# Joseph Lee Smith v. Margie Lee Smith (mem. dec.)

> Indiana Court of Appeals · September 1, 2017

URL: https://www.frixlaw.com/law-library/cases/4200798

## Case

- **Court:** Indiana Court of Appeals
- **Decided:** September 1, 2017
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), this Sep 01 2017, 8:17 am
Memorandum Decision shall not be regarded as CLERK
precedent or cited before any court except for the Indiana Supreme Court
Court of Appeals
purpose of establishing the defense of res judicata, and Tax Court
collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Joseph A. Christoff Michael T. Yates
Christoff & Christoff More Miller & Yates
Fort Wayne, Indiana Fort Wayne, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Joseph Lee Smith, September 1, 2017

Appellant-Petitioner, Court of Appeals Case No.
02A03-1612-DR-2724
v. Appeal from the Allen Superior
Court.
The Honorable Charles F. Pratt,
Margie Lee Smith, Judge.
Appellee-Respondent. The Honorable Sherry A. Hartzler,
Magistrate.
Trial Court Cause No.
02D07-0211-DR-770

Friedlander, Senior Judge

[1] Joseph Lee Smith appeals the trial court’s award of damages to him, claiming

the award is insufficient and should not be payable in installments. He further

appeals the trial court’s refusal to hold his ex-wife Margie Lee Smith in

contempt of court. We affirm in part, reverse in part, and remand with

instructions.

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[2] Joseph and Margie married in 1991 and separated in 2002. They did not have

any children together. On November 15, 2002, Joseph filed a verified petition

for dissolution of marriage. The parties engaged in settlement negotiations and

filed a written settlement agreement. The trial court approved the agreement on

January 14, 2005, and incorporated it into a decree dissolving the parties’

marriage. Among other provisions, the agreement required Margie to pay

Joseph twenty-five percent of her “gross monthly” pension payments from the

State of Indiana’s Public Employees Retirement Fund (PERF) and to disclose

to Joseph on an annual basis the amount PERF paid her per month.

Appellant’s Appendix Vol. II, p. 23.

[3] On February 27, 2015, Joseph filed a Verified Information for Contempt,

Alternatively Breach of Contract. He amended the Verified Information on

June 5, 2015. Joseph claimed Margie had missed several monthly payments.

He further claimed Margie received additional pension funds as enhancements

to her monthly check or as standalone extra payments at the end of the year but

was not giving him his twenty-five percent share of those additional funds.

Finally, Joseph argued Margie had failed to disclose to him on an annual basis

the amount that PERF paid her per month. Margie did not dispute that she

had failed to make several monthly payments to Joseph but claimed he was not

entitled to a share of her additional payments.

[4] The trial court held an evidentiary hearing. On June 20, 2016, the court issued

an order determining Margie had failed to comply with the agreed judgment by

missing several payments and by paying Joseph from her net pension income

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rather than her gross monthly payments. The court declined to find she was in

contempt of court. The court further determined Margie was not required to

pay Joseph a share of her additional funds from PERF. Finally, the court

ordered Margie to pay Joseph $3,287.85 in damages at the rate of twenty-five

dollars per month, plus $4,512.50 in attorney’s fees at the rate of fifty dollars per

month.

[5] Next, Joseph filed a motion to correct error. The court corrected a scrivener’s

error in the judgment but otherwise denied the motion. This appeal followed.

[6] Joseph raises four issues, which we restate as: (1) whether the trial court erred

in determining Joseph was not entitled to a share of Margie’s additional

pension payments; (2) whether the trial court erred in ordering Margie to pay

damages and attorney’s fees in installments; (3) whether the trial court abused

its discretion in concluding that Margie was not in contempt of court; and (4)

whether Joseph is entitled to appellate attorney’s fees per the settlement

agreement.

1. Additional Pension Payments
[7] Joseph argues Margie is obligated under their settlement agreement to give him

a portion of her additional pension payments. Margie responds that she is

required to give him a share of her regular monthly pension payments and

nothing more.

[8] When dissolving a marriage, the parties are free to craft an agreement providing

for the disposition of property. Bailey v. Mann, 895 N.E.2d 1215 (Ind. 2008).
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Settlement agreements become binding contracts when incorporated into the

dissolution decree. Id. A trial court may entertain requests to clarify and

interpret a settlement agreement after it has been incorporated into a dissolution

decree, pursuant to ordinary contract law principles. Beaman v. Beaman, 844

N.E.2d 525 (Ind. Ct. App. 2006). Interpretation of a settlement agreement, as

with any other contract, presents a question of law and is reviewed de novo.

Bailey, 895 N.E.2d 1215.

[9] The terms of a settlement agreement will be given their plain and ordinary

meaning unless they are ambiguous. Pherson v. Lund, 997 N.E.2d 367 (Ind. Ct.

App. 2013). Where the terms are clear and unambiguous, we will not construe

the contract or look at extrinsic evidence. Magee v. Garry-Magee, 833 N.E.2d

1083 (Ind. Ct. App. 2005). The terms of a contract are ambiguous only when

reasonably intelligent persons would honestly differ as to the meaning of those

terms. Bressler v. Bressler, 601 N.E.2d 392 (Ind. Ct. App. 1992). If there is an

ambiguity, parol evidence is considered to clarify the ambiguity. Magee, 833

N.E.2d 1083. The goal is to determine the intent of the parties when they made

the agreement. McDivitt v. McDivitt, 42 N.E.3d 115 (Ind. Ct. App. 2015), trans.

denied.

[10] The parties’ settlement agreement provides: “The subject matter of this

Agreement is the settlement of the respective rights of Husband and Wife to all

property, both real and personal, now in their name and/or possession.”

Appellant’s App. Vol. II, p. 20. The contract further states:

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Wife shall pay to Husband on a monthly basis, an amount equal
to twenty-five percent (25%) of her gross monthly payment from
Wife’s pension from the State of Indiana Public Employees
Retirement Fund. Provided however, the first two such
payments·from Wife to Husband shall be in an amount equal to
fifty percent (50%) of Wife’s net payment from said pension and
thereafter said payments shall be in an amount equal to twenty-
five percent (25%) of her gross monthly payment from said
pension. Such payments shall commence October 15, 2004 and
shall be paid by Wife to Husband on the 15th of each month
thereafter until terminated as indicated herein. Such payments
shall terminate upon the earliest occurrence of the following: 1.
The expiration of 20 years of the date of the decree of dissolution
in this cause; 2. The death of Wife; or 3. The death of Husband.

Wife shall provide to Husband written documentation of the
amount of said monthly pension payment to Wife on an annual
basis. Should Wife make any other subsequent withdrawals from
such pension, she shall pay to Husband an amount equal to
twenty-five percent (25%) of any such other gross withdrawal or
any other available death benefit. Husband shall be entitled to
receive, from Wife’s estate, twenty-five percent (25%) of any such
other gross withdrawal or any other available death benefit from
said pension.

Id. at 23.

[11] As noted above, PERF issued to Margie her additional pension payments by

two methods: (1) as funds added to her “gross monthly payment;” and (2) a

standalone payment at the end of the year. Based on the plain language of the

settlement agreement, any funds added to Margie’s “gross monthly payment”

should have been included in calculating the monthly twenty-five percent share

Margie owed to Joseph. Margie is obligated to pay Joseph twenty-five percent

of her gross monthly payment, regardless of amount, and the settlement
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agreement does not exclude any additional funds that PERF may add to the

monthly payments.

[12] As for the standalone additional annual payments, the settlement agreement

does not mention them, focusing instead on Margie’s gross monthly payments.

The agreement purports to dispose of the parties’ rights to all marital property,

and the additional pension payments would appear to be marital property. See

Ind. Code § 31-9-2-98 (1997) (marital property includes “a present right to

withdraw pension or retirement benefits” and “the right to receive pension or

retirement benefits . . . that are vested . . . but that are payable after the

dissolution of marriage”). The agreement is ambiguous as to whether Joseph is

entitled to a twenty-five percent share of the standalone payments. See Shepherd

v. Tackett, 954 N.E.2d 477 (Ind. Ct. App. 2011) (divorce decree ambiguous as to

husband’s obligation to make mortgage payments for marital home).

[13] We may consider parol evidence to resolve the ambiguity. The parties did not

present to the trial court any evidence as to their intent with respect to the
1
standalone payments at the time they drafted the agreement. At the time the

agreement was drafted the parties anticipated monthly pension payments, but it

is unclear whether they were aware Margie would receive additional payments.

The trial court erred in concluding Joseph is not entitled to twenty-five percent

1
Joseph claims that Margie drafted the agreement and argues that it should be interpreted against her.
During oral argument on Joseph’s motion to correct error, his counsel conceded “we were both involved
involved [sic] in the drafting [and Margie’s counsel] was just the primary drafter.” September 12, 2016
Hearing Tr. p. 5. We decline to construe the agreement against Margie.

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of the standalone pension payments because the record is inadequate to

determine the parties’ intent. We reverse and remand for the court to: (1)

calculate Joseph’s share of the additional amounts that PERF added to

Margie’s gross monthly payments and adjust the damages award accordingly;

and (2) hear evidence as to the parties’ intent at the time the agreement was

drafted with respect to standalone additional payments from PERF and

determine whether the payments are subject to the settlement agreement.

2. Installment Payments
[14] Joseph argues the trial court lacked the authority to allow Margie to pay

damages and attorney’s fees in installments. Margie responds that the court

acted appropriately due to her limited economic circumstances. Resolving this

issue requires application of the governing statute. We apply a de novo

standard of review to questions of statutory interpretation. G.S. v. M.S., 69

N.E.3d 500 (Ind. Ct. App. 2017).

[15] The trial court had the authority to impose installment payments in the original

divorce decree. See Ind. Code § 31-15-7-4 (1997) (a court shall divide marital

estate “in a just and reasonable manner,” including ordering one spouse to pay

an amount where necessary, “either in gross or installments”). Joseph argues

that he presents a simple claim of breach of contract, and the court’s installment

plan prevents him from being made whole in a reasonable manner because it

will take years for Margie to pay off the judgment and attorney’s fees award in

increments of twenty-five and fifty dollars. He further claims the court should

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have simply entered a judgment for the total amounts Margie owed him and

allowed him to pursue proceedings supplemental to collect.

[16] The statute that governs enforcement of dissolution decrees provides:

Notwithstanding any other law, all orders and awards contained
in a dissolution of marriage decree or legal separation decree may
be enforced by:
(1) contempt;
(2) an income withholding order; or
(3) any other remedies available for the enforcement of a court
order;
except as otherwise provided by this article.

Ind. Code § 31-15-7-10 (2006).

[17] The statute grants the trial court wide discretion to ensure meaningful

compliance with a dissolution decree. For example, in Cope v. Cope, 846 N.E.2d

360 (Ind. Ct. App. 2006), the parties executed a decree that provided wife

would receive a portion of husband’s military pension, in installments, through

a qualified domestic relations order (QDRO) or other method approved by the

military. The military refused to recognize the QDRO, and husband refused to

make payments on his own. Wife sought to enforce the settlement agreement,

and the trial court garnished husband’s wages. A panel of this court affirmed

the trial court’s decision, concluding the trial court acted appropriately because

garnishment was the “only practical recourse.” Id. at 363.

[18] In this case, the court concluded Margie breached the agreement, but she was

seventy-four years old and “of meager means and resources.” Appellant’s App.

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Vol. II, p. 12. The court did not err in attempting to balance the parties’

interests by establishing a realistic payment plan.

[19] Joseph argues the court unfairly prevented him from seeking to enforce the

judgment through proceedings supplemental. We disagree. Nothing in the

court’s order prevents Joseph from seeking to enforce the judgment if Margie

misses an installment payment for damages or attorney’s fees.

[20] Joseph further claims the installment plan is, in substance, an inappropriate

modification of the terms of the agreement. “Orders concerning property

disposition” in an action for dissolution of marriage “may not be revoked or

modified, except in case of fraud.” Ind. Code § 31-15-7-9.1 (1998). A court

retains jurisdiction to interpret the terms of the decree and decide questions

pertaining to its enforcement. Shepherd, 954 N.E.2d 477. Clarifying a

settlement agreement, consistent with the parties’ intent, is not the same as

modifying the agreement. Id.

[21] We cannot agree that the court modified the settlement agreement by ordering

payment of damages and attorney’s fees on an installment basis. None of the

terms of the agreement have changed. Margie still owes Joseph twenty-five

percent of her monthly payments and must compensate him for missed

payments. The court merely devised a plan that Margie can afford and is most

likely to result in compliance with the settlement agreement. See id. at 482 (trial

court did not modify decree but instead clarified terms under which husband

was to make monthly payments to wife).

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3. Contempt
[22] Joseph claims the trial court should have held Margie in contempt because she

disregarded the settlement agreement. Margie responds that the trial court

acted appropriately because she did not willfully violate the agreement.

[23] A person engages in “indirect contempt of court” when he or she “is guilty of

any willful disobedience of any process, or any order lawfully issued.” Ind.

Code § 34-47-3-1 (1998). Whether a party is in contempt of court is a matter for

the trial court’s discretion, and its decision will be reversed only for an abuse of

discretion. In re Paternity of M.F., 956 N.E.2d 1157 (Ind. Ct. App. 2011). A

court abuses its discretion when its decision is against the logic and effect of the

facts and circumstances or is contrary to law. Id. We will neither reweigh the

evidence nor judge the credibility of witnesses. Piercey v. Piercey, 727 N.E.2d 26

(Ind. Ct. App. 2000).

[24] The trial court determined, and Margie does not dispute, that she violated the

settlement agreement by missing several monthly payments to Joseph and by

paying him from her net pension income rather than in gross pension income.

The record demonstrates Margie failed to make ten payments because she

experienced unexpected financial difficulties, including being unable to work

for several weeks in 2014-15 due to illness. Although she receives pension

payments and a paycheck, her income is limited. Further, Margie did not

appear to understand the difference between gross and net income. Despite

these factors, Margie had otherwise managed to make monthly payments to

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Joseph for almost a decade. This evidence supports a conclusion that she did

not willfully disobey the dissolution decree.

[25] Joseph points out that Margie also failed to give him an annual statement of the

amount she received from PERF per month, in violation of the settlement

agreement. Margie testified that Joseph never requested a statement until he

filed his petition for contempt, ten years after the agreement was executed.

Margie was solely responsible for fulfilling her obligations under the agreement,

but the trial court could have reasonably determined that Margie’s failure to

provide an annual statement was not a willful, material violation if her

noncompliance was unobjectionable for a decade. The trial court did not abuse

its discretion. See Topolski v. Topolski, 742 N.E.2d 991 (Ind. Ct. App. 2001) (no

abuse of discretion in failing to find husband in contempt of divorce decree;

husband missed some child support payments but paid much of child’s college

expenses).

4. Appellate Attorney’s Fees
[26] Joseph argues he is entitled to appellate attorney’s fees per the terms of the
2
settlement agreement. The trial court awarded attorney’s fees to Joseph due to

Margie’s breach of the settlement agreement.

2
He does not present a claim for appellate attorney’s fees under Indiana Appellate Rule 66(E).

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[27] Each party pays his or her own attorney’s fees absent an agreement between the

parties, statutory authority, or a rule to the contrary. Fackler v. Powell, 891

N.E.2d 1091 (Ind. Ct. App. 2008), trans. denied. A contractual clause that

allows for the recovery of attorney’s fees will be enforced according to its terms

unless it violates public policy. Steiner v. Bank One Indiana, N.A., 805 N.E.2d

421 (Ind. Ct. App. 2004).

[28] The portion of the settlement agreement that governs attorney’s fees provides as

follows:

G. INDEMNIFICATION.
Each party agrees to indemnify and save and hold the other
harmless from all damages, losses, expenses (including attorney’s
fees), costs and other fees incurred by reason of the other’s
violation or breach of any of the terms and conditions hereof.

Appellant’s App. Vol. II, p. 25.

[29] In Fackler, the parties to a dissolution of marriage case negotiated a settlement

agreement. The agreement included an indemnification clause that is almost

identical to the clause at issue here, replacing the word “other’s” with

“indemnitor’s.” 891 N.E.2d at 1098. Wife argued that Husband failed to pay

her money she was owed under the settlement agreement. Husband prevailed

in the trial court. On appeal, this Court determined the trial court erred and

Husband had breached the agreement by failing to fully compensate Wife. The

Court further determined that, pursuant to the indemnification clause, Husband

owed Wife attorney’s fees because of his breach, in an amount to be determined

by the trial court.

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[30] In the current case, we affirm the trial court’s decision that Margie was not in

contempt, but we also conclude Joseph is entitled to at least a portion of the

additional pension payments Margie received. Margie breached the settlement

agreement to a greater extent than the trial court determined, and Joseph is

entitled to an award of appellate attorney’s fees pursuant to the indemnification

clause. The trial court shall calculate the amount of the attorney’s fees on

remand.

[31] For the reasons stated above, we affirm the judgment of the trial court in part,

reverse in part, and remand for further proceedings not inconsistent with this

opinion.

[32] Judgment affirmed in part, reversed in part, and remanded with instructions.

Riley, J., concurs in part and concurs in result in part with separate opinion.

Najam, J., concurs in part and dissents in part with separate opinion

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IN THE
COURT OF APPEALS OF INDIANA

Joseph Lee Smith, Court of Appeals Case No.
02A03-1612-DR-2724
Appellant-Petitioner,

v.

Margie Lee Smith,
Appellee-Respondent.

Riley, Judge concurring in result on Issue I, and concurring in Issues II, III,

and IV.

[33] I concur in result on Issue I, and concur in Senior Judge Friedlander’s lead

opinion on Issues Two, Three, and Four. Unlike Judge Najam, I cannot

conclude that the settlement agreement is unambiguous with respect to the

standalone retirement payments Margie receives at the end of the year. While

analyzing the issue differently, I concur with Senior Judge Friedlander that the

Issue should be remanded to the trial court for further evidence.

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[34] The explicit language of the settlement agreement, which was accepted by both

parties, states clearly that Margie has to pay Joseph “twenty-five percent of her

gross monthly” pension payments. (Appellant’s App. Vol. II, p. 23). As the

standalone payment is paid to Margie on a yearly basis, and not on a monthly

basis, I would conclude that, under the terms of the settlement agreement,

Joseph is not entitled to a twenty-five percent share thereof. Nevertheless, as

this particular clause of the settlement agreement is subject to three different

legal interpretations, the agreement, by definition, must be ambiguous. For that

reason, I concur in result and agree to remand Issue I to the trial court to allow

the parties to present further evidence on their intent with respect to the

standalone payment at the time of drafting the agreement. I concur with the

majority in all other respects.

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IN THE
COURT OF APPEALS OF INDIANA

Joseph Lee Smith Court of Appeals Case No.
02A03-1612-DR-2724
Appellant-Petitioner,

v.

Margie Lee Smith,
Appellee-Respondent.

Najam, Judge, concurring in part and dissenting in part.

[35] I concur in Senior Judge Friedlander’s lead opinion on Issues Three and Four

but respectfully dissent on Issue One. On that issue, I would hold that the

settlement agreement is unambiguous and that judgment should be entered for

Husband. Thus, I would also instruct the trial court on remand to recalculate

the installment payments discussed in Issue Two of the lead opinion.

[36] The settlement agreement states as follows:

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Wife shall pay to Husband on a monthly basis[] an amount equal to
twenty-five percent (25%) of her gross monthly payment from Wife’s
pension from [PERF]. . . .
Wife shall provide to Husband written documentation of the amount
of said monthly pension payment to Wife on an annual basis. Should
Wife make any other subsequent withdrawals from such pension, she shall pay
to Husband an amount equal to twenty-five percent (25%) of any such other
gross withdrawal or any other available death benefit. Husband shall be
entitled to receive, from Wife’s estate, twenty-five percent (25%) of any such
other gross withdrawal or any other available death benefit from said pension.
Appellant’s App. Vol. II at 23 (emphases added).

[37] By its plain terms, the agreement provides both that Husband is entitled to

twenty-five percent of gross monthly payments as well as to twenty-five percent

of “any other subsequent withdrawals.” It is immaterial whether distributions

from Wife’s PERF account are called “payments” or “withdrawals.” The

purpose of the agreement’s provisions is clear: Husband is entitled to twenty-

five percent of whatever gross sums Wife receives from her PERF account

whether those sums are distributed as regular or irregular payments or

withdrawals, without exception. This is further confirmed by the final sentence

in the last paragraph above, which provides that Husband is entitled to receive

from Wife’s estate twenty-five percent of any such other gross withdrawal or

any other available death benefit from Wife’s PERF pension.

[38] In this agreement, the terms “payments” and “withdrawals” are used

interchangeably. This is apparent from the phrase, “any other subsequent

withdrawals.” (Emphasis added.) Here, “any” plainly means “all.” And, here,

“other . . . withdrawals” refers directly to “gross monthly payments,” which is

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the only possible antecedent. The text demonstrates that “gross monthly

payments” are deemed withdrawals and that “other . . . withdrawals” are

deemed payments. The agreement provides that Husband is entitled to twenty-

five percent of “any such other gross withdrawal” (emphasis added); that is, in

addition to the gross monthly payments, he is entitled to a share of any “other”

gross withdrawal. This is the only interpretation that gives meaning to the

word “other,” which is used three times in the same paragraph.

[39] The words “other” and “such other” require an antecedent. Otherwise, those

words are surplusage and meaningless. But we may not excise those words

from the agreement. Our Supreme Court has been clear that, in reading

contracts, our ultimate goal is to determine the intent of the parties at the time

that they made the agreement. Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 813

(Ind. 2012). “We begin with the plain language of the contract, reading it in

context and, whenever possible, construing it so as to render each word, phrase,

and term meaningful, unambiguous, and harmonious with the whole.” Id. By

using the word “other” to modify the word “withdrawal,” there is no question

that the parties considered payments to be withdrawals and that they

contemplated and provided for the payment of twenty-five percent of “any”

withdrawals “other” than monthly payments to be made to Husband.

[40] The agreement connects the words “payments” and “withdrawals” and uses

them interchangeably. The phrases “any other subsequent withdrawals,” “any

other gross withdrawal,” and “any such other gross withdrawal” are catch-all

provisions that refer back to the only “other” withdrawals mentioned in the

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agreement: the gross monthly payments. These catch-all provisions

demonstrate the parties’ intent that Husband is to receive twenty-five percent of

“any” gross distributions from Wife’s PERF account.

[41] Any distribution other than the monthly payments—including any standalone,

additional annual payment—is an “other gross withdrawal” and, thus, falls

squarely within the plain language of the agreement. And, significantly, the

agreement does not say that husband is entitled only to twenty-five percent of

the “gross regular monthly payment.” The word “regular” does not appear in

the agreement. See B&R Oil Co. v. Stoler, ___ N.E.3d ___, 2017 WL 22334035

(Ind. Ct. App. May 30, 2017) (we “must interpret the contract as written, not as

it might have been written”), trans. pending.

[42] In sum, I would reverse the trial court’s judgment for Wife on Issue One.3 The

plain meaning of the settlement agreement demonstrates the parties’ intent to

have Husband receive twenty-five percent of all gross distributions from the

PERF account. Thus, I would also remand with instructions for the trial court

to recalculate the installment payments due to Husband that are discussed in

3
If the agreement were ambiguous, as the lead opinion concludes, then the proper disposition would be to
affirm the trial court’s judgment. Husband appeals from a negative judgment, which requires him to show
that “the evidence leads to but one conclusion and the trial court reached an opposite conclusion.” Burnell v.
State, 56 N.E.3d 1146, 1150 (Ind. 2016). If the agreement were ambiguous, then Husband had the
opportunity to present evidence to the trial court, and, having failed to meet his burden of proof, Husband
would not be entitled to a remand.

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Issue Two of the lead opinion. I concur in Senior Judge Friedlander’s

resolution of Issues Three and Four.

.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4200798. Public record. Not legal advice.
