James W. Avery v. Cynthia L. (Avery) Howe ( 2013 )

Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be Nov 05 2013, 5:47 am
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 – PRO SE: ATTORNEY FOR APPELLEE:
JAMES W. AVERY MICHAEL G. RUPPERT
Avery Law Firm Ruppert & Schaefer, P.C.
Denver, Colorado Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JAMES W. AVERY, )
)
Appellant-Respondent, )
)
vs. ) No. 18A05-1301-DR-28
)
CYNTHIA L. (AVERY) HOWE, )
)
Appellee-Petitioner. )
APPEAL FROM THE DELAWARE CIRCUIT COURT
The Honorable Marianne L. Vorhees, Judge
Cause No. 18C01-1103-DR-55
November 5, 2013
MEMORANDUM DECISION – NOT FOR PUBLICATION
BAKER, Judge
In the instant case, appellant-respondent James W. Avery (Husband) appeals the
trial court’s dissolution decree awarding him 60% of the marital estate that he had once
shared with appellee-petitioner Cynthia L. (Avery) Howe, (Wife) who was awarded the
remaining 40%. More particularly, Husband argues that inflammatory testimony about
him visiting prostitutes resulted in Wife receiving a larger share of the marital estate.
Additionally, Husband contends that the trial court erred by including property that had
been acquired before the marriage and by using an inflated valuation on real property
located in Colorado. Finally, Husband asserts that the trial court erred by failing to
consider the tax consequences of its property distribution and by awarding Wife $15,000
in attorney fees. Finding no error, we affirm the judgment of the trial court.
FACTS
Husband and Wife began cohabitating in 2000 and married on June 26, 2004. The
parties did not have an antenuptial or a prenuptial agreement.
Throughout the couple’s relationship, Wife worked for Environmental
Construction in Yorktown where she was paid an annual salary of $60,000 and provided
a company vehicle. Wife made significant contributions to the marital estate by working
full-time, providing health insurance, reducing expenses by using the company vehicle,
and by assisting Husband in his law practice with bookkeeping and organizing.
Husband owned and operated a successful law practice and is licensed to practice
law in Colorado, Indiana, and New York. However, Husband’s income could be
unpredictable; therefore, Wife was sometimes responsible for paying the monthly bills.
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Later in the marriage, the couple’s finances were exposed to extreme risk because of the
large credit line from Husband’s business, which was secured by the marital residence.
Despite Husband’s unstable income, Wife estimated his income to be at least
$500,000 per year based on her personal knowledge and statements Husband made on a
dating website that were entered into evidence. Nevertheless, the trial court determined
that despite Husband’s “much greater” earning capacity, there was very little on which to
base his income because he had not filed tax returns in several years. Appellant’s App. p.
2.
At the time the couple began cohabitating, Wife owned two rental properties.
Husband did not own any real property, but did have a timeshare, a BMW, a retirement
account, and his law practice. During the period of cohabitation, Husband acquired
property on Cheyenne Drive in Muncie, which would become the marital residence, and
many vehicles. Husband brought to the marriage a $60,000 Chase brokerage account.
In September 2010, the couple purchased a residence in Evergreen, Colorado for
$750,000. Husband testified that the property was purchased in a short sale. There was
evidence presented that at the time of the sale, the property appraised between $940,000
and $960,000. The 2011 tax assessed value was $1,109,860. Another valuable asset in
the marital estate was Husband’s business account from his law practice worth $267,676.
On March 28, 2011, Wife filed a petition to dissolve the marriage. On November
9, 2011, Wife filed a motion to compel discovery, which the trial court granted, giving
Husband no later than November 25 to respond. On November 28, 2011, Husband filed a
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motion for extension of time. On December 12, 2011, the trial court held a telephone
conference during which the trial court instructed Wife’s counsel to submit a list of
specific items being requested and directed Husband to advise the trial court how much
time he needed to respond to the requests.
On January 18 and 19, 2012, the trial court issued discovery orders, including
ordering Husband to respond to interrogatories and to produce documents. On April 12,
2012, Wife filed a motion for sanctions for failure to comply with the January discovery
orders, a motion for enlargement of time to respond to Husband’s request for discovery,
and a motion to require Husband to sign IRS Form 4506. Husband filed a response, and
on June 6, 2012, the trial court held a telephone conference regarding the discovery
dispute. On June 20, 2012, the trial court entered its order on Wife’s motion for
sanctions, directing Husband to execute Form 4506, which permitted Wife to obtain tax
information on Husband directly from the IRS. Husband was also required to produce
certain documents, and Wife was given the option of filing another motion to compel,
serving third party requests at Husband’s expense, or deposing Husband at his expense.
On November 30, 2012, the trial court held a final hearing during which Wife
made a request for specific findings pursuant to Trial Rule 52. During the hearing, Wife
argued that Husband had dissipated assets when he made “several visits to prostitutes.”
Tr. p. 68. No other such reference was made by Wife, and Husband did not object to this
testimony. However, Wife did testify that she had incurred $29,821.63 in attorney fees
and that a portion of this was attributed to the significant discovery disputes that arose.
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Indeed, as of the final hearing, Husband had still failed to provide sufficient information
permitting Wife to calculate his personal income or the income generated by his business.
Wife requested that the court order Husband to reimburse her $15,000 in attorney fees.
On December 20, 2012, the trial court entered its decree of dissolution in which
the trial court dissolved the parties’ marriage, found that Husband had rebutted the
presumption that an equal distribution of the marital estate was reasonable and just and
that he should take 60% of the marital estate and Wife should take 40%, and ordered
Husband to pay $15,000 of Wife’s attorney fees. Husband now appeals.
DISCUSSION AND DECISION
I. Standard of Review
Specific findings and conclusions thereon were requested pursuant to Trial Rule
52(A). Accordingly, we apply a two-tiered standard of review: first, we determine
whether the evidence supports the findings, and then, we determine whether the findings
support the judgment. Troyer v. Troyer, 987 N.E.2d 1130, 1134 (Ind. Ct. App. 2013),
reh’g denied. We will reverse only if the trial court’s findings are clearly erroneous, or,
put another way, leave us with a firm conviction that a mistake has been made. Id.
Additionally, a judgment is clearly erroneous if it relies on an incorrect legal standard.
Id.
II. Property Division
Husband alleges that the 40% award of the marital estate to Wife was tainted by
inflammatory testimony. Additionally, Husband argues that the trial court erred by
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including property before the marriage and by using the assessed value of the Colorado
property as opposed to the purchase price in valuing that property.
A. Inflammatory Testimony
Husband claims that Wife’s reference to him visiting prostitutes and dissipating
assets was so inflammatory that it led to her receiving a more generous portion of the
marital estate. Here, the trial court issued very detailed findings and conclusions in its
decree of dissolution1 and not one single finding mentioned Husband visiting prostitutes.
Indeed, it appears that the trial court disregarded that testimony entirely. Even more
compelling, the trial court found that “[Husband] did not dissipate assets.” Appellant’s
App. p. 2. Consequently, this argument fails.
B. Property Acquired Before the Marriage
Husband argues that the trial court erred by including property that the couple
accumulated before they were married and treating it the same as the property that they
accumulated after they were married. Indiana Code section 31-15-7-4 provides that in a
dissolution of marriage action, the property of parties shall be divided whether:
(1) owned by either spouse before the marriage;
(2) acquired by either spouse in his or her own right:
…
(3) acquired by their joint efforts.
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We commend the trial court for its meticulous findings and the careful thought put into those findings.
Because of the solid foundation that the trial court has already placed, this Court can adequately address
the issues more efficiently.
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“This ‘one pot’ theory specifically prohibits the exclusion of any asset from the
scope of the trial court’s power to divide and award.” In re Marriage of Nickels, 834
N.E.2d 1091, 1098 (Ind. Ct. App. 2005). However, Indiana Code section 31-15-7-5
provides a list a factors that a court may consider to rebut the presumption that an equal
division of the property is just and reasonable, one of which is the extent to which the
property was acquired by each spouse before the marriage. Nevertheless, the burden is
on the party who seeks to rebut the presumption that an equal division is not just and
reasonable. In re Marriage of Nickels, 834 N.E.2d at 1098.
Here, the trial court determined that Husband successfully rebutted the
presumption that an equal division of the marital estate was just and reasonable.
Appellant’s App. p. 3. Specifically, the trial court determined that the marriage was
relatively short-term, the parties came into the marriage with established careers and left
the marriage with those careers, one of the most valuable assets was generated by
Husband’s law practice, and Husband brought into the marriage a significant amount of
money in his brokerage account. Id. The trial court was not required to separate from the
marital pot every piece of property that was acquired before the marriage, and
consequently did not err by including property that was accumulated before the couple
was married.
C. Property Value
Husband maintains that the trial court erred by using the assessed value of the
Colorado property rather than the purchase price. At the outset, we note that as pointed
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out by Wife, Husband’s assertion is incorrect. Specifically, in the trial court’s findings, it
determined that “[t]he Court will use the appraisal value for the mortgage loan purposes
as testified to by [Wife] on rebuttal. The actual purchase price is too low to use, because
[Husband] bought the property in a short sale.” Appellant’s App. p. 5. Thus, the trial
court did not use the assessed value; rather, it used the appraisal value.2
Here, Husband and Wife testified that they bought the Colorado property in a short
sale transaction for $750,000. Tr. p. 105, 175. Wife testified that at the time of sale, the
property was appraised between $940,000 and $960,000. Id. at 258. Thus, the trial
court’s valuation of the Colorado property at $940,000 was within the scope of the
evidence, and this argument also fails. See Goossens v. Goossens, 829 N.E.2d 36, 38-39
(Ind. Ct. App. 2005) (holding that the trial court did not err when it valued real property
within the range of the evidence presented at trial).
III. Tax Consequences
Husband asserts that the trial court erred by failing to consider the tax
consequences to him by awarding to Wife 40% of the value of the business funds and the
brokerage account. Husband contends that he is liable for taxes “in the range” of $35,333
“on this pre-tax asset.” Appellant’s Br. p. 17.
Indiana Code section 31-15-7-7 provides that “[t]he court, in determining what is
just and reasonable in dividing property under this chapter, shall consider the tax
2
This Court expects accuracy in the factual assertions made by the litigants who appear before us,
particularly those who are licensed to practice law in three states. The findings in the trial court’s decree
are abundantly clear.
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consequences of the property disposition with respect to the present and future economic
circumstances of each party.” However, if no tax consequences are presented to the
court, a party may not argue that the court erred by failing to consider the consequences.
Hardin v. Hardin, 964 N.E.2d 247, 254 (Ind. Ct. App. 2012).
Here, Husband has failed to direct this Court to any evidence in the record
regarding his tax liability as the immediate result of the trial court’s property distribution.
See Granger v. Granger, 579 N.E.2d 1319, 1321 (Ind. Ct. App. 1991) (stating that “[a]
taxable event must occur as a direct result of the court-ordered disposition of the marital
estate for the resulting tax to reduce the value of the marital estate”). Thus, the trial court
could not have been required to consider tax consequences if they were not presented,
and this argument fails. See Hardin, 964 N.E.2d at 254 (holding that husband invited
error by failing to present evidence to the trial court regarding tax consequences).
IV. Attorney Fees
Husband argues that the trial court erred by awarding Wife $15,000 in attorney
fees. We review an award of attorney fees for an abuse of discretion. Hartley v. Hartley,
862 N.E.2d 274, 286 (Ind. Ct. App. 2007).
Under Indiana Code section 31-15-10-1, the trial court has the authority to order
one party to pay the attorney fees of the other party in a dissolution proceeding. When
making such an award, the trial court must consider the resources of the parties, their
economic condition, their ability to engage in gainful employment, and any other factors
that affect the reasonableness of the award. Ratliff v. Ratliff, 804 N.E.2d 237, 249 (Ind.
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Ct. App. 2004). The court may also consider any misconduct by one party that resulted
in additional attorney fees incurred by the other party. Id.
In this case, Wife testified and submitted evidence that she earned $60,000 per
year. Tr. p. 54; Appellee’s App. p. 293. Wife estimated that Husband earned in excess
of $500,000 per year. Tr. p. 62. Wife also testified that she had incurred around $29,000
in attorney fees. And while the trial court did not specifically find that Husband’s
misconduct regarding his discovery responses formed the basis of the award, the trial
court was not required to make such a finding, and the record speaks volumes regarding
Husband’s misconduct in failing to properly respond to discovery. Appellee’s App. p.
32, 61, 188. Consequently, the trial court did not err by awarding Wife $15,000 in
attorney fees.
The judgment of the trial court is affirmed.
FRIEDLANDER, J., and VAIDIK, J., concur.
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