Darren L. Simmons v. Michelle D. Simmons (mem. dec.) ( 2016 )

MEMORANDUM DECISION Feb 29 2016, 9:35 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Paul L. Jefferson Perry D. Shilts
Jefferson & Brewer, LLC Katherine Ridenour
Indianapolis, Indiana Shilts Law Office
Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Darren L. Simmons, February 29, 2016
Appellant-Respondent, Court of Appeals Case No.
92A03-1106-DR-288
v. Appeal from the Whitley Superior
Court
Michelle D. Simmons, The Honorable James R. Heuer,
Appellee-Petitioner. Special Judge
Trial Court Cause No. 92D01-0906-
DR-199
Bradford, Judge.
Case Summary
[1] Appellant-Respondent Darren Simmons (“Husband”) and Appellee-Petitioner
Michelle Simmons (“Wife”) married in 1992, and Wife petitioned for
dissolution in June of 2009. Husband worked for the Simmons Company, LLC
(“the Company”), of which he owned a 50% share and where he worked with
his brother (and Company co-owner) Brent Simmons and Brent’s wife Sarah.
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In 2007, Husband and Wife had bought an H&R Block Franchise (“the
Franchise”) for $450,000.00, with the intent that Wife would operate it and
draw an income. As of early 2011, Wife had yet to draw a steady income from
the Franchise, and its outstanding debt was $483,598.00.
[2] In 2008, Husband obtained a check from the Company to purchase property in
Columbia City (“the Property”) from Wife’s mother, who, instead of deeding
the Property to the Company, deeded it to Husband and Wife. In March of
2009, the parties purchased the former marital residence (“the Marital
Residence”), then valued at $450,000.00, taking on mortgage loan debt of
$378.000.00. By the time of the final dissolution, this debt had risen to
$407,000.00.
[3] After Wife filed a petition for dissolution of her marriage to Husband, a dispute
arose regarding ownership of the Property, with the Company apparently
indicating that it wished to obtain title. Wife told both Husband and Brent that
she was willing to deed the Property to the Company. Despite this, after Wife
filed for dissolution, the Company sued her and her mother, seeking the transfer
of the Property.
[4] In January of 2011, the trial court held a final hearing on the dissolution.
Husband testified, and the trial court found, that his interest in the Company
was now 44%. Inter alia, the trial court (1) assigned the Franchise to Wife and
valued it at $0.00; (2) assigned the Marital Residence to Husband and valued it
at the outstanding mortgage loan balance, or $407,000.00; and (3) ordered Wife
to transfer title to the Property to the Company and ordered Husband to cause
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the Company to dismiss its suit against Wife and her Mother. Husband argues
that the trial court abused its discretion in valuing the Franchise and the Marital
Residence and in ordering him to cause the Company to dismiss its lawsuit.
We conclude that the trial court did not abuse its discretion in valuing the
marital assets. However, we agree with Husband that the trial court erred in
ordering Husband to cause the Company to dismiss its lawsuit. Consequently,
we affirm in part, reverse in part, and remand with instructions.
Facts and Procedural History
[5] On August 29, 1992, Husband and Wife married and, during their marriage,
had four children.1 Wife filed for dissolution on June 30, 2009. Husband works
for the Company, as do Brent and Sarah. Wife testified that Husband owned a
50% share in the Company on the date of filing and Husband testified that he
owned a 44% interest on the date of the final hearing.
[6] In 2007, Husband and Wife purchased the Franchise for $450,000.00; the
parties borrowed $350,000.00 from Crossroads Bank and $145,000.00 from
Wife’s uncle Robert James Miller. Although Wife had been using Franchise
funds to make annual debt-service payments of between $48,000.00 and
$58,000.00, at the time of Wife’s filing for dissolution, the Franchise’s
outstanding total loan balance was $483,598.00. Wife testified that she had not
drawn a steady salary from the Franchise since its purchase but hoped, after a
1
Neither custody nor support of the children is at issue in this appeal.
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possible refinancing, to draw an annual salary of $30,000.00 in the future.
Husband testified that the value of the Franchise was $100,000.00, while Wife
valued it at -$77,000.00 as of July 31, 2009.
[7] In 2008, Husband obtained a check from the Company to purchase the
Property from Wife’s mother, who, instead of deeding the Property to the
Company, deeded it to Husband and Wife. At some point, a dispute arose
regarding ownership of the Property, with the Company apparently indicating
that it wished to obtain title. Wife told both Husband and Brent that she was
willing to deed the Property to the Company and that all they had to do was
“get me the paperwork and I’ll sign it over[.]” Tr. p. 353. Despite this, after
Wife filed for dissolution, the Company sued her and her mother, seeking the
transfer of the Property. Brent testified that he made the decision to bring suit.
[8] In 2009, the parties purchased the Marital Residence, and the original amount
of the mortgage loan was $378,000.00. In a financial statement filed April 1,
2009, the Marital Residence was valued at $450,000.00. At the time of filing of
the dissolution petition on June 30, 2009, the mortgage loan balance on the
Marital Residence had been paid down to $369,000.00. In December of 2010,
the parties entered into an agreement to sell the Marital Residence for
$360,000.00, which sale never actually occurred due to Husband’s actions. By
the time of the final hearing, the mortgage loan balance had risen to
$407,000.00. Neither party introduced any appraisal evidence regarding the
Marital Residence’s current value during the dissolution proceedings.
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[9] On January 25, 2011, the trial court heard evidence in a final hearing. On May
25, 2011, trial court issued its dissolution decree, which provides, in part, as
follows:
3. Wife is 41 years of age and Husband is 42 years of
age at the time of the final hearing held on January 25, 2011.
4. The parties were married on August 29, 1992.
During their marriage, four children were born[.]
* * * *
8. In 2007, Wife and Husband decided to purchase the
Whitley County H&R Block franchise, with the intention of
having Wife operate that business. Although Wife has made a
number of withdrawals from that business, most especially in
2009 when the parties were finishing construction of their new
marital Marital Residence, this franchise has not paid Wife a
salary nor provided her a steady income. Wife testified that
though she received little or no benefit from the operation of the
H&R Block franchise in 2010, she intends to refinance the loan,
and as a consequence, would hope that she could earn a
$30,000.00 per year income from her operation and management
of this business. Wife has been unable to repay any significant
amount toward the loan received from family member, Robert
James Miller, to assist her and her husband in the purchase of
this business. In fact, since she initially borrowed $145,000.00,
she has had to borrow additional sums from family member,
Robert James Miller, to assist the cash flow of this business.
* * * *
10. Husband has been involved in the construction
trades his entire life. Prior to the divorce being filed, Husband
was paid $102,000.00 per year, plus his employer, the Simmons
Company, LLC (hereinafter “Simmons Company’’), rented his
2004 Ford 350 pickup truck for an amount equal to the loan
payment of $600.00 per month and allowed Husband the use of
another 2008 Ford 350 pickup truck for his personal and business
use. Husband’s gasoline expenses of $600.00-$800.00 per month
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are paid by the Simmons Company as an additional benefit of
employment. Husband’s brother, Brent, who is also an employee
of the Simmons Company, is paid a similar wage and
presumably receives similar other employment benefits.
11. Prior to the divorce filing, Husband and his brother,
Brent, arranged for each of their wives to be paid $34,000.00 per
year salary for nominal and miscellaneous employment services
for the Simmons Company. After Wife filed this divorce action,
Husband immediately terminated Wife’s receipt of this
$34,000.00 per year salary, though [Sarah] continues to receive
this amount of salary per year for nominal and miscellaneous
employment services.
* * * *
30. This Court, taking into consideration all of the
evidence presented, now determines that the following assets and
debts of the marital estate have the following values or amounts
owing:
(ASSETS AND SECURED DEBTS)
a) The former marital Marital Residence at 3355 S. 150 E.,
Columbia City, Indiana, has a fair market value which
approximates the mortgage balance owing to Crossroads Bank.
There is no equity in this asset which shall be awarded to
Husband subject to the security interest of Crossroads Bank. The
Court notes that there was no appraisal of the marital real estate.
* * * *
v) With Husband’s consent, Wife purchased the Whitley
County H&R Block franchise in 2007. The purchase price was
$450,000.00. $350,000.00 was borrowed by the parties from
Crossroads Bank. Another $145,000.00 was borrowed from
Robert James Miller, an uncle of Wife’s. (Wife’s Exhibit 15.)
On the date that the divorce was filed; the loan to Crossroads
Bank had been reduced to $298,000.00, but the amount owing to
Robert James Miller had risen to $185,598.00, due in part to an
additional loan that Wife received after the purchase of the
business, but before the filing of the divorce action. (Wife’s
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Exhibit 16.) Wife does acknowledge having made withdrawals
from the H&R Block business since its purchase, but these
withdrawals were generally to assist in the payment of expenses
relating to the construction of the parties’ new Marital Residence
and not income generated from the successful operation of the
business. These withdrawals necessitated additional borrowings
from Robert James Miller and prevented repayment of the loan
to Robert James Miller. Husband identifies a $100,000.00 value
for Wife’s interest in the H&R Block franchise, but provided this
Court no basis for that valuation other than his belief that Wife
would be successful in its operation going forward in time.
While Wife advocates a negative value to her interest in this
business, this Court declines to do so. For purposes of this
dissolution action, Wife’s interest in the H&R Block franchise is
valued at zero dollars ($0.00).
* * * *
TOTAL ASSETS (NET OF SECURED LOANS)
IN MARITAL ESTATE: $760,196.00
TOTAL UNSECURED DEBTS IN
MARITAL ESTATE: $30,848.00
MARITAL NET WORTH: $729,348.00
* * * *
33A. Wife shall be awarded ownership of the following
assets free and clear of any claim by Husband thereto:
a) Wife’s portion of the household and
furnishings $20,000.00
b) Wife’s 1999 Plymouth Dodge minivan $2,700.00
c) The 2005 GMC Yukon Denali $2,705.00
d) Wife’s Pro Fed Checking Account #4268 $120.00
e) Wife’s H&R Block business Checking
Account #8265 $17.00
f) Wife’s H&R Block business $0.00
g) Wife’s The Simmons Company 401(k)
Retirement Plan $3,604.00
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h) Wife’s Ameriprise IRA Account #2762 $131.00
i) Wife’s Hartford Union Security Ins.
Co. Policy cash surrender value $277.00
Wife’s Total Assets: $24,144.00
B. Wife shall be ordered to timely and completely pay and
hold Husband harmless in all respects, including attorney fees,
the following debts:
a) Wife’s Macy Store Charge
Card Account #7289 $218.00
b) Wife’s Kohl’s Store Charge
Card Account #4264 $897.00
c) Wife’s Sears/CVSD Account #8114 $1,292.00
d) Wife’s Macy’s Visa Account #5268 $2,987.00
e) Wife’s Discover Card Account #3530 $2,664.00
f) Wife’s Citi Platinum Select
Card Account #5726 $5,956.00
g) Parkview Whitley Hospital Account #7408 $283.00
h) MDS Properties, LLC First Equity
Visa Account #8055 $541.00
i) Dr. Timothy Bussick $1,917.00
Wife’s total debts $16,755.00
C. NET: $7,389.00
34A. Husband shall be awarded ownership of the
following assets free and clear of any claim by Wife thereto:
a) Former marital Marital Residence at 3355 S. 150 E.
Columbia City, IN $0.00
b) Husband’s V2 interest in “Granny’s Land’’
at 1910 E. Kaiser Road Coiumbia City, IN $36,488.00
c) Rental house at 1936 E. 3rd Street,
Fort Wayne, IN (net) $18,507.00
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d) Rental house at 408 E: Van Buren Street,
Columbia City, IN (net) $29,636.00
e) Lot 892, Jellystone Campground $10,000.00
f) Husband’s portion of the household
goods and furnishings $20,000.00
g) Husband’s firearms) ammunition and
sporting equipment $25,000.00
h) Husband’s gun safe $3,000.00
i) Parties’ 2008 Amended Federal Tax Refund $3,600.00
j) Husband’s 2004 Ford F350 Pickup Truck $7,143.00
k) Two (2) Yamaha Grizzley 4-wheelers $6,616.00
l) John Deere garden tractor $4,100.00
m) 1999 Nevvmar American Star Four
Camper 5th Wheel (net) $7,743.00
n) 2004 Harley Davidson Screaming
Eagle Motorcyle (net) $7,518.00
o) 2007 camper $25,000.00
p) Husband’s Crossroads Bank
Checking Account #9192 $219.00
q) Husband’s interests in Simmons
Company, NEICCS, B&D
Family Investments and B&D Family
Limited Partnership (net) $500,000.00
r) Husband’s Simmons Company 401(k) $26,404.00
s) Husband’s E* Trade Financial
stock account $829.00
t) Husband’s Hartford Union Security
Ins. Co. policy cash surrender value $1,250.00
Husband’s Total Assets: $736,052.00
B. Husband shall be ordered to timely and completely pay
and hold Wife harmless in all respects, including attorney fees,
the following debts
a) Husband’s Sears Charge Card
Account #l600 $320.00
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b) Star Financial Bank Account
#2588 unsecured Line of Credit $2,915.00
c) Lowes Account #673 $3,231.00
d) Sam’s club Account #5590 $1,189.00
e) United ADJ #8109 $438.00
f) Citi Bank Account #8820 (perhaps the
same as Citi Platinum Account #6650) $6,000.00
Husband’s Total Debts: $14,093.00
C. NET: $721,959.00
35. In order for Wife to receive 50% of the marital
estate, she should receive $364,674.00. Given that she has only
received $7,389.00 of the net marital estate of $729,959.00, she
needs to receive from Husband $357,285.00.
* * * *
41. Husband is further ordered to hold Wife harmless
and indemnify her and [her mother] in all respects, including
attorney fees, regarding the present lawsuit brought by the
Simmons Company and [Sarah] against Wife and her mother[.]
Given Husband’s role in the financial affairs of the various
businesses he and his brother own and operate, this Court does
not believe that this lawsuit could have been brought against
Wife and her mother … without Husband’s authorization and/or
consent. Wife is ordered to quitclaim any interest she has in the
underlying real estate involved in that present lawsuit to
Husband and/or to the Simmons Company, as directed by the
attorney for the Simmons Company in that lawsuit. Husband is
ordered to cause that lawsuit to be dismissed forthwith against
both Wife and her mother … with prejudice. Failing that
dismissal within thirty (30) days of the issuance of this Decree,
Wife may petition this Court to review Husband’s failure in the
aforesaid regard by way of a Contempt Citation, in which she
may ask for more appropriate and/or specific relief at that time.
Appellant’s App. pp. 14, 15-16, 20, 23, 25, 26-28, 30-31.
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[10] On June 22, 2011, Husband filed a notice of appeal. On February 3, 2012, this
court suspended briefing at Wife’s request, which was prompted by Husband’s
bankruptcy filing. In 2015, briefing resumed, presumably because Husband’s
bankruptcy proceeding had concluded.
Discussion and Decision
I. Whether the Trial Court Abused its Discretion in
Assigning Value to Certain Marital Assets
[11] Husband contends that the trial court abused its discretion in valuing the
Franchise and the Marital Residence. “Subject to the statutory presumption
that an equal distribution of marital property is just and reasonable, the
disposition of marital assets is committed to the sound discretion of the trial
court.” Augspurger v. Hudson, 802 N.E.2d 503, 512 (Ind. Ct. App. 2004).
An abuse of discretion occurs if the trial court’s decision is clearly
against the logic and effect of the facts and circumstances, or the
reasonable, probable, and actual deductions to be drawn
therefrom. An abuse of discretion also occurs when the trial
court misinterprets the law or disregards evidence of factors listed
in the controlling statute. The presumption that a dissolution
court correctly followed the law and made all the proper
considerations in crafting its property distribution is one of the
strongest presumptions applicable to our consideration on
appeal. Thus, we will reverse a property distribution only if there
is no rational basis for the award and, although the circumstances
may have justified a different property distribution, we may not
substitute our judgment for that of the dissolution court.
Id. (citations, quotation marks, and brackets omitted).
[12] As for the assignment of values to particular assets in the marital estate,
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A trial court has broad discretion in valuing marital assets, and
its valuation will only be disturbed for an abuse of that discretion.
Leonard v. Leonard, 877 N.E.2d 896, 900 (Ind. Ct. App. 2007). A
trial court does not abuse its discretion as long as sufficient
evidence and reasonable inferences exist to support the valuation.
Id. If the trial court’s valuation is within the scope of the
evidence, the result is not clearly against the logic and effect of
the facts and reasonable inferences before the court. See Skinner
v. Skinner, 644 N.E.2d 141, 144 (Ind. Ct. App. 1994). 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) (citing Quillen
v. Quillen, 671 N.E.2d 98, 102 (Ind. 1996)).
Webb v. Schleutker, 891 N.E.2d 1144, 1151 (Ind. Ct. App. 2008).
A. The Franchise
[13] Husband contends that the trial court abused its discretion in valuing the
Franchise because the assigned value fails to capture the Franchise’s value as an
ongoing business enterprise. Husband points to the Franchise’s ability to (1)
pay Wife a steady salary of $30,000.00 per year, (2) service the Franchise’s debt,
and (3) provide funds for the construction of the Marital Residence. First, Wife
testified at the final hearing that she had never drawn a steady income from the
Franchise, hoping (provided refinancing was secured) to draw $30,000.00 from
the Franchise in the future. Second, despite Wife’s testimony that the
Franchise was providing significant debt service, the Franchise’s debt stood at
$483,598.00, over $30,000.00 more than the purchase price approximately three
years previously. Finally, while the trial court did find that some withdrawals
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were made which were applied to the cost of the Marital Residence, there is no
finding relating to how much those withdrawals might have been.
[14] The trial court split the difference, more or less, between Husband’s
$100,000.00 valuation and Wife’s -$77,000.00. Put another way, the trial
court’s valuation falls within the scope of the evidence. Given ample evidence
that the Franchise is not yet profitable but that it might someday be, we cannot
say that the trial court’s valuation of $0.00 constitutes an abuse of discretion.
Husband’s argument is an invitation to reweigh the evidence, which we will not
do. See DeHaan v. DeHaan, 572 N.E.2d 1315, 1320 (Ind. Ct. App. 1991), trans.
denied.
B. The Marital Residence
[15] Husband contends that the trial court overestimated the value of the Marital
Residence when it assigned it a value equal to the current mortgage loan
balance, which was $407,000.00 as of the final hearing. Husband argues that
the sales agreement for $360,000.00 entered into in December of 2010, and
another offer to purchase at around the same time for $347,000.00 more
accurately reflect the Marital Residence’s true value. The sale for $360,000.00
did not occur because Husband elected to regain possession of the Marital
Residence. First, Wife submitted evidence that the fair market value of the
Marital Residence in April of 2009 was $450,000.00. Although Husband
argues that “[i]t is no secret at the time of the decree the real estate values in
Indiana have plummeted,” Appellant’s Amended Br. p. 12, he points to no
evidence touching on this plummet, much less any evidence to establish the
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approximately 20% drop in value he claims occurred. Moreover, Husband
presents no evidence that the offers for $360,000.00 and $347,000.00 were
reasonable. Indeed, one possible inference to be drawn from Husband’s
decision not to sell the Marital Residence at $360,000.00 is that he considered it
a below-value offer. As with the previous issue, the trial court’s valuation is
within the scope of the evidence. Husband’s argument, as was his previous
argument, is nothing more than an invitation to reweigh the evidence, which
we will not do. See id. Husband has failed to establish that the trial court
abused its discretion in valuing the Franchise and Marital Residence.
II. Whether the Trial Court Abused its Discretion in
Ordering Husband to Cause The Company to Dismiss its
Lawsuit Against Wife and Wife’s Mother
[16] Finally, Husband contends that the trial court erred in ordering him to cause
the Company to dismiss its lawsuit against Wife and her mother concerning
title to the Property. Husband testified at the final hearing, and the trial court
found, that he had a 44% interest in the Company. Without more, such as
evidence that Husband was appointed a proxy by another owner, a 44% interest
simply does not give Husband control over the Company’s affairs. “The law
recognizes that the majority shareholders normally have a right to manage,
operate and control the corporation.” Lafayette Realty Corp. v. Moller, 215
N.E.2d 859, 861 (Ind. 1966). Whoever the majority owner or owners of the
Company are, they are not party to this lawsuit, and therefore cannot be
ordered to dismiss the lawsuit. “It is axiomatic that a divorce decree does not
affect the rights of nonparties.” Sovern v. Sovern, 535 N.E.2d 563, 566 (Ind. Ct.
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App. 1989). We conclude that the trial court erred in ordering Husband to
cause the Company to dismiss its lawsuit against Wife and Wife’s mother,
because Husband does not have the legal authority to do so.2
Conclusion
[17] We conclude that the trial court did not abuse its discretion in assigning values
to the Franchise and the Marital Residence. However, we conclude that the
trial court erred in ordering Husband to cause the Company to dismiss its
lawsuit against Wife and Wife’s mother, as Husband does not have a
controlling interest in the Company. We remand with instructions for the trial
court to vacate the portion of its dissolution decree ordering Husband to cause
the Company to dismiss the lawsuit.
[18] The judgment of the trial court is affirmed in part, reversed in part, and
remanded with instructions.
Najam, J., and Riley, J., concur.
2
Wife argues that Husband’s claim of not having a controlling interest in the Company is a “ruse[,]”
Appellee’s Br. p. 22, and that he has de facto control. Even assuming, arguendo, that this is true, this does not
change the fact that he does not have de jure control, which is as far as our inquiry may go. Although we
have concluded that the trial court did not have the authority to order Husband to cause the Company to
dismiss the lawsuit, we remind the parties that we have affirmed the portion of the dissolution order
providing that “Husband is further ordered to hold Wife harmless and indemnify her and [her mother] in all
respects, including attorney fees, regarding the present lawsuit brought by the Simmons Company and
[Sarah] against Wife and her mother[.]” Appellant's App. p. 30.
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