Roxann R. Behnke v. James C. Behnke (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
Jan 09 2020, 9:06 am
regarded as precedent or cited before any
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Nicholas J. Hursh Douglas E. Johnston
Shambaugh, Kast, Beck Tourkow, Crell, Rosenblatt
& Williams, LLP & Johnston, LLP
Fort Wayne, Indiana Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Roxann R. Behnke, January 9, 2020
Appellant-Petitioner, Court of Appeals Case No.
19A-DN-1627
v. Appeal from the Noble Superior
Court
James C. Behnke, The Honorable Robert E. Kirsch,
Appellee-Respondent III, Judge
Trial Court Cause No.
57D01-1710-DN-10
Baker, Judge.
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[1] Roxann Behnke (Wife) and James Behnke (Husband) dissolved their marriage.
Wife appeals the trial court’s valuation and division of property, arguing that
the trial court erred in both respects. Finding no error, we affirm.
Facts
[2] Husband and Wife married in 2006. Sometime in 2013, Husband and Wife
formed YNot Metal, Inc. (YNot), a closely-held corporation. The business
specialized in fabricating, bending, welding, and cutting metal. Both Husband
and Wife contributed funds from their retirement accounts to capitalize the
business. Husband contributed $166,282.10 and owned 166.2821 shares, and
Wife contributed $75,835.30 and owned 75.8353 shares.
[3] On August 1, 2017, Wife filed her petition for dissolution of the marriage. The
trial court conducted an August 9, 2018, final dissolution hearing, at which
Husband and Wife submitted findings of fact and called witnesses to testify.
Finally, on February 25, 2019, the trial court issued its findings of fact,
conclusions of law, and decree of dissolution of marriage. The trial court found
and held, in pertinent part, as follows:
Asset Analysis – [YNot]
***
8. At the time of the filing of the divorce, the business had no
intrinsic value other than a liquidation value.
9. As part of the divorce, the hard assets of the business were
appraised at a value of $102,835.00. . . . The business had certain
Court of Appeals of Indiana | Memorandum Decision 19A-DN-1627 | January 9, 2020 Page 2 of 10
outstanding indebtedness, which brought that value of the business
down to $78,426.20.
10. James Houlihan, a certified public accountant and licensed
business evaluator, testified as to the value of the business, [YNot].
11. Mr. Houlihan reviewed various tax matters supplied by both
parties to him, as well as the tax returns for the business and
consideration of other factors, including the fact that 75% of the
customer base was one customer, Titan Metal.
12. Based upon all of the information available to him, Mr.
Houlihan found the business to be worth $78,217.00, representing
the liquidation value of the assets, less liabilities. This amount was
not taking into account any pre-marital assets of either party.
13. Mr. Houlihan explained why there was no intrinsic value, in
the form of enterprise or personal goodwill for this entity. In short,
its lack of profitability prevented such a finding.
***
18. Wife also took the position that there were substantial
revenues during the year 2017 that should have resulted in the
business actually being on the rise in profitability. However,
evidence indicated that she communicated direct[ly] with
[Husband] that the business was in trouble. The combination of
her own words recognizing trouble, coupled with the default on
the loan, all indicate that the liquidation analysis of the expert was
based on real world facts and circumstances, as opposed to the
position advanced by [W]ife.
19. Wife had argued the business was worth $271,000.00 as
reflected on her balance sheet.
20. There was no evidence presented to support that valuation,
and the Court declines to accept that as accurate.
21. Accordingly, the Court finds that the net value of the business,
[YNot], is $78,217.00 and is set over to Husband.
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Analysis of the Respective Inheritances
22. Wife testified that [H]usband had inherited property from his
parents, and that his interest in that property was roughly
$25,000.00.
23. The evidence established that, as of the date of the filing of the
divorce, [H]usband’s father was still alive. Thus, any real estate
which passed to [H]usband was not a countable asset in the
marriage as of the date of filing.
24. Accordingly, the Court is excluding any of [H]usband’s
inheritance from the marital pot.
25. Similarly, [W]ife had an inheritance of just over $8,000.00, and
[H]usband’s position was that [W]ife should receive that
inheritance without setoff. The combination of [H]usband’s
inheritance not even being in existence at the time of the divorce,
coupled with his position that [W]ife should be entitled to retain
the entirety of her inheritance is eminently reasonable in light of
the evidence presented.
26. Accordingly, the Court does not factor any inheritance into the
marital pot.
Analysis of Real Estate
27. At the time of filing of the divorce, Wife owned real estate
which she purchased in November[] 2000 for $85,000.00.
28. For the tax year covering the date of filing, the tax assessor
placed the value of the real estate at $94,400.00.
29. Wife has taken the position that [H]usband had a prior piece of
real estate that should be determined to be his separate property.
Husband owned the real estate before the marriage and it was sold
during the marriage.
30. The evidence at trial, as presented by [W]ife, indicates that the
real estate was sold well before the divorce action. The undisputed
testimony was that the funds were consumed in the marital estate
and do not separately still exist.
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31. Accordingly, the court declines [W]ife’s offer to identify the
sale of [H]usband’s pre-marital estate as a continuing asset in
existence for purposes of division herein.
Appealed Order p. 2-4 (emphases omitted).
[4] Ultimately, the trial court ordered an equal 50/50 split of the marital estate. See
id. at 9. On March 27, 2019, Wife filed a motion to correct errors, which the
trial court denied on June 17, 2019, following a hearing. Wife now appeals.
Discussion and Decision
I. Standard of Review
[5] Our standard of review for these types of cases is well established:
When reviewing judgments with findings of fact and conclusions
of law, Indiana’s appellate courts “shall not set aside the findings
or judgment unless clearly erroneous, and due regard shall be
given to the opportunity of the trial court to judge the credibility of
the witnesses.” Ind. Trial Rule 52(A). Appellate judges are not to
reweigh the evidence nor reassess witness credibility, and the
evidence should be viewed most favorably to the judgment. See
Ind. Dep’t of Child Servs. v. LaPorte Circuit Court (In re T.S.), 906
N.E.2d 801, 804 (Ind. 2009); J.I. v. J.H. (In re K.I.), 903 N.E.2d
453, 457 (Ind. 2009); Dunson v. Dunson, 769 N.E.2d 1120, 1123
(Ind. 2002). “Findings are clearly erroneous only when the record
contains no facts to support them either directly or by inference.”
Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind.1997) (quoting Estate
of Reasor v. Putnam County, 635 N.E.2d 153, 158 (Ind. 1994)).
Appellate deference to the determinations of our trial court judges,
especially in domestic relations matters, is warranted because of
their unique, direct interactions with the parties face-to-face, often
over an extended period of time. Thus enabled to assess credibility
and character through both factual testimony and intuitive
discernment, our trial judges are in a superior position to ascertain
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information and apply common sense, particularly in the
determination of the best interests of the involved children.
Best v. Best, 941 N.E.2d 499, 502 (Ind. 2011). “[I]t is not enough that the
evidence might support some other conclusion, but it must positively require
the conclusion contended for by appellant before there is a basis for reversal.”
Kirk v. Kirk, 770 N.E.2d 304, 307 (Ind. 2002).
II. Valuation
[6] First, Wife argues that the trial court erred in its valuation of property.
Specifically, Wife contends that the trial court improperly valued their metal
business, YNot.
[7] “[T]he trial court has broad discretion in ascertaining the value of property in a
dissolution action[.]” Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind. 1996). “[W]e
will not reverse the trial court unless the decision is clearly against the logic and
effect of the facts and circumstances before it.” Id. The trial court does not err
when its valuation of property is within the range of values supported by the
evidence. Sanjari v. Sanjari, 755 N.E.2d 1186, 1191-92 (Ind. Ct. App. 2001).
[8] From the record, we know that Husband called expert witness James Houlihan,
a certified public accountant and licensed business evaluator, to testify as to
YNot’s business value. Based on his experience and an independent evaluation
of the financial documents, Houlihan concluded that YNot was worth
$78,217.00. This sum included all liquidated assets in addition to all liabilities
and outstanding debts. Wife disputed this figure, arguing that YNot should
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have been valued at $271,000.00 given the inherent profitability and intrinsic
value of the company.
[9] It is apparent that the trial court gave substantial weight to the testimony of
Husband’s expert witness, Houlihan. By contrast, the trial court deliberately did
not give weight to Wife’s contentions about the value of YNot because she did
not proffer witnesses—or any reliable evidence, for that matter—to refute
Husband’s or Houlihan’s conclusion. See Alexander v. Alexander, 927 N.E.2d
926, 935 (Ind. Ct. App. 2010) (holding that “[a] valuation submitted by one of
the parties is competent evidence of the value of property in a dissolution action
and may alone support the trial court’s determination in that regard[]”).
Furthermore, the value calculated by Houlihan was at or near $78,426.20—the
net value of YNot—and is within the range of values supported by the evidence.
[10] We will not second-guess the trial court’s findings and conclusions unless there
is clear error, and here, nothing leads us to believe that the trial court ruled
erroneously. Thus, we hold that the trial court did not err in its valuation of
YNot.
III. Division
[11] Next, Wife argues that the trial court erroneously divided the marital estate.
Specifically, Wife contends that the trial court should have deviated from the
equal division of property by including other assets. “The distribution of marital
assets is committed to the sound discretion of the trial court.” Breeden v. Breeden,
678 N.E.2d 423, 427 (Ind. Ct. App. 1997). “We will only reverse the trial
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court’s decision when it is clearly against the logic and effect of the facts and
circumstances before the court.” Id.[12] “The court shall presume that an equal division of marital property between the
parties is just and reasonable, and may deviate from an equal division only
when that presumption is rebutted.” Campbell v. Campbell, 993 N.E.2d 205, 212
(Ind. Ct. App. 2013). Pursuant to Indiana Code section 31-15-7-5, one party can
produce evidence of the following, among other things, to demonstrate that an
equal division would not be just and reasonable:
(1) The contribution of each spouse to the acquisition of the
property, regardless of whether the contribution was incoming
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 the children.
(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.
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[13] First, Wife argues that the trial court should have ordered that her and her
Husband’s respective inheritances would be included in the ultimate division of
marital property. The trial court ordered, instead, that Wife and Husband
would each keep their own respective inheritance money. The trial court
reached this decision, in part, because Husband’s father, from whom Husband
will receive his inheritance, was still alive at the time Wife filed for divorce.
Further, there is manifest evidence that Husband wanted Wife to maintain her
own inheritance because he felt that he was not entitled to any of that money. It
was within the trial court’s discretion to make this decision, and we hold that
the trial court did not err in determining that the parties would each retain their
respective inheritances.
[14] Next, Wife contends that the trial court erred by not including the value of
Husband’s real estate that he “sold shortly before the dissolution action and
final date of separation.” Appellant’s Br. p. 16. However, according to the trial
court, “[t]he undisputed testimony was that [those] funds were consumed in the
marital estate and do not separately still exist.” Appealed Order p. 4. Thus, in
evaluating the evidence, the trial court decided that those profits from
Husband’s sale of property did not constitute a separate asset that could be
factored into the division of property. Once again, nothing in the record
suggests that the trial court erred in making this determination.
[15] Finally, Wife argues that the trial court should have considered her lower
earning capacity and economic circumstances. This amounts to a request that
we reweigh the evidence in Wife’s favor, which we may not do. Based on the
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record and the trial court’s final decree, it is clear to us that the trial court
carefully and prudently evaluated both parties’ assets while simultaneously
considering Wife’s requests to deviate from the 50/50 split. Nevertheless, the
trial court reached the conclusion that an even split would be in the best
interests of Husband and Wife, and the record supports such a conclusion. As
such, the trial court did not err in this respect.1
[16] Thus, we find no error in the trial court’s division of property or determination
that Wife presented no credible evidence to deviate from the presumption of an
equal 50/50 division.
[17] The judgment of the trial court is affirmed.
Riley, J., and Brown, J., concur.
1
Additionally, Wife argues that the trial court did not consider evidence of Husband’s actions post-
separation as they pertained to YNot and the sale of certain business property. However, this is nothing more
than another attempt by Wife to have us revalue the YNot business entity, which, as we have already
discussed, was a decision left to the sound discretion of the trial court. Accordingly, we dismiss this argument
as redundant.
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