In Re: the Marriage of: Renita A. Marek and Edward Marek (mem. dec.) ( 2016 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any Feb 04 2016, 9:15 am
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Adam J. Sedia Tim Kelly
Rubino, Ruman, Crosmer, & Polen Kelly Law Offfices
Dyer, Indiana Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In Re: the Marriage of: February 4, 2016
Renita A. Marek, Court of Appeals Case No.
45A03-1503-DR-93
Appellant,
Appeal from the Lake Circuit
and Court
The Honorable George C. Paras,
Edward Marek, Judge
Trial Court Cause No.
Appellee
45C01-1311-DR-910
Robb, Judge.
Case Summary and Issue
[1] In 2015, the trial court entered a decree dissolving the marriage of Edward
Marek (“Husband”) and Renita Marek (“Wife”). The trial court ordered that
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the parties’ marital property be equally divided. Wife appeals, raising one issue
for our review: whether the trial court erred in concluding she had not rebutted
the presumption that an equal division is just and reasonable. Concluding the
trial court’s judgment equally dividing the marital property is unsupported by
the findings and evidence, we reverse and remand.
Facts and Procedural History 1
[2] Husband and Wife were married in 1978. At the time of the marriage, both
parties worked full time. Husband has worked full time for Ford Motor
Company throughout the marriage. Wife left her outside employment to be a
full time homemaker after the birth of the parties’ first child in 1982. A second
child was born to the couple in 1986. In 1997, Wife returned to the workforce.
But for a two-year period when she again left the workforce and two subsequent
temporary leaves of absence for medical reasons, Wife has worked part-time
(twenty-one hours per week) at the local library since 1997 earning $13.39 per
hour. Full-time employment at the library is thirty-seven and one-half hours at
the same hourly rate. Wife has not attempted to obtain full-time employment
at the library or elsewhere. She does babysit the parties’ granddaughter three or
four days a week. At the time of the final hearing in this matter, Husband was
1
Husband has not included within his brief a Statement of Issues, Statement of the Case, or Statement of
Facts. Although such omissions are allowed by the appellate rules if the appellee agrees with those
statements as set forth in the appellant’s brief, our rules also require the brief to specifically state that the
appellee agrees with the appellant’s statements. Ind. Appellate Rule 46(B)(1). Husband did not include that
statement of agreement.
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earning approximately $80,000.00 per year and overtime, and Wife was earning
approximately $14,000.00 per year.
[3] During the marriage, Wife inherited property and funds after the deaths of her
mother and uncle. The property was sold, and the proceeds of the sale together
with the funds were deposited into multiple bank accounts in Wife’s name only
(the “inheritance accounts”). The value of the inheritance accounts as of the
final hearing was approximately $90,000.00. Husband knew of the
inheritances, but otherwise had virtually no knowledge regarding where the
monies were held or in what amounts. Also during the marriage, Husband
suffered work-related injuries for which he received a worker’s compensation
settlement totaling approximately $150,000.00.2
[4] In November 2013, Husband filed a petition for dissolution of marriage. In
December 2013, the parties entered an Agreement on Stipulated Provisional
Orders, in which they agreed, in part, to share the use of the marital home. In
August 2014, the parties entered a Partial Agreed Order, in which they agreed
that Husband would be awarded the marital residence and Wife would be
permitted to continue to reside there under the terms of the provisional order
2
The Partial Agreed Order describes the components of Husband’s settlement as: $115,839.00 for permanent
partial disability, $19,898.88 for temporary total disability, and attorney fees and expenses of $32,659.89 “for
a total of $152,357.03.” Appellants’ [sic] Appendix at 26. Adding the individual amounts does not result in
the total sum stated, but the accompanying documents indicate the total settlement was indeed $152,357.03,
less attorney fees and costs of $32,659.89, and that temporary total disability—the only component relevant
to the property distribution—was $19,898.88. See id. at 29-32.
The Partial Agreed Order further states the settlement was placed in an account in Husband’s name with a
value in May 2014 of approximately $120,000. Id. at 26.
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until seven days “from the time as the Final Decree of Dissolution is entered
and she is paid her equity in the residence.” App. at 25. They further agreed to
the valuation of certain assets and that some of those assets were “wholly
marital assets.” Id. at 25-26. The parties noted that the following items
remained in dispute:
Whether Husband’s Workers Compensation Settlement should
in whole or in part be included in the marital pot, whether Wife’s
inheritance from her Mother and Uncle should be awarded
wholly to Wife as an additional share of the marital pot, whether
the marital pot should be divided equally, Husband’s contributive
share of Wife’s Attorney fees, whether Wife is entitled to spousal
support, and if so how much and for how long.
Id. at 27.
[5] The trial court held a final hearing on November 18, 2014. By this time, the
parties had agreed and stipulated that only the temporary total disability portion
of Husband’s worker’s compensation settlement (approximately $20,000.00)
would be included in the marital pot and the remainder was excluded and not
subject to division. Wife’s inheritance remained a point of contention.
Husband requested the trial court apply the statutory presumption of equal
division of the marital estate; citing the parties’ income disparity, Wife
requested the trial court deviate from the statutory presumption and award a
65/35 percent distribution in her favor, including setting over the inheritance
accounts to her.
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[6] On February 17, 2015, the trial court entered a decree distributing the parties’
assets and dissolving their marriage. The trial court concluded “a deviation
from the statutory presumptive equal division of the marital estate is not
warranted and that Wife has not rebutted the presumption that an equal
division of the marital estate in this case is a just and reasonable division of the
same.” Id. at 15. Based upon the agreed values of the marital assets, including
the inheritance accounts, the total value of the marital estate was $562,648.19.
The trial court equally divided the marital pot between the parties, assigning the
inheritance accounts to Wife.3 Additionally, the trial court ordered that
Husband pay $3,000 of Wife’s attorney fees. Wife now appeals.
Discussion and Decision
I. Standard of Review
[7] The division of marital property is highly fact sensitive. Fobar v. Vonderahe, 771
N.E.2d 57, 59 (Ind. 2002). It is a task within the sound discretion of the trial
court, and we will reverse only for an abuse of discretion. Love v. Love, 10
N.E.3d 1005, 1012 (Ind. Ct. App. 2014). We will reverse a trial court’s division
of marital property only if there is no rational basis for the award; that is, if the
result is clearly against the logic and effect of the facts and circumstances,
including the reasonable inferences to be drawn therefrom. Luttrell v. Luttrell,
3
The trial court’s division of assets resulted in Wife receiving $281,328.20 and Husband receiving
$281,319.99.
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994 N.E.2d 298, 301 (Ind. Ct. App. 2013), trans. denied. We will also reverse if
the trial court has misinterpreted the law or disregarded evidence of factors
listed in the controlling statute. Webb v. Schleutker, 891 N.E.2d 1144, 1153 (Ind.
Ct. App. 2008). When we review a claim that the trial court improperly divided
marital property, we consider only the evidence most favorable to the trial
court’s disposition of the property without reweighing evidence or assessing
witness credibility. Id. Although the facts and reasonable inferences might
allow for a conclusion different from that reached by the trial court, we will not
substitute our judgment for that of the trial court. Id. at 1154.
[8] The trial court’s judgment here included specific findings of fact and
conclusions at the request of the parties. We review conclusions of law de
novo. Johnson v. Johnson, 999 N.E.2d 56, 59 (Ind. 2013). But pursuant to Trial
Rule 52(A), we “shall not set aside the findings or judgment unless clearly
erroneous, and due regard shall be given to the opportunity of the trial court to
judge the credibility of the witnesses.” Findings of fact are clearly erroneous
when the record contains no facts to support them, and a judgment is clearly
erroneous if no evidence supports the findings, the findings fail to support the
judgment, or if the trial court applies an incorrect legal standard. In re B.J.R.,
984 N.E.2d 687, 697 (Ind. Ct. App. 2013).
II. Division of Marital Property
[9] Indiana Code chapter 31-15-7 governs disposition of marital assets in a
dissolution proceeding. Indiana Code section 31-15-7-4 provides the trial court
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shall divide the property of the parties in a just and reasonable manner, whether
that property was owned by either spouse before the marriage, acquired by
either spouse in his or her own right after the marriage and before the final
separation, or acquired by their joint efforts. This “one pot” theory of marital
property ensures that all marital assets are subject to the trial court’s power to
divide and award. Estudillo v. Estudillo, 956 N.E.2d 1084, 1090 (Ind. Ct. App.
2011).
[10] “The court shall presume that an equal division of the marital property between
the parties is just and reasonable.” Ind. Code § 31-15-7-5. However, the
presumption of equal division may be rebutted by a party who presents
evidence that an equal division would not be just and reasonable because of the
contribution each spouse made to the acquisition of property; the extent to
which property was acquired before the marriage or through inheritance or gift;
the economic circumstances of each spouse at the time of dissolution; the
conduct of the parties during the marriage relating to their property; and the
earnings or earning ability of each party. Id. The party seeking to rebut the
presumption of equal division bears the burden of proof of doing so, Beckley v.
Beckley, 822 N.E.2d 158, 163 (Ind. 2005), and a party challenging the trial
court’s decision on appeal must overcome a strong presumption that the trial
court acted correctly in applying the statute, Campbell v. Campbell, 993 N.E.2d
205, 212-13 (Ind. Ct. App. 2013), trans. denied.
[11] The dissent has stated this proposition favoring a trial court’s ruling as follows:
“The presumption that a dissolution court correctly followed the law and made
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all the proper considerations in crafting its property distribution is one of the
strongest presumptions applicable to our consideration on appeal.” See slip op.
at ¶ 22 (quoting Hyde v. Hyde, 751 N.E.2d 761, 765 (Ind. Ct. App. 2001)).
Tracing this quote back ultimately leads to this statement being made in the
dissent in Wallace v. Wallace, 714 N.E.2d 774, 781 (Ind. Ct. App. 1999), trans.
denied, which cites In re Marriage of Stetler, 657 N.E.2d 395 (Ind. Ct. App. 1995),
trans. denied, in support. Stetler, however, simply says, “The presumption in
favor of the correct action by the trial court is one of the strongest presumptions
applicable to our consideration on appeal.” Id. at 398. To the extent the more
specific formulation articulated by the dissent in Wallace would imply a trial
court’s determination regarding property distribution in the dissolution arena is
specifically entitled to the “strongest presumption” of correctness, it is
somewhat misleading. See, e.g., Estate of Alexander v. Alexander, 138 Ind. App.
443, 449-50, 212 N.E.2d 911, 915 (1966) (stating, in a case claiming against an
estate for personal services, that “[a] long line of Indiana cases have held that
the exercise of discretion by the trial court is not reviewable; it is only the abuse
of the power which is reviewable on appeal. ‘The presumption in favor of
correct action on the part of a trial court is one of the strongest presumptions
applicable to the consideration of a cause on appeal.’”) (internal citations
omitted) (quoting Wis. Nat’l Life Ins. Co. v. Meixel, 221 Ind. 650, 654, 51 N.E.2d
78, 79 (1943) (a case of a claim against an insurance policy)). The dissolution
cases which now state the standard of review specifically in favor of the trial
court’s division of marital property have overstated or misinterpreted the
language of Alexander and its predecessors such that an appellant would rarely,
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if ever, be found to have overcome this “strongest presumption.” In short,
while we may presume the trial court followed the law in making its decision,
we still review a trial court’s property division for an abuse of the trial court’s
discretion. “[T]here is no general rule for the determination of what is, and
what is not, an abuse of discretion. The solution of the question when it arises
must depend upon the particular facts of each case.” Id. at 450, 212 N.E.2d at
915. We turn now to those facts.
[12] Wife does not challenge any of the trial court’s findings of fact as clearly
erroneous. Rather, she challenges the trial court’s conclusion and judgment
based on its findings and, contrary to the trial court’s conclusion otherwise,
believes she rebutted the presumption of equal division of the marital estate
with evidence regarding her inheritance and her economic disadvantage.
[13] The trial court’s findings relevant to these issues are:
7. When the Parties were married [in 1978], Husband was
working at Ford Motor Company and Wife was working at
Time, Inc. Both jobs were full-time. The highest level of
education obtained by Wife is a high school diploma.
8. Wife worked at her full-time position for seven years until the
birth of the Parties’ first child [in 1982]. A second child was born
in 1986.
9. Wife stayed home with both children until 1997.
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10. In 1997, Wife began working at the Lake County Public
Library on a part-time basis. Wife left such position until she
returned to work there in 2000 or 2001.
11. In 2000 or 2001, Wife went back to work at the Lake County
Public Library as a clerk making $13.39 per hour working
approximately 21 hours per week. Wife continued to be so
employed as of the date of the Final Hearing.
12. A full-time clerk position at Wife’s employer opened a year
before the commencement of this case but Wife did not apply for
that full-time position.
13. During her present employment with the Lake County
Public Library, Wife has taken 2 leaves of absence for medical
reasons.
14. Wife claimed to have medical restrictions upon her ability to
work, but admitted that no doctor has ever issued written
medical restrictions and no credible evidence of any medical
restrictions on her ability to work was presented at the Final
Hearing.
15. Wife is physically capable of working a full-time job.
16. From the inception of the marriage to the date of the Final
Hearing, Husband has remained employed as a full-time
employee with Ford Motor Company. Husband’s annual
income from his employment, as of the date of the Final Hearing,
is approximately $80,000.00.
***
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19. In 2005 and 2009, Wife inherited funds upon the deaths of
her mother and uncle. Wife did no[t] share specifics of her
inheritances with Husband during the marriage and the evidence
demonstrated that ultimately such funds are now held and
embodied in [the inheritance accounts].
20. The funds Wife inherited were available for her use and used
by her during the marriage.
***
25. Husband requested that this Court employ and apply the
statutory presumptive equal division of the marital estate.
26. Wife requested a deviation from the statutory presumptive
equal division of the marital estate primarily alleging that a
disparity amongst the Parties’ incomes warrants a deviation and
requesting a deviation whereby the martial [sic] estate is divided
65% to Wife and 35% [to Husband] including, within such
proposed division, the setting over all funds obtained by Wife
during the Parties’ marriage via inheritance to Wife.
App. at 9-10, 12. The trial court’s conclusions on these findings are:
46. Having considered the evidence, the Court finds and
concludes that a deviation from the statutory presumptive equal
division of the marital estate is not warranted and that Wife has
not rebutted the presumption that an equal division of the marital
estate in this case is a just and reasonable division of the same.
***
54. The Court having considered the factors it must consider in
exercising its broad discretion to award attorney fees in
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dissolution cases finds and orders that Wife should recover a
reasonable portion of the attorney fees that did incur in this case.
In reaching this conclusion, the Court has considered the current
earning power of each Party; the disparity in current income, the
size of the marital estate and division set forth herein, and the
time and expenses expended by the Parties in this case as
demonstrated by the evidence of fees and costs incurred by Wife.
Id. at 15, 17.
[14] Wife challenges the trial court’s conclusion that an equal distribution of the
marital property is just and reasonable. Specifically, she claims she rebutted the
statutory presumption of an equal division with evidence regarding the
inheritance accounts and the parties’ economic disparity. All the factors of
Indiana Code section 31-15-7-5 are to be considered together, with no one
factor alone necessarily proving or requiring an unequal division. See Fobar,
771 N.E.2d at 59-60 (noting that the trial court’s disposition is to be considered
as a whole, not item by item and therefore, “[e]ven if some items meet the
statutory criteria that may support an unequal division of the overall pot, the
law does not require an unequal division if overall considerations render the
total resolution just and equitable.”).
[15] We acknowledge the high bar Wife has to overcome for us to reverse the trial
court’s decision regarding division of the marital property. But we agree with
Wife that the trial court’s findings do not support the court’s conclusion that an
equal division is just and reasonable in this case. The trial court’s findings
acknowledged Wife’s limited education, in that she has only a high school
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diploma. The findings acknowledge her time out of the workforce on behalf of
the family, leaving a full-time job to stay home with the parties’ children for
over fifteen years. Although Husband intimated that Wife leaving her job at
that time was her mother’s idea, there is no indication that he objected to her
being a stay-at-home mother and homemaker, and Wife testified the decision
was a mutual one. Moreover, there is no indication Husband wanted Wife to
work full-time when she returned to the workforce. In addition, the trial court’s
findings acknowledge Wife’s limited income in comparison to Husband’s. In
fact, the trial court cited the economic disparity between the parties as the
reason supporting its conclusion that Husband should pay some of Wife’s
attorney fees. Wife’s income is less than one-quarter of Husband’s; even if she
were to obtain a full-time job at the library, her hourly rate would not increase,
and she would still only make approximately one-third of what Husband
makes. There is no indication—given her education and work experience—that
Wife could get a full time job elsewhere that would pay the same rate, let alone
significantly more. Further, as a part-time employee only, Wife has not been
earning retirement benefits to this point, a fact upon which the trial court made
no findings.
[16] As to the inheritance accounts, the trial court’s findings acknowledge Wife kept
them solely in her name and for her use and Husband was unaware of the
specifics of the accounts. There is no evidence that family funds were
commingled with the inheritance accounts or that Wife used the funds in those
accounts for family purposes, other than a one-time use of $7,000 from the
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accounts toward the parties’ daughter’s wedding. That amount represents less
than one-tenth the value of the inheritance accounts as of the time of the final
hearing.
[17] A party’s inheritance alone does not necessarily dictate how property should be
divided. Compare Fobar, 771 N.E.2d at 60 (holding the trial court did not err in
equally dividing marital estate despite evidence of wife bringing inherited
property into the marriage and keeping control over it; wife earned more than
husband and would have greater resources following dissolution), with
Castaneda v. Castaneda, 615 N.E.2d 467, 470-71 (Ind. Ct. App. 1993) (finding no
error in the trial court setting aside inheritance to wife because evidence that
inheritance was kept in her name, husband did nothing to contribute to the
accumulation of the funds, funds were never co-mingled with other assets, and
funds were not treated as marital property rebutted presumption of equal
division). Rather, inherited property “must be considered in conjunction with
relevant evidence regarding other statutorily prescribed factors, and with any
evidence demonstrating additional reasons that an unequal distribution would
be just and reasonable.” Eye v. Eye, 849 N.E.2d 698, 702 (Ind. Ct. App. 2006).
In this case, that includes evidence and findings that Husband did not
contribute to the maintenance or accumulation of the inheritance accounts;
Husband did not have access to or use of the accounts; and the parties did not
treat the accounts as marital property.
[18] In addition, there are findings and evidence that Wife’s earnings are
substantially less than Husband’s earnings; Wife’s earning ability is not
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significantly greater in the future than it is now; and Wife has earned no
retirement benefits of her own. By agreement, Husband was awarded the
marital home and was to pay Wife half its value as part of the property
distribution, but also by agreement, the parties were sharing the residence
throughout the proceedings and Wife was permitted to reside there until seven
days after the dissolution decree was entered. She will therefore be required to
find other housing with part of her distribution from the marital estate. Wife
will ultimately be in disadvantaged economic circumstances as compared to
Husband after the dissolution.4
[19] No one factor listed in Indiana Code section 31-15-7-5 is entitled to special
weight over any other. See Bertholet v. Bertholet, 725 N.E.2d 487, 496 (Ind. Ct.
App. 2000). In this case, however, the findings made by the trial court and
nearly all the statutory factors listed favor an unequal distribution of the marital
estate. No findings support an equal division. The trial court’s findings do not
support its conclusion that an equal division is just and reasonable in this case.
The presumption that the trial court correctly applied the law in dividing the
marital assets has been rebutted and we therefore conclude the judgment
awarding the parties equal shares of the marital estate is an abuse of discretion.
Although Wife requested a 65/35 split of the marital estate, awarding her the
4
We also note that the bulk of Husband’s worker’s compensation settlement was not included in the marital
estate. Although this portion of the settlement may have been properly excluded from the marital estate (and
Wife does not claim otherwise), see Leisure v. Leisure, 605 N.E.2d 755, 759 (Ind. 1993) (holding worker’s
compensation benefits, to the extent they replace earnings after dissolution, remain separate property not
subject to inclusion or division as part of the marital estate), it is nonetheless a substantial sum of money
available to Husband after dissolution.
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entirety of the inheritance accounts would result in an approximately 60/40
split, and we believe that would be a just and reasonable resolution here. We
therefore reverse and remand for the trial court to amend the decree of
dissolution accordingly.
Conclusion
[20] Wife has met her burden of overcoming the presumption on appeal that the trial
court acted correctly in applying the statutory presumption of an equal division
of the marital estate. The trial court’s findings do not support its conclusion
that equal division is just and reasonable. Therefore, we reverse the trial court’s
judgment and remand for proceedings consistent with this opinion.
[21] Reversed and remanded.
Vaidik, C.J., concurs.
Pyle, J., dissents with opinion.
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IN THE
COURT OF APPEALS OF INDIANA
In Re: the Marriage of:
Renita A. Marek,
Appellant, Court of Appeals Case No.
45A03-1503-DR-93
and
Edward Marek,
Appellee.
Pyle, Judge, dissenting.
[22] I respectfully dissent from my colleague’s reversal of the trial court’s decision to
equally divide the marital estate. As the majority ably notes, a party seeking to
rebut the presumption of an equal division of marital property bears the burden
of proof in doing so. Beckley v. Beckley, 822 N.E.2d 158, 163 (Ind. 2005); see also
I.C. § 31-15-7-5. “‘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.’” Love v. Love, 10 N.E.3d 1005, 1012-13
(quoting Wanner v. Hutchcroft, 888 N.E.2d 260, 263 (Ind. Ct. App. 2008)).
Indeed, “‘[t]he presumption that a dissolution court correctly followed the law
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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) (quoting Wilson v.
Wilson, 732 N.E.2d 841, 844 (Ind. Ct. App. 2000), trans. denied). Whether a
trial court’s division of the marital property was just and reasonable is “in some
sense an issue of law” but “it is highly fact sensitive and is subject to an abuse of
discretion standard.” Fobar v. Vonderahe, 771 N.E.2d 57, 59 (Ind. 2002). Thus,
we will reverse a property distribution only if there is no rational basis for the
award. Love, 10 N.E.3d at 1013.
[23] In this case, reasonable minds might disagree as to whether it would be more
just to award Wife a 60/40 split in the marital estate. However, I do not believe
that is the question for our court to answer. The question is whether there is a
rational basis for the trial court’s award. In answering that question, I do not
find any basis for concluding that there was no rational basis for the trial court’s
equal division of property. The trial court held a hearing, listened to the
evidence, made credibility determinations, and entered specific findings that
provided a rational basis for its judgment. As a result, I would affirm the trial
court’s award.
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