Wife’s sole efforts in saving farm, reducing debts justifies real estate award in divorce, COA affirms

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A wife’s ability to refinance secured debt on farm property and make an equalization payment made it “just and reasonable” to award all real estate to her in a divorce case, the Court of Appeals of Indiana affirmed Tuesday.

According to court records, Gerard and Sandra Dierckman were married in 1987.

Over the course of the marriage, the Dierckmans acquired farmland in Rush and Decatur counties. All the land was held jointly by the husband and wife as a sole proprietorship.

In October 2018, Gerard was arrested and charged with strangulation and domestic battery of his wife. Following a jury trial, he was found guilty of strangulation, pleaded guilty to the domestic battery charge and was sentenced to a year in jail.

Then in December 2019, Sandra filed for divorce.

The parties’ sons, along with their wives, continued to help Sandra operate the farm, and she also helped the sons with their own farms.

In retaliation for Sandra’s refusal to “drop the divorce,” Gerard refused to provide his necessary participation to extend the Citizen’s Union Bank operating line of credit for the farm for the year 2020. The line of credit was not extended, but farm mortgage payments were still due.

Following a hearing, the Decatur Circuit Court entered a provisional order granting Sandra exclusive use, possession and control of the “marital real estate” — which included the farm and farming equipment — pending a final determination on dissolution. She was also ordered to “timely pay the monthly mortgage, taxes[,] and insurance.”

Since March 2020, Sandra has been solely legally responsible for the operation of the parties’ 1,500-acre farm, including making all decisions, managing finances, maintaining the Agri Business Finance line of credit and delivering grain.

While the dissolution proceedings were pending, Sandra used proceeds from the farming operation to pay down the parties’ marital debts. As of October 2021, she had reduced the debts by $941,728, and by August 2022, she had increased the debt reduction to $1,260,563.

During the dissolution proceedings, Sandra also used farm proceeds to pay Gerard $70,393 for his personal expenses.

In its final dissolution order, the trial court held that, per Sandra’s agreement, the parties’ marital estate would be divided evenly between them. It also found it was “just and reasonable to award all real estate to Wife along with the corresponding secured debt, subject to an equalizing payment.”

The court awarded Sandra the value of the farm equipment, inventory, accounts receivable and bank accounts and ordered her to pay Gerard an equalization payment of “$4,974,222.45 less the personal expenses she paid on his behalf [of] $70,393.00, for a net judgment of $4,903,829.45.”

Gerard appealed, arguing that the trial court’s findings were clearly erroneous and that the court erred in the valuation dates that were chosen for the marital assets.

He also argued the trial court erred in valuing the marital debt as of the date of the petition for dissolution, and erroneously reduced Sandra’s equalization payment by the amount she paid him for his personal expenses incurred during the dissolution proceedings.

The Court of Appeals affirmed in full, with Judge L. Mark Bailey writing for the appellate court.

Bailey noted that the trial court did not find fault with Gerard, but rather discussed his poor relationships with his wife, his sons, and the lenders and vendors as evidence that it was unlikely that he would be able to refinance the secured debt and make an equalization payment to his wife if the real estate were awarded to him.

“The fact that Husband’s poor and erratic behavior continued during the proceedings is further evidence of his likely continuing inability to secure the assistance he would need to take over the farm operations,” Bailey wrote.

Although Gerard challenged the factual finding that he failed to present evidence of his ability to qualify for refinancing of the approximately $5.5 million of debt for the farm mortgage and equipment, the trial court correctly found that Gerard’s 2021 income tax return showed he had a gross income of only $2,619 that year, the COA ruled. Unlike his wife, Gerard did not provide any evidence that he would be approved for an adequate loan if the court entered an order giving him exclusive use and possession of the property, Bailey wrote.

The appellate judge also disagreed with the husband’s allegations that the trial court erred by excluding from the marital estate alleged appreciation of the value of the real estate, and erroneously excluded farm inventory, farm accounts receivable and farm income allegedly accrued during the pendency of the dissolution proceedings.

Bailey wrote that the only evidence regarding possible appreciation of the land pending the final dissolution hearing was the parties’ testimonies that they believed the market price of farmland in the area had increased during that time.

“The trial court did not err in refusing to credit the parties’ anecdotal testimony over the appraised values or in finding that anecdotal testimony insufficient to support a finding of increased value,” Bailey wrote.

Further, the COA held that the evidence established that the farm income in the years 2019 through 2022 was produced solely through Sandra’s efforts and not at all through Gerard’s efforts, as Gerard was incarcerated during the year 2019 and did not help at all with the farm operations during that year or at any time thereafter.

“Therefore, there was a rational basis for the trial court’s failure to divide the 2019 and 2020 farm income between the parties,” Bailey wrote. “Any error in the failure to include that income in the marital pot was harmless, as the evidence supported an award of that income to Wife.”

Bailey also dismissed Gerard’s argument regarding the date of valuation the trial court chose for the marital debts as well as his argument that the trial court erred in how it reduced Sandra’s equalization payment.

The appellate judge pointed out that the husband’s expenses were paid using income from the farm that his wife obtained through her own efforts alone and despite his refusal to cooperate in obtaining refinancing of the farm.

“There is nothing inequitable in crediting Wife with the amount she paid for Husband’s personal expenses with farm income that she, alone, produced while the dissolution was pending,” Bailey wrote.

Judges Melissa May and Paul Felix concurred.

The case is Gerard M. Dierckman v. Sandra E. Dierckman, 22A-DN-2801.