Fobar v. Vonderahe

• Decision Date: 01 July 2002
• Docket Number: No. 34S05-0204-CV-228.,34S05-0204-CV-228.
• Citation: 771 N.E.2d 57
• Parties: Rose FOBAR (Vonderahe), Appellant (Respondent Below), v. Anthony M. VONDERAHE, Appellee (Petitioner Below).
• Court: Indiana Supreme Court

771 N.E.2d 57

Rose FOBAR (Vonderahe), Appellant (Respondent Below), v. Anthony M. VONDERAHE, Appellee (Petitioner Below).

No. 34S05-0204-CV-228.

Supreme Court of Indiana.

July 1, 2002.

Mark Small, Indianapolis, Indiana, Attorney for Appellant.

Scott P. Sullivan, Kokomo, Indiana, Attorney for Appellee.

ON PETITION TO TRANSFER

BOEHM, Justice.

In this marriage dissolution case, the Court of Appeals found the trial court abused its discretion and instructed the trial court to deviate from a 50-50 property division to the extent necessary to reflect the value of one spouse's inherited and non-commingled interest in property. Fobar v. Vonderahe, 756 N.E.2d 512, 523 (Ind.Ct.App.2001). We hold that a trial court's discretion in dividing property in a dissolution is to be reviewed by considering the division as a whole, not item by item. So viewed, the trial court's 50-50 division was within its discretion.

Factual and Procedural Background

Rose Fobar Vonderahe and Anthony Vonderahe were married in 1983, and Anthony filed a Petition for Dissolution of Marriage in 1999. The couple jointly owned their marital residence, and Rose and Anthony each individually owned rental real estate acquired before the marriage. In addition, Rose owned a one-half interest in real estate in Buffalo, Indiana that was inherited from her first husband after a fatal automobile accident. Rose's only daughter, Robin, inherited the other half of the Buffalo property.

The trial court included Rose's one-half interest in the Buffalo real estate as marital property. After a three-day hearing, at Rose's request, the court entered findings of fact and conclusions of law. The court divided the marital estate nearly equally, 50.7% to Anthony, 49.3% to Rose.

Rose appealed, claiming that the trial court was required to set aside her interest in the Buffalo property to her. The Court of Appeals agreed and remanded the case to the trial court with instructions to "enter a property division decree that deviates from a 50/50 division of property in favor of [Rose] to the extent necessary to reflect the value of her interest in the Buffalo property."¹ 756 N.E.2d at 523. Anthony sought transfer, arguing that the Court of Appeals did not apply the proper standard of review. This Court granted transfer in a previous order dated April 5, 2002.

Standard of Review of a Property Division

Property owned by either spouse before the marriage is included in the marital estate and subject to division and distribution. Ind.Code § 31-15-7-4 (1998). Indiana law requires that marital property be divided in a "just and reasonable manner," id., and provides for the statutory presumption that "an equal division of the marital property between the parties is just and reasonable." I.C. § 31-15-7-5. This presumption may be rebutted, however, by evidence of each spouse's contribution to the acquisition of the property, the extent to which the property was acquired before the marriage or by inheritance, the economic circumstances of each spouse, the conduct of the parties relating to the disposition or dissipation of assets, and each spouse's earning ability. Id.

At Rose's request, the trial court entered findings of fact and conclusions of law. Findings of fact are reviewed under a clearly erroneous standard. Ind. Trial Rule 52(A). Conclusions of law, however, are reviewed de novo. Finally,

A "clearly erroneous" judgment can result from application of the wrong legal standard to properly-found facts, and in that situation we do not defer to the trial court. We are not bound by the trial court's characterization of its results as "findings of fact" or "conclusions of law." Rather, we look past these labels to the substance of the judgment and will review a legal conclusion as such even if the judgment wrongly classifies it as a finding of fact.

Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind.2002). This case turns on whether the trial court's division of the marital property was just and reasonable. Although this is in some sense an issue of law, it is highly fact sensitive and is subject to an abuse of discretion standard. Taylor v. Taylor, 436 N.E.2d 56, 58 (Ind. 1982); Elkins v. Elkins, 763 N.E.2d 482, 484-85 (Ind.Ct.App.2002); Pitman v. Pitman, 721 N.E.2d 260, 264 (Ind.Ct.App. 1999), trans. denied; Berger v. Berger, 648 N.E.2d 378, 381 (Ind.Ct.App.1995); Truman v. Truman, 642 N.E.2d 230, 234 (Ind. Ct.App.1994). A reviewing court will not weigh evidence, but will consider the evidence in a light most favorable to the judgment. Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind.1996); Pitman, 721 N.E.2d at 264.

The Court of Appeals found that Rose made a clear showing that she obtained the Buffalo property both by inheritance and before the marriage, and that Anthony never used the property, did not contribute to its improvements, and participated in no decisions concerning the property. Fobar, 756 N.E.2d at 522-23. Based on these facts, the Court of Appeals concluded that the trial court abused its discretion in refusing to consider the Buffalo property as an additional value to be allocated to Rose. Id. at 521-23. In reaching this conclusion, the Court of Appeals relied principally on Castaneda v. Castaneda, 615 N.E.2d 467 (Ind.Ct.App.1993). Castaneda held that all property of the parties must be included in the marital estate regardless of its source, but "the trial court may deviate" from the 50-50 statutory presumption if property was brought separately into the marriage, was never commingled with other marital assets, and was never treated as marital assets. 615 N.E.2d at 470 (emphasis added). Anthony correctly responds that Castaneda does not stand for the proposition that a trial court is required to reach an unequal division of property because one spouse brought some items separately to the marriage. Rather Castaneda permits the trial court, in its discretion, to choose to distribute the marital property unequally in favor of one spouse based on statutorily identified considerations, one of which is inherited property. Whether to do so is a matter of trial court discretion in light of all other relevant factors.

The trial court's disposition is to be considered as a whole, not item by item. Simpson v. Simpson, 650 N.E.2d 333, 335 (Ind.Ct.App.1995); Livingston v. Livingston, 583 N.E.2d 1225, 1227 (Ind.Ct.App. 1992), trans. denied; Hoyle v. Hoyle, 473 N.E.2d 653, 657 (Ind.Ct.App.1985). In crafting a just and reasonable property distribution, a trial court is required to balance a number of different considerations in arriving at an ultimate disposition. The court may allocate some items of property or debt to one spouse because of its disposition of other items. Similarly, the factors identified by the statute as permitting an unequal division in favor of one party or the other may cut in different directions. As a result, if the appellate court views any one of these in isolation and apart from the total mix, it may upset the balance ultimately struck by the trial court.

Here, there is ample basis justifying the trial court's inclusion of Rose's interest in the Buffalo property and the equal division of the entire marital pot. Anthony has an annual income of $32,800, and Rose earns approximately $40,500. Rose was awarded Anthony's rental property that he acquired prior to the marriage. The trial court found that Rose's earning ability was "substantially more" than Anthony's and would be increased by her greater rental income after the Decree takes effect. Thus the trial court was well within its discretion in offsetting Rose's higher earning capacity and resources by including the Buffalo property in the...