ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
JAMES A. GOTHARD RANDALL L. VONDERHEIDE
Bennett, Boehning & Clary Vonderheide & Knecht, P.C.
Lafayette, Indiana Lafayette, Indiana
IN RE THE MARRIAGE OF ) MECHELLE K. MOYARS, ) Appellant-Petitioner, ) ) vs. ) No. 04A03-9904-CV-134 ) DAVID G. MOYARS, ) ) Appellee-Respondent. )
operations and rental proceeds.
In September 1998, Mechelle sought an order compelling
discovery from Geneva Moyars.
Geneva Moyars responded with a Motion to Quash. After
a hearing on October 9, 1998, the trial court issued an order which stated in part:
The Court, having reviewed the cases and considering all issues, determines that the Motion to Quash the Discovery Request Directed to Geneva Moyars should be GRANTED. Further, the Court determines that the real estate, as it relates to the remainder interest vested in David G. Moyars (husband) as shown by Personal Representative's Deed recorded July 31, 1996 (Petitioner's Exhibit #1) is too remote to be divisible as part of the marital estate. It is primarily for that reason that the Motion to Quash is granted. The Motion for Order Compelling Discovery filed September 11, 1998 by Petitioner, Mechelle Moyars, is OVERRULED AND DENIED.
Record at 94 (emphasis added).
Mechelle requested that the trial court certify the issue of whether David's interest in the real property was a marital asset for interlocutory appeal, but the trial court declined. After the final hearing, the trial court set aside the interest in the real estate to David, and awarded him the marital residence and improvements in lieu of maintenance. Mechelle now appeals.
Id. Ind. Trial Rule 26(B)(1) states that parties may obtain discovery that is reasonably likely
to lead to the discovery of admissible evidence about any matter that is relevant to the subject
matter of the pending action and not privileged. The trial court concluded that information
about the value of the real property was not discoverable because the real property was not
marital property and therefore the information was not relevant to the subject matter of the
proceeding. Therefore, we will examine the trial court's conclusion that the real property
was not a marital asset.
Mechelle argues that the trial court's conclusion that David's remainder interest in real estate was too remote to be divisible as a marital asset was erroneous. IC 31-15-7- 4(a)(2)(A) provides that the trial court shall divide the property of the parties, including property acquired by either spouse after the marriage. Property is defined as all of the assets of either party or both parties. IC 31-9-2-98. This one pot theory prohibits the exclusion of any asset in which a party has a vested interest from the scope of the trial court's power to divide and award. Hann v. Hann, 655 N.E.2d 566, 569 (Ind. Ct. App. 1995), trans. denied (1996). The systematic exclusion of any marital asset for the marital pot is erroneous. See Wilson v. Wilson, 409 N.E.2d 1169, 1173 (Ind. Ct. App. 1980).
David cites Loeb v. Loeb, 261 Ind. 193, 301 N.E.2d 349 (Ind. 1973),See footnote 1 as support for the trial court's conclusion that his remainder interest is not a marital asset. In Loeb, the supreme court held that a husband's vested remainder subject to a condition subsequent in a trust created by his mother was not a marital asset subject to division. During the marriage
of the parties, the husband's mother created a trust consisting of common stock of the family
corporation. The trust provided that the husband's mother would receive the income from
the stock during her lifetime. Upon her death, the principal and any undistributed income
was to be paid over to the husband and his two siblings in equal shares. If any of the
beneficiaries did not survive the husband's mother, his or her share was to be paid to the
surviving issue of that beneficiary per stirpes, or in the event that no such person existed,
then to the other beneficiaries in equal shares.
The wife argued that the husband's interest in the trust was a vested remainder which was subject to division by the dissolution court. The husband disagreed, and characterized his interest as contingent. The court concluded that the husband held a vested remainder subject to a condition subsequent because his interest was subject to complete defeasance if he predeceased his mother. Id. at 199, 301 N.E.2d at 353. The court concluded that such a determination, however, was not dispositive. Instead, [t]he central question is not whether the interest is 'vested' or 'contingent,' but, rather, the issue is whether the future interest is so remote that it should not have been included in the property settlement award. Id. at 198, 301 N.E.2d at 352. In the case before it, the court determined that the husband's interest was too remote. It noted that the husband had no present possessory interest and that the interest was of no present pecuniary value to him. Thus, the husband's interest in the trust was not divisible in the property settlement award. Id. at 199-200, 301 N.E.2d at 353.
By contrast, in this case, David's interest is not too remote to be included in the property settlement award. David owns a remainder interest as a tenant in common with his
two siblings, subject to a life estate in his mother. David's interest became vested at his father's death . Although David has no legal present possessory interest in the land, we note that he and Mechelle have in fact enjoyed the possession of a portion the land for many years now. Further, unlike in Loeb, David's interest in the real property does represent a present pecuniary interest; David could sell or mortgage his interest if he chose to. See Poulson v. Poulson, 691 N.E.2d 504, 506 (Ind. Ct. App. 1998) (owner in common of property may sell his undivided interest). Remainder interests, like fee simple interests, are capable of valuation. We agree with the Kansas Supreme Court, which when faced with precisely the same issue, stated, [Husband] owned specific undivided future interests in two quarter sections of land. Neither of these will ripen into a possessory interest until the termination of the estate of the life tenant of each tract. Nevertheless his interests are vested remainders which may be sold or otherwise alienated, transferred or mortgaged. They have present value. McCain v. McCain, 549 P.2d 896, 899-900 (Kan. 1976). David's interest in the property is a valuable asset. Thus, we hold that David's vested remainder in the real estate was not too remote to be included in the property division.See footnote 2
something of value during the marriage which the spouse still has and which is properly
regarded as present marital property. Gregg v. Gregg, 510 A.2d 474, 480 (Del. 1986). In
Gregg, the husband contended that his remainder interest in real property subject to a life
estate in his mother was not a marital asset. The court disagreed, noting that future interests
have a separate present value and are significant property assets. Id. at 479. Since the
husband had acquired the future interest during the marriage, it was marital property subject
to division. Id. at 480. See also Davidson v. Davidson, 474 N.E.2d 1137 (Mass. App. Ct.
1985) (remainder interest in trust was marital property where right to remainder was fixed
during marriage); In re Marriage of Hill, 643 P.2d 582, 587 (Mont. 1982) (remainder interest
in real estate subject to a life estate is marital property; [w]hile the right to possession of a
vested future interest is postponed, it is still a property interest that can be distributed.); In
re Marriage of Bentson, 656 P.2d 395 (Or. Ct. App. 1983) (husband's future interest in trust,
whether vested or contingent, is marital asset to be considered in division of marital
Having concluded that David's interest in the real property is marital property, we hold that the trial court's ruling on the motion to quash was an abuse of discretion. We note that the effect of the trial court's ruling on the discovery was to foreclose the introduction of virtually any evidence about the value of the property .See footnote 3 Thus, we have no evidence in the
Record before us about the value of David's interest in the property. Therefore, we cannot
review the trial court's division of property between the parties.See footnote
David's remainder interest in the real property which was transferred to him during the marriage is a marital asset subject to division. We vacate the discovery order and the judgment and remand to the trial court. Both parties should be permitted to conduct discovery with regard to the value of David's interest in the property and present such evidence at a hearing. The trial court should consider this evidence and make any appropriate changes to the property division.
Reversed and remanded.
DARDEN, J. , and BROOK, J., concur.
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