MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), FILED this Memorandum Decision shall not be Apr 30 2020, 5:41 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 George P. Galanos Daniel J. Zlatic Crown Point, Indiana Rubino, Ruman, Crosmer & Polen, LLC Dyer, Indiana
IN THE COURT OF APPEALS OF INDIANA
Matthew Dallman, April 30, 2020 Appellant-Respondent, Court of Appeals Case No. 19A-DR-2115 v. Appeal from the Lake Circuit Court Eunjin Choi, The Honorable Marissa Appellee-Petitioner. McDermott, Judge Trial Court Cause No. 45C01-1602-DR-130
Pyle, Judge.
Statement of the Case [1] Matthew Dallman (“Husband”) appeals the trial court’s order concluding that
the decree dissolving his marriage to Eunjin Choi (“Wife”) did not create a
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 1 of 10 constructive trust in favor of Husband. Finding no error, we affirm the trial
court’s judgment.
[2] We affirm.
Issue Whether the trial court’s determination that the final dissolution decree did not create a constructive trust in favor of Husband is clearly erroneous.
Facts [3] Husband and Wife were married in July 2013 and have one child, who was
born in August 2014. During the course of the parties’ marriage, Wife filed a
sexual harassment lawsuit against a co-worker. In December 2015, Wife
entered into a confidential settlement agreement in the lawsuit. Pursuant to the
terms of the agreement, Wife was awarded $40,000 in settlement proceeds.
Wife received a $20,000 payment in December 2015 and used $18,000 to make
a payment on student loans that she had taken out before the marriage. Wife
filed a dissolution petition in February 2016 and used the remaining $2,000
from the first settlement payment to make an attorney fee deposit for the
dissolution. Wife received the second $20,000 payment after she had filed the
dissolution petition.
[4] In April and May 2018, Magistrate Lisa Berdine (“Magistrate Berdine”), in the
court of Judge Marissa McDermott (“Judge McDermott”), presided over a six-
day dissolution hearing and took the matter under advisement. In December
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 2 of 10 2018, Wife filed a praecipe requesting that the case be transferred to the Indiana
Supreme Court for the appointment of a special judge pursuant to Trial Rule
53.2 because the case had been under advisement for more than ninety days.
While the Indiana Supreme Court was considering Wife’s praecipe, Magistrate
Berdine issued a 68-page dissolution order in January 2019. Judge McDermott
also signed the dissolution order.
[5] A few days later, the Indiana Supreme issued an order on Wife’s praecipe. In
its order, the Indiana Supreme Court noted that “[f]ailing for over seven
months to render a decision in this case [was] unacceptable.” (App. Vol. 2 at
49). However, pointing out that Magistrate Berdine had recently issued the
dissolution order, the Indiana Supreme Court further noted that appointing a
special judge would only result in further delay. The Indiana Supreme Court
remanded the case to “the Lake Circuit Court and Judge McDermott.” (App.
Vol. 2 at 49).
[6] Although Wife had argued that the settlement proceeds from her sexual
harassment settlement should not be considered as part of the marital pot, the
January 2019 dissolution order provided in relevant part as follows:
41. The total marital estate, minus the settlement proceeds, is Ninety Three Thousand One Hundred Fifty-Five and 36/100 Dollars ($93,155.36). [Husband’s] fifty-five percent (55%) interest totals Fifty One Thousand Two Hundred[] Thirty-Five and 45/100 Dollars ($51,235.45). [Husband] has received assets totaling Eleven Thousand One Hundred Forty-Six and 98/100 Dollars (11,146.98), leaving a balance owed to [Husband] in the amount of Forty Thousand Eighty-Eight and 47/100 Dollars
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 3 of 10 ($40,088.47). [Husband] shall have judgment against [Wife] for said amount. [Wife] shall pay [Husband] the amount of Nine Thousand and 00/100 Dollars ($9,000) from the settlement proceeds being held by [Wife], within seven days of the date of the Decree. . . . [Wife] shall pay the remainder to [Husband] at the rate of Five Hundred and 00/100 Dollars ($500.00) per month, until this judgment is paid in full, beginning February 1, 2019 and payable on the first of each month thereafter.
42. [Husband] shall receive a fifty-five percent (55%) interest in [Wife’s] first settlement check totaling Twenty Thousand and 00/100 Dollars ($20,000). [Wife] shall pay [Husband] his fifty-five percent (55%) interest, Eleven Thousand and 00/100 Dollars ($11,000.00), from the monies [Wife] is holding from her second settlement distribution, within seven (7) days of the date of this Decree.
(App. Vol. 2 at 118-19).
[7] In early February 2019, Wife filed a notice of appeal in this Court. Two weeks
later, she filed a voluntary Chapter 13 bankruptcy petition in the bankruptcy
court and a motion to dismiss the appeal in this Court. We granted Wife’s
motion to dismiss the appeal with prejudice. In the bankruptcy court petition,
Wife named Husband as one of many non-priority unsecured creditors. One
month later, in March 2019, Wife filed a proposed Chapter 13 payment plan in
the bankruptcy court.
[8] Husband immediately filed in Wife’s bankruptcy case a motion for relief from
the stay and an objection to Wife’s proposed plan. Husband argued that he was
not a non-priority unsecured creditor because the dissolution decree had created
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 4 of 10 a constructive trust, which is not dischargeable in bankruptcy.1 In September
2019, the bankruptcy court modified that automatic stay “to the full extent
necessary for [Husband] and [Wife] to litigate on the merits . . . the discrete
issue of whether the Lake Circuit Court granted [Husband] a constructive trust
pursuant to same decree.” (App. Vol. 2 at 35).
[9] Thereafter, Father filed a motion requesting the trial court to schedule a hearing
to determine whether the dissolution decree had created a constructive trust in
his favor. He also requested that Magistrate Berdine hear and decide the
matter.
[10] Judge McDermott scheduled an August 2019 hearing. At the beginning of the
hearing, with Judge McDermott presiding, Husband pointed out that he had
asked for Magistrate Berdine to both hear and decide the matter. Judge
McDermott responded that the Indiana Supreme Court had remanded the case
to her and that she would be deciding it.
[11] Following a brief hearing, Judge McDermott issued an order concluding that
the dissolution decree had not created a constructive trust in favor of Husband.
Rather, according to Judge McDermott, the “final decree . . . [was] no different
than any other divorce decree in that it decided what should be part of the
1 See In re Lucas, 300 B.R. 526, 533 (B.A.P. 10th Cir. 2003) (explaining that property that a debtor holds in a constructive trust for another is not part of the debtor’s bankruptcy estate).
Free access — add to your briefcase to read the full text and ask questions with AI
MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), FILED this Memorandum Decision shall not be Apr 30 2020, 5:41 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 George P. Galanos Daniel J. Zlatic Crown Point, Indiana Rubino, Ruman, Crosmer & Polen, LLC Dyer, Indiana
IN THE COURT OF APPEALS OF INDIANA
Matthew Dallman, April 30, 2020 Appellant-Respondent, Court of Appeals Case No. 19A-DR-2115 v. Appeal from the Lake Circuit Court Eunjin Choi, The Honorable Marissa Appellee-Petitioner. McDermott, Judge Trial Court Cause No. 45C01-1602-DR-130
Pyle, Judge.
Statement of the Case [1] Matthew Dallman (“Husband”) appeals the trial court’s order concluding that
the decree dissolving his marriage to Eunjin Choi (“Wife”) did not create a
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 1 of 10 constructive trust in favor of Husband. Finding no error, we affirm the trial
court’s judgment.
[2] We affirm.
Issue Whether the trial court’s determination that the final dissolution decree did not create a constructive trust in favor of Husband is clearly erroneous.
Facts [3] Husband and Wife were married in July 2013 and have one child, who was
born in August 2014. During the course of the parties’ marriage, Wife filed a
sexual harassment lawsuit against a co-worker. In December 2015, Wife
entered into a confidential settlement agreement in the lawsuit. Pursuant to the
terms of the agreement, Wife was awarded $40,000 in settlement proceeds.
Wife received a $20,000 payment in December 2015 and used $18,000 to make
a payment on student loans that she had taken out before the marriage. Wife
filed a dissolution petition in February 2016 and used the remaining $2,000
from the first settlement payment to make an attorney fee deposit for the
dissolution. Wife received the second $20,000 payment after she had filed the
dissolution petition.
[4] In April and May 2018, Magistrate Lisa Berdine (“Magistrate Berdine”), in the
court of Judge Marissa McDermott (“Judge McDermott”), presided over a six-
day dissolution hearing and took the matter under advisement. In December
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 2 of 10 2018, Wife filed a praecipe requesting that the case be transferred to the Indiana
Supreme Court for the appointment of a special judge pursuant to Trial Rule
53.2 because the case had been under advisement for more than ninety days.
While the Indiana Supreme Court was considering Wife’s praecipe, Magistrate
Berdine issued a 68-page dissolution order in January 2019. Judge McDermott
also signed the dissolution order.
[5] A few days later, the Indiana Supreme issued an order on Wife’s praecipe. In
its order, the Indiana Supreme Court noted that “[f]ailing for over seven
months to render a decision in this case [was] unacceptable.” (App. Vol. 2 at
49). However, pointing out that Magistrate Berdine had recently issued the
dissolution order, the Indiana Supreme Court further noted that appointing a
special judge would only result in further delay. The Indiana Supreme Court
remanded the case to “the Lake Circuit Court and Judge McDermott.” (App.
Vol. 2 at 49).
[6] Although Wife had argued that the settlement proceeds from her sexual
harassment settlement should not be considered as part of the marital pot, the
January 2019 dissolution order provided in relevant part as follows:
41. The total marital estate, minus the settlement proceeds, is Ninety Three Thousand One Hundred Fifty-Five and 36/100 Dollars ($93,155.36). [Husband’s] fifty-five percent (55%) interest totals Fifty One Thousand Two Hundred[] Thirty-Five and 45/100 Dollars ($51,235.45). [Husband] has received assets totaling Eleven Thousand One Hundred Forty-Six and 98/100 Dollars (11,146.98), leaving a balance owed to [Husband] in the amount of Forty Thousand Eighty-Eight and 47/100 Dollars
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 3 of 10 ($40,088.47). [Husband] shall have judgment against [Wife] for said amount. [Wife] shall pay [Husband] the amount of Nine Thousand and 00/100 Dollars ($9,000) from the settlement proceeds being held by [Wife], within seven days of the date of the Decree. . . . [Wife] shall pay the remainder to [Husband] at the rate of Five Hundred and 00/100 Dollars ($500.00) per month, until this judgment is paid in full, beginning February 1, 2019 and payable on the first of each month thereafter.
42. [Husband] shall receive a fifty-five percent (55%) interest in [Wife’s] first settlement check totaling Twenty Thousand and 00/100 Dollars ($20,000). [Wife] shall pay [Husband] his fifty-five percent (55%) interest, Eleven Thousand and 00/100 Dollars ($11,000.00), from the monies [Wife] is holding from her second settlement distribution, within seven (7) days of the date of this Decree.
(App. Vol. 2 at 118-19).
[7] In early February 2019, Wife filed a notice of appeal in this Court. Two weeks
later, she filed a voluntary Chapter 13 bankruptcy petition in the bankruptcy
court and a motion to dismiss the appeal in this Court. We granted Wife’s
motion to dismiss the appeal with prejudice. In the bankruptcy court petition,
Wife named Husband as one of many non-priority unsecured creditors. One
month later, in March 2019, Wife filed a proposed Chapter 13 payment plan in
the bankruptcy court.
[8] Husband immediately filed in Wife’s bankruptcy case a motion for relief from
the stay and an objection to Wife’s proposed plan. Husband argued that he was
not a non-priority unsecured creditor because the dissolution decree had created
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 4 of 10 a constructive trust, which is not dischargeable in bankruptcy.1 In September
2019, the bankruptcy court modified that automatic stay “to the full extent
necessary for [Husband] and [Wife] to litigate on the merits . . . the discrete
issue of whether the Lake Circuit Court granted [Husband] a constructive trust
pursuant to same decree.” (App. Vol. 2 at 35).
[9] Thereafter, Father filed a motion requesting the trial court to schedule a hearing
to determine whether the dissolution decree had created a constructive trust in
his favor. He also requested that Magistrate Berdine hear and decide the
matter.
[10] Judge McDermott scheduled an August 2019 hearing. At the beginning of the
hearing, with Judge McDermott presiding, Husband pointed out that he had
asked for Magistrate Berdine to both hear and decide the matter. Judge
McDermott responded that the Indiana Supreme Court had remanded the case
to her and that she would be deciding it.
[11] Following a brief hearing, Judge McDermott issued an order concluding that
the dissolution decree had not created a constructive trust in favor of Husband.
Rather, according to Judge McDermott, the “final decree . . . [was] no different
than any other divorce decree in that it decided what should be part of the
1 See In re Lucas, 300 B.R. 526, 533 (B.A.P. 10th Cir. 2003) (explaining that property that a debtor holds in a constructive trust for another is not part of the debtor’s bankruptcy estate).
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 5 of 10 marital estate and then divided that estate as the court deemed equitable.”
(App. Vol. 2 at 21).
[12] Husband now appeals the trial court’s order.
Decision [13] As a preliminary procedural matter, we note that Father contends that the trial
court erroneously denied his request for Magistrate Berdine to “preside over the
. . . hearing regarding the discrete issue of whether the Final Decree created the
equitable remedy of a constructive trust in favor of [Husband].” (Husband’s Br.
17). However, Judge McDermott explained that the Indiana Supreme Court
had remanded the case to her. Notwithstanding Husband’s argument that
Judge McDermott misinterpreted the Indiana Supreme Court’s order, that
Court has previously explained that the presiding judge retains control of the
proceedings although a magistrate may assist. Williams v. State, 724 N.E.2d
1070, 1087 (Ind. 2000), reh’g denied, cert. denied. Here, Judge McDermott
retained control over the proceedings and had the authority to deny Husband’s
request that Magistrate Berdine hear and decide the case. We find no error.
[14] We now turn to the substantive issue in this case. Husband argues that the trial
court erred when it determined that the final dissolution decree did not create a
constructive trust in his favor. Specifically, Husband contends that “[s]ince
Wife held Husband’s portion of the marital estate awarded to Husband and
willfully and wrongly failed to turn over and pay said portion to Husband, Wife
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 6 of 10 held said portion in a constructive trust for the benefit of Husband.”
(Husband’s Br. at 18).
[15] Our standard of review is well-settled where, as here, the trial court sua sponte
entered findings of fact and conclusions thereon. Sua sponte findings and
conclusions control only as to the issues they cover, and a general judgment
standard applies to any issue upon which the court has not found. Nelson v.
Marchand, 691 N.E.2d 1264, 1267 (Ind. Ct. App. 1998). In reviewing findings
and conclusions, we first determine whether the evidence supports the findings
and then whether findings support the judgment. K.I. ex rel. J.I. v. J.H., 903
N.E.2d 453, 457 (Ind. 2009). We will not set aside the judgment unless it is
clearly erroneous. Id. A judgment is clearly erroneous when there is no
evidence supporting the findings or the findings fail to support the judgment.
Id. A judgment is also clearly erroneous when the trial court applies the wrong
legal standard to properly found facts. Id.
[16] “A constructive trust is a creature of equity, devised to do justice by making
equitable remedies available against one who through fraud or other wrongful
means acquires property of another.” Kalwitz v. Estate of Kalwitz, 822 N.E.2d
274, 280 (Ind. Ct. App. 2005), trans. denied. The Indiana Supreme Court has
further explained as follows:
A constructive trust is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. The duty to convey the property may rise because it was acquired through fraud, duress, undue influence
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 7 of 10 or mistake, or through a breach of a fiduciary duty, or through the wrongful disposition of another’s property. The basis of the constructive trust is the unjust enrichment which would result if the person having the property was permitted to retain it.
Id. (quoting Melloh v. Gladis, 261 Ind. 647, 656, 309 N.E.2d 433, 438-39 (1974)
(citing 5 SCOTT ON TRUSTS § 404.2). A constructive trust is more in the nature
of an equitable remedy than an independent cause of action. Kalwitz, 822
N.E.2d at 280. Further, the law is firmly established that fraud, either actual or
constructive, is a prerequisite to the imposition of a constructive trust. Id.
(Emphasis added).
[17] Here, in support of his argument that the final dissolution decree created a
constructive trust in his favor, Husband directs us to Leever v. Leever, 919 N.E.2d
118 (Ind. Ct. App. 2009). There, Verna and Don Leever (“Parents”) executed a
quitclaim deed of their home to their son, Doug (“Doug”), and his wife, Lisa
(“Lisa”), in 1999. Parents executed the quitclaim deed so that if Parents had to
go to a nursing home, Parents “would be able to get Medicaid while, at the
same time, the property would remain in the family.” Id. at 123. Despite
signing the quitclaim deed, Parents, who had lived in the house for fifty-one
years, continued to pay the mortgage, utilities, homeowner’s insurance, and
real estate taxes. Parents also made all home maintenance decisions.
[18] In 2007, Lisa filed a dissolution petition. At the hearing on the petition, Lisa
testified that it was her understanding that Parents had gifted their house to her
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 8 of 10 and Doug and that it was a marital asset. Doug testified that he considered the
house to belong to his parents and that it should not be taken away from them.
[19] Following the hearing, the trial court concluded that it would be an injustice to
allow Lisa or Doug to take a portion of the real estate when they had not taken
a portion before their separation. Instead, the trial court ordered Doug to take
the residence subject to a constructive trust in favor of his parents.
[20] Lisa appealed, and this Court pointed out that when Lisa requested the trial
court to include the home in the marital estate and divide it between her and
Doug, Lisa had violated her oral promise to Parents to keep the home as a safe
place for them to live. Id. at 123. This Court further concluded that “to allow
Lisa and Doug to dispossess [Parents] of their home would be to permit them to
be unjustly enriched by the sale price or rents and profits accruing during the
remainder of [Parents’] life, to which they are not entitled.” Id. at 124.
Accordingly, we affirmed the trial court’s creation of a constructive trust to
safeguard Parents’ interests. Id.
[21] Here, we agree with Wife that Husband’s reliance on Leever is misplaced
because “[n]one of the elements in Leever, essential to the creation of a
constructive trust, are present here.” (Wife’s Br. 24). First, Husband did not
convey the disputed funds to Wife. Rather, Wife received the funds in a
settlement of her sexual harassment claim against a party unrelated to this case.
Further, Wife neither induced Husband, through a promise, to place himself in
a worse position than he would have been absent such a promise, nor would be
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 9 of 10 unjustly enriched by the disputed funds because she will not be keeping them.
In addition, Husband has failed to show that the funds were acquired through
fraud, duress, undue influence or mistake, or through the breach of a fiduciary
duty or the wrongful disposition of another’s property. The trial court did not
err when it determined that the dissolution decree did not create a constructive
trust in favor of Husband.
[22] We further note that the trial court properly pointed out that this “final decree .
. . [was] no different than any other divorce decree in that it decided what
should be part of the marital estate and then divided that estate as the court
deemed equitable.” (App. Vol. 2 at 21). The law is well-settled that a property
settlement in a dissolution decree is dischargeable in bankruptcy.2 Cowart v.
White, 711 N.E.2d 523, 528 (Ind. 1999), clarified on reh’g, 716 N.E.2d 401 (Ind.
1999) (citing 4 GOLDSTEIN ET AL., COLLIER ON BANKRUPTCY ¶ 523.11[6][c]
(15th ed.1996). We find no error here.
[23] Affirmed.
May, J., and Crone, J., concur.
2 On the other hand, obligations to support a former spouse or child in connection with a dissolution decree are not dischargeable in bankruptcy. See Bean v. Bean, 902 N.E.2d 256 (Ind. Ct. App. 2009) (and authority cited therein). However, Husband makes no argument that the funds that he seeks to place in a constructive trust are in the nature of support. Even if he had, this argument would fail as well since the dissolution decree clearly states that these funds were distributed as part of the marital estate.
Court of Appeals of Indiana | Memorandum Decision 19A-DR-2115 | April 30, 2020 Page 10 of 10