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Man who failed to disclose property interest must divide mother’s estate with ex-wife

December 14, 2018

A woman who learned after the divorce was final that her estranged husband did not disclose his interest in his mother’s estate has gotten relief from the Indiana Court of Appeals, which found the man “made a mockery of the discovery process.”

In January 2013, Mary McDaniel filed for a dissolution of marriage from Peter Coles and served him several interrogatories. Coles answered and returned them but failed to disclose that he held a remainder fee-simple interest in real estate subject to his mother’s life estate.

Following the dissolution agreement settlement in 2015, McDaniel filed a motion for relief from judgment, alleging Coles did not disclose his interest in certain real property prior to the agreement. McDaniel claimed she was entitled to relief because she would not have entered into the agreement if had she known of Coles’ interest in the property.

The Fountain Circuit Court granted McDaniel’s motion after two failed meditation attempts and entered an order distributing the relevant debts and asset. On appeal in Peter Coles v. Mary (Coles) McDaniel, 23A05-1712-DR-2817, Coles argued the trial court’s conclusion was incorrect as a matter of law because the misconduct standard under Indiana Trial Rule 60(B)(3) did not apply to the case. Specifically, he argued that the trial court’s reliance on Outback Steakhouse of Fla., Inc. v. Markley, 856 N.E.2d 65 (Ind. 2006) was “inapposite and readily distinguishable from the facts in the instant case” and that it would be impossible to evaluate the impact of his alleged “misconduct” on the “full and fair” presentation of a case at trial.

The appellate court disagreed, finding that the legal analysis in Markley directly applied to the case and, therefore, McDaniel was entitled to relief from judgment.

“Here, the trial court found that Husband’s answers to the relevant interrogatories, including the reply, ‘Investigation continues,’ … made a mockery of the discovery process, especially considering Husband did not later supplement that response and considering Husband indicated as part of the Dissolution Settlement Agreement that he had disclosed all real property interests,” Judge Melissa May wrote for the court.

The appellate court also found there was no abuse of discretion when the trial court divided Coles’ fee-simple interest in the property. Finding he provided no evidence regarding the value of the property either at time of separation or at the time the trial court granted McDaniel relief, the appellate court found Coles was estopped from challenging the manner in which the trial court distributed the property.

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