Nill v. Nill

• Decision Date: 21 January 1992
• Docket Number: No. 43A03-9101-CV-00013,43A03-9101-CV-00013
• Parties: In re the Marriage of Mark S. NILL, Appellant-Respondent Below, v. Karen NILL, Appellee-Petitioner Below.
• Court: Indiana Appellate Court

Page 602

584 N.E.2d 602

In re the Marriage of Mark S. NILL, Appellant-Respondent Below, v. Karen NILL, Appellee-Petitioner Below.

No. 43A03-9101-CV-00013.

Court of Appeals of Indiana Third District.

Jan. 21, 1992.

Rehearing Denied March 11, 1992.

Transfer Denied June 12, 1992.

John F. Lyons, Barrett & McNagny, Fort Wayne, appellant-respondent.

Stephen P. Rothberg, Fort Wayne, for appellee-petitioner.

STATON, Judge.

Mark Nill appeals the decree dissolving his marriage with Karen Nill. In particular, Mark contends that the trial court abused its discretion in dividing the marital property and in calculating child support payments.

Affirmed, as modified.

On April 21, 1989, Karen filed a petition for dissolution of the parties' marriage of fifteen years. The court held a dissolution hearing on September 24, 1990, and, pursuant to Mark's request for special findings and conclusions, entered findings and conclusions in the final decree dated October 11, 1990. The court found that the net assets of the marital estate totalled $737,488, $51,337 of which was allocated to Karen. In order to effect the statutory presumption of an equal share in the marital assets, the court awarded Karen a monetary judgment of $317,407. ¹ The trial court awarded custody of the parties' three children to Karen, and ordered Mark to pay child support in the amount of $2,100 per month. Mark now alleges that the court's calculation of marital property is erroneous in several respects, and that the award of child support is an obligation of such magnitude that it amounts to an economic penalty.

I. DIVISION OF MARITAL PROPERTY

The trial court has broad discretion in ascertaining the value of property in a dissolution action, and its valuation will not be disturbed absent an abuse of that discretion. Neffle v. Neffle (1985), Ind.App., 483 N.E.2d 767, 770, trans. denied. The trial court does not abuse its discretion if there is sufficient evidence and reasonable inferences therefrom to support the result. Id. In other words, we will not reverse the trial court unless the decision is We also observe that the trial court entered special findings pursuant to Mark's request under Ind. Rules of Procedure, Trial Rule 52(A). Special findings of fact and conclusions of law are reviewed under the following standard: we first must determine whether the evidence supports the findings; then we determine whether the findings support the judgment. Kaminszky v. Kukuch (1990), Ind.App., 553 N.E.2d 868, 870, trans. denied. The judgment of the trial court will be affirmed if we conclude that the special findings support the judgment and are not clearly erroneous. Brancheau v. Weddle (1990), Ind.App., 555 N.E.2d 1315, 1317. A judgment is clearly erroneous where a review of the record leaves us with a firm conviction that a mistake has been made. Indiana Dep't of Correction v. Stagg (1990), Ind.App., 556 N.E.2d 1338, 1341, trans. denied.

                clearly against the logic and effect of the facts and circumstances before it.  Porter v. Porter (1988), Ind.App., 526 N.E.2d 219, 222, trans. denied.   As a reviewing court, we will not weigh evidence, but will consider the evidence in a light most favorable to the judgment.  Id.  In addition, the party challenging the trial court's property division must overcome a strong presumption that the court complied with the statute.  Id
                

A. Personal Property.

In its findings, the trial court determined that "the parties respectively own household goods, furnishings, personal effects and jewelry, which are of approximately equal value and the principal value of which lies, not in an economic sense, but in their use." Record, p. 100. The court then awarded each party the property in their respective possession. Mark contends that the trial court ignored the value of this property in computing the total marital estate subject to division.

At the dissolution hearing, Karen opined that Mark's personal property was at least of equal value to her own. However, Karen's summary of assets listed the value of her personal property as $21,125, while similar property in Mark's possession was valued at no more than $9,000. This amounts to a difference of $12,125. Karen maintains that the trial court merely accepted as true her opinion of the property's value. Yet the court's findings indicate that this was not the case, determining that the value of the property was equal in its "use," not "in an economic sense."

Indiana law has been uniformly interpreted as requiring the trial court to divide "all" the property of the parties, specifically prohibiting the exclusion of any assets from the scope of the court's powers to divide and award. IND. CODE 31-1-11.5-11(b) (Supp.1991); In re Davidson (1989), Ind.App., 540 N.E.2d 641, reh'g denied; Lord v. Lord (1982), Ind.App., 443 N.E.2d 847. "[T]he trial court has the right and a duty to settle and determine the property rights of parties in a dissolution case including rights in money, in physical assets, or in both." White v. White (1981), Ind.App., 425 N.E.2d 726, 728. The court clearly intended to equally divide the marital property in accordance with the statutory presumption; therefore, its failure to consider the value of personal property was clearly erroneous, and an abuse of discretion.

Nor do we regard the exclusion of personal property a "de minimis" omission as contended by Karen; the trial court saw fit to include assets worth far less than $30,125 (the combined value of personal property in this case) in its calculations. The trial court is instructed to reduce the monetary payment to Karen by $6,062.50 to effect an equal distribution of the marital estate. ²

B. Federal Tax Refund.

The parties filed a federal joint tax return for the 1989 tax year, and received a refund check of $27,000. The trial court included the tax refund in its calculation of marital assets. Mark contends that the It is true that property acquired after final separation is generally not subject to division as a marital asset. In re Marriage of Hirsch (1979), 179 Ind.App. 166, 385 N.E.2d 193. However, we do not necessarily agree with Mark's contention that the tax refund constitutes such after-acquired property.

court erred by characterizing the entire refund as marital property because he was the sole wage earner, and he earned two-thirds of his income after the parties became separated in April, 1989. At most, he argues, the trial court should have included $9,000, one-third of $27,000, in the amount of property subject to division.

The precise issue concerning the allocation of a tax refund from a jointly filed income tax return has not yet been addressed in Indiana. To our knowledge, the only case in which this specific issue was decided is Angelo v. Angelo (1980), 74 A.D.2d 327, 428 N.Y.S.2d 14. As in this case, the parties in Angelo filed a joint income tax return, though the income was attributable solely to the husband's salary. The court in Angelo considered a number of factors, including the tax statutes, the common law, dissolution statutes, and an analysis of the circumstances of the parties' marriage to arrive at its determination.

The New York court first noted that the parties were no doubt swayed by the pecuniary advantage to the family as a whole in filing jointly. Doubtless such a pecuniary advantage likewise influenced the parties to this appeal. As an additional benefit to Mark, upon signing the return Karen became jointly and severally liable for payment of any tax owed. See 26 U.S.C.A. Sec. 6013(d)(3) (1989). "But where the advantages are taken, the burdens must also be accepted." Angelo at 331, 428 N.Y.S.2d at 16. Mark seeks to enjoy the benefits of filing jointly, but disclaim the burdens.

The Angelo court also noted that the filing of a joint return in one jurisdiction creates a joint interest, entitling the decedent's surviving spouse to the proceeds of the tax refund, even though the decedent's earnings composed the bulk of the income reflected by the return. Id. at 332, 428 N.Y.S.2d at 17 (citing Pennsylvania case law). On the other hand, in bankruptcy law, title to a tax refund is generally not vested in the non-income producing spouse by virtue of the joint return, and the bankruptcy court will not presume that the insolvent spouse intended to make a gift of the proceeds to his or her spouse. Id. (citations omitted).

Rather than relying on the rigid application of a mechanical formula to determine the allocation of an income tax refund, the court in Angelo reviewed the circumstances of the general financial background of the marriage. As the court observed:

The financial arrangements between husband and wife are intensely personal; what suits one household would throw another in disarray. Sometimes the spouses join in discharging the financial responsibilities of the family; sometimes one spouse defers to the other in managing their affairs. Sometimes they agree to keep their individual earnings and property separately; sometimes they agree to merge them. Sometimes their agreement is formal; in most instances it is not.

* * * * * *

In this case the [husband] was the wage earner, and the refund was derived from his income. It may fairly be decided that the joint return was filed for no other purpose than to obtain an advantage which the tax statutes were designed to provide.

Nevertheless, the financial arrangements between the parties show that the [wife] and the [husband] had equal interests in the refund. The parties had maintained joint accounts established for the keeping and disbursement of their funds. The evidence demonstrated that the sums on deposit in the joint account were sizable, as was the tax refund payable to them. Special Term might justifiably draw the inference that it was intended by the parties that each was empowered to draw on the funds, no matter what may have been the original source Id. at 333-34, 428 N.Y.S.2d at 17-18.

and that each...