COA upholds trial court’s lengthy divorce order

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A separated couple won’t be seeing any changes to the 47-page order dividing up their marital assets after appeals by both parties were denied by the Court of Appeals of Indiana.

James K. Alifimoff and Regina K. Stuart married in 1991 and moved to Kansas that same year. While living there, Stuart gave birth to three children.

The family moved to Fort Wayne in 2005 and purchased a home. At some point in 2007, the couple purchased four parcels of land in Osborne County, Kansas.

Also in 2007, Alifimoff entered into an installment sales agreement with Stephen and Vicki Hutchings to purchase a tract in Smith County, Kansas.

In March 2017, Stuart filed a petition for dissolution of marriage and Alifimoff filed a counter-petition for dissolution. The Allen Circuit Court held a three-day hearing and ultimately issued a detailed 47-page order following lengthy testimony with, as requested by both the husband and wife, findings of fact and conclusions of law.

A month later, Alifimoff filed a motion to correct error, arguing that “[t]he [trial] [c]ourt erred in excluding from the marital assets the parties’ Suspended Passive Activity Losses generated by the marital real estate investments.”

In support of his argument, he directed the trial court to Magee v. Garry-Magee, 833 N.E.2d 1083 (Ind. Ct. App. 2005). According to the husband, Magee “suggest[ed] that Indiana courts treat carry-overs as marital assets to be valued and divided.”

Also, Alifimoff argued the trial court erred in including the Smith County tract in the marital estate. According to the husband, although he had “a contractual interest in the [Smith County tract], that interest ha[d] no value because it [was] subordinate to the agreement with (friend Ross) Heinen and to Heinen’s equitable and legal interest in the property.”

After the denial of his motion to correct error, Alifimoff appealed.

On Friday, the COA upheld the trial court’s ruling.

First, judges rejected the argument that the trial court abused its discretion when it determined that suspended passive activity losses generated from the parties’ passive real estate holdings were too speculative and remote to be included in the marital pot.

“Indeed, Husband’s witness, tax expert (Gregory) Green, acknowledged the possibility that the requirements to take the deductions for the suspended passive activity losses might never be met,” Judge Rudolph Pyle wrote. “Accordingly, the trial court did not abuse its discretion when it determined that suspended passive activity losses generated from the parties’ passive real estate holdings were too speculative and remote to be included in the marital pot. We find no error.”

Regarding the Smith County tract, the COA pointed to Henderson v. Henderson, 139 N.E.3d 227 (Ind. Ct. App. 2019).

“Here, the facts before us are substantially similar to those in Henderson,” Pyle wrote. “Specifically, the Agreement identified Husband as the purchaser, who agreed to pay the Hutchings $92,000 plus interest over the course of twenty years and who was entitled to immediate possession of the Smith Country tract.

“Additionally, Husband did not have the right to assign or transfer the Agreement, any interest therein, or any interest in the real estate without the Hutchings’ written consent,” he continued. “Husband offered no such consent.

“We further note that the title insurance policy identified Husband as both the insured and the purchaser of the property. In addition, Heinen acknowledged that if he were to pass away, the title to the property would remain in Husband’s name. Because the trial court’s decision to include the Smith County tract in the marital pot is not clearly against the logic and effect of the facts and circumstances before the court, we find no abuse of the trial court’s discretion.”

Finally, looking at Stuart’s cross-appeal, judges concluded the trial court didn’t abuse discretion in the valuation of the Osborne County tract because it was within the range of values supported by the evidence.

The case is James K. Alifimoff v. Regina K. Stuart, 21A-DN-2320.

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