Normandin v. Normandin
| Decision Date | 17 December 2020 |
| Docket Number | 2018-SC-0451-DG |
| Citation | 634 S.W.3d 589 |
| Parties | Laura R. NORMANDIN, Appellant v. Scott W. NORMANDIN, Appellee |
| Court | United States State Supreme Court — District of Kentucky |
COUNSEL FOR APPELLANT: Paul Joseph Hershberg, Paul Hershberg Law, PLLC, Louisville, Louis Paz Winner, Louisville, Clay Daniel Winner LLC.
COUNSEL FOR APPELLEE: James Daniel Theiss, James L. Theiss, Theiss Law Offices PLLC.
Laura R. Normandin (Laura) appeals from an order entered by the Oldham Circuit Court, Family Division, on February 2, 2016, and subsequent denial of her motion to alter, amend, or vacate the order entered on March 21, 2016. Specifically, she appeals the Family Court's classification and division of marital property, calculation of maintenance, and calculation of child support. The Court of Appeals affirmed the decision of the Oldham Family Court in whole. Having reviewed the record and considered the arguments of the parties, we hereby affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
This case stems from Laura's dissolution of marriage action against Scott W. Normandin (Scott). The parties were married in Madison County, Virginia, on January 25, 2004. The marriage resulted in the birth of four children who are still minors. In November 2013, Laura filed for dissolution. The parties attempted to reconcile for approximately a year, before moving forward with the divorce proceedings that ultimately culminated in a trial on January 6, 2016. The Oldham Family Court issued its findings of fact and conclusions of law on February 2, 2016.
Prior to and immediately after their marriage, Laura worked as a commercial real estate manager in Washington, D.C. Following the birth of their first child in 2005, Laura focused on responsibilities as a stay-at-home mother and homemaker. From that point until the time of divorce, Laura had no substantial source of income outside of marital funds with the exception of her receipt of approximately $450,000 from her father's estate while the divorce proceedings were ongoing in the trial court below.
Scott was the sole income earner for the family after Laura left the workforce. At the time of the divorce proceeding he was employed by Humana as the Chief Security Officer with a base salary of $226,096 per year. In this position, he was also the recipient of regular bonuses and incentive-based income, including restricted stock units (RSUs). Classification of Scott's RSUs is the primary issue before the Court. The Humana RSUs were usually granted annually, at Humana's discretion, and vested to the employee after three years. Prior to vesting, the RSUs were subject to restrictions, unavailable to the employee, and non-transferrable until such restrictions lapsed and vesting occurred. The primary restriction was that if Scott was no longer employed by Humana on the date of vesting, any RSUs would be forfeited with only limited exceptions (retirement, disability, or death) which are not applicable to Scott.
The RSUs represented a significant portion of the couple's marital income. In fact, Scott admitted that his 2013 grant of RSUs was due to vest shortly after the conclusion of the trial and would result in a payment of approximately $220,000. In addition to the 2013 grant of RSUs, Scott had similar grants in 2014 (vesting in 2017) and 2015 (vesting in 2018). However, at the time of the trial, Humana was in discussions with Aetna regarding a merger, clouding Scott's job outlook due to likely restructuring. This merger was never consummated.
In addition to the RSUs, the parties contested the classification and equitable distribution of two other pieces of property: Scott's 401k and a plot of unimproved land in Wyoming. The 401k was valued at $499,879. At issue was the portion of the 401k deemed Scott's nonmarital property. The account consisted of funds derived from Scott's employment at Humana during the marriage, Honeywell both prior to and during the marriage, and the Secret Service and British Aerospace prior to the marriage. At trial, Scott testified to rolling his retirement funds from his premarital employment into the Humana account in 2009, claiming $77,000 as the present nonmarital value of the account. Laura argued that Scott did not sufficiently prove any nonmarital interest in the 401k.
The unimproved Wyoming property was purchased prior to the parties’ marriage. Laura stated she paid the initial down payment of $5,000 for the property when they purchased it. Scott testified that although Laura made the down payment, he reimbursed her for it thereafter. They both argued that based on their payment of the down payment, a portion of the property should have been classified as their individual nonmarital property. Neither party provided documentation to support their testimony.
The family court in its February 2, 2016, order found all proceeds from Scott's unvested RSUs were his nonmarital property and did not include them in his income when calculating maintenance or child support. It accepted Scott's $77,000 estimate of the value of his nonmarital portion of his 401k. It found neither party proved by clear and convincing evidence a nonmarital interest in the Wyoming property, deeming it all marital and dividing its value equally.
In determining maintenance, the trial court found Laura's reasonable needs to be $6,000 per month. After considering the nonmarital inheritance, her portion of the marital property awarded, and her ability to become employed, the trial court awarded her maintenance of $1,500 per month for forty-eight months. The trial court granted joint custody, identifying Laura as the primary residential parent, with Scott having custody every other weekend and Wednesdays after school. Turning to child support, the trial court found the couple's monthly adjusted income was above the statutory guideline ceiling of $15,000. Applying the top of the guidelines and declining to adjust upward from that standard resulted in a support award of $2,199.60 per month paid by Scott to Laura.1
Following the decree, both parties filed motions to alter, amend, or vacate and motions for additional findings of fact. Those motions were denied by the trial court in a second order on March 21, 2016. Laura appealed that order to the Court of Appeals, disputing the classification of the RSUs, the retirement account, and the Wyoming property, as well as the calculation of maintenance and child support, and the denial of attorney's fees.
The Court of Appeals affirmed the Oldham Family Court in full. The Court of Appeals held that the RSUs were Scott's separate property relying principally on Sharber v. Sharber , 35 S.W.3d 841 (Ky. App. 2001), and Gallagher v. Gallagher , 2012-CA-00671-MR, 2013 WL 5886028 (Ky. App. November 1, 2013). The Court of Appeals held that the trial court's classification and division of the 401k was supported by substantial evidence and that the trial court properly found neither party met the burden of proving a nonmarital interest in the Wyoming property. As to maintenance and child support, the Court of Appeals held that under an abuse of discretion standard the trial court did not abuse its discretion in awarding $1,500 per month maintenance or in its decision to deny an upward adjustment from the child support guidelines. Laura now appeals the Court of Appeals’ decision with respect to the classification of the RSUs, the 401k, and the Wyoming property, as well as the calculation of maintenance and child support.
The conclusion of whether property is marital or nonmarital is reviewed under a two-part inquiry in which the factual findings made by the court are reviewed under the clearly erroneous standard and the ultimate legal conclusion denominating the item as marital or nonmarital is reviewed de novo.2 KRS 3 403.190 states that "all property acquired by either spouse after the marriage and before the decree of legal separation is presumed to be marital property," a presumption that may be rebutted by showing the acquisition was via a means excepted by the statute. The trial court's specific findings of fact as to the acquisition of the property are viewed under a clearly erroneous standard while its conclusions of law applying those facts are reviewed de novo.4 Lastly, equitable division of marital property need not be equal, rather only "in just proportions," and we will not disturb the trial court's equitable division unless the trial court has abused its discretion.5
The standard of review for determinations of maintenance and child support is an abuse of discretion.6 "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles."7 An appellate court will not disturb the holdings or substitute its own judgment when the evidence supports the trial court's decision and it did not abuse its discretion when deciding the case.8
This Court has never directly addressed the marital division of RSUs. The Court of Appeals, when considering this issue, has classified them inconsistently.9 Kentucky statutes are deceptively simple in classifying property as marital or nonmarital. KRS 403.190(3) states that:
[a]ll property acquired by either spouse after the marriage and before a decree of legal separation is presumed to be marital property, regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, and community property.
(Emphasis added). This Court has broadly defined property in this context as referring "to a determinate thing or an interest in a determinate thing."10 The statute goes on to state the party seeking to rebut the presumption has the burden to show the...
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