Kriston M. Scott, Appellant-Defendant,
Gerald J. Corcoran, III, Appellee-Plaintiff.
from the Lake Circuit Court Trial Court Cause No.
45C01-1009-DR-856 The Honorable Marissa McDermott, Judge, The
Honorable Lisa A. Berdine, Magistrate Judge
Attorney for Appellant Tula Kavadias Crown Point, Indiana
Attorney for Appellee Andrew P. Martin Saint John, Indiana
Kriston M. Scott ("Mother") appeals from the trial
court's order denying her petition for rule to show cause
regarding Gerald J. Corcoran, III's ("Father")
failure to pay child support; and denying her request for
attorney's fees. We affirm in part, reverse in part, and
Mother raises three issues on appeal, which we revise and
restate as follows:
I. Whether the trial court abused its discretion in denying
Mother's request for further extension of time to submit
proposed findings of fact and conclusions of law.
II. Whether the trial court clearly erred in denying
Mother's petition for rule to show cause regarding
Father's failure to timely pay child support.
III. Whether the trial court clearly erred in finding that
Father overpaid child support to Mother and in entering a
money judgment against Mother and in favor of Father.
IV. Whether the trial court clearly erred in failing to order
Father to pay Mother's attorney's fees incurred for
defending against Father's petition for an accounting,
which petition Father withdrew at the close of the four-day
Mother and Father married in 2002 and have two children.
During the marriage, Mother worked primarily as a homemaker,
and Father was employed as an operations manager for Scrap
Metal Services ("SMS"). In 2013, Father's
annual base salary from SMS was approximately $150, 000.00.
Father is a minority shareholder in SMS,  in which he once
owned a 20.65 percent interest. Father is also a shareholder
in SMS Realty and other SMS entities (collectively, "the
subsidiary companies"). In addition to his salary,
Father receives distributions from SMS and the subsidiary
companies in profitable years.
Father filed to dissolve the marriage and, on November 26,
2013, the trial court approved an agreed decree of
dissolution ("Agreed Decree") that incorporated the
parties' negotiated settlement agreement and settled
outstanding issues of property division, custody, parenting
time, and child support. The relevant portion of the Agreed
Decree for purposes of this appeal is as follows:
Commencing December 1, 2013, the Father shall pay Two Hundred
and Thirty Five Dollars ($235.00) per week in Guideline Child
Support and, consistent with the Guideline treatment for
irregular income, shall pay 12% of all income earned by the
husband in excess of $2, 903.79 per week as set forth in the
attached Child Support Worksheet. The 12% of irregular income
based Child Support shall include income received in the last
quarter of 2013. Thereafter, the Husband shall file his
Federal tax returns no later than November 1st of
each year and shall immediately notify the Mother of his
filing. The parties shall have 30 days to calculate the 12%
of irregular income and to calculate the support owed thereon
consistent with the Indiana Child Support Guidelines, and
taking into consideration support paid by Father to Mother
for the year 2013. The Father shall have 30 days thereafter
to pay all amounts owed for said irregular income. Any amount
not paid within the 30 days shall become a judgment against
the Father. . . . .
The parties agree that in order to determine Father's
excess income that the following information shall be
In addition to wages and rental income in the form of
Distributions from SMS Burnham, LLC, Father receives other
income Distributions from various entities in which he has an
interest, including but not limited to Scrap Metal Services,
LLC. The parties further agree that Father may at time
receive "disbursed income" (distributions received)
and "undisbursed income" (pass through income) from
these entities. Consistent with the holdings in Tebbe v.
Tebbe, 815 N.E.2d 180, 182 (Ind.Ct.App. 2004), the
parties agree that any undisbursed income of Father, i.e.
pass through income, shall not be included in Father['s]
gross income for making the calculation of child support,
however, all disbursed income received and as demonstrated on
Father's K-1's and his tax returns shall be included
in Father's gross income for child support purposes.
The parties further agree that in order to properly calculate
Father's support obligation, the income tax on the
undisbursed portion of his income shall be calculated and
then deducted from Father's income. All the remaining
Distributions, excluding the undisbursed as indicated and the
tax on the undisbursed, shall then be used to calculate
Father's gross income.
Finally, the parties agree that Father's tax rate may and
likely will be in excess of the presumed tax rate set forth
in the Indiana Child Support Guidelines as the rate exists in
2013, and as it may change in subsequent years. To that end,
the parties agree to adjust the calculation of Father's
child support by adjusting the calculation to reflect the
actual tax rate that Father pays each year on the disbursed
and regular income used for his support obligation
calculation, but not the tax rate that Father pays on his
App. Vol. II pp. 48-50 (footnotes omitted). In the Agreed
Decree, Father also agreed to execute an authorization to
allow Mother to obtain his federal tax return "directly
from the IRS annually" and to provide "his complete
federal and all state income tax returns, his 1099s from all
sources, including his INT, DIV and related forms, and his
K-1's from all sources" to Mother. Id. In
2012 and 2013, Father paid $37, 230 for irregular child
support. Father did not pay irregular child support in 2014.
In dividing the marital property in the Agreed Decree, the
trial court, inter alia, assigned to Mother
Father's interest income from a promissory note
("Note") for approximately $1.155 million between
Father and SMS. Mother was to receive monthly interest
payments of approximately $9, 000.00 on the Note and the
principal when it was due. In 2015, SMS temporarily ceased
making interest payments to Mother because of financial
difficulties. The Agreed Decree provided that "once
[ ] interest income which Mother receives on the Promissory
Note . . . terminates, [ ] Mother shall be entitled to a
modification of support as that event will constitute . . .
change[d] circumstances." Id. at 50. Father did
not pay any irregular child support in 2015.
On August 12, 2015, Mother filed a petition for modification
of child support in which she alleged a continuous and
substantial change in circumstances warranting modification
of the child support order for various reasons, including the
suspension of interest payments on the Note. Mother also
filed a verified motion for rule to show cause regarding
Father's failure to timely produce his 2013 and 2014 tax
returns and Father's failure to pay Mother "any sum
. . . arising from [ ] his excess income." Id.
at 63. At the time, Father was paying his agreed-upon base
support of $235.00 per week. Mother also sought
In April 2016, Father paid a lump-sum payment of $108, 021.00
for irregular child support to Mother, based on calculations
based on his original tax returns. On April 26, 2016, Father
filed a petition to modify child support in which he asked
the trial court to deviate from the recommended child support
pursuant to the Indiana Child Support Guidelines; and Father
requested that the trial court, "in determining a proper
child support amount for the children[, ] tak[e] into
consideration that the support payments being made by
[F]ather to [M]other [we]re in excess of a reasonable and
necessary amount to provide for the care and expenses of the
children." Id. at 71. Father also sought an
accounting of Mother's use of all child support monies
and attorney's fees.
On February 12 and 13, July 30, and November 26, 2018, the
trial court conducted a multi-day hearing on Mother's
petition to modify child support and motion for rule to show
cause, filed on August 12, 2015, and on Father's
petitions to deviate from the Child Support Guidelines and
for an accounting, filed on April 26, 2016. On the first day
of the hearing, Mother testified, under questioning by her
counsel, that Father failed to timely supply Mother with his
tax returns as required in the Agreed Decree.
Mother's expert, certified public accountant and
certified valuation expert, Jill Jones testified that Mother
hired her to aid in crafting the formula prescribed in the
Agreed Decree for calculating Father's income for
purposes of child support. Jones testified that Father's
failure to timely produce his tax returns hampered her
calculation efforts. Jones further testified that Father
suffered significant business losses of approximately $4.4
million in 2015, carried the losses back on his already-filed
tax returns, and amended his 2013 tax returns to carry back
his losses. Jones testified that she needed the amended 2013
tax returns for purposes of calculating Father's income
for child support but that, as of the first day of the
hearing-February 12, 2018-Father still had not provided his
amended tax returns to Mother.
Father's expert, certified public accountant Gary Shutan,
testified that his calculations of Father's income for
child support purposes were based on Father's original
tax returns and not on the amended returns. Shutan testified
that the amended 2013 tax returns had no effect on the amount
of child support Father was required to pay pursuant to the
After the February 13, 2018, portion of the hearing, the
trial court continued the hearing and ordered Father to:
provide all amended returns. The signed copies. And all
attachments that support those returns within fourteen days.
The parties are then to have their respective accountants
review those amended returns and recalculate [Father's
child support obligation] pursuant to their formulas . . . .
And those are to be submitted to the Court within sixty days.
Tr. Vol. III p. 104. Father, then, produced his amended tax
At the hearing on July 30, 2018, counsel for Mother moved to
admit Father's 2015 tax return as well as his amended
2013 tax return into evidence. Jones testified that she had
performed an updated computation of Father's child
support obligation for 2013 to reflect the impact of
Father's business losses carried back on the child
support calculation, pursuant to the Agreed
Decree. Jones testified that there was a
"significant difference" in the accountants'
final calculations of Father's income for purposes of
child support for 2013. Tr. Vol. III p. 132. Jones testified,
regarding the disparity between her calculations and
Shutan's calculations, that Shutan used an effective rate
of forty-three ...