Douglas A. Schwan v. Linda D. Schwan ( 2012 )

FILED
Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not
be regarded as precedent or cited
Dec 11 2012, 9:05 am
before any court except for the purpose
of establishing the defense of res
judicata, collateral estoppel, or the law CLERK
of the supreme court,
court of appeals and
of the case. tax court
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
ZACHARY T. ROSENBARGER BRENT R. BORG
Wuertz Law Office, LLC Church, Church, Hittle & Antrim
Indianapolis, Indiana Fishers, Indiana
IN THE
COURT OF APPEALS OF INDIANA
DOUGLAS A. SCHWAN, )
)
Appellant, )
)
vs. ) No. 80A05-1204-DR-171
)
LINDA D. SCHWAN, )
)
Appellee. )
APPEAL FROM THE TIPTON CIRCUIT COURT
The Honorable Thomas R. Lett, Judge
Cause No. 80C01-1004-DR-202
December 11, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
BROWN, Judge
Douglas A. Schwan (“Husband”) appeals from the trial court’s division of marital
property in the dissolution of his marriage to Linda D. Schwan (“Wife”). Husband raises
three issues which we consolidate and restate as whether the court erred in its division of
the marital property. We affirm.
The relevant facts follow. Husband and Wife were married in 1990, and no
children were born of the marriage. During the marriage, Wife worked for Schwan
Chiropractic, in Toledo, Ohio, which was Husband’s chiropractic clinic. In October
2009, Wife vacated the marital residence in Toledo, Ohio, and moved to Tipton County,
Indiana, to live with her daughter and her family. Husband continued to live in the
marital residence but failed to make mortgage payments, and the residence entered
foreclosure proceedings. The parties also owned a rental property in Cicero, Indiana,
which was sold after the parties separated, and the proceeds of the sale were about
$13,300.
On April 21, 2010, Wife filed a verified petition for dissolution of marriage. The
court held a hearing on December 14, 2010, at which Wife appeared in person and by
counsel and Husband appeared in person, and entered provisional orders on December
21, 2010, which included orders that Husband respond fully and completely to Wife’s
interrogatories and request for production of documents, that Husband pay for an
appraisal of his clinic in Ohio, that Husband pay $2,000 toward a replacement automobile
for Wife, and that Husband pay Wife an amount of $150 per week as temporary
maintenance. The court held hearings on August 16, 2011, and October 6, 2011, at which
Husband failed to appear, regarding various aspects of Husband’s failure to comply with
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the court’s provisional orders. On December 8, 2011, the court held a final hearing in the
dissolution matter, at which Wife and her counsel were present but Husband did not
appear in person or by counsel. Wife testified as to the value of certain property of the
marital estate and requested a sixty percent share of the marital estate, that she receive
among other property the building in which the chiropractic clinic operated and the
chiropractic equipment, and that Husband retain among other property his ongoing
chiropractic business.
On December 14, 2011, the court entered Findings of Fact, Conclusions of Law
and Decree of Dissolution of Marriage in which it ordered that Husband be responsible
for all costs and fees associated with the foreclosure and any deficiency resulting
therefrom with respect to the marital residence and that the proceeds of the property in
Cicero, Indiana, be held in escrow by Wife’s counsel for the benefit of the parties. The
court found that Husband had failed to follow the court’s previous orders in failing to
timely pay Wife spousal maintenance of $150 per week, to obtain an appraisal on the
building where Husband’s chiropractic practice was located, to fully and completely
answer interrogatories and request for production of documents, and to reimburse the
escrow account held by Wife’s counsel for certain amounts. The court found that the
amounts which Husband failed to pay would be charged against the escrow account and
that Wife would receive the balance of $7,118.76 in order to achieve an equitable
distribution of the marital estate. The court further found that the business real estate in
Toledo, Ohio, should become the property of Wife and ordered Husband to vacate the
building and transfer title to Wife. The court further found that in order to achieve an
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equitable division of the marital property, Wife shall have a judgment against Husband in
the amount of $48,578; that each party would retain their personal property, household
furnishings, bank accounts, jewelry, and life insurance policies upon their respective
lives; that Wife shall have the automobile in her possession, a motorcycle, a travel trailer,
and chiropractic equipment; and that Husband shall have his business, Schwan
Chiropractic, a pontoon boat, and two vehicles. The court also found that Husband’s
failure to comply with preliminary and other orders was willful and contemptuous and
ordered Husband to pay attorney fees to Wife in the amount of $2,390. Husband, by
counsel, filed a motion to correct error, and following a hearing the court denied the
motion.
The issue is whether the trial court erred in its division of the marital property. In
general, sua sponte findings control only as to the issues they cover, and a general
judgment will control as to the issues upon which there are no findings. Yanoff v.
Muncy, 688 N.E.2d 1259, 1262 (Ind. 1997). When a trial court has made findings of
fact, we apply the following two-tier standard of review: whether the evidence supports
the findings of fact, and whether the findings of fact support the conclusions thereon. Id.Findings will be set aside if they are clearly erroneous. Id. “Findings are clearly
erroneous only when the record contains no facts to support them either directly or by
inference.” Id. A judgment is clearly erroneous if it applies the wrong legal standard to
properly found facts. Id. To determine that a finding or conclusion is clearly erroneous,
our review of the evidence must leave us with the firm conviction that a mistake has been
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made. Id. “A general judgment entered with findings will be affirmed if it can be
sustained on any legal theory supported by the evidence.” Id.Ind. Code § 31-15-7-4 governs the division of property in dissolution actions and
requires that the trial court “divide the property in a just and reasonable manner.” Ind.
Code § 31-15-7-4(b). The court shall presume that an equal division of marital property
between the parties is just and reasonable, and the trial court may deviate from an equal
division only when that presumption is rebutted. Ind. Code § 31-15-7-5. The trial court’s
division of marital property is “highly fact sensitive and is subject to an abuse of
discretion standard.” Fobar v. Vonderahe, 771 N.E.2d 57, 59 (Ind. 2002). Also, a trial
court’s discretion in dividing marital property is to be reviewed by considering the
division as a whole, not item by item. Id. We “will not weigh evidence, but will consider
the evidence in a light most favorable to the judgment.” Id. A trial court may deviate
from an equal division so long as it sets forth a rational basis for its decision. Hacker v.
Hacker, 659 N.E.2d 1104, 1109 (Ind. Ct. App. 1995).
“A party who challenges the trial court’s division of marital property must
overcome a strong presumption that the court considered and complied with the
applicable statute.” Wanner v. Hutchcroft, 888 N.E.2d 260, 263 (Ind. Ct. App. 2008).
“Thus, we will reverse a property distribution only if there is no rational basis for the
award.” Helm v. Helm, 873 N.E.2d 83, 89 (Ind. Ct. App. 2007) (citation omitted).
It is well-established that all marital property goes into the marital pot for division,
whether it was owned by either spouse before the marriage, acquired by either spouse
after the marriage and before final separation of the parties, or acquired by their joint
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efforts. Ind. Code § 31-15-7-4(a); Beard v. Beard, 758 N.E.2d 1019, 1025 (Ind. Ct. App.
2001), trans. denied. This “one-pot” theory ensures that all assets are subject to the trial
court’s power to divide and award. Thompson v. Thompson, 811 N.E.2d 888, 914 (Ind.
Ct. App. 2004), reh’g denied, trans. denied. The trial court has no authority to exclude or
set aside marital property but must divide all property. Moore v. Moore, 695 N.E.2d
1004, 1010 (Ind. Ct. App. 1998).
Ind. Code § 31-15-7-5 provides:
The court shall presume that an equal division of the marital property
between the parties is just and reasonable. However, this presumption may
be rebutted by a party who presents relevant evidence, including evidence
concerning the following factors, 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, including the desirability of awarding the
family residence or the right to dwell in the family
residence for such periods as the court considers just to
the spouse having custody of any children.
(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:
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(A) a final division of property; and
(B) a final determination of the
property rights of the parties.
Husband argues that the trial court abused its discretion in failing to determine a
value for certain marital property including the marital residence, in determining the
value of his business, and in distributing the marital estate unequally. Wife argues that
Husband refused to participate in the litigation, failed to appear or introduce evidence of
the value of the marital assets at the final hearing, and is thus estopped from challenging
the court’s division of the marital estate. Wife also argues that the court did not abuse its
discretion in valuing the assets in the marital estate or in dividing the marital estate.
In In re Marriage of Church, this court held that “any party who fails to introduce
evidence as to the specific value of the marital property at the dissolution hearing is
estopped from appealing the distribution on the ground of trial court abuse of discretion
based on that absence of evidence.” 424 N.E.2d 1078, 1081 (Ind. Ct. App. 1981). The
court further held that “[t]his rule places the burden of producing evidence as to the value
of the marital property where it belongs on the parties, rather than on the trial court,” that
“[i]t is appropriate to require the parties to bear the burden of gathering and presenting to
the trial court evidence as to the value of the marital property rather than to place upon
the trial court the risk of reversal if it distributes the marital property without specific
evidence of value,” that “we do no more than place the burden of producing evidence as
to the value of the marital property squarely where it belongs on the shoulders of the
parties and their attorneys,” and that “[a]fter all, the general rule is that parties to a legal
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proceeding are bound by the evidence they introduce at trial and they are not allowed a
second chance if they fail to introduce crucial evidence. We see no reason to make
dissolution proceedings an exception to this rule.” Id. at 1082.
Here, the trial court found that Husband had failed to follow the court’s previous
orders related to paying Wife spousal maintenance and obtaining an appraisal on the
building in Ohio where Husband’s chiropractic practice was located. The court also
found that Husband failed to fully and completely answer interrogatories and request for
production of documents or to reimburse the escrow account. Moreover, and
importantly, Husband did not appear in person or by counsel at the final hearing and thus
failed to present any evidence related to the value of the property in the marital estate.
Accordingly, Husband is estopped from appealing the distribution on the ground of trial
court abuse of discretion based on that absence of evidence. See Church, 424 N.E.2d at
1081-1082. See also In re Marriage of Larkin, 462 N.E.2d 1338, 1344 (Ind. Ct. App.
1984) (finding no abuse of discretion in the trial court’s division of assets where the
parties failed to provide evidence of the value of certain assets at trial); Showley v.
Showley, 454 N.E.2d 1230, 1231 (Ind. Ct. App. 1983) (rejecting the wife’s claims that
“the trial court was required to sua sponte fill the evidentiary void when the parties failed
to introduce evidence of value”); Hawblitzel v. Hawblitzel, 447 N.E.2d 1156, 1162 (Ind.
Ct. App. 1983) (“The wife had the burden of placing values into evidence if she found
error in those given by the husband. Having failed to appear, she is now ill positioned to
challenge the property distribution, which was made on the basis of credible evidence
given by the husband.”).
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Further, with respect to Husband’s argument that the court abused its discretion in
distributing Schwan Chiropractic to him when the business is actually future earning
capability, we note that the record contained evidence related to the value of the business.
The 2009 joint tax return for Husband and Wife shows that Schwan Chiropractic had a
gross income of $121,907 and net profit of $40,037 and that Husband and Wife’s total
income was $37,859. The tax return transcript1 for Husband and Wife for 2008 shows
that Schwan Chiropractic had net gross receipts of $120,099 and a net profit of $37,886
and that Husband and Wife had a total income of $32,195. The tax return transcript for
Husband and Wife for 2007 shows that Schwan Chiropractic had net gross receipts of
$129,115 and a net profit of $25,360, and that Husband and Wife had a total income of
$31,375. The tax return documents for 2009, 2008, and 2007 show office expense
amounts of $24,411, $25,221, and $49,995, respectively. Wife testified that Husband
prepared the tax returns, that she did not believe that the office expense amounts used
accurately reflected the actual expenses and that she did not recall having office expenses
in those amounts, and that the utility expense amount of $11,459 shown on the 2009 tax
return was higher than the utility expense amounts shown of $7,856 for 2008 and of
$5,829 for 2007 and nothing warranted the increase. Wife also testified that she and her
counsel highlighted those expenses on the tax return and transcripts which they
considered questionable. Wife testified that Husband’s annual income ranged from fifty
to eighty thousand dollars. Wife further testified that she valued Husband’s business in
her summary at $80,000 based upon his earnings for one year. Wife testified that she
1
Wife testified that she and her counsel obtained the tax return transcripts for 2007 and 2008
from the IRS because Husband would not provide the tax returns for those years.
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worked in the reception area for Schwan Chiropractic; made all the schedules, answered
the phones, took patients to the rooms, and submitted insurance for physical therapy; that
she was the sole employee; and that she purchased supplies, furniture, and other things
for the company. Wife further testified that she worked in the business for twenty-two
years and is able to operate the business of a chiropractic office.
With respect to Husband’s argument that the court abused its discretion in
distributing the marital estate, we note that Wife presented a summary of the value of
property in the marital estate. Wife also testified that her highest level of education was
high school and that Husband’s highest level of education was Doctor of Chiropractic.
Wife further testified and presented evidence that she was employed babysitting for her
grandchildren and earned fifty dollars per week doing so, that she received a portion of a
GM pension from her first husband and a social security benefit which together totaled
$155.58 per week, and that she had an appraisal of the building in which the chiropractic
clinic operated which valued the building at $60,000. Wife also testified that the marital
residence was in foreclosure, that she did not know if there was any equity in the
residence, and that she concluded there was no equity in the house. Wife presented
evidence of Husband’s income from his business as set forth in tax return documents for
2007, 2008, and 2009 as described above. Wife further testified that, other than working
at the chiropractic clinic and babysitting her grandchildren, she had not been employed
during the prior twenty years, that she was not given a paycheck while she worked at the
clinic although she was issued a W-2, that Husband did not make proper social security
withholdings during that period, and that “now [she is] reaping that because [she is] at
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social security age and [] not getting very much money at all after working there 22
years.” Transcript at 55. Wife also testified that she was requesting that the building in
which the clinic operated and chiropractic equipment associated with the clinic be
awarded to her, in part because she did not believe that Husband would follow a court
order to pay her a monetary award and because she would be able to sell the equipment
and receive the funds as she and her attorney had some difficulty in locating enough
property to set over to her to effect the percentage property division she requested.
There is support in the record for the court’s division of the marital estate. Under
the circumstances and upon review of the record and the court’s findings and
conclusions, we cannot say that Husband has overcome the strong presumption that the
court considered and complied with the applicable statute. Wanner, 888 N.E.2d at 263.
For the foregoing reasons, we affirm the trial court’s division of the marital estate.
Affirmed.
FRIEDLANDER, J., and PYLE, J., concur.
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