Hacker v. Hacker
| Decision Date | 29 December 1995 |
| Docket Number | No. 35A02-9409-CV-551,35A02-9409-CV-551 |
| Citation | 659 N.E.2d 1104 |
| Parties | Brenda K. HACKER, Appellant (Respondent), v. John HACKER, Appellee (Petitioner). |
| Court | Indiana Appellate Court |
Brenda Hacker (Brenda) appeals the trial court's order granting John Hacker's (John) motion to correct errors following a marriage dissolution decree.
We affirm in part, reverse in part, and remand with instructions for the trial court to enter a modified decree consistent with this decision.
Upon appeal, the parties present the following issues for our review, which we rephrase as follows:
(1) whether the trial court in granting John's motion to correct errors erred in its revised valuation of the marital estate;
(2) whether the trial court abused its discretion in awarding Brenda 88.3 percent of the marital assets based in part upon John's potential inheritance.
Brenda and John Hacker were married on April 17, 1970. John filed for dissolution on October 7, 1991, and on September 29, 1993, the court entered a final decree, along with findings of fact and conclusions of law.
At the time the dissolution action was filed, Brenda was 43 years old and was earning approximately $14,700 per year as a receptionist for an accounting firm. John was 45 years old and was self-employed as a farmer. Brenda's employer did not offer a retirement plan, and her sole retirement funds were lodged in an Individual Retirement Account.
Brenda was employed outside the home during the entire course of the marriage. From 1983 to 1991, her gross earnings were $117,761, while John's gross losses from his farming endeavors were $63,362. Undisputed evidence established that this pattern of earnings and losses was consistent throughout the couple's marriage. Although both parties contributed toward household and living expenses, Brenda was the principal homemaker in addition to working full time at the accounting firm and dedicating approximately 20 hours of service each week to the farming operation.
The couple lived rent-free on a 100-acre farm which was owned by John's parents, and made regular repairs and improvements to the property. With the exception of a bank loan taken over by John's father which was used to build a new pole barn, none of the couple's expenses in improving the property were reimbursed or paid for by John's parents. The trial court noted in its findings that Brenda considered the couple to be equitable owners, and not renters, of the property. John had no surviving siblings; thus, Brenda believed he would eventually inherit the farm.
Although John submitted an exhibit indicating that his net worth was $58,268 on October 7, 1991, contradictory financial statements which he executed under oath for various financial institutions were admitted into evidence on cross-examination. In these statements, he claimed his net worth in January 1990 was $276,444. The figure rose to $298,498 in January 1991, but then dipped to $130,065 in January 1992.
Brenda offered two variations as to the couple's net worth as of October 7, 1991. One set the net worth at $313,997, including an equitable interest in the family farm valued at $215,100. She also submitted an exhibit excluding the family farm and establishing a marital net worth of $177,722.
The trial court appeared to adopt Brenda's dual valuations of the marital estate in its analysis, and awarded her $156,998.50: $38,616 in marital assets and a judgment against John for $118,382.50. John's award included the family farm.
John filed a motion to correct errors on October 27, 1993, seeking relief from several errors allegedly made by the trial court. According to the motion, the trial court erred by treating the family farm as if it were owned in unencumbered fee simple and then improperly including it among the marital assets. The motion also asserted that the trial court's award to Brenda was contrary to law because it violated the presumption of equal division of marital assets, and exceeded the actual net worth of the couple. A final error alleged is that the court based its finding upon the assumption that John would inherit the family farm while refusing to receive evidence as to the testamentary intent of John's father.
On May 19, 1994, the trial court granted John's motion to correct errors, finding that it had "mistakenly included in the property distribution property that was not part of the marital estate." Record at 5. The decree was not modified to reflect the revised valuation.
Upon appeal, neither party challenges the court's decision to exclude the value of the family farm from the gross marital estate, a decision which we affirm. Case law has long established that an unvested interest in property is not divisible as a marital asset. Leisure v. Leisure (1993) Ind., 605 N.E.2d 755, 759 (future income); Skinner v. Skinner (1994) Ind.App., 644 N.E.2d 141, 146 (unvested pension); McNevin v. McNevin (1983) Ind.App., 447 N.E.2d 611, 616 (unliquidated tort claim). No one has vested rights in an ancestor's property until the latter's death. Townsend v. Meneley (1905) 37 Ind.App. 127, 137, 74 N.E. 274, 277, reh'g. denied. Even some vested interests, such as remainders in which the spouses have no present possessory interest, are deemed too remote to be included in a property award settlement. Loeb v. Loeb (1973) 261 Ind. 193, 199, 301 N.E.2d 349, 353 (); Fiste v. Fiste (1994) Ind.App., 627 N.E.2d 1368, 1371-72 ().
In this case, the dispute centers around the parties' differing interpretations as to the trial court's valuation of the gross marital estate and the family farm, as well as the effect of excluding the farm's value on the property distribution scheme.
Brenda contends that "[t]here can be no dispute that the original finding of the Court excluded the family farm" and valued the total marital estate at $177,722. Appellant's Brief at 10 (emphasis in original). The crux of her argument is that the court in granting the motion to correct errors mistakenly deducted the value of the family farm when, in fact, the family farm and its underlying debt already were excluded in the original decree. According to Brenda, this "double-deduction" resulted in a revised marital estate of $98,897.
Brenda's assertion reflects an erroneous mathematical computation and is not borne out by the clear wording of the decree. In dividing the property, the court adopted verbatim Brenda's higher valuation, holding that it had "the authority to include as a marital asset the parties['] equitable interest in the farm" since it was not conveying any specific interest in the property to Brenda. Record at 15.
Based upon the detailed valuation prepared by Brenda, the trial court determined the following net values for the marital estate:
ASSETS
Real estate $ 7,250
Sheets farm & other land $ 64,116
Equitable interest in family farm $ 215,100
Personal property (total) $ 2,977
Vehicles (total) $ 19,900
Farm equipment $ 105,225
Crops/feed $ 22,350
Feeder/livestock $ 11,247
Hay/straw $ 1,000
Bank accounts (total) $ 12,680
Certificate of deposit $ 530
U.S. Savings Bonds $ 1,333
Life insurance (total) $ 11,441
I.R.A. $ 8,689
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TOTAL ASSETS $ 483,838
LIABILITIES
Mastercard $ 285
State Bank of Markle--Equipment loan $ 55,236
Janice M. Hacker $ 15,000
State Bank of Markle--unsecured loan $ 16,000
State Bank of Markle--Dale Hacker $ 78,825
John Deere Credit Services $ 4,495
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TOTAL LIABILITIES $ 169,841
TOTAL ASSETS LESS TOTAL LIABILI-
TIES = NET WORTH AS OF 10/7/91 $ 313,997
The court awarded Brenda $38,901 in assets and $285 in liabilities, for a net value of $38,616. The decree also states that John "shall be awarded the following ...," Record at 20: $444,937 in assets, including the $215,100 equitable interest in the family farm, and $169,556 in liabilities, for a net value of $275,381. In addition, John was ordered to pay Brenda $118,382.50. Thus, each spouse would receive a total of $156,998.50--a 50/50 split. The decree also required the couple to share equally their 1991 federal income tax refund.
In ordering the above division of assets and liabilities, the court stressed that it had the authority to count the family farm as a marital asset since it was not conveying any interest to Brenda. The court went on to observe, however, "if [it] excludes the parties' equitable interest in the family farm, then the marital net worth of the parties is $177,722.00 and due to the above enumerated factors, Respondent Wife should be entitled to 88.3%". 1 Record at 15 (emphasis supplied). Under this alternative valuation excluding the family farm, Brenda would receive $156,998.50, which is the same dollar amount the trial court said she would be entitled to if the family farm were included and the property was divided equally.
Brenda is arguing that we should construe the one-paragraph alternative valuation as the actual award, and disregard, as dicta, the detailed six-page line-by-line valuation incorporated in the decree. However, it is clear from the language that the trial court included the family farm in...
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