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ATTORNEY FOR APPELLANT Amber L. Lapaich Michigan City, Indiana

ATTORNEY FOR APPELLEE Douglas L. Biege LaPorte, Indiana

In the

Indiana Supreme Court
No. 46S04-0907-CV-00346 GINA JOHNSON,

FILED
Jan 28 2010, 10:25 am
of the supreme court, court of appeals and tax court

CLERK

Appellant (Respondent below), v. ROBERT JOHNSON, Appellee (Petitioner below).

Appeal from the LaPorte Superior Court No. 1, No. 46D01-0604-DR-119 The Honorable Kathleen G. Lang, Judge The Honorable Greta S. Friedman, Magistrate On Petition to Transfer from the Indiana Court of Appeals, No. 46A04-0810-CV-00570

January 28, 2010 Shepard, Chief Justice.

In the course of settling their dissolution, Robert Johnson agreed to pay Gina Johnson for her interest in the family farm. When Robert later sought to renew a line of credit and restructure the farm's debt to pay Gina, the bank required Gina's agreement to give the bank's lien priority over hers. After she refused, Robert sought a declaratory order subordinating her lien. The trial court granted his motion.

We conclude that the parties' settlement agreement, though silent on the subject, must have contemplated the regular annual renewal of the farm's debt to finance its operations but not the higher level of debt necessary to finance Robert's obligations to Gina. Thus, the trial court's order impermissibly modified the settlement agreement. We reverse.

Facts and Procedural History

Since roughly the time Robert and Gina Johnson married, Robert has farmed with his father. About 1992, the two entered a partnership to operate Sunset Dairy, Inc., a dairy and grain farm.1 From the beginning of the partnership, the farm has used a series of lines of credit to finance its operations. Each April 15 the farm takes out a loan at First Source Bank to finance seasonal expenses such as fuel, chemicals, and rents.2 After selling the fall harvest, the farm repays the loan. The line of credit is secured by an all-assets security agreement that is crosscollateralized with all other collateral with the bank as well as personal guarantees from the farm's owners. The bank requires first position on all assets securing the farm's debt.

Although Robert farms with his father, Gina has always had at least a minimal role in the family business. She was well aware of the farm's annual financing arrangement. Robert testified that he and Gina talked about the financing, that Gina was present when he bought the first two hundred acres of land, that she signed her name to the note, and that she knew the amount of money Robert financed each year. (App. at 29

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Indiana Law