In the Matter of the Marriage of: Carolyn Burns v. Michael Burns (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: March 14, 2018
• Docket: 34A05-1707-DR-1614
• Status: Published

Opinion

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.

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