Kristie Akagi-Johnson v. James Johnson

RENDERED: FEBRUARY 25, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0342-MR
KRISTIE AKAGI-JOHNSON APPELLANT
APPEAL FROM MCCRACKEN FAMILY COURT
v. HONORABLE DEANNA WISE HENSCHEL, JUDGE
ACTION NO. 18-CI-01077
JAMES JOHNSON APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CALDWELL, CETRULO, AND MAZE, JUDGES.
CETRULO, JUDGE: Appellant Kristie Akagi-Johnson (“Wife”) appeals the
modification of maintenance order and order for rule (“Order”) that the McCracken
Family Court entered on November 6, 2020. The Order decreased Appellee James
Johnson’s (“Husband”) monthly maintenance payment amounts and stated that no
additional personal property need be given to Wife.1
FACTS AND PROCEDURAL BACKGROUND
Wife and Husband divorced on September 20, 2019. As part of the
proceedings, they entered into a marital settlement agreement (the “Agreement”),
which, in pertinent part, outlined the maintenance schedule. Therein, the parties
agreed to a maintenance structure that required Husband to pay Wife a total of
$69,324. Husband was to pay the total amount by making payments of $1,832 per
month for 18 months, followed by $932 per month for 39 months. Further, in the
Agreement, Husband agreed to not seek modification of the maintenance award or
amount based on Wife’s cohabitation or remarriage.
At the time the parties entered the Agreement, Husband earned a
salary of $210,000 as a regional manager for Worley Field Service (“Worley”). A
few months after the divorce, in early April of 2020, Husband lost that job because
the COVID-19 pandemic caused a downturn in Worley’s work. Husband testified
that immediately after his employer informed him of his impending termination, he
called Wife to express his concern about his ability to continue to make the
maintenance payments. Husband further testified that he immediately began
1
Wife appeals only the modification of maintenance, not the family court’s unwillingness to
redistribute property.
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applying to “any and all” jobs he could find. At the hearing, Husband provided
copies of the 500+ job applications he had submitted in his search. A little over a
week after his last day at Worley, on April 20, 2020, Husband secured his first
temporary position, which he testified resulted in a 40-45% pay cut. Due to his
reduced income, Husband filed his motion to terminate or modify maintenance in
June of 2020. Shortly thereafter, in August of 2020, Husband secured a new,
permanent position with a $150,000 salary. Husband testified that to accept this
new position, which was the highest paying position he was offered, he had to
move to a new state and buy a new home.
The family court held a hearing on the motion to modify or terminate
maintenance in September of 2020. Both Wife and Husband testified as to their
financial status at that time. During the hearing, Husband testified that when he
lost his job at Worley and began working jobs with lower pay, his standard of
living took a substantial downturn. He further testified that he had to cash out his
retirement to assist with his expenses, and, although he found a new job, it was a
substantial pay cut with no foreseeable opportunity for a raise. Therefore, he
claimed he no longer had the same cash flow as when he executed the Agreement,
and his financial status had substantially changed.
At the hearing, Wife testified that she entered into the Agreement
based on Husband’s promise to pay her the set maintenance amounts. She further
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explained that she entered into the Agreement largely because the amount of
maintenance made up for the fact that she would have to leave their marital
residence, move to a new state, and continue to pay for a marital car. Because of
those changes, she claimed that she fought for the set amount of maintenance
($69,324 total). However, she also testified that if the family court reduced the
maintenance award, she would need at least $1,000 a month to make ends meet.
Following the hearing, the family court determined that Husband had
made diligent efforts to secure a new job immediately upon losing the last, and that
there had been a substantial decrease in his salary. Further, the family court found
that the maintenance award should be decreased by 30% because the Husband’s
salary decreased by 30%, according to the court’s calculations. Specifically, the
modified maintenance award required Husband to pay Wife $1,282 from June 1,
2020 until March 1, 2021, and then in March 2021, start paying her $652 per
month for the following 39 months. The court explained that such parallel
decrease was a fair and reasonable way to accommodate both parties’ ongoing
needs.
Wife appealed the Order on the maintenance determination, arguing
the family court erred in modifying Husband’s obligation.
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STANDARD OF REVIEW
“We review the family court’s determination regarding a motion to
modify maintenance for an abuse of discretion.” Block v. Block, 252 S.W.3d 156,
159 (Ky. App. 2007) (citing Bickel v. Bickel, 95 S.W.3d 925, 927-28 (Ky. App.
2002)). “The test for abuse of discretion is whether the trial judge’s decision was
arbitrary, unreasonable, unfair, or unsupported by sound legal principles.” Holland
v. Herzfeld, 610 S.W.3d 360, 363 (Ky. App. 2020) (quoting Commonwealth v.
English, 993 S.W.2d 941, 945 (Ky. 1999)). “We cannot substitute our judgment
for the family court’s if there is substantial evidence supporting that court’s
decision.” Block, 252 S.W.3d at 159 (quoting Bickel, 95 S.W.3d at 928).
ANALYSIS
First, Wife claims Husband’s change in circumstance does not make
the maintenance award unconscionable, as KRS2 403.250(1) requires. Second, she
argues that even if the family court was correct to modify Husband’s monthly
payments, it should have increased the duration of the maintenance period to make
the total amount equal $69,324.
Kentucky courts may modify maintenance awards when the parties’
circumstances change in such a way that the original award becomes
2
Kentucky Revised Statute.
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unconscionable. KRS 403.250(1) (“Except as otherwise provided in [KRS
403.180(6)3] the provisions of any decree respecting maintenance may be modified
only upon a showing of changed circumstances so substantial and continuing as to
make the terms unconscionable.”). In Tudor, this Court explained that
“[m]aintenance becomes unconscionable if it is ‘manifestly unfair or inequitable.’”
Tudor v. Tudor, 399 S.W.3d 791, 793 (Ky. App. 2013) (quoting Combs v. Combs,
787 S.W.2d 260, 261 (Ky. 1990)). “To determine whether the circumstances have
changed” enough to become unconscionable, “we compare the parties’ current
circumstances to those at the time the court’s separation decree was entered.” Id.(quoting Block, 252 S.W.3d at 160).
Wife first argues that the original maintenance award was not
unconscionable because, she claims, Husband’s new debts do not constitute a
change in circumstances. Wife contends that Husband’s actions (not his 30%
salary decrease) were the main cause of his change in circumstance because he
purchased a truck and, when he relocated for his new job, purchased a house.
However, these claims fall flat. The record clearly shows that after Husband
bought the truck, in November 2019, he still made the full maintenance payments
to Wife every month. It was not until five months after he bought his truck, when
3
KRS 403.180(6) states “. . . the decree may expressly preclude or limit modification of terms if
the separation agreement so provides. Otherwise, terms of a separation agreement are
automatically modified by modification of the decree.”
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he lost his job in April of 2020, that he no longer made full payments to Wife and
sought maintenance modification. Although the purchase price of the new house is
higher than his previous house, the monthly payment for the new house is lower,
so we cannot conclude that such a change resulted in his overall downturn in cash
flow. After analyzing the parties’ income and expenses, the family court
concluded that the decrease in salary was a substantial and continuing
circumstance that warranted modification of the maintenance award. We agree.
As the family court correctly synthesized, at the time of the decree,
when Husband entered the Agreement, he was making $210,000 a year. When
Husband submitted his motion to modify maintenance, he had lost that job due to
COVID-19 and secured a new job earning $150,000 a year, a 30% income loss.
Citing to the Husband’s testimony that he applied to over 500 jobs immediately
upon hearing of his upcoming termination, the family court found that the husband
made diligent attempts to secure employment. The family court conducted a two-
hour hearing, considered the parties’ income and expenses, and then concluded that
the 30% decrease in salary was “substantial and continuing” so as to make the
maintenance award unconscionable under KRS 403.250(1). Therefore, the family
court determined that the maintenance award warranted modification and decided
that a 30% decrease was a fair and reasonable way to accommodate both parties’
ongoing needs. The family court’s finding adheres to Kentucky precedent.
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As this Court found in Mudd, a substantial reduction in income may
warrant a modification in maintenance. Mudd v. Mudd, 903 S.W.2d 533, 534 (Ky.
App. 1995). There, the husband alleged that his income decreased approximately
$160,000 (allegedly due in part to some questionable investments) and the trial
court reduced the husband’s maintenance payments by $15,000 per year. Id. Both
the husband and wife appealed the decision. Id. This Court held that, “based upon
the current needs of the parties and the economic conditions and circumstances of
the parties, we cannot say that it was an abuse of the trial court’s discretion to only
reduce [the husband’s] maintenance payments[.]” Id. Similarly, here, the family
court based its determination on the current needs of the parties and the financial
status of each. Although the alleged decrease in salary was greater in Mudd, the
family court here still determined Husband’s reduction was a “substantial
decrease.”4 Therefore, we cannot say that it was an abuse of the family court’s
discretion to reduce the maintenance payments based upon its determination of a
substantial decrease. Id.Second, Wife argues that even if the reduced monthly maintenance
payments were proper, the family court should have extended the maintenance
4
Husband cites to an unpublished case in which the husband’s salary was decreased by
approximately 40% and the family court decreased the maintenance by 40%. This Court found
that the circuit court did not abuse its discretion in such determination. List v. List, No. 2018-
CA-000068-MR, 2019 WL 1503959, at *1-2 (Ky. App. Apr. 5, 2019).
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duration to reach the $69,324 total specified in the Agreement.5 However, that is
not what Kentucky case law dictates. Instead, the Kentucky Supreme Court has
stated that any maintenance award, even lump sum awards (which Wife does not
argue this is), may be modified. Woodson v. Woodson, 338 S.W.3d 261, 263 (Ky.
2011) (“In giving [KRS 403.250(1)] its obvious meaning, all decrees ‘respecting
maintenance’ are modifiable under certain circumstances.”).6 The court’s authority
to modify maintenance, however, is not absolute. This Court has held that
maintenance awards may not be modified when a marital settlement agreement
expressly precludes it. Jaburg v. Jaburg, 558 S.W.3d 11, 13 (Ky. App. 2018)
(“KRS 403.250(1) prohibits a court from invoking this limited authority [to modify
maintenance awards] when the parties have a separation agreement pursuant to
KRS 403.180(6) that expressly precluded subsequent modification of the terms of
their separation agreement.”).7
5
The new maintenance structure the family court ordered totals $53,454 that Husband must pay
to Wife.
6
“The burden of proof to change maintenance orders is sufficiently strict to insure [sic] relative
stability and finality. . . . However, [KRS 403.250(1)] does not divest trial judges of the
discretion to decide when modification outweighs the virtue of finality in seeking fairness and
equity in what many times may be dire consequences and complicated options.” Woodson, 338
S.W.3d at 263 (emphasis added).
7
In Jaburg, this Court conducted a statutory analysis to determine whether KRS 403.250(1)
permitted the family court to modify a settlement agreement. We therefore utilized de novo
review. Here, we are not interpreting the statute, and instead we are merely looking at whether
the family court’s maintenance modification was supported by law. De novo review is not
required here.
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In Jaburg, the settlement agreement contained explicit “non-
modification clauses” which stated, “the parties agree this amount [of $2,700 per
month] is non-modifiable.” Id. Here, importantly, the Wife and Husband’s
Agreement contains no such language. It states only that Husband agreed “to not
seek modification of th[e] maintenance award or amount based on co[]habitation or
remarriage by [Wife].” Because his motion to seek modification was based on his
salary decrease, the Agreement did not preclude the family court from modifying
the maintenance amount. Therefore, the family court did not abuse its discretion
when it subsequently modified the maintenance award.
The family court stated that its decision to reduce maintenance by
30% was based on the parties’ income and expenses and, therefore, was a fair and
reasonable way to accommodate both parties’ needs. The family court had the
authority under Kentucky case law to modify the maintenance award in such a
manner. Jaburg, 558 S.W.3d at 13; see also Woodson, 338 S.W.3d at 263. We
find that the family court’s decision was not arbitrary and was supported by sound
legal principles. Holland, 610 S.W.3d at 363. Therefore, the family court did not
abuse its discretion.
CONCLUSION
For the foregoing reasons, we AFFIRM the McCracken Family Court
Order.
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ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Heather L. Jones Warner T. Wheat
Paducah, Kentucky Paducah, Kentucky
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