Even though a trial court believed a wife's testimony that her in-laws' purposefully kept her from receiving any money from the sale of the marital residence in the event of a divorce, the lower court erred by including the residence in the marital estate, ruled the Indiana Court of Appeals. The home was titled in the name of the in-laws and they weren't joined as nonparties to the dissolution proceedings.

Greta Nicevski testified during the dissolution proceedings that she believed her husband, Krstin, and his parents had titled the Nicevskis' home in the parents' names solely to deprive her of half the property's value if they were to divorce. After the Nicevskis married, Krstin's parents paid for the lot, construction, and title insurance for the home; the Nicevskis paid the parents rent to live in the house.

The trial court accepted Greta's testimony that she and her husband paid $80,000 toward the house, even though she didn't have evidence or bank statements to support her testimony. The lower court also ruled the house belongs to Krstin and that he must pay her $40,000.

In Krstin Nicevski v. Greta Nicevski, No. 02A04-0904-CV-188, the Court of Appeals relied on In re Marriage of Dall, 681 N.E.2d 718 (Ind. Ct. App. 1997), to reverse the trial court. In Dall, the wife's father purchased the lot, supplied most of the lumber for the home, paid the contractors and for the building materials, but the Dalls and the wife's parents all helped to build the home. The home was titled in the parents' name when the Dalls divorced. The trial court in that case held that an equitable interest in real property titled in a third-party's name, although claimed by one of the divorcing parties, shouldn't be included in the marital estate.

The Dall court also ruled that unless a nonparty is joined, the dissolution court is powerless to adjudicate with certainty the extent of the marital property interest in the real estate.

In the instant case, Krstin's parents were not joined as nonparties pursuant to Trial Rule 12(B)(7).

"We fully acknowledge that the trial court assessed witness credibility and chose to credit Greta's testimony over Krstin's, and we do not second-guess that decision," wrote Chief Judge John Baker. "Unfortunately, pursuant to Dall, the trial court simply did not have the power to include the residence in the marital estate."

The appellate court also rejected Greta's argument that Krstin waived any argument because he didn't object to her failure to join his parents at trial or seek to join them himself. The judges agreed with the Dall court that reliance on the waiver doctrine doesn't resolve this case, and that even though Krstin included a valuation of the residence at trial, he isn't precluded from arguing that the residence shouldn't have been included in the marital estate, wrote the chief judge.