Court Opinion

ID: 4192398
Source: CourtListenerOpinion
Date Created: 2017-08-03 15:09:17.768185+00
Date Added: 2024-06-11T09:21:28.840238
License: Public Domain

FILED
                                                                    Aug 03 2017, 5:37 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court

ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
George R. Livarchik                                       INTERVENOR
Livarchik & Farahmand                                     Sophia J. Arshad
Chesterton, Indiana                                       Arshad, Pangere and Warring, LLP
                                                          Merrillville, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Judith M. Edwards (n/k/a                                  August 3, 2017
Judith Klemos),                                           Court of Appeals Case No.
                                                          64A03-1608-DR-1954
Appellant-Defendant,
                                                          Appeal from Porter Superior Court.
        v.                                                The Honorable Katherine R. Forbes,
                                                          Magistrate.
                                                          The Honorable William E. Alexa,
Allen O. Edwards, Deceased,                               Judge.
                                                          Trial Court Cause No.
Appellee-Plaintiff,                                       64D02-1101-DR-887
        and

D. Juatrice Edwards, as Personal
Representative of the Estate of Allen O.
Edwards,

Appellee-Intervenor.

Sharpnack, Senior Judge

Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017                    Page 1 of 11
                                       Statement of the Case
[1]   Judith Edwards Klemos appeals from the dissolution court’s order granting D.

      Juatrice Edwards’ “Motion to Vacate Hearing and Orders Restraining Assets.”

      The court concluded that after the death of Allen O. Edwards, it no longer had

      jurisdiction over the disbursement of Allen’s pension and retirement benefits,

      which it had previously ordered, and dismissed the temporary restraining order

      protecting assets, which it had entered. We reverse and remand.

                                                      Issue
[2]   The dispositive issue presented in this appeal is whether the dissolution court,

      which had expressly retained jurisdiction, had jurisdiction over the

      disbursement of pension and retirement benefits after the death of one of the

      parties to the dissolution, and consequently erred by dismissing the temporary

      restraining order protecting those assets.

                                Facts and Procedural History
[3]   Judith was married to Allen for more than twenty years prior to the entry of

      their Agreed Dissolution Decree, which was approved by the court on January

      4, 2012. Judith appeared pro se during the proceedings, while Allen was

      represented by counsel. At issue here is enforcement of the award to Judith of

      her interest in Allen’s pension and retirement benefits with John Hancock,

      PERF, and Valic for the coverture period, and for any appreciation in the value

      of her share of the accounts as of the effective date of the qualified domestic

      relations order (“QDRO”).

      Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 2 of 11
[4]   Paragraph 9(H) is the provision of the Agreed Dissolution Decree resolving the

      division of the pension and retirement benefits.

              [Judith] shall be sole owner of and retain her full interest in her
              pension with In-Pact.
              The parties were married on April 29, 1989 and they separated
              on October 5, 2009. The parties lived together as husband and
              wife for 20 years and 5 months. [Judith] is entitled to one-half
              interest in [Edward’s] pension with John Hancock, PERF, and
              Valic for the coverture period of 20 years and five (5) months.
      Appellant’s App. Vol. II, p. 14.

[5]   The Agreed Dissolution Decree, which was prepared by Allen’s attorney, did

      not contain language assigning the responsibility of preparing the QDROs or

      other documents necessary to divide the pension and retirement benefits.

      Nevertheless, Allen’s attorney attempted to prepare a QDRO for Allen’s Valic

      account, but that QDRO was rejected. Id. at 24.

[6]   Nearly four years elapsed after the entry of the Agreed Dissolution Decree and

      Judith had yet to receive her share of the pension and retirement funds. On

      May 12, 2016, Judith, then represented by counsel, filed a “Verified Emergency

      Motion for Relief from Judgment Per TR 60(A) and (B)(8) (Due to Ex-

      Husband’s Terminal Illness)”. Id. at 18-22. In that filing, Judith stated that she

      “relied upon Allen’s attorney to complete the approval of the award to [her] of

      her one-half coverture interest in Allen’s PERF, John Hancock and Valic

      accounts and followed up with Allen and/or his attorney from time to time to

      determine the status of same.” Id. at 19. After receiving her copy of the letter

      Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017     Page 3 of 11
      from Valic indicating that the submitted QDRO was inadequate, Judith

      continued to contact Allen and his attorney to determine the status of the

      distribution.

[7]   Upon learning that Allen was terminally ill with cancer and had but a short

      time to live, Judith filed an emergency motion to obtain the assets awarded to

      her in the Agreed Dissolution Decree. In support of her motion, she claimed

      that she was misled to believe that PERF would divide Allen’s pension and
                                                                            1
      retirement benefits by a QDRO when it would not, and she later learned that

      Valic did not retain records sufficient to approve a QDRO for the account. She

      sought emergency relief from the dissolution court to enable her to receive her

      portion of the benefits from Allen’s PERF, Valic, and John Hancock accounts.

[8]   Responses to nonparty requests for production revealed that on April 26, 2016,

      well after the dissolution decree had been entered, Allen had signed a new

      beneficiary designation removing Judith and their daughter as the primary

      beneficiaries of Allen’s PERF annuity savings account, replacing them with a

      new beneficiary, Juatrice Davis, his fiancée. As for the John Hancock

      retirement account, by October 5, 2009, his assets were valued at $25,844.65.

      On March 31, 2016, the account had a value of $73,896.24. The QDRO

      prepared by Allen’s counsel provided for the withdrawal of $22,894.98 for

      1
       Certain restrictions applicable to a dissolution court’s division of PERF benefits have been recognized and
      addressed in Board of Trustees of Ind. Public Employees Retirement Fund v. Grannan, 578 N.E.2d 371 (Ind. Ct.
      App. 1991), trans. denied.

      Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017                        Page 4 of 11
       Judith’s share. No further action was taken at that point with respect to the

       Valic account.

[9]    On May 23, 2016, Judith filed an amended emergency motion, adding to her

       allegations a petition for rule to show cause. The next day Judith filed a

       verified petition under Indiana Trial Rule 65 for an immediate restraining order

       without notice and an application for a preliminary injunction. That day, with

       the agreement of the parties, the trial court issued the restraining order

       prohibiting Allen from disposing of any of his pension benefits, including the

       pension and retirement benefits subject to the order, and a hearing was set for

       July 1, 2016. The pertinent parts of the trial court’s order follow:

               (2)      The Court also orders that Attorney Livarchik [Judith’s
                        attorney] shall (as soon as reasonably possible) complete
                        QDROs or similar tax-free transfer instruments providing
                        for Judith to receive her share of Allen Edwards’ Valic and
                        John Hancock accounts as required by the January 4, 2012
                        Agreed Dissolution Decree. The Court specifically finds
                        that Attorney Livarchik’s fee for preparation of the
                        QDROs shall be paid out of Allen’s share of his retirement
                        funds, or Allen’s other property.
               (3)      The Court also finds that the PERF needs to be divided as
                        required by the January 4, 2012 Agreed Dissolution
                        Decree. The Court specifically reserves jurisdiction over
                        this matter including but not limited to the division of
                        Allen’s PERF and other retirement accounts.
       Id. at 46-47.

[10]   Allen passed away on May 25, 2016.

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017    Page 5 of 11
[11]   On June 30, 2016, Juatrice, by counsel, filed a “Motion for Leave to Intervene

       and Enter Limited Appearance to Offer Suggestion of Death and to Vacate

       Hearing and Orders Restraining Assets.” Id. at 51-56. Juatrice sought to

       intervene in the proceedings because she was Allen’s surviving spouse and

       claimed an interest in some of the property encumbered by the trial court’s

       restraining order. She further argued that any claim Judith had to property that

       had not been distributed during the four years since entry of the dissolution

       decree was now a claim against Allen’s estate, as the dissolution court no longer

       had jurisdiction of the matter after Allen’s death.

[12]   The trial court held a hearing to determine if it retained jurisdiction over the

       dissolution matters. On July 26, 2016, the trial court concluded that it no

       longer had jurisdiction over the distribution of Allen’s retirement and pension.

[13]   On August 12, 2016 in Lake Circuit Court, Juatrice filed a “Petition for Probate

       of Will and Issuance of Letters.” Appellant’s Supp. App. Vol. II, at pp. 2-3.

       On October 24, 2016, Judith filed a “Claim/Complaint” in the probate action

       in Lake County. Appellee’s App. Vol. II at pp. 5-18. Juatrice filed a motion to

       dismiss Judith’s complaint and filed a motion to strike in the probate action.

       Appellant’s Supp. App. Vol. II, pp. 12-18.

[14]   Judith now appeals from the dissolution court’s order concluding that it no

       longer had jurisdiction over the enforcement and distribution of Allen’s pension

       and retirement benefits and that the temporary restraining order should be

       dismissed.

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 6 of 11
                                     Discussion and Decision
[15]   Both parties agree that our standard of review is de novo. The dissolution court

       treated Juatrice’s motion as a motion to dismiss for lack of subject matter

       jurisdiction. The facts pertinent to the issue of the trial court’s jurisdiction are

       generally undisputed by the parties. When that is the case, we review the trial

       court’s ruling de novo. Beard v. Beard, 758 N.E.2d 1019, 1021 (Ind. Ct. App.

       2001), trans. denied.

[16]   Subject matter jurisdiction is defined as the power to hear and determine cases

       of the general class to which any particular proceeding belongs. In re Custody of

       M.B., 51 N.E.3d 230, 234 (Ind. 2016). With respect to dissolution proceedings,

       we begin by stating the general premise that dissolution proceedings terminate

       entirely with the death of one of the parties to the dissolution. State ex rel. Smith

       v. Delaware Cty. Superior Court, 442 N.E.2d 978, 980 (Ind. 1982). However,

       certain exceptions have since been recognized.

[17]   In Dodd v. Estate of Yanan, 625 N.E.2d 456 (Ind. 1993), the Husband died three

       years after his marriage to Wife was dissolved by a decree which also approved

       a property settlement agreement between them. Wife brought an action against

       Husband’s estate seeking monetary and punitive damages, claiming that he had

       withheld information regarding his net worth and thus defrauded her in the

       settlement agreement approved by the court.

[18]   The probate court dismissed the Wife’s claim on the ground that it was an

       impermissible collateral attack on the dissolution decree. Our Supreme Court

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 7 of 11
       affirmed the dismissal, holding that a decree of dissolution is a final judgment

       not subject to collateral attack in a different court and that Wife’s sole remedy

       was to apply for modification of the decree per then Indiana Code section 31-1-

       11.5-17(b) [now Ind. Code § 31-15-7-9.1(1998)], which provided for

       modification of property disposition orders of dissolution courts in cases of

       fraud.

[19]   In State ex rel. Paxton v. Porter Superior Court, 467 N.E.2d 1205, 1207 (Ind. 1984),

       Wife died prior to the entry of a decree of dissolution. Her attorney was

       allowed to claim attorney fees from Husband for services to Wife in the action

       prior to her death. In Lizak v. Schultz, 496 N.E.2d 40, 43 (Ind. 1986), the

       dissolution court was permitted to reduce child support arrearages to a

       judgment after the death of the spouse entitled to the child support payments.

       Her subsequent spouse, as administrator of her estate, was entitled to pursue

       enforcement of the award entered prior to her death in the dissolution court. In

       Beard, the dissolution court bifurcated proceedings, entering an order dissolving

       the marriage, and reserving the property distribution issues for separate

       decision. Husband died prior to any decision as to the property. Wife moved

       to dismiss the dissolution proceedings on the ground the death had deprived the

       dissolution court of jurisdiction. The court denied the motion and proceeded to

       a final hearing and a decree of dissolution, including an award of more than

       fifty percent of the marital property to Husband’s estate. A panel of this Court

       held that in light of the statute providing for bifurcation of dissolution

       proceedings, Indiana Code § 31-15-2-14 (1997), the death of a spouse after

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017    Page 8 of 11
       dissolution of the marriage and prior to the disposition of property did not

       deprive the dissolution court of jurisdiction to conclude the proceedings and

       decree both the dissolution and property division. Transfer was denied by our

       Supreme Court.

[20]   Judith contends that the dissolution court erred by refusing to retain

       jurisdiction, relying in large part on Lizak. Juatrice claims that none of the

       exceptions to the general rule are applicable and relies on Johnson v. Johnson,

       653 N.E.2d 512 (Ind. Ct. App. 1995). In particular, she notes a portion of the

       opinion stating, “We believe that the legislature did not intend for trial courts to

       retain jurisdiction over dissolution actions following the death of one of the

       parties for the purpose of resolving property matters between the parties and

       their successors in interest.” Id. at 516. Juatrice argues that the present case is

       like that in Johnson because it is a property matter between a party and a

       successor in interest.

[21]   Johnson is distinguishable, however. In Johnson, “the trial court had not made a

       final determination and pronouncement until after Husband had died.” Id.

       Therefore, the trial court erred by entering the decree of dissolution nunc pro

       tunc. Id.

[22]   In the present case, the trial court had made a final determination upon

       accepting the parties’ Agreed Dissolution Decree setting forth the division of

       pension and retirement assets among other things. Judith sought to enforce the

       award in the dissolution court. A dissolution court may exercise continuing

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 9 of 11
       jurisdiction to reexamine a property settlement where the nature of the

       examination is to seek clarification of a prior order.” Fackler v. Powell, 839

       N.E.2d 165, 167 (Ind. 2005). “This jurisdictional grant to a dissolution court is

       warranted as an extension of ‘the necessary and usual powers essential to

       effectuate th[e marital] dissolution, [which] include[s] the power to interpret the

       court’s own decree.’” Id. (quoting Behme v. Behme, 519 N.E.2d 578, 582 (Ind.

       Ct. App. 1988)). The trial court’s order on the May 24, 2016, hearing clarified

       the Agreed Dissolution Decree by assigning the task of preparing the QDROs

       or other necessary documents to Judith’s attorney as soon as possible and

       provided for the issuance of a restraining order to protect those assets given the

       state of Allen’s health. Allen died the next day, before counsel could prepare

       the necessary documents.

[23]   Juatrice intervened in the action and claimed that although the dissolution

       court had explicitly retained jurisdiction for purposes of seeing the disbursement

       of the pension and retirement funds through to its completion, the dissolution

       court no longer had jurisdiction over the matter due to Allen’s death. This

       position is contrary to the holdings of the cases cited above and the trial court

       erred by holding that it lacked continuing jurisdiction to complete the

       implementation of the division of property as ordered in the final decree.

[24]   The dissolution court’s continuing jurisdiction would also include the ability to

       reopen the decree to address any allegations of fraud which may have

       underpinned the final decree or fraud in the attempts to carry out the

       preparation of the QDROs. Additionally, the dissolution court would have the

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 10 of 11
       authority to clarify the issue of any appreciation or depreciation of Judith’s

       share of the pension and retirement benefits for the coverture period.

[25]   Consequently, the dissolution court further erred by dismissing the restraining

       order protecting the retirement and pension assets until they could be properly

       divided.

                                                  Conclusion
[26]   In light of the foregoing, we reverse the dissolution court’s order and remand

       for proceedings consistent with this opinion.

[27]   Reversed and remanded.

       Crone, J., and Bradford, J., concur.

       Court of Appeals of Indiana | Opinion 64A03-1608-DR-1954 | August 3, 2017   Page 11 of 11