Heather McWhorter v. Bill McWhorter ( 2013 )

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
Jun 06 2013, 8:10 am
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
JOHN V. COMMONS DAVID ROSSELOT
Indianapolis, Indiana Kokomo, Indiana
IN THE
COURT OF APPEALS OF INDIANA
HEATHER MCWHORTER, )
)
Appellant, )
)
vs. ) No. 34A02-1207-DR-527
)
BILL MCWHORTER, )
)
Appellee. )
APPEAL FROM THE HOWARD SUPERIOR COURT
The Honorable George A. Hopkins, Judge
Cause No. 34D04-0912-DR-1397
June 6, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
FRIEDLANDER, Judge
Heather McWhorter appeals from the trial court’s equal division of marital property
upon the dissolution of her twenty-nine-year marriage to Bill McWhorter. Heather claims
that she was entitled to a larger share of the estate because of the parties’ disproportionate
earning abilities. On cross-appeal, Bill presents the following restated issues for review:
1. Did the trial court err in granting Heather’s request to rescind a post-
dissolution order entered pursuant to an agreement regarding marital
real estate located in Denver?
2. Did the trial court err in the division of certain debt associated with
Bill’s 401K?
3. Did the trial court abuse its discretion when valuing certain items of
personal property?
We affirm in part, reverse in part, and remand.
After twenty-nine years of marriage, Bill filled a dissolution petition on September 10,
2009. The parties have an adult daughter, Morgan, and an adult son, Ben. Their youngest
child, Ben, was nineteen at the time the dissolution petition was filed and was attending
college.
The trial court entered a provisional order on May 31, 2011. Bill was ordered to
provide Ben with $700 per month for post-secondary educational expenses, to pay spousal
maintenance to Heather in the amount of $200 per week, and to maintain health insurance for
Heather through his employer. Bill complied in full.
Bill worked at all times during the marriage and now earns approximately $140,000
per year. Heather worked off and on during the marriage, earning as much as $20 per hour
2
between 1988 and 1999 1 and more recently $12 per hour. During the marriage, she
interrupted her professional career to spend more time with her children. She also
maintained the home and was the primary care provider for the children. Bill’s current
earning ability is greater than Heather’s.
The couple’s net marital estate amounted to well over $650,000. The assets of the
estate included various retirement accounts, four vehicles, a home in Colorado (the Denver
Property), a home in Kokomo being sold on contract to the Deason family2 (the Deason
Property), a tract with a pole barn and another one-acre tract in Kokomo, and various items of
personal property in Colorado and Indiana. At the time the dissolution was filed, Heather
lived in the Denver Property and Bill lived in the pole barn. Sometime during the pendency
of the underlying action, Heather left the Denver Property and moved in with her sister in
Ohio.
The evidentiary hearing commenced on August 25, 2011 and concluded after a second
day on September 28, 2011. On October 20, 2011, the trial court entered its decision with
findings of fact and conclusions of law, along with a spreadsheet setting out the valuation
and division of property. The trial court attempted an equal distribution of the marital estate
and ordered a property settlement judgment in favor of Heather in the amount of $26,720.50.
1
During this period, Heather was given 3 years off by her employer so that she could move to Japan for a
career opportunity for Bill, who worked for the same company.
2
The conditional contract for the sale of this real estate was executed on March 18, 2009. Bill and Heather
used proceeds from this sale, along with a loan from Bill’s 401K, as part of the down payment for the Denver
Property, which they bought that same spring with their son. The monthly payments from the Deasons were
subsequently used to pay mortgages on both the Deason Property and the Denver Property.
3
Further, the court ordered Bill to continue to pay $700 per month to Ben until May 31, 2012.
With respect to the Denver Property, the court indicated that it should be immediately
listed for sale with a licensed real estate agent and that in the interim the parties were to each
pay one-half of the utility expenses, taxes, insurance, and homeowners dues. Payments from
the Deasons were to continue to be applied to the mortgages on the Deason and Denver
Properties. If the funds were insufficient to cover both mortgages, the parties were to split
the remaining amount due. Upon sale of the Denver Property and payment of the mortgage
and remaining expenses, the parties were to divide any remaining proceeds of the sale. Bill
and Heather agreed, however, that there was likely to be little to no proceeds.
Both parties filed a motion to correct error in November 2011. Among other things,
Heather alleged: (1) an equal division of the marital estate was not equitable; (2) the court
should have awarded temporary spousal maintenance in the form of health insurance; and (3)
the Denver Property should have been awarded to Bill because Heather was unable to share
in the costs associated with this property pending its sale.
While the motions to correct error were pending, the parties reached an agreement
regarding the Denver Property (the Denver Agreement). An agreed entry, signed by the
parties’ respective counsels, was approved by the trial court on February 13, 2012. Pursuant
to the Denver Agreement, Heather was to “immediately deed the property to [Bill] and he
will be allowed to sell or otherwise dispose of the property.” Appellee’s Appendix at 45. In
exchange, Heather was to “no longer be responsible for one-half (1/2) of the out-of-pocket
payments, taxes, homeowner’s association fees or other costs attached to the real estate.” Id.
4
The Denver Agreement provided further that Heather’s furniture and household goods were
to be left in the home for ninety days or until the sale of the property, whichever occurred
first.
On May 11, 2012, Bill filed an addendum to his motion to correct error, in which he
alleged the following error:
(a) The Court, in it’s [sic] division of property, awarded one-half (1/2) of
the 401 K debt to [Heather]. The 401 K belongs to [Bill]. The 401 K debt is a
pay back of money borrowed from the 401 K and used by the parties.
(b) [Heather] can not pay this sum as the pay back of the 401 K is a
mandatory withdrawal from [Bill’s] wages. No outside payments can be made
on this loan. As such, [Heather] can not satisfy the debt as set forth in the
Court’s balance sheet.
Id. at 44.
The court held a hearing on all pending matters on May 16, 2012, including a motion
filed by Heather that day entitled Repudiation of Agreed Entry Regarding Denver Property.
Heather asked the court to rescind the order entered pursuant to the Denver Agreement on the
basis that a term providing for an $8000 payment to Ben had been left out through an
oversight by her previous attorney. Although the February agreed entry required her to
immediately deed the property to Bill, Heather acknowledged that she had yet to do so
because of the omitted provision regarding Ben. At the hearing, Bill argued that Heather had
no basis to ignore the order but indicated that he did intend to give this money to Ben when
the property sells or when Ben’s first student loan comes due, whichever is first.
On June 4, 2012, the court issued its ruling on all pending motions. The court, among
other things, rejected Heather’s request for an unequal division of the marital estate, granted
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her request to rescind the agreed entry, ordered Bill to provide temporary maintenance in the
form of health insurance for Heather, and denied Bill’s request regarding the 401K loan. The
court also corrected a few clerical errors in the valuation worksheet, which resulted in a
slightly larger property settlement awarded to Heather to equalize the distribution. Heather
and Bill both appeal the trial court’s distribution of property.
Heather’s Appeal
We turn first to Heather’s claim that the trial court erred by dividing the marital estate
equally between the parties. Heather argues, essentially, that because the trial court found
Bill’s earning ability to be greater than hers, the court was required to “offset” this disparity
by awarding her more of the marital estate. Appellant’s Brief at 8.
The division of marital property lies within the sound discretion of the trial court, and
we will reverse only for an abuse of discretion. Keown v. Keown, 883 N.E.2d 865 (Ind. Ct.
App. 2008). Such an abuse occurs when the trial court’s decision is clearly against the logic
and effect of the facts and circumstances presented. Id. Abuse also occurs when the trial
court misinterprets the law or disregards evidence of factors listed in the controlling statute.
Augspurger v. Hudson, 802 N.E.2d 503 (Ind. Ct. App. 2004).
“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.” Hyde v.
Hyde, 751 N.E.2d 761, 765 (Ind. Ct. App. 2001). Thus, we will reverse a
property distribution only if there is no rational basis for the award and,
“[a]lthough the circumstances may have justified a different property
distribution, we may not substitute our judgment for that of the dissolution
court.” Id.
Id. at 512.
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When dividing the marital property, the court shall presume that an equal division is
just and reasonable. Ind. Code. Ann. § 31-15-7-5 (West, Westlaw current through P.L. 76
with effective dates through April 15, 2013). This presumption, however, “may be rebutted
by a party who presents relevant evidence…that an equal division would not be just and
reasonable.” Id. I.C. § 31-15-7-5(5) provides as an example that evidence of the “earnings
or earning ability of the parties as related to: (A) a final division of property; and (B) a final
determination of the property rights of the parties” may be considered.
In this case, the evidence clearly establishes that Bill has a greater earning ability than
Heather. To be sure, at the time of dissolution, Bill was earning $140,000 per year and
Heather was unemployed (less than a year), though looking for work and capable of working.
Further, although Heather had a significant work history during their twenty-nine-year
marriage, her career development was voluntarily curbed, especially in later years, by her role
as wife and mother.
On this evidence, the trial court certainly could have deviated from the statutory
presumption of a 50/50 split. Heather, however, has failed to establish that the trial court
abused its discretion in refusing to do so. See Augspurger v. Hudson, 802 N.E.2d at 513
(“[w]hile the trial court’s findings of fact in the Decree could support deviation from the
presumed equal division of the marital estate, we conclude that such deviation is not
mandated”). In fact, the only case Heather cites to support her argument is an unpublished
memorandum decision of this court. Indiana Appellate Rule 65(D) makes clear that such
decisions “shall not be regarded as precedent and shall not be cited to any court except by the
7
parties to the case to establish res judicata, collateral estoppel, or law of the case.” Heather’s
reliance, therefore, on White v. White, 966 N.E.2d 792 (Ind. Ct. App. 2012) is improper.
Here, the trial court acknowledged the existence of unequal earnings but declined
Mother’s invitation to deviate from the statutory presumption both in the original decree and
in its order on motion to correct error. In addition to awarding half of the relatively
substantial marital estate to Heather, we observe that the trial court awarded temporary
spousal maintenance in the form of health insurance, awarded payment of attorney fees to
her, and ordered Bill to pay all of the parties’ parental obligation to contribute to the post-
secondary expenses of their son, Ben. In light of the overall effect of the dissolution on the
parties, Heather has not established that the trial court’s decision to divide the marital estate
equally is unjust or unreasonable. See Augspurger v. Hudson, 802 N.E.2d at 513 (“[d]ivision
of property should not be considered in a vacuum, and the trial court is free to consider other
awards…when determining the proper division”).
Bill’s Cross-Appeal 3
1.
The first issue raised by Bill on cross-appeal addresses the propriety of the trial court’s
grant of Heather’s request to rescind (i.e., revoke) the order entered pursuant to the Denver
Agreement. Bill argues that this action was improper under I.C. § 31-15-7-9.1 (West,
Westlaw current through P.L. 76 with effective dates through April 15, 2013) because
3
Heather did not file a brief in response to the cross-appeal issues raised by Bill. Accordingly, we may
reverse if Bill presents a prima facie case of error. In re Riddle, 946 N.E.2d 61 (Ind. Ct. App. 2011). Prima
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Heather did not allege fraud.
I.C. § 31-15-7-9.1 provides:
(a) The orders concerning property disposition entered under this chapter []
may not be revoked or modified, except in case of fraud.
(b) If fraud is alleged, the fraud must be asserted not later than six (6) years
after the order is entered.
Thus, fraud must be alleged and found in order to revoke or modify an order dealing with
property disposition. 4
In the instant case, Heather did not allege or prove fraud. On the contrary, she alleged
simply that her former attorney had erroneously left out a term from the agreement that she
had expressed to him was important to her. The trial court revoked the agreement, over
Bill’s objection, based upon a finding that “the agreement did not contain the entire
agreement of the parties.” Appellee’s Appendix at 27.
Bill has established prima facie error in this regard. The trial court had no authority to
rescind the Denver Agreement without Bill’s consent. See Ryan v. Ryan, 972 N.E.2d 359
(Ind. 2012). Therefore, we reverse this portion of the June 4, 2012 order and remand with
instructions for the trial court to reinstate the Denver Agreement.
2.
The next issue raised by Bill concerns the trial court’s treatment of the 401K debt.
This marital debt arose from a loan Bill and Heather took out against Bill’s 401K to pay part
facie error is “error at first sight, on first appearance, or on the face of it.” Sand Creek Country Club, Ltd. v.
CSO Architects, Inc., 582 N.E.2d 872, 876 (Ind. Ct. App. 1991).
4
Of course, this does not prevent parties from agreeing to a revocation or modification of such an order.
9
of the down payment on the Denver Property. The court divided the $8769.93 debt equally
between the parties. In his addendum to his motion to correct error, Bill indicated that the
payback of the 401K will be accomplished through mandatory withdrawals from his wages
and that Heather cannot make direct payments on this loan. Accordingly, Bill sought to have
the entire debt set off to him and then for the court to make an adjustment in the award of
property. Heather did not object.
In its June 4, 2012 order, the trial court denied Bill’s request. The court indicated as
follows: “The Court’s ruling as to the 401K loan places the responsibility to pay the loan on
both parties. The Court will not direct the parties as to the method of repayment.”
Appellant’s Appendix at 30.
Under the circumstances, therefore, Heather will pay her share of the debt directly to
Bill as it becomes due, not unlike what the parties had been doing with respect to the bills
related to the Denver Property. While Bill’s suggested property distribution might have been
more optimal, Bill has failed to establish an abuse of discretion with respect to the course
chosen by the trial court.
3.
Finally, Bill contends that the trial court erred in valuing the personal property in the
pole barn, for which neither party obtained appraisals. With respect to this property, Heather
submitted Exhibit D with a list of property having a total value of $29,247, and Bill
submitted Exhibit 11 with property totaling $2735. Bill claims that Heather “attached a very
self-serving high value to the items she intended to leave husband” and a “low value to those
10
items she intended to keep”. Appellee’s Brief at 20. Further, he asserts that his exhibit is
“much more detailed” and “superior to the list submitted by wife.” Id. at 21.
Upon reviewing the exhibits and testimony, the trial court expressly found: “the
exhibits offered by the wife are more comprehensive than those offered by the husband.
Respondent’s Exhibit D was compiled at the time of the purchase of the Colorado property.”
Appellee’s Appendix at 20. The court, therefore, used the figures in Heather’s exhibit and
valued the personal property in the barn at $27,112. 5 In its subsequent order, the court noted
a clerical error and adjusted the total valuation to $27,012.
We reject Bill’s blatant invitation for us to reweigh the evidence. The values found by
the trial court were within the range of the evidence, and the trial court did not abuse its
discretion in determining that Heather’s valuations were more accurate than Bill’s. See
Sanjari v. Sanjari, 755 N.E.2d 1186 (Ind. Ct. App. 2001).
Judgment affirmed in part, reversed in part, and remanded with instructions.
CRONE, J., concurs.
ROBB, C.J., dissents with a separate opinion.
5
This amount was less than the total in Heather’s exhibit because the court excluded a missing diamond
pendant (valued at $2235).
11
IN THE
COURT OF APPEALS OF INDIANA
HEATHER MCWHORTER )
)
Appellant, )
)
vs. ) No. 34A02-1207-DR-527
)
BILL MCWHORTER )
)
Appellee. )
)
ROBB, Chief Judge, dissenting
I respectfully dissent from the majority’s conclusion that the trial court erred in
rescinding the Denver Agreement without Bill’s consent.
The majority relies on Indiana Code section 31-15-7-9.1 and the fact that Heather did
not allege or prove fraud. However, that statute is not the only relevant source of law. We
have acknowledged previously that Trial Rule 60(B) may be available to provide relief when
a party petitions to rescind an order regarding division of property, even in the absence of
fraud. See Dusenberry v. Dusenberry, 625 N.E.2d 458, 461-62 (Ind. Ct. App. 1993). In
12
Dusenberry, we concluded that Trial Rule 60(B)(1) was not available to correct the mistake
in that case, because the petition to modify was filed more than one year after the decree was
entered. Id. at 462 In this case however, Heather filed her motion to repudiate the
agreement well within a year of submission of the Denver Agreement to the court.
I believe that the court was well within its discretion to grant the motion to repudiate
the agreement where the motion was filed within one year. Especially so here, where Bill
does not seem to contest that the Denver Agreement contained a mistake and did not in fact
reflect the agreement of the parties. It appears that Bill acknowledges that the parties
intended to include the provision regarding a payment to Ben, and in fact Bill represented
that he intended to give the money to Ben; he must therefore only have contested the motion
to be contrary. Because the parties both acknowledge that the Denver Agreement as
submitted to the court did not reflect the will of the parties, and because Heather’s motion
was filed within one year of the order and therefore fell within Trial Rule 60(B), I would
affirm the decision of the trial court.
In all other respects, I concur with the majority opinion.
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