Kelly v. Kelly

• Decision Date: 10 May 2011
• Docket Number: No. WD 72238.,WD 72238.
• Citation: Kelly v. Kelly, 340 S.W.3d 673 (Mo. App. 2011)
• Parties: Robert KELLY, Appellant,v.Carlotta A. KELLY, Respondent.
• Court: Missouri Court of Appeals

340 S.W.3d 673

Robert KELLY, Appellant,

v.Carlotta A. KELLY, Respondent.

No. WD 72238.

Missouri Court of Appeals, Western District.

May 10, 2011.

George A. Wheeler, Kansas City, MO, for appellant.Brent L. Winterberg, Kansas City, MO, for respondent.Before: MARK D. PFEIFFER, P.J., and THOMAS H. NEWTON and ALOK AHUJA, JJ.ALOK AHUJA, Judge.

Robert Kelly (“Husband”) appeals the decree entered by the Circuit Court of Clay County, dissolving his marriage to Carlotta A. Kelly (“Wife”). Husband argues that the circuit court erred by failing to specify a date certain for the sale of the marital home, and erroneously: classified a portion of Husband's pension and retirement savings plan as marital property; failed to assign to Wife a share of the expenses to maintain the home; and awarded Wife $1,000 in attorneys fees. Because we conclude that the trial court should have specified a method for selling the marital home by a specific date if efforts to market the home as specified in the judgment were unsuccessful, we reverse and remand for further proceedings concerning the sale of the marital home. We reject Husband's other challenges to the dissolution decree.

Factual Background

Husband and Wife were married on July 21, 2001. The parties physically separated on or about September 28, 2008, after Husband came home and discovered that Wife had moved out.

During the marriage, Husband and Wife purchased a home in Liberty for $219,000; a $205,850 balance remained on the mortgage at the time of trial. Husband testified that the current value of the home is only $195,000, while Wife testified that the value was $250,000. Husband testified that he paid $30,000 in upkeep after Wife vacated the home, and that he can no longer afford to stay there.

The evidence indicates that Husband receives substantially more income per month than Wife. Husband worked for the United States Department of Housing and Urban Development (“HUD”) until retiring in 2004, and currently receives $4,800 per month from his pension. Wife, on the other hand, is a full time employee with the Internal Revenue Service, earning $38,118 in salary, or $3,176 per month. In addition to his pension, Husband opened a Thrift Savings Plan ¹ account while employed with HUD. Husband testified that, at the time of trial, his Thrift Savings Plan account had a balance of approximately $50,000.

The circuit court held a trial on January 26, 2010, and entered its final decree on February 17, 2010. It ordered the marital home sold, and ordered that the net sales proceeds be divided 60% to Husband, and 40% to Wife. The court's decree specifies that the home be listed for sale at $240,000, and decreased $10,000 in listing price for every 60 days on the market, until the price reaches $210,000, where it will remain until sold. The decree does not specify an end date for the marketing of the home, or specify what will happen if the home fails to sell even at the reduced listing price of $210,000. The circuit court allowed Husband to continue to live in the home, but required that he maintain the property in optimal sales condition at all times, and continue to pay the mortgage and utility bills. Additionally, the circuit court ordered that Husband pay Wife $15,000 in the event he defaulted on the mortgage and a foreclosure resulted.

The circuit court classified 11.5% of Husband's pension and Thrift Savings Plan account as marital property, based on the fact that he was married for three of the 26 years he worked at HUD. The court divided this marital portion evenly. The circuit court did not require Wife to contribute to Husband's claimed $30,000 in home upkeep expenses, and ordered Husband to pay $1,000 of Wife's attorneys fees. Although both parties requested it, the trial court did not order that spousal maintenance be paid to either party. Husband appeals.

Standard of Review

“In a dissolution proceeding, we affirm the decision of the trial court unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.” Wisdom v. Wisdom, 316 S.W.3d 499, 501 (Mo.App. W.D.2010). “As to the court's division of marital property, we will reverse the trial court's decision only when the division so unfairly favors one party that it amounts to an abuse of discretion.” Id. “We review all evidence in the light most favorable to the ruling of the trial court and find an abuse of discretion only when the ruling is ‘clearly against the logic of the circumstances and is so arbitrary and unreasonable as to shock one's sense of justice and indicate a lack of careful consideration.’ ” Id. (citation omitted).

Analysis²

I.

Husband argues, first, that the circuit court abused its discretion by failing to set a specific deadline to sell the marital home, because the judgment placed an undue burden on him to maintain the home, and gave Wife no incentive to facilitate the sale of the home (for example, by agreeing to a sale for less than the home's listing price). We agree.³

The circuit court's judgment notes that the parties agreed that the home should be sold, and provided that:

[T]he parties' marital home ... shall be listed for sale with a realtor with a list or asking price of $240,000.... [I]f the said marital real estate is not sold (or a signed contract for sale obtained) within 60 days, the asking or list price shall be lowered by $10,000, and further shall be lowered by an additional $10,000 after each 60 days that the property is not sold (or a signed contract for sale obtained) until the price is lowered to $210,000 at which time it shall remain at $210,000 until sold.

The judgment provided that “the parties may ... agree to a sales contract of less than the listed or asking price, so long as both [Husband] and [Wife] agree.” It also provided that Husband “may remain in possession [of] the home until sold, but he must maintain the property in a condition for optimal sales presentation at all times,” and “shall timely pay the monthly mortgage payments to Wells Fargo as well as utility payments until the marital home is sold.” If Husband “default[s] on the loan resulting in foreclosure on the property, [Wife] is awarded a Judgment against [Husband] in the amount of $15,000.”

Although the judgment specifies an initial listing price for the home, and a schedule on which the listing price will be gradually reduced if it fails to sell, the judgment fails to specify any date certain by which the home must be sold, or specify any procedure by which the home can be sold for less than its listing price (other than with the consent of both parties). Moreover, because she is not paying any of the costs for maintaining the home's physical condition or financing, and stands to receive a substantial judgment if Husband fails to make payments on the mortgage, Wife has little or no incentive to facilitate the prompt sale of the home.

The specification in the decree of an initial listing price, and the schedule for reducing that listing price if efforts to sell the home are unsuccessful, represents a practical approach to the sale of marital real estate in the current economic climate. Nevertheless, in order to be sufficiently definite and minimize the need for future court intervention, and given the lack of any other apparent incentive on Wife to facilitate a sale, the judgment must contain some provisions to ensure that the residence is not marketed indefinitely, and provide some mechanism for selling the property if the parties are unable to agree to a disposition.

We addressed a similar dissolution decree in Thomas v. Thomas, 76 S.W.3d 295 (Mo.App. W.D.2002). There, the decree provided that the marital home “shall be sold” and the proceeds equally divided, and ordered that the property be listed for sale “at $56,000 or at such price as is recommended by the real estate agent selected by [husband].” Id. at 298. The decree provided that the wife could continue to live in the home pending its sale, and required her to make the mortgage payments while she resided there. Id. While the decree in Thomas required the wife to make the mortgage payments on the property, we nevertheless agreed with husband's complaints that the decree “set no time limit for the sale of the house” and gave wife “no incentive to cooperate in any sale.” Id. at 304. We noted that wife had testified that rental rates in the relevant community exceeded the mortgage payments, which husband contended “represents a disincentive for her to sell the property.” Id. In these circumstances, we held that the decree had to be modified to specify a time period within which the home must be sold:

As is evident from the portion of the decree quoted supra, the judgment is silent as to when or how the property shall be sold. Thus, the portion of the trial court's judgment ordering the sale of the marital residence at an undefined time is remanded for clarification. The trial court is directed to designate a time period for the sale of the marital home and any other relevant conditions that the trial court deems appropriate.

Id. (citation omitted).

The Southern District addressed a similar situation in Bussen v. Bussen, 273 S.W.3d 90 (Mo.App. S.D.2008), in which a dissolution decree provided only that the marital home “shall be sold” and the proceeds equally divided, and ordered that the property “be listed for sale.” Id. at 91. As here, the husband in Bussen argued that the decree gave wife no incentive to participate in the aggressive marketing of the home, since she was given rent-free possession of a home having no mortgage. Following Thomas, Bussen reversed and remanded this aspect of the decree, directing that, on remand, “the trial court ... designate a time period for sale and other appropriate conditions, if any, not inconsistent with this opinion.” Id. at 92; see also Isakson v. Isakson, 277 S.W.3d 784, 787–88 (Mo.App. S.D.2009).

Reversal is...