Court Opinion

ID: 4254403
Source: CourtListenerOpinion
Date Created: 2018-03-14 15:07:47.106259+00
Date Added: 2024-06-11T14:43:42.161159
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D),                                      FILED
      this Memorandum Decision shall not be                                  Mar 14 2018, 8:39 am
      regarded as precedent or cited before any                                   CLERK
      court except for the purpose of establishing                            Indiana Supreme Court
                                                                                 Court of Appeals
      the defense of res judicata, collateral                                      and Tax Court

      estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT
      Alan D. Wilson
      Kokomo, Indiana

                                                IN THE
          COURT OF APPEALS OF INDIANA

      In the Matter of the Marriage of:                       March 14, 2018

      Carolyn Burns,                                          Court of Appeals Case No.
                                                              34A05-1707-DR-1614
      Appellant-Respondent,
                                                              Appeal from the
              v.                                              Howard Superior Court
                                                              The Honorable
      Michael Burns,                                          Brant J. Parry, Judge
                                                              Trial Court Cause No.
      Appellee-Petitioner.
                                                              34D02-1511-DR-831

      Kirsch, Judge.

[1]   Carolyn Burns (“Wife”) appeals following the dissolution of her marriage to

      Michael Burns (“Husband”). She presents the following restated issue for our

      review: whether the trial court abused its discretion in applying the coverture

      Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018           Page 1 of 11
      fraction formula to Husband’s pension benefit, which resulted in an unequal

      division of the marital estate.

[2]   We reverse and remand with instructions.

                                 Facts and Procedural History
[3]   Wife and Husband married on November 19, 1983. At that time, Husband had

      been employed at Delphi/General Motors for ten years, and he continued to

      work at the same employment for approximately twenty years during the

      marriage. Husband earned a pension during his employment. He voluntarily

      retired at age forty-nine, after working for thirty-two years and began drawing

      his pension. Husband’s pension stopped accruing at retirement. At the time of

      the parties’ separation, Husband had been retired for ten years. At the time of

      the dissolution, Husband’s income consisted of social security payments and his

      pension payments, and he was not able to work because of medical issues.

[4]   During their thirty-four years of marriage, Wife helped raise the parties’ child,

      took care of the home, provided services to Husband and child, and worked

      outside the home, but has no pension or retirement available to her other than

      her portion of Husband’s pension. After Husband retired, Wife helped him

      with three different businesses, and they “worked as a team” on them. Tr. Vol.

      II at 32. At the time of the final hearing, although Wife was not physically

      disabled, she was having continuing medical problems and was not employed.

[5]   Husband filed a petition for dissolution of marriage on November 4, 2015, and

      a final hearing was held on April 17, 2017. Following the hearing, the trial
      Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 2 of 11
      court entered a dissolution decree on May 8, 2017. In the decree, Husband’s

      pension represented the largest asset in the marital estate, and the trial court

      awarded Husband 66.5% of the pension benefit and awarded 33.5% of the

      pension benefit to Wife; the trial court otherwise equally divided the marital

      assets. Appellant’s App. Vol. II at 8-9. Thereafter, Wife filed a motion to correct

      error, alleging that the trial court inequitably divided the pension. The trial

      court denied the motion, and this appeal ensued.

                                     Discussion and Decision
[6]   When reviewing a claim that the trial court improperly divided marital assets,

      we consider whether the trial court abused its discretion. Fobar v. Vonderahe,

      771 N.E.2d 57, 59 (Ind. 2002). The trial court abuses its discretion when its

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

      before it, including the reasonable inferences to be drawn therefrom. Taylor v.

      Taylor, 436 N.E.2d 56, 58 (Ind. 1982). Moreover, where, as here, the trial court

      has, sua sponte, entered written findings and conclusions, we “shall not set

      aside the findings or judgment unless clearly erroneous” and must give “due

      regard . . . to the opportunity of the trial court to judge the credibility of the

      witnesses.” Ind. Trial Rule 52(A). “As to the issues covered by the findings,

      we apply the two-tiered standard of whether the evidence supports the findings,

      and whether the findings support the judgment.” In re S.D., 2 N.E.3d 1283,

      1287 (Ind. 2014). We review the remaining issues under a general judgment

      standard, whereby we affirm the judgment if it can be sustained on any legal

      theory supported by the evidence. Id. In conducting our review, we will not

      Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 3 of 11
      reweigh the evidence and will consider the evidence in a light most favorable to

      the judgment. Fobar, 771 N.E.2d at 59. Furthermore, where, as here, the

      appellee has not filed a brief, “we do not undertake to develop the appellee’s

      arguments. Rather, we will reverse upon an appellant’s prima facie showing of

      reversible error.” Branham v. Varble, 952 N.E.2d 744, 746 (Ind. 2011).

[7]   In entering a dissolution decree, the trial court is obligated to “divide the

      property of the parties . . . in a just and reasonable manner.” Ind. Code § 31-15-

      7-4. Under Indiana’s “one pot” approach to the division of marital assets, all

      property owned by the spouses is put into the “marital pot,” where the property

      is subject to division. Barton v. Barton, 47 N.E.3d 368, 378 (Ind. Ct. App. 2015),

      trans. denied. Thus, whether the property was “owned by either spouse before

      the marriage,” individually “acquired by either spouse” before the parties

      finally separated, or acquired through the spouses’ “joint efforts,” I.C. § 31-15-

      7-4, in a dissolution action, there is a single “marital pot” and everything the

      spouses own is potentially divisible. Id. (citing Falatovics v. Falatovics, 15 N.E.3d

      108, 110 (Ind. Ct. App. 2014), trans. denied). Moreover, our legislature has

      made it clear that a spouse’s “present right to withdraw pension or retirement

      benefits” constitutes property that belongs in the marital pot, as does a vested

      “pension or retirement benefit[] . . . payable after the dissolution of marriage.”

      I.C. § 31-9-2-98(b)(1), (2); see also Hill v. Hill, 863 N.E.2d 456, 461 (Ind. Ct. App.

      2007) (determining that a “pension . . . was properly included in the marital

      pot” where a spouse was “currently receiving payments from his pension

      plan”).

      Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 4 of 11
[8]   Once the trial court has identified property to be included in the “marital pot,”

      the trial court must evaluate how to “divide the property in a just and

      reasonable manner.” I.C. § 31-15-7-4(b). The trial court is to begin with the

      “presum[ption] that an equal division of the marital property . . . is just and

      reasonable.” I.C. § 31-15-7-5. Nevertheless, the trial court is not obligated to

      equally divide the marital property; rather, a party may rebut the presumption

      by “present[ing] relevant evidence . . . that an equal division would not be just

      and reasonable.” Id. Moreover, our legislature has articulated a non-

      exhaustive list of factors that bear on the reasonableness of an equal division,

      among them, “[t]he contribution of each spouse to the acquisition of the

      property, regardless of whether the contribution was income producing,” and

      “[t]he extent to which the property was acquired by each spouse . . . before the

      marriage.” Id. In giving effect to a just and reasonable property division, the

      trial court may take several actions, including “setting the property or parts of

      the property over” to one of the spouses. I.C. § 31-15-7-4. In other words, the

      trial court may ultimately reach into the “marital pot” and unequally distribute

      the assets contained therein, so long as a spouse presented “relevant evidence”

      rebutting the statutory presumption. See I.C. §§ 31-15-7-4, 31-15-7-5; cf. Quinn v.

      Quinn, 62 N.E.3d 1212, 1223 (Ind. Ct. App. 2016) (“Although 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.”).

      Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 5 of 11
[9]    Here, the trial court awarded 33.5% of the pension benefit to Wife and 66.5% to

       Husband. In selecting these percentages, the trial court adopted a calculation

       set forth in Husband’s exhibit, applying what courts refer to as the “coverture

       fraction” formula. See Morey v. Morey, 49 N.E.3d 1065, 1071 (Ind. Ct. App.

       2016) (providing background on the formula). Under this approach, the value

       of a pension benefit “‘is multiplied by a fraction, the numerator of which is the

       period of time during which the marriage existed (while pension rights were

       accruing) and the denominator is the total period of time during which pension

       rights accrued.’” Id. (quoting In re Marriage of Fisher, 24 N.E.3d 429, 433 (Ind.

       Ct. App. 2014)). In the present case, the trial court divided the months of

       marriage (259) by the months Husband worked toward the pension (384),

       which yielded 67%—a figure purportedly reflecting the percentage of the

       pension benefit that Husband earned during the marriage. In other words, the

       trial court’s calculation indicated that Husband purportedly acquired 33% of the

       pension benefit through efforts prior to the marriage. No evidence was

       introduced to establish the value of the pension on the date of the parties’

       marriage, and Husband failed to present any evidence to support the assertion

       that one-third the value of the pension was acquired before the parties were

       married.

[10]   In allocating the pension benefit, the trial court equally divided the 67%

       presumed to have been earned during the marriage—33.5% to Wife and 33.5%

       to Husband—and awarded the remaining 33% to Husband. Thus, the trial

       court ultimately allocated 33.5% to Wife and 66.5% to Husband. Wife argues

       Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 6 of 11
       that the trial court abused its discretion in dividing the pension benefit in this

       way, and directs us to a portion of the decree in which the trial court

       “conclude[d] that an equal division of the marital property between the parties

       [wa]s just and reasonable.” Appellant’s App. Vol. II at 9. Specifically, Wife

       asserts that this division of the pension benefit was in error because of her

       contribution to the marriage and the disparity in income between the parties.

       Wife also contends that the trial court erred due to the lack of evidence as to the

       value of Husband’s pension at the time of the separation, which made the

       yielded result from the coverture fraction formula based on speculation.

[11]   Under Indiana law, an entire vested pension benefit belongs in the “marital

       pot,” where it is subject to just and reasonable distribution. See I.C. §§ 31-9-2-

       98, 31-15-7-4, 31-15-7-5; Hill, 863 N.E.2d at 461. Here, the trial court

       ultimately set aside a portion of the pension, but it is unclear whether it

       accomplished this by using the coverture fraction formula to exclude the pre-

       marital portion of the pension entirely from the marital pot or, after including

       the entire pension in the marital pot, by using the formula to determine what

       portion of the pension was subject to division.1 Regardless of how the trial

       1
         In looking to Indiana case law, there is inconsistent support as to how the coverture fraction formula should
       be used to shelter the pre-marital portion of a pension benefit. Compare, e.g., Morey v. Morey, 49 N.E.3d 1065,
       1072 (Ind. Ct. App. 2016) (“[T]he coverture fraction formula operates to segregate a percentage of a given
       asset from the marital pot while including the balance of the asset in the marital pot.”), and Barton v. Barton,
       47 N.E.3d 368, 380 (Ind. Ct. App. 2015) (“The dissolution court should have included the entire present
       value of . . . the pension . . . in the marital estate (one pot theory) and then applied the coverture fraction
       formula to determine what portion of each asset was earned during the marriage and therefore subject to
       division.”), with Falatovics v. Falatovics, 15 N.E.3d 108, 110 (Ind. Ct. App. 2014) (“The systematic exclusion of
       any marital asset from the marital pot is erroneous.”), and Kendrick v. Kendrick, 44 N.E.3d 721, 729 (Ind. Ct.
       App. 2015) (“While the court may ultimately determine that the portion of Husband’s pension earned prior

       Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018               Page 7 of 11
       court applied the coverture fraction formula in this case, we find that it was an

       abuse of discretion to apply the coverture fraction formula in this case where

       Husband’s pension benefit was the only substantial asset in the marriage and

       the marriage was long in duration.

[12]   Here, the marriage between Husband and Wife lasted over thirty years with

       Husband working and earning his pension for over twenty of those years.

       During the marriage, Wife both worked outside of the home and contributed to

       the marriage by raising their child, taking care of the home, and helping

       Husband in business ventures after his retirement. At the time of the

       dissolution, Wife was unable to work due to medical problems and did not have

       a pension available. Husband’s pension was the largest asset of the marriage,

       and it represented nearly all of the parties’ net worth. After the parties’ long

       marriage, the application of the coverture fraction formula in this case resulted

       in a large disparity in the division of assets, which we conclude was an abuse of

       discretion. Wife has made a prima facie showing of reversible error, and we,

       therefore, reverse the trial court’s division of the marital assets and remand with

       instructions to include the entire value of Husband’s pension benefit in the

       marital estate and to equally divide the value between Husband and Wife.

[13]   Reversed and remanded with instructions.

       to the marriage should be awarded solely to him, it must first include the asset in its consideration as to how
       the marital estate should be divided.”), trans. denied.

       Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018               Page 8 of 11
Pyle, J., concurs.

Bailey, J., dissents with separate opinion.

Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 9 of 11
                                                 IN THE
           COURT OF APPEALS OF INDIANA

       In the Matter of the Marriage of:                       Court of Appeals Case No.
                                                               34A05-1707-DR-1614
       Carolyn Burns,
       Appellant-Respondent,

               v.

       Michael Burns,
       Appellee-Petitioner.

       Bailey, Judge, dissenting.

[14]   I respectfully dissent. The Indiana Code provides that a party may rebut the

       presumptive equal division of marital assets by presenting “relevant evidence,”

       including evidence concerning “[t]he extent to which the property was acquired

       by each spouse . . . before the marriage.” I.C. § 31-15-7-5. Here, there was

       evidence indicating that before Wife was in the picture, Husband spent ten

       years working toward the pension benefit. Relying on this evidence, the court

       allocated to Husband part of the benefit, proportional to the pre-marital period.

       See I.C. § 31-15-7-4 (permitting a court to “set[] the property or parts of the

       property over” to one spouse). This Court is to “reverse a property distribution

       Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 10 of 11
       only if there is no rational basis for the award.” Luttrell v. Luttrell, 994 N.E.2d

       298, 301 (Ind. Ct. App. 2013), trans. denied. Indeed, when reviewing for abuse

       of discretion, “[w]e do not reweigh the evidence; rather, we determine whether

       the evidence before the trial court can serve as a rational basis for its decision.”

       DePuy Orthopaedics, Inc. v. Brown, 29 N.E.3d 729, 732 (Ind. 2015).

[15]   The majority concludes that the trial court abused its discretion in applying the

       coverture fraction formula because the pension benefit “was the only substantial

       asset in the marriage and the marriage was long in duration.” Slip op. at 8.

       Yet, these factors—relevant as they are—are for trial courts to weigh. This

       Court has accordingly afforded deference to a trial court’s decision to allocate a

       portion of the assets in view of a spouse’s pre-marital efforts. See In re Marriage

       of Fisher, 24 N.E.3d 429, 433 (Ind. Ct. App. 2014) (deferring to the trial court’s

       decision to apply the coverture fraction formula in a case involving a marriage

       of twenty-four years). To be sure, there is a certain point when a decision

       concerning marital property can be said to exit the wide orbit of what is just and

       reasonable. Still, reasonable minds can disagree, and so we must steadfastly

       adhere to our deferential standard of review—whatever we may think of the

       outcome. Adhering to that standard in this case, I cannot say that the court’s

       decision is irrational or clearly inconsistent with the facts and circumstances.

[16]   I would therefore affirm.

       Court of Appeals of Indiana | Memorandum Decision 34A05-1707-DR-1614 | March 14, 2018   Page 11 of 11