Ryan v. Ryan

• Citation: 972 N.E.2d 359
• Decision Date: 31 July 2012
• Docket Number: No. 71S03–1111–DR–644.,71S03–1111–DR–644.
• Parties: Sean Thomas RYAN, Appellant (Petitioner below), v. Dee Anna RYAN, Appellee (Respondent below).
• Court: Indiana Supreme Court

972 N.E.2d 359

Sean Thomas RYAN, Appellant (Petitioner below),

v.Dee Anna RYAN, Appellee (Respondent below).

No. 71S03–1111–DR–644.

Supreme Court of Indiana.

July 31, 2012.

Matthew A. Yeakey, Elkhart, IN, Attorney for Appellant.

Robert J. Palmer, Mishawaka, IN, Attorney for Appellee.

On Petition to Transfer from the Indiana Court of Appeals, No. 71A03–1009–DR–453

SULLIVAN, Justice.

When Sean and Dee Anna Ryan divorced, they agreed to sell two properties they owned and divide the proceeds, subject to a proviso that neither party was required to accept a sale yielding net proceeds below specified minimums. When the properties could not be sold at or above the specified minimums, Dee Anna refused to waive the proviso. She was entitled by law to do so.

Background

When Sean Ryan filed for divorce on March 5, 2008, he and Dee Anna owned a residence in Granger, Indiana, and a lake house in Union, Michigan. Both properties had mortgages on them. The parties entered into a “Property Settlement Agreement” in which they agreed to sell the properties and pay off the mortgages. (This agreement also covered child-related matters, the disposition of personal property, and other matters customary in agreements of this kind.) Until the properties sold, Sean and Dee Anna agreed that they would pay 75% and 25%, respectively, of the applicable mortgage/loan payments, taxes, and insurance. Concurrently with the settlement agreement, the parties executed a “Private Agreement,” which provided that Sean and Dee Anna could “bind” each other to accept a purchase of the properties so long as the “resulting net proceeds” equaled at least $1,100,000 in the case of the Granger residence and at least $300,000 in the case of the lake house. (“Net proceeds” was defined to mean the amount realized after payment of broker commission and closing costs.) This agreement also specified how the proceeds would be distributed once the properties were sold.

The settlement agreement was incorporated into a divorce decree issued by the trial court on September 19, 2008. Following the decree, the properties were listed for sale at $1,349,000 for the Granger residence and $349,000 for the lake house, that is, well above the minimum sales prices specified in the parties' agreement. As of May 14, 2010, neither of the properties had sold so Sean filed a Motion for Relief from Judgment pursuant to Indiana Trial Rule 60(B)(8), seeking a court order that the properties be sold at “prevailing fair market value and the Private Agreement be declared of no further force and effect.” Appellant's App. 33.

The trial court denied Sean's request, but the Court of Appeals reversed and remanded for the trial court to hold an evidentiary hearing on Sean's motion, Ryan v. Ryan, 946 N.E.2d 1191 (Ind.Ct.App.2011), reh'g denied. We granted transfer, Ryan v. Ryan, 962 N.E.2d 651 (Ind.2011) (table), thereby vacating the opinion of the Court of Appeals, Ind. Appellate Rule 58(A).

Discussion

One's view of this case is largely affected by the narrative that situates it. Sean's narrative is grounded in the proposition that he and Dee Anna agreed to sell the two properties at issue for their market value, divide the proceeds in an agreed manner, and get on with their separate lives. They specified in their agreement what they both in good faith thought was a minimum sales price well below the market value of the properties; when the recession of 2008 materialized, that good-faith estimate proved incorrect; and when Dee Anna refused to reduce it, it was entirely appropriate for the dissolution court to order her to do so.

Dee Anna's narrative is grounded in the proposition that she and Sean agreed to walk away from their marriage with net assets predicated on the two properties being worth at least as much as the specific minimum amounts set forth in their agreement and that they would continue to share the costs of ownership until the properties could be liquidated at those prices. The fact that the recession hit shortly after the divorce was final is of little consequence; the housing market in Michiana had been soft for several years prior to 2008, and the parties could easily have written a market contingency into their agreement if that had been their intent; and Sean has simply changed his mind and the law does not allow him to do so without Dee Anna's consent.

Both stories have resonance, but our task, as the trial court recognized, is not to choose between the two so much as it is to determine the law that applies for resolving postdissolution disputes.

I

This law starts with direction given to us by the Legislature:

The disposition of property settled by an agreement [in writing between the parties to a marriage dissolution providing for the disposition of any property owned by either or both of them] and incorporated and merged into the decree is not subject to subsequent modification by the court, except as the agreement prescribes or the parties subsequently consent.

Ind.Code § 31–15–2–17(c) (2008).

In fact, the Legislature has prohibited the revocation or modification of all court orders concerning property disposition, not only those (like the one at issue in this case) entered by agreement of the parties:

The orders concerning property disposition entered under this chapter [of the Indiana Code governing the disposition of property and maintenance] (or IC 31–1–11.5–9 before its repeal) may not be revoked or modified, except in case of fraud.

I.C. § 31–15–7–9.1(a).

Our decisions have made clear that the statutory proscription on revocation and modification of property-distribution agreements is “unambiguous.” Voigt v. Voigt, 670 N.E.2d 1271, 1278 (Ind.1996).

Our most recent opinion enunciating this principle was Johnson v. Johnson, where Chief Justice Shepard, writing for a unanimous court, flatly stated that the statutes set forth above require that “property distribution settlements approved as part of a dissolution may be modified only where both parties consent or where there is fraud, undue influence, or duress.” 920 N.E.2d 253, 258 (Ind.2010) (citations omitted).¹

Another unanimous opinion written by Chief Justice Shepard emphasized that the statutory no-modification rule is grounded in contract law:

An agreement for division of property is economic in nature—an ordinary contract. See Bowman v. Bowman, 567 N.E.2d 828 (Ind.Ct.App.1991).... As with other contracts, a division of property may only be modified according to the terms of the agreement, if the parties' [sic] consent, or if fraud or duress occurs. [I.C.] §§ 31–15–2–17(c), –7–9.1.

Snow v. England, 862 N.E.2d 664, 668 (Ind.2007).

Also providing guidance is a third unanimous Shepard opinion—Voigt, cited above for describing the proscription on modifying property-distribution agreements as “unambiguous.” 670 N.E.2d at 1278.Voigt is relevant here for more than just that statement. In Voigt, the former husband had sought modification of an order of maintenance (as opposed to property disposition as in the case before us). The statutory scheme governing maintenance (as opposed to property disposition) allows a court to modify an order of maintenance following dissolution “upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable.” I.C. § 31–15–7–3(1); see also Voigt, 670 N.E.2d at 1278. Notwithstanding this language, this Court concluded that the trial court could not unilaterally upset the parties' contract. Voigt, 670 N.E.2d at 1280. We acknowledged that the statutory authority to modify based on changed circumstances “refers to the modification of only court-imposed maintenance, not of approved maintenance agreements,” id. at 1279 (emphasis in original), and held that it could not be extended to maintenance agreements, id. at 1280.²

Voigt's relevance here: if a court does not have authority to modify a maintenance agreement notwithstanding statutory language allowing modification in the face of changed circumstances, it surely does not have authority to modify a property-distribution agreement where the statute flatly prohibits modification.

These authorities make clear that to the extent that Sean seeks to have his and Dee Anna's agreement modified without her consent, the trial court was entirely correct to rule that it had no authority to do so. Their agreement disposed of property owned by them by an agreement in writing between them; was incorporated and merged into the divorce decree; and did not provide for, nor did the parties subsequently consent to, modification. As such, it was “not subject to subsequent modification by the court.” I.C. § 31–15–2–17(c). The Court of Appeals was wrong to hold that the trial court enjoyed “ ‘equitable jurisdiction ... to modify a division of property.’ ” Ryan, 946 N.E.2d at 1196 (quoting Dusenberry v. Dusenberry, 625 N.E.2d 458, 461 (Ind.Ct.App.1993)).

II

That a court has no authority to modify a property-settlement agreement, I.C. § 31–15–2–17(c) (or, for that matter, a property-division order, I.C. § 31–15–7–9.1(a)), does not mean that a court has no authority to resolve a dispute over the interpretation of a settlement agreement or property-division order.

This is a significant gloss to the analysis set forth in Part I, supra, for one party's assertion that the other is seeking an impermissible modification is frequently met with the contention that only clarification of an agreement or order is sought. See Brownsing v. Brownsing, 512 N.E.2d 878, 881 (Ind.Ct.App.1987) (Garrard, P.J., concurring) (deeming the difference between “modification” and “clarification” in this context to be merely “semantic”), trans. denied. In Poppe v. Jabaay, for example, a third-party purchaser of the marital residence asserted that the former wife sought an impermissible modification of a property-division order; the wife contended that she merely sought to have the court clarify whether the property-division order should be...