JOHNNY MACK HUMPHREY v. RACHEL LOUISE HUMPHREY

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Court of Appeals of Kentucky.

JOHNNY MACK HUMPHREY v. RACHEL LOUISE HUMPHREY

NO. 2011–CA–002312–MR

Decided: May 24, 2013

BEFORE:  DIXON, THOMPSON AND VANMETER, JUDGES. BRIEFS FOR APPELLANT:  Tasha K. Scott Florence, Kentucky BRIEF FOR APPELLEE:  Shannon Devine Tomlinson Williamstown, Kentucky

Johnny Mack Humphrey appeals from the findings of fact and conclusions of law entered by the Boone Family Court in this dissolution of marriage action.   He argues that the family court abused its discretion in denying his motion for a continuance and its characterization and distribution of the parties' assets.

Johnny and Rachel Louise Humphrey were married in Bristol, England, on February 14, 2003.   The couple resided in Massachusetts until they separated on March 1, 2009, when Rachel moved to Kentucky.   Johnny remained in Massachusetts, and later moved to Georgia.   Johnny, an engineer, is employed by Cargill and earns approximately $131,000 annually.   Rachel, also an engineer, is employed by General Cable and earns $102,000 annually.

Rachel filed a petition for dissolution of marriage in the Boone Family Court on December 1, 2009.   A trial was held on November 7, 2011.   At the commencement of the trial, Johnny summarily dismissed his attorney and moved for a continuance.   The motion was denied and the trial proceeded.   The family court entered findings of fact and conclusions of law dividing the parties' property, which consisted mainly of bank accounts.   This appeal followed.

Johnny argues that the trial court abused its discretion in denying his motion for a continuance.   With respect to the denial of a continuance, our standard of review is whether the trial court abused its discretion.  Guffey v. Guffey, 323 S.W.3d 369, 371 (Ky.App.2010) (internal citation omitted).

A review of the procedural history of this case indicates that Johnny failed to respond to discovery requests, failed to comply with pretrial disclosure requirements, and discharged his attorney immediately before the trial without explanation.

After Rachel filed her petition for dissolution of marriage on December 1, 2009, three unsuccessful attempts were made to serve Johnny with the petition at his Massachusetts address.   A warning order attorney, Richard Scott, was eventually appointed.   He succeeded in contacting Johnny, who then retained him as his counsel.   Although Johnny claims that the case languished for the ten months between the filing of the petition and the appointment of the warning order attorney, the record indicates that Scott was able to contact Johnny immediately at the same address that had been used in the previous attempts to serve the petition.   Moreover, Johnny's answer, filed on November 18, 2010, also provided as his current address the same address that had been used in the prior unsuccessful attempts to serve the petition.

On December 27, 2010, Rachel propounded interrogatories and request for production of documents on Johnny, who did not respond.   The parties were ordered to mediation, but they failed to reach an agreement.   A case management conference was scheduled and an order was entered requiring the completion of preliminary verified financial disclosure statements to be exchanged between the parties.   Johnny attended the conference but did not provide the disclosures.   He also did not produce the final verified disclosures or exhibits as ordered by the court.   He also failed to comply with a subpoena duces tecum which his attorney agreed to accept on his client's behalf.

On November 7, 2011, the scheduled trial date, Johnny appeared in court with his attorney.   Rachel's counsel stated that no preliminary financial disclosures, response to interrogatories and request for production of documents, exhibit list, final verified financial disclosures or any of the documents requested by the subpoena duces tecum had been provided by Johnny.   Johnny's counsel stated that Johnny had just handed him the final verified disclosure statement, and he had not reviewed it.   Rachel's counsel asked the court to proceed on the basis of the documents her client produced.   The trial court observed that Johnny had not done what he was ordered to do and stated he would “have to bear the burden of that.”   Johnny's counsel asked for a break to speak privately with his client.   When they returned to the courtroom, his counsel asked to withdraw because he had been fired by Johnny.   He requested a continuance on Johnny's behalf that was denied.   He was then permitted to leave.   Johnny asked the trial court for a continuance that was also denied, and the trial proceeded.

In determining when the denial of a continuance constitutes an abuse of discretion, we consider the following factors:

1) length of delay;

2) previous continuances;

3) inconvenience to litigants, witnesses, counsel and the court;

4) whether the delay is purposeful or is caused by the accused;

5) availability of other competent counsel;

6) complexity of the case;  and

7) whether denying the continuance will lead to identifiable prejudice.

Id.

Applying these factors, Johnny argues as follows:  (1) there was no evidence that a lengthy delay would have resulted if the continuance had been granted;  (2) the case “ambled along” with no evidence of any reason for hurry or any prior requests for a continuance;  (3) he was the individual who would be most inconvenienced by a continuance because he lives hundreds of miles away in Georgia;  (4) it was clear that he provided discovery documentation to his attorney, but that Rachel's counsel never received it, and that consequently one could surmise that he parted ways with his attorney for this reason;  (5) that he went to the courthouse on the day of trial believing he was going to be represented by counsel, but did not have an attorney when the trial was called;  (6) he was entitled to representation because the tracing of funds in this case was complex and difficult to present at trial;  and (6) there is no evidence to suggest that anyone would have suffered any prejudice if a continuance had been granted, whereas he suffered considerable prejudice by having to represent himself at trial.

Granting a continuance would have caused inconvenience to Rachel, her counsel, and to the court, who were all prepared to proceed on the day of trial.   Johnny was given ample notice of the trial date (the order scheduling the trial was entered on August 15, 2011, three months earlier), yet he chose not to make the appropriate disclosures, to retain other counsel, or make a motion to reschedule the trial date.   Much of the delay of which he complains was caused by his own dilatory tactics and outright refusal to respond to court orders or discovery requests.   Although he claimed at trial that he provided his attorney with all necessary discovery documents, he does not dispute his attorney's statement to the court that Johnny had provided him with the final verified disclosure statement with some exhibits immediately prior to the trial.   There is no indication that Johnny's counsel was incompetent or withheld documents from Rachel's counsel.   Admittedly, Johnny may have been prejudiced by the fact that he was unrepresented at trial, but the situation was largely one of his own making.   Based on his prior behavior, there is no indication that Johnny would have retained other counsel and provided the necessary disclosures in a timely manner if a continuance had been granted.   Under these circumstances, the trial court did not abuse its discretion in refusing to grant a continuance.

When disposing of property in a dissolution of marriage action, the trial court is required by Kentucky Revised Statutes (KRS) 403.190 to follow a three-step process:  (1) the trial court first characterizes each item of property as marital or nonmarital;  (2) the trial court then assigns each party's nonmarital property to that party;  and (3) the trial court equitably divides the marital property between the parties.   See Travis v. Travis, 59 S.W.3d 904, 908–909 (Ky.2001) (citations and footnotes omitted).

KRS 403.190(3) creates a presumption that all property acquired after the marriage is marital property.   See Sexton v. Sexton, 125 S.W.3d 258, 266 (Ky.2004) (citations and quotation marks omitted).  “A party claiming that property acquired during the marriage is other than marital property, bears the burden of proof.”  Terwilliger v. Terwilliger, 64 S.W.3d 816, 820 (Ky.2002).

On appeal, we review the trial court's findings of fact only to determine if they are clearly erroneous.  CR 52.01.  “A factual finding is not clearly erroneous if it is supported by substantial evidence.”  Owens–Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky.1998).   The trial court's division of the marital property will not be disturbed except for an abuse of discretion.  Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky.2001).

Each party has a TD Ameritrade Roth IRA;  Rachel's contained approximately $8,000 and Johnny's contained $11,000.   The trial court found that the funds in both accounts had been acquired during the course of the marriage and deemed them to be marital property.   It ordered the accounts be divided equally between the parties.   Johnny argues that his IRA existed prior to the marriage and contained $3,000 in nonmarital funds on the date of the marriage.   At trial, Johnny was asked by Rachel's counsel if he had any proof with him that he had started the account with $3,000.   He replied that he did not.   Although the Kentucky Supreme Court has emphasized that tracing a nonmarital asset “to a mathematical certainty is not always possible,” it has distinguished between the standards applied to “skilled business persons who maintain comprehensive records of their financial affairs,” and “persons of lesser business skill or persons who are imprecise in their record-keeping abilities.”  Terwilliger, 64 S.W.3d at 820 (citing Chenault v. Chenault, 799 S.W.2d 57, 578 (Ky.1990)).   Johnny is a well-educated professional who might reasonably be expected to produce some minimal documentary evidence regarding the origins of a substantial investment account.   The trial court was not obliged to accept his unsupported assertion regarding the nonmarital portion of the account.

A family court operating as finder of fact has extremely broad discretion with respect to testimony presented, and may choose to believe or disbelieve any part of it.   A family court is entitled to make its own decisions regarding the demeanor and truthfulness of witnesses, and a reviewing court is not permitted to substitute its judgment for that of the family court, unless its findings are clearly erroneous.

Bailey v. Bailey, 231 S.W.3d 793, 796 (Ky.App.2007).   The trial court did not abuse its discretion in ordering the assets in the account to be equally divided.

Next, Johnny argues that the trial court erred in failing to grant him his nonmarital interest in a Pentagon federal account.   Johnny testified that there was a balance in the account in excess of $20,000 at the time of the parties' marriage.   The balance in the account at the time of trial was $14,000.   The trial court divided this amount equally between the parties.   Rachel conceded that there were funds in the account at the time of their marriage, but that she was not aware of the actual balance.   Johnny produced a statement showing that a few weeks prior to their wedding, the balance in the account was $24,000.   At that time, however, he held the account jointly with his father.   Johnny argues that he should have been awarded the full $14,000, because his nonmarital share exceeded that amount.   Johnny produced no evidence to show whether his father remained a joint holder of the account and what impact this had on the funds in the account.   Johnny simply did not provide sufficient or accurate information for the court to base a finding regarding the nonmarital portion of the account.  Kleet v. Kleet, 264 S.W.3d 610, 615 (Ky.App.2007).   The trial court did not abuse its discretion in dividing the account equally.

Next, he argues that Rachel “financially abandoned” the marriage many months before the filing of the petition for dissolution, taking her funds and depositing them in accounts that were solely in her name, leaving him to resolve the joint obligations of the parties.   He claims that she accumulated over $263,000 in marital assets, including bank accounts, a brokerage account, and a vehicle.   He argues that the court erroneously awarded all of these marital assets to Rachel, even though they were acquired during the course of the marriage.   He contends that this error was caused by the trial court's finding that the parties physically and financially separated on March 1, 2009, and treated property acquired after that date as nonmarital.   Under KRS 403.190(3), property subject to division in a dissolution action retains its marital status until the entry of an actual decree of legal separation.   Stallings v. Stallings, 606 S.W.2d 163, 164 (Ky.1980).   The trial court expressly relied upon subsection (1)(a) of the same statute, which states as follows:

(1) In a proceeding for dissolution of the marriage or for legal separation, or in a proceeding for disposition of property following dissolution of the marriage by a court which lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, the court shall assign each spouse's property to him.   It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors including:

(a) Contribution of each spouse to acquisition of the marital property, including contribution of a spouse as homemaker[.]

KRS 403.190.

Because the assets of this marriage consisted mainly of bank accounts, the trial court's decision to treat contributions made after the physical and financial separation as essentially nonmarital assets was not clearly erroneous, because it most accurately reflected the contribution of that spouse to the acquisition of the property.   Under the unique circumstances of this case, the trial court's approach furthered the equitable goal that the division of the marital property should reflect the contribution of each spouse.

Johnny argues that this case should be remanded for a new trial, because the trial court failed to award either party the General Cable and BP stock and failed to specify the amount of Rachel's nonmarital interest in her General Cable 401K. Johnny did not bring this alleged omission to the trial court's attention after the entry of the judgment in the form of a motion for additional findings under CR 52.04.   That rule requires parties to move for additional findings of fact when the trial court failed to make essential findings.   Failure to move for additional findings constitutes a waiver of error.  Cherry v. Cherry, 634 S.W.2d 423, 425 (Ky.1982).

Rachel was awarded her engagement ring and the “balloon picture,” which she testified that she received from her parents.   Johnny argues that Rachel's testimony that she last saw the ring and picture when she moved from the marital residence indicates that she had abandoned these items and they should to be awarded to him as the possessor.   He provides no legal support for this argument.   The trial court's decision to award these items to Rachel did not constitute an abuse of discretion.

Johnny argues that the trial court awarded Rachel half of the balance in a Covidien account without specifying that it was to be half of the balance remaining after the payment of a substantial tax burden related to this asset.   He testified that the account had to be “cashed out” when he left his employment with Covidien, and that as a result he was solely subject to the resulting taxes.   He further argues that the court erred in arbitrarily accepting the date of division of a TD Waterhouse account as May 2010, when in the case of the other assets, the court chose either the date of separation or the date of decree.   He contends that the court unfairly allowed Rachel to benefit by dividing the account on the day she cashed out one half of the balance.   He provides no reference to the record regarding these accounts.  “It is not the job of the appellate courts to scour the record in support of an appellant['s] argument.”  Dennis v. Fulkerson, 343 S.W.3d 633, 637 (Ky.App.2011).   As to his testimony regarding the taxes on the Covidien account, we reiterate that “[a] family court operating as finder of fact has extremely broad discretion with respect to testimony presented, and may choose to believe or disbelieve any part of it.”  Bailey, 231 S.W.3d at 796.

For the foregoing reasons, the findings of fact and conclusions of law incorporated into the decree of dissolution entered by the Boone Family Court are affirmed.

ALL CONCUR.

THOMPSON, JUDGE: