FAMILY LAW:  Marital property (division of lawsuit, workers comp award; "just proportions"; dissipation)
DATE RENDERED: 6/22/2007

Ex-Husband appealed TC ruling that required him to pay all the debt remaining on the marital residence, gave Ex-Wife half of any future award he may receive from his lawsuit against his former employer, and awarded maintenance to Ex-Wife. Although Ex-Husband made about three times Ex-Wife’s income during the marriage, he was fired from his employment after failing a mandatory drug test. TC found that this unemployment was not voluntary.

Debt on Marital Residence:

Because of the disparity in incomes between John and Barbara and in lieu of maintenance, TC initially ruled that Ex-Husband was responsible for making the mortgage payments on the marital residence during the pendency of the divorce action. However, Ex-Husband failed to make the mortgage payments as ordered, resulting in foreclosure on the mortgage prior to TC’s final hearing, which required Ex-Wife and the parties’ two children to find a new home. Following a sale of the property, there remained a deficiency balance of approximately $100,000.00. Though Ex-Husband failed to make the payments due to his firing, TC nonetheless found that Ex-Husband had sufficient income to maintain the mortgage payments until the final hearing. CA found no abuse of discretion in this decision.

Division of Potential Wrongful Termination Award:

Ex-Husband argued that awarding Wife half of his potential wrongful termination award would accord Ex-Wife a windfall. CA did not dispute the possibility that this might be true, but noted that any attempt by TC to divide the claims as a part of the marital estate was premature given the fact that there was no proof in the record as to the exact nature of the claims asserted by Ex-Husband and whether any damages awarded for those claims may properly be deemed marital property. CA noted that there is no Kentucky precedent as to the divisibility of speculative wrongful termination awards, but the treatment of other forms of future income in Kentucky, such as personal injury and workmen’s compensation claims, reveals that such awards have some components that are deemed marital property and some that are not. Thus, because Ex-Husband had not yet received any damage award pursuant to his wrongful termination claim, and further because of the speculative nature of any such award and its characterization, CA held that TC lacked a sufficient basis for deeming the entirety of his wrongful termination claims marital property. CA noted that if, at some point in the future, Ex-Husband is successful and receives a monetary judgment against his former employer, TC may revisit the matter for an appropriate determination at that time.

Award of Maintenance to Ex-Wife:

Ex-Husband claimed that TC should not have ordered him to pay maintenance to Ex-Wife because TC awarded her majority of marital property and she had employment income sufficient to provide for her own needs. CA disagreed with this argument, finding that Ex-Wife’s income and assets were insufficient to support the standard of living acquired during the marriage. However, CA held that TC failed to consider Ex-Husband’s ability to pay when it awarded maintenance to Ex-Wife, and reversed the maintenance order and remanded to TC for additional proceedings.

By Michelle Eisenmenger Mapes with

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