Lobbying Affiliate: MML&K Government Solutions

In Family Law, Technicalities Matter…. Except When They Don’t

March 17, 2016
McBrayer Newsletter, March 2016

Family law is largely a creature of state law, yet it is rare for major family law cases to emerge from the Kentucky Supreme Court. In February, however, it happened not just once, but twice, with the court issuing Davis v. Davis and A.H. v. W.R.L. and M.L. on February 16th. While one is a reminder that details matter, the other could have lasting impact on adoptions and divorce for decades to come.

Davis v. Davis

The lesson here – and it was an expensive one for Ms. Davis – is that “little things” and “technicalities” matter.  As part of a property settlement agreement at the end of their marriage in 2003, Matthew Davis agreed to keep Linda Davis, his soon-to-be ex-wife, as the beneficiary of a $100,000 life insurance policy on himself. While this may seem unwise at first blush, it is common practice to secure the ongoing obligations of a divorcing party.  For example, the ex-spouse of a police officer may want to secure the officer’s child support obligation with a life insurance policy, given the dangerous nature of the officer’s work. 

For whatever reason, however, the property settlement agreement was not incorporated into the final decree of dissolution. Kentucky law states that, “[u]nless the separation agreement provides to the contrary, its terms shall be set forth verbatim or incorporated by reference in the decree of dissolution or legal separation and the parties shall be ordered to perform them…”[1] In other words, the Davis’s property settlement agreement, by law, is not part of the divorce decree. This oversight wasn’t noticed until Matthew Davis died in 2011 and Linda learned that he had changed the beneficiary on his life insurance policy to his new wife, Karen Davis. When the issue wound up in court, both the trial and appellate courts agreed the property settlement agreement is unenforceable as such under the decree of dissolution. The appellate court specifically stated that the only right to make a separation agreement stems from KRS 403.180, and failure to meet the specifications of that statute rendered the agreement thoroughly unenforceable.

The Kentucky Supreme Court agreed with the lower courts that the agreement failed to meet the qualifications of KRS 403.180(4), and “[t]herefore, the Agreement cannot be enforced as a judgment by the family court.”[2] The analysis doesn’t end there, however. The court went on to suggest that, even though the settlement agreement is unenforceable as part of the divorce decree (which is a final judgment), Linda Davis is not precluded from trying to enforce the agreement as a standard contract or pursuing equitable remedies such as unjust enrichment. The court reversed the holding of the appellate court and remanded the case to the trial court for proceedings on contract and equitable relief claims. Without a separation agreement to be interpreted by the family court, however, these parties are likely to end up in federal court.  The insurance company will want to initiate a federal interpleader action, pay the proceeds into court, and let Linda and Kim argue fight it out.  I litigated a similar case just last year. 

The key takeaway from this case is that it’s important to have an attorney who knows all of these rules/requirements and will comply with them.  Incorporation of the settlement agreement into the divorce decree is and should be a standard practice of competent representation, and Ms. Davis found that out the hard way. This case is also a good reminder that the Uniform Marriage & Divorce Act (adopted by Kentucky in KRS Chapter 403) really is its own world.  We’re constantly reminded that it is an abrogation of the common law, and that seems particularly true here – you’re not going to get any help from the general case law or get anything for free. 

A.H. v. W.R.L. and M.L.

We often say that the family doesn’t end in divorce.  Just because the parents are separating, that doesn’t mean either parent is separating from the child.  Kentucky’s appellate courts have issued a few opinions in the last six or seven years that expand that concept to apply to unmarried couples, and it comports with the idea that children’s relationship with the people they look to as parents doesn’t end when those parents separate, regardless of what legal format that separation takes. It’s a more nuanced approach that can require, at times, some creative legal problem-solving, as in the case of A.H. v. W.R.L. and M.L.

Amy and Melissa began a relationship in 2005 and decided to have a child together. Melissa became pregnant through artificial insemination in 2006, giving birth to a daughter that year. They separated in 2011, and Melissa married Wesley in 2012, who then filed for a stepparent adoption in 2014. Amy filed a petition for shared custody that year and moved to intervene in the adoption case. The trial court granted Amy’s motion and then dismissed the adoption action. The Court of Appeals reversed the trial court, holding that Amy did not have standing to seek adoption, and remanded the case to reinstate Wesley’s adoption proceeding.

The KY Supreme Court, rather than wade directly into issues of standing (at least, not facially) or same-sex relationships, predicated their decision to reverse the Court of Appeals on basic principles of the civil rules. As the court stated, “[t]his is a case about people and their ability to participate in a lawsuit in which the outcome may adversely affect their interest.”[3] The court purported to bypass the question of standing altogether, instead focusing on the language of Civil Rule 24.01, which deals with intervention of right in civil cases. The court found that the rule allows for intervention in a case when a party claims a “cognizable legal interest,” conveniently allowing it to sidestep directly addressing the question of whether Amy had standing in the adoption case.

The result here is not unwelcome – the court takes great pains to protect Amy’s interests as a parent, acknowledging that parenthood is more than just legal standing. To do so, however, the Kentucky Supreme Court had to nimbly dodge KRS 199.480, which expressly states the parties to an adoption action. The implications of this shift are not immediately clear, and it could serve to muddy the legal waters surrounding adoption and standing for a time. Still, rather than staying slavishly adherent to the letter of the statute, the court’s open acknowledgment that families and parenthood come in all shapes and sizes is a welcome philosophical direction and a boon to all parents, married or unmarried. That just leaves pesky questions of actual standing, notice, service and other aspects of adoption open for further development.

[1] KRS 403.180(4)(a)

[2] Davis v. Davis, ___ S.W. 3d ___, 2014-SC-000751-DG (Ky. 2016) at 4.

[3] A.H. v. W.R.L. and M.L., ___ S.W.3d___, 2015-SC-000247-DGE (Ky. 2016) at 2.

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