Kimberley A. Fisher v. Frederick H. Fisher, III (mem. dec.)

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be FILED regarded as precedent or cited before any Sep 19 2018, 8:45 am

court except for the purpose of establishing CLERK Indiana Supreme Court the defense of res judicata, collateral Court of Appeals and Tax Court estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE Zachary J. Stock Jeremy S. Bell Indianapolis, Indiana New Castle, Indiana

IN THE COURT OF APPEALS OF INDIANA

Kimberley A. Fisher, September 19, 2018 Appellant-Petitioner, Court of Appeals Case No. 18A-DR-929 v. Appeal from the Henry Circuit Court Frederick H. Fisher, III, The Honorable Kit C. Dean Crane, Appellee-Respondent. Judge Trial Court Cause No. 33C02-1405-DR-93

Mathias, Judge. [1] The marriage of Frederick Fisher (“Husband”) and Kimberley Fisher (“Wife”)

was dissolved in the Henry Circuit Court in 2014. In 2017, Husband filed a

motion to hold Wife in contempt because she failed to make a required

payment on the mortgage secured by the marital residence as agreed under the

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parties’ settlement agreement. After a hearing, the trial court concluded that to

purge herself of contempt, Wife must sell or refinance the residence. Wife now

appeals and contends that the trial court’s order should be set aside. [2] We reverse and remand.

Facts and Procedure [3] Prior to their divorce, Husband and Wife took out a mortgage on their marital

property so that their adult son could purchase separate property. Husband,

Wife, and son all agreed and understood that the son was responsible for

making the mortgage payments on the marital property until the loan was

satisfied. [4] On May 30, 2014, Wife filed a petition for dissolution of marriage. The parties

engaged in settlement negotiations and filed a written settlement agreement.

The trial court approved the agreement on October 14, 2014, and incorporated

it into a decree dissolving the parties’ marriage. Among other provisions, the

settlement agreement awarded Wife the marital residence and then specified:

Wife shall be responsible for all costs associated with this residence. There is a mortgage on the marital property; however, neither party shall be responsible for it for the following reason. The parties’ son owns a house, the loan for which is secured by the marital residence. The son pays Wife each month, and she in turn pays the bank. Wife shall still be responsible for the taxes and insurance on the marital residence.

Appellant’s App. p. 17.

Court of Appeals of Indiana | Memorandum Decision 18A-DR-929 | September 19, 2018 Page 2 of 10 [5] After the divorce, Wife lived in the marital residence, and son made the

mortgage payments as indicated in the settlement agreement. However, in

January 2017, son failed to provide Wife with money on time, and therefore,

the mortgage payment was late. Wife was unemployed at the time, so she was

unable to cover the payment, but “[i]t was all paid the next month.” Tr. p. 28.

As a result of the missed payment, on April 27, 2017, Husband filed a motion

for contempt which alleged that Wife had “not made the required payments on

the mortgage secured by the marital residence.” Appellant’s App. p. 21.

Husband maintained that the missed mortgage payment adversely affected his

credit score and his ability to receive financing. [6] The trial court held an evidentiary hearing on August 4, 2017,1 and February

14, 2018. After hearing testimony from both Husband and Wife at the February

14 hearing, the trial court stated in part:

Well, it’s clear to the court that the court has continuing jurisdiction over a settlement agreement. Particularly when it’s necessary to clarify a prior order. So, [counsel for Husband], if you could prepare an order, I’m going to direct that the [martial residence] be sold within the next ninety days. If [Wife] can buy the house, then that’s great. If not, then it’s going to be sold in the next ninety days. And then I -- following the sale of the house, we’ll come back here in about a hundred and twenty days

1 The transcript for the August 4 hearing is not included in the record provided to us on appeal. Therefore, although we know the hearing took place because of an August 7, 2017 entry on the Chronological Case Summary, we do not know what specifically transpired during this hearing. Appellant’s App. pp. 6–7.

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. . . to discuss what happens to the net proceeds on the sale of the house.

Tr. p. 29. [7] Wife’s counsel then asked the trial court which aspect of the settlement

agreement it was clarifying, and the court responded in part:

[T]he parties agreed to this settlement agreement, and it’s not working. So, I’m going to carve out something that’s going to work. So, you can look at the settlement agreement, [counsel for Wife], and kind of figure out which parts of it I’m having to re- examine, because there’s a number of those -- you know, just that one sentence -- there’s a mortgage, they both signed the mortgage, however, “Neither party shall be responsible.” Both sides are still responsible to the bank, but only [Husband] here is the one that’s suffering and damaged because of this agreement.

Id. at 30. [8] On March 21, 2018, the court issued an order which indicated that “[Wife] is

responsible for the note on the marital residence under the settlement

agreement.” Appellant’s App. p. 10. The order further provides that “[t]he note

payments on the marital residence mortgage were not being paid in a timely

manner, and that such untimely payments are damaging [Husband’s] credit and

credit report[.]”2 Id. It then concluded that “Wife is hereby ordered to purge

2 Although the order uses the term “payments,” there is no evidence in the record of any other late payment made after the parties’ dissolution except for January 2017.

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herself of contempt by paying the note on the marital residence off within (90)

days, by listing and selling the marital residence, or refinancing said note into

[Wife’s] own name.” Id. at 11. Wife now appeals.

Discussion and Decision [9] Wife contends that the trial court abused its discretion when it ordered her to

sell or refinance her home in order to purge herself of contempt because there

was insufficient evidence to support the court’s finding that she willfully

violated the terms of the dissolution settlement agreement. Specifically, she

argues that the portion of the agreement that she allegedly violated “was at the

very least unclear[,]” and she cannot be held in contempt for willfully

disobeying an ambiguous order. Appellant’s Br. at 6–9. Husband alleges that

the decree is not ambiguous, and thus the court’s order fell within its discretion

“to use its coercive and remedial powers in a contempt hearing to move Wife

into action to protect [] Husband from further damage[.]” Appellee’s Br. at 11. [10] Whether or not a party is in contempt is a determination left to the discretion of

the trial court.3 Reynolds v. Reynolds, 64 N.E.3d 829, 832 (Ind. 2016). On appeal,

we will consider the evidence and all reasonable inferences drawn therefrom

that support the trial court’s determination, and we will not reweigh evidence

nor judge the credibility of the witnesses. Deel v. Deel, 909 N.E.2d 1028, 1032

3 We note that the trial court’s order does not explicitly state that Wife is in contempt. See Appellant’s App. pp. 10–11. However, because of the language in the order that Wife “is hereby ordered to purge herself of contempt[,]” we will treat this as if the trial court is holding Wife in indirect contempt until she satisfies the requirements set out in its order. Id.

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(Ind. Ct. App. 2009). As such, we will only reverse a trial court’s contempt

determination where an abuse of discretion has been shown, which occurs

when the trial court’s decision is clearly against the logic and effect of the facts

and circumstances before it. Bessolo v. Rosario, 966 N.E.2d 725, 730 (Ind. Ct.

App. 2012), trans. denied. [11] The trial court here concluded that Wife failed to comply with the dissolution

decree in that she failed to make timely mortgage payments on the marital

residence. See Appellant’s App. p. 10. “Willful disobedience of any lawfully

entered court order of which the offender had notice is indirect contempt.”

Mitchell v. Mitchell, 785 N.E.2d 1194, 1198 (Ind. Ct. App. 2003) (quotation and

citations omitted); Ind. Code § 34-47-3-1. Our supreme court has clarified that

“[t]he order must have been so clear and certain that there could be no question

as to what the party must do, or not do, and so there could be no question

regarding whether the order is violated.” City of Gary v. Major, 822 N.E.2d 165,

170 (Ind. 2005). Thus, “[a] party may not be held in contempt for failing to

comply with an ambiguous or indefinite order.” Id. [12] When dissolving a marriage, parties are free to negotiate their own settlement

agreements and may incorporate those into a dissolution decree. Ind. Code §

31-15-2-17. Such agreements are contractual in nature, and once incorporated

into a trial court’s final order, the agreements become binding on both parties.

Whittaker v. Whittaker, 44 N.E.3d 716, 719 (Ind. Ct. App. 2015). Thus, the terms

of a settlement agreement will be given their plain and ordinary meaning unless

they are ambiguous. Id. Where the terms are clear and unambiguous, we do not

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construe the agreement or look to extrinsic evidence. Id. Terms are ambiguous

“only when reasonably intelligent persons would honestly differ as to the

meaning of those terms.” Schmidt v. Schmidt, 812 N.E.2d 1074, 1080 (Ind. Ct.

App. 2004) (citation omitted). When interpreting a settlement agreement, our

goal is to determine the intent of the parties when they entered into it. In re the

Paternity of G.G.B.W., 80 N.E.3d 264, 270 (Ind. Ct. App. 2017), trans. denied. As

with any other contract, interpreting a settlement agreement presents a question

of law that we will review de novo. Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind.

2008). [13] Despite the agreement Husband and Wife had with their adult son relating to

the mortgage on the marital residence, the trial court here determined that Wife

was responsible for the note because the parties’ son “is not a party to this

matter, was not a signatory on the settlement agreement, and no evidence or

testimony was submitted that the child was bound to any such agreement.”

Appellant’s App. p. 10. However, Husband and Wife voluntarily entered into a

settlement agreement which the trial court approved and incorporated into the

dissolution decree that included the following, unambiguous language:

Wife shall be responsible for all costs associated with this residence. There is a mortgage on the marital property; however, neither party shall be responsible for it for the following reason. The parties’ son owns a house, the loan for which is secured by the marital residence. The son pays Wife each month, and she in turn pays the bank. Wife shall still be responsible for the taxes and insurance on the marital residence.

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Appellant’s App. p. 17 (emphasis added). [14] This section plainly indicates that Wife is responsible for the costs, taxes, and

insurance on the marital residence and that “costs” do not include the mortgage

because of the parties’ intent that their adult son would be responsible for the

mortgage and make payments to Wife. By its plain language, neither Wife nor

Husband are responsible for the mortgage, and thus, there is no ambiguity in

the agreement.4 Cf. Burrell v. Lewis, 743 N.E.2d 1207, 1212 (Ind. Ct. App. 2001)

(holding that a portion of a custody order was ambiguous where two

paragraphs outlining father’s visitation time were in direct conflict). [15] Simply put, Wife was not responsible for the mortgage on the marital residence

by the express terms of the settlement agreement, and therefore, she cannot be

held in contempt of court for willfully refusing an order that does not exist. Cf.

Dawson v. Dawson, 800 N.E.2d 1000, 1005–06 (Ind. Ct. App. 2003) (concluding

the trial court did not abuse its discretion when it found husband in contempt of

court where the settlement agreement specifically required him to satisfy the

balance of a mortgage on a precise date, and he failed to do so). [16] Further, the trial court’s order effectively modified the dissolution decree by

concluding that Wife “is responsible for payment of the note on the marital

residence.” Appellant’s App. p. 10. But under Indiana Code section 31-15-2-

4 Even if “costs” is read to include the mortgage, the subsequent sentence stating “neither party shall be responsible for” the mortgage creates an ambiguity in the settlement agreement, Appellant’s App. p. 17, and thus Wife cannot be held in contempt for violating an ambiguous order. Major, 822 N.E.2d at 170.

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17(c), once “the disposition of property [is] settled . . . and incorporated and

merged into the degree[,]” then it “is not subject to subsequent modification by

the court, except as the agreement prescribes or the parties subsequently

consent.” And Indiana Code section 31-15-7-9.1(a) provides: “The orders

concerning property disposition entered under this chapter . . . may not be

revoked or modified, except in case of fraud.” [17] Our supreme court has explained that the statutory prohibition against a trial

court modifying a property-settlement agreement “requires a court to approach

any dispute over a settlement agreement . . . as a contract dispute, subject to the

rules of contract law.” Ryan v. Ryan, 972 N.E.2d 359, 370–71 (Ind. 2012). Thus,

“If there is an ambiguity in a contract, contract law provides the rules for

resolving it. If there is a mutual mistake, contract law provides the rules for

resolving it. If the contract becomes impossible to perform, contract law

provides rules for handling the situation.” Id. at 371 (citations omitted). [18] Husband and Wife did not consent to a modification of the settlement

agreement nor is there any allegation of fraud. Moreover, Husband chose to

initiate a contempt proceeding rather than invoking contract law or filing a

motion for the trial court to clarify or modify the settlement agreement. See

Beaman v. Beaman, 844 N.E.2d 525, 531 (Ind. Ct. App. 2006). And the language

in the settlement agreement conveyed the parties’ intent that their son would be

responsible for making mortgage payments on the marital property. Cf. Pherson

v. Lund, 997 N.E.2d 367, 371 (Ind. Ct. App. 2013) (trial court did not abuse its

discretion where it clarified a settlement agreement to conform with the parties’

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intent, language of which was missing in the agreement). Thus, to the extent the

portion of the settlement agreement relating to the mortgage on the marital

residence is unworkable, the trial court was not free to modify the agreement on

its own. See Thomas v. Abel, 688 N.E.2d 197, 201 (Ind. Ct. App. 1997).

Accordingly, the trial court abused its discretion when it modified the

settlement agreement through a contempt proceeding.

Conclusion [19] Based on the facts and circumstances before us, Wife did not willfully disobey

the parties’ settlement agreement, and thus the trial court erred when it ordered

Wife to sell or refinance her home in order to purge herself of contempt.

Accordingly, we reverse the trial court’s order and remand for proceedings

consistent with this opinion.

Bailey, J., and Bradford, J., concur.

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