Ohio Case Law Review by Topic: August 1, 2023 through October 31, 2023

Novak v. Novak, 3rd Dist. Henry No. 19 DR 0026, 7-23-01, 2023-Ohio-2811

Marital Property: equitable division, de facto date, loan (401(k)); valuation

Dated: August 14, 2023
Affirming

During the parties’ marriage, they entered into an agreement to purchase their marital home from a friend, which they funded in part via a 2014 withdrawal from Husband’s retirement annuity. Unusually, Wife was made responsible for the repayment of said loan against Husband’s retirement, which she defaulted on in 2017.

Wife’s default rendered the loan a taxable distribution, which resulted in a tax deficiency of $20,250 for 2017. This amount was subsequently reduced by the parties’ 2020 tax refund.

Wife moved out in 2018, and Husband defaulted on purchase agreement payments in 2019. The latter led to a civil suit in which Husband was ultimately awarded $19,671 for the house, which was by that time under contract for sale to another party.

Both parties agreed to a de facto marital end date of 09/17/2008. At issue was the valuation of the home: Wife argued her interest therein should be based on equity/value as of 09/17/2008, whereas Husband argued Wife’s interest should be based on one-half of the amount awarded from the civil suit, reduced by one-half of the remaining tax penalty from the 2017 loan default.

Wife was ultimately assigned one-half of the amount awarded to Husband from the civil suit, and subsequently appealed.

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In its review, the Court noted “that a trial court must have discretion to do what is equitable upon the facts and circumstances,” and that as part of this, a trial court may make factual determinations that cannot be disturbed, absent an abuse of discretion. Such determinations may include the decision to utilize a de facto marital end date, the final hearing date, or other date as required for an equitable distribution of the property. The Court affirmed the trial court's decision, stating that it found no abuse of discretion based on the evidence presented at trial.

Mullins v. Mullins, 1st Dist. Hamilton No. DR2001444, C-220389, 2023-Ohio-3266

Marital Property: separate property, stock, tracing
Witness: expert

Dated: September 15, 2023
Affirming in Part, Reversing in Part, and Remanding

As part of the parties’ 2020 divorce, Husband asserted that certain stocks within a brokerage he opened prior to the parties’ marriage were his non-marital property, not subject to division. Husband identified 5 ‘blocks’ of stocks, and retained an expert witness to conduct forensic accounting of these and other assets.

During the course of the trial, however, several errors were identified in the expert’s report, and his methodology was called into question. The trial court ultimately found that Husband failed to meet his burden of proof for his claim of a traced, non-marital interest, noting multiple errors in Husband’s expert’s report, and a lack of “sufficient tracing evidence.” Husband objected, was overruled, and this appeal followed.

In his first assignment of error, Husband argued the trial court erred in deeming the brokerage account marital, while finding him solely responsible for tax liability stemming from a stock sale therefrom.

At the outset, we note that [Husband] does not contest the division of cash in the brokerage account. He concedes that the cash in the brokerage account has been extensively commingled and there was no way to adequately trace it. Rather, his claims of separate property are limited to the shares of Ameren, American Electric Power, Duke Energy, P&G, and Mastercard stock in the brokerage account.

Reviewing each ‘block’ of stock in turn, the Court reversed as the Ameren and American Electric Power stocks, and affirmed as to the Duke Energy, P&G, and Mastercard stock.

Husband had provided statements documenting his ownership of the Ameren and American Electric Power stocks throughout the term of the marriage, and thus the trial court’s ‘marital’ determination was against the manifest weight of the evidence.

Alongside his trial testimony, Husband cited publicly available information related to stock splits for the Duke Energy, P&G, and Mastercard stocks, but -the Court noted- failed to request judicial notice during the trial court proceedings. Due to this failure, the Court found against Husband’s separate property claims as to these stocks, and affirmed.

The Court agreed, however, that the trial court erred and contradicted itself when it assigned sole responsibility to Husband for the payment of tax liability stemming from the sale of Mastercard stock, while also deeming said stock marital. The Court went on, however, to note that Husband had not actually appealed said assignment of tax liability, and thus no relief could be granted.

In an additional assignment of error, Husband argued the trial court erred by treating the brokerage account as cash, and requiring that it be liquidated. The Court rejected this argument, finding that the trial court’s assignment of an interest in the account did not constitute an order to liquidate the account.

Dilley v. Dilley, 11th Dist. Geauga No. 2008 DC 000591, 2023-G-0008, 2023-Ohio-3303

QDRO: spousal support (arrearage)

Dated: September 18, 2023
Affirming

As part of the parties’ 2008 divorce, Wife was awarded 50% of Husband’s retirement benefits, along with monthly child support for a period of 8 years and 8 months. Very, very lengthy proceedings and appeals followed:

See Dilley v. Dilley, 11th Dist. Geauga No. 2016-G-0078, 2017-Ohio-4046; Dilley v. Dilley, 11th Dist. Geauga No. 2014-G-3227, 2015-Ohio-1872; Dilley v. Dilley, 11th Dist. Geauga No. 2012-G-3109, 2013-Ohio-4095; Dilley v. Dilley, 11th Dist. Geauga No. 2012-G-3091, 2013-Ohio-994; Dilley v. Dilley, 11th Dist. Geauga No. 2011-G-3030, 2011-Ohio-5863; Dilley v. Dilley, 11th Dist. Geauga No. 2010-G-2957, 2011-Ohio-2093; Dilley v. Dilley, 11th Dist. Geauga No. 2017-G-0115, 2017-Ohio-8439; Dilley v. Dilley, 11th Dist. Geauga No. 2016-G-0078, 2017-Ohio-4046; Dilley v. Dilley, 11th Dist. Geauga No. 2019-G-0207, 2020-Ohio-984.

As part of these proceedings, on remand in 2012, the trial court ordered that Husband’s spousal support arrearages would be paid via QDRO from one of his pension plans. In 2014, the trial court entered another QDRO related to Husband’s spousal support arrearage, this time from another retirement plan.

In 2022, Husband filed a Motion to Modify/Terminate Spousal Support and for Reimbursement, and the trial court subsequently ordered that all spousal support payments through CSEA and via QDRO should terminate immediately. The trial court found that Husband had overpaid, but declined to award any reimbursement, citing Husband’s failure to timely file a motion to terminate spousal support, failure to pay support in a timely manner, and overall obstructive conduct. Husband objected, but was overruled, and this appeal followed.

In his appeal, Husband argued that the trial court erred: (1) in its entry of additional QDROs related to its assignment of spousal support; and (2) in its denial of his motion for recoupment of overpayments.

Noting the extensive proceedings in which these matters were already litigated and decided upon, the Court found Husband’s claims were barred by the doctrine of res judicata. The Court thus affirmed, and dismissed Husband’s appeal.

Wilson v. Wilson, 9th Dist. Summit No. DR 2020 02 0471, CA 30538, 2023-Ohio-3521

Marital Property: equalization, stock
Spousal Support: definition of income, double-dipping

Dated: September 29, 2023
Affirming

As part of Husband’s compensation through his employer, he received shares of stock that was attributable to more than half of his annual income. As part of the divorce proceedings, the trial court ordered that Husband would not be permitted to dispose of any of his employer-awarded stock shares. The trial court further ordered monthly payments of $1,320 for spousal support, based on both Husband’s base salary and ongoing stock shares awards.

Husband moved the trial court to release the ‘hold’ on his employer-assigned stocks, and to permit him to sell his shares, and was denied. His appeal followed.

In his first assignment of error, Husband argued the trial court erred when it compelled him to assign a portion of his account to Wife, while denying him permission to make changes to his account by which he could effectuate the transfer to Wife. Noting that the trial court’s decree ended the pendency of the action, the Court overruled Husband’s argument as moot.

In his second assignment of error, Husband argued the trial court erred in its assignment of spousal support to Wife, and was ‘double-dipping’ by assessing his stock shares awards as both income and marital property. The Court disagreed and again affirmed, writing:

Husband does not allege, let alone identify anything in the record that establishes, that his shares of company stock are or were considered to be income-producing. The treatment of the company stock is no different than if Husband was paid bonuses in cash and he used them to buy stock or placed the funds in a savings account. He received something of value from his employer during the marriage and retained it as an asset. The bonuses, therefore, both qualified as income in the years Husband received them and, because he retained them, became a marital asset subject to equitable division.

The Court similarly judged Husband’s arguments -concerning child support and his stock shares awards- to be based on a misreading of the trial court’s rulings.

In Husband’s final assignment of error, he argued the trial court should not have treated his stock shares awards as marital property, since their ongoing receipt was also factored into the computation of his spousal support obligation. The Court overruled this, and affirmed, finding that Husband had again conflated the stock shares he already received in his account, with the income (through salary and stock shares awards) he expects to receive. The former being subject to division, and the latter, for factoring into his support obligation.

Waligura v. Waligura, 12th Dist. Clermont No. 2020 DRA 00661, CA2022-11-076, 2023-Ohio-3747

Marital Property: de facto date (termination of marriage); gift
Spousal Support: double-dipping; voluntary underemployment

Dated: October 16, 2023
Affirming

During the parties’ marriage, Wife worked as a part-time speech pathologist and undertook related doctoral studies. Husband worked as an environmental engineer, earning most of the parties’ income. After leaving her position to tend to affairs following the death of a family member, Wife never resumed her speech pathology studies. The parties attempted a collaborative divorce in 2019, and after this failed, Husband filed for divorce in 2020.

During the divorce proceedings, Wife was imputed an income based on her potential earnings were she employed in her field, and Husband’s spousal and child support obligations were calculated using the parties’ respective incomes. Wife’s appeal followed.

In her appeal, Wife argued that the trial court erred when it imputed additional income to her and found her voluntarily underemployed. Wife claimed she was unable to obtain full-time work in her field, noting her obligations as executrix to her father’s estate, gap in work history, the demands of resuming her studies, and an ankle injury. The Court disagreed, noting the estate and injury had both been resolved at the time of the final hearing, her then-current full-time employment, and expert testimony estimating a potential annual income of $90,000.

In her second assignment of error, Wife argued that the trial court erred in deeming money loaned to the parties by her mother and stepfather as a gift. Noting its manifest weight of the evidence standard for overturning the trial court’s factual determination, the Court again affirmed.

Based upon the lack of documentation, as well as the lack of any demand for repayment and the passage of time, the trial court's finding that the money was a gift as opposed to a loan was not against the manifest weight of the evidence, despite wife's testimony to the contrary.

In her final assignment of error, Wife contended that the trial court erred when it valued the marital estate as of the day Husband filed for divorce, instead of the final hearing date. While the Court conceded that a final hearing date may be used by default, it further noted that a trial court may use a de facto marital end date when doing so yields an equitable result.

In this case, the trial court utilized the earlier date of Husband’s filing for divorce in part because the parties had already attempted a collaborative dissolution beforehand, and at the time of filing Husband had already moved from the marital residence and opened a separate bank account. Based on this, the Court again affirmed.

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.