Ohio Case Law Review by Topic: May 1, 2023 through June 30, 2023

Matheson v. Matheson, 9th Dist. Lorain No. 19DU086106, 22CA011881, 2023-Ohio-1709

Marital Property: ambiguity, debts, financial misconduct

Dated: May 22, 2023
Affirming in Part and Reversing in Part

The parties married in 1989, and 9 children were born through the term of marriage, of which 2 were minors at the time of their divorce in 2019. Over the course of proceedings, the trial court ruled on matters including the parties’ respective separate and marital property, Husband’s retirement assets, debts, support, and proceeds from the sale of the marital home. Wife appealed, raising three assignments of error.

In her first assignment of error, Wife argued the trial court failed to properly allocate the parties’ respective debts and assets, and failed to make a distributive award in light of Husband’s financial misconduct. During the marriage and throughout the divorce proceedings, Husband took out various and substantial loans, often repaying older balances with larger new loans. Noting the trial court’s failure to specify both the total debt, and the amount to be repaid with proceeds from the sale of the parties’ home, the Court sustained Wife’s assignment of error in part. The Court declined, however, to consider Wife’s arguments for a distributive award, finding discussions premature pending an overall determination of the parties’ marital property.

The Court similarly declined to consider Wife’s second assignment of error, concerning her spousal support award, again noting the pendency of an overall marital property determination.

Finally, the Court rejected Wife’s third assignment of error, finding the trial court had not erred in its exclusion of two of Wife’s witness requests over her failures in discovery compliance. Finding Wife’s pre-trial behavior indeed sanctionable, the Court further noted that the parties had stipulated to Wife’s at-home role during the marriage, and: “[d]ue to the nature of this stipulation, the testimony of a vocational expert and family friend regarding [Wife’s] need for spousal support, duties in the home, and ability to regain income was not necessary to aid the trier of fact in this instance.”

The three people in the middle are doing ‘O H I O’ arms totally wrong.

Earnest v. Earnest, 5th Dist. Knox No. 21DV-01-0020, 22CA000022, 2023-Ohio-1803

Marital Property: retirement benefits
QDRO: ambiguity, impermissible modification, market experience (gains/losses), merely implements decree
ORC 3105.171(I): (prohibition on modification)

Dated: May 30, 2023
Affirming

Editor’s note: A special shout-out to the local Court Administrator for sending this to me (hot off the presses) and making sure I didn’t miss this case, as well as to Zach D. Smith, Esq.

This case repeats a theme familiar to longtime readers of this blog. When making an assignment valued as of a prior date from a defined contribution plan, specify whether gains/losses should or should not apply.

It is interesting to note, also, that Wife’s appeal in this case concerns only the non-application of gains/losses to her award, and not the ‘order’ in which the assignment and offset were calculated. Since one might reasonably read the decree in either of the following ways: (a) (account balance / 2) – offset, or (b) (account balance – offset) / 2. And in this case, the use of (a) resulted in a smaller overall assignment.

Under the parties’ 2021 agreed judgment entry and decree, Wife was awarded the following interest in Husband’s 401(k) plan (notwithstanding a typo subsequently corrected by nunc pro tunc entry):

Wife shall retain 50% of the statement balance, less $29,020, of Husband’s FTP 401(k) as of 10/31/2018, and Husband shall retain the balance. 10/31/2018 shall be the valuation date. Husband is the Plan Participant and Wife is the Alternate Payee. Husband shall cause a QDRO to be prepared and filed to divide the retirement account. The parties shall share equally in the cost of preparation and filing of the QDRO. Otherwise, each party shall retain any retirement benefits or accounts that they have accumulated in their individual names free and clear of any claim on the part of the other and each waives any interest in the other’s retirement account. This includes Wife’s right to retain her own retirement account.

Husband subsequently sought to have Wife held in contempt for her failure to sign a QDRO assigning her $62,634.74, representing Husband’s account balance as of 10/31/2018, divided by two, and further reduced by $29,020. The QDRO assignment was valued as of 10/31/2018, with no apportionment of gains/losses from 10/31/2018 to the date of QDRO approval. At a later hearing, Wife argued that her QDRO assignment was intended to include gains/losses from 10/31/2018 to the date of QDRO approval, but the trial court sided with Husband due to the absence of such provisioning in the parties’ agreement, and entered the proposed QDRO over Wife’s objections.

In her appeal, Wife argued that the trial court erred, and that the QDRO was inconsistent with the parties’ underlying intent. Wife stated that the decree’s silence as to the application of gains/losses to her award made it ambiguous, necessitating the trial court look to the parties’ underlying intent. Wife placed emphasis on her original award of a percentage, rather than a dollar amount, as indicative of the parties’ intent to include gains/losses from 10/31/2018 through the date of QDRO approval.

Noting that its review must follow the general rules of contract interpretation, due to the document being an agreed judgment entry, and its de novo standard of review to determine whether ambiguity exists, the Court disagreed.

[T]he parties did not specify in the agreed judgment entry whether Wife’s portion of Husband’s retirement account was subject to earnings or losses between the assignment date (October 31, 2018) and the date the QDRO was approved. However, the mere absence of this language does not create an ambiguity.

We find no ambiguity in the divorce decree incorporating the agreed judgment entry. The decree provides Wife should retain 50% of the statement balance, less $29,020, of Husband’s 401(K) as of 10/31/2018. While the parties could have agreed to include a clause that Wife’s portion was subject to earnings or losses between October 31, 2018 and the QDRO approval date, they did not. Rather, the decree specifically states Husband “shall retain the balance” after Wife receives 50% of the statement balance, less $29,020. As such, we find the QDRO the trial court adopted accurately reflects the divorce decree and agreed judgment entry, and does not violate R.C. 3105.171(I).

While Wife cited local rules wherein any assignment that does not specify whether gains/losses should apply should be interpreted to include them, the rule -the Court pointed out- was from a different county. The Court overruled Wife’s assignment of error, and affirmed the trial court’s decision not to assign her gains/losses on the award.

Carson v. Manubay, 12th Dist. Butler No. CR 2021 05 0426, CA2022-11-107, 2023-Ohio-2015

Marital Property: equitable division, gift, separate property, termination date of marriage
Spousal Support

Dated: June 20, 2023
Affirming

During the parties’ marriage, Wife supported Husband’s medical schooling, aided in part by her family’s largesse. When the parties purchased their marital home in 2020, they were given an interest-free loan through Wife’s family, and each party paid a portion of the downpayment from their own, separately maintained bank accounts.

The parties made subsequent improvements to the house, at a cost of $38,985, with money given to Wife by her mother. And when Husband began working as a cardiologist in 2019, his income greatly expanded and he began receiving substantial bonuses. Following the sale of the house consequent to divorce proceedings, Wife claimed that her mother’s financial assistance both with the downpayment and the improvements were intended as a gift for her, only. Husband alleged his own separate property claim, based on his continued payments on the home loan even after the parties separated.

The trial court rejected both parties’ separate property claims, distributed property as jointly stipulated, and equally divided the property the parties could not agree on proceeds from the sale of the house, the parties 2021 tax debt, and Husband’s 2021 bonus. Noting that Wife’s mother did not testify as to her alleged donative intent, the trial court found that her contributions were a gift to both parties. Husband’s appeal and Wife’s cross-appeal followed.

In his appeal, Husband argued that the trial court erred in not finding that a $55,000 payment toward the home, which occurred after a valuation date used for the parties’ separate accounts, was his separate property. Noting that its review of separate versus marital property determinations follows a manifest-weight-of-the-evidence standard, as well as the use of several different valuation dates by the trial court, the Court rejected Husband’s argument and affirmed the trial court’s decision.

In a manifest-weight analysis, the reviewing court weighs the evidence and all reasonable inferences, considers the credibility of witnesses, and determines whether, in resolving conflicts in the evidence, the fact-finder clearly lost its way and created such a manifest miscarriage of justice that the judgment must be reversed. Eastley at ¶ 20. The reviewing court must be guided by the presumption that the fact-finder got it right. Ohmer at ¶ 36…

The Court similarly rejected Wife’s argument in her cross-appeal, concerning her alleged separate property interest in the monies provided by her mother toward the home loan and improvements. Wife’s mother deposited money in Wife’s bank account throughout the marriage, and Wife failed to show (and her mother’s testimony did not support) how the gifts toward the home loan and improvements were intended for her alone.

Finally, the Court rejected Husband’s assignment of error concerning the award of spousal support to Wife in addition to a portion of his bonuses. Husband cited the short duration of his higher income (since 2019), and claimed much of Wife’s monthly expenses stemmed from her costly equestrian hobbies. Husband further alleged that, due to his income bracket, the assignment of 30% of his bonus pay for four years would actually provide a higher net amount to Wife than he would receive.

We conclude that the trial court did not abuse its discretion in its award of spousal support. The trial court considered the statutory factors as well as other relevant factors before fashioning its award. While the award may appear generous, we are not permitted by the legal standards of appellate review simply to substitute our judgment for that of the trial court.

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.