In re the Marriage of: Dedra L. Fisher v. Terry L. Fisher (mem. dec.)

MEMORANDUM DECISION Mar 02 2015, 10:52 am
Pursuant to Ind. Appellate Rule 65(D), 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
Michael H. Michmerhuizen Thomas C. Allen
Barrett & McNagny LLP Fort Wayne, Indiana
Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In re the Marriage of: March 2, 2015
Court of Appeals Case No.
02A03-1407-DR-258
Dedra L. Fisher,
Appeal from the Allen Circuit Court
Appellant-Petitioner, The Honorable Thomas J. Felts,
Judge
v. The Honorable John D. Kitch III,
Magistrate
Cause No. 02C01-0008-DR-665
Terry L. Fisher,
Appellee-Respondent
Bradford, Judge.
Case Summary
[1] Appellant-Petitioner Deedra Fisher (“Wife”) and Appellee-Respondent Terry
Fisher (“Husband”) (collectively “the parties”) divorced in 2001. The parties
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have two children, a son and daughter. The parties executed a Property
Settlement Agreement (“PSA”) which determined distribution of the marital
assets and debts and established Husband’s child support obligations. In 2013,
Wife filed a motion requesting the trial court hold Husband in contempt for
failure to comply with certain provisions of the PSA. The trial court found that
Husband had overpaid his child support obligation by $17,582.00 but had failed
to pay Wife for several other obligations as required by the PSA. The trial court
awarded Wife a money judgment with regards to the personal property
obligations and allowed the child support overpayments to be credited against
prior unpaid childcare expenses and the daughter’s future college expenses.
[2] On appeal, Wife argues that the trial court erred by (1) declining to find
Husband in contempt, (2) misinterpreting the PSA regarding what Husband
was obligated to pay, (3) crediting Husband’s child support overpayments
toward future college expenses, and (4) not awarding Wife attorney’s fees. We
affirm the trial court’s determination on the issues of contempt, PSA
interpretation, and overpayment crediting. However, we reverse the trial
court’s ruling not to award attorney’s fees to Wife.
Facts and Procedural History
[3] On August 21, 2001, the parties executed the PSA. On August 23, 2001, the
parties’ marriage was dissolved and the PSA was incorporated into the trial
court’s dissolution decree. According to the PSA, Husband was responsible for
paying (1) $210.00 per week in child support, (2) “one half (1/2) of the annual
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school registration fees[,]” (3) one-half of any orthodontic expenses, (4) the
balance of a loan for Husband’s truck (“the truck debt”), (5) $9855.77 to Wife
for personal obligations on which Husband was in arrears, and (6) the balances
due on several accounts including Discover, Target, AT&T, Best Buy, and
Marathon credit cards (“Credit Card Debts”). Appellant’s Ex. 1 The PSA also
provided for the division of real estate equity and debt as follows:
E. Personal Property Settlement For Husband:
***
h. It is further agreed that Husband shall assume and pay, and
shall hold Wife harmless from the payment of one-half of the
outstanding indebtness on the second mortgage on a monthly basis
which shall be paid at the rate of Forty-Two and 59/100 Dollars
($42.59) per week through a voluntary Wage Assignment.
F. Division of Real Estate Equity.
Parties agree that certain real estate in their joint names … shall
be held in the sole possession of Wife. Husband shall transfer any and
all interest he may have in said property to Wife by Quit Claim Deed.
Wife shall list said property for sale and/or refinance said property.
The sale or refinance of the marital residence shall be done as
expeditiously as possible with progress reports of offers, showings or
mortgage applications being provided to Husband every thirty (30)
days. Until such time as the property is sold or refinanced, [H]usband
and [W]ife shall each be responsible for 50% of both the first and
second mortgages.
Appellee’s App. p. 18-19.
[4] After the income withholding order (“IWO”) was made effective pursuant to
the PSA terms, Husband moved to Florida to live with his parents because he
could not afford to live on his own. Husband admitted that, following the
finalization of the divorce, he did not pay the truck debt or several of the Credit
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Card Debts pursuant to the PSA because he did not have the money to do so.
Wife paid the outstanding truck debt and the AT&T credit card balance. Wife
refinanced the marital home on October 22, 2001. Husband did not pay on the
second mortgage because he did not think it was necessary once the house was
refinanced.
[5] Sometime prior to June of 2008, Husband became aware that he had been
overpaying his child support obligation for several years and subsequently
called the child support office to inquire about the overpayments. On June 18,
2008, the trial court entered an order finding that Husband had overpaid his
child support obligation by $13,255.01 and entered a new IWO. On October
10, 2012, Husband filed a petition for emancipation regarding the parties’ son
and for modification of child support. On October 26, 2012, Wife filed a
motion requesting Husband contribute to the daughter’s college expenses. On
May 13, 2013, the trial court granted Husband’s request for emancipation,
ordered the parties to share in funding the daughter’s college education, and
determined that Husband had overpaid his child support obligation by
$16,849.00. On June 4, 2013, Wife filed a petition for rule to show cause
requesting the trial court hold Husband in contempt for failing to comply with
the PSA. Specifically, she alleged that Husband failed to pay orthodontic and
school expenses, the truck and AT&T debt, half of the second mortgage, and
the $9855.77 arrearage. Husband was unaware of the children’s orthodontia
services or school registration fees until after Wife’s June 4, 2013 petition for
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contempt was filed. On October 2, 2013, Husband filed a motion for
emancipation regarding the parties’ daughter and termination of child support.
[6] On April 14, 2014, the trial court held a hearing on Wife’s petition for show
cause and Husband’s petition for emancipation and termination of child
support. In its subsequent order, the trial court held as follows: (1) the daughter
was emancipated for child support purposes and the IWO was terminated; (2)
Husband had overpaid child support in the amount of $17,582.00; (3) Husband
could not be held in contempt for failing to pay $9855.77 to Wife (as required
by the PSA) because it was a money judgment not enforceable through
contempt; (4) Husband owes Wife $2440.00 for the truck debt; (5) Husband
owes Wife $481.25 for the AT&T credit card debt, (6) pursuant to paragraph
E(1)(h) and Section F of the PSA, Husband owes Wife $183.13 on the second
mortgage of the marital home ($42.59 for each week after the PSA was
executed and prior to the refinancing of the home), (7) Husband owes Wife
$2582.00 for orthodontic expenses, (8) the PSA only required Husband to pay
for “corporate fees” (totaling $407.69) and not books or consumables, and (9)
Husband did not comply with the terms of the PSA but was not in contempt
because, among other things, his noncompliance was due to a financial
inability. The trial court clarified that the $9855.77 arrearage obligation from
the PSA, and the additional $3104.39 owed to Wife (total for truck debt, AT&T
debt, and second mortgage), were money judgments not in the nature of child
support and as such were collectable through the attachment process and not
enforceable by contempt. The unpaid orthodontic fees and school expenses
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were credited to Husband’s child support overpayment leaving a total credit of
$14,592.31, which would be applied to the daughter’s future college expenses.
Discussion and Decision
[7] Wife makes four contentions on appeal: (1) the trial court erred in declining to
find Husband in contempt for noncompliance with the PSA; (2) the trial court
improperly calculated the amounts Husband owes for school expenses and on
the second mortgage; (3) the trial court erred in crediting Husband’s child
support overpayments toward future college expenses; and (4) the trial court
erred in not awarding Wife attorney’s fees.
I. Contempt
[8] The determination of whether a party is in contempt of court is a
matter within the sound discretion of the trial court. Jackson v. State,
644 N.E.2d 607, 608 (Ind. Ct. App. 1994), trans. denied. We will
reverse the trial court’s determination only if the court has abused its
discretion. Id. A court has abused its discretion when its decision is
against the logic and effect of the facts and circumstances before the
court or is contrary to law.
Williams v. State ex rel. Harris, 690 N.E.2d 315, 316 (Ind. Ct. App. 1997). “Upon
review, we neither reweigh the evidence nor judge the credibility of the
witnesses.” Piercey v. Piercey, 727 N.E.2d 26, 29 (Ind. Ct. App. 2000).
[9] “To hold a party in contempt for a violation of a court order, the trial court
must find that the party acted with ‘willful disobedience.’” Williamson v.
Creamer, 722 N.E.2d 863, 865 (Ind. Ct. App. 2000) (quoting In re Marriage of
Glendenning, 684 N.E.2d 1175, 1179 (Ind. Ct. App. 1997), trans. denied). The
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trial court possesses unique knowledge of the parties before it and is in the best
position to determine whether a party’s disobedience of the order was done
willfully. Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 203 (Ind. 2012).
[10] Generally, money judgments are not enforceable by contempt. Pettit v. Pettit,
626 N.E.2d 444, 447 (Ind. 1993). Although contempt may not be used to
enforce a fixed money judgment, it is an available remedy for noncompliance
with a dissolution decree that creates non-fixed monetary obligations. Mitchell
v. Mitchell, 871 N.E.2d 390, 395 (Ind. Ct. App. 2007). Contempt is also an
option to assist in the enforcement of child support orders when the trial court
finds that the delinquency in payment was the result of (1) a willful failure by
the parent to comply with the support order and (2) that the delinquent parent
has the financial ability to satisfy his or her support obligation. Id.[11] Wife concedes that the $9855.77 amount contemplated by the PSA is a fixed
money judgment not enforceable by contempt. However, she argues that (1)
the unpaid property debts (AT&T debt, truck debt, and second mortgage) are
non-fixed money judgments enforceable by contempt and (2) the unpaid
orthodontic and school expenses are childcare related and thus enforceable by
contempt. Husband concedes that the personal property debts are not fixed
money judgments and so may be enforced through a contempt order.
However, as Husband notes, the trial court also determined that Husband did
not breach the PSA willfully. As it relates to the truck debt, AT&T debt, and
second mortgage, Husband’s breach was a result of a financial inability to make
payments following the dissolution. As it relates to the orthodontic and school
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expenses, Husband’s breach was not willful both because he was not informed
of the expenses and because his substantial overpayment of child support far
exceeded these child-related expenses. The parties disagree as to whether
Husband’s breach was willful; however, this was a factual determination on
which the trial court issued findings. As such, we will not reweigh the
evidence. Piercey, 727 N.E.2d at 29.
[12] Even if we assume Husband breached the PSA willfully, Wife’s argument still
fails. The language of Mitchell informs us that contempt may “be used to
enforce compliance with a property settlement agreement incorporated into a
dissolution decree,” it does not require a trial court to do so. Mitchell, 871
N.E.2d at 395. “[I]t is within the inherent power of the trial court to fashion an
appropriate punishment for the disobedience of the court’s order.” Williamson
v. Creamer, 722 N.E.2d 863, 867 (Ind. Ct. App. 2000) (quoting Bechtel v. Bechtel,
536 N.E.2d 1053, 1056 (Ind. Ct. App. 1989)). The trial court was not obligated
to find Husband in contempt; rather, it chose to enter money judgments in
favor of Wife for the truck debt, AT&T debt, and second mortgage payments,
which allows Wife to pursue the collection of those debts through Indiana Trial
Rule 69. Because Wife has now received a money judgment to remedy
Husband’s noncompliance with the PSA, it is unclear what she stands to gain
by having Husband declared in contempt.
II. Calculation of Husband’s Obligations
[13] Wife argues that the trial court erred in its interpretation of the terms of the
PSA.
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Settlement agreements become binding contracts when incorporated
into the dissolution decree and are interpreted according to the general
rules for contract construction. Unless the terms of the agreement are
ambiguous, they will be given their plain and ordinary meaning.
Interpretation of a settlement agreement, as with any other contract,
presents a question of law and is reviewed de novo.
Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind. 2008) (citations omitted).
A. Second Mortgage
[14] Section F of the PSA provides that “[u]ntil such time as the property is sold or
refinanced, [H]usband and [W]ife shall each be responsible for 50% of both the
first and second mortgages.” Appellee’s App. p. 19. Section E(1)(h) provides
that “Husband shall assume and pay, and shall hold Wife harmless from the
payment of one-half of the outstanding indebtness on the second mortgage on a
monthly basis which shall be paid at the rate of Forty-Two and 59/100 Dollars
($42.59) per week through a voluntary Wage Assignment.” Appellee’s App. p.
18. The trial court read these provisions together and determined that Husband
was responsible for payments pursuant to Section E(1)(h) for the period after
the August 23, 2001 dissolution, and prior to the October 22, 2001 refinancing
of the home.1
1
Although Wife did not raise this issue, we note that the trial court erred in calculating the amount
Husband owes on the second mortgage. The trial court improperly calculated Husband’s monthly payments
to be “$183.13 ($42.59 x 4.3 equals $183.13 per month times two months equals $366.27 times 50% equals
$183.13).” Appellant’s App. p. 16. The weekly payments of $42.59 were not intended to be split by the
parties but reflected only Husband’s share of the mortgage. Therefore, the total amount Husband owes Wife
for the second mortgage should be $366.27.
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[15] Wife contends that these two provisions should be read separately, i.e. that
Husband was obligated to make weekly payments of $42.59 on the second
mortgage even after the home was refinanced. We find this to be an illogical
reading of the PSA. It would make little sense for Husband to continue making
payments on a mortgage that no longer exists. We think that the voluntary
wage assignment for $42.59 contained in Section E(1)(h) provided a specific
means of ensuring that Husband made payments toward the second mortgage
consistent with the obligations of Section F, thus allowing Wife to avoid the
risk of Husband’s share of the second mortgage going unpaid prior to refinance
or sale. Additionally, we note that any perceived ambiguity regarding a
contract must be construed against the drafter, which was Wife in this instance.
Rogers v. Lockard, 767 N.E.2d 982, 990 (Ind. Ct. App. 2002).
B. School Expenses
[16] The PSA states that “[t]he Husband shall also be responsible for one half (½) of
the annual school registration fees.” Appellee’s App. p. 15. In Exhibit 6, Wife
outlines the children’s various school expenses, which are separated into three
categories: books, consumables, and corporate fees. The trial court noted that
the term “school registration fees” was not defined in the PSA. The trial court
found that “registration fees” included “corporate fees” and did not include
books or consumables.
[17] “If a contract is ambiguous or uncertain, its meaning is determined by extrinsic
evidence and its construction is a matter for the fact-finder. An ambiguity exists
where a provision is susceptible to more than one interpretation and reasonable
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persons would differ as to its meaning.” Claire’s Boutiques, Inc. v. Brownsburg
Station Partners LLC, 997 N.E.2d 1093, 1097 (Ind. Ct. App. 2013) (citations
omitted). Because the term “annual school registration fees” is not defined in
the PSA and is susceptible to more than one interpretation, we find it to be
ambiguous.
[18] Aside from Wife’s brief testimony generally describing the school registration
process, neither party provided any extrinsic evidence to assist in the
interpretation of the ambiguous term. We think that a common-knowledge
interpretation of “school registration fee” would contemplate a flat fee required
to enroll in a school and would not typically include additional expenses such
as books, meals, boarding, or other class materials. Without any evidence to
the contrary and considering that the PSA must be construed against Wife as
drafter, we find that the trial court’s interpretation of the PSA was reasonable.
III. Crediting Overpaid Child Support Payments Against
Other Childcare Obligations
[19] Wife claims that the trial court erred by crediting Husband’s overpayment of
child support against the amounts owed for unpaid orthodontic and school
expenses, as well as any future college expenses. In support of this claim, Wife
argues that “child support payments cannot be applied prospectively to support
not yet due at the time of the overpayment.” Drwecki v. Drwecki, 782 N.E.2d
440, 448 (Ind. Ct. App. 2003) (quoting Matson v. Matson, 569 N.E.2d 732, 733
(Ind. Ct. App. 1991)). However, Wife neglects to mention that this rule only
applies to voluntary overpayments, not overpayments made by virtue of mistake
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or as a result of an inaccurate support order (both of which were reasons for
Husband’s overpayment).
[20] In Drwecki, we addressed this rule in a situation where a father was making
child support payments pursuant to a court order which was later modified
retroactively. The court found that the father could recover the overpayments
from the mother. Id. at 449.
In previous cases, we have held that “child support payments cannot
be applied prospectively to support not yet due at the time of the
overpayment.” [Matson, 569 N.E.2d at 733].
The rationale behind the rule is that it would be unjust for a
non-custodial parent to voluntarily build up a substantial credit
and then suddenly refuse to make support payments for a
period of time. This would thwart the court’s purpose of
providing regular, uninterrupted income for the benefit of the
children. The regularity and continuity of court decreed
support payments are as important as the overall dollar amount
of those payments.
Id. This rule suggests that Father cannot receive credit against future
support payments.
However, the rationale underlying this rule does not fully apply here,
where Father did not voluntarily build up a substantial credit. Rather,
Father built up a substantial credit because he followed the court’s
previous order that required him to pay $241 per week in child
support. If Father had failed to make those payments until the court
modified the order, the trial court might have found him in contempt.
***
For all these reasons, we hold that Father should be able to recover the
overpayments that Mother received.
Id. at 448-49 (emphasis added).
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[21] In the instant case, the trial court was within its discretion to offset Husband’s
overpayments with the children’s prior childcare expenses and daughter’s future
college expenses. It is unclear why Wife is opposed to this arrangement when
the trial court could have ordered her to reimburse Husband for the entire
overpayment amount minus the prior orthodontic and school expenses.
IV. Attorney’s Fees
[22] The PSA provides that “[e]ach party agrees to indemnify and save and hold the
other harmless from all damages, losses, expenses (including attorney fees),
costs, and other fees incurred by reason of the other’s violation or breach of any
of the terms and conditions hereof.” Appellee’s App. p. 20. Wife argues that
Husband’s admission to not paying certain obligations under the PSA amounts
to an admission of a breach and, therefore, that the trial court erred in failing to
award attorney’s fees pursuant to the attorney fee provision. We agree. By his
own admission Husband violated the terms of the PSA. Additionally, Husband
provided no argument as to why this provision should not be enforced as
written. Accordingly, we reverse the trial court’s decision not to award
attorney’s fees and remand for a determination of the appropriate amount of
attorney’s fees to which Wife is entitled.
Conclusion
[23] We reverse and remand with orders that the trial court (1) recalculate the
amount Husband owes for the second mortgage consistent with our reasoning
in footnote 1, and (2) determine the amount of attorney’s fees to which Wife is
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entitled. We affirm the judgment of the trial court with respect to all other
issues discussed herein.
[24] Affirmed in part, reversed and remanded in part.
Najam, J., and Mathias, J., concur.
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