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Miller v. Brown

Court of Appeals of Indiana

September 29, 2017

David K. Miller, Appellant-Respondent,
Joy A. (Miller) Brown, Appellee-Petitioner

         Appeal from the Bartholomew Superior Court 2 The Honorable Jon W. Webster, Special Judge Trial Court Cause No. 03D02-1006-DR-092

          ATTORNEY FOR APPELLANT Sean G. Thomasson Thomasson, Thomasson, Long & Guthrie, P.C. Columbus, IN

          ATTORNEYS FOR APPELLEE R. Patrick Magrath Alcorn Sage Schwartz & Magrath, LLP Madison, IN


         Case Summary

         [¶1] While David Miller ("Father") and Joy Brown ("Mother") were married, Father opened two college savings accounts in his name, designating the couple's two sons as the beneficiaries. After the couple divorced, Father continued making contributions to those two accounts, and Mother opened two additional accounts in her own name with the boys as the beneficiaries. The older son enrolled in college but eventually withdrew. At issue in this case is the trial court's order requiring Father and Mother to, among other things, combine all the savings accounts into a single, jointly owned account for the benefit of the younger son. Father appeals. He says he has no objection to paying his share of his son's college expenses but argues that the funds in the accounts he opened are his property and that the trial court lacked authority to make Mother a co-owner. We agree with Father, reverse the order in its entirety, and remand for further proceedings.

         Facts and Procedural History

         [¶2] Father and Mother married in 1986 and had two sons: Z.M., born in May 1995, and N.M., born in December 1997. During the marriage, Father opened two "529 accounts"-the tax-advantaged college savings accounts authorized by 26 U.S.C. § 529. Father designated Z.M. as the beneficiary of one of the accounts and N.M. as the beneficiary of the other.

         [¶3] Father and Mother divorced in 2010. They entered a settlement agreement regarding property division, as well as custody and child support, but the agreement did not specifically address the 529 accounts, which at the time had balances of "roughly $5, 000" each. Tr. p. 22. After the divorce, Father continued contributing to the accounts, and Mother opened two new 529 accounts in her own name, also with Z.M. and N.M. as the designated beneficiaries.

         [¶4] In June 2014, Mother filed a petition in which she indicated that Z.M. had started college and asked the trial court to order Father to pay a share of the expenses. Father objected, noting that Z.M. was nineteen years old "and thus emancipated" when Mother filed her petition and arguing that the petition was therefore "late, moot, and untimely and should be dismissed." Appellant's App. Vol. II p. 34. In January 2015, while Mother's petition relating to Z.M. was still pending, she filed a similar petition as to N.M., explaining that he had "plans to attend college once he graduates high school." Id. at 36.

         [¶5] The trial court held a hearing on both of Mother's petitions in April 2015. Mother claimed that she had paid between $20, 000 and $25, 000 for Z.M.'s "attempt at college"-an attempt that had "failed." Id. at 41; Tr. pp. 11-12. Nonetheless, the trial court granted Father's motion to dismiss Mother's petition relating to Z.M., relying on our decision in Neal v. Austin, 20 N.E.3d 573 (Ind.Ct.App. 2014), to hold that Mother had waited too long (i.e., until after Z.M. had turned nineteen) to file the petition.[1] As such, the court denied Mother's request for reimbursement from Father's 529 account for Z.M., which by that point had a balance over $20, 000. Regarding N.M., the court deferred consideration of Mother's petition, noting that N.M. was still in high school and had not even applied to any colleges.

         [¶6] N.M. attended Ivy Tech in the fall of 2016, and Mother notified the trial court that her petition relating to N.M. was ripe. The trial court held another hearing, at which Mother testified that N.M.'s tuition for the fall was $1600 and that Father had not paid any of it. She also testified that N.M. had withdrawn from Ivy Tech and enrolled at Indiana State, at a cost of approximately $20, 000 per year. By the time of the hearing, Mother had consolidated her two 529 accounts for Z.M. and N.M. into a single account for N.M., with a balance of approximately $11, 400. Father was still maintaining the two original 529 accounts, with balances of approximately $21, 000 for Z.M. and $25, 000 for N.M. Based on the parties' testimony and the exhibits they submitted, the trial court ordered that: (1) the parties consolidate all the 529 funds into a single account, with Mother and Father as "equal co-owners"; (2) 100% of N.M.'s college expenses be paid from the consolidated account (including reimbursing Mother for the Ivy Tech expenses); and (3) in the event that the consolidated account is exhausted, additional expenses will be paid 55% by Mother and 45% by Father (except for textbooks and fees, which will be paid by N.M.). Appellant's App. Vol. II p. 12.

         [¶7] ...

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