RENDERED: JANUARY 19, 2024; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0038-MR
THOMAS MAGINNIS APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT
v. HONORABLE GINA K. CALVERT, JUDGE
ACTION NO. 17-CI-500728
NINAMARY BUBA,
F/K/A NINAMARY B. MAGINNIS APPELLEE
AND
NO. 2022-CA-0903-MR
NINAMARY BUBA,
F/K/A NINAMARY B. MAGINNIS APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT
v. HONORABLE GINA K. CALVERT, JUDGE
ACTION NO. 17-CI-500728
THOMAS MAGINNIS APPELLEE
AND
NO. 2022-CA-1239-MR
THOMAS MAGINNIS APPELLANT
APPEAL FROM JEFFERSON FAMILY COURT
v. HONORABLE GINA K. CALVERT, JUDGE
ACTION NO. 17-CI-500728
NINAMARY BUBA,
F/K/A NINAMARY B. MAGINNIS APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: THOMPSON, CHIEF JUDGE; ECKERLE AND TAYLOR, JUDGES.
ECKERLE, JUDGE: These consolidated appeals arise from post-judgment orders
of the Jefferson Family Court involving matters relating to the dissolution of the
marriage between Thomas Maginnis (“Maginnis”) and Ninamary Buba f/k/a
Ninamary B. Maginnis (“Buba”). The first two appeals address matters that were
the subject of this Court’s order of remand in the prior appeal. Buba challenges the
Family Court’s calculation of marital goodwill attributable to the marital business.
Maginnis argues that the Family Court relied on improper methods to calculate his
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income for maintenance purposes and abused its discretion by failing to make the
reduction of his maintenance obligation retroactive. We find no error or abuse of
discretion in any of these matters.
In the third appeal, Maginnis challenges several rulings relating to
matters that arose while the prior appeal was pending. He argues that the Family
Court acted outside of its jurisdiction by allowing Buba to purchase the marital
residence and abused its discretion by denying his request for reimbursement of
mortgage payments he made prior to Buba’s refinancing of the residence. We
likewise find no error or abuse of discretion in these matters. Hence, we affirm in
all three appeals.
I. Factual and Procedural History
The underlying facts of this action were set forth in detail in the prior
appeal. For purposes of this appeal, the following facts are relevant. Maginnis and
Buba were married in 1986 and separated in 2017. In 1994, the parties started a
business called Chimney Master. Maginnis performed the manual labor as a
chimney sweep, and Buba performed some other tasks, such as bookkeeping. At
the time of trial, Chimney Master had one other employee.
When the matter came to a bench trial in 2019, one of the primary
issues concerned the valuation of Chimney Master and division of its marital
interest. In her pretrial disclosure, Buba identified Chris Johnson, a certified public
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accountant (“CPA”), to testify regarding his valuation of Chimney Master. Her
pretrial disclosure stated that Johnson would testify as to the financial standing and
earning potential of Chimney Master based on his analysis of the business and
financial records from 2015 and 2016, the business’s well-being, and current
earnings potential. Johnson was expected to testify that Chimney Master is a going
concern with excellent future income potential, but that he believed that not all
invoice amounts for those years are accounted for in the operating bank account,
totaling $45,000.
At trial, Johnson’s testimony was largely consistent with his written
report but differed in one important respect regarding the “enterprise value” as
opposed to the “total value” of Chimney Master. In Johnson’s written report, he
concluded Chimney Master’s “enterprise value” was $284,141, but in his
testimony, he concluded Chimney Master’s “total value” was $284,414. In
Johnson’s testimony and in his written report, he consistently stated that 70% of
Chimney Master’s value was personal goodwill (deemed “personal attributes” in
the report) and 30% was enterprise goodwill (deemed “enterprise attributes” in the
report). However, during his testimony he clarified that the 30% “enterprise
value” of Chimney Master calculated out to about $85,000 of the total value of
$284,414.
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In his pre-trial disclosure, Maginnis identified C.P.A. Melissa DeArk
as an expert concerning the business valuation of Chimney Masters. However, his
disclosure did not specify DeArk’s actual opinion. Consequently, when Maginnis
attempted to call DeArk at trial as a “rebuttal witness,” the Family Court refused to
allow her testimony.
In its post-trial order, the Family Court divided the marital property.
Based on Johnson’s $284,141 valuation of Chimney Master, the Family Court
awarded Chimney Master to Maginnis and ordered him to pay Buba half its value -
$142,070. The Family Court noted that “transferable goodwill” was a factor in
determining a business’s value, but it nonetheless did not make any findings
regarding Chimney Master’s goodwill. In its order denying Thomas’s CR1 59.05
motion, the Family Court stated that there was no evidence that a chimney-sweep
business generated any personal goodwill.
The Family Court further concluded that Buba was entitled to
maintenance, noting her disability and lack of other resources. In determining
Maginnis’s income, the Court took the average of the reported gross receipts on his
2015, 2016, and 2017 tax returns. The Family Court also pointed to the testimony
that Maginnis receives cash payments that he does not report, and that Chimney
1
Kentucky Rules of Civil Procedure.
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Master directly pays some of his expenses. Consequently, the Family Court found
Maginnis’s average annual income to be $160,308, against expenses of $2,075 per
month. Based on its other findings concerning Buba’s income and expenses, the
Family Court ordered Maginnis to pay Buba maintenance in the amount of $3,300
per month.
In addition, the Family Court calculated the marital interest in the
residence. The Court found that the residence had a total equity of $74,924,
subject to Maginnis’s non-marital interest of $42,886. Consequently, the Family
Court directed that the property be sold. Maginnis would be entitled to the first
$42,886 of the sale proceeds, and the parties would equally divide the remaining
sale proceeds. Finally, the Family Court directed Maginnis to pay maintenance to
Buba in the amount of $3,300 per month.
Maginnis appealed from the Family Court’s division of the marital
interest in Chimney Master. The prior panel of this Court affirmed the Family
Court’s exclusion of DeArk’s testimony. However, the panel reversed the Family
Court’s calculation of the marital value of Chimney Master, holding as follows:
Thomas’s [Maginnis’s] next argument is that the
family court’s valuation of Chimney Master is fatally
flawed because it ignores the analysis in Johnson’s report
and testimony that 30% of Chimney Master’s value was
due to enterprise goodwill, a marital asset, and 70% of
Chimney Master’s value was due to personal goodwill, a
nonmarital asset. Pursuant to Gaskill v. Robbins, 282
S.W.3d 306 (Ky. 2009), there is a distinction between
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enterprise goodwill, which is a marital asset and can be
divided in a dissolution, and personal goodwill, which is
nonmarital. We agree with Thomas that the judgment
must be vacated on this basis.
“The valuation of a business is complicated, often
speculative or assumptive, and at best subjective . . . .
Nonetheless, when a business is established during a
marriage and is thus marital property, the trial court is
required to fix a value and divide it between the
spouses.” Id. at 311 (paragraph break omitted). As it
pertains to this case, quoting approvingly from Yoon v.
Yoon, 711 N.E.2d 1265, 1268-70 (Ind. 1999) (citations
and quotation marks omitted), Gaskill instructed family
courts to allocate personal and enterprise goodwill when
valuing and dividing a business:
Goodwill in a professional practice
may be attributable to the business
enterprise itself by virtue of its existing
arrangements with suppliers, customers or
others, and its anticipated future customer
base due to factors attributable to the
business. It may also be attributable to the
individual owner’s personal skill, training or
reputation. This distinction is sometimes
reflected in the use of the term “enterprise
goodwill,” as opposed to “personal
goodwill.”
Enterprise goodwill is based on the
intangible, but generally marketable,
existence in a business of established
relations with employees, customers and
suppliers . . . . Enterprise goodwill is an
asset of the business and accordingly is
property that is divisible in a dissolution to
the extent that it inheres in the business,
independent of any single individual’s
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personal efforts and will outlast any person’s
involvement in the business . . . .
In contrast, the goodwill that depends
on the continued presence of a particular
individual is a personal asset, and any value
that attaches to a business as a result of this
“personal goodwill” represents nothing more
than the future earning capacity of the
individual and is not divisible . . . .
....
In sum, to the extent a business or
profession has goodwill (or has a value in
excess of its net assets) it is a factual issue to
what extent, if any, that goodwill is personal
to the owner or employee and to what extent
it is enterprise goodwill and therefore
divisible property.
Gaskill, 282 S.W.3d at 314.
Gaskill does not explicitly state that all business
valuations henceforth must contain an enterprise versus
personal goodwill analysis. Nonetheless, we reject
Ninamary’s [Buba’s] argument that the goodwill analysis
in Gaskill was not mandatory here. First, as Gaskill
recognized, Kentucky law had already recognized that
“goodwill is a factor to be considered in arriving at the
value of a business[.]” Id. at 312. Second, the family
court in Gaskill did not engage in an enterprise versus
personal goodwill analysis in dividing the medical
practice – indeed, there was no Kentucky law at the time
authorizing it to do so. Nonetheless, our Supreme Court
found the family court erred by failing to conduct that
analysis, explaining: “If the value of goodwill can be
reasonably determined at all, the amount of enterprise
goodwill, which is all that can be considered as marital
property, can be determined. Therefore the trial court
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erred in failing to consider personal and enterprise
goodwill.” Id. at 315 (paragraph break omitted). If it
was error to not conduct an analysis which was not
authorized under Kentucky law, it must be error to fail to
conduct the analysis after the law has been settled.
Ninamary [Buba] also argues that Gaskill is
inapplicable here because it dealt with valuing a
professional business, unlike Chimney Master.
Ninamary’s [Buba’s] argument places her in the unusual
position of asking us to affirm the family court’s decision
to ignore her own expert’s unrebutted testimony.
Unfortunately, the parties have not cited, nor have we
independently located, any binding authority definitively
addressing whether Gaskill applies to valuing
professional and nonprofessional business entities alike.
However, there is no explicit indication in Gaskill
that it was intended to only apply to valuing professional
businesses. Indeed, the Indiana Supreme Court’s
decision in Yoon, which our Supreme Court quoted at
length and deemed “compelling” repeatedly refers to
valuing “a business or practice” or “a self-employed
business or professional practice” or “a business or
profession[.]” Gaskill, 282 S.W.3d at 313-14 (quoting
Yoon, 711 N.E.2d at 1268-70). Moreover, the practical
effect of Ninamary’s [Buba’s] argument would be to
permit family courts to ignore goodwill testimony when
valuing nonprofessional businesses.
Rabe v. Rabe, No. 2011-CA-001972-MR, 2015
WL 3505232 (Ky. App. May 29, 2015) (unpublished),
discussed by the parties, is – in addition to being
unpublished and therefore not binding – materially
distinguishable. Unlike the case at hand, in Rabe “no
testimony was offered suggesting that any of the
business’s goodwill was personal.” Id. at *3. When
valuing a business, ignoring unrebutted goodwill
evidence is not the same as failing to sua sponte create
and assign personal goodwill to a business. In short,
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though the issue may more often arise when valuing a
professional entity, we conclude Gaskill also applies to
valuing nonprofessional entities.
We are left here with the question of whether the
family court erred by accepting Johnson’s overall
valuation while ignoring his component conclusion that
only thirty percent of its value is marital (enterprise
goodwill). Precedent has long held that a family court’s
valuation will be affirmed if it “reasonably approximated
the [entity’s] net value[,]” Clark v. Clark, 782 S.W.2d 56,
59 (Ky. App. 1990), and falls “within the range of the
competent testimony[,]” Roberts v. Roberts, 587 S.W.2d
281, 283 (Ky. App. 1979).
A finder of fact does not have to accept blindly the
valuation testimony and conclusions of an expert, even if
they are unrebutted. Cf. 31A AM. JUR. 2D Expert and
Opinion Evidence § 245 (2021). However, the finder of
fact must provide a legitimate explanation for rejecting
uncontradicted evidence or it will be reversed as acting in
an arbitrary and unsupported manner. Kroger Limited
Partnership I v. Boyle County Property Valuation
Administrator, 610 S.W.3d 332, 338 (Ky. App. 2020).
The family court incorrectly indicated there was no
goodwill evidence for it to consider and justified its
division based on this faulty understanding of the
evidence. The family court cannot be deemed to have
reasonably approximated the marital value of Chimney
Master when it failed to address unrebutted evidence of
the entity’s enterprise versus personal goodwill. Ignoring
Johnson’s goodwill conclusions led to a roughly
$200,000 increase in the marital portion of Chimney
Master’s value. Therefore, we vacate the family court’s
valuation of Chimney Master and remand with
instructions to address Johnson’s goodwill conclusions
by either: (1) accepting them and apportioning the value
of Chimney Master in accordance therewith, or (2)
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rejecting them, and providing a sufficient explanation for
so doing.
Maginnis v. Maginnis, No. 2019-CA-1090-MR, 2021 WL 2483877, at *5-7 (Ky.
App. Jun. 18, 2021) (unpublished), discretionary review denied (Jan. 11, 2022).
In light of its decision to vacate and remand the holding concerning
the division of marital property, the prior panel also directed the Family Court to
re-evaluate its maintenance award to Buba. Id. at *7. The Court further noted that
the Family Court failed to set out how it calculated Maginnis’s net income. Thus,
this Court held that “on remand the family court must ensure its findings are
supported by substantial evidence and its mathematical computations are
sufficiently explained.” Id. at *8.
On remand, the Family Court advised the parties that it would review
the trial recording to render its new decision. On June 29, 2022, the Family Court
entered its findings on the remanded issues. With respect to its calculation of
Chimney Master’s enterprise and personal goodwill, the Family Court found as
follows:
Ninamary [Buba] testified that she and Thomas
[Maginnis] started the business together. She testified
[that] she managed the business’s collection efforts,
handled the marketing, and performed other secretarial
functions throughout the marriage until she was
diagnosed with cancer. She acknowledged that Thomas
[Maginnis] handled the client relations, labor, and the
business’s accounting outside of collections. Thomas
[Maginnis] testified that Ninamary [Buba] was a stay-at-
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home mother and primarily raised the parties’ minor
children in the business’s early years. He acknowledged
she managed some of the collection accounts, and that
her contributions in the home allowed him to work full-
time outside the home.
Ninamary’s [Buba’s] expert witness, Chris
Johnson, CPA, testified he used a cash flow analysis
approach to value Chimney Masters at $284,414. He
extrapolated Chimney Master’s earning potential over ten
years, then discounted it for present value. He also stated
he reviewed the company’s 2017 draft tax return, which
reflected a higher gross income and supported his
calculation that the business would continue to increase
in revenue. He based the bulk of his valuation on the
company’s 2015 and 2016 tax returns, customer invoices,
bank statements, assets, and accounts receivable. He
noted that he found discrepancies in Chimney Master’s
total invoiced amount and total income reported, which
he testified reflected that Chimney Masters may not
report all of its cash payments. However, on cross
examination, he admitted that may be partially due to the
business’s inability to collect all outstanding invoiced
accounts. Thomas’ [Maginnis’s] testimony was that he is
not able to collect payment on all jobs performed. He
testified his valuation did not deduct the business’s
liabilities because they were so egregiously comingled
with personal debts.
Ultimately, he assigned a personal goodwill value
of seventy percent (70%) and an enterprise goodwill
value of thirty percent (30%). He attributed Thomas’s
[Maginnis’s] skills as a chimney sweep, his reputation in
the community, his health and age, to personal goodwill.
He attributed the business’s branding, its name, its repeat
clients, and its one employee to enterprise goodwill.
While Mr. Johnson’s testimony did not provide ample
examples, his report, which was admitted into evidence
listed several applicable categories and rated each
category on a scale of one to five in importance and zero
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to five in existence within the company, which
adequately supported his goodwill calculations. Thomas
[Maginnis] also testified to his skill level, the type of
work he performed, the impact gas fireplaces have taken
on his business, and the personal relationships he has
with the 1099 workers[2] he utilizes for bigger jobs.
Thomas’s [Maginnis’s] testimony supported Mr.
Johnson’s goodwill calculations.
Thus, the Court accepts Mr. Johnson’s valuation of
$284,414, and divides the marital portion of that
valuation, i.e., the enterprise goodwill of $85,324.3
Thomas [Maginnis] shall pay Ninamary [Buba] $42,662,
which is half of the business’s marital value. Thomas
[Maginnis] is awarded Chimney Masters.
With respect to the maintenance award, the Family Court noted that
Buba has been unable to work since 2017. Buba’s illness and actions taken by
Maginnis have harmed her ability to earn money as an attorney. She earns
approximately $479 per month in residual income from her legal practice, plus
$1,529 in Social Security Disability, for a total income of $2,008 per month.
Against this income, Buba reported reasonable expenses of $5,189, leaving a
shortfall of $3,182.
The Family Court next addressed the conflicting evidence concerning
Maginnis’s income, ultimately adopting the amount set forth on his 2017 tax return
2
A “1099 worker” refers to an independent contractor or other self-employed worker who
completes particular jobs or assignments but is not an employee of the company. The name
derives from IRS Form 1099, on which payments to such workers are reported.
3
Enterprise value was 30% of $284,414, which equals $85,324.
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- $107,200 per year or $8,933 per month. The Family Court also noted the
evidence that Chimney Master pays many of his personal expenses, leaving him
with monthly expenses of $2,075 per month. Thus, the Family Court found that
Maginnis has a surplus of $6,858 per month. Based on these calculations and the
adjusted allocation of marital property, the Family Court directed Maginnis to pay
maintenance to Buba in the amount of $3,100 per month. Both parties separately
appealed from this order. Additional facts will be set forth below as necessary.
II. Appeal No. 2022-CA-0903-MR
In her appeal, Buba challenges the Family Court’s calculation of the
enterprise and personal goodwill business attributable to Chimney Master.
Because this Court previously remanded the matter for additional findings on this
question, the Family Court must strictly follow the mandate given in that case.
Buckley v. Wilson, 177 S.W.3d 778, 781 (Ky. 2005). In a subsequent appeal
following a retrial after remand, this Court’s role is limited to whether the Trial
Court properly construed and applied the mandate. Inman v. Inman, 648 S.W.2d
847, 849 (Ky. 1982). We review that question de novo. See Univ. Med. Ctr., Inc.
v. Beglin, 432 S.W.3d 175, 178 (Ky. App. 2014). But where the Family Court has
complied with this Court’s mandate for remand, its factual findings will only be
disturbed if clearly erroneous. CR 52.01; Cherry v. Cherry, 634 S.W.2d 423, 425
(Ky. 1982).
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Buba complains that the Family Court’s allocation of goodwill was
not in accordance with the holding of Gaskill v. Robbins, supra. She maintains
that the Family Court’s 2019 judgment properly concluded that Chimney Master
has no personal goodwill. However, this Court’s prior opinion held otherwise,
specifically holding that the goodwill analysis in Gaskill is applicable to
professional and non-professional businesses alike. Right or wrong, that holding is
now law of the case, and is binding on all parties, the Family Court, and this Court
on subsequent appeal. Williamson v. Commonwealth, 767 S.W.2d 323, 325 (Ky.
1989) (citing Martin v. Frasure, 352 S.W.2d 817, 818 (Ky. 1961)). Consequently,
the Family Court could not simply ignore Johnson’s uncontested testimony about
the personal goodwill attributable to the value of Chimney Master.
The Family Court clearly complied with this Court’s directive on
remand. The Family Court noted Johnson’s uncontested testimony assigning 70%
of the business’s value to personal goodwill and 30% to enterprise goodwill. The
Family Court also pointed out that Johnson gave specific reasons for these
assignments – most notably Maginnis’s skills as a chimney sweep, his reputation in
the community, his health, and age. In compliance with this Court’s mandate, the
Family Court found no basis to reject his uncontested testimony. Although Buba
points to other testimony that may have afforded a basis to reach a different result,
we cannot say that the Family Court was compelled to reject Johnson’s testimony.
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Therefore, we will not disturb the Family Court’s judgment dividing the marital
equity of Chimney Master.
III. Appeal 2022-CA-1239-MR
In his first appeal, Maginnis argues that the Family Court abused its
discretion in awarding maintenance to Buba. We review the Family Court’s
determination of maintenance for abuse of discretion in accordance with the
standards set forth in KRS4 403.200. Stipp v. St. Charles, 291 S.W.3d 720, 727
(Ky. App. 2009). “The test for abuse of discretion is whether the trial judge’s
decision was arbitrary, unreasonable, unfair, or unsupported by sound legal
principles.” Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581
(Ky. 2000). More specifically, a court abuses the discretion afforded it when “(1)
its decision rests on an error of law . . . or a clearly erroneous factual finding, or (2)
its decision . . . cannot be located within the range of permissible decisions.”
Miller v. Eldridge, 146 S.W.3d 909, 915 n.11 (Ky. 2004) (cleaned up).
KRS 403.200 sets out a two-part test to award maintenance. First, the
Family Court must first find that the spouse seeking maintenance lacks sufficient
property, including marital property, to provide for her reasonable needs. KRS
403.200(1)(a). Second, the Family Court must find that the spouse is unable to
support herself through appropriate employment according to the standard of living
4
Kentucky Revised Statutes.
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established during the marriage. KRS 403.200(1)(b). Once that two-part
determination is made, the Trial Court considers various factors in setting the
“just” amount and duration of maintenance. KRS 403.200(2). Maginnis does not
challenge the Family Court’s findings under the first part of the statute.
Rather, Maginnis argues that the Family Court relied on improper
methods to calculate his income, thus reaching an incorrect conclusion regarding
his ability to meet his own needs while also meeting Buba’s needs. KRS
403.200(2)(f). Maginnis focuses on the Family Court’s reliance on the gross
receipts reported on his 2017 tax returns. He contends that the use of gross
receipts substantially overstates his actual income. Maginnis also argues that the
Family Court improperly considered Buba’s allegations that he collected
unreported cash payments from the business.
We find no error or abuse of discretion. In our prior opinion, this
Court directed the Family Court to explain how it calculated Maginnis’s income
for maintenance purposes. On remand, the Family Court noted that there was very
little definitive evidence on that issue. Maginnis does not dispute that Chimney
Master pays some of his personal expenses directly. The Family Court found
Maginnis’s testimony regarding the invoice discrepancies to be not credible. The
Family Court found that the gross receipts reported on the 2017 tax returns were
likely conservative, but still less than what Johnson estimated Maginnis’s earning
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potential to be. The Family Court further found that Maginnis has a surplus of
$6,858 per month in excess of his reasonable expenses, and he is therefore able to
pay maintenance to Buba. Under the circumstances, we cannot conclude that the
Family Court clearly erred by adopting that amount as Maginnis’s income.
Maginnis also contends that the Family Court abused its discretion
when it refused to modify maintenance retroactively to the date of the 2019 decree.
He asserts that Buba was unjustly enriched by the Family Court’s failure to make
the modified award retroactive. The Family Court has discretion to grant a
retroactive award of maintenance from the filing of the motion to the entry of
judgment. Mudd v. Mudd, 903 S.W.2d 533, 534 (Ky. App. 1995). However, the
maintenance statutes generally contemplate prospective relief. Pursley v. Pursley,
144 S.W.3d 820, 828-29 (Ky. 2004). Thus, retroactive relief is usually appropriate
only when circumstances delay a case from being submitted for decision. Mudd,
903 S.W.2d at 534 (citing Ullman v. Ullman, 302 S.W.2d 849, 850 (Ky. 1957)).
Such circumstances are not present in this case. In its prior opinion,
this Court did not hold that the Family Court abused its discretion by awarding
maintenance in the 2019 judgment. Rather, the prior panel merely held that the
award must be reconsidered in light of the more specific findings regarding
Maginnis’s income and the new division of marital property. The Family Court’s
findings in its 2022 judgment marginally reduced Buba’s maintenance award based
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on these new findings. But the Family Court’s determination was based mainly on
new or more detailed evidence concerning the parties’ income in 2019.
Furthermore, in its October 7, 2022, order denying Maginnis’s CR 59.05 motion,
the Family Court explained that the reduction in maintenance was caused by
Maginnis’s failure to produce accurate and reliable income documentation. We
conclude the Family Court did not abuse its discretion by declining to modify
maintenance retroactively. See Higbee v. Higbee, 89 S.W.3d 409, 410 (Ky. 2002).
IV. Appeal No. 2022-CA-0038-MR
Finally, Maginnis appeals from several post-judgment orders relating
to the marital residence. Some additional facts and procedural history are
necessary at this point. As discussed above, the Family Court’s 2019 judgment
calculated the equity in the residence, awarded Maginnis his non-marital interest,
directed the sale of the residence, and ordered that the proceeds of the sale be
divided accordingly. However, that sale never occurred.
After entry of the judgment on April 10, 2019, Buba filed a CR 59.05
motion asking the Family Court to vacate its ruling that the residence be sold,
stating that she “lacked the stamina, mental and emotional strength, or physical
ability to relocate.” The Family Court denied the motion on July 2, 2019. Neither
party appealed from this portion of the judgment.
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Nevertheless, the parties were unable to agree on how to list the
residence for sale. On August 1, 2019, Maginnis filed a motion to compel sale of
the residence. Buba responded that she was taking the necessary steps, but the
property required extensive repairs. Buba also filed a motion to hold Maginnis in
contempt because he deducted the mortgage payments from his maintenance
payments. Maginnis then requested a “clarification” of the April 10, 2019,
judgment concerning his responsibility for the mortgage payments. Maginnis also
requested orders directing Buba to reimburse him for mortgage payments made
and to cease any further repairs of the property. The parties continued to have
disputes over the choice of a real estate agent.
In an order entered on July 22, 2020, the Family Court held that
Maginnis was not entitled to deduct the mortgage payments from maintenance.
However, the Family Court directed that, rather than listing the property for sale,
Buba should be permitted to buy Maginnis’s interest. Therefore, the Court
directed Buba to start making the mortgage payments and gave her 90 days to seek
refinancing of the property. The Family Court’s order also stated that, if Buba did
not refinance the property within that time, the property shall be listed for sale.
The Family Court then passed the remaining motions for a later hearing.
On August 3, 2020, Buba filed a motion to alter, amend, or vacate the
July 22, 2020, order to allow her more time to refinance. The Family Court denied
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the motion on September 28, 2020. That order was designated as final and
appealable pursuant to CR 54.02.
Thereafter, the remaining motions came before the Family Court at a
hearing on October 1, 2020. Thereafter, on October 8, 2020, the Family Court
issued an order addressing those matters. In pertinent part, the Family Court first
held that, under the April 10, 2019, judgment, Maginnis remained responsible for
the mortgage payments until the property was sold. In addition, the Family Court
noted that, due to the COVID-19 pandemic stimulus, the mortgage payment was in
forbearance through much of 2020. Consequently, the Family Court concluded
that Maginnis was not entitled to deduct the mortgage payments from his
maintenance obligation and was not entitled to reimbursement of his mortgage
payments. The Family Court’s order did not address either refinancing or listing
the property for sale.
On October 13, 2020, Buba moved the Family Court for an additional
90 days to secure refinancing of the property. In the alternative, she requested an
order directing Maginnis to sign a quitclaim deed transferring the property to her.
On October 16, 2020, Maginnis filed motions under CR 59.05, 60.01, and 60.02 to
vacate the October 8, 2020, order with respect to the denial of his request for
reimbursement of the mortgage payments.
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On October 26, 2020, the Family Court entered an order directing
Maginnis to sign a quitclaim deed transferring the residence to Buba within seven
days. Maginnis signed the quitclaim deed on November 2, 2020, and Buba
recorded the deed on November 10. Buba refinanced the property near the end of
November 2020.
On December 8, 2021, the Family Court entered an Order denying
Maginnis’s October 16, 2020, motions. Among other things, the Family Court
concluded that Maginnis’s motion to compel the sale of the residence was moot
because the property had already been transferred and refinanced. The Family
Court also denied Maginnis’s motion to alter, amend, or vacate the October 8,
2020, order denying his request for reimbursement of mortgage payments. The
Family Court designated this order as final and appealable pursuant to CR 54.02.
Maginnis filed his notice of appeal from this order on January 5, 2022.
Maginnis argues that the Family Court acted outside its particular-
case jurisdiction when it altered the terms of its July 22, 2020, order giving Buba
90 days to obtain refinancing of the property. He correctly notes that the Family
Court denied Buba’s motion to allow her more time to refinance on September 28,
2020. Because CR 59.05 provides that a final judgment may be altered, amended,
or vacated only within ten days after entry of the final judgment, Maginnis
contends that the Family Court acted outside of its particular-case jurisdiction
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when it subsequently allowed her additional time to refinance and ordered him to
quitclaim the property. We disagree.
Even if the Family Court acted outside its particular-case jurisdiction,
that issue may be waived if not timely raised. Goodlett v. Brittain, 544 S.W.3d
656, 660 (Ky. App. 2018) (citing Commonwealth v. Steadman, 411 S.W.3d 717,
724-25 (Ky. 2013)). Here, Maginnis did not raise any objection to the refinancing
other than it was beyond the 90 days allowed in the July 22, 2022, order. He did
not appeal or seek a writ from the order requiring him to sign the quitclaim deed.
As noted above, the property was transferred to Buba in November of 2020.
Moreover, while the September 28, 2022, order included finality
language, it was not a final and appealable order. Specifically, neither the July 22,
2022, order nor the September 28, 2022, order conclusively determined the rights
of the parties in regard to that particular phase of the proceeding. Francis v.
Crounse Corp., 98 S.W.3d 62, 65 (Ky. App. 2002) (citing Hale v. Deaton, 528
S.W.2d 719 (Ky. 1975)). The July 22, 2022, order merely commanded the
property to be listed for sale if Buba failed to secure financing within the
prescribed time. The September 28, 2022, order denied Buba’s request for
additional time for refinancing. Under both orders, matters concerning that sale
were reserved for later adjudication. Consequently, the Family Court retained the
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authority to allow Buba to purchase the property as part of its continuing
jurisdiction to enforce its orders.
As directed in the prior judgments, the property was sold and the
proceeds divided. Maginnis does not ask this Court to vacate the transfer to Buba
and direct the Family Court to order a sale of the property. Morgan v. Getter, 441
S.W.3d 94, 98-99 (Ky. 2014). In addition, Maginnis does not claim that he did not
receive his allotted share of the sale proceeds. Thus, the matter is now moot.
Separately, Maginnis argues that the Family Court erred by denying
his motion for reimbursement of mortgage payments that he made between the
April 10, 2019, judgment and the July 22, 2022, order directing Buba to assume
the mortgage payments until the property was sold. The Family Court repeatedly
denied Maginnis’s motion for reimbursement, concluding that he waived the issue
by voluntarily making payments on the mortgage after the April 10, 2019,
judgment and by failing to raise the issue until nearly a year later. We agree with
Maginnis that he adequately reserved this issue in his October 16, 2020, motion.
However, this merely returns us to the underlying question – was
Maginnis entitled to reimbursement of mortgage payments made between the April
10, 2019, judgment and the July 22, 2020, order directing Buba to assume
responsibility for the payments? Maginnis argues that Buba has been unjustly
enriched by these payments. Unjust enrichment is an equitable doctrine that serves
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as a basis of restitution to prevent one person from keeping money or benefits
belonging to another. Haeberle v. St. Paul Fire & Marine Ins. Co., 769 S.W.2d
64, 67 (Ky. App. 1989) (citing Union Central Life Ins. Co. v. Glasscock, 270 Ky.
750, 110 S.W.2d 681 (1937)). “There are three elements that a party must meet in
order to prevail on a claim of unjust enrichment: (1) benefit conferred upon
defendant at plaintiff’s expense; (2) a resulting appreciation of benefit by
defendant; and (3) inequitable retention of benefit without payment for its value.”
Collins v. Kentucky Lottery Corp., 399 S.W.3d 449, 455 (Ky. App. 2012).
As the Family Court recognized in its October 8, 2020, order,
Maginnis did not show any compelling grounds for reimbursement. The mortgage
was originally in Maginnis’s sole name. Since the April 10, 2019, judgment did
not address assignment of the mortgage, he was ultimately responsible for the
payments until the property was sold. Maginnis unilaterally elected to withhold
the mortgage payments from Buba’s maintenance. But he did not elect to seek a
credit for those payments until well into 2020. Furthermore, both parties were
responsible for the delays in listing the property for sale in 2019, and the COVID-
19 pandemic created additional obstacles to listing the property. And as the
Family Court noted, the mortgage was in forbearance through much of 2020.
Arguably, Maginnis showed that his mortgage payments conferred a
benefit. But since the property was to be sold, that benefit accrued to both parties.
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Had the property been sold to a third party as planned, Maginnis would not have a
right to any additional proceeds because he never requested that relief. Therefore,
the fact that Buba ultimately obtained the benefit of those payments was not
inequitable. Under the circumstances, we conclude that the Family Court did not
abuse its discretion by denying his request for reimbursement or an offset for those
payments.
Finally, Maginnis raises several issues relating to the Family Court’s
rulings on his discovery motions. Buba responds that these discovery issues relate
to the issue of temporary maintenance, which is not appealable. Maginnis states
that he is not appealing the issue of temporary maintenance, but he does not
identify what those discovery matters concerned. Maginnis merely asserts that
“[h]e is merely challenging the propriety of the [Family Court’s] demonstratable
bias by allowing one party to conduct discovery while prohibiting the other party
from the same.”
The orders at issue specifically related to discovery of records
concerning Maginnis’s income and Buba’s ability to work. Furthermore, the
orders referenced Buba’s claim for pendente lite maintenance. This Court could
only grant potential relief on these discovery issues by remanding the temporary
maintenance issues for further proceedings. But as this Court’s motion panel
recognized, temporary maintenance orders are interlocutory in nature and generally
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are not subject to appeal. Atkisson v. Atkisson, 298 S.W.3d 858, 864 (Ky. App.
2009). Maginnis does not request any other relief, such as recusal of the Trial
Judge due to bias. Since the subject of the discovery orders is beyond the
jurisdiction of this Court, we decline to address the issue further.
V. Conclusion
Accordingly, we affirm the orders of the Jefferson Family Court in all
three appeals.
ALL CONCUR.
BRIEFS FOR APPELLANT/CROSS- BRIEFS FOR APPELLEE/CROSS-
APPELLEE: APPELLANT:
Allison S. Russell Robert Frederick Smith
Shanna R. Ballinger Louisville, Kentucky
Louisville, Kentucky
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