Richard R. Hogshire v. Ursula Hoover

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 Jun 27 2014, 9:26 am
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:
PRESTON T. BREUNIG CHRISTOPHER M. GILLEY
MARTHA L. WESTBROOK Anderson, Indiana
Buck Berry Landau & Breunig, P.A.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
RICHARD R. HOGSHIRE, )
)
Appellant-Petitioner, )
)
vs. ) No. 06A01-1309-DR-402
)
URSULA HOOVER, )
)
Appellee-Respondent. )
APPEAL FROM THE BOONE SUPERIOR COURT
The Honorable Matthew C. Kincaid, Judge
Cause No. 06D01-1202-DR-74
June 27, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
NAJAM, Judge
STATEMENT OF THE CASE
Richard Hogshire (“Husband”) appeals the dissolution court’s order regarding
provisional maintenance, expert witness fees, and the distribution of proceeds from the
sale of the marital residence in this dissolution action. Husband presents the following
issues for our review:
1. Whether the dissolution court abused its discretion when it ordered,
sua sponte, that the proceeds from the sale of the marital residence
shall be distributed to Ursula Hoover’s (“Wife”) attorney’s trust
account.
2. Whether the dissolution court abused its discretion when it ordered
him to pay provisional maintenance to Wife.
3. Whether the dissolution court’s order that he pay fees incurred by a
valuation expert is ambiguous and/or an abuse of discretion.
We affirm in part, reverse in part, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
We previously set out the facts and procedural history in this case as follows:
On January 5, 2012, Husband filed a petition for dissolution of his fourteen-
year-marriage to Wife. Wife filed a counter-petition for dissolution on
January 13, 2012. After granting Husband two enlargements of time in
which to respond to discovery, the trial court held a preliminary hearing on
April 30, 2012. At the hearing, Wife requested, inter alia, that the trial
court grant her possession of the marital residence pending its sale and
$20,000 in preliminary attorney’s fees from Husband.
The trial court issued its provisional order on April 30, 2012. In it,
the trial court awarded Husband possession of the marital residence and
ordered Wife to vacate the home by May 31, 2012. The trial court also
ordered Husband to make all mortgage payments on the home during the
provisional period, to provide a $750 down payment toward an apartment
for Wife, and to pay wife $300 per month in maintenance. Additionally,
Husband was given thirty days in which to pay Wife $5000 in provisional
expenses for valuation of Husband’s businesses. Wife’s request for
attorney’s fees, however, was denied.
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Wife did not vacate the marital residence until July 13, 2012. In
doing so, she placed the majority of the residence’s furniture in storage at a
cost of $1600. Wife stayed at her daughter’s home for approximately two
months, where she suffered from cat allergies and bronchitis. On
September 21, 2012, Husband allowed Wife to move back into the marital
residence for a few days so she could recuperate. Husband then requested
that Wife move the furniture back into the marital residence so that it would
show better for sale. Wife returned the furniture on September 27, 2012, at
an additional cost of $1600. On September 28, 2012, Husband informed
Wife that he intended to move back into the marital residence, and he later
requested that Wife vacate the home by October 10, 2012.
On October 9, 2012, Wife petitioned for emergency relief from and
modification of the trial court’s April 30, 2012[,] provisional order.
Specifically, Wife requested that the trial court stay its order granting
Husband possession of the marital residence, set the matter for hearing, and
thereafter modify the order to grant wife possession of the home. Wife also
requested that Husband be ordered to pay her attorney’s fees with respect to
the petition. On October 10, 2012, the trial court stayed the provisional
order as it pertained to possession of the marital residence. On November
13, 2012, Husband responded to Wife’s petition for modification.
The trial court held a hearing on Wife’s petitions on November 16,
2012. At the hearing, Wife testified in support of her petition for
modification and was cross-examined by Husband. The time allotted for
the hearing, however, expired without Husband having an opportunity to
present evidence in opposition to Wife’s petition. The trial court granted
Wife the relief she sought and modified its April 30, 2012[,] provisional
order as follows:
Wife shall have provisional possession of the residence.
Husband shall pay all expenses and utilities associated with
the residence, all landscaping and upkeep. The Husband’s
obligation to pay maintenance is extinguished and Husband
shall pay an additional five thousand dollars to the attorneys
for [Wife] in order to secure the business valuation promptly,
an additional ten thousand dollars in attorney fees are due
provisionally from [Husband] to [Wife’s] attorneys. The
same is due within fifteen days.
Tr. II, p. 78-79. No evidence was heard on the issue of attorney’s fees and
costs.
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On November 21, 2012, Husband moved for the trial court to
reconsider its November 16, 2012[,] order granting Wife possession of the
marital residence and awarding her $15,000 in preliminary attorney’s fees
and costs. As this motion pertained to attorney’s fees, Husband argued that
it was an abuse of discretion for the trial court to issue such an award
without first conducting an evidentiary hearing as to the parties’ financial
circumstances. The trial court denied Husband’s motion to reconsider on
November 30, 2012, explaining, “At a certain point on November 16th, the
Court, considering the extensive hearing on provisional matters five months
before, concluded that it had been duly advised.” Appellant’s App. p. 90.
“The $15,000.00 in additional attorney’s fees and suit costs . . . are
reasonable considering that the assets of the marriage are a closely held
business and not much else.” Appellant’s App. p. 93.
Hogshire v. Hoover, No. 06A01–1212–DR–557, slip op. at *1-2 (Ind. Ct. App. Nov. 27,
2013) (“Hogshire I”). In Hogshire I, we held that the dissolution court did not abuse its
discretion when it sua sponte ordered Husband to pay Wife’s preliminary attorney’s fees.
Id. But we also held that the dissolution court abused its discretion when it ordered
Husband to pay those fees without first holding an evidentiary hearing on the issue of
Husband’s ability to pay. Id.
The parties have since sold the marital residence, and the sale proceeds total
approximately $45,000. Wife has depleted her savings account, which had
approximately $150,000 in it at the time of the parties’ separation. Wife’s sole source of
income is monthly Social Security benefits totaling approximately $860, and her monthly
expenses, including discretionary spending, total $7,455.42. Wife owes her attorney
approximately $40,000. Husband owns several businesses and receives Social Security
benefits and reports a monthly income from all sources of $7,818. Husband’s debts
include joint marital debt totaling $89,000; $11,775 owed to the Internal Revenue Service
for 2012 taxes; and $25,000 owed to his attorney.
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The parties hired an expert, Howard Gross, to valuate Husband’s businesses and
have paid him $15,000 to date. The parties owe Gross an additional $12,536 to date.
Gross has not yet completed his valuation of Husband’s businesses.
On May 16, 2013, Wife filed her Verified Petition to Modify Court’s November
16th Order Regarding Provisional Maintenance and Request for a Hearing Regarding the
Same. Wife alleged that, because Husband was no longer paying for her to live in the
marital residence, she was entitled to maintenance. Following a hearing, the trial court
entered the following order:
1. Husband shall, effective September 13, 2013, pay maintenance to
wife of $750.00 per week.
2. Husband shall pay all outstanding fees incurred by Howard Gross to
complete his business valuation of all companies operated by
Husband in which he has an ownership interest.
3. The funds from the sale of the marital residence shall be distributed
to the trust account of [Wife’s attorney] Carl Becker. Final
distribution of the same shall be upon final hearing.
4. Husband is restrained from transferring, gifting, encumbering or
otherwise divesting marital assets tangible or intangible without
Court authority.
5. Husband shall cooperate in furnishing all information to Howard
Gross such that he can complete his valuation.
Appellant’s App. at 8. This appeal ensued.
DISCUSSION AND DECISION
Issue One: Proceeds from Sale of Marital Residence
Husband first contends that the trial court abused its discretion when it sua sponte
ordered that the proceeds from the sale of the marital residence shall be “distributed to
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the trust account of Carl Becker[, Wife’s attorney].” Appellant’s App. at 8. Husband
maintains that neither party moved the court to so distribute the proceeds, which were
being held in escrow by a title company. And Husband suggests that the sua sponte order
shows that the dissolution court is biased in favor of Wife. In support, Husband cites to
Judge Bailey’s separate opinion in Hogshire I, where Judge Bailey stated: “Unless there
has been a direct affront to the dignity or conduct of the court, a sua sponte award in the
absence of a motion and an evidentiary hearing creates the appearance that neutrality has
been abandoned, and opens the dissolution court to the allegations of bias or prejudice.”
Slip op. at *3.
But the dissolution court’s order regarding the proceeds is not an award to Wife.
Wife’s attorney is merely holding the proceeds in trust for the parties, and Husband
cannot show that he is prejudiced in any way by the order. Indeed, the dissolution court
expressly stated that “Final distribution of the [proceeds] shall be upon final hearing.”
Appellant’s App. at 8. Husband has not shown that the dissolution court abused its
discretion or indicated any bias in ordering the proceeds held in trust by Wife’s attorney.
Issue Two: Maintenance
Husband next contends that the dissolution court abused its discretion when it
ordered him to pay Wife $750 per week in maintenance. A trial court has broad
discretion to modify a spousal maintenance award, and we will reverse only upon an
abuse of that discretion. Mitchell v. Mitchell, 875 N.E.2d 320, 323 (Ind. Ct. App. 2007),
trans. denied. An abuse of discretion will be found if the trial court’s decision is clearly
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against the logic and effect of the facts or reasonable inferences to be drawn therefrom.
Id.
Here, the evidence shows that Husband’s monthly income, including Social
Security benefits and salary, is $7,818. And while Wife argued to the dissolution court
that Husband’s businesses have value, there is no evidence in the record showing what
the businesses are worth. Thus, there is no evidence before us of Husband’s assets or
other income beyond his monthly income as stated above.
Husband’s monthly expenses, which include the $750 per week maintenance
order, $3,153.54 per month in payments on joint marital debt, estimated income taxes of
$1,000 per month, and $218 per month for Wife’s health insurance premium, total
$7,596.54. These expenses do not include the court’s order for Husband to pay the
remaining cost of Gross’s valuation, and Husband is left with only $221.46 per month to
pay for rent, utilities, food, gas, insurance, attorney’s fees, and the like. We hold that the
dissolution court erred when it ordered Husband to pay Wife $750 per week in
maintenance. See, e.g., Pham v. Pham, 650 N.E.2d 1212, 1214 (Ind. Ct. App. 1995)
(holding dissolution court abused its discretion when it ordered husband to pay 86% of
his income in maintenance to wife). We reverse the dissolution court’s maintenance
award and remand with instructions to modify the maintenance award taking into account
Husband’s earnings, living expenses, and other obligations imposed by the court’s
provisional orders.
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Issue Three: Order to Pay Valuation Expert
Finally, Husband contends that the dissolution court abused its discretion when it
ordered him to pay “all outstanding fees incurred by Howard Gross to complete his
business valuation of all companies operated by Husband in which he has an ownership
interest.” Appellant’s App. at 8. In particular, Husband maintains that the order is
ambiguous; that the order is inappropriate in that it orders him to pay “an open-ended,
undefined” amount of money; and that the evidence shows that he does not have the
ability to pay the amount ordered. Appellant’s Brief at 10. We address each contention
in turn.
Indiana Code Section 31-15-10-1 provides in relevant part that a dissolution court
periodically may order a party to pay a reasonable amount for the cost to the other party
of maintaining or defending a dissolution proceeding. The trial court has broad discretion
in making such an award and we will not disturb such an award absent an abuse of that
discretion. Thompson v. Thompson, 696 N.E.2d 80, 84 (Ind. Ct. App. 1998). When
making such an award, the trial court must consider the resources of the parties, their
economic condition, the ability of the parties to engage in gainful employment and to
earn adequate income, and such factors that bear on the reasonableness of the award. See
id.
First, we agree with Husband that the dissolution court’s order on this issue is
ambiguous to the extent that it requires Husband to pay the “outstanding fees” due to
Gross “to complete his business valuation” of Husband’s companies. Appellant’s App. at
8. The only outstanding, or unpaid fees are those due Gross for work he has already
8
completed. The evidence presented at the hearing indicates that the parties currently owe
Gross $12,536, but that they will incur additional fees as he completes the valuation.
Second, we agree with Husband that the dissolution court’s order appears to
require him to pay both outstanding and future fees to complete the valuation of his
businesses. Thus, Husband is correct that the dissolution court’s order is for an unknown
amount. And absent evidence showing what the total amount of Gross’s valuation will
be, there is no basis to determine whether the order is reasonable based on the resources
of the parties, their economic condition, and the value provided by Gross’s services.
Thompson, 696 N.E.2d at 84. In essence, the dissolution court has ordered Husband to
write a blank check to Gross, which is unreasonable. Further, after the total amount of
the fees are determined, Husband should have an opportunity to be heard regarding the
reasonableness of Gross’s fees.
Third, as we discussed in Issue Two, above, the evidence does not show that
Husband has the means to pay Gross’s fees. Thus, we hold that the dissolution court
erred when it ordered Husband to pay both the outstanding and future fees for the
valuation. We reverse the dissolution court’s order on this issue and remand for further
proceedings to determine: the total amount of Gross’s fees to complete the valuation;
whether Husband has the ability to pay the outstanding and/or future fees once
determined; and whether Gross’s fees are reasonable.
CONCLUSION
The dissolution court did not abuse its discretion when it sua sponte ordered that
the proceeds of the marital residence be distributed to Wife’s attorney to be held in his
9
trust account pending the final distribution of the marital estate. But the dissolution court
erred when it ordered Husband to pay $750 per week in maintenance to Wife. And the
dissolution court erred when it ordered Husband to pay both the outstanding and future
fees to Gross for completing his valuation of Husband’s businesses.
Affirmed in part, reversed in part, and remanded for further proceedings.
BROWN, J., concurs.
VAIDIK, C.J., concurs in part and dissents in part with separate opinion.
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_______________________________________________________
IN THE
COURT OF APPEALS OF INDIANA
RICHARD R. HOGSHIRE, )
)
Appellant-Petitioner )
)
vs. ) No. 06A01-1309-DR-402
)
URSULA HOOVER, )
)
Appellee-Respondent. )
VAIDIK, Chief Judge, concurring in part and dissenting in part.
I concur in full with the majority’s conclusions regarding the marital-residence
proceeds and the trial court’s order to pay the valuation expert. I respectfully dissent,
however, as to the court’s order that Husband pay Wife $750 per week in temporary
maintenance.
The trial court’s power to award maintenance is wholly within its discretion, and
we will reverse only when the decision is clearly against the logic and effect of the facts
and circumstances of the case. Augspurger v. Hudson, 802 N.E.2d 503, 508 (Ind. Ct.
App. 2004) (citation omitted). “The presumption that the trial court correctly applied the
11
law in making an award of spousal maintenance is one of the strongest presumptions
applicable to the consideration of a case on appeal.” Id.
Wife receives $860 per month in social security. This is her only income. By
contrast, Husband’s monthly income is approximately $7800. At the preliminary
hearing, Wife calculated her monthly expenses to be $7455.42, and she requested
approximately $6500 in monthly maintenance. See Resp’ts Ex. C. She did not receive
nearly that much; with Husband’s weekly maintenance obligation of $750 and her social-
security income, she receives slightly less than $4000 each month—about $2500 less
than she needs to pay her monthly expenses.
By the majority’s calculations, once Husband makes his monthly maintenance
payment, pays joint marital debts, and pays Wife’s health-insurance premium, he has
approximately $220 with which to pay his monthly expenses. Slip op. at 7. I admit this
is a small amount; however, the dissolution process commonly leaves one or both parties
financially humbled—it is the unfortunate reality of divorce. In this case, both Husband
and Wife have taken a financial hit. But importantly, this is merely a preliminary order:
the trial court has yet to determine the parties’ long-term financial obligations.
For these reasons, and given the strong presumption that the trial court acted
within its discretion in awarding spousal maintenance, I respectfully dissent as to the trial
court’s award of temporary maintenance and would affirm the award.
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