Anthony J. Rhea v. Marjorie Rhea (mem.dec.)

MEMORANDUM DECISION

Pursuant to Ind. Appellate Rule 65(D),

this Memorandum Decision shall not be

regarded as precedent or cited before any FILED

court except for the purpose of establishing May 31 2017, 10:45 am

the defense of res judicata, collateral CLERK

Indiana Supreme Court

estoppel, or the law of the case. Court of Appeals

and Tax Court

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE

Chad D. Wuertz Stacy L. Kelley

Wuertz Law Office, LLC Glaser & Ebbs

Indianapolis, Indiana Indianapolis, Indiana

IN THE

COURT OF APPEALS OF INDIANA

Anthony J. Rhea, May 31, 2017

Appellant-Petitioner, Court of Appeals Case No.

49A02-1611-DR-2572

v. Appeal from the Marion Superior

Court

Marjorie Rhea, The Honorable James A. Joven

Appellee-Respondent. Trial Court Cause No.

49D13-1503-DR-8513

Bailey, Judge.

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Case Summary

[1] Anthony Rhea (“Husband”) appeals the property division in the dissolution of

his marriage to Marjorie Rhea (“Wife”). We affirm.

Issues

[2] Husband presents two issues for review:

I. Whether the trial court abused its discretion by precluding

Husband’s realtor from testifying as an expert on the value

of real properties owned by the parties; and

II. Whether the trial court abused its discretion by deviating

from a presumptive 50/50 split of the marital pot.

Facts and Procedural History

[3] The parties were married on May 19, 1995. On March 16, 2015, Husband filed

a petition for dissolution of the marriage.

[4] At that time, Husband and Wife owned three real properties in Marion County,

Indiana. The property located on Priscilla Avenue had been purchased and

occupied by Wife prior to the marriage. It was the initial marital home, but was

later converted to exclusive use as a day care center. The property located on

East 23rd Street had been purchased and renovated for re-sale. The property on

Bluestem had been the second marital home. It had been occupied by Husband

post-separation and was in foreclosure at the time of the final hearing. A

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private sale was pending, but for a purchase price of less than the two

mortgages and expenses of sale.

[5] Provisional hearings were conducted in July, August, and September of 2015.

A final hearing was conducted on October 17 and 18, 2016. The marriage was

dissolved pursuant to a decree entered on November 3, 2016. Wife received

58% of the marital assets and Husband received 42%. This appeal ensued.

Discussion and Decision

Exclusion of Testimony

[6] Husband argues that his realtor should have been allowed to testify as an expert

on the value of real properties owned by the parties. The competency of a

witness to testify as an expert is a matter for the trial court to determine and is

subject to its discretion. Hegerfeld v. Hegerfeld, 555 N.E.2d 853, 855 (Ind. Ct.

App. 1990). An abuse of discretion occurs if the trial court’s decision is clearly

against the logic and effect of the facts and circumstances before the court, or

the reasonable, probable, and actual deductions to be drawn therefrom. Dillard

v. Dillard, 889 N.E.2d 28, 32 (Ind. Ct. App. 2008). An abuse of discretion also

occurs when the trial court has misinterpreted the law. Id.

[7] Wife requested that she be awarded the properties on Priscilla Avenue and East

23rd Street. She obtained written appraisals for the properties, with assigned

values of $67,000.00 and $203,500.00, respectively. The appraisals were

admitted into evidence at the final hearing. Husband disagreed with those

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values but did not submit into evidence an alternate appraisal. Rather, he

called as a witness Merrill Moores (“Moores”), the attorney and real estate

agent who was handling the short sale of the Bluestem property, 1 to “rebut” the

appraisals. (Tr. Vol. I at 158).

[8] At the commencement of his testimony, Moores stated that he was a licensed

real estate agent and a practicing attorney who did not have a real estate

appraiser’s license. He testified that he did appraisals “for divorces” and for

“his own purposes seeking listings.” (Tr. Vol. I at 152.) Husband’s counsel

asked Moores if he had “looked at” the Priscilla Avenue property and Wife

objected that Husband was eliciting speculative testimony unsupported by

documentation. (Tr. Vol. I at 155.) Wife asked a “preliminary question” of

Moores, and Moores confirmed that he had not compiled a written appraisal.

(Tr. Vol. I at 156.) Wife moved to exclude Moores’ testimony as irrelevant.

[9] In the ensuing bench conference, the trial court characterized Wife’s objection

as an objection to Moores’ qualifications as an expert, and stated that a lay

witness is not permitted to give opinion testimony. The trial court inquired

whether Husband’s counsel had authority for the proposition that someone

other than a licensed appraiser could testify concerning real estate value;

counsel responded that he did not currently possess such authority; and the trial

court ruled that Moores could not give opinions regarding properties other than

1

Moores testified without objection regarding the progress of the Bluestem property sale and the anticipated

proceeds.

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the Bluestem property. Husband was afforded the opportunity to make an offer

of proof. Counsel summarized:

If allowed to testify, this witness would testify that the valuation

of Priscilla property – or the property at Priscilla would be in a

market analysis that he performed looking at comparable

properties, at or above $80,000, I think $82 to $85, additionally

that the property that would be the 23rd Street address, in the

neighborhood it is with the transition of the market that’s there,

the actual evaluation of it would be $270 – or $265,000 to

$275,000 in a normal market condition; substantially higher than

what the – the appraisal has been offered and opposing party’s

documents.

(Tr. Vol. I. at 165.)

[10] On appeal, Husband directs our attention to Indiana Code Section 25-34.1-3-8.

This statute permits a person licensed as a real estate broker to appraise real

estate in Indiana for compensation, although he or she is not licensed or

certified as a real estate appraiser. Husband then argues that the trial court

made a mistake of law in concluding that Moores was unqualified to render an

opinion as to real estate values.

[11] Pursuant to Indiana Code Section 25-34.1-3-8, a real estate broker may accept

compensation for performing a real estate appraisal even if the broker does not

have an appraiser’s license. However, this statute does not directly concern the

qualifications of an expert witness to offer evidence. Indiana Rule of Evidence

702(a) addresses testimony by expert witnesses, providing:

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A witness who is qualified as an expert by knowledge, skill,

experience, training, or education may testify in the form of an

opinion or otherwise if the expert’s scientific, technical, or other

specialized knowledge will help the trier of fact to understand the

evidence or to determine a fact in issue.

[12] Nevertheless, whether a real estate broker may offer valuation testimony in

some circumstances2 is beside the point in this case. Even assuming Moores is

qualified and competent to conduct a property-specific appraisal, he did not

perform that function here. As indicated in the offer of proof, his anticipated

testimony was based upon an undocumented market analysis. The offer of

proof did not explain the methodology for or scope of a market analysis, and

Husband made no claim that Moores had examined the subject properties

beyond looking inside. In these circumstances, the trial court was within its

discretion to conclude that Moores’ valuation testimony would not assist in the

determination of a fact in issue.

Deviation from Presumptive Split

[13] Pursuant to Indiana Code Section 31-15-7-5, the trial court shall presume that

an equal division of the marital property between the parties is just and

reasonable. The presumption may be rebutted by relevant evidence, including

evidence concerning the following factors:

2

See e.g., Hudson v. McClaskey, 641 N.E.2d 36, 41 (Ind. Ct. App. 1994) (the trial court did not abuse its

discretion in permitting expert testimony of land value by an auctioneer/broker/appraiser who allegedly

lacked formal appraisal training but had taken several appraisal courses).

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(1) The contribution of each spouse to the acquisition of the

property, regardless of whether the contribution was income

producing.

(2) The extent to which the property was acquired by each

spouse:

(A) before the marriage; or

(B) through inheritance or gift.

(3) The economic circumstances of each spouse at the time of the

disposition of the property is to become effective, including

the desirability of awarding the family residence or the right to

dwell in the family residence for such periods as the court

considers just to the spouse having custody of any children.

(4) The conduct of the parties during the marriage as related to

the disposition or dissipation of their property.

(5) The earnings or earning ability of the parties as related to:

(A) a final division of property; and

(B) a final determination of the property rights of the

parties.

[14] Wife was awarded 58% of the marital estate and Husband was awarded 42%.

Husband argues that the deviation amounted to clear error because (1) Wife’s

counsel, in the written proposed order, improperly expanded upon the oral

direction of the trial court; (2) Wife’s testimony as to her day care earnings is

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contradicted by evidence of her cash flow; and (3) Husband was hindered in the

presentation of evidence relative to his retirement plans.

[15] On October 25, 2016, the trial court detailed an administrative event in the

Chronological Case Summary:

Comes now the court and directs counsel for [Wife] to submit a

Decree that adopts the stipulations of the parties and divides the

marital estate in accordance with Exhibit Q from trial. Husband

shall pay $10,000 of Wife’s attorney fees due to disparities in

income and discovery issues. Court finds that a deviation of the

50/50 presumption is appropriate given the property Wife

brought into the marriage, the disparity in incomes and economic

circumstances as they leave the marriage. Husband owes Wife

$1,500 for maintenance for Sept-Nov.

(App. at 13.) In the Decree of Dissolution, the reasons for deviation have been

expanded to include “the actions of the parties during the pendency of this

matter.” (Appealed Order at 3.) It appears that counsel followed the trial

court’s directive but then took some liberty in drafting.3 However, the trial

court adopted the additional grounds in counsel’s submission. Ultimately, even

if a trial court has adopted verbatim a party’s proposed findings and

conclusions, causing a lower level of confidence that findings reflect the

independent judgment of the trial court, the task of this Court is to review for

3

Husband makes a cursory allegation that the Decree also improperly referenced a stipulation, when the

parties had none. As Husband points out, the final hearing began with the parties denying that they had

made any stipulation. However, during a break in the final hearing, the parties reached an agreement as to

personal property and advised the trial court accordingly. This stipulation was properly included in the

Decree.

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clear error the findings as adopted. Kitchell v. Franklin, 26 N.E.3d 1050, 1058

(Ind. Ct. App. 2015).

[16] When reviewing a property division, we begin with a strong presumption that

the trial court considered and complied with the applicable law governing

property division. Perkins v. Harding, 836 N.E.2d 295, 299 (Ind. Ct. App. 2005).

We cannot substitute our judgment for the trial court’s, even if the evidence

could have supported a different property distribution. Augspurger v. Hudson,

802 N.E.2d 503, 512 (Ind. Ct. App. 2004). We decide whether the decision

distributing property constitutes an abuse of discretion, considering only the

evidence most favorable to the court’s disposition of the property. Estudillo v.

Estudillo, 956 N.E.2d 1084, 1092 (Ind. Ct. App. 2011).

[17] At the time of the final hearing, Wife was receiving Social Security payments of

$947.00 per month. Her 2015 tax return indicates that her net annual income

from the operation of a day care center was $421.00 per year. She testified that

she was in 2016 earning $87.00 per week in net income. Husband’s income for

the prior year consisted of wages of $126,530.00. He had earned $63,090.79 for

January through May of 2016. As such, there was evidence to support the

finding of disparate economic circumstances. Wife testified that she had owned

the Priscilla Avenue property when the parties got married. This supports the

finding that Wife brought property into the marriage. As for the conduct during

the proceedings – the basis for the finding that Wife’s counsel added and the

trial court adopted – there was testimony that Husband was ordered to pay the

mortgage on the Bluestem property during his tenancy there, but did not do so

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despite regular income. Ultimately, the Bluestem property was sold in a short

sale after foreclosure proceedings were commenced. This evidence supports the

determination that Husband’s conduct negatively impacted the net marital

estate available for division. In sum, the deviation is amply supported by the

evidence.

[18] Husband argues, however, that certain evidence should be disregarded. That is,

he focuses upon the testimony that Wife nets $87.00 weekly from the day care

center together with the testimony that the Priscilla Avenue property was

owned free of any mortgage. Ignoring Schedule C of the 2015 tax return

indicating that Wife took in gross proceeds of $60,648.00, Husband insists that

it is a “financial impossibility” for Wife to have maintained the “cash flow” for

a mortgage payoff if she earns only $87.00 per week. (Appellant’s Brief at 15.)

His argument represents a stark request to reweigh evidence. We decline the

invitation. See Estudillo, 956 N.E.2d at 1092 (recognizing that we do not

reweigh the evidence nor assess witness credibility when reviewing a property

distribution decision).

[19] Finally, Husband asserts that the finding of disparate incomes rests upon an

assumption that he will continue working, yet he was not offered a meaningful

opportunity to introduce evidence of his need to retire. Husband directs our

attention to a colloquy between Husband’s counsel and the trial court, during

which counsel suggested that sixty-two “is retirement, Judge.” (Tr. Vol. II at

pg. 189.) The trial court disagreed and expressed the view that, in the absence

of medical necessity, a claim of plans for early retirement would likely not be

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accorded much evidentiary weight. Thereafter, Husband testified that he is a

diabetic. He did not, however, claim that his retirement was imminent or that

his early retirement would be medically necessary. Husband’s cursory

argument in this regard is, at bottom, an additional request to reweigh the

evidence. Husband has not demonstrated that the trial court abused its

discretion by deviating from the presumptive 50/50 split.

Conclusion

[20] The trial court did not abuse its discretion by precluding valuation testimony

concerning two of the marital real properties. The trial court’s order of property

division is supported by the evidence and does not constitute an abuse of

discretion.

[21] Affirmed.

Vaidik, C.J., and Robb, J., concur.

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