Court Opinion

ID: 4313525
Source: CourtListenerOpinion
Date Created: 2018-09-19 15:06:51.05735+00
Date Added: 2024-06-11T14:17:41.023777
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D),
      this Memorandum Decision shall not be                                        FILED
      regarded as precedent or cited before any                               Sep 19 2018, 8:45 am

      court except for the purpose of establishing                                 CLERK
                                                                               Indiana Supreme Court
      the defense of res judicata, collateral                                     Court of Appeals
                                                                                    and Tax Court
      estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
      Zachary J. Stock                                         Jeremy S. Bell
      Indianapolis, Indiana                                    New Castle, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Kimberley A. Fisher,                                     September 19, 2018
      Appellant-Petitioner,                                    Court of Appeals Case No.
                                                               18A-DR-929
              v.                                               Appeal from the Henry Circuit
                                                               Court
      Frederick H. Fisher, III,                                The Honorable Kit C. Dean Crane,
      Appellee-Respondent.                                     Judge
                                                               Trial Court Cause No.
                                                               33C02-1405-DR-93

      Mathias, Judge.

[1]   The marriage of Frederick Fisher (“Husband”) and Kimberley Fisher (“Wife”)

      was dissolved in the Henry Circuit Court in 2014. In 2017, Husband filed a

      motion to hold Wife in contempt because she failed to make a required

      payment on the mortgage secured by the marital residence as agreed under the

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018                Page 1 of 10
      parties’ settlement agreement. After a hearing, the trial court concluded that to

      purge herself of contempt, Wife must sell or refinance the residence. Wife now

      appeals and contends that the trial court’s order should be set aside.

[2]   We reverse and remand.

                                         Facts and Procedure
[3]   Prior to their divorce, Husband and Wife took out a mortgage on their marital

      property so that their adult son could purchase separate property. Husband,

      Wife, and son all agreed and understood that the son was responsible for

      making the mortgage payments on the marital property until the loan was

      satisfied.

[4]   On May 30, 2014, Wife filed a petition for dissolution of marriage. The parties

      engaged in settlement negotiations and filed a written settlement agreement.

      The trial court approved the agreement on October 14, 2014, and incorporated

      it into a decree dissolving the parties’ marriage. Among other provisions, the

      settlement agreement awarded Wife the marital residence and then specified:

              Wife shall be responsible for all costs associated with this
              residence. There is a mortgage on the marital property; however,
              neither party shall be responsible for it for the following reason.
              The parties’ son owns a house, the loan for which is secured by
              the marital residence. The son pays Wife each month, and she in
              turn pays the bank. Wife shall still be responsible for the taxes
              and insurance on the marital residence.

      Appellant’s App. p. 17.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018   Page 2 of 10
[5]   After the divorce, Wife lived in the marital residence, and son made the

      mortgage payments as indicated in the settlement agreement. However, in

      January 2017, son failed to provide Wife with money on time, and therefore,

      the mortgage payment was late. Wife was unemployed at the time, so she was

      unable to cover the payment, but “[i]t was all paid the next month.” Tr. p. 28.

      As a result of the missed payment, on April 27, 2017, Husband filed a motion

      for contempt which alleged that Wife had “not made the required payments on

      the mortgage secured by the marital residence.” Appellant’s App. p. 21.

      Husband maintained that the missed mortgage payment adversely affected his

      credit score and his ability to receive financing.

[6]   The trial court held an evidentiary hearing on August 4, 2017,1 and February

      14, 2018. After hearing testimony from both Husband and Wife at the February

      14 hearing, the trial court stated in part:

               Well, it’s clear to the court that the court has continuing
               jurisdiction over a settlement agreement. Particularly when it’s
               necessary to clarify a prior order. So, [counsel for Husband], if
               you could prepare an order, I’m going to direct that the [martial
               residence] be sold within the next ninety days. If [Wife] can buy
               the house, then that’s great. If not, then it’s going to be sold in
               the next ninety days. And then I -- following the sale of the
               house, we’ll come back here in about a hundred and twenty days

      1
        The transcript for the August 4 hearing is not included in the record provided to us on appeal. Therefore,
      although we know the hearing took place because of an August 7, 2017 entry on the Chronological Case
      Summary, we do not know what specifically transpired during this hearing. Appellant’s App. pp. 6–7.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018                  Page 3 of 10
              . . . to discuss what happens to the net proceeds on the sale of the
              house.

      Tr. p. 29.

[7]   Wife’s counsel then asked the trial court which aspect of the settlement

      agreement it was clarifying, and the court responded in part:

              [T]he parties agreed to this settlement agreement, and it’s not
              working. So, I’m going to carve out something that’s going to
              work. So, you can look at the settlement agreement, [counsel for
              Wife], and kind of figure out which parts of it I’m having to re-
              examine, because there’s a number of those -- you know, just that
              one sentence -- there’s a mortgage, they both signed the
              mortgage, however, “Neither party shall be responsible.” Both
              sides are still responsible to the bank, but only [Husband] here is
              the one that’s suffering and damaged because of this agreement.

      Id. at 30.

[8]   On March 21, 2018, the court issued an order which indicated that “[Wife] is

      responsible for the note on the marital residence under the settlement

      agreement.” Appellant’s App. p. 10. The order further provides that “[t]he note

      payments on the marital residence mortgage were not being paid in a timely

      manner, and that such untimely payments are damaging [Husband’s] credit and

      credit report[.]”2 Id. It then concluded that “Wife is hereby ordered to purge

      2
       Although the order uses the term “payments,” there is no evidence in the record of any other late payment
      made after the parties’ dissolution except for January 2017.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018              Page 4 of 10
       herself of contempt by paying the note on the marital residence off within (90)

       days, by listing and selling the marital residence, or refinancing said note into

       [Wife’s] own name.” Id. at 11. Wife now appeals.

                                          Discussion and Decision
[9]    Wife contends that the trial court abused its discretion when it ordered her to

       sell or refinance her home in order to purge herself of contempt because there

       was insufficient evidence to support the court’s finding that she willfully

       violated the terms of the dissolution settlement agreement. Specifically, she

       argues that the portion of the agreement that she allegedly violated “was at the

       very least unclear[,]” and she cannot be held in contempt for willfully

       disobeying an ambiguous order. Appellant’s Br. at 6–9. Husband alleges that

       the decree is not ambiguous, and thus the court’s order fell within its discretion

       “to use its coercive and remedial powers in a contempt hearing to move Wife

       into action to protect [] Husband from further damage[.]” Appellee’s Br. at 11.

[10]   Whether or not a party is in contempt is a determination left to the discretion of

       the trial court.3 Reynolds v. Reynolds, 64 N.E.3d 829, 832 (Ind. 2016). On appeal,

       we will consider the evidence and all reasonable inferences drawn therefrom

       that support the trial court’s determination, and we will not reweigh evidence

       nor judge the credibility of the witnesses. Deel v. Deel, 909 N.E.2d 1028, 1032

       3
         We note that the trial court’s order does not explicitly state that Wife is in contempt. See Appellant’s App.
       pp. 10–11. However, because of the language in the order that Wife “is hereby ordered to purge herself of
       contempt[,]” we will treat this as if the trial court is holding Wife in indirect contempt until she satisfies the
       requirements set out in its order. Id.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018                      Page 5 of 10
       (Ind. Ct. App. 2009). As such, we will only reverse a trial court’s contempt

       determination where an abuse of discretion has been shown, which occurs

       when the trial court’s decision is clearly against the logic and effect of the facts

       and circumstances before it. Bessolo v. Rosario, 966 N.E.2d 725, 730 (Ind. Ct.

       App. 2012), trans. denied.

[11]   The trial court here concluded that Wife failed to comply with the dissolution

       decree in that she failed to make timely mortgage payments on the marital

       residence. See Appellant’s App. p. 10. “Willful disobedience of any lawfully

       entered court order of which the offender had notice is indirect contempt.”

       Mitchell v. Mitchell, 785 N.E.2d 1194, 1198 (Ind. Ct. App. 2003) (quotation and

       citations omitted); Ind. Code § 34-47-3-1. Our supreme court has clarified that

       “[t]he order must have been so clear and certain that there could be no question

       as to what the party must do, or not do, and so there could be no question

       regarding whether the order is violated.” City of Gary v. Major, 822 N.E.2d 165,

       170 (Ind. 2005). Thus, “[a] party may not be held in contempt for failing to

       comply with an ambiguous or indefinite order.” Id.

[12]   When dissolving a marriage, parties are free to negotiate their own settlement

       agreements and may incorporate those into a dissolution decree. Ind. Code §

       31-15-2-17. Such agreements are contractual in nature, and once incorporated

       into a trial court’s final order, the agreements become binding on both parties.

       Whittaker v. Whittaker, 44 N.E.3d 716, 719 (Ind. Ct. App. 2015). Thus, the terms

       of a settlement agreement will be given their plain and ordinary meaning unless

       they are ambiguous. Id. Where the terms are clear and unambiguous, we do not

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018   Page 6 of 10
       construe the agreement or look to extrinsic evidence. Id. Terms are ambiguous

       “only when reasonably intelligent persons would honestly differ as to the

       meaning of those terms.” Schmidt v. Schmidt, 812 N.E.2d 1074, 1080 (Ind. Ct.

       App. 2004) (citation omitted). When interpreting a settlement agreement, our

       goal is to determine the intent of the parties when they entered into it. In re the

       Paternity of G.G.B.W., 80 N.E.3d 264, 270 (Ind. Ct. App. 2017), trans. denied. As

       with any other contract, interpreting a settlement agreement presents a question

       of law that we will review de novo. Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind.

       2008).

[13]   Despite the agreement Husband and Wife had with their adult son relating to

       the mortgage on the marital residence, the trial court here determined that Wife

       was responsible for the note because the parties’ son “is not a party to this

       matter, was not a signatory on the settlement agreement, and no evidence or

       testimony was submitted that the child was bound to any such agreement.”

       Appellant’s App. p. 10. However, Husband and Wife voluntarily entered into a

       settlement agreement which the trial court approved and incorporated into the

       dissolution decree that included the following, unambiguous language:

                Wife shall be responsible for all costs associated with this
                residence. There is a mortgage on the marital property;
                however, neither party shall be responsible for it for the
                following reason. The parties’ son owns a house, the loan for
                which is secured by the marital residence. The son pays Wife
                each month, and she in turn pays the bank. Wife shall still be
                responsible for the taxes and insurance on the marital residence.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018   Page 7 of 10
       Appellant’s App. p. 17 (emphasis added).

[14]   This section plainly indicates that Wife is responsible for the costs, taxes, and

       insurance on the marital residence and that “costs” do not include the mortgage

       because of the parties’ intent that their adult son would be responsible for the

       mortgage and make payments to Wife. By its plain language, neither Wife nor

       Husband are responsible for the mortgage, and thus, there is no ambiguity in

       the agreement.4 Cf. Burrell v. Lewis, 743 N.E.2d 1207, 1212 (Ind. Ct. App. 2001)

       (holding that a portion of a custody order was ambiguous where two

       paragraphs outlining father’s visitation time were in direct conflict).

[15]   Simply put, Wife was not responsible for the mortgage on the marital residence

       by the express terms of the settlement agreement, and therefore, she cannot be

       held in contempt of court for willfully refusing an order that does not exist. Cf.

       Dawson v. Dawson, 800 N.E.2d 1000, 1005–06 (Ind. Ct. App. 2003) (concluding

       the trial court did not abuse its discretion when it found husband in contempt of

       court where the settlement agreement specifically required him to satisfy the

       balance of a mortgage on a precise date, and he failed to do so).

[16]   Further, the trial court’s order effectively modified the dissolution decree by

       concluding that Wife “is responsible for payment of the note on the marital

       residence.” Appellant’s App. p. 10. But under Indiana Code section 31-15-2-

       4
         Even if “costs” is read to include the mortgage, the subsequent sentence stating “neither party shall be
       responsible for” the mortgage creates an ambiguity in the settlement agreement, Appellant’s App. p. 17, and
       thus Wife cannot be held in contempt for violating an ambiguous order. Major, 822 N.E.2d at 170.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018               Page 8 of 10
       17(c), once “the disposition of property [is] settled . . . and incorporated and

       merged into the degree[,]” then it “is not subject to subsequent modification by

       the court, except as the agreement prescribes or the parties subsequently

       consent.” And Indiana Code section 31-15-7-9.1(a) provides: “The orders

       concerning property disposition entered under this chapter . . . may not be

       revoked or modified, except in case of fraud.”

[17]   Our supreme court has explained that the statutory prohibition against a trial

       court modifying a property-settlement agreement “requires a court to approach

       any dispute over a settlement agreement . . . as a contract dispute, subject to the

       rules of contract law.” Ryan v. Ryan, 972 N.E.2d 359, 370–71 (Ind. 2012). Thus,

       “If there is an ambiguity in a contract, contract law provides the rules for

       resolving it. If there is a mutual mistake, contract law provides the rules for

       resolving it. If the contract becomes impossible to perform, contract law

       provides rules for handling the situation.” Id. at 371 (citations omitted).

[18]   Husband and Wife did not consent to a modification of the settlement

       agreement nor is there any allegation of fraud. Moreover, Husband chose to

       initiate a contempt proceeding rather than invoking contract law or filing a

       motion for the trial court to clarify or modify the settlement agreement. See

       Beaman v. Beaman, 844 N.E.2d 525, 531 (Ind. Ct. App. 2006). And the language

       in the settlement agreement conveyed the parties’ intent that their son would be

       responsible for making mortgage payments on the marital property. Cf. Pherson

       v. Lund, 997 N.E.2d 367, 371 (Ind. Ct. App. 2013) (trial court did not abuse its

       discretion where it clarified a settlement agreement to conform with the parties’

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018   Page 9 of 10
       intent, language of which was missing in the agreement). Thus, to the extent the

       portion of the settlement agreement relating to the mortgage on the marital

       residence is unworkable, the trial court was not free to modify the agreement on

       its own. See Thomas v. Abel, 688 N.E.2d 197, 201 (Ind. Ct. App. 1997).

       Accordingly, the trial court abused its discretion when it modified the

       settlement agreement through a contempt proceeding.

                                                 Conclusion
[19]   Based on the facts and circumstances before us, Wife did not willfully disobey

       the parties’ settlement agreement, and thus the trial court erred when it ordered

       Wife to sell or refinance her home in order to purge herself of contempt.

       Accordingly, we reverse the trial court’s order and remand for proceedings

       consistent with this opinion.

       Bailey, J., and Bradford, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018   Page 10 of 10