Donald P. Katz v. Lori B. Katz , 118 N.E.3d 813 ( 2019 )

FILED
Jan 24 2019, 7:46 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Jonathan R. Deenik Michael Cheerva
Deenik Law, LLC Emswiller Williams Noland &
Greenwood, Indiana Clarke, LLC
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Donald P. Katz, January 24, 2019
Appellant-Petitioner, Court of Appeals Case No.
18A-DR-1125
v. Appeal from the Hamilton
Superior Court
Lori B. Katz, The Honorable William J. Hughes,
Appellee-Respondent. Judge
Trial Court Cause No.
29D03-1401-DR-888
Shepard, Senior Judge.
[1] When parties negotiate a court-approved property settlement during dissolution
of marriage proceedings but later informally agree to carry out its terms through
predictable, if different, means, does this latter path constitute an improper
amendment of the original settlement?
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[2] Under the facts of this case, we conclude that the parties’ later arrangements fell
within the larger terms of the formal decree and that Donald Katz was required
to make additional property settlement payments to Lori Katz under the terms
of their court-approved agreement. We affirm the trial court.
Facts and Procedural History
[3] In 2014, Donald filed a petition to dissolve the parties’ marriage. The marital
estate included the parties’ house in Carmel, Indiana, a condominium in
Colorado, and various investments and business interests. Donald and Lori
negotiated a settlement agreement that the trial court approved and
incorporated in a decree of dissolution on August 17, 2016. Among other
provisions, the parties agreed the house and the condominium would be sold,
and the proceeds would be used to pay off a mortgage and a line of credit
secured by those properties. The agreement further stated Donald would pay
Lori a monthly sum to equalize the division of marital assets. According to the
agreement, if the parties later agreed to not sell either or both properties, Lori
would be entitled to additional monthly payments “to add back the costs of sale
that are no longer being incurred.” Appellant’s App. Vol. 2, p. 23.
[4] The home and condominium were listed for sale. On June 6, 2017, Donald
and Lori signed a one-page document that Donald had drafted without an
attorney. In the document, Donald and Lori explained they wanted to “modify
[their] earlier arrangement” and remove the properties from listings for sale “for
the foreseeable future.” Id. at 36. The document further states, “Donald P.
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Katz has expressed a desire to continue to occupy the [house] and maintain [the
condominium] as a second home.” Id. Donald and Lori further stated they
wanted to “refinanc[e] the current loan secured by these properties into a more
favorable mortgage program.” Id. Lori quitclaimed her interest in the house
after the document was signed, but she and Donald were still both parties to a
mortgage on the property.
[5] On November 6, 2017, Donald filed a request for appointment of a
commissioner. That document has not been provided to this Court. Lori
responded by asking the trial court to either: order the sale of the house and
condominium, or order Donald to make additional monthly payments to
accurately account for the changed division of marital property.
[6] The court held an evidentiary hearing. On January 30, 2018, it denied
Donald’s request for appointment of a commissioner. The court granted Lori’s
request for additional payments, increasing Donald’s monthly obligation from
154 payments (per the original divorce decree) to 186 payments. In its order,
the court determined the additional payments were necessary because “[t]he
parties agreed not to sell the marital home and condo as shown in [the June 6,
2017 document].” Id. at 13. This appeal followed.
Issue
[7] Donald raises three issues, which we consolidate and restate as: Whether the
trial court erred in ordering Donald to make additional payments to Lori.
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Discussion and Decision
[8] Neither party requested findings of fact and conclusions thereon, and the trial
court did not issue any. We review the court’s order under a general judgment
standard. A general judgment will be affirmed if it can be sustained upon any
legal theory consistent with the evidence. Shelby Eng’g Co., Inc. v. Action Steel
Supply, Inc., 707 N.E.2d 1026 (Ind. Ct. App. 1999). We neither reweigh the
evidence nor judge the credibility of the witnesses. Bedford Recycling, Inc. v. U.S.
Granules Corp., 634 N.E.2d 1361 (Ind. Ct. App. 1994), trans. denied.
[9] Donald argues the trial court erred in ordering him to make additional monthly
payments to Lori due to their agreement not to sell the house and the
condominium. He claims the evidence showed he still intended to sell those
properties later, and the court’s decision amounted to an improper modification
of the settlement agreement.
[10] Settlement agreements are contractual in nature and bind the parties when the
court merges and incorporates that agreement into the divorce decree. Shorter v.
Shorter, 851 N.E.2d 378 (Ind. Ct. App. 2006). Once incorporated into a judicial
decree, such agreements may not be altered, absent fraud, duress, or consent of
the parties. Still, as Justice Sullivan observed for a unanimous Court, that
“does not mean that a court has no authority to resolve a dispute over the
interpretation of a settlement agreement or property-division order.” Ryan v.
Ryan, 972 N.E.2d 359, 363 (Ind. 2012).
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[11] When such moments arise, and the terms of a contract are unambiguous, we do
not construe its terms or look to extrinsic evidence. Deel v. Deel, 909 N.E.2d
1028 (Ind. Ct. App. 2009). Unambiguous terms are conclusive, and we will
merely apply the contractual provisions. Id.[12] According to the parties’ settlement agreement, the house and the
condominium were to be listed for sale and “remain listed until sold.”
Appellant’s App. Vol. 2, p. 18. Donald could live in the house “until its sale,”
but he was “solely responsible for all mortgages . . . and all other obligations
associated with the marital residence.” Id. In addition, “[Donald] shall pay
[Lori a] property settlement judgment of $3,600 a month for 154 months.” Id.
at 22. If the proceeds from the sale of the house and the condominium were
less than certain specified amounts, then Lori’s settlement payments were to be
reduced accordingly. By contrast, “[i]n the event there is a future agreement
not to sell either or both of the properties, counsel for [Donald and Lori] shall
calculate the extension of the payments to add back the costs of sale that are no
longer being incurred.” Id. at 23. The unambiguous language of the agreement
provides Lori is entitled to additional payments if the properties are removed
from sale by agreement of the parties.
[13] Did the trial court properly determine the parties agreed not to sell the
properties? Donald and Lori’s June 6, 2017 document states, “Donald P. Katz
has expressed a desire to continue to occupy the [marital home] and maintain
[the condominium] as a second home.” Id. Donald and Lori further stated
they wanted to “refinance[e] the current loan secured by these properties into a
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more favorable mortgage program.” Id. Lori later testified Donald had told her
he planned to return the properties to sale listings, but he had not done so by the
time of the evidentiary hearing. Tr. Vol. 2, p. 45. This is ample evidence from
which the trial court could have reasonably concluded the parties had agreed to
not sell the properties, and, further, that Donald intended to keep them for an
extended period, thus triggering Donald’s contractual obligation to make
additional payments to Lori. Donald points to evidence that he had removed
the properties from sale listings on a temporary basis while he worked out
financing for his businesses. We see this as a request to reweigh the evidence.
[14] Donald further claims the June 6, 2017 document was not valid because it did
not modify the settlement agreement. We agree the document did not modify
the original settlement agreement, which required any modification to be
submitted to a court for approval. Lori testified she wanted to submit the
document to the trial court, but Donald refused.
[15] Even if the document did not modify the settlement agreement, it is sufficient
evidence of the parties’ intent to not sell the properties. Donald does not
dispute drafting or signing the document. In addition, the original settlement
agreement unambiguously states the parties could make a “future agreement”
to not sell the properties. Appellant’s App. Vol. 2, p. 23. Indeed, the
agreement described how to calculate the additional payments to Lori if she and
Donald agreed not to sell one or both of the properties. The original settlement
agreement did not require that any future agreement must meet the
requirements for a formal modification of the settlement agreement.
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[16] We conclude that the June 6, 2017 signed document, which reflected the
parties’ agreement not to sell the properties, was explicitly contemplated by the
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terms of the original settlement. See Ind. Code § 31-15-2-17(c) (1997) (once an
agreement on property disposition is incorporated into a decree, it may be
modified “as the agreement prescribes or the parties subsequently consent”); see
also Ring v. Ring, 51 N.E.3d 1245, 1250 (Ind. Ct. App. 2016) (noting the parties
had agreed to sell a parcel of land, which was permissible under the terms of
their property settlement agreement, but rejecting the proposed sale of a
different parcel as an inappropriate modification because one party objected).
[17] Finally, Donald claims the trial court’s award of additional property settlement
payments was unfair because he had no notice that the court would rule upon
“the issue of whether the parties had agreed not to sell the properties.”
Appellant’s Br. p. 12.
[18] The record shows otherwise. In Lori’s response to Donald’s request to appoint
a commissioner, she claimed the settlement agreement required the parties to
sell the marital home and the condominium. She further stated Donald had
removed the properties from sale and she was entitled to either: (1) a court
order to sell the properties; or (2) additional property settlement payments from
Donald. Donald was clearly informed in advance of the hearing that Lori
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Donald also argues the trial court’s order effectively modified the original settlement agreement. To the
contrary, the court merely applied the plain terms of the agreement by determining: the parties decided not
to sell the home and the condominium; and, under the agreement, Lori was entitled to additional payments
because of the decision not to sell.
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sought additional property settlement payments due to his withdrawal of the
properties from sale, and he was by no means ambushed at the evidentiary
hearing.
[19] For these reasons, we affirm the judgment of the trial court.
[20] Affirmed.
May, J., and Robb, J., concur.
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