Court Opinion

ID: 4523995
Source: CourtListenerOpinion
Date Created: 2020-04-09 16:03:43.367847+00
Date Added: 2024-06-11T09:26:06.454335
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                         Apr 09 2020, 10:06 am
court except for the purpose of establishing                            CLERK
the defense of res judicata, collateral                             Indiana Supreme Court
                                                                       Court of Appeals
estoppel, or the law of the case.                                        and Tax Court

ATTORNEYS FOR APPELLANT                                  ATTORNEYS FOR APPELLEE
Jere L. Humphrey                                         George E. Horn, Jr.
Janette E. Surrisi                                       Thomas M. Everett
Plymouth, Indiana                                        South Bend, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Lisa R. Carpenter, nka Ball,                             April 9, 2020
Appellant-Petitioner,                                    Court of Appeals Case No.
                                                         19A-DN-2512
        v.                                               Appeal from the Marshall Circuit
                                                         Court
Jack L. Carpenter,                                       The Honorable Curtis D. Palmer,
Appellee-Respondent                                      Judge
                                                         Trial Court Cause No.
                                                         50C01-1805-DN-80

Altice, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020               Page 1 of 15
                                             Case Summary
[1]   Lisa R. Carpenter, nka Ball, (Ball) appeals from the trial court’s distribution of

      marital property following the dissolution of her marriage to Jack L. Carpenter

      (Carpenter). Ball presents two issues for our review, which we divide and

      restate as:

              1. Did the trial court deprive Ball of a fair proceeding in
              violation of her due process rights by not considering her
              proposed findings of fact and conclusions of law?

              2. Did the trial court abuse its discretion in valuing the marital
              residence?

              3. Did the trial court abuse its discretion in dividing the marital
              property?

[2]   We affirm in part, reverse in part, and remand with instructions.

                                   Facts & Procedural History
[3]   Carpenter lost his first wife in a tragic automobile accident on March 29, 1999.

      They had two children. Carpenter filed a wrongful death action that resulted in

      a $4.6 million settlement, which was awarded to Carpenter after he married

      Ball. Approximately half of the money was put in trust for his children.

[4]   Ball and Carpenter were married on August 5, 2000, and separated on or about

      May 9, 2018, when Ball filed a petition for dissolution of marriage. There were

      Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 2 of 15
      no children born of the marriage, but they raised a blended family together. 1

      During the marriage, Ball’s parents gifted them an eight-acre parcel on which

      they built their marital home. Carpenter paid for the construction of the marital

      home, pool, and pole barn, at an estimated cost of $1 million, with money from

      the wrongful death settlement. Carpenter kept the remaining settlement funds

      in an account separate from other marital property.

[5]   During the marriage, Carpenter paid for real estate taxes, homeowner’s

      insurance, household furnishings, and family vacations. Ball paid for groceries,

      utilities, a housekeeper, and her own vehicle expenses. Ball testified that during

      their nearly eighteen-year marriage, they did things as a family and as a couple,

      raised their children, and had a marriage partnership, sharing in household

      duties and other intangibles associated with raising a blended family.

[6]   The trial court held a final hearing on August 6, 2019. The parties submitted a

      stipulation to the court in which they “agree[d] on everything except the final

      division.” Transcript Vol. II at 3. Ball testified that she was making no claim to

      $345,080 in wrongful death settlement funds Carpenter maintained in separate

      accounts. The hearing proceeded with the parties presenting their respective

      evidence as to the value of the marital home, personal property, and vehicles, as

      well as their positions as to the final division of marital property. At the

      1
          In addition to Carpenter’s two children, Ball has one child.

      Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 3 of 15
      conclusion of the evidence, counsel for both parties agreed to reserve final

      arguments for their post-hearing submissions.

[7]   The chronological case summary (CCS) has a September 13, 2019 entry

      indicating that Carpenter submitted his proposed findings of fact and

      conclusions of law on September 12, 2019. Although the CCS indicates that

      Ball submitted her findings of fact and conclusions of law on September 12,

      2019, such was not noted on the CCS until September 30, 2019. The trial court

      entered the Decree of Dissolution on September 26, 2019 and divided the

      marital assets. As pertinent to the issues presented herein, the court made the

      following findings:

              7. The parties are the joint owners of an eight-acre parcel of real
              estate where the marital residence, pool and associated
              outbuildings are located. This ground was obtained as a gift
              from [Ball]’s parents shortly after the parties were married.

                                                      ***

               9. All of the improvements to the property were paid for by
              [Carpenter] from funds he obtained following the settlement of a
              civil claim resulting from an automobile accident in which his
              first wife was killed.

              10. The civil claim arose before the parties were married, but the
              settlement of approximately $4.6 Million was received after they
              were married. Regardless of the timing, those funds (less any
              money put in trust for [Carpenter]’s two minor sons) became
              marital property.

      Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 4 of 15
        11. During the eighteen-year marriage, the parties maintained
        separate bank accounts and the wrongful death settlement funds
        were never commingled with [Ball]’s funds.

                                                ***

        17. During the marriage, [Carpenter] paid for the construction and
        furnishings for the marital home, pool, pool house, pole barn, etc.
        He also paid for all family vacations, all real estate taxes and all
        homeowner’s insurance.

                                                ***

        29. The contributions of each spouse to the acquisition and
        improvement of the marital real estate are not equal. Although
        the ground was gifted to the parties from [Ball]’s parents, the
        overwhelming majority of the current value of the marital real
        estate stems from the wrongful death settlement funds used for
        construction of the improvements to the real estate.

        30. The real estate is the single largest asset to be divided by the
        court.

        31. The court finds the wrongful death settlement funds paid to
        [Carpenter] to be similar in kind to property obtained by one
        spouse through inheritance or gift as referred to in IC § 31-15-7-
        5(2)(B)

Appellant’s Appendix Vol. II at 9-10. The trial court determined that the

presumption of an equal distribution had been rebutted and awarded eighty

percent of the identified marital assets to Carpenter and twenty percent to Ball.

Ball now appeals. Additional facts will be provided as necessary.

Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 5 of 15
                                        Discussion & Decision
                                                   1. Due Process

[8]    Ball argues that the trial court deprived her of a fair proceeding in violation of

       her due process rights. Specifically, Ball argues that because the trial court had

       the benefit of Carpenter’s proposed findings of fact and conclusions of law but

       not hers, she was deprived “of an even playing field and a fair proceeding.”

       Appellant’s Brief at 11.

[9]    The Fourteenth Amendment of the United States Constitution prohibits any

       state from depriving a person of life, liberty, or property without due process of

       law. The due course of law provision of the Indiana Constitution provides that

       “All courts shall be open; and every person, for injury done to him in his

       person, property, or reputation, shall have remedy by due course of law.”

       Indiana courts have consistently construed Article I, Section 12 of the Indiana

       Constitution as analogous to the federal due process clause. See, e.g., Doe v.

       O’Connor, 790 N.E.2d 985, 988 (Ind. 2003); see also McIntosh v. Melroe Co., 729
N.E.2d 972, 976 (Ind. 2000). The fundamental requirement of due process is

       the opportunity to be heard “at a meaningful time and in a meaningful

       manner.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976).

[10]   Ball’s argument is based solely on the fact that her post-hearing submission was

       not entered on the CCS until after the trial court entered its judgment. The

       CCS, however, is simply a sequential order of all judicial events in any given

       proceeding. Ind. Trial Rule 77(B) provides, in pertinent part:

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 6 of 15
                  Notation of judicial events in the CCS shall be made promptly,
                  and shall set forth the date of the event and briefly define any
                  documents, orders, rulings, or judgments filed or entered in the
                  case. The date of every notation in the CCS should be the date the
                  notation is made, regardless of the date the judicial event occurred.

       (Emphasis supplied). Thus, under T.R. 77(B), the date of the entry in the CCS

       does not represent the date a document was filed. Rather, the CCS is a

       subsequent record created by the clerk that sets forth and describes documents

       that have been filed.

[11]   Ball has not shown that the trial court did not have the benefit of her proposed

       findings and conclusions. Although not entered on the CCS until after the trial

       court issued its judgment, the CCS entry specifically states that Ball’s post-

       hearing submission was “Submitted: 09/12/2019.” 2 Appellant’s Appendix Vol. II

       at 6. Contrary to Ball’s claim, the delayed entry on the CCS is not evidence

       that “the court didn’t have the benefit of [Ball]’s written argument prior to

       ruling.” Appellant’s Brief at 11. Ball has not pointed to any other evidence that

       suggests the trial court did not consider her filing. Because the CCS entry date

       was the basis of her due process claim, such claim fails.

                                          2. Valuation of Marital Residence

[12]   As an initial matter, we note that the dissolution court entered special findings

       of fact and conclusions thereon pursuant to Ind. Trial Rule 52(A). Accordingly,

       2
           We remind the trial court that filings with the court should be file-stamped to avoid problems such as this.

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020                        Page 7 of 15
       our standard of review is two-tiered: first, we determine whether the evidence

       supports the findings and, second, whether the findings support the judgment.

       Marion Cnty. Auditor v. Sawmill Creek, LLC, 964 N.E.2d 213, 216 (Ind. 2012).

       We view the evidence in the light most favorable to the judgment and defer to

       the court’s findings if they are supported by the evidence or any legitimate

       inferences flowing therefrom. Id. at 216-17. Legal conclusions, on the other

       hand, are reviewed de novo. Id. at 217.

[13]   Ball challenges the trial court’s valuation of the marital residence. 3 The trial

       court’s valuation of marital assets is within its sound discretion and will only be

       disturbed for an abuse of discretion. Morey v. Morey, 49 N.E.3d 1065, 1069

       (Ind. Ct. App. 2016) (citing In re Marriage of Nickels, 834 N.E.2d 1091, 1095

       (Ind. Ct. App. 2005)). As long as the evidence is sufficient and reasonable

       inferences support the valuation, an abuse of discretion does not occur. Id. We

       will not reweigh the evidence and will consider the evidence in the light most

       favorable to the judgment. Id. “Although the facts and reasonable inferences

       might allow for a different conclusion, we will not substitute our judgment for

       that of the trial court.” Nickels, 834 N.E.2d at 1095 (quoting Bizik v. Bizik, 753
N.E.2d 762, 766 (Ind. Ct. App. 2001), trans. denied).

[14]   The trial court noted that Ball’s appraisal valued the marital residence,

       including the pole barn, at $675,000 and that Carpenter’s appraisal valued the

       3
        The marital residence includes the eight-acre parcel of land, the home, the pool, and associated
       outbuildings.

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020                       Page 8 of 15
       marital residence at $565,000, but such did not include the pole barn. The court

       also noted that, consistent with the testimony of the parties, the pole barn cost

       $70,000 to construct. Without further explanation the trial court determined

       the “fair value for the real estate (including the pole barn) to be $625,000.”

       Appellant’s Appendix Vol. II at 11. Ball suggests that the trial court arrived at this

       number by using Carpenter’s appraisal of $565,000 and adding $70,000 for the

       pole barn, which she correctly observes adds up to $635,000, not $625,000. Ball

       argues that the trial court abused its discretion because the math does not add

       up and there is no other evidence to support the court’s calculation. We

       disagree.

[15]   The evidence before the court was that it cost between $60,000 and $70,000 to

       construct the pole barn. The evidence also established that historical

       construction costs were greater than the current market value. Indeed, the

       parties agreed that construction of the martial residence cost nearly one million

       dollars, but that its current value was much less. Thus, the value of the pole

       barn was likely less than the cost to construct it. The court’s valuation of the

       marital residence, including the pole barn, at $625,000 was within the evidence

       presented by the parties. We find no abuse of discretion.

                                               3. Property Division

[16]   Ball also argues that the trial court abused its discretion in dividing the marital

       property. Like the valuation of marital property, the disposition of marital

       assets is within the dissolution court’s sound discretion, and we will reverse

       only for an abuse of that discretion. Eye v. Eye, 849 N.E.2d 698, 701 (Ind. Ct.
       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 9 of 15
Ohio App. 2006). We consider only the evidence most favorable to the dissolution

       court’s decision, without reweighing the evidence or assessing the credibility of

       witnesses. Id.

[17]   Pursuant to Ind. Code § 31-15-7-5, the dissolution court is required to divide the

       marital estate in a just and reasonable manner. An equal division is presumed

       just and reasonable, but a party may rebut this presumption by presenting

       evidence that an equitable division would not be just and reasonable, including

       evidence concerning the following pertinent factors:

               (1) The contribution of each spouse to the acquisition of the
               property, regardless of whether the contribution was income
               producing.

               (2) The extent to which the property was acquired by each
               spouse:

                        (A) before the marriage; or

                        (B) through inheritance or gift.

                                                       ***

               (5) The earnings or earning ability of the parties as related to:

                        (A) a final division of property; and

                        (B) a final determination of the property rights of the
                        parties.

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 10 of 15
Id. The term “just” invokes a concept of fairness and of not doing wrong to

       either party; it does not necessarily mean equal or relatively equal. Doyle v.

       Doyle, 756 N.E.2d 576, 578 (Ind. Ct. App. 2001).

[18]   A party challenging the dissolution court’s division of marital property must

       overcome a strong presumption that the dissolution court “‘considered and

       complied with the applicable statute, and that presumption is one of the

       strongest presumptions applicable to our consideration on appeal.’” McCord v.

       McCord, 852 N.E.2d 35, 43 (Ind. Ct. App. 2006) (quoting DeSalle v. Gentry, 818
N.E.2d 40, 44 (Ind. Ct. App. 2004)), trans. denied. Accordingly, we will reverse

       a property distribution only if there is no rational basis for the award, and

       although the circumstances may have justified a different property distribution,

       we may not substitute our judgment for that of the dissolution court. Augspurger

       v. Hudson, 802 N.E.2d 503, 512 (Ind. Ct. App. 2004).

[19]   Here, the trial court divided the property unequally with a purported 80-20 split

       that was actually even greater of a split. Although the trial court found that

       Carpenter’s wrongful death settlement was marital property, it did not include

       the $345,080 in settlement funds that were set off to Carpenter in its 80-20

       division of martial assets. As this court has before stated, “for the sake of

       clarity, it’s the best practice to include inherited property in final marital pot

       calculations, instead of setting them off, in order to more accurately reflect the

       actual division of marital property.” Maxwell v. Maxwell, 850 N.E.2d 969 (Ind.

       Ct. App. 2006). Had the trial court properly included the funds as part of the

       marital pot and then set such off to Carpenter before dividing the remaining

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 11 of 15
       assets with an 80-20 split, the actual division of property would have been

       closer to an 86-14 split in favor of Carpenter.

[20]   Ball does not disagree that the separate settlement funds should be set off to

       Carpenter, resulting in a greater distribution to him. Ball argues, however, that

       the trial court treated the home improperly. Here, the trial court justified the

       80-20 split because Carpenter used settlement funds to pay for construction of

       the marital residence and the settlement funds were akin to an inheritance or

       gift.

[21]   Ball argues that settlement funds Carpenter used to pay for construction of the

       marital residence that they lived in for nearly all of the seventeen-plus-year

       marriage are not of the same character as the settlement funds Carpenter kept in

       separate accounts. Specifically, Ball argues that the funds became commingled

       marital property, thereby negating the trial court’s justification for an 80-20

       split. Ball argues that the trial court abused its discretion by awarding

       Carpenter the majority of the value of the marital residence. Carpenter asserts

       that because he paid for the construction of the marital residence, the settlement

       funds are traceable to its current value and thus should be set off to him, which

       he maintains, justifies the court’s property division.

[22]   The concept of traceability arose in Keller v. Keller, 639 N.E.2d 372 (Ind. Ct.

       App. 1994), trans. denied. In that case, the majority upheld an unequal

       distribution of marital property in favor of wife where wife inherited a home in

       her name only during the marriage, subsequently sold the home and deposited

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 12 of 15
       the proceeds into a joint account, and then used the proceeds toward the

       purchase of a second marital home. The majority approved of the trial court

       using “‘traceability’ as a tool to determine the extent to which some of the

       marital property was acquired through inheritance.” Id. at 374. Judge Staton

       dissented, opining that acquisition of property by inheritance “does not,

       without more, satisfy the statutory criteria that a deviation from the presumed

       50/50 split is appropriate.” Id. at 375. He pointed out that the parties lived in

       the home wife inherited for six years, jointly contributed to the maintenance of

       the home and used joint funds to pay the mortgage during that time, deposited

       the proceeds from the sale of the home into a joint account, and used the

       proceeds to purchase a second marital residence. Id. Because the parties

       commingled all their assets and efforts, Judge Staton would have reversed and

       remanded for an equal distribution of marital assets. Id.

[23]   Eleven years later, a majority in Hatten v. Hatten, 825 N.E.2d 791 (Ind. Ct. App.

       2005) (Baker, J. dissenting), trans. denied, disagreed with the Keller holding,

       stating that “the mere fact of traceability of assets should not be the basis for

       deviation from the presumptive equal division.” Id. at 796. The Hatten

       majority acknowledged that husband had received an inheritance and that he

       initially put the money into an account in his name only. The majority noted,

       however, that wife’s name was later added to the account and that for nearly

       fifteen years of the parties’ marriage, the account was used to pay for marital

       expenses such as home improvements, an automobile, and travel and living

       expenses. The majority held that considering this commingling of funds over

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 13 of 15
       the course of the marriage, the trial court abused its discretion in awarding the

       entire value of the account to husband on the basis that the proceeds therein

       were “directly traceable to Husband’s inheritance.” Id. at 793.

[24]   At issue here is how the court treated the settlement funds used to pay for the

       marital home. We agree with the Hatten majority that “the mere fact of

       traceability of assets should not be the basis for deviation from the presumptive

       equal division.” Id. at 796. Carpenter used a million dollars of the settlement

       to pay for construction of the marital residence that he and Ball lived in and

       raised their blended family for almost all of their nearly eighteen-year marriage.

       As evidenced by the following exchange, even Carpenter believed that the

       marital home was marital property that they shared equally. During the final

       hearing, the following exchange occurred:

               Q And at that time, before the house was built, you would have
               thought the house was equally yours and equally hers, wouldn’t
               you?

               A Yes.

               Q Do you have any hesitation on that?

               A No, the house is definitely, you know, was ours. Um – I
               would contest that I used my money to build it; so, part of me
               thinks it’s my sons and mine because the money came from the
               death of my wife and their mother.

       Transcript Vol. II at 32.

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 14 of 15
[25]   Based on the forgoing, we conclude that the settlement funds Carpenter used to

       pay for construction of the marital residence lost their identity as settlement

       funds and became commingled marital property. Our conclusion in this regard

       negates the trial court’s justification for awarding its unequal distribution of

       martial assets, especially where Carpenter received settlement funds in addition

       to eighty percent of the other marital assets, including the marital home. Aside

       from improperly tracing Carpenter’s settlement funds to the marital residence,

       there is no other justification for awarding Carpenter eighty percent of the

       home’s value. In sum, we hold that the disparity in the distribution of marital

       property is clearly against the logic and effect of the facts and circumstances

       before the court. We remand to the trial court to recalculate division of marital

       property in accordance with this decision.

[26]   Judgment affirmed in part, reversed in part, and remanded.

       Bailey, J. and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-DN-2512 | April 9, 2020   Page 15 of 15