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COA: Lawyer’s $3.4M fee wrongly applied in child support

October 19, 2018

A trial court miscalculated the impact of a Merrillville lawyer’s $3.4 million legal fee in a personal injury case on his child support obligation, the Indiana Court of Appeals ruled Friday.

Gregory W. Brown of Brown & Brown in Merrillville was awarded $3,457,000 in attorney fees for his representation of Kristen Zak of Dyer, who was awarded $32.5 million in damages for debilitating injuries resulting from a 2006 crash involving a J.B. Hunt Transport semi on Interstate 65 in Jasper County.

After the 2015 verdict, Brown established a structured settlement for his attorney fee in that case so that he would receive $100,000 annually from 2017 through 2024; $150,000 annually from 2025 to 2029; and $494,500 annually for eight years thereafter. A special judge in Lake Superior Court ruling on paternity, custody, visitation and child support was largely affirmed Friday by the Indiana Court of Appeals, but the panel found the trial court clearly erred in calculating child support in view of Brown’s fee in the Zak case.

Lake Superior Special Judge John Sedia found that under the settlement, Brown would receive less than one-third of the principal amount of the fee before the younger of his two minor children’s 19th birthdays. The children were born in 2007 and 2011.

“Whether or not Father structured the agreement in this manner in an attempt to minimize his child support obligation, to provide for himself during his retirement years, or for tax liability allocation purposes, or for all three reasons, is not relevant to the analysis the Court must make in determining Father’s income to calculate child support. (Minor children) C.B. and S.B. are entitled to benefit from the full amount of Father’s fee, including the interest it would generate,” Judge Terry Crone wrote. “The structured settlement agreement provides for this, as its total payments, principal and interest, amount to $5,506,000 over twenty years, or one thousand forty weeks. This extrapolates to a weekly income over the life of the agreement of $5,294.”

The trial court ordered Brown to pay $600 a week in child support beginning in November 2017 based on an arrearage it calculated dating to 2015, which the Court of Appeals found was in error because Brown didn’t receive the first payment from the structured settlement until February 2017.

“Therefore, we reverse and remand with instructions to recalculate Father’s weekly gross income prior to that date accordingly,” Crone wrote in a 31-page order in In re the Paternity of C.B. and S.B.; Gregory W. Brown v. Kara Davis, 45A03-1711-JP-2810.

The panel otherwise affirmed that Brown had not waived his right to appeal and that the trial court’s custody and parenting time rulings were not erroneous. The COA panel noted the trial court “patiently endured seven days of extremely contentious hearings on the paternity and contempt petitions from February through October 2017.”

In its ruling, the panel in a footnote observed, “Father’s statement of facts is inappropriately argumentative and contrary to the applicable standard of review in violation of Indiana Appellate Rule 46(A)(6)(b),” and that both parties had violated appellate rules by including copies of multiple exhibits in appendices. “We caution the parties not to include nonessential information in the appendix in future appeals,” Crone wrote.  

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