Ryan J. Schrader v. Marcy C. Schrader (mem. dec.) ( 2020 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
regarded as precedent or cited before any Mar 31 2020, 9:00 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT
Gregory K. Blanford
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Ryan J. Schrader, March 31, 2020
Appellant-Petitioner, Court of Appeals Case No.
19A-DR-2236
v. Appeal from the St. Joseph Circuit
Court
Marcy C. Schrader, The Honorable William L. Wilson,
Appellee-Respondent, Magistrate
Trial Court Cause No.
71C01-1512-DR-1147
Robb, Judge.
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Case Summary and Issue
[1] Ryan Schrader appeals the trial court’s order finding him in contempt for failure
to pay money owed to his ex-wife Marcy. Ryan raises one issue for our review:
whether the trial court properly used its contempt power to coerce compliance
with a post-dissolution order that Ryan pay to Marcy the value of a lost asset.
Concluding the trial court did not abuse its discretion in using its contempt
power to find Ryan in contempt, we affirm.
Facts and Procedural History
[2] Ryan and Marcy were married in 2002 and separated in 2015. On July 29,
2016, the trial court entered a Decree of Dissolution dissolving their marriage
and incorporating a Mediation Settlement Agreement between the parties. The
Settlement Agreement provided, in relevant part, that Ryan would become the
sole owner of the marital residence and Marcy would retain the parties’ two
timeshares with Disney Vacation Club. Ryan was to “assume, timely pay and
indemnify [Marcy] as to the balances owed on the two loans [and] pay all
maintenance fees or other expenses related to the timeshares which accrued
through December 31, 2016, which the parties agree total $1,032.05, and . . .
indemnify and hold [Marcy] harmless as to such fees and expenses.” Corrected
Appellant’s Appendix, Volume III at 14. More generally, the parties mutually
agreed to indemnify and hold each other harmless “by reason of any failure on
the part of either of them to timely pay obligations being assumed by them for
payment[,]” id. at 18, and “to do all things necessary to carry this [Settlement
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Agreement] into effect[,]” id. at 19. They also represented that they had each
fully disclosed to the other their financial situations.
[3] On September 6, 2016, Marcy filed a motion for rule to show cause alleging, in
part, that Ryan had failed to make the timeshare payments as required by the
Settlement Agreement and Marcy was unable to “enjoy the Time Share that she
was awarded through a Marital Settlement Agreement due to the lack of
payments.” Id., Vol. IV at 2. Following a hearing, the trial court issued an
order on March 17, 2017, resolving the rule to show cause as follows:
[Ryan] failed to pay Disney Vacation Club loans and the
timeshares which were in foreclosure. Before he signed the
Mediation Settlement Agreement, he knew the timeshare loans
were in default and foreclosure was imminent. [Marcy] did not
learn of this until after the agreement was incorporated into the
Decree. The agreement was that she would have ownership of
the timeshares and [Ryan] should pay off the timeshare loans.
He would also pay consolidated marital debts. In return, [Ryan]
had ownership of the marital home (he is current on his mortgage
payments) and he retained his retirement accounts. Based upon
the obligation ordered regarding the timeshares [sic] loans and
the intentional failure to make required payments, [Ryan] is
found to be in contempt of court. Apparently, it is beyond any
available redemption period and the timeshares cannot be saved.
[Ryan] must pay [Marcy] $22,000.00 to satisfy his obligation.
This may be satisfied by a monthly payment of $200.00 plus
interest at 5% per annum, or an additional $10.00 per month.
Id.at 8. On July 19, 2018, Ryan and Marcy signed an Agreed Stipulation
Regarding Payment of Judgement [sic] pursuant to which Ryan agreed to pay
Marcy “the sum of $250.00 per month until such time as the judgement [sic] is
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satisfied.” Id. at 11. The first payment was to be made on or before August 10,
2018, with each subsequent payment to be made on or before the 10th of each
succeeding month. On July 30, 2018, the trial court approved the stipulation
and ordered the parties to carry out its terms.
[4] On September 28, 2018, Marcy filed a motion requesting a status conference be
scheduled because Ryan had failed to comply with the terms of the stipulation
in that he had not made a single payment (and should have made at two). At
Ryan’s request, the conference was continued. Ryan then asked for and
received a change of judge. When the status conference was reset for December
in front of the new judge, Ryan failed to appear.
[5] On February 7, 2019, Marcy filed a second motion for rule to show cause
regarding the timeshares alleging that Ryan had not yet made a single payment
pursuant to the Agreed Stipulation and asking that he be held in contempt.
Ryan alleged at the rule to show cause hearing, as he does here, that contempt
was not an available remedy. The trial court took the matter under advisement
and entered a written order on that possibly dispositive issue on March 27,
2019, determining that contempt “may not be unavailable” and ordering an
evidentiary hearing “concerning the willfulness of Ryan’s failure to pay.” Id.,
Vol. V at 3. Ryan filed a motion to reconsider which the trial court denied
upon concluding that its earlier ruling was correct.
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[6] The trial court then held an evidentiary hearing to determine whether Ryan had
willfully failed to pay. Ryan was the sole witness at the hearing. He testified as
follows:
[Marcy’s counsel]: When it comes to the judgment or the – you
know, the Disney timeshare, would you agree you’ve made no
payments toward that whatsoever?
[Ryan]: Correct.
[Marcy’s counsel]: Okay. And why haven’t you made any
payments?
[Ryan]: Because I don’t see where it should be paid for through
me, because it went into foreclosure.
[Marcy’s counsel]: Okay. So you don’t think you should have to
pay it at all?
[Ryan]: No.
[Marcy’s counsel]: And did you sign the property settlement
agreement saying you would pay it?
[Ryan]: Yes, I did.
***
[Marcy’s counsel]: And you know there’s now an amount of
money you have to pay [Marcy]?
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[Ryan]: Yes, I do.
[Marcy’s counsel]: But you just don’t agree with that?
[Ryan]: I don’t agree with it.
***
[Marcy’s counsel]: So you were ordered to pay $200 per month
against this judgment; correct?
[Ryan]: Let’s just say yes. . . .
[Marcy’s counsel]: And you signed an agreement saying you
would pay $250 a month towards this, this money owed; correct?
[Ryan]: Correct.
[Marcy’s counsel]: And when you signed that agreement, did
you have any intention of making those payments?
[Ryan]: No.
[Marcy’s counsel]: Okay. So why did you sign the agreement?
[Ryan]: Because you would still be coming after me if I didn’t,
like you are now.
Transcript, Volume 2 at 8-9, 18-19. Over Ryan’s continued objection that
contempt is not a remedy for failure to pay a money judgment, the trial court
issued an order finding Ryan in contempt:
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17. Ryan was asked directly whether he ever intended to pay the
$250 per month as stated in the stipulation he signed, and Ryan
replied that he did not. The Court finds this small portion of
Ryan’s testimony to be credible.
18. The record in this case and the evidence presented at the
[contempt] hearing demonstrates clearly that Ryan will
misrepresent important facts, such as the circumstances
surrounding the Disney Vacation Club being in default, and that
he will “promise” anything to achieve what he thinks are his
goals. For example, Ryan promised to pay the Disney Vacation
Club costs in the marital settlement agreement and later
promised to pay Marcy pursuant to the stipulation when, in fact,
he obviously never intended to do so – by his own admission as
to the latter promise.
19. The Court has rarely seen this high level of blatant
dishonesty on the part of a party in a marriage dissolution case.
Ryan’s conduct in this case not only shows contempt for the
Court, but it shows contempt toward the mother of his children.
20. The Court concludes that Marcy has proven by clear and
convincing evidence that Ryan knew of the July 2018 stipulation
and order, that he willfully failed to pay the $250 each month as
he promised he would and as ordered, and that he has no
justification for his failure to do so. Therefore, Ryan [] is found
to be in contempt of court.
***
26. As a sanction for Ryan’s willful failure to comply with this
Court’s order of July 30, 2018, the Court orders as follows:
a. Ryan shall pay the judgment of $22,000, plus interest
up to the present at the rate of 5% per annum and continuing
after the entry of this order at the rate of 8% per annum in
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monthly payments of $250 payable on September 10, 2019 and
on the 10th of each [month] thereafter until the judgment is paid
in full.
b. If Ryan fails to make any payment as ordered, he is
ordered to pay to Marcy the amount of $15 per day for each day
he does not make a required payment. Such payments shall not
be applied toward the judgment owned by Marcy against Ryan.
Any unpaid amounts ordered under this paragraph shall not
constitute a judgment against Ryan. In reality, Ryan can avoid
the $15 per day payment obligation so long as he makes the
judgment payments as ordered above in a timely manner.
c. Ryan is also ordered to pay attorney’s fees to [Marcy’s
counsel] in the sum of $1,500 as a further sanction for his
contempt. This award shall be enforceable in [counsel’s] own
name as provided by statute.
Appealed Judgment at 5-8.1 Ryan now appeals the trial court’s order of
contempt.
Discussion and Decision
I. Standard of Review
[7] We first note that Wife has chosen not to file a brief. When the appellee fails to
file a brief on appeal, we do not undertake the burden of developing arguments
for that party. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1068 (Ind. 2006).
Instead, we apply a less stringent standard of review and may reverse if the
appellant establishes prima facie error, namely “error at first sight, on first
1
Citation to the appealed judgment is based on the .pdf pagination.
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appearance, or on the face of it.” Spencer v. Spencer, 990 N.E.2d 496, 497 (Ind.
Ct. App. 2013) (quotation omitted).
[8] As for the finding of contempt, “[i]t is soundly within the discretion of the trial
court to determine whether a party is in contempt, and we review the judgment
under an abuse of discretion standard.” Steele-Giri v. Steele, 51 N.E.3d 119, 124
(Ind. 2016) (quotation omitted). “We will reverse a trial court’s finding of
contempt only if there is no evidence or inference therefrom to support the
finding.” Id. Because a trial court has the inherent power to “maintain[ ] its
dignity, secur[e] obedience to its process and rules, rebuk[e] interference with
the conduct of business, and punish[ ] unseemly behavior[,]” id., it is given great
deference in contempt actions, id. at 129; see also Ind. Code § 34-47-3-1 (statute
defining indirect contempt of court is legislative recognition of trial courts’
inherent power to cite and punish for contempt).
II. Contempt Finding
[9] Ryan contends the current contempt finding is in error because although the
court’s March 17, 2017 order finding Ryan in contempt for failing to pay the
loans for the timeshares was within the trial court’s authority, that order also
converted Ryan’s obligation under the Settlement Agreement from an
obligation that could be enforced by contempt – performance of his obligation
to pay the timeshare loans – into one that cannot be – payment of money to
Marcy. Therefore, he argues, the most current contempt order cannot stand.
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[10] Indirect contempt is the willful disobedience of any lawfully entered court order
of which the offender has notice. Henderson v. Henderson, 919 N.E.2d 1207,
1210 (Ind. Ct. App. 2010). It lies within the inherent power of the trial court to
fashion an appropriate remedy for the disobedience of its order. In re Paternity of
M.P.M.W., 908 N.E.2d 1205, 1209 (Ind. Ct. App. 2009). Civil contempt is for
the benefit of a party who has been injured or damaged by the failure of another
to conform to a court order issued for the private benefit of the aggrieved party.
Cowart v. White, 711 N.E.2d 523, 530 (Ind. 1999), clarified on reh’g on other
grounds, 716 N.E.2d 401 (1999). The primary objective of a civil contempt
proceeding is not to punish the contemnor but to coerce action for the benefit of
the aggrieved party. Thompson v. Thompson, 811 N.E.2d 888, 905 (Ind. Ct. App.
2004), trans. denied.
Crucial to the determination of contempt is the evaluation of a
person’s state of mind, that is, whether the alleged contemptuous
conduct was done willfully. The determination of whether to
find a party in contempt permits the trial court to consider
matters which may not, in fact cannot, be reflected in the written
record. The trial court possesses unique knowledge of the parties
before it and is in the best position to determine how to maintain
its “authority, justice, and dignity” and whether a party’s
disobedience of the order was done willfully.
Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 202-03 (Ind. 2012) (citations
omitted).
[11] Because of the prohibition against imprisonment for debt, our supreme court
has held that, with limited exceptions, “all forms of contempt are generally
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unavailable to enforce an obligation to pay money.” Cowart, 711 N.E.2d at 531
(emphasis added); but see Ind. Const., Art. 1, § 22 (stating, in part, “there shall
be no imprisonment for debt, except in the case of fraud”) and Pettit v. Pettit, 626
N.E.2d 444, 447 (Ind. 1993) (holding that “contempt is always available to
assist in the enforcement of child support” including a “child support obligation
that was transformed into a money judgment”). However, Indiana Code
section 31-15-7-10 provides, in relevant part, “Notwithstanding any other law,
all orders and awards contained in a dissolution of marriage decree . . . may be
enforced by [] contempt[.]” Although section 31-15-7-10 “is certainly subject to
the constitutional prohibition on imprisonment for debt[,]” there is no other bar
“to a court’s use of contempt to enforce an order that requires performance
instead of payment or to the use of sanctions other than imprisonment.” Cowart, 711
N.E.2d at 531 (emphasis added). Civil sanctions, including additional civil
damages, are not prohibited by Article 1, section 22. Id.
[12] We acknowledge the general rule that a trial court’s use of its contempt power
is limited to enforcing an order that requires performance instead of payment of
a fixed sum and that Trial Rule 69 proceedings supplemental should be used to
enforce a money judgment.2 See Whittaker v. Whittaker, 44 N.E.3d 716, 719
2
Ryan contends that Marcy “has repeatedly sought to enforce the money judgment through proceedings
supplemental” and that this “underscores the unavailability of contempt” here, directing us to pages 9 and 10
of Volume II of the Appellant’s Appendix. Corrected Appellant’s Brief at 9. Those pages are part of the
Chronological Case Summary and show that one Motion for Proceedings Supplemental was filed on
November 20, 2017. That motion was filed by Marcy’s attorney seeking to enforce the judgment entered
against Ryan for payment of Wife’s attorney fees in the dissolution decree plus $750.00 ordered to be paid to
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(Ind. Ct. App. 2015). The trial court’s finding of contempt in this case,
however, was based on Ryan’s actions and failures to act that resulted in Marcy
losing the benefit of an asset to which she was entitled pursuant to the
Settlement Agreement. Specifically, the trial court’s contempt order reads:
The Court concludes that Marcy has proven by clear and
convincing evidence that Ryan knew of the July 2018 stipulation
and order, that he willfully failed to pay the $250 each month as
he promised he would and as ordered, and that he has no
justification for his failure to do so.
Appealed Judgment at 6, ¶ 20. Ryan violated both the letter and the spirit of
the Settlement Agreement and the July 2018 stipulation. By Ryan’s actions and
inactions (failing to disclose relevant information about the timeshares at the
time of the Settlement Agreement despite representing that he had fully
disclosed his financial situation, failing to bring the loans current and keep them
up to date in order to meet his obligation to Marcy, and entering into a
stipulation he admitted he never intended to honor), Ryan failed to meet his
obligation and hold Marcy harmless as he agreed to do and Marcy lost the
opportunity to enjoy the marital asset to which she was entitled and has since
been denied even the value of that asset. Importantly, the trial court did not
need to evaluate Ryan’s state of mind to determine whether his conduct was
willful, see Witt, 964 N.E.2d at 202, as Ryan plainly stated at the contempt
him in the March 2017 contempt order. Ryan points to no other evidence in the record before us that Marcy
has pursued proceedings supplemental.
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hearing that he never had any intention of making payments to Marcy because
he did not believe he should have to pay her the value of an asset that was lost,
notwithstanding it was lost due to his conduct. In sum, the trial court was
within its discretion in finding Ryan in contempt.
[13] Ryan’s violation of the dissolution decree in the first instance and his defiance
of the orders that were meant to make Marcy whole thereafter amount to much
more than failing to meet an obligation to pay a debt. Instead, the violation
created “inconvenience and frustration suffered by the aggrieved party” that can
be taken into account in fashioning a remedy. Cowart, 711 N.E.2d at 532. The
first contempt order was aimed at compensating Marcy for the loss of the
timeshares by awarding her monetary damages for their value. In other words,
because of the nature of Ryan’s contempt in failing to abide by the terms of the
Settlement Agreement, he could no longer be coerced to perform that specific
obligation and monetary damages were the only practical recourse to give
Marcy the benefit of her bargain. The most current contempt order is intended
to coerce Ryan into honoring his now monetary obligation and to compensate
Marcy if he continues to refuse to be held accountable to her or to the courts.
Accordingly, the trial court imposed on Ryan civil sanctions in the form of
monetary penalties if he fails to pay the original obligation as ordered. The trial
court also offered Ryan a way to purge his contempt: “In reality, Ryan can
avoid the [penalty] so long as he makes the judgment payments as ordered
above in a timely manner.” Appealed Judgment at 7. The trial court did not
abuse its discretion in the sanction it imposed.
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Conclusion
[14] Ryan has not established prima facie error; the trial court did not abuse its
discretion in finding Ryan in contempt for willfully failing to abide by a court
order of which he had knowledge. The judgment of the trial court is affirmed.
[15] Affirmed.
Bradford, C.J., and Altice, J., concur.
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