEES

                                  OPINION
                                 REVERSING
                               AND REMANDING

                                  ** ** ** ** **

BEFORE: LAMBERT, MAZE, AND L. THOMPSON, JUDGES.

MAZE, JUDGE: Timothy O’Keefe (Tim) appeals from the Findings of Fact,

Conclusions of Law, Judgment and Decree of Dissolution of the Bullitt Circuit

Court dissolving his marriage to Angela O’Keefe (Angela). On appeal, Tim raises

three issues: 1) the amount of funds assigned to Angela as non-marital property; 2)

the propriety of the maintenance award to Angela; and 3) the propriety of the
attorney’s fee award to Angela. The Court having found reversible error in the

trial court’s failure to make required findings, we reverse and remand its judgment

in this case.

                Tim and Angela were married on October 23, 1999, in Jefferson

County, Kentucky. At the time of their divorce, Angela was 47 years old and

employed as a clerical assistant for the Bullitt County Public Schools. She also

worked as a weekend bartender at a golf course. Although she was employed as a

mortgage loan processor prior to the parties’ marriage, during the marriage, she

was out of the workforce, acting as a “stay at home” mom during the minority of

the parties’ two children. In addition, she has an associate degree in computer

information systems and a certificate in medical billing. Tim was 55 years old and

worked for the Kentucky Transportation Cabinet as a field technician. He also

worked a second job as a basketball referee. He has no education beyond his high

school diploma.

                Prior to trial, Tim and Angela reached an agreement as to the

distribution of automobiles, the (now adult) children’s bank accounts and the

division of credit card debt. On January 13, 2021, the matter came before the court

for trial on the remaining issues. Further proceedings were conducted on March

24, 2021, as to the issue of Angela’s attorney’s fees.

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   I.       DIVISION OF NON-MARITAL PROPERTY:

              The trial court found that Angela used the sum of $28,118.80 as the

   down payment for the parties’ marital home, the balance of the $80,572.85

   purchase price having been financed with a mortgage loan. The Court further

   found that the parties have since refinanced the home numerous times.

   However, no evidence was introduced regarding the fair market value of the

   property at the time of any of those transactions. Although it was undisputed

   that Angela made the initial down payment from a non-marital source, the court

   held that the increase in value of that property was attributable to the joint

   efforts of the parties. The court then concluded that the current value of the

   marital residence is $146,000.00 to be offset by the amount of the non-marital

   contribution and the sum of $1,250.00 in loan proceeds from Tim’s 401(k)

   account taken after separation, leaving a mortgage balance of $77, 301.06 to be

   assumed by Angela. The court found the amount of marital equity to be

   $39,330.14 and directed Angela to pay to Tim the sum of $19,665.07 as his

   share.

              On appeal, Tim has argued that although Angela did indeed make the

initial down payment using non-marital funds, she failed to introduce sufficient

evidence tracing that contribution through the multiple refinancing transactions

into the current equity in the home and therefore, the trial court erred in crediting

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Angela with $28,118.80 as her non-marital contribution. Further, Tim argues that,

of that initial non-marital contribution, the sum of $5,930.00 represents closing

costs and therefore, pursuant to Schoenbachler v. Minyard, 110 S.W.3d 776 (Ky.

2003), does not increase the equity in the property and should not be used in

calculating Angela’s non-marital interest. As an initial matter, the Court notes that

the HUD Settlement statement from the parties’ closing on the property reflects a

down payment of $22,188.30 and closing costs of $5,930.50. Therefore, based on

Schoenbacher, supra, the Court concludes that the trial court erred in including the

closing costs as a part of Angela’s non-marital contribution.

                The classification of inherited funds is a matter to be reviewed de

novo. Young v. Young, 314 S.W.3d 306 (Ky. App. 2010). KRS1 403.190(3)

contains a statutory presumption that property acquired during marriage is marital

property. Therefore, the burden of proof of proving the non-marital nature of the

property and then tracing the property into a marital asset lies with the party

claiming the non-marital interest. Kleet v. Kleet, 264 S.W.3d 610 (Ky. App. 2007).

However, in Chenault v. Chenault, 799 S.W.2d 575, 578-79 (Ky. 1990), the

Kentucky Supreme Court retreated from “draconian requirements” for tracing,

particularly as applied to “persons of lesser business skills or persons who are

imprecise in their record-keeping abilities.”

1
    Kentucky Revised Statutes.

                                            -4-
             The case of Smith v. Smith, 503 S.W.3d 178 (Ky. App. 2016),

involved the tracing of non-marital property, a CD, into the purchase of the marital

home. The Smith Court held that the trial court appropriately found that the

testimony of Mrs. Smith, her mother, and Mr. Smith was sufficient to demonstrate

the non-marital character of her contribution. However, Mr. Smith argued that his

former wife was required to show the reason for the increase in value of the

residence. The Court then concluded that Mrs. Smith had shown that the increase

was due to additional marital contribution and “economic conditions,” and found

that there had been “no principal debt reduction made on the property.” Id. at 184.

             Here, as in Smith, supra, Angela has clearly demonstrated that the

sum of $22,188.30 was a non-marital contribution to the purchase of the marital

home. She testified as to the inheritance and tendered a copy of her mother’s last

will and testament. Indeed, Tim’s counsel indicated that they did not intend to

challenge Angela’s inheritance. However, this Court cannot find that any evidence

was presented to the trial court as to the reason for the increase in value of the

property. Therefore, as there was no such proof connecting the non-marital

contribution to the increase, this Court reverses and remands this portion of the

trial court’s judgment for a finding in that regard.

                                          -5-
   II.   ALLOCATION OF MAINTENANCE:

             As to the necessity for maintenance, the trial court found that both

parties are middle aged and nearing the end of their earning years, Angela has been

hampered in her earning ability by both her lack of education and her years out of

the workforce. Although the trial court concluded that the parties’ financial

positions had been “equalized” by the property disposition, it still found that

Angela was entitled to spousal maintenance pursuant to KRS 403.200 in the

amount of $500 per month for ten years.

             On appeal, Tim argues that the trial court failed to make the findings

required by KRS 403.200(1)(a) and (b). These provisions require that, to make a

maintenance award, the trial court must find that the recipient not only lacks

enough property to meet his “reasonable needs” but is “unable to support himself

through appropriate employment[.]” While the trial court stated that its award was

made “pursuant to KRS 403.200,” it failed to make any findings as to Angela’s

“reasonable needs,” before finding that “after receiving her portion of the marital

estate in combination with the non-marital asset the [c]ourt has recognized should

be awarded to her, the financial circumstances of the parties going forwarded [sic]

are much more equalized.”

             As stated in Wattenberger v. Wattenberger, 577 S.W.3d 786, 787-88

(Ky. App. 2019), “the threshold conditions of KRS 403.200(1) must be met before

                                         -6-
a circuit court can legally consider the factors enumerated in KRS 403.200(2)(a)-

(f).” As such, this Court must vacate and remand the matter to enable the trial

court to make the requisite findings.

             Further, the trial court’s Findings of Fact, Conclusions of Law,

Judgment and Decree of Dissolution, does not reflect that it considered all the

factors set forth in KRS 403.200(2)(a)-(f) regarding the amount and duration of

maintenance. Not only must a court awarding maintenance consider the recipient’s

resources and needs, but her ability to obtain employment, the parties’ standard of

living, the length of the marriage, her age, physical and emotional condition, and

the “ability of the spouse from whom maintenance is sought to meet his needs

while meeting those of the spouse seeking maintenance.” KRS 403.200(2)(f).

However, since this Court concludes that because the trial court failed to meet the

“threshold” for an award of maintenance, it need not reach a decision as to the

propriety of the amount and length of the award.

   III.   ATTORNEY’S FEES:

             Finally, the trial court awarded attorney’s fees to Angela based on the

fees each party anticipated paying for representation as well as the court’s

“personal knowledge” as to the costs of legal fees in the local community. On

appeal, Tim argues that the trial court abused its discretion in making its award

based on these considerations.

                                         -7-
             KRS 403.220 provides that an award of attorney’s fees may be made

“after considering the financial resources of both parties[.]” Such an award has

been held to be entirely discretionary with the trial court. Tucker v. Hill, 763

S.W.2d 144 (Ky. App. 1988). In Smith v. McGill, 556 S.W.3d 552 (Ky. 2018), the

Court overruled Sullivan v. Levin, 555 S.W.2d 261 (Ky. 1977), Hale v. Hale, 772

S.W.2d 628 (Ky. 1989), Bishir v. Bishir, 698 S.W.2d 823 (Ky. 1985), and

Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001), holding that a finding of

financial imbalance is required. Instead, the Smith Court concluded that “[w]hile

financial disparity is no longer a threshold requirement which must be met in order

for a trial court to award attorney’s fees, we note that the financial disparity is still

a viable factor for trial courts to consider in following the statute and looking at the

parties’ total financial picture.” 556 S.W.3d at 556. In this case, the trial court

failed to consider “the parties’ total financial picture,” including Tim’s post-

judgment resources, and therefore, its judgment as to an award of attorney’s fees is

reversed and this matter is remanded for additional findings.

             Accordingly, we reverse and remand the judgment of the Bullitt

Circuit Court for the required findings.

             ALL CONCUR.

                                           -8-
BRIEFS FOR APPELLANT:    BRIEF FOR APPELLEE:

Kirk Hoskins             Allison S. Russell
Louisville, Kentucky     Shanna R. Ballinger
                         Louisville, Kentucky

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