Chenault v. Chenault

portions other afford- record shall be confidentiality required ed the under SCR BAR KENTUCKY ASSOCIATION, Movant, 3.150 unless directed this otherwise Court.

v. Respondent pay 4. shall the costs of SUGGS, Stanley Respondent. C. these proceedings. No. 90-SC-307-KB. suggested respondent 5. It is also Supreme Kentucky. Court of guidance support seek Law- from the yers Helping Lawyers division of the Ken- 6, Sept. 1990. tucky Bar Association. ORDER OF TEMPORARY SUSPENSION All concur. 3.165, Pursuant to SCR we have con- 6, September Entered 1990. Inquiry sidered Petition of the Tribu- (s) Stephens Robert F. nal, documents, supporting and con- Chief Justice clude that reasonable cause exists to be- respondent misappropriated lieve the has

funds he held for another to his own use funds, improperly

has otherwise dealt with physical

and that he does not have the

mental practice fitness to continue to law.

We further conclude that reasonable cause

exists to believe unless an order of issued, temporary suspension is a real and CHENAULT, Appellant, E. present danger public. exists to the v. IT IS THEREFORE ORDERED that re- CHENAULT, Appellee. William C. spondent, Stanley Suggs, C. he is hereby temporarily suspended from the No. 89-SC-185-DG. practice of law this Commonwealth until Supreme Kentucky.

further order of this Court. 18, Oct. 1990.

IT IS FURTHER ORDERED THAT: As Amended Nov. 1990. (20) 1. twenty days Within from the entry date suspension, of this order of

respondent notify shall all writing clients in inability represent his to continue to

them and photostat copies shall furnish

the letters of notice Director of the

Kentucky Bar Association. temporary suspension respon-

2. The entry

dent shall be effective with the

this order and shall continue in until effect disciplinary as the merits of this

proceeding finally can be determined accordance with SCR 3.370 or respondent

SCR 3.480 or until such time as good why

can show cause the order of

temporary suspension should be amended

or dissolved. proceeding

3. Such of this as

contained this order shall be deemed a public All

matter record at this time. Woodward, Joseph L. Leni-

William F. han, Fulton, Woodward, Hobson & Louis- ville, appellant. Louisville,

Joseph Mobley, appel- V. lee.

LAMBERT, Justice. granted discretionary This review Court Appeals of the decision imposed stringent requirements Chenault, Ruby E. upon appellant, who sought proceeds of nonmari- to “trace” time the tal at the effect, Appeals the Court dissolved. dissolution, party held at the time of undertaking prove char- nonmarital character of these assets. The acter of must do so documenta- said: ry evidence and with near mathematical “The below established that precision. We believe such death, at the time of her husband’s beyond the 403.190 and mandate of KRS appellant bequeathed a house worth Hence, contrary policy. public $14,000 to sound approximately and other cash $21,000. reverse. and securities worth over Addi- tionally, she inherited 27 shares of stock Ruby married in 1971. At and William in Nevertheless, Company. Standard Oil marriage the time of their both were in there inability part was a total on the early 50’s William was the father her counsel to trace the course of either seven-year-old daughter of a who lived with the cash or the subsequent stock to 1966. During 15-year him. the duration of their Although appellant the testified that she marriage, Ruby discharged the normal purchased CD’s with the duties of homemaker and mother and after tinued roll them during to over the dura- daughter William’s college, went to worked marriage, tion of the she was unable low-wage position in a at Speed the Art testimony, document such either as to Museum in During Louisville. the mar- purchase specific dates of amounts riage, William worked as a construction involved.... worker and after his retirement from that “Similarly, although appellant the tes- position, worked a security guard as at the tified that she inherited 27 shares of Speed Museum. company standard oil at the time of her appeal, On this the principal and decisive death, husband’s there were no stock cer- issue is Appeals, whether the Court of af- tificates by or other records introduced firming court, the trial holding erred in her counsel to substantiate the claim that Ruby present failed to sufficient evi- she continued to hold them from 1966 to liquid dence that certain assets should have 1971 and from 1971 until 1986. On the been to her as proper- contrary, only the exhibits introduced on ty. Ruby contends that brought she to the this issue were those introduced the marriage $21,000 cash, appellee, at least in showing a home stock certificates is- $14,000, appellant valued the and 27 sued to Oil shares stock Standard Company trial, beginning Sep- Standard Oil of of California California. At she continuing presented August tember convincing evidence that she evidence, together 1980. Such with owned her home to the appellant’s own that she that the home was sold proceeds and the during had sold a Likewise, realized marriage. times, supports her stock at different presented convincing evidence that at a finding trial court’s that such $10,000 minimum she had year in cash one must be considered marital. And al- Treasury and that a though the house she inherited from her $10,000 Note for came due and rein- first husband was not sold until 1974— marriage. Finally, Ruby vested years some three after the were testified that she inherited shares of correctly married —the trial court deter- stock Standard Oil of and that California mined that there was no of either by virtue of stock dividends and stock payment subsequent the down or the splits, grew signifi- this number of shares mortgage payments paid to her her cantly marriage. before and daughter and son-in-law.” Despite the sale of some of this stock dur- ing marriage, a fact fact, which William findings accuracy In its admits, Ruby continued to own 50 such disputed by party, which is not either Regardless shares at the time of trial. trial court found that in addition to the 50 evidence, foregoing Ap- stock, the Court of shares of Standard Oil of California peals affirmed the trial Ruby possession court’s determina- of cash and was then $91,329. Nevertheless, tion that had failed to establish the securities valued at inability any specific which were owned virtue of her to trace assets separation, trial at the time of these assets to the satisfaction of the court, it had no trial court concluded that it was determined that all of such power assign any property to Mrs. assets were marital property. The Brunson as nonmarital 403.190(2)(b), prop KRS supports trial court’s conclu- record defined, part, erty is as “all trace the that Mrs. Brunson failed to sion spouse subsequent brought the mar- which she into assets (b) marriage except: Property ac ... riage assets owned at the time quired exchange property acquired separation.” Id. at 176. exchange before the or in Daniels, that non- In the Court determined property acquired by gift, bequest, devise sufficiently was traced property marital (3) of 403.- descent.” Subsection KRS assignment trial court’s affirmed the presumption property that all 190.creates a The Court said: to the owner. acquired during marital is that properly court determined “The trial permits presumption but this money which he had property Harvey had traced by proof be that overcome purchase of (2) use in the acquired as in subsection inherited to its was and, involving except this Court for one trade statute. Numerous decisions of stock purchase of and the Court of have construed the sale of one stock and statutory provision Harvey kept and from these de had intact this another in emerged concept bought of from cisions there has which he had the securities “tracing” although term is nowhere Id. at 706. his cash inheritances.” Among the more found the statute. requirements for non- precise While such point significant decisions on this are Tur appropriate asset-tracing may be Ky.App., ley Turley, v. 562 S.W.2d persons who maintain for skilled business (1978), Brunson, Ky.App., 569 Brunson v. financial af- records of their comprehensive Allen, (1978), Ky.App., Allen v. S.W.2d per- fairs, may appropriate for not be Daniels, (1979),Daniels v. 584 S.W.2d 599 persons skills or sons of lesser business (1987), Sharp Ky.App., 726 S.W.2d 705 record-keeping imprecise their who are (1975). Sharp, Ky., 516 S.W.2d 875 v. compounded in a problem This is abilities. of the fore cursory Even a review re- spouse is the marital union where one requirement a going decisions reveals is detail and the other corder of financial precision process in the considerable such matters. essentially indifferent tracing property if the claimed to be non- Moreover, requirement may pro- such a instance, For marital is to be so found. disharmony by placing pre- a mote marital said: Turley, sepa- the Court mium on the careful maintenance any prop- rate estates. Turley “Mr. failed to show that erty at the time owned Allen, supra, the Court of v. Allen of his separation use was its earli- from Appeals retreated somewhat proceeds from inheritance or from the that “the er decisions and held of the automobile and furniture the sale fulfilled, at least as tracing should marriage. Be- him to the owned concerned, when it is money is far as the inheritance or cause he did not trace deposit- funds were that nonmarital shown disposition proceeds, any, if from marital funds and commingled with ed and furniture, of the automobile of the account never that the balance to award him the error for the trial court amount of the nonmari- reduced below the at 668. of such items.” Id. value at 600. The view deposited.” Id. tal funds Brunson, the Court said: Likewise with the expressed in Allen is consistent Vance, J., Turley concurring opinion of recognized that Mrs. “The trial court concurring opin- In that Turley, supra. brought property into the mar- v. Brunson argued that all ion, persuasively However, failed to it was riage. because she restored should be that trace marriage providing payment dissolution of the est and reinvestment made have, throughout marriage, 16-year period. a maintained at least as much in assets as Finally, in view of her the combined value of their nonmarital and the absence of evidence to the con inference, property. By logical if this view trary, we are convinced that owned adopted, any were decrease 27 shares of Oil stock Standard parties’ in the total nonmarital marriage; pro rata charged asset value would be number of shares increased means against percentage share of total non- splits; stock dividends and stock that dur assigned. to be ing marriage portion of the stock was appealing As foregoing may as the view sold; dissolution, and at the time of the be, particularly simplicity when the of its owned 50 shares of stock. Standard Oil application equity and its inherent is con- This evidence was sufficient to sidered, concept believe is finding remaining 50 shares of firmly too established the law to be Standard Oil stock is nonmarital abandoned at this time. and should be to her. Accordingly, gen- we shall adhere to the Ruby’s Also before this eral that nonmarital assets be contention that the trial court erred re traced into assets owned at fusing upon to her consider and rule claim dissolution, but relax some of the draconian portion that she should be awarded a requirements heretofore laid down. We pension; William’s Ironworker’s that Wil position, part, take this upon reliance liam’s share of the division of marital as Kentucky the trial courts of to detect de- charged sets should be for the he ception exaggeration and or to ad- spent education; upon daughter’s his and proof ditional suspected. when allegedly imprudent that William’s invest ment in the stock market should be bar, the case Ruby presented charged against his of the marital unchallenged evidence that she owned her estate. The Court of did not reach prior home to her and that it was upon the merits of these issues its determi $14,000. sold her nation that same were not raised “in the Likewise, Ruby proved bought that she only trial in a to below but motion vacate $10,000 paid for a Treasury prior Note to judgment.” judgment of the trial her and she testified that it was absolutely court makes no mention of reinvested the course of the mar of these issues. riage. When this evidence is considered along ease, with the trial unchallenged Ruby court’s At the trial of this the issues finding of fact that presents at the time of the now were indeed raised and dissolution, Ruby thereon, possession presented had in her siderable evidence was $91,000 assets, liquid apparent, worth of and that but for reasons which are not appar- neglected had worked little trial court to rule. It is only position, ent, however, entry and then a low-income that money judgment, Ruby’s sought oppor- that conclusion is unavoidable counsel Ruby tunity present claims as nonmarital is included in to a memorandum on these portfolio her current asset and that such issues and the motion was overruled. Upon receipt findings to her. From the evi of the trial court’s should be decree, fact, Ruby Ruby frugal it is that conclusions of law and dence obvious pursuant and a cautious investor. It would be com moved to CR 52.02 and CR 59.05 alter, judgment pletely unreasonable to believe that she to amend or vacate upon ac- squandered the assets she had her identified the issues which such when marriage began managed sought. tion Filed with her motion to subse $91,000. quently acquire extensive memorandum which It is unremarka was an position which she clearly and less than fatal to her that identified issues ble this, every rulings Despite Ruby sought was unable to document inter- of the court. GANT, J., rulings her motion on these issues was dissents. overruled and there was no modification VANCE, J., by separate concurs

the court’s final decree. opinion. record, appears From our review of the every step took reasonable VANCE, Justice, concurring. ruling obtain a on these issues from the reached I concur the result Accordingly, Ap- trial court. Court of majority opinion and concur in the view peals erred in its determination that these requirements of the the draconian unpreserved. Upon remand issues were tracing of nonmarital assets set forth retrial, Ruby may again raise these be relaxed. The ma- earlier cases should court. issues in the trial opinion, my opinion, does not set jority The final issue for our consideration to deter- guidelines forth can be used antenuptial agreement exe concerns an adequacy mine of nonmarital their mar cuted under assets in cases other than the one agreement riage. We have examined review. not intended persuaded and are that it was marriage, it is Upon the dissolution of a parties’ apply upon dissolution of assign court each duty only in marriage; agreement that it was an to him and to divide the spouse’s property Accordingly, we contemplation of death. just proportions. give need no further consideration to 403.109(1). property acquired All K.R.S. antenuptial agreement. purported subsequent to the mar- spouse foregoing issues on In addition to the presumed to be marital riage is to strike appeal, Ruby has moved except: By brief. or- portions certain of William’s acquired by gift, bequest, Property 1. 1990, 16, May on der entered descent; devise, or to strike passed consideration of motion exchange Upon present Property acquired merits. consideration in 2. marriage and our decision on acquired of the motion to strike or property before merits, overruled. acquired by the motion should be exchange property in devise, descent; bequest, gift, held that Inasmuch as we have spouse a af- Property in determinations erred 3. courts below legal separation; the items of nonmarital ter a decree of regard with herein, recogni- in and property identified agree- valid Property 4. excluded tion of and parties; ment of the must be property, marital there division of property The increase value 5. proper- assignment of nonmarital proper a marriage to the ex- acquired before Low, 403.190(1); Ky., (KRS cf., Low v. ty result increase did not tent that such (1989)), necessary to it is 936 777 S.W.2d parties during from the efforts Upon trial. for a new remand this case marriage. retrial, presented is if the evidence 403.190(2). Property owned a K.R.S. appears substantially same as same or also non- is spouse prior to the here, deemed decision shall be this Court’s all As to other the law of the case. to be issues, kept unrestricted is property trial court will be long As as nonmarital usually is no dif- apart, consideration thereof. there separate its and as non- proving its classification ficulty reversed and remanded This cause is is sold asset a nonmarital marital. When pro- court for further Circuit the Jefferson and com- to cash otherwise converted consistent herewith. ceedings sep- its assets loses mingled with marital impos- becomes identity, and it often COMBS, arate C.J., STEPHENS, dollar in a com- any specific WINTERSHEIMER, JJ., to trace sible LEIBSON dollar that as the same mingled account concur. was received in exchange for a property pro nonmarital marital should be reduced asset. rata.

I precise words, would not tracing. In other where marital and non- tracing commingled one asset into another marital funds have been is a complicated account, legal and bank all accounting process, withdrawals from the ac- and, in my opinion, it count will be considered to be marital funds is inimical to the spirit marriage. I until the marital funds are exhausted. It my As stated in only tracing that the curring opinion in would follow of non- Turley Ky. v. Turley, property necessary proof App., (1978): would be S.W.2d property that nonmarital If once existed. “Marriage sharing, connotes with the form, longer original it no exists in its upon concentration what is ‘ours’ rather proof there should be it had been than what is ‘his’ and what is ‘hers.’ It exchanged for other or converted does not bode well for the institution of cash, proof that the total assets partner if each keep must upon greater dissolution were than the to- the back of possible his mind the advan- tal value of the nonmarital assets and/or tage to be keeping up obtained with in exchange received for such being every able to trace penny nonmarital assets. If there is a contention brought addition, marriage. into the that the total value of their assets some- process usually so com- was reduced to plex expense that the involved cannot be an amount less than the value of their justified when the accumulation is small proof the burden of as in this case.” party making should rest I think it is the clear intent of K.R.S. claim. 403.190 that whatever is accumu- We reach this result this case. Mrs. lated joint due to the $10,000.00 sold her house and her Chenault efforts of the should be divided treasury completely note and was unable just between them in proportions, and trace she received those whatever that was brought to the assets, transactions into her current marriage by either of them-or inherited greater now have a much value. Since it is party acquired in exchange for not shown that her total assets were ever should be restored to each less than the amount she received ex- of them as nonmarital change treasury for her house and her to marriage cannot said note, simply indulge presumption to have accumulated property during that the amount she received for her non- marriage by joint efforts unless part remains intact as a they they own more than owned the assets she now owns. She is therefore at the time of the or later ac- entitled to be awarded quired by gift or I inheritance. would prop- property before a division of marital indulge presumption therefore that mo- erty occurs. expended by during marriage nies them commingled

from marital and nonmarital expenditure

assets was an of marital funds not would serve to decrease the

amount of their nonmarital unless

it could be shown that their total assets at point

some were reduced less than the If

value of their nonmarital assets. occur, would,

event should

course, have all of their exhausted part prop- of their nonmarital

erty, spouse’s and the value of each non-

Case Details

Case Name: Chenault v. Chenault

Court Name: Kentucky Supreme Court

Date Published: Nov 8, 1990

Citation: 799 S.W.2d 575

Docket Number: 89-SC-185-DG

Court Abbreviation: Ky.