RENDERED: DECEMBER 4, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-0547-MR
DENNIS L. THOMAS APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT v. HONORABLE TARA HAGERTY, JUDGE ACTION NO. 17-CI-500876
DEBORAH A. THOMAS APPELLEE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; K. THOMPSON AND L. THOMPSON, JUDGES.
THOMPSON, K., JUDGE: Dennis L. Thomas appeals from an order of the
Jefferson Family Court requiring him to obtain additional life insurance to cover
the full balance of his maintenance obligation. We reverse and remand because the
family court misinterpreted the parties’ settlement agreement and Dennis’s
obligations pursuant to it. Dennis and Deborah A. Thomas married in 1984. In March 2017,
Deborah filed a petition for dissolution. She requested maintenance based on the
long length of the marriage, her role in raising their now-adult children, and the
great disparity in their incomes.
In November 2017, pursuant to mediation, Dennis and Deborah
entered into a marital settlement agreement which was incorporated into the decree
of dissolution. As to maintenance, Dennis agreed to pay Deborah $5,000.00 each
month for a period of ten years plus $3,000.00 two times a year based on Dennis’s
bonuses with Dennis’s obligation to pay maintenance terminating upon the death
of either party or Deborah’s cohabitation. The agreement further specified:
Dennis has a life insurance policy through the Kentucky Society of CPAs. He shall make Deborah beneficiary for the balance of the maintenance to the date of termination of maintenance, to the maximum benefit amount. He shall provide proof of coverage to Deborah by January 31 each year.
In February 2018, Deborah filed a motion to hold Dennis in contempt
for failing to provide proof of life insurance in an amount sufficient to pay for the
balance of his maintenance, explaining in an affidavit that Deborah was only made
the beneficiary of a $170,000.00 policy. Dennis responded that he complied with
his obligation of making Deborah the beneficiary of the maximum benefit of his
life insurance policy through the Kentucky Society of CPAs.
-2- In March 2018, the family court ordered Dennis to file proof of the
maximum benefit available to him for life insurance coverage through the
Kentucky Society of CPAs. Dennis responded with a letter from National
Insurance Agency which provided: “Your Kentucky Society CPAs Life Insurance
Plan Policy is in force with coverage in the amount of $170,000.00. The maximum
death benefit on the policy listed above is $170,000.00.” Deborah responded,
challenging Dennis’s assertion that he could not receive higher coverage through
the Kentucky Society of CPAs, explaining she contacted the National Insurance
Agency that provides the policy and learned Dennis could increase the amount of
coverage up to the $660,000.00 amount by filling out an application to allow for
this coverage.
In July 2018, Deborah renoticed her motion to require Dennis to
provide sufficient insurance. The family court set a contempt hearing. Deborah
provided an application for term life insurance through the Kentucky Society of
CPAs which provided that a ten-year term life policy for an insured under age
sixty-five is available for $1,000,000.00 of coverage, and an annual renewable
term policy is available for an insured under age seventy-five for up to
$2,000,000.00.
On December 10, 2018, the family court held the contempt hearing
and Deborah and Dennis testified. Deborah testified she understood the settlement
-3- agreement to require Dennis to obtain life insurance coverage naming her as the
beneficiary, commiserate with the amount of maintenance remaining due her.
Therefore, Dennis was to obtain a $660,000.00 policy at the outset which could
decline as the balance of the total due her declined.
Dennis testified he understood that his obligation pursuant to the
settlement agreement was to maintain the same amount of coverage that he had
under his then-existing Kentucky Society of CPAs life insurance policy in effect at
the time of the property settlement agreement. Dennis testified he had had the
Kentucky Society of CPAs life insurance policy since 1990 when he became a
CPA; it started out at $120,000.00 and through no act of his own it increased to
$145,000.00 in 2015 and $170,000.00 in 2017. He explained that the $170,000.00
amount to which Deborah was a beneficiary was the maximum benefit for the
then-existing policy, and it was his understanding that to obtain additional
coverage he would have to apply for a new policy. Dennis testified that because he
has a fatty liver and is prediabetic, he feared he would have trouble getting a new
policy and any policy he could get would be more expensive.
On February 25, 2019, the family court ruled as follows:
Although Dennis argues that he agreed to maintain his long-standing life insurance policy with Kentucky Society of CPAs, not to increase the amount of coverage, the language of the parties’ agreement clearly ties the amount of insurance required to the balance of Deborah’s maintenance award.
-4- The Court being sufficiently advised, IT IS HEREBY ORDERED that Dennis shall obtain additional life insurance to cover the full amount of Deborah’s maintenance award. He may increase the coverage under his policy with the Kentucky Society of CPAs, if possible, or purchase additional insurance from another company. He shall provide proof of coverage to Deborah within thirty days of this Order and by January 31 of each year thereafter. Dennis may reduce the amount of the life insurance policy over time as he pays maintenance to Deborah. His obligation to maintain the life insurance policy with Deborah as a beneficiary shall terminate when he has paid the full amount of maintenance owed to her.
The family court declined to find Dennis in contempt and included finality
language.
Dennis filed a timely motion to alter, amend, or vacate which the
family court denied. He then appealed.
“[J]udicial review of a property settlement agreement to determine its
meaning is simply a matter of contract interpretation.” Sadler v. Buskirk, 478
S.W.3d 379, 382 (Ky. 2015). See Kentucky Revised Statutes (KRS) 403.180(5).
“When no ambiguity exists in the contract, we look only as far as the four corners
of the document to determine the parties’ intentions.” 3D Enterprises Contracting
Corp. v. Louisville and Jefferson County Metropolitan Sewer Dist., 174 S.W.3d
440, 448 (Ky. 2005) (citation omitted). “The fact that one party may have intended
different results . . . is insufficient to construe a contract at variance with its plain
and unambiguous terms.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d
-5- 381, 385 (Ky.App. 2002). We review the family court’s interpretation of the
parties’ settlement agreement de novo. Sadler, 478 S.W.3d at 382.
Important to our decision about how to interpret the settlement
agreement’s provisions on maintenance is KRS 403.250(2), which provides:
“Unless otherwise agreed in writing or expressly provided in the decree, the
obligation to pay future maintenance is terminated upon the death of either
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RENDERED: DECEMBER 4, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-0547-MR
DENNIS L. THOMAS APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT v. HONORABLE TARA HAGERTY, JUDGE ACTION NO. 17-CI-500876
DEBORAH A. THOMAS APPELLEE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; K. THOMPSON AND L. THOMPSON, JUDGES.
THOMPSON, K., JUDGE: Dennis L. Thomas appeals from an order of the
Jefferson Family Court requiring him to obtain additional life insurance to cover
the full balance of his maintenance obligation. We reverse and remand because the
family court misinterpreted the parties’ settlement agreement and Dennis’s
obligations pursuant to it. Dennis and Deborah A. Thomas married in 1984. In March 2017,
Deborah filed a petition for dissolution. She requested maintenance based on the
long length of the marriage, her role in raising their now-adult children, and the
great disparity in their incomes.
In November 2017, pursuant to mediation, Dennis and Deborah
entered into a marital settlement agreement which was incorporated into the decree
of dissolution. As to maintenance, Dennis agreed to pay Deborah $5,000.00 each
month for a period of ten years plus $3,000.00 two times a year based on Dennis’s
bonuses with Dennis’s obligation to pay maintenance terminating upon the death
of either party or Deborah’s cohabitation. The agreement further specified:
Dennis has a life insurance policy through the Kentucky Society of CPAs. He shall make Deborah beneficiary for the balance of the maintenance to the date of termination of maintenance, to the maximum benefit amount. He shall provide proof of coverage to Deborah by January 31 each year.
In February 2018, Deborah filed a motion to hold Dennis in contempt
for failing to provide proof of life insurance in an amount sufficient to pay for the
balance of his maintenance, explaining in an affidavit that Deborah was only made
the beneficiary of a $170,000.00 policy. Dennis responded that he complied with
his obligation of making Deborah the beneficiary of the maximum benefit of his
life insurance policy through the Kentucky Society of CPAs.
-2- In March 2018, the family court ordered Dennis to file proof of the
maximum benefit available to him for life insurance coverage through the
Kentucky Society of CPAs. Dennis responded with a letter from National
Insurance Agency which provided: “Your Kentucky Society CPAs Life Insurance
Plan Policy is in force with coverage in the amount of $170,000.00. The maximum
death benefit on the policy listed above is $170,000.00.” Deborah responded,
challenging Dennis’s assertion that he could not receive higher coverage through
the Kentucky Society of CPAs, explaining she contacted the National Insurance
Agency that provides the policy and learned Dennis could increase the amount of
coverage up to the $660,000.00 amount by filling out an application to allow for
this coverage.
In July 2018, Deborah renoticed her motion to require Dennis to
provide sufficient insurance. The family court set a contempt hearing. Deborah
provided an application for term life insurance through the Kentucky Society of
CPAs which provided that a ten-year term life policy for an insured under age
sixty-five is available for $1,000,000.00 of coverage, and an annual renewable
term policy is available for an insured under age seventy-five for up to
$2,000,000.00.
On December 10, 2018, the family court held the contempt hearing
and Deborah and Dennis testified. Deborah testified she understood the settlement
-3- agreement to require Dennis to obtain life insurance coverage naming her as the
beneficiary, commiserate with the amount of maintenance remaining due her.
Therefore, Dennis was to obtain a $660,000.00 policy at the outset which could
decline as the balance of the total due her declined.
Dennis testified he understood that his obligation pursuant to the
settlement agreement was to maintain the same amount of coverage that he had
under his then-existing Kentucky Society of CPAs life insurance policy in effect at
the time of the property settlement agreement. Dennis testified he had had the
Kentucky Society of CPAs life insurance policy since 1990 when he became a
CPA; it started out at $120,000.00 and through no act of his own it increased to
$145,000.00 in 2015 and $170,000.00 in 2017. He explained that the $170,000.00
amount to which Deborah was a beneficiary was the maximum benefit for the
then-existing policy, and it was his understanding that to obtain additional
coverage he would have to apply for a new policy. Dennis testified that because he
has a fatty liver and is prediabetic, he feared he would have trouble getting a new
policy and any policy he could get would be more expensive.
On February 25, 2019, the family court ruled as follows:
Although Dennis argues that he agreed to maintain his long-standing life insurance policy with Kentucky Society of CPAs, not to increase the amount of coverage, the language of the parties’ agreement clearly ties the amount of insurance required to the balance of Deborah’s maintenance award.
-4- The Court being sufficiently advised, IT IS HEREBY ORDERED that Dennis shall obtain additional life insurance to cover the full amount of Deborah’s maintenance award. He may increase the coverage under his policy with the Kentucky Society of CPAs, if possible, or purchase additional insurance from another company. He shall provide proof of coverage to Deborah within thirty days of this Order and by January 31 of each year thereafter. Dennis may reduce the amount of the life insurance policy over time as he pays maintenance to Deborah. His obligation to maintain the life insurance policy with Deborah as a beneficiary shall terminate when he has paid the full amount of maintenance owed to her.
The family court declined to find Dennis in contempt and included finality
language.
Dennis filed a timely motion to alter, amend, or vacate which the
family court denied. He then appealed.
“[J]udicial review of a property settlement agreement to determine its
meaning is simply a matter of contract interpretation.” Sadler v. Buskirk, 478
S.W.3d 379, 382 (Ky. 2015). See Kentucky Revised Statutes (KRS) 403.180(5).
“When no ambiguity exists in the contract, we look only as far as the four corners
of the document to determine the parties’ intentions.” 3D Enterprises Contracting
Corp. v. Louisville and Jefferson County Metropolitan Sewer Dist., 174 S.W.3d
440, 448 (Ky. 2005) (citation omitted). “The fact that one party may have intended
different results . . . is insufficient to construe a contract at variance with its plain
and unambiguous terms.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d
-5- 381, 385 (Ky.App. 2002). We review the family court’s interpretation of the
parties’ settlement agreement de novo. Sadler, 478 S.W.3d at 382.
Important to our decision about how to interpret the settlement
agreement’s provisions on maintenance is KRS 403.250(2), which provides:
“Unless otherwise agreed in writing or expressly provided in the decree, the
obligation to pay future maintenance is terminated upon the death of either
party[.]” In interpreting this statute, our Courts have clarified that a provision
awarding an amount certain of maintenance over a given number of years in either
the settlement agreement or the decree does not extend the obligation to pay future
maintenance after the obligor dies; in the absence of a clear statement providing
that the maintenance obligation continues past the obligor’s death, it will terminate
at his death as no inference of continuation will be inferred. Messer v. Messer, 134
S.W.3d 570, 572-73 (Ky. 2004); Weldon v. Weldon, 957 S.W.2d 283, 286
(Ky.App. 1997).
The reference to Dennis’s existing life insurance policy through the
Kentucky Society of CPAs is not in dispute. What is in dispute is the meaning of
the following sentence: “[Dennis] shall make Deborah beneficiary for the balance
of the maintenance to the date of termination of maintenance, to the maximum
benefit amount.”
-6- Dennis argues that the settlement agreement does not require that he
increase his existing Kentucky Society of CPAs life insurance policy to
$660,000.00 or obtain another life insurance policy. He interprets the language
regarding “to the maximum benefit amount” as referring back to the maximum
benefit amount in his then-existing Kentucky Society of CPAs life insurance
policy. He argues this wording is unambiguous and that the family court
impermissibly added language to the settlement agreement by requiring him to
either obtain additional life insurance on his Kentucky Society of CPAs life
insurance policy or purchase additional insurance from another company. He
argues when he made Deborah the beneficiary of the $170,000.00 policy, she
received the benefit of the bargain and the settlement agreement must be strictly
enforced.
Deborah also argues that the settlement agreement is unambiguous.
She focuses on the language that she would be the “beneficiary for the balance of
the maintenance to the date of termination of maintenance” and agrees with the
family court’s ruling.
We agree with Dennis that the language regarding “the maximum
benefit amount” refers to the maximum benefit amount in his then-existing
Kentucky Society of CPAs life insurance policy. Deborah had no automatic right
to receive any outstanding maintenance should Dennis predecease her before he
-7- finished paying her maintenance for the ten-year term the parties agreed upon, and
we will not imply such an obligation from the wording of this settlement
agreement. Indeed, the settlement agreement provided that the maintenance
obligation would terminate with the death of either party.
If Deborah wanted to be guaranteed the full balance of the
maintenance due her in the event Dennis dies before paying maintenance to her for
those ten years, she needed to negotiate to have the settlement agreement explicitly
extend this obligation past his death. Had such a provision been in place,
supporting this obligation with a life insurance policy to cover the balance of the
maintenance obligation due her would have made sense to ensure she would, in
fact, receive such maintenance in the event of Dennis predeceasing her before the
ten years of maintenance was paid. Alternatively, the same result could have been
obtained by explicitly stating that Dennis would obtain life insurance which would
cover the entire outstanding amount of maintenance due Deborah, starting with a
policy of at least $660,000.00, which could be decreased as his obligation was
reduced.
The family court erred in its determination that Dennis’s agreement to
make Deborah the beneficiary of his Kentucky Society of CPAs life insurance
policy meant that she was entitled to make him obtain life insurance to cover the
entire balance of maintenance due, essentially making his maintenance obligation
-8- survive his death. Such an obligation is at odds with the wording of the settlement
agreement and KRS 403.250(2).
Accordingly, we reverse and remand the Jefferson Family Court’s
order requiring Dennis to obtain additional life insurance as Dennis has fully
satisfied the requirements of the settlement agreement as incorporated into the
decree.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Sandra B. Hammond Harold L. Storment Sandra F. Keene Louisville, Kentucky Louisville, Kentucky
-9-