RENDERED: AUGUST 21, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-000608-MR
DALE CORNATZER APPELLANT
APPEAL FROM BRECKINRIDGE CIRCUIT COURT v. HONORABLE BRUCE T. BUTLER, JUDGE ACTION NO. 04-CI-00075
ANGELA CORNATZER APPELLEE
OPINION AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; TAYLOR AND L. THOMPSON, JUDGES.
THOMPSON, L., JUDGE: Dale Cornatzer (“Appellant”) appeals from an order of
the Breckinridge Circuit Court addressing his motion to enforce a property
settlement agreement (“the Agreement”) entered into with his former wife Angela
Cornatzer (“Appellee”). Appellant argues that the circuit court improperly
interpreted the Agreement; that if the Agreement is ambiguous it should be construed against the drafter; that there was no meeting of the minds; and that the
interpretation sought by Appellee is unconscionable. For the reasons addressed
below, we find no error and affirm the order on appeal.
FACTS AND PROCEDURAL HISTORY
The parties were divorced by way of a decree of dissolution of
marriage entered on November 4, 2004. The decree incorporated the Agreement,
which disposed of various matters including real property, custody, child support,
and retirement funds. Notably, Paragraph 101 which is titled “PENSIONS/
RETIREMENTS/401K/459/SAVINGS ACCOUNTS” states,
The parties agree that the Petitioner [Appellant] will pay the Respondent [Appellee] $700.00 per month until the last child graduates from high school or is eighteen (18) years of age and is not in school. The Petitioner shall then pay the Respondent 50% of his hazardous duty pay and 38% of the non-hazardous duty pay. When the Respondent retires Mr. Cornatzer will be entitled to his marital share and it shall be credited against sums paid to the Respondent.
Pursuant to the Agreement, Appellant began paying to Appellee the
sum of $700 per month in representing Appellee’s marital share of Appellant’s
retirement proceeds. Appellee retired in June 2018, after which the parties,
through counsel, discussed their ongoing obligations. Appellee asserted that
Appellant was required to pay to her 50% of his hazardous duty pay and 38% of
1 Appellant refers to this as “Paragraph X.”
-2- the non-hazardous duty pay, subject to a credit representing Appellant’s share of
Appellee’s retirement pay. Appellant maintained that this was not what the
Agreement required, nor was it reasonable or conscionable.
On October 31, 2018, Appellant filed a motion to enforce the
Agreement on the issue of retirement proceeds. A hearing was conducted on
December 16, 2018, after which the circuit court rendered an order interpreting
Paragraph 10. The court determined that the Agreement gave Appellee 50% of
Appellant’s hazardous duty pay and 38% of his non-hazardous duty pay, minus a
credit for Appellant’s share of Appellee’s retirement pay. The court noted that
Appellee filed an affidavit that her marital share of Appellant’s retirement is
$802.17, with Appellant’s share of Appellee’s retirement being $276.00. The court
accepted these sums as accurate and awarded to Appellee the amount of $525.57
per month representing $802.17 minus $276.60.2 It determined that this obligation
continued as long as Appellee received retirement income. This appeal followed.
ARGUMENTS AND ANALYSIS
Appellant argues that the Breckinridge Circuit Court erred in its
interpretation of Paragraph 10. He maintains that the plain meaning of this
language provides that upon Appellee’s retirement, Appellant’s obligation to pay
2 The order on appeal incorrectly states that Appellant’s share of Appellee’s monthly retirement payment is $276.00. The correct amount is $276.60.
-3- to Appellee her share of his retirement proceeds terminates, and that his marital
share of Appellee’s retirement is then credited against the sums he previously paid
to Appellee. Appellant argues that one could not reasonably conclude from this
language that his obligation to pay to Appellee a portion of his retirement
continues in perpetuity. Rather, the language at issue, he argues, terminated his
obligation at the time of Appellee’s retirement. In support of this interpretation,
Appellant directs our attention to the following sentence he claims disposes of any
alternate interpretations: “[W]hen the . . . [Appellee] retires the . . . [Appellant]
will be entitled to his marital share and it shall be credited against sums paid to the
. . . [Appellee].” Appellant notes that the term “paid” is past tense and must
necessarily refer to payments previously made to Appellee. It cannot, he argues,
refer to future payments to Appellee as the language “to be paid” is not found in
Paragraph 10. In sum, Appellant contends that his payment obligation terminated
at Appellee’s retirement, that he is entitled to a marital share of her retirement to be
credited against sums he previously paid, and that the Breckinridge Circuit Court
erred in failing to so conclude.
“The terms of a settlement agreement set forth in a decree
of dissolution of marriage are enforceable as contract terms. [Kentucky Revised
Statute (KRS)] 403.180(5). The construction and interpretation of a contract is a
matter of law and is reviewed under the de novo standard.” Money v. Money, 297
-4- S.W.3d 69, 71 (Ky. App. 2009) (citing Cinelli v. Ward, 997 S.W.2d 474, 476 (Ky.
App. 1998)). “Absent an ambiguity in the contract, the parties’ intentions must be
discerned from the four corners of the instrument without resort to extrinsic
evidence. . . . The fact that one party may have intended different results, however,
is insufficient to construe a contract at variance with its plain and unambiguous
terms.” Money, 297 S.W.3d at 72 (citations and internal quotation marks omitted).
The primary question before us is whether the circuit court correctly
interpreted the Agreement as continuing Appellant’s obligation as long as he
receives retirement income. We must answer this question in the affirmative. The
Agreement expressly states at Paragraph 8 that the parties waived any entitlement
to maintenance, and as Paragraph 10 is titled “PENSIONS/RETIREMENTS/401K/
459/SAVINGS ACCOUNTS,” we may reasonably construe this language as
disposing of the parties’ marital property. While the parties are entitled to dispose
of their marital property in any way they see fit so long as the Agreement is not
unconscionable, id., the underlying statutory scheme for the division of marital
property centers on a division “in just proportions.” KRS 403.190(1); KRS
403.180(3). All property acquired by either spouse after the marriage is presumed
to be marital property. KRS 403.190(3). If the parties sought to mirror the
statutory scheme, Appellant’s obligation to distribute Appellee’s share of
-5- Appellant’s retirement income would necessarily continue as long as he was
receiving such income.
Irrespective of the statutory scheme, from which the parties may agree
to depart, nothing in Paragraph 10 can properly be interpreted as terminating
Appellant’s obligation when Appellee retires.
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RENDERED: AUGUST 21, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-000608-MR
DALE CORNATZER APPELLANT
APPEAL FROM BRECKINRIDGE CIRCUIT COURT v. HONORABLE BRUCE T. BUTLER, JUDGE ACTION NO. 04-CI-00075
ANGELA CORNATZER APPELLEE
OPINION AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; TAYLOR AND L. THOMPSON, JUDGES.
THOMPSON, L., JUDGE: Dale Cornatzer (“Appellant”) appeals from an order of
the Breckinridge Circuit Court addressing his motion to enforce a property
settlement agreement (“the Agreement”) entered into with his former wife Angela
Cornatzer (“Appellee”). Appellant argues that the circuit court improperly
interpreted the Agreement; that if the Agreement is ambiguous it should be construed against the drafter; that there was no meeting of the minds; and that the
interpretation sought by Appellee is unconscionable. For the reasons addressed
below, we find no error and affirm the order on appeal.
FACTS AND PROCEDURAL HISTORY
The parties were divorced by way of a decree of dissolution of
marriage entered on November 4, 2004. The decree incorporated the Agreement,
which disposed of various matters including real property, custody, child support,
and retirement funds. Notably, Paragraph 101 which is titled “PENSIONS/
RETIREMENTS/401K/459/SAVINGS ACCOUNTS” states,
The parties agree that the Petitioner [Appellant] will pay the Respondent [Appellee] $700.00 per month until the last child graduates from high school or is eighteen (18) years of age and is not in school. The Petitioner shall then pay the Respondent 50% of his hazardous duty pay and 38% of the non-hazardous duty pay. When the Respondent retires Mr. Cornatzer will be entitled to his marital share and it shall be credited against sums paid to the Respondent.
Pursuant to the Agreement, Appellant began paying to Appellee the
sum of $700 per month in representing Appellee’s marital share of Appellant’s
retirement proceeds. Appellee retired in June 2018, after which the parties,
through counsel, discussed their ongoing obligations. Appellee asserted that
Appellant was required to pay to her 50% of his hazardous duty pay and 38% of
1 Appellant refers to this as “Paragraph X.”
-2- the non-hazardous duty pay, subject to a credit representing Appellant’s share of
Appellee’s retirement pay. Appellant maintained that this was not what the
Agreement required, nor was it reasonable or conscionable.
On October 31, 2018, Appellant filed a motion to enforce the
Agreement on the issue of retirement proceeds. A hearing was conducted on
December 16, 2018, after which the circuit court rendered an order interpreting
Paragraph 10. The court determined that the Agreement gave Appellee 50% of
Appellant’s hazardous duty pay and 38% of his non-hazardous duty pay, minus a
credit for Appellant’s share of Appellee’s retirement pay. The court noted that
Appellee filed an affidavit that her marital share of Appellant’s retirement is
$802.17, with Appellant’s share of Appellee’s retirement being $276.00. The court
accepted these sums as accurate and awarded to Appellee the amount of $525.57
per month representing $802.17 minus $276.60.2 It determined that this obligation
continued as long as Appellee received retirement income. This appeal followed.
ARGUMENTS AND ANALYSIS
Appellant argues that the Breckinridge Circuit Court erred in its
interpretation of Paragraph 10. He maintains that the plain meaning of this
language provides that upon Appellee’s retirement, Appellant’s obligation to pay
2 The order on appeal incorrectly states that Appellant’s share of Appellee’s monthly retirement payment is $276.00. The correct amount is $276.60.
-3- to Appellee her share of his retirement proceeds terminates, and that his marital
share of Appellee’s retirement is then credited against the sums he previously paid
to Appellee. Appellant argues that one could not reasonably conclude from this
language that his obligation to pay to Appellee a portion of his retirement
continues in perpetuity. Rather, the language at issue, he argues, terminated his
obligation at the time of Appellee’s retirement. In support of this interpretation,
Appellant directs our attention to the following sentence he claims disposes of any
alternate interpretations: “[W]hen the . . . [Appellee] retires the . . . [Appellant]
will be entitled to his marital share and it shall be credited against sums paid to the
. . . [Appellee].” Appellant notes that the term “paid” is past tense and must
necessarily refer to payments previously made to Appellee. It cannot, he argues,
refer to future payments to Appellee as the language “to be paid” is not found in
Paragraph 10. In sum, Appellant contends that his payment obligation terminated
at Appellee’s retirement, that he is entitled to a marital share of her retirement to be
credited against sums he previously paid, and that the Breckinridge Circuit Court
erred in failing to so conclude.
“The terms of a settlement agreement set forth in a decree
of dissolution of marriage are enforceable as contract terms. [Kentucky Revised
Statute (KRS)] 403.180(5). The construction and interpretation of a contract is a
matter of law and is reviewed under the de novo standard.” Money v. Money, 297
-4- S.W.3d 69, 71 (Ky. App. 2009) (citing Cinelli v. Ward, 997 S.W.2d 474, 476 (Ky.
App. 1998)). “Absent an ambiguity in the contract, the parties’ intentions must be
discerned from the four corners of the instrument without resort to extrinsic
evidence. . . . The fact that one party may have intended different results, however,
is insufficient to construe a contract at variance with its plain and unambiguous
terms.” Money, 297 S.W.3d at 72 (citations and internal quotation marks omitted).
The primary question before us is whether the circuit court correctly
interpreted the Agreement as continuing Appellant’s obligation as long as he
receives retirement income. We must answer this question in the affirmative. The
Agreement expressly states at Paragraph 8 that the parties waived any entitlement
to maintenance, and as Paragraph 10 is titled “PENSIONS/RETIREMENTS/401K/
459/SAVINGS ACCOUNTS,” we may reasonably construe this language as
disposing of the parties’ marital property. While the parties are entitled to dispose
of their marital property in any way they see fit so long as the Agreement is not
unconscionable, id., the underlying statutory scheme for the division of marital
property centers on a division “in just proportions.” KRS 403.190(1); KRS
403.180(3). All property acquired by either spouse after the marriage is presumed
to be marital property. KRS 403.190(3). If the parties sought to mirror the
statutory scheme, Appellant’s obligation to distribute Appellee’s share of
-5- Appellant’s retirement income would necessarily continue as long as he was
receiving such income.
Irrespective of the statutory scheme, from which the parties may agree
to depart, nothing in Paragraph 10 can properly be interpreted as terminating
Appellant’s obligation when Appellee retires. Notably, there is no language in
Paragraph 10, express or implied, which terminates Appellee’s right to her share of
this marital asset nor his right to hers. In contrast, the preceding sentence
addressing a $700 monthly payment to Appellee does expressly set forth a fixed
termination date, i.e., when the minor child graduates or reaches the age of
majority. The parties could have, but did not, incorporate similar express terms
terminating Appellant’s obligation to pay Appellee her share of his ongoing
retirement proceeds.
Under the terms of the Agreement, the parties distributed their fixed
marital assets such as the marital home, vehicles, and personal property. Due to
the indeterminate nature of their retirement assets, however, and because the
parties could not know if they would receive retirement proceeds for one year or
30 years after the dissolution, the distribution of those assets to the parties must
necessarily occur on an ongoing basis. Further, Appellant acknowledges that
Appellee’s obligation to credit to him a portion of her retirement assets is also
ongoing. As there is no language in Paragraph 10 terminating Appellee’s right to a
-6- division of Appellant’s retirement proceeds on an ongoing basis, we find no error
in the Breckinridge Circuit Court’s conclusion on this issue.
Appellant goes on to argue that the rule of contra proferentem, i.e.,
that ambiguities in a contract are construed against its drafter, required the circuit
court to adopt his interpretation of Paragraph 10 over the interpretation forwarded
by the Appellee. See McMullin v. McMullin, 338 S.W.3d 315 (Ky. App. 2011). In
the alternative, he contends that there was no meeting of the minds sufficient to
form a contract, and that the interpretation asserted by the Appellee is
unconscionable. We are not persuaded by these arguments. Paragraph 10 is not
ambiguous or unconscionable. It states in clear terms that Appellant shall pay the
Appellee 50% of his hazardous duty pay and 38% of the non-hazardous duty pay,
subject to a credit for his share of Appellee’s retirement income. If the distribution
of retirement assets had been accomplished by the circuit court pursuant to KRS
Chapter 403 and the “just proportions” standard applied, rather than a distribution
agreed to by the parties, the result likely would have been substantially similar.
We find no error.
CONCLUSION
The Breckinridge Circuit Court properly interpreted Paragraph 10 of
the Agreement as requiring ongoing payments to Appellee representing a portion
of Appellant’s retirement income, subject to a credit for Appellant’s entitlement to
-7- a portion of Appellee’s retirement income. Paragraph 10 disposes of marital assets
in a manner substantially similar to the scheme set out in KRS Chapter 403, does
not contain a termination date, and is not ambiguous or unconscionable. For the
foregoing reasons, we affirm the order of the Breckinridge Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Hollyn Richardson Brett Butler Louisville, Kentucky Hardinsburg, Kentucky
-8-