Hammond v. Hammond
| Decision Date | 04 April 2014 |
| Docket Number | NO. 2012-CA-001810-MR,2012-CA-001810-MR |
| Parties | GLENN MARTIN HAMMOND APPELLANT v. ELENA JILL HAMMOND, BRITTANY KOCH AND DAVID GUARNIERI APPELLEES |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEAL FROM PIKE CIRCUIT COURT
The facts of this matter were presented to the trial court below on multiple occasions, culminating in a voluminous record. Of import, the parties were married in 2001, were separated in 2008, and the dissolution of the marriage was entered on November 18, 2010. Prior to the marriage and thereafter, Glenn owned his own law firm, and was a solo practitioner. Jill worked in the broadcast industry and for the local school board. During the marriage, Glenn received substantial legal fees and deposited the money into brokerage accounts. After the separation the parties maintained separate financial accounts; Glenn had the exclusive use and control of virtually all of the parties' marital assets. After the parties separated in 2008, Glenn transferred financial accounts into other accounts without consulting with Jill. The court ordered Glenn to pay temporary maintenance to Jill in the amount of $1,500.00 per month in June of 2009.
The trial court was presented evidence in great detail. Since 1996 Glenn has been the sole owner of the Law Offices of Glenn H. Hammond. Glennpractices his cases on a contingent fee basis. He is paid at the end of a successful case. His cases last from several months to several years. His business is set up so that Glenn pays taxes when he receives the fees and not when he earned the fees. Thus, Glenn received payment of legal fees after the marriage for work he performed before the marriage and received payment of legal fees for work he performed during the marriage, after the dissolution of marriage was entered.
Glenn used the services of certified public accountants and bookkeepers to help manage his law office. Glenn's CPA testified that when the parties separated, Glenn's law office had a value of $34,808.00, including the automobile owned in the name of the law office and driven primarily by Glenn. In April 2011, Glenn verified in his financial disclosure statement that his total gross monthly income was then $29,468.00. At the February 14, 2012, final hearing Glenn testified that the gross receipts from his law practice between 2001 and 2009 were from $1.273 to $1.4 million.1 Glenn's 2008 and 2009 federal income tax returns indicate that he reported income of $478,379.00 and $398,240.00 respectively. Glenn argued that his firm lost money each year since 2009. Glenn produced balance sheets by CPA Mark Enderle for 2009, 2010, and 2011 which showed a net income for 2009 to be $140,876.00; for 2010 to be $24,692.00; and for 2011 to be $9,579.00. Jill did not provide an independent expert to value Glenn's business.
Jill came into the marriage with very few assets. Glenn asserted that Jill provided no duties as a homemaker and contributed nothing financially or otherwise to the marriage for the entire eight years. Glenn testified that in addition to making all the income from his law practice he was also responsible for the yard work, "outside chores," laundry, housecleaning and grocery shopping. However, the court found that during the marriage both parties contributed to the household chores and both enjoyed an extravagant lifestyle.
During the marriage Jill worked as a news anchor at WYMT from 1997 to 2002. She made about $21,500.00 per year. She then worked for the Pikeville Independent Board of Election where she earned about $21,500.00 per year as the Public Relations Director. Jill was then employed as a salesperson for East Kentucky Broadcasting where she earns about $30,000.00 per year. Jill testified that she has Type-1 diabetes, which requires strict attention to medications and can have long-term debilitating effects on her health.
The court found that the parties' date of separation was the appropriate date to value the assets as Glenn made numerous financial transactions after July 2008, whereby he transferred funds from account to account and withdrew monies without Jill's consent or knowledge.
During the marriage Glenn had financial accounts at various institutions throughout Kentucky with balances that fluctuated throughout the marriage. Most of the accounts were started by Glenn prior to marriage but during the marriage they were changed to different accounts and marital monies wereadded to them. Marital and nonmarital expenses were paid out of them. All of the accounts had balances that were allowed to decrease below their premarital balance at some point during the marriage. The court listed the accounts as follows:
In April of 2005, Glenn moved the accounts and consolidated them at JP Morgan Chase where they were managed by David Demarest. The approximate amount consolidated was $206,856.00. After deposits from marital funds, the account grew until, in September of 2008, they totaled $493,000.00. There was also a small IRA account at JP Morgan of $33,000.00.
In July of 2004, the parties purchased a home in Pikeville for $492,500.00 from David Demarest. The down payment on the home included $23,000.00 from the sale of Glenn's camper he had purchased prior to marriage. While Glenn claimed the entire down payment of $50,000.00 was nonmarital, the court found that Glenn had only adequately traced $23,000.00 of nonmarital assets. The parties sold the residence on October 29, 2010, for $485,000.00, which, after payment of all outstanding liens, resulted in a net payment to the parties of $95,287.89. The court had previously ordered that each party receive $20,000.00and the rest had been deposited into an escrow account. The court then had to distribute the remaining $55,100.94.
Glenn has an ownership in Condor Properties that has a value of $25,000.00. Glenn had an ownership interest in various oil and gas wells operated under the name J&R Fuels valued at $20,000.00.
Glenn also had a 50% ownership in Green Partners, LLC, which owns 46% of a commercial building on South Broadway in Lexington, Kentucky. Green Partners, LLC was originally incorporated in 2009; Glenn and David Demarest are the only shareholders. Jill had originally signed the note with Forcht Bank when the South Broadway property was purchased. However, she was never a shareholder or employee of the corporation and the note she signed has been satisfied and retired when the Community Trust Bank became the primary mortgagee. The fair market value of the Green Partners' 46% ownership in the commercial building is $1,150,000.00. The outstanding debt owed on the building in $954,397.76. Therefore, the equity in the building is $195,600.00 and Glenn's half interest is $97,800.00.
Glenn owned a life insurance policy with a cash value of $13,511.49.
The court concluded that all legal fees received by Glenn between the date of the marriage and the date of separation were marital assets. The court concluded that Glenn had failed to trace any claimed nonmarital assets in the brokerage accounts, given the commingling of the funds. Glenn added marital funds to and withdrew from these accounts during the course of the marriage,causing their balances to fluctuate to very low levels at times and very high levels at other times. The court deemed it impossible to determine that all or any specific part of the accounts contained nonmarital money.
The value of the marital estate subject to division, as found below, was $768,300.00, comprised of:
Brokerage/Investment Accounts
$585,300
(Demarest)
Condor Properties 3.75%
2,500
(Wallen)
JR Fuels
20,000
(Wallen)
JA East Partners 6.25%
3,900
(Wallen)
Green Partners 50%
97,800
(Glenn)
Hammond Law Office
34,800
(Griffith)
Life Insurance
13,500
(Glenn)
Marital residence escrow (net)
32,1002
(court)
Family Bank Account
7,200
(Glenn)
US Bank
3,100
(Jill)
BMW automobile
10,700
(Jill)
Total: $768,300.00.
During these proceedings, Glenn paid marital taxes in 2008 in the amount of $84,000.00 and the court gave him credit for the taxes he paid on behalf of Jill in the amount of $42,000.00.
The court ordered that Jill be awarded her bank account at US Bank and her BMW automobile. Glenn was awarded all the remaining property owned by the parties, including any interest in Green Partners, LLC, Condor Partners, JA East Partners, J&R Fuels, and the Law Office of Glenn M. Hammond, and was ordered to pay Jill $377,300.00 for her marital interest in this property. The court ordered that each party was responsible for any debt associated with the property awarded them.
Additionally, the court found that there was an extreme disparity of income between ...
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