Massachusetts neighbours lose appeal over $3.7 million verdict for disrupting couple's home construction

NewsWorld NewsUS NewsIn 2008, a Massachusetts couple bought oceanfront land to build a house, but neighbours repeatedly disrupted the construction; 18 years later, an appeals court upheld a $3.7 million verdict against them In 2008, a Massachusetts couple bought oceanfront land to build a house, but neighbours repeatedly disrupted the construction; 18 years later, an appeals court upheld a $3.7 million verdict against them An Indiana couple ran several rental homes, but during divorce the husband moved $62,000 to an account his wife could not access; an appeals court upheld her 55% share of the marital estate and a $138,219 paymentAn Indiana couple who built a portfolio of rental homes during their marriage saw their divorce end with an unequal division of assets after the husband moved $62,000 from a joint account into an account his wife could not access.

The Indiana Court of Appeals upheld the trial court’s decision to award Nichole McIntosh 55 percent of the marital estate, along with a $138,219.45 property settlement payment from Vernon McIntosh, according to the appellate decision published by Justia U.S.

Law.The case shows how a divorce involving rental properties can become complicated when one spouse controls the money, the records and the day-to-day management. The appellate court found that the husband’s conduct before and during the divorce, including moving funds, concealing a coin-based transaction and failing to document rental expenses, justified treating the property division differently from a simple 50-50 split.A marriage built around rentals Vernon and Nichole McIntosh married in May 2008 and had no children together.

During the marriage, they acquired several properties in Marion County, including a duplex, three single-family homes and their jointly owned marital residence on Woodlawn Avenue. All of the properties except the Woodlawn home were used as rentals, listed on Airbnb, Hospitable and through private leases.

Both spouses had administrative rights and responsibilities on the rental platforms and were active in managing the properties.The couple also formed two LLCs, Zoe Rentals LLC and Shelby Home Rentals LLC, for the rental business.

However, they never transferred the rental properties or mortgages into those entities, which meant the assets and debts remained tied directly to the marriage.The $62,000 transfer that changed things In September 2022, just days before Vernon filed for divorce, he transferred $62,000 from a joint bank account on which Nichole was the primary owner and he was an authorized user.

The money went into an account where he was the primary owner and Nichole’s access was terminated.The trial court found that this transfer was part of a broader pattern of dissipation. Vernon also eliminated Nichole’s administrative access to the Airbnb portal, reported credit cards on which she was a joint user as stolen, used a marital credit card to pay $4,800 to his attorney, withdrew $4,000 from a joint account and converted $11,250 in cash to a coin-based product without disclosing it.After filing for divorce, Vernon deposited rental income into accounts solely owned or accessible by him and spent the funds without consulting Nichole or providing documentation for alleged expenses.

He did not give her any of the rental income earned after the filing date.Why the court found dissipation Under Indiana law, dissipation refers to the frivolous, unjustified spending of marital assets, including concealment and diversion of funds.

The appellate court said the trial court’s findings met that standard.The court noted that Vernon attempted to conceal funds in a coin-based account, diverted $62,000 to an account Nichole could not access, and used $8,800 of marital assets for his own benefit.

His accounting for rental income and expenses was described as questionable, and he consistently failed to produce accurate supporting documents.The trial court also found Vernon in contempt for willfully failing to pay mortgages, which created additional marital debt.

That history of noncompliance strengthened the case for treating the property division as unequal.Why the 55 percent split was preserved Nichole argued that an equal division of the marital estate would not be fair and equitable given the disparity in income between the spouses, the fact that the assets and debts were acquired because of the efforts of both spouses, and Vernon’s dissipation of marital assets.

The trial court agreed.The court noted that Vernon had consistently made at least twice and possibly three times what Nichole made. The gap was large enough to warrant a move away from the assumed equal split even when her highest income was taken into account.

The result was a 55 percent share of the marital estate for Nichole, with a cash payment of $138,219.45 from Vernon. The appellate court found that this outcome was supported by the evidence and did not constitute an abuse of discretion, as per the report.The rental income question The trial court also had to decide how much income the rental properties generated during the three years the divorce was pending.

Nichole calculated a net value of $145,000, while Vernon claimed $0, despite earlier testimony suggesting a net profit of $10,000 to $20,000 per year.The court found it very difficult to determine the true net earnings because Vernon’s management of income and expenses was extensively commingled with personal finances.

Multiple profit and loss spreadsheets he submitted showed different numbers for the same time period, and none offered documentation supporting the alleged expenses.After reviewing all the evidence, the trial court found that the net rental income over the three-year period was $60,000.

The appellate court upheld that valuation as fair and reasonable, given the totality of the circumstances.What happens to the properties The trial court ordered that the rental properties be listed for sale, with the proceeds divided...