Gerhard Klimeck v. Virginia Klimeck (mem. dec.)

FILED
MEMORANDUM DECISION Aug 11 2016, 9:48 am
CLERK
Indiana Supreme Court
Pursuant to Ind. Appellate Rule 65(D), Court of Appeals
and Tax Court
this Memorandum Decision shall not be
regarded as precedent or cited before any
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
Cynthia Phillips Smith Jennifer Fehrenbach Taylor
Lafayette, Indiana Fehrenbach Taylor Law Office
Lafayette, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Gerhard Klimeck, August 11, 2016
Appellant, Court of Appeals Cause No.
79A02-1510-DR-1796
v. Appeal from the Tippecanoe
Circuit Court
Virginia Klimeck, The Honorable Thomas H. Busch,
Appellee. Judge
Trial Court Cause No.
79C01-1501-DR-10
Barnes, Judge.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 1 of 19
Case Summary
[1] Gerhard Klimeck appeals the denial of the motion to correct error he filed
following the trial court’s issuance of findings of fact, conclusions of law, and
dissolution decree in his divorce from his wife Virginia Klimeck. We affirm in
part, reverse in part, and remand.
Issues
[2] The restated substantive issues before us are:
I. whether the trial court divided the marital estate in a just
and reasonable manner;
II. whether the trial court abused its discretion by ordering
Gerhard to make spousal maintenance payments to
Virginia; and
III. whether the trial court abused its discretion by imposing a
“gag order” on Gerhard with regard to Virginia’s medical
conditions and treatment.
Facts
[3] Gerhard and Virginia were married on July 1, 1995, and have two children.
Gerhard is a tenured professor at Purdue University. Virginia, who has a
bachelor’s degree in chemical engineering and a master’s degree in business
administration, was not employed outside the home after 2002 and, instead,
cared for the couple’s children. Their first child was born in 2004, and their
second was born in 2007. In 2006 and 2008, Gerhard inherited property in
Germany from his parents. He sold the property and invested the proceeds in
several German accounts. During the parties’ marriage, Gerhard made some
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 2 of 19
deposits into those accounts, and the family used some of the money in them to
finance visits to Germany.
[4] On February 19, 2014, Gerhard filed a Petition for Dissolution of Marriage.
Shortly before Gerhard filed the petition, and while the petition was pending,
Gerhard made numerous sizeable withdrawals from the parties’ joint Fidelity
accounts. Less than a month before filing the petition, and without Virginia’s
agreement, Gerhard transferred approximately $280,000.00 from a joint
Fidelity account into the children’s 529 college savings accounts. Despite the
fact that Gerhard’s salary was sufficient to support himself and the children,
Gerhard used marital assets to cover their living expenses while the petition was
pending. As a result of his withdrawals, Gerhard incurred $66,000.00 in
capitals gains taxes.
[5] After a hearing, the trial court entered findings of fact, conclusions of law, and a
dissolution decree on July 1, 2015. The trial court ordered Gerhard to pay the
$66,000.00 in capital gains taxes but otherwise divided the marital estate,
including the German accounts, equally. The trial court also ordered Gerhard
to make maintenance payments to Virginia until December 25, 2015, and to
refrain from divulging information related to Virginia’s medical conditions or
treatment.
[6] Gerhard and Virginia both filed motions to correct error after the trial court
issued its final order. The trial court held a hearing on those motions on
September 4, 2015. On October 14, 2015, the trial court issued corrected
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 3 of 19
findings of fact, conclusions of law, and dissolution decree. On October 28,
2015, Gerhard filed his timely notice of appeal in this matter.
Analysis
[7] At the outset we acknowledge the unusual procedural posture of this case with
regard to the parties’ motions to correct error. Both parties filed motions to
correct error after the trial court issued its July 1, 2015, order. The trial court
then held a timely hearing on those motions. Pursuant to Trial Rule 53.3, the
trial court was required to rule on the motions to correct error within thirty days
after they were heard. It did not do so, however, nor did it seek an extension of
time in which to issue its ruling. Ind. Tr. Rule 53.3. The parties’ motions were
thus deemed denied on October 5, 2015. Id. After the motions were deemed
denied, the trial court issued corrected findings of fact, conclusions of law and
dissolution decree on October 14, 2015.
[8] We acknowledge that our supreme court has outlined a narrow set of
circumstances under which a belatedly-granted motion to correct error may
stand. See Cavinder Elevators v. Hall, 726 N.E.2d 285 (Ind. 2001). Neither party,
however, contends the belatedly-issued corrected findings of fact, conclusions of
law and dissolution decree stand in this case. Instead, the parties base their
arguments on the trial court’s original, July 1, 2015, order. We therefore do not
address whether the Cavinder Elevators exception applies in this case but instead
review the trial court’s deemed denial of Gerhard’s motion to correct error for
an abuse of discretion. State of Indiana and Indiana Bureau of Motor Vehicles v.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 4 of 19
Hargrave, 51 N.E.3d 255, 259 (Ind. Ct. App. 2016). Doing so requires that we
examine the trial court’s July 1, 2015, findings of fact, conclusions of law and
dissolution decree.
[9] Virginia requested, and the trial court issued, findings of fact and conclusions of
law; we will not set aside the court's findings unless they are clearly erroneous.
Mitchell v. Mitchell, 875 N.E.2d 320, 322-23 (Ind. Ct. App. 2007), trans. denied.
We determine whether the evidence supports the findings and the findings
support the judgment. Id. We do not reweigh the evidence or reassess the
credibility of witnesses. Id. “Rather, a trial court’s findings of fact will only be
found clearly erroneous when the record is without any evidence or reasonable
inferences to support them.” Id. at 323. “We give considerable deference to the
findings of the trial court in family law matters.” Stone v. Stone, 991 N.E.2d
992, 999 (Ind. Ct. App. 2013), aff'd on reh'g.
I. Division of Marital Assets
[10] Gerhard first contends the trial court abused its discretion when it divided the
marital estate. The pertinent question is whether the trial court’s division of the
marital property was just and reasonable. Morgal-Henrich v. Henrich, 970 N.E.2d
207, 210-11 (Ind. Ct. App. 2012). “Although this is in some sense an issue of
law, it is highly fact sensitive and is subject to an abuse of discretion standard.”
Id. at 211. Pursuant to Indiana Code Section 31-15-7-4(b), the trial court must
divide the marital property in a “just and reasonable manner.” “The court shall
presume that an equal division of the marital property between the parties is just
and reasonable.” I.C. 31-15-7-5.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 5 of 19
[11] “Our supreme court has held that a trial court’s disposition is to be considered
as a whole, not item by item.” Morgal-Henrich, 970 N.E.2d at 212.
In crafting a just and reasonable property distribution, a trial
court is required to balance a number of different considerations
in arriving at an ultimate disposition. The court may allocate
some items of property or debt to one spouse because of its
disposition of other items. Similarly, the factors identified by the
statute as permitting an unequal division in favor of one party or
the other may cut in different directions. As a result, if the
appellate court views any one of these in isolation and apart from
the total mix, it may upset the balance ultimately struck by the
trial court.
Fobar v. Vonderahe, 771 N.E.2d 57, 60 (Ind. 2002). “[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.” In re Marriage of Marek, 47
N.E.3d 1283, 1288 (Ind. Ct. App. 2016), trans. denied. A review of the trial
court’s order in this case reveals the court intended to divide the marital assets
evenly between Gerhard and Virginia.
A. German Accounts
[12] Gerhard first contends the trial court should have segregated several German
investment accounts from the marital estate.1 These accounts were funded, at
1
Gerhard also argues, “The Court treated all three of the German funds the same in its Order, when there
were different circumstances for each.” Appellant’s Br. p. 17. Virginia notes Gerhard’s Appellant’s Brief
“refers to three German accounts at issue, but does not clarify which three of the four German accounts are
at issue.” Appellee’s Br. p. 20-21. We need not address these issues because we conclude the trial court
properly divided these assets.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 6 of 19
least in part, by the sale of property Gerhard inherited from his parents in
Germany.
[] In an action for dissolution of marriage . . . the court shall
divide the property of the parties, whether:
(1) owned by either spouse before the marriage;
(2) acquired by either spouse in his or her own right:
(A) after the marriage; and
(B) before final separation of the parties; or
(3) acquired by their joint efforts.
I.C. § 31-15-7-4. This “one pot” theory of marital property “ensures that all
marital assets are subject to the trial court’s power to divide and award.”
Marek, 47 N.E.3d at 1288. Consequently, the trial court properly included the
German accounts as part of the marital estate.
[13] We presume that an equal division of marital property is just and reasonable.
I.C. § 31-15-7-5. This presumption may be rebutted by showing:
(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:
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 7 of 19
(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 . . .
(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:
(A) a final division of property; and
(B) a final determination of the property rights of the
parties.
Id. Thus, inheritance is only one factor to consider in deviating from an equal
division of marital property.
[14] With regard to the German accounts, the trial court found:
40. The parties jointly decided how to invest the monies in the
German accounts that Husband inherited from his parents in
2006 and 2008.
41. Husband had earnings from international employment
deposited into the accounts in Germany during the parties’
marriage.
42. Husband spent monies from the German accounts for the
family’s travel in Europe during the parties’ marriage.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 8 of 19
43. The German accounts were included in the parties’ joint tax
return filings from 2006-2013.
App. p. 26. Gerhard does not specifically challenge any of the above-quoted
findings. Instead, he directs us to the evidence favorable to his position and
argues that the evidence does not support the trial court’s order. Our standard
of review does not permit us to reweigh the evidence. Mitchell, 875 N.E.2d at
322-23.
[15] Gerhard relies on Castaneda v. Castaneda, 615 N.E.2d 467 (Ind. Ct. App. 1993),
to support his contention that, because the three (unidentified) German
accounts were funded at least in part through the sale of inherited property and
were never commingled with other marital assets, they should have been
segregated from the marital estate or not divided between the parties. This
Court addressed that precise argument in Hyde v. Hyde, 751 N.E.2d 761 (Ind.
Ct. App. 2001):
Although the court in Castaneda . . . affirmed setting aside the
party's inheritance because the funds were never co-mingled with
the marital assets, [that case] recognize[s] that while a trial court
must include the inheritance in the marital pot, the decision of
whether to set over the inheritance to a party is discretionary.
Hyde, 751 N.E.2d at 766.
[16] Our review of the record reveals that Gerhard testified he and Virginia included
the German accounts on their joint tax return. Virginia testified Gerhard
deposited income from international speaking engagements into the German
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 9 of 19
accounts and that family vacations to Germany were funded, at least in part, by
the money in those accounts. Virginia also testified she and Gerhard made
decisions together regarding funding the German accounts. Given the joint
decision-making regarding the accounts and use of the money for family
vacations, Gerhard has not demonstrated that the trial court abused its
discretion by equally dividing the assets.
B. Mitsubishi Automobile
[17] Gerhard contends the trial court abused its discretion by identifying the value of
the Mitsubishi Outlander Sport, which the trial court ordered him to purchase
for Virginia, as a distinct asset and also including the value of the vehicle in the
valuation of the bank account from which Gerhard paid for it. Virginia
concedes the trial court “double counted” the value of the vehicle, $16,250.00.
Appellee’s Br. p. 18. As such, we remand this matter and instruct the trial court
to correct its calculations with regard to the Mitsubishi Outlander Sport.
C. Fidelity and Credit Union Accounts/Credit for Maintenance Payments
[18] Gerhard next contends the trial court abused its discretion by “failing to include
the proper amount of the Fidelity account and the PEFCU [Purdue Employees
Federal Credit Union] account Virginia received” and “despite paying the sum
of $3,200.00 per month in temporary maintenance and the sum of $5[,]600.00
per month in maintenance after the Dissolution Decree was entered, the Trial
Court refused to give Gerhard any credit for the property settlement monies
owed to Virginia in the final order.” Appellant’s Br. p. 15.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 10 of 19
[19] Indiana Rule of Appellate Procedure 46(A)(8)(a) states that arguments in an
Appellant’s Brief “must contain the contentions of the appellant on the issues
presented, supported by cogent reasoning.” Further, “Each contention must be
supported by citations to the authorities, statutes, and the Appendix or parts of
the Record on Appeal relied on . . . .” Id. We note that Gerhard’s argument
regarding the Fidelity and PEFCU accounts contains no explanation, including
what he believes to be the correct balances of these accounts, or citation to the
record. As such, we conclude he has waived this argument. Likewise,
Gerhard’s argument (as we interpret it) that his maintenance payments to
Virginia should be viewed as assets distributed to Virginia as part of the division
of marital assets is unclear at best. It is not, as required by Appellate Rule
46(A)(8)(a), cogent, nor does he cite to any authority in support of his position.
He has thus also waived this argument.
C. Capital Gains Tax
[20] Gerhard next argues the trial court “ignored” the capital gains taxes he incurred
as a result of substantial withdrawals he made from the parties’ joint Fidelity
account. He argues, “the implications of the liquidation of the Fidelity account
had already occurred by the time of the final hearing in this matter. The Court
attributed to [sic] the cost of the capital gains tax entirely to Gerhard . . . both
parties should be responsible for the payment of the tax . . . .” Appellant’s Br.
p. 19. He seems to contend the capital gains tax was excluded from the exhibit
attached to the trial court’s order. That exhibit is a chart that lists all of the
parties’ assets and debts.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 11 of 19
[21] To the extent the trial court did not account for the capital gains tax in the
division of marital assets and debts, we direct the trial court to make a
correction on remand. We also note that Indiana Code Section 31-15-7-5
provides that the trial court may deviate from an equal division of the marital
property if there is evidence that an equal division would not be just and
reasonable in light of, among other things, “[t]he conduct of the parties during
the marriage as related to the disposition or dissipation of their property.” Id.
[22] The trial court found:
34. Husband opened a new Fidelity account . . . in January
2014, which he kept at a zero balance until after he filed his
Petition for Dissolution. Husband proceeded to live from marital
assets from January 2014 through September 2014 and to deposit
his entire income earned from Purdue in his new separate
account despite being able to pay for his living expenses from his
income.
35. From January 1, 2014 through October 2014, Husband spent
in excess of $12,000.00 on groceries and in excess of $15,000.00
on vacations from marital assets for the benefit of himself and the
children.
*****
67. Husband transferred $828,004.62 from joint accounts into
accounts in his individual name from January 15, 2014 through
August 31, 2014. Of that amount, $407,879.80 was transferred
prior to the February 19, 2014 date of filing.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 12 of 19
68. Wife transferred $87,357.38 from joint accounts into accounts
in her individual name from January 15, 2014 through August
31, 2014. Of that amount, $8,000.86 was transferred prior to the
February 19, 2014 date of filing.
*****
71. Wife incurred attorney fees to sort through the numerous
transfers of money from the two joint Fidelity accounts from
which in excess of $915,362.00 was removed since January 15,
2014.
*****
74. Husband removed over ten times the amount of money that
Wife did from the joint Fidelity accounts during 2014. Wife did
not have access to sufficient funds from other sources to pay her
living expenses. Husband did have sufficient income to pay his
living expenses during that time. It is appropriate for Husband to
pay the capital gains tax of approximately $66,000.00 on the
withdrawals from the joint Fidelity accounts in 2014.
App. pp. 29-30. Again, Gerhard does not specifically challenge the trial court’s
findings as being unsupported by the evidence.
[23] In short, the trial court found Gerhard needlessly liquidated marital assets; he
had sufficient personal income to support himself and the children while this
dissolution action was pending. As a result, Gerhard incurred capital gains tax.
Gerhard’s numerous transfers also caused Virginia to incur attorney fees. The
trial court’s findings clearly establish Gerhard inappropriately disposed of
marital assets. The trial court did not abuse its discretion by ordering Gerhard
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 13 of 19
to pay the $66,000.00 tax debt, even if it resulted in an uneven distribution of
marital assets. To the extent that debt is not accounted for in the chart attached
to the trial court’s order and results in a deviation from the presumption of an
equal division, the trial court should make any necessary corrections to the
chart and/or its order on remand.
II. Maintenance
[24] Gerhard next contends the trial court abused its discretion by ordering him to
pay $3,200.00 per month through December 25, 2015, to Virginia in spousal
maintenance. A trial court’s decision to award maintenance is purely within its
discretion . . . .” Coleman v. Atchison, 9 N.E.3d 224, 228 (Ind. Ct. App. 2014).
“An abuse of discretion will be found if the trial court's decision is clearly
against the logic and effect of the facts or reasonable inferences to be drawn
therefrom, if the trial court misinterprets the law, or if it disregards evidence of
factors in a controlling statute.” Banks v. Banks, 980 N.E.2d 423, 426 (Ind. Ct.
App. 2012), trans. denied.
[25] Indiana Code Section 31-15-7-2 permits a trial court to find maintenance is
necessary for a spouse if the receiving spouse is: 1) physically or mentally
incapacitated to the extent that spouse’s ability to support himself or herself is
materially affected; 2) the receiving spouse lacks sufficient property, including
marital property apportioned to the spouse, to provide for the spouse’s needs; or
3) the receiving spouse is the custodian of a child whose physical or mental
incapacity requires the custodian to forgo employment.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 14 of 19
[26] In determining whether to award maintenance, the trial court must consider:
(A) the educational level of each spouse at the time of marriage
and at the time the action is commenced;
(B) whether an interruption in the education, training, or
employment of a spouse who is seeking maintenance
occurred during the marriage as a result of homemaking or
child care responsibilities, or both;
(C) the earning capacity of each spouse, including educational
background, training, employment skills, work experience,
and length of presence in or absence from the job market; and
(D) the time and expense necessary to acquire sufficient
education or training to enable the spouse who is seeking
maintenance to find appropriate employment.
Ind. Code § 31-15-7-2.
[27] Here, the trial court found:
54. Husband was ordered to pay the sum of $3,200.00 per month
in spousal maintenance to the Wife. These payments should
continue through December 25, 2015, to permit Wife to obtain
employment.
55. Wife did not present expert testimony tending to prove and
did not prove that she is disabled and unable to work. Wife has
not demonstrated that she requires rehabilitative or disability
maintenance beyond December 25, 2015.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 15 of 19
App. pp. 27-28. Gerhard contends these findings are inconsistent and, thus, an
abuse of discretion. We disagree. Read together, findings of fact 54 and 55
state that Virginia should receive maintenance until December 25, 2015, but
that the evidence does not support an order for maintenance beyond that date.
[28] Gerhard argues that Virginia did not prove she is unable to work. He cites to
the evidence most favorable to his position and argues that the trial court’s
findings do not support its conclusion that maintenance is necessary. Again we
note that our standard of review does not permit us to reweigh the evidence.
Mitchell, 875 N.E.2d at 322-23.
[29] The trial court found:
58. Although Wife has an MBA and an undergraduate degree in
chemical engineering, Wife has not been employed since 2002 by
agreement of the parties.
59. Wife’s break in employment occurred so that Wife could stay
at home with the parties’ children and serve as their primary
caregiver and homemaker.
60. Wife has not had any additional educational training since
2002.
61. Husband has a Ph.D. and an undergraduate degree in
electrical engineering.
62. Husband is employed at Purdue University as the Director of
the Network for Computational Nanotechnology, the Reilly
Director of the Center for Predictive Materials and Devices, and
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 16 of 19
a Professor of Electrical and Computer Engineering. Husband
has been a tenured professor at Purdue University since
December 15, 2003.
63. Husband earns $268,026.76 in gross wages from Purdue
University. Husband also earns additional monies for consulting
or speaking engagements.
App. p. 28.
[30] Our review of the record reveals that Virginia, who has an engineering degree
and a master’s degree in business administration, has been unemployed for
thirteen years. Instead of working outside the home, Virginia and Gerhard
agreed Virginia would stay home with their two children; she was home with
them their entire lives. Virginia has not returned to school, completed any
training, or updated her resume in any way. In contrast, Gerhard has a Ph.D.
in electrical engineering, is a tenured professor at Purdue University, and earns
$268,000.00 annually. There is ample evidence to support the above-quoted
findings related to spousal maintenance, and those findings support the trial
court’s conclusion maintenance was necessary. Thus, the trial court did not
abuse its discretion by ordering Gerhard to pay spousal maintenance.
III. Gag Order
[31] The trial court found: “12. Husband should continue to be restrained from
discussing Wife’s medical situation with anyone besides his medical providers,
his attorney, and the treatment team in this case.” App. p. 22. Gerhard first
contends the evidence does not support that order and, second, that it is overly
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 17 of 19
broad and violates his right to free speech. We note that, during the final
hearing, Gerhard’s attorney asked, “Do you recall the court issuing a[n] order
in [sic] October 14, 2014 stating that you are not to talk about her medical
condition or mental health with anyone other than your attorney or healthcare
providers?” Tr. p. 92. Gerhard confirmed he did. His counsel then asked,
“Are you asking [the trial court] to look at that and rewrite it as he sees fit given
that the two of you will be divorced?” Id. (emphasis added). Gerhard
responded, “Yes please.” Id.
[32] Gerhard did not ask the trial court to lift what the parties refer to as a gag order,
nor did he request any specific modifications to it. Instead, he agreed the trial
court should have discretion to write the order as it saw fit. The trial court saw
fit to order Gerhard not to discuss Virginia’s medical situation with anyone
except his medical providers, his attorney, and the treatment team. Any error
in that order was invited by Gerhard, and he may not now take advantage of it.
See Harris v. Harris, 42 N.E.3d 1010, 1013 (Ind. Ct. App. 2015).
Conclusion
[33] The trial court abused its discretion by twice adding the value of the Mitsubishi
Outlander Sport into the marital estate. The trial court shall make any
necessary corrections to its order with regard to the capital gains tax. The trial
court did not abuse its discretion by equally dividing the marital assets between
Gerhard and Virginia, by ordering Gerhard to make maintenance payments to
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 18 of 19
Virginia, or by ordering Gerhard to abide by a “gag order.” We affirm in part,
reverse in part, and remand for corrections consistent with this decision.
Affirmed in part, reversed in part, and remanded.
Vaidik, C.J., and Mathias, J., concur.
Court of Appeals of Indiana | Memorandum Decision 79A02-1510-DR-1796 | August 11, 2016 Page 19 of 19