Court Opinion

ID: 4397484
Source: CourtListenerOpinion
Date Created: 2019-05-16 15:04:36.95371+00
Date Added: 2024-06-11T14:27:44.168265
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D),                                    FILED
      this Memorandum Decision shall not be                                May 16 2019, 6:26 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                                  ATTORNEY FOR APPELLEE
      Danielle L. Flora                                       Robert J. Hardy
      Fort Wayne, Indiana                                     Auburn, Indiana

                                                IN THE
          COURT OF APPEALS OF INDIANA

      Mischelle R. Musser,                                    May 16, 2019
      Appellant-Petitioner,                                   Court of Appeals Case No.
                                                              18A-DR-1765
              v.                                              Appeal from the Steuben Superior
                                                              Court
      Michael A. Musser,                                      The Honorable William C. Fee,
      Appellee-Respondent                                     Judge
                                                              Trial Court Cause No.
                                                              76D01-0710-DR-391

      Altice, Judge.

                                               Case Summary

[1]   In 2007, Mischelle R. Musser (Mother) filed a petition to dissolve her fifteen-

      year marriage to Michael A. Musser (Father), with whom she has five children.

      The trial court entered a provisional order in May 2009, which provided that in

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019                  Page 1 of 12
      lieu of child support Father would pay the monthly payments for the second

      mortgage on the marital residence. A final dissolution order, addressing

      division of assets, child support, and child custody, was entered in September

      2017. Both parties filed motions to correct error, which the trial court granted

      in part and modified the dissolution order accordingly.

[2]   On appeal, Mother contends that the trial court erred when calculating Father’s

      child support obligation, alleging that a larger weekly income figure should

      have been used for Father. Similarly, Father challenges the child support order,

      but he argues that the trial court improperly included irregular income in the

      calculation of his weekly income. Father also notes that the trial court failed to

      specify how the award of retroactive child support, covering a period of ten

      years, was to be calculated and paid.

[3]   We affirm and remand with instructions.

                                       Facts & Procedural History

[4]   Mother and Father were married on August 31, 1992, and subsequently had

      five children together born between 1992 and 2005. In October 2007, Mother

      filed for dissolution of their marriage, which had been tumultuous over the

      years and included a protective order against Father in July 2002. Following

      their separation, Mother remained in the marital home with the children.

[5]   The trial court entered a stipulated provisional order on May 20, 2009,

      regarding custody, support, and property. Relevant here, the order provided:

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 2 of 12
              3. That the parties have stipulated that the Child Support
              Worksheet attached as exhibit 1, reflects the true income figures
              of the parties for purposes of calculation of child support.
              Further, the parties stipulate that grounds for deviation from the
              Child Support Guidelines exists [sic]. Deviation is based upon
              the fact that father takes sole responsibility for making payment
              on the second mortgage of the marital residence that will be
              occupied by mother and children….

              5. That Mother shall have sole possession of the marital
              residence and shall be solely responsible for the payment of the
              primary mortgage and the utilities and any other costs associated
              with the marital residence except for real estate taxes.

      Appellee/Cross Appellant’s Appendix at 44-45. The attached support worksheet

      indicated weekly gross incomes of $410.00 and $354.46 for Father and Mother,

      respectively. Pursuant to the worksheet, Father’s recommended support

      obligation was $139.44 per week.

[6]   For reasons unclear in the record, the final dissolution hearing did not

      commence until July 28, 2017, nearly ten years after the filing of Mother’s

      dissolution petition and eight years after entry of the provisional order. 1 At the

      hearing, Mother presented substantial evidence of Father’s deception,

      dissipation of assets, and hidden income. Specifically, since May 2013 and

      continuing through the hearing, Father had been “flipping” houses “to make

      some more money.” Transcript Vol. I at 182. He had purchased four properties

      1
       At some point during this period, Father was tried and acquitted of child molest charges involving one of
      his daughters. This might account for some of the delay.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019                    Page 3 of 12
      during this time and had sold three for a profit and expected to sell the fourth at

      some point in the future when he was done working on it. Father had gross

      earnings on the three sold properties between 2014 and 2016 totaling $186,000,

      but he did not reveal any of this income in his pretrial disclosures. He disclosed

      only the income from his job as a general laborer, at which he indicated at trial

      that he made $14 per hour.

[7]   Additionally, Mother presented evidence that Father had led her to believe

      there was a second mortgage on the marital home when, in fact, there was

      none. Thus, Father had avoided child support payments during the lengthy

      dissolution proceedings and had not been paying a second mortgage on the

      marital home.

[8]   After the provisional order in 2009, Father began paying the mortgage

      payments for separate real estate, a forty-acre farm. 2 A mortgage of over

      $32,000 still existed on the farm at the time of the final hearing. However,

      Father testified that he and Mother had transferred the farm to his father by quit

      claim deed in October 2002. The trial court ultimately found that Mother’s

      signature on the deed had been forged and that the transfer was a “sham”.

      Appellant’s Amended Appendix Vol. 2 at 42. The court determined that the farm

      constituted (dissipated) marital property with a value of $220,000.

      2
       Before the provisional order, Mother had been making these payments along with the mortgage payments
      on the marital residence, believing that this was a second mortgage on the marital home.

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019               Page 4 of 12
[9]   On September 6, 2017, the trial court issued its dissolution order with findings

      of fact and conclusions. With respect to the parties’ incomes, the order

      provided:

              9. [Father] is employed at Halex making $14.00 per hour and
              averaging forty (40) hours per week. Husband’s gross weekly
              income is $560.00 from employment. [Father’s] employment
              income has remained relatively stable since a few months after
              the date of separation…. Pursuant to the testimony of the
              Steuben County Assessor, Kimberly Johnson, and the Chief
              Deputy Recorder, Dani Lou Parrish, [Father], since the date of
              separation, has purchased numerous real estate parcels, namely:

                      A. 1445 W 100N, Angola, IN. Said property was
                      purchased May 1, 2013 and sold on February 15, 2016.
                      Said property was purchased for $30,000.00 and was sold
                      for $105,000.00.

                      B. Lane 110A, Hogback Lake, IN. Said property was
                      purchased on September 26, 2014 [sic] for $10,000.00 and
                      was sold on September 26, 2014. The assessed value of
                      said property was $38,000.00.

                      C. 202 Wabash, Hudson, IN. Said property was
                      purchased on July 16, 2015 for $17,500.00 and was sold on
                      October 27, 2016 for $101,000.00.

                      D. 905 Oakcrest Drive, Angola, IN. Said property was
                      purchased on July 18, 2016 for $75,000.00, with an
                      assessed value of $109,400.00. Said property has not yet
                      been sold….

      Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 5 of 12
                E. The properties listed in subsection A and B were
                purchased from God’s Lighthouse of New Beginnings, a
                church where [Father’s] relatives are the Pastor and were
                three (3) trustees approving the sale of the property,
                including his mother and brother….

        10. [Father] testified that the properties listed above were owned
        jointly with his brother. However, Dani Lou Parrish, from the
        office of the Steuben County Recorder, testified that all of the
        deeds for the above properties had [Father] listed as the sole
        owner.

        11. [Father] did not list any income from the sale of the real
        estate listed above as income on the parties’ Property,
        Indebtedness and Earnings Disclosure.… Therefore, the Court
        must use the values for said property that can be documented, as
        well as accept as valid the deeds that [Father] executed himself.
        Therefore, the Court finds that [Father] had earnings of
        $75,000.00 for the property located at 1445 W 100N, Angola, IN;
        $28,000.00 for the property located at Hogback Lake; and
        $83,500.00 for the property in Hudson, IN for a total of
        $186,000.00 [sic]. However, it is reasonable to assume that
        [Father] incurred business related expenses and paid taxes on
        these transactions. Further, the Oakcrest Drive property was
        likely purchased with the proceeds and should be subtracted.
        The Court finds a reasonable estimate of this income is
        $74,000.00. The $74,000.00 was earned over three (3) years.
        [Father’s] average yearly income from real estate was $24,790.00.
        On a weekly basis, this constitutes income of $476.73.

        12. [Mother] is on Social Security Disability receiving monthly
        benefits in the sum of $1,671.00. As a result of [Mother’s]
        disability, [she] also receives Social Security benefits for the
        parties’ two (2) unemancipated children … each in the sum of
        $278.00 per month.… [Mother’s] gross monthly income is
        $2,227.00 or gross weekly income of $513.92….
Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 6 of 12
       Id. at 30-31.

[10]   Using the above income figures, 3 the trial court set Father’s current weekly

       child support obligation at $217.00 for the parties’ two minor children. The

       trial court determined that Father would not be held responsible for back

       payment of child support “due to the fact that he took over the primary

       mortgage payment for the marital residence.” Id. at 31. The court noted: “The

       Provisional Order provided for a deviation from [Father’s] weekly payment of

       child support pursuant to a stipulated obligation to pay the second mortgage

       when, in fact, there was no second mortgage to pay. Consequently [Father]

       took over the primary mortgage in 2009.” Id.

[11]   Mother and Father filed timely motions to correct error. On March 9, 2018,

       following a hearing, the trial court issued an order granting the motions in part

       and amending the final order. The only change relevant to this appeal concerns

       child support. Mother argued that the trial court erred by not ordering back

       child support, noting that she always paid the primary mortgage payments

       during the dissolution proceedings and that there was no second mortgage on

       the residence. The trial court agreed with Mother and concluded:

               [Mother’s] Motion to Correct Error alleges the Court erred by
               not making child support retroactive. In doing so, the Court gave
               weight to the Provisional Order…. However, the evidence at
               trial established there was no “second mortgage of the marital

       3
         The trial court added Father’s weekly income from employment ($560.00) to his average weekly income
       from flipping houses ($477.00) for a total weekly income of $1037.00.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019                 Page 7 of 12
               residence”. It did not exist. Therefore, the provision was, from
               its inception, an insufficient basis for a deviation from the Child
               Support Guidelines. The Court erred on this issue. Child
               support shall be retroactive to the date of filing, October 18,
               2007.

       Id. at 42-43. Father subsequently filed a second motion to correct error, which

       was summarily denied by the trial court. Both parties now appeal the trial

       court’s rulings with respect to child support.

                                           Discussion & Decision

[12]   Mother and Father argue that the trial court erred when it calculated Father’s

       weekly income with respect to his side business of flipping houses. Neither

       party disagrees with the trial court’s calculation of gross earnings of $186,000

       over the three years leading up to the final hearing. Mother argues that the trial

       court erred in reducing this amount to $74,000 in net income based on

       unproven business-related expenses and taxes. Father, on the other hand,

       contends that this income was improperly included in the support calculation

       because it “nearly doubled Father’s weekly income” with no indication that

       Father “would continue to earn such additional amounts.” Appellee/Cross

       Appellant’s Brief at 6.

[13]   A trial court’s calculation of child support is presumptively valid and will not be

       set aside unless clearly erroneous. See Bogner v. Bogner, 29 N.E.3d 733, 738

       (Ind. 2015); McGinley-Ellis v. Ellis, 638 N.E.2d 1249, 1251 (Ind. 1994)

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 8 of 12
       (appropriate standard of appellate review of support orders is the clearly

       erroneous standard rather than the abuse of discretion standard).

[14]   Although not disclosed by Father prior to the hearing, the record establishes

       that for the three years leading up to the hearing he had made a substantial

       income from his side business of flipping houses. Father also acknowledged at

       the hearing that he had a fourth house that was currently a work in progress

       that he hoped to sell later that year. The trial court determined that Father’s

       gross earnings from the sale of the three houses amounted to $186,000. The

       trial court then determined that a reasonable estimate of Father’s net earnings

       (i.e., income from flipping houses) was $74,000. Father does not challenge

       these amounts on appeal. He argues only that this irregular income should not

       have been included in the calculation of ongoing child support because it nearly

       doubled his weekly income with “no evidence that Father was habitually in the

       business of selling real estate or that he would ever sell any real estate in the

       future.” Appellee/Cross Appellant’s Brief at 8.

[15]   Weekly gross income is broadly defined when determining income in the child

       support guideline calculation and encompasses income from nearly any source.

       See Ashworth v. Ehrgott, 982 N.E.2d 366, 373-74 (Ind. Ct. App. 2013) (citing Ind.

       Child Support Guideline 3(A)). “While a very fact-sensitive determination,

       irregular income may be included in the total income approach taken by the

       Guidelines.” Id. The commentary to Guideline 3(A) suggests that

               an equitable method of treating [irregular] income may be to
               require the obligor to pay a fixed percentage of overtime,
       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 9 of 12
                bonuses, etc., in child support on a periodic but predetermined
                basis…rather than by the process of determining the average of
                the irregular income by past history and including it in the
                obligor’s gross income calculation.

       Child Supp. G. 3(A), Cmt. 2(b) (emphasis supplied); see also Ashworth, 982
N.E.2d at 374. The commentary makes clear that “one method of treating

       irregular income” is to determine the ratio of the basic child support obligation

       to the combined weekly adjusted income and then apply the ratio to the

       irregular income during a fixed period. Child Supp. G 3(A), Cmt. 2(b). But

       this is not the only method of treating such income. Ultimately, it is within the

       trial court’s discretion to choose a suitable approach to include the irregular

       income based on the facts of the particular case. See id. (“Judges and

       practitioners should be innovative in finding ways to include income that would

       have benefited the family had it remained intact, but be receptive to deviations

       where reasons justify them.”).

[16]   Under other circumstances, the trial court might have used the ratio method

       now suggested by Father on appeal. 4 Father’s history of deception, including

       his failure to disclose three years of substantial irregular income from flipping

       houses, however, suggests that using the ratio method here could be

       burdensome. Unlike bonuses and overtime, Father’s irregular income is not

       readily accessible from a third party. Thus, the ratio method would require

       4
         There is no indication in the record before us that Father asked the trial court to apply a ratio method
       instead of averaging his past irregular income to determine a weekly income amount.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019                       Page 10 of 12
       Mother to continuously investigate Father’s income from flipping houses or to

       rely on his self-reporting, which has not been reliable in the past. The trial

       court’s decision to use an averaging method based on Father’s last three years

       of irregular income to determine his gross weekly income for child support

       purposes was not clearly erroneous.

[17]   Mother challenges the trial court’s determination of Father’s average income

       from flipping houses. She contends that the court should not have subtracted

       any amount for expenses and taxes from Father’s gross earnings from the sale

       of the homes. This argument is clearly unreasonable. The evidence before the

       trial court was necessarily limited by Father’s lack of disclosure, but Father

       generally testified that he paid taxes on the sale of the properties and had other

       expenses. He claimed total net income on the sale of the three houses of only

       about $45,000.00, and Father had purchased a fourth house that was not yet

       fixed up and ready for resale. The trial court determined that “a reasonable

       estimate” of Father’s net income from flipping the houses was $74,000.00.

       Mother has failed to establish that this determination was clearly erroneous.

[18]   Finally, we address Father’s argument regarding the award of retroactive child

       support. In the order on the parties’ motions to correct error, the trial court

       ordered that “[c]hild support shall be retroactive to the date of filing, October

       18, 2007.” Appellant’s Amended Appendix Vol. 2 at 43. As observed by Father,

       the order failed to indicate how this support, which covered a period of ten

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019   Page 11 of 12
       years, should be calculated and paid. 5 On remand, the trial court shall calculate

       the amount of back support due and set forth a payment plan for the arrearage.

[19]   Judgment affirmed, and case remanded with instructions.

       Kirsch, J. and Vaidik, C.J., concur.

       5
         Father does not challenge the award of child support retroactive to the date of filing. He simply seeks
       clarification from the trial court regarding the amount of this award and how he must pay it.

       Court of Appeals of Indiana | Memorandum Decision 18A-DR-1765 | May 16, 2019                      Page 12 of 12