John Walter Roush, II v. Emilie Lauren Roush ( 2021 )

RENDERED: OCTOBER 29, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-1186-MR
JOHN WALTER ROUSH, II APPELLANT
APPEAL FROM FAYETTE CIRCUIT COURT
v. HONORABLE KATHY W. STEIN, JUDGE
ACTION NO. 18-CI-04037
EMILIE LAUREN ROUSH APPELLEE
OPINION
REVERSING IN PART,
VACATING IN PART,
AND REMANDING
** ** ** ** **
BEFORE: COMBS, GOODWINE, AND LAMBERT, JUDGES.
COMBS, JUDGE: This case involves a post-dissolution dispute over the terms of
a property settlement agreement. John Walter Roush, II, appeals orders of the
Fayette Family Court entered on March 27, 2020; July 11, 2020; and August 25,
2020, that: construed the terms of a property settlement agreement incorporated
into the parties’ divorce decree; granted the motion of Emilie Lauren Roush for an
award of attorney’s fees; and denied John’s motion to alter, amend, or vacate.
After our review, we reverse the orders to the extent that they require John either to
refinance a loan or to repay it immediately. We also vacate the award to Emilie of
attorney’s fees incurred with respect to this issue. But we remand on one issue as
we shall discuss later in our Opinion.
John and Emilie married in September 2015 and separated in May
2018. Emilie filed a petition for dissolution of the marriage a few months later.
John filed an entry of appearance in which he indicated that he did not intend to
contest the petition for dissolution. He acknowledged that he did not have an
attorney and waived notice of any further proceedings. The parties have no
children.
The marriage was dissolved by the Fayette Family Court in a decree
entered on July 1, 2019. The decree of dissolution incorporated a property
settlement agreement executed by the parties on February 19, 2019. In relevant
part, the parties’ agreement provided as follows:
II. DIVISION OF PROPERTY AND DEBT
****
6. Vehicles. The parties agree that John shall receive
exclusive ownership of the 2016 Ford F-150 and will
remove Emilie’s name from the title of the vehicle no
later than September 1, 2019. Emilie shall receive
exclusive ownership of the 2014 Kia Forte. Any debt
-2-
owed on either of the vehicles shall be the responsibility
of the party receiving ownership of said vehicle.
****
8. PNC Bank Loan. The debt of the PNC bank loan
which is in both Emilie’s and John’s names is to be
equally born and divided between the parties. The
parties will set up automatic payments to be withdrawn
from their checking accounts monthly to timely satisfy
their half of the minimum payment. Such payments will
continue to be withdrawn in a timely fashion each month
until the loan has been paid in full. The parties will
provide proof of the automatic payment process being set
up prior to the submission of this property settlement
agreement.
****
III. MISCELLANEOUS PROVISIONS
****
2. Default. The parties agree that in the event either
party defaults in or breaches any of his or her respective
obligations and duties as contained in this Agreement,
then the defaulting or breaching party shall be
responsible for and pay to the injured party, in addition to
such other damages as any court may award, all of his or
her attorneys’ fees, court costs, and other related
expenses incurred to enforce the provisions contained
herein against the defaulting party.
3. Bankruptcy. The assumption of the indebtedness by
the parties herein shall be considered an obligation
directly related to the support and maintenance of the
other spouse, although payments of said debts shall not
be considered deductible or taxable as alimony,
maintenance, or support for income tax purposes. The
parties further stipulate that they intend that the debts and
-3-
liabilities assumed by them shall be non-dischargeable
under Section 523(a)(5) of the Bankruptcy Code.
On February 25, 2020, Emilie filed a motion to enforce the
parties’ settlement agreement and to have John held in contempt for violation of
the terms of the divorce decree. Emilie stated that “John has not removed [my
name] from the title [of the 2016 Ford F-150], nor has he taken steps to assume the
debt.” Emilie asked the court to use its inherent authority to sanction John for
failing to comply with the requirements of the divorce decree. She also sought to
recover $500 in attorney’s fees pursuant to the provisions of KRS1 403.220.
John, pro se, filed a response on March 4, 2020. In a letter to the
court, John explained that he had made attempts to refinance the truck loan to no
avail in January 2018 and again in January 2019 -- before the property settlement
agreement was signed in February 2019. He indicated that Emilie had agreed in
August 2019 to give him more time to resolve the issue as long as he kept the truck
payment current. He also indicated that he had been advised by an attorney to
declare bankruptcy. He said that he had “reassured [Emilie] that I had no
intentions of not continuing to pay on the vehicle or any other joint loans that we
still had.” He admitted that Emilie had explained to him that his failure to
refinance the debt in his name alone was affecting her credit score and her ability
1
Kentucky Revised Statutes.
-4-
to purchase a home. Finally, John candidly admitted that it was unlikely that he
would be able to refinance the debt owed on the truck.
At a hearing conducted on March 6, 2020, the family court decided
not to order a continuance in order for John to have time to hire an attorney.
Instead, he was questioned under oath. Emilie did not testify. Following the
hearing, the family court ordered John either to refinance the truck debt or to sell
the truck and satisfy the loan within twenty (20) days. Emilie’s motion for
attorney’s fees was denied. The court’s written order was not entered until March
27, 2020.
On April 6, 2020, John filed a motion to alter, amend, or vacate. He
contended that he did not fail to comply with the provisions of the property
settlement agreement. John argued that the agreement did not provide that the
truck loan would be refinanced or that he would repay it immediately -- only that
he would have Emilie removed from the certificate of title and that he would
remain solely responsible for the debt. John explained that it would be difficult to
sell the truck given the limitations imposed by the pandemic and that the proceeds
were not likely to cover the outstanding debt anyway, thus likely resulting in entry
of a deficiency judgment against both parties. He produced the documents
necessary to have Emilie removed from the certificate of title and indicated that the
-5-
loan payments had remained current. In the alternative, John sought a new
hearing.
On April 22, 2020, Emilie filed a supplemental motion to enforce
John’s obligation to make monthly payments toward the parties’ PNC
consolidation loan. She sought to have John held in contempt and to recover her
attorney’s fees in the amount of $1,404.00. John filed his objection to the
supplemental motion.
During its hearing, the family court observed that the language of the
agreement concerning the truck loan “was not very artfully drawn” but announced
that John would nevertheless have to refinance the loan. Subsequently, John filed
a motion requesting a written order pertaining to his motion to alter, amend, or
vacate and a written order concerning Emilie’s request for attorney’s fees.
In an order entered on July 11, 2020, the family court recited as
follows:
the parties contemplated that they were required to
transfer, refinance, obtain a cosigner or to take other
action so that the other party to the marriage would have
no encumbrance to their ability to borrow money nor any
obligation to repay the debt in the event of default by the
party receiving said vehicle.
-6-
The court concluded that by failing to have the truck loan refinanced, John had
violated the requirements of its decree of dissolution. It denied John’s motion to
alter, amend, or vacate.
Next, the family court concluded that Emilie’s motion to enforce the
provisions related to the parties’ PNC consolidation loan was moot because John
had brought current his share of the loan repayment.
The court ordered John to do whatever was necessary (including
selling the Ford F-150) to eliminate Emilie’s financial responsibility for the truck
loan within thirty (30) days. It granted Emilie’s motion for attorney’s fees and
directed her to file an affidavit of counsel with respect to the work performed and
the fees charged in the proceedings. The affidavit was filed on July 22, 2020, and
it reflected attorney’s fees totaling $2,565.00.
In an order entered on August 25, 2020, the family court concluded
that the attorney’s services and the amount billed were reasonable and necessary.
It ordered John to pay to Emilie $2,565.00 within thirty (30) days. This appeal
followed.
On appeal, John argues that the family court erred in its interpretation
of the terms of the property settlement agreement. We agree.
Interpretation of a property settlement agreement is governed by
contract law. Frear v. P.T.A. Indus., Inc., 103 S.W.3d 99 (Ky. 2003). Where a
-7-
contract is ambiguous, the court may consider extrinsic evidence concerning the
circumstances surrounding its execution, its subject matter, the object sought to be
accomplished, and the conduct of the parties. Cantrell Supply, Inc. v. Liberty Mut.
Ins. Co., 94 S.W.3d 381 (Ky. App. 2002). However, where the contract is not
ambiguous, it will be enforced “strictly according to its terms[.]” Frear, 103
S.W.3d at 106.
A court interprets a contract’s unambiguous terms by assigning the
language its ordinary meaning and without resort to extrinsic evidence. Wehr
Constructors, Inc. v. Assurance Co. of America, 384 S.W.3d 680, 687 (Ky. 2012).
A contract is ambiguous where a reasonable person would find it susceptible of
different interpretations. Hazard Coal Corp. v. Knight, 325 S.W.3d 290 (Ky.
2010). However, “the fact that one party may have intended a different result is
insufficient to alter the plain and unambiguous terms of a written contract.” Green
v. McGrath, 662 F. Supp. 337, 342 (E.D. Ky. 1986). Whether a contract is
ambiguous is a question of law subject to our de novo review. First
Commonwealth Bank of Prestonsburg v. West, 55 S.W.3d 829 (Ky. App. 2000).
After considering the disputed provision of the property settlement
agreement, the family court held as follows:
By stating that each party “shall receive exclusive
ownership” of their respective vehicles and by stating
“any debt owed on either vehicle shall be the
responsibility of the party receiving ownership of said
-8-
vehicle,” and having considered the testimony received
during the hearing of March 6, 2020, the Court hereby
finds that the parties contemplated that they were
required to transfer, refinance, obtain a cosigner or to
take other action so that the other party to the marriage
would have no encumbrance to their ability to borrow
money nor any obligation to repay the debt in the event
of default by the party receiving said vehicle.
While we agree that the property settlement agreement provides that
each party “shall receive exclusive ownership” of their respective vehicle and that
“[a]ny debt owed on either of the vehicles shall be the responsibility of the party
receiving ownership of said vehicle[,]” we do not agree that the disputed provision
is ambiguous. Consequently, we are compelled to reverse the orders of the family
court.
The disputed provision assigned the Ford F-150 to John and gave to
him exclusive ownership of it. In Kentucky, a vehicle’s titleholder is its owner.
KRS 186.010(7). To this end, John agreed to have Emilie’s name removed from
the certificate of title. However, the mere act of having Emilie’s name removed
from the certificate of title would never have rescinded her obligation to repay the
loan used to purchase the truck, nor would it have affected her ability to secure a
home loan from another lender.
This is not a rare occurrence in a dissolution action. Ownership of the
truck was turned over to John; however, pursuant to the loan documents, both
parties remained contractually liable for repayment of the debt against it. This
-9-
result occurs because the lienholder has no legal obligation to remove the non-
owner from the loan documents despite the parties’ agreement in a dissolution
proceeding.
While John could (and did) agree to make the entirety of the monthly
loan payments, that agreement could not absolve Emilie from her outstanding and
underlying financial obligation to the lender. Instead, John and Emilie could have
agreed that John would refinance the original loan to pay off the existing debt
against the truck. At that point, Emilie could have been released from her
obligation to repay the loan, and the outstanding debt would no longer have
affected her credit rating. However, this option was not included in the parties’
property settlement agreement. Although John agreed that the truck loan would be
his debt to pay, he did not agree to have the truck loan refinanced. His efforts to
have the loan refinanced (undertaken even before the agreement was executed) had
been fruitless.
The court speculated on what the parties may have “contemplated” --
despite the literal language of the agreement itself -- impermissibly embellishing
and expanding the scope of its terms. By ordering John either to refinance the loan
or to sell the truck and immediately repay the debt, the family court has construed
the parties’ agreement to include a provision that was not part of the bargain. The
court erred in doing so.
-10-
The terms of the settlement agreement are unambiguous as to John’s
responsibility to repay the truck loan. However, he is under no obligation either to
refinance the loan or to repay it immediately. Consequently, we reverse the family
court’s orders to the contrary. Furthermore, we vacate the award of attorney’s fees
to the extent that they relate to a resolution of the truck loan dispute. However, we
remand the matter to the family court to consider whether an award of attorney’s
fees is appropriate with respect to the dispute concerning John’s failure to keep
timely the payment of his share of the PNC loan.
To recapitulate, we reverse the orders of the Fayette Circuit Court
with respect to the truck. We remand for the limited purpose of considering
whether an award of attorney’s fees (incurred only to enforce the parties’
agreement with respect to the PNC loan) is warranted.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Nathanael Cutler Christopher R. Jenkins
Stanford, Kentucky Lexington, Kentucky
-11-