Court Opinion

ID: 4125828
Source: CourtListenerOpinion
Date Created: 2017-02-14 16:06:36.401588+00
Date Added: 2024-06-11T14:50:14.589097
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
                                                                              FILED
this Memorandum Decision shall not be                                    Feb 14 2017, 10:26 am

regarded as precedent or cited before any                                     CLERK
                                                                          Indiana Supreme Court
court except for the purpose of establishing                                 Court of Appeals
                                                                               and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
Aaron Westlake                                           Cory R. Swagger
Bradley Kim Thomas, II                                   Auburn, Indiana
Thomas Law Firm
Auburn, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Cassie L. Carnahan,                                      February 14, 2017
Appellant-Petitioner,                                    Court of Appeals Case No.
                                                         17A03-1606-DR-1537
        v.                                               Appeal from the DeKalb Superior
                                                         Court
Jason M. Carnahan,                                       The Honorable Monte L. Brown,
Appellee-Respondent.                                     Judge
                                                         Trial Court Cause No.
                                                         17D02-1510-DR-187]

Riley, Judge.

Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017          Page 1 of 15
                                STATEMENT OF THE CASE
[1]   Appellant-Petitioner, Cassie L. Carnahan (Wife), appeals the trial court’s

      division of marital property following the dissolution of her marriage to

      Appellee-Respondent, Jason M. Carnahan (Husband).

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

                                                   ISSUES
[3]   Wife raises two issues on appeal, which we restate as follows:

      (1) Whether the trial court abused its discretion by awarding the entirety of

      certain disputed marital property to Husband; and

      (2) Whether the trial court abused its discretion in its valuation of certain

      marital property.

                      FACTS AND PROCEDURAL HISTORY
[4]   Husband and Wife were married on July 29, 2006. Their marriage produced

      two children: a daughter, born July 10, 2007; and a son, born December 15,

      2011. Husband is employed by KD Carnahan Farms Incorporated (Carnahan

      Farms), which is his family’s business. Wife is a paralegal.

[5]   During their marriage, Husband and Wife lived rent-free in a house that is

      owned by Carnahan Farms. However, prior to the marriage, in May of 2003,

      Husband purchased a seventy-eight-acre tract of farmland in Butler, Dekalb

      County, Indiana (the Property), for $139,500. Although the parties planned to

      eventually build a home on the Property, they never did so. Rather, Husband
      Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 2 of 15
      leased the Property’s acreage to Carnahan Farms for farming purposes. In lieu

      of a fixed amount of rent, Carnahan Farms, paid just enough to cover the

      Property’s mortgage, property taxes, and insurance.

[6]   On October 5, 2015, Wife filed a petition to dissolve the parties’ nine-year

      marriage. On February 11, 2016, the parties filed a Partial Mediated Settlement

      Agreement with the trial court. Pursuant to the Partial Mediated Settlement

      Agreement, Husband and Wife resolved all issues relating to certain marital

      assets and debts (i.e., retirement accounts, vehicles, other personal property,

      credit card debt, and student loan obligations). The Partial Mediated

      Settlement Agreement also provided for the custody and support of the parties’

      minor children. In particular, Husband and Wife agreed to share joint legal

      custody of the children, with Wife having primary physical custody. The

      parties agreed that Husband would exercise reasonable parenting time and that

      he would pay $110.00 per week in child support. The parties were unable to

      reach a mutual agreement regarding the Property in their Partial Mediated

      Settlement Agreement.

[7]   On March 23, 2016, the trial court conducted a final hearing. The only matters

      to be determined by the court were the valuation and division of the Property.

      On May 31, 2016, the trial court issued a Decree of Dissolution of Marriage. In

      its Decree, the trial court adopted the agreements reached by the parties in their

      Partial Mediated Settlement Agreement. As to the Property, the trial court

      Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 3 of 15
      valued the Property at $254,000 based on an appraisal completed in February of

      2013 1 and awarded the Property entirely to Husband.

[8]   Wife now appeals. Additional facts will be provided as necessary.

                                 DISCUSSION AND DECISION
[9]   Wife claims that the trial court abused its discretion in valuing and dividing the

      Property. The trial court issued specific findings of fact and conclusions

      thereon in support of its Decree of Dissolution. It does not appear in the record

      that either party requested such findings; as such, sua sponte findings “control

      only the issues they cover, and a general judgment will control as to the issues

      upon which there are no findings.” Estudillo v. Estudillo, 956 N.E.2d 1084,

      1089-90 (Ind. Ct. App. 2011). As to the issues upon which the trial court made

      specific findings, we apply a two-tiered standard of review: first, we consider

      whether the evidence supports the findings of fact; second, we determine

      whether the findings of fact support the conclusions thereon. Id. at 1090. We

      will uphold the trial court’s findings of fact and conclusions thereon unless they

      are clearly erroneous. Ind. Trial Rule 52(A). Clear error is “that which leaves

      us with a definite and firm conviction that a mistake has been made.” Masters v.

      Masters, 43 N.E.3d 570, 575 (Ind. 2015).

      1
       The trial court also found that, as of the date the petition for dissolution was filed, the balance of the
      mortgage on the Property was $122,140.44.

      Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017             Page 4 of 15
                                           I. Division of the Property

[10]   We first address Wife’s claim that the trial court improperly awarded the

       Property solely to Husband. A trial court has broad discretion in dividing the

       marital estate, and we will reverse a trial court’s decision only for an abuse of

       discretion. O’Connell v. O’Connell, 889 N.E.2d 1, 10 (Ind. Ct. App. 2008). The

       “party challenging the trial court’s division of marital property must overcome a

       strong presumption that the trial court considered and complied with the

       applicable statute, and that presumption is one of the strongest presumptions

       applicable to our consideration on appeal.” Id. (internal quotation marks

       omitted). On review, we will neither reweigh evidence nor assess the credibility

       of witnesses, and “we will consider only the evidence most favorable to the trial

       court’s disposition of the marital property.” Id.

[11]   In dissolution proceedings, the trial court is required to divide the property of

       the parties “in a just and reasonable manner.” Ind. Code § 31-15-7-4(b). This

       includes property that is

               (1) owned by either spouse before the marriage;

               (2) acquired by either spouse in his or her own right:

                   (A) after the marriage; and

                   (B) before final separation of the parties; or

               (3) acquired by their joint efforts.

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 5 of 15
       I.C. § 31-15-7-4(a). Thus, in Indiana, the division of marital property is a two-

       step process. O’Connell, 889 N.E.2d at 10. First, the trial court must ascertain

       what property is to be included in the marital estate; second, the trial court must

       fashion a just and reasonable division of the marital estate. Id. The “one-pot”

       theory—i.e., that all property acquired before or during the marriage is to be

       included in the marital estate—ensures “that all assets are subject to the trial

       court’s power to divide and award. While the trial court may ultimately

       determine that a particular asset should be awarded solely to one spouse, it

       must first include the asset in its consideration of the marital estate to be

       divided.” Id. at 11 (quoting Hill v. Hill, 863 N.E.2d 456, 460 (Ind. Ct. App.

       2007)).

[12]   In determining how to divide a marital estate, the trial court “shall presume that

       an equal division of the marital property between the parties is just and

       reasonable.” I.C. § 31-15-7-5 (emphasis added). However, this is a rebuttable

       presumption, and a party may present relevant evidence to establish that an

       equal division would not be just and reasonable. I.C. § 31-15-7-5. The trial

       court may consider evidence of the following factors in determining whether it

       would be appropriate to deviate from the presumption of an equal division:

               (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:

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 6 of 15
                   (A) before the marriage; or

                   (B) through inheritance or gift.

               (3) The economic circumstances of each spouse at the time the
                   disposition of the property is to become effective, including
                   the desirability of awarding the family residence or the right to
                   dwell in the family residence for such periods as the court
                   considers just to the spouse having custody of any children.

               (4) The conduct of the parties during the marriage as related to
                   the disposition or dissipation of their property.

               (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.

       I.C. § 31-15-7-5. Where, as here, “the parties divide[d] between themselves a

       part of the marital estate and [left] the division of the balance to the discretion

       of the trial court, the trial court should assume that the property that the parties

       have already divided was divided justly and reasonably and shall divide the

       remainder of the assets and liabilities of the parties as if they were the entirety of

       the marital estate.” Nornes v. Nornes, 884 N.E.2d 886, 889 (Ind. Ct. App. 2008).

[13]   In the present case, there is no dispute that the Property is marital property

       subject to the presumption of an equal division. However, the trial court found

       that Husband rebutted the presumption and awarded the Property to him in its

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 7 of 15
entirety. In support of its decision to deviate from the presumption of an equal

division, the trial court made the following findings:

        (a) That [Husband] purchased the [Property] in his name alone
            approximately [three] years prior to the parties’ marriage and
            was never transferred into their joint names;

        (b) That all payments on the mortgage, taxes, and insurance
            associated with the subject real estate were paid entirely from
            the proceeds of the tenant that leased said [Property] from the
            date it was purchased through the date that the Petition for
            Dissolution of Marriage was filed;

        (c) That the [c]ourt is unable to make an informed determination
            regarding the economic circumstances of each spouse at the
            time the disposition of the [P]roperty is to become effective
            for the reason that the provisions of the [m]arital [s]ettlement
            [a]greement were mediated and not specifically stated in the
            [Partial Mediated Settlement Agreement];

        (d) That no evidence was presented to the [c]ourt that either party
            was responsible for the dissipation of property during the
            parties’ marriage; and

        (e) That the only evidence submitted to the [c]ourt regarding
            [Husband’s] income is the Child Support Obligation
            Worksheet attached to the [Partial Mediated Settlement
            Agreement] reflecting a weekly gross income for [Husband] in
            the amount of $680.00 and a weekly gross income for [Wife]
            in the amount of $1,078.00 reflecting that [Wife] earns
            approximately 61% of the marital income and [Husband]
            earns approximately 39% of the marital income, [Wife]
            having a significantly greater income earning ability.

Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 8 of 15
       (Appellant’s App. pp. 17-18). Thus, the trial court heavily relied on the fact that

       Husband purchased the Property prior to the marriage; the proceeds from

       leasing the Property covered all of the expenses associated therewith; and

       Wife’s earning ability exceeds that of Husband.

[14]   Wife concedes that “[i]t is possible that there was sufficient evidence presented

       to allow the trial court to find that the presumption of an equal distribution was

       rebutted.” (Appellant’s Br. p. 12). Nevertheless, without specifically

       challenging any of the trial court’s findings, she insists that

               [a]lthough some of the factors weighed in favor of Husband,
               including Husband’s premarital acquisition of the . . . Property
               and Wife’s somewhat greater income, the factors did not weigh
               so much in Husband’s favor so as to justify a [100%] to [0%] split
               in favor of Husband. Much of the equity in the . . . Property
               accrued during the marriage while Husband was actively
               employed by the tenant of the . . . Property [(i.e., Carnahan
               Farms)].[ 2] Although Wife’s income was higher than Husband’s
               at the time of the final hearing, the trial court should have also
               considered the economic situation of the parties. Notably, Wife
               was leaving the marriage as the primary custodian of two minor
               children without a residence she could depend on. There was
               also no evidence that Wife was leaving the marriage with
               substantial assets that would put her in a favorable economic
               situation. On the other hand, the evidence suggests that
               Husband was going to be able to continue to rely on rent free

       2
         Based on the trial court’s valuation of the Property at $254,000 and the outstanding mortgage balance of
       $122,140.44, Wife asserts that, at the time the parties separated, there was “no less than $131,859.56 in
       equity” in the Property. (Appellant’s Br. p. 13). Furthermore, the value of the Property increased from
       $185,000 at the time of purchase to $254,000 at the time of the dissolution.

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017         Page 9 of 15
               living in the marital residence that was provided by [Carnahan
               Farms].

       (Appellant’s Br. pp. 17-18). In turn, Husband argues that it was well within the

       discretion of the trial court to award nothing to Wife.

[15]   It is clear that the trial court considered the factors set forth in Indiana Code

       section 31-15-7-5 for deviating from the presumption of an equal division, and

       we agree that there is evidence to warrant a deviation from an equal split. In

       particular, Husband brought the Property into the marriage, and, thereafter, the

       Property neither directly benefitted the marital estate by producing extra

       income, nor diverted marital assets away from the family’s use as it was

       sustained by the rent paid thereon. Nevertheless, during the course of the

       marriage, the Property significantly increased in value. In fact, between 2003

       and 2013, the Property appreciated from a value of $185,000 to $254,000,

       during which time the mortgage steadily decreased.

[16]   Furthermore, notwithstanding the trial court’s finding that there is little

       evidence of the parties’ economic circumstances, it is clear from the Partial

       Mediation Settlement Agreement and the final hearing that the Property is the

       only marital asset of any substantial value. The parties were married for more

       than nine years, during which both parties contributed financially. Although

       the trial court found as a reason for deviating from an equal division that Wife

       earned 61% of the income and has a greater income earning ability than

       Husband, the evidence also indicates that the parties lived rent-free throughout

       their marriage as a benefit of Husband’s employment. Wife was still living in
       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 10 of 15
       the house owned by Carnahan Farms at the time of the final hearing while

       Husband was temporarily housesitting for a neighbor, but Wife has pointed out

       that she and the children will have to find new living arrangements because the

       marital home belongs to Husband’s family/Carnahan Farms. Thus, she argues

       that Husband will be able to continue to reside in the marital home rent-free (in

       addition to owning the Property, which is effectively mortgage-free). The trial

       court has, essentially, awarded the entirety of the estate to Husband. See Nornes,
884 N.E.2d at 889. While a deviation from the presumption of an equal

       division may be justified, we cannot agree that it was just and reasonable to

       completely exclude Wife from any share of the marital pot. Accordingly, we

       remand with instructions for the trial court to re-divide the Property between

       the parties in a just and reasonable manner.

                                         II. Valuation of the Property

[17]   Wife next challenges the trial court’s valuation of the Property. As with the

       division of marital property, we likewise review a trial court’s decision in

       ascertaining the value of certain marital assets for an abuse of discretion. Balicki

       v. Balicki, 837 N.E.2d 532, 536 (Ind. Ct. App. 2005), trans. denied. “If the trial

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

       evidence, the court does not abuse its discretion.” Id. On the other hand, “[a]

       trial court abuses its discretion when there is no evidence in the record

       supporting its decision to assign a particular value to a marital asset.”

       Thompson v. Thompson, 811 N.E.2d 888, 917 (Ind. Ct. App. 2004), trans. denied.

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 11 of 15
[18]   During the final hearing, three appraisals of the Property’s value were admitted

       into evidence. The first, Exhibit 1, was completed in January of 2003—shortly

       before Husband purchased the Property—and estimated the value of the

       Property at $185,000. Exhibit 2 contains an appraisal that was completed in

       February of 2013, which estimates the Property’s value at $254,000. Finally,

       the third appraisal, Exhibit 3, was completed in February of 2016 and values

       the Property at $337,500. All three exhibits were submitted by Wife, and the

       two appraisals currently at issue—the February 2013 appraisal and the

       February 2016 appraisal—were completed by the same appraiser. In the

       Decree of Dissolution, the trial court stated that it

               disregarded the [February 2016] appraisal . . . for several reasons,
               including the fact that [the Property] was valued as of a date
               nearly [four] months after the date of final separation and for the
               reason that the cover letter to the report states that the report is
               based on a physical analysis of the property “having no
               improvements[.”] However, the report itself states that included
               in the appraisal is a bank barn and an attached flat barn with the
               pole barn (flat barn) included in the appraised value in the
               amount of $7,500.00, but does not reference the bank barn or its
               value.

       (Appellant’s App. p. 16). Thus, the trial court concluded

               [t]hat the only meaningful evidence concerning the value of said
               [Property] is [Wife’s] Exhibit 2, which values the real estate of
               February 1, 2013, in the amount of $254,000.00. Said appraisal,
               both in the report and on the addendum attached thereto, shows
               that no improvements are included in the valuation of said
               [Property] pursuant to the request of [Wife].

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 12 of 15
       (Appellant’s App. p. 16).

[19]   Wife now contends that the trial court abused its discretion by relying on the

       February 2013 appraisal because it establishes the value of the Property more

       than two-and-a-half years prior to the parties’ separation date. It is well

       established that a trial court has authority to “set any date between the date of

       filing the dissolution petition and the date of the final hearing as the date for

       marital property valuation.” Leonard v. Leonard, 877 N.E.2d 896, 900 (Ind. Ct.

       App. 2007). Because the February 2016 appraisal was conducted within the

       appropriate timeframe, Wife asserts that the trial court should have valued the

       Property at $337,500. Husband, however, asserts that the trial court properly

       disregarded the February 2016 appraisal because it contained “too many

       inconsistencies.” (Appellee’s Br. p. 10).

[20]   Our court has previously found an abuse of discretion where the trial court

       valued property based on a date that preceded the date of final separation (that

       is, the date the petition for dissolution was filed). See Trackwell v. Trackwell, 740
N.E.2d 582, 585 (Ind. Ct. App. 2000), trans. dismissed. However, in Thompson,
811 N.E.2d at 898, 919, the trial court valued the marital residence at $387,000

       in accordance with the wife’s appraisal, which was procured approximately a

       year-and-a-half before the petition for dissolution was filed. In so doing, the

       trial court rejected the husband’s proffered appraisal, which was completed after

       the date of final separation. Id. at 919. In affirming the trial court’s valuation

       of the marital residence, we stated that its “decision to value the . . . marital

       residence at $387,000 was not necessarily an indication that it chose a date prior

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 13 of 15
       to final separation to value the residence.” Id. Rather, we noted that the

       husband’s proffered valuation “was heavily contested at trial, and inferences

       from the evidence adduced at trial support[ed] the trial court’s chosen

       valuation.” Id. at 919-20.

[21]   In the present case, the trial court found discrepancies in the February 2016

       appraisal regarding whether certain improvements on the Property were

       included in the valuation. It appears that while the appraiser noted in its cover

       letter that there were no improvements on the Property, it included the value of

       two barns in its final estimate (but only identified the specific contributing value

       of one of those barns). On the other hand, it appears that the February 2013

       appraisal, per Wife’s request, was based on the value of the land without

       consideration of the improvements thereon. Wife now contends that, in

       addition to the fact that the February 2016 appraisal is the appropriate evidence

       of valuation based on its date of completion, any improvements on the Property

       are part of the marital pot and should properly be included in the valuation.

[22]   We reiterate that the weight and credibility of evidence are matters reserved to

       the discretion of the trial court, and, here, Wife submitted evidence with

       inconsistencies that led the trial court to doubt its reliability. Furthermore, we

       find that there is evidence from the February 2016 appraisal to support the trial

       court’s valuation of $254,000. In its report, the appraiser noted that “[a]lthough

       a single value conclusion [of $337,500] is provided within this report, the value

       of the [Property] could easily vary within the range indicated by the comparable

       sales.” (Appellant’s Exh. 3). The comparable sales provide a range of values

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 14 of 15
       from $175,000 to $322,800. Thus, the trial court’s valuation of $254,000 based

       on the February 2013 appraisal also falls within the range of evidence supported

       by the February 2016 appraisal. As in Thompson, notwithstanding any reliance

       on an outdated appraisal, we affirm the trial court because there is other

       evidence to support such a valuation within the proper timeframe. See

       Thompson, 811 N.E.2d at 919-20.

                                             CONCLUSION
[23]   Based on the foregoing, we conclude that the trial court abused its discretion by

       awarding the entirety of the disputed marital estate (i.e., the Property) to

       Husband, and we remand for the trial court to effectuate a division that is just

       and reasonable. We further conclude that the trial court did not abuse its

       discretion in its valuation of the Property.

[24]   Affirmed in part, reversed in part, and remanded.

[25]   Crone, J. and Altice, J. concur

       Court of Appeals of Indiana | Memorandum Decision 17A03-1606-DR-1537 | February 14, 2017   Page 15 of 15