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Judges order modification of dissolution decree

May 5, 2011

The Indiana Court of Appeals found a trial court abused its discretion when it didn’t consider a $160,000 change in value of a property when calculating marital assets and distributing marital property.

In Patrick M. McGrath v. Linda S. McGrath, No. 46A03-1008-DR-429, Patrick McGrath challenged the LaPorte Superior Court’s use of a 2005 valuation of property he and his wife Linda purchased on Shawmut Avenue in Michigan City in 1994. When Linda filed for divorce in 2005, the Shawmut property was appraised at $389,000. In November 2009, it was appraised at $229,000.

The trial court stated at the final hearing on the petition for dissolution that it intended to divide the marital property equally. The court entered the decree using the 2005 appraisal amount when dividing the martial property. The court ordered Linda to transfer her interest in the real estate to Patrick.

Patrick filed a motion to correct error, claiming the court should have used the 2009 appraisal value and by not doing so, the court deviated from an equal division of marital assets and Linda would actually receive more than 62 percent of the marital pot.

A trial court may select any date between the filing of the petition for dissolution and the date of the final hearing for purposes of choosing a date upon which to value marital assets, Judge Elaine Brown wrote. She also noted that the trial court is required to divide the marital estate in a just and reasonable manner, with an equal division presumed to be just and reasonable.

The appellate judges found the $160,000 decline in the value of the property represented a significant departure from an equal division of the marital estate. The trial court’s division didn’t account for the decreased value during the pendency of the proceedings and ultimately rendered an unequal division of marital property, which was contrary to the court’s stated intent, wrote Judge Brown.

Judge Ezra Friedlander concurred in result in a separate opinion, stressing that his vote was based upon the internal inconsistency in the trial court’s division of property. He noted that the trial court has discretion to choose the valuation date and discretion to divide an estate evenly or not, depending on particular circumstances.

“It may not, however purport to achieve a current equal division by assigning a value to an asset that does not comport with current reality,” he wrote.

The Court of Appeals remanded with instructions to enter a modified decree of dissolution or an amendment to the decree reflecting an equal property division of the martial estate considering the change in value of the Shawmut property.

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