ATTORNEY FOR APPELLANT
: ATTORNEYS FOR APPELLEE:
RICHARD L. RENNICK, JR. JASON W. BENNETT
Wallace Law Firm JAMES A. GOTHARD
Covington, Indiana Bennett, Boehning & Clary
COURT OF APPEALS OF INDIANA
LARRY MARTIN, )
vs. ) No. 23A05-0111-CV-516
JUDY MARTIN, )
APPEAL FROM THE FOUNTAIN CIRCUIT COURT
The Honorable Vincent F. Grogg, Senior Judge
Cause No. 23C01-0007-DR-222
July 2, 2002
OPINION - FOR PUBLICATION
Larry Martin (Husband) appeals the trial courts order finding him in contempt of
its orders and awarding monetary damages to Judy Martin (Wife). We affirm.
We restate the issues before us as:
I. whether the trial court erred in finding Husband in contempt; and
II. whether the trial court erred in calculating the damages awarded to Wife.
Husband and Wife were divorced on June 5, 2001. As part of
the division of the couples property, the trial court awarded Wife a trucking
business, known as Martin Trucking, for which she had performed bookkeeping services and
which was valued at $499,000, less debts of $155,000. The dissolution decree
stated in relevant part:
[T]he Wife is awarded the following marital assets: . . . the trucking
operation, including all trucks and equipment, subject to the debts thereon . .
. . Each party shall execute any and all instruments necessary to
effect the division of assets herein ordered . . . .
App. pp. 11-12. The decree provided Wife with sixty days to vacate
the marital residence that was awarded to Husband, and Husband was allowed sixty
days to arrange for a parcel of real estate awarded to Wife to
be released from a mortgage lien. The decree contained no such time-delayed
provision with respect to the trucking business. Nevertheless, it is undisputed that
Husband continued to operate Martin Trucking for at least two months after the
dissolution decree, utilizing its assets and paying drivers wages and other expenses out
of the business checking account. He also proposed to Wife, through counsel,
that he continue to run Martin Trucking until August 5, 2001, and to
transfer the business at that time. In June, Husband and his son,
Matt Martin, incorporated a new trucking business, L & M Trucking. Husband
transferred several Interstate Commerce Commission (ICC) identification numbers necessary for operating tractor-trailers from
Martin Trucking to L & M Trucking.
On July 5, 2001, Wife filed a Motion to Correct Error, alleging that
the marital property division was inequitable because the $499,000 valuation of Martin Trucking
was based in large part on income derived from oral lease agreements between
Husband and his customers that Wife could not enforce, and on Husbands relationships
with the drivers and customers of the business generally. The motion also
alleged that Husband had assured his drivers that he was starting a new
trucking business, beginning August 6, 2001. On July 6, 2001, the trial
court, acting ex parte, modified the dissolution decree as follows:
The Husband is PROHIBITED from entering into any trucking business in Fountain County,
or in any adjoining county for a period of five years following this
Decree, either in person, or in a partnership or corporation in competition with
the trucking business of the parties, and he is further ORDERED not to
interfere in any way with, or do anything relating to any present customer,
driver, etc. of the trucking business owned by the parties and awarded herein
to the Wife, which would adversely affect Wifes ability to maintain said trucking
business as a going business.
App. p. 16. Husband did not appeal from or in any way
challenge this order or the original dissolution decree, except for requesting that he
be permitted to continue operating trucks as part of his farming business.
The trial court granted this request. After receiving notice of this modification,
Husband severed official ties with L & M Trucking.
On August 9, 2001, Wife filed a petition alleging Husband was in contempt
of the trial courts original dissolution decree and its subsequent modification because he
was continuing to operate Martin Trucking and had not turned over necessary records
and other documentation to Wife. After conducting a hearing, the trial court
found Husband in contempt, stating in part:
I dont know where anybody got the idea that there was a sixty
day period. There was of course a sixty day period involved [sic]
the house. I set that out specifically. There was a sixty
day period to arrange financing on transferring part of the real estate because
it was part of the joint debt on other real estate. I
did that as a convenience to the parties. . . . I
mean, thats ridiculous, that the parties can decide when these properties are going
to be transferred. The property was transferred the date of the decree,
period . . . . So, and whether somebody had to operate
the business or not wasnt, that was Mrs. Martins problem, not Mr. Martins,
but he continued to operate the business, paid his son large amounts of
money out of this business, paid himself large amounts of money out of
the business, paid a lot of drivers out of the business, and a
lot of those payments were made after I specifically entered an order that
he was to have nothing more to do with trucking, period, except for
his farm operation.
Tr. pp. 122-24. The trial court assessed damages as follows: $45,500
for sums paid to Husbands sons trucking business; $20,000 Husband paid to himself
as salary; $1000 for Husband removing tires from Martin Trucking vehicles, transferring them
to L & M Trucking vehicles, and replacing them with inferior tires; $2000
for selling license plates from Martin Trucking vehicles to L & M Trucking;
$1500 for transferring ICC numbers to L & M Trucking; $22,000 representing unjust
enrichment, which figure was arrived at by subtracting legitimate Martin Trucking expenses from
Martin Trucking income for the period after the divorce was final; and $28,000
for a payment to a diesel fuel supplier made at the end of
August 2001. The total damages award was $120,000, plus $5,000 in attorney
fees. Husband now appeals.
I. Propriety of Contempt Finding
Husband first argues that there was an insufficient basis to conclude that he
engaged in contemptuous conduct. Contempt is for the benefit of the party
who has been injured or damaged by the failure of another to conform
to a court order issued for the private benefit of the aggrieved party.
Cowart v. White, 711 N.E.2d 523, 530 (Ind. 1999). Whether a
party is in contempt is a matter within the trial courts discretion.
Id. at 530-31. We reverse a trial courts finding of contempt only
if there is no evidence or inferences drawn therefrom that support it.
Id. at 531. Contempt may be used to enforce a courts decree
that a party transfer property to another. Id. As with any
fact-sensitive issue on appeal, we will neither weigh the evidence nor judge the
credibility of witnesses, and will look at the evidence in the light most
favorable to the judgment. See Adkins Investments, Inc. v. Jackson County REMC,
731 N.E.2d 1024, 1034 (Ind. Ct. App. 2000), trans. denied.
We first observe that to the extent Husband explicitly and impliedly challenges the
wisdom or propriety of the original dissolution decree and its later modification, such
challenges are inappropriate in the context of a contempt proceeding. Contempt proceedings
are not actions designed to correct errors previously made by trial courts, even
errors of a constitutional dimension. Clark v. Atkins, 489 N.E.2d 90, 96
(Ind. Ct. App. 1986). Collateral attack of a previous order is allowed
in a contempt proceeding only if the trial court lacked subject matter or
personal jurisdiction to enter the order. Id. There is no such
claim in this case. Even an erroneous order must be obeyed unless
and until reversed on appeal. Crowl v. Berryhill, 678 N.E.2d 828, 830
(Ind. Ct. App. 1997). A partys remedy for an erroneous order is
appeal; disobedience of the order is contempt. Id. Husband never appealed
the orders at issue and, therefore, cannot challenge them now.
Husband posits that if he had not continued to operate Martin Trucking after
the date of the dissolution decree and its modification, he would have destroyed
Martin Trucking as a going business and it would also seem to have
been in violation of the Courts order. Reply Br. p. 3.
Husband claims, therefore, that it is unjust to hold him in contempt for
continuing to operate the business because not doing so also might have caused
him to be held in contempt. Husbands argument, however, views the evidence
in the light most favorable to him, not to Wife. It necessarily
assumes the evidence demonstrates he altruistically had the best interests of Martin Trucking
and Wife in mind by his continued operation of the business, when in
fact the record contains evidence and inferences clearly to the contrary.
Specifically, the record supports the conclusion that Husbands continued operation of Martin Trucking
was designed to foster a smooth transition of that business clients and drivers
to a newly-formed corporation, L & M Trucking, that would have effectively put
Martin Trucking out of business, thus depriving Wife of almost its entire value.
Husband and his son formed L & M Trucking shortly after the
divorce; he transferred ICC numbers and tires from Martin Trucking vehicles to L
& M Trucking vehicles. Wife testified that she spoke to some Martin
Trucking drivers after the divorce, who apparently indicated that they were unwilling to
work for her, thus obviously impeding her ability to run the business; Husband
apparently had something to do with this unwillingness.
See footnote Many of these drivers
ended up working for L & M Trucking. It is also interesting
to note that, although Husband allegedly severed all ties with L & M
Trucking after the trial court entered its non-compete modification of the dissolution decree,
at least three of L & M Truckings clients were former clients of
Martin Trucking, practically depriving Martin Trucking of its entire client base.See footnote Husband
paid $45,500 to his son from Martin Truckings account after the divorce, allegedly
for services provided by the sons sole proprietorship trucking business. However, no
documentation supported the claim that these payments were for legitimate services; Wife, who
did bookkeeping for Martin Trucking prior to the divorce, testified that there was
never an occasion on which payments were made to the son without first
receiving invoices and bills. She also testified that she did not believe
Matt Martin was being truthful as to what he was legitimately owed.
It is reasonable to infer from this evidence that Husbands intention in continuing
to operate Martin Trucking was to maintain his own personal goodwill with its
drivers, customers, and suppliers, and to provide indirect financial support to L &
M Trucking, for the purpose of fostering the growth of that corporation at
the expense of Martin Trucking.
Husband also contends that the trial courts orders were so vague and ambiguous
with respect to Martin Trucking that he could not be held in contempt
for allegedly violating those orders. A party may not be held in
contempt for failing to comply with an ambiguous or indefinite order.
v. Lewis, 743 N.E.2d 1207, 1213 (Ind. Ct. App. 2001). We conclude,
however, that whatever the practical considerations of how to implement Wifes full takeover
of Martin Trucking, it was abundantly clear from the dissolution decree that the
business was not Husbands to operate after the date of the decree, June
5, 2001. Husband could not operate it and receive any profits therefrom
after that date. He could not transfer the ICC numbers and tires
on the trucks to another business. He certainly could not siphon funds
from the business into his sons trucking business. Furthermore, Husbands transfer of
the ICC numbers hindered Wifes ability to operate the business, as did his
failure to turn over all necessary and relevant business records to Wife.
She was not required to request these records from him; he was required
to present them to her by operation of the dissolution decree, instead of
proposing to transfer the business sixty days after the dissolution decree, where such
delay was not provided for in the decree.
Finally, we note that our supreme court held when considering a divorce decree
requiring the sale of property and division of the proceeds that the decree
implied an obligation not to devalue the property, and thus the terms of
the decree included taking reasonable steps to preserve the value of the property
to adequately compensate both parties, and certainly precluded willful acts to devalue the
property. Cowart, 711 N.E.2d at 532 (emphasis added). The same is
true here: Wife was awarded Martin Trucking based on its value of
approximately $500,000 less debts of $155,000, which value was based in large part
on its ability to generate income. Husbands undertaking to deprive the business
of that ability through the various means we have described justified the trial
courts finding that he was in contempt of not only the non-compete modification
to the divorce decree, but also the original decree awarding Wife the trucking
operation, which clearly refers to much more than the physical assets of the
operation. The trial court did not abuse its discretion in concluding Husband
willfully violated its orders with respect to the award of Martin Trucking to
II. Amount of Damages
On appeal, Husband does not in any way challenge the imposition of damages
in the amount of $20,000 for payments Husband made to himself, $2000 for
the selling of Martin Trucking license plates to L & M Trucking, and
$1000 for the removal of tires from Martin Trucking vehicles. He additionally
does not challenge the amount of the attorney fees award. As for
the remaining $97,000 in damages, it is true that the amount of damages
awarded must be supported by substantial evidence. Hancz v. City of South
Bend, 691 N.E.2d 1322, 1326 (Ind. Ct. App. 1998). It is also
a cardinal rule of appellate review, however, that appellants have the burden of
showing reversible error by the record, as all presumptions are in favor of
the judgments and rulings of the trial court. City of Fort Wayne
v. Bishop, 228 Ind. 304, 315, 92 N.E.2d 544, 548 (1950). We
conclude Husband has not met his burden to demonstrate reversible error by the
Husbands argument that the trial court improperly assessed damages against him in the
amount of $45,500, for payments made to his sons sole proprietorship trucking business,
is simply an invitation for us to reweigh the evidence and judge witness
credibility, which we cannot do. The trial court concluded that these payments
were not legitimate expenses of Martin Trucking. There was no written documentation
to support Husbands claim that these were legitimate expenses, and his and his
sons testimony that there never was any such documentation as a customary business
practice conflicts with Wifes testimony on the subject. Wife also doubted the
veracity of the sons testimony on the legitimacy of this claimed expense.
The trial court was within its discretion to do likewise; there was substantial
evidence to support the award to Wife of $45,500.
Husband also claims there is no basis in the record for concluding Wife
was damaged in the amount of $1500 because of Husbands transfer of ICC
authority numbers from Martin Trucking to L & M Trucking. Although there
is no documentary basis for this particular damages award, the inconvenience and frustration
suffered by the aggrieved party may be taken into account in determining the
appropriate amount of damages in a civil contempt proceeding. Cowart, 711 N.E.2d
at 532. Husband claims these ICC numbers were personal to him and
could not be transferred for Wife to use to operate Martin Trucking; he
explained that he was able to transfer the numbers to L & M
Trucking because he was the majority shareholder of that corporation at the time
of the transfer. Even assuming that was true, however, he permitted L
& M Trucking to continue using the ICC numbers after the trial courts
explicit non-compete order and after he divested himself of any interest in that
corporation. This facilitated the transfer of Martin Trucking business to L &
M Trucking to Wifes detriment. The trial court did not err in
assessing damages in the amount of $1500 for the inconvenience and frustration to
Wife caused by the transfer of the ICC numbers.
Next, Husband challenges the trial courts conclusion that following the dissolution decree, Martin
Trucking had $258,000 in gross income and $236,000 in legitimate expenses, resulting in
$22,000 in unjust enrichment that the court ordered him to pay to Wife.
The full extent of Husbands argument on this point is that [c]ounsel
for the husband introduced into evidence a check ledger which showed income and
expenses of Martin Trucking and we can only presume that this was used
by the Court to justify the twenty-two thousand dollar ($22,000) award but it
does not support that amount and nowhere in the record is there anything
to substantiate the damage award to said wife. Appellants Br. pp. 10-11.
We agree with Wife that this argument falls short of demonstrating error
by the trial court, particularly because the copy of the ledger in question
that has been provided to this court is illegible in many parts, primarily
on the income side of the ledger. Additionally, we agree that Husband,
at the least, was required to propose what a proper calculation of Martin
Truckings income and expenses during the relevant time period should have been.
Having failed to do so, we are unwilling to sift through a record
to locate error so as to state an appellants case for him.
Wright v. Elston, 701 N.E.2d 1227, 1230 (Ind. Ct. App. 1998), trans. denied.
Finally, Husband claims the trial court erred in concluding that a $28,000 payment
to Westland Co-op, a diesel fuel supplier, in August 2001, was not a
legitimate expense of Martin Trucking. He asserts that this payment went toward
a reduction of a debt to Westland that was outstanding prior to the
date of the dissolution decree. This is one characterization of the evidence
before the trial court, but it is not the characterization most favorable to
the judgment. Although Wife concedes that there was an outstanding debt to
Westland of approximately $89,000 prior to the date she was awarded Martin Trucking,
she also introduced evidence that that debt was substantially increased during Husbands operation
of the business following the dissolution decree. According to Westland statements, Martin
Trucking incurred additional diesel fuel debt in the amount of $47,140 in June
and July 2001, alone. The trial court apparently considered a $40,000 payment
to Westland in July 2001, as a legitimate Martin Trucking expense, but excluded
the $28,000 payment at the end of August 2001, as a legitimate expense
because it was made after Husband claimed he would transfer the business to
Wife. The court had a substantial basis for concluding that that payment
went toward an illegitimate debt incurred after the date of the divorce.
Looking at the evidence in the light most favorable to the judgment, we
conclude the trial court did not abuse its discretion in finding Husband in
contempt of its orders awarding Martin Trucking to Wife. Furthermore, Husband has
failed to demonstrate that the damages assessed were not supported by substantial evidence.
We affirm in all respects.
KIRSCH, J., and MATHIAS, J., concur.
Wife testified as follows: I talked to his drivers. Larry
had told them . . . . I didnt have any drivers.
Tr. p. 91.
Footnote: The record contains letters from Husbands counsel to three customers of Martin
Trucking dated July 17, 2001, informing the customers that Wife was awarded the
trucking business and that it would be transferred to her on August 5,
2001. These three businesses became customers of L & M Trucking.
Additionally, Wife testified that a contact person at one of those businesses told
her he was informed that Martin Trucking was no longer going to be,
that it was going to be L & M Martin Trucking Inc.
Tr. p. 102.
Footnote: Wife also requests that we remand to the trial court for an
assessment of appellate attorney fees against Husband. Under Indiana Appellate Rule 66(E),
we may award damages against an appellant, including attorney fees, if an appeal
is frivolous or in bad faith. However, we must use extreme restraint
when exercising our discretionary power to award damages on appeal because of the
potential chilling effect upon the exercise of the right to appeal.
Zukerman, Davis, Inc. v. Chubb Group of Ins. Companies, 698 N.E.2d 1251, 1254
(Ind. Ct. App. 1998), trans. denied. Here, we do agree that Husband
has not strictly complied with all of our appellate rules, most notably 46(A)(6)(b),
which requires that the facts shall be stated in accordance with the standard
of review appropriate to the judgment or order being appealed. This is
particularly true with respect to the issues of the $45,500 and $28,000 damage
awards to Wife. Nevertheless, we cannot say Husbands appeal is so utterly
lacking in merit or that his brief so egregiously violates the appellate rules
that an award of appellate attorney fees is warranted.