Earl R. Jean v. Karen Suzann Jean

• Court: Court of Appeals of Kentucky
• Decided: November 1, 2024
• Docket: 2023-CA-0591
• Status: Unpublished

Opinion

RENDERED: NOVEMBER 1, 2024; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2023-CA-0591-MR

EARL R. JEAN APPELLANT

APPEAL FROM JEFFERSON FAMILY COURT v. HONORABLE DERWIN L. WEBB, JUDGE ACTION NO. 19-CI-503813

KAREN SUZANN JEAN APPELLEE

AND

NO. 2023-CA-0808-MR

APPEAL FROM JEFFERSON FAMILY COURT v. HONORABLE DERWIN L. WEBB, JUDGE ACTION NO. 19-CI-503813

KAREN SUZANN JEAN AND NICOLE M. KERSTING APPELLEES OPINION REVERSING AND REMANDING

** ** ** ** **

BEFORE: ECKERLE, A. JONES, AND TAYLOR, JUDGES.

ECKERLE, JUDGE: In these consolidated appeals, Appellant, Earl R. Jean

(“Husband”), seeks review of the Jefferson Family Court’s rulings regarding the

valuation of property, marital interest of his ex-wife, Appellee, Karen Suzann Jean

(“Wife”), in real estate and other property, debt allocation, maintenance, and

attorney fees. After careful review, we reverse and remand.

I. Factual and Procedural History

Before marrying Wife, Husband had already inherited 120 acres of

real property (“the Farm”) from his family. While they dated, the couple resided at

Wife’s nonmarital home. In 2003, Husband and Wife married and moved onto the

Farm. Wife sold her former home and used the sale proceeds to renovate a barn on

the property where they lived. During the marriage, Husband and Wife built a

home that they shared on the Farm. More than 15 years after marriage, in 2019,

Wife filed a petition for dissolution of marriage. They had been separated for

some time before the petition. When Wife instituted divorce proceedings, she was

about 67 years of age, and Husband was about 64. No children were born of their

marriage. Husband had been self-employed as a machinist. Wife had worked part-

time as an aide at some point during the marriage and took care of the household.

-2- However, the Social Security Administration eventually declared her disabled due

to arthritis. Husband suffered a stroke and claimed disability.

During divorce proceedings, the parties appeared to concede that the

Farm is Husband’s nonmarital property. Nonetheless, they dispute the value and

ownership of the residence on the land. They also vehemently argue about Wife’s

marital interest in the home.

Property valuation was a major item of contention before the Family

Court. Prior to trial, Husband stated in an interrogatory response that the fair

market value of the entire property was $1,387,680, which included a value of

$591,780 for the home alone.1 He also noted that in 2021, the Property Valuation

Administrator (“PVA”) had assessed the entire property with the home and

including four other structures at $1,478,590. Husband later repudiated the

$591,780 figure. The Family Court gave no credence to the second, seemingly

superseding figure. Wife, on the other hand, in her verified, final pretrial

disclosure statement, divided the Farm into two tracts. She valued one at $590,000

and another at $4,000,000. Trial Court Record (“R.”) at 179. Immediately before

trial, Wife had asked the Family Court to appoint an expert appraiser, but that

Court denied the request as untimely.

1 This discovery has been characterized as verified. Yet, the original response was not; only the second disclosure was verified.

-3- Both parties admit that the home’s construction was financed with

$161,000 of Husband’s money that he had unilaterally acquired from selling his

other nonmarital, real property. The home was also built on Husband’s nonmarital

land, but this undisputed point has been glossed over repeatedly by the parties and

the Family Court. However, Wife maintains that Husband eventually depleted his

nonmarital funds, and they took loans to finish the construction. She also listed

chores that she performed on the home during construction and household items

she purchased. Husband, on the other hand, asserts that the home was entirely his

nonmarital asset because it was built on his nonmarital land using his nonmarital

funds. He also argues that he repaid the loans from other nonmarital funds, the

loans were not specifically related to home construction, and the loans were taken

out during the marriage and after construction.

The Family Court conducted a two-day bench trial to address the

heated dispute. It started the trial with one day of proceedings in June of 2022 and

concluded the second day two months later, in August of 2022. Both Husband and

Wife testified at trial. However, neither presented an expert appraisal of the value

of the land, home, or other structures. The Family Court allowed the parties to

offer lay testimony as to value, and it considered the PVA assessment.

The following year, in 2023, the Family Court issued a series of

decisions based upon the trial that had occurred six months earlier. First, the

-4- Family Court found that the home had a value of $591,780, based solely upon

Husband’s earlier, but later contested, interrogatory response. Whether this ruling

encompasses real property or just the home’s structure is unclear, as it was not

specific and not based upon an expert appraisal. Second, the Family Court held

that the home was a marital asset, based largely upon the parties’ marital equity

loan. As with the property value, the Family Court’s ruling was conclusory and

left many questions unanswered. Third, the Family Court found that Husband had

only a $67,000 nonmarital interest in the marital home, and it divided equally the

remaining number it had achieved based on Husband’s disavowed, lay valuation of

the home. Based on these calculations, it determined that Wife’s marital interest in

the home was $262,390 ($591,780 minus $67,000 divided by two). The Family

Court also awarded Wife maintenance of $1,000 per month for five years,

retroactive to the date she vacated the marital residence, which was before she had

requested it by motion. This order resulted in an arrearage totaling over $40,000,

and the Family Court ordered Husband to pay it within 90 days. Husband filed

appeal No. 2023-CA-0591-MR from those decisions.

Subsequently, the Family Court ordered Husband to pay $25,300

towards Wife’s attorney fees. Husband filed appeal No. 2023-CA-0808-MR from

that decision. We ordered the appeals to be consolidated and will resolve both in

this combined Opinion. Additional facts will be developed below, as necessary.

-5- II. Analysis

Kentucky Revised Statutes (“KRS”) 403.190(1) provides in relevant

part that “[i]n a proceeding for dissolution of the marriage . . . the court shall assign

each spouse’s property to him [or her]. It also shall divide the marital property

without regard to marital misconduct in just proportions . . . .” Marital property,

other than some limited exceptions, includes “all property acquired by either

spouse subsequent to the marriage . . . .” KRS 403.190(2). In many divorce cases,

“some property may have both marital and nonmarital components by virtue of the

fact that it was purchased with a combination of marital and nonmarital funds.”

Smith v. Smith, 235 S.W.3d 1, 5 (Ky. App. 2006).

“The question of whether an item is marital or nonmarital is reviewed

under a two-tiered scrutiny 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.” Id. at 6. We

review a Family Court’s decision about how to divide marital property under the

deferential abuse of discretion standard. Id. And, of course, we may affirm on

alternate grounds supported by the record and applicable law. Mark D. Dean,

P.S.C. v. Commonwealth Bank & Tr. Co., 434 S.W.3d 489, 496 (Ky. 2014).

-6- A. Valuation of the Marital Residence

Property individually owned by a spouse prior to marriage is

indubitably nonmarital property. Chenault v. Chenault, 799 S.W.2d 575, 580 (Ky.

1990). KRS 403.190(3) creates a presumption that the increase in value of

nonmarital property is marital if it was the result of the joint efforts of the parties

but nonmarital if the increase was due to general economic conditions. Travis v.

Travis, 59 S.W.3d 904, 909 (Ky. 2001). Family Courts’ valuations of properties

and residences must be based upon sufficient evidence and be rendered in

accordance with sound legal principles. Young v. Young, 314 S.W.3d 306, 308

(Ky. App. 2010) (“We review a trial court’s determinations of value and division

of marital assets for abuse of discretion.”).

Here, the total real property that Husband had owned prior to marriage

is not at issue per se because the parties have stipulated that it is Husband’s sole,

inherited-from-his-family, nonmarital real property. However, the Family Court

did not treat the value of the land on which the residence was built as Husband’s

nonmarital contribution, even though it was undisputed that this land was his

alone. This failure is likely due to the lack of any evidence as to the value of that

underlying parcel of land.

Though not discussed by the parties or the Family Court, we have

long held that trial courts cannot value marital property solely from valuations

-7- offered by the property’s owners – unless those owners “are properly qualified.”

Robinson v. Robinson, 569 S.W.2d 178, 179 (Ky. App. 1978), overruled on other

grounds by Brandenburg v. Brandenburg, 617 S.W.2d 871, 873 (Ky. App. 1981).

Of course, a property owner is permitted to “set[] a value on his [or her] own

property.” Roberts v. Roberts, 587 S.W.2d 281, 283 (Ky. App. 1979). “There

must be some qualification for giving an opinion, however. Mere ownership does

not qualify a party to establish a true value.” Id. Robinson has been the law of the

land for nearly 50 years, and we have steadfastly continued to adhere to its core

holding regarding property valuation. See, e.g., Jones v. Jones, 245 S.W.3d 815,

820 (Ky. App. 2008) (citing Robinson for the conclusion that “[w]hen determining

the fair market value of real property with improvements and without

improvements, expert opinion is ordinarily necessary. To be qualified to express

an opinion upon fair market value of real property, a witness, including the owner

thereof, must possess some basis for a knowledge of market values. Simply stated,

the mere ownership of property does not qualify a lay person to give an opinion

upon market value.”) (internal quotation marks and citations omitted).2

2 We have held that a Trial Court may value property based on uncontradicted testimony offered by one owner. Turley v. Turley, 562 S.W.2d 665, 667 (Ky. App. 1978). However, the parties here offer contradictory values.

-8- In laying bare the minimum qualifications that a property owner must

have in order to testify about a property’s “true value,” Robinson and Roberts each

cite to a condemnation case, Commonwealth, Dep’t of Highways v. Fister, 373

S.W.2d 720, 722 (Ky. 1963), which provides as follows:

After extensive research we have been unable to find a persuasive reason for the arbitrary rule that mere ownership of realty automatically qualifies such owner to render a valid opinion concerning its market value at any given time.

It is true an owner may properly be presumed familiar with the character and extent of his property, but this is only one of two necessary elements in the appraisal of its value. The other element is some knowledge of property values. While the owner may have a general concept of the worth of his property based upon what he paid for it (and evidence of this price ordinarily is competent . . . ), it does not sufficiently qualify him to express an objective opinion of its current market value.

It has always been recognized that there must be some basis for a knowledge of market values before a witness may express an opinion as to values. With respect to other lay witnesses, it is required that they have a knowledge of property values generally, . . . or be acquainted with property values in the vicinity . . . .

We see no reason why an owner, before expressing his opinion concerning the market value of his real estate, should not have the initial minimum qualifications required of his neighbors. It follows that the qualifications of the owner witness, as other witnesses, must be affirmatively shown before his opinion of market values is expressed.

-9- The net effect of our decision on this question is that the owner of real estate shall not be presumed adequately qualified to express an opinion of market values by reason of ownership alone.

Fister, 373 S.W.2d at 722-23 (internal quotation marks and citations omitted).

Accord, e.g., Louise Everett Graham and James E. Keller, 15 Ky. Prac., Domestic

Relations Law § 13:3 (2024); Summe v. Gronotte, 357 S.W.3d 211, 213 (Ky. App.

2011).

In the case sub judice, the parties did not jointly agree on the fair

market value of the home. They each submitted their own lay opinions as to the

value, but neither Husband nor Wife was qualified to offer such an opinion.

Neither had been employed as a residential, real estate appraiser. Neither proffered

any training, education, or experience in that field. Neither professed any

familiarity with real estate values in the neighboring areas. Neither showed any

basis for knowing or putting forth a reliable market value. Husband owned the

property before marriage, but this fact alone does not render him competent under

Kentucky law to opine about the fair market value of his land. And Husband later

withdrew his initial tender of approximated value. Wife did not even own any of

the property prior to marriage, thus rendering her even less capable of offering a

reliable opinion on the matter. The Family Court even acknowledged that it did

not know the manner by which Husband had arrived at his figure, but it used that

number anyway, even after Husband challenged it.

-10- Therefore, the Family Court should not have allowed either Husband

or Wife to offer “evidence” of the property’s supposed value. And it could not

accept one unfounded number from Husband anymore than it could have accepted

a second unfounded number from him, especially without any foundation for a

finding that one number was more reliable than another. It likewise had no basis

by which to accept Wife’s proffer. The Family Court, as all Trial Courts, serves as

a gatekeeper to allow only reliable, qualified evidence into Court. Because it failed

in this role, the Family Court did not base its valuation upon sufficient evidence

and did not render it in accordance with sound legal principles. Young, 314

S.W.3d at 308. Accordingly, while we appreciate the Family Court’s efforts in this

difficult case, we must find that it abused its discretion in offering any credence to

this lay testimony as to a residential fair market value of land.

The Family Court compounded this problem by relying on a PVA

assessment that Husband had offered. The Family Court offered no reason for this

reliance. At one point, it even stated that it did not know the source of the figure,

even though it had received the assessment. Regardless, the Family Court did not

clarify whether it used the figure because it was a PVA assessment or because

Husband had first offered it (and then withdrew it). Because the Family Court may

have relied upon it, we must offer some guidance on the proper use of PVA

-11- assessments, as this case is being remanded for a proper determination of value,

which must specify the source(s) used.

A Family Court may consider a PVA assessment when determining

the value of real property. “PVA assessments constitute relevant and probative

evidence.” Borders Self-Storage & Rentals, LLC v. Transportation Cabinet,

Department of Highways, 636 S.W.3d 452, 456 (Ky. 2021). While not required to

adopt wholesale a PVA assessment, a finder of fact may use its discretion to weigh

PVA and other evidence of value accordingly:

As stated in the case of Commonwealth v. Rankin [346 S.W.2d 714, 717 (Ky. 1960)] . . . “(i)n determining the value of land . . . assessed value, though not conclusive, can be considered [i]n connection with other evidence of value of property.”

Robinson, 569 S.W.2d at 180. Thus, as part of the evidentiary package here, the

Family Court could have heard testimony from the PVA or accepted the

assessment into evidence as a public record. Kentucky Rule of Evidence 803(8).

In Borders, the Supreme Court allowed a PVA assessment in a condemnation case

where the Trial Court had already appointed appraisers and where the landowner

testified and wanted to use that assessment. The Supreme Court in Borders

emphasized that a PVA assessment does not “constitute[] a final and unassailable

determination of value. Rather, it is one factor to be considered by the jury in

evaluating and determining the appropriate value of the land to be condemned.”

-12- Borders, 636 S.W.3d at 456; cf. Roberts, 587 S.W.2d at 283 (“a bare exhibit of a

property assessment ha[s] no probative value”). “Testimony regarding the PVA’s

value would be subject to challenge and parties are free to argue the weight to be

given to such valuations.” Borders, 636 S.W.3d at 456.

Here, the value of the PVA assessment was hotly contested. Thus, the

Family Court could not adopt it on its face as the authoritative value of the

property without specific findings of its reliability and relevance. There were none

here. Instead, the Family Court did not specifically base its valuation on the PVA

assessment, even though it used the same number provided by Husband. Likewise,

the Family Court did not hear testimony from a PVA official. It also failed to

admit the assessment into evidence under the hearsay exception for public records.

Thus, the Family Court could not have considered it – if indeed it did. However, if

the Family Court had properly admitted the assessment into evidence, it could have

considered the assessment along with the other evidence, such as assessment

provided by expert appraisers, as in Borders.

However, we must repeat that the Family Court must make specific

findings on these issues. The PVA assessment here is much less relevant than that

used in Borders. First, this PVA assessment occurred in 2021. Accordingly, it did

not account for the value of the property before the marriage – nearly 20 years

earlier in 2003. The Family Court provided no way of knowing that 2003

-13- nonmarital value. Likewise, the Family Court heard no value at the time of the

home building in 2008. A value obtained solely after the divorce proceedings

began is of minimal, if any, use standing alone. Further, we have no valuation here

of the value of the tract on which the residence is even located – and if it can even

be severed.

Thus, neither we nor the Trial Court had any manner of knowing the

amount of the increase in the value of nonmarital property during the time of the

marriage. Importantly, if the Family Court were to use a PVA assessment, it

needed to use the 2021 valuation in conjunction with a 2003 valuation at the time

of marriage and a 2019 valuation at the time of the institution of divorce

proceedings. Without taking any evidence of such values, the Family Court cannot

reasonably divide the property. And likewise, no one yet knows whether any

increase is marital because of the joint efforts of the parties or nonmarital because

of general, economic conditions. Reliable, relevant evidence is required before

making these determinations.

The fact pattern of this case is similar to Robinson. “[W]e cannot let

indistinguishable cases yield distinguishable results in the interests of expediency.”

W.H.J. v. J.N.W., 669 S.W.3d 52, 57 (Ky. App. 2023). And for the same reasons,

we must reverse and remand the Family Court’s valuation. On remand, the Family

Court must follow our directive in Robinson:

-14- If the parties come to the end of their proof with grossly insufficient evidence on the value of the property involved, the trial court should either [sic] order this proof to be obtained, appoint [its] own experts to furnish this value, at the cost of the parties, or direct that the property be sold.

Robinson, 569 S.W.2d at 180.

Thus, the Family Court must, at the very least, direct the parties to

submit expert testimony of their own at a new trial. Alternatively, it may appoint

an expert of its own at the parties’ expense. As a third and final option, it may

direct the property to be sold. When obtaining values of the property in order to

divide it potentially, the Family Court will need an expert appraisal of the real

property as a whole, including separately the land underlying the residence, the

residence itself, and any other structures. An equitable distribution – if such

distribution is ultimately made – will have to be based upon this type of specific

evidence.

B. Property Allocation and Division

Once the Family Court receives proper, expert valuation(s) of the real

property as a whole, the home, the property underlying the residence, and the other

structures, and once it then makes a corresponding valuation of its own with

sufficient factual findings, the Family Court must allocate the nonmarital property

individually according to law. As we are remanding this case due to the lack of a

qualified valuation, once the Family Court receives and determines an appropriate

-15- valuation, it will once again be tasked with making a financial distribution.

Accordingly, we will provide some additional guidance on this issue in an attempt

to avoid a second appeal.

The Family Court initially made the following relevant findings:

The parties do not dispute that the initial source of the funds to build the home came from [Husband], who sold a portion of his non-marital land . . . for $161,000.00. It is not clear from the testimony and documents presented to the Court, where the remaining funds, if any, came from. Additionally, there have been loans taken out against said property totaling approximately $94,000.00 during the marriage, which were thereafter paid with marital funds. As such, the Court finds that [Husband’s] non-marital interest in the residence is $67,000.00.

According to [Husband], the marital residence has a fair market value of $591,780.00 and as there has been no formal appraisal for the same, the Court adopts that amount as the value of the marital home. With the determination of the value of the home being $591,780.00 and [Husband’s] non-marital interest being valued at $67,000.00, the marital interest to be divided would be $524,780.00. As such, [Wife], would be entitled to equity in the amount of $262,390.00. . . .

R. at p. 420.

In response to Husband’s post-judgment motions, the Family Court

made these additional findings:

The bank records from [Husband’s] account ending in 0444 from 2008 – March, [sic] 2022 indicate that $94,010.36 was paid towards a line of credit against the property. Because this account was not [Husband’s]

-16- “business account,” it would have been marital in nature. [Husband], did not bear his burden of proof [to show] that the account or these payments were non-marital in nature, so as a result, the Court found that his non-marital portion was limited to $67,000.00 and gave [Husband] credit for the same.

As for the fair market value of the residence, neither party had the property formally appraised. [Husband] introduced the Property Valuation records in an attempt to show a lower value for the residence. However, such records are not an accurate depiction of fair market value at any given time. Therefore, [the] Court used [Husband’s] own assessment of the same – $591,780.00. He now argues that he does not know where that figure came from. While the Court does not claim to know the factors used by [Husband] to arrive at said amount, said value was provided by him as part of his verified financial disclosure to the Court.

The Court will not disturb its prior ruling that [Wife] would be entitled to equity in the amount of $262,390.00.

R. at 613-14.

Under KRS 403.190(2), all property acquired during marriage is

presumed to be marital, with some, limited exceptions. But before dividing marital

property, a court must first assign a party’s nonmarital property individually. A

claimant must trace his nonmarital property into a specific asset. Maclean v.

Middleton, 419 S.W.3d 755, 767 (Ky. App. 2014). If the claimant does so, then

the Family Court must assign the specific property to him as nonmarital property.

Id.

-17- It is without dispute that the loans at issue here were incurred during

the marriage. However, that fact alone does not automatically render them marital.

“[T]here is no presumption that debts incurred during the marriage are marital.”

Gonzalez v. Dooley, 614 S.W.3d 515, 524 (Ky. App. 2020).

The Family Court noted Husband’s significant, nonmarital

contribution towards home construction. Its very concise ruling notes that the

$161,000 may have covered all of the construction. This is especially true because

the land was already owned by Husband. However, the Family Court then

immediately mentioned loans in general and in lump sum, and it then offered the

cursory conclusion that the home was both marital and nonmarital. While the

home was constructed during the marriage; Wife had some, limited involvement;

and loans were taken, the Family Court did not sufficiently explain its

classification of the home as marital. It must first rule specifically as to whether

the home’s construction was entirely financed by Husband’s sole nonmarital funds

of $161,000, which is what he claims and what the Court alluded to in its ruling. If

so, the loans taken during the marriage are not relevant to this inquiry and certainly

not dispositive of the issue of whether the home constitutes marital property.

Moreover, the Family Court’s analysis must address the value of the land Husband

owned prior to marriage that underlies the residence and beyond.

-18- Instead, the Family Court here essentially began its ruling by finding

that Husband’s nonmarital interest in the $0.5 million home to which he made a

$161,000 investment on his nonmarital $1.5 million property was $67,000. It then

awarded Wife quadruple the amount in marital interest that it had awarded

Husband in nonmarital interest. Setting aside the incongruity apparent on the face

of such an award, there are several problems with this conclusion. First, of course,

the home’s value was not properly predicated on reliable evidence, as discussed,

supra.

Second, the Family Court did not award Husband his $161,000 of

nonmarital contributions at the outset of any analysis. The Family Court instead

skipped to dividing what it concluded was the remaining marital interest without

any finding that there was any marital interest left. Missing entirely is evidence of

the cost of construction beyond $161,000. Also completely absent is any

discussion of how the home increased in value five-fold after construction. And

the Family Court’s analysis is devoid of mention that Husband owned the land

under the residence outright. And if the Family Court had a proper appraisal of the

value, it should have awarded Husband the value of his nonmarital land at the

beginning.

Moreover, the Family Court received no valuation of the

residence at the time of construction and at the time of divorce. It

-19- undoubtedly increased in value over that time. While the increase in value of

nonmarital property is presumed to be marital, this presumption can be

overcome by a showing that the increase was due to general, economic

conditions and not the joint efforts of the parties. The Family Court took no

proof on these crucial issues of fact.

Third, the Family Court did not require traceable proof about the loans

to make an accurate determination of whether and or even to what extent they were

marital or nonmarital. Wife did not submit any evidence that she contributed any

nonmarital funds to build the home. She said that she performed some of the

construction tasks, but she did not submit a value for those tasks. She also claimed

that the parties took out marital home equity loans, but Husband contested that

evidence with his own showing that the loans were for other purposes, and that he

alone paid them back with his nonmarital funds. The uncontroverted evidence

showed that Husband sold nonmarital Farm property to avoid taking out mortgages

to finance home construction. At most Wife’s testimony established that several

loans were taken out during the marriage for various purposes. This evidence was

insufficient to support the Family Court’s findings.

“Kentucky courts have typically applied the ‘source of funds’ rule to

characterize property or to determine parties’ nonmarital and marital interests in

such property.” Travis, supra, at 909 (footnotes and citations omitted). The

-20- Family Court stated that Husband did not carry his burden of tracing his nonmarital

funds to the home’s construction. But actually, he did. Indeed, the only specific,

tracing evidence presented to the Family Court was that Husband alone provided

all of the construction cost from his nonmarital funds. The parties did not use a

joint checking account. Husband made loan payments from a checking account

which was in his name only.

Wife contended that the parties took $94,000 in loans to finance the

construction, which were paid off using marital funds. As this was her argument,

and not his, the Family Court’s finding that he bore the burden of proof to connect

the loans to the construction was a misstatement of the law.

And Wife submitted no traceable evidence to support her burden of

proving the conclusion ultimately reached by the Family Court that both parties

took out loans of $94,000 to be paid by marital funds to finance home construction.

Wife did not show any specific dollar amounts of loans that were allegedly taken

during construction itself, that they were used for that construction as opposed to

other purposes, and that Husband did not pay off the loans with nonmarital funds.

Instead, she only testified that she periodically wrote checks to Husband, some of

which were introduced as exhibits. The facts surrounding these checks remains

unknown. Indeed, in her brief, she concedes that she offered no tabulation of the

loans, and that the Family Court arrived at the $94,000 sum without showing its

-21- own math. Appellee Brief, p. 2. We do not know how the Family Court arrived at

this figure. However, it is clear that this calculation ignored Husband’s testimonial

evidence that he alone paid such marital debt for these loans down to zero.

Appellant’s Opening Brief, p. 14.

Although Wife provided proof that she used $7,500 from the sale of

her nonmarital home (which Husband claimed was closer to $5,000), she did not

trace those proceeds into home construction. Rather, she said that she used that

money to renovate a barn on Husband’s Farm where they lived prior to the home’s

construction. Wife also claimed that both parties worked on the Farm and boarded

horses, using sweat equity and receiving income from boarding horses. She did

not trace any amounts of either into the home construction. She provided evidence

that she purchased light fixtures, vanities, and other small items, but did not show

that she contributed to the cost of construction at all.

Fourth, even if there had been proof that Husband and Wife took

loans totaling $94,000 to finance home construction alone – and manifestly there

was not – the Family Court is not permitted to allocate all of that “marital” debt to

Husband and charge it against his nonmarital financing. The attribution of that

debt is as troublesome as was its calculation. At the outset, it would appear that

the Family Court should have subtracted this debt from the total value of the home

before dividing the remainder between the parties. A marital debt should reduce

-22- the value of the home’s marital interest. Instead, the Family Court subtracted all of

this marital debt from Husband’s nonmarital contribution. Surely Wife must be

responsible for some marital debt and not be shielded from any of it merely

because she made no nonmarital financial investment. We do not know because

the Family Court provided no explanation for using this method, quite possibly

because there was no proper valuation of marital value from which to subtract

marital debt. But even using its novel method, the Family Court, at the very least,

would have had to subtract only half of a potential marital loan of $94,000 (i.e.,

$47,000) from the initial $161,0000 nonmarital investment. This would have

resulted in a finding of $114,000 in Husband’s nonmarital property (versus

$67,000). Upon remand, the Family Court must make findings detailing its

reasoning for making its calculations.

Detailed rulings from the Family Court as to the various issues

surrounding these loans are crucial because that Court primarily used these very

loans as the primary reasoning for classifying the residence as marital. It then

assigned all of the debt solely to Husband. If the loan was Husband’s alone, then

the Family Court cannot properly use it to make the residence a marital asset.

Moreover, it should have added the $94,000 to the $161,000 of Husband’s

nonmarital investment, for a sum of at least $255,000 (plus the land). If the loan

was marital, then Wife would be responsible for some of it. And we would need to

-23- know which portions of loans were used to build the home. We cannot accept

cursory findings on these critical matters.

The Family Court did not make the required factual findings of: the

specific amount of each loan; the purpose of each loan (construction or otherwise);

whether the loan was taken out by both parties; which party or parties paid back

the loan; and the source of the funds used to pay back the loan (marital or

nonmarital). If the parties do not carry their burdens on sourcing, then the Family

Court may so find. But the Family Court cannot combine and categorize large

sums of money without sufficient evidence and factual findings.

All of that being said, we do appreciate the challenges that the Family

Court encountered in this case. The proceedings were bitter, the issues were

complex, and the trial provided more heat than light. The Family Court conducted

itself with honor and tried to stay out of the fray while presiding over this intense

battle with a gargantuan amount of exhibits, disjointed proof, and bickering

arguments. But the Family Court is the arena, and it is vested with the duty to

delve into the details and push the parties on their proof. As our Supreme Court

has held: “[t]he judges presiding over family law matters must be mindful of the

ramifications of their written orders. A bare-bone, conclusory order such as the

one entered here, setting forth nothing but the final outcome, is inadequate and will

-24- enjoy no presumption of validity on appeal.” Keifer v. Keifer, 354 S.W.3d 123,

126 (Ky. 2011). Upon remand, the Family Court must rule precisely.

C. Marital Misconduct

Husband also asserts that the Family Court erred by allowing evidence

of marital misconduct at trial. Husband speculates that “evidence of marital

misconduct could certainly explain the trial court’s grossly miscalculating the

largest asset at issue[,]” i.e., the home. Reply Brief, p. 5. Yet the Family Court

did not mention marital misconduct in its division of marital assets, and Husband

did not cite any evidence of the Family Court’s consideration of such evidence.

But it was nonetheless inadmissible. KRS 403.190(1) requires marital property to

be divided “without regard to marital misconduct . . . .” Because we are remanding

this case for a new trial, we caution the Family Court to refrain from admitting

prejudicial, character evidence that is irrelevant to the findings that the Family

Court must make.

D. Marital Debts

Husband argues that the Family Court erred in assigning two types of

marital debts to him, the aforementioned home loans and certain credit card debts.

As stated supra, the Family Court must make specific findings about the loans.

The same analysis applies to the credit cards. Absent such findings, the award

must be reversed as unsupported by the evidence.

-25- Unlike property acquired during a marriage, KRS 403.190 “does not

create a presumption as to marital debts and we do not believe one can be

judicially implied. All debts incurred during marriage are not necessarily marital

debts. Consideration should be given to the nature of the debts based upon the

receipt of benefits and the extent of participation.” Bodie v. Bodie, 590 S.W.2d

895, 896 (Ky. App. 1979); see also Neidlinger v. Neidlinger, 52 S.W.3d 513, 523

(Ky. 2001), overruled on other grounds by Smith v. McGill, 556 S.W.3d 552 (Ky.

2018) (discussing the bearing of the economic circumstances of the parties upon

their respective abilities to assume indebtedness); Inman v. Inman, 578 S.W.2d

266, 270 (Ky. App. 1979). Courts are also required to make findings as to whether

the debt was incurred to purchase marital property and/or to provide for

maintenance and support of the family. Neidlinger, 52 S.W.3d at 523. Because

specific factual determinations are required, “there is no presumption that debts

must be divided equally or in the same proportion as the marital property.” Smith,

235 S.W.3d at 15.

The Family Court’s reasoning supporting its allocation of the marital

debts is sparse:

Any remaining debt owed on the home equity line of credit shall be paid by [Husband] and the debt shall be refinanced into his sole name within thirty (30) days from the date of this Order. Each party shall each [sic] be responsible for any credit cards or outstanding debt in their [sic] own name.

-26- R. at 423.

The Family Court’s exceptionally terse discussion of marital debts

does not address any factors, such as who acquired the debts, who derived the

benefit of them, and whether they were used for marital or nonmarital purposes.

Bodie, 590 S.W.2d at 896. We reversed in similar circumstances in Guffey v.

Guffey, 323 S.W.3d 369, 373 (Ky. App. 2010). And we must do so here.

First, the division of marital debts is one piece of the parties’ overall

financial status. In other words, a just division of marital debts may be dependent

upon the amount of marital property a party receives. See, e.g., Graham and

Keller, 15 Ky. Prac. Domestic Relations Law § 15:89 (2024) (“On some occasions

a court may want to consider the relationship between marital assets and marital

debt in order to evaluate the net estate distributed to each party.”). Since the

parties’ largest asset, the home, is being valued anew and potentially re-allocated

or re-divided on remand, the Family Court must also re-evaluate the parties’

marital debts.

Second, the Family Court did not explain its decision by addressing

any of the required, pertinent factors. That Court is not required to list

exhaustively the Bodie factors, but it must offer some explanation of its rationale.

To do otherwise is an abuse of discretion, as the discretion appears untethered to

the specific facts. Neidlinger, 52 S.W.3d at 523. For example, it would seem

-27- unjust for a party to be ordered to pay marital debts which another party

unilaterally incurred for nonmarital purposes. As we construe his briefs, Husband

argues that is what occurred here regarding the credit card debts. On remand, the

Family Court must explain which party acquired any marital debts, in what

amount, when, and for what purpose (marital or nonmarital).

E. Maintenance

Husband argues that the Family Court erred in awarding Wife

maintenance. Because one key component of any maintenance award is the

recipient’s inability to provide for her reasonable needs, maintenance awards are

essentially dependent upon a just division of property. Newman v. Newman, 597

S.W.2d 137, 138 (Ky. 1980). Because we are reversing both the valuation of the

marital home (which will impact the value of the property) and the conclusory

adjudication of it as marital without requisite findings, as well as the division of

marital debts (which also may impact the overall net value of the property), we

also reverse and remand the award of maintenance. Ensor v. Ensor, 431 S.W.3d

462, 475-76 (Ky. App. 2013).

For the benefit of the parties and Family Court on remand, we will

briefly address retroactive maintenance as that is a contested issue likely to recur.

Because we are reversing and remanding the other orders of the Family Court, it

will need to adjust the order of maintenance itself upon remand.

-28- Wife sought maintenance in her petition for dissolution of marriage,

but she did not file a contemporaneous motion for temporary maintenance. R. at

47. Under KRS 403.160(1), a motion for temporary maintenance must be

accompanied by an affidavit “setting forth the factual basis for the motion and the

amounts requested.” Wife’s petition alone was thus statutorily insufficient to

support an award of even temporary maintenance.

For reasons not apparent from the face of the record, the Family Court

did not hold a hearing on Wife’s motion until late March 2022. Further, it did not

issue a subsequent, written decision about temporary maintenance.3 Instead, the

Family Court seems to have first addressed Wife’s request for maintenance years

later in the March 2023 decree of dissolution of marriage.

In the March 2023 decree, the Family Court awarded Wife $1,000 per

month in maintenance for five years, retroactive to November 1, 2019, the

approximate date that she left the residence. The end result of this ruling was that

Husband had an instant, almost $40,000 maintenance arrearage obligation, which

the Family Court ordered him to pay in full within 90 days.

3 Whether the Family Court made oral findings is unknown to us. Kentucky Rules of Appellate Procedure (“RAP”) 24(A)(3) requires the video recordings of a trial to be made part of the appellate record and allows other “recordings of other proceedings that have been designated by the parties . . . [to] be certified as a part of the record on appeal.” Though Husband designated video recordings of some other proceedings to be contained in the record on appeal, see R. at 897, he did not designate video of the March 2022 temporary maintenance hearing to be part of the appellate record. Thus, the video recording of that hearing is not before us.

-29- Maintenance statutes generally contemplate prospective relief.

Pursley v. Pursley, 144 S.W.3d 820, 828-29 (Ky. 2004). Retroactive relief is

usually appropriate only when circumstances delay a case from being submitted for

decision. Mudd v. Mudd, 903 S.W.2d 533, 534 (Ky. App. 1995). Nonetheless, the

Family Court has the discretion to award maintenance retroactively to the date it

was first sought. Higbee v. Higbee, 89 S.W.3d 409, 410 (Ky. 2002); see also

Weldon v. Weldon, 957 S.W.2d 283, 286 (Ky. App. 1997).

But the Family Court here awarded maintenance to Wife retroactive to

a date preceding her filing of the dissolution petition. There is no Kentucky

authority permitting Family Courts to award maintenance sua sponte before it is

sought. We agree with a Kentucky treatise’s observation that “the trial court is

granted considerable discretion in fixing the effective date of maintenance so long

as it does not precede the making of a request for maintenance by some means.”

Richard A. Revell, Diana L. Skaggs, Michelle Eisenmenger Mapes, Procedure For

Obtaining Maintenance, Kentucky Divorce § 13:5 (2023) (emphasis added).

This award of retroactive maintenance constitutes an abuse of

discretion and is reversed and remanded. As maintenance awards are required to

be based in part on marital property, upon remand, the Family Court must assess

anew whether Wife should be awarded maintenance after resolving anew the

sundry issues involving valuing the marital residence, allocating nonmarital

-30- property, and equitably dividing marital property and debts. KRS 403.200

(requiring a determination of whether marital property provides for one’s needs).

The Family Court’s forthcoming maintenance analysis must address the factors in

KRS 403.200. No maintenance award shall be ordered to begin retroactively to a

date before Wife sought such relief.

F. Attorney Fees

Husband raises two issues regarding attorney fees. First, he argues

the Family Court erred by denying his request to receive attorney fees from Wife

as a discovery sanction. Second, Husband contends the Family Court erred by

ordering him to pay $25,300 of Wife’s attorney fees.

1. Husband’s Request for Attorney Fees

Husband submitted requests for admission to Wife under Kentucky

Rules of Civil Procedure (“CR”) 36.01, including requests that asked her to admit

that the Farm and a certificate of deposit (“CD”) were each Husband’s nonmarital

property. Wife declined to concede the point.

The Family Court eventually held that the Farm was nonmarital, and

that Wife never seriously disputed this fact. It further found that the CD was also

nonmarital because Husband purchased it with funds obtained from selling his

nonmarital property. However, the Family Court did not address Husband’s claim

for reimbursement of the funds he expended in trying to prove a point that was

-31- ultimately not contested. Under CR 37.03, “[i]f a party fails to admit the . . . truth

of any matter as requested under Rule 36, and if the party requesting the

admissions thereafter proves the . . . truth of the matter,” then the requesting party

“may apply to the court for an order requiring the other party to pay him the

reasonable expenses incurred in making that proof, including reasonable attorney’s

fees.”4 The intent of the rule is that parties to litigation should not consume time at

trial or be put to the expense of proving evidence or ultimate facts that are not

substantially contested. Berrier v. Bizer, 57 S.W.3d 271, 279-80 (Ky. 2001).

The Court concluded that Husband was not entitled to attorney fees

due to Wife’s denial that the Farm was entirely his nonmarital property because

there was a genuine dispute on that matter. See CR 37.03(c) (permitting a court to

deny attorney fees if “the party failing to admit had reasonable ground to believe

that he might prevail on the matter . . . .”). We fail to see any genuine dispute on

that issue in the record before us. The parties disputed the marital nature of the

home, and not the nonmarital nature of the land. We are reversing and remanding

the decision about the marital property for same reasons we have already discussed

4 Husband did not submit a separate motion seeking relief under CR 37.03. Instead, in his proposed findings of fact and conclusions of law, Husband sought to recover attorney fees from Wife due to her failure to admit the nonmarital nature of the Farm and the CD. In a case involving Husband’s counsel, our Supreme Court discouraged seeking relief under CR 37.03 by embedding the request in proposed findings of fact and conclusions of law. Rumpel v. Rumpel, 438 S.W.3d 354, 360 n.2 (Ky. 2014). However, it did not prohibit the practice.

-32- at length, and there remains an ongoing dispute about the marital property to be

resolved by the Family Court. We must now reverse and remand the Family

Court’s decision to decline to award attorney fees as to the undisputed issue of the

nonmarital nature of the land. The Family Court must determine the amount of the

attorney fees dedicated solely to this narrow issue.

As to the CD, the Family Court never addressed Husband’s request, as

it must on remand. We cannot be the initial decisionmaker on Husband’s request

because “[a]s an appellate court, we review judgments; we do not make them.”

Klein v. Flanery, 439 S.W.3d 107, 122 (Ky. 2014). Accord Calhoun v. CSX

Transp., Inc., 331 S.W.3d 236, 245 (Ky. 2011) (“In this Commonwealth, it is

axiomatic that appellate courts are not fact-finders . . . .”). We must remand this

issue to the Family Court for consideration.

2. Award of Attorney Fees to Wife

Under KRS 403.220, “[t]he court from time to time after considering

the financial resources of both parties may order a party to pay a reasonable

amount for the cost to the other party of maintaining or defending any proceeding

under this chapter and for attorney’s fees . . . .” “Disparate resources, not need per

se, is all that is required to invoke the statute . . . .” Rumpel, 438 S.W.3d at 363. If

the Family Court finds “the parties’ resources are disparate,” the Court “enjoys a

broad discretion under the statute to allocate costs and award fees . . . .” Id.

-33- Here, after conducting an evidentiary hearing, the Family Court held

that “there is no question that there is a financial disparity between the parties, with

[Husband] having significantly more resources available to him than [Wife] has

available to her.” R. at 869. The Court found that Wife’s attorney’s fees totaled

$41,300, of which she had already paid $16,000. The Court ordered Husband to

pay the remaining balance, $25,300, directly to Wife’s counsel, who is listed as the

Appellee, Nicole M. Kersting, in No. 2023-CA-0808-MR.

Husband appeals that decision on procedural and substantive grounds.

Procedurally, he contends the Family Court abused its discretion by denying his

request to conduct additional discovery prior to the hearing and by denying his

request to continue the hearing. Substantively, he contends the Family Court’s

“analysis was erroneously skewed . . . .” Appellant’s Opening Brief, p. 32.

a. Procedural Challenges to the Attorney Fee Award

CR 33.01(3) provides in relevant part that “[e]ach party may

propound a maximum of thirty (30) interrogatories and thirty (30) requests for

admission to each other party . . . .” It is uncontested that Husband had already

propounded 30 interrogatories to Wife before the hearing on Wife’s motion for

attorney fees. Thus, Wife objected to Husband being permitted to propound

additional interrogatories. The Family Court agreed with Wife.

-34- We discern no error. Husband cites to nothing which required the

Family Court to allow him additional interrogatories. Under these facts, with the

voluminous record before it, Husband has not shown that the Family Court erred or

abused its discretion by denying Husband’s request to conduct further discovery.

We also reject Husband’s argument that the Family Court denied him

procedural due process. Husband was afforded notice of and the opportunity to be

heard at the hearing on attorney fees. Hampson v. Boone Cnty. Planning Comm’n,

460 S.W.3d 912, 917 (Ky. App. 2014) (“Fundamentally, the hallmarks of

procedural due process are notice and an opportunity to be heard.”). Indeed,

Husband testified at length on his own behalf, and his counsel extensively cross-

examined Wife. Moreover, the parties had already submitted, and exhaustively

discussed, a host of financial documents at trial.

We similarly discern no abuse of discretion in the denial of Husband’s

request for a continuance of the hearing. “With respect to the denial of a

continuance, our standard of review is whether the court abused its discretion.”

Guffey, 323 S.W.3d at 371. Husband asserts a continuance was appropriate to let

him conduct more discovery. But we have already rejected this claim. Wife filed

the dissolution proceeding in December 2019; the attorney fee hearing was

conducted in June 2023. We discern no abuse of discretion in the Family Court’s

-35- bottom line conclusion that all issues needed to be finally resolved without further

delay.

b. Substantive Challenges to the Attorney Fee Award

Husband also argues that the Family Court erred by not discussing the

appropriate factors for determining whether to award attorney fees. We agree, but

the main reason that we must reverse the attorney fee award has been discussed at

length already. The Family Court needs to conduct a new trial as to property

valuation, nonmarital allocation, marital division, debt allocation, and

maintenance. Attorney fees must be part of the new equation.

The Family Court discussed, as it should have, the parties’ financial

situations and the disparity that it concluded existed between the financial

resources of Husband and Wife. But it must also consider additional factors, such

as the results secured by the attorney. Rumpel, 438 S.W.3d at 363. It must also

engage in a meaningful substantive analysis of the other, required factors in its

written decision. While the Family Court here cited authority outlining factors

relevant to an award of attorney fees, it did not expound upon or render an analysis

of their impact on the specifics of this case. Id.; see also Boden v. Boden, 268

S.W.2d 632 (Ky. 1954). Although a prong-by-prong analysis of the eight

potentially relevant factors is unnecessary, merely listing them is insufficient. An

-36- application of the law to the facts is essential. Gentry v. Gentry, 798 S.W.2d 928,

937 (Ky. 1990). This analysis must occur as part of the new trial.

We are mindful of Husband’s argument that “[a] good part of [Wife’s]

attorney fees would not have been incurred but for the issues resulting from the

family court committing numerous errors which [Husband] had to address in order

to preserve his rights.” Appellant’s Opening Brief, p. 34. We have been required

to reverse and remand the Family Court’s decisions. Continued litigation of points

that should already have been resolved is an issue. However, Husband will need to

demonstrate to the Family Court that Wife’s attorney fees were artificially inflated

or incurred for unnecessary reasons. Wife had the right to defend the Family

Court’s conclusions to the same extent that Husband had the right to challenge

them. Both parties are allowed to fight for themselves in the Family Court, and

both achieved some success there.

And while only one prevails here at this time, the litigation is far from

over. From our review of the record, this action has been bitterly fought each step

of the way, and a new trial looms with more battles to be fought. Large attorney

fees are the inevitable end result of protracted legal trench warfare. As our

Supreme Court put it, “the financially superior party in a KRS Chapter 403

proceeding is free to play hard-ball [sic], but that party does so at the risk of being

obliged to pay for the other side’s designated hitter.” Rumpel, 438 S.W.3d at 365.

-37- The Family Court may conclude that neither Wife nor Husband may escape

responsibility for the protracted, acrimonious nature of this case’s progression and

the resulting consequences (such as the length of litigation and the incurrence of

significant attorney fees).

III. Conclusion

For the foregoing reasons, we reverse and remand the orders and

judgments below. Despite the laudable efforts of the Family Court in a difficult

trial, the errors were significant, compounded each other, and pervaded all of the

rulings, which were themselves too lacking in detail. The Family Court shall

conduct a new trial, enter specific findings of fact and conclusions of law including

a proper valuation of the marital home with expert testimony, allocation of

nonmarital property, a determination of any marital property and distribution,

division of marital debts, maintenance, and attorney fees.

ALL CONCUR.

BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:

William Dennis Sims Allison Spencer Russell Louisville, Kentucky Louisville, Kentucky

J. Gregory Troutman Louisville, Kentucky

-38-