FAMILY LAW: BAILEY V. BAILEY (COA 8/17/2007)

BAILEY V. BAILEY
FAMILY LAW: Separation agreement; health insurance and medical; property
2006-CA-000533
PUBLISHED: REVERSING AND REMANDING
PANEL: NICKELL PRESIDING; COMBS, MOORE CONCUR
COUNTY: FAYETTE
DATE RENDERED: 8/17/2007

Ex-Wife appealed Order of trial court denying her claims against Ex-Husband for reimbursement of their children’s health insurance premiums, extraordinary medical expenses, and half the expenses for one adult child’s funeral, and monetary damages for Ex-Husband’s failure to convey marital residence to her. The parties’ Marital Settlement Agreement, entered six years earlier, provided that Ex-Husband would provide health insurance for the children, pay half of uncovered medical expenses, and that Ex-Husband would convey his interest in marital residence to Ex-Wife within ten days of entry of decree.

Enforcement of Marital Separation Agreement (MSA)

Wife first contended to CA that TC erred generally in applying principles of equity in its interpretation of the enforcement of the MSA, arguing that the MSA should have been interpreted as a contract. CA noted that, after an MSA is originally found to be not unconscionable and incorporated into a decree of dissolution, it may be subsequently modifiied only if a party can prove that there have been a change in circumstances that have rendered the MSA unconscionable (except for terms regarding the custody, support and visitation of children.) Without this subsequent showing of unconscionability, the terms of the MSA must be enforced as contract terms. Because Ex-Husband did not meet his burden of proof that the MSA terms had been rendered unconscionable, CA held that TC clearly erred when it applied principles of equity in interpreting enforcement of the MSA.

Health Insurance Premiums

Ex-Wife next contended to CA that TC erred by finding she failed to present sufficient proof that Ex-Husband had not maintained health insurance on children as ordered by MSA, though she introduced bills at the hearing that indicated the children did not have health insurance coverage at the time of service. CA held that it was clearly erroneous for TC to summarily state that Ex-Wife did not provide sufficient evidence on the issue, and that CA believed she had provided proper evidence relating to her payment of at least a portion of the health insurance premiums. TC was reversed on this issue and it was remanded.

Medical Bills

CA held that TC clearly erred in finding that Ex-Wife provided insufficient proof that she had submitted medical bills to Ex-Husband, citing to her testimony on this issue, and CA also found that TC erred in applying principles of equity in denying Ex-Wife’s claim due to the amount of time that had passed since the bills were incurred. TC was reversed on this issue.

Relocation Expenses

Ex-Wife contended that TC erred in denying her claim for monetary damages against Ex-Husband due to Ex-Husband’s failure to execute a quitclaim deed within enough time that Ex-Wife could receive a sizeable relocation reimbursement from her employer. Ex-Husband was to execute the deed within ten days of entry of the decree, but did not do so for four years. CA disagreed with TC’s finding that Ex-Husband’s provision of the deed after four years somehow cured the breach. Rather, CA held that the breach had occurred, and Ex-Wife’s delay in enforcement of the MSA requiring Ex-Husband to execute the deed was not a waiver of her contractual right to make a claim for damages resulting from the breach. CA reversed on this issue and remanded to TC for findings as to whether Ex-Husband’s breach was sufficient to entitle Ex-Wife to reimbursement for the relocation expenses.

Funeral Contract

Finally, TC ruled that Ex-Wife’s claim for reimbursement of half the costs of the funeral costs for the parties’ child was barred by Ex-Husband’s defense of res judicata, because a similar complaint had been filed and dismissed previously in another court. CA found that Ex-Husband raised the defense of lack of subject matter jurisdiction, but not res judicata, and that it appeared TC raised the res judicata defense sua sponte. As res judicata is an affirmative defense, it can be waived, and CA held that Ex-Husband’s failure to affirmatively plead the defense was fatal to TC’s ruling. Thus, this issue, too, was reversed and remanded to TC for further findings.

As digested by Michelle Eisenmenger Mapes, Diana L. Skaggs + Associates

 

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