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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.

FILED
May 28 2010, 9:03 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEY FOR APPELLANT: DEBORAH M. AGARD Law Office of Deborah M. Agard Indianapolis, Indiana

ATTORNEY FOR APPELLEE: RALPH E. DOWLING Muncie, Indiana

IN THE COURT OF APPEALS OF INDIANA
IN RE: THE MARRIAGE OF FARRELL, JOHN M. FARRELL, Appellant-Respondent, and NICOLE T. FARRELL, Appellee-Petitioner. ) ) ) ) ) ) ) ) ) ) )

No. 18A02-0803-CV-266

APPEAL FROM THE DELAWARE CIRCUIT COURT The Honorable Richard A. Dailey, Judge Cause No. 18C02-0412-DR-47

May 28, 2010 MEMORANDUM DECISION - NOT FOR PUBLICATION

MAY, Judge

John M. Farrell ("Father") challenges the support modification order that he pay 92% of his daughters "uncovered" college expenses1 and 92% of attorney fees for Nicole T. Farrell ("Mother"). Father asserts clear error in the courts finding Father is voluntarily underemployed and that his potential income is $403,369 per year. We affirm. FACTS AND PROCEDURAL HISTORY Father and Mother married in 1980 and separated in 2004. Their marriage

produced four children, but support of only one child, M.F., a daughter born in 1987, is at issue. In July of 2006, the trial court entered a child support order that provided in pertinent part: FINDINGS ***** 3. [Father] was formerly employed as a high level corporate executive, and left that employment in late 1999. He obtained substantial assets and had earned substantial wages as a corporate executive, in some years earning in excess of $500,000.00. 4. He has not earned any regular wages since 2000, by his own choice, but does have assets, which earn income, and he could have sought employment had he chosen to do so. Instead, he has attempted to earn income by trading stocks and by starting a residential real estate construction business. He has constructed homes, which are for sale. ***** 6. [Father] has notes payable to him, which will provide interest income to him of at least Fifty-five Thousand Dollars ($55,000.00) per year, in addition to his earnings in the real estate business. He built a residence, which is for sale at this time. He also is an able-bodied person who could seek employment as a corporate executive, as he has done before. 7. It is therefore appropriate that the Court establish [Father]s income in the amount of $55,000.00 per year, for purposes of child support
"Uncovered" college expenses are those "not covered by scholarships or grants," including "tuition, room and board, fees, and books." (Amended App. at 10-16.)
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calculation. The Court should impute to [Mother] minimum wages at this time. 8. The two older children are receiving higher education, but are emancipated. The third child, [M.F.], is a Ball State freshman, with substantial scholarships during her freshman year, although those scholarships may not be available to her next school year. [M.F.] resides with her mother in the summer for at least eighteen (18) weeks, and that should be considered in the calculation with respect to the time she lives with her mother. In the event that [M.F.]s scholarship status changes for school year 2006-07 and subsequent years, the Court may reconsider this Order based upon that status. ***** 10. A child support worksheet is attached, and [Father] should pay child support to [Mother] effective as of the hearing date of March 17, 2006, in the sum of $156.96 per week. He should also be required to keep the children of the parties covered with health insurance so long as such is available at a reasonable cost. The six percent (6%) rule shall apply to uninsured medical and related bills, and therefore [Mother] will be responsible to pay the first $666.12 per year in uninsured medical bills for the children. ***** CONCLUSIONS IT IS THEREFORE, ORDERED, ADJUDGED AND DECREED as follows: 1. [Father] shall pay $156.96 per week to [Mother] effective as of March 17, 2006, through the Clerk of Delaware County, for the support of [M.F.] and [D.F.]. John Farrell shall provide health insurance for the minor children so long as such is available at a reasonable cost, and Nicole shall be responsible for the first $666.12 per year of uninsured medical expenses for the children. ***** 3. In the event that [M.F.]s scholarship status changes, the parties shall submit for the Courts consideration, a child support worksheet to the Court on or before August 15 of each year reflecting her scholarship status. (Amended App. at 31-34.)2 Two months later, when M.F. returned to college for her sophomore year, she did
"Amended App." denotes the Appendix Father filed after we required him in 2009 to resubmit his original Appendix, filed in 2008, in a format that complied with Trial Rule 5(G) and Appellate Rule 9(J). "Supp. App." denotes the Appendix Father filed to provide materials produced by our remand.
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not have the same scholarships and grants she had received during her freshman year. However, neither party filed a new child support worksheet before August 15, 2006. On December 20, 2006, Mother moved for modification of child support. On January 4, 2008, the court found and ordered in pertinent part: 7. The Court now finds that [Father] has yet failed to obtain employment, he continues to draw on investment funds to support himself. The Court continues to find that he is an able bodied person who could seek employment as he has done before and that he has not earned regular wages since 2000, again by his own choice. The Court further finds that in calendar year 2007, [Father] sold a property located at 301 S. Greenland in Muncie, IN, and that as a result of that sale he took a home in trade which he has valued at $126,800.00 and that he further received net cash in the sum of $131,751.00. The Court further finds that [Father]s bank records of June/July 2007 indicate a deposit of $144,838.00. The Court finds that these three figures; $144,838, $131,751, and $126,800, should be combined to reflect [Father]s income for 2007 to use in the calculation in the child support worksheet. 8. [Mother] is now employed full time as a teacher earning a weekly gross income of $719.00. The Court finds that this is a reasonable sum to use as [Mother]s income for the calculation of child support. ***** 16. The Court therefore finds based upon the above information that [Father] should be paying 92% of [M.F.]s college education expenses and [Mother] paying 8% which expenses are not covered by scholarships or grants. Those expenses shall include tuition, room and board, fees, and books. ***** 21. The Court further finds that [Mother] submitted, via counsel, a fee affidavit totally [sic] $2,527.05. The Court finds that [Father] shall be responsible for paying 92% of those fees based upon his percentage of income from the child support worksheet. [Father] shall therefore pay the sum of $2,322.98 by paying one-half within 30 days and one-half within 60 days of the entry of this order to the office of [Mothers counsel]. [Mother] shall be responsible for the balance of her fees. (Id. at 10-16.) Father appealed that order. We held that a change in M.F.s scholarships and

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grants was a change in circumstances that permitted the court to modify the child support calculation. Farrell v. Farrell, No. 18A02-0803-CV-266, Slip op. at 11 (Ind. Ct. App. Dec. 30, 2008). We reversed and remanded for clarification of the findings regarding Fathers income because neither the parties nor we were certain whether the trial court calculated Fathers actual income or imputed income due to voluntary underemployment. Id. at 12-13. In addition, we asked the court, after it clarified Fathers income, to revisit the order that Father pay 92% of Mothers attorney fees.3 Id. at 15. The trial court then ordered, in pertinent part: CLARIFICATION #1: THE COURT IMPUTED FATHER'S POTENTIAL INCOME. 1. This Courts Order Book Entry of January 4, 2008 ("the OBE"), was intended to express that the Court had imputed potential income, not calculated actual income, for [Father] for child support purposes. 2. This Court intended to convey that it was imputing potential income for [Father] both by references in the OBE intended to communicate this Courts finding that Father was voluntarily underemployed (see Clarification #2, infra) and the language in paragraph 7 of the OBE (quoted in Slip Opinion, p. 12) referring to the $403,369 figure as one that the Court thought would "reflect [Fathers] income for 2007 to use in the calculation in the child support worksheet." (emphasis added). 3. Even if Father were not voluntarily underemployed, the Court still could not have calculated Fathers actual income because Fathers own demeanor prevented such actual calculation in that: (a) The Court found much of Fathers testimony to be not credible due both to his testimonial demeanor and to the inherent lack of believability of many of his factual assertions; and (b) Father failed to provide the Court with the mandatory sworn Child Support Worksheet. 4. The OBE included some of the testimony and prior findings of this Court that supported the imputed potential income amount,
We also retained jurisdiction over the case so that we could address the parties remaining arguments after we received clarification from the trial court.
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including: OBE paragraph 3, which incorporated findings made July 10, 2006, and reported in paragraphs 3-4 of that 2006 order. (b) OBE paragraph 7, which refers to substantial financial transactions made by Father in 2007 that appeared to be income to him and to which he offered no credible testimony or other evidence that these transactions were not income to him or at least a reliable indicator of his potential income if he would cease to be voluntarily underemployed and offer truthful disclosure of his income. (c) Fathers efforts to show that the transactions he claimed were not income were not credible because they were supported primarily by his own incredible testimony and his submission of unitemized and unsworn documents. 5. In addition to the evidence cited in the OBE, there was other undisputed evidence of Fathers potential income at the hearings on this case, including evidence that he could and did earn nearly $1 million in one year, and averaged $850,000 the last two years he was employed before he chose to become voluntarily underemployed. 6. This Court did not make a finding of Fathers actual income for child support purposes. CLARIFICATION #2: THE COURT FOUND FATHER WAS VOLUNTARILY UNDEREMPLOYED. 1. On January 4, 208, this Court did find that Father was voluntarily underemployed. 2. Although the Court of Appeals properly noted that this Court did not "explicitly find [Father] "voluntarily ,,unemployed or ,,voluntarily underemployed,"[sic] this Court intended to communicate this finding in the OBE as follows: (a) OBE paragraph 3s reference to Fathers former employment as a high level corporate executive often earning over half a million dollars per year; (b) OBE paragraph 3s reference to Father not having earned any regular wages since the year 2000 by his own choice; (c) OBE paragraph 3s reference to the fact that Father could have sought employment if he had chosen to do so; (d) OBE paragraph 7s reference to Father having "yet failed to obtain employment" long after the Court 6 (a)

noted his substantial earning power and voluntary failure to seek and find employment at the time of the March 2007 hearing; and (e) OBE paragraph 7s reference to the Court continuing to find that Father is able bodied and could seek employment but has chosen not to do so. 3. There was substantial other evidence from the hearing in the case from which the Court concluded Father was voluntarily underemployed, including: (a) Although Father claimed he was having trouble finding other sources of income because he was too busy winding down the affairs of Vista Homes, this testimony was incredible because his company Vistas home building projects were all completed and listed for sale with a realtor; (b) Although Father testified that he had been seeking a job since 1999, substantial evidence made this claim incredible, including his own testimony that he had not been looking for a job for wages because his selfemployment precluded it, testimony from Nicole Farrell ("Mother") that Father was not looking for work between 1999 and 2006, and testimony from Mother that Father did not want a regular job because he did not like working for others and thus was looking for a company to run; and (c) Fathers testimony that he had been unable to find gainful employment despite an alleged search for such work also was not credible given the many years that had passed and the evidence that he was a healthy able-bodied man who had an M.B.A. decree, and had high level corporate executive experience in positions paying several hundred thousand dollars per year. Father had no credible explanation other than voluntary underemployment for his inability to find work under these circumstances if he had actually been seeking it as he claimed. (Supp. App. at 12-15.) The trial court renewed its order that Father pay 92% of Mothers attorney fees.4

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The Court also recalculated Fathers arrearage for the 2006-2007 school year and ordered Father to pay

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DISCUSSION AND DECISION We presume a trial courts calculation of child support is valid. Young v. Young, 891 N.E.2d 1045, 1047 (Ind. 2008). We may reverse only if its decision is clearly erroneous or contrary to law. Id. "A decision is clearly erroneous if it is clearly against the logic and effect of the facts and circumstances that were before the trial court." Id. We review first whether the evidence supports the specific findings and then whether the findings and conclusions support the judgment. Id. As we conduct our review, we consider only the evidence most favorable to the judgment and all reasonable inferences therefrom. Kondamuri v. Kondamuri, 852 N.E.2d 939, 944 (Ind. Ct. App. 2006). We may neither reweigh evidence nor assess credibility of witnesses. Id. A. Contents of the Record on Appeal

Before evaluating whether the evidence supports the findings, we must address Fathers argument that we held the evidence presented at a hearing in 2006 could not be considered. When this case was first before us, we stated: A trial court may take judicial notice of law, a fact, or of the contents of the pleadings and filings in the case before it. Sanders v. State, 782 N.E.2d 1036 (Ind. Ct. App. 2003); see also Rule 201 of the Indiana Rules of Evidence. More generally, a trial court may take judicial notice of proceedings
$2,240. (Supp. App. at 18.) Neither party challenges that calculation. After we received the trial courts clarifications, Father asked us to schedule additional briefing and strike portions of the trial courts clarification order, and Mother filed responses to those motions. We granted Fathers request for additional briefing and provided a schedule therefor, but we denied Fathers motion to strike, indicating Father could include his arguments regarding the trial courts order in his supplemental brief. Father filed a supplemental brief, supplemental appendix, and an addendum to his supplemental brief, and Mother filed a supplemental brief. Thereafter, we returned Fathers supplemental appendix and addendum to him and ordered him to bring them into compliance with Trial Rule 5(G) and Appellate Rule 9(J). For the same reason, we ordered the trial court reporter to correct the Exhibits volume.

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that have taken place in that court, and in that cause of action. Vance v. State, 640 N.E.2d 51 (Ind. 1994); Gerrick v. State, 451 N.E.2d 327. The cases cited above--as well as other, similar cases--have permitted incorporating by reference evidence presented in an earlier hearing when doing so would prevent redundancy. That is, courts allow it when it will minimize needless and time-consuming duplication of effort that results in nothing more than the presentation of evidence that is identical to or cumulative of evidence previously placed before the court in the same case. See, e.g., Vance v. State, 640 N.E.2d 51 and Gerrick v. State, 451 N.E.2d 327 (permitting incorporation by reference, in a later proceeding, of evidence presented at an earlier waiver hearing); Smith v. State, 713 N.E.2d 338 (Ind. Ct. App. 1999) (allowing incorporation by reference, at a bench trial, statements made at an earlier suppression hearing), trans. denied; Miller v. State, 702 N.E.2d 1053 (Ind. 1998), cert. denied, 528 U.S. 1083, 120 S. Ct. 806, 145 L.Ed.2d 679 (2000) and Wisehart v. State, 693 N.E.2d 23 (Ind. 1998), cert. denied, 526 U.S. 1040, 119 S. Ct. 1338, 143 L.Ed.2d 502 (1999) (permitting incorporation by reference, at the penalty phase, of evidence adduced at the earlier guilt phase). Arms v. Arms, 803 N.E.2d 1201, 1209-10 (Ind. Ct. App. 2004). Accordingly, the trial court could have taken judicial notice of the transcript of the earlier hearing on the motion of one of the parties or on its own motion. It is not clear that happened in this case. Our review of the trial courts order leads us to believe the courts findings relied on its prior order for all the facts that it needed. Therefore, we will disregard the transcript and evidence from the original support hearing and review the courts new order based on the evidence presented at the modification hearings and the findings in the original order. Farrell, Slip op. at 8-9 n.2. To summarize, the trial court herein would have been well within its discretion to take judicial notice of the evidence presented at the 2006 hearing. Nevertheless, it was not "clear" to us that the trial court had taken judicial notice of that evidence. Id. The "Record on Appeal" consists "of the Clerks Record and all proceedings before the trial court." Ind. Appellate Rule 2(L). "It is well settled that matters outside 9

the record cannot be considered by this court on appeal." Schaefer v. Kumar, 804 N.E.2d 184, 187 n.3 (Ind. Ct. App. 2004), trans. denied. Thus, without clear indication from the trial court that it had taken notice of the evidence presented at the 2006 hearing, we could not consider it. See id. (striking materials that had not been presented to the trial court). However, on remand, the trial court entered a new order that contains a number of findings explicitly based on that 2006 evidence, which indicates the court did, in fact, take notice of the evidence presented in the earlier proceedings. Because we now know the court took notice of that evidence, it is part of the Record on Appeal and we may consider it as we review the validity of the courts findings of fact. Accordingly, to the extent Father asserts the trial courts findings on remand are erroneous simply because they are supported only by evidence from the 2006 hearing, his arguments fail.5 B. Fathers Credibility

Father notes the trial "court made no implicit or explicit finding concerning [Fathers] credibility either during the court proceeding or in the Modification Order," (Appellants Supplemental Br. at 15), and then asserts: "The trial court cannot cure the fatal defect of the missing legal bases for the voluntary underemployment status and potential income by filling the order with language about [Father]s credibility." (Id. at
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These findings include Paragraphs 4 and 5 of Clarification #1 and Paragraph 3 of Clarification #2. Because we reproduced those paragraphs above, we do not do so again here. Father also challenges the courts finding he "failed to provide the Court with the mandatory sworn Child Support Worksheet," Paragraph 3(b) of Clarification #1, because he submitted proposed child support worksheets. However, as Father acknowledges, he did not sign those worksheets. Therefore, despite any testimony Father may have provided in support of the worksheets, they were not the worksheets required by Ind. Child Support Guideline 3(B)(1) ("In all cases, a copy of the worksheet which accompanies these Guidelines shall be completed and filed with the court when the court is asked to order support. . . . Worksheets shall be signed by both parties, not their counsel, under penalties for perjury.").

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16.) The trial courts determinations regarding Fathers credibility explain the courts decision not to credit the evidence Father presented regarding his economic and employment situation. That Father was not cross-examined regarding much of his

testimony does not require the trial court to believe Fathers version of events. We have explained: The trier of fact may not arbitrarily disregard evidence, but the evidence as a whole and the circumstances of trial may justify rejection of evidence not directly controverted: Among the factors that may be considered in determining the credit to be given to the testimony of a witness are: The interest of the witness, if any, in the outcome of trial; his bias and prejudice, if any is shown; his opportunity for knowing and recollecting the facts about which he testified; the probability or improbability of his testimony; and his demeanor while on the witness stand. It has long been recognized that a jury may disbelieve uncontradicted oral evidence, on the basis of credibility. Terry v. West, 524 N.E.2d 343, 348-49 (Ind. Ct. App. 1988) (quoting Gemmer v. Anthony Wayne Bank, 181 Ind. App. 379, 386-87, 391 N.E.2d 1185, 1189 (1979), reh'g denied), reh'g denied. evidence.6 Father also claims the trial court should not have disregarded all of his testimony
Neither was the court required to make an explicit or implicit finding regarding Fathers lack of credibility prior to our request for clarification in order for those new findings to be valid. Father also challenges one of the trial courts findings that suppor ts its determination he was not credible: "his submission of un-itemized and unsworn documents." (Supp. App. at 13 (Clarification #1, Paragraph 4).) Father asserts error in that finding because it was Mother, not he, who submitted those documents to the trial court. Assuming arguendo Father is correct, we need not reverse, as an absence of documents supplied by Father could not provide more support for his position than unsworn and unitemized documents. Moreover, the court made numerous other findings that are sufficient to support its determination that Father was not credible.
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Thus, the court was not required to give weight to any of Fathers

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because his testimony was not "inherently improbable" or "wholly uncorroborated." (Appellants Supp. Br. at 15.) The standard Father cites is for "incredible dubiosity"

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