Cooper v. Cooper, No. 2008-CA-000338-MR (Ky. App. 4/2/2010)
| Decision Date | 02 April 2010 |
| Docket Number | No. 2008-CA-000338-MR.,No. 2008-CA-001458-MR.,2008-CA-000338-MR.,2008-CA-001458-MR. |
| Parties | Kyle Allan COOPER, Appellant, v. Joan Allison COOPER, Now Lloyd, Appellee. |
| Court | Kentucky Court of Appeals |
Lisa A. Riley, Charlie Gordon, Louisville, Kentucky, Briefs for Appellant.
B. Mark Mulloy, Louisville, Kentucky, Brief for Appellee.
Before: CAPERTON, KELLER and LAMBERT, Judges.
Not to be Published
Kyle Allan Cooper appeals from Jefferson Circuit Court, Family Division's judgment of December 10, 2007, in which the court allocated the parties' marital and nonmarital property and awarded Joan Allison Cooper (now Lloyd) attorney fees. In addition, Cooper brings a second appeal from the July, 24, 2008, order in which the court modified the parties' Qualified Domestic Relations Order (QDRO).
Cooper first argues that the court abused its discretion by failing to divide all of the parties' assets; specifically that the court failed to value and divide Arrow Partners, LTD.1 Cooper next argues what are essentially trial errors, specifically that the court erred in excluding Cooper's expert, limiting discovery, sanctioning Cooper, and denying his motion for a continuance. Lastly, Cooper argues that the presiding judge should have recused based on the information he learned while acting in his capacity as the Chief Judge of the Jefferson Family Court.
On his second appeal, Cooper argues that the court's July, 24, 2008, order which modified the parties' QDRO in fact modified the December 10, 2007, judgment. Cooper argues that the court was without jurisdiction to make such a change as the judgment had been final for months and was on appeal at the time of the change.
Lloyd argues that the court did not abuse its discretion. In particular, Lloyd argues that the court did not abuse its discretion in refusing to adjudicate the value of the partnership interests in Arrow Partners; that the court did not abuse its discretion concerning the exclusion of Cooper's expert, limiting discovery, sanctioning Cooper, or in denying his motion for a continuance; that the issue on whether recusal of the presiding judge was required is not properly before this Court; and that the court did not modify the judgment after it became final but was only enforcing the final judgment through a supplemental order ancillary to the implementation of the final judgment.
After a thorough review of the parties' arguments, the voluminous record, and the applicable law, we have concluded that the trial court did not abuse its discretion as to Cooper's claimed errors concerning the exclusion of his expert, limiting discovery, sanctioning Cooper, and denying his motion for a continuance. However, the December 10, 2007, judgment did not dispose of all of the parties' marital assets as the court failed to properly assess the value of the parties' property and to properly divide it pursuant to KRS 403.190.
Therefore, we reverse the December 10, 2007, judgment of the trial court insofar as the trial court decided it was without jurisdiction to value and divide partnership property, and vacate the remainder of the judgment and remand for complete allocation of the parties' marital and non-marital property by the trial court. As this judgment was final and appealable, and was in fact appealed by Cooper, the trial court was not free to modify the judgment through its July 24, 2008, order. Consequently, we vacate the July 24, 2008, order. The issue concerning the recusal of the trial judge is not properly before our Court and, thus, is dismissed from this appeal.
The facts that give rise to the instant appeal before this Court may be briefly summarized. The parties were married for approximately twenty-three years. The trial court entered a decree of dissolution of marriage on August 24, 2004, and reserved allocation of marital and non-marital property. After reviewing the voluminous record including multiple hearings, the court issued its December 10, 2007, judgment which addressed the three remaining issues: 1) the allocation of the parties' property; 2) child support and other financial issues related to the children; and 3) both parties' claims for attorney's fees. From this judgment the parties only appeal the trial court's allocation of property. However, prior to issuing its order, the court ruled on the various discovery issues that Cooper now appeals.
For the sake of clarity, we have condensed Cooper's litany of alleged errors concerning the trial court's rulings within the judgment of December 10, 2007, into three arguments: 1) the trial court erred in its property division as it did not properly value and dispose of all the marital assets; 2) the trial court erred in its rulings concerning exclusion of Cooper's expert, limited discovery of C.S.T. Co., sanctions, and failure to grant a continuance; and 3) the presiding judge erred by not recusing. We now address each in turn and later discuss the second appeal.
Cooper first contests2 the trial court's division of the parties' property. Cooper asserts that in failing to divide the parties' partnership interest in Arrow Partners, it failed to properly take into account this interest in the overall distribution of property.3 In response, Lloyd asserts that the trial court did not commit error or abuse its discretion in its division of the parties' marital estate.
Concerning the Arrow Partners marital property the trial court explicitly found in its judgment of December 10, 2007:
Arrow Partners, Ltd. owns and operates the real property associated with Greene & Cooper. Arrow Partners was created in July, 1993 by a limited partnership agreement was between the parties [Coopers] and Mr. Greene and his wife. The limited partnership agreement was submitted to the Court, Respondent's Exhibit 43. At the time there was a general partner, G&C Property, Inc. and the Coopers and Greenes were limited partners. . . . [The Coopers were each issued 37.5% of the shares of the partnership and the Greenes were each issued 12.5%.] The parties purchased this partnership interest by borrowing money secured by a mortgage on the marital residence . . . [d]uring the marriage the loan was paid off with marital funds. The general partner, G&C Property later became Greene & Cooper PSC.
On December 20, 2005 . . . [the Greenes] entered into an agreement selling to Mr. Cooper their limited partnership interests in Arrow Partners for $162,000. Ms. Lloyd objects to the transaction between Mr. Cooper and the Greenes because she claims it violated the parties' Limited Partnership Agreement. Furthermore, Ms. Lloyd argues that although the parties' interest in Arrow Partners is marital, the business entity is not before this Court and rather is controlled by the parties' limited partnership agreement. Mr. Cooper claims that the Court should divide the business entity and that its value is best determined by the arm's length transaction between himself and the Greenes.
Business assets acquired during the marriage which do not meet an exception in KRS 403.190 are marital property regardless of the type of business entity. . . . However, the kind of business interest can significantly impact the Court's ability to divide the asset. In this case, marital assets were used to acquire partnership property . . . thus the partnership interest is clearly marital property pursuant to KRS 403.190. However, the Court cannot divide the marital partnership interest like any other marital property. Pursuant to KRS 362.185(3), real estate titled in the name of a partnership cannot be transferred or sold in any name other than that of the partnership.
The Court finds that the parties' interest in Arrow Partners is marital. The Court further finds that at the time of the entry of the Decree of the Dissolution, prior to purchase of the Greenes interest by Mr. Cooper, the parties had equal ownership interest and the Court finds that to be an equitable division of the marital interest. Ms. Lloyd alleges that Mr. Cooper has acted to the detriment of her interest in Arrow Partners. Mr. Cooper acknowledged that he has taken management fees and rents since the entry of the Decree of Dissolution that were not customarily taken during the marriage and which were in excess of those received by Ms. Lloyd. Further, Mr. Cooper, acting as the general partner, encumbered the partnership property for the benefit of Equitable Financial Services without Ms. Lloyd's knowledge or consent. There is no dispute that Mr. Cooper purchased the Greenes' interest in Arrow Partners without the shares first being offered to either the general partner or Ms. Lloyd. The Court finds that the partnership agreement and partnership law control the partnership interests in Arrow Partners. The division of this asset and Ms. Lloyd's claims against Mr. Cooper are matters properly heard as a partnership dissolution in Jefferson Circuit Court, not as a part of the dissolution of marriage proceeding. Therefore, the Court declines to make any further findings or assignments as to this business asset.
Based on the court's December 10, 2007, judgment, Cooper first argues that the trial court erred in its property division as it did not properly value and dispose of all the marital assets.
We note that in dividing marital property and debt equitably, a trial court has wide latitude, and absent an abuse of discretion we shall not disturb the trial court's ruling. See Smith v. Smith, 235 S.W.3d 1 (Ky.App. 2006), and Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001). Abuse of discretion is that which is arbitrary or capricious, or at least an unreasonable and unfair decision. See Sexton v. Sexton, 125 S.W.3d 258, 272 (Ky. 2004). However, the trial court's conclusions of law are reviewed de novo. Stipp v. St. Charles, 291 S.W.3d 720, 723 (Ky.App. 2009).
The trial court in the case sub judice...
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