Peter Coles v. Mary (Coles) McDaniel , 117 N.E.3d 573 ( 2018 )

FILED
Dec 14 2018, 8:34 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT
William O. Harrington
Harrington Law, P.C.
Danville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Peter Coles, December 14, 2018
Appellant-Respondent, Court of Appeals Case No.
23A05-1712-DR-2817
v. Appeal from the Fountain Circuit
Court
Mary (Coles) McDaniel, The Honorable Stephanie S.
Appellee-Petitioner Campbell, Judge
Trial Court Cause No.
23C01-1301-DR-35
May, Judge.
[1] Peter Coles (“Husband”) appeals the trial court’s grant of Mary (Coles)
McDaniel’s (“Wife”) motion for relief from judgment and the trial court’s
subsequent division of certain real property of the marriage. We affirm.
Facts and Procedural History
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[2] Husband and Wife were married in 1991. On January 30, 2013, Wife filed for
dissolution. Wife served a series of interrogatories on Husband on January 8,
2015, and Husband answered those interrogatories on March 11, 2015. As part
of those interrogatories, Husband was asked if he owned any real estate. The
parties did not own real estate together, however, Husband held a remainder
fee-simple interest in real estate subject to his mother’s life estate (“Lizton
House”), which he did not disclose on the interrogatories.
[3] The parties agreed to terms resolving all issues related to dissolution and
submitted their Dissolution Settlement Agreement to the court. On August 12,
2015, the trial court entered a decree of dissolution, incorporating the custody,
support, and property settlement agreements from the Dissolution Settlement
Agreement.
[4] On March 22, 2016, Wife filed a motion for relief from judgment, alleging
Husband did not disclose his interest in certain real property prior to the
Dissolution Settlement Agreement. Specifically, Wife directed the trial court to
two of Husband’s answers to interrogatories wherein he indicated he did not
own real estate. Wife claimed she was entitled to relief because she would not
have entered into their Dissolution Settlement Agreement if had she known of
Husband’s interest in the Lizton House.
[5] The trial court first ordered the parties to mediation, but mediation was
unsuccessful. The trial court held a hearing on February 14, 2017. On April
14, 2017, the trial court entered findings of fact and conclusions of law granting
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Wife’s motion to set aside the portions of the Dissolution Settlement
Agreement regarding the parties’ debts and assets. The trial court ordered the
parties to participate in mediation to determine the value of those debts and
assets prior to the court holding a final hearing on the matter. Mediation was
again unsuccessful. The trial court held a hearing on September 29, 2017, and
then entered an order distributing the relevant debts and assets on November 5,
2017 (“2017 Property Order”).
Discussion and Decision
[6] As an initial matter, we note Wife did not file an appellee’s brief. When an
appellee does not submit a brief, we do not undertake the burden of developing
arguments for that party. Thurman v. Thurman, 777 N.E.2d 41, 42 (Ind. Ct.
App. 2002). Instead, we apply a less stringent standard of review and may
reverse if the appellant establishes prima facie error. Id. Prima facie error is
“error at first sight, on first appearance, or on the face of it.” Van Wieren v. Van
Wieren, 858 N.E.2d 216, 221 (Ind. Ct. App. 2006).
Order Granting Wife Relief from Judgment
[7] Whether to grant a motion for relief from judgment under Indiana Trial Rule
60(B) is within the discretion of the trial court, and we reverse only for abuse of
that discretion. Miller v. Moore, 696 N.E.2d 888, 889 (Ind. Ct. App. 1998). An
abuse of discretion occurs when the decision is clearly against the logic and
effect of the facts and circumstances before it, or if the trial court has
misinterpreted the law. Id. When we review a trial court’s decision, we will
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not reweigh the evidence. Beike v. Beike, 805 N.E.2d 1265, 1267 (Ind. Ct. App.
2004).
[8] Where, as here, the trial court entered findings sua sponte after a bench trial, the
findings control our review and judgment only as to those issues specifically
referenced in the findings. See Samples v. Wilson, 12 N.E.3d 946, 949-50 (Ind.
Ct. App. 2014). When the trial court does not make specific findings on an
issue, we apply a general judgment standard, and we may affirm on any legal
theory supported by the evidence adduced at trial. Id. at 950.
A two-tier standard of review is applied to the sua sponte findings
and conclusions made: whether the evidence supports the
findings, and whether the findings support the judgment.
Findings and conclusions will be set aside only if they are clearly
erroneous, that is, when the record contains no facts or inferences
supporting them. A judgment is clearly erroneous when a review
of the record leaves us with a firm conviction that a mistake has
been made. In conducting our review, we consider only the
evidence favorable to the judgment and all reasonable inferences
flowing therefrom. We will neither reweigh the evidence nor
assess witness credibility.
Id. Husband does not challenge the trial court’s findings, and thus they stand as
proven. See Madlem v. Arko, 592 N.E.2d 686, 687 (Ind. 1992) (“Because
Madlem does not challenge the findings of the trial court, they must be accepted
as correct.”). Thus, we turn to whether those findings support the trial court’s
decision. Samples, 12 N.E.3d at 950.
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[9] Indiana Trial Rule 60(B)(3) provides for relief from a judgment for “fraud
(whether heretofore denominated intrinsic or extrinsic), misrepresentation, or
other misconduct of an adverse party[.]” In its order granting Wife’s motion for
relief from judgment, the trial court found Husband submitted incomplete or
false answers to some of Wife’s interrogatories as part of the dissolution action.
In addition, the trial court made other relevant findings, including:
11. Husband’s responses to request for document production
contained a total of thirty-eight (38) pages, and Exhibit C
consisted of only two (2) documents. One document is an
untitled document that does not list any address, but does
contain a parcel number and a past due balance with handwriting
from an unidentified source that states “This property is eligible
for tax sale this year. You hold the life estate so the taxes are
your responsibility.” The second page of Exhibit C is another
untitled document that appears to be a tax statement of current
account balance and refers to the same parcel number. It appears
to be addressed to Pauline Coles but also lists [Husband’s]
Reservation of Life Estate.
12. Interrogatory No. 26 directs husband to “list all real or
personal property in which you have a present or future interest,
which you claim as inherited and/or property not to be included
as marital property”. Husband responded “Investigation
continues”.
13. There was no evidence that husband ever supplemented his
discovery responses with regard to any real property interest.
14. Evidence at the hearing on wife’s motion to set aside
judgment showed that both documents in Exhibit C of the
discovery responses pertain to a parcel of property in which
husband’s mother held a life estate and husband held the
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remainder. Wife testified that property tax assessments on the
property value [sic] over $100,000.00. No evidence was
presented as to the value of husband’s remainder interest.
15. At the hearing on February 14, 2017, wife testified that she
never reviewed husband’s discovery responses, nor did she
review the responses with her attorney, prior to entering the
Settlement Agreement.
16. Wife also testified that prior to entering the Settlement
Agreement, she was aware that husband’s mother had granted
husband a remainder interest in her residence in Lizton, Indiana,
during the parties’ marriage.
17. According to wife, husband’s mother “put husband’s name
on her property” to protect herself in the event she made a
“stupid financial decision” in her old age.
18. In paragraph 5 of the Settlement Agreement, the parties
acknowledged that “they own no real estate together.”
(Emphasis added). Nowhere in their Settlement Agreement do
the parties acknowledge that they own no [sic] real estate. In
paragraph 12 of their Settlement Agreement, “the parties
acknowledge that they have disclosed all financial marital assets
in this proceeding[.]”
19. Husband argues that he did not sign the discovery responses
and that they were provided to wife’s counsel with only
husband’s counsel signing as to objections. Husband’s signature
line “as to answers” is blank.
20. Wife testified that if she had known that husband had a
pecuniary interest in the property she would not have entered
into the property settlement agreement under the same terms and
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that the value of the property is a substantial asset that should be
included in the marital estate and divided between the parties by
the Court.
(App. Vol. II at 17-8.)
[10] Based on those findings, the trial court determined Wife was entitled to relief
from the judgment. Citing Outback Steakhouse of Fla., Inc. v. Markley, 856 N.E.2d
65 (Ind. 2006), the trial court specifically concluded:
25. Husband’s false or incorrect (whether intentional or not)
answer to Interrogatory number 4, his failure to answer
Interrogatory number 26, and then his claim that he did not
respond to the discovery request because he did not sign the
responses that were submitted to wife would be in fact allowing
husband to make a game and mockery of the discovery process
that is required by the Trial Rules. Husband had a duty to
respond honestly and fully to each interrogatory, not contend
that an answer to a request for production trumps his
Interrogatory Answers and expect wife to recognize this. Nor
should he be permitted to submit responses without his signature
and then argue that wife should not rely on the information in
the discovery responses. Husband had a duty to comply with
both the letter and the spirit of the discovery rules and this Court
finds he did not.
26. Further, husband executed the property settlement
agreement with the acknowledgement that he had disclosed all
financial marital assets. Even giving husband every benefit, it
cannot be said with certainty that he did in fact disclose his
present interest in the real estate.
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(App. Vol. II at 18-9.) Husband argues the trial court’s conclusion is incorrect
as a matter of law of because the misconduct standard under Indiana Trial Rule
60(B)(3) does not apply to this case.
[11] In Markley, the case cited by the trial court, our Indiana Supreme Court set forth
factors required for a party to show that she is entitled to relief for another
party’s misconduct under Indiana Trial Rule 60(B)(3): (1) the relevant discovery
responses amounted to misconduct; (2) the misconduct prevented the
complaining party from fully and fairly presenting its case at trial; and (3) the
complaining party has made a prima facie showing of a meritorious defense.
Markley, 856 N.E.2d at 74.
[12] In Markley, a patron at the grand opening of an Outback Steakhouse, William
Whitaker, allegedly became intoxicated and caused an accident that injured the
Markleys. The Markleys sued Outback Steakhouse, claiming Outback
negligently served alcohol to an intoxicated person, knowingly served alcohol
to an habitual drunkard, and knowingly served alcohol to a visibly intoxicated
person. Outback served interrogatories on the Markleys, including one that
requested:
State specifically each and every fact upon which you rely to
support your allegation under I.C. § 7.1-5-10-15.5 that these
Defendants, and each of them, provided alcoholic beverages to
William J. Whitaker with actual knowledge that he was visibly
intoxicated, and the names and addresses of those persons
possessing knowledge of such facts.
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Id. at 75. The Markleys did not disclose the name of Roysdon, whom they
knew to be present at the time of the incident, because they did not intend to
call her as a witness. Outback deposed Roysdon prior to trial and subpoenaed
her to testify in Outback’s defense, as Roysdon told Outback in her deposition
that Whitaker was not visibly intoxicated when she saw him at the grand
opening.
[13] However, during the trial, Roysdon contacted the Markleys and told them that
she had lied to Outback and that she had observed Whitaker visibly intoxicated
at the grand opening. She did not communicate any of her change in testimony
to Outback, nor did the Markleys. When the trial resumed, the Markleys called
Roysdon as a witness, much to the surprise of Outback, who did not object to
Roysdon’s serving as a witness and was given an opportunity to cross examine
Roysdon.
[14] After the jury returned a verdict finding Outback 65% at fault for the Markleys’
injuries, Outback filed a motion to correct error, asking for a new trial based on
the circumstances surrounding Roysdon’s testimony. Outback also filed a
motion for a new trial under Indiana Trial Rule 60(B). The trial court denied
all of Outback’s post-trial motions, and Outback appealed. On appeal, Outback
argued they were entitled to relief from the judgment under Indiana Trial Rule
60(B)(3) because the Markleys violated various trial rules when they: (1) did not
initially disclose their knowledge of Roysdon in the interrogatory, and (2) did
not supplement that interrogatory when Roysdon came to the Markleys during
trial. Our Indiana Supreme Court agreed with Outback and concluded:
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[T]he [Markleys’] failure to identify Roysdon as a person with
knowledge of the relevant facts was a negligent if not intentional
breach of its discovery obligations. Subsequently, [the Markleys]
failed to supplement their response with the substance of her
change in testimony. As these events unfolded, these omissions
cascaded into a closing argument that materially misled the jury.
The cumulative effect was misconduct prejudicing Outback’s
defense.
Id. at 74.
[15] Husband argues Markley is
inapposite and readily distinguishable from the facts in the
instant case, because this case involves a property settlement
agreement in a dissolution of marriage case and not a jury trial in
a personal injury case. Moreover, there was not even a bench
trial in this case. Therefore, it would be impossible to evaluate
the impact of [Husband]’s alleged “misconduct” on the “full and
fair” presentation of a case at trial.
(Br. of Husband at 28.) We disagree with Husband. Despite the difference in
procedural posture, the legal analysis directly applies to this case. In addition,
the prejudice referenced in Markley, a personal injury case, also applies in cases
where there is no trial. See Stonger v. Sorrell, 776 N.E.2d 353, 355-6 (Ind. 2002)
(analysis of Indiana Trial Rule 60(B)(3) as applied to a divorce proceeding).
[16] In Markley, our Indiana Supreme Court first noted the standard for
interpretation of the requests in interrogatories and the requirements for the
answers to interrogatories:
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Interrogatories should not “be interpreted with excessive rigidity
or technicality, but a rule of reason should be applied.”
Additionally, answers to interrogatories “must be responsive,
full, complete and unevasive.” This commonsense approach to
the interpretation of interrogatory requests furthers the purposes
of discovery, namely, to allow parties to obtain evidence
necessary to evaluate and resolve their dispute based on a full
and accurate understanding of the true facts, to promote
settlement, to remove surprise from trial preparation, and to
narrow the disputed issues and facts requiring trial.
Markley, 856 N.E.2d at 75-6 (internal citations omitted).
[17] Here, the trial court found that Husband’s answers to the relevant
interrogatories, including the reply, “Investigation continues,” (App. Vol. II at
17), made a mockery of the discovery process, especially considering Husband
did not later supplement that response and considering Husband indicated as
part of the Dissolution Settlement Agreement that he had disclosed all real
property interests. Further, Wife indicated she would not have entered into the
Dissolution Settlement Agreement that excluded the Lizton House if she had
known Husband’s interest therein. We therefore conclude the findings support
the trial court’s conclusion that Wife was entitled to relief from judgment under
Indiana Trial Rule 60(B). See Markley, 856 N.E.2d at 73 (listing factors to
determine misconduct under Indiana Trial Rule 60(B)(3)).
Division of Property Following Relief from Judgment
[18] “The division of marital assets lies within the sound discretion of the trial court
and we will reverse only for an abuse of that discretion.” Fischer v. Fischer, 68
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N.E.3d 603, 608 (Ind. Ct. App. 2017), trans. denied. An abuse of discretion
occurs when the trial court’s decision is against the logic and effect of the facts
and circumstances before the court. Id. In our review of the trial court’s
decision, we do not reweigh the evidence or assess the credibility of witnesses,
and we consider only the evidence most favorable to the trial court’s
disposition. Id.[19] In its order granting Wife relief from judgment, the trial court vacated all
property division provisions in the Dissolution Settlement Agreement between
the parties. Then, in its 2017 Property Order, it divided the property as follows:
The terms of the previously approved property settlement
agreement is [sic] reaffirmed, with the additional order that wife
and husband shall have set over to them as tenants in common
the interest that husband held as of the date of the filing of
separation and now fully vested remainder interest in the real
property 106 N. Mulberry St., Lizton, IN, parcel number 32-03-
29-440-002.000-021.
Husband is ordered to cause to be prepared and to execute a deed
transferring an undivided one-half interest to wife as tenant in
common to wife [sic] within 7 days of the issuance of this order.
(App. Vol. II at 21-2.) The trial court also divided Wife’s pension, which was
not included in the Dissolution Settlement Agreement.
[20] Husband argues the trial court abused its discretion when it divided his fee
simple interest in the Lizton House when, at the time of separation, he had only
a remainder interest in fee simple in the Lizton House. However, Husband
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provided the trial court with no evidence regarding the value of the property
either at time of separation or at the time the trial court granted Wife relief from
the Dissolution Settlement Agreement. Therefore, he is estopped from
challenging the manner in which the trial court distributed the property. See In
re Marriage of Church, 424 N.E.2d 1078, 1081 (Ind. Ct. App. 1981) (holding that
“any party who fails to introduce evidence as to the specific value of marital
property . . . is estopped from appealing the distribution on the ground of the
trial court abuse of discretion based on that absence of evidence”).
Conclusion
[21] The trial court’s findings support its conclusion that Wife was entitled to relief
from the dissolution settlement agreement because Husband engaged in
misconduct when he provided evasive answers to interrogatories regarding the
ownership of real property. Additionally, Husband is estopped from
challenging the manner in which the trial court divided the Lizton House
between the parties because he did not present evidence regarding its value at
any time. Accordingly, we affirm.
[22] Affirmed.
Riley, J., and Mathias, J., concur.
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