Kentucky Bankruptcy Law

Counsel with Care

Lessons in family law: appeals, bankruptcy & garnishment

There are a number of lessons to be learned from the recently released Kentucky Court of Appeals case Mickler v. Mickler, 2006-CA-001313-MR (Jan. 25, 2008)(to be published). A few of the lessons come from the procedure and facts of the underlying case rather than the appeal itself.

In Mickler, some affluent folks, Andrew and Terry got divorced. Andrew was an otolaryngologist who made in excess of $200,000.00 per year. The first lesson is that the harder it is to pronounce what you do, the more you will likely be paid. At the time of the divorce, Terry was 53 years old and had not worked outside the home for the duration of the twenty-two year marriage. The trial court awarded Terry $111,809.03 for her share in Andrew’s medical practice, half the proceeds from the sale of the marital residence and another piece of property, her car, and over $400,000.00 in retirement funds. In addition, Terry was awarded $7,000.00 in monthly maintenance for 12 years (that’s $1,008,000.00 for my fellow coupon clippers).

The second lesson is that if you are married to a highly paid professional, it pays to not pursue your own career. Actually, this is not a hard and fast rule because the majority of Kentucky appellate cases where long-term maintenance is awarded involves some form of disability on the part of the receiving spouse. I would consider this situation a gray area regarding maintenance for two reasons. First, being 53 is not really a disability although it can be more difficult to obtain gainful employment at that age without relevant experience. Second, Terry received considerable assets in the divorce. To receive maintenance, you must show that you cannot meet your reasonable living expenses and your standard of living only comes into play after crossing that initial hurdle.

Arguably, Terry could meet those reasonable living expenses (and even some unreasonable ones) with the assets distributed to her. Here though, the trial court seemed to define Terry’s reasonable living expenses by her prior lifestyle which is a bit of circular logic. If the legislature had meant for all divorced folks to maintain their prior standard of living, then they would have made the initial hurdle “lacks sufficient property . . . to provide for his standard of living established during the marriage” instead of “reasonable needs“. KRS 403.200.

I suspect these apparent errors by the trial court encouraged the filing of the appeal. Here is where the third lesson came into play. Because Andrew (actually his attorney) failed to file a supersedeas bond to stay the execution of the trial court’s orders pending the appeal. The lesson is that if you think the court messed up, be sure to do all you can to put those orders on hold while you appeal. Because Andrew did not do this, but also did not pay up, Terry filed a motion to hold him in contempt. Andrew responded with filing bankruptcy to get the stay on collection proceedings offered there.

Here is where Andrew made yet another mistake. He withdrew $64,000.00 from his checking account (I would never have another overdraft!) without disclosing this fact. That tends to be a no-no regardless of whether you are in Family or Bankruptcy court. Fortunately, Andrew was able to make a deal with Terry for temporarily reduced maintenance during that first appeal.

The Court of Appeals upheld the trial courts original order (well, I said it was a gray area – not clearly erroneous) and Terry came back with a second contempt motion. Andrew responded with yet another bankruptcy petition. This was the next mistake (sorry, I’ve lost track of how many) because this petition was quickly dismissed because (can you guess it?) the petition was filed for the purpose of avoiding compliance with the Family Court’s orders. The Supreme Court of Kentucky also turned down discretionary review of the divorce decree. Things just were not going well for Andy at this point.

Sensing that Andrew was on the ropes, Terry filed garnishments on various insurance carriers thought to owe funds to Andrew’s medical practice. That is where this particular appeal finally comes into play: click here for the rest of the story!

January 27, 2008 - Posted by | Bankruptcy, Civil Procedure, Family Law | , , , ,

1 Comment »

  1. […] lessons related to family law exist in the underlying facts and procedure and can be found at this post at Lexington Family Law blog. Suffice it to say that a doctor, Andrew, with his own practice went through a bitterly fought […]

    Pingback by Garnishment: where business law & family law intersect « Bluegrass Business Law | January 28, 2008 | Reply

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: