Tim Johnson v. Julie Johnson (mem. dec.)

MEMORANDUM DECISION FILED
Apr 13 2016, 6:04 am

Pursuant to Ind. Appellate Rule 65(D), this CLERK
Memorandum Decision shall not be regarded as Indiana Supreme Court
Court of Appeals
precedent or cited before any court except for the and Tax Court

purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Nicole A. Zelin R. Scott Hayes
Pritzke & Davis, LLP Hayes Copenhaver Crider Harvey LLP
Greenfield, Indiana New Castle, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Tim Johnson, April 13, 2016

Appellant-Respondent, Court of Appeals Case No.
33A04-1508-DR-1007
v. Appeal from the Henry Circuit
Court.
The Honorable Kit C. Dean Crane,
Julie Johnson, Judge.
Appellee-Petitioner. Cause No. 33C02-1404-DR-59

Friedlander, Judge

[1] Tim Johnson appeals the trial court’s distribution of marital assets between him

and Julie Johnson. Tim claims the court’s distribution is unreasonable. Under

the circumstances of this case, the court’s split of marital assets in favor of Julie

is supported by statute and precedent, and we affirm.

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[2] Tim and Julie married in 1998. It was a second marriage for both of them, and

they both had children from prior relationships. Tim and Julie did not have any

children together.

[3] Before they married, Tim moved into Julie’s house (“the marital home”), which

she had purchased in 1996, subject to a mortgage, during a prior marriage.

Julie and her then-husband had made a down payment on the marital home

using the equity from the sale of a prior house. Julie and her then-husband had

purchased the prior house using a $10,000 gift from Julie’s parents, among

other sources of funds. In addition, Julie later received an inheritance of

$36,741. She used that money to expand the property on which the marital

home was located.

[4] Tim and Julie both brought debt to the marriage. Julie owed her prior husband

his share of the equity in the marital home, and Tim owed his father money and

had credit card debt. Tim and Julie paid off all of those debts during their

marriage. They both worked outside the home. In addition, they had a joint

bank account, and Tim managed their money. Both of them contributed to

paying the mortgage during the marriage.

[5] In May 2012, Tim was charged in Henry County with molesting Julie’s

daughter. Tim and Julie separated at that time. In August 2013, prior to his

criminal trial, Tim used marital funds to purchase a fifth-wheel trailer for

$10,633. He hooked it up to a truck he had purchased during the marriage, put

most of his personal items in the trailer, and left the state for Florida.

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[6] Before he left Indiana, Tim took $1,400 out of a savings account he shared with

Julie. He did not have her permission to make the withdrawal. In addition,

while Tim was passing through Tennessee on his way to Florida, he accessed a

line of credit that was secured by the marital home and withdrew $30,000

without Julie’s knowledge or permission. Tim acknowledged he and Julie were

jointly responsible for the line of credit, and if he could not pay, then she would

be responsible for repaying the funds as well as making payments on their

mortgage. Once Julie discovered Tim had drawn funds from the line of credit,

she began to repay it while also making payments on the first mortgage. She

expects to be able to pay off the line of credit in 2029, but she does not think she

will be able to pay off the mortgage by herself in her lifetime.

[7] Tim did not return to Indiana for his criminal trial and was tried in absentia.

During this process, he was arrested in Florida. At that time, he transferred the

titles for the truck and fifth-wheel trailer to his mother, who lived in Florida. In

addition, Tim transferred to his daughter from a prior relationship the title for a

camper that belonged to him and Julie.

[8] Eventually, $18,000 of the $30,000 Tim withdrew from the line of credit was

placed in his attorney’s trust account. Tim spent the rest on truck repairs and

living expenses in Florida.

[9] Julie filed a petition for dissolution while Tim’s criminal case was pending.

The parties jointly asked the trial court to issue a decree of dissolution of their

marriage, reserving the division of the marital estate until later. On March 12,

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 2015, the court granted the request, dissolving the marriage but deferring a

ruling on the distribution of marital assets.

[10] Next, the trial court held an evidentiary hearing. At the time of the hearing,

Tim was incarcerated in the Indiana Department of Correction, serving a

seventy-year sentence. He has a job, at which he earns twenty-five cents per

hour or forty-three dollars per month. Some of his pay goes to pay for re-entry

services, shoes, and some clothes. In addition, Tim would be required to

contribute some of his pay for health care if necessary. Tim conceded he has no

way to repay the $12,000 he spent from the $30,000 line of credit and cannot

assist with the mortgage on the marital home.

[11] After the hearing, the trial court issued findings of fact and conclusions thereon.

The court determined the facts justified an unequal division of marital property.

Among other considerations, the court noted Tim’s “transfer of the trailer, the

Chevrolet Silverado, the pop up camper and the creation of a $30,000 debt in

order to receive $30,000 cash, which Julie gets no benefit from, constitutes

ample evidence of dissipation.” Appellant’s App. p. 12.

[12] The court granted Julie the marital residence subject to all debt, her retirement

accounts, and two older, high-mileage vehicles. The court granted Tim certain

items of personal property, as well as the $1,400 he withdrew from the savings

account and the $30,000 he took from the line of credit. As for the $18,000 that

was in Tim’s attorney’s trust account, the court directed that it be used to pay

Tim’s attorney’s fees, with any remainder to be deposited in his prison

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 commissary account. The division amounted to a sixteen percent share of the

marital estate for Tim and an eighty-four percent share of the marital estate for

Julie. The court concluded, “In effect, Julie is only receiving her home,

acquired by her before her marriage, now subject to a substantially higher debt,

her personal property, two cars that are over 10 years old with high miles, and

the right to receive her pension and 401-K someday.” Id. at 15. This appeal

followed.

[13] Tim claims the trial court erred in its division of marital assets, asserting he is

entitled to half of the marital estate rather than sixteen percent. When a trial

court divides marital assets, it must start by presuming “an equal division of the

marital property between the parties is just and reasonable.” Ind. Code § 31-15-

7-5 (West, Westlaw 1997). A party may rebut the presumption that an equal

division is just and reasonable by presenting relevant evidence concerning the

following factors:

(1) The contribution of each spouse to the acquisition of the
property, regardless of whether the contribution was income
producing.
(2) The extent to which the property was acquired by each
spouse:
(A) before the marriage; or
(B) through inheritance or gift.
(3) The economic circumstances of each spouse at the time the
disposition of the property is to become effective, including the
desirability of awarding the family residence or the right to dwell
in the family residence for such periods as the court considers just
to the spouse having custody of any children.

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 (4) The conduct of the parties during the marriage as related to
the disposition or dissipation of their property.
(5) The earnings or earning ability of the parties as related to:
(A) a final division of property; and
(B) a final determination of the property rights of the parties.

Id.

[14] The division of marital assets is a matter for the trial court’s discretion, and we

will reverse only for an abuse of discretion. In re Marriage of Perez, 7 N.E.3d

1009 (Ind. Ct. App. 2014). We consider only the evidence most favorable to

the trial court’s disposition of the property, without reweighing the evidence or

assessing the credibility of witnesses. Webb v. Schleutker, 891 N.E.2d 1144 (Ind.

Ct. App. 2008). A party challenging the trial court’s division of marital

property must overcome a strong presumption that the court considered and

complied with Indiana Code section 31-15-7-5. Id. That presumption is one of

the strongest presumptions applicable to our consideration on appeal. Id.

[15] Tim claims the trial court abused its discretion in concluding he dissipated

marital assets, thereby justifying an unequal division of the marital estate.

Specifically, Tim asserts that buying a trailer, withdrawing money from the line

of credit, and moving to Florida did not amount to dissipation of marital assets.

[16] Dissipation is the frivolous or unjustified expenditure of marital assets.

Goodman v. Goodman, 754 N.E.2d 595 (Ind. Ct. App. 2001). Factors to consider

in determining whether dissipation has occurred include:

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 1. Whether the expenditure benefited the marriage or was made
for a purpose entirely unrelated to the marriage;
2. The timing of the transaction;
3. Whether the expenditure was excessive or de minimis; and
4. Whether the dissipating party intended to hide, deplete, or
divert the marital asset.
Id.

[17] In this case, after Tim had been criminally charged, he left his job. Tr. p. 32.

While his criminal case was pending and he was separated from Julie, he

purchased a fifth-wheel trailer for $10,633, hitched it to a truck he had

purchased during the parties’ marriage, and left the state with most of his

personal property. He also transferred the title of a pop-up camper to his

daughter from a previous relationship. Tim took these marital assets for his

own use without discussing the matter with Julie. When Tim was arrested in

Florida, he signed the titles for the truck and trailer over to his mother, who

also lived in Florida. There is no explanation as to why he could not have

arranged to have those marital assets returned to Julie. Instead, one may

reasonably infer Tim was attempting to keep the truck and trailer in Florida and

out of Julie’s possession.

[18] In addition, Tim took $1,400 from the parties’ savings and withdrew $30,000

from a line of credit secured by the marital home. He did not consult with Julie

about these withdrawals, much less seek her agreement. These transactions did

not benefit the marital estate and instead amounted to a diversion of marital

assets for Tim’s sole benefit. Even worse, Tim’s act of drawing on the line of

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 credit for his own use burdened the marital estate’s primary asset, the marital

home, with additional debt. Tim knew that without his assistance, Julie would

be responsible for repaying the line of credit and the mortgage on the marital

estate, but he absconded with the funds anyway. During his time in Florida he

had no income, stating “I was done working.” Id. at 29. Tim was only in his

late forties at the time. He used $12,000 of the money for living expenses and

appeared to have no intent of paying Julie back.

[19] This evidence amply demonstrates Tim expended marital assets without

justification, and the trial court did not abuse its discretion in concluding he

dissipated marital assets. See Newby v. Newby, 734 N.E.2d 663 (Ind. Ct. App.

2000) (no error in finding dissipation of marital assets where spouse converted

funds from a joint account for personal use).

[20] In a related argument, Tim claims the trial court’s award of the marital home

and Julie’s retirement accounts to Julie was disproportionate to the amount of

marital assets he dissipated. We disagree. Tim fails to note that in awarding

the marital home to Julie, the court required her to take on all of the pending

debt as well. Although Tim is incarcerated, the court could have assigned a

portion of the debt to him in the event he obtained a reduction in his sentence

or was otherwise released from prison early. Next, Tim also fails to note he has

hindered Julie’s ability to retire by depriving the marriage of his income and by

burdening the marital home with an additional $30,000 in debt from the line of

credit. Julie testified she will pay off the line of credit by 2029, but she does not

think she will be able to pay off the mortgage in her lifetime and will not be able

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 to retire. Under these circumstances, which are the result of Tim’s dissipation

of marital assets, the trial court acted within its discretion in awarding Julie a

far greater share of the marital estate.

[21] Next, Tim argues the trial court gave Julie undue credit for the $10,000 gift she

received from her parents to buy her prior house and the inheritance of $36,541,

which she used to expand the property on which the marital home was located.

He asserts these factors must be balanced against his payment of the mortgage

during the marriage, his contribution to paying Julie’s prior husband for his

share of equity in the marital home, and his work on the marital home,

including constructing a patio and other permanent improvements.

[22] We disagree with Tim’s view of the evidence. Viewing the facts in the light

most favorable to the judgment, he and Julie both contributed to mortgage

payments after they were married. Tr. p. 66. Further, Tim contributed to

paying Julie’s prior husband, but he also brought debt to the marriage, which

Tim and Julie paid off together. Tim did not attempt to quantify the value of

his work on the marital home.

[23] In addition, the factors Tim offers are further outweighed by his unilateral and

secret decision to take out $30,000 from the line of credit, secured by the marital

home, after separating from Julie. He burdened the marital home with

additional debt for his own personal purposes. The trial court was entitled to

determine that Julie’s contributions to the marital home from her parents’ gift

and her inheritance, plus Tim’s burdening of the marital home for selfish

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 purposes, outweighed his contributions to the home. Tim’s argument amounts

to a request to reweigh the evidence, which we cannot do. See Estudillo v.

Estudillo, 956 N.E.2d 1084 (Ind. Ct. App. 2011) (no abuse of discretion in

unequal division of marital assets where husband transferred marital property to

third parties immediately prior to separating from wife and admitted he did so

to hide assets).

[24] In the alternative, Tim claims even if Julie was entitled to credit for the gift and

inheritance that she used for the marital estate, the court should have awarded

Julie only the improved equity in the residence rather than the residence and

her retirement accounts. Tim does not cite any authority to support this

argument, so it is waived. See McKibben v. Hughes, 23 N.E.3d 819 (Ind. Ct.

App. 2014) (failure to support claim with citation to authority results in waiver),

trans. denied. Waiver notwithstanding, the trial court awarded Julie the good

with the bad: she gets the marital home, but she is solely responsible for the

related debts, including the extra $30,000 unilaterally incurred by Tim.

[25] Finally, Tim argues the trial court improperly considered his lengthy prison

sentence in dividing the assets, claiming the court “sought to punish [him] for

his criminal acts and such punishment was already dispensed to [him] in his

criminal case.” Appellant’s Br. p. 6. We disagree. When a court considers an

unequal division of the marital estate, Indiana Code section 31-15-7-5 requires

the trial court to take into account “the economic circumstances of each spouse

at the time the disposition of the property is to become effective.”

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[26] As a result, the trial court was required to consider Tim’s incarceration and the

resulting impact on his finances in the course of dividing the marital assets.

Consequently, the court properly noted Tim’s living expenses would be much

lower than Julie’s because the State is providing him with food, clothing, and

shelter, potentially for the rest of his life. The record fails to reflect any intent

on the part of the trial court to punish Tim for his criminal conduct. To the

contrary, the court assigned all debt on the marital home to Julie, noting the

court could not “in good conscience order Tim to pay anything during the next

35 years.” Appellant’s App. p. 12. Furthermore, the court directed that the

$18,000 in Tim’s attorney’s trust account must be used to pay Tim’s attorney’s

fees, with any remainder to be placed in his prison commissary account.

[27] For the foregoing reasons, we affirm the judgment of the trial court.

[28] Judgment affirmed.

Bradford, J., and Pyle, J., concur.

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