JOHN CONRAD ROBINSON, SR. v. ANNE HARVEY ROBINSON
Annotate this Case
Download PDF
RENDERED:
DECEMBER 5, 2003; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-001769-MR
JOHN CONRAD ROBINSON, SR.
v.
APPELLANT
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE LAURANCE B. VANMETER, JUDGE
ACTION NO. 00-CI-01483
ANNE HARVEY ROBINSON
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, COMBS, AND DYCHE, JUDGES.
BUCKINGHAM, JUDGE:
John Conrad Robinson, Sr. (“Con”) appeals
from an order of the Fayette Circuit Court that divided marital
assets with his former wife, Anne Harvey Robinson (“Anne”).
Specifically, Con argues that the trial court erred by
overvaluing the inventory, equipment, and rolling stock of Con’s
business, Con Robinson Contracting, Inc., and by awarding Anne
interest accrued as her nonmarital property on an $86,000 loan
she made to the business in 1989.
Having reviewed the record,
the arguments of the parties, and the applicable law, we affirm.
Con and Anne were married on December 21, 1980.
During their marriage, Con owned and operated a business1 that
sold topsoil, compost, and mulch to Lexington, Kentucky, area
customers and that later engaged in wood and concrete recycling.
Anne worked as chief financial officer for the business and
handled the parties’ corporate and personal finances.
Con operated the business from two tracts of land in
Lexington.
The business operations occurred on property located
on Georgetown Road and in the Cahill Industrial Park.
These
properties are both considered to be valuable tracts of
development property in the Lexington area.
The Georgetown Road
property contained large quantities of unprocessed material that
was sold by the business.
The business also bought, maintained,
and sold various pieces of equipment that Con was using to
further its purposes.
The company’s recycling, compost, and
topsoil products also produced a reasonable profit during the
1990s.
Throughout their marriage, Con and Anne constantly
disagreed over business practices and expenditures.
1
These
The record shows that Anne owned 51% of Con Robinson Contracting while Con
owned 49% of the business. During the litigation of this matter, Con
asserted that he was never aware that Anne owned a majority of the business.
Anne stated that Con willingly signed over a majority of the business to her
in recognition of her bookkeeping abilities as well as to qualify the
business for special status as a female-owned enterprise.
-2-
disagreements, coupled with Con’s desire to leave the business
altogether, led the parties to place the business for sale.
They unsuccessfully tried to sell the business as a going
concern several times during the 1990s.
In the meantime, the
parties continued to buy and sell equipment and incurred
additional debt.
The business also became less profitable
because it lost customers to increased competition that was able
to produce better material through screening.
In 1998, Con discovered that Anne had moved over
$300,000 from the business accounts into accounts that were
solely in her name.2
Anne asserted that this money represented
repayment of a loan she had made to the business from an
inheritance in 1989 in the amount of $86,000 at 15% interest.
After learning of this and other withdrawals, Con removed Anne’s
signature authority on the business account and changed the
address of the business’s accounts receivable department.
After
losing her financial authority over the business, Anne filed for
divorce on April 17, 2000.
An evidentiary hearing was held in this matter on
March 18 and March 20, 2002.
At this hearing, both parties
presented evidence concerning the value of the business.
Anne
testified that Con annually assessed each piece of equipment and
rolling stock individually and determined the value of those
2
The largest withdrawal was a check to Morgan Keegan for $275,000 on March
10, 1998.
-3-
items.
The parties then purchased insurance on those items
based on Con’s assessment.
Anne supported her testimony with
insurance policies from CNA Insurance Company that listed the
actual cash value of the equipment and rolling stock.
The
equipment and rolling stock were insured by CNA for 100% of the
actual cash values as determined by Con during his assessments.
With regard to the inventory value of the business,
Anne testified that she relied on quarterly and annual reports
prepared for and provided to the Environmental Protection Agency
and the Kentucky Division of Waste Management for the years
1998, 1999, and 2000.
Anne stated that she was responsible for
filing these quarterly and annual reports that summarized the
sales and amount of material processed by the compost and
recycling operations.
From these reports, Anne estimated that
50,000 cubic yards of inventory was located on the Georgetown
Road property and that the inventory was valued at $500,000.3
Finally, Anne testified that she had loaned the
company $86,000 in 1989 from her inheritance in an effort to
help the business during a period of financial difficulty.
She
noted that the parties had agreed to repay the loan at 15%
3
In obtaining this value, Anne estimated that the compost blend constituted
20,000 cubic yards of the inventory, which sold for $15 per yard. The total
value for the compost was estimated to be $300,000. The remaining 30,000
cubic yards of product was mulch and was sold for $11 per yard for a value of
$330,000. Anne discounted the $630,000 in estimated inventory by 20% to take
into account the cost the business would incur to finish the product and
prepare it for sale. At this point, Anne obtained her final estimate that
the inventory on the Georgetown Road property was valued at approximately
$500,000.
-4-
interest.
Anne repeated her assertion that the $300,000 she
moved from the business accounts to accounts in her name only
constituted the repayment of that loan.
Con acknowledged that
Anne had loaned the company $86,000 and that the loan was paid
back in 1998, but he denied having agreed to pay interest on the
loan.
Con testified that he was never aware that Anne moved
money between accounts until 2000.
Calvin D. Cranfill, a certified public accountant,
testified on Anne’s behalf concerning his valuation of the
business.
Cranfill testified that he accepted Anne’s valuation
of the equipment, rolling stock, and inventory based upon the
documentation Anne provided.
Accordingly, Cranfill valued the
inventory at $500,000, the equipment at $1,004,879, the rolling
stock at $162,650, and the accounts receivable at $35,377.
He
further testified that the business possessed assets of $226,227
in cash and $162,650 in goodwill.
Cranfill also placed a value
on the real property owned by the business, with the Cahill
property being worth $1,075,000 while the Georgetown Road
property was valued at $875,000.4
According to Cranfill, the
business had total assets of $4,305,662 and liabilities of
$454,800.
From these assessments, Cranfill determined the fair
market value of the business to be $3,850,862.
4
Cranfill did not appraise the real property himself. Rather, he accepted
real estate appraiser Steven B. Rohlfing’s valuation of the property. Con
accepted Rohlfing’s assessment of the Cahill property.
-5-
In response to Anne’s evidence concerning the
valuation of Con Robinson Contracting, Con’s appraiser, Carrell
L. Eakle, valued the business at $2,060,003. Eakle stated that
he believed the inventory stored on Georgetown Road possessed no
value due to its poor condition.
Further, Eakle testified that
he assigned a value of $1,021,490 to the equipment based upon
its resale, not its insured, value.
Eakle noted that he
performed no independent appraisal of the equipment, but simply
relied upon Con’s assessment of the fair market value for each
piece of equipment.
Con’s property appraiser, Doris Leach, testified that
the value of the Georgetown Road property was $450,000.
Leach
noted that the poor condition of the inventory and the cost to
clear this inventory from the premises lowered the value of the
Georgetown Road property.
However, Leach testified that if
remediation of the property was not taken into account, the
Georgetown Road property is worth approximately $650,000.
Finally, Con testified that he believed Anne’s
valuation of the business was incorrect because the value of the
equipment and inventory was inflated.
According to Con, the
inventory had no value because of its poor condition and because
anyone could obtain this material from the Fayette County
landfill for free.
Yet, during his testimony, Con admitted that
he did, in fact, possess inventory at the Georgetown Road farm
-6-
and that he prepared some of that inventory for sale and had
received some income from the sale of the Georgetown Road
inventory.
With regard to the equipment, Con asserted that he
appraised each piece of equipment personally, provided those
values to Anne, and insured the equipment for its actual cost.
Con further admitted that, from the time Anne filed for divorce,
he renewed the CNA Insurance policies twice for the amounts in
which he could actually sell each piece on the open market.
On June 13, 2002, the trial court issued its
Supplemental Findings of Fact and Conclusions of law.
In this
judgment, the trial court first found that Anne had made a loan
of $86,000 to the business in 1989 from nonmarital funds and was
entitled to have the loan paid back with 8% interest.
also held that the interest was nonmarital property.
court valued the marital estate at $4,525,637.
The court
Next, the
In making this
finding, the court accepted Cranfill’s valuation of the business
in its entirety except for the value he assigned to the
Georgetown Road property.
For the Georgetown Road property, the
court accepted Leach’s assessment of $650,000.
Accordingly, the
trial court found that the business was worth $3,625,862.
The court then awarded Anne the Cahill and Harrodsburg
road properties, valued together at $1,931,000, a Central Bank
account containing $43,775, and cash from Con in the amount of
$288,043.50.
Con retained the assets of the business except for
-7-
the Cahill property.
After the cash payment was considered,
each party received $2,262,818.50, which represented one-half of
the total marital estate.
After the trial court made its rulings, Con filed a
motion for a new trial pursuant to Kentucky Rules of Civil
Procedure (CR) 59.02, arguing that the evidence at trial was
insufficient to support the value of the inventory, equipment,
and rolling stock of the business.
motion on August 19, 2002.
The court denied Con’s
This appeal followed.
On appeal, Con presents three assertions of error for
our review.
First, he argues that the trial court erred in
valuing the marital business because the evidence presented at
trial was insufficient to support the value the court placed on
the company’s inventory, equipment, and rolling stock.
In
support of this argument, Con contends that the court erred in
relying upon Anne’s testimony concerning the valuation of the
inventory, equipment, and rolling stock.
He relies upon
Robinson v. Robinson, Ky. App., 569 S.W.2d 178, 180 (1978),
overruled on other grounds by Brandenburg v. Brandenburg, Ky.
App., 617 S.W.2d 871 (1981), in asserting that the trial court
should have ordered that additional evidence be obtained through
appraisals by qualified experts.
In divorce actions, Kentucky law clearly permits a
property owner to establish a value on property she owns.
-8-
Roberts v. Roberts, Ky. App., 587 S.W.2d 281, 283 (1979).
Indeed, a lay witness is authorized to testify regarding the
value of property and services even if that testimony involves
the use of opinions and conclusions.
KRE5 701;
Highways v. Swift, Ky., 375 S.W.2d 691 (1964).
Department of
There must,
however, be some qualifications for giving an opinion.
supra.
Roberts,
Mere ownership of property does not qualify to establish
a true value.
Commonwealth, Department of Highways v. Fister,
Ky., 373 S.W.2d 720, 721-22 (1963).
The record shows that each party testified during the
hearing, with each party having personal knowledge of the
business and being competent to testify as to the value of its
components.
While Con had a more thorough knowledge of his
company’s continuing field operations, Anne had been heavily
involved in the business before the parties separated.
As chief
financial officer for the business, Anne was responsible for
keeping all of the company’s financial records, renewing the
insurance policies on the business and its equipment,
maintaining and collecting accounts receivable, staying educated
on developments in the market that may affect the price of the
company’s products, and filing reports with various state and
federal agencies concerning the activities of the business.
With these responsibilities, Anne became familiar with the value
5
Kentucky Rules of Evidence.
-9-
of the equipment, the market for the inventory held at the
Georgetown Road property, and the earnings adduced by this
business.
Accordingly, it is apparent that Anne, through her
experience with the business, was qualified to express an
opinion concerning the value of the company’s inventory,
equipment, and rolling stock.
Her testimony concerning the
valuation of the assets of the business was also supported by
various insurance documents, environmental reports filed with
state and federal agencies, and income tax returns.
Moreover, Anne’s expert witness provided testimony
that supported the value Anne assigned to the company’s
property.
Cranfill testified that he confirmed the values of
the equipment from its insured values, as evidenced by documents
from CNA Insurance.
Cranfill asserted that Con would not have
insured the equipment for approximately $1,000,000 if Con did
not believe the equipment was actually worth that value.
Further, Cranfill noted that this business had a history of
selling equipment for reasonable gains.
As for the inventory, Cranfill stated that his value
was based upon Anne’s opinion, but he verified Anne’s
calculations with the reports the company filed with the EPA and
the Kentucky Division of Waste Management.
This value was
consistent with the market price for mulch and compost, minus
the cost of preparing these products for sale.
-10-
Based upon this
information, Cranfill believed the value Anne assigned to the
equipment and inventory was proper.
Hence, unlike Robinson, supra, there is not a total
lack of evidence regarding valuation.
To the contrary, the
record shows that the parties, through lay and expert testimony,
adduced substantial conflicting evidence as to valuation of the
business assets, and the trial court assigned a value to those
assets from this evidence.
A trial court’s valuation of marital
property in a divorce action will not be disturbed on appeal
unless it is clearly contrary to the weight of the evidence.
Underwood v. Underwood, Ky. App., 836 S.W.2d 439, 442 (1992),
overruled in part on other grounds by Neidlinger v. Neidlinger,
Ky., 52 S.W.3d 513 (2001).
Since the trial court’s valuation of
Con Robinson Contracting’s assets was supported by competent
evidence, we cannot say that it abused its considerable
discretion in determining the value of those assets.
Therefore,
we find Con’s argument concerning this issue to be without
merit.
Next, Con asserts that the trial court erred because
it failed to divide the marital property in just proportions as
required by KRS 403.190.
We disagree.
As stated earlier, the
trial court’s valuation of the marital property was based upon
substantial evidence.
After placing values on the marital
property, the court divided the marital estate evenly.
-11-
Having
found the court’s valuations to be proper, coupled with the fact
that Anne and Con each received one-half of the marital estate,
we believe that the marital property was properly divided in
just proportions.
Finally, Con argues that the trial court erred in
ruling that the 8% per annum interest on the $86,000 in
inherited monies that Anne loaned the business in 1989 was
Anne’s nonmarital property.
In support of this argument, Con
relies on KRS 403.190(2)(a), which provides as follows:
(2)
For the purpose of this chapter,
“marital property” means all property
acquired by either spouse subsequent to
the marriage except:
(a)
Property acquired by gift,
bequest, devise, or descent during
the marriage and the income
derived therefrom unless there are
significant activities of either
spouse which contributed to the
increase in value of said property
and the income earned therefrom.
We believe Con’s reliance on KRS 403.190(2)(a) is
misguided.
The record reveals that Anne acquired $86,000 during
the marriage from an inheritance and, as such, these funds are
Anne’s nonmarital property.
Anne testified that she loaned this
money to the business in 1989 with the understanding that it
would be repaid to her.
At the hearing, Con did not dispute
that Anne loaned the money to the business and that she expected
to be repaid.
-12-
Since Anne loaned, not invested, her inheritance money
to the business, it cannot be said that any significant
activities of these parties contributed to increase the value of
her nonmarital property.
Under Kentucky law, the mere increase
in value of nonmarital property remains nonmarital.
Mercer, Ky., 836 S.W.2d 897, 899-900 (1992).
Mercer v.
As such, there
exists a distinction between an increase in value of property
that occurs without effort on the part of the owners and the
increase in the value of property that occurs as a result of the
efforts of the parties.
210-211 (1989).
Marcum v. Marcum, Ky., 779 S.W.2d 209,
Accordingly, the increase in value of
nonmarital property that is not attributable to “team effort” or
“team funds” follows the property and must be returned to the
party who owned the property prior to marriage.
Sharp v. Sharp,
Ky., 491 S.W.2d 639, 644 (1973).
Here, it is clear that the interest on Anne’s loan
accrued without any effort on the part of either party.
Both
parties testified that the business borrowed Anne’s money and
used these funds for business purposes.
Also, there was no
dispute that Anne was entitled to repayment of her loan.
As
such, equity and justice demand that one who uses money or
property of another for his own benefit, particularly in a
business enterprise, should pay interest on the original loan
amount.
Curtis v. Campbell, Ky., 336 S.W.2d 355, 361 (1960).
-13-
The accrual of interest on loaned monies merely
increases the value of that property without any effort on the
part of the borrower or the lender.
In effect, this increase
was caused merely because of general economic conditions, which
does not entitle Con to share in that increase.
Ky., 497 S.W.2d 418, 419 (1973).
Smith v. Smith,
As no “team effort” by these
parties caused Anne’s nonmarital inheritance to increase in
value, the mere increase in the value of her nonmarital property
remained her nonmarital property.
900.
See Mercer, 836 S.W.2d at
Hence, we find no error in the trial court’s decision to
award Anne her original $86,000 loan with interest in the amount
of 8% per annum as nonmarital property.
For the aforementioned reasons, the judgment of the
Fayette Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
J. Robert Lyons, Jr.
WOODWARD, HOBSON & FULTON LLP
Lexington, Kentucky
Anita M. Britton
Crystal L. Osborne
STOLL, KEENON & PARK LLP
Lexington, Kentucky
-14-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
