Kevin L. King v. Mary E. King (mem. dec.) ( 2017 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Mar 02 2017, 9:12 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Joshua Flowers Andrew Z. Soshnick
Indianapolis, Indiana Teresa A. Griffin
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Kevin L. King, March 2, 2017
Appellant-Petitioner, Court of Appeals Case No.
29A02-1601-DR-34
v. Appeal from the Hamilton
Superior Court
Mary E. King, The Honorable Steven R. Nation,
Appellee-Respondent Judge
The Honorable David K. Najjar,
Magistrate
Trial Court Cause No.
29D01-1305-DR-4454
Altice, Judge.
Case Summary
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[1] Nearly four years have passed since Kevin L. King filed his petition for
dissolution of his marriage to Mary E. King. During that time, Kevin has
engaged in a campaign of subterfuge in an attempt to dissipate the marital
estate and secrete property from Mary and their two minor children, whom he
has essentially disowned. Additionally, Kevin has been found in contempt for
failing to pay child support and for disposing of marital property in direct
contravention of the trial court’s orders. On appeal, Kevin challenges certain
aspects of the trial court’s distribution of assets and debts.
[2] We affirm.
Facts & Procedural History1
[3] Mary and Kevin began dating in October 2006 and moved in together the
following month, along with Mary’s five-year-old son and daughter (the
Children). From the start, the couple agreed that Mary would stop working to
take care of the family and assist with Kevin’s various businesses. Kevin was
going through a divorce at the time, which was finalized in November 2007,
and he was granted the marital home. After he and Mary remodeled and
completely redecorated the home, they moved into it in February 2008 and
were married on July 24, 2008. Shortly after the marriage, Kevin adopted the
1
Kevin provides one short paragraph of facts, and the few facts that are provided are not stated in a light
most favorable to the trial court’s judgment. This is wholly insufficient. See Ind. Appellate Rule 46(A)(6) (an
appellant’s statement of facts “shall describe the facts relevant to the issues presented for review” and “shall
be stated in accordance with the standard of review appropriate to the judgment or order being appealed”).
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Children. The family lived a lavish lifestyle until debt, much of which Kevin
brought into the marriage, caught up with them. Throughout the marriage,
marital expenses, which initially averaged $80,000 monthly but decreased to
$20,000 monthly in 2013, were paid out of his various business accounts.
[4] On May 15, 2013, Kevin filed a petition for dissolution of marriage, but he
remained in the marital home with Mary and the Children. Mary filed several
petitions for protective orders in January 2014, and Kevin followed with a
motion for temporary restraining order and for order of possession of the
marital residence on February 3, 2014. At a hearing the following week, the
parties informed the trial court that they had come to an agreement. The
agreement provided: (1) both parties would remain in the marital residence, (2)
they would each return any property previously removed, (3) Kevin would
provide Mary with $200 per week in spending money; (4) the marital residence
would be listed for sale (a short sale) with cooperation of both parties; and (5)
Kevin would continue to pay ordinary bills.
[5] Within days of the hearing, Kevin moved Mary’s belongings from the master
bedroom and bathroom and installed deadbolts on doors to several rooms,
including the master bedroom, office, theater room, and storage room. He
locked property, including toiletries and daily essentials, in these rooms and
away from Mary and the Children. The police were called by Mary on
numerous occasions, and she had to damage doors to get to her property.
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[6] Kevin moved out of the home in mid-March 2014 and, without Mary’s
knowledge or consent, took almost everything with him, including furniture,
mirrors, fixtures, televisions, speakers, cleaning supplies, and silverware. He
even removed built-in appliances, cabinets, and desks, resulting in damage to
the home. Mary and the Children were ultimately left with beds, a chair, and a
patio set in their 8000 square foot home. He also had the home’s boat dock
with lift station on Geist Reservoir removed from the property. Kevin’s actions
significantly lowered the value of the marital residence.
[7] After moving out, Kevin did not regularly pay the utility bills and mortgage,
cancelled the homeowners and car insurance, and refused to contribute to most
expenses for the Children. He moved into a rental home on Geist Reservoir
costing $5000 a month and generally continued his expensive lifestyle. His rent
was paid by his mother through the Inner Printing, Inc. corporate bank
account. This company was nominally in his mother’s name. In early 2014,
the Inner Printing bank account had a balance of $90,000.
[8] In light of Kevin’s actions, Mary filed an emergency motion for a provisional
order, and a hearing on that motion commenced on April 21, 2014. Kevin
denied many of the allegations made by Mary and accused her of not returning
certain property. At the conclusion of the hearing on May 30, 2014, the trial
court granted Kevin parenting time with the Children and, after imputing
income to both parties, ordered him to pay $350 per week in child support. The
court also ordered Kevin to restore the utilities to the home and keep the
payments current. With respect to personal property, the court directed the
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parties to each make a list of any items they believed had been removed or
secreted from the marital residence. They were then directed to exchange their
lists and, within 30 days, return any such property either to the marital
residence or a storage facility for proper accounting.
[9] Mary complied with the trial court’s order and returned the limited property she
had removed from the residence. Kevin, however, defied the order at nearly
every turn. He did not pay any child support, and he filed a separate action
attempting (unsuccessfully) to void his adoption of the Children. Additionally,
he did not consistently pay the utility bills and did not return any of the
property he had taken from the home. In fact, after the hearing, Kevin sold
much of the furniture and other property at a consignment shop or through
other avenues.
[10] At a contempt hearing on September 29, 2014, the trial court found Kevin in
contempt for nonpayment of child support and for disposing of marital property
in violation of the provisional order. The court found this to be “a classic case
of underemployment in order to avoid paying child support.” Transcript at 222.
The court continued:
The history over the course of this marriage…indicates that you
are certainly capable of making lots more than that. The
evidence that is also before the Court with regard to your
spending habits at the country club also would indicate that you
are able, certainly, to afford a lot more than what you are
indicating to the Court….
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With regard to the personal property…, the evidence that is
before the Court is that some 24 hours after my order went out, a
bunch of that missing property suddenly showed up at a
consignment store. Curious.
Mr. King, you are in contempt there as well. As a sanction for
your contempt, sir, because I’m not quite sure that you
understand that the Court does mean what it says, I’m going to
order that you serve 30 days in the Hamilton County Jail. There
will be a cash bond in the amount of the outstanding balance of
your child support arrears in the amount of $6,950.
Id. at 223-24. The trial court then provided Kevin with 24 hours to pay the
arrearage and avoid jail. Kevin was also directed to comply with the
provisional order regarding personal property by returning the items and/or
reporting to the court those items that cannot be returned to the marital home.
Kevin paid the arrearage as ordered by the court, but he did not return the vast
majority of the marital property or account for any sold property.
[11] The final hearing took place on April 13 and August 10, 2015. A real estate
broker testified that the marital residence had been listed in July 2014 for $1.65
million, and there was a current offer pending for $1 million. The home was
sold in a short sale by the bank2 after the first day of the final hearing, and Mary
and the Children moved into a rental.
2
Kevin had a foreclosure judgement against him in the amount of $1.6 million for the marital residence.
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[12] Kevin testified that he had a substantial amount of personal debt (over $2
million excluding the foreclosure judgment) and no assets aside from about
$5000 in household furnishings and possessions. Kevin conceded that the
majority of his debt was incurred prior to his and Mary’s marriage. 3 He
indicated that he wanted Mary to share in certain credit card debt (totaling
approximately $254,000) but acknowledged that these cards were used for both
personal and business expenses. Additionally, he testified that the unsold items
at the consignment shop had been returned to Mary but that all other furniture
and belongings were either still in his possession or had been sold. Kevin
claimed annual income of only about $30,000, all from Inner Printing – a
company of which he owned 99% and his mother owned 1%. Although Kevin
did not make regular child support payments, his mother made several lump
sum payments on his behalf.
[13] Mary testified that throughout the marriage she worked for Kevin’s various
businesses without pay, as well as maintained their home. The family’s
personal debts were regularly paid with corporate funds. Kevin started several
of his businesses in other family member’s names, including Mary’s, due to his
lack of credit. Mary testified that on January 28, 2014, there was a corporate
bank account with over $90,000 in it.
3
For example, Kevin had $1.42 million in debt related to one boat and $470,000 for another boat, both of
which were purchased prior to the marriage.
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[14] In January 2015, Mary obtained full-time employment making $28,000 a year.
Mary’s family stepped in during the dissolution proceedings to help pay bills, as
Kevin did not regularly pay utility bills or child support as directed by the court.
Mary documented approximately $39,000 in ordinary household expenses she
incurred during the dissolution action.
[15] With respect to personal property, Mary testified that Kevin had returned only
a sofa and four chairs. She estimated, conservatively, that the garage-sale value
of the property taken by Kevin and never returned was $100,000. Additionally,
Mary testified that she did not dispose of and had returned all of the property
(rugs, wine, and sports memorabilia) she had removed from the marital
residence as ordered by the trial court.
[16] On October 5, 2015, the trial court entered its decree of dissolution of marriage
(the Decree). With respect to child support, the court found that Kevin was
voluntarily underemployed with the education, experience, and ability to earn
at least $100,000 per year. The court observed that Kevin continued “to
operate much of his life in a lifestyle commensurate with such income.”
Appellant’s Appendix at 27. Kevin was ordered to pay $337 per week in child
support, as well as an arrearage of $4500.
[17] Particularly relevant to this appeal, the Decree provided the following with
respect to property:
19. The Court finds that there is a great disparity in the testimony
regarding the property of the marital estate. Both parties have
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testified that the other party has removed or secreted property
from the other.
20. The Court finds that [Kevin] has engaged in actions to reduce
the size of the marital estate, specifically, that he has sold and
given away marital property, and allowed family members to do
the same. This Court ordered [him] to return items to the marital
residence…. [Kevin] has not complied, nor has he completed an
accounting of such items as previously ordered.
21. The Court finds that there existed a business account with a
balance of approximately $90,000 as of February 2014. The
Court finds that this is a marital asset and should be divided
equally….
22. The Court will further order [Kevin] to return all of the
personal property listed on Respondent’s Exhibit A (attached) to
[Mary] within ten (10) days of this Order. The Court finds that
the value of such items is not less than $85,000.00. Should
[Kevin] not return the items of property, he shall be obligated to
pay to [Mary] the sum of $85,000.00.
23. The Court finds that [Mary] paid a number of expenses
related to the marital residence or the children, for which [Kevin]
was obligated. The Court finds that [Kevin] should reimburse
[Mary] for these expenses in the sum of $39,248.71….
24. [Kevin] shall have as his sole property the assets and debts
related to [all of his businesses]….
****
27. Except as specifically noted above, [Kevin] shall retain as his
sole property the personal property currently in his possession….
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28. Except as specifically noted above, [Mary] shall retain as her
sole property the personal property currently in her possession….
29. [Kevin] shall be responsible for any debts and any credit cards
issued in his name.
30. [Mary] shall be responsible for any debts, payment of her
student loans, and any credit cards issued in her name.
****
32. The Court notes that Indiana law presumes an equal division
of the marital estate. The Court, however, finds that this
presumption has been rebutted in this case due to a number of
factors. Specifically, the Court finds that, historically, [Kevin]
has had a far greater earning potential than [Mary].
Additionally, during the course of this litigation, the Court has
found that [Kevin] has engaged in actions to dissipate the marital
estate, to secret [sic] property away from [Mary], and has failed
to abide by Court orders to preserve the marital estate. Although
the Court does not have sufficient information from which to
determine the exact value of the marital estate, and cannot
therefore determine whether each party has an equal share, the
Court does find that the totality of the circumstances in this case
justify an unequal distribution of the marital estate in favor of
[Mary].
****
Id. at 30-32.
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[18] After an unsuccessful motion to correct error, Kevin initiated this appeal
challenging certain aspects of the property distribution. We will provide
additional facts below as needed.
Discussion & Decision
[19] On appeal, Kevin challenges the trial court’s award of $85,000 to Mary for
personal property removed from the marital residence, the division of marital
debt, and the division of funds in a corporate bank account. His arguments on
appeal are poorly developed and essentially boil down to improper requests for
us to reweigh the evidence and judge witness credibility.
[20] When reviewing a challenge to the trial court’s division of marital property, we
determine whether the evidence supports the findings, and then whether the
findings support the judgment. Goodman v. Goodman, 754 N.E.2d 595, 599
(Ind. Ct. App. 2001). We review such a challenge for an abuse of discretion,
and consider only the evidence favorable to the judgment. Id. Due regard will
be given to the opportunity of the trial court to judge the credibility of the
witnesses. Steele-Giri v. Steele, 51 N.E.3d 119, 123 (Ind. 2016). We will reverse
only if the trial court’s judgment is clearly against the logic and effect of the
facts and the reasonable inferences to be drawn from those facts. Goodman, 754
N.E.2d at 599.
[21] In Indiana, there is a well-established preference for granting latitude and
deference to our trial courts in family law matters. Steele-Giri, 51 N.E.3d at 124.
As an appellate court, we are in a poor position to look at a cold transcript of
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the record, and conclude that the trial court, who saw the witnesses, observed
their demeanor, and scrutinized their testimony as it came from the witness
stand, did not properly understand the significance of the evidence. Id. It is not
enough that the evidence might support some other conclusion, but it must
positively require the conclusion contended for by appellant before there is a
basis for reversal. Id.
[22] The trial court’s discretion in the disposition of marital property is subject to a
statutory presumption in favor of equal distribution. Goodman, 754 N.E.2d at
599. Ind. Code § 31-15-7-5, however, provides that this presumption may be
rebutted by evidence that an equal division would not be just and reasonable,
including evidence of the following factors:
(1) The contribution of each spouse to the acquisition of the
property, regardless of whether the contribution was income
producing.
(2) The extent to which the property was acquired by each
spouse:
(A) before the marriage; or
(B) through inheritance or gift.
(3) The economic circumstances of each spouse at the time the
disposition of the property is to become effective, including the
desirability of awarding the family residence or the right to dwell
in the family residence for such periods as the court considers just
to the spouse having custody of any children.
(4) The conduct of the parties during the marriage as related to
the disposition or dissipation of their property.
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(5) The earnings or earning ability of the parties as related to:
(A) a final division of property; and
(B) a final determination of the property rights of the
parties.
Id. “The party challenging the trial court’s property division must overcome a
strong presumption that the court complied with the statute and considered
evidence of statutory factors.” Goodman, 754 N.E.2d at 599 (quoting Newby v.
Newby, 734 N.E.2d 663, 669 (Ind. Ct. App. 2000)).
[23] We initially address Kevin’s brief argument that the trial court abused its
discretion by failing to consider each of the statutory factors in determining that
an unequal division of assets was just and reasonable. Specifically, he contends
that the trial court failed to consider that he brought the majority of assets (i.e.,
the marital residence and furnishings) into the marriage. It is true that the trial
court did not address this factor in the Decree, but a trial court’s exclusion of a
factor from its written findings does not mean that it did not consider the factor.
See Eye v. Eye, 849 N.E.2d 698, 703 (Ind. Ct. App. 2006); Shumaker v. Shumaker,
559 N.E.2d 315, 318 (Ind. Ct. App. 1990). The court addressed a number of
the statutory factors and ultimately determined that the totality of the
circumstances justify an unequal distribution in favor of Mary. The trial court’s
conclusion in this regard is supported by the record, and Kevin’s claim that one
factor would have altered this determination rings hollow, especially in light of
the amount of debt he brought into the marriage.
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[24] With respect to dissipation of assets, Kevin acknowledges the evidence of his
contemptuous behavior and selling of marital property but asserts that he also
presented evidence that Mary failed to return certain property. Mary directly
disputed his claims. Thus, contrary to Kevin’s assertion that the trial court
ignored the evidence he presented, it is apparent that the trial court simply did
not believe him. As the trier of fact, this was well within the trial court’s
province. See DeSalle v. Gentry, 818 N.E.2d 40, 44 (Ind. Ct. App. 2004) (“it falls
solely within the province of the trial court to determine the witnesses’
credibility and to weigh the evidence from their testimony”). We reject Kevin’s
bald invitation for us to reweigh the evidence. Accordingly, Kevin has failed to
establish an abuse of discretion regarding the award to Mary of $85,000 for
unreturned personal property.
[25] Kevin next challenges the trial court’s division of marital debt, in which the trial
court made each party responsible for any debts or credit cards issued in their
individual name. Kevin claims that this resulted in him taking on “an
exhorbatant [sic] amount of debt”, some of which Mary benefitted from and
was incurred during the marriage. Appellant’s Brief at 11. Again, this amounts
to an improper request for us to reweigh the evidence. The evidence favorable
to the judgment establishes that the majority of the debt was brought into the
marriage by Kevin, and he actively dissipated assets during the marriage.
Moreover, as Mary observes, she did not leave the marriage debt free, as the
trial court assigned to her all expenses related to the Palace Premier Timeshare,
indebtedness related to personal property in her possession, and credit card and
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student loan debt in her name. Kevin has failed to establish that the trial court
abused its broad discretion when assigning marital debt between the parties.
[26] Finally, Kevin makes a bizarre argument related to the trial court’s equal
division of funds in one of his corporate bank accounts for Inner Printing. In
essence, he contends that the $90,000 in this account was improperly included
in the marital estate because “[t]here was no mention by [Mary], nor the court
about piercing a corporate veil in order to gather the funds located in the
corporate bank account.” Appellant’s Brief at 15. He continues, “[b]ecause no
action was taken to request to pierce the veil, the veil remains.” Id.[27] Kevin apparently does not understand the concept of piercing the corporate
veil, and we do not endeavor to educate him here. 4 The evidence favorable to
the judgment reveals that throughout the marriage Kevin owned a number of
companies and regularly paid personal and marital expenses with corporate
funds. In early 2014, one corporate bank account had a balance of $90,000.5
This was an account for Inner Printing, a company nominally placed in his
mother’s name and of which he was a 99% shareholder. Additionally, there
4
A corporate veil protects shareholders from being “held personally liable for acts attributable to the
corporation.” See Aronson v. Price, 644 N.E.2d 864, 867 (Ind. 1994) (emphasis supplied).
5
Kevin did not dispute this fact at trial or present any evidence related to these funds. To the extent Kevin
attempts to challenge the valuation of this asset in his reply brief, we note that new arguments may not be
asserted for the first time in a reply brief. See I.A.E., Inc. v. Hall, 49 N.E.3d 138, 153 (Ind. Ct. App. 2015),
trans. denied. In his opening brief, he argued only that the funds were not a marital asset subject to division
because Mary could not pierce the corporate veil.
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was evidence presented from which one could reasonably infer that Kevin was
secreting money through Inner Printing.
[28] We agree with Mary that Kevin’s contention that the corporate veil must be
pierced in order for Mary to receive a share of the account is a red herring.
Thus, Kevin has made no showing on appeal that the trial court erred in equally
dividing the funds between the parties.
[29] Judgment affirmed.
[30] Riley, J. and Crone, J., concur.
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