Nancy Jo L. Coles v. Robert Nelson Coles, Jr. (mem. dec.) ( 2015 )

MEMORANDUM DECISION
Jun 16 2015, 9:17 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Robert C. Beasley Deborah Farmer Smith
Dennis Wenger & Abrell, P.C. Campbell Kyle Proffitt LLP
Muncie, Indiana Carmel, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Nancy Jo L. Coles, June 16, 2015
Appellant, Court of Appeals Case No.
18A02-1410-DR-767
v. Appeal from the Delaware County
Circuit Court No. 4
Robert Nelson Coles, Jr., Cause No. 18C04-1303-DR-027
Appellee The Honorable Linda Wolf
Judge.
Friedlander, Judge.
[1] Nancy Jo Coles is totally and permanently disabled and cannot support herself.
Upon dissolution of her thirty-five year marriage to Robert Coles, the trial court
divided the marital estate evenly and ordered Robert to pay spousal
maintenance to Nancy for a finite period of time – two years. On appeal,
Nancy presents the following restated issues for review:
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1. Did the trial court abuse its discretion by awarding
maintenance for a predetermined, finite period of time?
2. Did the trial court err by not awarding maintenance during the
eighteen-month provisional period?
3. Was it an abuse of discretion to equally divide the marital estate
given the economic disparity between the parties?
4. Should the value of Robert’s accrued paid time off have been
included in the marital pot?
We affirm in part, reverse in part, and remand.
[2] Nancy and Robert were married on May 13, 1978. They have one child,
Travis, who is now an adult. Robert worked consistently throughout the
marriage, while Nancy worked for periods of time but generally stayed home
and fulfilled the agreed-upon role of homemaker and primary caregiver for
Travis. Nancy has suffered from significant health issues for more than a
decade. On February 4, 2013, Robert filed a petition to dissolve the marriage.
[3] The final hearing occurred on July 31 and August 1, 2014. At the time of the
hearing, Robert and Nancy were sixty-five and sixty-two years old, respectively.
The parties stipulated to the admission into evidence of Robert Gregori, M.D.’s
report concerning Nancy’s medical condition and her ability to work.1 In his
detailed report, Dr. Gregori concluded:
Based on Ms. Coles’ medical history, extensive medical records
reviewed, and her present physical examination, I would support the
position of both her treating rheumatologist and primary care
physician, who have recognized for over the last year that she is totally
1
Dr. Gregori was the independent medical examiner hired by Robert.
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and permanently disabled. Based on her limited tolerance for standing
and walking, as well as her limited tolerance for upright sitting and her
impairments of the hands and elbows, I do not believe that she could
do even a sedentary position on a part-time basis. I would not expect
her to sit for more than 30 minutes in duration or for a total of two
hours over the course of a day period in the upright position. I would
also not expect her to tolerate standing, walking, or any repetitive
activities involving her hands or upper extremities. Her medical
condition requires her to frequently lie on a recliner throughout the
course of the day. I have no doubt that the patient is totally and
permanently disabled due to her rheumatologic condition, especially
the rheumatoid arthritis. Contributing to her disabling arthritis are her
medical conditions that include hypothyroidism, fibromyalgia,
interstitial lung disease, and atrial fibrillation. Again, she is
permanently and totally disabled and has likely been so for a number
of years.
Appellant’s Appendix at 40-41.
[4] Robert and Nancy have accumulated a marital estate of just over one million
dollars, including a modest mortgage-free home, two automobiles, a boat and
trailer, other personal property, and cash and retirement assets. While Nancy
cannot work, Robert is an executive with an annual base salary of $120,000 and
bonus eligibility. Well over half of his after-tax income constitutes disposable
income. Moreover, Robert has accrued the maximum amount of paid time off
(PTO) allowed by his company – 520 hours. Robert is in excellent health and
can continue to work.
[5] Robert did not provide Nancy with spousal maintenance payments during the
provisional period. He did, however, pay the real estate taxes on the marital
home for one year, three bi-annual installments of the homeowner’s insurance,
and Nancy’s Visa bill for several months.
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[6] In addition to attorney fees, Nancy sought to recoup from Robert
approximately $41,000, which she had used to support herself during the
provisional period. She also asked for the court to order Robert to pay $1720
per month for spousal maintenance and to pay her health insurance premiums
of approximately $540 per month. Robert, on the other hand, argued that he
should not be required to pay maintenance or, alternatively, that any
maintenance order “be for a fixed duration so that [he] can determine how
much longer, after age 66, he must continue to work.” Id. at 54. In lieu of
provisional maintenance and attorney fees, Robert sought a 52.5/47.5 split of
the marital estate in favor of Nancy. Nancy asked for a 65/35 split in her favor.
[7] In the final dissolution decree issued on September 29, 2014, the trial court
divided the marital estate equally, with each party receiving approximately
$520,000 in assets.2 Robert was ordered to pay $10,000 of Nancy’s attorney
fees. Further, the court ordered him to pay spousal maintenance in the amount
of $2000 per month for two years from October 1, 2014 through September 1,
2016. Nancy appeals from this order.
1.
[8] Nancy contends that the trial court abused its discretion by restricting the
spousal maintenance payments to two years. In light of the stipulated evidence
2
Included in the Nancy’s assets was the marital home, valued at $148,600.
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that she is totally and permanently disabled and unable to work, Nancy argues
that the court could not limit the period of maintenance.
[9] An award of spousal maintenance is statutorily authorized for three limited
purposes: spousal incapacity maintenance, caregiver maintenance, and
rehabilitative maintenance. Coleman v. Atchison, 9 N.E.3d 224, 229 (Ind. Ct.
App. 2014). With respect to incapacity maintenance, Indiana Code Ann. § 31–
15–7–2(1) (West, Westlaw current with P.L. 1-2015 to P.L. 87-2015 of the First
Regular Session of the 119th General Assembly, with effective dates through
April 29, 2015) provides: “[i]f the court finds a spouse to be physically or
mentally incapacitated to the extent that the ability of the incapacitated 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.”
[10] A trial court’s decision to award maintenance is within its discretion, and we
will reverse only if the award is against the logic and effect of the facts and
circumstances of the case. Coleman v. Atchison, 9 N.E.3d 224. Our Supreme
Court has made clear, however, that “a trial court has limited discretion
whether to award incapacity maintenance once the court makes the requisite
finding regarding disability.” Id. at 229 (citing Cannon v. Cannon, 758 N.E.2d
524 (Ind. 2001)). In Cannon, the Court 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
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circumstances[3] that directly relate to the criteria for awarding
incapacity maintenance.
Cannon v. Cannon, 758 N.E.2d at 527.
[11] In the instant case, there is no dispute that Nancy is physically incapacitated to
the extent that her ability to support herself is materially affected. In fact, she is
totally and permanently disabled and unable to work. Recognizing Nancy’s
incapacity, the trial court awarded monthly spousal maintenance in the amount
of $2000. With no explanation or finding of extenuating circumstances,
however, the court limited the maintenance payments to two years. This was
an abuse of discretion.
[12] I.C. § 31-15-7-2(1) authorizes an award of spousal maintenance “during the
period of incapacity” and makes this award “subject to further order of the
court.” Id. See also Haville v. Haville, 825 N.E.2d 375, 378 (Ind. 2005)
(“duration of [spousal maintenance award] is expressly measured by the period
of the recipient’s incapacity”). Accordingly, such an award may be modified in
the future if the spouse’s incapacity sufficiently resolves or extenuating
circumstances arise that directly relate to the criteria for awarding incapacity
maintenance.
3
Such circumstances include: the financial resources of the party seeking maintenance (including marital
property awarded), the standard of living established during marriage, duration of the marriage, and the
ability of the spouse from whom maintenance is sought to meet his/her needs while meeting the needs of the
incapacitated spouse. See Coleman v. Atchison, 9 N.E.3d at 229.
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[13] While there may be limited situations where a court could find that a spouse’s
incapacity will last for a finite period of time, this is clearly not such a case.4 See
Spivey v. Topper, 876 N.E.2d 781 (Ind. Ct. App. 2007). Accordingly, the trial
court abused its discretion by limiting the maintenance award to two years. See
id. (court abused its discretion by concluding that spouse’s incapacity was finite
and by limiting maintenance to six months). On remand, the trial court is
directed to amend the dissolution decree to reflect that Nancy is entitled to
receive spousal maintenance for an indefinite period of time, subject to future
modification upon Robert’s retirement or other changed circumstances.
2.
[14] Nancy also argues that the trial court abused its discretion by failing to award
maintenance reimbursement to her for the eighteen-month provisional period.
Nancy claims that she consumed approximately $41,000 of the marital estate
for her living and medical expenses5 during the provisional period and that
Robert had a spousal duty to contribute to these expenses out of his earnings.
[15] A provisional order is designed to maintain the status quo of the parties during
the dissolution proceedings. Mosley v. Mosley, 906 N.E.2d 928 (Ind. Ct. App.
4
We further observe that the trial court did not find, nor does the record support a finding, that extenuating
circumstances directly relating to the criteria for awarding incapacity maintenance will necessarily arise in
two years. Given Robert’s age and pending retirement, changed circumstances are certainly on the horizon,
but the timing is unknown. When such changes arise, of course, Robert is entitled to seek modification of the
maintenance award, which may include termination or significant reduction of the maintenance obligation.
5
Of this amount, $5710 was for HVAC replacement for the marital home, which was ultimately awarded to
Nancy.
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2009). It is an interim order that terminates when the final dissolution decree is
entered. Mosley v. Mosley, 906 N.E.2d 928 (citing I.C. § 31–15–4–14 (West,
Westlaw current with P.L. 1-2015 to P.L. 87-2015 of the First Regular Session
of the 119th General Assembly, with effective dates through April 29, 2015)).
“Any disparity or inequity in a provisional order—can and should—be adjusted
in the trial court’s final order.” Mosley v. Mosley, 906 N.E.2d at 930.
[16] The determination of temporary orders, such as for provisional maintenance, is
committed to the sound discretion of the trial court. Id. See also Ind. Code
Ann. § 35-15-4-8(a) (West, Westlaw current with P.L. 1-2015 to P.L. 87-2015 of
the First Regular Session of the 119th General Assembly, with effective dates
through April 29, 2015) (“court may issue an order for temporary
maintenance…in such amounts and on such terms that are just and proper”).
On appeal, we consider the evidence most favorable to the trial court’s decision
and will reverse only where the decision is clearly against the logic and effect of
the facts and circumstances before the court. Mosley v. Mosley, 906 N.E.2d 928.
[17] Due to a number of continuances brought on by the parties, there was no
provisional hearing in this case. Rather, Nancy sought reimbursement for
provisional maintenance at the final hearing. The record reveals that, despite
the absence of a provisional order, Nancy continued living in the mortgage-free
marital home, while Robert paid the homeowner’s insurance and the real estate
taxes. Robert also paid Nancy’s Visa bill for several months in 2013. Further,
during the provisional period, Nancy remained on Robert’s health insurance
and accessed approximately $5000 of the couple’s medical health savings
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account. Under the circumstance and in light of the broad discretion granted
trial courts regarding provisional orders, we conclude that the trial court did not
abuse its discretion when, in the final decree, it ordered Robert to pay $10,000
of Nancy’s legal fees but did not award provisional maintenance.
3.
[18] Nancy challenges the trial court’s equal division of the marital estate as an
abuse of discretion. She claims this was improper given the vast disparity in the
economic circumstances of the parties.
[19] Our standard of review is well settled:
The division of marital assets lies within the sound discretion of the
trial court, and we will reverse only for an abuse of discretion. When a
party challenges the trial court’s division of marital property, [s]he
must overcome a strong presumption that the court considered and
complied with the applicable statute, and that presumption is one of
the strongest presumptions applicable to our consideration on appeal.
We may not reweigh the evidence or assess the credibility of the
witnesses, and we will consider only the evidence most favorable to
the trial court’s disposition of the marital property. Although the facts
and reasonable inferences might allow for a different conclusion, we
will not substitute our judgment for that of the trial court.
Troyer v. Troyer, 987 N.E.2d 1130, 1139 (Ind. Ct. App. 2013) (quoting Galloway
v. Galloway, 855 N.E.2d 302, 304 (Ind. Ct. App. 2006)), trans. denied.
[20] Indiana law presumes that an equal division of the marital property is just and
reasonable. I.C. § 31-15-7-5 (West, Westlaw current with P.L. 1-2015 to P.L.
87-2015 of the First Regular Session of the 119th General Assembly, with
effective dates through April 29, 2015). The presumption, however, may be
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rebutted by relevant evidence that an equal division would not be just and
reasonable. Id. Factors a court may consider in this regard include: the
contribution of each spouse to the acquisition of the property; the extent to
which the property was acquired by each spouse before the marriage or through
inheritance or gifts; the economic circumstances of each spouse at the time of
disposition; the conduct of the parties as it relates to disposition or dissipation
of their property; and the earnings or earning ability of each spouse. Id.
[21] Though Nancy focuses on the economic position of each party, she begins her
argument by noting that she brought significant assets into the marriage6 while
Robert brought only debt. Nancy, however, does not cite to any evidence that
these assets were held separately by her during the marriage, without being
comingled with joint marital assets. Additionally, we find that the sheer length
of the marriage weighs heavily against considering the assets and liabilities each
party brought into the marriage.
[22] We turn now to the income earning ability and economic circumstances of the
parties. The record establishes that Robert continues to have a substantial
earning ability, while Nancy is unable to work due to her disability and her
medical and living expenses far exceed her social security income. Robert’s
monthly net income is approximately $6700, of which $2000 is dedicated to
6
Nancy brought approximately $25,000 in cash and $57,000 in inheritance assets. The couple also received
financial assistance and gifts from Nancy’s parents during the marriage.
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spousal maintenance. The property division also provides Nancy with assets
totaling over $520,000.
[23] Although the relative earning abilities and economic circumstances of the
parties could support a division of marital assets in Nancy’s favor, it was within
the trial court’s discretion to determine that the disparity was adequately
addressed by the $2000 spousal maintenance award.7 We reject the invitation
to substitute our judgment for that of the trial court. See Troyer v. Troyer, 987
N.E.2d 1130. See also Augspurger v. Hudson, 802 N.E.2d 503, 513 (Ind. Ct. App.
2004) (“the trial court could reasonably determine that an equal division is just
and reasonable under the circumstances, despite Wife’s poor health and meager
earning ability”). As we have previously observed, “[d]ivision of property
should not be considered in a vacuum, and the trial court is free to consider
other awards (such a[s] spousal maintenance) when determining the proper
division.” Id. at 513. In light of the overall dissolution order, Nancy has not
established that the trial court’s decision to divide the marital estate equally is
unjust or unreasonable.
4.
[24] Finally, Nancy contends that the value of Robert’s accrued PTO should have
been included as an asset of the marital estate. She claims the PTO was vested
7
We note that a dissolution court’s role is not to equalize salaries. Hyde v. Hyde, 751 N.E.2d 761 (Ind. Ct.
App. 2001).
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and Robert had a right to convert the 520 hours of PTO to cash in December
2013. Nancy provides little analysis in support of this argument or her assertion
that Bingley v. Bingley, 935 N.E.2d 152 (Ind. 2010), is controlling.
[25] In Bingley, the husband was retired from Navistar and received, in addition to
his pension, paid health insurance for the remainder of his life. The Supreme
Court held that these benefits plainly constituted an intangible marital asset
subject to division, as the husband was presently receiving the benefits and they
were not subject to divestiture in future years. Id. The Court explained that the
health insurance benefits “closely resemble[d] a right to future pension
payments.” Id. at 156.
[26] “Whether a right to a present or future benefit constitutes an asset that should
be included in marital property depends mainly on whether it has vested by the
time of dissolution.” Id. at 155. A right can vest in possession or interest. That
is, it can be an immediately existing right of present enjoyment or a presently
fixed right to future enjoyment. See Bingley v. Bingley, 935 N.E.2d 152. The
cash value of Robert’s PTO is neither.
[27] The parties do not dispute that Robert had accrued 520 hours of PTO. A
personnel document issued by Robert’s employer was admitted into evidence.
It indicates that “PTO is a system which provides for paid absence from work
for rest/relaxation, illness, short-term disability, condolence leave, or personal
emergencies.” Appellee’s Appendix at 88 (emphasis in original). An employee
may not accumulate more than 520 hours of PTO. To prevent a loss in accrual,
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employees have a cash-in option to receive cash “in lieu of PTO accrual”. Id. at
90. The document provides:
In order to utilize the “cash-in” option, an employee will need to
choose by December 29th how much future PTO accrual he or she
desires to cash-in. The center will provide employees the opportunity
to elect this cash-in option between December 1 and December 29 of
each calendar year. The election will be for the calendar year
following the election…. Employees will be paid the second payroll in
January.
There are certain restrictions that apply to the cash-in option.
1. Before an employee may elect to receive cash in lieu of
PTO accrual for the future calendar year the employee
must have accrued 40 hours.
2. A balance of 40 hours must be reflected in the employee
PTO balance after case [sic] in occurs.
Id. at 91 (emphases supplied). While employees are generally entitled to
payment for accrued PTO at separation from employment, the document
provides that an employee “who is being discharged for significant disciplinary
reasons…or who fails to provide the requisite prior written notice of his or her
resignation of employment is not entitled to receive pay for his or her accrued
and unutilized Paid Time Off.” Id. at 94 (emphasis in original).
[28] A plain reading of the personnel document reveals that Robert was not entitled
to convert his 520 hours of accrued PTO to cash in December 2013, as asserted
by Nancy. Rather, if elected in December (which it was not), Robert could
have cashed in the 160 hours he was to earn in 2014, the next calendar year. At
the time of the dissolution, Robert did not have a present right to be paid for the
PTO accrued during the marriage.
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[29] Further, the 520 hours accrued during the marriage were subject to actual use
for time off during the remainder of Robert’s employment. In other words, he
did not have a fixed right to future enjoyment (that is, payment for 520 hours of
accrued PTO) because at the time of his retirement the amount of accrued PTO
could be anywhere between 0 and 520 hours. See Akers v. Akers, 729 N.E.2d
1029, 1032 (Ind. Ct. App. 2000) (“it was mere speculation for the trial court to
assume that Husband would not suffer any illness and would retain at least 187
unused sick days at their current value until retirement”). The PTO hours were
also subject to divestiture depending on the nature of his separation from
service.
[30] We have consistently held that only property in which a party has a vested
interest at the time of dissolution may be included as a marital asset. Akers v.
Akers, 729 N.E.2d 1029. The PTO accrued during the marriage had a future
value that was indeterminate and speculative at best. See id. The trial court
properly excluded it from the marital estate.
[31] Judgment of the trial court is affirmed in part, reversed in part, and remanded
with instructions to amend the decree of dissolution to reflect that Nancy is
entitled to receive spousal maintenance for an indefinite period of time.
Baker, J., and Kirsch, J. concur.
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