Ohio Case Law Review by Topic: March 16,2020 through July 30, 2020

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Manley v. Manley, 7th Dist. Columbiana No. 2013 DR 660, 19 CO 0023, 2020-Ohio-1365

QDRO: spousal support arrearage
Spousal Support: modification (change in circumstances), retirement age

Dated: March 30, 2020
Affirming

Court affirmed trial court decision denying modification of spousal support and affirmed contempt finding against H for failing to pay spousal support and failing to evenly divide account by QDRO within a reasonable time after divorce. H argued that he was entitled to modification at age 62 (arguing that this was full retirement age under his pension plan); however, Court observed that no evidence was presented that plan assigned significance to age 62 and court had previously refused modification based on H’s retirement at age 61. Lower court had assigned age 66 as H’s full retirement age for purposes of spousal support modification (magistrate used age 66 since it is the age for full social security benefits). Lower court had specifically reserved jurisdiction over amount and duration of spousal support and noted H voluntarily reduced income by retiring early and essentially imputed pre-retirement income in finding no change of circumstances.

Court found no abuse of discretion (not unreasonable, arbitrary, or unconscionable) by trial court in declaring that age 66 be considered H’s full retirement age. Court noted that age 66 is aligned with a national standard and emphasized that it was not adopting a rule courts deny all requests to decrease support if obligor has not reached age 66. Affirmed trial court’s rejection of H’s desire to pay spousal support arrearage via QDRO that was at odds from the QDRO ordered in the divorce decree because it shifted tax burden.

Radwan v. Radwan, 8th Dist. Cuyahoga Nos. DR-15-358277, DR-17-368933, 108649, 2020-Ohio-1613

Marital Property: subject matter jurisdiction

Dated: April 23, 2020
Reversing and Remanding

W claimed trial court erred by granting H’s motion to dismiss divorce action, pursuant to Civ. R. 12(H)(3), due to lack of subject matter jurisdiction and by failing to provide her an opportunity to respond to H’s motion to dismiss. The Court reversed the judgment of the trial court and remanded, ruling that the trial court has subject matter and statutory authority to adjudicate other aspects of the divorce. H moved to Texas while W continued to live in Ohio. H filed for divorce in Texas and W filed in Ohio.

The Texas court granted the divorce, dissolving the marriage, without personal jurisdiction over W, so the court did not make orders regarding property or spousal support. The Ohio trial court granted H’s motion to dismiss under Civ. R. 12(H)(3), since the parties had previously been granted a divorce in Texas. The review standard is de novo for a complaint for lack of subject matter jurisdiction. Assn. of Cleveland Firefighters v. Cleveland, 2015-Ohio-1538, 31 N.E.3d 1285 (8th Dist.).

Court ruled that full faith and credit to the Texas judgment was required only to the extent that it dissolved the marriage of the parties; the Ohio trial court retained subject matter jurisdiction over the division of property and spousal support. The Court discussed the concept of divisible divorce. Vanderbilt v. Vanderbilt, 354 U.S. 416, 418-419, 77 S.Ct. 1360, 1 L.Ed.2d 1456 (1957) (holding divorce decree issued by court without personal jurisdiction over one spouse is only effective as to marital status, not on extinguishing personal rights or obligations). Collins v. Collins, 165 Ohio App.3d 71, 2006-Ohio-181, 844 N.E.2d 910 (1st Dist.) (ruling that in a divorce proceeding, the trial court must have personal jurisdiction over nonresident defendant to determine issues of spousal support and property division). In cases such as this, the ex parte divorce decree “is not a bar to a subsequent action for alimony.” Krajcik v. Krajcik, 9th Dist. Wayne C.A. No. 1658, 1980 Ohio App. LEXIS 11063, 5 (July 16, 1980). Likewise, the doctrine of res judicata applies to a valid final decree of divorce only as far as it effectively dissolves the marital relationship of the parties. It does not preclude issues of alimony, child support, and property division. See Hathorn v. Hathorn, 5th Dist. Fairfield No. 7-CA-88, 1988 Ohio App. LEXIS 5140, 4 (Dec. 8, 1988).

Abdulshafi v. Abdulshafi, 10th Dist. Franklin No. 02DR-3223, 19AP-487, 2020-Ohio-2692

Civ. R. 53(D)(4)(c): facial review of magistrate decision
OPERS

Dated: April 28, 2020
Affirming in Part, Reversing in Part, and Remanding (to determine amount owed)

H appealed trial court’s judgment entry adopting magistrate’s decision awarding arrears to W, for W’s share of unpaid Ohio Public Employees Retirement System (OPERS) distributions and finding H in contempt for not dividing and distributing 50% of investment account contents.

Court found clear and obvious error, a facially deficient decision, where the trial court had made findings that H owed W one amount, but in the same document, ordered H to pay W a different amount. The trial court decision and entry showed that H owed W $32,449.89 in pre-tax dollars and that H had paid $3,577.19 in taxes, so that H owed W $28,872.70. Yet, five pages later the trial court ordered H to pay W $32,449.89. H did not object, causing him a high burden to surmount; however, even in the absence of objection, the trial court must still conduct a facial review of a magistrate’s decision before adopting it under Civ. R. 53(D)(4)(c). Here, the trial court entered the magistrate’s decision at the very same time it was entered into the record. The Court specifically noted, “[w]hen the domestic division of the common pleas court instantaneously adopts magistrate's decisions at the moment they are filed in the record, the public's perception of and confidence in the judicial process is affected.”

Habtemariam v. Worku, 10th Dist. Franklin No. 16DR-146, 19AP-47, 2020-Ohio-3044

Marital Property: separate property

Dated: May 21, 2020
Reversing and Remanding

W filed for divorce and temporary motions and the trial court entered a divorce decree, including custody, child and spousal support and dividing assets and liabilities. H appealed judgment of the lower court granting divorce. H argued that the trial court wrongly divided assets and liabilities.

The lower court awarded a marital residence and its corresponding mortgage obligation to H, contingent upon him paying spousal support, allowing W to relocate herself and their child. H argued that the court misclassified this residence as marital property. H had purchased the residence prior to the marriage. Value had increased but equity had diminished and there was a net liability balance on the residence; therefore, under R.C. 3105.171(A)(3)(a)(iii), there was no appreciation during the marriage on the residence as separate property due to the labor, monetary, or in-kind contribution of the spouses. The Court remanded this issue for the trial court to divide the marital and separate property equitably, based on the assumption that the residence is H’s separate property.

Victor v. Kaplan, 8th Dist. Cuyahoga No. DR-15-358403, 108252, 2020-Ohio-3116

Expert Witness: qualification
Marital Property: structured settlement, tracing, proportional share method

Dated: May 28, 2020
Affirming in Part, Reversing in Part, and Remanding

H appealed lower court judgment adopting magistrate decision regarding distribution of marital assets. H filed for divorce, alleging gross neglect of duty and extreme cruelty. The lower court issued mutual restraining orders and indicated that both parties lacked credibility. The magistrate issued a 42-page decision, which addressed several pending motions for attorney fees, show cause and motions to compel. H objected to nearly all the magistrate’s decision and W objected to several provisions. The Court reversed the finding of the lower court that W’s structured settlement during the marriage of a premarital harassment claim was not marital.

H argued that the lower court erred in accepting John Davis, CPA, as an expert in retirement plans and in accepting his tracing methodology. The Court found no abuse of discretion in Davis’ qualification as an expert witness and no error regarding the use of the proportional share method. Davis testified that he used both direct tracing and proportional share method and explained why and when he used the different methods. Davis explained that direct tracing is most useful when the identified funds are identified in a separate account with no additional activity, or the funds were used entirely to acquire another item of value, or “when you can trace one item of value directly to another item of value.” Davis further explained that the proportional share method is necessary “once the funds became commingled.” It is a way of “accomplishing allocating income.”

Finally, H claimed Davis’ analysis ended prior to trial so it was incomplete; however, evidence showed the trial had been continued four times so the report had been prepared in advance and Davis reserved the right to update and amend.

Tincher v. Tincher, 5th Dist. Fairfield No. 15 DR 496, 2019 CA 00028, 2020-Ohio-3352

Marital Property: loan, termination date of marriage, tracing, separate property

Dated: June 16, 2020
Affirming

Court found no abuse of discretion in the lower court’s finding that the termination date of the parties’ marriage was the date of the final hearing, not the date of separation. Generally, pursuant to R.C. 3105.171(A)(2), the date of the final hearing is the de facto termination date of the marriage; however the trial court has broad discretion in choosing the appropriate marriage termination date and a decision cannot be disturbed on appeal absent an abuse of discretion. See Berish v. Berish, 69 Ohio St.2d 318, 321, 432 N.E.2d 183 (1982). W cited Dill v. Dill, 179 Ohio App.3d 14, 2008-Ohio-5310, 900 N.E.2d 654 (3rd Dist.)(setting out the factors a court may apply to determine whether it should find a date other than the final hearing date as the end of the marriage for purpose of property division). However, the Court distinguished that the parties in Dill had been separated for over ten years by the time of the final hearing and the parties in this case had only been separated for three years, and the parties were still financially intertwined because of a jointly owned business.

The trial court found W’s Chase’s 401(k) to be a marital asset. W had argued that it was her separate property because it had accrued prior to the date of the marriage. W argued abuse of discretion, but had presented no evidence to the lower court as to the value of the 401(k) on or prior to the date of the marriage. W had presented her own measure of value of the 401(k), however, the Court noted Wife did not present case law stating the trial court was required to accept a party’s proposed measure of value. Rather, the valuation of the assets is a factual issue left to the discretion of the trial court.

W also argued that the lower court erred when it found that W’s PNC Bank 401(k) was marital property and alleges that decision was based on the trial court’s finding that the marriage termination date was the first day of trial, May 15, 2018. W began her employment with PNC in 2015 and argued that the de facto termination date of the marriage should be December 1, 2015. However, since the Court found that the lower court did not abuse its discretion in determining the date of marriage termination, the Court found no merit in W’s argument. The Court also found that the loan W had taken toward a down payment on her new home in April of 2018 was non-marital.

Ward v. Ward, 3rd Dist. Marion No. 2017 DR 0198, 9-19-24, 2020-Ohio-3415

Marital Property: appreciation on stock, equitable division, gift of stock, totality of circumstances

Dated: June 22, 2020
Affirming

W appealed the judgment of the family court finding that certain stock, and appreciation thereon, acquired by H during the marriage was non-marital. W argued that the portion of company stock that H received in consideration of his employment should have been considered marital in nature. The stock was related to a family-owned company founded by H’s grandfather. Testimony revealed that gifts of stock were made over the years by the company to family members as an advanced inheritance process and that the company never followed a procedure of rewarding employees with stock for job performance or corporate goals. Further evidence was presented that the company was closely held, and the shares were governed by a restrictive buy sell agreement, requiring a right of first refusal to the board of the company before a sale. The Court found that the family court’s decision that the stock was non-marital was supported by competent credible evidence.

W also claimed an abuse of discretion by the family court by not equitably dividing any appreciation of stock due to H’s labor. However, the Court specified that neither party raised the issue or presented evidence of any appreciation of stock at the final hearing or in pretrial briefs, which waives the issue for appeal. See Lassiter v. Lassiter, 1st Dist. Hamilton No. C-010309, 2002-Ohio-3136; Dolan v. Dolan, 11th Dist. Trumbull Nos. 2000-T-0154, 2001-T-0003, 2002-Ohio-2440.

Lastly, W argued that the family court did not equitably divide assets and debts when it awarded her a Honda van. However, “[i]n determining whether the trial court abused its discretion, a reviewing court should not examine the valuation and division of a particular marital asset or liability in isolation.” Siferd v. Siferd, 3rd Dist. Hancock No. 5-17-04, 2017-Ohio-8624, Harris v. Harris, 6th Dist. Lucas No. L-02-1369, 2004-Ohio-683, Briganti v. Briganti, 9 Ohio St.3d 220, 222 (1984). Rather, '“[t]he reviewing court must, instead, view the property division under the totality of the circumstances to determine whether the property division reflects an unreasonable, arbitrary or unconscionable attitude on the part of the domestic relations court.” Id. W had testified that she could not afford to keep the van and the parties owed considerably more on the van than it was worth. Viewing the totality of the circumstances, the Court concluded there was no abuse of discretion by the family court in awarding the van and the corresponding debt to W.

Sullinger v. Sullinger, 9th Dist. Lucas No. DR2015-0204, 2020-Ohio-3459

Marital Property: equitable division, financial misconduct
Spousal Support: double-dipping, life insurance, modification

Dated: June 30, 2020
Affirming

Court affirmed the clarification by the lower court, made on remand regarding spousal support. The parties jointly owned a successful business during the marriage where H controlled the company’s day-to-day operations and W participated to a lesser extent. As part of a division of marital assets, H received entire business, free and clear of W’s interest. The trial court had determined that H engaged in financial misconduct (H violated court orders by disposing of marital assets and incurring new debt, directing a change in revenue recognition for the business, and taking excessive distributions) during the pendency of the divorce, and rejected H’s assertion that W engaged in wrongdoing. As a result of instances of H’s misconduct, the trial court exercised its equitable authority and ordered an unequal division of marital property, awarding W an extra $500,000.

In assessing spousal support to W, the trial court properly assessed the factors under R.C. 3105.18, noting the standard of living of the parties, W’s contribution to the business, H’s conduct during the proceeding (attempting to divest W of her share), and W’s disparate income after division of business. The trial court had awarded spousal support of $14,000 per month for seven years, which H had appealed as “double-dipping,” since the trial court had considered income from the jointly owned business. The trial court had used the business’ future income stream in valuing the business and half H’s future income stream and his salary to set spousal support. Further, H argued that the trial court had failed to consider all income of the parties, including assets awarded to W and expenses for their emancipated children, in setting the amount of spousal support. Lastly, H challenged the requirement he provide life insurance, without any indication that the spousal support should survive his death, which had also been an issue remanded back to the trial court.

Upon remand, the trial support provided clarification for H’s income calculation and the intent regarding the life insurance (that the spousal support continue upon H’s death). The Court concluded that it had previously disposed of other issues in the prior appeal, rejecting the “double-dipping” assertion and finding that the expenses for the emancipated children were not included in the calculation. The sole issue remaining on appeal was whether the trial court committed prejudicial error when it failed to calculate H’s W-2 income based on a four-year average. The Court found that although there was a statute that provides for “income averaging” in appropriate cases, (See R.C. 3119.05(H)), there was no similar statute applying to spousal support. Coors v. MacEachen, 1st Dist. Hamilton No. C-100013, 2010-Ohio-4470, ¶ 16. Thus, the Court found no abuse of discretion in the trial court not using an average salary, especially because H lacked credibility, had control over his own salary and distributions (owned business), and paid personal expenses out of the business.

Kalbaugh v. Kalbaugh, 9th Dist. Summit No. 1994-10-2283, 29184, 29185, 29219, 29328, 2020-Ohio-3873

OP&F
QDRO/DOPO: abuse of discretion, subject matter jurisdiction

Dated: July 29, 2020
Reversing in Part, Vacating in Part, and Remanding

Court consolidated four different appeals related to a 1995 divorce, involving H’s five argued assignments of error. At the heart of the dispute: 1) a 2014 QDRO for division of H’s deferred compensation account; 2) a 1996 Pension Order addressing H’s Ohio Police and Fire (OP&F) pension, which recognized that (at the time) a public pension could not be divided by means of QDRO, but setting forth information relating to division of H’s pension; and 3) two DOPOs (entered in September of 2018 and October of 2018).

This decision is 15 pages, and so one would think this blog post would be longer than it is. But at the end of the day, very little was ultimately decided: H lives to see another day, via remand.

Going in reverse order, the October 2018 DOPO was found void because the trial court lacked jurisdiction to enter it while H’s related previous appeal was pending. As for the September 2018 DOPO, which was rejected by OP&F (with no consequence to H’s appeal, despite W’s argument), the Court found the trial court abused its discretion by denying H’s motion for an evidentiary hearing. The 1996 Pension Order, which H argued was an improper modification of the decree, was never served on the parties and had no effect because Ohio did not permit assignment of public pension benefits via DOPO until 2002. Therefore, the Court considered H’s failure to timely appeal the 1996 Pension Order moot.

Therefore, after the Court’s review of the various property division orders in dispute, the only ‘survivor’ was the 2014 QDRO dividing H’s deferred compensation account. H argued that this QDRO assigned to W all that she was entitled under the decree, including amounts from both the deferred compensation and OP&F. Now H will get his chance to make this argument to the trial court once again.

Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.