Ohio Case Law Review by Topic: March 1, 2023 through April 30, 2023

This year’s Fourth of July celebrations will feature extra smoke.

Fitzgerald v. Fitzgerald, 6th Dist. Wood No. 2017DR0012, WD-22-002, 2023-Ohio-744

Marital Property: retirement benefits (nonqualified)
QDRO: merely implements decree, subject matter jurisdiction
ORC 3105.171(i) (prohibition on modification)

Dated: March 10, 2023
Affirming

As part of the parties’ divorce proceedings, Wife was awarded an interest in Husband’s ‘Alternative Retirement Plan,’ accrued through his employment at a state university, representing “70% of the parties’ combined accounts.” Wife’s assignment was first awarded via 11/14/2019 trial court decision, and was reaffirmed in a 03/02/2020 decision (the latter of which specified the use of a QDRO). Husband appealed the division of assets in the March 2020 decision, but not its call for the use of a QDRO.

The trial court subsequently issued an order forbidding any distribution by the plan’s recordkeeper (TIAA) to Husband, and on 03/20/2021 reaffirmed its 2019 and 2020 decisions. On 07/20/2021, the trial court issued an order allowing the release of funds from Husband’s account, and ruled his earlier appeal as moot. Wife filed a motion for QDRO approval on 08/17/2021, and on 11/08/2021 the trial court issued an order concerning the use of a QDRO for Wife’s assignment. A QDRO was finally issued on 12/21/2021, and Husband appealed.

In his appeal, Husband contended that the trial court erred with its utilization of a QDRO, rather than a Division of Property Order (DOPO), as he alleged was required under Ohio Revised Code.

Editor’s note: Husband’s argument may have more basis than readers imagine, as the use of a QDRO for alternate payee assignment from an Ohio Alternative Retirement Plan (ARP) has itself a very limited basis, at least under ORC 3305.21 (which sets forth the requirements for the division of ARP benefits). Since the Ohio Assembly first introduced ARPs as an alternative to state employee pensions, it has failed to address the division of ARP benefits. The controlling code for ARP assignments still refers to ORC 3105.80 and 3105.90, which relate to DOPO assignments for state retirement system-administered pension plans. (Though one might assume his employment of this argument, here, is more to avoid paying Wife than to correct a legislative oversight.)

In affirming the trial court’s decision, the Court noted that Husband’s argument against the use of a QDRO for Wife’s assignment was barred by the doctrine of res judicata. “[B]ecause he failed to raise the issue in an appeal of the divorce decree and, further, he failed to appeal subsequent trial court decisions that addressed retirement division issues.”

Noting that a QDRO is “merely a mechanism used to implement the trial court’s division of the parties’ marital assets,” the Court found no inconsistencies between the QDRO terms and the trial court’s decree. The Court reiterated, however, that Husband’s arguments were blocked at several junctures by the doctrine of res judicata.

The Court similarly dismissed Husband’s argument that the trial court failed to abide by its own local rules (requiring the reservation of jurisdiction for a QDRO in any final judgment entry), finding such failure did not prejudice Husband “in any way.”

Baronzzi v. Gamble, 7th Dist. Columbiana No. 2019 DR 00056, 2021 CO 32, 2023-Ohio-894

Civ. R. 60(B) (fraud)
Marital Property: ambiguity, deferred distribution
Spousal Support: definition of income, modification

Dated: March 10, 2023
Affirming in Part, Reversing in Part, and Remanding

Under the terms of the parties’ 2020 divorce decree, Wife was awarded $3,300 monthly spousal support, and in the months that followed, Husband ran unsuccessfully as a candidate for county prosecuting attorney (to which he was then an assistant). In December 2020, Husband moved to terminate or modify Wife’s spousal support award, based on his plans to retire from the county prosecutor’s office, following his loss.

In February 2021, Wife filed a Civ. R. 60(B) motion, seeking relief from the trial court’s divorce decree based on Husband’s receipt of roughly $96,000 in a payout of unused sick/vacation benefits. Wife argued that Husband deliberately concealed these benefits, which were accrued during the marriage, entitling her to relief under Civ. R. 60(B)(2) (based on newly discovered evidence) and Civ. R. 60(B)(3) (based on fraud).

[Wife] stated that [Husband] was a licensed attorney, that he was aware of his duty to disclose all marital assets, and that he intentionally concealed the sick/vacation benefits during the divorce.

In a hearing that followed, Husband testified that he had retired knowing “he would not be able to keep his job due to the bitterness of the election,” and that while he had previously received statements documenting his unused sick/vacation time, this time was never expressed as a value or dollar amount. His employment following his retirement from the county prosecutor’s office netted him a fraction of what he made previously.

At the same hearing, the county prosecutor’s office manager testified that sick/vacation benefits could only be paid out at separation from employment (employees who quit could only receive unused vacation time, whereas employees who retired received both).

The trial court subsequently dismissed Wife’s motion, and found that Husband’s request to modify spousal support was “premature.” Both parties appealed.

Wife’s appeal argued (1) the trial court erred in construing Husband’s payout as post-marital income, rather than a marital asset; and (2) the trial court erred in finding Husband could not have concealed the benefits, which were “common knowledge” (despite both parties’ testimony that they were unaware of them).

Construing Wife’s limited arguments as a challenge to the trial court’s overall rejection of her motion, the Court affirmed the trial court’s denial. While the Court sustained Wife’s first argument, finding that Husband’s benefits “fit squarely within the definition of marital property,” it found no evidence that Husband knowingly misrepresented or concealed the benefits from Wife, and thus no basis for relief under Civ. R. 60(B)(3).

Husband’s appeal argued (1) the trial court erred in treating his sick/vacation time payout as recurring income to him, in its denial of his motion to modify or terminate spousal support; (2) the trial court erred in deeming his motion premature, despite his drop in income; and (3) the trial court erred in its failure to reserve his right to retroactive relief from spousal support, should Wife’s appeal succeed in deeming the payout as marital property.

The Court sustained Husband’s first argument (and found the other two moot), and remanded the matter back to the trial court for reconsideration of Husband’s motion to modify or terminate spousal support.

LaCourse v. LaCourse, 6th Dist. Lucas No. DR0201900647, L-22-1092, 2023-Ohio-972

Civ. R. 60(B) (vacate)
Nunc Pro Tunc: void
ORC 3105.171(I) (prohibition on modification)

Dated: March 24, 2023
Affirming

In September 2019, the trial court granted the parties’ divorce, writing in relevant part that the parties agreed Husband would “retain as his own;... pension plans, and other retirement plans in his possession[.]” Wife filed a Civ. R. 60(B) motion in November 2021, alleging Husband had concealed a pension plan during the divorce proceedings, entitling her to relief under Civ. R. 60(B)(1), (2), (3), and (5). Husband did not file a response to Wife’s motion, and the parties subsequently reached a settlement and 2022 entry of a nunc pro tunc entry awarding Wife half of the marital value in Husband’s retirement benefits.

Husband subsequently motioned for leave to file a motion in opposition to Wife’s already-granted Civ. R. 60(B) motion, and a motion to vacate the 2022 entry, alleging a breakdown in communication with his counsel who consented to the entry without his authorization. The trial court denied Husband’s motion for leave, finding it mooted by virtue of Wife’s motion already being granted, as well as his motion to vacate.

Husband appealed, arguing (1) the trial court lacked subject matter jurisdiction to modify the decree; and (2) the trial court erred in finding he was not entitled to relief from the 2022 order under Civ. R. 60(B).

As part of his first assignment of error, Husband alleged that the trial court’s 2022 nunc pro tunc order substantively modified the terms of the decree, and thus constituted a reversible error.

[Husband] argues that because the modification of the divorce decree constituted a substantive change, the trial court erred in granting the modification through the issuance of a nunc pro tunc judgment. We agree that the substantive modification of the parties’ divorce decree was not subject to a nunc pro tunc order. However, we find that the trial court’s February 16, 2022 judgment was not a nunc pro tunc order despite its caption.

Notwithstanding its nunc pro tunc title, the trial court’s 2022 order only effectuated mutually consented-to relief from judgment for Wife, and the trial court’s misapplication of nunc pro tunc had no prejudicial effect on Husband.

Husband further asserted that the trial court lacked jurisdiction to modify the divorce decree, because he did not authorize his counsel to consent to the 2022 order. Noting that Husband only filed his Motion for leave to oppose Wife’s Civ. R. 60(B) motion after the entry of the 2022 order and granting of Wife’s motion, the Court found this argument was without merit.

In his second assignment of error, Husband argued the trial court erred in its denial of his motion to vacate the 2022 order. Noting the lack of reference to Civ. R. 60(B) in Husband’s motion to vacate, the Court wrote that a trial court may nonetheless construe a “generically-titled motion” to vacate as a Civ. R. 60(B) motion for relief.

In order to prevail on a motion for relief from judgment, “the moving party must demonstrate that he or she (1) has a meritorious defense or claim to present if the relief is granted, (2) is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through (5), and (3) has made the motion within a reasonable time unless the motion is based upon Civ.R. 60(B)(1), (2), or (3), in which case it must be made not more than one year after the judgment.” Oullette v. Oullette, 2020-Ohio-705, 152 N.E.3d 528, ¶ 34 (6th Dist).

In his motion to vacate, Husband argued his entitlement to relief based on his attorney’s unauthorized consent to the 2022 order, which the trial court denied. In his appeal, Husband now asserted his entitlement to relief based on alleged fraud on the part of Wife’s attorney, and that the unauthorized entry of the 2022 order constituted an “other reason justifying relief” under Civ. R. (B)(5).

Noting that Husband is barred from raising new arguments on appeal, the Court denied his appeal, finding no grounds for relief under Civ. R. 60(B)(3) or (5).

Smith v. Smith, 12th Dist, Butler No. DR 20 02 0132, CA2021-09-109, 2023-Ohio-982

Marital Property: gift, separate property, tracing
Witness: lay

Dated: March 27, 2023
Affirming

During the parties’ marriage, Husband received a very substantial inheritance following the death of his great aunt. After initially depositing the money into an individually-held savings account, Husband used the bulk of his inheritance to fund a brokerage account titled in his and Wife’s name. The rest of the inheritance money remained in his savings account, to and from which he made myriad transfers for marital expenses.

At a contested divorce hearing, Husband presented the trial court with a spreadsheet and his testimony asserting that the brokerage account constituted his separate property, as well as the bulk of the parties’ savings account. The trial court ultimately sided with Wife’s counsel, however, finding that the number of transactions between the parties’ accounts rendered any separate interest therein untraceable and commingled to the point of being transmuted into shared, marital property.

Husband appealed, arguing that the trial court erred in its determination he transmuted and failed to trace his separate interest, and further that the trial court failed to “employ reasonable presumptions” in its determinations of separate and marital funds.

Noting the claimant party’s burden of proof for establishing a separate property claim, the Court disagreed. As to the parties’ savings account, the Court wrote that “[Husband] commingled his separate inheritance funds with marital funds in the savings account to such a degree that tracing was no longer feasible.” From the 2015 deposit of the inheritance funds through the end of the marriage, there were hundreds of transfers to and from the account, many of which were for marital purposes.

Finding again that Husband failed to meet his burden of proof, the Court similarly agreed with the trial court’s determination of the brokerage account as marital. Because the brokerage account was funded through numerous transfers from the parties’ savings account, and the commingled funds therein, and Husband’s own testimony concerning the establishment of the account in his and Wife’s name (which per the Court constituted an inter vivos gift to Wife), the Court upheld the trial court’s determination that the account was shared, marital property.

Many gifts are made for reasons that sour with the passage of time, but the law does not allow a donor to recover or revoke a valid inter vivos gift simply because those reasons have soured. Dayal v. Lakshmipathy, 6th Dist. Wood No. WD-19-049, 2020-Ohio5441, ¶ 37, citing Cooper v. Smith, 155 Ohio App.3d 218, 2003-Ohio-6083, ¶ 25 (4th Dist.). In this regard, the pre-divorce removal of [Wife] as a title owner of the mutual fund appears to underscore [Husband’s] recognition of the gift as well as his attempt to revoke his prior gratuitous transfer. [Husband] claimed that [Wife] "agreed" to her removal, but [Wife] only indicated that she understood the account to be a joint account until the divorce began, and that [Husband] was in charge of the mutual fund.

Husband further alleged that the trial court erred in not adopting certain assumptions in its review of his separate property claim. Finding no authority for such obligation on the trial court’s part, in lieu of the claimant party’s own burden of proof for their claim, the Court again overruled Husband and affirmed the trial court’s decision.

Turner v. Turner, 6th Dist. Wood No. 2019-DR-0177, WD-22-025, 2023-Ohio-1298

Marital Property: gift, separate property

Dated: April 21, 2023
Affirming

During the parties’ marriage, due to an employment change of Husband and related employer lawsuit, the parties’ joint brokerage account was reestablished in Wife’s name, only. After the lawsuit resolved in 2015, the account remained in Wife’s name through the end of the parties’ marriage.

Following divorce hearings before a magistrate in 2021, the brokerage account was awarded to Wife as her separate property, and Husband appealed.

During the magistrate hearings, Wife testified that she had been aware of the account’s re-establishment, and recalled signing documents and receiving statements for the account thereafter. Wife had not initially identified the brokerage account as her separate property due to her unfamiliarity with the process and the parties’ financials. Husband had handled the family’s finances. Husband testified that he renamed the account to shelter it from creditors, in the event of an adverse judgment from his employer lawsuit. Following the re-establishment account, Husband ceased contributions to the account, and paid the parties’ children’s tuition from his regular earnings. During the parties’ marriage, Husband gave other gifts to Wife, including valuable jewelry, which neither party disputed the donative intent of.

In his appeal, Husband argued that the trial court erred in its application of law governing marital versus separate property, and that notwithstanding Wife’s ownership of the account, he maintained control as the financial advisor and remained its beneficiary on her death. Further, Husband noted Wife’s failure to disclose the account as her separate property, evincing her own understanding of the account as a marital asset. Wife, Husband argued, failed to meet her burden of proof establishing he had made an inter vivos gift to her of the account.

The Court disagreed, finding that Husband’s willing relinquishment of ownership of the account constituted a gift of the account to Wife.

While [Husband] testified he was the financial advisor on the brokerage account, he acknowledged the brokerage account was not a managed account. Moreover, [Husband] testified the only way assets could be sold or traded was at the direction of the account holder/client; [Wife] is the account holder/client of the brokerage account. We further find [Husband’s] transfer of the marital property, with the purpose of avoiding a creditor, constitutes clear and convincing evidence of donative intent to convert the marital property into [Wife’s] separate property. See Soley at ¶ 26; Dayal at ¶ 44.

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.