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Under Indiana law, and the doctrine of necessaries, what application

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Under Indiana law, and the doctrine of necessaries, what application does this sentence Typically, a creditor may look to a non-contracting spouse for satisfaction of the debts of the other only if the non-contracting spouse has otherwise agreed to contractual liability or can be said to have authorized the debt by implication under the laws of agency."This sentence implies there is some sort of loop whole. Please advise did not match with any Answers results.
Submitted: 1 year ago.
Category: Legal
Expert:  Joseph replied 1 year ago.
Hello and welcome to JustAnswer

I'm sorry to hear about your situation and hope I can help.

My goal is to provide you with excellent service today.

I need a bit more information from you before I can proceed to provide you with a complete and thorough answer to your question.

Are you asking about what circumstances in which a husband or wife would be liable for the debts of his or her spouse?
Customer: replied 1 year ago.

I am asking you to explain this phrase "only if the non-contracting spouse has otherwise agreed to contractual liability or can be said to have authorized the debt by implication under the laws of agency."

Expert:  Joseph replied 1 year ago.

Thanks for the clarification.

 

1) Non-contractual spouse agreed to contractual liability.

 

This would arise if the spouse had an agreement his or her husband and wife that he would also be liable for the debt. This could be done though an express written agreement or a verbal agreement with the spouse, that the spouse would also be responsible for a debt to a creditor.

 

2) Authorized the debt my implication under the laws of agency.

 

This would occur if the debt that was incurred was incurred in furtherance of the spouse's interests. Most noticeably, would be a situation in which the debtor spouse gave the non-contracting spouse a credit card and he or she made the purchases that created a debt.

 

Otherwise, it can be argued that if a credit card were used to purchase home necessities, then the debt (at least the portion spent on these necessities) would be considered to be on behalf of the husband and wife of the debtor spouse.

 

This is the legal definition:

 

"In law, a relationship in which one party (the agent) acts on behalf of and under the control of another (the principal) in dealing with third parties."

 

I hope the above information is helpful.

 

Please let me know if you have any clarifying questions as I want to ensure that you are completely satisfied with my service. If not, please remember to rate my answer positively so I get paid for my work.

 

Thanks and best of luck!

Customer: replied 1 year ago.

I am going to ask you to opt out since you are not licensed in Indiana

Expert:  socrateaser replied 1 year ago.

Hello,

Different contributor here. I am also not licensed in Indiana -- however, I have comprehensive access to the Westlaw® proprietary research system. Consequently, I can provide dispositive answers to any substantive legal question, if the question has been resolved by any appellate court in the USA.

I have already located case that you can review online which will provide you with a thorough discussion of the doctrine of necessaries as applied under Indiana law.

Frankly, the case law is probably better than any advice that you could obtain from a licensed Indiana practitioner, unless that person were to do exactly what I am offering: provide you with the dispositive case law.

Note: I'm probably the only person at justanswer.com with the level of access to Westlaw sufficient to thoroughly dispose of your question. So, if you choose to wait, you could be waiting a very long time for a dispositive answer.

Please advise if you would like me to assist. Thanks.

Customer: replied 1 year ago.

please assist..can you find case law that explains this phrase "only if the non-contracting spouse has otherwise agreed to contractual liability or can be said to have authorized the debt by implication under the laws of agency."

Expert:  socrateaser replied 1 year ago.
The quoted language comes from the very recent case of: HICKORY CREEK AT CONNERSVILLE v. ESTATE OF COMBS, --- N.E.2d ---- , 21A04-1211-ES-600 (Ind. App. 6/27/2013).

The above-cited case is a court of appeals decision. The court's reasoning relies heavily on the Indiana Supreme Court case of Bartrom v. Adjustment Bureau, Inc., 618 N.E.2d 1, 3 (Ind. 1993), which is the case to which I previously alluded, and which provides comprehensive coverage of the law surrounding the "doctrine of necessaries."

If after you review the materials, you have further questions, please feel free to ask, and I will try to help clarify the legalese.

Hope this helps.
Customer: replied 1 year ago.

This case law does not explain the application of the phrase that begins with the words "only if..." I mentioned above. it appears that medical creditors can attach the assets of both spouses anytime. can you find case law that a medical creditor lost in court because the financially superior spouse did not not agree to be contractually liable. How does one NOT imply to authorize a debt of their spouses? Is the fact that Indiana not a community property state a matter of statute? Does statute law supersede common law? Doesn't this doctrine of necessaries impose a liability on a person for someone else's bills when that person has no right of ownership in the other person's assets or income. what is to prevent a spouse from squandering their own personal wealth then going to the hospital and losing the personal wealth of their spouse? What if the spouse runs up tens of thousands of dollars on cosmetic surgery?

Expert:  socrateaser replied 1 year ago.

This case law does not explain the application of the phrase that begins with the words "only if..." I mentioned above.

A: I think that the case law explains the phrase marvelously! The Hickory Creek court writes:

  • That is, according to the doctrine of necessaries, each spouse is primarily liable for his or her independent debts. Bartrom, 618 N.E.2d at 8. Typically, a creditor may look to a non-contracting spouse for satisfaction of the debts of the other only if the non-contracting spouse has otherwise agreed to contractual liability or can be said to have authorized the debt by implication under the laws of agency. Id. Agency requires some indicia that the principal intended or authorized the agent to conduct business on his or her behalf. See Quality Foods, Inc. v. Holloway Assocs. Prof'l Eng'rs & Land Surveyors, Inc., 852 N.E.2d 27, 31-32 (Ind. Ct. App. 2006). Marriage alone is insufficient. A number of methods are available to prove this, such as a durable power of attorney, guardianship, or evidence of a conversation.
  • When, however, there is a shortfall between a dependent spouse's necessary expenses and separate funds, the law will impose limited secondary liability upon the financially superior spouse by means of the doctrine of necessaries. Bartrom, 618 N.E.2d at 8. The liability is characterized as "limited" because its outer boundaries are marked by the financially superior spouse's ability to pay at the time the debt was incurred. Id. It is "secondary" in the sense that it exists only to the extent that the debtor spouse is unable to satisfy his or her own personal needs or obligations. Id. These rules assist enforcement of the marital duty of support in both a workable and an equitable manner.[3] Id. & n.14.


The above-quoted text clearly shows how a spouse can be held secondarily liable for necessary financial support, where the other spouse's separate earnings and/or assets are insufficient to cover such necessary support.

it appears that medical creditors can attach the assets of both spouses anytime.

A: The above-quoted case law clearly shows that the spouse who incurs the debt is primarily liable for its payment -- and that only if the spouse cannot make payment from his or her earnings and/or assets is the other spouse liable for the difference.

can you find case law that a medical creditor lost in court because the financially superior spouse did not agree to be contractually liable.

A: After searching the case law, I find no appellate court opinion supporting this proposed assertion. Moreover, the case law that I have provided shows unambiguously that the spouse's refusal to be bound to pay for a necessary of the other spouse, will not protect the non-consenting spouse. So, looking for contrary decisions is pointless, since the Supreme Court has already spoken definitively as to exactly how liability is to be imposed.

However, it is equally clear that not every expense is a necessary. Cosmetic surgery, is arguably not a necessary. It would have been unknown at the time when the doctrine of necessaries was originated, because medical technology for such activities did not yet exist. So, the question of whether or not cosmetic surgery is a necessary is a question of fact and law for a court to determine. It is definitely not a fait accompli for a creditor.

How does one NOT imply to authorize a debt of their spouses?

A: The implied obligation under the doctrine of necessaries is one of mixed law and fact. A spouse does not have to do anything to impliedly guarantee the unpaid balance of his or her spouse. The doctrine imposes secondary liability where a spouse incurs a necessary. The question is whether or not a particular debt is in fact "necessary." That in my view is your argument against personal liability -- if the issue is cosmetic surgery -- as apparently is the case. Because if cosmetic surgery is not a necessary, then the plaintiff's entire argument falls apart.

Is the fact that Indiana not a community property state a matter of statute?

A: It is well-established beyond dispute that there are only nine U.S. community property jurisdictions, and Indiana is not among them. No court would find to the contrary.

Does statute law supersede common law?

A: To the extent that a statute resolves a common law issue differently than the common law would, yes. This, too is established beyond reasonable dispute. It is one of the foundations of substantive due process under U.S. law.

Doesn't this doctrine of necessaries impose a liability on a person for someone else's bills when that person has no right of ownership in the other person's assets or income. what is to prevent a spouse from squandering their own personal wealth then going to the hospital and losing the personal wealth of their spouse? What if the spouse runs up tens of thousands of dollars on cosmetic surgery?

A: I think that I've covered your remaining questions concretely in my answers above. I don't know exactly what's going on, but if this is about your spouse buying cosmetic surgery and then handing you the bill, I believe that with competent legal representation you could avoid personal liability for the debt. However, not knowing the status of your case, or the disposition of your separate and marital assets, etc., I'm in no position to provide a definitive answer to that sort of question. Only a lawyer "on the ground," would have sufficient details to be able to construct a proper defense for you.


Hope this helps.

Customer: replied 1 year ago.

One more set of question and I will be satisfied. I am looking for legal remedies to overcome this doctrine. A person of substantial wealth puts their entire fortune at risk due to the fact of spirally medical costs,( fighting cancer could cost hundred of thousands of dollars) and this doctrine, if such a person enters into a marriage with a person of lesser means. Would joint ownership (mother and daughter)of a million dollar farm protect the intention that the daughter receive the farm after her death, if the mother marries a person of lesser means. Or possibly deeding the farm to the daughter and leasing the property back for 99 years. The farm in question has been in this family for 5 generations

Expert:  socrateaser replied 1 year ago.
Joint tenancy is the worst possible means of holding title, because it makes the entire property liable for the separate debts of each joint tenant.

Transferring the property to a third party and leasing back is a better plan. But, if the transfer is made in violation of the Indiana Uniform Fraudulent Transfer Act (IC 32-18-2), then a creditor can force the transferee to return title to the transferor and then the transferor's interest can be seized and sold to satisfy the debt.

So, while the transfer is an obstacle to recovery, a sufficiently diligent creditor can reach the transferred property.

A Chapter 13 bankruptcy may be able to stretch payments out over the course of a 5 year plan. But, the best avoidance technique is probably to divorce the ill spouse and impoverish her in the settlement agreement. If that spouse continues to need health care then Medicaid could be used to pay for the ongoing care.

Of course, in Jan 2014, all health care plans must accept any individual regardless of preexisting condition and lifetime maximum health care coverage must be unlimited. So, if the big bills have yet to be incurred, then maybe you still have a few options.

Hope this helps.
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