William L. Koss v. Karen J. Koss (mem. dec.)
29A02-1611-DR-2455
| Ind. Ct. App. | Sep 28, 2017Background
- William and Karen Koss married in 1984, separated in 2014, and disputed division of a complex marital estate (businesses, real estate, personal property) after a multi-day dissolution trial in 2016.
- Husband (William) owned significant interests in Capital Machine and Indiana Forge; a separate veneer-mill venture failed and caused major losses and indebtedness to the marital estate.
- Substantial gifts and inheritances from Husband’s family were commingled with marital assets and used to pay debts (including clearing a mortgage on the family residence).
- During trial the court discovered undisclosed assets (cash, gold/silver coins, personal property) at Capital Machine and in the marital residence; Husband had testified inconsistently and the court found him not credible.
- The trial court: valued and divided assets (awarding slightly more to Wife), found dissipation and possible sham sales by Husband to third parties (Shoffner, Deckard), set the residence to Wife, awarded business interests to Husband, ordered Husband to pay $79,000 of Wife’s fees/expenses, and entered detailed findings; the Court of Appeals affirmed in part, reversed in part, and remanded for corrections.
Issues
| Issue | Husband's Argument | Wife's Argument | Held |
|---|---|---|---|
| Judicial bias from trial judge (including Husband’s temporary incarceration) | Trial judge’s conduct (jailing Husband pending contempt hearing, remarks) demonstrated personal prejudice and denied impartial adjudication | Judge’s actions grew from an error of law and frustration with Husband’s deceit; overall findings and careful valuation show impartiality | No bias established; error of law (contempt) and jailing noted but did not prejudice outcome |
| Valuation of Capital Machine and mathematical/calculation errors | Trial court relied on Wife’s expert and misapplied values; court overstated Husband’s percentage and the business value | Wife’s expert used tax returns/net-asset approach and marketability discount; trial court properly weighed credibility | Court affirmed valuation approach but found scrivener/mathematical errors; remanded to correct Capital Machine valuation and related arithmetic |
| Treatment of gifts/inheritances and dissipation (veneer mill & pre‑separation sales to Shoffner/Deckard) | Gifts/inheritances (~$4M) should have been treated as separate/non-marital and given greater weight; pre-separation sales should not be compensated from marital estate | Gifts/inheritances were commingled and used for marital obligations; Husband dissipated/misused assets and engaged in sham transactions to hide value | Court properly considered inheritances/gifts as commingled and considered Husband’s misconduct and dissipation; but court made inconsistent findings re items sold to Shoffner—remand to resolve and adjust division if needed |
| Award of Wife’s attorney fees and expenses | Award ($79,000) was excessive and trial court failed to properly weigh parties’ relative resources | Fees were reasonable given extensive discovery abuse, hidden assets, and litigation caused by Husband’s misconduct | Fee award affirmed: trial court acted within discretion and relied on parties’ resources and Husband’s misconduct |
Key Cases Cited
- Tumey v. Ohio, 273 U.S. 510 (recognition that impartial adjudication is required under due process)
- Blanche v. State, 690 N.E.2d 709 (Ind. 1998) (judicial impartiality standards)
- Garland v. State, 788 N.E.2d 425 (judicial impartiality presumption)
- In re J.K., 30 N.E.3d 695 (judicial comments/demeanor and bias analysis)
- Hewitt v. Westfield Washington Sch. Corp., 46 N.E.3d 425 (biased decisionmaker unacceptable)
- Richardson v. Richardson, 34 N.E.3d 696 (party alleging bias must show personal prejudice)
- In re Haigh, 7 N.E.3d 980 (definition and scope of direct contempt)
- In re A.S., 9 N.E.3d 129 (direct vs. indirect contempt analysis)
- In re Marriage of Neiswinger, 477 N.E.2d 257 (false testimony is not direct contempt)
- Pitman v. Pitman, 721 N.E.2d 260 (limits on compensating for pre‑separation dissipation)
- Kondamuri v. Kondamuri, 852 N.E.2d 939 (dissipation standard and factors)
- Balicki v. Balicki, 837 N.E.2d 532 (dissipation definition: wasted or misused assets)
- Grathwohl v. Garrity, 871 N.E.2d 297 (frivolous/unjustified spending and dissipation test)
- Allen v. Proksch, 832 N.E.2d 1080 (factors for awarding attorney fees in dissolution)