Ohio Case Law Review by Topic: November 1, 2023 through December 31, 2023

Condrin v. Condrin, 5th Dist. Licking No. 2021 DR 01070, 2023 CA 0039, 2023-Ohio-4382

Marital Property: retirement benefits, separate property
ORC 3106.06(A): postnuptial agreements

Dated: December 4, 2023
Reversing and Remanding

As part of the parties’ 2023 divorce, Husband was awarded a MoneyBlock IRA, along with some stocks, as his separate property. Wife appealed, arguing -among other things- that the trial court erred in its assignment of the MoneyBlock IRA. Wife argued that this assignment was in contravention of ORC § 3103.06, constituted an abuse of discretion, and that Husband had not met his burden of proof to establish a separate property claim for the IRA.

Husband cross-appealed, arguing the trial court failed to take judicial notice of verifiable company mergers relevant to his separate property interest in company stocks.

As to her claim of a marital interest in the MoneyBlock IRA, the Court agreed with Wife, and reversed and remanded the issue back to the trial court for new findings.

Husband’s claim of a separate property interest in the IRA (which the parties agreed was accumulated during the marriage) was based on Wife’s alleged surrender of marital interest therein, via signed waiver of beneficiary interest in 2012. At the time, Wife testified, she believed she was surrendering any survivor interest (to the parties’ son, in the event of Husband’s death). She had not believed she was surrendering her marital interest in the IRA, in the event of a divorce. Husband believed otherwise, and testified that he had sought the beneficiary change in part due to Wife’s moving out of the marital home before.

During the proceedings, the trial court stated an expert would be retained to review the 2012 form language for a determination of its impact on Wife’s marital property claim to the IRA. Subsequently, and absent any expert review, the trial court ruled that Wife had waived her rights to the IRA, offering little evidence to support its findings. The Court found that Wife’s failure to raise her own further arguments related to her marital claim was excused by her reasonable reliance on the trial court’s assertions that an expert would be reviewing the issue.

Because the Court reversed and remanded the IRA and marital/separate property claims therein back to the trial court for reconsideration (under contract law and ORC § 3103.36), the Court declined to make additional findings related to the appeal and cross appeal, and assignments of error therein.

Seipelt v. Seipelt, 12th Dist. Butler No. DR20070481, CA2023-02-018, 2023-Ohio-4468

Marital Property: equitable division, prenuptial agreement, separate property, tracing

Dated: December 12, 2023
Affirming

Prior to the parties’ marriage in 2017, they executed a prenuptial agreement in which -among other assets- Husband’s checking account x9953 (“Fifth Third account”) was listed as his separate property. As part of the parties’ 2020 divorce proceedings, this prenuptial agreement was deemed valid and enforceable, and the trial court awarded Husband ownership of the Fifth Third account. The trial court did not award Husband the parties’ Ally Bank and General Electric Credit Union (“GECU”) accounts, both of which he argued were established using funds from his Fifth Third account.

The trial court found that Husband failed to trace his ownership of the Ally Bank and GECU accounts, due to the commingling of marital and separate property funds in his Fifth Third account, which received marital income and paid marital expenses throughout the marriage. Husband appealed.

Noting its manifest-weight-of-the-evidence standard for review of any trial court marital/separate property determinations, the Court rejected Husband’s argument. Throughout the parties’ marriage, Husband deposited his employment income into the Fifth Third account, and transferred funds from the parties’ joint account into the Fifth Third account for marital expenses.

While Husband argues that the Fifth Third Bank account 9953 is listed in the prenuptial agreement, there is no provision in that agreement evincing any intent of the parties to treat their incomes earned during the marriage as separate property. It is clear from Husband's testimony that he relies on an overly broad interpretation of the prenuptial agreement… Merely because Husband's income was deposited in an account he listed as his separate property, does not mean that the parties intended for their incomes earned during marriage to be considered separate property.

Thus, the Court found Husband’s burden of proof to ‘trace’ his ownership of the Ally Bank and GECU accounts went beyond merely demonstrating they were funded using his Fifth Third account, and he failed to meet this standard. The Court similarly dismissed Husband’s assertion that the GECU account could not be marital because it was opened after “the term of the marriage had expired,” as the issue was how the account was funded, not when.

Finally, the Court also rejected Husband’s argument that the trial court erred in equitably distributing marital property not identified in the parties’ prenuptial agreement, when said agreement contained a waiver of rights to equitable distribution. The mortgage paydown and Ally Bank and GECU accounts, however, were not identified in the prenuptial agreement, and it is unclear how Husband would have them treated. And under the Court’s standard of review for such matters, it must -it wrote- defer to the trial court’s marital/separate property determinations.

Castello v. Castello, 9th Dist. Wayne No. 21DR0364, 22AP0020, 2023-Ohio-4586

QDRO: costs

Dated: December 18, 2023
Affirming

Husband alleged that the trial court made him bear the costs associated with preparing the QDROs to divide the marital retirement as a penalty for discovery contempt, even though the trial court never held a contempt hearing.

Related to the retirement, the trial court expressed within its decree that it would have preferred to divide the parties’ retirement accounts by offsetting them against each other. But because of Husband’s “persistent recalcitrance” in failing to provide information about all the accounts, however, it could not do so and had to order them to be divided equally.

ORC § 3105.171(E)(5) provides that, “[i]If a spouse has substantially and willfully failed to disclose marital property, separate property, or other assets, * * *, the court may compensate the offended spouse with a distributive award or with a greater award of marital property * * *.”

Thus, the Court concluded that the trial court did not have to find Husband in contempt to make him bear the cost of preparing QDROs, and that it did not exercise its discretion improperly when it chose to do so.

Jardim v. Jardim, 6th Dist. Lucas No. DR 2016-0249, L-23-1039, 2023-Ohio-4797

Marital Property: vesting, deferred distribution, financial misconduct, stock (RSU), tax liability, valuation
Spousal Support: modification (waiver of right to RSUs)
Witness: expert

Dated: December 27, 2023
Affirming

Consequent to the parties’ divorce proceedings, Wife was awarded half interest in Husband’s substantial (but unvested) restricted stock units (RSUs) obtained through his employment, payable “at the time of their vesting.” Additionally, the parties agreed to the sale of some of Husband’s vested RSUs, with a portion of the proceeds to be distributed into their attorneys’ IOLTA accounts to help defray certain marital costs.

Husband subsequently changed employers, thereby surrendering his then-unvested RSUs (with an estimated worth one million dollars, had they vested), and received a compensation package including $500,000 of RSUs with his new employer. Wife filed motions seeking a contempt finding against Husband, arguing that he failed to distribute proceeds from the sale of his vested RSUs, that he failed to pay spousal support through the full term it was awarded, and that he intentionally dissipated his unvested RSUs in conspiracy with his new employer. For recompense, Wife sought the award of half of the value of the unvested RSUs.

At a magistrate’s hearing in 2021, the parties presented expert witnesses to testify as to the value of Husband’s vested and unvested RSUs and Wife’s interests therein. Wife’s expert valued her interest in the now-disbursed, vested RSUs at $600,000, and valued her interest in the surrendered, unvested RSUs at $500,000. Husband’s expert testified that Wife’s expert inappropriately included RSU grants that occurred after the parties’ divorce, in their valuation, and further that Husband’s surrendered, unvested RSUs had no monetary value. Husband’s expert further argued that Husband’s tax liability should be calculated by preparing Husband’s taxes with and without the RSU disbursements (rather than via withholdings on his paystub, as Wife’s expert had utilized), and that doing so rendered an amount due to Wife of $424,621.

During the same hearing, the parties offered conflicting testimony as to the use of funds from their respective shares of the RSU disbursement proceeds (deposited into their lawyers’ IOLTA accounts), and the extent to which expenses paid therefrom were marital or non-marital.

The magistrate subsequently found Wife’s expert report unreliable, and instead utilized the value provided by Husband’s expert for Wife’s share of the vested RSU disbursement proceeds. The magistrate further agreed that Husband’s unvested RSUs had no value whatsoever, and found that Husband changed employment for legitimate reasons not constituting financial misconduct. These reasons included the better pay offered by Husband’s new employer, and the threat posed to his old job from organizational changes. The magistrate deemed the parties’ respective IOLTA expenditures “a wash,” finding both sides had engaged in some improper use. And finally, the magistrate ordered an extension of Wife’s spousal support award through December 2023, in consideration of her surrendered interest in the unvested RSUs and other factors.

The trial court ultimately adopted the magistrate’s findings concerning the unvested RSUs, and further found that Husband could not have committed financial misconduct under ORC § 3105.171(E)(4), because his actions occurred after the parties’ marriage. The trial court disagreed, however, with the magistrate’s deeming the IOLTA expenses a ‘wash,’ and found that Wife was entitled to $9.942.01 for Husband’s improper use.

In her appeal, Wife argued the trial court erred when it failed to award her any compensation for her interest in the unvested RSUs Husband surrendered when he switched employment. In his cross-appeal, Husband argued that the trial court erred when it assigned a $9,942.01 share of the vested RSU proceeds to Wife, but failed to award $79,294.42 to him from the same funds.

Wife argued (A) that the trial court incorrectly assigned no value to the surrendered unvested RSUs, and (B) made an inequitable assignment when it allowed Husband to benefit from his new employer RSUs in the place of his surrendered RSUs, while Wife’s RSU interests were extinguished.

The trial court utilized a ‘deferred distribution’ approach to its handling of the unvested RSUs, which -the Court argued- necessarily entails some risk. And Wife’s entitlement to a share of the value of the unvested RSUs only materialized upon their vesting. “Consequently, they no longer had any value and the trial court did not err in so concluding.” The Court similarly dismissed Wife’s concerns about the inequitable result. No evidence was presented to bolster her claims of collusion between Husband and his new employer, and Husband’s decision to change employers was reasonable based on the testimony provided.

Finally, as for Husband’s cross-appeal, the Court found that his failure to object to the original magistrate’s decision meant he could only object to the trial court’s decision based on plain error. Thus, the Court again affirmed.

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