Husband who wasn’t notified of dissolution decree wins COA reversal

A man who was never given notice of the final dissolution decree ending his marriage secured a reversal from the Indiana Court of Appeals on Wednesday.

During their final dissolution hearing, Larry and Kelly Penley discussed their marital assets and debts, which included the asset of their house that had already sold for more than $97,000. One of their debts was a personal loan to family friend Gracie Hamilton, who allowed the Penleys to borrow $65,000 to purchase their home.

The Penleys had signed a contract with and were making monthly payments to Hamilton, but the couple disagreed about how much money they still owed. Larry asserted they owed close to $14,000 and Kelly asserted they owed either $13,190 or $6,580.

A final dissolution decree in November 2017 ordered that the proceeds from the sale of the parties’ house would be used to “pay the Gracie Hamilton Loan in the amount of $13,190.00,” among other things. The trial court also determined Larry had dissipated marital assets during the course of the marriage and ordered that, due to this dissipation, the remaining proceeds from the house sale – close to $60,000 – be distributed 70% to Kelly and 30% to Larry.

However, the chronological case summary did not contain any notation to indicate that the decree was sent to the parties and did not indicate that automated e-notice was sent to either Larry or Kelly’s respective counsels.  But when Larry three months later filed a copy of a release signed by Hamilton indicating she had released the Penleys for the personal home loan for $10,000, Kelly’s counsel informed him that the CCS indicated the Tipton Circuit Court had already entered the final dissolution decree.

Larry subsequently asserted to the trial court that he had received neither written nor electronic notice of the decree as required by Trial Rule 72, filing a motion for leave and to reconsider the amount required to be paid to Hamilton.

The trial court, although acknowledging it could not explain why the CCS entry date for the decree was incorrectly entered as the date of the final dissolution hearing, ultimately found Larry had failed to timely file a motion to correct error and that “no good cause ha[d] been shown [that] would justify relief from the Trial Rules.”

But “(b)ecause it is undisputed that Husband did not receive notice of the November 2018 Decree and the CCS contains no record that the clerk had served notice of the decree to him, we conclude that the trial court abused its discretion by denying Husband’s request for leave to file a belated motion to correct error,” Judge Rudolph Pyle III wrote for the Indiana Court of Appeals in a reversal.

“Because Husband has made a prima facie showing of error, we reverse the trial court’s order denying Husband’s motion for leave to file a belated motion to correct error to challenge the final dissolution decree and remand to the trial court with instructions to allow Husband to file a motion to correct error within thirty days of this opinion being certified,” the appellate court concluded.

The case is Larry D. Penley v. Kelly R. Penley, 19A-DN-1918.