Indiana Property Rights and Third Party Intervenors

In a recent Indiana Court of Appeals decision, the court held that the man who wanted to purchase a divorcing couple’s farm lacked a present interest in the real estate and couldn’t prevent a settlement agreement between the couple, which led to the husband keeping the farm. (Joseph Meizelis v. Dana Durbin and Debra Durbin, 70A01-1112-DR-598.)

The third party initially approached the couple and made an offer to purchase their farm from them. The couple did not accept or reject the offer.

The third party then filed a Petition to Intervene in the dissolution action pending before the court. The Petition to Intervene was granted.

At a hearing in the dissolution at which the third party was present, the court ordered that if the husband were able to meet certain financial obligations, he would be able to keep the farm. However, in the event that the husband was not able to meet those obligations, the farm would be sold to the third party intervenor.

The husband filed a Motion to Correct Error based on the court’s ruling. While that Motion to Correct Error was pending, the parties reached a settlement agreement, which provided for Husband to keep the farm. The settlement agreement was largely similar to the court’s prior order, with a few modifications as to Husband’s financial obligations.

The third party intervenor then appealed the decision and filed a lis pendens notice on the property.

The lis pendens notice is a notice of the intervenor’s rights to the property so that in the event the property is sold or encumbered in any way, then the intervenor’s right to the property will not be diminished should he be successful in his claims.

The intervenor argued that the agreed entry was void because it had been entered without his knowledge or consent.

The trial court found that the intervenor had no present interest in the real estate and his lis pendens notice should be stricken, depending on the outcome of his appeal.

The Court of Appeals held that the intervenor had merely made an offer to purchase the property but the husband and wife never accepted that offer. The Court of Appeals stated, “[Intervenor]’s position appears to be that his interest arises from the fact that the trial court ordered [Husband] to sell to him if he could not meet certain financial obligations, but at no point was [Intervenor] under an affirmative obligation to do anything; the court’s orders were addressed to [Husband], not [Intervenor].”

The court held that the intervenor could not prevent the husband and wife from entering into a Property Settlement Agreement.

Indiana Property Agreements

In Indiana, there is a statute (IC 31-15-2-17) addressing agreements reached between the parties. To promote the amicable settlements of disputes that have arisen or may arise between the parties to a marriage, once a Petition for Dissolution has been filed, the parties may agree in writing to provisions addressing the disposition of any property owned by either or both of the parties, among other things.

In the above case, the parties reached an agreement that addressed the disposition of their property and was submitted to the judge for approval and incorporated into their Decree of Dissolution of Marriage. Since the agreement was approved by the judge and incorporated into their decree, it is not subject to subsequent modification by the court unless the parties agree or as provided for in the agreement.

Since the intervenor was not a party to the agreement, he had no standing to challenge the agreement reached by the parties and incorporated into the decree.

If the parties to a case are able to reach an agreement on the issues pending before the court, there is a tendency in Indiana to support that agreement and uphold it when it is later challenged. Parties to an agreement should carefully consider the potential intended and unintended consequences that an agreement may have prior to signing it as the agreement is likely to be upheld once it is approved by the court.

Indiana Divorce Lawyers

Because of this, it is important for parties to consult with divorce lawyers experienced in the area of domestic relations law prior to entering into any agreements with the opposing party.

Additionally, if your dissolution case involves a third party, or an individual who is not the husband or wife, it is important to consult with a men’s divorce attorney to ensure that your interests are adequately represented and protected in the process of the case.