Commonwealth of Kentucky Court of Appeals

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1 RENDERED: APRIL 24, 2009; 10:00 A.M. NOT TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO CA MR LARRY MEREDITH APPELLANT APPEAL FROM JOHNSON CIRCUIT COURT FAMILY COURT DIVISION v. HONORABLE JANIE MCKENZIE-WELLS, JUDGE ACTION NO. 04-CI BOBBI JO MEREDITH APPELLEE OPINION AFFIRMING IN PART AND REMANDING IN PART ** ** ** ** ** BEFORE: CAPERTON, TAYLOR AND WINE, JUDGES. WINE, JUDGE: Larry Meredith ( Larry ) appeals from an October 27, 2007, order of the Johnson Circuit Court denying his motion to alter, amend or vacate that court s findings of fact, conclusions of law and decree of dissolution of marriage. We remand this case back to the trial court as its factual findings are so inadequate that they do not comply with the applicable statutory requirements.

2 Larry and Bobbi Jo Meredith ( Bobbi Jo ) were married on October 14, The parties separated on or about September 5, The parties agreed to a bifurcated decree of dissolution, which was entered December 2, The disputed matters involving division of property and debt were submitted to the trial court for adjudication. Prior to the marriage, Larry purchased a tract of land located at 431 Colvin Branch Road in Oil Springs, Kentucky for $25, In the summer of 1997, the parties purchased a double-wide mobile home and financed it for $54, with a payment of $ per month. They then placed the mobile home on the land that Larry owned. At the time of separation on September 5, 2004, the parties had the following assets: the double-wide trailer, the tract of land Larry had purchased before the marriage, another tract of land they purchased during the marriage, a 2001 Harley Davidson motorcycle, a 1997 Honda four-wheeler, a 2002 Toyota Camry XLE, a 2002 Toyota truck, Larry s 401K and teacher s retirement, Bobbi Jo s Kentucky retirement, furniture, home interior and a one-third interest in American Driving Academy. At separation, the parties also had debt, including $10, on the Toyota truck, and $104, on the mobile home and land. American Driving Academy had debts of over $70, incurred as start-up costs. Larry was represented by Kimberly Osborne, Michael Osborne, Jim Webb and himself throughout this long and bitterly contested divorce. Bobbi Jo -2-

3 was initially represented by John David Preston, who was eventually appointed as Johnson Family Court Judge. After his appointment, Judge Preston recused himself, and a special judge, the Honorable Julie Paxton, was appointed to preside over the case. The case went for a final hearing on September 9, At the hearing, the court heard testimony from Bobbi Jo and Larry. However, Larry failed to provide income tax returns as previously directed by the court. Without those returns, Bobbi Jo was unable to obtain an appraisal of American Driving Academy. Larry suggested to the court that an appraisal was not necessary as the business was losing money. Larry asked the court to simply order a sale of the business and have the parties split the proceeds. The court declined and directed that Larry submit an appraisal regarding American Driving Academy within fortyfive days. The court further indicated that it would make a decision after the appraisal was submitted. Larry did not file an appraisal report, but submits that he was unable to offer the business s 2004 tax return because it was not yet filed as of the September 9 hearing. When Larry failed to file an appraisal, Bobbi Jo petitioned the court and was granted an extension of time to file her own appraisal. On December 12, 2005, Larry was able to file the American Driving Academy income tax return for Bobbie Jo claims that the 2004 tax returns for the business reflect that Larry transferred 100 percent of his interest in the marital business to -3-

4 David Wilburn in violation of the court s status quo order. Larry denies this allegation. The matter languished for some time on the court s docket. Larry submitted a total of three motions for a rule from the court. Instead, the court granted two thirty-day extensions of time for Bobbi Jo so that she could submit an appraisal. Finally, On May 18, 2006, Bobbi Jo filed an appraisal report written by James Wallen ( Wallen ). Wallen valued Larry s one-third interest in American Driving Academy at $162,432.00, based on a cash flow over a six-year period averaging $60, per year. On May 18, 2006, Larry filed a supplemental brief arguing that Wallen s findings were an inaccurate estimate of cash flow. Larry argued that Wallen never viewed any of the books or talked to the accountant or anyone else associated with American Driving Academy. Larry reiterated that the business was completely worthless and a huge liability. On May 25, 2006, Bobbi Jo filed her brief and proposed findings. Larry filed a motion to strike Wallen s appraisal report on July 31, Larry s motion was submitted to Judge Stephen Frazier who was substituting as a special judge for Judge Paxton. Judge Frazier signed the motion to strike on August 1, 2006, without a hearing. Bobbi Jo filed a motion to alter, amend or vacate. Judge Paxton sustained the motion and ordered the appraisal report to be part of the record. Judge Paxton concluded that Larry s objection would appear to go the weight, not the admissibility of Wallen s appraisal report. -4-

5 On December 11, 2006, Judge Paxton issued its findings of fact, conclusions of law and judgment dividing the property. The court awarded Bobbie Jo the following property: Larry was awarded: Deferred Compensation $10, Mobile home &14 acres $85, Harley Davidson $10, Furniture $ 5, Camry $12, /3 interest in American $162, Driving Academy Teacher s Retirement $ 33, Debt on mobile home & 14 $(95,000.00) Acres Four Wheeler $ 5, Toyota Pickup $ 12, Larry filed a motion to alter, amend or vacate on December 18, In addition, Larry filed for relief under Kentucky Rules of Civil Procedure ( CR ) The case was transferred to Johnson County since Judge Paxton took the other circuit court bench and the family court was now presided over by the Honorable Janie McKenzie Wells. After several delays, the court set an oral argument on July 19, Larry s counsel filed a motion to withdraw on May 24, 2007, so Larry represented himself at the oral argument. Larry accused Bobbi Jo s counsel of signing Judge Paxton s signature to the decree. Judge Wells upheld the decision rendered by Judge Paxton, and this appeal followed. On appeal, Larry raises six assignments of error. Specifically, Larry argues that: 1) the trial court improperly delegated its decision-making power and -5-

6 fact-finding authority to Bobbi Jo; 2) the trial court erred in finding that one-third interest in American Driving Academy was worth $160, and awarding said asset to Larry as an offset against the property awarded to Bobbi Jo; 3) the trial court erred in failing to restore the non-marital property of the real estate located at Colvin Branch to Larry and failing to assign Larry non-marital contributions to the property; 4) the trial court erred in failing to allow Larry to present his evidence at the final hearing; and finally, 5) the trial court gave Bobbi Jo valuable assets without assigning a value to said property or giving Larry an offset therefrom. First, Larry argues the trial court improperly delegated its decisionmaking power and fact-finding authority to Bobbi Jo. However, it is well established that the delegation of the clerical task of drafting proposed findings of fact and conclusions of law under the proper circumstances does not violate the trial court's fact-finding and decision-making responsibilities. Bingham v. Bingham, 628 S.W.2d 628, 629 (Ky.1982). Unless there is evidence that the findings of fact and conclusions of law are not the product of the deliberation of the trial court, they are sufficient under CR and will not be disturbed. Id. at In this case, there is no showing that the trial court abdicated its factfinding role. The record reflects that the trial court heard the testimony of the parties and reviewed the evidence presented. Thus, we are satisfied from the record that the trial court retained full control of the decision-making process. More to the point, once the trial court enters its findings of fact and conclusions of law, it is no longer the product of either party. Rather, it becomes -6-

7 the judgment of the court and will be reviewed for error as such. Brunson v. Brunson, 569 S.W.2d 173, 175 (Ky. App. 1978). The trial court's findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses. CR Larry next argues the trial court erred in finding that parties one-third interest in American Driving Academy was worth $160, and awarding said asset to Larry as an offset against the property awarded to Bobbi Jo. Specifically, Larry argues that Wallen, Bobbie Jo s appraiser, was not licensed nor was he a certified appraiser. In addition, Larry points out that the 2004 tax return indicated a company loss of $140,237.00, and the business is now bankrupt. In response, Bobbi Jo asserts that Larry changed the name of the business to Mid-American Driving Academy and is still operating the business today. Larry submits that even though he invited Bobbi Jo s appraiser to come to his business and view any and all records, Wallen never viewed any documents. Larry also complains that, even if Wallen was a qualified appraiser, the appraisal valued the business as of May 2006, rather than the date of dissolution, December 2, We find no error. Larry correctly notes that any appreciation in value of an asset occurring after the decree of dissolution is entered is generally non-marital. Culver v. Culver, 572 S.W.2d 617 (Ky. App. 1978). However, Wallen s report indicates that it does not just cover 2004, but a period of six years. Further, Larry submits no documentation that the business is in bankruptcy, nor does he show -7-

8 evidence, other than mere allegations, that Wallen s report is based upon incorrect information. As noted above, the court ordered Larry to submit an appraisal of American Driving Academy within forty-five days after the September 2005 hearing, but Larry failed to do so. Larry claims that he submitted an appraisal to the court on September 7, The record reflects that Larry submitted a number of documents to be entered into the file on April 17, One of the exhibits to that motion is an appraisal dated August 15, 2006, but the appraisal itself is not stamped filed by the court clerk. 1 Larry s appraisal was not entered into the record for the court to consider until April 17, The court s order was filed December 11, Therefore, Larry s appraisal was not timely filed and is not properly before this Court for review either. Larry had ample opportunity to submit evidence regarding the value of the business for the trial court to review in making a determination of the value of the business but he chose not to participate in a timely fashion. Therefore, he cannot now complain when the court makes a determination based on the only evidence that was before it. Larry next argues that the trial court erred in failing to restore the nonmarital property of the real estate located at Colvin Branch to Larry and failed to assign his non-marital contributions to the property. In a dissolution action, the 1 Larry claims a representative with the Johnson Circuit Court Clerk s office told him motions needed to be filed directly with Judge Paxton s office. There is not only no citation to the record to support this practice, but it would be clearly contrary to Rule 3.3 of the Johnson Circuit Court and the Kentucky Rules of Civil Procedure ( CR ) 5.05(2) and (3). -8-

9 division of the parties' assets is controlled by Kentucky Revised Statute ( KRS ) Pursuant to that statute, the trial court must go through three steps to divide assets: 1) characterize each item of the parties' property as either marital or non-marital; 2) assign to each party his or her non-marital property; and 3) equitably divide that remaining marital property between the parties. Hunter v. Hunter, 127 S.W.3d 656, 659 (Ky. App. 2003). The trial court in this case failed to even satisfy step one of the statute and characterize the parties property marital or non-marital. The trial court entered an order on October 30, 2007, overruling Larry s motion to alter, amend or vacate and his motion for relief under CR In said motion, Larry argued that the court failed to list the marital debts. In addition, he asserted that the court ignored the fact that he owned land before the parties were married. The court determined that it was in its discretion to determine the status of any marital or non-marital property according to the evidence and denied his motion for relief. While we agree with the trial court that it has the discretion to determine the status of property, the court failed to make that determination in this case. Moreover, Larry properly preserved his objection to the sufficiency of the trial court s findings. CR reads: 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 -9-

10 written request for a finding on that issue or by a motion pursuant to Rule On April 17, 2007, Larry filed a notice of filing wherein he argued that the trial court failed to acknowledge that he owned the land listed in the order before the parties were married. Thus, the court was put on notice pursuant to CR and should have made findings as to which property was marital. Since the trial court failed to make any findings and such findings were essential to its decision, we must remand this matter back to the trial court to address this matter. Next, Larry asserts that the trial court erred in failing to allow him to present evidence at the final hearing. Specifically, Larry contends Bobbi Jo was allowed an hour to present her case to the court. However, Larry was only allowed to testify for five minutes before his attorney began questioning him regarding American Driving Academy. In addition, Larry asserts that he had a witness that he intended to call on his behalf but never got the chance. Once the court learned that Larry failed to provide documentation concerning the assets or corporate tax returns of American Driving Academy as requested by the court, the trial court told Larry that she would hold the record open for forty-five days so that he would have an opportunity to secure an appraisal of American Driving Academy. Larry fails to name the individual he intended to call as a witness or state what information the witness would have provided for the court. In addition, Larry filed motion after motion requesting the court to make a decision in the case even though he still had not provided the -10-

11 necessary documentation. Both Larry and Bobbi Jo filed their proposed findings of fact and the court made a decision based on the evidence. Based on the record, we conclude that Larry had a full and fair opportunity to present evidence to the trial court. Finally, Larry argues that the trial court gave Bobbi Jo valuable assets without assigning a value to said assets or giving Larry an offset therefrom. This issue is not properly before us as Larry did not mention it in his prehearing statement. Regardless, Larry asserts the court failed to value the property at 431 Calvin Branch separate from the trailer home sitting on the property. In addition, Larry argues the court failed to take notice of various household furnishings given to Bobbi Jo that he claims are worth $20, without an offset to him. CR 76.03(8) provides that a party shall be limited on appeal to the issues in the prehearing statement before the Court of Appeals. Since Larry did not list this issue in his prehearing statement, it is not properly presented in this appeal. Even if this issue was properly preserved for our review, Larry makes assertions of value regarding various assets but submits no evidence in support. It is the responsibility of the parties to submit evidence of the property value so that the court can make an equitable distribution of the assets. Accordingly, this case is remanded for findings regarding the classification of the parties assets as marital or non-marital and for valuation of property. In all other respects, the judgment is affirmed. ALL CONCUR. -11-

12 BRIEFS FOR APPELLANT: Kimberly D. Webb Paintsville, Kentucky BRIEF FOR APPELLEE: John T. Chafin Prestonsburg, Kentucky -12-

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