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Duffy v. Duffy

Court of Appeals of Kentucky

January 19, 2018



          BRIEF FOR APPELLANT/ CROSS-APPELLEE: Lukas Lawless Campbellsville, Kentucky

          BRIEF FOR APPELLEE/ CROSS-APPELLANT: Wesley Eric Bright Campbellsville, Kentucky



          DIXON, JUDGE:

         Appellant/Cross-Appellee, Matthew Brian Duffy, appeals from Findings of Fact, Conclusions of Law, and Decree of Dissolution of Marriage of the Taylor Circuit Court, wherein the trial court determined that his unvested restricted stock units were marital property and subject to division by the court. Appellee/Cross-Appellant, Faustina Lanet Duffy Landis, has filed a cross-appeal challenging the trial court's reduction of its initial finding regarding Matthew's potential gross income. For the reasons stated herein, we affirm the trial court.

         The parties herein were married on December 31, 2001, in Natchitoches Parrish, Louisiana. One child was born during the marriage, a son whose date of birth is October 13, 2013. The parties relocated to Campbellsville, Kentucky in 2010, when Matthew accepted employment as a supervisor with Amazon. In 2014, Matthew was transferred to San Jose, California to work in a similar position with Amazon. Faustina and the parties' son remained in Campbellsville. On October 15, 2015, Faustina filed a petition for dissolution of marriage in the Taylor Circuit Court, which included a request for custody of the minor child.

         On November 19, 2015, the trial court entered Findings of Fact and Conclusions of Law awarding the parties joint custody, with Faustina being designated as the residential custodian. The trial court found that Matthew earned approximately $144, 757.15 in 2014. Further, Matthew was enrolled in Master's Degree classes at Santa Clara University under a 9/11 GI Bill and was receiving full tuition as well as a housing allowance of $2, 506.40 per month, despite not owning a home or paying rent in California. As a result, for the purposes of calculating temporary child support and maintenance, the trial court calculated Matthew's gross monthly income to be $17, 089.73.[1] Matthew was ordered to pay temporary child support in the amount of $1, 056 per month and temporary maintenance in the amount of $2, 500 per month.

         Subsequently, on December 5, 2015, some three weeks after the trial court's temporary order, Matthew discontinued his classes at Santa Clara University. Upon his withdrawal from college, the monthly housing allowance was terminated. Thereafter, on March 23, 2016, Matthew tendered a resignation letter to Amazon, which read,

Saket, I regret to inform you that I will end my employment with as of 4 April, 2016. I appreciate all that I have learned with Amazon fulfillment, but have to make adjustments to my work schedule due to some family related issues and cannot meet the requirements demanded of an Amazon area manager.
I do hope that, after I have resolved my family issues, I will be considered to work with Amazon again.
Thank you.
Matt Duffy

         At the time of Matthew's resignation, he had acquired 224 Restricted Stock Units (RSU) that had an unvested potential (pre-tax) value of $143, 886.40. Those shares were scheduled to vest on May 15, 2016. However, upon his resignation, Matthew forfeited all rights in the RSUs. Matthew thereafter took a job with Sun Basket Food Distributing at an annual base salary of $70, 000. He also received 5000 shares of company stock that were valueless at that time.

         A final hearing on the matter was held on May 6, 2016, during which both parties testified. The trial court entered its Findings of Fact, Conclusions of Law and Decree of Dissolution on May 17, 2016. In the trial court's extensive findings of fact, it determined that Faustina had the reasonable ability to earn $2, 000 per month in addition to her monthly Veteran's Administration disability income of $1, 227.09, for a total monthly imputed income of $3, 227.09. With respect to Matthew's income, the trial court found:

25. It is impossible for the Court to know the exact motivation of the Respondent in changing jobs. Certainly, it is suspicious the Respondent chose to change employment and discontinue his master's education only after the Court's temporary child support and maintenance order was entered. Child support and maintenance calculation are based on the Respondent's ability to earn money, and not what he is currently earning. The Court finds it would be inequitable to calculate Respondent's monthly income on his current earnings when he voluntarily chose to accept a $130, 000 yearly pay cut. Accordingly, for child support and maintenance calculation, the Court imputes the Respondent gross monthly income of $10, 000 per month.

         Further, regarding the classification and valuation of marital property, the trial court made the following relevant Findings of Fact:

65. At the time of Respondent's resignation from, he had 224 remaining unvested shares. In calculating the same yield which was generated on the other 95 shares which became vested in November, 2015, the Court finds these unvested shares had an after tax value of $82, 665.00
66. The Respondent voluntarily resigned his position with Amazon to accept new employment which was approximately one-third of the amount he was earning and relinquished $82, 665.00 from these unvested shares which had been accumulated. The Court finds the actions of the Respondent constitute a dissipation of marital assets. Accordingly, in the valuation of the marital property the Court assigns a value to the Respondent of these unvested benefits at Amazon in the amount of $82, 665.00. The Court finds the actions of the Respondent dissipated marital assets and basically gave away this money without any input or agreement by the Petitioner.

         In its Conclusions of Law, the trial court similarly noted,

22. One issue to be determined in this action involves the status of certain "Restricted Stock Units (RSU) offered by the Respondent's former employer, and whether or not they constitute a marital asset. From information provided to this Court, the Respondent was entitled, twice a year, to have stock issued in his name, which he could then hold or liquidate as he saw fit. The only requirement is that the Respondent be employed by Amazon on the declared date that the stock would be issued. In other words, the stock is issued as a sort of loyalty reward. Since Amazon has done well, the RSU distribution of the 224 unvested stock options to which the Respondent would have been entitled would have had [an after tax] value of $82, 665.00.
23. Unfortunately, on or about March 26, 2016, the Respondent elected to discontinue his employment with Amazon and forfeited his ability to receive the RSUs for the last distribution. By way of reference, the Respondent was aware of the RSU policy and procedures at the time he discontinued his employment, had exercised his rights under the RSU in the past, and the date of the last RSU was during the time ...

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