COA grants ex-wife full equalization payment from farm sale

Despite a man’s assertions that a trial court erred in denying his motion to correct error regarding the split of marital assets, the Indiana Court of Appeals found no such error occurred against him. Rather, it found error occurred against his ex-wife when she did not receive the full equalization payment after selling their farm. 

When James and Cindy Kobold ended their marriage, they entered into a property settlement agreement that awarded James their 175-acre farm. The agreement also stated that James would pay Cindy an equalization payment of $319,122.04 through installment payments running until June 2020.

If he breached the agreement, James agreed that Cindy could sell the marital assets ­— which she ultimately did after James subsequently failed to make any installment payments. Cindy then sold the farm to Rieth-Riley Construction Co. for more than $1.63 million.

James filed a motion to correct error but was denied in part when a trial court affirmed its decision to let Cindy to sell the farm and in denying his motion to rescind the sale. However, it did partly grant James’ motion by requiring that Cindy keep no more of the sale proceeds than necessary to pay the amount due to her under a signed promissory at the time the sale had closed.

Ultimately, Cindy received $383,123.09 and James received $500,000.00 from the sale. The Indiana Court of Appeals denied James’ request to stay the final judgment of possession, leading to his appeal and Cindy’s cross appeal in James Peter Kobold v. Cindy Ann Kobold and Wells Fargo Bank, National Association and Rieth-Riley Construction Co., Inc., 18A-DR-893

James argued that the motion to correct error ruling was erroneous because it incorrectly found that Cindy held a judgment lien against the farm and that in letting Cindy sell the farm, it impermissibly modified their agreement. He also contended it wrongly denied his request to rescind the sale.

First, the appellate court determined that because Cindy was the holder of a judgment lien, she had the right to negotiate a sale of the real estate, not James. It thus concluded the trial court did not err in finding that Cindy held a judgment lien against the farm and did not impermissibly modify the PSA by allowing her to sell the farm to collect the full equalization payment.

It also rejected James’ argument that the sale to Reith-Riley should have been rescinded and that the ejectment action was not properly before the trial court. Pointing out that he had previously conceded during the dissolution case that there was no prejudice in letting the ejectment matter proceed and that he defaulted on his obligations under the PSA, the appellate court concluded that James lacked the requisite clean hands to seek rescission and that the trial court did not abuse its discretion in denying his request.

Additionally, it concluded that although the trial court’s order did not identify Rieth-Riley as the buyer, the record clearly demonstrated the declaration that Rieth-Riley had the right to possess and own the property. Thus, the appellate court concluded a final adjudication of Rieth-Riley’s right to possess the farm was rendered, despite James’ contentions.

In addressing Cindy’s cross appeal, the appellate court agreed with her assertion that the trial court erred in ruling Cindy was entitled only to the amount of sales proceeds that would cover the amount James owed her at the time the sale of the farm had closed.  

Finding her entitled to the full amount of the equalization payment, the appellate court also rejected James’ assertion that her request for attorneys fees was res judicata. It therefore remanded

for the trial court to determine the amount of trial and appellate attorney fees Cindy was owed.