Smialek v. Smialek, No. 2006-CA-002613-MR (Ky. App. 8/8/2008), 2006-CA-002613-MR.
| Decision Date | 08 August 2008 |
| Docket Number | No. 2006-CA-002648-MR.,No. 2006-CA-002613-MR.,2006-CA-002613-MR.,2006-CA-002648-MR. |
| Parties | Kurt C. SMIALEK, Appellant/Cross-Appellee v. Paula Cash SMIALEK and Eugene L. Mosley, Appellees/Cross-Appellants. |
| Court | Court of Appeals of Kentucky |
Terry W. Holloway, Ashley Holloway Frank, Louisville, Kentucky, Briefs for Appellant/Cross-Appellee.
Eugene L. Mosley, Louisville, Kentucky, Brief for Appellee/Cross-Appellant.
Before: COMBS; Chief Judge; KELLER, Judge; HENRY, Senior Judge.
In this dissolution action, Kurt Smialek has appealed and Paula Cash Smialek and her attorney, Eugene L. Mosley, have cross-appealed from the Jefferson Family Court's May 3, 2006, Findings of Fact, Conclusions of Law Distribution of Property and Debts, and Supplemental Decree, and from its November 17, 2006, Order ruling on the parties' motions to alter, amend, or vacate. Among the issues we shall address are the award of maintenance, the assignment of debt, and the partial award of attorney fees to Paula's attorney. For the reasons set forth below and after a thorough review of the record, we affirm.
Kurt and Paula were married in Oldham County, Kentucky, on July 6, 1984. Two children were born of the marriage; both are now adults. During the course of their marriage, Kurt and Paula owned and operated two businesses, Smialek Enterprises and Louisville Power Sports. Paula, who has a degree in business management, worked as the bookkeeper. The parties separated on December 25, 2003, and Paula filed a Petition for Dissolution of Marriage on November 3, 2004. In her prayer for relief, Paula requested an equitable division of marital property and debts as well as maintenance. The same day she filed the petition, Paula sought a status quo order to prevent Kurt from disposing of, transferring, or dissipating their assets. The family court granted Paula's motion on November 29th and ordered that Paula would continue as the bookkeeper for the businesses. Kurt filed his response and counterclaim on December 28, 2004, asserting that Paula should be required to contribute to his support, as he was without funds to maintain himself. We note that this dissolution proceeding was highly contentious, with each party blaming the other party for the collapse of their business and of dissipating both business and personal assets. The family court dissolved the marriage in a decree entered December 21, 2005, which was subsequently amended on April 5, 2006.
After holding several hearings, the family court entered a 48-page judgment on May 3, 2006, in which it set forth its findings of fact, conclusions of law, distribution of property, and supplemental decree. To Paula, the family court awarded the marital residence (fair market value $220,000), the first mortgage debt of $149,000, and the $73,000 debt owed to Stock Yard Bank. To Kurt, it awarded the lakehouse (fair market value $213,400), the first mortgage debt of $115,000, and the second mortgage debt of $100,000. Due to the debts associated with the real properties, no equity remained to be divided. Regarding Paula's claim for maintenance, the family court looked to Paula's earnings ability, as well as Kurt's ability to meet his needs while paying maintenance, and determined that Kurt was barely able to meet his own living expenses. For those reasons, the family court denied Paula's motion for maintenance. The family court then ordered Kurt to pay $7,500 toward Paula's attorney fees, which at that point equaled $63,000, noting that Kurt had a higher earning potential than Paula.
Both Kurt and Paula moved the family court to alter, amend, or vacate its prior ruling. Following another hearing, the family court entered a 15-page order on November 16, 2006, ruling on the two motions. Significantly, the family court reversed its previous maintenance ruling and awarded Paula maintenance in the amount of $730 per month for seven years. These direct and cross-appeals followed.
We have identified three primary issues between Kurt's direct appeal and Paula's cross-appeal: 1) maintenance; 2) the assignment of debt; and 3) the award of attorney fees. In his direct appeal, Kurt raises essentially two arguments, which address the award of maintenance to Paula and the family court's assignment of marital debt.1 In her cross-appeal, Paula raises secondary issues concerning the use of Kurt's testimony from a prior hearing, the valuation of Smialek Enterprises, dissipation by Kurt, the divisibility of a storage shed, the valuation of several vehicles, the imputation of income to Paula, maintenance, and the award of attorney fees. We shall address each of the primary issues after we address secondary issues Paula raised in her cross-appeal.
Our standard of review is described in Hunter v. Hunter, 127 S.W.3d 656, 659 (Ky. App. 2003), as follows:
Under CR 52.01, in an action tried without a jury, See also Greater Cincinnati Marine Service, Inc. v. City of Ludlow, Ky., 602 S.W.2d 427 (1980). A factual finding is not clearly erroneous if it is supported by substantial evidence. Owens-Corning Fiberglas Corp. v. Golightly, Ky., 976 S.W.2d 409, 414 (1998); Uninsured Employers' Fund v. Garland, Ky., 805 S.W.2d 116, 117 (1991). Substantial evidence is evidence, when taken alone or in light of all the evidence which has sufficient probative value to induce conviction in the mind of a reasonable person. Golightly, 976 S.W.2d at 414; Sherfey v. Sherfey, Ky.App., 74 S.W.3d 777, 782 (2002). An appellate court, however, reviews legal issues de novo. See, e.g., Carroll v. Meredith, Ky.App., 59 S.W.3d 484, 489 (2001). (Footnote omitted).
With this standard in mind, we shall consider the issues raised in the present appeals.
First, Paula contends that the family court erred when it struck the transcript of Kurt's testimony from earlier hearings regarding his income and business activities. From what we can glean from the record, following the second hearing in January 2006, the family court entered an interim order permitting Paula to introduce Kurt's deposition testimony. Kurt then submitted a copy of Paula's deposition as evidence, and Paula submitted transcripts of the earlier hearings as well as another of her depositions. At that point, Kurt withdrew his submission of Paula's deposition and moved to strike Paula's submissions. In its May 3, 2006, judgment, the family court noted that:
During the hearing, neither party requested permission to submit as evidence Paula's entire pre-trial depositions or the June 2, 2005 and July 22, 2005 hearings. The Court did allow the parties to be deposed post trial and submit their depositions as rebuttal evidence; however, the Court did not hold the case open for submission of any other evidence.
Accordingly, the family court refused to admit either the transcripts of the previous hearings or Paula's pre-trial depositions.
Paula now argues that the family court should not have stricken the hearing transcripts as there was no basis in law for them to be excluded. She contends that the family court had authority under Kentucky Rules of Evidence (KRE) 613 to include this as evidence. It appears to this Court that even if the family court erred in excluding the hearing transcripts, any error would be harmless. The videotaped recordings of the two hearings are in the certified record and available for review, regardless of whether the transcripts are in evidence. Therefore, we decline to disturb the family court's decision to strike the hearing transcripts.
Paula contends that the family court erred when it failed to place a value on Smialek Enterprises. In its initial order, the family court found that Smialek Enterprises was a combination of Kurt's trim carpentry business and Paula's nameplate business, although neither was working through Smialek Enterprises at the time the decree was entered. After reviewing the evidence submitted, the family court determined that Paula did not provide any supporting documentation regarding her claim that the Smialek Enterprises was worth $100,000. In its later order, the family court indicated that the unaudited financial statements from 2002 and 2003 were not reliable support for her claim of the value of the business, and therefore declined to place a value on the business. In that same order, the family court also indicated that Kurt's trim business was worth more than Paula's nameplate business.
Paula now contends that there was no basis for the family court's finding that the financial statement valuations were inadequate, and that the family court should have assigned the trim portion to Kurt and the nameplate portion to Paula and ordered Kurt to pay Paula $25,000 to equalize the division. On the other hand, Kurt points out that the accountant who prepared the financial statements was not called to testify and was therefore not subject to cross-examination. Accordingly, Kurt argues that the family court did not commit any error or abuse its discretion in assigning no value to the business.
In Gomez v. Gomez, 168 S.W.3d 51, 55 (Ky. App. 2005), this Court addressed its role in reviewing a lower court's valuation of a business, stating that:
[A] trial court's ruling as to valuations in a dissolution action will not be disturbed on appeal unless clearly contrary to the evidence submitted. [Clark v. Clark, 782 S.W.2d 56 (Ky. App. 1990),] set the task of the appellate court to determine whether the trial court's approach...
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