Randolph Allen v. Anita Hale (Allen)

Opinion

RENDERED: AUGUST 14, 2026; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2025-CA-1272-MR

RANDOLPH ALLEN APPELLANT

APPEAL FROM FLOYD CIRCUIT COURT v. HONORABLE DWIGHT S. MARSHALL, JUDGE ACTION NO. 18-CI-00625

ANITA HALE (ALLEN) APPELLEE

OPINION

AFFIRMING

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BEFORE: ACREE, EASTON, AND KAREM, JUDGES. ACREE, JUDGE: This is a second appeal in a dissolution action arising out of the Floyd Circuit Court, Family Division. Randolph Allen (Randy) seeks review of the family court’s designation of land on which the marital residence sits as his former spouse’s nonmarital property, and its redivision of marital property upon remand. We affirm.

BACKGROUND

The facts and procedural background of this case are set forth in the original appeal, Allen v. Allen, No. 2023-CA-0657-MR, 2024 WL 3463383, at *1– 2 (Ky. App. Jul. 19, 2024) (hereafter Allen I). Pertinent to this second appeal, we note the parties were married 18 years and had one child, now an adult, before the dissolution in September 2018. After a two-day trial, the court entered a twenty- four-page order with extensive findings of fact and conclusions of law regarding the assignment of nonmarital property and division of the marital estate.

The family court found the land at Ed Hale Branch (Ed Hale land) on which the parties built their marital home is Anita’s nonmarital property but based that holding on an erroneous legal conclusion—that a prior partition action indicating the property was nonmarital was res judicata. Randy’s argument in the first appeal persuaded this Court that res judicata did not apply to the Ed Hale land issue. On this issue, we remanded the matter to the family court to determine whether the property was marital or nonmarital in nature. Id. at *3–4.

Before the first appeal, the family court also found Anita opened and solely funded a Morgan Stanley account during the marriage with a substantial balance. Anita claimed to use the account to pay their adult child’s college expenses and planned to gift the child the remaining balance upon graduation. The

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court awarded the account to Anita to be “held for the benefit of the child.” Id. at *2.

In that first appeal, Randy challenged the award of that account solely to Anita. Id. This Court found no merit in his argument and held:

Although the court did not explicitly state whether the Morgan Stanley account was marital or nonmarital, it is clear from the facts that it was established and funded during the marriage, making it marital property under KRS[1] 403.190(3). The family court treated it as such.

Randy concedes he made no contribution to the account and cites to no other factor in KRS 403.190(1) which would entitle him to a greater portion of the marital estate.

His argument also ignores the court’s award of a substantial equalization payment in his favor. In its thorough findings of fact, the court clearly considered the factors in KRS 403.190(1) in dividing the entire marital estate, including the Morgan Stanley account. There was no abuse of discretion.

Id. at *6.

Allen I acknowledged that our holding might compel a revisit to the “just-proportions” division of the marital estate, what we referred to as an “equalization payment.” We said, “if necessary, after deciding the nature of the Ed Hale land, the family court may reconsider the division of marital assets under KRS 403.190(1), including recalculation of the equalization payment[.]” Id.

1 Kentucky Revised Statutes.

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On remand, Anita discussed the proof in the record related to the Ed Hale land, which she continued to assert was a nonmarital gift from her parents. Randy argued Anita failed to present sufficient evidence that the land was nonmarital. The matter was then submitted for a final decision.

The family court reviewed the December 2022 hearings, its prior findings, and the directions from this Court, and entered an order in February 2025. It again concluded that the Ed Hale land was Anita’s nonmarital property pursuant to the source of funds rule:

That the Court finds that all the testimony presented by the parties and the witnesses, and exhibits submitted to the Court, supports the position that the real property was conveyed to [Anita] or to [Anita and Randy] as a gift to [Anita]. The Court finds that the Ed Hale property was conveyed by numerous deeds to the parties but all the deeds were for no monetary consideration or for a nominal value of one dollar or less.

That the Court finds that the intent of the Grantors of the Ed Hale property to [Anita] or parties was intended as a gift for the relationship which [Anita] shared to the Grantors which included her parents and siblings.

The family court then turned to the Morgan Stanley account.

We noted and affirmed in Allen I the family court’s original award that said: “Anita shall retain this account and the balance of the account shall be held for the benefit of the child.” Allen I, at *6. On remand, the court repeated the award. And although the account was deemed marital property, the trial court

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determined no portion of it should be part of the just proportions division of the marital estate as it was not for Anita’s benefit.

Furthermore, entrusting Anita with the responsibility of seeing to the account’s intended purpose made sense. Before the first appeal, Randy handled a separate account for their child’s benefit. As the family court said in the order we reviewed in the first appeal:

Randy has a bank account which is jointly held with the parties’ son, but it appears that there are no longer any funds held in this account. This account was established to receive the social security benefits for the parties’ child.

Calculating a benefit of approximately $1,100 per month from the time period beginning in 2004 until the date of separation in 2017, when Anita became aware of this benefit for the child and redirected the funds into another account [sic]. Randy admitted in his testimony that he has spent the funds that the child received from social security on things such as his own personal living expenses and child support and vacations, but the child did not receive the funds and Randy did not use said funds to pay for the child’s truck, the Kubota RTV purchased for the child, or the golf cart purchased for the child, nor were any of the funds contributed towards the child’s educational savings.

After some other adjustments based on motions by the parties, the family court settled on a final just proportions division of the marital property and, consequently, a final and significant equalization payment from Anita to Randy.

After the family court denied his motion to amend, Randy brought a timely appeal to this Court.

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STANDARD OF REVIEW

CR2 52.01 provides the general framework for the family court as well as appellate review:

In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specifically and state separately its conclusions of law thereon and render an appropriate judgment[.] . . . Findings of fact, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.

See also Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003) (An appellate court may set aside a lower court’s findings made pursuant to CR 52.01 “only if those findings are clearly erroneous.”). Application of the law to the facts is always reviewed de novo. Doyle v. Doyle, 549 S.W.3d 450, 454 (Ky. 2018).

We review a family court’s division of marital assets for abuse of discretion. Young v. Young, 314 S.W.3d 306, 308 (Ky. App. 2010).

ANALYSIS

Randy presents two arguments. First, he disputes the family court’s designation of the Ed Hale land as a gift to Anita and its assignment to her as nonmarital property. Second, he disputes the family court’s failure to include the Morgan Stanley investment account in the division of marital property and calculation of an equalization payment. We find no merit in either argument.

2 Kentucky Rules of Civil Procedure.

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Ed Hale land In the first appeal, we held “res judicata does not bar the family court from determining the marital or nonmarital nature of the Ed Hale land[.]” Allen I, at *3. As instructed, the family court decided the issue, holding the Ed Hale land was a gift to Anita and designated it as her nonmarital property. Randy argues that ruling was legal error based on erroneous factfinding. We disagree.

KRS 403.190 addresses the disposition of both marital and nonmarital property in dissolution actions. One subsection of the statute, in pertinent part, says, “All property acquired by either spouse after the marriage . . . is presumed to be marital property, regardless of” how it is titled, but that “[t]he presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (2) of this section.” KRS 403.190(3). Subsection (2), in pertinent part, says this presumption can be overcome by proof it is “[p]roperty acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise, or descent[.]” KRS 403.190(2)(b).

It was Anita’s burden to persuade the family court this exception applies. Hunter v. Hunter, 127 S.W.3d 656, 660 (Ky. App. 2003). The Hunter Court described the factors to be considered in determining whether what would be marital property constitutes a gift and is therefore nonmarital:

Factors relevant to determining whether particular property was a gift include the source of the money used

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to purchase the item, the intent of the donor, and the status of the marriage at the time of the transfer. However, the intent of the purported donor is considered the primary factor in determining whether a transfer of property is a gift. Whether property is considered a gift for purposes of a divorce proceeding is a factual issue subject to the clearly erroneous standard of review.

Id. (citations omitted).

The record indicates Anita’s parents gifted the land to her and her two sisters in equal proportions in 1988, a decade before Anita married Randy. After they married, the couple began building a house on the land. To obtain a construction loan, Randy needed to be named on the deed, which led to a partition action and the recording of master commissioner’s deeds. In her memorandum filed upon remand, Anita discussed the 1988 deed of conveyance of the subject property to her and her sisters from their parents, noting the deed listed nominal consideration, which established her parents intended the transfer to be a gift before she married. The 2007 master commissioner’s deeds Randy introduced did not alter the nature of the property even though his name was added; he did not contribute any funds as part of the consideration to add him to the title. Rather, this was done to satisfy the bank’s requirements for Anita and Randy to secure a loan. Randy’s name was added to facilitate the loan, not to give him a marital interest in the land.

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As stated in Hunter, “the intent of the purported donor is considered the primary factor in determining whether a transfer of property is a gift.” Id. The original 1988 deed certainly established the land was deeded as a gift by parents to their daughters. And Randy’s name was added later only to procure a loan to complete the construction of the marital residence on the land previously gifted to Anita. Randy’s citations to Sexton v. Sexton, 125 S.W.3d 258 (Ky. 2004), and O’Neill v. O’Neill, 600 S.W.2d 493 (Ky. App. 1980), do not support his contrary position. Accordingly, the circuit court’s decision as to the nonmarital nature of the Ed Hale land is supported by substantial evidence and is not clearly erroneous. Morgan Stanley investment account The family court did not err in awarding all the Morgan Stanley account to Anita for their son’s benefit as part of the just proportions division of marital property. “Once classified, the division of marital property is within the sound discretion of the trial court. We review a trial court’s determinations of value and division of marital assets for abuse of discretion.” Cobane v. Cobane, 544 S.W.3d 672, 676 (Ky. App. 2018) (internal quotation marks and citations omitted).

In the first appeal, we affirmed the family court’s treatment of the account as marital property and affirmed its award solely to Anita. That became law of the case and we cannot reconsider it. Martin v. Frasure, 352 S.W.2d 817,

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818 (Ky. 1961) (“A final decision of this Court, whether right or wrong, is the law of the case and is conclusive of the questions therein resolved. It is binding upon the parties, the trial court, and the Court of Appeals. It may not be reconsidered by prosecuting an appeal from a judgment entered in conformity therewith.”).

The new issue we can consider is whether that award so affected the division of the remaining marital property as to make Randy’s receipt of his proportionate share unjust. We do not find the award had such an effect.

A family court is only required to divide marital property in just proportions. In Cobane, this Court confirmed, “a ‘just’ division is not necessarily an equal division.” 544 S.W.3d at 684 (citations omitted). We cannot rightly say the family court abused its discretion in entrusting Anita to effectively manage that account for the benefit of their child which, in effect, benefits Anita and Randy equally as well. The funds were meant for the child, not to be divided between his parents. Randy may have netted less of the marital estate than Anita as he calculates it. But we cannot agree that the family court’s division violated the requirement of KRS 403.190 to divide that estate in just proportions.

Finally, we reject out-of-hand Randy’s argument that sexism played a role in the family court’s fact finding of any kind, or in any of its decision making.

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CONCLUSION

For the foregoing reasons, the judgment of the Floyd Circuit Court, Family Division, is affirmed.

ALL CONCUR.

BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:

Lawrence R. Webster Anita M. Britton Pikeville, Kentucky Lexington, Kentucky