      MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as
      precedent or cited before any court except for the
      purpose of establishing the defense of res judicata,
      collateral estoppel, or the law of the case.                     Jul 28 2015, 9:58 am


      ATTORNEY FOR APPELLANT
      Laurie Baiden Bumb
      Bumb & Vowels, LLP
      Evansville, Indiana



                                                   IN THE
          COURT OF APPEALS OF INDIANA

      In re the Marriage of:                                    July 28, 2015
                                                                Court of Appeals Case No.
      Thomas E. Thompson,                                       74A05-1412-DR-598
      Appellant-Respondent,                                     Appeal from the Spencer Circuit
                                                                Court
              v.
                                                                The Honorable Jonathan A. Dartt,
                                                                Judge
      Donna B. Thompson,                                        Cause No. 74C01-0801-DR-34
      Appellee-Petitioner,




      Bradford, Judge.



                                            Case Summary
[1]   Appellee-Petitioner Donna Thompson (“Wife”) filed for dissolution of

      marriage from her former husband, Appellant-Respondent Thomas Thompson

      (“Husband”). In separating the marital assets, the trial court awarded Husband

      Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015     Page 1 of 10
      the marital home and Husband’s 401(k) which accounted for the large majority

      of the total marital estate. The trial court also ordered Husband to make a cash

      equalization payment to Wife in order that the total assets would be split evenly

      by the parties. The trial court instructed Husband to liquidate certain

      retirement accounts, refinance the marital home, or obtain a loan to satisfy the

      cash payment to Wife. The trial court further instructed that if such options

      were insufficient, Husband would be required to sell the marital home. On

      appeal, Husband argues that the trial court erred by failing to consider tax

      consequences and costs of selling the home when valuating assets, resulting in

      an unequal division of property. We agree and remand with instructions that

      the trial court revaluate certain assets to account for the tax consequences and

      costs of real estate sale that will likely be incurred as a result of the order.



                            Facts and Procedural History
[2]   The parties were married on December 21, 1984 and have three adult children

      together. On January 16, 2008, Wife filed a petition for dissolution of

      marriage. On March 1, 2012, Husband retired from his job of twenty-three

      years. The trial court held a hearing on February 11, 2014 regarding the

      division of the marital estate. Among other assets, Husband had two pensions

      which Wife requested be split by means of a Qualified Domestic Relations

      Order (“QDRO”). In its June 26, 2014 decree of dissolution and property

      division, the trial court ordered the marital assets separated as follows:




      Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015   Page 2 of 10
              2. The Petitioner/Wife shall receive and own as her property the
              following property at the following values:
               Half of Husband’s Millwright Pension that accrued                            QDRO
               during marriage
               Half of Husband’s ALCOA Defined Benefit
                                                                                            QDRO
               (Pension) that accrued during marriage
               2002 Pontiac Grand Am                                                       $1,200
               2006 Chevy Aveo                                                             $8,000
               Ed Jones joint [account]                                                   $23,096
               Wife’s Freedom [account]                                                     $0.32
               Wife’s American Funds IRA                                                $57,871.41
               Wife’s SMMC 401(a)                                                        $1,024.56
               Wife’s SMMC 403(a)                                                        $2,038.53
               Personal Property (equal value to Husband’s)                               -----------
               TOTAL                                                                    $90,231.00
              3. The Respondent/Husband shall receive and own as [his] property
              the following property at the following values:
               Half of Husband’s Millwright Pension that accrued                            QDRO
               during marriage
               Half of Husband’s ALCOA Defined Benefit
                                                                                            QDRO
               (Pension) that accrued during marriage
               Marital home & real estate []                                            $97,000.00
               1984 Chevy Blazer                                                          $500.00
               Husband’s Freedom [account]                                               $3,600.38
               Husband’s ALCOA 401(k) Defined Contribution
                                                                                       $226,231.37
               Plan
               Personal Property (equal value to [Wife’s])                               -----------
               TOTAL                                                                   $406,901.50
      App. pp. 8-9.


[3]   The trial court gave Husband additional credits totaling approximately $28,000

      for personal funds spent on the parties’ children’s college expenses as well as for

      certificates of deposit brought into the marriage. Excluding the pensions

      divided by QDROs, Husband received $376,528.04 of the marital estate and

      Wife received $88,044.31. The trial court ordered Husband to make a cash

      Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015         Page 3 of 10
      equalization payment to Wife in the amount of $144,241.86 in order that each

      party receive a 50% share of the total net marital estate. The trial court

      specified that Husband could satisfy this cash payment by liquidating certain

      retirement accounts, refinancing the marital home, or obtaining a loan, and that

      if those options were insufficient then Husband would be required to sell the

      marital home.


[4]   On July 18, 2014, Husband filed a motion to correct errors in which he argued,

      among other things, that the trial court erred by failing to consider the tax

      consequences of drawing funds from the parties’ tax deferred assets, including

      Husband’s 401(k). The trial court denied Husband’s motion.



                                 Discussion and Decision
[5]   Husband raises two issues on appeal: (1) whether the trial court abused its

      discretion by failing to consider the costs of a real estate sale and tax

      consequences of its property disposition, and (2) whether the trial court abused

      its discretion by failing to order the division of Husband’s 401(k) by means of a

      QDRO.


                                        Standard of Review
[6]   “We apply a strict standard of review to a court’s distribution of property upon

      dissolution. The division of marital assets is a matter within the sound

      discretion of the trial court.” Smith v. Smith, 854 N.E.2d 1, 5 (Ind. Ct. App.

      2006) (citations omitted). “The presumption that a dissolution court correctly

      Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015   Page 4 of 10
      followed the law and made all the proper considerations when dividing the

      property is one of the strongest presumptions applicable to our consideration on

      appeal.” Id.


[7]   However, because Wife neglected to file an appellee’s brief, our standard of

      review is slightly different. Where one party fails to file an appellate brief, we

      may reverse the trial court if the appellant presents a case of prima facie error.

      Henderson v. Henderson, 919 N.E.2d 1207, 1210 (Ind. Ct. App. 2010). “Prima

      facie error means at first sight, on first appearance, or on the face of it.” Id.

      We will not undertake the burden of developing an argument on the Wife’s

      behalf. Id.


       I. Whether the Trial Court Erred by Failing to Consider
           the Tax Consequences of its Asset Distribution
[8]   Indiana Code Section 31-15-7-7 provides that “The court, in determining what

      is just and reasonable in dividing property under this chapter, shall consider the

      tax consequences of the property disposition with respect to the present and

      future economic circumstances of each party.” The statute requires the trial

      court to consider only the direct, immediate, or inherent and necessarily

      incurred tax consequences of the property disposition. Harlan v. Harlan, 560

      N.E.2d 1246 (Ind. 1990); Granger v. Granger, 579 N.E.2d 1319, 1321 (Ind. Ct.

      App. 1991). “A taxable event must occur as a direct result of the court-ordered

      disposition of the marital estate for the resulting tax to reduce the value of the

      marital estate.” Granger, 579 N.E.2d at 1321.


      Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015   Page 5 of 10
[9]    The inclusion of costs of the sale of real estate in a trial court’s valuation of said

       real estate has been analogized by this court to the consideration of tax

       consequences under Section 31-15-7-7. Dowden v. Allman, 696 N.E.2d 456, 458

       n.1 (Ind. Ct. App. 1998). Like tax considerations, we have held that it is only

       appropriate for a trial court to consider the costs of sale of real estate in its

       valuation when such costs will be incurred as a direct result of the trial court’s

       disposition of property.


[10]   In Granger, the husband filed a petition for dissolution of marriage and

       subsequently listed two laundromats he owned for sale. 579 N.E.2d at 1320.

       The trial court determined the anticipated tax liability from the sale of the two

       laundromats and reduced the marital estate by that amount. The trial court

       explained its consideration of the possible tax liabilities from the sale by stating

       that although it did not “specifically order the sale of the laundromats,” there

       would be no other way “under the circumstances, where [the husband] can

       accomplish the things that have been required by this Court without the sale of

       the laundromats.” Id. at 1321 (record citation omitted). On appeal, this court

       found that there was a reasonable inference that husband could borrow the

       necessary funds to meet his obligations under the property disposition should

       his income be insufficient, and therefore, the sale of both laundromats was not

       an immediate consequence of the property disposition. Id. Evidence which

       indicated that husband could meet his financial burden without selling the

       laundromats included husband’s personal income, the laundromats’ business

       income, the fact that the vast majority of husband’s liabilities under the


       Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015   Page 6 of 10
       disposition were payable in monthly installments, and that each one of the

       laundromats on their own was valued at an amount considerably higher than

       husband’s total indebtness under the property division. 1 Id.


[11]   In the instant case, the trial court’s order states as follows:

               [Husband] shall pay said cash equalization [$144,241.86] to [Wife]
               within seventy-five (75) days of the date of this Order such as by
               liquidating certain retirement accounts, refinancing the marital real
               estate and home, obtaining a loan, or a combination of the above. If
               he is unable to satisfy the cash equalization from said resources, is
               unable to refinance the real estate, or decides not to stay at said
               residence, said real estate shall be listed for sale within forty-five (45)
               days of this Order and sold through a licensed realtor.
       App. p. 12.


[12]   The record is devoid of any evidence regarding Husband’s ability to obtain a

       personal loan or mortgage financing. At the time of the hearing, Husband was

       unemployed and his total income consisted of monthly Social Security

       Disability payments and distributions from his pensions.2 In contrast to

       Granger, Husband has been ordered to make a larger cash payment within a

       relatively short period of time and is on a fixed income. As the trial court

       acknowledged in its order, it seems clear that Husband will be unable to satisfy




       1
         The trial court determined that husband would be liable for certain marital debts totaling $49,117.37, the
       majority of which was composed of a mortgage and business debt, and was payable monthly. The trial court
       also ordered husband to pay wife $6,168.23 within 180 days of the order. The laundromats were valued at
       $110,000 and $80,000, carrying a total indebtedness of $19,000. Husband had a personal income of $30,000
       per year. Id.
       2
        Husband’s Social Security Disability benefits and pension payments (after being reduced by the QDROs)
       amounted to approximately $41,500 per year.

       Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015             Page 7 of 10
       the cash payment without liquidating a portion of his retirement accounts,

       selling his home, or both.3 Accordingly, we think that there will clearly be a

       direct, necessarily-incurred tax consequence as a result of the trial court’s order.

       Because the retirement accounts are comprised of pre-tax funds, liquidation of

       those accounts will almost certainly cause Husband to incur a significant tax

       liability. More directly, the trial court stated in its property disposition, and in

       its order on Husband’s motion to correct errors, that Husband must sell the

       marital home if he is unable to satisfy the cash equalization by other means.

       There would certainly be standard sale-related costs incurred by Husband if he

       were forced to sell the marital home, costs which the trial court neglected to

       consider in its order. Accordingly, we find that the trial court erred in failing to

       consider both the tax consequences of drawing from Husband’s 401(k) assets

       and the real estate costs associated with the sale of the marital home.


[13]   “[T]he trial court’s judgment might provide alternative plans of distribution,

       one which appropriately considers resulting tax consequences and one which

       does not involve tax consequences.” Granger, 579 N.E.2d at 1321 n.2. On

       remand, the trial court shall consider the costs and/or tax consequences of its

       property valuation based on the options it provides Husband to meet his cash

       equalization, be that liquidating his tax-deferred accounts, selling the marital




       3
         We note that the court valued the marital home at $97,000. Assuming that Husband can sell the home for
       that price, not including any sale costs, Husband would still be approximately $47,000 shy of the cash
       equalization payment. Therefore, it is unlikely that he will be able to satisfy the order without liquidating
       retirement accounts.

       Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015               Page 8 of 10
       home, or otherwise, with the appropriate adjustment of the valuation of those

       assets contingent upon the manner in which Husband chooses to meet his

       equalization liability.4


           II. Whether the Trial Court Erred by Failing to Divide
                    Husband’s 401(k) Using a QDRO
[14]   Husband argues that dividing his 401(k) via a QDRO would have been a more

       equitable method of distribution and that doing so would have reduced the cash

       equalization payment to only $31,126.18, thus eliminating the tax consequence

       issue by preventing the need to liquidate accounts or sell the house. We

       disagree for several reasons. Firstly, although a QDRO would allow the parties

       to split the 401(k) without creating tax consequences, there are risks and

       complexities inherent in their use with respect to 401(k)’s. Preparing a QDRO

       takes time and must comply with the employer and benefit plan’s requirements.

       Often, the value of a 401(k) will fall before a QDRO can be implemented,

       resulting in difficulties satisfying the property disposition.5 See e.g. Ehman v.




       4
         Husband briefly acknowledges in his appellate brief that a trial court is not required to consider tax
       consequences if such consequences were not presented by the party. Hardin v. Hardin, 964 N.E.2d 247, 254
       (Ind. Ct. App. 2012). However, he argues that the issue could not have been anticipated because neither
       party contemplated the liquidation of the Husband’s 401(k) during trial and expected a QDRO to divide the
       401(k) rather than a cash payment. First, waiver is an affirmative defense and because Wife did not file a
       brief, we will not develop her argument for her. Second, we agree that the tax consequence issue was not
       readily apparent prior to the trial court’s ruling and further note that Husband appropriately raised the issue
       in his motion to correct errors after it became apparent. As such, we decline to find that Husband waived this
       argument on appeal.
       5
        We note that the value of Husband’s 401(k) fell from approximately $312,000 at the time Wife filed her
       petition for dissolution in 2008, to approximately $260,000 at the time of his retirement in 2012.

       Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015                Page 9 of 10
       Ehman, 941 N.E.2d 1103 (Ind. Ct. App. 2011); Case v. Case, 794 N.E.2d 514

       (Ind. Ct. App. 2003).


[15]   Furthermore, neither party specified to the trial court by what means they

       wished the 401(k) to be split. Husband made no argument at trial that a QDRO

       would be a superior method to divide the 401(k). Finally, Husband cited no

       cases or statutes in support of his contention that the trial court was required to

       use QDRO as opposed to a cash equalization payment. In light of the

       significant discretion afforded a trial court in its division of property and lack of

       support for Husband’s argument on this issue, we affirm the trial court’s

       judgment with regards to the means by which it chose to divide the marital

       assets.


[16]   The judgment of the trial court is affirmed in part, reversed in part, and

       remanded with instructions.


       May, J., and Crone, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 74A05-1412-DR-598 | July 28, 2015   Page 10 of 10
