Court Opinion

ID: 2815779
Source: CourtListenerOpinion
Date Created: 2015-07-09 14:15:05.364716+00
Date Added: 2024-06-11T11:30:37.100942
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D), this                             Jul 09 2015, 6:09 am
      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                                    ATTORNEY FOR APPELLEE
      Christina J. Miller                                       David R. Phillips
      Lucas, Holcomb & Medrea, LLP                              David E. Baum Law Office, P.C.
      Merrillville, Indiana                                     Chesterton, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      Donald W. Harshaw,                                        July 9, 2015

      Appellant-Defendant,                                      Court of Appeals Case No.
                                                                45A04-1408-PL-397
              v.                                                Appeal from the Lake Superior
                                                                Court
                                                                The Honorable Thomas Webber, Sr.,
      Elizabeth A. Harshaw,                                     Senior Judge
      Appellee-Plaintiff                                        Cause No. 45D04-1310-PL-91

      Bailey, Judge.

                                            Case Summary
[1]   Donald W. Harshaw (“Donald”) appeals an order adopting an arbitration

      award in favor of his former wife, Elizabeth Harshaw (“Elizabeth”). Donald

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      presents a single consolidated and restated issue for review: whether the trial

      court properly confirmed the award. 1 We affirm.

                              Facts and Procedural History
[2]   Donald and Elizabeth were married for twenty-five years. They divorced in

      1996 and the dissolution court divided the marital property. Subsequently, they

      reconciled and cohabitated for over fifteen years. During this time, the couple

      commingled some of the previously-distributed marital funds and also acquired

      new assets. In July of 2013, Donald moved out of their shared residence.

[3]   On September 27, 2013, Elizabeth filed her Complaint for Damages and

      Partition of Property. In Count I, Elizabeth sought equitable relief in the form

      of quantum meruit; in Count II, she sought to partition jointly-owned real

      estate. Donald answered the complaint, admitting that the real estate should be

      partitioned and denying that Elizabeth was entitled to any additional recovery.

      The trial court subsequently ordered the parties to submit a partition agreement.

      1
        Initially, Donald articulated two issues, with six sub-issues, alleging a lack of evidentiary support for the
      findings and conclusions and challenging the propriety of the remedies awarded. Elizabeth then asserted that
      appellate review was limited by the parties’ arbitration agreement. In his Reply Brief, Donald responded in
      part by including a revised statement of issues. Donald articulated the issues before this Court as two issues,
      concerning whether the parties limited the arbitrator’s authority and whether the arbitrator exceeded his
      power or miscalculated asset values.

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[4]   On June 3, 2014, the parties jointly submitted to the trial court their Agreement

      for Binding Arbitration on the demand for equitable relief. The arbitrator

      selected by the parties conducted an arbitration session on June 9, 2014.

[5]   The arbitrator made extensive findings of fact and conclusions thereon. He

      fashioned an award compensating Elizabeth for her contribution to the

      acquisition of assets during the period of cohabitation. In pertinent part, the

      arbitrator determined that Elizabeth should receive a judgment for $435,000.00,

      payable via an assignment of pension benefits, a Qualified Domestic Relations

      Order, or an alternate manner acceptable to both parties. Each party was to

      retain personal property in his or her possession, and Donald was to pay the

      mortgage, taxes, and insurance pending sale of the former marital residence.

[6]   On July 28, 2014, the trial court approved the arbitration award. This appeal

      ensued.

                                 Discussion and Decision
                                        Standard of Review
[7]   The purpose of arbitration is to afford parties the opportunity to dispose of

      controversies in an easier, more expeditious manner than by litigation. Bopp v.

      Brames, 677 N.E.2d 629, 631 (Ind. Ct. App. 1997). To facilitate this purpose,

      judicial review of arbitration awards is very narrow in scope. Id.

[8]   An arbitration award may be vacated on specific statutory grounds, including:

      (1) the award was procured by corruption or fraud; (2) there was evident
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       partiality; (3) the arbitrator exceeded their powers; (4) the arbitrator refused

       postponement despite a showing of sufficient cause; or (5) there was no

       arbitration agreement. Ind. Code § 34-57-2-13(a). An arbitration award may be

       modified when: (1) there was an evident miscalculation; (2) the arbitrator

       awarded upon a matter not submitted; or (3) the award is imperfect in a matter

       of form not affecting the merits of the controversy. I.C. § 34-57-2-14(a).

                                                   Analysis
[9]    Donald contends that he and Elizabeth entered into an arbitration agreement

       that was not “broadly written” but rather was “a specific contract requiring the

       arbitrator to conform with general principles of law and further requiring that

       the court review and accept said findings and order.” (Reply Brief at 4.)

       Accordingly, Donald argues that this Court may review all findings and

       conclusions as if they had been authored by the trial court. According to

       Donald, the arbitrator gave relief akin to a marital property division and, in so

       doing, selected an improper valuation date for Donald’s pension and

       disregarded debt. Elizabeth contends that the parties entered into an agreement

       for binding arbitration and Donald failed to present an issue for this Court

       consistent with the narrow scope of review available subsequent to alternative

       dispute resolution proceedings.

[10]   This Court will apply ordinary contract principles to determine whether the

       parties have agreed to arbitrate a dispute. Geneva-Roth, Capital, Inc. v. Edwards,

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       956 N.E.2d 1195, 1198 (Ind. Ct. App. 2011). In interpreting a contract, we give

       the language of the contract its plain and ordinary meaning. Id.

[11]   Donald and Elizabeth jointly submitted to the trial court their “Agreement for

       Binding Arbitration,” referencing Indiana Dispute Resolution Rule 3 (“the

       Arbitration Agreement”). (App. 17.) Section 1 of this rule provides in relevant

       part:

               the parties may file with the court an agreement to arbitrate wherein
               they stipulate whether arbitration is to be binding or nonbinding,
               whether the agreement extends to all of the case or is limited as to the
               issues subject to arbitration, and the procedural rules to be followed
               during the arbitration process.
       Consistent therewith, the Arbitration Agreement specified that Donald and

       Elizabeth “expressly confer jurisdiction on the Arbitrator to act as permitted by

       law with respect to the resolution of all claims and issues pending herein.”

       (App. 17.)

[12]   With respect to the effect of an arbitration determination, Section 4(F) of

       Arbitration Rule 3 provides in relevant part: “If the parties had submitted this

       matter to binding arbitration on all issues, the court shall enter judgment on the

       determination.”

[13]   Donald suggests that the Arbitration Agreement provision for findings and

       conclusions invokes a procedure akin to that under the Family Law Arbitration

       Statute, I.C. § 34-57-5-2, affording greater judicial scrutiny. We disagree. Even

       assuming the availability of family law arbitration procedures to former

       spouses, no designation to the family law arbitration statute appears in the

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       Arbitration Agreement. Although findings and conclusions are contemplated,

       they are specified as the product of binding arbitration:

               The parties have been informed that the Arbitrator shall make written
               findings of fact and conclusions of law not later than thirty (30) days
               following the arbitration hearing.
               The parties acknowledge that the Arbitrator shall forward a copy of his
               findings of fact and conclusions of law to all parties participating in the
               arbitration and the Court; following which the Court shall enter
               judgment and an Order for entry on the Court docket.

       (App. 17.) The Arbitration Agreement was for binding arbitration. The award

       is subject to attack only upon the statutory grounds applicable to an award

       arising from binding arbitration.

[14]   Donald argues that, in the event the award is considered to have arisen from

       binding arbitration, he nevertheless adequately raised an issue as to whether the

       award violates public policy or includes an evident miscalculation. Donald

       asserts that Elizabeth was effectively awarded maintenance, something not

       available to non-spouses under the law. As best we can discern, Donald’s

       position is that a remedy not expressly provided for by statute or common law

       must necessarily be contrary to public policy. He directs us to no authority for

       this proposition as required by Indiana Rule of Appellate Procedure 46(A)(8).

[15]   With respect to miscalculation, Donald attacks both the pension valuation date

       selected and the amount. However, he did not provide alternative calculations

       such that the trial court could have, consistent with I.C. § 34-57-2-14(a)(1),

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 6 of 14
       corrected “evident” miscalculation. Donald has not established grounds for

       modification.

[16]   Finally, Donald argues that the arbitrator exceeded his authority by

       determining that Donald should, for an indefinite period of time, continue to

       pay certain household expenses without contribution from Elizabeth.

       Specifically, the arbitrator concluded that Donald should pay mortgage

       payments, home insurance, and real estate taxes until the former marital home

       was sold, without being afforded any credit for those payments. In this regard,

       we agree with Donald.

[17]   Elizabeth’s complaint sought compensation under a theory of quantum meruit.

       Also, with respect to the real estate, Elizabeth’s complaint sought partition.

       The parties had agreed to sell the real estate and advised the arbitrator of their

       stipulation; Count 2 was resolved by a court order as opposed to arbitration. 2

       The arbitrator was not tasked with determining an allocation of expenses

       pending the sale of the real estate.

                                                       Conclusion
[18]   The trial court properly confirmed the arbitration award as to the equitable

       relief count of Elizabeth’s complaint. The partition count was not a pending

       2
         On February 6, 2014, the trial court ordered: “Counsel for the parties shall submit a written agreement as
       to the partition count of the plaintiff’s complaint as orally announced on this date.” (App. 16.)

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015                Page 7 of 14
       matter submitted for arbitration; accordingly, language purportedly allocating

       expenses accruing pending sale was superfluous.

[19]   Affirmed.

       Barnes, J., concurs.

       Riley, J., concurs in part and dissents in part with separate opinion.

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 8 of 14
                                                  IN THE
           COURT OF APPEALS OF INDIANA

       Donald W. Harshaw,                                       Court of Appeals Case No.
                                                                45A04-1408-PL-397
       Appellant-Defendant,

               v.

       Elizabeth A. Harshaw,
       Appellee-Plaintiff

       Riley, Judge, concurring in part and dissenting in part.

[20]   I concur with the majority’s determination that the trial court properly

       confirmed the arbitration award as to the equitable relief Count of Elizabeth’s

       Complaint because Donald did not seek the relief available under the Uniform

       Arbitration Act, but rather sought only to find deficiencies in the Arbitrator’s

       findings. However, I disagree with the majority’s finding that the partition

       Count was not a pending matter submitted for arbitration. Therefore, I must

       respectfully dissent as to this issue.

[21]   In the partition Count of her Complaint, Elizabeth claimed that she had an

       ownership interest in the real estate located at 2346 Capri Drive in Schererville,

       Indiana, and she requested the partition of such real estate. In his Counter-

       Claim, Donald argued that throughout their co-habitation, he had solely paid

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       the mortgage, real estate taxes, insurance, maintenance, and utilities for the real

       property. Therefore, he argued that he was entitled to reimbursement from

       Elizabeth for her pro-rata share of the expenses associated with the real

       property. Furthermore, while he agreed that the real estate should be

       partitioned, he claimed that he was entitled to a larger share proportionate to

       his payment of the expenses.

[22]   Prior to the arbitration, the parties stipulated that they would sell the jointly-

       owned real estate. Thus, at a status conference on February 6, 2014, the trial

       court ordered the parties to “submit a written agreement as to the partition

       [C]ount.” (Appellant’s App. p. 16). However, it does not appear from the

       docket that any written agreement was ever filed, and no such agreement has

       been included in the record.

[23]   At the start of the arbitration hearing on June 9, 2014, the parties made it clear

       to the Arbitrator that although they had stipulated to the sale of the real estate,

       there were several pending issues relating to the partition. Specifically, during

       her opening statement, Elizabeth stated that

               the disposition of the real estate is at issue. We have an agreement to
               place it on the market for sale. There . . . is a possibility of $140,000 in
               equity, give or take, in the house. And one of the issues, I believe, will
               be what’s the proper allocation of that equity and what, if anything,
               [Elizabeth] is entitled to based upon her reliance on [Donald’s]
               promises and the services that she rendered over the course of the last
               [fourteen] years.
       (Tr. p. 8). Then, during his opening statement, Donald argued that since he

       vacated the residence in July of 2013, he has “paid the mortgage, the taxes, the

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 10 of 14
       insurance, basically all the expenses of the residence.” (Tr. p. 10). “For

       whatever benefit [Elizabeth] feels she has conferred upon [Donald] in the form

       of taking care of the house and cooking and laundry and groceries and those

       sorts of things, we have a counter-benefit of room and board, transportation, all

       of which were paid from [Donald’s] earnings.” (Tr. pp. 11-12). Donald also

       informed the Arbitrator:

               We do have the partition action pending. Our concern here is not
               only—we’ve anticipated the residence would have been listed for sale
               some time ago. Part of the hang-up was that the parties were
               suggested to, by the realtor, to make certain repairs to the residence.
               Because of a lack of resources, there’s the determination not to make
               those repairs. But the residence has not yet been listed for sale.
               [Elizabeth] has continued to reside in the residence since July of 2013,
               when [Donald] left. And we believe that as we depart today, or before
               we depart today, this court [sic] needs to make a determination that if
               she is going to remain in the residence, she should be responsible for
               all the expenses associated with the ownership, use, and occupancy of
               the residence until such time as it sells.
       (Tr. pp. 12-13).

[24]   During the hearing, Donald testified that he paid $600 per month for the

       mortgage, $200 per month in real estate taxes, and $146.08 per month in

       homeowner’s insurance. As such, when questioned by his attorney, Donald

       explained:

               Q. . . . [Y]ou are seeking contribution back from [Elizabeth] upon –
               once the home is sold for moneys that you have paid; is that correct?
               A.       Yes, I am.
               Q.       That would include the mortgage, the taxes, and the insurance?
               A.       Everything, yes.
               Q.       You also – you request that she be responsible for payment of
               those expenses – you haven’t lived in the home since January – July of
       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 11 of 14
               –
               A.      July 6 of 2013. I’ve been making all the payments on it since.
               Q.      So, you received absolutely no benefit from your ownership in
               that property?
               A.      Nothing.
               Q.      You may have (inaudible) real estate taxes?
               A.      Yes, I just made it. I had to pay a late fee because apparently
               they’re mailed out to the address. And no one made me aware that
               they were due. Got a copy for me so I could pay them.
               Q.      So you’re seeking contribution based upon Indiana law, which
               would provide you the information in your submission, if that is part
               of your request?
               A.      Yes.
               Q.      You paid for the title insurance to attach to the partition
               petition because they did not; correct?
               A.      Yes, I did.
               Q.      That expense was, I believe, $250?
               A.      Yes, it was.
               Q.      Are you asking for possession of the residence until it sells?
               A.      If the individual that’s living in it cannot afford to pay for the
               mortgage and all the other expenses, then I want possession of the
               residence. I want the individual out of the house.
       (Tr. pp. 161-63).

[25]   Elizabeth, however, disagreed that she should be obligated to reimburse Donald

       for any of the expenses associated with the real estate. During cross-

       examination, Donald’s attorney questioned Elizabeth as follows:

               Q.     . . . There’s a partition action pending with respect to the
               residence; correct?
               A.     That means it’s being sold?
               Q.     Yes.
               A.     Yes.
               Q.     You’re filing action basically asking to force a sale of that
               house; correct?
               A.     We asked for the house to be sold, yes.
               Q.     Do you feel that you should reimburse [Donald] for any of the

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 12 of 14
               taxes and insurance, mortgage payments on that residence, since you
               are a co-owner of that residence, for any period of time since it was
               deeded to you in 2010?
               A.      No.
               Q.      Do you feel that you should be able to live in the house from
               this point until the house sells, and [Donald] should continue to pay
               the taxes and insurance and mortgage payments?
               A.      He didn’t have to pay it. That’s his decision.
       (Tr. pp. 94-95).

[26]   In accordance with the parties’ stipulation and the arguments raised during

       arbitration, the Arbitrator ordered that the “property should be sold as soon as

       possible; and further order[ed] the parties to cooperate in that regard and in all

       respects to accomplish [the] same immediately; and further; that they should

       share the net proceeds from the sale of this real estate between themselves, after

       closing and sale.” (Appellant’s App. p. 31). Pending the sale, the Arbitrator

       ordered Donald to “continue to pay the monthly mortgage payments, the

       insurance on this residence, and the real estate taxes when and if the same come

       due. No credits shall be afforded to him for any previous or future payments

       related to these real estate expenses.” (Appellant’s App. p. 31). The Arbitrator

       also clarified that Elizabeth owed “no reimbursement to [Donald] of any

       mortgage payments, property insurance, real estate taxes utilities, or other

       expenses advanced and paid by him and related to [Elizabeth’s] occupancy of

       this residence and real estate.” (Appellant’s App. p. 32).

[27]   While the trial court ordered the partition pursuant to the parties’ stipulation,

       the trial court apparently did not resolve the numerous other issues raised in the

       Complaint and Cross-Claim, which are part and parcel of the partition. Thus,

       Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 13 of 14
the issues of how the proceeds of the partition should be divided, the payment

of expenses pending the sale, and the reimbursement for expenses already paid

were matters squarely before the Arbitrator. Accordingly, I would find that the

trial court properly confirmed the arbitration award and would affirm the trial

court in all respects.

Court of Appeals of Indiana | Memorandum Decision 45A04-1408-PL-397 | July 9, 2015   Page 14 of 14