The Indiana Court of Appeals ruled Wednesday that the arbitrator in a contentious divorce proceeding erred when she ordered the husband to pay $95,000 in attorney fees to his ex-wife.
Robert and Leah Masters agreed to submit to arbitration to end their marriage and determine custody and parenting time issues regarding their one child. The arbitrator determined the parties’ respective incomes, whether actual or imputed. Robert Masters was determined to have an $80,000 income; Leah Masters had not worked for many years to be a stay at home mother, but received an imputed income between $15,000 and $23,400 based on her college degree.
In addition to ordering Robert Masters to pay back child support and an equalizer payment, the arbitrator ordered him to pay Leah Masters $95,000 for her attorney fees. Robert Masters hired an attorney through his union, at a reduced fee; Leah Masters had to pay for a private attorney with a loan from her parents.
“We hold that the arbitrator’s findings are clearly erroneous because they do not demonstrate Husband’s ability to pay the fee assessed against him. When determining whether to award attorney’s fees, the other party’s ability to pay is a factor to be considered,” Judge Edward Najam wrote. “But there are no findings here that demonstrate that the arbitrator considered that factor. To the contrary, the arbitrator expressly found that Husband’s annual income is $80,000; she directed Husband to pay $17,735 in his child support arrearage; she directed him to pay $23,965.05 as a cash equalization payment within 100 days of the dissolution order; and she directed him to pay $51,000 to “replenish...the parties’ bank accounts.” Moreover, the $95,000 award is about $1,000 more than Husband’s 40% of the valued portion of the marital estate. If anything, the arbitrator’s findings seriously call into doubt Husband’s ability to pay another $95,000 to Wife.”
In addition, there are no findings that Robert Masters acted in bad faith or in any way more inappropriately than wife through the dissolution process. The COA remanded with instructions for the court to enter a reasonable award of attorney fees to wife in a manner consistent with this opinion.
The judges also rejected each party’s request for appellate attorney fees but found that husband has the right to recover his appellate costs pursuant to Appellate Rule 67(C) since he was wholly successful in this appeal, Robert A. Masters v. Leah Masters, 02A04-1404-DR-178.