Gallagher v. Gallagher

• Court: Kentucky Court of Appeals
• Writing for the Court: MAZE
• Decision Date: 01 November 2013
• Docket Number: NO. 2012-CA-000671-MR,2012-CA-000671-MR
• Citation: Gallagher v. Gallagher, NO. 2012-CA-000671-MR (Ky. Ct. App. Nov 01, 2013)
• Parties: ANDREW T. GALLAGHER APPELLANT v. MARJORIE G. GALLAGHER APPELLEE

ANDREW T. GALLAGHER APPELLANT v. MARJORIE G. GALLAGHER APPELLEE

NO. 2012-CA-000671-MR

Commonwealth of Kentucky Court of Appeals

RENDERED: NOVEMBER 1, 2013

NOT TO BE PUBLISHED

APPEAL FROM OLDHAM CIRCUIT COURT

HONORABLE TIMOTHY E. FEELEY, JUDGE

ACTION NO. 09-CI-01265

OPINION

AFFIRMING IN PART,

REVERSING IN PART,

AND REMANDING

BEFORE: CAPERTON, LAMBERT AND MAZE, JUDGES.

MAZE, JUDGE: Appellant, Andrew Gallagher, appeals from the order of the Oldham Family Court regarding several matters pertaining to the dissolution of his marriage to Appellee, Marjorie Gallagher. Finding that the trial court abused itsdiscretion regarding three issues raised on appeal and must make further findings regarding a fourth, we affirm in part, reverse in part and we remand to the trial court for entry of amended orders.

Background

Andrew and Marjorie were married in North Carolina in 1991 and had two children during their marriage. Both Andrew and Marjorie hold engineering degrees. Prior to moving to Kentucky, Andrew worked for a major airline in Atlanta and Marjorie worked for the Centers for Disease Control, earning approximately $43,000. However, Marjorie quit this job to care for the couple's youngest child. After moving to Kentucky, Andrew worked for United Parcel Service earning just over $100,000 per year, while Marjorie began work as a certified real estate appraiser, earning just over $10,000 per year.

In 2009, Marjorie petitioned for divorce and soon moved for temporary child support, maintenance and debt service. Following a hearing on the matter, the trial court ordered Andrew to continue paying the $2,100 mortgage on the marital home in which Marjorie and the children still lived. The court also required Andrew to pay Marjorie $1,050 in temporary maintenance and $1,302 in temporary child support. Following entry of this order on February 11, 2010, this Court denied Andrew's motion for emergency relief from the order. Accordingly,the provisions of the trial court's temporary order remained in effect until January 30, 2012, when the court entered its final orders and decree of dissolution.

While the divorce was pending, Marjorie petitioned the trial court for permission to move back to Atlanta to pursue a job opportunity as a real estate appraiser. Marjorie also requested that her maintenance be increased due to Andrew's financial benefit from her vacating the marital home. In response, Andrew requested that his child support be adjusted to reflect Marjorie's new income and that their oldest child had moved in with him in September. In November, before the trial court had ruled on these matters, Marjorie moved to Atlanta with the couple's youngest child.

The trial court included its ruling on these matters in its final order of January 30, 2012. The court's order kept primary residential custody of both children with Marjorie and increased ordered maintenance to $1,500 per month. The trial court imputed an annual income of $36,000 to Marjorie in light of her new employment, up from $6,000, which was used to calculate the temporary child support and maintenance amounts. Andrew also remained responsible for the $2,100 mortgage payment.

The trial court made several decisions regarding the division of Andrew's and Marjorie's assets. The court divided the balance of an L&N Federal Credit Union account as a marital asset. This account originated from Andrew'sdecision to close out $6,898 in stock he held as a result of his employment with UPS. The trial court also held Andrew as having an additional $19,178 in restricted stock accrued during the marriage. Andrew was held responsible for half of $20,503 in marital credit card debt. As a result of Marjorie's testimony to this effect, the trial court credited Marjorie with $7,000 which she claimed increased the value of their home in Georgia by the full $7,000 before its sale. In addition, the trial court found that, due to the disparity in the parties' respective means, Marjorie was entitled to $6,000 in attorney's fees from Andrew.

Both parties filed a motion to alter, amend or vacate the trial court's order of January 30. As a result, the trial court awarded primary residential custody of the oldest child to Andrew in light of her decision to live with him. The trial court also reduced Andrew's child support obligation from $1,302.00 to $411.50 to reflect both Marjorie's increase in income (to $36,000.00) and that only one child resided with Marjorie. The order regarding child support was retroactive to December 1, 2011. The court refused to otherwise alter or amend its order of January 30, the remainder of which continued to apply. Andrew's appeal of both orders now follows.

Standard of Review

The issues in this case involve the trial court's decisions regarding child support, maintenance and the division of assets pursuant to a divorce.Accordingly, we review the trial court's decisions for an abuse of discretion. See Young v. Young, 314 S.W.3d 306 (Ky. 2010); McGregor v. McGregor, 334 S.W.3d 113 (Ky. App. 2011). To amount to an abuse of discretion, the trial court's decision must be "arbitrary, unreasonable, unfair or unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). Furthermore, the trial court's findings of fact will not be disturbed unless clearly erroneous, that is, supported by substantial evidence. Black Motor Co. v. Greene, 385 S.W.2d 954 (1965); Kentucky Rules of Civil Procedure ("CR") 52.01.

Analysis

Andrew appeals several holdings of the trial court from both its January 30 and March 13 orders. Andrew argues that the trial court abused its discretion by: 1) awarding child support, maintenance and debt service payments to Marjorie which were unsupported by evidence in the record; 2) imputing only $36,000 in income to Marjorie in its final child support and maintenance calculations when evidence of a higher salary existed in the record; 3) holding Andrew responsible for half of the credit card debt which he claims Marjorie created and benefitted from; 4) granting Marjorie $7,000 credit for improvements made to the marital home in Georgia; 5) including Andrew's L&N account as his marital asset; 6) including Andrew's restricted stock among his marital assets; 7) undervaluing one of the couple's marital vehicles when clear evidence of its assessed value existed in the record; 8) requiring Andrew to replenish the couples'children's funds after prior withdrawals which he claims Marjorie made; and 9) requiring Andrew to pay $6,000 of Marjorie's attorney's fees. We address these issues in turn.

I. Child Support, Maintenance and Debt Service Orders

As a preliminary matter, we note that temporary orders regarding child support and maintenance, such as the one the present trial court entered, are interlocutory in nature and generally are not subject to appeal. See Atkinsson v. Atkinsson, 298 S.W.3d 858 (Ky. 2009) (citing Cannon v. Cannon, 434 S.W.2d 48 (Ky. 1968); and Lebus v. Lebus, 382 S.W.2d 873 (Ky. 1964)). However, to the extent that such orders were incorporated into the final order, and to the extent that Andrew argues the trial court's final order denied him a credit on his child support, maintenance and debt service obligations, this Court has jurisdiction to review those orders. See Calloway v. Calloway, 832 S.W.2d 890, 894 (Ky. 1992). Hence, we review Andrew's objections to the various issues arising from the January 30 and March 13 orders, both which may incorporate elements of prior temporary orders.

A. Alleged Deviation from Child Support Guidelines

Child support, as well as the amount and duration of maintenance and debt service, are within the sound discretion of the trial court. Sexton v. Sexton, 125 S.W.3d 257, 272 (Ky. 2004); Gaskill v. Robbins, 282 S.W.3d 306 (Ky. 2009); Bailey v. Bailey, 246 S.W.3d 895, 897 (Ky. App. 2007) (citing Browning v.Browning, 551 S.W.2d 823 (Ky. App. 1977), and Russell v. Russell, 878 S.W.2d 24 (Ky. App. 1994)). Kentucky Revised Statutes ("KRS") 403.212 provides guidelines for child support calculation based on several factors, including the parties' income and the number of dependent children. A trial court may deviate from these guidelines if it finds that their application would be "unjust or inappropriate in a particular case" as determined by certain factors. See KRS 403.211(3).

Andrew argues that, because the court required him to continue paying the mortgage on the marital home and to make other payments as the result of the January 30 order, these orders "constitute[] additional temporary child support and maintenance that exceeds KRS 403.212." Andrew further argues that the trial court was required to make the findings listed under KRS 403.211(3) before it deviated from the guidelines. As support for this argument, Andrew cites to the Supreme Court's holding in Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001). In Neidlinger, the Court held that a debt incurred by a spouse to maintain and support the children's expensive private education was nonmarital and could not be allocated to the other spouse who was already paying maintenance and child support. The Court reasoned that "[i]f these debts were assigned to [the husband], the effect would be to allow [the wife] to unilaterally increase [the husband's] maintenance and support obligation to a level substantially higher than that established by court order." Neidlinger, 52 S.W.3d at 523.

We find Neidlinger to be insufficient authority for Andrew's argument. That case involved a debt which the Court held was clearly nonmarital, incurred by and for the exclusive benefit of one spouse. Such is the not the case regarding payment of Marjorie and Andrew's mortgage payment, a debt which was clearly marital and ordered to prevent default on the couple's largest asset. Furthermore, Neidlinger does not stand for the proposition that requiring one party to pay all or a substantial portion of a marital debt equates to a deviation from statutory child...