Court of Appeals of Indiana | Opinion 18A-DR-3109 | November 14, 2019 Page 1 of 17

ATTORNEY FOR APPELLANTS

Karen Celestino-Horseman

Of Counsel, Austin & Jones, P.C.

Indianapolis, Indiana

ATTORNEY FOR APPELLEE

Stephen R. Lewis

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Raul Hernandez-Velazquez,

Appellant-Respondent,

and

Modesto Hernandez and

Elizabeth Barcaleta,

Appellants-Intervenors,

v.

Sondra Hernandez,

Appellee-Petitioner

November 14, 2019

Court of Appeals Case No.

18A-DR-3109

Appeal from the 

Fountain Circuit Court

The Honorable 

Samuel A. Swaim, Special Judge

Trial Court Cause No.

23C01-1411-DR-332

Vaidik, Chief Judge.
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Case Summary

[1] Raul Hernandez-Velazquez (“Husband”), Modesto Hernandez, and Elizabeth 

Barcaleta Santiago (collectively, “Appellants”) appeal the trial court’s order 

requiring the conveyances of certain properties to Sondra Hernandez (“Wife”) 

to effectuate the division of marital assets in Husband and Wife’s divorce. 

Specifically, Appellants argue that the trial court erred in finding that Wife is a 

creditor under the Uniform Fraudulent Transfer Act (UFTA), by finding that 

Husband conveyed several properties to Elizabeth shortly before the divorce

with the intent to defraud Wife, and by setting aside those conveyances. 

Because the evidence supports the trial court’s finding that Wife is a creditor 

under UFTA and that Husband’s intent was fraudulent, we affirm.

Facts and Procedural History

[2] Husband and Wife were married in August 2001. Wife is a United States 

citizen. Husband is a citizen of Mexico and resides in the United States 

without proper documentation. Husband worked from approximately 2001 to 

2005 at Lithonia Lighting and then at Harrison Steel from 2005 to 2008. For 

her part, Wife worked as a translator on a contract basis for the Southeast 

Fountain School Corporation and Fountain Circuit Court. She also babysat 

occasionally but was primarily focused on raising her and Husband’s four 

children: S.H., born in May 2002, A.H., born in January 2006, and twins, I.H. 

and M.H., born in April 2008. To afford their daily living expenses, the family
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applied for and received government benefits, such as housing assistance, food 

stamps, and Medicaid.

[3] Husband’s brother, Modesto, was close to the family throughout the marriage. 

Modesto is also a citizen of Mexico and resides in the United States without 

proper documentation. Although they have never been married, Modesto has 

been in a relationship with Elizabeth, also a citizen of Mexico, for more than 

thirty years, and together they have three children. Since Modesto arrived in 

the United States in 1999, without Elizabeth, he has worked for Masterguard, 

Perdue, Harrison Steel, and Closure Systems International. He also mows

lawns whenever he can. In September 2005, Husband and Modesto decided to 

buy and renovate a foreclosed house at 317 Harrison Street in Crawfordsville. 

The brothers bought the house for $11,000 cash, with Modesto putting $9,600

toward the purchase price and Husband providing the rest and doing the 

renovations. See Tr. Vol. III p. 99. The house was titled and insured in 

Husband’s name. After renovations were complete, 317 Harrison Street was 

rented for $600 a month. Tr. Vol. II p. 24; see also Ex. 12. Wife was responsible 

for collecting rent and paying property taxes. In June 2006, Husband and 

Modesto decided to buy and renovate another house, this one located at 316 W. 

Van Buren Street in Veedersburg. The brothers bought the house for $18,000

cash. See Ex. 36. The house was titled and insured in Husband’s name. This 

house was Husband and Wife’s marital home through the remainder of the 

marriage. 
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[4] After Husband was fired from Harrison Steel in 2008, he and Wife started a 

business—Sorani Construction and Remodeling—that would buy foreclosed 

homes, fix them up, and then rent or sell them. Tr. Vol. II p. 15. In January 

2010, Husband decided to buy and renovate a foreclosed duplex at 115 N. 

Walnut Street in Crawfordsville. The duplex was purchased for $10,500 cash

and was titled and insured in Husband’s name. After renovations were 

complete, each unit at 115 N. Walnut Street was rented for $400 a month. Ex. 

27. Wife was responsible for collecting rent, and Sorani Construction paid the

property taxes. In March 2010, Husband decided to buy and renovate a 

foreclosed house at 821 N. Sherman Street in Veedersburg. The purchase price 

of the house was $9,000 and was paid for by a cashier’s check in Husband’s 

name. The house was titled and insured in Husband’s name. After renovations 

were complete, 821 N. Sherman Street was rented for $425 a month. See Ex. 

48. Wife was responsible for collecting rent, and Husband paid the property 

taxes. In May, Husband and Modesto decided to buy a house located at 415 

W. North Street in Crawfordsville. The brothers bought the house for $6,000 

cash, with Modesto putting $5,348.24 toward the purchase price and Husband 

providing the rest and doing the renovations. The house was titled in 

Modesto’s name, and Sorani Construction paid the property taxes. 

[5] Two years later, in November 2012, Modesto married Wife’s aunt, Penny 

Stonebraker. The marriage was part of Modesto’s attempt to acquire lawful

permanent resident status. Tr. Vol. II p. 140.
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[6] In May 2013, Husband decided to buy and renovate a foreclosed house at 404 

S. Grace Street in Crawfordsville. The purchase price of the house was $8,500 

and was paid for by a cashier’s check in Husband’s name. Tr. Vol. II p. 43; see 

also Ex. 31. The house was titled and insured in Husband’s name. After 

renovations were complete, 404 S. Grace Street was rented for $650 a month. 

Wife was responsible for collecting rent, and Sorani Construction paid the 

property taxes. In December, the brothers became worried that if Modesto 

divorced Penny, she could get the house located at 415 W. North Street, so 

Modesto transferred ownership of 415 W. North Street to Husband. Tr. Vol. II 

p. 32. Husband did not pay Modesto any money in exchange for the transfer. 

In February 2014, Husband sold 415 W. North Street to Jesus Trevino and 

Maria Magdalena under a rent-to-own arrangement. Ex. 17. The monthly 

payments are $680 a month. Tr. Vol. II p. 35.

[7] In April, Husband decided to buy and renovate a house at 515 Chambers Street 

in Veedersburg. He purchased the house for $19,500 cash, and it was titled and 

insured in his name. In September, while Modesto was still married to Penny, 

his partner, Elizabeth, arrived in the United States. Elizabeth arrived without 

proper documentation. Husband and Wife traveled to Texas to pick up

Elizabeth, and after they returned to Indiana, their marriage began to 

deteriorate. Husband told Wife that she needed to show Elizabeth how to 

collect rent and issue receipts because Elizabeth would now do that job instead 

of Wife. Tr. Vol. III pp. 13-14. Husband also had Wife type a document

saying that they owed Modesto $51,500. Id. at 133. Both Husband and Wife 
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signed the document. Then on October 13, Husband conveyed all the

properties titled in his name to Elizabeth for ten dollars. Tr. Vol. II p. 17; see 

also Exs. 1, 2. Less than a month later, Wife requested a protective order, 

alleging that Husband had committed two acts of domestic violence against 

her—first on October 24 and then again on November 12. Wife then filed a 

petition for dissolution of marriage on November 18, 2014.

[8] In May 2016, the trial court entered its findings of fact and conclusions of law 

and decree of dissolution. See Appellant’s App. Vol. II p. 12. Both parties filed 

motions to correct errors, and the trial court entered an agreed order vacating 

the property-division portion of the trial court’s May 2016 order. A special 

judge was appointed to resolve the property-division issue. 

[9] In July 2017, Wife filed an amended petition for dissolution of marriage, 

alleging that Husband “made the conveyances [to Elizabeth] with the intent to 

hinder, delay, and defraud creditors, including Wife, to protect and preserve the 

real property for Husband’s own use and benefit, and to prevent and hinder 

Wife from collecting and receiving, . . . the amount due Wife in this dissolution 

of marriage action.” Appellant’s App. Vol. II p. 84. Wife did not cite UFTA in 

her amended petition, but she used language found in the statute, which 

provides, in relevant part:

A transfer made or an obligation incurred by a debtor is voidable 

as to a creditor, whether the creditor’s claim arose before or after 

the transfer was made or the obligation was incurred, if the 

debtor made the transfer or incurred the obligation:
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(1) with actual intent to hinder, delay, or defraud any 

creditor of the debtor; or

(2) without receiving a reasonably equivalent value in 

exchange for the transfer or obligation, and the debtor:

(A) was engaged or was about to engage in a 

business or a transaction for which the remaining 

assets of the debtor were unreasonably small in 

relation to the business or transaction; or

(B) intended to incur or believed or reasonably 

should have believed that the debtor would incur 

debts beyond the debtor’s ability to pay as the debts 

became due.

Ind. Code § 32-18-2-14. UFTA defines a “debtor” as “a person that is liable on 

a claim,” Ind. Code § 32-18-2-2, and a “creditor” as “a person that has a 

claim,” id. 

[10] Wife’s amended petition also brought Elizabeth into the proceedings. See 

Appellant’s App. Vol. II pp. 83-86. In March 2018, Elizabeth and Modesto 

were permitted to intervene in the dissolution proceedings. See id. at 90.

[11] The trial court held the final hearing over three days on June 7, August 27, and 

October 18, 2018. Wife testified that she started Sorani Construction with 

Husband to “buy foreclosed homes, fix them up, rent them out or sell them.” 

Tr. Vol. II p. 15. Wife said that she and Husband used savings to purchase the 

houses they bought and credit cards to pay for the remodeling. Id. at 73. Wife 

acknowledged that Modesto had loaned the family some money but alleged 
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that the money was “not directly for any certain property.” Id. at 74, 170. Wife 

said that when they first started flipping homes, the family lived in an 

apartment and their rent was paid for by the government. Id. at 119. Wife also 

said that they received up to $500 a month in food stamps. Id. at 122. Wife 

testified that Husband told her that he transferred all their properties to 

Elizabeth in October 2014 to make sure that she “didn’t get any properties 

when [she] filed for divorce.” Id. at 18. Modesto testified that after Husband 

lost his job in 2008, he began loaning the family money for “bills and 

everything.” Id. at 244. Modesto said that he would give Husband money as 

he needed and that over time he had loaned Husband about $39,000. See id. at 

247. Husband testified that he had “a good job until 2008” and that after he 

was fired Modesto began helping his family financially. Tr. Vol. III p. 77. 

Husband said that when he was fired, he received around $22,000 in profit 

sharing but that all the money went to pay for things his children needed. See 

id. at 91. Husband acknowledged that he transferred all his properties to 

Elizabeth in October 2014 but said that he did so because he believed that all 

the properties belonged to Modesto. Id. at 104. Husband said that he believed 

that all the properties titled in his name belonged to Modesto because he had

helped finance all the purchases. See id. at 149. Husband said that he “still” has 

an arrangement with Modesto that he is “going to do the labor and [Modesto]

will repay [him].” Id. at 102. Husband also acknowledged that he withdrew 

$1,400 from his and Wife’s bank account on November 12, 2014—the day 

before Wife obtained a protective order against him. See id. at 135. Elizabeth 
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testified that she does not speak English and that in order to collect rent for the 

properties, she must use an interpreter. Id. at 59, 63.

[12] In December 2018, the trial court issued its findings of fact and conclusions of 

law. The trial court found that UFTA applies to Husband’s conveyance of the 

properties to Elizabeth and that Wife is a creditor under UFTA. Thereafter, the 

court addressed the disputed properties as follows:

33. [Husband] and Modesto allegedly formed a partnership in 

2005 to purchase, flip, and rent homes in Montgomery and 

Fountain counties.

*****

43. There is no documentary evidence to support the testimony 

regarding the partnership.

*****

57. [Husband] purchased each property in a cash transaction. 

Cash transactions require far less time and effort from the buyer’s 

perspective at closing. Given the lack of financing, the parties 

offered no explanation why the properties could not have been 

placed in Modesto’s name, or that of the partnership, in his 

absence.

58. The documentary evidence overwhelmingly supports the 

inclusion of each of the properties in the marital estate.

*****
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64. Given the modest purchase prices, [Wife’s] testimony that 

each of the properties was bought with the rental income is 

credible.

*****

67. Based on the applications for assistance, it appears that a 

significant portion of [Husband and Wife’s] daily living expenses 

w[ere] paid using government benefits. The Court does not 

condone this behavior, but it offers some explanation regarding 

the disposable income necessary to purchase the distressed 

properties.

*****

74. [T]he Court finds that the conveyances on October 13, 2014 

are fraudulent and are hereby set aside.

*****

76. The Court does find that Modesto Hernandez helped finance 

the purchase of most if not all the properties here under 

consideration. There ha[ve] been so many different attempts at 

defrauding the government and/or other parties it is impossible 

at this point to determine what the original intentions of the 

parties were as to these investments.

Appellant’s App. Vol. II pp. 32-35. After putting the disputed properties into 

the marital pot, the trial court divided it 50-50. Wife was assigned the

properties located at 317 Harrison Street, 415 W. North Street, 115 N. Walnut 

Street, and 316 W. Van Buren Street. Id. at 37. The trial court also ordered 

that “the parties shall execute quitclaim deeds within thirty (30) days of this 
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Order to convey title of each of the properties awarded to [Wife].” Id. at 36. 

Husband was assigned the properties located at 404 S. Grace Street, 821 N. 

Sherman Street, and 515 Chambers Street. Id. at 37. The trial court also found 

that Husband and Wife were both responsible for $51,500 they owed to 

Modesto. The trial court included the $51,500 as marital debt and divided it 

equally between Husband and Wife. See id. After the trial court divided the 

marital pot, it ordered Husband to pay Wife a lump-sum equalization payment 

of $2,382.30 within ninety days. See id.

[13] Husband, Modesto, and Elizabeth now appeal.

Discussion and Decision

[14] Where, as here, the trial court enters special findings and conclusions pursuant 

to Indiana Trial Rule 52(A), we apply a two-tiered standard of review. Barton v. 

Barton, 47 N.E.3d 368, 373 (Ind. Ct. App. 2015), trans. denied. We determine 

first if the evidence supports the findings and second whether the findings 

support the judgment. Id. The trial court’s findings and conclusions will be set 

aside only if clearly erroneous. Id. We neither reweigh the evidence nor 

reassess witness credibility. Id. Instead, we must accept the ultimate facts as 

stated by the trial court if there is evidence to sustain them. Id.

[15] Appellants’ brief touches on many different topics, but the gist of their

argument appears to be that the trial court erred when it included the properties 

that Husband transferred to Elizabeth (in the marital pot). Appellants allege 
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that these properties were actually owned by Modesto and that therefore they 

cannot be included in the marital pot. It is well settled that in a dissolution 

action, all marital property, whether owned by either spouse before the 

marriage, acquired by either spouse after the marriage and before final 

separation of the parties, or acquired by their joint efforts, goes into the marital 

pot for division. Ind. Code § 31-15-7-4(a); Falatovics v. Falatovics, 15 N.E.3d 

108, 110 (Ind. Ct. App. 2014). The date of “final separation” is the date the 

petition for dissolution is filed. Ind. Code § 31-9-2-46. When dividing marital 

property, the trial court must, at a minimum, be sufficiently apprised of the 

approximate gross value of the marital estate. Montgomery v. Faust, 910 N.E.2d 

234, 238 (Ind. Ct. App. 2009). “The requirement that all marital assets be 

placed in the marital pot is meant to insure that the trial court first determines 

that value before endeavoring to divide property.” Id. “Indiana’s ‘one pot’ 

theory prohibits the exclusion of any asset in which a party has a vested interest 

from the scope of the trial court’s power to divide and award.” Falatovics, 15 

N.E.3d at 110 (quotation omitted). While the trial court may decide to award a 

particular asset solely to one spouse as part of its just and reasonable property 

division, it must first include the asset in its consideration of the marital estate 

to be divided. Id.

[16] Here, the trial court found that there was evidence that Husband’s conveyances 

to Elizabeth in October 2014 were fraudulent under UFTA. On appeal, 

Appellants argue that the trial court erred by setting aside these conveyances
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pursuant to UFTA for two reasons: (1) Wife is not a creditor and (2) there is no 

evidence of an intent to defraud.

I. Spouse as Creditor

[17] Appellants argue that Wife is not a creditor under UFTA because the 

“properties were purchased by [Modesto] and [Modesto] had the legal right to 

direct to whom the properties should be conveyed, in this instance to 

[Elizabeth].” Appellant’s Br. p. 17. 

[18] UFTA defines “creditor” as “a person that has a claim.” I.C. § 32-18-2-2. The 

trial court found that “[a] spouse is a creditor” and that therefore Wife is a 

creditor under UFTA. Appellant’s App. Vol. II p. 28. Appellants argue that 

Modesto financed the purchases of the properties and that therefore Wife is not 

a creditor under UFTA. See Appellant’s Br. p. 17. However, there is ample 

evidence showing that Husband and Wife contributed to the purchases of the 

properties. First, Husband testified that he had a “good job until 2008.” Tr. 

Vol. III p. 77. Next, Wife testified that she and Husband used their savings to 

purchase the properties and credit cards to do the renovations. See Tr. Vol. II p. 

73. Wife also testified that during the time she and Husband were purchasing 

and flipping the properties, the family lived in an apartment paid for by the 

government and used food stamps to support their daily needs. See id. at 119, 

122. Finally, the majority of the properties were initially titled and insured in 

either Husband or Wife’s name, and the property taxes were paid by Husband 

and Wife’s business, Sorani Construction. All of this supports the trial court’s 
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finding that the properties are part of the marital estate for purposes of Husband 

and Wife’s divorce, and therefore Wife is a creditor under UFTA because she 

has a claim to the properties. See Appellant’s App. Vol. II p. 34. 

II. Fraudulent Intent 

[19] Appellants next argue that there is no evidence that indicates or suggests that 

the transfer of the properties from Husband to Elizabeth was made with the 

intent to hinder, delay, or defraud Wife in any way as required by UFTA.

[20] A creditor who seeks to have a transfer set aside as fraudulent under UFTA 

bears the burden of proving that such transfer was made with fraudulent intent. 

Greenfield v. Arden Seven Penn Partners, L.P., 757 N.E.2d 699, 703 (Ind. Ct. App. 

2001), trans. denied. The question of fraudulent intent is a question of fact. Id. 

Lack of consideration alone is not enough to support a charge of fraud. Id. 

Rather, fraudulent intent may be inferred from various factors or “badges of 

fraud” present in a given transaction. Id. These common-law factors include:

1. the transfer of property by a debtor during the pendency of a 

suit;

2. a transfer of property that renders the debtor insolvent or 

greatly reduces his estate;

3. a series of contemporaneous transactions which strip a debtor 

of all property available for execution;

4. secret or hurried transactions not in the usual mode of doing 

business;
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5. any transaction conducted in a manner differing from 

customary methods;

6. a transaction whereby the debtor retains benefits over the 

transferred property;

7. little or no consideration in return for the transfer;

8. a transfer of property between family members.

Id. (citing Otte v. Otte, 655 N.E.2d 76, 81 (Ind. Ct. App. 1995), trans. denied). As 

no single indicium constitutes a showing of fraudulent intent per se, the facts 

must be taken together to determine how many badges of fraud exist and if 

together they amount to a pattern of fraudulent intent. Id. Indiana’s UFTA has 

codified these “badges of fraud.” Under UFTA, to determine the debtor’s 

intent, the trial court may consider, among other factors, whether:

(1) the debtor retained possession or control of the property 

transferred after the transfer;

(2) the transfer or obligation was disclosed or concealed;

(3) before the transfer was made or the obligation was incurred, 

the debtor had been sued or threatened with suit;

(4) the transfer was of substantially all the debtor’s assets;

(5) the debtor absconded;

(6) the debtor removed or concealed assets;
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(7) the value of the consideration received by the debtor was 

reasonably equivalent to the value of the asset transferred or the 

amount of the obligation incurred;

(8) the debtor was insolvent or became insolvent shortly after the 

transfer was made or the obligation was incurred; and

(9) the transfer occurred shortly before or shortly after a 

substantial debt was incurred.

I.C. § 32-18-2-14.

[21] Here, there are at least five “badges of fraud” present. First, the record shows 

that Husband transferred the properties to Elizabeth approximately one month 

before Wife filed for divorce and when the parties’ relationship had already 

begun to deteriorate. Second, the transfer of these properties greatly reduced 

the marital estate because the rental properties were substantially all of the 

family’s assets. Third, there is evidence that Husband would retain some 

benefits over the rental properties. That is, Husband, Modesto, and Elizabeth, 

would continue to renovate and manage the properties and collect rent from 

tenants. Fourth, Husband transferred the properties to Elizabeth for little or no 

consideration. That is, he transferred all the properties to Elizabeth for ten

dollars. Finally, the transfer of these properties from Husband to Elizabeth was 

effectively a transfer between family members. Although Modesto and 

Elizabeth have never been married, they have been in a relationship for over 

thirty years and have three children together. All of this together constitutes a 

pattern of fraudulent intent. 
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[22] For all of the foregoing reasons, we affirm the trial court’s setting aside of 

Husband’s conveyances to Elizabeth.

[23] Affirmed.

Riley, J., and Bradford, J., concur.