Maclean v. Middleton

• Decision Date: 10 January 2014
• Docket Number: Nos. 2011–CA–000267–MR, 2011–CA–000268–MR, 2011–CA–001076–MR, 2011–CA–001160–MR.,s. 2011–CA–000267–MR, 2011–CA–000268–MR, 2011–CA–001076–MR, 2011–CA–001160–MR.
• Court: Kentucky Court of Appeals
• Parties: Louisa MACLEAN, f/k/a Louisa Middleton, Appellant/Cross–Appellee v. Lawrence MIDDLETON, Appellee/Cross–Appellant.

419 S.W.3d 755

Louisa MACLEAN, f/k/a Louisa Middleton, Appellant/Cross–Appellee

v.Lawrence MIDDLETON, Appellee/Cross–Appellant.

Nos. 2011–CA–000267–MR, 2011–CA–000268–MR, 2011–CA–001076–MR, 2011–CA–001160–MR.

Court of Appeals of Kentucky.

Jan. 3, 2014.

As Modified Jan. 10, 2014.

Marcia L. Sparks, Louisville, KY, for Appellant/Cross–Appellee.

J. Russell Lloyd, Donna J. Foust, Louisville, KY, for Appellee/Cross–Appellant.

Before MAZE, STUMBO AND TAYLOR, Judges.

OPINION

MAZE, Judge:

This appeal and cross-appeal arises from a judgment of the Jefferson Family Court which dissolved the marriage between Louisa Maclean and Lawrence Middleton. Maclean challenges the trial court's findings and orders which characterized Trust distributions as Middleton's non-marital property, divided marital property, allocated debt, and interpreted a prior support order. Middleton argues that the trial court erred in its determination of his non-marital interest in the marital residence, allocation of debt, calculation of child support, and awards of maintenance, attorney fees and costs to Maclean. Finding no clear error or abuse of discretion, we affirm.

I. Facts and Procedural History

Louisa Maclean and Lawrence Middleton were married on April 24, 1999. On the date of the marriage, Middleton was 48 years of age, and Maclean was 36. The parties are the parents of two minor children, A.M.M., born in 2000, and S.C.M., born in 2002.

At the time of the marriage, Middleton was employed as a financial advisor with Hilliard Lyons. He reported income ranging from a high of $583,393 in 2003 following a low of $238,472 in 2002. In 2005, Middleton left his employment with Hilliard Lyons to become a 20% shareholder of Atlas Brown, Inc. His base salary was $275,000, and the parties invested $444,000 in Atlas Brown at its creation. In December 2006, Middleton was terminated as president and chief compliance officer of Atlas Brown. However, he continued as a board member and shareholder of Atlas Brown and he received substantial income from that investment and other sources. Maclean was employed with Commonwealth Bank at the time of the marriage. Her highest income prior to the marriage was $28,000 per year. Following the marriage, she did not work outside the home.

The parties separated in May of 2006 and Maclean filed this petition for dissolution of the marriage in June of that year. After separation, Maclean was self-employed as the sole shareholder of Spring House Interiors, Inc., earning $1,462 per month. She also had other income through free-lance and contracting positions. From 2006 until October of 2007, Middleton paid Maclean combined maintenance and child support totaling $8,500 per month. Thereafter, Middleton paid temporary maintenance of $5,000 per month. In the final decree, the trial court found that Maclean was voluntarily underemployed and capable of earning at least $2,100 per month. Based on these findings and the allocation of property and debt, the trial court directed Middleton to pay Maclean $2,500 in maintenance for twelve months.

By agreement, the parties settled the issues relating to the care, custody and support of the two children. The primary disputed issue concerned the characterization of distributions to Middleton from a family trust. Middleton also claimed a substantial non-marital interest in the marital residence. There were also disputed issues concerning child support, division of marital property, assignment of responsibility for indebtedness, maintenance and assignment of attorney fees and costs. The parties agreed to submit these issues to a Master Commissioner, and the trial court appointed Hon. B. Mark Mulloy to serve in that capacity.

The parties appeared before the Master Commissioner during a series of hearings on these issues from October 2007 through October 2008. The Master Commissioner issued his report and findings on February 3, 2009. Both parties filed exceptions to various aspects of the Master Commissioner's report. The Master Commissioner filed a subsequent report addressing those exceptions on March 16, 2009.

These matters were then submitted to the trial court for final adjudication. On May 11, 2009, the trial court entered a decree dissolving the marriage. After additional proceedings and hearings, the trial court entered findings of fact, conclusions of law on November 8, 2010. The court adopted the Master Commissioner's findings and recommendations and entered final judgment resolving the disputed issues per the Master Commissioner's report.

Both parties filed motions to alter, amend or vacate the judgment pursuant to CR 59.05, which the trial court denied. This appeal and cross-appeal followed. Additional facts will be set forth below as necessary.

II. Preliminary Matters

As an initial matter, the dissent takes the position that the trial court lacked the authority to appoint the Master Commissioner in this case. Consequently, the dissent concludes that the trial court's order adopting the Master Commissioner's findings of fact and conclusions of law are void ab initio and must be set aside. We do not take issue with the dissent's analysis concerning the lack of statutory or procedural authority for the process used in this case. Nevertheless, we do not agree with the dissent's conclusion that this matter amounts to a jurisdictional error which this Court may raise on its own motion without prompting by either party.

As a general rule, an alleged failure to make adequate findings of fact must be brought to the trial court's attention as required under CR 52.02 or CR 52.04. Otherwise, a party has waived its right to raise the issue on appeal. Cherry v. Cherry, 634 S.W.2d 423, 425 (Ky.1982). In this case, neither party objected to the appointment of the Master Commissioner in this case. To the contrary, both parties agreed to the submission of the disputed issues to the Commissioner.

Moreover, we disagree with the dissent that the trial court improperly delegated its decision-making responsibility. As was the situation in Bingham v. Bingham, 628 S.W.2d 628 (1982), the record clearly shows that the trial court was thoroughly familiar with the proceedings and facts of the case and that it had prudently examined the proposed findings and conclusions. Although the Commissioner actually heard most of the evidence presented by the parties, a thorough record was made of those evidentiary hearings. The Commissioner's recommended findings were the subject of lengthy proceedings before the trial court. The trial court extensively discussed the issues raised by parties in their respective objections to the Commissioner's recommended findings. After thorough review, the trial court incorporated those findings into its judgment. Under the circumstances, we cannot find that the trial court abdicated its fact-finding and decision-making responsibilities to such a degree that its judgment must be set aside on this basis alone.

In the alternative, we also note that the trial court has the discretion to appoint experts who may assist the court in its fact-finding duties. Kentucky Rule of Evidence (KRE) 706(a). While Mulloy was designated as a “Master Commissioner” in this case rather than an expert witness, the practical effect was the same. The court appointed Mulloy, a well-qualified expert in the field, to assist it in resolving the complicated financial issues which were disputed in this dissolution case. Furthermore, we also disagree with the dissent that the trial court improperly delegated its decision-making responsibility. Although the precise procedure used may not have been correct, the appointment was within the discretion of the trial court.

Along similar lines, we also agree with the dissent that the $52,000 fee paid to the Master Commissioner in this case exceeds that total amount which would be authorized under CR 53.07. It is entirely appropriate for the dissent to comment on the excessive amount of the fee and to advise trial courts of the need to comply with the requirements of the rule in the future. However, the fee was awarded as part of an agreement by the parties, and the trial court directed payment of that amount as part of its allocation of attorney fees under KRS 403.220. On the other hand, if Mulloy is viewed as an appointed expert, then his compensation may be allocated in the same manner as costs without regard for the limitation in CR 53.07. KRE 706(b). In any event, neither party has challenged this aspect of the trial court's judgment. Consequently, we have no basis for reversing the award sua sponte.

Finally, the dissent correctly notes the lack of any statutory basis for the sealing the record in this case. Although trial courts have the authority to seal the record where there are interests favoring nondisclosure of court file materials, there is a strong presumption in favor of public access to court records. Roman Catholic Diocese of Lexington v. Noble, 92 S.W.3d 724, 730–731, 734 (Ky.2002). See also Cline v. Spectrum Care Academy, Inc., 316 S.W.3d 320 (Ky.App.2010). We certainly agree that court records should not be sealed as a matter of routine practice simply at the request of the parties. But in the absence of any challenge to the order, the issue is not before this Court and we have no authority to disturb the trial court's decision to seal the record.

III. Issues

We now turn to the issues raised by the parties in these appeals. In her direct appeal, Maclean raised challenges the trial court's decisions on five issues: (1) the designation of Trust settlement proceeds as non-marital; (2) the valuation of the marital residence for purposes of determining marital equity; (3) the sufficiency of findings concerning the division of personal property from the marital residence; (4) the allocation of marital debt; and (5) the denial of her claim for reimbursement of medical expenses and health insurance premiums incurred while this action was pending.

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