Ohio Case Law Review by Topic: December 1, 2021 through February 28, 2022

“Find it Here” but don’t open it for chocolate. That’s just an egg.

Miller v. Miller, 10th Dist. Franklin No. 16DR-1690, 18AP-877, 2021-Ohio-4573

Marital Property: valuation
Witness: expert

Dated: December 28, 2021
Reversing and Remanding in Part

Among its rulings in the parties’ divorce, the trial court allocated marital property and awarded spousal and child support on the basis of a disputed business valuation and Husband’s income therefrom. Husband appealed, arguing the trial court had: (1) erred in its valuation of his optometry business, leading to the inequitable distribution of the parties’ marital property and income; and (2) erred in its award of spousal support to Wife, despite her withdrawal of such request.

At trial, the parties submitted countering valuations for Husband’s business, reached by their respective experts. At the heart of the dispute was an accounting change, which was contemporaneous with Wife’s filing for divorce, whereby the business’ ‘discounts and adjustments’ related to insurance payments soared from $0 in 2015 to $658,000 in 2016. Wife’s expert employed a disputed method of valuation wherein such discounts were included with revenue, increasing the overall valuation of Husband’s business and his income therefrom.

The trial court ultimately found that Wife’s expert was more credible (but alluded to some deficiencies in their analysis, without specifically naming them), and utilized their business valuation for the allocation of marital property and assignment of spousal and child support.

In remanding on this issue, the Court agreed that Wife’s expert/valuation was more credible, but found the trial court had erred in wholly accepting this analysis in a “one or the other” approach.

The trial court had good reason in the record to find [Wife’s expert’s] bottom-line assessments more persuasive than the figures offered by [Husband’s] (lone court-approved) expert… But the ultimate task of the trial court was not simply to pick which one of the two experts it favored overall, but to come to proper and properly supported results. Here, not only was there a very wide chasm between the experts’ opinions (with [Wife’s Expert] having set the value of the business at $960,000, for example, as opposed to the $222,000 figure offered by [Husband’s expert], see Divorce Decree at 5), but the trial court also perceived that [Wife’s expert’s] valuation of Eye Columbus, LLC was “flawed in certain respects”

The Court remanded, ordering that the trial court “assess the evidence and formulate its views more precisely on what the proper allocation and appropriate and reasonable support results should be.”

Husband’s argument that Wife had withdrawn her request for spousal support, based on a small number of written and verbal statements at trial, was overruled based on limited supporting facts and the Court’s own remand relating to such support.

Picciano v. Picciano, 5th Dist. Stark No. 2019DR00952, 2021 CA 00050, 2021-Ohio-4603

Marital Property: gift, tracing

Dated: December 29, 2022
Affirming

Wife argued the trial court erred when it found she did not sufficiently trace $200,000 used to purchase two annuity contracts from the parties’ son. This money had originated in an account Wife had established to handle her father’s estate (but which housed commingled funds and was jointly used), before its transfer to the parties’ joint checking account for the annuities purchase. Citing both parties’ testimony as to the joint ownership of the annuities, the parties’ joint completion of forms to open such annuities, and the commingling of marital and inherited funds, the Court affirmed the trial court’s finding that “even if [Wife] provided sufficient tracing, the contracts were transmuted into marital property.”

The funds came directly from the parties’ joint account. Both parties completed the applications for the annuities. Most importantly, Wife testified that it was her intent to give Husband a property interest in these annuities for their retirement. Wife specifically stated that for annuity #124, she is the owner and Husband is the joint owner and she intended to make him a joint owner of #124. As to annuity #125, Wife stated Husband is the owner and she is the joint owner of the annuity. When counsel for Husband asked Wife if she intended to give Husband a property interest in the annuities, she stated it “was for both of them” for “retirement.” These facts, taken together, demonstrate Wife possessed the requisite donative intent. By Wife’s actions, she conveyed a present possessory interest in an undivided ½ interest in her separate property to Husband.

The Court similarly affirmed the trial court’s decision not to reopen to allow Wife to present new evidence concerning the funding of another annuity contract. Wife asserted she had documentation to that would trace the annuity funding to a required minimum distribution from her father’s IRA, but the Court overruled based on the parties’ previous stipulation of the marital status of the annuity, and Wife’s possession of said document at the time of the divorce.

Iacona v. Iacona, 11th Dist. Geauga No. 2015 D 000995, 2020-G-0270, 2021-Ohio-4616

Attorney Fees
Spousal Support: modification (change in circumstances), retirement benefits, retirement age

Dated: December 30, 2021
Affirming

As part of the parties’ 2017 divorce, Wife was awarded a marital share of Husband’s retirement benefits stemming from a managerial position with UPS, including a pension, UPS stocks, and $271,382 from Husband’s 401(k). Wife was also awarded spousal support in the amount of $3,250 per month, based on her work from home and Husband’s $100,000+ salary.

Husband subsequently retired at 55 in 2018, and requested modification of his spousal support obligation, citing a loss of employment income, Wife’s receipt of pension payments, and a lack of income from his new employment with his brother’s home inspection company. Wife argued that Husband had voluntarily allowed earnings to stay in his brother’s company to benefit family, and further cited Husband’s earnings from consulting along with his current Wife’s ‘substantial’ income.

The [trial] court adopted the Magistrate’s decision over [Husband’s] objections in October 2020. Specifically, it found his retirement to be early and voluntary. As such, it considered whether [Husband] demonstrated he had sound economic reasoning for retiring. It determined he did not, and instead determined that [Husband’s] retirement was “largely motivated to defeat [his] spousal support expectations.”

Husband appealed the trial court’s denial of his motion and treatment of his pre-retirement earnings as imputed income, as well as the trial court’s award of attorney fees to Wife. He contended that the trial court erred in its determination that he had retired early, despite his entitlement to full benefits at such time.

“Under Ohio law, ‘[a]n early retirement can be considered an involuntary decrease in a person’s salary where the party demonstrates that it was economically sound to take an early retirement.’” Ogle v. Ogle, 10th Dist. Franklin No. 17AP-560, 2018-Ohio-5141 ¶22, quoting Tissue v. Tissue, 8th Dist. Cuyahoga No. 83708, 2004-Ohio-5968 ¶21, citing Roach v. Roach, 61 Ohio App.3d 315, 319 (8th Dist. 1989). “By contrast, ‘if a party retires with the intent of defeating the spousal support obligation, the retirement is considered “voluntary underemployment,” and the party’s pre-retirement income is attributed to that party.”

Reviewing for abuse of discretion, the Court affirmed the trial court’s decision, continuing:

Though [Husband] retired when he was entitled to full benefits under his pension plan, he voluntarily retired, in good health, at the age of 55 from a job paying in excess of $100,000 annually, and reducing his income to $32,290.92 annually, only “because he could.” Given our deferential standard of review, we cannot agree the trial court abused its discretion…”

Husband also argued that his retirement had not been considered in the spousal support award, but the Court declined to examine this, based on the failure of his argument above. Similarly, based on its ruling on Husband’s first assignment of error, the Court also overruled his second assignment related to the award of attorney fees to Wife.

Blanchard v. Blanchard, 11th Dist. Ashtabula No. 2019 DR 00110, 2021-A-0003, 2022-Ohio-162

Marital Property: appreciation (stock), financial misconduct, tracing
Spousal Support
Witness: expert

Dated: January 24, 2022
Affirming

As part of the parties’ 2020 divorce, the trial court admitted the findings and testimony of an expert retained by Husband to trace funds related to the sale of company stocks Husband acquired before the marriage.

During the marriage until his 2007 retirement, Husband was employed by, and subsequently sat on the board of directors of, a company founded by his father. When the company was acquired in 2012, Husband received $4,881,907.11 in proceeds from the sale of his stock.

As part of their trace, Husband’s expert designated different periods of growth of the company’s overall value as ‘active’ and ‘passive’ appreciation, designating the period of Husband’s employment as active, and the period of his retirement (until the sale of the company) passive. The company’s value was utilized due to a stock split. Husband’s expert testified that such method was conservative in that it assumed all active appreciation was due to Husband’s employment.

Based on the above approach, Husband’s expert was able to trace Husband’s separate property interest in the current value of assets purchased with the proceeds from the stock sale, including real estate and luxury cars. The trial court found he had met his burden in establishing a separate property interest.

In her appeal, Wife first argued the trial court erred in admitting Husband’s expert’s report, which she asserted she had not been provided with enough time to review, retain an expert to counter, or to conduct related depositions. The Court noted several deficiencies in this argument, including: Wife’s failure to file a motion to set aside the magistrate’s order denying her motion for abeyance in a timely fashion; and her assertion that the report could not be admitted due to its inclusion of a list of assets from the parties’ antenuptial agreement (though the values thereon had been otherwise stipulated to). For these reasons, and others related to Wife’s next assignment of error, the Court affirmed.

In her second assignment of error, Wife argued the Court abused its discretion in assigning Husband a separate property interest based on the trace of stock sale proceeds. Wife argued that all increases in value during the marriage should be treated as active appreciation, that 2000-2010 sales of stock had not been taken into consideration, and that the joint titling of real estate purchases established the properties’ marital status. Wife also argued for the use of a de facto marriage date, prior to the parties’ ceremonial marriage date, with unclear effect as to Husband’s separate property interest. The Court overruled, and affirmed the trial court’s decision.

In her third assignment of error, Wife alleged the trial court abused its discretion by not making a finding of financial misconduct on the part of Husband based on his purchase of luxury cars that lost value, without wife’s knowledge. The Court found, however, that Wife failed to provide evidence “from which it can be reasonably inferred that Husband intended to defeat her interest in marital property” when he purchased the vehicles well in advance of the parties’ divorce (simultaneous with his founding of a luxury car rental company).

Finally, Wife argued that the trial court erred in its assignment of the amount and duration of spousal support payments to her. Noting the substantial property assets awarded to both parties, as well as the parties’ age and relative earning capacities, the Court again affirmed the trial court’s judgment.

Mayer v. Mayer, 10th Dist. Franklin No. 18DR-1343, 21AP-3, 2022-Ohio-533

Marital Property: book proceeds, vesting, stock (RSU)
Spousal Support: book proceeds, definition of income, double-dipping
Witness: expert

Dated: February 24, 2022
Reversing

At the time of the parties’ divorce, Wife was an exceptionally highly-paid attorney and became the Chief Legal and Compliance Officer for Cardinal Health. As part of her employment, Wife received income in three components: her base salary ($575,000), annual cash bonus ($559,061 in 2020), and Long-Term Incentive Plan (LTIP) stock compensation ($1,500,000 in 2020, per Husband’s expert’s valuation).

Wife’s LTIP bonus consisted of 60% Performance Share Units (PSUs) on a 3-year cliff vesting schedule, and 40% Restricted Stock Units on a 3-year progressive vesting schedule. As part of the parties’ marital property division, Husband was awarded a marital share of any LTIP bonus shares that vested prior to the agreed-upon end of marriage date, or that were awarded prior to such date, but vested thereafter. Husband was also awarded $3,136.05 per month in child support, and $4,166.66 per month in spousal support. In calculating the child support award, the trial court did not consider Wife’s LTIP bonus and cash bonus as part of her yearly income, nor did it consider her LTIP bonus in its assignment of spousal support.

Husband appealed, and in two assignments of error argued that the trial court had abused its discretion in excluding Wife’s bonuses from her annual income when calculating her spousal and child support obligation.

Testimony from both Husband’s and Wife’s expert witnesses supported the treatment of Wife’s LTIP bonuses as either income for the purpose of calculating support obligations, or marital property subject to division, provided that the same bonus could not be used for both.

Citing Ghanayem v. Ghanayem, 12th Dist. Warren Nos. 16DR39199, CA2018-12-138, CA2018-12-142, 2020-Ohio-423, the Court reversed the trial court, finding that any future LTIP bonuses to Wife that were not subject to the marital property division should be treated as income to Wife for spousal support owed.

[W]e find that the trial court abused its discretion by failing to consider [Wife’s] post-marital LTIP bonuses as income to [Wife] for purposes of calculating [Wife’s] spousal support obligation. In our view, [Wife’s] post-marital LTIP shares are simply a bonus, which should be considered in the calculation of her spousal support obligations.

In order to prevent ‘double-dipping’ (the same LTIP bonus/income included in both marital property division and spousal support obligation), the Court ordered the use of a ‘tiered approach’ wherein the trial court adjusts Wife’s “gross income, on remand, to account for income [Wife] will receive from stock units included in the division of marital property…”

Relying on the same arguments as above, the Court likewise reversed and remanded the trial court’s decision not to include Wife’s LTIP and cash bonuses in her annual income for calculating her child support obligation. Wife’s assertion of Husband’s waiver of said bonuses (for child support assignment purposes) was deemed unsupported in the Court’s review of the record.

In his third assignment of error, Husband argued the trial court abused its discretion when it awarded Wife 40% of any income derived from any book he “is writing or plans to write” about the parties’ divorce.

The Court agreed, noting that Husband’s separate obligation to notify Wife of any change in his income remained “for the publication of any type of [Husband’s] work, including books, magazines, online magazines or articles appearing on social media sites…”.

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