MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D),
Jul 12 2016, 8:31 am
this Memorandum Decision shall not be
regarded as precedent or cited before any CLERK
Indiana Supreme Court
court except for the purpose of establishing Court of Appeals
and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Crystal Sharp Bauer Martha L. Wischmeyer
Law Office of Crystal Bauer Valparaiso, Indiana
Valparaiso, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Edward Hearn, July 12, 2016
Appellant-Respondent, Court of Appeals Case No.
64A05-1504-DR-280
v. Appeal from the Porter Superior
Court
Anna Hearn, The Honorable William E. Alexa,
Appellee-Petitioner. Judge
The Honorable Katherine R.
Forbes, Magistrate
Trial Court Cause No.
64D02-0812-DR-12624
Vaidik, Chief Judge.
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Case Summary
[1] After the trial court approved their divorce settlement, Edward Hearn
(“Father”) and Anna Hearn (“Mother”) filed more than a dozen motions
regarding the implementation of the settlement agreement. Father appeals the
trial court’s rulings on several issues involving property division, spousal
maintenance, child support, and attorney’s fees. We affirm.
Facts and Procedural History
[2] In December 2008, Mother filed a petition to dissolve her marriage to Father.
They eventually mediated a settlement of all outstanding issues, and the trial
court approved the agreement in March 2010. Paragraph 20 of the agreement
provided for the disposition of a rental property on Oak Street in Valparaiso,
which Father managed during the marriage, as follows:
Father shall quit-claim his interest in the Oak Street property to
mother. Father shall bring the mortgage, real estate taxes now
due and utility payments current on said real estate and upon his
doing so mother shall then take over the financial responsibilities
for said property including the payment of the mortgage, real
estate taxes, utilities and other expenses associated therewith.
All security deposits shall be transferred to mother. Mother shall
obtain the release of father’s financial obligation due and owing
on the mortgage for said real estate within one (1) year. In the
event mother does not obtain father’s financial release on said
obligation or becomes in arrears two (2) months or more, father
may bring the payments current and he shall be entitled to a
dollar for dollar credit for the payments which he made from the
sale proceeds. Mother shall place the real estate for sale in the
event of her default or upon her failure to obtain release of
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father’s financial obligations related thereto within one (1) year of
the entering of the decree. Mother shall be considered for all
purposes as the successor in interest of all leases and father shall
provide mother with the originals of same.
Ex. 1, ¶20. The agreement also required Father to pay $35,000 to Mother’s
attorneys and $2000 in spousal maintenance to Mother every month for twelve
months (a total of $24,000).
[3] Shortly after the trial court approved the agreement, Mother contacted the Oak
Street tenants and took over receipt of the rent payments. However, Father
continued paying most or all of the expenses on the property, though without
actually bringing them current, which would have shifted the expenses to
Mother under paragraph 20 of the settlement agreement. Father continued to
pay expenses until Mother completed the refinancing in May 2011. In turn, he
deducted these amounts from the maintenance he was required to pay Mother.
As a result, he paid Mother only $3610.57 in maintenance over the twelve
months following the settlement, rather than the ordered amount of $24,000.
[4] Between April 2010 and December 2012, the parties filed numerous motions
relating to the implementation of the settlement agreement, including multiple
motions regarding Father’s maintenance obligation and the handling of the Oak
Street property. Father also filed a motion to reduce the amount of child
support he was required to pay.
[5] After holding at least eight days of hearings between 2012 and 2014, the trial
court issued a single order resolving all pending motions. The three rulings
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Father challenges on appeal are as follows: (1) that Father’s decision to
continue paying the Oak Street expenses did not reduce the amount he owed
for maintenance, meaning that he is responsible for a maintenance arrearage in
excess of $20,000; (2) that Father’s weekly child support obligation “for the
calendar year 2014 and going forward” is $367, Appellant’s App. p. 199; and
(3) that Father owes $500 to one of Mother’s attorneys, James Daugherty,
“[p]ursuant to the parties[’] Agreed Dissolution Decree,” id. at 203.
Discussion and Decision
I. Oak Street Expenses
[6] Father first contends that the trial court’s calculation of his financial obligation
to Mother should have included a credit in his favor based on the fact that he
continued paying the expenses on the Oak Street property after Mother began
receiving the rents. He asserts that he was entitled to receive the rents as long as
he was paying the expenses, and he seeks a credit equaling either the rents
received by Mother or the mortgage payments he made. Father asserts that the
trial court’s refusal to give him such a credit was based on a misinterpretation of
the settlement agreement. As with any contract, interpretation of a settlement
agreement presents a question of law and is reviewed de novo. Bailey v. Mann,
895 N.E.2d 1215, 1217 (Ind. 2008).
[7] Father concedes that Mother was to become the sole owner of the Oak Street
property under the settlement agreement. Furthermore, he does not dispute
Mother’s assertion that, under Indiana law, the owner of a rented property is
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generally entitled to receive the rents. See Appellee’s Br. p. 15 (citing
Washington Auto Sales Co. v. People’s State Bank, 100 Ind. App. 1, 194 N.E. 184
(1935)); see also Appellant’s Reply Br. p. 12. Instead, he argues that he and
Mother agreed to depart from this general rule, that is, they agreed that the
party paying the expenses would also receive the rents, regardless of ownership.
[8] Specifically, Father relies on the second sentence of paragraph 20 of the parties’
settlement agreement, which provides: “Father shall bring the mortgage, real
estate taxes now due and utility payments current on said real estate and upon
his doing so mother shall then take over the financial responsibilities for said
property including the payment of the mortgage, real estate taxes, utilities and
other expenses associated therewith.” Ex. 1, ¶20. According to Father, this
sentence allowed him to continue receiving the rents until he brought the
expenses current, and because he never brought the expenses current before
Mother refinanced the property in May 2011, he was entitled to the rent
payments during that entire period. In other words, Father reads the sentence
to mean that he could receive the rents as long as he wished (and deprive
Mother of the rents as long as he wished) simply by keeping the expenses in
arrears. But the sentence says nothing about entitlement to rents; it addresses
only the payment of expenses.
[9] Furthermore, “[i]n interpreting a contract, we are compelled to view a
particular section as a whole rather than examine each phrase therein in
isolation.” Steiner v. Bank One Ind., N.A., 805 N.E.2d 821, 824-25 (Ind. Ct. App.
2004). To the extent that there is any ambiguity in the second sentence of
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paragraph 20, it is cleared up by the remainder of the paragraph. The first
sentence provides, “Father shall quit-claim his interest in the Oak Street
property to mother.” Ex. 1, ¶20. It does not say, “Father shall quit-claim his
interest in the Oak Street property to mother after he brings the expenses current.”
Another sentence provides, “All security deposits shall be transferred to
mother.” Ex. 1, ¶20. It does not say, “All security deposits shall be transferred
to mother after Father brings the expenses current.” Perhaps most importantly, the
final sentence provides, “Mother shall be considered for all purposes as the
successor in interest of all leases[.]” Ex. 1, ¶20. It does not say, “Mother shall
be considered for all purposes as the successor in interest of all leases after Father
brings the expenses current.” Father did not quote these parts of paragraph 20 in
his brief, presumably because they are directly at odds with his strained
interpretation of the second sentence. Read as a whole, the meaning of the
paragraph is clear: Mother was to become the owner of the Oak Street
property, and therefore entitled under Indiana law to receive the rents,
regardless of when or whether Father brought the expenses current. The trial
court was correct to interpret the provision as such.1
1
The trial court ordered Father to pay $25,000 of Mother’s attorney’s fees based in part on the “many issues
surrounding the Oak Street Property.” Appellant’s App. p. 206. As such, Father contends that if we reverse
the trial court’s ruling regarding the Oak Street property, we should also reverse its attorney-fee award.
Because we affirm the trial court’s ruling on the Oak Street property, we need not address the fee award.
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II. Child Support
[10] Next, Father asks us to “remand the case to recalculate the child support
obligation for 2014 and forward[.]” Appellant’s Reply Br. p. 19. The trial court
set that obligation at $367 per week based in part on its determination that
Mother incurs a “Work-related Child Care Expense” of $175 per week.
Appellant’s App. p. 212. According to Father, the trial court reached the $175
figure based in part on the fact that “Mother claimed that she paid her
babysitter $200 and then $250 per week.” Appellant’s Br. p. 23. This, Father
says, is where the trial court erred. He contends that Mother was “judicially
estopped” from claiming $200-$250 in weekly child-care expenses because, for
tax years 2011 and 2013, respectively, Mother submitted forms to the IRS
indicating gross child-care expenses of $4100 (approximately $79 per week) and
$5000 (approximately $96 per week). Appellant’s Br. p. 22. In support of his
argument, Father relies on our decision in Chance v. State Auto Insurance Cos.,
684 N.E.2d 569 (Ind. Ct. App. 1997), reh’g denied, trans. denied. There are three
flaws in Father’s argument.
[11] First, Father’s claim of “judicial estoppel” is misplaced. The doctrine of
judicial estoppel involves inconsistent positions taken in judicial proceedings.
See, e.g., Wabash Grain, Inc. v. Smith, 700 N.E.2d 234, 237-38 (Ind. Ct. App.
1998) (addressing allegedly inconsistent positions taken in state-court case and
related federal-court case), reh’g denied, trans. denied. Here, though, Father
alleges that Mother’s in-court assertion about her child-care expenses was
inconsistent with earlier assertions made on tax forms, outside of litigation.
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[12] Second, even if we disregard that threshold legal error, Father has not provided
a record sufficient to allow for meaningful appellate review of his claim.
Perhaps Mother had a perfectly reasonable explanation for any alleged
inconsistency between her tax forms and her in-court testimony. Perhaps she
did not. The reason we do not know is that Father had only some of the
testimony and exhibits transcribed for purposes of his appeal. He is unable
even to provide a record citation for his assertion that “Mother claimed that she
paid her babysitter $200 and then $250 per week.” Appellant’s Br. p. 23. Our
rules require an appellant to provide “all portions of the Transcript necessary to
present fairly and decide the issues on appeal.” Ind. Appellate Rule 9(F)(5).
Father failed to do so with regard to his judicial estoppel argument, which
means that the argument is waived. See, e.g., Meisberger v. Bishop, 15 N.E.3d
653, 659 (Ind. Ct. App. 2014).
[13] Third, notwithstanding this waiver, Father has not identified the sort of clear,
direct inconsistency that would justify a finding of estoppel. In the case he
relies on, Chance, we held that a mother was estopped from asserting that her
son was a resident of her Fort Wayne home for purposes of an insurance claim
after she asserted that he was a resident of someone else’s home in Marion for
purposes of an earlier, closely-related insurance claim. 684 N.E.2d at 571.
Here, Father tells us (again, without citation to the record) that “Mother
claimed that she paid her babysitter $200 and then $250 per week,” and he
asserts that this is inconsistent with entries Mother made on tax forms for 2011
and 2013. But—even if we assume that those entries mean what Father says
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they mean—he does not allege, let alone establish, that Mother was talking
about 2011 or 2013 when she claimed to have paid $200-$250 per week. It is
possible that Mother was testifying about her expenses in 2010, 2012, or the
first half of 2014 (when several of the hearings were held), or even her
anticipated expenses for the remainder of 2014 or for 2015. If she was, then
there was no inconsistency, and if there was no inconsistency, there can be no
estoppel, judicial or otherwise. See Wabash Grain, Inc., 700 N.E.2d at 237-38;
Chance, 684 N.E.2d at 571. Father has not shown an inconsistency, and we will
not presume one.
[14] For all of these reasons, we reject Father’s judicial estoppel claim and affirm the
trial court’s child-support calculations.
III. Fees Owed to Attorney Daugherty
[15] Father also challenges the part of the trial court’s order that says the settlement
agreement requires him to pay $500 to Attorney James Daugherty. While it is
true that the settlement agreement required Father to pay $35,000 to Mother’s
attorneys, Attorney Daugherty was not one of them. His representation of
Mother did not begin until well after the parties reached their settlement.
Therefore, the trial court erred when it wrote that Attorney Daugherty is owed
$500 “[p]ursuant to the parties[’] Agreed Dissolution Decree[.]” Appellant’s
App. p. 203.
[16] However, the trial court did, after one of the many post-settlement hearings,
order Father to pay $500 to Attorney Daugherty. In June 2011, Father filed a
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motion to correct error relating to some of the attorney’s fees he owed under the
settlement agreement. A hearing was scheduled for August 4, 2011, but at
some point Father paid the fees in question, rendering his motion moot.
Father, though, did not ask to have the hearing vacated, and Attorney
Daugherty appeared as scheduled on behalf of Mother. Afterward, the trial
court issued an order that provided in part:
The court is advised that the subject matter of [Father’s] Motion
to Corrects [sic], to-wit: the requirements for the payment of a
$25,000 attorney fee judgment, is now moot in that payment has
been remitted by [Father]. [Mother], by counsel, shows the court
that since July 29, 2011, [Mother] has been seeking and has been
requesting that this hearing be vacated, but that [Father] has
failed to do so or to even contact the court.
[Mother’s] Petition for the payment of attorney fees and
sanctions in the sum of $500, based upon the travel time and time
expended at court, is warranted and is hereby granted. [Father]
is hereby ordered to remit the sum of $500 to [Mother’s] counsel,
James E. Daugherty, within a period of 30 days from August 4,
2011.
Appellee’s App. p. 1.
[17] On appeal, Father does not deny that he was directed to pay $500 to Attorney
Daugherty. Rather, he asks us to reverse that part of the trial court’s order
merely because the court misidentified the source of the obligation, referencing
the settlement agreement itself instead of the post-settlement court order.
However, as Mother notes, Indiana Appellate Rule 66(A) provides:
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No error or defect in any ruling or order or in anything done or
omitted by the trial court or by any of the parties is ground for
granting relief or reversal on appeal where its probable impact, in
light of all the evidence in the case, is sufficiently minor so as not
to affect the substantial rights of the parties.
The trivial error highlighted by Father falls squarely within the terms of this
rule. The critical aspect of the trial court’s order is the existence of the $500
obligation, not the precise origin of it. We will not disturb the trial court’s
ruling on this issue.
[18] Affirmed.
Barnes, J., and Mathias, J., concur.
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