Court Opinion

ID: 9897426
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:11:24.785619+00
Date Added: 2024-06-11T09:15:47.115657
License: Public Domain

FILED
                                                                             Apr 14 2023, 9:29 am

                                                                                  CLERK
                                                                             Indiana Supreme Court
                                                                                Court of Appeals
                                                                                  and Tax Court

      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Glen E. Koch, II                                           Michael A. Ksenak
      Boren, Oliver & Coffey, LLP                                Ksenak Law Firm
      Martinsville, Indiana                                      Martinsville, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Bradley Cooley,                                            April 14, 2023
      Appellant-Respondent,                                      Court of Appeals Case No.
                                                                 22A-DN-1202
              v.                                                 Appeal from the Morgan Superior
                                                                 Court
      Shelly Cooley,                                             The Honorable Sara A. Dungan,
      Appellee-Petitioner                                        Judge
                                                                 Trial Court Cause No.
                                                                 55D03-2108-DN-1213

                                      Opinion by Judge Mathias
                                Judges Bradford and Kenworthy concur.

      Mathias, Judge.

[1]   Bradley Cooley (“Husband”) appeals the Morgan Superior Court’s decree of

      dissolution of his marriage to Shelly Cooley (“Wife”). Husband presents two

      issues for our review:

      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023                             Page 1 of 8
              I.       Whether the trial court abused its discretion when it
                       ordered Husband to obtain and subsidize a life insurance
                       policy as security for his equalization payment, to be made
                       in installments, to Wife.

              II.      Whether the trial court abused its discretion when it did
                       not consider the potential tax consequences to him of
                       giving Wife one-half of his future pension distributions.

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

      Facts and Procedural History
[3]   Husband and Wife married in November 1995 and have no children together.

      They separated in August 2021, and Wife filed a petition for dissolution of the

      marriage. Following the final hearing, the trial court issued its decree of

      dissolution. In the decree, the court valued the marital estate at $1,257,934.96

      and divided it equally between the parties.

[4]   Husband is employed by the Morgan County Sheriff’s Department and the trial

      court valued his present interest in his pension at $1,101,110.82. Husband’s

      pension is not subject to a qualified domestic relations order (“QDRO”).1

      Accordingly, the court awarded the pension to Husband and ordered him to

      pay to Wife an equalization payment in the amount of $475,043.29.

      1
       Under federal law, government pensions are not subject to a QDRO. See Kendrick v. Kendrick, 44 N.E.3d
      721, 725 (Ind. Ct. App. 2015), trans. denied.

      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023                             Page 2 of 8
[5]   Husband does not have liquid assets sufficient to pay Wife the equalization

      payment, and he testified that it was “possible” that he would ignore a court

      order that he pay Wife one-half of his future retirement benefits to satisfy the

      equalization payment. Tr. p. 76. Accordingly, the trial court ordered that

      Husband pay Wife, over time, as follows:

              15. Should Husband die prior to receiving any of his pension,
              Wife would have no way to obtain a significant portion of her
              share of the marital property or estate. In order to provide some
              assurance the Wife will receive her share of the marital estate,
              within five (5) days of the issuance of the Decree, Husband shall
              contact Billy Guy at Farm Bureau insurance and apply for a life
              insurance policy with an initial death value of $475,000.00, with
              Wife to be the owner and beneficiary of said policy. Wife shall pay
              the premiums required for said policy and said premiums paid by Wife
              shall be added to the equalization payment set forth in the Court’s
              Distribution of Marital Estate (attached). Husband shall provide
              Wife with documentation of his application for such and a copy
              of the policy once written. This life insurance policy shall remain
              in full force and effect until Wife has received the full amount of
              the equalization balance. On an annual basis or as allowed by the
              life insurance company, the death value of the policy may be
              reduced to reflect the current revised equalization balance due
              after crediting Husband with the monthly cash equalization
              payments made by Husband to Wife as ordered below;

              16. Husband shall make monthly equalization payments to Wife
              in the amount of $400 per month, beginning no later than 30
              days following issuance of the Decree and continuing until he
              retires. Upon retirement, Husband shall make payments to Wife
              in the sum of $1,684.38 per month (50% of the monthly benefit to
              be paid to Husband for his accrued and vested benefit calculated
              through the date of filing August 11, 2021; Exhibit 2). Said
      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023         Page 3 of 8
              monthly payments would cease once Wife has received the
              equalization balance due to her;

              17. If Husband should pass away prior to Wife receiving her
              equalization share and the life insurance benefits received by
              Wife as explained above exceeds what is owed to her, then Wife
              shall pay to Husband’s estate the amount of life insurance
              proceeds received in excess of the equalization balance due to
              her[.]

      Appellant’s App. Vol. 2, pp. 37-38 (emphasis added). This appeal ensued.

      Discussion and Decision
      Standard of Review

[6]   Husband appeals the trial court’s decree of dissolution. Dissolution actions

      invoke the inherent equitable and discretionary authority of our trial courts,

      and, as such, we review their decisions with “substantial deference.” See, e.g.,

      R.W. v. M.D. (In re Visitation of L-A.D.W.), 38 N.E.3d 993, 998 (Ind. 2015).

      Here, the trial court supported its exercise of that authority with findings of fact

      and conclusions thereon following an evidentiary hearing. As our Supreme

      Court has stated:

              The trial court’s findings were entered pursuant to Ind. Trial Rule
              52(A) which prohibits a reviewing court on appeal from setting
              aside the trial court’s judgment “unless clearly erroneous.” The
              court on appeal is further required to give “due regard . . . to the
              opportunity of the trial court to judge the credibility of the
              witnesses.” When a trial court has made special findings of fact,
              as it did in this case, its judgment is clearly erroneous only if (i)

      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023          Page 4 of 8
              its findings of fact do not support its conclusions of law or (ii) its
              conclusions of law do not support its judgment. Estate of Reasor v.
              Putnam County, 635 N.E.2d 153, 158 (Ind. 1994). Findings are
              clearly erroneous only when the record contains no facts to
              support them either directly or by inference. Reasor, 635 N.E.2d
              at 158.

      Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind. 1996). Similarly, the trial court’s

      division of the marital property “is highly fact sensitive and is subject to an

      abuse of discretion standard” of review. Fobar v. Vonderahe, 771 N.E.2d 57, 59

      (Ind. 2002). Under that standard, we consider only “the evidence in a light most

      favorable to the judgment.” Id.

      Issue One: Life Insurance Policy

[7]   Husband first contends that the trial court abused its discretion when it ordered

      him to obtain and subsidize a life insurance policy naming Wife as the owner and

      beneficiary. Husband presents an issue of first impression for our courts,

      namely, whether a dissolution court has discretion to order a party to buy life

      insurance as security for an equalization payment.

[8]   Wife asserts that the trial court has that authority under Indiana Code section

      31-15-7-8, which provides that, when it enters a dissolution decree, “the court

      may provide for the security, bond, or other guarantee that is satisfactory to the

      court to secure the division of property.” As this Court has stated, this

      “‘statutory language obviously affords the court the broadest possible discretion

      in requiring security.’” Birkhimer v. Birkhimer, 981 N.E.2d 111, 127 (Ind. Ct.

      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023               Page 5 of 8
      App. 2012) (quoting In re Marriage of Davis, 395 N.E.2d 1254, 1259 (Ind. Ct.

      App. 1979)); see also Crider v. Crider, 15 N.E.3d 1042, 1066 (Ind. Ct. App. 2014)

      (affirming trial court’s grant to Wife of security interest in Husband’s LLCs to

      secure equalization judgment), trans. denied. We agree with Wife that, under the

      circumstances here, Indiana Code section 31-15-7-8 gave the trial court

      discretion to order Husband to secure Wife’s share of the marital estate by way

      of obtaining a life insurance policy payable to Wife.

[9]   However, whether the trial court may add the values of those future premium

      payments to the equalization payment Husband owes Wife is another matter.

      Again, the trial court ordered Wife to pay the life insurance premiums but also

      ordered that “said premiums paid by Wife shall be added to the equalization

      payment[.]” Appellant’s App. Vol. 2, p. 37. As Husband points out,

              Indiana Code section 31–15–7–4 provides that the marital estate
              that the trial court must divide in a dissolution proceeding is
              comprised of the property owned or acquired by either party
              before the “final separation of the parties[,]” which is defined as
              “the date of filing of the petition for dissolution of marriage[.]”
              Ind. Code § 31–9–2–46. In other words, the marital estate is set at
              the time of the filing of the dissolution petition[.]

      Helm v. Helm, 873 N.E.2d 83, 87 (Ind. Ct. App. 2007). Here, the trial court’s

      decree increases the amount of the equalization payment to Wife with every

      premium payment and thus, in effect, increases the value of the marital estate

      Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023            Page 6 of 8
       and the share of the marital estate awarded to Wife beyond the date of the

       parties’ final separation.

[10]   Accordingly, we hold that portion of the decree violates Indiana Code section

       31-15-7-4, and we reverse that part of the decree with respect to payment of the

       life insurance premiums. On remand, the trial court shall determine, either by

       agreement of the parties or by way of submissions or another hearing, the cost

       of the life insurance premiums in light of Husband’s life expectancy. With those

       factors determined, the trial court shall include the total projected cost of the life

       insurance policy2 in the marital estate3 as a security for the marital asset of

       Husband’s pension and recalculate the equalization payment to Wife so that

       Wife and Husband share the cost of this security equally.

       Issue Two: Tax Consequences

[11]   Husband next contends that the trial court abused its discretion when it did not

       consider the tax consequences he will incur when, at some point in the future,

       he starts to draw on his pension and pays Wife one-half of those benefits. Wife

       argues, however, that Husband did not present evidence to support an award

       2
        We note that a term life insurance policy in the amount of the equalization payment based on Wife’s life
       expectancy may be a less expensive alternative to other types of policies, and the trial court may, in its
       discretion, order that the parties purchase a term life insurance policy.
       3
        Because Husband has expressed disdain for the concept of sharing his pension with Wife, the trial court
       may determine on remand that Wife should pay the premiums, which can be listed as a liability assigned to
       Wife.

       Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023                                Page 7 of 8
       based on his tax consequences and has invited any error. We must agree with

       Wife.

[12]   In Hardin v. Hardin, we held that, absent evidence, a trial court is not required to

       consider the potential tax consequences that would result from the property

       disposition of awarding to a party an individual retirement account in a

       dissolution. 964 N.E.2d 247, 254 (Ind. Ct. App. 2012). We stated that, because

       the husband there had failed to present evidence of any future tax

       consequences, he had invited the alleged error and had waived the issue on

       appeal. Id. (citing Reinhart v. Reinhart, 938 N.E.2d 788, 791 (Ind. Ct. App. 2010)

       (“[A] party may not take advantage of an error that he commits, invites, or

       which is the natural consequence of his own neglect or misconduct.”)).

[13]   Here, in support of his argument on appeal, Husband directs us to a single page

       of the transcript where he testified that he would have to pay taxes on his

       monthly pension benefits. But Husband did not present evidence and can only

       speculate as to the amount he will owe in taxes on those benefits. Accordingly,

       Husband has not preserved this issue for our review. See id.

[14]   For all these reasons, we affirm in part, reverse in part, and remand with

       instructions.

       Bradford, J., and Kenworthy, J., concur.

       Court of Appeals of Indiana | Opinion 22A-DN-1202 | April 14, 2023         Page 8 of 8