BOWLING v. BOWLING (2025)

MEMORANDUM DECISION

Statement of the Case

[1] During their marriage, Angelia and Dustin Bowling (collectively referred to as “the parties”) jointly owned several properties purchased for the purpose of flipping or renting as their principal means of income. The loans secured to purchase the properties were in Dustin's name. Angelia filed for divorce, and the parties signed a mediated property settlement agreement (the “Agreement”) in which they agreed to sell certain real estate and equally share in the expenses as well as proceeds. Thereafter, the parties disagreed about whether certain loans for the real estate were part of the expenses contemplated by the Agreement. After a hearing, the trial court determined that any outstanding mortgages or loans for the real estate were expenses in which the parties had to share. Angelia now appeals, raising two issues for our review that we restate as follows:

1. Whether the trial court abused its discretion by denying Angelia's motion to continue the hearing on Dustin's motion to interpret the Agreement; and

2. Whether the trial court erred in interpreting the Agreement.

[2] We affirm.

Facts and Procedural History

[3] On January 1, 2009, the parties married, and on January 19, 2021, Angelia filed for divorce. Throughout the majority of their marriage, the parties’ principal income came from real estate investments. The parties initially rented out their investment properties but eventually started flipping some of the real estate they purchased together. The properties they intended to flip at the outset were purchased through their S-Corporation, Integrity Investments, Inc. Other properties were purchased solely in Dustin's name with secured loans outside of the S-Corporation and, years later, were quitclaimed into both the parties’ names at Angelia's request. The loans, however, remained in Dustin's name alone.

[4] On June 6, 2022, an agreed provisional order was entered permitting business and jointly held property to be sold and allowing the parties to pay investor interest and mortgage payments out of the business account. After a subsequent mediation, the parties executed the Agreement, which was approved by the trial court on August 2, 2023, and incorporated into the dissolution decree. The Agreement directs the parties to sell their jointly owned real estate, share equally in the proceeds and expenses of such sales, and bear responsibility for their individual debts. After the Agreement was approved, Dustin continued the parties’ prior practice of paying off the mortgage or loan associated with the property at closing.

[5] On November 27, 2023, Angelia filed a petition for rule to show cause and a motion for an order directing Dustin to immediately release to Angelia half of the gross sale amount of each sold property, less realtor fees, closing costs, and taxes. Angelia argued the Agreement contemplates that the repayment of the property-secured loans and mortgages are not expenses associated with the sale of those properties that need to be paid before the proceeds are split equally between the parties. Rather, according to Angelia, the loans and mortgages used to purchase the properties being sold are Dustin's personal debt, not her shared responsibility. That is, Angelia requested the trial court determine that she should receive half the gross proceeds of every real estate sale without factoring in the associated loans or mortgages.

[6] In April and May 2024, Dustin filed motions to set aside the Agreement. On September 26, a hearing was held to address Dustin's motions and the distribution of the marital estate. At the end of the September 26 hearing, Dustin notified the trial court that he intended to file a new motion with the court to have it interpret the Agreement. The trial court ordered the parties to reconvene on November 6 to proceed on all then-pending motions:

The parties are to appear in person and we'll either be proceeding with the pending matter regarding setting aside or on the anticipated new motion filed and which would also bootstrap in ex-Wife's motion for show cause which would ultimately bring in the issue of interpretation of those sections and for specification on the record the Court will note that the Court is anticipating, if that's the case, then the parties will be ready to address paragraphs six, seven, eight, nine and 11 [sic] specifically of the ․ [A]greement.

Tr. Vol. III at 59 (emphases added). Angelia requested the new motion be filed quickly to allow her time to prepare for the November 6 hearing, and Dustin filed the motion to interpret the Agreement on October 1, less than one week later. Also on October 1, the trial court made a docket entry reiterating to the parties that the motion to interpret would be addressed at the November 6 hearing.

[7] At the start of the November 6 hearing, Dustin withdrew his pending motions to set aside the Agreement and asked to proceed on the motion to interpret. Angelia requested a continuance due to an alleged lack of notice that the interpretation motion would be addressed at the November 6 hearing. The trial court denied the request for a continuance because it determined that Angelia had ample notice of the issues that would be addressed in the hearing. On November 14, the trial court issued its order on the hearing, in which it stated:

[T]he intended purpose of the [Agreement] is to be a net distribution following the satisfaction of all expenses, which the court now interprets to include the recorded mortgages, business expenses, investor loans, taxes, and the like. Both parties are entitled to an equal share of the net proceeds of the marital estate and business assets and are equally responsible for all liabilities associated therewith.

Appellant's App. Vol. II at 61–62. This appeal ensued.

Discussion and Decision

1. The Trial Court Did Not Abuse Its Discretion When It Denied Angelia's Motion to Continue

[8] Angelia claims the trial court abused its discretion by denying her motion to continue the hearing on Dustin's motion to interpret the agreement. Typically,

a trial court's decision to grant or deny a motion to continue is subject to abuse of discretion review. See Rowlett v. Vanderburgh Cnty. Office of Family & Children, 841 N.E.2d 615, 619 (Ind. Ct. App. 2006), trans. denied. “An abuse of discretion may be found in the denial of a motion for a continuance when the moving party has shown good cause for granting the motion,” but “no abuse of discretion will be found when the moving party has not demonstrated that he or she was prejudiced by the denial.” Id.

In re K.W., 12 N.E.3d 241, 243–44 (Ind. 2014).

[9] Angelia argues she showed good cause for a continuance because she believed the November 6 hearing would only address Dustin's motions to set aside the agreement. Angelia claims the denial of her motion prejudiced her because she had “no expectation that the trial court would hear a motion to interpret or the pending contempt motion on the same day as the motion to set aside.” Appellant's Br. at 35. Angelia ignores the trial court's explicit instructions to be prepared to address interpretation arguments as to the Agreement. At the September 26 hearing, Dustin informed the trial court he intended to file a motion for interpretation of the Agreement. When Angelia expressed concern about responding to the motion, Dustin promised to file the motion “within a reasonable amount of time,” Tr. Vol. III at 58, and did so within four days, giving Angelia ample preparation time. In addition to receiving notice on September 30 that the motion was filed and the trial court orally telling the parties to be prepared to address the interpretation issues in the upcoming hearing, the trial court also provided written notice to address the interpretation motion in the November 6 hearing. We are not persuaded Angelia lacked adequate preparation time and cannot say the trial court abused its discretion in denying Angelia's motion to continue.

2. The Trial Court Did Not Clearly Err in Interpreting the Agreement

[10] Angelia claims the trial court erred in interpreting paragraphs 6 and 8 (collectively, the “Real Estate Sales Paragraphs”) and paragraph 11 (the “Debt Paragraph”) of the Agreement. “When a party asks a court to clarify a settlement agreement, the court's task is one of contract interpretation.” Ryan v. Ryan, 972 N.E.2d 359, 363 (Ind. 2012). Contract interpretation is a question of law that we review de novo. Thomas v. Valpo Motors, Inc., 258 N.E.3d 236, 239 (Ind. 2025) (citing Land v. IU Credit Union, 218 N.E.3d 1282, 1286 (Ind. 2023)). When this court interprets a contract,

we ascertain the intent of the parties at the time the contract was made, as disclosed by the language used to express the parties’ rights and duties. We look at the contract as a whole ․ and we accept an interpretation of the contract that harmonizes all its provisions. A contract's clear and unambiguous language is given its ordinary meaning. A contract should be construed so as to not render any words, phrases, or terms ineffective or meaningless.

Ryan v. TCI Architects/Eng'rs/Cont'rs, Inc., 72 N.E.3d 908, 914 (Ind. 2017) (internal citations omitted). “A contract is not ambiguous simply because the parties disagree about the proper interpretation of its terms. Instead, for an ambiguity to exist, the contract must be subject to more than one reasonable interpretation.” Wohlt v. Wohlt, 245 N.E.3d 611, 616 (Ind. 2024) (emphasis added) (internal citations omitted).

[11] The relevant terms of the Agreement are as follows:

6. Real Estate Business/Business Assets. The parties own a closely held business known as Integrity Investments, Inc. (Said real estate held in the business, are listed in Exhibit A, attached hereto.) ․ The parties shall divide equally after all expenses associated with the sale, including, but not limited [sic], realtor fees, closing costs, and taxes. Both parties shall fully cooperate with the realtor to list, show, and sell the properties.

* * *

8. Jointly Held Real Estate. The parties own certain jointly held real estate houses/parcels. (Said real estate held jointly is listed in Exhibit B, attached hereto.) ․ The parties shall divide equally after all expenses associated with the sale, including, but not limited [sic], realtor fees, closing costs, and taxes. Both parties shall fully cooperate with the realtor to list, show, and sell the property.

* * *

11. Debts. Wife shall pay and otherwise be responsible for any indebtedness incurred in her individual name and Wife shall hold Husband harmless on each of her obligations. Husband shall pay and otherwise be responsible for any indebtedness incurred in his individual name and Husband shall hold Wife harmless on each of his obligations.

[12] Appellant's App. Vol. II at 66–69. Angelia argues the trial court impermissibly modified the Agreement by determining “all expenses associated with the sale” was ambiguous and interpreting that term to include real estate secured loans and mortgages that were in Dustin's individual name. More particularly, Angelia argues that, since the real estate secured loans and mortgages are in Dustin's name alone, it was her intention to “specifically contract[ ] to have the mortgages and loans addressed by the debt provision since she knew every mortgage and loan that existed was in Dust[in's] name, not hers.” Appellant's Br. at 33. Essentially, she asks us to consider the Debt Paragraph in a vacuum and ignore the broadly inclusive language found in the Real Estate Sales Paragraphs. We decline the invitation to do so.

[13] Reading the Real Estate Sales Paragraphs with the Debt Paragraph, we find there is an ambiguity regarding the term “all expenses associated with the sale.” Appellant's App. Vol. II at 66–68. Where, as here, “[an] ambiguity arises because of the language used in the contract and not because of extrinsic facts then its construction is purely a question of law to be determined by the trial court.” Fed. Sav. Bank of Ind. v. Key Mkts., Inc., 559 N.E.2d 600, 604 (Ind. 1990); see also Sisters of St. Francis Health Servs. v. Eon Props., LLC, 968 N.E.2d 305, 312 (Ind. Ct. App. 2012).

[14] The Real Estate Sales Paragraphs contemplate equal responsibility between the parties for expenses related to the sale of the real estate. The plain language of the paragraphs does not limit shared expenses to realtor fees, closing costs, and taxes. It is an absurdity to the plain and ordinary meaning of “all expenses associated with the sale” to claim that the repayment of a real estate secured loan or mortgage is not an expense associated with the sale of real estate when it is invariably a component of all real estate transactions where the property is subject to a secured loan or mortgage. See, e.g., Ticor Title Ins. Co. of Cal. v. Graham, 576 N.E.2d 1332, 1337 (Ind. Ct. App. 1991) (seller was unjustly enriched when she accepted the full sale amount and did not pay off the mortgage); see also Land, 218 N.E.3d at 1290 n. 7 (“[W]ords in a contract may be construed to avoid absurdity”).

[15] Dustin's testimony about one of the properties illustrates why Angelia's interpretation is absurd. The parties purchased a property for $40,000.00. Dustin secured a loan of $225,000.00 to purchase that property, intending to remodel and sell it for $325,000.00 upon completion. Assuming arguendo that Dustin was able to sell the property for the anticipated amount, Angelia would receive $162,500.00 less realtor fees, taxes, and closing costs, and Dustin would incur a $62,500.00 debt from selling that property. We therefore choose to avoid this absurdity and resolve the ambiguity occasioned by the use of a nonexclusive list of items describing expenses related to the sale by determining the repayment of outstanding mortgages or loans is included therein.

[16] Because the repayment of real estate secured loans and mortgages is thus accounted for in the Real Estate Sales Paragraphs, it is not superseded by the generic catch-all Debt Paragraph. See Castleton Corner Owners Ass'n, Inc. v. Conroad Associates, L.P., 159 N.E.3d 604, 611 (Ind. Ct. App. 2020) (“specific terms control over general terms.”). Our interpretation harmonizes the Real Estate Sales Paragraphs with the Debt Paragraph and does not render the Debt Paragraph meaningless. See Ryan, 72 N.E.3d at 914. The Debt Paragraph remains in effect and covers debts not otherwise accounted for in the Agreement. We therefore cannot say the trial court erred by interpreting the Agreement in this manner.

Conclusion

[17] In sum, the trial court did not abuse its discretion when it denied Angelia's motion to continue the hearing, and the trial court did not clearly err when it interpreted the Agreement. We therefore affirm the trial court on all issues raised.

[18] Affirmed.

Felix, Judge.

Vaidik, J., and Tavitas, J., concur.