Tracy L. Oedzes v. Bryan S. Oedzes ( 2013 )

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 Dec 06 2013, 6:08 am
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:
EUGENE M. FEINGOLD ADAM J. SEDIA
STEVEN P. KENNEDY Rubino, Ruman, Crosmer & Polen
Law Offices of Eugene M. Feingold Dyer, Indiana
Munster, Indiana
IN THE
COURT OF APPEALS OF INDIANA
TRACY L. OEDZES, )
)
Appellant-Petitioner, )
)
vs. ) No. 45A03-1302-DR-67
)
BRYAN S. OEDZES, )
)
Appellee-Respondent. )
APPEAL FROM THE LAKE CIRCUIT COURT
The Honorable George C. Paras, Judge
The Honorable Michael A. Sarafin, Magistrate
Cause No. 45C01-0604-DR-282
December 6, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
NAJAM, Judge
STATEMENT OF THE CASE
Tracy Oedzes (“Wife”) appeals the trial court’s denial of her motion for rule to
show cause alleging that Bryan Oedzes (“Husband”) had violated the terms of their
dissolution decree. Wife presents two issues for our review:
1. Whether the trial court abused its discretion when it found that
Husband was not in contempt.
2. Whether the trial court abused its discretion when it denied her
petition for attorney’s fees.
We affirm.
FACTS AND PROCEDURAL HISTORY
Husband and Wife were married in 1996, had two children together, and separated
in 2006. Ultimately, Husband and Wife entered into a Marital Property Settlement,
Custody, Alimony, and Parenting Agreement (“the Agreement”), which the trial court
approved and incorporated into a decree of dissolution on March 11, 2011. The
Agreement provided in relevant part as follows:
31. [Husband] is awarded all right, title and interest in and to the marital
residence, commonly known as 1239 Killarney Drive, Dyer, Indiana 46311,
and the right, title and interest in said real estate is divested from [Wife]
and vested in [Husband].
32. [Wife] shall execute a quit claim deed conveying her interest in the
marital residence to [Husband], subject to the outstanding mortgages, debts,
liens, taxes and all other expenses associated with said real estate. The
outstanding mortgage, debts, liens, taxes and other expenses shall be
assumed by [Husband], paid by [Husband] in accordance with their terms,
and from which indebtedness [Husband] shall hold [Wife] harmless and
indemnify her from any loss or expense on account thereof.
33. [Husband] shall cause [Wife] to be released from the liability of the
existing note or notes, mortgage or mortgages, and liens on the marital
residence within three (3) months following the delivery of the quit claim
deed. The time may be extended month by month upon a showing of
reasonable cause to do so.
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34. During the period of time that [Wife] is sharing the residence of
[Husband], [Husband] shall pay the mortgage, real estate taxes,
homeowners dues, fire and extended insurance coverage, lawn care, snow
removal, and all other costs associated with the ownership and occupancy
of the marital residence.
***
CASH DISTRIBUTION TO [WIFE]
40. Upon the entry of a decree of dissolution of marriage, [Husband]
shall pay to [Wife] on the first day of each month thereafter the following
sums:
a. Assuming their agreement that the residence real estate of the
parties now has a market value of $550,000, and further assuming and their
agreement that there now exists a first and only mortgage lien upon the
residence real estate in the amount of $350,000, equity of $200,000 is set.
b. [Husband] shall pay to [Wife] one half of the equity or the sum of
$100,000 in [monthly installments varying in amounts based upon
Husband’s annual income].
***
46. In the event that [Husband] sells the residence real estate or requests
that [Wife] leave the residence real estate before a period of five years
following the date of dissolution of marriage, [Husband] shall pay [Wife]
an additional amount of $70,000 under the same payment schedule set forth
above. If [Husband] is selling the residence real estate, the remaining debt
to [Wife], interest and costs shall be paid from the net proceeds of sale.
47. [Husband] agrees that this debt shall be a lien or charge upon the
residence real estate, and he shall not either increase, modify or restore the
mortgage debt, except to refinance for a lesser interest rate, without the
express written consent of [Wife] first having been received.
48. At such time as the debt obligation owed to [Wife] by [Husband] is
six months from final payment, the residence real estate shall be
reappraised. Given an assumed debt of $350,000, a new equity shall be
determined. If one-half of that equity exceeds $100,000, [Husband] shall
continue the payments beyond the six months until the additional one-half
of the equity is paid to [Wife]. If one-half of that equity equals or is less
than the original amount of $100,000, the payment schedule shall be
completed and [Husband] shall have no further obligation to [Wife] for this
sum of money.
***
DEBTS ACQUIRED PRIOR TO FILING
54. In addition to the real estate mortgage, lease obligations, chattel
mortgages and other debts referred to earlier in this agreement, the parties
have no debt other than reoccurring monthly obligations, including credit
card balances. [Husband] agrees to pay all monthly obligations incurred
through the month in which the decree of dissolution is granted.
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55. To the extent that [Husband] (even if joined by [Wife]) may have
used the real estate to secure any debt other than the existing first mortgage,
[Husband] agrees to release the real estate as security from such debt as
promptly as possible, and in no event longer than six (6) months. In the
event of the sale of the real estate, and such debt still remains against the
real estate, the debt shall be paid from any proceeds to which [Husband]
would otherwise be entitled.
56. As to any debt or obligation incurred by [Husband] since the filing
of the petition of dissolution, he agrees to pay the same, to hold [Wife]
harmless and to indemnify her from any loss or expense therefore.
Appellant’s App. at 11-17 (emphases added).
Pursuant to the terms of the Agreement, Husband paid off the balance of a home
equity line of credit within six months from the date of the decree. But that line of credit
remained open, and from January through April 2012, Husband drew against the line of
credit a total of $60,800. Husband used that money to keep his farm business
functioning. On June 29, 2012, Husband closed the line of credit and converted the
$94,000 balance owed into a term loan, with the marital residence serving as collateral
for the loan.
In the meantime, on April 25, 2012, Wife, who had conveyed her interest in the
marital residence to Husband pursuant to the terms of the Agreement, filed a Verified
Petition for Rule to Show Cause why Husband should not be found in contempt. In her
petition, Wife alleged in relevant part that Husband had “fail[ed] and refuse[d] to comply
with the provisions of the Agreement” in that he “has failed and refused to cause the
second mortgage secured by the residence to be released” and “has failed and refused to
pay off the existing second mortgage debt on the residence, and has refused to refrain
from using the equity of the residence as security for a second mortgage.” Id. at 48-49.
Following a hearing, the trial court found and concluded in relevant part:
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20. The evidence before the Court established that the “second
mortgage” referred to at the Final Hearing and in the Contempt Petition was
in fact a rotating line of the credit secured by the marital home (hereinafter
the “SLOC”).
***
22. The SLOC falls within the language of Paragraph 55 of the
Agreement which refers to “any debt other than the existing first mortgage”
secured by the marital home.
23. The evidence before the Court at the Final Hearing established that
the outstanding indebtedness of the SLOC was paid down to $0.00 by
Husband by July 2011 (within the time allotted to him under Paragraph 55
of the Agreement “to release the real estate from such debt as promptly as
possible, and in no event longer than six (6) months”) and that Husband has
drawn substantial funds from such SLOC since the date of dissolution in
the total amount of $94,000.00.
24. The evidence at the Final Hearing established that Husband
converted the SLOC to [a] term loan on or about mid-2012. As such,
Husband no longer has the ability to draw funds from the SLOC.[]
However, under the terms of the Term Loan, Husband is paying monthly
payments of approximately $600.00, with a balloon payment due in mid-
2013.
25. Wife claims that Husband is in contempt of this Court for using the
SLOC after the date of dissolution because Husband was obligated to
release the Marital Home as security for the SLOC within six (6) months of
the date of dissolution. Instead, Wife claims, that while Husband paid
down the SLOC to no balance by June or July 2011, his subsequent draws
on the account constitute contempt of this Court and that Wife is being
damaged because her equity in the Marital Home is jeopardized by
Husband’s conduct.
26. Husband countered by claiming that he believed the language of the
Agreement barred him only from securing new loans or credit lines secured
by the Marital Home and that he did not secure a new loan secured by the
Marital Home when he made his post-dissolution draws on the SLOC, but
that he merely drew upon an already existing credit facility. Husband
further claimed that his post-dissolution draws on the SLOC were used to
finance the fixed and variable costs, including salary to himself, of his
cattle farming business and that such conduct was in accord with the pre-
dissolution practice that he employed for financing such business, i.e.,
drawing on the SLOC, using such funds to operate his business, and then
paying down the SLOC upon receiving proceeds from the sale of the cattle.
Husband also claimed that his conduct was not harming the payment of
Wife’s equity interest as she has already received $12,000.00 towards the
$100,000.00 that she is owed.
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27. While Husband’s conduct as to the new draws upon the SLOC may
cause some initial cause for concern, the evidence established that Wife
continues to receive the payments towards her $100,000.00 of marital
equity in the Marital Home pursuant to and in accordance with the terms of
the Agreement. Wife has not suffered any damage as a result of Husband’s
alleged failure to comply with the Agreement and any claims that her
interests may be “jeopardized” do not amount to actual damage or harm
that was caused by Husband’s failure to comply with the Agreement. The
evidence further demonstrated that Husband’s conduct as to the post-
dissolution draws upon the SLOC were in keeping with the well-established
pattern of financial conduct that the Parties engaged in prior to their
dissolution. The Agreement results in a near continuation of the Parties’
financial lifestyle prior to the dissolution; a lifestyle that could not be
maintained but for Husband’s draws upon the SLOC and without such
draw[s] it is not clear how, based on the evidence before the Court,
Husband would have been able to meet his other obligations under the
Agreement, including his obligations to make the first mortgage payments
on the Marital Home and to continue providing vehicle insurance for Wife.
As Wife has not suffered any damage from Husband’s alleged
contemptuous failure of his obligation to discharge and release the SLOC
pursuant to the Agreement, there is no remedy in contempt available to
Wife for the alleged contemptuous conduct and the Contempt Petition is
hereby dismissed and discharged upon Husband’s alleged contemptuous
failure to discharge and release the SLOC.
***
29. Wife admitted into evidence a fee affidavit from her attorney in
support of her request for attorney’s fees in connection with the Contempt
Petition. After considering the foregoing factors related to the award of
post-dissolution attorney’s fees, including the resources of the parties, their
current economic condition, and other factors that bear on the
reasonableness of an award, this Court hereby orders that each Party shall
pay his or her own attorney’s fees in connection with the Contempt
Petition.
Id. at 5-8. Wife filed a motion to correct error, which the trial court denied. This appeal
ensued.
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DISCUSSION AND DECISION
Issue One: Contempt
Wife first contends that the trial court abused its discretion when it did not find
Husband in contempt of the dissolution decree. Our supreme court has set out the
applicable standard of review:
A party that is willfully disobedient to a court’s order may be held in
contempt of court. City of Gary v. Major, 822 N.E.2d 165, 170 (Ind. 2005).
The order must be “clear and certain” in its requirements. Id. It is soundly
within the discretion of the trial court to determine whether a party is in
contempt, and we review the judgment under an abuse of discretion
standard. Id. at 171. “We will reverse a trial court’s finding of contempt
only if there is no evidence or inference therefrom to support the finding.”
Id. . . . “[C]ontempt of court involves disobedience of a court which
undermines the court’s authority, justice, and dignity.” Id. at 169 (citing
Hopping v. State, 637 N.E.2d 1294, 1297 (Ind. 1994)). The trial court has
the inherent power to “maintain [] its dignity, secur[e] obedience to its
process and rules, rebuk[e] interference with the conduct of business, and
punish[] unseemly behavior.” Id. (citing State v. Shumaker, 200 Ind. 623,
640-41, 157 N.E. 769, 775 (1927)). Crucial to the determination of
contempt is the evaluation of a person’s state of mind, that is, whether the
alleged contemptuous conduct was done willfully. Id. at 170 (“In order to
be held in contempt for failure to follow the court’s order, a party must
have willfully disobeyed the court order.”); In re Perrello, 260 Ind. 26, 29,
291 N.E.2d 698, 700 (1973) (“The willful disobedience of a court order can
constitute indirect . . . contempt. However, the act must be done willfully
and with the intent to show disrespect or defiance.” (citations omitted));
Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind. Ct. App. 1999) (“When a
person fails to abide by a court’s order, that person bears the burden of
showing that the violation was not willful.”). The determination of whether
to find a party in contempt permits the trial court to consider matters which
may not, in fact cannot, be reflected in the written record. The trial court
possesses unique knowledge of the parties before it and is in the best
position to determine how to maintain its “authority, justice, and dignity”
and whether a party’s disobedience of the order was done willfully.
Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 202-03 (Ind. 2012).
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Here, Wife maintains that her interest in the equity of the marital residence is
impaired as a result of Husband’s using the residence as collateral for a $94,000 loan in
contravention of the terms of the Agreement. In particular, Wife asserts that that
encumbrance “would reduce the likelihood that [Wife] would receive the full amount she
was entitled to at the time of sale of the property because it would reduce the equity. It
would reduce the likelihood she would be paid the sum over the $100,000 minimum
when the house was sold.” Appellant’s Brief at 13. And Wife contends that the trial
court was “obligated to enforce” the provisions of the Agreement and that its failure to do
so constitutes an abuse of discretion. Id. at 17.
All orders contained within a dissolution of marriage decree may be enforced by
contempt. Ind. Code § 31-15-7-10. When dissolving a marriage, parties are free to
negotiate their own settlement agreements and may incorporate those into a dissolution
decree. Deel v. Deel, 909 N.E.2d 1028, 1032 (Ind. Ct. App. 2009). The settlement
agreements then become binding contracts and are interpreted according to the general
rules of contract construction. Id.Here, the Agreement explicitly states that Husband agrees that “he shall not either
increase, modify or restore the mortgage debt, except to refinance for a lesser interest
rate, without the express written consent of [Wife] first having been received.”
Appellant’s App. at 35. Thus, Husband violated that provision of the Agreement when
he borrowed $94,000 with the marital residence as collateral. But the trial court found
that Wife has not suffered any harm as a result of that loan. Indeed, the $94,000 loan is
less than the amount of equity owed to Husband under the terms of the Agreement. And
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if the marital residence is sold, any balance remaining on the term loan would be
chargeable entirely against his interest. Finally, Husband has not missed any payments to
Wife to date. However, we disagree with the trial court, and we agree with Wife that she
has been harmed in that her security interest in the marital residence has been impaired as
a result of the term loan.
Regardless, the trial court also concluded that Husband’s conduct was “in keeping
with the well-established pattern of financial conduct that the Parties engaged in prior to
their dissolution.” Appellant’s App. at 16. In essence, then, the trial court found that
Husband’s conduct was not a willful violation of the decree. Thus, Wife has not
demonstrated that the trial court abused its discretion when it declined to find Husband in
contempt. See, e.g., Whitman v. Whitman, 405 N.E.2d 608, 614 (Ind. 1980) (affirming
trial court’s order concluding father not in contempt despite noncompliance with child
support order).1
Issue Two: Attorney’s Fees
Wife next contends that the trial court abused its discretion when it denied her
request for attorney’s fees. We review an award of attorney’s fees for an abuse of
discretion. Scoleri v. Scoleri, 766 N.E.2d 1211, 1221 (Ind. Ct. App. 2002). The trial
court has broad discretion in assessing attorney’s fees, and reversal is warranted only
when the trial court’s award is clearly against the logic and effect of the facts and
circumstances before the court. Id. When assessing attorney’s fees, the trial court
1
While we hold that the trial court did not abuse its discretion when it did not find Husband in
contempt, the evidence is undisputed that Husband violated the terms of the Agreement when he used the
marital residence as collateral for the term loan. On remand, if the term loan is still outstanding, Wife is
not entirely without recourse to compel Husband to comply with this provision of the Agreement.
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considers the resources of the parties, their economic condition, their ability to engage in
gainful employment and to earn adequate income and other factors that bear on the
reasonableness of the award. Id. The court may also look at the responsibility of the
parties in incurring the attorney’s fees. Id. The trial judge possesses personal expertise
that he or she may use when determining reasonable attorney’s fees. Id.Here, as stated in its order, the trial court made the appropriate considerations in
rejecting Wife’s attorney’s fee request. Wife’s contention on appeal amounts to a request
that we second-guess the trial court, which we will not do. The trial court did not abuse
its discretion when it ordered the parties to pay their own attorney’s fees.
Affirmed.
BAKER, J., and CRONE, J., concur.
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