Michael W. Palmby v. Karen M Palmby

Jun 04 2014, 9:42 am
FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
BRADLEY L. BANKS CYNTHIA P. HELFRICH
Banks & Brower, LLC Brownsburg, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
MICHAEL W. PALMBY, )
)
Appellant-Petitioner, )
)
vs. ) No. 32A04-1310-DR-506
)
KAREN M PALMBY, )
)
Appellee-Respondent. )
APPEAL FROM THE HENDRICKS SUPERIOR COURT
The Honorable Stephenie LeMay-Luken, Judge
Cause No. 32D05-0801-DR-8
June 4, 2014
OPINION - FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellant-Petitioner, Michael W. Palmby (Michael), appeals the trial court’s
denial of his Verified Petition for Revocation of Spousal Maintenance.
We affirm.
ISSUE
Michael raises three issues which we consolidate and restate as: Whether the trial
court abused its discretion when it denied Michael’s request to revoke spousal
maintenance which the parties had agreed upon and the trial court had incorporated in the
final divorce decree.
FACTS AND PROCEDURAL HISTORY
Michael and Appellee-Respondent, Karen M. Palmby (Karen), were married on
June 13, 1981 and divorced on May 2, 2008. During the marriage, three children were
born, two of whom were emancipated at the time of the divorce. The youngest child was
of college age and not emancipated for purposes of college expenses. During the course
of their marriage, Michael and Karen ran a family business where they both worked.
Karen had worked at a daycare center for a short time, but mainly stayed home with the
children.
The Agreement of Property Settlement entered into by Michael and Karen at the
time of the divorce contained a provision for spousal maintenance in favor of Karen,
which read
9. Spousal Maintenance
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a. Purpose and Intent of this Article: It is the mutual desire of the parties to
provide a continuing measure of income for Wife, receiving party, after the
dissolution of the parties’ marriage. The payments made by Husband,
paying party, are intended to qualify as contractual alimony as that term is
defined in section 71(a) of the Internal Revenue Code of 1986 (the “Code”),
as amended, and are intended to be includable in the gross income of the
receiving party under section 71(a) of the Code and deductible by paying
party under section 215(a) of the Code. All provisions of this article will be
interpreted in a manner consistent with that intention.
b. Terms, Conditions and Contingencies:
1. Payments. Husband shall make and pay regular monthly alimony
payments in the amount of one thousand five hundred dollars for
twenty-four (24) months.
2. Term. The payments shall be for a period of twenty-four months
commencing per paragraph 9(b)(3) with the last payment being on
the 24th month.
3. [] Husband agrees to make spousal maintenance payments in the
amount of One Thousand Five Hundred Dollars ($1,500.00) per
month for a period of 2 years, or twenty-four (24) months, for a sum
of Thirty Six Thousand Dollars ($36,000.00).
***
e. The payments shall be considered spousal maintenance as Wife has been
out of the workforce for a period of time and needs additional time to
rehabilitate herself, finding additional training to reenter the workforce.
(Appellant’s App. pp. 15-16).
At the time of the entry of the agreement, May 2, 2008, Michael was working as a
realtor, earning approximately $120,000 per year. Over time, Michael’s income
diminished to the point where Michael could no longer afford to rent his apartment and,
in 2009, he moved in with his girlfriend. In 2012, Michael’s yearly earnings had shrunk
to $1,200 and in 2013, Michael terminated his real estate license. After resigning as a
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realtor, Michael began working as a call center employee for RCI in Indianapolis,
receiving an hourly wage of $9.45. He made an approximate amount of $50,000 in 2013.
During the pendency of the divorce, Karen became employed at Kohl’s
Department Store. Shortly thereafter, she broke her arm, causing her to leave her
employment for a while. Karen resumed her position in January 2009 and has since
received a promotion, earning $15.36 per hour.
Since the parties divorced in 2008, Michael has failed to make the maintenance
payments anticipated by the parties’ settlement agreement. On October 29, 2009, in
response to Michael not making full payments, Karen filed a Verified Petition for
Contempt. On December 16, 2009, the trial court approved the parties’ agreed entry
showing that Michael had paid $7,000.00 in maintenance payments and continued to owe
a total of $29,500.00 in payments. As a result, the trial court ordered Michael’s pay
garnished at an amount of 10% until paid in full. After this agreed entry, Michael made
another $5,333.64 in payments to Karen, with his last payment in September of 2012.
On August 5, 2013, Karen filed another Verified Petition for Contempt. That
same day, Michael filed a Verified Petition for Revocation of Spousal Maintenance,
requesting the trial court to revoke the spousal maintenance provisions of the settlement
agreement because of a substantial and continuing change in his circumstances. On
September 17, 2013, the trial court conducted a hearing on the parties’ Petitions. That
same day, the trial court issued its Order, finding Michael in contempt and denying his
Petition for Revocation of Spousal Maintenance but modifying the payment schedule.
The trial court concluded, in pertinent part, that
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3. Husband owes $24,299.36 in spousal maintenance to Wife.
4. Husband had a significant reduction in income while employed as a real
estate agent.
5. On December 17, 2009, the Parties entered into an Agreed Entry that
addressed the spousal maintenance issue wherein Husband’s wages would
be garnished at a lesser amount than $1,500.00 per month. Husband
changed employment twice without providing his work information to Wife
so she could have the garnishment order amended.
6. Husband testified that 2008 and 2009 were difficult financial years due
to the real estate market. However, Husband entered into the property
settlement agreement in the middle of 2008.
7. Wife relied on receiving these monthly funds from Husband.
8. Husband cannot reasonably afford to pay $1,500.00 per month.
9. Husband had the funds to make payments towards spousal maintenance
in 2013 but failed to do so.
10. The parties entered into the property settlement agreement while
represented by counsel.
11. If Wife knew Husband was not going to pay over $24,000.00 of
spousal maintenance, it is reasonable and logical to believe other parts of
the agreement would have been altered.
12. The Court finds that Husband is in contempt for failing to make a
continued good faith effort to make spousal maintenance payments.
13. The Court denied Husband’s Petition to Revoke Spousal Maintenance.
14. The Court modified the payment schedule. Husband is [o]rdered to
pay $200.00 per paycheck towards spousal maintenance. Husband’s
attorney shall prepare an Income Withholding Order for the Court’s
approval.
(Appellant’s App. pp. 9-10).
Michael now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
Michael contends that the trial court abused its discretion in denying his Petition to
Revoke Spousal Maintenance. Specifically, he asserts that the substantial and continuing
change in his employment and financial circumstances warrants the revocation of the
maintenance award. As we consider Michael’s argument, we note that the trial court’s
order is a general judgment entered with findings. Sua sponte findings control only as to
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the issues they cover and a general judgment will control as to the issues upon which
there are no findings. Zan v. Zan, 820 N.E.2d 1284, 1287 (Ind. Ct. App. 2005). A
general judgment entered with findings will be affirmed if it can be sustained on any
legal theory supported by the evidence.
There are two ways in which a party to a divorce may be obligated to make
spousal maintenance payments. Either the parties may provide for maintenance in a
negotiated settlement agreement or the court may order maintenance payments in certain
limited circumstances. Voigt v. Voigt, 670 N.E.2d 1271, 1275-76 (Ind. 1996). A trial
court may award only “three, quite limited” varieties of post-dissolution maintenance:
spousal incapacity maintenance, caregiver maintenance, and rehabilitative maintenance.
Id. at 1276. A court may order rehabilitative maintenance for no more than three years if
it finds that a spouse needs support while acquiring sufficient education or training to get
an appropriate job. See I.C. § 31-15-7-2(3). Additionally, the parties “may themselves
provide for maintenance in settlement agreements where the court could not otherwise
order it.” Voigt, 670 N.E.2d at 1277. Where the parties have contractually agreed to
spousal maintenance, our supreme court has made it clear that courts should exercise
authority to review settlement agreements with “great restraint,” so as not to interfere
with contractual freedom. Id. Indeed, the Voigt court determined that “[w]here a court
had no authority to impose the kind of maintenance award that the parties forged in a
settlement agreement, the court cannot subsequently modify the maintenance obligation
without the consent of the parties.” Id. at 1279-80. Subsequently, in Zan, this court
concluded, as a logical outgrowth of Voigt, that where a settlement agreement rested on a
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ground on which the trial court could have ordered the maintenance in the absence of an
agreement, a trial court may modify the agreement. Zan, 820 N.E.2d at 1288. Thus, the
propriety of the trial court’s order modifying the maintenance in the instant case depends
entirely upon the designation of the original award of maintenance it purports to
modify—and to which the parties acquiesced in the settlement agreement.
Casting the spousal maintenance as rehabilitative maintenance, Michael contends
that because Karen re-entered the workforce instead of seeking vocational training, the
maintenance is not used as intended and should be revoked. Rehabilitative maintenance
may not be awarded for more than three years from the date of the final decree and is
intended to help a spouse “acquir[e] sufficient education or training to enable the spouse
who is seeking maintenance to find appropriate employment.” I.C. §31-15-7-2(3).
Paraphrazing the language of the statute, the settlement agreement provided Karen with
spousal maintenance for a period of twenty-four months, to “rehabilitate herself, finding
additional training to reenter the workforce.” (Appellant’s App. p. 16). From the
evidence presented during the modification hearing, we readily glean that even though
Karen conceded that the spousal maintenance payments were intended to allow her to
“obtain additional training or education,” she allocated Michael’s infrequent payments
towards the payment of medical bills. She admitted that “had maintenance been regularly
paid as was contemplated in the [p]roperty [s]ettlement [a]greement,” she would have
“sought other employment, other training to gain employment.” (Transcript p. 16).
Therefore, because the settlement agreement rested on a ground on which the trial
court could have ordered the maintenance in the absence of an agreement, the trial court
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had the authority to modify the instant agreement with respect to rehabilitative
maintenance.
It is worth noting that the parties agreed to spousal maintenance for a period of
twenty-four months, i.e., June 1, 2008 to May 1, 2010. In December 2009,
approximately nineteen months into the twenty-four month period, Michael entered into
an agreed entry, acknowledging he was in contempt for failure to make the payments as
directed and the trial court modified the payment terms by garnishing his pay at an
amount of 10% until paid in full. In other words, at the time the spousal maintenance
terms were in effect, Michael did not request a modification based on a substantial and
continuing change in circumstances, nor did he submit evidence reflecting this change
during the relevant period.
Currently, although the spousal maintenance terms are no longer in effect,
Michael’s failure to pay regularly has resulted in an accrued deficit of $24,299.36.
Because the period during which the rehabilitative maintenance had to be paid has ended,
the terms of the maintenance can no longer be modified; rather, only the payment terms
of the accrued amount are modifiable. In the instant disputed modification, the trial
court, finding that Michael had the funds to make payments towards the accrued spousal
maintenance amount in 2013 but failed to do so, modified the payment terms, ordering
him to pay $200.00 per paycheck towards the accumulated maintenance.
Mindful of the “great restraint” which we should exercise in reviewing settlement
agreements, we cannot say that the trial court abused its discretion in denying Michael’s
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request to revoke the spousal maintenance and instead modified the payment terms of the
accumulated rehabilitative maintenance. See Voigt, 670 N.E.2d at 1277.
CONCLUSION
Based on the foregoing, we conclude that the trial court did not abuse its discretion
by denying Michael’s Petition to Revoke Spousal Maintenance.
Affirmed.
ROBB, J. and BRADFORD, J. concur
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