Court Opinion

ID: 4434518
Source: CourtListenerOpinion
Date Created: 2019-08-29 15:04:02.570156+00
Date Added: 2024-06-11T13:33:08.004466
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                            Aug 29 2019, 9:27 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.

ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
Darlene R. Seymour                                       Bryan H. Babb
William P. Means                                         Bose McKinney & Evans LLP
Roberts Means, LLC                                       Indianapolis, Indiana
Carmel, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Bryan Wesolek,                                           August 29, 2019
Appellant-Respondent,                                    Court of Appeals Case No.
                                                         18A-DR-2419
        v.                                               Appeal from the
                                                         Porter Superior Court
Dana Wesolek,                                            The Honorable Douglas
Appellee-Petitioner                                      McMillan, Judge Pro Tem
                                                         Trial Court Cause No.
                                                         64D02-1404-DR-3264

Vaidik, Chief Judge.

Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019               Page 1 of 15
                                          Case Summary
[1]   Bryan Wesolek (“Husband”) appeals the trial court’s decree dissolving his

      marriage to Dana Wesolek (“Wife”). Husband argues that the trial court erred

      by including certain property in the marital pot, in its valuation of Husband’s

      business, and by finding Husband in contempt. We affirm.

                            Facts and Procedural History
[2]   Although the dissolution decree covers many topics, this appeal concerns only a

      few of them. Accordingly, we set forth the facts that are relevant to the issues

      the parties raise on appeal.

[3]   In 1991, Husband founded Data Limited, Inc. (DLI), which designed and

      manufactured rugged computer equipment, such as industrial tablets used by

      Disney and Anheuser-Busch. In 1997, Husband and Wife were married. No

      children were born to the marriage. During the marriage, Husband owned and

      operated DLI. In 2000, Husband and Wife created Wesolek Properties, LLC,

      which built or purchased various properties to house DLI’s operations.

      Husband and Wife shared 50-50 ownership in Wesolek Properties. In 2010,

      Husband expanded DLI’s business and opened a location in Taiwan. Upon

      entry into the Taiwanese market, Husband purchased personal stock in Arbor, a

      company that DLI had a business relationship with. In early 2013, Wesolek

      Properties purchased commercial real estate located on Lee Street (“Lee Street

      property”) in Lehigh Acres, Florida, and Husband moved DLI’s operations to

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 2 of 15
      that location. In late 2013, DLI’s business began declining. By the beginning

      of 2014, DLI’s sales had not improved, and its inventory was increasing.

[4]   Wife filed a petition for dissolution of marriage on March 10, 2014. While the

      dissolution was pending, DLI’s problems began to spiral out of control. In

      2016, many of DLI’s devices were rendered unusable because of an issue with

      the wireless-network card purchased from Intel. When Husband couldn’t fix

      the defective Intel cards himself, he was forced to replace the cards, costing DLI

      $450,000. By July 2017, DLI’s relationships with its customers had become so

      damaged that Husband sold DLI to Comark, another company in the rugged

      computer-equipment industry, for $1,200,000.

[5]   In December 2017, the trial court held the final dissolution hearing over three

      days. The most contentious issue was the value of DLI. Wife presented the

      testimony of Chris Hirschfeld, an accredited senior appraiser, regarding its

      value. Hirschfeld testified that using the asset-based approach, the value of DLI

      as of March 10, 2014—the date of filing—was $2,940,000. See Tr. Vol. II p.

      128.

[6]   To refute Wife’s expert’s valuation of DLI, Husband called Robert Schlegel, a

      certified business appraiser, to testify regarding the value of DLI. Schlegel

      stated that he had completed two valuations of DLI. His first valuation valued

      DLI as of the date of filing. Using the asset-based approach, Schlegel found

      that the value of DLI’s assets was $418,000. See Tr. Vol. IV p. 58; see also

      Resp’t’s Ex. 5. On cross-examination, Wife’s attorney asked Schlegel whether

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 3 of 15
      he considered the finding of Accell, another accounting firm, that there should

      have been an $824,284 increase in DLI’s 2014 equity. See id. at 60; see also

      Pet’r’s Ex. 32. Schlegel stated that he did not consider Accell’s finding and

      could not say whether a $824,284 increase in equity would increase the value of

      DLI under the asset-based approach. See Tr. Vol. IV pp. 60, 62-63. Schlegel

      then testified about his second valuation of DLI following its sale to Comark.

      Using the asset-based approach, Schlegel found that the value of DLI’s assets

      was zero. See id. at 48; see also Resp’t’s Ex. 6. Schlegel explained that although

      DLI had been sold to Comark for $1,200,000, DLI had outstanding debts over

      $4,000,000 and that because a valuation can’t be less than zero, the reportable

      value is zero. See Tr. Vol. IV pp. 48-49.

[7]   Another issue of contention was whether Husband sold his shares of Arbor

      stock before Wife filed her petition for dissolution. Wife testified that Husband

      provided three overseas bank-account documents, written in Taiwanese, as

      “backup” for the Arbor stock sale. Tr. Vol. III p. 209. Wife stated that she

      could not “make heads or tails of” the documents and did not know when

      Husband sold his stock in Arbor. Id. at 210-11. On cross-examination,

      Husband’s attorney asked Wife about an Excel spreadsheet that Husband had

      created allegedly showing that his Arbor stock had been sold in 2013 for

      $110,934.76. Wife acknowledged that she had received the Excel spreadsheet

      but said that it did not show the alleged stock sale. See Tr. Vol. IV p. 78. Wife

      said that she thought “there would be stock transfer information” but that she

      never received any of that information. Id.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 4 of 15
[8]   In April 2018, the trial court issued a decree of dissolution. As for the value of

      DLI, the trial court explained:

              Considering the asset based approach as the most equitable value
              determination for a manufacturing operation, and fully
              considering the other factors . . . , the Court strongly considered
              the averaging of Hirschfeld’s (Wife’s Valuator) original asset
              based valuation in the amount of $2,414,000 and Schlegel’s
              (Husband’s Valuator) asset based valuation in the amount of
              $1,243,000 [$419,000 + $824,000] (adjustment for prior years[’]
              understated equity) for a total value of $1,828,500. However,
              this does not in the Court’s opinion fully take into consideration
              the full difficulties and impact of the business influences of the
              faulty Intel Wireless product. Also, using [Husband’s] own
              Appraiser (which it might be assumed as illustrated this was
              significantly lower than that of [Wife’s]). The Court finds the
              equity adjustment appropriate due to the additional investigation
              completed [by Accell]. The Court therefore determines that the
              most equitable valuation for [DLI] prior to the onset of the
              outside influences of Intel [in 2016,] to be the asset based
              approach of [Husband’s] appraiser, (with adjustment for the
              understated equity) to be $1,243,000.

      Appellant’s App. Vol. II pp. 74-75, 83 (emphases in original). Regarding the

      Arbor stock, the trial court found:

              To Wife’s knowledge and as she testified, the stock was in
              existence at the time she filed her Petition. . . . Through
              discovery, the only evidence provided by Husband to document
              this stock and/or its sale was an Excel spreadsheet with excerpts
              from overseas bank accounts seemingly unrelated to this
              transaction as the dates do not coincide with Husband’s alleged
              stock sale time frame of May 9, 2013 through May 15, 2013[.]

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 5 of 15
                                                     *****

              The Court finds that Husband has provided insufficient evidence
              to support the date of sale for the Arbor stock personally held.
              This bank account information is insufficient as it fails to
              adequately trace the sale of the Arbor stock. The Arbor stock net
              sale proceeds totaling $110,934.76 constitute a portion of the
              marital estate and this amount is set over to Husband.

      Id. at 84; see also Pet’r’s Ex. 35. Finally, the trial court assigned the Lee Street

      property “in full portion to the Husband in the appraised value of 2,000,000

      dollars, less the indebtedness on the property of $452,982 for an asset valuation

      to the Husband of 1,547,018.00.” Appellant’s App. Vol. II p. 28. The trial

      court ordered that “documentation, quit claims, etc. will be made removing

      Wife from her position of [50%] ownership of Wesolek Properties and only

      upon full and complete settlement of all terms of this decree.” Id. After the

      trial court assigned the parties their respective properties, it divided the marital

      pot 50-50 and ordered Husband to pay Wife a lump-sum equalization payment

      in the amount of $1,276,275.13 within 180 days. See id. at 93.

[9]   On May 23, Husband filed a motion to correct error. The next day, May 24,

      Wife filed her own motion to correct error. On May 25, the trial court

      scheduled Husband’s motion for a hearing on August 14. See id. at 140. Two

      weeks later, Husband filed a response to Wife’s motion to correct error,

      requesting “that all matters raised in Wife’s Motion be set to be heard

      concurrently with Husband’s Motion to Correct Error on August 14, 2018.”

      Appellee’s App. Vol. II pp. 13-14. At some point after Husband filed his

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 6 of 15
       response to Wife’s motion to correct error, but before the August 14 hearing, he

       sold the Lee Street property.

[10]   On August 14, the trial court held a hearing on the parties’ motions to correct

       error. During the hearing Wife’s attorney told the trial court that “on July 26th

       of this year, [Husband], on behalf of Wesolek Properties, sold [the] Lee Street

       [property].” Aug. 14, 2018 Tr. p. 24. Wife alleged that Husband had not paid

       her the equalization payment and that she was still a 50% owner of Wesolek

       Properties LLC, which, in turn, had previously owned the Lee Street property.

       Following the hearing, the trial court issued an order, which denied Husband’s

       motion to correct error and granted Wife’s motion to correct error in part.1 The

       trial court’s order also dealt with the Lee Street property, finding that Husband

       sold the Lee Street property before he had made any equalization payments to

       Wife as he was required to do and before removing Wife “as 50% owner of

       Wesolek Properties.” Appellant’s App. Vol. II p. 101. The trial court therefore

       ordered Husband to immediately “deposit the proceeds from [the sale of the

       Lee Street property] to be held by the Clerk of Porter County.” Id. at 97-98.

       1
         Husband asserts that the trial court did not set Wife’s motion to correct error for a hearing within 45 days of
       Wife filing it, that the motion was therefore deemed denied pursuant to Trial Rule 53.3(A), and that because
       the motion was deemed denied the trial court had no authority to grant any part of it. This argument is
       patently disingenuous. In his June 7, 2018 response to Wife’s motion—filed two weeks after Wife filed her
       motion—Husband specifically requested “that all matters raised in Wife’s Motion . . . be set to be heard
       concurrently with Husband’s Motion to Correct Error on August 14, 2018.” Appellee’s App. Vol. II p. 14.
       Tellingly, Husband fails to acknowledge that request in his briefs on appeal, and he left the response out of
       his appendix.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019                     Page 7 of 15
[11]   On September 10, after confirming with the Clerk of Porter County that

       Husband had not made any deposit as he was ordered to, the trial court set an

       emergency show-cause hearing for September 13 regarding Husband’s sale of

       the Lee Street property. Husband appeared telephonically and, after being

       sworn in, was asked various questions about the sale of the Lee Street property

       by Wife’s attorney. When asked what he sold the Lee Street property for,

       Husband refused to answer the question. See Sept. 13, 2018 Tr. p. 9. Husband

       also refused to answer a question regarding whether a check was issued at

       closing. After some discussion, the following colloquy ensued:

               The Court: How much was the property sold for?

               [Husband]: Respectfully, Your Honor, I’m not going to answer
                          that question.

                                                      *****

               The Court: Was there a check issued at the time of closing?

               [Husband]: Respectfully, I’m not going to answer that question.

                                                      *****

               The Court: Okay. Well, here’s what we’re going to do,
                          [Husband]. We are resetting this for a new court
                          day. That will be September 26[.]

                                I am finding you in direct contempt of this court for
                                your refusal to answer those two questions in

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 8 of 15
                                particular, and your overall reticence in answering
                                this court truthfully. You are ordered to appear
                                here personally on that date, September 26 . . . to
                                answer those contempt citations.

       Id. at 18-20. At the hearing on September 26, an attorney appeared on

       Husband’s behalf, but Husband himself did not appear and no explanation was

       given for his absence. Thereafter, the trial court took Wife’s request for a body

       attachment and additional sanctions under advisement. To date, the trial court

       has not decided whether to issue a body attachment or additional sanctions. See

       Cause No. 64D02-1404-DR-3264.

[12]   Husband now appeals.

                                  Discussion and Decision
[13]   Where, as here, the trial court enters special findings and conclusions pursuant

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

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

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

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

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

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

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

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 9 of 15
                               I. Property in the Marital Pot
[14]   Husband first contends that the trial court erred when it included the Arbor

       stock in the marital pot. He alleges that the Arbor stock was sold before the

       filing of the dissolution petition, and therefore it cannot be included in the

       marital pot. It is well settled that in a dissolution action, all marital property,

       whether owned by either spouse before the marriage, acquired by either spouse

       after the marriage and before final separation of the parties, or acquired by their

       joint efforts, goes into the marital pot for division. Ind. Code § 31-15-7-4(a);

       Falatovics v. Falatovics, 15 N.E.3d 108, 110 (Ind. Ct. App. 2014). The date of

       “final separation” is the date the petition for dissolution is filed. Ind. Code §

       31-9-2-46. “The requirement that all marital assets be placed in the marital pot

       is meant to insure that the trial court first determines that value before

       endeavoring to divide property.” Montgomery v. Faust, 910 N.E.2d 234, 238

       (Ind. Ct. App. 2009). “Indiana’s ‘one pot’ theory prohibits the exclusion of any

       asset in which a party has a vested interest from the scope of the trial court’s

       power to divide and award.” Falatovics, 15 N.E.3d at 110 (quotation omitted).

       While the trial court may decide to award a particular asset solely to one spouse

       as part of its just and reasonable property division, it must first include the asset

       in its consideration of the marital estate to be divided. Id.

[15]   With respect to the Arbor stock, Husband asserts that the evidence shows that

       he sold the stock before Wife filed the dissolution petition and that Wife

       conceded that Husband sold the stock in 2013. Neither assertion is correct.

       First, the trial court found that the evidence Husband alleges shows that the

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 10 of 15
       Arbor stock was sold before March 10, 2014, is documentation from three

       overseas bank accounts, written in Taiwanese, that was unrelated to the sale of

       the Arbor stock. See Pet’r’s Ex. 35. Next, Wife testified that she “could not

       make heads or tails” of the three bank-account documents, written in

       Taiwanese, and that she believed the Arbor stock was in existence when she

       filed her dissolution petition. Tr. Vol. III p. 210. Therefore, Husband’s

       argument amounts to a request for us to reweigh the evidence, which we do not

       do. See Barton, 47 N.E.3d 373. Accordingly, we find that the trial court did not

       abuse its discretion by including the Arbor stock in the marital pot.

                                       II. Valuation of DLI
[16]   Next, Husband challenges the trial court’s valuation of DLI. Specifically,

       Husband argues that there “is no date assigned” and “no methodology to

       explain how the trial court arrived at” a value of $1,243,000.00 for DLI.

       Appellant’s Br. p. 24.

[17]   A trial court has broad discretion in determining the date upon which to value

       marital assets. McGrath v. McGrath, 948 N.E.2d 1185, 1187 (Ind. Ct. App.

       2011). We have said that the trial court may select any date between the date of

       filing of the petition for dissolution and the date of the final hearing. Id. A trial

       court’s decision in ascertaining the value of property in a dissolution action is

       reviewed for an abuse of discretion. Del Priore v. Del Priore, 65 N.E.3d 1065,

       1076 (Ind. Ct. App. 2016), trans. denied. Generally, there is no abuse of

       discretion if a trial court’s chosen valuation is within the range of values

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 11 of 15
       supported by the evidence. Id. “A valuation submitted by one of the parties is

       competent evidence of the value of property in a dissolution action and may

       alone support the trial court’s determination in that regard.” Id. (citing

       Alexander v. Alexander, 927 N.E.2d 926, 935 (Ind. Ct. App. 2010), trans. denied).

       On appeal, “we resist the temptation to get deeply involved in analyzing the

       valuation evidence presented at trial.” Quillen v. Quillen, 671 N.E.2d 98, 100

       (Ind. Ct. App. 1996). Finally, when we review a trial court’s valuation of

       property in a dissolution, we will neither reweigh the evidence nor judge the

       credibility of witnesses. Del Priore, 65 N.E.3d at 1076-77.

[18]   The record reveals that the trial court heard evidence regarding the value of

       DLI as of March 2014—the date of filing—and as of July 2017—the date of sale

       to Comark. Wife’s expert, Hirschfeld, valued DLI at $2,940,000.00 as of

       March 2014. See Pet’r’s Ex. 5. Husband’s expert, Schlegel, completed two

       valuations of DLI—one valuing DLI as of the date of filing and the other

       valuing DLI as of the date of sale to Comark. Schlegel’s first valuation found

       that the value of DLI as of the date of filing was $418,000. See Tr. Vol. IV p.

       58. Wife challenged Schlegel’s valuation of DLI by presenting evidence that

       Accell, another accounting firm, had found that DLI had $824,284 in

       understated equity, which would increase the value of DLI as of the date of

       filing. See id. at 60. Regarding his second valuation, Schlegel testified that DLI

       had zero value after its sale to Comark in July 2017. See Tr. Vol. IV pp. 48-49.

       Schlegel said that his zero-value appraisal accounted for the rapid decline and

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 12 of 15
       collapse of DLI. See id. at 47-49. After the final hearing, the trial court’s order

       explained its determination of the value of DLI:

               The Court therefore determines that the most equitable valuation
               for [DLI] prior to the onset of the outside influences of Intel [in
               2016] to be the asset based approach of [Husband’s] appraiser
               [$418,000] (with adjustment for the understated equity
               [$824,000]) to be $1,243,000.

       Appellant’s App. Vol. II p. 83 (emphases in original).

[19]   First, we note that the trial court’s valuation of DLI was within the range of

       values supported by the evidence. See Del Priore, 65 N.E.3d at 1076. Next, we

       disagree with Husband’s assertion that the trial court did not assign a specific

       date to its valuation. That is, the trial court used Schlegel’s valuation of DLI as

       of March 10, 2014—the date of filing—and added $824,000 of understated

       equity, discovered by Accell, to determine a value for DLI. As such, because

       the trial court’s valuation of DLI is within the range of values supported by the

       evidence, we cannot say that the trial court abused its discretion in valuing DLI.

                                             III. Contempt
[20]   Finally, Husband argues that “the trial court’s finding that [Husband] is in

       contempt for his sale of the Lee Street property is erroneous as a matter of law.”

       Appellant’s Br. p. 35. Contempt of court generally involves disobedience of a

       court or court order that undermines the court’s authority, justice, and dignity.

       Reynolds v. Reynolds, 64 N.E.3d 829, 832 (Ind. 2016). There are two kinds of

       contempt: direct contempt and indirect contempt. Id. Direct contempt, which

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 13 of 15
       is at issue in this case, involves “acts which are committed in the presence of the

       court or in such close proximity to it so as to disrupt its proceedings while in

       session.” In re A.S., 9 N.E.3d 129, 132 (Ind. 2014) (quoting State v. Heltzel, 552
N.E.2d 31, 34 (Ind. 1990)). The General Assembly has codified the elements

       and procedural requirements for direct contempt. See Ind. Code chapter 34-47-

       2. Here, Husband asserts that insofar as the contempt finding is related to the

       sale of the Lee Street property, it constitutes an impermissible modification of

       the Final Decree. See Appellant’s Br. p. 35.

[21]   First and foremost, Husband confuses which act forms the basis of the trial

       court’s contempt finding. That is, Husband argues that the trial court found

       him in contempt for selling the Lee Street property; however, the trial court

       explicitly stated that it was finding him “in direct contempt” for refusing to

       answer two questions regarding the sale of the Lee Street property. Sept. 13,

       2018 Tr. p. 20. The procedural requirements for finding direct contempt are

       codified in Indiana Code section 34-47-2-2, which in relevant part provides:

               Every person who:

                       (1) is sworn to testify as a witness, in any trial or
                       proceeding, in any court of record, and refuses to testify in
                       the trial or proceeding;

                       (2) is required by any court to be sworn in any trial or
                       proceeding, and refuses to take an oath or affirmation; or

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 14 of 15
                       (3) while upon the witness stand, is purposely so
                       demeaning as to retard or disturb the proceedings of the
                       court;

               is considered guilty of a direct contempt of court.

       In his opening brief, Husband does not acknowledge that after he was called as

       a witness and sworn in, he refused to answer questions about the sale of the Lee

       Street property, even after he was given multiple opportunities. See Sept. 13,

       2018 Tr. pp. 19-20. After Wife points this out, Husband still does not

       acknowledge his refusal to answer two questions regarding the sale of the Lee

       Street property in his reply brief. As such, we find that the trial court did not err

       by finding Husband in direct contempt for refusing to answer the trial court’s

       questions.

[22]   Affirmed.

       Kirsch, J., and Altice, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-2419 | August 29, 2019   Page 15 of 15