Brad Barton v. Alexandra Barton , 47 N.E.3d 368 ( 2015 )

Dec 07 2015, 8:28 am
ATTORNEY FOR APPELLANT
Bryan L. Ciyou
Ciyou and Dixon, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Brad Barton, December 7, 2015
Appellant-Petitioner, Court of Appeals Case No.
32A04-1412-DR-550
v. Appeal from the Hendricks Circuit
Court
Alexandra Barton, The Honorable Jeffrey V. Boles,
Appellee-Respondent Judge
The Honorable Daniel F. Zielinski,
Judge
Trial Court Cause No.
32C01-1109-DR-641
Crone, Judge.
Case Summary
[1] In a consolidated appeal, Brad Barton (“Husband”) appeals the trial court’s
decree dissolving his marriage to Alexandra Barton (“Wife”) and the trial
court’s subsequent order denying his motion for relief from judgment on the
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basis of fraud or misrepresentation. 1 On appeal, Husband contends that each of
the appealed orders constitutes an abuse of discretion. We conclude that the
trial court did not abuse its discretion in denying Husband’s motion for relief
from judgment and we affirm that order in its entirety. Regarding the
dissolution decree, we conclude that the trial court did not abuse its discretion
in awarding incapacity spousal maintenance and attorney’s fees to Wife.
However, we conclude that the trial court erred in dividing the marital estate,
namely in valuing and dividing Husband’s pension and deferred tax savings
plan. Therefore, we affirm in part, reverse in part, and remand with
instructions.
Facts and Procedural History
[2] Husband and Wife were married on April 12, 2005. No children were born of
the marriage. Husband filed his petition for dissolution of marriage on
September 1, 2011, and Wife filed her counter-petition for dissolution on
October 20, 2011. Following numerous continuances and extensions of time, a
final dissolution hearing was held on October 2, 2014. The dissolution court
entered its decree on October 31, 2014. In addition to dividing the marital
property, which primarily included Husband’s pension and deferred tax savings
plan, the dissolution court found Wife to be physically incapacitated to the
extent that her ability to support herself is materially affected. Accordingly, the
1
When referring to portions of the trial transcripts, we will cite to the final dissolution hearing transcript as
“Dissolution Tr.” and the motion for relief from judgment hearing transcript as “60(B) Tr.”
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court ordered Husband to pay spousal maintenance in the amount of $1500 per
month and to secure COBRA coverage for Wife until she becomes eligible for
Medicare. 2 The dissolution court also found that Husband caused Wife to
incur extraordinary attorney’s fees by his failures to comply with discovery,
switching attorneys, and delaying the case. Thus, the court ordered Husband to
pay Wife’s attorney’s fees in the amount of $24,364.18.
[3] Husband filed his notice of appeal on December 1, 2014. Shortly thereafter,
Husband filed a “Motion to Stay Order on Dissolution Decree” pending
appeal. Specifically, Husband requested that the dissolution court stay its order
regarding the award of spousal maintenance and attorney’s fees, as well as the
division of Husband’s pension and deferred tax savings plan. The dissolution
court granted the motion to stay regarding the division of Husband’s retirement
benefits, but denied the motion regarding the award of spousal maintenance
and attorney’s fees.
[4] Wife remarried on December 12, 2014. On April 21, 2015, Husband filed his
petition for leave to file an Indiana Trial Rule 60(B) motion for relief from
judgment in the dissolution court and requested that we remand his appeal
pending that ruling. Our motions panel granted Husband’s petition and
remanded the matter to the dissolution court. Husband subsequently filed his
Trial Rule 60(B) motion challenging the dissolution court’s award of spousal
2
The record indicates that Wife has since rescinded her request for Husband to provide COBRA coverage.
60(B) Tr. at 65.
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maintenance and attorney’s fees to Wife. Following a hearing, the trial court
issued its findings of fact, conclusions thereon, and order denying Husband’s
motion for relief from judgment. Husband then filed his amended notice of
appeal, and this Court assumed jurisdiction over a consolidated appeal of both
the dissolution decree and the trial court’s order on the motion for relief from
judgment. 3
Discussion and Decision
[5] We begin by noting that Wife did not file an appellee’s brief. When an appellee
fails to submit a brief, we do not undertake the burden of developing appellee’s
arguments. K.L. v. E.H., 6 N.E.3d 1021, 1029 (Ind. Ct. App. 2014). Instead,
we apply a less stringent standard of review and may reverse if the appellant
establishes prima facie error. Id. “Prima facie error in this context is defined
as, at first sight, on first appearance, or on the face of it.” Falatovics v. Falatovics,
15 N.E.3d 108, 110 (Ind. Ct. App. 2014) (citation omitted). With this in mind,
we will address Husband’s appeal from each order in turn.
3
We note that the Honorable Jeffrey V. Boles presided over the dissolution proceedings and we will refer to
“the dissolution court” when referring to those proceedings. The Honorable Daniel F. Zielinski presided
over the motion for relief from judgment proceeding and we will refer to “the trial court” when referring to
that proceeding.
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Section 1 – The trial court did not abuse its discretion in
denying Husband’s motion for relief from judgment regarding
the dissolution court’s incapacity spousal maintenance award.
[6] We first address Husband’s appeal from the trial court’s denial of his motion for
relief from judgment. Specifically, Husband asserts that the trial court abused
its discretion in denying his motion for relief from the dissolution court’s award
to Wife of incapacity spousal maintenance on the basis of fraud or
misrepresentation. 4 Indiana Trial Rule 60(B) provides in relevant part, “On
motion and upon such terms as are just the court may relieve a party … from a
judgment … for the following reasons: … (3) fraud (whether heretofore
denominated as intrinsic or extrinsic), misrepresentation, or other misconduct
of an adverse party.” The burden is on the moving party to establish the ground
for relief under Trial Rule 60(B). In re Paternity of P.S.S., 934 N.E.2d 737, 740
(Ind. 2010). While we will discuss the actual merits of the incapacity
maintenance award later in our opinion, Trial Rule 60(B) motions address only
the procedural, equitable grounds for justifying relief from the legal finality of a
final judgment, not the legal merits of the judgment. Id.[7] We review the trial court’s ruling on a motion for relief from judgment using an
abuse of discretion standard. Speedway SuperAmerica, LLC v. Holmes, 885
4
Based upon Husband’s statement of the issues and the first argument section of his brief, it does not appear
that he is appealing the trial court’s denial of his motion for relief from judgment regarding the dissolution
court’s award of attorney’s fees. He does briefly mention his motion for relief coupled with the attorney’s
fees issue in a subsequent section of his brief, and we will likewise address it later in our opinion as we deem
appropriate.
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N.E.2d 1265, 1270 (Ind. 2008). An abuse of discretion occurs only when the
trial court’s action is clearly erroneous, that is, against the logic and effect of the
facts before it and inferences drawn therefrom. P.S.S., 934 N.E.2d at 741.
Moreover, where as here, the trial court enters special findings and conclusions
pursuant to Indiana Trial Rule 52(A), we apply a two-tiered standard of review.
Stonger v. Sorrell, 776 N.E.2d 353, 358 (Ind. 2002). First we determine if the
evidence supports the findings, and second whether the findings support the
judgment. Id. The trial court’s findings and conclusions will be set aside only if
clearly erroneous. Id. We neither reweigh the evidence nor reassess witness
credibility. Id. Instead, we must accept the ultimate facts as stated by the trial
court if there is evidence to sustain them. Id.[8] “A party making a claim under Trial Rule 60(B)(3) and alleging fraud or
misrepresentation must demonstrate that: (1) the opposing party knew or
should have known from the available information that the representation is
false, and (2) the misrepresentation was made with respect to a material fact
which would change the trial court’s judgment.” Seleme v. JP Morgan Chase
Bank, 982 N.E.2d 299, 310-11 (Ind. Ct. App. 2012) (citation and quotation
marks omitted), trans. denied (2012). In his motion for relief, Husband asserted
that he had discovered “new material evidence” that during the final dissolution
hearing, Wife misrepresented her “financial needs,” and that such
misrepresentation of material fact affected the dissolution court’s judgment
awarding incapacity spousal maintenance to Wife. Appellant’s App. at 161,
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166. 5 Specifically, Husband claimed that Wife was residing with and being
financially supported by her then-boyfriend (now husband), that she misled the
dissolution court in stating that she did not intend to marry or continue residing
with her boyfriend, and that Social Security Disability (“SSDI”) was her only
source of income. Husband points to Wife’s post-dissolution remarriage to
support his claim that Wife misled the court.
[9] During the hearing on the motion for relief from judgment, Wife confirmed her
earlier testimony that, at the time of the final dissolution hearing, she did not
intend to marry her boyfriend, that she intended to move out of his residence
and obtain her own housing, and that SSDI was her only source of income. In
denying Husband’s motion for relief, the trial court found in relevant part,
7. While it might be true that [Wife’s] testimony was “artful[,]”
Court cannot find in the record that [Wife] misrepresented that
she received any other “income” than that from the Social
Security Administration.
Appellant’s App. at 25. It is the trial court’s prerogative to weigh the evidence
and assess witness credibility, and we will not second-guess that determination
5
We note that, at the trial court level, Husband appeared confused as to which subsection of Indiana Trial
Rule 60(B) applied to his motion for relief. When a request for relief is based on newly discovered evidence
pursuant to Trial Rule 60(B)(2), the appellant must show, among other things, that evidence could not have
been discovered before trial by the exercise of due diligence. State Farm Fire & Cas. Co. v. Radcliff, 18 N.E.3d
1006, 1013 (Ind. Ct. App. 2014), trans. denied (2015). Trial Rule 60(B)(3) motions, on the other hand, are
based on fraud on the court, so long as it is chargeable to an adverse party and had an adverse effect on the
moving party. Id. In his motion, Husband referred both to the “new evidence” language of subsection (B)(2)
and the “fraud” and “misrepresentation” language of subsection (B)(3). However, throughout his brief on
appeal, he appears to rely solely on the fraud and misrepresentation language of Trial Rule (60)(B)(3).
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on appeal. Stonger, 776 N.E.2d at 358. We agree with the trial court that
Husband failed to carry his burden of proving that, during the dissolution
proceedings, Wife misrepresented any material fact to the dissolution court
regarding her financial resources which would have changed the court’s
judgment. Indeed, the evidence supports the trial court’s finding that SSDI was
Wife’s only source of income at the time of dissolution and, in turn, this finding
supports the trial court’s denial of relief on the basis of fraud or
misrepresentation.
[10] While we acknowledge Husband’s frustration with Wife’s remarriage
approximately six weeks after dissolution, that does not alter what Wife’s (not
her then-boyfriend’s) financial resources were at the time of dissolution. The
crux of Husband’s claim can be summarized essentially as this: Wife lied about
her future intent to remarry, and the dissolution court would not have awarded
her incapacity spousal maintenance if she had not misrepresented that intent.
First, the entirety of Husband’s argument is an invitation for this Court to
reassess Wife’s credibility, which we will not do. Moreover, we note that, as a
general matter, a claim of actual fraud cannot be based on representations of
future conduct, on broken promises, or on representations of existing intent that
are not executed. Wallem v. CLS Indus., Inc., 725 N.E.2d 880, 889 (Ind. Ct.
App. 2000). These are exactly the types of representations complained about by
Husband, and such complaint is misplaced in a motion for relief from judgment
premised upon fraud or misrepresentation.
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[11] Based upon the record before us, we cannot say that the trial court clearly erred
in rejecting Husband’s contention that Wife misrepresented any material fact
regarding her financial resources which would have changed the dissolution
court’s decision to award incapacity spousal maintenance. Thus, the trial court
did not abuse its discretion in denying Husband’s motion for relief from
judgment, and we affirm the trial court’s order.
Section 2 – The dissolution court did not abuse its discretion
in awarding Wife incapacity spousal maintenance.
[12] Turning now to the dissolution decree, Husband contends that the dissolution
court abused its discretion in awarding Wife incapacity spousal maintenance.
A trial court’s power to award spousal maintenance is wholly within its
discretion. Spivey v. Topper, 876 N.E.2d 781, 784 (Ind. Ct. App. 2007). The
presumption that the court correctly applied the law in making an award of
spousal maintenance is one of the strongest presumptions applicable to our
consideration of a case on appeal. Id. We will reverse a trial court’s decision to
award spousal maintenance only when the decision is clearly against the logic
and effect of the facts and circumstances of the case. Clokey v. Bosley Clokey, 956
N.E.2d 714, 718 (Ind. Ct. App. 2011), aff’d on reh’g, 957 N.E.2d 1288.
[13] Indiana Code Section 31-15-7-1 provides that the trial court may order spousal
maintenance as part of its disposition of marital property, if the court makes
certain findings including,
(1) If the court finds a spouse to be physically or mentally
incapacitated to the extent that the ability of the incapacitated
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spouse to support himself or herself is materially affected, the
court may find that maintenance for the spouse is necessary
during the period of incapacity, subject to further order of the
court.
Ind. Code § 31-15-7-2. With regard to such incapacity maintenance, our
supreme court has observed,
Where a trial court finds that a spouse is physically or mentally
incapacitated to the extent that the ability of that spouse to
support himself or herself is materially affected, the trial court
should normally award incapacity maintenance in the absence of
extenuating circumstances that directly relate to the criteria for
awarding incapacity maintenance.
Cannon v. Cannon, 758 N.E.2d 524, 527 (Ind. 2001). Thus, our supreme court
has made clear that a trial court’s discretion is “limited” regarding whether to
award incapacity maintenance once the court makes the requisite finding
regarding incapacity. Coleman v. Atchison, 9 N.E.3d 224, 229 (Ind. Ct. App.
2014). Once the requisite finding of incapacity has been made, the trial court
should award incapacity maintenance or identify specific extenuating
circumstances directly related to the statutory criteria for awarding such
maintenance that would justify denying the award. Id.[14] Here, the evidence indicates that Wife has been diagnosed with “stiff person’s
syndrome” with the primary symptom of chronic severe muscular pain.
Dissolution Tr. at 59. Wife complains of muscle spasms and falling spells as a
result of her condition. To control the pain, Wife must take narcotic
medications that cause sedation and impaired response. Id. at 61. Wife’s
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doctor opined that her ability to work is materially affected by her condition.
Id. at 60. Wife also testified that she applied for and was approved for SSDI
benefits due to her condition and her resulting inability to work. Based upon
this evidence, the dissolution court found,
[Wife] succeeded in proving, by testimony of Dr. George Elms[ 6]
and the approval by the Social Security Disability and Benefits
that she is entitled to spousal maintenance.… Clearly from the
testimony, [Wife] is physically incapacitated to the extent that
her ability to support herself is material[ly] affected.
Appellant’s App. at 22-23.
[15] The dissolution court found no extenuating circumstances directly related to the
statutory criteria for awarding such maintenance that would justify denying the
award, and there is nothing in the record to convince us that such extenuating
circumstances existed at the time of dissolution. 7 Although Husband asserts
that Wife failed to establish that her incapacity actually prevents her from
working and supporting herself, the dissolution court found to the contrary in
concluding that the evidence presented established that Wife’s ability to support
6
In the transcript, the doctor spells his surname “Elmes.” Dissolution Tr. at 57.
7
As stated earlier, the statutory criteria for awarding incapacity maintenance are: (1) the spouse’s physical or
mental incapacity, (2) which incapacity materially affects the spouse’s self-supporting ability. See Ind. Code §
31-15-7-2(1).
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herself is materially affected. 8 Findings are clearly erroneous only if the record
is devoid of facts or inferences to support them, or if they do not support the
judgment. The record here is not so devoid. The dissolution court did not
abuse its discretion in awarding Wife incapacity spousal maintenance. 9
[16] Husband further posits that the dissolution court failed to consider his ability to
pay Wife $1500 per month in incapacity spousal maintenance, and therefore the
award constitutes an abuse of discretion. We agree that “in determining the
propriety of a maintenance award, the ‘ability of the husband to pay should also
be made to appear.’” Clokey, 957 N.E.2d at 1289 (quoting Rooney v. Rooney, 231
Ind. 443, 445, 109 N.E.2d 93, 94 (1952)), opinion on reh’g. Here, the dissolution
court made specific findings regarding Husband’s substantial weekly earnings
($32.20 per hour for forty hours plus overtime) 10 from his United Parcel Service
employment. Appellant’s App. at 20. Thus, although the dissolution court did
8
As indicated by the dissolution court’s findings, in addition to the medical testimony, Wife’s receipt of
SSDI benefits strongly suggests that she is “incapacitated” for spousal maintenance purposes. See Pohl v.
Pohl, 15 N.E.3d 1006, 1011-12 (Ind. 2014) (noting that the standard for SSDI benefits is “far more exacting
than the incapacity-maintenance standard, which inquires only whether the recipient’s means of self-support
are ‘materially affected.’”).
9
Husband relies heavily on In re Marriage of Gertiser, 24 N.E.3d 521 (Ind. Ct. App. 2015), trans. granted, and
argues that, at the time of dissolution, Wife had “financial resources available to her” both from SSDI and
her then-boyfriend (now husband), and therefore she did not then and does not now (due to her remarriage)
need incapacity maintenance. Appellant’s Br. at 19. This Court’s opinion in Gertiser was recently vacated by
our supreme court and no longer has any precedential or persuasive value. In re Marriage of Gertiser, No.
29S02-1511-DR-643, 2015 WL 6941124 (Ind. Nov. 10, 2015); see Ind. Appellate Rule 58 (Except under
specific circumstances, if transfer is granted, the opinion of the Court of Appeals shall be automatically
vacated). In any event, Husband’s reliance on Gertiser is misplaced as Gertiser involved a motion to modify
and revoke an incapacity spousal maintenance award based upon the financial change in circumstances due
to a remarriage, not the original incapacity maintenance award as is involved here.
10
Although the dissolution court found that Husband earns $32.20 per hour plus overtime, Appellant’s App.
at 20, Husband testified that he gets paid $32.90 per hour plus overtime. Dissolution Tr. at 30, 117.
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not state so explicitly, it clearly considered Husband’s ability to pay the
maintenance award. Husband’s assertion on appeal that he is unable to satisfy
the maintenance award for various reasons despite his income is merely an
invitation for us to reweigh the evidence in his favor, and we will not. A
deferential view of all the evidence presented persuades us that no abuse of
discretion occurred.
Section 3 – The dissolution court did not abuse its discretion
in awarding Wife attorney’s fees.
[17] Husband next contends that the dissolution court abused its discretion in
awarding Wife $24,364.18 in attorney’s fees. Pursuant to Indiana Code Section
31-15-10-1, a trial court may order a party in a dissolution proceeding to pay a
reasonable amount of the other party’s attorney’s fees, after considering the
parties’ resources, their economic condition, their ability to engage in gainful
employment and earn income, and other factors bearing on the reasonableness
of the award. Troyer v. Troyer, 987 N.E.2d 1130, 1142-43 (Ind. Ct. App. 2013),
trans. denied (2013). Misconduct that directly results in additional litigation
expenses may properly be taken into account in the trial court’s decision to
award attorney’s fees. Hendricks v. Hendricks, 784 N.E.2d 1024, 1028 (Ind. Ct.
App. 2003).
[18] The trial court has broad discretion in awarding attorney’s fees. Bessolo v.
Rosario, 966 N.E.2d 725, 733 (Ind. Ct. App. 2012). “Reversal is proper only
where the trial court’s award is clearly against the logic and effect of the facts
and circumstances before the court.” Id. “Further, ‘the trial court need not give
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its reasons for its decision to award attorney’s fees.’” Id. (quoting Thompson v.
Thompson, 811 N.E.2d 888, 905 (Ind. Ct. App. 2004), trans. denied.).
[19] The dissolution court’s award of attorney’s fees to Wife is supported by the
record. The basis for the award is partially Husband’s misconduct. The court
found that Husband caused Wife “to incur extraordinary attorneys’ fees by his
failures to comply with discovery, switching attorneys, and delaying the case.”
Appellant’s App. at 23. Husband concedes that some of these things did occur,
but he claims that Wife was equally if not more responsible for causing any
delays. We again decline Husband’s invitation for us to reweigh the evidence
and reassess witness credibility on this issue. Also, as noted above, the
dissolution court made specific findings regarding the disparity in the parties’
earning abilities, specifically finding that Husband earns $32.20 per hour for a
forty-hour work week ($5152/month) and that Wife has been unemployed due
to her physical incapacity since sometime in 2011. Id. at 21. The court found
that Wife’s only source of income is SSDI of $1491 per month. Thus,
Husband’s monthly income is more than three times that of Wife.
[20] While Husband complains that the dissolution court awarded Wife all of her
attorney’s fees rather than just a portion, we conclude that the extreme disparity
in the parties’ earning abilities and financial resources as shown by the evidence
justifies the award. We cannot say that the dissolution court’s decision to
award Wife $24,364.18 in attorney’s fees is clearly against the logic and effect of
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the facts and circumstances before the court. The dissolution court did not
abuse its discretion. 11
Section Four – The dissolution court erred in valuing and
dividing Husband’s pension and deferred tax savings plan.
[21] As noted by Husband, the dissolution court determined that the only two
marital assets with value and subject to division were Husband’s pension and
deferred tax savings plan. 12 Husband asserts that the dissolution court abused
its discretion in dividing these retirement assets by apparently awarding Wife
the entire value earned during the marriage of both of these assets. We agree
with Husband that the dissolution court committed error in valuing and
dividing the retirement assets, and we reverse that portion of the dissolution
decree and remand for further proceedings.
11
We will not seriously entertain Husband’s repeated assertion that Wife was “gifted” the money to pay her
attorney’s fees and therefore is in a better economic condition than he is to pay the fees. Appellant’s Br. at
37. In denying Husband’s motion for relief from judgment on this issue, the trial court found to the contrary,
stating, “Court cannot find from the record that [W]ife’s attorney fees were ‘gifted’ to her, only that another
individual, her now current husband, paid a substantial portion of her attorney fees. However, again,
nothing in the record reflects whether those fees need to be repaid.” Appellant’s App. at 25. Husband has
failed to demonstrate that this finding is clearly erroneous.
12
Husband briefly mentions two additional marital assets/liabilities about which he claims that he needs
“clarification” as to how they were handled in the dissolution decree. Appellant’s Br. at 41. First, regarding
an alleged debt of $63,868 owed by the parties to Wife’s mother, the dissolution court made clear in its
findings that there was insufficient evidence presented regarding this alleged debt, and therefore it is
assignable to neither party and not included in the marital estate. Regarding the allegedly severely damaged
Chrysler Pacifica vehicle that was given to Wife pursuant to a provisional agreement, the dissolution court
made clear that the vehicle was included in the martial pot, but it assigned “no value of the Pacifica to either
party.” Appellant’s App. at 21. The dissolution decree is sufficiently clear on these issues, and we believe
that no further clarification in necessary.
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[22] We begin our discussion of this issue with a summary of Indiana’s one pot
theory.
It is well settled that in a dissolution action, all marital property
goes into the marital pot for division, whether it was 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. For purposes of dissolution,
property means all the assets of either party or both parties. The
requirement that all marital assets be placed in the martial pot is
meant to insure that the trial court first determines that value
before endeavoring to divide property. Indiana’s one pot theory
prohibits the exclusion of any asset in which a party has a vested
interest from the scope of the trial court’s power to divide and
award. While the trial court may decide to award a particular
asset solely to one spouse as part of its just and reasonable
property division, it must first include the asset in its
consideration of the marital estate to be divided.
Falatovics, 15 N.E.3d at 110 (citations and quotation marks omitted).
[23] After determining what constitutes marital property, the trial court must then
divide the marital property under the presumption that an equal division is just
and reasonable. Leever v. Leever, 919 N.E.2d 118, 124 (Ind. Ct. App. 2009).
This presumption may be rebutted by relevant evidence that an equal division
would not be just and reasonable. Ind. Code § 31-15-7-5. However, the trial
court must state its reasons for deviating from the presumption of an equal
division in its findings and judgment. Hartley v. Hartley, 862 N.E.2d 274, 285
(Ind. Ct. App. 2007).
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[24] We note that nowhere in the dissolution court’s findings or judgment does the
court state reasons for deviating from the presumption of an equal division, so
we must presume that the dissolution court intended a 50/50 division of marital
property. In valuing and dividing Husband’s retirement assets, the dissolution
court found,
13. [Husband] has a Teamster’s Deferred Tax Savings Plan with
a value of $22,842.33 and he should pay [Wife] a figure
computed by a factor of the number of years the parties were
married, approximately six, divided by the number of years
[Husband] used to earn the deferred tax savings plan times the
$22,842.33 and pay that amount to [Wife] within thirty (30)
days.[ 13]
14. Also, [Husband] owns a UPS Pension Plan, as of the date of
filing worth $39,823.9[2] earned during the marriage. The
multiplier used for the deferred tax savings plan should be used
regarding the $39,823.9[2] and that amount shall be paid by
[Husband] to [Wife] as a lien upon the value of the pension plan
when it begins to pay out to [Husband].[ 14]
13
Regarding Husband’s tax savings plan, it is clear that the dissolution court intends Wife to obtain an
immediate distribution of her share of those benefits. See Kendrick v. Kendrick, No. 49A02-1412-DR-888, 2015
WL 5562440, at *5 (Ind. Ct. App. Sept. 22, 2015) (citing 2 EQUIT. DISTRIB. OF PROPERTY, 3d §§ 6:30, 6:36
(2014)) (under the “immediate offset method,” the trial court determines the present value of the retirement
benefits and awards the nonowning spouse his or her share of the benefits in an immediate lump sum), trans.
pending.
14
Regarding Husband’s pension, it is clear that the dissolution court intends Wife to obtain a deferred
distribution of her share of those benefits. See Kendrick, 2015 WL 5562440 at *5 (under the “deferred
distribution method,” the court makes no immediate division of the retirement benefits but determines the
future benefits to which the nonowning spouse is entitled).
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Appellant’s App. at 22. From these findings, it is evident that the dissolution
court is purporting to use the coverture fraction formula to divide Husband’s
pension and deferred tax savings plan between the parties.
[25] This Court has explained,
The “coverture fraction” formula is one method a trial court may
use to distribute pension or retirement plan benefits to the
earning and non-earning spouses. Under this methodology, the
value of the retirement plan is multiplied by a fraction, the
numerator of which is the period of time during which the
marriage existed (while pension rights were accruing) and the
denominator is the total period of time during which pension
rights accrued.
In re Marriage of Fisher, 24 N.E.3d 429, 433 (Ind. Ct. App. 2014) (quoting Hardin
v. Hardin, 964 N.E.2d 247, 250 (Ind. Ct. App. 2012) (citation omitted)
(emphasis omitted)). In other words, the coverture fraction formula is applied
to determine what portion of a retirement asset is subject to division.
[26] We observe several critical errors in the dissolution court’s findings and
application of the coverture fraction formula here. We will first explain what
should have happened, and we will then explain what apparently did happen.
The dissolution court should have included the entire present value of both the
pension and the deferred tax savings plan in the marital estate (one pot theory)
and then applied the coverture fraction formula to determine what portion of
each asset was earned during the marriage and therefore subject to division.
The coverture fraction multiplied by the present value of each asset would take
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into account the six years of marriage divided by the number of years Husband
spent working during which those retirement benefits accrued. 15 After applying
the fraction, the dissolution court then should have divided the coverture value
of these assets equally between the parties, or state reasons why deviation from
an equal division would be appropriate.
[27] Regarding Husband’s deferred tax savings plan, the dissolution court properly
included in the marital estate the entire present value of the plan, $22,842.33.
However, the dissolution court then stated that the coverture fraction formula
should be applied to that amount and that Husband should “pay that amount”
to Wife. Appellant’s App. at 22. Thus, the court appears to have awarded the
entire coverture portion of the deferred tax savings plan to Wife, rather than
awarding her one half of the coverture portion of the plan based upon the
coverture fraction formula. Absent any finding that an equal division of
property would not be just and reasonable, this is error.
[28] As for Husband’s pension, the record indicates that the total value of the
pension at the time of filing was $99,776.33. However, rather than first
including the entire value of the pension in the marital pot and then applying
the coverture fraction formula to determine the divisible amount, the
dissolution court erroneously included what Husband claims is already the
15
The dissolution court did not make a specific finding regarding the denominator of the coverture fraction.
For purposes of clarity, we urge the court to do so on remand. Husband presented evidence that the
coverture fraction should be 39.9132%, which accounts for 6.3861 years of marriage and 16 years of
employment (6.3861÷16 =.399132). Petitioner’s Exh. 10.
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coverture portion of Husband’s pension, that amount being $39,823.92. 16
While the dissolution court may ultimately determine that the portion of
Husband’s pension earned prior to the marriage should be awarded solely to
him, it must first include the entire asset in the marital pot. See Falatavics, 15
N.E.3d at 110. The dissolution court then instructed that the coverture fraction
formula be applied to what was already the coverture portion of the pension
and, to further compound the problem, awarded Wife the entire value of the
resultant figure without reference to why an equal division of property would
not be just and reasonable. Again, this was error.
[29] Based upon the foregoing, we conclude that Husband has met his burden to
show prima facie error in the dissolution court’s valuation and division of his
pension and deferred tax savings plan. Accordingly, we reverse that part of the
dissolution decree and remand with instructions for the dissolution court to
include the entire value of each retirement asset in the marital estate, apply the
coverture fraction formula to determine what portion of each asset is subject to
division, and then either divide those amounts equally between the parties or
state reasons why an equal division of marital property would not be just and
reasonable. The dissolution decree is affirmed in all other respects.
16
This number is 39.9132% of $99,776.33. Petitioner’s Exh. 10.
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[30] Affirmed in part, reversed in part, and remanded.
May, J., and Bradford, J., concur.
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