Vinita Singh Tyagi v. Vichitra Tyagi, Vijai and Sushma Tyagi

FILED
Feb 18 2020, 5:51 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Darren A. Craig VIJAI AND SUSHMA TYAGI
Emily J. Schmale Thomas A. Whitsitt
Frost Brown Todd LLC Whitsitt Nooning & Kruse, P.C.
Indianapolis, Indiana Lebanon, Indiana
ATTORNEYS FOR APPELLEE
VICHITRA TYAGI
Michael J. Andreoli
Zionsville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Vinita Singh Tyagi, February 18, 2020
Appellant-Petitioner, Court of Appeals Case No.
19A-DR-607
v. Appeal from the Boone Superior
Court
Vichitra Tyagi, The Honorable Matthew C.
Appellee-Respondent; Kincaid, Judge
Trial Court Cause No.
Vijai and Sushma Tyagi, 06D01-1610-DR-428
Appellees-Intervenors.
Pyle, Judge.
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Statement of the Case
[1] Vinita Singh Tyagi (“Wife”) appeals the trial court’s order excluding from the
marital estate a company and residence she claims are owned by Vichitra Tyagi
(“Husband”). Wife argues that the trial court erred in finding that Hoosier
Broadband LLC (“HBB”) and a residence located in Zionsville (the “Real
Estate”) are owned by Husband’s parents, Sushma Tyagi (“Sushma”) and Vijai
Tyagi (“Vijai”) (collectively, “Husband’s parents”), and thus are not marital
assets. Concluding that the trial court did not abuse its discretion by finding
that HBB and the Real Estate, which are both titled or owned by Husband’s
parents, are not marital assets and to be excluded from the marital estate, we
affirm the trial court’s judgment.
[2] We affirm.
Issue
Whether the trial abused its discretion when it found that
property titled or owned by Husband’s parents were not marital
assets.
Facts
[3] Husband and Wife married on September 21, 2007. Wife filed to dissolve the
marriage in October 2016. In September 2017, Husband’s parents, Sushma and
Vijai, filed a motion to intervene in the dissolution proceedings on the grounds
that Sushma owns HBB and Vijai owns the Real Estate. In the motion,
Husband’s parents argued that the dissolution proceedings may “impair or
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impede [their] ability to protect their interests in their property and their interest
is not adequately represented by existing parties.” (App. Vol. 2 at 17). The trial
court granted the motion to intervene in October 2017.
[4] Husband and Wife then jointly moved to bifurcate the dissolution proceedings
and requested that the trial court determine, apart from the rest of the
proceedings, whether HBB and the Real Estate should be included in the
marital estate as marital assets. The trial court granted the bifurcation and held
the separate hearing in January 2019. At the hearing, the trial court heard
testimony from Wife, Husband, Sushma, Vijai, and a former HBB employee.
[5] Testimony at the hearing revealed that HBB was established in 2004 by
Husband and two non-parties, Matt Campbell and James Hessman
(“Hessman”). Husband prepared the LLC Agreement and was listed as the
“President and Chief Executive Officer” and “Chief Financial Officer and
Secretary[.]” (Vinita’s Ex. F). In 2005, after suffering some financial
difficulties and in an effort to avoid potential conflicts with his then-employer,
Husband transferred his seventy-five percent (75%) ownership interest in HBB
to Sushma. Sushma did not pay Husband to acquire his interest in HBB and
there is no written agreement evidencing the transfer of ownership. Husband
continued his employment at HBB in his previous roles, and he also became the
Chief Technology Officer.
[6] Around the time that Husband and Wife were married in 2007, Wife began
helping Husband with HBB and eventually became HBB’s Chief Operating
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Officer. As part of her duties, she assisted HBB in obtaining a line of credit
from Chase Bank (“Chase LOC”) in 2008. Wife testified that she first became
aware that HBB was owned by Sushma while assisting with the Chase LOC.
Wife explained that after she and Husband had met with a banker, prepared the
necessary financial documents, and obtained approval for the loan, Husband
informed her that Sushma’s signature would be required because HBB “was
technically under [his] mom’s name.” (Tr. Vol. 2 at 162). After HBB obtained
the Chase LOC, Wife told Husband to ask his mother to have HBB’s ownership
transferred to reflect him as the owner. Husband complied, and Sushma
refused Husband’s request. Subsequent requests to transfer ownership were
also denied, and Sushma testified that she never represented that she would
ever transfer ownership to Husband. As a result, Husband and Wife began
purchasing real estate in India in their names jointly.
[7] Hessman left HBB in 2008 and later filed suit against the company in 2011,
claiming an interest in HBB. Hessman’s claim was settled in 2012 for $75,000.
As a result of the settlement, Sushma acquired 100 percent (100%) of the
ownership interest in HBB, as reflected in subsequent business documents and
tax returns. Wife testified that she was aware of Hessman’s litigation and that
she gave a deposition in connection with the dispute.
[8] Sushma acknowledged that she was not familiar with the financial affairs and
that her son had taken the lead role in that area. She further explained that she
has no control over Husband’s salary stating that, “he just told me. He
decide[s].” (Tr. Vol. 2 at 109). As a result, Husband and Wife have enjoyed all
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of the financial benefits of HBB. Their salaries varied from year-to-year
depending on HBB’s annual profitability. Sushma and Vijai have reaped no
financial benefits and instead have an “emotional stake” in “seeing [Husband]
succeed and seeing the business succeed as well[.]” (Tr. Vol. 2 at 128).
[9] The testimony also revealed that in 2009, Vijai purchased the Real Estate on the
advice of his son who was looking for a business location and residence.1 In
order to fund the down payment, Vijai contributed $60,000 and borrowed
another $60,000 from Husband. Vijai and Husband did not execute a note to
evidence the contribution by Husband. In 2012, the Real Estate’s mortgage was
refinanced and Vijai contributed $11,000 and borrowed $11,000 from Husband
to put towards the refinance.2 This second contribution by Husband was also
not reduced to writing. Vijai is the only obligor on the mortgage loan, and the
real estate taxes and homeowner insurance for the Real Estate are also in Vijai’s
name. Similar to the ownership of HBB, Wife desired to have the Real Estate
transferred to reflect Husband as the owner. She made several requests to
Husband, who in turn asked his father to convey the Real Estate to him. Vijai
denied the requests and testified that he never represented to Husband or Wife
that he would convey title to the Real Estate to the couple.
1
Testimony revealed that the Real Estate was used primarily as a residence for Wife, Husband, and
Husband’s parents. HBB operated out of two rooms, and Vijai received rent from the company in the
amount of $4,900 per month, which was sufficient to cover the mortgage, insurance, and taxes. There was
no written lease agreement between Vijai and HBB regarding the use of space or the monthly payments.
2
The parties do not dispute that the payments made to Vijai to assist in the purchase and refinance of the
Real Estate, totaling $71,000, were loans that remain unpaid and collectively are a marital asset.
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[10] At the conclusion of the hearing, the parties agreed that they would not make
final oral arguments. Rather, with the trial court’s permission, the parties
submitted post-trial briefs. In Wife’s post-trial brief, she suggested that
Husband fraudulently transferred his interest in HBB to Sushma and argued
that: (1) HBB’s corporate form has been so disregarded that it is appropriate to
consider HBB as Husband’s alter ego; and (2) that HBB is the true owner of the
Real Estate and, therefore, both should be considered marital assets.
Thereafter, the trial court found that “HBB and the Real Estate are not marital
assets and rather are property of [Sushma and Vijai][.]”3 (App. Vol. 2 at 13).
Wife now appeals.
Decision
[11] Wife argues that the trial court erred by finding that HBB and the Real Estate
are not marital assets and excluding them from the marital estate.4 Husband
3
The trial court entered the judgment as a final judgment.
4
Wife also claims that HBB was Husband’s alter ego, and, therefore, the company should be considered a
marital asset. In support, she relies on a Nebraska Supreme Court decision that held that “[w]hen a
corporation is or becomes the mere alter ego, or business conduit, of a person, it may be disregarded.”
Medlock v. Medlock, 642 N.W.2d 113, 124 (Neb. 2002). The Medlock court applied an “alter ego” doctrine to a
divorce action in which the husband was the president of a nonprofit religious corporation. The Nebraska
court reasoned that equity demanded the inclusion of the nonprofit corporation’s assets in the distribution of
the parties’ marital estate. The record showed that the husband made extensive personal use of corporate
funds and assets, and he carried on personal dealings in the name of the corporation. Additionally, the
husband regularly purchased goods and services in the corporate name for his family’s personal use. In
reaching its decision, the Medlock court explained that the parties owned no personal property in their own
names because “all property that would ordinarily have been acquired during their 28-year marriage was
instead acquired in the name of the [nonprofit].” Id. at 125.
There is no dispute that Husband and Wife benefited greatly from Husband’s parents’ extreme generosity.
Here, the testimony revealed that Husband and Wife both received an income while working at HBB.
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counters that the trial court correctly found that HBB and the Real Estate are
owned by Sushma and Vijai and, therefore, not marital assets. We agree with
Husband.
[12] Neither party requested special findings and the court made no findings sua
sponte. In the absence of special findings, we apply a general judgment standard
of review. Perdue Farms, Inc. v. Pryor, 683 N.E.2d 239, 240 (Ind. 1997). Under
this standard, we presume that the court correctly followed the law, and we do
not reweigh the evidence or reassess the credibility of witnesses. Id. We will
affirm if the judgment is “sustainable upon any theory consistent with the
evidence.” Id.
[13] It is well-settled that in a dissolution action, all marital property, whether
owned by either spouse before the marriage, acquired by either spouse after the
marriage and before final separation of the parties, or acquired by their joint
efforts, goes into the marital pot for division. IND. CODE § 31-15-7-4(a);
Falatovics v. Falatovics, 15 N.E.3d 108, 110 (Ind. Ct. App. 2014). For purposes
of dissolution, property means “all the assets of either party or both parties[.]”
I.C. § 31-9-2-98. This “one pot” theory ensures that all assets are subject to the
trial court’s power to divide and award. Hill v. Hill, 863 N.E.2d 456, 460 (Ind.
Significantly, Wife testified that as a result of Sushma’s denials to transfer ownership of HBB to Husband, the
couple purchased properties in India in their names jointly. Additionally, testimony indicated that Husband
and Wife own a home in Illinois. Unlike in Medlock where there was an inadequate marital estate, here, the
evidence reveals otherwise. Thus, we are unpersuaded by Medlock and its analysis.
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Ct. App. 2007). The division of marital assets, including a determination as to
whether an asset is a marital asset, is within the trial court’s discretion.
Antonacopulos v. Antonacopulos, 753 N.E.2d 759, 760 (Ind. Ct. App. 2001). This
court will reverse the determination of a trial court only if that discretion is
abused. Id. An abuse of discretion occurs when the trial court’s decision is
clearly against the logic and effect of the facts and circumstances before the
court. Id.
[14] Specifically, Wife contends that “[Husband] owns HBB, and HBB in turn owns
the Real Estate” and, therefore, they are both marital assets. (Vinita’s Br. 20).
She directs us to Sovern v. Sovern for the proposition that “[b]are legal title alone
does not eliminate either the property or the investment thereon from being a
part of the marital estate to be considered by the Court in arriving at an
equitable division.” Sovern v. Sovern, 535 N.E.2d 563, 565 (Ind. Ct. App. 1989),
reh’g denied. In Sovern, the property in question consisted of two parcels of real
estate, a marital residence, and an automobile shop. The facts supporting the
judgment reveal that while the husband’s parents held legal title to the parcels,
the husband and wife used marital resources to construct the residence. The
husband and wife also held themselves out as the owners of the residence, the
house was insured in both their names, and the homeowner’s policy did not
reflect an insurable interest held by the parents. The parents, who were not
joined as parties to the dissolution proceeding, did not claim an interest in the
real property and were willing to deed the property to the couple. Based on
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these facts, this Court affirmed the trial court’s inclusion of the property in the
marital estate because husband and wife had a vested interest in the real estate.
[15] Here, however, Wife does not argue on appeal that she or Husband possess a
vested interest in HBB or the Real Estate. Rather, she argues that HBB and the
Real Estate are divisible marital assets because they are owned by Husband. As
such, the instant case is distinguishable from Sovern. See In re Marriage of Dall,
681 N.E.2d 718, 722 (Ind. Ct. App. 1997) (limiting the Sovern decision to the
specific facts of the case and concluding that “an equitable interest in real
property titled in a third-party, although claimed by one or both of the divorcing
parties, should not be included in the marital estate.”); see also Vadas v. Vadas,
762 N.E.2d 1234, 1236 (Ind. 2002) (distinguishing Sovern and Dall and
concluding that “[t]he holding of Dall promotes predictability, consistency and
efficiency by excluding ‘remote and speculative’ interests from the marital
estate.”).
[16] Our review of the evidence reveals that Sushma and Vijai intervened in the
dissolution proceeding to assert their respective ownership interests in HBB and
the Real Estate. Testimony at the hearing revealed that HBB was established in
2004. Sushma acquired Husband’s interest in the company in 2005, which was
two years prior to Husband and Wife’s marriage in 2007. Following the
settlement of Hessman’s lawsuit in 2012, Sushma then acquired 100 percent
ownership of the company, which is reflected in the company’s business and
tax documents. In addition, Wife acknowledged that she had asked Husband
to persuade his mother to transfer ownership of HBB to him, which Sushma
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denied. Given the evidence before the trial court, it found that HBB was owned
by Sushma.
[17] Similarly, Vijai acquired the Real Estate, which was deeded in his name only,
in August 2009. Vijai paid the mortgage, real estate taxes, and homeowner
insurance, which were also in his name. Moreover, Wife testified that she did
not know of anything evidencing that Husband had an ownership interest in the
Real Estate. This was confirmed by Vijai who testified that he never
represented that he would convey title of the Real Estate to Husband.
[18] Accordingly, Wife has failed to show that Husband owns HBB and the Real
Estate. Thus, we conclude that the trial court did not abuse its discretion in
finding that HBB and the Real Estate are owned by Susma and Vijai and,
therefore, were not marital assets. See Estudillo v. Estudillo, 956 N.E.2d 1084,
1091 (Ind. Ct. App. 2011) (“[A] trial court may not distribute property not
owned by the parties.”), reh’g denied; see also Nicevski v. Nicevski, 909 N.E.2d 446,
449 (Ind. Ct. App. 2009) (trial court erred in including marital home in marital
estate where husband and wife lived in marital home legally titled to husband’s
parents, husband and wife disputed origin of money used to purchase the home,
and husband’s parents were not joined as necessary nonparties), trans. denied.
Accordingly, we affirm the trial court’s judgment.5
5
To the extent that Wife argues that the trial court failed to void the 2005 fraudulent transfer of Husband’s
interest in HBB to Sushma, we conclude that Wife has waived appellate review of this argument. As we
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[19] Affirmed.
Robb, J., and Mathias, J., concur.
have previously explained, any grounds not raised in the trial court are not available on appeal. Grace v.
State, 731 N.E.2d 442, 444 (Ind. 2000), reh’g denied. Below, Wife did not argue that the 2005 transfer of
Husband’s interest was fraudulent. While she made a passing reference in the post-trial brief that “[t]he case
at hand reflects a fraudulent transfer of interest[,]” she did not further develop the argument. (App. Vol. 2 at
102). For these reasons, we find her argument on appeal to be waived. See Showalter v. Town of Thorntown,
902 N.E.2d 338, 342 (Ind. Ct. App. 2009) (explaining that “[t]he rule of waiver in part protects the integrity
of the trial court; it cannot be found to have erred as to an issue or arguments that it never had an opportunity
to consider. Conversely, an intermediate court of appeals, for the most part, is not the forum for the initial
decisions in a case.”), trans. denied.
Waiver notwithstanding, Wife’s claim fails. Her reliance on Coak v. Rebber is misplaced. 425 N.E.2d 197
(Ind. Ct. App. 1981), reh’g denied. She contends that the Coak court “confirmed [that] there are circumstances
in the divorce context that an Indiana court may disregard the function of [the corporation] as being a legal
entity and conclude, in order to prevent fraud and injustice, that such a separate legal entity did not exist.”
(Vinita’s Br. 16). (quotation and citation omitted) (emphasis added). However, in Coak, Coak’s former wife
filed a garnishment action against Coak to collect “arrearages in support payment for the care of the couple’s
six children.” Coak, 425 N.E.2d at 198. In that proceeding, the former wife challenged a transfer of stock
Coak had made to his present wife. Importantly, this Court noted that the transfer was fraudulent because
Coak’s former wife was a creditor at the time of transfer. Here, the transfer of ownership interest occurred
two years before Husband and Wife married, and she has not alleged that she was a creditor at the time of
transfer.
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