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Masters v. Masters

Court of Appeals of Indiana

April 12, 2018

Robert A. Masters, Appellant-Petitioner,
Leah Masters, Appellee-Respondent.

          Appeal 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.

          RILEY, JUDGE.


         [¶1] 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.

         [¶2] We affirm.


         [¶3] 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.


         [¶4] 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 34-57-5-7(d)(1).

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.

         [¶5] 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).

         [¶6] 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.

         [¶7] 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' daughter.
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 ...

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