Opinion
No. 88A01-1102-DR-72
10-13-2011
In re: THE MARRIAGE OF, WILLIAM SCOTT MITCHELL, Appellant, v. CRYSTAL HOPE BAILEY, Appellee.
ATTORNEY FOR APPELLANT : LEWIS MAUDLIN Salem, Indiana ATTORNEY FOR APPELLEE : J. BART MCMAHON Louisville, Kentucky
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:
LEWIS MAUDLIN
Salem, Indiana
ATTORNEY FOR APPELLEE:
J. BART MCMAHON
Louisville, Kentucky
APPEAL FROM THE WASHINGTON SUPERIOR COURT
The Honorable Frank Newkirk, Jr., Judge
Cause No. 88D01-1008-DR-157
MEMORANDUM DECISION - NOT FOR PUBLICATION
BARNES , Judge
Case Summary
William Mitchell appeals the trial court's distribution of property following the dissolution of his marriage to Crystal Bailey. We affirm and remand.
Issue
Mitchell raises four issues, which we consolidate and restate as whether the trial court properly distributed the marital estate.
Facts
Mitchell and Bailey were married on January 15, 2007. At the time of the marriage, Bailey was employed with the Jefferson County Public Schools in Louisville, Kentucky, making $63,000 per year. Bailey had pensions and life insurance policies. She had a house in Louisville, a Toyota Camry subject to a loan, and $20,000-$30,000 in savings. Bailey also had two children from a previous marriage. Mitchell owned a twenty-five-acre parcel of real estate in Salem, with a house located on the parcel. Mitchell was the president and CEO of a trucking company, Premier Freight, a closely-held corporation. Mitchell also received Navy pension and disability payments totaling $1,000 per month.
During the marriage, Bailey quit her job and began working without pay for Premier Freight. The couple sold Bailey's house in Louisville, subdivided the parcel in Salem, built a new house on one parcel, and used the existing house as an office for Premier Freight. At some point, Mitchell and Bailey executed a deed in lieu of foreclosure without recourse for the house they had built. However, a home equity line of credit remained and was eventually negotiated down from $42,000 to $25,000. Bailey and Mitchell then added onto the existing house and used it as an office and a house. Premier Freight experienced financial difficulties and borrowed $15,000 from Mitchell's mother. Bailey also cashed in a small pension and made $3,250 in contributions to another of her pensions while she was still employed with the school district.
When the parties separated in June 2010, Bailey's Camry was paid off, and Mitchell owned a Suburban, which was worth slightly more than what he owed on it. Bailey eventually moved back to Louisville, and Mitchell remained in the house in Salem. Bailey's savings had been reduced to $1,000, and she was unable to return to her former job.
On August 23, 2010, Bailey petitioned for dissolution. During the pendency of the dissolution action, the existing Salem house went into foreclosure, Premier Freight went into receivership, and Mitchell sold various items of personal property.
On December 31, 2010, the marriage was dissolved. On January 27, 2011, after a hearing, the trial court issued an order disposing of the parties' marital property. In its order, the trial court made findings concerning the parties' financial positions at the time of marriage and at the time of the separation. The trial court described the parties' actions relating to the marital estate during the pendency of the dissolution proceeding. The trial court also restated the parties' proposals for distributing the marital estate. The trial court distributed the marital estate as follows:
3. Mr. Mitchell shall quitclaim his interest in and to the office house to Ms. Bailey.App. pp. 15-16. Mitchell now appeals.
4. Ms. Bailey shall liquidate that house by the most reasonable and expeditious manner in order to obtain the
maximum return on the house if possible, and use any proceeds to pay the mortgage on that house, [home equity line of credit] and associated tax obligation due to its reduction.
5. Mr. Mitchell and Ms. Bailey share equally in the remaining obligation on the [home equity line of credit], the taxes related to its reduction and the mortgage on the office house.
6. Mr. Mitchell shall be solely responsible for the debt to his mother on the loan from December 2009;
7. Mr. Mitchell shall return to Ms. Bailey the baking dish given [sic] Ms. Bailey by her late mother;
8. Mr. Mitchell shall retain his Navy pension in full;
9. Ms. Bailey shall retain her pensions and paid up life [sic] policy as her sole and separate property.
10. Ms. Bailey shall pay her CitiBank credit card of $7,500;
11. Mr. Mitchell shall pay the Premier Freight credit cards and other obligations of Premier Freight, Inc.;
12. Mr. Mitchell shall retain the Suburban with the debt, Ms. Bailey shall retain her Camry that she brought into the marriage;
13. Mr. Mitchell shall retain sole ownership of Premier Freight, Inc., and hold Ms. Bailey harmless from any and all obligations arising therefrom;
14. Ms. Bailey shall retain her personal accounts and those of her children remain those of her children;
15. Each party retain [sic] the balance of the personal property in their respective current possession unless otherwise noted;
16. Each party shall hold the other harmless from the respective debts apportioned to them . . . .
Analysis
Mitchell argues that the trial court did not properly distribute the marital estate. The trial court's entry of findings and conclusions was sua sponte. "Sua sponte findings control only as to the issues they cover, and a general judgment will control as to the issues upon which there are no findings." Indiana Bureau of Motor Vehicles v. McNeil, 931 N.E.2d 897, 900 (Ind. Ct. App. 2010), trans. denied. We affirm a general judgment entered with findings if it can be sustained on any legal theory supported by the evidence. Id. When a court has made special findings, we review sufficiency of the evidence using a two-step process. Id. We first determine whether the evidence supports the trial court's findings, and then we determine whether those findings of fact support the trial court's conclusions. Id.
Indiana law requires that marital property be divided in a just and reasonable manner. Fobar v. Vonderahe, 771 N.E.2d 57, 58 (Ind. 2002) (citing Ind. Code § 31-15-74). There is a statutory presumption that an equal division of the marital property between the parties is just and reasonable. Id. at 58-59 (citing I.C. § 31-15-7-5). This presumption may be rebutted by evidence of each spouse's contribution to the acquisition of the property, the extent to which the property was acquired before the marriage or by inheritance, the economic circumstances of each spouse, the conduct of the parties relating to the disposition or dissipation of assets, and each spouse's earning ability. Id. at 59 (citing I.C. § 31-15-7-5). "The trial court's disposition is to be considered as a whole, not item by item." Id. In crafting a just and reasonable property distribution, a trial court is required to balance a number of different considerations in arriving at an ultimate disposition, and if the appellate court views any one of these in isolation and apart from the total mix, it may upset the balance ultimately struck by the trial court. Id. at 60.
Although whether a trial court's division of the marital property was just and reasonable is in some sense an issue of law, it is highly fact sensitive and is subject to an abuse of discretion standard. Id. at 59. "A reviewing court will not weigh evidence, but will consider the evidence in a light most favorable to the judgment." Id.
Pointing to nine alleged inaccuracies in the trial court's findings, Mitchell first asserts that the findings referred to evidence not in the record. Mitchell suggests the trial court's findings came from the nearly verbatim adoption of Bailey's proposed findings and contends, "Absent ex parte contact, the verbatim adoption of the proposed findings is the only way the Court could have had access to the 9 facts not included in the trial record." Appellant's Br. p. 10. Mitchell concludes that the appearance that the trial court's decision was not the result of considered judgment alone should be reason enough to set aside the trial court's order.
Mitchell's brief does not include pages numbers on all of the pages. We have numbered them and reference them accordingly.
Initially we point out that Mitchell did not include a copy of Bailey's proposed findings in his Appendix. Therefore, we cannot determine whether the trial court's findings were in fact a verbatim adoption of Bailey's proposed findings.
Further, although accepting a party's proposed findings verbatim may weaken our confidence that the findings were the result of considered judgment by the trial court, the practice is not prohibited. In re Marriage of Nickels, 834 N.E.2d 1091, 1096 (Ind. Ct. App. 2005). Thus, the critical inquiry is whether such findings, as adopted by the court, are clearly erroneous. Id. Without more, Mitchell has not established that the alleged verbatim adoption of Bailey's findings alone is reversible error.
Mitchell does not specifically assert how these allegedly inaccuracies in the findings affected his substantial rights. "The court at every stage of the proceeding must disregard an error or defect in the proceeding which does not affect the substantial rights of the parties." Ind. Trial Rule 61. We decline to undertake the burden of making such arguments for him and limit our review to his explicit argument that the wholesale adoption of Bailey's proposed findings alone was improper.
Mitchell next contends that the trial court improperly excluded certain property from the marital pot. In support of this argument, Mitchell directs us to three findings specifically describing the parties' financial positions at the time of separation:
f. Ms. Bailey had cashed in a small pension and commingled it into the marital pot; her remaining pensions and whole life insurance remained separate and apart from the marital pot;App. pp. 11-12. In addition to these findings, this section of the trial court's order referred to the status of the foreclosure proceeding on the house the couple built together, the amount of the home equity line of credit, the amount of the mortgage on the house used as an office, the parties' cars, Bailey's life insurance policy, their bank accounts, their various credit cards, Premier Freight, Bailey's employment, and Bailey's children's bank accounts.
g. Ms. Bailey made $3,250 of contributions to her Jefferson County teachers' pension during the marriage and the remainder of the pension remained separate and apart from the marital pot.
h. Ms. Bailey made no contributions to her American Funds pension during the marriage; it remained separate and apart from the marital pot, and lost value during the marriage.
Mitchell is correct that in Indiana, "all marital property goes into the marital pot for division, whether it was owned by either spouse prior to the marriage, acquired by either spouse after the marriage and prior to final separation of the parties, or acquired by their joint efforts." Hill v. Hill, 863 N.E.2d 456, 460 (Ind. Ct. App. 2007) (citing I.C. § 31-15-7-4). When read in context, it appears the trial court was describing the manner in which the parties treated the assets during the marriage—whether Mitchell and Bailey commingled certain assets or kept them separate—and was not excluding Bailey's retirement accounts and life insurance policy from the marital pot improperly. However, for the sake of clarity, we remand for further explanation.
Mitchell also asserts that the trial court conducted a piecemeal distribution of the marital assets without regard to their value, resulting in an unequal division of assets. He then goes on to argue that the trial court improperly deviated from the 50/50 presumption without explaining why it was doing so. Specifically, Mitchell contends that Bailey received a car with no debt, her pension accounts, a life insurance policy, her bank accounts, and her wedding ring, while he only received his Suburban with debt equal to its value, Premier Freight, which apparently has no value, his bank accounts, and his wedding band. Mitchell also points out that Bailey was only burdened with the $7,500 credit card debt and half of the line of credit, while he was burdened with half of the line of credit, Premier Freight's credit card debt, and the loan from his mother.
In his brief, Mitchell refers to the loan associated with the Suburban when explaining that the vehicle should not be considered an asset and again when describing it as a debt assigned to him. We decline to consider it as a liability twice as he urges. We also reject Mitchell's suggestion that Bailey erroneously received as an asset the ability to claim her children on her taxes. Without cogent argument supported by authority showing that he should have been permitted to claim Bailey's children on his taxes, this issue is waived. See Ind. Appellate Rule 46(A)(8)(a). Finally, at one point in his brief, Mitchell suggests that Bailey received the house as an asset. He later, correctly, acknowledges that the trial court awarded Bailey the house and ordered her to liquidate it, use the proceeds to pay the mortgage, home equity line of credit, and certain taxes, and ordered them to jointly share in any remaining liability on those items.
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In making these arguments, Mitchell repeatedly describes Bailey's wedding ring as having a value of $5,000. At the hearing, however, Mitchell stated it was worth $2,500. See Tr. pp. 251, 269. Bailey testified that the ring was worth between $500 and $1,200. Similarly, in his brief Mitchell values Bailey's car at $10,525, while Bailey testified it was worth $5,450. Further complicating the issue, Mitchell does not include his Navy pension as an asset because, as he argues without citation, "it has no surrender value and is future income." Appellant's Br. p. 18. Mitchell also suggests that the trial court could have only set off to Bailey the portions of Bailey's retirement accounts and life insurance policy that existed prior to the marriage.
To the extent Mitchell is asking us to reconsider the trial court's specific distribution of marital property, we consider the trial court's distribution as a whole, not item by item. Fobar, 771 N.E.2d at 59. Moreover, to the extent he is asking us to value the assets the same way he did, we cannot reweigh the evidence and must consider the evidence in the light most favorable to the judgment. Id. We, therefore, decline any such requests.
Nevertheless, it appears that the trial court deviated from the 50/50 presumption in distributing the marital estate. Although the facts of this case may very well warrant deviation from the 50/50 presumption when considering the factors listed in Indiana Code Section 31-15-7-5, the trial court was required to explain why it was doing so. See Thompson v. Thompson, 811 N.E.2d 888, 912-13 (Ind. Ct. App. 2004) ("If the trial court deviates from this presumption, it must state why it did so."), trans. denied. Because the trial court's order does not clearly establish that the marital estate was split 50/50 or, in the alternative, explain the trial court's reasoning for deviating from the 50/50 presumption, we remand for the trial court to more clearly explain its distribution showing that it resulted in a 50/50 split or to explain why it deviated from the 50/50 presumption.
Conclusion
Mitchell has not established that the alleged verbatim adoption of Bailey's proposed findings is reversible error. We decline any request by Mitchell to reconsider the distribution of the marital estate item by item or to reweigh the trial court's valuation of the marital property. We do, however, remand for the clarification of whether Bailey's retirement accounts and life insurance policy were excluded from the marital pot and, if they were excluded, for the trial court to include them in the marital pot. We also remand for the trial court to clearly establish that its distribution was a 50/50 split of the marital estate or to issue findings explaining why it deviated from the 50/50 presumption. We affirm and remand.
Affirmed and remanded.
ROBB, C.J., and BRADFORD, J., concur.