Phyllis Henson v. James C. Maxwell ( 2023 )

RENDERED: JANUARY 27, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-1273-MR
PHYLLIS HENSON APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
v. HONORABLE JOHN R. GRISE, JUDGE
ACTION NO. 20-CI-00972
JAMES C. MAXWELL APPELLEE
OPINION
AFFIRMING
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BEFORE: DIXON, LAMBERT, AND MCNEILL, JUDGES.
LAMBERT, JUDGE: Phyllis Henson appeals from the Warren Circuit Court’s
Final Order Dividing Sale Proceeds entered on September 28, 2021. We affirm.
Henson and James C. Maxwell purchased a home together (joint with
right of survivorship) in November 2016. The parties were not married to each
other. Maxwell provided the down payment of $34,187.01, and the remaining
$120,000.00 of the purchase price was mortgaged. Henson lived alone in the home
from December of that year until June 2021. During that time, she made all the
mortgage, insurance, tax, utilities, warranty, and homeowners association dues
payments. She also performed all upkeep on the home. Henson claimed that she
had invested nearly $60,000.00 paying the expenses over the years. Maxwell
never lived at that address. He described the arrangement as an investment
opportunity for him.
In August 2020, after the parties had a falling out, Maxwell filed suit
against Henson, asking the circuit court to order a sale of the real estate and to
divide the proceeds. See Kentucky Revised Statute (KRS) 389A.030 (“Action in
Circuit Court for sale or division of property”). Henson answered and counter-
claimed Maxwell. The following November, Maxwell moved for default
judgment, summary judgment, an order for the property to be sold, and attorney
fees. Henson requested that the circuit court stay the proceedings to allow her to
obtain a mortgage in her name and reimburse Maxwell’s down payment.
On December 16, 2020, the circuit court entered an order granting the
motions for default and summary judgment and ordered that the master
commissioner sell the property at public auction. The order referring the matter to
the master commissioner was entered one month later. The master commissioner
advertised the property and scheduled the sale to take place on February 10, 2021.
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The weather on the date of the auction was bad, and Maxwell, for fear
that the property would be sold for less than optimum value, decided to cancel the
sale. The master commissioner noted this in its report to the circuit court and
stated that the parties’ fee would be $3,588.60. The report was confirmed by court
order dated February 25, 2021. Maxwell satisfied his share of the fees (namely,
$1,794.30) by payment to the master commissioner one day later.
Maxwell and Henson agreed to sell the house with a local real estate
company (although Henson continued to assert that she should be given the
opportunity to refinance the note and purchase Maxwell’s share from him). The
house was listed for just under $200,000.00 and was under contract within a matter
of days for $15,000.00 over the asking price. The closing took place in June 2021
(after which Henson moved out). After satisfying the mortgage and closing costs,
the net proceeds were $94,617.17.
The circuit court scheduled the matter for an evidentiary hearing (held
on July 9 and continued to July 14, 2021) to give the parties the opportunity to
argue their respective positions (with supporting documents) concerning the
division of the net proceeds. The circuit court’s final order was entered on
September 28, 2021. Maxwell was to receive his down payment, and Henson was
to receive 50% of the remaining proceeds. Her share was further reduced by her
outstanding obligation of the master commissioner’s fee, leaving her a net portion
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of $28,390.78. Henson’s subsequent post-judgment motions were denied, and she
filed her notice of appeal.
We begin by stating the standard of review, recently summarized in
Lawson v. Smith, 652 S.W.3d 643, 645 (Ky. App. 2022):
The standard of review upon appeal of an order
granting summary judgment is “whether the trial court
correctly found that there were no genuine issues as to
any material fact and that the moving party was entitled
to judgment as a matter of law.” Scifres v. Kraft, 916
S.W.2d 779, 781 (Ky. App. 1996) (citing CR[1] 56.03).
Upon a motion for summary judgment, all facts and
inferences in the record are viewed in a light most
favorable to the non-moving party and “all doubts are to
be resolved in his favor.” Steelvest, Inc. v. Scansteel
Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991). Thus,
a summary judgment looks only to questions of law, and
we review a trial court’s decision to grant summary
judgment de novo. Brown v. Griffin, 505 S.W.3d 777,
781 (Ky. App. 2016); see also Blackstone Mining Co. v.
Travelers Ins. Co., 351 S.W.3d 193, 198 (Ky. 2010), as
modified on denial of reh’g (Nov. 23, 2011). However,
“[a] party opposing a summary judgment motion cannot
rely on the hope that the trier of fact” would simply
“disbelieve the movant’s denial of a disputed fact, but
must present affirmative evidence in order to defeat a
properly supported motion for summary judgment.”
Ryan v. Fast Lane, Inc., 360 S.W.3d 787, 790 (Ky. App.
2012) (citing Steelvest, 807 S.W.2d at 481).
Furthermore:
“‘[D]ue regard shall be given to the opportunity of the
trial court to judge the credibility of the witnesses’
because judging the credibility of witnesses and weighing
1
Kentucky Rules of Civil Procedure.
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evidence are tasks within the exclusive province of the
trial court.” Moore v. Asente, 110 S.W.3d 336, 354 (Ky.
2003) (quoting CR 52.01 and citing Bowling v. Natural
Resources and Environmental Protection Cabinet, 891
S.W.2d 406 (Ky. App. 1994)). An appellate court defers
to factual findings of the trial court unless those findings
are clearly erroneous. CR 52.01. Clearly erroneous
findings are those which are unsupported by substantial
evidence. Jones v. Livesay, 551 S.W.3d 47, 50-51 (Ky.
App. 2018); Moore, 110 S.W.3d at 354.
Commonwealth v. Graham, 586 S.W.3d 754, 769 (Ky. App. 2019). With these
standards in mind, we turn to Henson’s appeal.
Henson argues that the circuit court erred in its division of the
proceeds, that fairness dictates she be restored the monies she contributed to the
principal on the mortgage (specifically, $14,263.23 – she does not seek restoration
of her other expenditures). The circuit court was aware of Henson’s contributions
during her stay in the home but held that Henson’s benefit of living in the home
included “the obligation of upkeep and maintenance.” We agree. Maxwell never
lived in the home. His uncontradicted testimony was that this was a real estate
investment opportunity for him. Although Henson was able to trace her expenses
over the years the parties owned the property together, she was not able to offer
sound evidence that Maxwell agreed to allow her to live there rent-free (which
would have been the effect of restoring her contributions). The circuit court’s
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findings were not clearly erroneous. Graham, 586 S.W.3d at 769.2 Because we
find no error in the circuit court’s holding regarding reduction of mortgage
principal, we likewise decline to find merit in Henson’s further assertion that the
$1,141.59 in the mortgage escrow account should be refunded to her. Id.
Nor are Henson’s other arguments persuasive. She was not denied
due process of law. Rather, she was afforded a hearing,3 with an opportunity to be
heard and to present evidence, as well as to cross-examine Maxwell. Additionally,
we find no error in the assignment of 50% of the master commissioner’s fee to
each party. Although Maxwell pulled the sale, both parties reaped the benefit of
the private sale bringing a higher price on the property. Henson conceded as much
in her testimony. “If the trial judge’s findings are supported by substantial
evidence, ‘then the appellate court’s role is confined to determining whether those
facts support the trial judge’s legal conclusion.’” Ellington v. Becraft, 534 S.W.3d
785, 790 (Ky. 2017) (citations omitted).
The judgment of the Warren Circuit Court is affirmed.
ALL CONCUR.
2
We are not unaware of the Kentucky Supreme Court’s decision in Talley v. Paisley, 525
S.W.3d 523 (Ky. 2017), but distinguish that case because the joint tenants cohabitated. Such is
not the situation here.
3
Henson received the bench trial afforded her by statute. KRS 389A.030(1) (“The case shall be
tried without a jury.”).
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BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Nancy Oliver Roberts Matthew J. Baker
Bowling Green, Kentucky Bowling Green, Kentucky
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