David Windsor Lundy v. Carol Ann Lundy (mem. dec.) ( 2017 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), Nov 30 2017, 9:23 am
this Memorandum Decision shall not be
CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
court except for the purpose of establishing and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Patrick A. Duff Kathryn L. Kornblum
Duff Law, LLC Vanstone & Kornblum, LLC
Evansville, Indiana Evansville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
David Windsor Lundy, November 30, 2017
Appellant-Respondent, Court of Appeals Case No.
82A05-1704-DR-786
v. Appeal from the Vanderburgh
Superior Court
Carol Ann Lundy, The Honorable Richard G.
Appellee-Petitioner D’Amour, Judge
Trial Court Cause No.
82D07-1512-DR-1560
Crone, Judge.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 1 of 15
Case Summary
[1] David Windsor Lundy (“Husband”) appeals the trial court’s distribution of the
marital estate following the dissolution of his marriage to Carol Ann Lundy
(“Wife”). He claims that the trial court abused its discretion when it deviated
from the presumption of an equal division of property. He further asserts that
the trial court abused its discretion in its valuation of various marital assets.
Finding no abuse of discretion or reversible error, we affirm.
Facts and Procedural History
[2] Husband and Wife were married in October 1992. Each had been previously
married, and each owned significant assets prior to the marriage which were
either inherited or accumulated through their individual efforts. Specifically,
prior to the marriage, Husband owned a home in Henderson, Kentucky, with
his previous spouse. Pursuant to the divorce decree, Husband retained his one-
half interest in the home while his previous spouse has the right to live in, and
still does live in, the home until it is sold. When she was in high school, Wife
inherited a one-eighth interest in farmland that had been owned by her family
for generations. In 2005, Wife inherited another five-eighths interest in the
farmland. Wife also inherited $256,000 and placed those funds in an
investment account often used by both Husband and Wife to pay for individual
and joint purchases. In 2009, Husband inherited a one-third interest in real
property that subsequently became the marital residence when the parties
purchased the remaining two-thirds interest from Husband’s siblings for
$80,000.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 2 of 15
[3] During the marriage, both Husband and Wife were self-employed. Husband
worked part-time repairing musical instruments and electronics, and also spent
some time servicing HVAC products. Husband continues to work and has a
monthly social security income of $1820. Wife was a piano teacher. She
retired due to health reasons and has a monthly social security income of $992.
Also during the marriage, Husband maintained two investment accounts, Wife
had three investment accounts, and the parties had two joint investment
accounts, all with Hilliard Lyons. The parties also owned a timeshare, various
items of jewelry, several pianos, and other personal property.
[4] In September 2015, the parties separated. A few months prior to the
separation, Wife met with an attorney and placed her interest in the farm
property in an irrevocable trust with Wife’s grandson as the beneficiary upon
Wife’s death. Husband was present with Wife during this transaction.
[5] Wife filed a petition for dissolution of marriage on December 4, 2015. The trial
court held two contested hearings on August 4 and October 24, 2016. The
court entered its decree of dissolution of marriage on November 10, 2016. In its
dissolution order, the court found and concluded in relevant part as follows:
3. All property of the parties, either owned jointly or in their
individual names, whether owned prior to the marriage or
inherited before or during the marriage, has been included in the
marital pot. The Court finds that the presumption of an equal
division has been rebutted in regards to two pieces of real estate,
one owned by the Husband prior to the marriage and the other a
parcel of real estate inherited both prior to and during the
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 3 of 15
marriage by the Wife. The division of said real estate is as
follows:
A. Real Estate in Henderson, Kentucky.
The Husband and a former spouse jointly own a home in
Henderson Kentucky. His ex-wife currently resides in the home
and has for close to twenty-five (25) years. At some point the
Husband or his heirs may receive his one-half (1/2) interest in
this home. The Husband’s share has a fair market value of
[$67,500]. The Husband is awarded his fifty percent (50%)
interest in said real estate free and clear from the Wife. The
property is set off to the Husband’s side of the marital ledger
without including its value with the other items of property
awarded to him. This property is set off to the Husband in this
manner because he has continuously owned said real estate with
his ex-wife through this marriage and that the Husband’s interest
in said real estate is remote due to his ex-wife’s apparent life
estate.
B. 153 acres in Spencer County, Indiana
The Wife had a seventy-five percent (75%) interest in one
hundred fifty-three (153) acres of farm ground in Spencer
County, Indiana. A 1/8[th] share of this real estate was inherited
prior to the marriage and a 5/8ths interest was inherited by her
during the marriage. Said real estate has always been in her
name and she was primarily responsible for the business aspect of
tenant farming this real estate during the marriage, although with
some assistance from the Husband. The Court is aware of her
attempt to place this real estate outside the marital estate five (5)
months before the filing of this action by placing it in an
irrevocable trust. The timing of this action on her part is
certainly suspect and could have, if plead, raised issues of fraud,
either actual or constructive. However, the Court declines to
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 4 of 15
make a ruling on the validity of the irrevocable trust and on the
issue of fraud. This farm ground has been in the Wife’s family
for generations. She kept it in her name and she ran the farm
operations. The Husband did receive some of the benefit from
the farm income that came into the family unit during the
marriage and was used to purchase marital assets and pay marital
debts. The Court finds her interest in this farm ground to have a
fair market value of [$286,875]. The Wife is awarded her interest
in said real estate free and clear of any claim by the Husband.
This property is set off to the Wife’s side of the marital ledger
without including its value with the other items of property
awarded to her.
Appellant’s App. 19-21. The trial court valued and divided the remaining items
of real and personal property equally ($371,427 to each party), finding that “a
50/50 division of these items to be just and reasonable under the
circumstances.” Id. at 21-22.
[6] Husband filed a motion to correct error and requested a stay of the court’s
order. Following a hearing, the trial court denied Husband’s motion. This
appeal ensued.
Discussion and Decision
[7] The trial court here sua sponte entered findings of fact and conclusions thereon
to accompany its dissolution decree. Accordingly, the specific factual findings
control only the issues that they cover, while a general judgment standard
applies to issues upon which there are no findings. Fetters v. Fetters, 26 N.E.3d
1016, 1019 (Ind. Ct. App. 2015), trans. denied. As to the issues upon which the
trial court made specific findings, we apply a two-tiered standard of review:
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 5 of 15
first, we consider whether the evidence supports the findings of fact; second, we
determine whether the findings of fact support the conclusions thereon.
Estudillo v. Estudillo, 956 N.E.2d 1084, 1090 (Ind. Ct. App. 2011). We will
uphold the trial court’s findings of fact and conclusions thereon unless they are
clearly erroneous. Id. Clear error is “that which leaves us with a definite and
firm conviction that a mistake has been made.” Masters v. Masters, 43 N.E.3d
570, 575 (Ind. 2015).
Section 1 – The trial court did not abuse its discretion in
determining that the presumption of an equal division of
marital property had been rebutted with respect to the
Kentucky and Spencer County properties.
[8] Husband contends that the trial court abused its discretion in determining that
the presumption of an equal division of marital property had been rebutted with
respect to the Kentucky and Spencer County properties. The division of marital
assets lies in the trial court’s discretion, and we will reverse only for an abuse of
that discretion. Fischer v. Fischer, 68 N.E.3d 603, 608 (Ind. Ct. App. 2017), trans.
denied. It is well established in Indiana that all marital property goes into the
marital pot for division, whether it was owned by either spouse prior to the
marriage, acquired by either spouse after the marriage and prior to final
separation of the parties, or acquired by their joint efforts. Ind. Code § 31-15-7-
4(a); Hill v. Hill, 863 N.E.2d 456, 460 (Ind. Ct. App. 2007). This “one-pot”
theory insures that all assets are subject to the trial court’s power to divide and
award. Hill, 863 N.E.2d at 460. While the trial court may ultimately determine
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 6 of 15
that a particular asset should be awarded solely to one spouse, it must first
include the asset in its consideration of the marital estate to be divided. Id.[9] Indiana Code Section 31-15-7-4(b) requires the trial court to divide the marital
property in a “just and reasonable manner.” The court “shall presume that an
equal division of the marital property between the parties is just and
reasonable.” Ind. Code § 31-15-7-5. This presumption can be rebutted by a
party who presents relevant evidence, including evidence concerning the
following factors, demonstrating that an equal division would not be just and
reasonable:
(1) The contribution of each spouse to the acquisition of the
property, regardless of whether the contribution was income
producing.
(2) The extent to which the property was acquired by each
spouse:
(A) before the marriage; or
(B) through inheritance or gift.
(3) The economic circumstances of each spouse at the time the
disposition of the property is to become effective ....
(4) The conduct of the parties during the marriage as related to
the disposition or dissipation of their property.
(5) The earnings or earning ability of the parties as related to:
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 7 of 15
(A) a final division of property; and
(B) a final determination of the property rights of the parties.
Id.[10] The division of marital property is highly fact sensitive. Fobar v. Vonderahe, 771
N.E.2d 57, 59 (Ind. 2002). A party challenging the trial court’s division of
marital property must overcome a strong presumption that the dissolution court
“considered and complied with the applicable statute, and that presumption is
one of the strongest presumptions applicable to our consideration on appeal.”
McCord v. McCord, 852 N.E.2d 35, 43 (Ind. Ct. App. 2006) (quoting DeSalle v.
Gentry, 818 N.E.2d 40, 44 (Ind. Ct. App. 2004)), trans. denied. Accordingly, we
will reverse a trial court’s division of marital property only if there is no rational
basis for the award. Luttrell v. Luttrell, 994 N.E.2d 298, 301 (Ind. Ct. App.
2013), trans. denied (2014). We consider only the evidence most favorable to the
trial court’s disposition of the property without reweighing evidence or
assessing witness credibility, and although the facts and reasonable inferences
might justify a different property distribution, we will not substitute our
judgment for that of the trial court. Webb v. Schleutker, 891 N.E.2d 1144, 1153-
54 (Ind. Ct. App. 2008).
[11] Here, the trial court determined that the presumption of an equal division of
marital property had been rebutted solely with respect to two pieces of marital
property: the Kentucky residence owned by Husband and his prior spouse, and
the Spencer County farmland inherited by Wife both before and during the
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 8 of 15
marriage. The court specifically included the parties’ respective interests in
both pieces of real estate in the marital pot, and then determined that
Husband’s interest in the Kentucky residence, valued at $67,500, should be set
aside solely to him, and that Wife’s interest in the Spencer County farmland,
valued at $286,875, should be set aside solely to her.
[12] Husband first complains that the trial court awarded Wife’s interest in the
Spencer County farmland solely to her. It is well settled that while a trial court
must include inherited property in the marital pot, the decision of whether to set
over the inherited property to a party is discretionary. See Hyde v. Hyde, 751
N.E.2d 761, 766 (Ind. Ct. App. 2001). That is to say, if the trial court here
determined that setting aside the inherited property to Wife was just and proper,
and explained its deviation from the presumptive fifty-fifty split accordingly, we
will not disturb that decision.
[13] The trial court here explained its deviation from the presumptive fifty-fifty split
based upon the fact that Wife’s interest in the Spencer County property was
inherited; the land has been in Wife’s family for generations; it has always
remained in Wife’s name; and Wife, rather than Husband, handled the
operation of that farmland.1 The trial court further noted that Husband did
receive some of the benefit from the farm income that came into the family unit
during the marriage and was used to purchase marital assets and pay marital
debts. The record also indicates that Husband collects almost double the social
1
The record indicates that Wife hired tenant farmers to work the useable portions of the land.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 9 of 15
security income that Wife does, and that he is still employed and enjoys a
higher future earning ability. Given these facts, we cannot say that the trial
court abused its discretion when it deviated from an equal division of property
and set aside Wife’s inherited interest in the Spencer County property solely to
her. See Casteneda v. Casteneda, 615 N.E.2d 467, 470-71 (Ind. Ct. App. 1993)
(holding that trial court did not abuse discretion in setting aside inheritance
exclusively to wife where it was kept in wife’s name separate from husband and
husband did not contribute to accumulation of the property). The evidence
supports the trial court’s findings of fact in this regard, and the findings of fact
support the conclusions thereon.2
[14] It is difficult to discern Husband’s complaint regarding his interest in the
Kentucky property that he acquired prior to the marriage, and that was set aside
solely to him. Apparently, he disputes the inclusion of that asset in the marital
pot in the first place. He asserts that his interest in that property should not
have been considered a marital asset because it is “remote and non-vested.”
Appellant’s Br. at 13.
[15] An asset may vest in possession or in interest. In re Marriage of Preston, 704
N.E.2d 1093, 1097 (Ind. Ct. App. 1999). “Vesting in possession connotes an
2
Wife points out that prior to her filing of the dissolution petition, she placed the Spencer County property in
an irrevocable trust. The trial court specifically noted that the timing of Wife’s action was “certainly
suspect,” but the court declined to make a finding as to the validity of the trust. Appellant’s App. at 20. Wife
argues that “the trial court clearly erred in not finding the irrevocable trust placed the farmland outside the
marital pot as she was divested of her interest.” Appellee’s Br. at 21. However, Wife does not expand on
this argument, stating that this alleged error “is not fatal in that [the trial court] set the property aside to
Wife.” Id. at 10. Therefore, we will not address either the trust or its validity.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 10 of 15
immediate existing right of present enjoyment, while vesting in interest implies
a presently fixed right to future enjoyment.” Id. This Court has concluded that
a future or remainder interest in real estate subject to a life estate is a present
pecuniary interest capable of valuation. Falatovics v. Falatovics, 15 N.E.3d 108,
111 (Ind. Ct. App. 2014). Here, the trial court found that Husband still owns
the Kentucky property jointly with his former spouse, and that Husband’s ex-
wife enjoys what may be described as a life estate in the property pursuant to
the divorce decree.3 Thus, although Husband does not have a legal present
possessory interest in the Kentucky property, his fifty-percent future interest in
that property is fixed and certain, and that interest has a present pecuniary
value. Accordingly, the trial court properly included the property in the marital
pot before setting it aside solely to Husband.
[16] In sum, Husband’s complaint can be boiled down to one thing: he is unhappy
with the wide disparity between the value of the Kentucky property set aside
solely to him and the value of the Spencer County property set aside solely to
Wife. Be that as it may, we think that the trial court adequately explained its
reasons for deviating from the presumption of an equal division of property
with respect to the two pieces of real estate based upon the relevant evidence
presented regarding the statutory factors listed in Indiana Code Section 31-15-7-
5. As there is a rational basis for the property distribution, we will not
3
The divorce decree basically permits Husband’s ex-wife to live on the Kentucky property until she no longer
wishes to or gets remarried. However, the decree also permits either party to purchase the other’s interest or
sell their interest to a third party at any time. Appellant’s App. Vol. 2 at 101.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 11 of 15
substitute our judgment for that of the trial court. We find no abuse of
discretion.
Section 2 – The trial court did not abuse its discretion in
valuing the remaining marital property.
[17] Husband further challenges the trial court’s valuation of various other items of
marital property. We review a trial court’s valuation of an asset in a marriage
dissolution for an abuse of discretion. Bingley v. Bingley, 935 N.E.2d 152, 154
(Ind. 2010). As long as evidence is sufficient and reasonable inferences support
the valuation, an abuse of discretion does not occur. Webb, 891 N.E.2d at 1151.
Upon review of a trial court’s valuation of property in a dissolution, we neither
reweigh the evidence nor judge the credibility of witnesses. Crider v. Crider, 15
N.E.3d 1042, 1056 (Ind. Ct. App. 2014), trans. denied.
[18] When determining the date upon which to value the marital assets, the trial
court may select any date between the date of filing the dissolution petition and
the date of the final hearing. Deckard v. Deckard, 841 N.E.2d 194, 200 (Ind. Ct.
App. 2006). Our supreme court has explained that “[t]he selection of the
valuation date for any particular marital asset has the effect of allocating the
risk of change in value of that asset between the date of valuation and date of
the hearing. We entrust this allocation to the discretion of the trial court.”
Quillen v. Quillen, 671 N.E.2d 98, 103 (Ind. 1996). There is no abuse of
discretion where the trial court’s valuation of a marital asset is within the range
of values supported by the evidence. Balicki v. Balicki, 837 N.E.2d 532, 536 (Ind.
Ct. App. 2005), trans. denied (2006). A valuation submitted by one of the parties
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 12 of 15
is competent evidence of the value of property in a dissolution action and may,
alone, support the trial court’s determination. Crider, 15 N.E.3d at 1056.
[19] Husband first contends that “there is a sum of $6834.81 that is unaccounted for
towards [Wife’s] share of [the marital] estate and not considered by the trial
court’s distribution of assets.” Appellant’s Br. at 18. Husband states that this
discrepancy was caused by the trial court’s selection of a valuation date of
October 24, 2016, for Wife’s Hilliard Lyons IRA account, but a valuation date
of August 4, 2016, for two of Husband’s Hilliard Lyons accounts.4 Husband
asserts that the trial court was required to “value all accounts at the same point
in time” and that reversible error occurred because the court did not. Id. at 20.
However, contrary to Husband’s assertion,“[t]here is no requirement in our law
that the valuation date be the same for every asset.” Wilson v. Wilson, 732
N.E.2d 841, 843 (Ind. Ct. App. 2000), trans. denied. To the extent Husband
argues that the trial court’s valuation was erroneous because the court selected
different dates on which to value different assets, we find no error.5
4
Wife’s IRA account reportedly had a value of $73,998.00 on August 4, 2016, and a value of $67,139.19 on
October 24, 2016, resulting in a difference of $6834.81.
5
Husband mentions that the trial court “didn’t take into consideration the funds that [Wife] spent from her
Hilliard Lyons IRA” account during the pendency of the dissolution. Appellant’s Br. at 20. However,
Husband made no argument to the trial court, nor does he make an argument to this Court, that Wife’s use
of those funds was unjustified or constituted a dissipation of assets. See Hardebeck v. Hardebeck, 917 N.E.2d
694, 700 (Ind. Ct. App. 2009) (“Dissipation generally involves the use or diminution of the marital estate for
a purpose unrelated to the marriage and does not include the use of marital property to meet routine financial
obligations” and may also include “the frivolous and unjustified spending of marital assets.”). We need not
address this issue any further.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 13 of 15
[20] Husband also maintains that the trial court abused its discretion in valuing (or
failing to assign a positive value to) numerous other assets including certain
debt owed to Husband, a vehicle, a trailer, Husband’s business, guns and a gun
safe, pianos, jewelry, the timeshare, cosmetic procedures that Wife received
during the marriage, and a bank account. While we decline to go into detail
regarding each of these items, our thorough review of the record reveals that the
trial court’s valuations of each of these items is within the range of values
supported by the evidence presented to the trial court. Husband essentially asks
us to reweigh the evidence in his favor, which we will not do. We find no
abuse of discretion with respect to the trial court’s valuation of those assets.
[21] We do agree with Husband, however, that a slight error may have occurred
regarding the Evansville Teachers Federal Credit Union account ending in 753.
It appears that the only evidence presented as to the value of this account
revealed a balance of $361.00, but the trial court assigned a value of $500.00 on
the final balance sheet. This was likely a scrivener’s error. Wife does not
disagree that this error occurred.6 Nevertheless, because the error had a de
minimis effect on the substantial property distribution that occurred here, we
find it harmless and leave the trial court’s order undisturbed. The trial court’s
dissolution order and property distribution is affirmed.
6
Wife did not respond to Husband’s argument in this regard. An appellee’s failure to respond to an issue
raised in an appellant’s brief is, as to that issue, akin to failing to file a brief. Khaja v. Khan, 902 N.E.2d 857,
868 (Ind. Ct. App. 2009). Thus, the appellant need only establish that the trial court committed prima facie
error, that is, error at first sight, on first appearance, or on the face of it. Id.Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 14 of 15
[22] Affirmed.
Vaidik, C.J., and Mathias, J., concur.
Court of Appeals of Indiana | Memorandum Decision 82A05-1704-DR-786 | November 30, 2017 Page 15 of 15