Ford v. Ford
| Citation | 578 S.W.3d 356 |
| Decision Date | 10 May 2019 |
| Docket Number | NO. 2017-CA-001491-MR,2017-CA-001491-MR |
| Parties | Paula P. FORD, Appellant v. John S. FORD III, Appellee |
| Court | Kentucky Court of Appeals |
BRIEF FOR APPELLANT: William G. Knoebel, Florence, Kentucky.
BRIEF FOR APPELLEE: W. Kelly Caudill, Maysville, Kentucky.
BEFORE: JONES, KRAMER, AND K. THOMPSON, JUDGES.
Paula P. Ford ("Paula") appeals from several orders of the Mason Circuit Court rendered in connection with the dissolution of her marriage to John S. Ford III ("John"). Paula asserts the trial court erred when it refused to set aside a separation agreement she negotiated with John during a court-ordered mediation, ordered the separation agreement incorporated into the parties' dissolution decree even though it was unconscionable, and later denied her CR 1 59.05 motions to set aside the judgment (incorporating the agreement) without allowing her to present additional evidence at a hearing. Following our review of the record and all applicable legal authority, we affirm the trial court’s order incorporating the parties' settlement agreement into the final dissolution decree over Paula’s objection. We decline to review any issues associated with the trial court’s denial of Paula’s CR 59.05 motion to alter, amend or vacate because orders denying CR 59.05 motions are interlocutory and not subject to appellate review.
After thirty years of marriage, John filed a petition for divorce from Paula on September 9, 2014. Shortly thereafter, Paula, who resides in Colorado, sent correspondence to the trial court indicating that she had been unable to hire an attorney in Kentucky, but that she and John had agreed that he would withdraw his petition for dissolution of marriage. Paula indicated that she and John had reached an agreement on the division of their real and personal property and would file for legal separation sometime later. The trial court does not appear to have taken any action on Paula’s letter as John’s petition remained pending.
Almost a year later, on August 21, 2015, John filed a motion to have his petition referred to the Domestic Relations Commissioner for a hearing on property division issues. John stated that he and Paula had discussed several proposed settlements but had been unable to reach an agreement. Both parties filed preliminary verified disclosure statements, which demonstrated that, in addition to the parties' significant marital assets, each had substantial non-marital assets. The trial court entered a status quo order on December 16, 2015, and referred the parties to mediation.
Both parties accompanied by their respective legal counsel participated in mediation on April 19, 2016. Despite owning significant marital and non-marital property, the parties did not have any appraisals of their residential and commercial real property performed to aid in dividing their property at the mediation. Instead, John and Paula relied on their own estimates of property values. At the time of mediation, the parties estimated the total value of their major marital assets to be $ 1,585,390, comprised as follows:
The mediation appeared to be successful, as a handwritten Mediation Agreement Order (the "Agreement") was filed of record on April 22, 2016.4 The Agreement was signed by Paula, John and their respective counsel. The Agreement stated as follows:
Paula does not dispute that she agreed to the above terms during the mediation. However, shortly after the mediation, Paula began to have doubts regarding the settlement. It appears Paula’s shortcomings prevented the parties from "formalizing" the agreement into a typed written document.
On April 25, 2016, John moved the trial court to enter a decree of dissolution. Two days later, Paula filed a motion requesting the trial court vacate the Agreement and a motion requesting that the court declare the Agreement unconscionable. Paula stated that during her and John’s marriage, she had an equitable interest in the Southgate Plaza business. She alleged that John had reorganized the business during the parties' separation and transferred Paula’s interest to himself without any consideration. Paula argued that if she had retained her equitable interest in Southgate Plaza, she would not have needed to bargain for a payout of her marital interest in the business as she could have retained her equitable interest and continued to receive income from it. Paula additionally contended that John had not provided her with his preliminary verified disclosures in a timely fashion. Paula contended that the Agreement deprived her of $ 30,000 of annual income on which she was relying for her retirement. She expressed her worry that, without that income, she would be forced to sell the Steamboat Property. Paula contended that it was that concern, coupled with the fact that she had not eaten lunch and had low blood sugar during mediation, that had caused her to settle for the "pitiful" lump sum payment of $ 135,000.
John filed a response to both of Paula’s motions on May 12, 2016. Therein, John noted that both parties are educated, both had been represented by counsel during the entirety of the mediation, and that both had disclosed their financial information prior to mediation. John informed the court that Paula had received more than half of the value of the parties' marital assets. As to Paula’s expressed concern about retirement funds, John noted that Paula had received $ 80,386 from dividends and rent in 2015, while he had only earned $ 67,362 that year from investments and rent. Further, John informed the court that Paula was co-trustee and co-beneficiary of a trust valued at $ 2 million, and would receive one-half of the corpus of that trust upon the death of her ninety-two-year-old mother. John disputed Paula’s claim that her suffering from low blood sugar during the mediation weakened her negotiation skills. He noted that Paula had not requested a break during mediation or suggested that mediation be continued. In an affidavit sworn by John and attached to his response, John agreed with Paula that she did not have any equitable interest in the Southgate Plaza. However, John testified that Paula’s interest in that business had ended in 1998, when it was restructured for the parties' children’s trust.8
A hearing was held on May 13, 2016; however, the video recording is not included in the record before this Court. On May 25, 2016, the trial court entered an order denying Paula’s motion to vacate and motion to declare the Agreement unconscionable. The trial court concluded that the terms of the Agreement indicated that it was the result of a bargained for exchange. The trial court noted the fact that Paula’s requests that the parties not change their wills and that John be limited in his choice of power of attorney had been included in the Agreement reflected that she was very much involved in the bargaining process. Additionally, the trial court found that under the terms of the Agreement Paula was to receive 53% of the parties' marital estate. Further, Paula retained approximately $ 1 million in non-marital assets and had the expectation of receiving another $ 1 million. The trial court found that in addition to Paula using the Steamboat Property as her home, she rented out a portion of it and received income from it. Thus, the trial court concluded that income from the Steamboat Property, combined with the income Paula receives from her interest in her trust, would provide her with sufficient future income. The trial court noted that Paula was free to sell the Steamboat Property and invest the proceeds into a higher-income-producing property if she chose. Also, on May 25, 2016, the trial court entered a decree of dissolution of marriage, which incorporated the terms contained in the Agreement.
Sometime thereafter Paula retained new counsel. With the assistance of her new counsel, on June 2, 2016, Paula filed a CR 59.05 motion to alter, amend, or vacate. In that motion, Paula argued that John had not resided in Kentucky for the 180 days preceding his filing the petition for divorce as required by KRS 9 403.140, meaning that the trial court lacked subject matter jurisdiction. In support of her claim, Paula contended that John maintains a Colorado driver’s license, files Colorado tax returns, and receives mail in Colorado. Paula maintained her argument that John had failed to timely and...
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