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McMahel v. Deaton

Court of Appeals of Indiana

September 14, 2016

Jeffrey L. McMahel, Appellant-Defendant,
Mary A. Deaton, Appellee-Plaintiff.

         Appeal from the Orange Circuit Court Trial Court Cause No. 59C01-1403-PL-73 The Honorable Larry R. Blanton, Judge

          Attorney for Appellant Zachary J. Stock Zachary J. Stock, Attorney at Law, P.C. Carmel, Indiana

          Attorneys for Appellee David A. Smith Patrick J. Smith McIntyre & Smith Bedford, Indiana

          Brown, Judge.

         [¶1] Jeffrey L. McMahel appeals the trial court's order awarding certain property to Mary A. Deaton following their cohabitation. McMahel raises one issue which we revise and restate as whether the court's order is clearly erroneous. We affirm.

         Facts and Procedural History

         [¶2] In 1996, McMahel and Deaton met and Deaton moved into McMahel's house on Hudleson Street in Paoli, Indiana. McMahel and Deaton had one child together born in April 1998. McMahel and Deaton's relationship ended in February 2014.

         [¶3] On March 20, 2014, Deaton filed a Complaint for Partition and/or Unjust Enrichment alleging she and McMahel resided together for a number of years, they have one child together, they had a joint bank account until September 2013, they acquired property together including real property and vehicles, and requesting an equitable distribution of the property. McMahel filed a counterclaim for trespass and conversion.

         [¶4] On August 20, 2015, the court held a hearing at which the parties presented testimony and documentary evidence. Deaton called McMahel as a witness and asked when he and Deaton began residing together, and McMahel replied that "[t]o be honest from April 9th she would not leave, " that "I never asked her to come to my home, ever, " and that "[s]he never left." Transcript at 49. McMahel testified that Deaton moved around, and when asked how often she left, he replied "[a]t least half the time but would not stay gone. She would come back." Id. at 51. When asked when Deaton's name was added to his account at Hoosier Hills Credit Union, McMahel replied he did not know the exact date but probably 2008 or 2009. When asked how long he was in a relationship with Deaton, McMahel replied "[p]robably never, " and when asked what he called it, he answered "[a] mistake." Id. at 53. McMahel testified that he worked for Essex, the plant closed in 2003, he received a severance, he was unemployed for one year and received unemployment benefits, and that he worked for Production Heating and Cooling from 2004 until 2009, when he became disabled. He testified that he purchased a home on Sandyhook Road at an auction in 2002 and the closing occurred in 2003, that Deaton was present during the auction, and that they probably discussed the purchase but did not discuss the finances.

         [¶5] Deaton testified that she was in a relationship with McMahel from April 1996 until February 2014 and that they resided together during that time. She testified they did everything as a family, made purchases together, and took vacations. She stated that, when she first moved in with McMahel, he was living on Hudleson Street and that he had purchased the residence the previous month, that their son was born in 1998, and that she, McMahel, and their son moved to the Sandyhook Road residence. She also testified that, around Christmas time of 1997 or 1998, she and McMahel purchased a living room suite and that her sister co-signed a loan to help McMahel establish his credit after he filed for bankruptcy. She also testified that she and McMahel purchased a truck that he drove and a car as her main transportation and that they made these decisions together.

         [¶6] With respect to her earnings, Deaton testified that she began working at Hoosier Uplands in August of 1998, her salary in 2000 was about $14, 000 and gradually increased, and that she earned just under $19, 000 in 2013. She stated that she worked from August through May, was off in the summers, received unemployment benefits, and that her income was deposited into the joint account with McMahel. When asked when the joint account was created, Deaton responded that McMahel already had the account in his name and then they added her name and that she was "pretty sure" that occurred before her son was born. Id. at 69. The court admitted into evidence certain tax and employment documents showing that Deaton earned wages of approximately $2, 919 in 1998; $13, 719 in 2000; $14, 261 in 2001; $15, 637 in 2002; $18, 131 in 2003; $15, 990 in 2004, $16, 403 in 2005; $18, 263 in 2006; $17, 053 in 2007; $18, 870 in 2011; $15, 727 in 2012; and $18, 755 in 2013.

         [¶7] Deaton presented bank statements of McMahel and Deaton from Hoosier Hills Credit Union for July of 2005 through July of 2013, into which the parties made deposits and later direct deposits from Hoosier Uplands and social security. Deaton testified that she and McMahel paid all of the bills and made all of their purchases from the checking account, including utilities, household items, groceries, insurance, and medical expenses. She also testified that the money for purchasing vehicles and four-wheelers came from the joint account and that the only debt was the home mortgage.

         [¶8] Deaton also presented an itemized list of assets showing a value for each based upon an appraisal, statement, guide, or personal belief, including a house, Deaton's 401(k), McMahel's IRA and savings, a 1996 Chevy, a Subaru Tribeca, [1] a 2009 Harley Davidson, an ATV, a Genesis Boat, a 1998 Suzuki dirt bike, a 2001 Honda EX, two 4-wheelers, two trailers, a golf cart, and two riding mowers. She presented print-outs of guides from the National Automobile Dealers Association regarding the value of the 1996 Chevy, the Subaru, the 2009 Harley Davidson, the ATV, the 1998 Suzuki, one of the 4-wheelers, and the 2001 Honda. Deaton also presented Hoosier Hills bank statements for 2014, and the statement for the period of February 1, 2014, through February 28, 2014, the month in which the parties' relationship ended, showed an IRA with a previous balance of $13, 671.58, and a mortgage loan with a previous balance of $8, 300.21. Deaton testified that McMahel had her name taken off of the account near the end of 2013.

         [¶9] Deaton further testified that McMahel opened the IRA in 2003 and had rolled over funds from a 401(k) into the IRA. When asked if the IRA had about seven thousand dollars at the time, she answered that she was unsure.[2] She also stated that she worked for Hoosier Uplands for several years before she signed up for her retirement account and that she started working there after she began her relationship with McMahel. She presented a statement from her 401(k) showing it had a value of $28, 521.37 on January 1, 2014. She presented an appraisal report dated March 23, 2015, for the residence on Sandyhook Road which stated that the value by a sales comparison approach was $105, 000.

         [¶10] Deaton testified that she owned some property together with her sister that they had received from their parents, that likewise McMahel owned some property with his father, there were no joint efforts to acquire them, and those properties should be set aside. She testified that $4, 100 was spent from her joint account with McMahel toward the construction of a garage on the property owned by McMahel and his father but that she was not including that in her list of assets to be divided. She testified that McMahel's earnings were probably higher than her earnings, that she kept the home, she was the person who cleaned the gutters, painted the house, cleaned the toilets, and cooked, and that she was their son's primary caretaker.

         [¶11] McMahel presented evidence that he received proceeds of $7, 333.34 from the sale of real estate in October 2002 and testified that he had "sold ten (10) acres of [his] grandpa's property that actually paid for the down payment" on the Sandyhook Road property. Id. at 130. He testified that he took a mortgage with Hoosier Hills to finance the remaining portion of the purchase price and presented a mortgage dated February 7, 2013, identifying him as the borrower and securing a promissory note in favor of Hoosier Hills in the original amount of $59, 400.[3] He also testified that he gave a cashier's check of $20, 900 to a car dealership when the Subaru was purchased and that he received the money from back pay for disability.[4] He testified that he received disability benefits of $1, 630 per month, and that he earned around $40, 000 per year when he worked for Essex, that he earned about $65, 000 per year at Production Heating and Cooling, and that in his final year of working he earned $67, 500 "counting everything." Id. at 146. With respect to the IRA, McMahel testified that he had "an account with Essex before [Deaton], " id. at 147, that he transferred the funds to an IRA after his employment with Essex ended, and that he has not contributed to the IRA since then.[5] On cross-examination, McMahel indicated that the mortgage payments were made from the Hoosier Hills account, and that his salary of $67, 500 included his vehicle, that he was hired at a rate of around $16.75 per hour, and that he received a commission check as well.

         [¶12] Following the hearing, the parties submitted proposed findings of fact and conclusions, and on December 11, 2015, the court entered its findings and conclusions, awarded certain property to Deaton, and ordered McMahel to pay Deaton the sum of $13, 102.30. The court's findings of fact and conclusions state in part:

         Findings of Fact

1. There is agreement, by the Parties, that they met in April of 1996, and entered into a relationship. They began living together (co-habitation) almost immediately. They resided together, in the house owned by Mr. McMahel.
** * * *
4. Plaintiff Deaton, during the term of co-habitation earned from $13, 000 to $18, 000 per year. Her work was irregular and sometimes seasonal, depending on the needs of services provided by Hoosier Uplands . . . .
Defendant McMahel, during the tenure of the relationship earned from his employment $40, 000 to $67, 000 per year. His employment options and opportunities are severely limited due to complications arising from multiple sclerosis. He now receives disability benefits of (approximately) $1, 600 per month.
** * * *
6. However the Parties choose to define their physical and psychological relationship they lived in at least two residences together, they purchased vehicles, furniture and residential accouterments and they became parents to a son.
7. Factually, the Parties presented a family unit. They shared a home, they parented a child, they purchased vehicles and they traveled together.
8. At some point in time (the exact time is in dispute) the parties began to comingle their assets. They established and maintained a joint checking account. Ms. Deaton claims that arrangement began in 1997. Mr. McMahel estimates that arrangement began some time around 2005. During this period of their co-habitation there were assets purchased - some jointly - some in ...

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