Court Opinion

ID: 3191722
Source: CourtListenerOpinion
Date Created: 2016-04-06 15:05:24.21927+00
Date Added: 2024-06-11T14:35:46.185926
License: Public Domain

FILED
                                                                  Apr 06 2016, 9:32 am

                                                                       CLERK
                                                                   Indiana Supreme Court
                                                                      Court of Appeals
                                                                        and Tax Court

ATTORNEYS FOR APPELLANT                                    ATTORNEY FOR APPELLEE
Colby A. Barkes                                            Robert A. Plantz
Duane W. Hartman                                           Robert A. Plantz & Associates,
Blachly, Tabor, Bozik & Hartman LLC                        LLC
Valparaiso, Indiana                                        Merillville, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Carrie Baker,                                              April 6, 2016
Appellant,                                                 Court of Appeals Case No.
                                                           64A05-1509-DR-1381
        v.                                                 Appeal from the Porter Superior
                                                           Court
Michael Baker,
                                                           The Honorable Roger V. Bradford,
Appellee.                                                  Judge
                                                           The Honorable Mary A. DeBoer,
                                                           Magistrate
                                                           Trial Court Cause No.
                                                           64D01-0904-DR-3345

Brown, Judge.

Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016                   Page 1 of 13
[1]   Carrie Baker (“Wife”) appeals an order granting a motion to strike and dismiss,

      as well as denying motions to reconsider and to correct errors, in favor of

      Michael Baker (“Husband”). Wife raises one issue which we revise and restate

      as whether the court erred in granting Husband’s motion and denying her

      motion to reconsider and to correct errors without a hearing. We reverse and

      remand.

                                       Facts and Procedural History1

[2]   On April 21, 2009, Husband and Wife executed a Mutual Waiver of Final

      Hearing and Marital Settlement Agreement (“Property Settlement

      Agreement”), which was finalized on June 25, 2009, when they were granted a

      Decree of Dissolution of Marriage. During the divorce proceedings, Wife was

      not represented by counsel, and she relied on Husband, Husband’s counsel, and

      the Dissolution Decree regarding the truthfulness of the parties’ marital assets.

      Wife was aware of Husband’s deferred income that is listed in the Property

      Settlement Agreement, but she was not aware of any additional deferred

      income, i.e., assets of the marriage that Husband was to receive at a later time

      after the dissolution, that had not been listed in that agreement. Also, the

      Property Settlement Agreement contained the following provisions, among

      others:

      1
       The facts are based upon those stated in Wife’s Verified Motion to Open the Property Settlement
      Proceedings Because of Non-Disclosed Assets.

      Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016                       Page 2 of 13
        1. Equal Division of Property

                 The Husband and the Wife intend to settle forever and
                 completely their interests and obligations in all property,
                 both real and personal, between themselves and on behalf
                 of their heirs and assigns, and regardless of whether the
                 property was acquired by either or both of them, before or
                 during their marriage, or whether it was acquired by way
                 of gift or inheritance. The parties intend to effect a
                 division in a fair, just and equal manner.

        2. Itemization of Property Division

                                               *****

                 The parties shall each maintain or receive title to and
                 interest as indicated in the following financial accounts or
                 financial interests. Title to and interest in these
                 accounts/interests shall be exclusive as to the party
                 indicated, and the party with or receiving ownership will
                 hold the other party harmless as to liabilities of the owned
                 account/interest. The parties acknowledge that they have
                 not appraised each other’s assets or financial accounts and
                 waive any right to do so and acknowledge that one party
                 may receive a larger share than the other. The parties have
                 also agreed to waive the requirement of exchanging
                 financial declaration forms.

                                                    *****

        5. Mutual Releases

                 Both parties expressly and mutually release and forever
                 discharge the other from any and all claims, demands,

Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016       Page 3 of 13
                       obligations, debts, and cause of action, at law or in equity
                       or otherwise, which either of them ever had or now has or
                       hereafter may have against the other up to the date of the
                       execution of this Agreement.

              6. Representation by Counsel

                       Husband acknowledges that this agreement has been fully
                       explained to him by his attorney. Wife acknowledges that
                       she has the right to and has had the opportunity to obtain
                       legal counsel pertaining to this action and to explain the
                       consequences of this agreement. Wife has been informed
                       that Husband’s attorney in no way represents Wife’s
                       interests in this matter and has been advised of her right to
                       seek independent counsel to represent her or review this
                       agreement and is completely aware, not only of its
                       contents, but also its legal effects. The parties
                       acknowledge that each is satisfied with the preparation and
                       contents of this agreement.

              7. Entire Agreement

                       Each party acknowledges that no representations of any
                       kind have been made to him or her as an inducement to
                       enter into this Agreement, other than the representations
                       set forth herein, and that this Agreement constitutes all of
                       the terms of the contract between them.

      Appellant’s Appendix at 28, 35-36, 42-43.

[3]   In November 2014, Wife discovered that there were additional assets of the

      marital estate in excess of $1,000,000, and on April 22, 2015, she filed a

      Verified Motion to Open the Property Settlement Proceedings because of Non-

      Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016        Page 4 of 13
Disclosed Assets (the “Verified Motion”), in which she alleged fraud by

Husband by not disclosing the deferred income despite the fact that he had an

affirmative duty to disclose and that the Property Settlement Agreement stated

that she “shall receive an ‘equal division of property’.” Id. at 46. The Verified

Motion did not cite to a specific rule to open the proceedings. On July 7, 2015,

Husband filed a Motion to Strike and Dismiss Respondent’s Motion to Open

the Property Settlement Proceedings Because of Non-Disclosed Assets

(“Motion to Strike”). That same day, without giving Wife an opportunity to

respond and without a hearing, the court granted Husband’s motion (the “July

7th Order”). The court’s July 7th Order stated:

        1. The Divorce Decree was entered 6/25/2009. An agreed
        Modification Order was entered on 8/24/2010, while [Wife] was
        represented by counsel.

        2. The Court is prohibited from revoking or modifying a written
        settlement agreement or agreed or [sic], except in the case of
        fraud. I.C. §31-15-2-17(c).

        3. [Wife’s] Motion to Open Property Settlement Agreement
        alleges “fraud,” but Trial Rule 60(B)(3) allows for relief from the
        judgment or order on the grounds of fraud, but the motion shall
        be filed . . . not more than one (1) year after the judgment or
        order.

        4. The Motion filed by [Wife] was well after the one (1) year
        deadlines and, moreover, the Court is prohibited by I.C. §31-15-
        2-17(c) from modifying the order. For these reasons,

Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016      Page 5 of 13
               [Husband’s] Motion to Strike is GRANTED and [Wife’s2]
               Verified Motion to Open the Property Settlement Proceedings
               Because of Non-Disclosed Assets is hereby ordered Stricken from
               the Record and Dismissed.

      Id. at 47.

[4]   On August 5, 2015, Wife filed a motion to correct errors and to reconsider, and

      the court denied her motion the same day without a hearing.

                                                       Discussion

[5]   The issue is whether the court erred in granting Husband’s Motion to Strike and

      Dismiss. Generally, a grant or denial of equitable relief under Ind. Trial Rule

      60 is within the discretion of the trial court and is reviewed for an abuse of that

      discretion. Wagler v. West Boggs Sewer Dist., Inc., 980 N.E.2d 363, 371 (Ind. Ct.

      App. 2012), reh’g denied, trans. denied, cert. denied, 134 S. Ct. 952 (2014).

      “However, if a trial court’s ruling is strictly based upon a paper record, we will

      review the ruling de novo because we are in as good a position as the trial court

      to determine the force and effect of the evidence.” Jahangirizadeh v. Pazouki, 27
N.E.3d 1178, 1181 (Ind. Ct. App. 2015) (citing In re Adoption of C.B.M., 992
N.E.2d 687, 691 (Ind. 2013)). The trial court here ruled solely upon a paper

      record, and so our review is de novo.

      2
       The Court’s July 7th Order refers to “Petitioner’s Verified Motion,” in which the petitioner in this case is
      Husband. Appellant’s Appendix at 47. However, it is undisputed that Wife filed the Verified Motion.

      Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016                            Page 6 of 13
[6]   Ind. Trial Rule 60(B)(3) “provides that a judgment may be set aside for ‘fraud

      (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or

      other misconduct of an adverse party . . . .’” Id. (quoting Ind. Trial Rule

      60(B)(3)). Additionally, a motion for relief from judgment under Trial Rule

      60(B)(3) must be filed not more than one year after the judgment was entered.

      Id. However, Trial Rule 60(B) contains a “savings clause” which provides:

      “This rule does not limit the power of a court to entertain an independent

      action to relieve a party from a judgment, order or proceeding or for fraud upon

      the court.” Id. (quoting Ind. Trial Rule 60(B))

[7]   Wife argues that Ind. Code § 31-15-7-9.1, which governs the revocation or

      modification of property disposition orders in the case of fraud, provides that

      orders concerning property disposition may not be revoked or modified except

      in the case of fraud and that if fraud is alleged it must be asserted within six

      years of the order. She argues that Husband’s assertion in his Motion to Strike

      is incorrect that Ind. Trial Rule 60 precludes her motion because that rule

      “explicitly states ‘this rule does not limit the power of a court to entertain an

      independent action to relieve a party from a judgment, order, or proceeding or

      for fraud upon the court.’” Appellant’s Brief at 7. She asserts that the type of

      fraud alleged is the central issue and that she has alleged either an independent

      action for fraud or fraud upon the court, either of which is reviewable at this

      stage. She notes that Porter County Family Law Rule 2100.1 requires financial

      disclosure unless waived in writing and where “‘all financial issues’ are settled,”

      and argues that here, under Porter County Family Law Rule 2100.2, all

      Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016   Page 7 of 13
      financial issues were not settled and Husband violated a mandatory obligation

      indicative of a scheme or fraud sufficient to bring an action for fraud upon the

      court and/or an independent action for fraud. Id. at 10.

[8]   She also argues in her reply brief that the Motion to Strike and Dismiss was

      granted the same day it was filed, that accordingly there was no opportunity for

      her to request oral argument, and that there is no requirement for a responding

      party to request a hearing under these circumstances pursuant to Porter County

      Civil Rule 3300.60. She asserts that instead Porter County Civil Rule 3300.20

      “requires . . . ‘all motions are to be set for hearing at the time of their filing’”

      and that “[i]t shall be the responsibility of movant or the movant’s attorney to

      secure the date of such hearing from the Court personnel . . . . It shall also be

      the responsibility of the movant to coordinate the hearing date with all

      opposing counsel.” Appellant’s Reply Brief at 3. She maintains that, contrary

      to Husband’s claims, the local rules require a hearing on the Motion to Strike.

[9]   Husband argues that Wife is incorrect in asserting that she is entitled to an

      opportunity to respond, to a hearing, and to complete discovery, noting that she

      did not file a request for oral argument in accordance with Porter County Civil

      Rule 3300.30, which allows that “any party ‘may’ request a hearing on a

      Motion to Correct Error by filing a request with the court.” Appellee’s Brief at

      12. Husband also asserts that Porter County Civil Rule 3300.60 allows a party

      to request oral argument, that “such request may be heard ‘only at the

      discretion of the court,’” that Wife did not make such a request, and that,

      pursuant Ind. Trial Rule 6(C), the court did not err in granting his Motion to

      Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016      Page 8 of 13
       Strike. Id. He states that Wife filed her motion, which should be characterized

       as a motion under Ind. Trial Rule 60(B)(3), well outside of the applicable one-

       year time period.

[10]   Recently, in Jahangirizadeh, this Court discussed “the three ways that a motion

       to set aside a judgment for fraud can be raised,” noting that the Indiana

       Supreme Court in Stonger v. Sorrell, 776 N.E.2d 353 (Ind. 2002) adopted

       “analysis used by federal courts for Federal Rule of Civil Procedure 60(b)(3),

       which is nearly identical to Trial Rule 60(B)(3).” 27 N.E.3d at 1181. We

       observed:

               First is a motion filed under subsection (3) of the Rule, which
               “may be based on any kind of fraud (intrinsic, extrinsic, or fraud
               on the court) so long as it is chargeable to an adverse party and
               has an adverse effect on the moving party.” Stonger, 776 N.E.2d
               at 356. A motion under this Rule also must be filed in the court
               that issued the judgment, and it must be made within one year of
               the judgment. Id.

               Second, a party may file an independent action for fraud
               pursuant to traditional equitable principles. Id. “Independent
               actions are usually reserved for situations that do not meet the
               requirements for a motion made under” Rule 60(B)(3). Id. Such
               cases include ones where “(i) the fraud is not chargeable to an
               adverse party; (ii) the movant seeks relief from a court other than
               the rendering court; or, most often, (iii) the one-year time limit
               for Rule 60(b)(3) motions has expired.” Id. An independent
               action for fraud is subject to the doctrine of laches and is
               available only in extremely limited circumstances. Id.

       Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016   Page 9 of 13
                  Third, a party may invoke the inherent power of a court to set
                  aside its judgment if procured by fraud on the court. Id. at 356-
                  57. Also, a court may sua sponte set aside a judgment for fraud
                  on the court. Id. at 357. There is no time limit for a fraud on the
                  court proceeding. Id.

                  Regardless of which procedural avenue a party selects to assert a
                  claim of fraud, “the party must establish that an unconscionable
                  plan or scheme was used to improperly influence the court’s
                  decision and that such acts prevented the losing party from fully
                  and fairly presenting its case or defense.” Id. If it is unclear
                  which procedural avenue a party intended to use to set aside a
                  judgment and more than one year has passed, a court may
                  construe a motion to set aside as either an independent action for
                  fraud or as a pleading to grant relief for fraud on the court. Id.;
                  see also United States v. Buck, 281 F.3d 1336, 1342 (10th Cir. 2002)
                  (“The substance of the plea should control, not the label.”). To
                  establish fraud warranting relief from judgment, a party must
                  show more than a possibility that the trial court was misled;
                  rather, “there must be a showing that the trial court’s decision
                  was actually influenced.” Stonger, 776 N.E.2d at 358.

       Id. at 1181-1182.

[11]   As noted, Wife asserts that the court erred in granting Husband’s Motion to

       Strike and Dismiss without a hearing. Porter County Civil Rule 3300.20, titled

       Setting Motions for Hearing, provides:

                  Except for motions to correct error or those described in section
                  D[3] of this Rule, all motions shall be set for hearing at the time of
                  their filing. It shall be the responsibility of the movant or the

       3
           It is undisputed that none of the exceptions apply to Husband’s Motion to Strike.

       Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016                Page 10 of 13
                movant’s attorney to secure the date of such hearing from the
                Court personnel who maintain the calendar for each of the
                Judges or Magistrates. It shall also be the responsibility of the
                movant to coordinate the hearing date with all opposing counsel.

[12]   We agree with Wife that the court improperly granted Husband’s Motion to

       Strike and Dismiss when it did so without scheduling and holding a hearing. 4

[13]   To the extent that Husband suggests that Wife’s allegations clearly fall within

       Ind. Trial Rule 60(B)(3) and are subject to the one-year time limit, and

       accordingly that the court did not err, as we observed in Jahangirizadeh, Trial

       Rule 60(B) contains a “savings clause” providing that it “does not limit the

       power of a court to entertain an independent action to relieve a party from a

       judgment, order or proceeding or for fraud upon the court.” 27 N.E.3d at 1181.

       Although use of the savings clause is limited, it is within the court’s discretion

       to construe a motion to set aside as either an independent action for fraud or as

       a pleading to grant relief for fraud on the court. Id. at 1182. We therefore

       conclude that it would be premature to examine substantive precedent and

       make such a judgment prior to a hearing required by Porter County Civil Rule

       3300.20.

       4
         To the extent Husband cites to Porter County Civil Rule 3300.30 and 3300.60, we first note that Rule
       3300.30 concerns motions to correct error. Also, as noted above by Wife, Rule 3300.60 provides that
       requests for oral argument shall be made by separate instrument and filed with the pleading to be argued; it
       does not place a burden on a responding party to request oral argument.

       Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016                         Page 11 of 13
[14]   We observe that “Indiana trial courts may establish local rules for their own

       governance as long as the local rules do not conflict with the rules established

       by the Indiana Supreme Court or by statute.” Gill v. Evansville Sheet Metal

       Works, Inc., 970 N.E.2d 633, 645-646 (Ind. 2012); see also Ind. Code § 34-8-1-4

       (“Other Indiana Courts may establish rules for their own government,

       supplementary to and not conflicting with the rules prescribed by the supreme

       court or any statute.”). The Court specifically authorizes the making and

       amending of local rules in Ind. Trial Rule 81(A), which states: “Courts may

       regulate local court and administrative district practice by adopting and

       amending in accordance with this Rule local and administrative district rules

       not inconsistent with—and not duplicative of—these Rules of Trial Procedure

       or other Rules of the Indiana Supreme Court.” “As a general matter, local rules

       are procedural and ‘are intended to standardize the practice within that court,

       to facilitate the effective flow of information, and to enable the court to rule on

       the merits of the case.’” Gill, 970 N.E.2d at 646 (quoting Meredith v. State, 679
N.E.2d 1309, 1310 (Ind. 1997)). However, the rules of procedure promulgated

       by the Indiana Supreme Court “are binding on all Indiana courts, and no court

       ‘can circumvent the rules and thereby avoid their application’ by promulgating

       an inconsistent local rule.” Spudich v. N. Ind. Pub. Serv. Co., 745 N.E.2d 281,

       286 (Ind. Ct. App. 2001) (quoting Armstrong v. Lake, 447 N.E.2d 1153, 1154

       (Ind. Ct. App. 1983) (quoting In re Estate of Moore, 155 Ind. App. 92, 96, 291
N.E.2d 566, 568 (1973))), reh’g denied, trans. denied. “A local rule which is

       inconsistent with the Trial Rules is deemed to be without force and effect.” Id.

       Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016   Page 12 of 13
[15]   In Spudich, we noted that the Court first articulated a test for determining when

       a procedural rule enacted by statute is inconsistent with the trial rules in State v.

       Bridenhager, 257 Ind. 699, 279 N.E.2d 794 (1972), reh’g denied, as follows:

                To be “in conflict” with our rules . . . , it is not necessary that the
                statutory rules be in direct opposition to our rule, so that but one
                could stand per se. It is only required that they be incompatible
                to the extent that both could not apply in a given situation.

       Id. at 286 (quoting Bridenhager, 257 Ind. at 704, 279 N.E.2d at 796). Then, in

       Armstrong, “this court held that the same test would apply to a local rule alleged

       to be inconsistent with the trial rules.” Id. (citing Armstrong, 447 N.E.2d at

       1154).

[16]   Here, Porter County Civil Rule 3300.20 is not incompatible with Ind. Trial

       Rule 60(B) because Rule 60(B) contains the savings clause mentioned above

       which allows for motions to be filed outside of the time periods specified in

       certain subsections of that rule. Thus, the local rule should be followed.

                                                     Conclusion

[17]   For the foregoing reasons, we reverse the court’s grant of Husband’s Motion to

       Strike and remand for a hearing consistent with this opinion.

[18]   Reversed and remanded.

       Kirsch, J., and Mathias, J., concur.

       Court of Appeals of Indiana | Opinion 64A05-1509-DR-1381 | April 6, 2016      Page 13 of 13