Vinita Singh Tyagi v. Vichitra Tyagi, Vijai and Sushma Tyagi

• Court: Indiana Court of Appeals
• Decided: February 18, 2020
• Docket: 19A-DR-607
• Status: Published

Opinion

FILED Feb 18 2020, 5:51 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES Darren A. Craig VIJAI AND SUSHMA TYAGI Emily J. Schmale Thomas A. Whitsitt Frost Brown Todd LLC Whitsitt Nooning & Kruse, P.C. Indianapolis, Indiana Lebanon, Indiana ATTORNEYS FOR APPELLEE VICHITRA TYAGI Michael J. Andreoli Zionsville, Indiana

IN THE COURT OF APPEALS OF INDIANA

Vinita Singh Tyagi, February 18, 2020 Appellant-Petitioner, Court of Appeals Case No. 19A-DR-607 v. Appeal from the Boone Superior Court Vichitra Tyagi, The Honorable Matthew C. Appellee-Respondent; Kincaid, Judge Trial Court Cause No. Vijai and Sushma Tyagi, 06D01-1610-DR-428 Appellees-Intervenors.

Pyle, Judge.

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 1 of 11 Statement of the Case

[1] Vinita Singh Tyagi (“Wife”) appeals the trial court’s order excluding from the

marital estate a company and residence she claims are owned by Vichitra Tyagi

(“Husband”). Wife argues that the trial court erred in finding that Hoosier

Broadband LLC (“HBB”) and a residence located in Zionsville (the “Real

Estate”) are owned by Husband’s parents, Sushma Tyagi (“Sushma”) and Vijai

Tyagi (“Vijai”) (collectively, “Husband’s parents”), and thus are not marital

assets. Concluding that the trial court did not abuse its discretion by finding

that HBB and the Real Estate, which are both titled or owned by Husband’s

parents, are not marital assets and to be excluded from the marital estate, we

affirm the trial court’s judgment.

[2] We affirm.

Issue

Whether the trial abused its discretion when it found that property titled or owned by Husband’s parents were not marital assets.

Facts

[3] Husband and Wife married on September 21, 2007. Wife filed to dissolve the

marriage in October 2016. In September 2017, Husband’s parents, Sushma and

Vijai, filed a motion to intervene in the dissolution proceedings on the grounds

that Sushma owns HBB and Vijai owns the Real Estate. In the motion,

Husband’s parents argued that the dissolution proceedings may “impair or Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 2 of 11 impede [their] ability to protect their interests in their property and their interest

is not adequately represented by existing parties.” (App. Vol. 2 at 17). The trial

court granted the motion to intervene in October 2017.

[4] Husband and Wife then jointly moved to bifurcate the dissolution proceedings

and requested that the trial court determine, apart from the rest of the

proceedings, whether HBB and the Real Estate should be included in the

marital estate as marital assets. The trial court granted the bifurcation and held

the separate hearing in January 2019. At the hearing, the trial court heard

testimony from Wife, Husband, Sushma, Vijai, and a former HBB employee.

[5] Testimony at the hearing revealed that HBB was established in 2004 by

Husband and two non-parties, Matt Campbell and James Hessman

(“Hessman”). Husband prepared the LLC Agreement and was listed as the

“President and Chief Executive Officer” and “Chief Financial Officer and

Secretary[.]” (Vinita’s Ex. F). In 2005, after suffering some financial

difficulties and in an effort to avoid potential conflicts with his then-employer,

Husband transferred his seventy-five percent (75%) ownership interest in HBB

to Sushma. Sushma did not pay Husband to acquire his interest in HBB and

there is no written agreement evidencing the transfer of ownership. Husband

continued his employment at HBB in his previous roles, and he also became the

Chief Technology Officer.

[6] Around the time that Husband and Wife were married in 2007, Wife began

helping Husband with HBB and eventually became HBB’s Chief Operating

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 3 of 11 Officer. As part of her duties, she assisted HBB in obtaining a line of credit

from Chase Bank (“Chase LOC”) in 2008. Wife testified that she first became

aware that HBB was owned by Sushma while assisting with the Chase LOC.

Wife explained that after she and Husband had met with a banker, prepared the

necessary financial documents, and obtained approval for the loan, Husband

informed her that Sushma’s signature would be required because HBB “was

technically under [his] mom’s name.” (Tr. Vol. 2 at 162). After HBB obtained

the Chase LOC, Wife told Husband to ask his mother to have HBB’s ownership

transferred to reflect him as the owner. Husband complied, and Sushma

refused Husband’s request. Subsequent requests to transfer ownership were

also denied, and Sushma testified that she never represented that she would

ever transfer ownership to Husband. As a result, Husband and Wife began

purchasing real estate in India in their names jointly.

[7] Hessman left HBB in 2008 and later filed suit against the company in 2011,

claiming an interest in HBB. Hessman’s claim was settled in 2012 for $75,000.

As a result of the settlement, Sushma acquired 100 percent (100%) of the

ownership interest in HBB, as reflected in subsequent business documents and

tax returns. Wife testified that she was aware of Hessman’s litigation and that

she gave a deposition in connection with the dispute.

[8] Sushma acknowledged that she was not familiar with the financial affairs and

that her son had taken the lead role in that area. She further explained that she

has no control over Husband’s salary stating that, “he just told me. He

decide[s].” (Tr. Vol. 2 at 109). As a result, Husband and Wife have enjoyed all

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 4 of 11 of the financial benefits of HBB. Their salaries varied from year-to-year

depending on HBB’s annual profitability. Sushma and Vijai have reaped no

financial benefits and instead have an “emotional stake” in “seeing [Husband]

succeed and seeing the business succeed as well[.]” (Tr. Vol. 2 at 128).

[9] The testimony also revealed that in 2009, Vijai purchased the Real Estate on the

advice of his son who was looking for a business location and residence.1 In

order to fund the down payment, Vijai contributed $60,000 and borrowed

another $60,000 from Husband. Vijai and Husband did not execute a note to

evidence the contribution by Husband. In 2012, the Real Estate’s mortgage was

refinanced and Vijai contributed $11,000 and borrowed $11,000 from Husband

to put towards the refinance.2 This second contribution by Husband was also

not reduced to writing. Vijai is the only obligor on the mortgage loan, and the

real estate taxes and homeowner insurance for the Real Estate are also in Vijai’s

name. Similar to the ownership of HBB, Wife desired to have the Real Estate

transferred to reflect Husband as the owner. She made several requests to

Husband, who in turn asked his father to convey the Real Estate to him. Vijai

denied the requests and testified that he never represented to Husband or Wife

that he would convey title to the Real Estate to the couple.

1 Testimony revealed that the Real Estate was used primarily as a residence for Wife, Husband, and Husband’s parents. HBB operated out of two rooms, and Vijai received rent from the company in the amount of $4,900 per month, which was sufficient to cover the mortgage, insurance, and taxes. There was no written lease agreement between Vijai and HBB regarding the use of space or the monthly payments. 2 The parties do not dispute that the payments made to Vijai to assist in the purchase and refinance of the Real Estate, totaling $71,000, were loans that remain unpaid and collectively are a marital asset.

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 5 of 11 [10] At the conclusion of the hearing, the parties agreed that they would not make

final oral arguments. Rather, with the trial court’s permission, the parties

submitted post-trial briefs. In Wife’s post-trial brief, she suggested that

Husband fraudulently transferred his interest in HBB to Sushma and argued

that: (1) HBB’s corporate form has been so disregarded that it is appropriate to

consider HBB as Husband’s alter ego; and (2) that HBB is the true owner of the

Real Estate and, therefore, both should be considered marital assets.

Thereafter, the trial court found that “HBB and the Real Estate are not marital

assets and rather are property of [Sushma and Vijai][.]”3 (App. Vol. 2 at 13).

Wife now appeals.

Decision

[11] Wife argues that the trial court erred by finding that HBB and the Real Estate

are not marital assets and excluding them from the marital estate.4 Husband

3 The trial court entered the judgment as a final judgment. 4 Wife also claims that HBB was Husband’s alter ego, and, therefore, the company should be considered a marital asset. In support, she relies on a Nebraska Supreme Court decision that held that “[w]hen a corporation is or becomes the mere alter ego, or business conduit, of a person, it may be disregarded.” Medlock v. Medlock, 642 N.W.2d 113, 124 (Neb. 2002). The Medlock court applied an “alter ego” doctrine to a divorce action in which the husband was the president of a nonprofit religious corporation. The Nebraska court reasoned that equity demanded the inclusion of the nonprofit corporation’s assets in the distribution of the parties’ marital estate. The record showed that the husband made extensive personal use of corporate funds and assets, and he carried on personal dealings in the name of the corporation. Additionally, the husband regularly purchased goods and services in the corporate name for his family’s personal use. In reaching its decision, the Medlock court explained that the parties owned no personal property in their own names because “all property that would ordinarily have been acquired during their 28-year marriage was instead acquired in the name of the [nonprofit].” Id. at 125. There is no dispute that Husband and Wife benefited greatly from Husband’s parents’ extreme generosity. Here, the testimony revealed that Husband and Wife both received an income while working at HBB.

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 6 of 11 counters that the trial court correctly found that HBB and the Real Estate are

owned by Sushma and Vijai and, therefore, not marital assets. We agree with

Husband.

[12] Neither party requested special findings and the court made no findings sua

sponte. In the absence of special findings, we apply a general judgment standard

of review. Perdue Farms, Inc. v. Pryor, 683 N.E.2d 239, 240 (Ind. 1997). Under

this standard, we presume that the court correctly followed the law, and we do

not reweigh the evidence or reassess the credibility of witnesses. Id. We will

affirm if the judgment is “sustainable upon any theory consistent with the

evidence.” Id.

[13] It is well-settled that in a dissolution action, all marital property, whether

owned by either spouse before the marriage, acquired by either spouse after the

marriage and before final separation of the parties, or acquired by their joint

efforts, goes into the marital pot for division. IND. CODE § 31-15-7-4(a);

Falatovics v. Falatovics, 15 N.E.3d 108, 110 (Ind. Ct. App. 2014). For purposes

of dissolution, property means “all the assets of either party or both parties[.]”

I.C. § 31-9-2-98. This “one pot” theory ensures that all assets are subject to the

trial court’s power to divide and award. Hill v. Hill, 863 N.E.2d 456, 460 (Ind.

Significantly, Wife testified that as a result of Sushma’s denials to transfer ownership of HBB to Husband, the couple purchased properties in India in their names jointly. Additionally, testimony indicated that Husband and Wife own a home in Illinois. Unlike in Medlock where there was an inadequate marital estate, here, the evidence reveals otherwise. Thus, we are unpersuaded by Medlock and its analysis.

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 7 of 11 Ct. App. 2007). The division of marital assets, including a determination as to

whether an asset is a marital asset, is within the trial court’s discretion.

Antonacopulos v. Antonacopulos, 753 N.E.2d 759, 760 (Ind. Ct. App. 2001). This

court will reverse the determination of a trial court only if that discretion is

abused. Id. An abuse of discretion occurs when the trial court’s decision is

clearly against the logic and effect of the facts and circumstances before the

court. Id.

[14] Specifically, Wife contends that “[Husband] owns HBB, and HBB in turn owns

the Real Estate” and, therefore, they are both marital assets. (Vinita’s Br. 20).

She directs us to Sovern v. Sovern for the proposition that “[b]are legal title alone

does not eliminate either the property or the investment thereon from being a

part of the marital estate to be considered by the Court in arriving at an

equitable division.” Sovern v. Sovern, 535 N.E.2d 563, 565 (Ind. Ct. App. 1989),

reh’g denied. In Sovern, the property in question consisted of two parcels of real

estate, a marital residence, and an automobile shop. The facts supporting the

judgment reveal that while the husband’s parents held legal title to the parcels,

the husband and wife used marital resources to construct the residence. The

husband and wife also held themselves out as the owners of the residence, the

house was insured in both their names, and the homeowner’s policy did not

reflect an insurable interest held by the parents. The parents, who were not

joined as parties to the dissolution proceeding, did not claim an interest in the

real property and were willing to deed the property to the couple. Based on

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 8 of 11 these facts, this Court affirmed the trial court’s inclusion of the property in the

marital estate because husband and wife had a vested interest in the real estate.

[15] Here, however, Wife does not argue on appeal that she or Husband possess a

vested interest in HBB or the Real Estate. Rather, she argues that HBB and the

Real Estate are divisible marital assets because they are owned by Husband. As

such, the instant case is distinguishable from Sovern. See In re Marriage of Dall,

681 N.E.2d 718, 722 (Ind. Ct. App. 1997) (limiting the Sovern decision to the

specific facts of the case and concluding that “an equitable interest in real

property titled in a third-party, although claimed by one or both of the divorcing

parties, should not be included in the marital estate.”); see also Vadas v. Vadas,

762 N.E.2d 1234, 1236 (Ind. 2002) (distinguishing Sovern and Dall and

concluding that “[t]he holding of Dall promotes predictability, consistency and

efficiency by excluding ‘remote and speculative’ interests from the marital

estate.”).

[16] Our review of the evidence reveals that Sushma and Vijai intervened in the

dissolution proceeding to assert their respective ownership interests in HBB and

the Real Estate. Testimony at the hearing revealed that HBB was established in

2004. Sushma acquired Husband’s interest in the company in 2005, which was

two years prior to Husband and Wife’s marriage in 2007. Following the

settlement of Hessman’s lawsuit in 2012, Sushma then acquired 100 percent

ownership of the company, which is reflected in the company’s business and

tax documents. In addition, Wife acknowledged that she had asked Husband

to persuade his mother to transfer ownership of HBB to him, which Sushma

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 9 of 11 denied. Given the evidence before the trial court, it found that HBB was owned

by Sushma.

[17] Similarly, Vijai acquired the Real Estate, which was deeded in his name only,

in August 2009. Vijai paid the mortgage, real estate taxes, and homeowner

insurance, which were also in his name. Moreover, Wife testified that she did

not know of anything evidencing that Husband had an ownership interest in the

Real Estate. This was confirmed by Vijai who testified that he never

represented that he would convey title of the Real Estate to Husband.

[18] Accordingly, Wife has failed to show that Husband owns HBB and the Real

Estate. Thus, we conclude that the trial court did not abuse its discretion in

finding that HBB and the Real Estate are owned by Susma and Vijai and,

therefore, were not marital assets. See Estudillo v. Estudillo, 956 N.E.2d 1084,

1091 (Ind. Ct. App. 2011) (“[A] trial court may not distribute property not

owned by the parties.”), reh’g denied; see also Nicevski v. Nicevski, 909 N.E.2d 446,

449 (Ind. Ct. App. 2009) (trial court erred in including marital home in marital

estate where husband and wife lived in marital home legally titled to husband’s

parents, husband and wife disputed origin of money used to purchase the home,

and husband’s parents were not joined as necessary nonparties), trans. denied.

Accordingly, we affirm the trial court’s judgment.5

5 To the extent that Wife argues that the trial court failed to void the 2005 fraudulent transfer of Husband’s interest in HBB to Sushma, we conclude that Wife has waived appellate review of this argument. As we

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 10 of 11 [19] Affirmed.

Robb, J., and Mathias, J., concur.

have previously explained, any grounds not raised in the trial court are not available on appeal. Grace v. State, 731 N.E.2d 442, 444 (Ind. 2000), reh’g denied. Below, Wife did not argue that the 2005 transfer of Husband’s interest was fraudulent. While she made a passing reference in the post-trial brief that “[t]he case at hand reflects a fraudulent transfer of interest[,]” she did not further develop the argument. (App. Vol. 2 at 102). For these reasons, we find her argument on appeal to be waived. See Showalter v. Town of Thorntown, 902 N.E.2d 338, 342 (Ind. Ct. App. 2009) (explaining that “[t]he rule of waiver in part protects the integrity of the trial court; it cannot be found to have erred as to an issue or arguments that it never had an opportunity to consider. Conversely, an intermediate court of appeals, for the most part, is not the forum for the initial decisions in a case.”), trans. denied. Waiver notwithstanding, Wife’s claim fails. Her reliance on Coak v. Rebber is misplaced. 425 N.E.2d 197 (Ind. Ct. App. 1981), reh’g denied. She contends that the Coak court “confirmed [that] there are circumstances in the divorce context that an Indiana court may disregard the function of [the corporation] as being a legal entity and conclude, in order to prevent fraud and injustice, that such a separate legal entity did not exist.” (Vinita’s Br. 16). (quotation and citation omitted) (emphasis added). However, in Coak, Coak’s former wife filed a garnishment action against Coak to collect “arrearages in support payment for the care of the couple’s six children.” Coak, 425 N.E.2d at 198. In that proceeding, the former wife challenged a transfer of stock Coak had made to his present wife. Importantly, this Court noted that the transfer was fraudulent because Coak’s former wife was a creditor at the time of transfer. Here, the transfer of ownership interest occurred two years before Husband and Wife married, and she has not alleged that she was a creditor at the time of transfer.

Court of Appeals of Indiana | Opinion 19A-DR-607 | February 18, 2020 Page 11 of 11