ILNews

Court splits on first impression dissipation case

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An Indiana Court of Appeals judge dissented today from his colleagues' decision that a spouse may be found to have dissipated property after refusing to sign and file joint tax returns because the judge believes the ruling is "bad law and bad policy."

In Anna Mae Hardebeck v. James A. Hardebeck, No. 48A04-0904-CV-212, Judges Edward Najam and Michael Barnes adopted the holding that whether a spouse's failure to file a joint tax return constitutes dissipation under Indiana Code Section 31-15-7-5(4) must be determined from a review of the facts and circumstances in each case. The majority relied on caselaw from Pennsylvania and Tennessee since it was the first time the issue had been addressed in Indiana courts.

The dissolution court ruled Anna Mae Hardebeck dissipated marital assets when she refused to file a joint income tax return for 2006 and 2007 with her husband, James. That cost James more than $8,600 in state and federal income taxes. James filed for dissolution in 2008.

"As in any case involving an allegation of dissipation, the court should consider relevant factors including whether the expenditure benefited the marriage or was made for a purpose entirely unrelated to the marriage, the timing of the transaction, whether the expenditure was excessive or de minimis, and whether the dissipating party intended to hide, deplete, or divert the marital asset," wrote Judge Najam.

The majority noted Anna Mae never suggested she filed her tax returns separately to protect herself because James' returns were fraudulent, and she apparently refused to file their taxes jointly out of spite.

But Anna Mae was within her statutory rights in refusing to file a joint tax return, Judge James Kirsch wrote in his dissent, and she may have been acting with great prudence in doing so.

"I believe that requiring a spouse to execute a joint income tax return in such circumstances and to incur the joint and several liability that accompanies filing such a return, including any deficiencies resulting from it, any penalties assessed because of it and any additional tax liability subsequently imposed on it is bad law and bad policy," he wrote.

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  2. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  3. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  4. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  5. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

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