William Thomas Thompson v. Lora Lou Wolfram ( 2020 )

FILED
Dec 22 2020, 8:28 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Michael K. Wandling Mark S. Lenyo
Wandling & Associates South Bend, Indiana
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
William Thomas Thompson, December 22, 2020
Appellant-Respondent, Court of Appeals Case No.
19A-DR-2622
v. Appeal from the St. Joseph
Superior Court
Lora Lou Wolfram, The Honorable Steven L.
Appellee-Petitioner, Hostetler, Judge
Trial Court Cause No.
71D07-1606-DR-586
Robb, Judge.
Court of Appeals of Indiana | Opinion 19A-DR-2622 | December 22, 2020 Page 1 of 20
Case Summary and Issue
[1] William Thomas Thompson1 and Lora Lou Wolfram signed a Prenuptial
Agreement (“Agreement”) before marrying in 1996. Wolfram filed a petition
for dissolution of marriage in 2016 and the trial court entered a dissolution
order in 2019. Thompson appeals the trial court’s dissolution order, raising one
issue for our review: whether the trial court erred when it interpreted the
language of the parties’ Agreement as it relates to Thompson’s 401(k) and IRA
accounts (“Retirement Accounts”). Concluding the trial court did not err in
interpreting the Agreement and properly divided the Retirement Accounts, we
affirm.
Facts and Procedural History
[2] Thompson and Wolfram were married on July 4, 1996. Prior to their wedding,
Wolfram suggested they sign a premarital agreement to protect and keep their
separate property in case of divorce. Thompson contacted his brother-in-law,
who is an attorney, to prepare the document. The parties signed the Agreement
the day before their wedding.
[3] In part, the Agreement provided that in the event of a divorce,
A. All assets owned by each party and in the name of that party,
all at the time of the marriage, and which assets are maintained
1
Appellant’s name is spelled as both “Thompson” and “Thomson” in court documents. The Agreement
signed by both parties lists Appellant’s name as “Thompson,” and we use this spelling in our opinion.
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separately by that party after the marriage, and which are not
commingled with the other party’s assets, or which are not listed
under the joint name of the parties, shall remain the separate
assets of that party and shall not be subject to division upon
divorce.
***
D. Any assets acquired by the parties during their marriage to
each other, other than as provided herein above, shall be
considered joint marital assets and subject to equal division
between the parties upon divorce.
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Appellant’s Appendix, Volume II at 16-17. The parties’ assets and investments
at the time of the marriage were listed in Exhibits A and B attached to the
Agreement as follows:
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Id. at 19-20.
[4] Wolfram filed a Petition for Dissolution of Marriage on June 27, 2016. All of
Wolfram’s separate assets and investments listed in the Agreement had since
been liquidated, transferred into another format, or placed in both names. Of
Thompson’s separate property listed in the Agreement, the 1985 Jeep CJ,
Monroe Bankcorp Stock, and his Retirement Accounts were still in existence
and in only Thompson’s name at the time of the parties’ dissolution hearing.
As of June 1, 2016, Thompson’s Retirement Accounts were valued at
$994,523.00.
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[5] In September 2019, the trial court held a bench trial. The parties agreed about
the extent of their property and further agreed their separate pensions had not
been included in the Agreement. They disagreed about how to treat
Thompson’s Retirement Accounts under the Agreement. Thompson argued no
part of his Retirement Accounts was divisible marital property, and Wolfram
argued that, although the $97,477.00 starting value of the Retirement Accounts
at the time of marriage should be set aside to Thompson, the remaining value in
the Retirement Accounts should be considered property of the marriage to be
divided equally.
[6] The trial court subsequently entered a Decree of Dissolution of Marriage with
specific findings of fact and conclusions of law at Thompson’s request. The
trial court agreed with Wolfram’s position regarding the Retirement Accounts
and ordered the increase in Thompson’s Retirement Accounts since the
marriage to be split equally between the parties, concluding:
The Prenuptial Agreement the parties to this case signed did not
exclude from the marital estate to be divided either contributions
made during the marriage or earnings and appreciation.
Therefore, the Prenuptial Agreement by default requires that
such contributions, earnings and appreciation be included in the
marital estate to be divided equally.
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Appealed Order at 6. The trial court therefore awarded Thompson $97,477.00
plus one-half of the appreciation to his Retirement Accounts and awarded
Wolfram the remaining one-half of the appreciation.2
[7] The trial court also addressed the parties’ separate pension accounts, ruling that
both parties’ pension plans would be subject to division as marital property
because they were not mentioned in the Agreement. The trial court noted,
however, that although the two pension accounts are subject to division, there
was insufficient evidence presented during trial to allow the court to properly
assess the value of the pension accounts. Therefore, the trial court scheduled a
future hearing to determine the value and distribution of the pensions.
[8] Thompson appealed from the trial court’s decree of dissolution. His Notice of
Appeal designates this as an Appeal from a Final Judgment. However, pursuant
to Indiana Appellate Rule 2(H)(1), a judgment is not final unless the order
adjudicates all claims as to all parties. Thompson’s appeal is not from a final
judgment because the trial court’s order did not distribute the parties’ pensions.
Instead, the trial court set an additional evidentiary hearing to be held on
December 18, 2019, regarding the pensions. Nonetheless, Thompson’s appeal
is an interlocutory appeal of right because the trial court’s order required
2
The trial court’s order states that Wolfram is awarded “One-Half of Husband’s Retirement Savings Account
of $994,523.00 (less starting amount of $97,477.00) plus one-half of any increase since [date of filing]” for a
total award of $448,477.00 from the Retirement Accounts. Appealed Order at 9. Although that math does
not seem to be correct ($994,523.00 - $97,477 / 2 = $448,523.00), neither party raises this as an issue, and we
assume the final amount represents any change in the accounts after the petition was filed.
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Thompson to pay Wolfram an equalization payment within thirty days of the
appealed order. See Ind. Appellate Rule 14(A)(1) (permitting parties to file
interlocutory appeal from an order for payment of money).
Discussion and Decision
I. Standard of Review
[9] When a trial court’s decree of dissolution is accompanied by findings of fact,
“the court on appeal 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.” Ind. Trial Rule 52(A). In determining
whether the findings or judgment are clearly erroneous, we first determine
whether the evidence supports the findings and, second, whether those findings
support the trial court’s conclusions of law and judgment. Hurt v. Hurt, 920
N.E.2d 688, 691 (Ind. Ct. App. 2010). The trial court’s findings control unless
there are no facts in the record to support them, either directly or by inference,
but we review legal conclusions de novo. Baglan v. Baglan, 137 N.E.3d 271, 275
(Ind. Ct. App. 2019). We will set aside a trial court’s judgment only if it is
clearly erroneous, and a judgment is “clearly erroneous” if, after review of the
evidence most favorable to it, we are firmly convinced that a mistake has been
made. Id. When a party has requested special findings of fact and conclusions
thereon pursuant to Trial Rule 52(A), we may affirm the judgment on any legal
theory supported by the findings. Werner v. Werner, 946 N.E.2d 1233, 1244
(Ind. Ct. App. 2011), trans. denied.
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II. Division of Thompson’s Retirement Accounts
[10] Indiana has adopted the one-pot theory of marital property, in which all
property owned by either spouse before the marriage, acquired by either spouse
in his or her own right after the marriage and prior to the final separation of the
parties, or acquired by their joint efforts is part of the marital estate. Ind. Code
§ 31-15-7-4(a). This one-pot theory ensures that all property from both spouses
is subject to the trial court’s power to divide and award, Tyagi v. Tyagi, 142
N.E.3d 960, 964 (Ind. Ct. App. 2020), trans. denied, under the presumption that
an equal split is just and reasonable, Ind. Code § 31-15-7-5. However, as an
alternative to the inclusion of all property in the marital estate per statute,
prospective spouses may enter a legally recognized premarital agreement, and
“as long as [it is] entered into freely and without fraud, duress, or
misrepresentation, and [is] not unconscionable[,]” it will be recognized as a
valid contract. Rider v. Rider, 669 N.E.2d 160, 162 (Ind. 1996); see Ind. Code
ch. 31-11-3 (the Uniform Premarital Agreement Act, applicable to premarital
agreements executed on or after July 1, 1995).3
[11] Premarital agreements are legal contracts entered into prior to marriage to settle
the interest each spouse has in the property of the other and therefore, standard
principles of contract formation and interpretation apply to such agreements.
3
Premarital, prenuptial, and antenuptial are all terms used to describe an agreement entered into in
contemplation of marriage. See Beaman v. Beaman, 844 N.E.2d 525, 530 (Ind. Ct. App. 2006). Because
Indiana Code chapter 31-11-3 adopts the Uniform Premarital Agreement Act, we use the term “premarital”
throughout.
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Fetters v. Fetters, 26 N.E.3d 1016, 1020 (Ind. Ct. App. 2015), trans. denied. “To
interpret a contract, a court first considers the parties’ intent as expressed in the
language of the contract.” Schmidt v. Schmidt, 812 N.E.2d 1074, 1080 (Ind. Ct.
App. 2004). A court should read all of the provisions “as a whole to accept an
interpretation that harmonizes the contract’s words and phrases and gives effect
to the parties’ intentions as established at the time they entered the contract.”
Id. As premarital agreements are favored by the law, they will be liberally
construed to realize the parties’ intentions. Perrill v. Perrill, 126 N.E.3d 834, 840
(Ind. Ct. App. 2019), trans. denied. If the terms of the contract are
unambiguous, “the intent of the parties must be determined from the four
corners of the document.” Schmidt, 812 N.E.2d at 1080. If the terms are
ambiguous, the court may consider parol evidence to clarify the ambiguity.
McCord v. McCord, 852 N.E.2d 35, 43 (Ind. Ct. App. 2006), trans. denied. “The
terms of a contract are ambiguous only when reasonably intelligent persons
would honestly differ as to the meaning of those terms.” Schmidt, 812 N.E.2d
at 1080.
[12] Thompson asserts that the trial court erred by failing to properly interpret the
Agreement which contains the following relevant provisions:
William Thompson (Bill) and Lora Wolfram (Lora), for the
mutual promises herein contained and other valuable
considerations not herein expressed, do hereby freely and
voluntarily enter into this Prenuptial Agreement, and they do
hereby acknowledge and agree as follows:
1. They plan to be married on July 4, 1996.
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2. Attached hereto as Exhibit “A,” and made a part hereof, is the
Financial Statement of Net Worth as provided by Bill.
3. Attached hereto as Exhibit “B,” and made a part hereof, is the
Financial Statement of Net Worth as provided by Lora.
4. In the event their marriage should end in divorce, they agree
as follows:
A. All assets owned by each party and in the name of that
party, all at the time of the marriage, and which assets are
maintained separately by that party after the marriage, and which
are not commingled with the other party’s assets, or which are
not listed under the joint name of the parties, shall remain the
separate assets of that party and shall not be subject to division
upon divorce.
B. Personal property, to include furniture, tools, and
antiques brought into the marriage by a party shall remain with
that party and not be subject to division upon divorce.
C. Any real estate owned, or to be owned in the future, in
the joint names of the parties shall be considered equal ownership
and upon divorce shall be subject to equal division between the
parties.
D. Any assets acquired by the parties during their
marriage to each other, other than as provided herein above,
shall be considered joint marital assets and subject to equal
division between the parties upon divorce.
Appellant’s App., Vol. II at 16-17.
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[13] The sole point of contention here is the disposition of Thompson’s Retirement
Accounts.4 Thompson acknowledges that the Agreement “is silent as to how
future contributions, earnings, or appreciation of assets should be handled.”
Appellant’s Brief at 8. He argues, however, that the parties’ intent at the time
the Agreement was drafted was “to protect their assets that they had before the
marriage[.]” Id. He therefore argues that Section 4.A. of the Agreement
protects the current value of his Retirement Accounts and not just the value at
the time the Agreement was entered. Wolfram counters that only the value of
the Retirement Accounts at the time of the Agreement is governed by Section
4.A. and any appreciation is governed by Section 4.D. and should be
considered an asset acquired during marriage subject to division.
[14] In McCord, the parties entered into a premarital agreement and attached thereto
exhibits listing their assets and the values of each. One of the husband’s listed
assets was a 401(k) valued at $11,000. By the time of the parties’ divorce, the
401(k) had a value of $73,000, which included contributions made during the
marriage and accumulated earnings. As in this case, the trial court awarded
half of the increase in the 401(k) since marriage to the wife, and the husband
appealed. Unlike this case, however, the agreement provided in part that each
4
Thompson’s brief occasionally references his pension in the same breath as his IRA and 401(k). Although
he does not specifically challenge the trial court’s decision that the parties’ pensions are a marital asset subject
to division, to the extent his aggregation of all the accounts is meant to imply the pensions are also covered
by the Agreement and should have been considered separate property, he is mistaken. The parties admitted
at trial that they did not include their respective pensions in the financial statements they attached to the
Agreement and therefore, the trial court correctly determined the pensions are not covered by the Agreement
and were subject to division as marital assets.
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party “recognizes that the property of the other may increase through earnings,
appreciate [sic], further investments, inheritances, and the like and is entering
into this prenuptial agreement regardless of the value of such additions.” 852
N.E.2d at 39. Based on this provision, we agreed with the husband that the
trial court erred, concluding the agreement was clear that the parties intended
husband’s 401(k), including any growth for any reason, to remain his separate
property. Id. at 43; see also In re Marriage of Conner, 713 N.E.2d 883, 889 (Ind.
Ct. App. 1999) (holding the trial court properly excluded only IRA
contributions from the marital estate where the parties’ premarital agreement
specifically excluded contributions from the marital estate but was silent as to
earnings). Here, the Agreement is silent as to how any increases of any kind in
Thompson’s Retirement Accounts should be treated.
[15] Premarital agreements “are intended as a means of preserving the status quo as
to property interests existing before marriage[.]” In re Marriage of Boren, 475
N.E.2d 690, 695 (Ind. 1985) (quoting In re Marriage of Stokes, 608 P.2d 824, 828
(Colo. App. 1979)). And as stated above, in interpreting a contract, we first
consider the parties’ intent “as expressed in the language of the contract.”
Schmidt, 812 N.E.2d at 1080. The specific property Thompson and Wolfram
owned at the time of the marriage and intended to protect via the Agreement is
listed in their respective financial statements and attached to the Agreement as
exhibits. Thompson’s financial statement showed that he had an IRA and
401(k) with a balance of $97,477.00 as of March 31, 1996. See Appellant’s
App., Vol. II at 19 (“Exhibit A”). Pursuant to Section 4.A. of the Agreement,
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$97,477.00 was the property interest existing at the time of the marriage and
that was the separate property interest intended to be protected in order to
preserve the status quo. See Boren, 475 N.E.2d at 695; see also Transcript,
Volume 2 at 46 (Thompson testifying that what “[a]ll at the time of the
marriage” in Section 4.A. means to him is, “what the value was at the time of the
marriage”) (emphasis added). Had the parties intended to exclude from the
marital pot any increase above the specific values listed in the exhibits, the
Agreement could have provided that the property outlined in the financial
statements including any increase in value through whatever means (or some similar
language) would remain a party’s separate property. See, e.g., McCord, 852
N.E.2d at 39. Instead, the Retirement Accounts as listed on Exhibit A included
a specific value as of a certain date with no provision for how to treat increases
in that value through contributions or otherwise. To the extent the specific
words used in the Agreement create an ambiguity, we construe them against the
drafter – here, Thompson, by his counsel. See Buskirk v. Buskirk, 86 N.E.3d 217,
224 (Ind. Ct. App. 2017).
[16] The dissent argues this result interjects language that is not in the Agreement.
On the contrary, the decision is firmly grounded in the actual language and
organization of the Agreement. Section 4.A. states that “All assets owned by
each party and in the name of that party, all at the time of the marriage, . . .
shall remain the separate assets of that party and shall not be subject to division
upon divorce.” Appellant’s App., Vol. II at 17. “[A]ll at the time of marriage”
modifies “assets owned by each party.” Thompson’s Retirement Accounts with
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a balance of $97,477.00 at the time of the marriage remained his separate assets.
But pursuant to Section 4.D., the increase in the value of the Retirement
Accounts during the marriage is an asset “other than as provided” in Section
4.A. Therefore, the trial court rightly considered the increase to be joint marital
property subject to equal division upon the parties’ divorce. Appellant’s App.,
Vol. II at 17.5
Conclusion
[17] The plain language of the Agreement indicates the then-current value of
Thompson’s Retirement Accounts was his separate property and the trial court
correctly concluded the increase in value from that date was marital property
subject to division upon divorce. Accordingly, we affirm the trial court’s
judgment, including its treatment of Thompson’s Retirement Accounts.
[18] Affirmed.
Vaidik, J., concurs.
May, J., dissents with opinion.
5
Although the trial court did not divide the increase in value of the Monroe Bankcorp stock, neither party
argues on appeal that was an abuse of discretion. As it is not an issue in this appeal, we decline to comment
on the trial court’s treatment of it.
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IN THE
COURT OF APPEALS OF INDIANA
William Thomas Thompson Court of Appeals Case No.
19A-DR-2622
Appellant-Plaintiff,
v.
Lora Lou Wolfram,
Appellee-Defendant.
May, Judge, dissenting.
[1] I respectfully dissent. I believe the plain language of the prenuptial agreement
dictates that Thompson’s retirement account remains separate and to rule
otherwise turns into a charade the time-honored process of protecting one’s
assets in the event of dissolution. I also believe this case is distinguishable from
McCord and Conner.
[2] The plain language of Section 4.D. states: “Any assets acquired by the parties
during the marriage to each other, OTHER THAN AS PROVIDED
HEREINABOVE, shall be considered joint marital assets and subject to equal
division between the parties upon divorce.” (App. Vol. II at 17) (emphasis
added). Section 4.A. was “hereinabove” and “provided”:
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All assets owned by either party and in the name of that party, all
at the time of the marriage, in which assets are maintained
separately by that party after the marriage, and which are not
commingled with any other party’s assets, or which are not listed
under the joint name of the parties, shall remain the separate
assets of that party and shall not be subjected to the division upon
divorce.
(Id. at 16.) The retirement asset in question was listed in Exhibit A, was owned
in just Thompson’s name at the time of the marriage, and was maintained
separately thereafter, without being commingled. Had the retirement asset not
been listed in Exhibit A, there is no question that Wolfram would be entitled to
her share of the value. However, because it WAS listed, Section 4.D. precludes
it from being shared by Wolfram. Ruling otherwise vitiates the intent behind
signing a prenuptial agreement.
[3] Nor do the McCord and Conner cases require the result reached by the majority
as both were decided based on specific language in the prenuptial agreement
directing the division of certain future earnings on properties listed in those
agreements. In McCord, we held that the husband’s 401K, including its
earnings, was his sole property because the prenuptial agreement contained the
language, “each party recognizes that the property of the other may increase
through earnings, appreciate [sic], further investments, inheritances, and the
like and is entering into this prenuptial agreement regardless of the value of
such additions.” 852 N.E.2d at 43. Similarly in Conner, our court affirmed the
trial court’s inclusion of the earnings and appreciation associated with the
husband’s IRA account into the marital pot, while the contributions to the IRA
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account during the marriage were the husband’s sole property because the
prenuptial agreement contained controlling language that differentiated
contributions as the only part of the asset for direct exclusion from division.
713 N.E.2d at 889.
[4] Unlike McCord and Conner, the Agreement here made no specific mention of
contributions, earnings, or appreciation, and it did not attempt to parcel out
Thompson’s assets into distinct categories. Because the Agreement does not
contain language intended to include or exclude particular monies, we must
look to the parties’ overall intent when initially drafting their Agreement. As
stated in the majority opinion, we must rely on the language contained within
the four corners of the agreement, Schmidt, 812 N.E.2d at 1080, and give the
terms within the contract their plain and ordinary meaning. Rodriguez v.
Rodriguez, 818 N.E.2d 993, 995-996 (Ind. Ct. App. 2004), trans. denied.
[5] The plain language of the Agreement indicates that each party wished to regard
their respective assets as a whole, with an inherent understanding that assets
inevitably appreciate or depreciate throughout the life of the asset. 6 Both parties
had the capacity to understand that retirement accounts, when contributed to,
tend to gain value throughout the marriage. Thompson’s Retirement Accounts
6
Note, for example, that the trial court assigned to Thompson, with a fair market value of $0.00, all shares of
the Monroe Bank/Old National Bank stocks. The court did not divide between the parties the $1712.00 in
appreciation that occurred between the value at the signing of the Agreement ($4,035.00) and the value at
dissolution ($5,747.00). The court simply assigned the entirety of the asset to Thompson in accordance with
the language of Section 4.A. of the Agreement.
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were specifically introduced into the marriage as a separate asset, and they were
further maintained separately from Wolfram throughout the duration of the
marriage, complying with Sections 4.A. and 4.D. Thus, the majority’s decision
to divide the contribution and earnings as a marital asset goes against the clear
intent of the parties.
[6] Other jurisdictions have faced similar dilemmas and held that when a
prenuptial agreement is silent as to certain aspects of properties, such as
earnings, contributions, or appreciation, those aspects are treated as part of the
whole property and therefore should be divided as the property was to be
divided under the agreement. See, e.g., Brummund v. Brummund, 785 N.W.2d
182, 183 (N.D. 2010) (each party unambiguously waived any interest in the
separately listed property of the other, particularly when no language was
included to restrict the separate interest in the property to its value and
appreciation on a specific date); see also Boschetto v. Boschetto, 224 A.3d 824, 830
(R.I. 2020) (the parties’ premarital agreement contained a provision entitling
the Husband to one-half of the Wife’s 401K contributions made during their
marriage, but was silent as to appreciation in value; because the plain language
of the parties’ premarital agreement only referenced contributions, Husband
was not entitled to any appreciation of value).
[7] I must diverge from the majority’s reasoning because I believe the plain
language of the Agreement dictates that Thompson’s Retirement Accounts and
any contributions and earnings throughout the duration of the marriage must
remain as his separate property in their entirety in order to maintain the
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integrity of the Agreement and uphold the intention of the parties. To interject
language that is simply not present into the Agreement controverts not only the
intent of the parties but well-established contract law. Based thereon, I
respectfully dissent.
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