Imre L. Falatovics v. Amy L. Falatovics

FILED
Mar 10 2017, 9:14 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Lori B. Schmeltzer Kristina J. Jacobucci
Schmeltzer Law PLLC Newby, Lewis, Kaminski & Jones,
Traverse City, Michigan LLP
La Porte, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Imre L. Falatovics, March 10, 2017
Appellant-Respondent, Court of Appeals Case No.
46A04-1605-DR-1161
v. Appeal from the La Porte Superior
Court
Amy L. Falatovics, The Honorable Michael S.
Appellee-Petitioner Bergerson, Judge
Trial Court Cause No.
46D01-1302-DR-59
Crone, Judge.
Case Summary
[1] For the third time, this matter comes before us for review. Imre L. Falatovics
(“Husband”) and Amy L. Falatovics (“Wife”) were divorced. Following the
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issuance of the dissolution decree, Wife filed an appeal and Husband filed an
Indiana Trial Rule 60(B) motion (“Trial Rule 60(B) Motion”) to set aside the
dissolution decree. After this Court reversed a portion of the dissolution decree
and remanded, another appeal ensued. Once this Court’s opinion was certified,
Wife moved to dismiss Husband’s Trial Rule 60(B) Motion and his addendum
to his Trial Rule 60(B) Motion (“Addendum”) (sometimes collectively referred
to as “Trial Rule 60(B) Motions”). The trial court granted Wife’s motion and
dismissed Husband’s Trial Rule 60(B) Motions.
[2] Husband now appeals the dismissal of his Trial Rule 60(B) Motions. He argues
that the trial court erred in finding that he failed to follow the proper procedure
for bringing his Trial Rule 60(B) Motions. He also asserts that Wife is barred
by the doctrines of laches and/or invited error from arguing that he failed to
follow the proper procedure. Finally, he also contends that his constitutional
rights were violated because he did not receive an evidentiary hearing on his
motions. Wife contends that Husband’s appeal is frivolous and in bad faith and
requests that we award her appellate attorney fees.
[3] We conclude that trial court did not err in finding that Husband failed to follow
the proper procedure. We further conclude that neither laches nor invited error
applies and that Husband was not deprived of his constitutional rights. We
affirm the judgment and deny Wife’s request for attorney’s fees.
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Facts and Procedural History
[4] On December 19, 2013, the trial court issued the dissolution decree, dissolving
the parties’ marriage and dividing the marital estate. On January 13, 2014,
Wife appealed. On January 29, 2014, the Court of Appeals acquired
jurisdiction when the notice of completion of clerk’s record was entered in the
chronological case summary (“CCS”). Ind. Appellate Rule 8.
[5] While the appeal was still pending, on May 7, 2014, Husband filed in the trial
court his verified Trial Rule 60(B) Motion to set aside the dissolution decree,
asserting that “Wife committed fraud to the court by not disclosing assets,
vehicle(s) and bank accounts” owned during the divorce proceedings.
Appellant’s App. at 26. The trial court set the matter for hearing on August 26,
2014. On August 5, 2014, Wife filed a motion to continue the hearing, stating
that her appeal was pending, and therefore the trial court had no jurisdiction to
hear Husband’s Trial Rule 60(B) Motion “until after a decision on the Appeal
has been rendered.” Id. at 28. The trial court granted Wife’s motion.
[6] On August 14, 2014, this Court issued its opinion on Wife’s appeal. Falatovics
v. Falatovics, 15 N.E.3d 108 (Ind. Ct. App. 2014) (“Falatovics 1”). In her appeal,
Wife argued that the trial court erred in excluding from the marital estate
Husband’s interest in two parcels of real estate (“Parcels 1 and 2”) that he held
with his brother as joint tenants subject to a life estate in his mother. Husband
did not file a brief, and therefore we reviewed the trial court’s judgment for
prima facie error. We concluded that Husband held a present pecuniary
interest in Parcels 1 and 2, and therefore the trial court improperly excluded his
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interest in them from the marital estate. In addition, we observed that the
parties had agreed on the value of Husband’s interest in Parcels 1 and 2, and
therefore, we reversed and remanded with instructions to the trial court to
include Husband’s interest in Parcels 1 and 2 in the marital estate and divide
the marital estate based on the new valuation in a manner it deemed fair. Id. at
111-12. Neither Husband nor Wife sought rehearing or transfer of our opinion,
and it was certified as final on September 26, 2014.
[7] On October 29, 2014, the trial court held a status conference and addressed the
remanded issues. On November 14, 2014, Husband filed his Addendum,
claiming that the appraisals for Parcels 1 and 2 submitted by Wife “during the
final hearing” were mistaken in fact and valuation. Appellant’s App. at 36. On
November 25, 2014, the trial court issued its amended dissolution decree,
wherein it included Husband’s interest in Parcels 1 and 2 in the marital estate,
revised the value of the estate accordingly, and equally divided the marital
estate based upon this revised valuation. On December 9, 2014, the trial court
scheduled a hearing for all pending issues on March 2, 2015.
[8] On December 23, 2014, Husband appealed the amended dissolution decree.
On January 23, 2015, the notice of completion of clerk’s record was entered in
the CCS.
[9] On February 17, 2015, Wife filed in the trial court a motion for continuance of
the hearing on Husband’s pending Trial Rule 60(B) Motions, declaring that his
appeal was pending before the Court of Appeals, and therefore the trial court
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had no jurisdiction to hear the motions until after the appeal was rendered. Id.
at 42. The same day, Husband filed an objection to continuance, claiming that
the appeal briefing schedule was stayed and that “his pleadings before [the trial]
Court must be heard prior to the appeal and it’s [sic] briefing schedule.” Id. at
43. On February 23, 2015, Wife filed a response to Husband’s objection,
asserting that the CCS did not show that the briefing schedule for the appeal
had been stayed. The same day, the trial court granted Wife’s motion for
continuance.
[10] On March 12, 2015, Husband filed in the Court of Appeals a motion to stay
appeal and remand jurisdiction to the trial court to consider his Trial Rule 60(B)
Motions. Husband attached his Trial Rule 60(B) Motion and Addendum and
averred that a ruling on these motions “may resolve some or all of the issues
raised on appeal.” Appellee’s App. at 10. On March 30, 2015, Wife filed her
objection to Husband’s motion to stay appeal, asserting that Husband waived
all issues raised in his Trial Rule 60(B) Motions by failing to seek leave of the
Court of Appeals to file his motions. Id. at 18. On April 10, 2015, this Court
denied Husband’s motion to stay appeal. It did not provide the basis for its
denial.
[11] On November 5, 2015, this Court handed down its memorandum decision on
Husband’s appeal of the amended dissolution decree. Falatovics v. Falatovics,
No. 46A03-1412-DR-449, 2015 WL 6777221 (Ind. Ct. App. Nov. 5, 2015),
trans. denied (2016) (“Falatovics 2”). In this appeal, Husband challenged the
equal division of the marital estate. We concluded that the trial court did not
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abuse its discretion in equally dividing the martial estate. Id. at * 3. We also
rejected Husband’s attempt to relitigate issues regarding his interest in Parcels 1
and 2 and their valuation. Id. at * 2. Accordingly, we affirmed the amended
dissolution decree. Husband petitioned for transfer, which was denied on
February 11, 2016.
[12] On February 15, 2016, the matter was certified back to the trial court. On
March 14, 2016, Wife filed a motion to dismiss Husband’s Trial Rule 60(B)
Motions. Husband filed a response. In April 2016, following a hearing, the
trial court granted Wife’s motion to dismiss, finding that Husband failed to
follow the appropriate procedure for bringing his Trial Rule 60(B) Motions, and
that therefore he had waived his arguments and was not entitled to an
evidentiary hearing. This appeal ensued.
Discussion and Decision
Section 1 – The trial court did not err in granting Wife’s
motion to dismiss.
[13] Husband challenges the dismissal of his Trial Rule 60(B) Motions. His first
Trial Rule 60(B) Motion alleged that Wife committed fraud in failing to disclose
assets, and his Addendum alleged that Wife’s appraisals of Parcels 1 and 2 were
based on mistakes of fact and valuation. Trial Rule 60(B) provides, “On
motion and upon such terms as are just the court may relieve a party … from a
judgment, including a judgment by default, for the following reasons: (1)
mistake, … and (3) fraud (whether heretofore denominated intrinsic or
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extrinsic), misrepresentation, or other misconduct of an adverse party[.]” Trial
Rule 60(D) states, “In passing upon a motion allowed by subdivision (B) of this
rule the court shall hear any pertinent evidence.”
[14] As an initial matter, we must resolve the parties’ dispute as to the proper
standard of review. Husband claims that this is an appeal of the trial court’s
decision on a motion to dismiss pursuant to Trial Rule 12(B), which we review
de novo. Wife contends that the trial court’s dismissal of Husband’s Trial Rule
60(B) Motions is effectively a denial, which we review for an abuse of
discretion.
[15] We conclude that the trial court’s dismissal of Husband’s Trial Rule 60(B)
Motions is effectively a denial. See Jahangirizadeh v. Pazouki, 27 N.E.3d 1178,
1181 (Ind. Ct. App. 2015) (equating dismissal of Trial Rule 60(B) motion with
denial). In general, we review a trial court’s denial of a motion to set aside
judgment for an abuse of discretion. Id. However, in this case the issue
presented involves purely a question of law, which we review de novo. See
Goodson v. Carlson, 888 N.E.2d 217, 220 (Ind. Ct. App. 2008) (observing that
when appeal of trial court’s denial of motion to set aside judgment involves
question of law, our review is de novo).
[16] Husband first asserts that the trial court erred in finding that he failed to follow
the appropriate procedure for bringing his Trial Rule 60(B) Motions and
therefore waived his claims and is not entitled to an evidentiary hearing.
Husband filed his Trial Rule 60(B) Motion after Wife appealed the dissolution
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decree. On January 29, 2014, the Court of Appeals obtained jurisdiction when
the notice of completion of the clerk’s record was entered in the CCS. Husband
filed his Trial Rule 60(B) Motion on May 7, 2014. Thus, when Husband filed
his Trial Rule 60(B) Motion, the trial court did not have jurisdiction over the
case.
[17] In Logal v. Cruse, 267 Ind. 83, 368 N.E.2d 235 (1977), cert. denied (1978), our
supreme court set forth the proper procedure to follow when a party wishes to
pursue a Trial Rule 60(B) motion while an appeal is pending. There, the trial
court dismissed Logal’s lawsuit because he failed to comply with a discovery
order. Logal appealed the dismissal. During the pendency of the appeal, Logal
filed in the trial court a motion to set aside the dismissal and reinstatement of
the lawsuit. The trial court “overruled” Logal’s motion, and he appealed that
ruling. Id. at 83, 368 N.E.2d at 236. Our supreme court consolidated Logal’s
appeals and adopted the following procedure for bringing a motion to set aside
while a judgment is on appeal (“the Logal Procedure”):
(1) The moving party files with the appellate court an application
for leave to file his 60(B) motion. This application should be
verified and should set forth the grounds relied upon in a specific
and non-conclusory manner.
(2) The appellate court will make a preliminary determination of
the merits of the movant’s 60(B) grounds. In so doing the
appellate court will determine whether, accepting appellant’s
specific, non-conclusory factual allegations as true there is a
substantial likelihood that the trial court would grant the relief
sought. Inasmuch as an appellate court is not an appropriate
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tribunal for the resolution of factual issues, the opposing party
will not be allowed to dispute the movant’s factual allegations in
the appellate court.
(3) If the appellate court determines that the motion has sufficient
merit, as described in the preceding paragraph, it will remand the
entire case to the trial court for plenary consideration of the 60(B)
grounds. Such remand order will terminate the appeal and the
costs in the appellate court will be ordered taxed against the party
procuring the remand. The decision to remand does not require
the trial court to grant the motion. If the trial court denies the
motion, the movant should file a motion to correct errors
addressed to this denial, and appeal the denial. In this new
appeal any of the issues raised in the original appeal may be
incorporated, without being included in the second motion to
correct errors.
(4) If the trial court grants the motion, the opposing party may
appeal that ruling under the same terms as described in
paragraph (3). The original appeal shall be deemed moot.
Id. at 86-87, 368 N.E.2d at 237 (citations omitted). The Logal court explained
that “this procedure will allow full and fair consideration of grounds for relief
from judgment with a minimum of disruption of the appellate process.” Id. at
87, 368 N.E.2d at 237.
[18] The Logal court then considered the issues raised in the two consolidated
appeals. “For purposes of illustration and in the interests of fairness,” the Logal
court considered Logal’s motion to set aside the dismissal as though he had
followed the procedure set forth above. Id., 368 N.E.2d at 237. The court
concluded that there was not a substantial likelihood that Logal would succeed
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in his claim that he did not have notice of the trial court’s discovery order. Id.,
368 N.E.2d at 238. In addition, the court reviewed whether the trial court
abused its discretion in dismissing the lawsuit and concluded that it had not. Id.
at 88, 368 N.E.2d at 238. Accordingly, the Logal court affirmed the trial court’s
dismissal of the action and the denial of Logal’s motion to set it aside. Id., 368
N.E.2d at 238.
[19] The Logal Procedure was enforced in Southwood v. Carlson, 704 N.E.2d 163 (Ind.
Ct. App. 1999). There, Southwood brought a medical malpractice action
against various medical care providers. The trial court granted the medical care
providers’ summary judgment motion, and Southwood appealed. Before the
trial clerk submitted the record of proceedings to the Court of Appeals,
Southwood filed a motion for relief from judgment pursuant to Trial Rule 60(B)
with the trial court. After the Court of Appeals obtained jurisdiction over the
case, the trial court granted Southwood’s motion for relief from judgment and
set aside its grant of summary judgment in favor of the medical care providers.
The medical care providers appealed the grant of Southwood’s motion for relief
from judgment.
[20] The medical care providers’ appeal and Southwood’s appeal of the summary
judgment ruling in favor of the medical care providers were consolidated. The
Southwood court began by addressing the medical care providers’ argument that
the trial court was without jurisdiction to grant Southwood’s motion for relief
from judgment. The court rejected Southwood’s contention that because the
Court of Appeals had not yet acquired jurisdiction over the case at the time he
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filed his motion, the Logal Procedure was inapplicable. Id. at 165. The court
concluded that Southwood was obligated to follow the Logal Procedure when
the Court of Appeals acquired jurisdiction, and he had not. Id. Therefore, the
court concluded that the trial court was without jurisdiction to rule upon
Southwood’s motion for relief from judgment and vacated the trial court’s ruling
granting his motion. Id. at 166.
[21] The Southwood court then considered the trial court’s summary judgment ruling
in favor of the medical care providers. Southwood argued that there was a
genuine issue of material fact precluding summary judgment and that the trial
court erred by refusing to consider his designated affidavits. The Southwood
court concluded that Southwood’s designation of evidence was untimely, and
therefore the trial court correctly entered summary judgment in favor of the
health care providers. Id. at 169.
[22] Here, Husband concedes that he did not follow the Logal Procedure, but he
contends that Logal and Southwood are distinguishable, and therefore the Logal
Procedure is inapplicable. First, he asserts that in Logal and Southwood, the
party seeking to have the trial court’s judgment set aside was also the appellant
and the issue raised in the motion to set aside and the appeal was the same.
Thus, according to Husband, the movant/appellant in those cases was seeking
to have two bites of the same apple. Husband points out that he filed the Trial
Rule 60(B) Motion, but Wife brought the first appeal, and he claims that the
issue he raised in his Trial Rule 60(B) Motion was different from the issue
raised in Wife’s appeal.
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[23] We reject the contention that the identity of the movant and the appellant is
relevant to the rationale underlying the Logal Procedure; namely, to permit fair
consideration of the motion without unduly disrupting the appeals process.
The trial court loses jurisdiction over the case once the Court of Appeals obtains
jurisdiction regardless of who initiated the appeal. We also reject Husband’s
assertion that the issues must be the same. As long as the same judgment is the
subject of the appeal and the motion for relief from judgment, the issues raised
could result in the judgment or a portion of it being reversed or set aside. If a
judgment is on appeal, and there are grounds to set aside that same judgment, it
is a waste of the parties’ and the court’s resources to follow through with the
appeals process only to have that same judgment set aside albeit for a different
reason. The motion to set aside should be heard before the appeal proceeds so
that all issues can be appealed at once. In fact, the circumstances of this case
are a perfect illustration of this concept.
[24] Here, Husband claims that the potential for competing results is not present
because the issues presented to this Court and the trial court were different. We
disagree. Wife’s appeal addressed the exclusion of Husband’s interest in
Parcels 1 and 2 from the marital estate, and Husband’s Trial Rule 60(B) Motion
addressed the exclusion of Wife’s assets as a result of her failure to disclose
assets. Wife’s appeal and Husband’s Trial Rule 60(B) Motion both directly
affected the same judgment. Each raised issues pertaining to the
exclusion/inclusion of marital assets, which affects the ultimate determination
of the value of the marital estate and the equitable distribution thereof. Thus,
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the failure to follow the Logal Procedure would result in piecemeal decisions
regarding the same judgment and multiple appeals as to the fair distribution of
the marital estate. Furthermore, Husband’s Addendum and the first appeal
both addressed Husband’s interest in Parcels 1 and 2, and inclusion of
Husband’s interest in that property was the reason for the issuance of the
amended dissolution decree. Husband recognized in his motion to stay appeal
that a ruling on his Trial Rule 60(B) Motions “may resolve some or all of the
issues raised on appeal.” Appellee’s App. at 10.
[25] Another distinction Husband attempts to make is that the movant/appellant in
both Logal and Southwood had the issues in their motions to set aside heard on
the merits, whereas he has not. However, Logal did not have his motion to set
aside heard on the merits. The Logal court considered only whether there was a
substantial likelihood that the trial court would grant the relief Logal sought in
his motion to set aside in accordance with the procedure it had outlined. Thus,
the Logal court did not hear evidence in support of Logal’s motion to set aside
and the opposing party was not permitted to dispute the movant’s factual
allegations. Logal, 267 Ind. at 86-87, 368 N.E.2d at 237-38.
[26] Husband’s comparison to Southwood is also unavailing. In Southwood, although
the trial court conducted an evidentiary hearing on Southwood’s motion for
relief from judgment and issued a ruling, the appellate court vacated that ruling
because the trial court did not have jurisdiction over the case. 704 N.E.2d at
166. We fail to see the benefit of having a hearing on a motion when the ruling
on the motion is vacated. Finally, we note that although Trial Rule 60(D)
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generally requires trial courts to hold a hearing on any pertinent evidence before
granting Trial Rule 60(B) relief, a party is not always entitled to an evidentiary
hearing. See Thompson v. Thompson, 811 N.E.2d 888, 904 (Ind. Ct. App. 2004)
(concluding that appellant was not entitled to evidentiary hearing on his Rule
60(B)(1) motion based on excusable neglect where he alleged that his attorney
was negligent but attorney negligence will not support a finding of excusable
neglect as a matter of law), trans. denied (2005). Accordingly, we are
unpersuaded that the distinctions between this case and Logal and Southwood
render the Logal Procedure inapplicable.
[27] Next, Husband claims that Wife’s motion to dismiss is barred by the doctrines
of laches and/or invited error. “Laches is an equitable defense that may be
raised to stop a person from asserting a claim that he would normally be
entitled to assert.” Ind. Real Estate Comm’n v. Ackman, 766 N.E.2d 1269, 1273
(Ind. Ct. App. 2002). “Laches requires: ‘(1) inexcusable delay in asserting a
known right; (2) an implied waiver arising from knowing acquiescence in
existing conditions; and (3) a change in circumstances causing prejudice to the
adverse party.’” SMDfund, Inc. v. Fort Wayne-Allen Cty. Airport Auth., 831
N.E.2d 725, 729 (Ind. 2005) (quoting Shafer v. Lambie, 667 N.E.2d 226, 231
(Ind. Ct. App. 1996)). Husband argues that he filed his Trial Rule 60(B)
Motion on May 7, 2014, but Wife did not file her motion to dismiss until
almost two years later on March 14, 2016, which constitutes inexcusable delay.
Husband ignores that two appeals occurred during that time period. Wife filed
her motion to dismiss within thirty days of the trial court resuming jurisdiction
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on February 15, 2016, when the decision in Falatovics 2 was certified. We
cannot say that Wife inexcusably delayed in filing her motion to dismiss.
[28] “The doctrine of invited error is grounded in estoppel.” Witte v. Mundy ex rel.
Mundy, 820 N.E.2d 128, 133 (Ind. 2005). Under this doctrine, “a party may not
take advantage of an error that she commits, invites, or which is the natural
consequence of her own neglect or misconduct.” Evans v. Evans, 766 N.E.2d
1240, 1245 (Ind. Ct. App. 2002). Husband argues that Wife invited the error by
moving for two continuances, rather than dismissal, of the Trial Rule 60(B)
Motions, indicating to the trial court that “the matter could not be adjudicated
and heard until after the appeal was completed.” Appellant’s Br. at 28.
Husband overstates the effect of Wife’s motions for continuance. In her
motions, she merely informed the trial court that it lacked jurisdiction to
entertain evidentiary hearings while the case was pending on appeal. That was
not error. If the trial court had ruled on Husband’s Trial Rule 60(B) Motions
when the appeals were pending, the judgment would have been void. See
Southwood, 704 N.E.2d at 166. We conclude that the doctrine of invited error
does not apply.
[29] Finally, Husband claims that the dismissal of his Trial Rule 60(B) Motions
without an evidentiary hearing violates his federal constitutional due process
rights and his state constitutional right to open access to the courts. The
Fourteenth Amendment of the United States Constitution prohibits any state
from depriving a person of life, liberty, or property without due process of law.
Article 1, Section 12 of the Indiana Constitution provides, “All courts shall be
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open; and every person, for injury done to him in his person, property, or
reputation, shall have remedy by due course of law.” Indiana courts have
consistently construed Article 1, Section 12 of the Indiana Constitution as
analogous to the federal due process clause. Doe v. O’Connor, 790 N.E.2d 985,
988 (Ind. 2003).
[30] We observe that Husband had an opportunity to be heard on the issue raised in
the Addendum—the valuation of Parcels 1 and 2—before the dissolution decree
was issued, but at that time he apparently agreed to the valuation of properties
in Wife’s appraisals. See Falatovics 1, 15 N.E.3d at 111 (“The parties agreed that
the value of Husband’s interest in Parcels 1 and 2 was $106,700.”). As for his
Trial Rule 60(B) Motion, parties are not entitled to evidentiary hearings when
procedural requirements have not been satisfied. See Plank v. Cmty. Hosps. of
Ind., Inc., 981 N.E.2d 49, 54 (Ind. 2013) (concluding that Plank forfeited
opportunity for evidentiary hearing on his constitutional challenge to Medical
Malpractice Act damages cap); Bunker v. Nat’l Gypsum Co., 441 N.E.2d 8, 14
(Ind. 1982) (concluding that statute of limitations in Occupational Diseases Act
was constitutional as applied to worker’s claim for permanent disability). Here,
Husband would have received an evidentiary hearing on the merits of his
motion if he had followed the proper procedure. Husband was not completely
denied an opportunity to be heard merely by being required to follow the proper
procedure. We find no violation of Husband’s constitutional rights.
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Section 2 - Wife is not entitled to appellate attorney’s fees.
[31] As a final matter, we address Wife’s request for attorney’s fees pursuant to
Indiana Appellate Rule 66, which permits this Court to assess damages,
including attorney’s fees, if an appeal is frivolous or in bad faith. “Our
discretion to award attorney fees under Indiana Appellate Rule 66(E) is limited
to instances when an appeal is permeated with meritlessness, bad faith,
frivolity, harassment, vexatiousness, or purpose of delay.” Thacker v. Wentzel,
797 N.E.2d 342, 346 (Ind. Ct. App. 2003). “[W]e must use extreme restraint
when exercising this power because of the potential chilling effect upon the
exercise of the right to appeal.” Id. “A strong showing is required to justify an
award of appellate damages and the sanction is not imposed to punish mere
lack of merit but something more egregious.” Ballaban v. Bloomington Jewish
Cmty., Inc., 982 N.E.2d 329, 339-40 (Ind. Ct. App. 2013). While we find
Husband’s argument unpersuasive, his appeal is not permeated with frivolous
claims or brought in bad faith. Therefore, we decline Wife’s request for
attorney’s fees.
[32] Based on the foregoing, we affirm the dismissal of Husband’s Trial Rule (60)(B)
Motions.
[33] Affirmed.
Riley, J., and Altice, J., concur.
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