Family Law Case Review: Horner v Horner, Supreme Court Disagrees w/ Court of Appeals

Case: Dennis Jack Horner v. Marcia (Horner) Carter
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: The Indiana Supreme Court vacated an earlier Court of Appeals ruling that found error where the trial court had excluded Husband’s testimony regarding statements Husband made to the mediator during a mediation session. In so doing, the Supreme Court underscored the general inadmissibility of conduct and statements that occur within mediation.

FACTS AND PROCEDURAL HISTORY:
The facts and procedural history appear below in the digest of the Court of Appeals’ opinion from June 2012.

In reviewing the case after granting transfer, the Indiana Supreme Court reviewed ADR Rule 2.11 regarding confidentiality and its related case law. The Supreme Court disagreed with the Court of Appeals’ conclusion that statements made in mediation were admissible as extrinsic evidence to aid in the construction of an ambiguous settlement agreement. Citing policy reasons, the Supreme Court found that the amicable settlement of disputes warrants “a robust policy of confidentiality of conduct and statements made during negotiation and mediation,” and that the benefit of providing this confidentiality outweighs the cost of not having such statements available as extrinsic evidence to help interpret agreements.

The judgment of the trial court was affirmed.

To view the text of this opinion in its entirety, click here: Dennis Jack Horner v. Marcia (Horner) Carter

June 2012 Indiana Court of Appeals Digest:
Case: Dennis Jack Horner v. Marcia (Horner) Carter
Case Summary – by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Notwithstanding the general confidentiality of communications made within mediation, details of what occurred within a session are admissible for purposes of determining whether a final settlement agreement was drafted to reflect the parties’ agreement accurately.

HELD: Term of final settlement agreement that obligated Husband to make contributions towards Wife’s future monthly housing expenses until the death of either party was correctly interpreted to be an obligation in the nature of property settlement, not maintenance, and thus non-modifiable.

FACTS AND PROCEDURAL HISTORY:  Husband and Wife divorced in 2005 after 38 years of marriage. In a mediation session, the parties reached a global settlement that was reduced to a five-page agreement. The written agreement, incorporated into the parties’ Decree, included separate sections entitled “Real Estate” and “Maintenance/Support.”

In the “Real Estate” section, Husband was obligated to sell the parties’ marital residence and contribute the sum of $550 per month towards Wife’s purchase of a new residence.

In the “Maintenance/Support” section, Husband was obligated to pay Wife, as maintenance, the sum of $500 per pay period for the first year, and then $600 per pay period thereafter “unless otherwise modified by the Court or the death of the [Wife].”

Years later, Husband succeeded in terminating the monthly maintenance payment to Wife, based upon her remarriage. He continued paying the housing payment.

In 2011, a dispute between the parties arose over the monthly housing payment. At a hearing, Husband attempted to testify that the agreement in mediation was that the housing payment would also be modifiable maintenance, not property settlement. The trial court would not admit that testimony into evidence, and ultimately concluded that Husband’s obligation to pay $550 per month towards Wife’s housing was property settlement, not maintenance. Husband appealed.

On appeal, the Court of Appeals first discussed ADR Rule 2.11, regarding confidentiality of mediation, and its interplay with Evidence Rule 408, which makes settlement discussions generally inadmissible. However, the Court of Appeals noted that Evid. Rule 408 does not require exclusion of evidence offered for a purpose other than “to prove liability for or invalidity of the claim or its amount.” Thus, since Husband was offering evidence of what occurred in mediation for another purpose — that is, to establish a drafting error — the evidence should have been admitted.

However, the Court of Appeals also considered the error to be harmless. Reviewing the totality of the decree, especially including its property division terms, the Court of Appeals concluded that the trial court did not err in determining that the monthly housing payments were property settlement, rather than maintenance.

The trial court’s order was affirmed.

To view the text of this opinion in its entirety, click here: Dennis Jack Horner v. Marcia (Horner) Carter

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The Indiana Family Law Update is a free service provided by Bingham Greenebaum Doll, LLP. While significant efforts are made to ensure an accurate summary and reproduction of each opinion, readers are advised to verify all content and analysis with a traditional case law reporter before relying on the content and analysis offered here.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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