Court Opinion

ID: 4181225
Source: CourtListenerOpinion
Date Created: 2017-06-27 15:08:23.936174+00
Date Added: 2024-06-11T14:13:04.741909
License: Public Domain

MEMORANDUM DECISION
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.                                   FILED
                                                               Jun 27 2017, 8:50 am

                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court

ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
Colby A. Barkes                                          Robert A. Plantz
Duane W. Hartman                                         Robert A. Plantz & Associates,
Blachly, Tabor, Bozik & Hartman LLC                      LLC
Valparaiso, Indiana                                      Merrillville, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Carrie Baker,                                            June 27, 2017
Appellant-Respondent,                                    Court of Appeals Case No.
                                                         64A03-1702-DR-219
        v.                                               Appeal from the Porter Superior
                                                         Court
Michael Baker,                                           The Honorable Roger E. Bradford,
Appellee-Petitioner.                                     Judge
                                                         The Honorable Katherine R.
                                                         Forbes, Magistrate/Special Judge
                                                         Trial Court Cause No.
                                                         64D01-0904-DR-3345

Bradford, Judge.

Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017     Page 1 of 15
                                          Case Summary
[1]   On or about April 7, 2009, Appellee-Petitioner Michael Baker (“Husband”)

      initiated proceedings to dissolve his marriage to Appellant-Respondent Carrie

      Baker (“Wife”). On April 21, 2009, the parties filed a Mutual Waiver of Final

      Hearing and Marital Settlement Agreement (“Settlement Agreement”). The

      trial court accepted the parties’ Settlement Agreement and thereafter entered an

      order dissolving the parties’ marriage on June 25, 2009.

[2]   Approximately six years later, on April 22, 2015, Wife filed a verified motion

      seeking to re-open the parties’ property settlement proceedings (“Wife’s

      Motion”), claiming that she had discovered that Husband had committed fraud

      by previously failing to disclose certain assets. On July 7, 2015, Husband filed a

      Motion to Strike and Dismiss (“Husband’s Motion”) Wife’s Motion. That

      same day, without giving Wife an opportunity to respond and without a

      hearing, the court granted Husband’s Motion. Wife appealed.

[3]   On appeal, we concluded that the Porter County Local Rules required that the

      trial court conduct a hearing on Husband’s Motion before ruling on the motion.

      Accordingly, we reversed the trial court’s order granting Husband’s Motion and

      remanded for further proceedings. On remand, the trial court conducted a

      hearing on Husband’s Motion at which Husband appeared in person and was

      represented by counsel and Wife was represented by counsel. Following the

      hearing, the trial court granted Husband’s Motion. This second appeal follows.

      Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 2 of 15
[4]   Wife contends on appeal that the trial court abused its discretion in granting

      Husband’s motion. Because we conclude otherwise, we affirm.

                            Facts and Procedural History
[5]   This is the second appeal stemming from the underlying cause. The facts, as set

      forth in our prior opinion in this matter, provide as follows:

              On April 21, 2009, Husband and Wife executed a [Settlement
              Agreement], which was finalized on June 25, 2009, when they
              were granted a Decree of Dissolution of Marriage. During the
              divorce proceedings, Wife was not represented by counsel, and
              she relied on Husband, Husband’s counsel, and the Dissolution
              Decree regarding the truthfulness of the parties’ marital assets.
              Wife was aware of Husband’s deferred income that is listed in
              the [ ] Settlement Agreement, but she was not aware of any
              additional deferred income, i.e., assets of the marriage that
              Husband was to receive at a later time after the dissolution, that
              had not been listed in that agreement. Also, the [ ] Settlement
              Agreement contained the following provisions, among others:

                       1. Equal Division of Property

                       The Husband and the Wife intend to settle forever
                       and completely their interests and obligations in all
                       property, both real and personal, between themselves
                       and on behalf of their heirs and assigns, and
                       regardless of whether the property was acquired by
                       either or both of them, before or during their
                       marriage, or whether it was acquired by way of gift or
                       inheritance. The parties intend to effect a division in
                       a fair, just and equal manner.

                       2. Itemization of Property Division

      Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 3 of 15
                                              *****

                 The parties shall each maintain or receive title to and
                 interest as indicated in the following financial
                 accounts or financial interests. Title to and interest in
                 these accounts/interests shall be exclusive as to the
                 party indicated, and the party with or receiving
                 ownership will hold the other party harmless as to
                 liabilities of the owned account/interest. The parties
                 acknowledge that they have not appraised each
                 other’s assets or financial accounts and waive any
                 right to do so and acknowledge that one party may
                 receive a larger share than the other. The parties
                 have also agreed to waive the requirement of
                 exchanging financial declaration forms.

                                              *****

                 5. Mutual Releases

                 Both parties expressly and mutually release and
                 forever discharge the other from any and all claims,
                 demands, obligations, debts, and cause of action, at
                 law or in equity or otherwise, which either of them
                 ever had or now has or hereafter may have against
                 the other up to the date of the execution of this
                 Agreement.

                 6. Representation by Counsel

                 Husband acknowledges that this agreement has been
                 fully explained to him by his attorney. Wife
                 acknowledges that she has the right to and has had
                 the opportunity to obtain legal counsel pertaining to
                 this action and to explain the consequences of this
                 agreement. Wife has been informed that Husband’s
                 attorney in no way represents Wife’s interests in this
                 matter and has been advised of her right to seek
Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 4 of 15
                   independent counsel to represent her or review this
                   agreement and is completely aware, not only of its
                   contents, but also its legal effects. The parties
                   acknowledge that each is satisfied with the
                   preparation and contents of this agreement.

                   7. Entire Agreement

                   Each party acknowledges that no representations of
                   any kind have been made to him or her as an
                   inducement to enter into this Agreement, other than
                   the representations set forth herein, and that this
                   Agreement constitutes all of the terms of the contract
                   between them.

          Appellant’s Appendix at 28, 35-36, 42-43 (bold in original).[1]

          In November 2014, Wife discovered that there were additional
          assets of the marital estate in excess of $1,000,000, and on April
          22, 2015, she filed [Wife’s Motion], in which she alleged fraud by
          Husband by not disclosing the deferred income despite the fact
          that he had an affirmative duty to disclose and that the [ ]
          Settlement Agreement stated that she “shall receive an ‘equal
          division of property’.”[2] Id. at 46. [Wife’s Motion] did not cite
          to a specific rule to open the proceedings. On July 7, 2015,
          Husband filed [Husband’s Motion]. That same day, without
          giving Wife an opportunity to respond and without a hearing, the
          court granted Husband’s [M]otion (the “July 7th Order”). The
          court’s July 7th Order stated:

1
  The record reveals that as part of the parties’ original division of property, Wife received $140,000.00 from
the parties’ joint checking account and was guaranteed child support payments, which would be paid from
the deferred income which Husband was entitled to receive until 2013, in the amount of $1,167,609.00.
2
    Husband disputes Wife’s unsupported assertion that the allegedly non-disclosed assets exist.

Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017                Page 5 of 15
                 1. The Divorce Decree was entered 6/25/2009. An
                 agreed Modification Order was entered on
                 8/24/2010, while [Wife] was represented by counsel.

                 2. The Court is prohibited from revoking or
                 modifying a written settlement agreement or agreed
                 or [sic], except in the case of fraud. I.C. § 31-15-2-
                 17(c).

                 3. [Wife’s Motion] alleges “fraud,” but Trial Rule
                 60(B)(3) allows for relief from the judgment or order
                 on the grounds of fraud, but the motion shall be filed
                 ... not more than one (1) year after the judgment or
                 order.

                 4. [Wife’s Motion] was [filed] well after the one (1)
                 year deadlines and, moreover, the Court is prohibited
                 by I.C. § 31-15-2-17(c) from modifying the order. For
                 these reasons, [Husband’s Motion] is GRANTED
                 and [Wife’s Motion] is hereby ordered Stricken from
                 the Record and Dismissed.

        Id. at 47.

        On August 5, 2015, Wife filed a motion to correct errors and to
        reconsider, and the court denied her motion the same day
        without a hearing.

Baker v. Baker, 50 N.E.3d 401, 402-03 (Ind. Ct. App. 2016) (footnote omitted).

Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 6 of 15
[6]   Upon review, we noted that Porter County Civil Rule 3300.20 requires that “all

      motions shall be set for a hearing”3 and stated that

                [a]lthough use of the savings clause is limited, it is within the
                court’s discretion to construe a motion to set aside as either an
                independent action for fraud or as a pleading to grant relief for
                fraud on the court. [Jahangirizadeh v. Pazouki, 27 N.E.3d 1178,
                1182 (Ind. Ct. App. 2015)]. We therefore conclude that it would
                be premature to examine substantive precedent and make such a
                judgment prior to a hearing required by Porter County Civil Rule
                3300.20.

      Id. at 406. We further concluded that the trial court improperly granted

      Husband’s Motion “when it did so without [first] scheduling and holding a

      hearing.” Id.

[7]   On remand, Wife requested a change of judge, which was granted. Wife also

      filed a response to Husband’s Motion. In this response, Wife asserted that

      Husband’s Motion should be dismissed because she had sufficiently alleged

      fraud and lack of disclosure. Wife does not point to any specific fraudulent acts

      which she claims Husband committed, claiming only that “[t]he hiding of in

      excess of $1,000,000.00 of deferred income, and possibly another $1,000,000.00

      from the Citadel Partners Equity Participant fund, is certainly evidence of ‘an

      unconscionable plan or scheme used to improperly influence the Court’s

      decision.’” Appellant’s App. Vol. II, p. 60.

      3
          Porter County Civil Rule 3300.20 provides for limited exceptions to this rule, none of which apply here.

      Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017                Page 7 of 15
[8]   On November 30, 2016, the trial court conducted a hearing on Husband’s

      Motion. Wife did not appear for this hearing but was represented by counsel.

      During this hearing, both sides presented argument relating to (1) the language

      contained in the Settlement Agreement. With respect to the parties’ financial

      accounts, the Settlement Agreement, which again was filed within thirty days of

      the dissolution petition and was included by reference in Wife’s Motion,

      explicitly provided as follows:

              [t]he parties acknowledge that they have not appraised each
              other’s assets or financial accounts and waive any right to do so
              and acknowledge that one party may receive a larger share than
              the other. The parties have also agreed to waive the requirement
              of exchanging financial declaration forms.

      Appellant’s App. p. 25. Thus, Husband asserts that pursuant to the terms of the

      Settlement Agreement, there was no duty to disclose and that “if there’s no

      duty to disclose, there can’t be any fraud based upon a non-disclosure.” Tr. p.

      6. Wife’s counsel argued that the Settlement Agreement demonstrated that the

      parties intended to have an equal division of the marital estate. Wife’s counsel

      did not present any specific argument or evidence during the hearing relating to

      Wife’s claims of fraud merely relying on the fact that Wife generally alleged

      fraud by Husband. After taking the matter under advisement, on January 9,

      2017, the trial court issued an order granting Husband’s Motion.

                                 Discussion and Decision

      Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 8 of 15
[9]   Wife contends on appeal that the trial court abused its discretion in granting

      Husband’s Motion.

              Generally, we will review the denial of a Trial Rule 60 motion
              for an abuse of discretion. Wisner v. Laney, 984 N.E.2d 1201,
              1205 (Ind. 2012). However, if a trial court’s ruling is strictly
              based upon a paper record, we will review the ruling de novo
              because we are in as good a position as the trial court to
              determine the force and effect of the evidence. In re Adoption of
              C.B.M., 992 N.E.2d 687, 691 (Ind. 2013). The trial court here
              ruled solely upon a paper record, and so our review is de novo.

              Indiana Trial Rule 60(B)(3) provides that a judgment may be set
              aside for “fraud (whether heretofore denominated intrinsic or
              extrinsic), misrepresentation, or other misconduct of an adverse
              party....” Additionally, a motion for relief from judgment under
              Trial Rule 60(B)(3) must be filed not more than one year after the
              judgment was entered. However, Trial Rule 60(B) contains a
              “savings clause” which provides, “This rule does not limit the
              power of a court to entertain an independent action to relieve a
              party from a judgment, order or proceeding or for fraud upon the
              court.”

              In Stonger v. Sorrell, 776 N.E.2d 353 (Ind. 2002), our supreme
              court addressed the three ways that a motion to set aside a
              judgment for fraud can be raised, adopting analysis used by
              federal courts for Federal Rule of Civil Procedure 60(b)(3), which
              is nearly identical to Trial Rule 60(B)(3). First is a motion filed
              under subsection (3) of the Rule, which “may be based on any
              kind of fraud (intrinsic, extrinsic, or fraud on the court) so long as
              it is chargeable to an adverse party and has an adverse effect on
              the moving party.” Stonger, 776 N.E.2d at 356. A motion under
              this Rule also must be filed in the court that issued the judgment,
              and it must be made within one year of the judgment. Id.

              Second, a party may file an independent action for fraud

      Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 9 of 15
        pursuant to traditional equitable principles. Id. “Independent
        actions are usually reserved for situations that do not meet the
        requirements for a motion made under” Rule 60(B)(3). Id. Such
        cases include ones where “(i) the fraud is not chargeable to an
        adverse party; (ii) the movant seeks relief from a court other than
        the rendering court; or, most often, (iii) the one-year time limit
        for Rule 60(b)(3) motions has expired.” Id. An independent
        action for fraud is subject to the doctrine of laches and is
        available only in extremely limited circumstances. Id.

        Third, a party may invoke the inherent power of a court to set
        aside its judgment if procured by fraud on the court. Id. at 356-
        57. Also, a court may sua sponte set aside a judgment for fraud
        on the court. Id. at 357. There is no time limit for a fraud on the
        court proceeding. Id.

        Regardless of which procedural avenue a party selects to assert a
        claim of fraud, “the party must establish that an unconscionable
        plan or scheme was used to improperly influence the court’s
        decision and that such acts prevented the losing party from fully
        and fairly presenting its case or defense.” Id. If it is unclear
        which procedural avenue a party intended to use to set aside a
        judgment and more than one year has passed, a court may
        construe a motion to set aside as either an independent action for
        fraud or as a pleading to grant relief for fraud on the court. Id.;
        see also United States v. Buck, 281 F.3d 1336, 1342 (10th Cir. 2002)
        (“The substance of the plea should control, not the label.”). To
        establish fraud warranting relief from judgment, a party must
        show more than a possibility that the trial court was misled;
        rather, “there must be a showing that the trial court’s decision
        was actually influenced.” Stonger, 776 N.E.2d at 358.

Jahangirizadeh, 27 N.E.3d at 1181-82.

Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 10 of 15
[10]   Wife’s Motion did not specify whether her claims were being raised as a claim

       for relief from judgment under Trial Rule 60(b)(3) or as a claim under Indiana

       Code section 31-15-7-9.1, which provides as follows:

               (a) The orders concerning property disposition entered under this
               chapter (or IC 31-1-11.5-9 before its repeal) may not be revoked
               or modified, except in case of fraud.

               (b) If fraud is alleged, the fraud must be asserted not later than six
               (6) years after the order is entered.

       As such, like in Jahangirizadeh, “we will proceed to consider whether the motion

       stated a possible independent action for fraud or invoked the trial court’s

       authority to set aside the judgment for fraud on the court.” 27 N.E.3d at 1182.

[11]   In Jahangirizadeh, we considered the difference between the various types of

       “fraud.” In doing so, we noted that Jahangirizadeh’s motion to set aside

       adequately alleged that the trial court’s property division decision was actually

       influenced by Pazouki’s alleged falsification of her assets. Id. However, we

       further noted the following:

               We do not believe that is enough, however, to establish a possible
               case for an independent action for fraud or fraud on the court. A
               number of federal court opinions and authorities have gone into
               significantly greater detail than Stonger regarding the differences
               between “ordinary” fraud, an independent action for fraud, and
               fraud on the court. Given the Stonger opinion’s adoption of
               federal authorities, we will look to those authorities as well to
               further delineate the differences among the three types of fraud.

               In the Buck opinion, heavily relied upon by Stonger, the 10th

       Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 11 of 15
        Circuit addressed a motion to set aside a quiet title judgment in
        favor of the United States filed four years after judgment was
        entered; the movant alleged that government attorneys had
        committed fraud by failing to disclose evidence that could have
        altered the original judgment. Because the motion was filed past
        the one-year deadline of Civil Procedure Rule 60(b)(3), the court
        addressed whether an independent action for fraud or fraud on
        the court had been proven. The court held that it had not.

        In particular, the court explained that the type of egregious fraud
        required to prove fraud on the court or an independent fraud
        action “‘is fraud which is directed to the judicial machinery itself
        and is not fraud between the parties or fraudulent documents,
        false statements or perjury.... [A]llegations of nondisclosure in
        pretrial discovery will not support an action for fraud on the
        court.’” Buck, 281 F.3d at 1342 (quoting Bulloch v. United States,
        763 F.2d 1115, 1121 (10th Cir. 1985), cert. denied). Such fraud
        also may include “‘only the most egregious conduct, such as
        bribery of a judge or members of a jury, or the fabrication of
        evidence by a party in which an attorney is implicated....’” Id.
        (quoting Weese v. Schukman, 98 F.3d 542, 552-53 (10th Cir.
        1996)). “‘[N]ondisclosure of facts allegedly pertinent to the
        matter before [the court] ... will not ordinarily rise to the level of
        fraud on the court.’” Id. Fraud on the court also requires a
        showing of intentional misconduct or intent to deceive or defraud
        the court. Id. (citing Robinson v. Audi Aktiengesellschaft, 56 F.3d
1259, 1267 (10th Cir. 1995), cert. denied).

        Additionally, fraud on the court does not exist “in cases in which
        the wrong, if wrong there was, was only between the parties in
        the case and involved no direct assault on the integrity of the
        judicial process. Nondisclosure by a party or the party’s attorney
        has not been enough.” 11 Fed. Prac. & Proc. Civ. § 2870, Fraud
        on the Court (3rd ed. 2014). The mere possibility of a witness
        testifying falsely is an ordinary risk of the judicial process and is
        not fraud on the court, unless possibly an attorney or other officer
        of the court has been involved in perjury or the falsification of
Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 12 of 15
               evidence. Id. (citing Lockwood v. Bowles, 46 F.R.D. 625, 632–33
               (D.D.C.1969)).

               Similarly, the United States Supreme Court has held that a
               party’s failure to furnish relevant information to an opposing
               party in a lawsuit does not support an independent action for
               fraud to set aside a judgment. United States v. Beggerly, 524 U.S.
38, 46, 118 S. Ct. 1862, 1867, 141 L. Ed. 2d 32 (1998). Rather, the
               Court held that such conduct is of the type intended to be
               covered by Civil Procedure Rule 60(b)(3), and that expanding the
               definition of an independent action for fraud to include such
               conduct would eviscerate the strict one-year time limit for
               motions under that Rule. Id. It also has been said that an
               independent action for fraud “is available only to prevent a grave
               miscarriage of justice.” 11 Fed. Prac. & Proc. Civ. § 2868,
               Independent Action for Relief (citing Beggerly, 524 U.S. at 46, 118
               S.Ct. at 1867).

       Id. at 1182-84.

[12]   We concluded that Jahangirizadeh’s allegations against Pazouki amounted “to

       a clear example of ‘ordinary’ fraud noted in the federal authorities, involving

       Pazouki’s alleged nondisclosure of assets to Jahangirizadeh in order to not have

       them subject to division by the trial court in the dissolution decree and her

       alleged general unreliability as a witness.” Id. at 1184. In reaching this

       conclusion, we noted the following:

               [t]here are no allegations that Pazouki’s attorneys were involved
               in any intentionally fraudulent conduct. There are no allegations
               of any egregious conduct infringing upon the integrity of the
               judiciary. The only person negatively impacted by Pazouki’s
               allegedly fraudulent conduct is Jahangirizadeh; the public at
               large is not affected by the parties’ marital property division.

       Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 13 of 15
       Id. As such, we further concluded that

               [t]o the extent Pazouki may have been less-than-forthright
               regarding her assets—assuming Jahangirizadeh’s allegations to
               be true—this is the type of “ordinary” fraud that must be subject
               to the one-year time limit of Trial Rule 60(B)(3). Otherwise, the
               Rule’s time limit could be rendered a nullity in a much wider
               range of cases of supposed “fraud” than was intended to be
               covered by the Rule. Jahangirizadeh’s motion to set aside, as
               well as his motions to reconsider and to correct error, fail to give
               support to an independent action for fraud or a claim for fraud on
               the court. As such, the motion to set aside is barred by the one-
               year time limit of Trial Rule 60(B)(3).

       Id.

[13]   Similarly, we conclude that Wife’s allegations against Husband amounted to

       “ordinary” fraud as Wife raised no allegation that Husband or his attorneys

       were involved in any intentionally fraudulent conduct which infringed upon the

       integrity of the judiciary. Like in Jahangirizadeh, the only person who was

       negatively impacted by Husband’s alleged fraudulent conduct is Wife as the

       public at large is not affected by the parties’ marital property division.

       Consequently, Husband’s alleged fraudulent acts—assuming Wife’s allegations

       to be true—constituted the type of “ordinary” fraud that is subject to the one-

       year time limit set forth in Trial Rule 60(B)(3). See id. It is undisputed that

       Wife’s Motion was not filed within this one-year time limit. As such, we

       Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017   Page 14 of 15
       conclude that the trial court did not abuse its discretion in granting Husband’s

       Motion.4

[14]   The judgment of the trial court is affirmed.

       Mathias, J., and Altice, J., concur.

       4
         To the extent that Wife intended to raise her claims under Indiana Code section 31-15-7-9.1, Wife has
       failed to fully develop this claim. Furthermore, Wife’s summary allegations—even if assumed to be true—
       cannot amount to fraud given the terms of the parties’ Settlement Agreement. The terms of the Settlement
       Agreement, which again was incorporated into Wife’s Motion by reference, explicitly provide that although
       the parties’ generally intended to have an equal distribution of the marital estate, the parties waived the right
       to request a financial declaration and acknowledged that the Settlement Agreement might actually result in
       an unequal distribution. Under these terms, Husband cannot be found to have committed fraud merely for
       failing to disclose assets to Wife and Wife has presented no specific claims or arguments relating to any
       fraudulent acts allegedly committed by Husband.

       Court of Appeals of Indiana | Memorandum Decision 64A03-1702-DR-219 | June 27, 2017                 Page 15 of 15