Ehle v. Ehle

• Decision Date: 25 October 2000
• Docket Number: No. 02A03-9911-CV-412.,02A03-9911-CV-412.
• Parties: In re the Marriage of Kenneth E. EHLE, Appellant-Petitioner, v. Rochelle A. EHLE, Appellee-Respondent.
• Court: Indiana Appellate Court

737 N.E.2d 429

In re the Marriage of Kenneth E. EHLE, Appellant-Petitioner, v. Rochelle A. EHLE, Appellee-Respondent.

No. 02A03-9911-CV-412.

Court of Appeals of Indiana.

October 25, 2000.

Jack R. Rochyby, Avery & VanGlider, Fort Wayne, Indiana, Attorney for Appellant.

Linda Peters Chrzan, Blume, Connelly, Jordan & Stucky, Fort Wayne, Indiana, Attorney for Appellee.

OPINION

SULLIVAN, Judge

Appellant, Kenneth E. Ehle (Husband), appeals the trial court's order reopening and modifying the property disposition in the dissolution of his marriage to Rochelle A. Ehle (Wife).

We affirm.

Husband presents four issues¹ for our review which we condense and restate as follows:

I. Whether the trial court erred when it reopened the marital estate and modified the property distribution upon the basis of constructive fraud;

II. Whether the trial court erred when it ordered Husband to transfer to Wife one half of the stock in the joint account including the stock split and to pay Wife all dividends attributable to that account since the date of separation; and III. Whether the trial court erred when it ordered Husband to pay Wife's attorney fees.

The facts relevant to this appeal are that Husband and Wife were married in 1974 and are the parents of three children. On September 11, 1995, Husband filed a Petition for Dissolution of Marriage. A highly contested custody dispute ensued over the three children. Both Husband and Wife were represented by counsel, and Wife, in fact, retained two lawyers to represent her.

Following a pre-trial conference, the trial court ordered the parties to exchange names and addresses of all witnesses and copies of exhibits to be used at trial and further ordered the parties "to file with the Court a marital balance sheet, including date-of-filing values and supporting documentation, as well as a proposed division of assets and liabilities at least [seven] days prior to trial." Record at 102. The court, through its order, further indicated that if a party failed to comply, the case would be removed from the trial calendar and the non-complying party would be subject to sanctions.

A final hearing date was set for October 23, 1996. Husband filed his "Petitioner's Proposed Net Worth Statement" and "Petitioner's Proposed Division of Assets and Debts" on October 15, 1996. Record at 218, 220. Wife also filed her statement of net worth and proposed division of assets, albeit not until October 22, 1996, the afternoon before the final hearing. Both Husband's and Wife's net worth statements indicated three General Electric (GE) Investment accounts and placed a value of $18,841 on the GE Investment Services Stock Account.² However, neither of the parties listed Husband's individual GE stock account as an asset.

On the morning of the final hearing, Husband and Wife entered into a "Stipulation on Net Worth Statement and Division of Assets," which was signed by both parties and their respective counsel. Record at 248. The stipulation included the three previously mentioned GE accounts.³ The GE Investment Services Stock account was assigned a value of $18,841 and Husband and Wife agreed to divide it equally. On October 23, 1996, the trial court entered a Decree of Dissolution and incorporated the stipulation of net worth and division of assets.

After the divorce, Wife attempted to have her half of the GE stock transferred to her. The transfer was delayed as Husband and Wife could not agree whether the decree ordered transfer of $9,420.00 or one-half of the stock shares. On May 6, 1997, Husband signed a stock power to transfer 81 shares of GE stock to Wife. GE returned the stock power and notified the parties that the stock could not be transferred without the stock certificates. The matter, however, became more complicated because on May 9, 1997, GE had a two-for-one stock split. Wife contacted GE regarding the stock split and discovered the possibility that there were two GE Investment Services Stock Accounts instead of the one Husband had disclosed in his proposed net worth statement and as also reported by Wife.

After alerting Husband's counsel to the omission, Wife attempted to serve GE with a Non-Party Production Request. Husband filed an objection to Wife's request for discovery. After a hearing, the trial court denied Husband's request to quash and ordered that Wife's discovery could proceed. Husband filed a Motion to Correct Errors which the trial court denied.

It was discovered that Husband had included a jointly titled GE stock account (Account No. XXXX-XXXXXXXXX) ("joint account") in the net worth statement filed with the trial court but had omitted an individually titled GE stock account (Account No. XXXX-XXXXXXXXX) ("individual account"). The omitted individual account contained 292 shares of GE stock valued at over $17,000.

On October 8, 1998, Wife filed a Motion to Reopen and Modify Property Disposition and for Attorney Fees. A hearing was held after which the trial court, upon Husband's request, issued findings of fact and conclusions of law. The trial court found that Husband had committed constructive fraud when he failed to disclose the GE Investment Services Stock individual account in his proposed marital balance sheet. On October 11, 1999, the trial court ordered:

"Petitioner is ordered to immediately transfer to the Respondent one half (½) of the General Electric Stock contained in account number XXXX-XXXXXXXXX as of September 11, 1995 together with all growth and loss including one-half (½) of the May 9, 1997 2 for 1 stock split.

* * *

Petitioner is ordered to immediately transfer to the Respondent one half (½) of the General Electric Stock contained in account number XXXX-XXXXXXXXX as of September 11, 1995 together with all growth and loss including the 2 for 1 stock split of May 9, 1997.

* * *

Petitioner is ordered immediately to pay to Respondent within thirty days of the Order all General Electric Stock dividends attributable to the stocks being transferred to Respondent from September 11, 1995 until Respondent['s] shares of stock have been received by her, including all dividends associated with the May 9, 1997 stock split. The Petitioner is also Ordered to pay the Respondent Two Thousand One Hundred Forty-Three Dollars and Eight Cents ($2,143.08) within thirty (30) days of this Order which represents one-half (½) of the stock dividends issued since the Date of Separation. In addition, the Petitioner is ordered to pay Respondent one-half (½) of any additional dividends that the Petitioner has received before the stock transfers are completed.

* * *

Petitioner is further ordered to pay Respondent's attorney Two Thousand Nine Hundred Forty-Five Dollars and Ninety-Four Cents (2,945.94) within ninety (90) days from the date of this order."

Record at 374.

I. Constructive Fraud

Husband contends that the trial court erred when it ordered the parties' property distribution to be set aside and awarded Wife one-half of the GE stock contained in the individual account. Husband asserts Wife is bound to the stipulated value of the marital assets. He further maintains that Wife's claim for constructive fraud must fail because Husband did not have a duty to disclose the existence of the individual account, a necessary element of constructive fraud.

The peculiar nature of a stipulation is that it establishes a particular matter as a fact. "A stipulation of facts is an express waiver by a party or his counsel of the intended issues." Indiana Dept. of Environmental Management v. Adapto, Inc. (1999) Ind.App., 717 N.E.2d 646, 650 (citing B-Dry Owners Ass'n v. B-Dry System, Inc. (1994) Ind.App., 636 N.E.2d 161, 165,trans. denied.). Once the parties enter into a stipulation, and the court approves it, the stipulation is binding upon all involved. Wittwer v. Wittwer (1989) Ind.App., 545 N.E.2d 27, 29.

Wife, upon voluntarily entering into the stipulation of the marital assets and their value was bound by that agreement. As all parties to a lawsuit have, Wife also had the opportunity to conduct discovery to ascertain the assets of the marital estate and their value. In opting not to conduct her own discovery, but choosing instead to rely upon Husband's representations of the marital assets, Wife may not later assert that the stipulation should be set aside upon the basis that assets were omitted.

However, a stipulation may be modified if the existence of fraud, mistake or undue influence is proved. Harlan v. Harlan (1989) Ind.App., 544 N.E.2d 553, 556, opinion affirmed by (1994) Ind., 560 N.E.2d 1246. Wife maintained, and the trial court agreed, that Husband had committed constructive fraud when he failed to disclose the existence of the individual account.

"Constructive fraud arises by operation of law when there is a course of conduct which, if sanctioned by law, would secure an unconscionable advantage, irrespective of the actual intent to defraud." Biberstine v. New York Blower Co. (1993) Ind.App., 625 N.E.2d 1308, 1315. In order to prove constructive fraud, a party must establish: (1) that there is a duty owed by the party charged to the complaining party as a result of their relationship, (2) a violation of that duty by the making of deceptive material misrepresentations of past or existing facts or remaining silent when a duty to speak exists, (3) reliance on the misrepresentation by the complaining party, (4) injury to the complaining party as a result of the misrepresentation, and (5) an advantage gained by the charged party at the expense of the complaining party. Voigt v. Voigt (1994) Ind.App., 645 N.E.2d 623, 625, trans. denied. Relying upon Selke v. Selke (1992) Ind., 600 N.E.2d 100, Husband contends that he did not owe Wife a duty to disclose the individual account on the marital balance sheet.

In Selke, the parties entered into a property settlement agreement which was subsequently approved by the trial court and which gave husband all of the pension rights...