TERESA FAITH WALDRON v. JOSEPH NEAL WALDRON TERESA FAITH WALDRON v. JOSEPH NEAL WALDRON; and MORRIS & MORRIS, PSC
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RENDERED: JUNE 9, 2000; 10:00 a.m.
NOT TO BE PUBLISHED
MODIFIED: SEPTEMBER 22, 2000; 2:00 p.m.
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 1998-CA-002868-MR
TERESA FAITH WALDRON
v.
APPELLANT
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE REBECCA OVERSTREET, JUDGE
CIVIL ACTION NO. 95-CI-02891
JOSEPH NEAL WALDRON
APPELLEE
** ** ** ** **
NO. 1999-CA-000460-MR
TERESA FAITH WALDRON
v.
APPELLANT
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE REBECCA OVERSTREET, JUDGE
CIVIL ACTION NO. 95-CI-02891
JOSEPH NEAL WALDRON; and
MORRIS & MORRIS, PSC
APPELLEES
OPINION
AFFIRMING IN PART, VACATING IN PART,
REVERSING IN PART AND REMANDING
** ** ** ** **
BEFORE:
HUDDLESTON, McANULTY and MILLER, Judges.
HUDDLESTON, Judge:
In these consolidated appeals Teresa Waldron
challenges various rulings made by Fayette Circuit Court in a
decree dissolving her marriage to Joseph Waldron and in a postdecree order awarding costs and a fee to Joseph’s attorney pursuant
to Kentucky Rule of Civil Procedure (CR) 68.
We hold that CR 68 is not applicable to actions for
dissolution of marriage and, therefore, that the circuit court
erred in awarding costs and an attorney’s fee based on Teresa’s
failure to obtain a decree more favorable than Joseph’s offer of
judgment; that the circuit court did not err when it adopted a
decree prepared by Joseph’s attorney; that the court’s award of
custody of the parties’ two teen-aged sons to Joseph and visitation
to Teresa is supported by substantial evidence; that there is
substantial evidence to support the court’s finding as to Teresa’s
weekly wages for the purpose of awarding child support; that the
court erred in failing to apply the parties’ stipulation fixing the
cut-off date for the accumulation and valuation of marital assets;
that the court did not err in dividing a marital debt; and that the
court
properly
classified
a
fifteen-year-old
VCR
as
marital
property.
I.
FACTS AND PROCEDURAL HISTORY
Teresa and Joseph were married for over thirteen years.
They are the parents of two children,
Steven (now age 15).
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Christopher (now age 17) and
In 1995, the parties separated, and a month later Joseph
filed a petition for dissolution of marriage.
Initially, the
parties agreed to joint custody of their sons with Teresa as the
primary residential custodian.
In time, however, the proceedings
became contentious.
Due apparently to the discontinuation of the use of
domestic relations commissioners, the proceedings were delayed.
Following a one-day trial, the circuit court issued a decree
dissolving the parties’ marriage and, inter alia, awarding sole
custody of the children to Joseph.
Teresa appealed.
While the first appeal was pending, the circuit court
considered Joseph’s motion to award an attorney’s fee pursuant to
CR 68.
During the course of the proceedings, Joseph had made an
offer of judgment pursuant to CR 68, which Teresa had not accepted.
In granting Joseph’s motion, the court found that the offer of
judgment was more favorable than the decree obtained.
The second
appeal on the issue of the award of costs and an attorney’s fee
followed.
II.
AWARD OF ATTORNEY’S FEE AND COSTS
Teresa raises various issues regarding the award of an
attorney’s fee and costs to Joseph. Because we deem it unnecessary
to address all of her claims of error, we shall only consider
whether CR 68 is applicable to actions for dissolution of marriage.
CR 68 provides, in relevant part, that:
(1) At any time more than 10 days before the trial
begins, a party defending against a claim may serve upon
the adverse party an offer to allow judgment to be taken
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against him for the money or property, or to the effect
specified in his offer, with costs then accrued.
The
offer may be conditioned upon the party's failure in his
defense.
If within 10 days after service of the offer
the adverse party serves written notice that the offer is
accepted, either party may then file the offer and notice
of
acceptance,
thereof,
and
together
thereupon
with
the
judgment
proof
shall
of
be
service
rendered
accordingly, except when the offer is one conditioned
upon failure in defense, in which case the judgment shall
be rendered when the defense has failed.
* * *
(3) * * *
If the judgment finally obtained by the
offeree is not more favorable than the offer, the offeree
must pay the costs incurred after the making of the
offer.
* * *
There is a dearth of authority addressing whether CR 68,
which requires an award of costs after a judgment is obtained that
is not more favorable than a previously filed offer of judgment, is
applicable
to
actions
for
dissolution
generally, to equitable actions.
so holding, nor have we found one.
of
marriage
or,
more
The parties do not cite a case
The only reported case we have
located, In re the Marriage of Marshall,1 holds that a Colorado
civil rule like CR 682 “is not applicable to an action in equity
1
781 P.2d 177 (Colo. Ct. App. 1989).
2
Both the Colorado rule and Ky. R. Civ. Proc. (CR) 68 are
(continued...)
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that does not seek a money judgment at law.”3
went on to say that:
The Colorado court
“A request for the entry of permanent orders
requesting child custody and support, maintenance, and property
division in a dissolution of marriage action cannot be considered
to be an action at law for money damages.”4
In Kentucky, an action for dissolution of marriage is a
statutory action in which the circuit court exercises its equitable
powers.5
While
as
a
general
rule
parties
to
lawsuits
are
responsible for their own attorney’s fee, the General Assembly has
authorized
an
award
of
such
fees
in
certain
circumstances.
Kentucky Revised Statutes (KRS) 403.220 provides that:
The
court
from
time
to
time
after
considering
the
financial resources of both parties may order a party to
pay a reasonable amount for the cost to the other party
of maintaining or defending any proceeding under this
chapter and for attorney’s fees, including sums for legal
services
rendered
commencement
judgment.
of
and
the
costs
incurred
proceeding
or
prior
after
to
entry
the
of
The court may order that the amount be paid
directly to the attorney, who may enforce the order in
his name.
2
(...continued)
based on Fed. R. Civ. Proc. (FRCP) 68.
3
Marshall, supra, n. 1, at 181.
4
Id.
5
Ky. Rev. Stat. (KRS) Chapter 403.
-5-
The purpose of this statute is to put the parties, insofar as
possible, on an equal footing, that is, to insure that a party who
lacks
financial
resources
will
be
able
to
employ
counsel
to
represent the party’s interests in such an important matters as the
custody
and
support
property and debts.
of
children
and
the
division
of
marital
Consistent with the Colorado decision cited
above, it is our opinion that CR 68 is not applicable to actions
for dissolution of marriage.6
Instead, an attorney’s fee must be
assessed under KRS 403.220 which requires the court awarding the
fee to consider the financial resources of both parties.7
This is
not to say that in making an award of such fees that the court may
not consider whether one party or the other unnecessarily prolonged
the action or otherwise acted irresponsibly in preventing the
matter from being brought to a timely conclusion.8
Accordingly, we
vacate the award of a fee to Joseph’s attorney of record under CR
68 and remand this case to Fayette Circuit Court to determine
whether an attorney’s fee should be awarded to either party under
KRS 403.220.
III.
TENDERED DECREE
Teresa contends that the circuit court erred in adopting
Joseph’s tendered decree as its own.
Joseph responds by arguing
6
In many, if not most cases, it would be virtually
impossible to determine who is the prevailing party when
considering all aspects of the decree — child custody, visitation,
child support, maintenance, and division of marital property and
debts.
7
As a prerequisite to assessing attorney fees, the circuit
court need only find disparity in the financial resources of the
parties. Gentry v. Gentry, Ky., 798 S.W.2d 928, 937 (1990).
8
Id.
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that Teresa has failed to preserve this error.
Even if she has
not, Teresa contends, the court committed a palpable error.
We must first determine whether Teresa has preserved the
alleged error.
CR 52.04 provides:
A final judgment shall not be reversed or remanded
because of the failure of the trial court to make a
finding of fact on an issue essential to the judgment
unless such failure is brought to the attention of the
trial court by a written request for a finding on that
issue or by a motion pursuant to Rule 52.02.
And CR 52.02 provides that:
Not later than 10 days after entry of judgment the court
of its own initiative, or on the motion of a party made
not later than 10 days after entry of judgment, may amend
its findings or make additional findings and may amend
the judgment accordingly.
The motion may be made with a
motion for a new trial pursuant to Rule 59.
In this case, Teresa did not move the court pursuant to
CR 52.02 or 52.04 to amend its decree.
Thus, Teresa has not
preserved the issue for appellate review. Furthermore, the circuit
court did not commit a palpable error.
According to CR 61.02:
A palpable error which affects the substantial rights of
a party may be considered by the court on motion for a
new trial or by an appellate court on appeal, even though
insufficiently
raised
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or
preserved
for
review,
and
appropriate relief may be granted upon a determination
that manifest injustice has resulted from the error.
This alleged error does not rise to the level of palpable
error contemplated by CR 61.02.
In Prater v. Cabinet for Human
Resources,9 Prater asserted that “the trial court failed to make
independent findings of fact as required by CR 52.01.”10
Although
the circuit court in Prater did not make any changes to proposed
findings of fact submitted by the Cabinet, the Supreme Court
concluded that “[i]t is not error for the trial court to adopt
findings of fact which were merely drafted by someone else.”11
Likewise, the circuit court did not err in this case in adopting
findings drafted by Joseph’s counsel where the findings were
clearly the court’s own.
IV.
STATUTORY GUIDELINES IN AWARDING CHILD CUSTODY
Teresa claims that the circuit court erred in awarding
sole custody of the parties’ sons to Joseph, and she cites evidence
to support an award of custody to her.
“[I]n reviewing the decision of a trial court the test is
not whether [an appellate court] would have decided [the case]
differently, but whether the findings of the trial judge were
clearly erroneous or [the trial court] abused [its] discretion.”12
9
Ky., 954 S.W.2d 954 (1997).
10
Id. at 956.
11
Id. (citing Bingham v. Bingham, Ky., 628 S.W.2d 628
(1982)).
12
Cherry v. Cherry, Ky., 634 S.W.2d 423, 425 (1982).
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The findings in this case are not clearly erroneous nor did the
court abuse its discretion in awarding custody to Joseph.
KRS 403.270 outlines the procedures to be followed by the
circuit court in awarding child custody and sets out the factors to
be considered by the court.
In announcing its findings of fact and
conclusions of law, the court stated that it would be in the best
interest of the children to award sole custody to Joseph with
reasonable visitation for Teresa and gave its reasons for doing so.
In the decree, the court simply awarded sole legal custody to
Joseph without further explanation.
In Cherry v. Cherry,13 the Supreme Court considered a
similar challenge to perfunctory findings.
The circuit court in
Cherry had utilized a cursory application of the statute in its
determination of child custody.
The Supreme Court concluded that
the appellant should have moved for in-depth findings pursuant to
CR 52.02 or 52.04.14
Because no objection had been raised, the
Court found that the argument had been waived. Nevertheless, after
reviewing the record, the Court concluded that “[e]ven though the
trial
judge
may
not
have
made
in-depth
findings
of
fact
as
contemplated by CR 52.01; . . . when the record as a whole is
considered, we do not find that the action of the trial judge was
clearly erroneous . . . .”15
In this case, the court’s finding that
it was in the best interest of the children to award Joseph sole
13
Ky., 634 S.W.2d 423 (1982).
14
Text, supra.
15
Id. at 425.
-9-
custody was not clearly erroneous nor did the court abuse its
discretion in awarding sole custody.
V.
AWARD OF TIME SHARING
Teresa also argues that the circuit court erred in
limiting its award of time sharing to her.
criticizes
the
court’s
visitation
utilized
use
by
of
In particular, she
standardized
Fayette
Circuit
guidelines
Courts
in
for
awarding
visitation.
KRS 403.320(1) provides:
A parent not granted custody of the child is entitled to
reasonable visitation rights unless the court finds,
after a hearing, that visitation would endanger seriously
the child's physical, mental, moral, or emotional health.
Upon request of either party, the court shall issue
orders which are specific as to the frequency, timing,
duration, conditions, and method of scheduling visitation
and which reflect the development age of the child.
The
statute
reasonable.
provides
no
guidance
for
determining
what
is
To promote uniformity and to provide a starting point
for making a determination of what is reasonable, the circuit court
used the standardized guidelines.
While the statute does not specifically authorize the
creation of such standardized guidelines, we cannot say that their
use is an abuse of discretion.
The guidelines are simply that -
guidelines; they provide a framework for establishing visitation in
this
case.
visitation
Due
is
not
to
as
the
ages
of
important
-10-
the
as
it
children,
would
be
the
with
issue
of
younger
children.
The issue of time sharing is a discretionary issue for
the trial court.
It is not our prerogative to second-guess the
court.
VI.
AWARD OF CHILD SUPPORT
Teresa also claims that in setting the amount she was
required to contribute to the support of her children the circuit
court erred in finding that she was earning $552.00 per week.
Instead, she argues that her weekly income is but $534.00.
As has been said, we will not set aside a trial court’s
findings of fact unless they are clearly erroneous. In determining
child support, the court has to apply KRS 403.211-.212.
In fixing
the amount of support pursuant to KRS 403.212, the court must
consider the adjusted gross income of the parties and set support
payments in proportion to their incomes.
The circuit court heard evidence as to Teresa’s weekly
income.
The crux of her claim is that the court incorrectly based
her weekly income on four hours of overtime instead of three.
During cross-examination, she testified that she averaged three
hours per week overtime.
However, in the three weeks prior to her
testimony, she had four hours of overtime per week.
She conceded
that her weekly income during those weeks was $480.00 at her hourly
rate plus $72.00 in overtime.
In light of this testimony, the
circuit court’s finding of fact that her weekly income was $552.00
is not clearly erroneous.
VII.
CUT-OFF DATE FOR ACCUMULATION OF MARITAL ASSETS
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Teresa also argues that the circuit court erred in
failing to follow the parties’ stipulation regarding the cut-off
date for the accumulation of marital assets.
We agree.
On October 12, 1998, the parties stipulated that “[t]he
cut off date for the accumulation of marital assets was January 7,
1997.”
However, in its October 22, 1998, decree, the court used
the value of Joseph’s 401(k) and employee stock option plan (ESOP)
at the time of separation in awarding marital property.
Under Kentucky law, parties are free to enter into
stipulations, and they are then bound by the stipulations.16 Courts
have recognized various exceptions to the general rule, including
“[t]he right to repudiate a stipulation . . . where it is shown
that it was inadvertently made, provided notice is given to the
opposite party in sufficient time to prevent prejudice to him.”17
In this case, Joseph agreed to the stipulated cut-off
date for the accumulation of assets after the cut-off date.
This
fact is important because it directly undermines Joseph’s argument
that it would have been inequitable to use the stipulated cut-off
date for his 401(k) plan and employee stock ownership plan (ESOP).
Joseph knew or could have ascertained the value of the 401(k) and
ESOP when he entered into the stipulation.
He never attempted to
repudiate the stipulation. Thus, the circuit court erred in failing
16
See, e.g., Baker v. Reese, Ky., 372 S.W.2d 788, 788 (1963)
(noting that the parties’ stipulation to limit the issue to the
determination of the location of a disputed boundary will be
honored unless some reason can be shown to invalidate it).
17
World Fire & Marine Ins. Co. v. Tapp, 286 Ky. 650, 151
S.W.2d 428, 430 (1941) (citing Karnes v. Black, 185 Ky. 410, 215
S.W. 191 (1919)) (emphasis supplied).
-12-
to value the 401(k) and ESOP as of January 7, 1997, when dividing
the parties’ marital property.
VII.
FAILURE TO UTILIZE UNIFORM CUT-OFF DATE
Next, Teresa claims that the circuit court erred in not
utilizing a different cut-off date for the accumulation of marital
debts.
We disagree.
As we have discussed, the parties signed a
stipulation on October 12, 1998, addressing the accumulation of
marital assets.
However, the stipulation does not mention marital
debts.
KRS 403.190(3) provides that “[a]ll property acquired by
either spouse after the marriage and before a decree of legal
separation is presumed to be marital property . . . .”
Under
Kentucky law, “[d]ebts accrued subsequent to separation, but before
entry of a divorce decree are rebuttably presumed to be marital
debts.”18 “This presumption may be rebutted by clear and convincing
proof” to the contrary.19
In this case, Teresa had the burden of proving that a
disputed loan was nonmarital.
Joseph testified that he incurred
the debt by borrowing money from his father to make payments on
marital debts and presented three notes evidencing the loans that
he had signed.
claim.
Teresa cites to no evidence to rebut Joseph’s
Thus, the finding was not clearly erroneous and the court
18
Underwood v. Underwood, Ky. App., 836 S.W.2d 439, 445
(1992) (citing Daniels v. Daniels, Ky. App., 726 S.W.2d 705, 706
(1986)).
19
Id. at 442 (citations omitted).
-13-
did not abuse its discretion in awarding one-half the debt to
Teresa.20
IX.
CLASSIFICATION OF PROPERTY
Finally, Teresa argues that the circuit court improperly
classified a fifteen-year-old VCR as non-marital property. We will
not set factual findings aside unless they are clearly erroneous.21
As we said in Calloway v. Calloway:22
In determining whether an item was a gift, consideration
should be given to the factors which include the source
of the money used to purchase the item, the intent of the
purported donor, and the status of the marriage at the
time of the transfer.
This determination must be based
on the facts of each case.23
In this case, Joseph and Teresa were married at the time
his parents gifted the VCR.
conflicting
evidence
nonmarital property.
as
to
That fact is undisputed.
whether
the
VCR
was
There was
marital
or
In his itemized schedule of income and
personal property, Joseph listed the VCR as a gift to him from his
20
See Spratling v. Spratling, Ky. App., 720 S.W.2d 936, 938
(1986) (concluding that the trial court did not err in dividing a
marital debt in conjunction with the division of marital property
and assignment of marital assets and debts).
21
CR 52.01; Ghali v. Ghali, Ky. App., 596 S.W.2d 31, 32
(1980) (“It is well settled that [] [CR] 52.01 applies to domestic
matters and that the principles of that rule require reviewing
courts to accept findings of a trial judge unless they are clearly
erroneous”).
22
Ky. App., 832 S.W.2d 890 (1992).
23
Id. at 892 (internal citation omitted) (citing O’Neill v.
O’Neill, Ky. App., 600 S.W.2d 493 (1980)).
-14-
parents. During direct examination, Joseph likewise testified that
the VCR was given to him.
However, on cross-examination, Joseph
was equivocal as to whether the VCR was a gift to the family or
him.
As fact-finder, the circuit court could choose to believe
all, some or none of Joseph’s testimony.24
The court’s finding is
supported by evidence of record and is not, therefore, clearly
erroneous.
X.
CONCLUSION
Accordingly, that portion of the decree awarding Joseph
the accretions to his 401(k) plan and ESOP after the separation
date is reversed.
The orders of November 30, 1998, January 4,
1998, and January 7, 1999, which award an attorney’s fee and costs
to Joseph pursuant to CR 68, are vacated.
The balance of the
decree is affirmed. This case is remanded to Fayette Circuit Court
for proceedings consistent with this opinion.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Richard R. Melville
PRATT & MELVILLE, LLP
Lexington, Kentucky
James M. Morris
Sharon K. Morris
Jason V. Reed
MORRIS & MORRIS
Lexington, Kentucky
24
Webb Transfer Lines, Inc. v. Taylor, Ky., 439 S.W.2d 88,
95 (1968) (“[A] [fact finder] may believe any of the witnesses in
whole or in part”) (citing Cross v. Clark, 308 Ky. 18, 213 S.W.2d
443 (1948)).
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