Beverly Czech v. James Czech ( 2014 )

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.
Jan 15 2014, 6:11 am
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
P. JEFFREY SCHLESINGER LARRY D. STASSIN
Merrillville, Indiana Dyer, Indiana
IN THE
COURT OF APPEALS OF INDIANA
BEVERLY CZECH, )
)
Appellant, )
)
vs. ) No. 45A05-1305-DR-234
)
JAMES CZECH, )
)
Appellee. )
APPEAL FROM THE LAKE CIRCUIT COURT
The Honorable George Paras
Cause No. 45C01-0606-DR-505
January 15, 2014
MEMORANDUM DECISION – NOT FOR PUBLICATION
MATHIAS, Judge
The marriage of Beverly Czech (“Wife”) and James Czech (“Husband”) was
dissolved in Lake Circuit Court. Wife now appeals the trial court’s exclusion of real
property inherited by Husband through intestate succession.
We reverse and remand to the trial court for proceedings consistent with this
opinion.
Facts and Procedural History
Beverly Czech (“Wife”) and James Czech (“Husband”) married in 1984. During
the marriage, both of Husband’s parents died intestate,1 leaving, among other things, a
piece of real property located in the state of Missouri (“Missouri property”). Husband
and his two siblings each received one-third shares of the property through intestate
succession. However, neither Husband nor either of his siblings initiated probate
proceedings in Missouri. Instead, the Missouri property remained titled in Husband’s
deceased father’s name, and Husband and his siblings paid taxes on the property from a
joint checking account into which they all deposited funds. According to the trial court’s
decree of dissolution, Husband and his siblings also “held themselves out as the owners
of the Missouri Property.” Appellant’s App. p. 20.
Wife filed a petition for dissolution of marriage on June 30, 2006, in Lake Circuit
Court. The parties thereafter attempted reconciliation but were unsuccessful, and the
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It appears that both of Husband’s parents had died by some time in the 1990s. Tr. p. 78.
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dissolution proceedings resumed on May 11, 2012. On January 31, 2013, the trial court
issued its final decree of dissolution. The decree provided, in relevant part:
30. A court may only dispose of property in which the parties have a vested
present interest. If the parties do not own the asset at issue or if their
interest in the property is only contingent, a court may not include it in the
marital estate or dispose of it.
31. The evidence established that the Missouri Property was held by
Husband’s parents and upon the death of Husband’s last surviving parent
Husband and his siblings failed to effectuate a transfer of the Missouri
property to themselves through any type of probate process. While the
evidence indicated that Husband and his siblings held themselves out as
owners of the Missouri Property and that Husband issued checks upon a
bank account into which he and his siblings deposited funds for the real
estate and personal property taxes associated with such property; the
property tax payment receipts for the Missouri Property admitted into
evidence spanning from 2003 to 2011 set forth Husband’s father as the
person to whom such tax bills are directed.
32. There is no evidence that Husband holds any present vested interest in
the Missouri Property or that he acquired a present vested interest in the
Missouri Property during the marriage. The fact that Husband and his
siblings could have inherited interests in the Missouri property does not
translate to an actual inheritance of an interest in the Missouri Property by
Husband during the course of the Parties’ marriage.
33. As Husband did not acquire any present vested interest in the Missouri
Property either before or during the Parties’ marriage; such property does
not fall within the Marital Estate before the Court.
Appellant’s App. p. 20 (internal citations omitted).
Wife filed an amended motion to correct error on April 5, 2013, arguing that
“Indiana and Missouri law are contrary to the court’s position, holding that an heir
receives a vested interest upon the death of the owner by intestate succession.”
Appellant’s App. p. 11. The trial court granted Wife’s motion to correct error in part but
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denied the motion as it related to the inclusion of the Missouri property in the marital
estate.
Wife now appeals.
Discussion and Decision
Because the trial court entered written findings and conclusions, we apply a two-
tiered standard of review. First, we determine whether the evidence supports the findings,
and second, whether the findings support the conclusions. In re V.C., 867 N.E.2d 167,
179 (Ind. Ct. App. 2007). We will reverse only if the evidence does not support the
findings, or the findings do not support the judgment. Id. We consider only the evidence
most favorable to the judgment and the reasonable inferences flowing therefrom. Id. We
will not reweigh the evidence or judge the credibility of the witnesses. Id.
Indiana Code section 31-15-7-4(a) provides:
In an action for dissolution of marriage . . . the court shall divide the
property of the parties, whether:
(1) owned by either spouse before the marriage;
(2) acquired by either spouse in his or her own right:
(A) after the marriage; and
(B) before final separation of the parties; or
(3) acquired by their joint efforts
It is well settled that Indiana Code section 31-15-7-4(a) requires inclusion in the
marital estate of all property owned by the parties prior to separation, including property
that one of the parties inherited. See Grathwohl v. Garrity, 871 N.E.2d 297, 301 (Ind. Ct.
App. 2007); Fobar v. Vonderahe, 771 N.E.2d 57, 60 (Ind. 2002); Maxwell v. Maxwell,
850 N.E.2d 969, 973 (Ind. Ct. App. 2006), trans. denied. As long as one of the parties
has a present possessory interest in the property, the property should be included. See
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Grathwohl, 871 N.E.2d at 301; Hunt v. Hunt, 645 N.E.2d 634, 636-37 (Ind. Ct. App.
1994). Only property that is acquired after the final separation date is excluded from the
marital estate. See Maxwell, 850 N.E.2d at 973.
Wife argues that the trial court erred in finding that Husband’s interest in the
Missouri property had not vested, and thus, Husband’s interest should be excluded from
the marital estate. We agree.
Both Indiana law and Missouri law clearly provide that an intestate heir’s interest
in the inherited property vests immediately upon the death of the owner. Thus, when
Husband’s last parent died, Husband’s one-third interest in the Missouri property passed
to him automatically, by operation of law, without any affirmative action of a personal
representative or probate court. See Tippecanoe Loan & Trust Co. v. Carr, 40 Ind. App.
125, 78 N.E. 1043, 1044 (1906) (“The law is well settled in this state that the title to lands
upon the death of the owner intestate, immediately vests in the heirs of such deceased
owner”); Wass v. Hammontree, 77 S.W.2d 1006, 1009 (Mo. 1934) (“Generally, real
estate, on the death of the owner, intestate, vests at once in the heirs and not in the
administrator”). See also 42 Am. Jur. 2d § 127 (“When a decedent dies intestate, the
decedent’s property automatically passes to and title immediately vests in her heirs at
law, subject only to sale, administration and attendant costs provided by the law”); 29
A.L.R. 3d 174 (“Where the intestate holds legal title to real estate, the title passes
automatically on his death in accord with the laws of descent”).
Both the trial court in its decree and Husband in his appellee’s brief cite three
Indiana cases, Wilcox v. Wilcox, Libuano v. Libuano, and Maxwell v. Maxwell, as bases
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for the conclusion that Husband has no vested interest in the Missouri property, and
therefore the property should be excluded from the marital estate. Husband’s and the
trial court’s reliance on these cases is misplaced. In Wilcox, this court held that a spouse
has no vested present interest in his future earnings and that such earnings may be
excluded from the marital pot. See Wilcox v. Wilcox, 173 Ind. App. 661, 663, 365
N.E.2d 792, 794 (1977). In Libuano, this court held that “the trial court may consider the
future value of an asset, but the final distribution must be just and equitable in light of the
present vested interest of the particular fund. A distribution based on contingent values
could result in no distribution at all.” Libunao v. Libunao, 180 Ind. App. 242, 246-47,
388 N.E.2d 574, 577 (1979). In Maxwell, this court held that the trial court properly
included in the marital estate assets inherited by one of the spouses a few months before
the spouse moved out of the marital residence and a year before the spouse filed a
petition for dissolution, but that “the facts and circumstances justified a deviation from a
50-50 split of the marital estate.” Maxwell v. Maxwell, 850 N.E.2d 969, 971, 973 (Ind.
Ct. App. 2006).
The facts of the present case are easily distinguishable from the facts in Wilcox
and Libuano. Husband’s interest in the Missouri property was neither contingent upon
some occurrence or lack of occurrence, nor a vested present interest in future earnings, as
in Libuano and Wilcox. Rather, his one-third interest in the property vested at the time of
his last parent’s death, when his marriage was still intact. Maxwell also fails to support
his argument since, there, the trial court actually included the Husband’s inherited
property in the marital estate, and this court affirmed.
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Therefore, we conclude that the trial court erred when it found that Husband had
no present vested interest in the Missouri property during the marriage and that the
property was not part of the marital estate.
Conclusion
For all of these reasons, we remand for the trial court to include the one-third
interest in the Missouri property Husband inherited from his parents in the marital estate,
to value that interest, and to recalculate the division of marital assets accordingly.
BRADFORD, J., and PYLE, J., concur.
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