Ohio Case Law Review by Topic: October 1, 2022 through November 30, 2022

Karabogias v. Zoltanski, 8th Dist. Cuyahoga No. DR-16-364810, 111062, 2022-Ohio-3548

Marital Property: equitable division, de facto date (termination of marriage)
ORC 3105.171(I)
QDRO: abuse of discretion, impermissible modification, valuation date

Dated: October 6, 2022
Affirming

Editor’s Note: This Opinion was since vacated for a very similar ruling, the edits/revisions to which are summarized by our blog here.

As part of the parties’ 2019 divorce, Husband was awarded 50% of Wife’s pension accrued through employment as a hospital executive. While the trial court deemed the trial’s start date, 01/08/2018, to be the date of termination of the marriage, it also stated that the parties’ marital property “will not be valued as of January 8, 2018.” This determination stemmed in part from the lack of valuation and benefit information provided by the parties for such date.

“It’s supposed to snow again this week? Can a non-migratory bird get a break?”

Wife had submitted information and values for her retirement benefits as of 07/23/2019, though the trial court had requested documentation as of earlier dates, as well. Following issuance of the decree, Husband’s counsel sought adoption of a QDRO for the pension based on the value of benefit accruals as of the date of decree, 10/31/2019. Wife objected, arguing that the QDRO should utilize 01/08/2018 for the valuation of her accrued benefits, instead. The trial court found in favor of Husband, and Wife appealed.

During this appeal, Husband sought a limited remand to revise the QDRO to utilize an earlier date, 07/23/2019, in conformity with the valuation date used for other retirement assets in the matter. Husband’s request was granted, and a revised QDRO was subsequently adopted. Wife appealed, arguing that the trial court abused its discretion and impermissibly modified the decree when it issued a QDRO with the 07/23/2019 date.

Noting that a trial court has broad discretion in utilizing dates for valuing marital assets, based on what the trial court determines would produce the most equitable outcome, the Court rejected Wife’s arguments. The trial court’s decree specifically stated that the parties’ assets would not be valued as of 01/08/2018. Further, the trial court’s reliance on the 07/23/2019 date stemmed in part from the valuations that Wife herself provided. Wife argued that the use of the term ‘marital portion’ in the decree necessarily limited her pension accruals to those as of 01/08/2018, but the Court rejected this as well, writing:

The choice of the term “marital portion” in the [trial] court’s statement does not have the significance claimed by wife. She cites R.C.3105.171 in support of her claim, but that statute only defines “marital property,” which is all property currently owned by either or both spouses, including the retirement benefits, that was acquired by either or both spouses during the marriage. R.C. 3105.171(A)(3)(a)(i). Furthermore, regarding what “during the marriage” means, the statute specifically permits the trial court to “select dates that it considers equitable in determining marital property.” R.C. 3105.171(A)(2)(b).

Wiseman v. Wiseman, 12th Dist. Madison No. DRD20180237, CA2022-03-004, 2022-Ohio-3689

Civ. R. 53
Civ R. 60(B): fraud

Dated: October 17, 2022
Affirming

Husband filed a Civ. R. 60(B) motion for relief from the parties’ 2018 decree, after Wife commenced benefits under her UPS pension in 2021. Husband argued that Wife had engaged in fraud or misrepresentation by not disclosing her pension in her affidavit of property. As a consequence of this, Husband was deprived of his interest in the pension when he signed a separation agreement entitling both parties to their own respective employer retirement benefits.

At the hearing for the motion, Husband acknowledged reading the separation agreement, but stated he had understood the references to Wife’s pension to be general, boilerplate language. Wife testified that Husband had been well aware of her pension, and had agreed for her to keep it. Wife “simply did not know how to value the pension or whether it should be included.” Finding Wife’s testimony more credible than Husband’s the magistrate denied Husband’s motion, and the trial court upheld the decision. Husband’s appeal followed.

In his first assignment of error, Husband argued that the magistrate should have granted his motion for relief under Civ. R. 60(B)(3). The Court rejected this argument, writing:

[W]hether [Husband] is entitled to relief from judgment turns on whether he knew about [Wife’s] UPS pension when he entered the separation agreement. [Husband] says that he did not know; [Wife] says that he did. The magistrate determined that [Wife] was more credible on the issue. The trial court similarly found that [Husband] knew about the pension. Therefore, the [trial] court held that he was not entitled to the requested relief. This decision is eminently reasonable.

The Court similarly rejected Husband’s second assignment of error, wherein he argued the trial court failed to properly review the record before adopting the magistrate’s decision. The Court found no basis for determining the trial court failed in its review of the magistrate’s decision, prior to adopting it.

Turnmire v. Turnmire, 12th Dist. Butler No. CV 2020 11 17547, CA2021-12-165, 2022-Ohio-3698

Marital Property: life insurance, survivorship (SBP), unjust enrichment

Dated: November 7, 2022
Affirming

Editor’s note: While the circumstances leading to this case originated with a domestic relations action in Florida, the appealed case itself was a civil judgment.

As part of John and Martha’s 2005 dissolution, John was ordered to: (a) maintain his military Survivor Benefit Plan (SBP) for an annuity payable to Martha upon his death; and (b) elect death benefits for Martha in the amount of $200,000 through his Veterans Government Life Insurance (VGLI) policy. Within a year of the decree, John married his subsequent spouse named (somewhat confusingly for the opinion and this summary) Marsha.

As part of a 2009 modification order, John’s alimony and VGLI obligations were reduced (the latter to $150,000), and the SBP obligations remained intact.

John died in 2020, whereupon Martha discovered that John had failed to elect survivorship for her under both benefits to the extent he had been ordered, with Marsha receiving the bulk of the VGLI benefit and all of the SBP annuity. Martha brought suit, claiming unjust enrichment, breach of contract, conversion, and fraud, and requested that the two benefits be placed in a constructive trust. The trial court claimed it had no authority to circumvent federal law under which the benefits were paid to Marsha, and dismissed Martha’s claims. Martha appealed.

In addressing Martha’s claim to relief for the VGLI benefit, the Court reviewed case law in which the Servicemembers’ Group Life Insurance Act (controlling regulation for the VGLI benefit) has been judged to preempt state law. While Martha claimed John’s fraud -him having changed the beneficiary designation for the policy while dissolution proceedings were still taking place- provided an exception to such preemption, the Court disagreed, noting John’s right under federal law to make any such changes, and Martha’s failure to exercise her own right under the decree to request annual proof of her designation under the policy.

In addressing Martha’s claim to relief for the SBP annuity, the Court noted that:

Under federal law, if the service member is required by court order to elect the former spouse as beneficiary and fails or refuses to do so, the service member is “deemed” to have made the election, provided that the former spouse sends the appropriate military Secretary a written request for a deemed election, along with a copy of the court order… within one year of the court order.

Martha argued that such a request had been submitted by her attorney, but was apparently not processed once received. Martha failed, however, to submit as evidence either document referred to as proof of such submission. The Court further found that Martha’s deposition statements alleging such submission were hearsay, based on statements made by her former attorney, and thus inadmissible.

The problem is that Martha’s testimony lacks a permissible basis. Her testimony that she “believed” her attorney had submitted an election request has one of three possible bases: she saw him submit the request, he told her that he submitted it, or he told her that he would submit it…

Martha has failed to show that a genuine issue of fact exists as to the SBP benefits. Once her testimony is excluded for Civ.R. 56 purposes, no evidence remains on which it would be reasonable to find that a deemed election was made.

In addition, the Court wrote that it had no authority to grant relief, as such an administrative decision must come from the military secretary/SBP administrator. There is no case law to support an Ohio court ordering a change in beneficiary for a SBP annuity, more than a year after the decree. Martha, the Court wrote, must seek corrective redress from the military secretary/SBP administrator directly.

Editor’s Note: As might be imagined with such a nuanced opinion, one Appeals Court member dissented in part. The reasonings begin at Page 22 of the Opinion, and conclude that the trial court had been right to dismiss Martha’s motion for summary judgment against Marsha, but wrong to have granted Marsha’s motion for summary judgment against Martha.

Smith v. Smith, 2nd Dist. Montgomery No. 2021-CV-1991, 29524, 2022-Ohio-4180

DOPO: survivorship
Marital Property: unjust enrichment

Dated: November 23, 2022
Affirming

Editor’s note: While the circumstances leading to this case originated with a domestic relations action, the appealed case itself was a civil judgment.

Under a 1988 divorce decree, Elaine Smith was awarded half of the OP&F disability benefits then being paid to Larry Smith in the form of a single life annuity. The decree also ordered that, in the event the plan was modified for a surviving spouse benefit, Elaine would be named the beneficiary at that time. A QDRO was entered reflecting these terms.

Following the intervention of the Ohio Attorney General, seeking vacation of the QDRO due to OP&F’s ERISA-exempt status, a new entry vacated the QDRO and ordered instead that Elaine be paid her interest in the OP&F benefit as spousal support. This entry did not address any surviving spouse benefit, and Elaine began receiving payments thereafter.

Larry was later married to Carolyn Farmer in 1993, until his death in 2019. Following Larry’s death, Farmer received a one-time death benefit of $1,000, as well as surviving spouse benefits under ORC 742.37(D). Former Spouse Smith’s spousal support benefit immediately ceased, and she filed suit against Farmer in 2021, alleging unjust enrichment and conversion. Smith argued that Larry’s breach of contract by failing to ensure her designation as surviving spouse entitled her to a claim against Farmer, as fiduciary for his estate, for the surviving spouse benefits via a constructive trust. While a deadline for motions for summary judgment was set for 03/28/2022, Farmer’s motion for summary judgment and memo in opposition to Smith’s motion for summary judgment was filed on 04/01/2022. The trial court did not strike Farmer’s motion as untimely, and ultimately ruled in her favor. Smith’s appeal followed.

The Court first addressed Smith’s claim that the trial court erred in not striking Farmer’s motion as untimely. While the trial court did not provide a written entry addressing Smith’s motion to strike, it can be presumed -according to the Court- that the trial court overruled Smith’s motion based on its ruling on Farmer’s motion for Summary Judgment. Moreover, the Court wrote, a trial court maintains discretion over its own proceedings.

In her remaining assignments of error, Smith argued that the trial court erred in ruling against her motion for summary judgment on her claims related to the surviving spouse benefit, and request for a constructive trust. Employing a de novo standard of review, the Court again disagreed. The Court noted that the entry filed after the vacated QDRO made no mention of surviving spouse benefits, which -the Court found- were not available at the time of the divorce and remained unavailable through Larry’s death, due to the statutory nature of the benefits and Larry’s single life annuity election.

We find this case more analogous to Cosby, in which the supreme court stated that it was not proper to impose a constructive trust when the trust would result in the reallocation of pension funds in a manner contrary to the statutory mandates of the public pension plan. The divorce decree cannot provide Smith with statutory survivor benefits contrary to the mandates or R.C. 742.37(D), nor can a constructive trust be used to circumvent the fact that R.C. chapter 742 provides statutory survivor benefits to Farmer as the surviving spouse.

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