Michael Kelley v. Wendy Kelley (mem. dec.)

MEMORANDUM DECISION FILED
Mar 07 2017, 9:21 am
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be CLERK
Indiana Supreme Court
regarded as precedent or cited before any Court of Appeals
and Tax Court
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
Renee M. Ortega David P. Matsey
Merrillville, Indiana Valparaiso, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Michael Kelley, March 7, 2017
Appellant-Defendant, Court of Appeals Case No.
45A04-1607-DR-1705
v. Appeal from the Lake Circuit
Court
Wendy Kelley, The Honorable George C. Paras,
Appellee-Plaintiff Judge
Trial Court Cause No.
45C01-1407-DR-672
Altice, Judge.
Case Summary
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[1] Michael Kelley (Husband) appeals from the dissolution court’s order dissolving
his marriage to Wendy Kelley (Wife). On appeal, Husband argues that the
dissolution court abused its discretion in dividing the marital estate.
[2] We affirm.
Facts & Procedural History
[3] On May 30, 2008—prior to the marriage—Wife received a distribution from
her grandfather’s estate in the amount of $305,865.26. Wife used the money to
purchase what would become the marital home. Although Husband did not
contribute financially toward the purchase of the home and Husband and Wife
were not yet married at the time of the purchase, both Wife’s and Husband’s
names were included on the deed. Thereafter, on September 29, 2008,
Husband and Wife were married. The parties subsequently had one child, a
daughter who was born in August 2009.
[4] Aside from the marital home, neither party brought any assets of substantial
value into the marriage, nor did the parties accumulate anything of value
thereafter. During the marriage, the parties took out a home equity line of
credit, which was used for home improvements and other living expenses. At
the time of final separation, the loan had a balance of $19,639.28.
[5] On July 28, 2014, Wife filed a petition for dissolution of marriage. An agreed
provisional order was approved on January 6, 2015, pursuant to which Wife
was awarded sole physical and legal custody of the parties’ child and Husband
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was awarded parenting time and ordered to pay child support in the amount of
$51 per week. Husband was also ordered to return Wife’s jewelry in his
possession. Husband, however, failed to pay child support and he did not
return Wife’s jewelry as agreed, later testifying that he had thrown the jewelry
into a lake instead.
[6] At the final hearing on March 14, 2016, the parties submitted a partial
settlement agreement resolving issues of child custody, parenting time, and
child support.1 The agreement also provided that the parties were awarded any
financial accounts in their individual names and any vehicles in their possession
and that each party was to be responsible for any debt related to their respective
vehicles and any other debts held in their individual names. Further, the parties
were to divide their personal property “according to agreements between them”
and any items not agreed upon were to be submitted at the final hearing.
Appellant’s Appendix at 17. Thus, the only significant issues remaining for the
dissolution court to resolve with respect to property division were the
distribution of the marital home and the allocation of the debt owed on the
home equity line of credit. At the conclusion of the hearing, the dissolution
court took the matter under advisement.
1
They copy of the settlement agreement included in the Appellant’s Appendix is incomplete. Specifically,
the page reflecting the parties’ agreement with respect to custody and parenting time is missing. It is
apparent, however, that these issues were resolved by agreement.
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[7] The dissolution court entered its final decree on June 27, 2016, in which it
concluded that an unequal distribution of the marital estate was just and
reasonable under the circumstances of this case. The dissolution court awarded
the marital home to Wife and also allocated liability for the debt owed on the
home equity line of credit to Wife. Father now appeals. Additional facts will
be provided as necessary.
Discussion & Decision
[8] On appeal, Husband argues that the dissolution court abused its discretion in
awarding the only marital asset of any significant value—the marital home—
solely to Wife. As an initial matter, we note that the dissolution court in this
case entered special findings of fact and conclusions thereon pursuant to Ind.
Trial Rule 52(A). Accordingly, our standard of review is two-tiered: first, we
determine whether the evidence supports the findings and, second, whether the
findings support the judgment. Marion Cnty. Auditor v. Sawmill Creek, LLC, 964
N.E.2d 213, 216 (Ind. 2012). We view the evidence in the light most favorable
to the judgment and defer to the court’s findings if they are supported by the
evidence or any legitimate inferences flowing therefrom. Id. at 216-17. Legal
conclusions, on the other hand, are reviewed de novo. Id. at 217.
[9] The disposition of marital assets is within the dissolution court’s sound
discretion, and we will reverse only for an abuse of that discretion. Eye v. Eye,
849 N.E.2d 698, 701 (Ind. Ct. App. 2006). In so doing, we consider only the
evidence most favorable to the dissolution court’s decision, without reweighing
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the evidence or assessing the credibility of witnesses. Id. A dissolution court
abuses its discretion if its decision is clearly against the logic and effect of the
facts and circumstances before the court, or if it has misinterpreted the law or
disregards evidence of factors listed in the controlling statute. Id.[10] Pursuant to Ind. Code § 31-15-7-5, the dissolution court is required to divide the
marital estate in a just and reasonable manner. An equal division is presumed
just and reasonable, but a party may rebut this presumption by presenting
evidence that an equitable division would not be just and reasonable, including
evidence concerning the following factors:
(1) The contribution of each spouse to the acquisition of the
property, regardless of whether the contribution was income
producing.
(2) The extent to which the property was acquired by each
spouse:
(A) before the marriage; or
(B) through inheritance or gift.
(3) The economic circumstances of each spouse at the time the
disposition of the property is to become effective, including the
desirability of awarding the family residence or the right to dwell
in the family residence for such periods as the court considers just
to the spouse having custody of any children.
(4) The conduct of the parties during the marriage as related to
the disposition or dissipation of their property.
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(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. A party challenging the dissolution court’s division of marital property must
overcome a strong presumption that the dissolution court “‘considered and
complied with the applicable statute, and that presumption is one of the
strongest presumptions applicable to our consideration on appeal.’” McCord v.
McCord, 852 N.E.2d 35, 43 (Ind. Ct. App. 2006) (quoting DeSalle v. Gentry, 818
N.E.2d 40, 44 (Ind. Ct. App. 2004)), trans. denied. Accordingly, we will reverse
a property distribution only if there is no rational basis for the award, and
although the circumstances may have justified a different property distribution,
we may not substitute our judgment for that of the dissolution court. Augspurger
v. Hudson, 802 N.E.2d 503, 512 (Ind. Ct. App. 2004).
[11] The dissolution court in this case made several findings relevant to the factors
set forth in I.C. § 31-15-7-5. Specifically, the court found that Wife had
received the funds used to purchase the marital residence prior to the marriage
through gift or inheritance from her family, and that Husband had brought
nothing of economic value into the marriage. The court further found that the
value of the marital home was $312,500 and that the balance owed on the home
equity line of credit was $19,639.28 at the time of final separation. The court
further found that Husband had relocated to Florida, where he was working at
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Hilton Resorts and making nine dollars per hour, or approximately $18,700 per
year.2 Wife was working full-time for her father’s business and earning
approximately $38,000 per year. The court also found that although Husband
had been employed since the final separation, he had made no child support
payments and no contributions toward the payment of property taxes, the home
equity loan, or maintenance of the marital home.3 In considering the impact of
these facts on the division of property, the court made the following findings:
17. Wife’s contribution of effectually of all of [sic] the marital
assets rebuts an equal division of property. Wife is responsible
for the contribution of virtually all of the marital property. The
only marital asset of any value is the Marital Home. It is
undisputed that the exclusive source of this property was the
funds provided to the Parties by Wife’s family. The extent that
the marital property was acquired by Wife through gift from her
family rebuts an equal division of property. Husband brought
nothing of material value into the marriage and, in fact, without
the gift of funds from Wife’s family to acquire the Marital Home,
the Parties would not have been able to purchase such a home.
This was not a long term marriage nor was it a marriage where
the Parties, through joint or individual efforts, accumulated any
assets during the marriage.
2
We note that Husband testified he made an hourly wage plus commission, and that with commission, he
could make as much as $2,000 per week.
3
Husband seems to take issue with the dissolution court’s finding that he made no payments toward marital
debts and obligations during the dissolution proceedings. Specifically, he notes that the provisional order did
not require him to make such payments. It should be noted, however, that the provisional order did not
allocate responsibility for these debts and obligations to Wife, either. Rather, the provisional order simply
did not address the issue.
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18. The economic circumstances of the Parties at the time of
dissolution also rebut an equal division of the marital estate. An
equal division would give Husband approximately $150,000,
presumably in liquid assets, and no debt, and Wife the
uncertainty of relocating and finding new shelter for herself and
the Parties’ daughter and the payment of the debt of $19,639.28.
19. The conduct of the Parties during the marriage also rebuts an
equal division of property. Husband took and failed to return
Wife’s jewelry. Husband has not maintained regular and reliable
employment while this case was pending and failed to materially
contribute to marital debts and obligations during the provisional
period in this case.
20. Each Party’s earnings and earnings ability do not mitigate
against and support an unequal division of property. Husband
had employment provided through Wife’s Father until he was
fired. He has had short term non-career employment until the
present, where he claims he now has career opportunities with
Hilton Resorts. Wife, in the meantime, was employed part-time
with her father until the dissolution was filed and now works full
time at her Father’s business.
21. It will not be just and reasonable for Husband to be awarded
50% or any substantial portion of the marital assets when he
brought nothing of financial value into the marriage, when
virtually all of the marital assets resulted from a generous gift
from Wife’s family, when Husband contributed nothing of
economic value to the marriage while married, and when Wife
had to bear the full brunt of financially supporting herself and the
parties’ minor daughter while this matter was pending.
Appellant’s Appendix at 30-31.
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[12] Husband does not appear to dispute any of the dissolution court’s factual
findings, but instead argues that the facts do not support the court’s decision to
award the marital residence solely to Wife. In support of his argument, he
relies solely on Swinney v. Swinney, 419 N.E.2d 996 (Ind. Ct. App. 1981), trans.
denied. That case, however, is readily distinguishable from this one.
[13] In Swinney, this court held that the dissolution court abused its discretion by
awarding 97% of the marital estate to the wife where the bulk of the property at
issue was acquired during the marriage and by way of gifts made by the wife’s
father to the husband and wife jointly. Id. at 997. Because the property was
given to the husband and wife jointly, they were on the same footing with
respect to the acquisition of property by way of gift or inheritance. Id. at 998.
This is unlike the situation presented here, where Wife alone acquired the funds
used to purchase the marital home before the marriage. Husband and Wife
certainly do not stand in parity when it comes to the acquisition of property
either before the marriage or through gift or inheritance.
[14] Swinney is distinguishable in a number of other ways as well. Perhaps most
notably, in Swinney, this court noted that it appeared that the dissolution court
“did not consider the family residence, which was primarily the result of gifts
from wife’s father, to be a part of the ‘marital pot.’” Id. at 999. This is clearly
not the case here, where the dissolution court expressly indicated that the home
was a marital asset. Moreover, the marital estate in Swinney included several
assets—two cars, a savings account valued at $1,010, a checking account valued
at $60, household goods valued at $2,000, and the marital home valued at
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$40,000. Id. at 997.4 Nevertheless, the dissolution court awarded the husband
only one vehicle valued at $1,300 and a few items having only sentimental
value. Id. In other words, it would have been feasible for the dissolution court
in Swinney to fashion a somewhat more equitable award without forcing a sale
of the marital home the wife was sharing with the parties’ children. In this case,
however, the marital home is the only asset of any significant value, and in
order for it to be divided equally, a sale would be necessary, and the parties’
child would lose the only home she had ever known. Additionally, unlike the
husband in Swinney, Husband dissipated marital assets by disposing of Wife’s
jewelry.
[15] For all of these reasons, we do not find Swinney controlling. The dissolution
court’s findings are supported by the evidence, and the findings support the
judgment with respect to the division of property. We find no abuse of
discretion in the dissolution court’s distribution of the marital estate.
[16] Judgment affirmed.
[17] Riley, J. and Crone, J., concur.
4
We note that the electronic version of Swinney appearing on Westlaw omits this list of assets. The list can
be found in the version of the opinion appearing in the bound volume of the North Eastern Reporter.
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