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Thursday, January 28, 2010

Ind. Decisions - Supreme Court decides one today

In Gina Johnson v. Robert Johnson, an 8-page, 5-0 opinion, Chief Justice Shepard writes:

In the course of settling their dissolution, Robert Johnson agreed to pay Gina Johnson for her interest in the family farm. When Robert later sought to renew a line of credit and restructure the farm’s debt to pay Gina, the bank required Gina’s agreement to give the bank’s lien priority over hers. After she refused, Robert sought a declaratory order subordinating her lien. The trial court granted his motion.

We conclude that the parties’ settlement agreement, though silent on the subject, must have contemplated the regular annual renewal of the farm’s debt to finance its operations but not the higher level of debt necessary to finance Robert’s obligations to Gina. Thus, the trial court’s order impermissibly modified the settlement agreement. We reverse. * * *

If Robert’s declarations about the state of his finances are accurate, he may well be unable to pay Gina without financing higher level of debt on the farm. It is probably in both parties’ interests to negotiate an agreement allowing Robert to meet his obligations. Numerous arrangements that meet both parties’ needs exist, and we encourage them to avoid further litigation on this issue.

Posted by Marcia Oddi on January 28, 2010 12:46 PM
Posted to Ind. Sup.Ct. Decisions