Robert A. Masters, Appellant-Petitioner,
Leah Masters, Appellee-Respondent.
from the Allen Superior Court The Honorable Charles F. Pratt,
Judge The Honorable Lori K. Morgan, Magistrate Trial Court
Cause No. 02D07-1204-DR-261
Attorneys for Appellant Michael A. Setlak, Perry D. Shilts
Shilts & Setlak, LLC Fort Wayne, Indiana.
Attorneys for Appellee Michael H. Michmerhuizen Barrett
McNagny, LLP Fort Wayne, Indiana.
Cornelius B. Hayes, Hayes & Hayes, Fort Wayne, Indiana.
OF THE CASE
Appellant-Petitioner, Robert Masters (Husband), appeals the
trial court's order awarding attorney fees in favor of
Appellee-Respondent, Leah Masters (Wife), pursuant to an
indemnification clause in the parties' divorce decree.
Husband presents one issue on appeal, which we restate as:
Whether the indemnification clause incorporated in the
parties' dissolution decree (Decree) permitted the
reimbursement of Wife's appellate attorney fees and costs
expended by Wife in her defense to Husband's appeal.
AND PROCEDURAL HISTORY
This is Husband's second appeal to this court, and his
prior appeal was heard by the supreme court. See Masters
v. Masters, 20 N.E.3d 158 (Ind.Ct.App. 2014), trans.
granted and opinion vacated by Masters v. Masters, 43
N.E.3d 570 (Ind. 2015) (respectively, Masters I and
Masters II). The underlying facts, as previously
described in Masters II, are as follows:
The parties were married in 1993 and are the parents of one
child, a daughter, born in January 2007. Dissolution
proceedings began in 2012, and a year later, the parties
signed an agreement to arbitrate under the Family Law
Arbitration Act (FLAA). See Ind. Code §
34-57-5-1 et seq. The FLAA permits parties in a
dissolution of marriage action to resolve their disputes
through arbitration rather than in a trial before a trial
judge. The FLAA details the role and duties of the family law
arbitrator in such arbitration.
The family law arbitrator's findings of fact in this case
are undisputed. Noting that this had "been a very
contentious divorce, " . . . the family law arbitrator
entered extensive findings of fact regarding the legal and
primary physical custody of the parties' daughter,
parenting time, child support, parochial school expenses,
healthcare expenses for their daughter, dependency exemptions
for tax purposes of the husband and the wife, spousal
maintenance for the wife, rehabilitative maintenance for the
wife, division of marital property, and the allocation of
attorney's fees and litigation expenses. The family law
arbitrator then entered conclusions of law that in summary
provided for: the marriage to be dissolved, sole legal and
primary physical custody to be granted to the wife, parenting
time to be granted to the husband, the husband to pay certain
child support obligations, the wife to receive 60% of the
assets and the husband to receive 40% of the assets, the
husband to replenish $51, 000 in the parties' bank
accounts, the wife to be awarded an equalization judgment
against the husband for $23, 965.05 with an interest rate of
8% until paid in full, the husband to pay certain spousal
maintenance costs, the husband to pay $95, 000 of the
wife's attorney's fees, and the wife to be denied
rehabilitative maintenance. The family law arbitrator's
decision was submitted to the trial court, which entered
judgment thereon in accordance with Indiana Code section
Masters II, 43 N.E.3d 571-72 (footnotes omitted).
Instead of paying Wife's attorney fees and costs as
ordered in the Decree, Husband pursued an appeal. See
Masters I, 20 N.E.3d at 158.
The post-decree activity in this case covers the period
between May 2014 and December 2016, whereby the parties filed
a total of twenty-nine motions, petitions, or citations.
Following the trial court's entry of the parties'
Decree in March of 2014, Wife filed a motion for attachment,
seeking to attach Husband's 40% share of assets
(including Husband's share of gold, silver and ancient
coins) so as to satisfy the $95, 000 attorney fees and costs
award. Husband thereafter objected to Wife's motion, and
he requested that Wife's motion be stayed until his
appeal in Masters I was resolved. On October 3,
2014, the trial court issued an order providing that
"both the [status quo] concerning the coins
shall be maintained and the Motion to Attach Money Judgment
filed by [Wife], shall pend and shall be stayed until such
time as the Court of Appeals renders its opinion on the
issues presented before it." (Appellant's App. Vol.
II, p. 155).
Husband's sole challenge in Masters I
was that the arbitrator's finding and conclusion
requiring him to pay $95, 000 of Wife's attorney fees and
costs was unsupported by the evidence. Masters I, 20
N.E.3d at 159. Each party also requested appellate attorney
fees pursuant to Appellate Rule 66(E). Id. at 160.
As stated, the arbitrator in this case had distributed all of
the parties' marital assets at 60%/40% in Wife's
favor. Id. at 163. In challenging Husband's
claim in Masters I, Wife argued that the valuation
of Husband's 40% share of certain gold, silver, and
ancient coins demonstrated Husband's ability to pay the
$95, 000 attorney fees and costs award. Id. at 164.
Notwithstanding Wife's argument that the valuation of
Husband's 40% share of coins would demonstrate
Husband's ability to pay her attorney fees, we found the
arbitrator had rejected Wife's valuation, and had
concluded that the value of coins remained
"unknown." Id. Thus, we held that
we are in no position either to speculate on a value for the
coins or to say that the arbitrator meant for Husband to sell
or otherwise collateralize them. And, at best, Wife's
evidence regarding the value of the coins would make the
arbitrator's findings irrational in that the arbitrator
would have found that the coins had an unknown value and then
relied on that unknown value to assess fees against Husband.
Id. In addition, we noted that although the
arbitrator had expressly found that Husband's annual
income is $80, 000, we determined that the arbitrator's
findings raised serious doubts as to Husband's ability to
pay Wife's attorney fees. Id. Specifically, we
noted that the arbitrator had directed Husband to immediately
pay $17, 735 in child support arrearage; pay Wife a cash
payment of $23, 965.05 within 100 days of the arbitration
award in order to equalize the parties' marital assets;
and replenish the parties' bank account with $51, 000.
Id. Accordingly, we found that the $95, 000 attorney
fees and costs award was more than Husband's 40% valued
share of the marital estate. Id. Thus, finding that
the arbitrator's findings of fact raised grave concerns
on Husband's ability to pay Wife's attorney fees, we
concluded that the judgment was erroneous and reversed the
trial court. Id. at 165. Also, we summarily rejected
each side's request for appellate attorney fees pursuant
to Appellate Rule 66(E). Id.
On April 2, 2015, our supreme court granted transfer and
ultimately reached a different result by affirming the trial
court's award of attorney fees in favor of Wife. See
Masters II, 43 N.E.3d at 570. The supreme court stated,
in pertinent part:
The arbitrator's conclusions, findings, and award
comprised twenty-seven pages of single-spaced paragraphs
extensively addressing various factors. The arbitrator
determined the value of the marital estate, its division, and
the economic circumstances of each of the parties; the
relative education of each of the parties, their job
opportunities, and their actual incomes as well as their
potential incomes; the behavior of the parties, their level
of cooperation in this case, and how attorney's fees were
incurred and funded by each of the parties; and various
aspects of the education and support of the parties'
The husband does not argue that the family law arbitrator
made improper findings of fact. Rather, his challenge is
directed to the amount of the award as compared to his
ability to pay. He also contends that the arbitration award
contradicts the arbitrator's own findings, specifically
that the arbitrator failed to appropriately consider the
wife's potential income and the resulting ratio of the
parties' relative incomes; that the wife received $50,
000 more than the husband in the property division; that the
wife's attorney's fees were paid by the wife's
parents and the potential forgiveness of the resulting
promissory notes from the wife to her parents; and that the
wife's attorney's fees were triple his own and were
"undeserved given the results of the case."
The crux of the husband's argument compares his $95, 000
attorney's fee award obligation against his share of the
marital estate, "approximately $94, 000 . . . plus forty
percent of some unvalued coins." In making this claim,
the husband relies on the fact that the family law arbitrator
did not expressly assign a particular value to the
parties' extensive coin collection. To the contrary, we
find that the sizeable coin collection and its disposition is
highly relevant to our review. The family law arbitrator
recognized the coins in her findings and stated that
"[t]hroughout the marriage, Husband invested income
earned during the marriage in numismatic and ancient coins .
. . believ[ing] that the investment was a good retirement
investment strategy." The arbitrator then noted that the
wife had hired an appraiser who valued the gold and silver
coins at $242, 954.55 and that husband had hired an appraiser
who valued the ancient coins at $60, 635.00. Based on those
findings, the family law arbitrator then ordered "that
the gold and silver coins be divided by [wife's
appraiser] and the [ancient] coins be divided by
[husband's appraiser]. . . . Husband shall receive forty
percent (40%) of the divided coins and Wife shall receive the
remaining sixty percent (60%) thereof." These findings
clearly imply ...