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Dumka v. Erickson

Court of Appeals of Indiana

January 31, 2017

Russell F. Dumka, Appellant-Plaintiff,
Lori Erickson and Edward Jones, Appellees-Defendants

          Attorney for Appellant John William Davis, Jr. Davis & Roose

         Appeal from the Elkhart Circuit Court The Honorable Terry C. Shewmaker, Judge Trial Court Cause No. 20C01-1405-PL-000127

          Crone, Judge.

         Case Summary

          [¶1] Russell F. Dumka appeals from the trial court's order denying garnishment of an individual retirement account inherited by Lori Erickson from her husband. Although he concedes that the asset is exempt from garnishment, he argues that the trial court erred by applying the statutory exemption because it was Lori's burden to assert the exemption and she failed to do so. Concluding that the order complies with the evidence and the law, we affirm.

         Facts and Procedural History

          [¶2] In May 2014, Dumka and Craig Erickson (now deceased) each owned fifty percent of MIKO-Home Machine Co., Inc. Craig served as president, and Dumka served as vice-president. Craig's wife, Lori, served as secretary and treasurer. Craig, Lori, and Dumka constituted the board of directors. Dumka filed a stockholder's derivative action on behalf of MIKO against Craig and Lori, alleging that they had stolen property from MIKO and requesting that a receiver be appointed for MIKO. In July 2014, the trial court entered a default judgment ("the MIKO Judgment") in favor of MIKO and against the Ericksons jointly and severally for $2, 124, 132.24 plus attorney fees and court costs. In January 2015, the trial court issued an order approving the receiver's final accounting, conveying MIKO's tangible assets to Dumka, and assigning part of the MIKO Judgment to Dumka.

         [¶3] In December 2015, Dumka filed a motion for proceedings supplemental against Lori and naming Edward Jones as garnishee-defendant, seeking to recover the unpaid balance of $984, 129.48 remaining under the MIKO Judgment. In January 2016, a hearing was held. Dumka appeared in person and by counsel, and Lori appeared pro se. Dumka submitted Edward Jones's answer to interrogatories, in which it indicated that it held in Lori Erickson's name an "Inherited Traditional Individual Retirement Account (IRA) … held for the benefit of Craig D. Erickson, C/O Lori L. Erickson, " with an estimated value of $51, 115.02. Appellant's App. at 190. The answer to interrogatories also stated, "Please note this account was formerly a traditional IRA held for the benefit of Craig D. Erickson." Id. Dumka also submitted Lori's affidavit, in which she attested that she had the Edward Jones IRA. Id. at 194. Both documents were admitted into evidence without objection. Dumka asked the trial court to enter a final order of garnishment directing Edward Jones to liquidate the IRA. The trial court asked Lori whether she had any problems with the submission by Dumka's attorney of a final garnishment order against Edward Jones, and she said, "No." Tr. at 3. At no time did Lori assert that the IRA was exempt from garnishment. The trial court then directed Dumka's attorney to submit a proposed garnishment order and stated that it would approve the order. Id. The entry in the chronological case summary states, "[W]ithout objection, Final Order in Garnishment will issue upon receipt of same." Appellant's App. at 13.

         [¶4] In February 2016, the trial court issued an order denying Dumka's request for garnishment ("the Order"). The trial court found that pursuant to Indiana Code Section 34-55-10-2(c)(6), "non-spousal inherited IRAs are not exempt from garnishment, " but "IRAs inherited by surviving spouses are exempt, " and because the Edward Jones IRA was inherited by a surviving spouse, it is exempt from garnishment. Id. at 21. Dumka filed a motion to correct error, arguing that the trial court erred by asserting exemptions on Lori's behalf and acting as her advocate. Following a hearing, the trial court denied the motion, finding that it did not err by taking judicial notice of Section 34-55-10-2(c)(6). This appeal ensued.

         Discussion and Decision

          [¶5] Initially, we note that Lori did not file a brief.

When an appellee fails to submit a brief, we do not undertake the burden of developing appellee's arguments, and we apply a less stringent standard of review. We may reverse if the appellant establishes prima facie error, which is error at first sight, on first appearance, or on the face of it. The prima facie error rule relieves this Court of the burden of controverting arguments advanced in favor of reversal where that burden properly rests with the appellee.

Jenkins v. Jenkins, 17 N.E.3d 350, 351-52 (Ind.Ct.App. 2014) (citations omitted).

          [¶6] Dumka argues that the trial court erred by denying his request for garnishment based on an exemption ...

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