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Hernandez-Velazquez v. Hernandez

Court of Appeals of Indiana

November 14, 2019

Raul Hernandez-Velazquez, Appellant-Respondent,
v.
Sondra Hernandez, Appellee-Petitioner and Modesto Hernandez and Elizabeth Barcaleta, Appellants-Intervenors,

          Appeal from the Fountain Circuit Court The Honorable Samuel A. Swaim, Special Judge Trial Court Cause No. 23C01-1411-DR-332

          Attorney for Appellants Karen Celestino-Horseman Of Counsel, Austin & Jones, P.C. Indianapolis, Indiana

          Attorney for Appellee Stephen R. Lewis Indianapolis, Indiana

          VAIDIK, CHIEF JUDGE

         Case Summary

         [¶1] Raul Hernandez-Velazquez ("Husband"), Modesto Hernandez, and Elizabeth Barcaleta Santiago (collectively, "Appellants") appeal the trial court's order requiring the conveyances of certain properties to Sondra Hernandez ("Wife") to effectuate the division of marital assets in Husband and Wife's divorce. Specifically, Appellants argue that the trial court erred in finding that Wife is a creditor under the Uniform Fraudulent Transfer Act (UFTA), by finding that Husband conveyed several properties to Elizabeth shortly before the divorce with the intent to defraud Wife, and by setting aside those conveyances. Because the evidence supports the trial court's finding that Wife is a creditor u er UFTA and that Husband's intent was fraudulent, we affirm.

         Facts and Procedural History

         [¶2] Husband and Wife were married in August 2001. Wife is a United States citizen. Husband is a citizen of Mexico and resides in the United States without proper documentation. Husband worked from approximately 2001 to 2005 at Lithonia Lighting and then at Harrison Steel from 2005 to 2008. For her part, Wife worked as a translator on a contract basis for the Southeast Fountain School Corporation and Fountain Circuit Court. She also babysat occasionally but was primarily focused on raising her and Husband's four children: S.H., born in May 2002, A.H., born in January 2006, and twins, I.H. and M.H., born in April 2008. To afford their daily living expenses, the family applied for and received government benefits, such as housing assistance, food stamps, and Medicaid.

         [¶3] Husband's brother, Modesto, was close to the family throughout the marriage. Modesto is also a citizen of Mexico and resides in the United States without proper documentation. Although they have never been married, Modesto has been in a relationship with Elizabeth, also a citizen of Mexico, for more than thirty years, and together they have three children. Since Modesto arrived in the United States in 1999, without Elizabeth, he has worked for Masterguard, Perdue, Harrison Steel, and Closure Systems International. He also mows lawns whenever he can. In September 2005, Husband and Modesto decided to buy and renovate a foreclosed house at 317 Harrison Street in Crawfordsville. The brothers bought the house for $11, 000 cash, with Modesto putting $9, 600 toward the purchase price and Husband providing the rest and doing the renovations. See Tr. Vol. III p. 99. The house was titled and insured in Husband's name. After renovations were complete, 317 Harrison Street was rented for $600 a month. Tr. Vol. II p. 24; see also Ex. 12. Wife was responsible for collecting rent and paying property taxes. In June 2006, Husband and Modesto decided to buy and renovate another house, this one located at 316 W.Van Buren Street in Veedersburg. The brothers bought the house for $18, 000 cash. See Ex. 36. The house was titled and insured in Husband's name. This house was Husband and Wife's marital home through the remainder of the marriage.

         [¶4] After Husband was fired from Harrison Steel in 2008, he and Wife started a business-Sorani Construction and Remodeling-that would buy foreclosed homes, fix them up, and then rent or sell them. Tr. Vol. II p. 15. In January 2010, Husband decided to buy and renovate a foreclosed duplex at 115 N. Walnut Street in Crawfordsville. The duplex was purchased for $10, 500 cash and was titled and insured in Husband's name. After renovations were complete, each unit at 115 N. Walnut Street was rented for $400 a month. Ex. 27. Wife was responsible for collecting rent, and Sorani Construction paid the property taxes. In March 2010, Husband decided to buy and renovate a foreclosed house at 821 N. Sherman Street in Veedersburg. The purchase price of the house was $9, 000 and was paid for by a cashier's check in Husband's name. The house was titled and insured in Husband's name. After renovations were complete, 821 N. Sherman Street was rented for $425 a month. See Ex. 48. Wife was responsible for collecting rent, and Husband paid the property taxes. In May, Husband and Modesto decided to buy a house located at 415 W. North Street in Crawfordsville. The brothers bought the house for $6, 000 cash, with Modesto putting $5, 348.24 toward the purchase price and Husband providing the rest and doing the renovations. The house was titled in Modesto's name, and Sorani Construction paid the property taxes.

         [¶5] Two years later, in November 2012, Modesto married Wife's aunt, Penny Stonebraker. The marriage was part of Modesto's attempt to acquire lawful permanent resident status. Tr. Vol. II p. 140.

         [¶6] In May 2013, Husband decided to buy and renovate a foreclosed house at 404 S. Grace Street in Crawfordsville. The purchase price of the house was $8, 500 and was paid for by a cashier's check in Husband's name. Tr. Vol. II p. 43; see also Ex. 31. The house was titled and insured in Husband's name. After renovations were complete, 404 S. Grace Street was rented for $650 a month. Wife was responsible for collecting rent, and Sorani Construction paid the property taxes. In December, the brothers became worried that if Modesto divorced Penny, she could get the house located at 415 W. North Street, so Modesto transferred ownership of 415 W. North Street to Husband. Tr. Vol. II p. 32. Husband did not pay Modesto any money in exchange for the transfer. In February 2014, Husband sold 415 W. North Street to Jesus Trevino and Maria Magdalena under a rent-to-own arrangement. Ex. 17. The monthly payments are $680 a month. Tr. Vol. II p. 35.

         [¶7] In April, Husband decided to buy and renovate a house at 515 Chambers Street in Veedersburg. He purchased the house for $19, 500 cash, and it was titled and insured in his name. In September, while Modesto was still married to Penny, his partner, Elizabeth, arrived in the United States. Elizabeth arrived without proper documentation. Husband and Wife traveled to Texas to pick up Elizabeth, and after they returned to Indiana, their marriage began to deteriorate. Husband told Wife that she needed to show Elizabeth how to collect rent and issue receipts because Elizabeth would now do that job instead of Wife. Tr. Vol. III pp. 13-14. Husband also had Wife type a document saying that they owed Modesto $51, 500. Id. at 133. Both Husband and Wife signed the document. Then on October 13, Husband conveyed all the properties titled in his name to Elizabeth for ten dollars. Tr. Vol. II p. 17; see also Exs. 1, 2. Less than a month later, Wife requested a protective order, alleging that Husband had committed two acts of domestic violence against her-first on October 24 and then again on November 12. Wife then filed a petition for dissolution of marriage on November 18, 2014.

         [¶8] In May 2016, the trial court entered its findings of fact and conclusions of law and decree of dissolution. See Appellant's App. Vol. II p. 12. Both parties filed motions to correct errors, and the trial court entered an agreed order vacating the property-division portion of the trial court's May 2016 order. A special judge was appointed to resolve the property-division issue.

         [¶9] In July 2017, Wife filed an amended petition for dissolution of marriage, alleging that Husband "made the conveyances [to Elizabeth] with the intent to hinder, delay, and defraud creditors, including Wife, to protect and preserve the real property for Husband's own use and benefit, and to prevent and hinder Wife from collecting and receiving, . . . the amount due Wife in this dissolution of marriage action." Appellant's App. Vol. II p. 84. Wife did not cite UFTA in her amended petition, but she used language found in the statute, which provides, in relevant part:

A transfer made or an obligation incurred by a debtor is voidable as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) intended to incur or believed or reasonably should have believed that the debtor would incur debts beyond the debtor's ability to pay as the debts became due.

Ind. Code § 32-18-2-14. UFTA defines a "debtor" as "a person that is liable on a claim," Ind. Code § 32-18-2-2, and a "creditor" as "a person that has a ...


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