Ohio Case Law Review by Topic: April 8, 2019 through March 15, 2020

With my mind on my gavel and my gavel on my mind

Ganues v. Ganues, 3rd Dist. Seneca No. 2006 DR 0106, 13-18-36, 2019-Ohio-1285

Spousal Support: modification (change in circumstances) (waiver of right to pension), retirement benefits

Dated: April 8, 2019
Affirming

H argued that lower court erred by not terminating spousal support to W who had remarried (twice) and requested forgiveness of his spousal support arrearage of over $18,000. The parties’ separation agreement, which had been incorporated into the divorce decree, stated that W’s award of spousal support was in lieu of division of H’s military pension. Under R.C. 3105.18(E), the lower court found that the decree had specifically authorized the court to modify the spousal support, and it properly evaluated the change in circumstances using the factors set forth in R.C. 3105.18(C). The Court found that the lower court had properly modified the spousal support after finding the requisite change in circumstances. Further, the Court found no abuse of discretion in not terminating the spousal support based on W’s remarriage; the lower court specifically noted that terminating the spousal support would deprive W of her bargain with regard to waiving her rights to H’s military pension.

In Re: Contempt of Mehdi Saghafi, 8th Dist. Cuyahoga No. DR-13-346931, 2019-Ohio-1363

QDRO: attorney fees, contempt

Dated: April 11, 2019
Affirming

The Court found that the trial court did not abuse its discretion in finding H in contempt of court because H owed a duty to cooperate with W in dividing ERISA-qualified retirement plans which were sponsored/owned by H’s medical practice, because the QDROs and the trial court’s local rules prohibited a participant from taking any actions or inactions to circumvent the terms and provisions of the QDROs.  H’s refusal to qualify the QDROs (as the plans administrator) was a violation of a court order.  The trial court did not abuse its discretion in awarding attorney fees to W for H’s “contumacious conduct;” no evidence of income and expenses is required prior to awarding attorney fees arising out of contempt proceedings.

Schoch v. Schoch, 9th Dist. Lorain No. 17DR082335, 18CA011382, 2019-Ohio-1394

Attorney Fees: abuse of discretion
Marital Property: separate property, valuation
Witness: expert, lay

Dated: April 15, 2019
Affirming in Part, Reversing in Part

W argued the trial court erred by relying on the parties’ testimony about the value of the marital residence, since it had excluded an appraisal report on the value.  W’s attorney had objected to the admission of the appraisal report because the appraiser did not appear to authenticate the contents.  The Court found no abuse of discretion by the trial court in admission of the parties’ lay testimony regarding the value of the marital home and discussed that generally a witness who offers an opinion regarding the value of property must be qualified as an expert, but an owner of property may testify about its value without being so qualified. Corrigan v. Corrigan, 9th Dist. Medina No. 3174-M, 2001 WL 1044210, *2 (Sept. 12, 2001), citing Tokles & Sons, Inc. v. Midwestern Indemn. Co., 65 Ohio St.3d 621 (1992), paragraphs one and two of the syllabus, overruled on other grounds by Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552 (1994).  The basis for this rule is that an owner is presumed to be familiar with the property by virtue of “having purchased or dealt with it.” Tokles & Sons, Inc., at paragraph two of the syllabus.

W argued that the trial court abused its discretion by awarding attorney fees to H, and that the record did not support she engaged in misconduct.  The Court found no abuse of discretion: the trial court had focused on W’s conduct during the litigation, in which she hid and destroyed property, and frustrated the settlement.

Lastly, the Court found that it was reversible error for the trial court to award 100% of H’s pension and collection of engines to H.  The trial court had failed to assign any value to the pension or the collection.

Fogt v. Fogt, 3rd Dist. Defiance No. 13-DR-42551, 4-18-10, 2019-Ohio-1403

Marital Property: debts, valuation

Dated: April 15, 2019
Affirming

The Court overruled W’s argument that the trial court erred in denying her motion to dismiss H’s objections to magistrate’s decision. W had specifically argued that H had failed to provide the trial court with a transcript of the hearings conducted before the magistrate and that the trial court was bound by the magistrate’s findings of fact due to this failure. However, the Court noted that the lower court was permitted to consider H’s objections based on the magistrate’s interpretation of the law or the application of the law to the facts of the case. “Indeed, the trial court had an obligation to determine whether the magistrate correctly interpreted and applied the law prior to adopting the magistrate’s decision…” Civ. R. 53(D)(4)(c).

There was no abuse of discretion in several modifications by the trial court of the magistrate’s decision. The trial court modified the magistrate’s valuation and division of a bank account, by reducing the account’s value prior to division, to ensure that the property division conformed to the general legal rule that marital assets and debts be divided equally. The Court did note a factual discrepancy of $1.97, which it indicated was neither judicially, economically, nor financially advantageous to remand, and thus a harmless error.

The magistrate’s findings of fact regarding a loan incurred during the marriage did not support the trial court’s conclusion regarding marital debt. The loan was incurred during the marriage, for the joint benefit of the parties; therefore, the Court found that the trial court properly modified the magistrate’s decision to equally divide the debt.

King v. King, 6th Dist. Erie No. 2011-DR-0014, E-17-072, 2019-Ohio-1561

Spousal Support: definition of income, retirement benefits

Dated: April 26, 2019
Affirming

W contended that the trial court erroneously considered funds that she was already awarded as separate property, pursuant to the stipulations, in calculating H’s spousal support award. W further asserted that if the trial court used separate property awarded to her as income, then H’s separate property should have been treated similarly. The Court rejected W’s first argument and discussed that, in determining whether a spousal support award is reasonable and appropriate, and in determining the nature, duration, amount, and terms of such support, “under R.C. 3105.18(C)(1)(a), a court is required to consider: ‘[t]he income of the parties from all sources, including, but not limited to, income derived from property divided, disbursed, or distributed under section 3105.171 of the Revised Code.’ (Emphasis added).” The Court found that the trial court did not err in considering W's withdrawals from her investment accounts in resolving the question of spousal support, because the definition of “income,” as applied to spousal support awards, is broad. The record demonstrated that the parties contemplated supplementing their early retirements with these funds. The Court rejected W’s argument that, because the parties stipulated to the division of her Ohio Public Employees Retirement System (OPERS) benefits, the court should not have considered her retained portion as income when it awarded spousal support. Ohio courts have permitted the consideration of pension income in determining spousal support where the court had already valued and divided the pension as a marital asset. See generally Gallo v. Gallo, 10th Dist. Franklin App. No. 14AP-179, 2015-Ohio-982.

The Court found no abuse of discretion by the trial court when it calculated the parties’ incomes for purposes of awarding spousal support without imputing minimum wage to H; ordered retroactive spousal support; and used funds awarded to W from H’s Employee Stock Ownership Plan to offset W’s spousal support arrearage.

Bursley v. Bursley, 6th Dist. Huron No. DR 2012 0803, H-19-006, 2019-Ohio-1556

Marital Property: depreciation, prenuptial agreement, separate property, tracing, valuation
QDRO: ambiguity, subject matter jurisdiction
Witness: expert

Dated: April 26, 2019
Affirming

Over the course of several years of active post-decree litigation, H eventually brought the instant appeal, arguing the trial court erred in finding his retirement account to be marital in nature, lacked subject matter jurisdiction, and erred in adopting a QDRO awarding W 50% of his retirement account. H launched several assertions to support his pre-marital claim, many of which were not supported by the record or that were even contradicted by the record.

Moreover, H’s own expert was deemed unreliable by the trial court. H’s expert acknowledged H’s documents contained significant “gaps or omissions.” H’s expert was merely able to opine that over the course of the marriage, H’s retirement plan decreased in value. The trial court found H’s expert’s testimony lacked any opinion rendered within a reasonable degree of professional certainty. The Court agreed with the trial court (and W) that H’s expert merely engaged in an “untraceable journey,” which provided little support to meet H’s burden.

The Court observed that the trial court retains the power to clarify and construe agreements and to ensure any interpretation thereof does not result in a manifest absurdity. The parties’ agreement here stated that:

“Husband has a pension and/or retirement plan through his place of employment. All amounts in husband’s 401(k) earned prior to the date of marriage are the sole property of husband per the Antenuptial Agreement of the parties. Any amounts paid into the Uni-K plan, including any gains therefrom, from the date of marriage to the date of dissolution shall be divided equally between the parties, subject, however, to the following provision. There currently exists a loan on Husband’s 401(k) in the amount of $4,044.72. Wife’s one-half of the marital component of husband’s plan shall be reduced by $2,022.36, which represents her half of the loan amount. Thereafter, husband shall be responsible for payment of the 401(k) loan. Wife is not entitled to any appreciation from husband’s separate premarital contributions to said plan. Qualified Domestic Relations Orders shall issue to implement this provision, with the costs thereof being divided between the parties.”

Despite H’s plea, the Court determined the existence of a prenuptial agreement was not supportive of H’s burden to prove a separate property claim, as details of the pre-marital “401(k)” balance were not found within the separation agreement. Thus, with the lack of any other competent evidence to support H’s claim, the trial court had the authority to clarify and construe the agreement in determining the disputed account was marital.

As for H’s remaining arguments, the Court found that since the trial court aptly determined the disputed account was marital, and since the parties’ agreement displayed an intent to divide marital property equally, the trial court had subject matter jurisdiction to enter the QDRO and did not error by awarding 50% of the entire account (as of the date of decree) to W.

Gibson v. Gibson, 2nd Dist. Montgomery No. 2011-DR-1008, 28171, 2019-Ohio-1799

Spousal Support: modification, retirement benefits

Dated: May 10, 2019
Affirming

The Court determined the trial court did not err in reducing spousal support obligation due to a change in circumstances or in failing to enforce a suspended sentence for contempt for failure to pay spousal support. Judgment affirmed.

W asserted that the change in H’s income since the time of the original spousal support award directly arose from his criminal conviction for stealing over $250,000 from his family and should not have justified a reduction in spousal support. W cited Taylor v. Taylor, 2d Dist. Miami No. 2014-CA-21, 2015-Ohio-701, and asserted that the Court and “many other Ohio courts have specifically found that incarceration due to criminal conduct is voluntary.” H responded that the trial court did not abuse its discretion in finding that a change in circumstances had occurred. At the time of the parties’ divorce, H was employed earning approximately $100,000 to $200,000 per year; he was aware that he owed over $200,000 to his mother’s estate, but he had an informal agreement with his brother to repay the debt. The magistrate found that H had experienced a substantial decrease in income and that W had become fully employed and earned $50,000 annually, which were both changes in circumstances. Thus, the magistrate found that these changes warranted exercise of the court’s continuing jurisdiction over spousal support, and reduced the spousal support to $100 per month, with an additional $50 payment on the arrearage.

In Taylor, 2d Dist. Miami No. 2014-CA-21, 2015-Ohio-701, H appealed from the trial court’s decision finding him in contempt and refusing to modify or terminate his spousal support obligation. H had been terminated from his employment one year before his divorce, and he also had farm income. After the divorce, H was convicted of a felony and W filed a motion seeking a finding of contempt in part for H’s failure to pay support, and H filed a motion to modify, suspend, or terminate spousal support. At the hearing before the magistrate, H admitted that he failed to pay support and that he was in arrears in excess of $28,000. After hearing the evidence, the magistrate concluded that H did not show a substantial change in circumstances. The magistrate noted that H's termination of his employment was voluntary and was also known to the court at the time of the prior spousal support order. In addition, the magistrate noted that H's criminal conviction was of his own choosing and could not be used to lower or eliminate his obligation to pay spousal support. The magistrate also found H in contempt for failing to pay spousal support, observed that H failed to provide evidence of inability to work, and had willfully refused to apply for SERS benefits, which would have given him a monthly income to pay most of his spousal support obligations. In affirming the finding of contempt, this Court further noted that “Larry chose not to work – a fact that he admitted at the contempt hearing, when he indicated that he did not work, since it would cost him money, i.e., he observed that if he worked, he would have to pay a portion of his wages to his ex-wife, and that made ‘no sense’ to him.”

In this case, H acknowledged that he was aware at the time of the divorce, when he agreed to pay spousal support in the amount of $2,750 per month, that he owed over $250,000 due to his theft, and he testified that he had a “payment plan” with his brother. The loss of his security clearance, however, was a subsequent collateral consequence of his conviction. The magistrate and the trial court clearly credited his testimony that he was unable to find work comparable to his prior employment as a result his conviction and, accordingly, found that he was entitled to a reduction in his spousal support obligation. Unlike in Taylor, H testified that he had made repeated efforts to find employment and obtained some lower-paying jobs, and that he consistently paid W what he could, namely $50 to $75 a month. Given H’s change of circumstances, the Court saw no abuse of discretion in the reduction of H’s spousal support obligation to $100 a month, with an additional $50 on his arrearage.

C.S. v. M.S., 9th Dist. Summit No. DR 2017-03-0889, 29070, 2019-Ohio-1876

Marital Property: appreciation, separate property, tracing
Spousal Support: definition of income

Dated: May 15, 2019
Reversing and Remanding

The Court agreed with W that the trial court erred in determining her spousal support award. W argued that, pursuant to R.C. 3105.18(C), the trial court was required to, but did not, consider H’s income from all sources (i.e., his bonus income), and to consider that each party contributed equally to the production of marital income. R.C. 3105.18(C)(1)(a) and R.C. 3105.18(C)(2). W asserted that the trial court abused its discretion by awarding her spousal support based upon H’s income of $102,000 when his average income over a three-year period, inclusive of bonuses, was $146,855, and in its finding it inequitable for her to benefit from H’s bonus income. The Court found that this misapplication of the law by the trial court resulted in an abuse of discretion.

Additionally, the Court agreed that the trial court erred in its division of marital property relative to the parties’ two Ford Mustangs. The trial court ordered H to pay W $14,000 as her portion of the Ford Mustangs, which is half of the amount the parties purchased them for. W argued that the trial court erred by using the cost of the vehicles, as opposed to their appraised value, and by finding that she failed to provide any proof that marital funds were used to enhance the value of the vehicles. W further argued that it was H’s duty to prove that non-marital funds were used to restore the vehicles, not her duty to prove that marital assets were used. The trial court found that W failed to prove that marital funds were used to enhance the value of the Mustangs, and that H should not have to pay W for the increase in their value, which was occasioned by H’s sole efforts. The Court found that the trial court ignored the presumption that an asset, including its appreciation in value, is marital property unless proven otherwise. See Salmon v. Salmon, 9th Dist. Summit No. 22745, 2006-Ohio-1557, ¶ 11, citing Middendorf v. Middendorf, 82 Ohio St.3d 397, 400 (1998) (stating that, even when considering separate property, “when the efforts of one spouse contribute to the active appreciation of the asset, the increased value is characterized as marital property and subject to division.”).

Estate of Parkins v. Parkins, 3rd Dist. Allen No. DR 2015 0022, 1-18-50, 2019-Ohio-1941

Civ. R. 60(B)
DOPO: ambiguity, OPERS (PLOP), postmortem

Dated: May 20, 2019
Affirming

As part of the parties’ separation agreement in 2015, H was awarded a fixed-sum of $87,703.43 from W’s OPERS through a partial lump sum option payment (PLOP). Upon W’s retirement, such amount was to be paid to H via division of property order (DOPO). The fixed-sum represented an equalization of the parties’ mutual marital retirement.

H died in May of 2016, and W retired in August of 2016. At the time of his death, W had not paid H or his estate any portion of the fixed-sum. A few months after his death, H’s trial counsel filed a motion for contempt against W for her failure to pay the estate upon her retirement. After a slew of motions brought by all sides of little relevance here, H’s trial counsel finally filed an amended motion for relief from judgment under Civ. R. 60(B), arguing the decree should be vacated because it was impossible to accomplish the property equalization method chosen by the parties: payment via DOPO was no longer available to effect payment to H, due to his death. The trial court found that the Civ. R. 60 motion was untimely filed, but also found that the impossibility to affect payment via DOPO did not negate W’s personal obligation to H’s estate.

In 2017, H’s estate filed a complaint for declaratory judgment requesting the trial court to declare H’s estate was entitled to payment of the fixed-sum from W. Again, slews of motions were filed by both sides. In the end, the court granted H’s estate’s complaint for declaratory judgment. Such prompted W’s appeal in 2018, wherein she raised two assignments of error, both hinging on her argument that her obligation to pay the fixed-sum extinguished upon H’s death because the DOPO was no longer a possibility.

Stepping back a moment, and critical to the underlying events leading up to H’s death, shortly after the parties’ decree was entered, they discovered a PLOP could not pay the entire fixed-sum. This is because the amount due H exceeded the amount that could be paid via DOPO under Ohio law. At such point in time, the parties began renegotiating through counsel. During the course of these renegotiations, multiple DOPOs were drafted but all were denied approval by OPERS because of various drafting errors.

Just ten days before H’s death, W proposed making a direct payment to H of $50,000.00. The remainder would be paid via $250.00 installments to be paid over ten years commencing at her retirement. The very day H died, OPERS’ counsel sent W a letter stating that any rights H had under an approved DOPO (which still did not exist, at any rate) would terminate upon his death under Ohio law. Again, it was only about two and a half months later that W retired.

Joining the appeal again, and W’s argument, W relied upon various case law to support her claim that her obligation had extinguished with H’s death. However, the Court found such case law to be off point or otherwise unpersuasive. The Court simply viewed W’s obligation under the decree as one subject to continuing enforcement as a division of marital property. The Court found the agreement unambiguous, and so declaratory relief was well-founded. While H’s death may have terminated the right to use a DOPO to collect the money owed by W, it did not affect the viability of the underlying property settlement. After all, in citing Wilson v. Wilson, 116 Ohio St.3d 268, 2007-Ohio-6056, the Court reminded W (and all of us) that a DOPO is merely a tool used to effect a decree, and does not in and of itself constitute a further adjudication on the merits of pension division.

Budd v. Budd, 9th Dist. Summit No. 2004-09-3850, 28863, 2019-Ohio-1972

Marital Property: life insurance (to secure property interest), retirement benefits (installment payment v. lump sum)
QDRO: abuse of discretion, equalization

Dated: May 22, 2019
Affirming

The parties’ 30-year marriage ended in 2006. In 2008, the trial court issued a decision ordering a division of the parties’ assets and for W to pay support to H. In 2013, the trial court entered a further decision, ordering W to pay H $1,500.00 per month for 120 months for spousal support, and H to pay W a sum of $185,758.00, payable in 120 monthly installments for purposes of property division. W appealed that decision, arguing the trial court erred by allowing H to pay the award over 10 years, and without requiring H to secure the amount or pay interest. The Court agreed, and remanded. Before the trial court entered its new decision on remand, W filed a motion to terminate support. The trial court responded by relieving H of paying interest since W avoided paying support for some seven years (from 2006 to 2013), and finding it would be inequitable to require H to acquire life insurance because the insurance premiums were excessive, again, particularly in light of W’s avoidance of support payments. The trial court also denied W’s motion to terminate support.

The Court acknowledged this time around that the trial court had no obligation to award interest or require an insurance policy. Further, the trial court determined H could not pay the lump-sum outright. W argued he could do so, via a QDRO on his 401(k). The Court was unpersuaded: while other options for payment may have existed, a trial court does not abuse discretion simply because another judge could have reached another conclusion.

Archer v. Dunton, 9th Dist. Summit No. DR-1992-09-2167, 29091, 2019-Ohio-1971

Civ. R. 60(B): vacate judgment
DOPO: coverture (traditional v. frozen), OP&F (DROP)

Dated: May 22, 2019
Reversing

The parties agreed at the time of divorce that H’s Ohio Police and Fire Pension Fund (OP&F) benefit had a present value of $58,618.27 and that W’s share was half. The court entered a division of property order (DOPO) in 2003, approved by W’s counsel, only. In 2016, H filed a Civ. R. 60 motion to vacate the DOPO based on mistakes by the trial court. W filed her own motion to modify the DOPO, to include a portion of H’s Deferred Retirement Option Plan (DROP). The trial court granted H’s motion but did not address W’s.

W appealed, arguing the trial court erred by granting H’s motion. The Court agreed, after much discussion, finding H did not allege any grounds sufficient to vacate the DOPO under Civ. R. 60, and that H’s motion was untimely (being brought 13 years after-the-fact). W further argued the trial court erred by denying her motion to modify the DOPO. The Court agreed, and remanded.

On remand, the trial court determined the DROP funds were nonmarital and denied W’s motion. The trial court also sua sponte determined the DOPO was not consistent with the decree and permitted H to submit an amended DOPO. W appealed. The Court found W had a marital interest in the DROP account and provided an excellent primer on how the DROP account is funded by marital and nonmarital deposits; however, such interest was limited to her half of the benefit accrued as of the date of divorce (“frozen coverture”). The Court provided another excellent primer comparing “traditional” versus frozen coverture. The former calculates the benefit as of the date of retirement, allocating a ‘smaller percentage of a larger pie’ to the non-pensioned spouse; the latter simply calculates the benefit as if it were frozen as of the date of divorce. The Court premised its conclusion that frozen coverture applied based on the terms of the parties’ agreement that valued H’s benefit “as of the date of divorce.”

Finally, the Court sustained W’s argument that the trial court erred by permitting H to submit a modified DOPO on the same grounds as articulated in his original Civ. R. 60 motion to vacate. The Court agreed, although acknowledging that the Court’s prior decision would not preclude H from seeking further relief through a motion to modify the DOPO based on grounds other than that already submitted by H.

Hornbeck v. Hornbeck, 2nd Dist. Clark No. 2016-DR-0887, 2018-CA-75, 2019-Ohio-2035

Marital Property: appreciation, de facto date (marriage), distributive award, equitable division, separate property

Dated: May 24, 2019
Reversing in Part, Affirming in Part, and Remanding

The Court found the trial court erred as a matter of law by refusing to consider a date prior to the parties’ ceremonial marriage for purposes of making an equitable division of property. Under R.C. 3105.171(A)(2)(b), trial courts have discretion to apply an earlier date to make an equitable distribution of property.

The trial court also erred in failing to equitably divide the equity in the real estate that accrued during the marriage and in failing to award expert fees to appellant. W contended that, even if a date before the ceremonial date of marriage was not used, the trial court erred in failing to consider that the properties purchased before marriage were mortgaged after the date of marriage and were also paid for with marital funds. Increased equity in a marital home during the marriage is generally treated as marital property. See, e.g., Wright v. Cramer, 2018-Ohio-764, 107 N.E.3d 836, ¶ 15 (2nd Dist.). In this case, the marital home was purchased for $90,000 prior to the ceremonial date of marriage and H took out a mortgage in his name only for $70,000 which H refinanced for $67,600 in November 2002, shortly before the ceremonial marriage date. The property was then refinanced during the marriage in both parties’ names for $73,600; however, H never changed the deed to include W's name. The Court found it clear that equity accrued during the marriage, as a $73,600 mortgage in both parties’ names was reduced to slightly more than $35,000 by the time of trial. The trial court did not order a distributive award and simply concluded W should not receive any equitable relief, including $23,500 and other items she sought. In view of the facts of this case, the trial court could have made a distributive award to W under R.C. 3105.171(E)(1) (stating that the court may make a distributive award to facilitate, effectuate, or supplement a division of marital property), even if the court had used the ceremonial marriage date and had concluded that the equity in separate property was not marital property (although this would have been incorrect). See e.g., Chance v. Chance, 9th Dist. Wayne No. 02CA0003, 2002-Ohio-5767, ¶ 13 (trial court did not abuse its discretion in disbursing farm to husband as separate property and then ordering distributive award to wife of half the value of property after taxes). The Court remanded this matter for the trial court to determine the amount of equity in the properties, to divide the equity equitably as a marital asset, and reevaluate the distributive award issue.

Allan v. Allan, 8th Dist. Cuyahoga No. DR-15-355865, 107142, 2019-Ohio-2111

Marital Property: de facto date (marriage), distributive award, separate property

Dated: May 30, 2019
Affirming

The Court concluded that the trial court’s findings that two gas station businesses should be considered marital property for purposes of totaling the marital estate and equally dividing it, despite the fact that the two gas station businesses were titled in H’s brother’s name, were supported by the record and are not against the manifest weight of the evidence. H argued that the trial court abused its discretion when it determined that two gas station businesses were marital property. H does not argue that the gas stations were his separate property, instead he contends that the evidence he presented at trial established that he transferred ownership of both gas station businesses to his brother and therefore they cannot be considered marital property. The trial court found that the gas stations were marital property for purposes of its distributive award because it found that H had committed financial misconduct in attempting to divest himself of any property so that he did not have to share any of it with W (despite the fact that it was W who originally owned the first gas station and that W had transferred title to him for mere pennies compared to what she paid for it).

The Court further noted that, not only does the record support the trial court’s findings and division of property, the trial court could have, in its sound discretion, awarded W with a “greater award of marital property” or a “distributive award,” on top of what it awarded her as part of her share of the marital estate, to “compensate” W for H’s serious financial misconduct. See R.C. 3105.171(E)(4) (stating “[i]f a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property[.]”).

H also argued that the trial court erred in its assignment of a de facto wedding date, but the Court found no abuse of discretion in the determination of such date by the trial court. R.C. 3105.171(A)(2)(b) provides the court with authority to select a date other than the ceremonial wedding date for purposes of equitably determining what comprises the marital estate for a division of property assessment. D’Hue v. D’Hue, 8th Dist. Cuyahoga No. 81017, 2002-Ohio-5857, ¶ 48. In this case, the trial court found that the parties had lived together in W’s home before the legal marriage celebration date for six years and were financially entangled, while H was married to his first wife. The trial court found that it would be inequitable for the purposes of division of property and the interpretation of “duration of the marriage” to use the date of the parties’ legal marriage. The trial court commenced the division of property in this case after H’s divorce from his first wife. R.C. 3105.171(A); Bryan v. Bryan, [8th Dist. Cuyahoga No. 97817], 2012-Ohio-3691.

Ward v. Kiernan, 9th Dist. Summit No. 2016-09-2667, 29186, 2019-Ohio-2306

Civ. R. 75(F)
Marital Property: subject matter jurisdiction

Dated: June 12, 2019
Dismissing

The Court dismissed H’s attempted appeal of the lower court’s judgment based on lack of jurisdiction because the trial court failed to fully dispose of the parties’ property; therefore, there was no final and appealable order. Upon review of the evidence presented at the final hearing, the Court ruled it was clear that the trial court’s judgment entry fails to dispose of all the property of the parties. “The Court has held that a divorce decree that leaves issues unresolved is not a final order.” Wallace v. Wallace, 9th Dist. Lorain No. 15CA010736, 2016-Ohio-630, ¶ 3, quoting Civ. R. 75(F)(1).

Jones v. Jones, 2nd Dist. Montgomery No. 2016-DR-127, 28074, 2019-Ohio-2355

Marital Property: appreciation, separate property, valuation

Dated: June 14, 2019
Reversing and Remanding

The Court found that the trial court erred by not allowing H an opportunity to review, and potentially use, documents he subpoenaed regarding the parties’ employment litigation settled during the marriage. Based upon its failure to consider all the circumstances surrounding the employment litigation settlement, the trial court abused its discretion when it designated the entire settlement as W’s separate property. Here, the trial court’s finding that the proceeds were non-marital was based solely upon the language of the settlement agreement regarding W’s “physical sickness” and the fact that the settlement checks were made payable to W; the trial court does not appear to have considered any other evidence regarding the nature of the proceeds. Further, the Court found an abuse of discretion because the trial court denied H a reasonable opportunity to establish the marital nature of the settlement proceeds when it denied him the right to review the subpoenaed documents. On remand, the trial court was directed to allow H access to the subpoenaed materials and then allow the parties to present evidence regarding their respective claims as to the settlement proceeds.

Due to the absence of evidence regarding the value of H’s pre-marital businesses at the inception of the marriage, the Court found that the trial court erred in awarding W $46,238.50 as her marital portion of one of the businesses. There was no dispute that H acquired the businesses prior to the marriage; however, W claimed that she was entitled to a division of the increased value of those businesses. However, there was no evidence presented as to the value of the business at the inception of the parties' marriage. Therefore, the trial court could not have determined that there was any increase in the value of that business, let alone whether the increase was passive or, instead due to the marital contribution of either or both of the spouses.

Finally, the Court held that the issue of spousal support required reconsideration in light of the property division determinations. Judgment reversed and remanded for further proceedings.

Schaad v. Schaad, 5th Dist. Morgan No. CV05-098, 18AP0010, 2019-Ohio-2553

Spousal Support: separate property

Dated: June 19, 2020
Reversing

The Court found the trial court exceeded its authority in changing the divorce decree by revoking H’s right to the STRS benefit and requiring H to pay spousal support. The Court held the trial court was without authority to modify the decree after it had been ordered; courts are permitted to clarify divorce decrees, but they cannot not alter them after they are final. W retired and W and H receiving their respective portions of the STRS benefit. W later became aware that H was receiving veterans’ benefits, which, when combined with his portion of W’s STRS benefit, resulted in H receiving a higher monthly income than W. W filed a motion claiming her STRS benefit was divided improperly, in part, because H’s veteran benefits were not addressed in the divorce decree. H argued his veterans’ benefits were separate property and that is why they were not addressed in the decree. The trial court granted W’s motion and vacated the Division of Property Order (DOPO) dividing W’s pension, rescinding H’s right to the STRS benefit. The trial court further ordered H to pay W spousal support, which was never mentioned in the divorce decree, to “equalize” the parties’ monthly incomes.

Dimmerling v. Dimmerling, 7th Dist. Noble No. 215-0048, 18 NO 0460, 2019-Ohio-2710

Witness: expert

Dated: June 24, 2019
Affirming in Part, Reversing in Part, and Remanding

The presumption that the end date of marriage was the final hearing was not rebutted and the Court held it was not an abuse of discretion for the trial court to use such date. The Court remanded the issue of an account not addressed in the division of property. The Court found that the trial court did not abuse its discretion in determining 19 acres was a gift to both H and W and thus marital property. Further, the Court found that the trial court did not abuse its discretion in determining that H did not fail to disclose cash. There was no abuse of discretion by the trial court in failing to award interest on equalization payments. The trial court did not abuse its discretion in relying on H’s experts rather than W’s. There was no abuse of discretion in dividing farm and mineral interests. The trial court did not err when it did not retroactively award child support and the issue regarding the federal tax dependency claim was found moot. The final divorce decree disposed of contempt motions because they merged into the final order and any alleged violation was deemed moot.

Hoffman v. Tustin, 9th Dist. Summit No. DR-2011-07-2007, 28799, 29104, 2019-Ohio-2546

Civ. R. 60(B)
QDRO: equalization, market experience (gains/losses), valuation date

Dated: June 26, 2019
Affirming

The Court found the trial court did not err in denying H's motion for relief from judgment without a hearing, since H did not show why he was entitled to passive growth in the amount he was awarded from W's defined contribution plan for the period between the de facto termination date of marriage and the valuation date of QDRO. The Court agreed with the trial court that there is no controlling legal authority directing that any appreciation or depreciation in a retirement account value between the date of judgment and the date of disbursement be shared equally between spouses. Such determination is made at the sole discretion of the trial court where -as in this case- there is no language in the decree addressing the issue, or language to the contrary. Moreover, the Court found that because the decree set forth a specific lump sum award and did not provide for any additional calculation thereon for passive growth on that amount, had the trial court sustained H’s motion, it would have been tantamount to an impermissible modification of the decree.

Tekamp v. Tekamp, 12th Dist. Warren No. 16DR38848, CA2018-08-092, 2019-Ohio-2382

QDRO: market experience (gains/losses), valuation date

Dated: June 27, 2019
Affirming

The Court affirmed the trial court’s approval of a QDRO submitted by W that entitled her to receive an equal division of H's 401(k) account as of the stipulated division date of their marriage, as well as any investment gains and/or losses that had since accrued, where the domestic relations court's local rules provided that W's share would include any gains and/or losses attributed to that account unless otherwise agreed to by the parties. The divorce decree in this case, which reflected the parties’ agreed-upon division of H’s 401(k) account, stated that the account was to be “divided 50/50 by QDRO;” the decree was silent on the issue of gains and/or losses from the period between divorce and distribution of the funds. The local rules (Loc. R. 6.9 Section (B)(2)(b)) explicitly stated that unless otherwise agreed, a QDRO for a defined contribution plan shall contain the following provisions or be governed by these assumptions: … b. the alternate payee’s share of the benefits shall be credited with investment earnings and/or losses from the date of division until contribution.

The plain language of this rule sets forth a presumption, or in this case an assumption, that the alternate payee's share shall include any gains and/or losses for a defined contribution plan unless otherwise agreed.

Kmet v. Kmet, 8th Dist. Cuyahoga No. DR-15-358333, 107759, 2019-Ohio-2443

Marital Property: separate property
QDRO: ambiguity, impermissible modification, valuation

Dated: June 29, 2019
Reversing and Remanding

The Court determined that the parties were bound by the dollar amount listed in the separation agreement as the pre-marital portion and the trial court could not amend that amount, even after it was discovered that the amount was inaccurate. H and W entered into a separation agreement that listed the parties’ date of marriage as September 26, 1996. Based upon that date, it was determined by the magistrate that the pre-marital portion of the H’s Thrift Savings Plan (TSP) (a retirement savings and investment plan for federal employees and members of the uniformed services that is similar to a 401(k) plan) was $28,328.29. It was later discovered that the parties had used the wrong marriage date, the parties were actually married on September 26, 1995, not 1996. The parties amended the original separation agreement to reflect the correct marriage date, but still had H’s TSP listed as $28,328.29. After the separation agreement was revised and incorporated into a decree, W had an amended QDRO drafted to reflect the correct date of marriage and it was discovered that the pre-marital portion of the TSP account was less than $28,328.29. The Court found that the trial court abused its discretion where it overruled H’s objections to the magistrate’s decision. H maintained a good-faith belief that the calculated amount of his pre-marital portion of his Thrift Savings Plan was correct. That amount was included in the separation agreement and accepted by the court. The terms of the separation agreement were unambiguous. The Court found that where H’s pre-marital amount was recalculated based on a corrected date of marriage, H was not in contempt of court for his failure to sign the QDRO.

Scrimizzi v. Scrimizzi, 12th Dist. Warren No. 15DR38238, CA2018-11-131, 2019-Ohio-2793

Civ. R. 60(B)
Marital Property: tax liability

Dated: July 8, 2019
Affirming

The Court ruled that the trial court did not abuse its discretion in allocating a tax liability to H. Further, the trial court did not abuse its discretion in denying H's Civ. R. 60(B)(1) and (2) motion regarding the allocation of a tax liability.

Turull v. Turull, 12th Dist. Butler No. DR94-06-1088, CA2018-10-197

Civ. R. 60(B)
QDRO: coverture, impermissible modification

Dated: July 15, 2019
Affirming

Editor’s Note: to read Eileen’s previous post on this case, click here.

The Court affirmed the trial court’s determination that a QDRO containing a different coverture fraction from the separation agreement, even if one of the parties claimed the change was bargained for, is invalid. The parties had agreed that W would be granted a QDRO granting her 50% of the portions of H’s pension and 401(k) plans that were accrued during the marriage; this was stated in the separation agreement, which was incorporated into the final divorce decree.

The QDRO that W had drafted calculated the marital portion of H’s pension by using a coverture fraction “the numerator of which [was] the number of years of the marriage, and the denominator of which [was] the number of years of continuous service” as of the date of the parties’ divorce. The trial court discussed that the formula proposed in the QDRO differed from the separation agreement. Hoyt v. Hoyt, 53 Ohio St.3d 177 (1990) established the formula generally accepted in Ohio, where the marital portion of the pension is determined by using the traditional coverture fraction: years of service during the marriage divided by the participant’s total years of service at benefit commencement. In this case, the Court opined that it was “well-settled” under Hoyt that when parties agree to divide the marital portion of a pension, it is presumed that they are agreeing to use a traditional coverture fraction, unless stated otherwise. The calculation used by W differed, and significantly changed the ratio in a manner that was beneficial to her.

The Court held that the trial court did not err by granting H's Civ. R. 60 motion for relief from judgment where the court did not retain jurisdiction following the issuance of the final decree. The Court further held that the trial court had not erred when it determined that the QDRO, which is merely an order in aid of execution, significantly modified the pension division, and was therefore voidable for error.

Temple v. Temple, 5th Dist. Muskingum No. DA2018-0025, CT2018-0084, 2019-Ohio-2901

Marital Property: retirement benefits, separate property, tracing, valuation

Dated: July 15, 2019
Affirming

The Court disagreed with H’s claims the trial court erred in equally dividing his 401(k). H argued approximately $10,000 in his 401(k) was earned prior to the marriage and therefore, the trial court erred in equally dividing the account. It should be noted that H did not provide a pre-marital balance or support his claim with any evidence. The Court thus found that the trial court had not abused its discretion in equally dividing appellant's 401(k) and that the decision to do so was not against the manifest weight of the evidence.

Estate of DeChellis v. DeChellis, 5th Dist. Stark No. 228240, 2018CA00153, 2019-Ohio-3078

Witness: credibility

Dated: July 29, 2019
Affirming

This case has a long and complicated history regarding concealment of assets. The deceased was patriarch of a large blended family, he had a 30-year affair with his paramour who he had a son with, and they ultimately divorced their respective spouses and cohabitated together. The deceased ran a pizza business, Napoli’s Italian Eatery in Canton, Ohio as a mostly cash business. The deceased suffered a heart attack and was diagnosed with lung cancer so had estate planning prepared by Stanley Rubin. At the estate planning meeting, the deceased stated that he had $750k cash (but never stated where this cash was located) that he wanted divided equally between his four children.

The Court found that the trial court utilized the correct burden of proof, preponderance of the evidence, in determining whether the paramour and son of patriarch concealed, embezzled, or conveyed away or was in possession of $750k belonging to patriarch’s estate.

Paramour and son argued the trial court erred in admitting, over objection, hearsay testimony. “Hearsay” is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. Evid. R. 801(C). Hearsay is generally not admissible unless it falls within one of the recognized exceptions. Evid. R. 802; State v. Steffen, 31 Ohio St.3d 111, 119, 509 N.E.2d 383 (1987). The Court declined to reverse the trial court’s testimony admissions since, in contravention of App. R. 16(A)(7), appellants had not provided references to the record to support a reversal of the trial court.

This case turned on the credibility of the witnesses. The trial court had the opportunity to view and listen to all of the parties, including Attorney Rubin, and observed their demeanors, gestures, and voice inflections while they were testifying and thus the trial court “may believe all, part or none of the testimony of any witness.” In re Estate of Gordon, 5th Dist. Richland No. 13-CA-77, 2014-Ohio-2087, ¶ 23 citing Lee v. Lee, 5th Dist. Licking No. 2008 CA 112, 2009-Ohio-5250. The trial court stated in its judgment entry that it found the testimony of Attorney Rubin to be the most credible and reliable. Attorney Rubin testified that in 2015, the deceased told him multiple times he wanted to split $750k in cash between his four children. Attorney Rubin drafted a Will containing a residuary clause for division of the $750k in cash; he had no interest in the cash or motivation to misstate the wishes of his client.

The trial court did not find the testimony and actions of paramour and son were believable. One issue the trial court had with their credibility was their invocation of their Fifth Amendment right against self-incrimination. The Fifth Amendment to the United States Constitution provides that “no person * * * shall be compelled in any criminal case to be a witness against himself.” Courts have applied the privilege against self-incrimination to civil proceedings. Cuyahoga Hts. Local School Dist. v. Palazzo, 8th Dist. No. 103592, 2016-Ohio-5137, 69 N.E.3d 162, 2016 WL 4037309, ¶ 22 citing McCarthy v. Arndstein, 266 U.S. 34, 40, 45 S.Ct. 16, 69 L.Ed. 158 (1924) (upholding the use of the privilege in a bankruptcy proceeding). In Cuyahoga, the Eighth District Court of Appeals observed that the Fifth Amendment right against self-incrimination might be a shield in criminal cases, but in civil cases it can be a sword turned against the person claiming the privilege. This adverse inference drawn against a party who invokes the Fifth Amendment “exists because a witness's [sic] assertion that the answer to a question might be self-incriminating proves that the witness engaged in some incriminating activity relative to the question.” Cuyahoga, at 162.

In this case, paramour and son’s use of their privilege against self-incrimination acted as a sword, not a shield, in determining whether they were in possession of and concealed, embezzled, or conveyed away the $750k from the Estate. This inference, in conjunction with the undisputed evidence that the deceased exclusively used cash in his personal and business dealings, and had large amounts of cash at home to which the parties had access after his death, supported the trial court’s conclusion that paramour and son possessed the $750k and they concealed, embezzled, or conveyed away the funds from the Estate. The Court found the trial court’s finding of guilt was supported by the weight and sufficiency of the evidence.

Dejak v. Dejak, 11th Dist. Case No. Lake No. 2016 DR 000533, 2018-L-139, 2019-Ohio-3236

Marital Property: ambiguity, de facto date (termination of marriage), prenuptial agreement

Dated: August 12, 2019
Affirming

The Court found no error in the adoption of the magistrate’s decision by the trial court concluding a prenuptial agreement was enforceable. There was evidence submitted at the hearing, the magistrate provided analysis, and applied the correct legal rules. H’s argument that the agreement was ambiguous, so that the magistrate’s award of 20% of his assets to W was erroneous, goes to the interpretation of the agreement. This matter was addressed at the final hearing, where H was represented by counsel and during which he properly objected.

H contended a provision in the prenuptial agreement was ambiguous because it was susceptible to two reasonable interpretations; one interpretation was the construction applied by the magistrate, and adopted by the trial court, i.e., because the parties were married for over three years, W was entitled to 20% of the assets. The alternative interpretation, which H advances, would only award W 5% because, per the language of the agreement, the parties were married for more than two years and as such, she “shall receive Five Percent (5%) of the H’s assets.” The Court maintained that H’s construction was unreasonable and thus there is no ambiguity. Because the parties were married more than three years, but less than four years, appellee was entitled to 20% and the trial court did not abuse its discretion in adopting the magistrate’s decision on this point.

The Court found no error by the trial court in adopting the finding of the magistrate that the date of termination of the marriage was the date W filed for divorce.  H asserted the trial court should have used the date the parties commenced living separate and apart.  The magistrate’s decision noted that the prenuptial agreement did not define “married” or “time of divorce.”  The magistrate determined, in light of the evidence, “the reasonable and equitable interpretation of the intention of the parties is ‘time of the divorce’ is the filing of the complaint for divorce.  In setting the termination date at the date of the filing, the magistrate suggested that this date represents the final point at which reconciliation would no longer occur.

Stratton v. Stratton, 8th Dist. Cuyahoga No. DR-17-368178, 107798, 2019-Ohio-3279

Marital Property: debts, equitable division, retirement benefits

Dated: August 15, 2019
Affirming

The Court found the trial court did not err in dividing marital property where: 1) court found that W should share in overall debt by taking a reduced value in other assets; 2) court divided various retirement accounts equally; and 3) court awarded full interest in pension plan to H because he was allocated sole responsibility of marital student loan debt. R.C. 3105.171 directs a trial court to equitably divide the parties’ marital property. An equitable division of marital property generally involves an equal division of marital property. However, if an equal division of marital property would be inequitable, the court shall not divide the marital property equally but instead shall divide it between the spouses in the manner the court determines equitable. In order to determine what is equitable, the trial court must consider the factors outlined in R.C. 3105.171(F). Such factors include, among others, the duration of the marriage, the assets and liabilities of the spouses, tax consequences of the property division, any retirement benefits of the spouses, and any other factor the court expressly finds to be relevant and equitable.

The Court found no abuse of discretion by the trial court’s award of allowing W to remain in the marital residence until she vacated or died, but no later than May 1, 2019, even though the trial court had awarded the marital residence to H. The trial court had found it was equitable under the circumstances to allow W, who was gravely ill and had undergone brain surgery during the divorce, to remain in the home.

H argued the division of the retirement assets was not equitable. Specifically, H argued the trial court failed to consider that W’s prognosis indicated that she would pass away prior to June 2019; therefore, giving half the retirement assets to W, who would then give those assets to an unrelated third party was not equitable. Under the circumstances, the Court did not find the trial court’s division of the retirement assets, which were amassed during the parties’ 36-year marriage, to be an abuse of discretion.

The Court found no abuse of discretion by the trial court and found the division of the credit card debt was fair, just, and equitable under the circumstances. Based on W’s lack of income, health condition, and anticipated future medical expenses, the trial court allocated the outstanding credit card debt, which included some of W’s attorney fees, to H. However, the trial court ordered each party to pay their own attorney fees, including the portion that had been charged to the credit card.

H argued it was inequitable to be assigned full responsibility for the debt for the education of their adult children. However, the trial court found that the repayment of the student loan should be allocated to H, but also found that W should share in the overall debt by taking a reduced value in other assets. To this end, the trial court did not award W any share of H’s CNA pension, because he had been allocated sole responsibility for repaying the marital student loan debt. Based on this offset, the Court found no abuse of discretion.

Miller v. Miller, 12th Dist. Butler No. DR2017-06-0551, CA2018-08-174, 2019-Ohio-3420

Marital Property: equitable division, retirement benefits (medical insurance), tax liability, unjust enrichment, valuation

Dated: August 26, 2019
Affirming

The Court affirmed medical insurance provided as part of retirement benefits is not marital property subject to division upon divorce. The trial court did not abuse its discretion by dividing the retirement assets as it did, because the division was equitable given the totality of the circumstances. Further, the trial court did not abuse its discretion denying an award of attorney fees.

The Court previously held that healthcare benefits provided by a pension plan are not to be considered marital property subject to division and distribution. Yates v. Yates, 12th Dist. Preble Nos. CA2004-07-010 and CA2004-07-011, 2006-Ohio-743, ¶ 16. As the Yates court explained, such benefits are not guaranteed and are therefore unlike other employment deferred benefits. Id. at ¶ 16-17. Here, the trial court found that H received retirement medical insurance as a result of settlement from a class-action lawsuit against his former employer where the employer created a healthcare trust fund for the class of retirees and the retirees' immediate family. Nevertheless, the trial court found that no marital funds were used to establish the healthcare trust fund and H could not withdraw or otherwise control any of the money in that fund. Additionally, there was evidence presented that the healthcare trust fund was a closed fund and not otherwise guaranteed; the fund's continued viability depends on stock market investments and annual expenses.

W also argued that the trial court erred by not properly valuing H's pension and that this improper valuation led to an inequitable division of the parties' retirement assets. Regardless of the total value of the marital retirement assets, the trial court found that W had a higher stream of income and was to receive more real estate properties with higher potential rental profits than those received by H. The Court noted that an equitable division does not mean that each account must be divided equally and found that the trial court did not abuse its discretion when it divided the retirement assets as it did.

The Court found that the trial court did not abuse its discretion in dividing the tax liabilities of the marital estate. W argued that the trial court decision was inequitable because it did not properly account for taxes up to the separation date and it did not properly consider that H was the sole recipient of the rental payments from these properties. The trial court found that while H retained the rental payments, he was not unjustly enriched because he paid the expenses on the properties, maintained the properties, and dealt with the tenants. The Court found a de minimis discrepancy of a few cents between the evidence presented at trial and in the decree in the division of the tax liabilities, however this did not amount to an abuse of discretion nor was it otherwise inequitable.

Murphy v. Murphy, 5th Dist. Stark No. 2016DR00112, 2018CA00161, 2019-Ohio-3454

Spousal Support: definition of income, modification, retirement benefits, tax liability

Dated: August 26, 2019
Affirming

H contended the trial court committed error when it failed to consider as income benefits that W’s employer pays for her, and when it failed to deduct certain expenses from H’s income. Specifically, H argued the trial court: failed to consider the implications of FICA tax due to H’s self-employment; failed to consider the portion that W’s employer pays for contributions to her pension and 401(k) plans; and committed error by not considering other employee benefit contributions by W’s employer as part of W’s income, such as her monthly health insurance premium and dental insurance premium.

The Court found no abuse of discretion in the trial court’s decision and ruled that there was no evidence presented that W could control the deposits to her pension or 401(k) so that she could convert them to disposable income. Beiers v. Phillips, 5th Dist. Licking No. 08CA0127, 2009-Ohio-3278. As to the health insurance premiums, evidence was presented that H was getting a tax deduction for a portion of the premiums he self-pays for health insurance and that the cost of H’s health insurance does not take a large portion of his income.

The trial court did give H credit for the amount W’s employer puts into her HSA because it reasoned this money can be utilized by W to pay her expenses. Additionally, the Court had previously stated, “there is no express requirement that the domestic relations court’s order granting or denying a motion to modify spousal support order reexamine in toto the factors listed in R.C. 3105.18(C)(1) that apply to an initial determination of spousal support.” Skerness v. Skerness, 5th Dist. Coshocton No. 2015CA0002, 2015-Ohio-3467.

In this case, W was working for the same employer as when the trial court made its original spousal support order and there was no evidence presented that her employer contributes any different amount to her pension and 401(k) plans than at the time of the previous order, or that W’s employer pays any different amount of her health insurance and dental insurance premiums.

Similarly, there was no evidence presented that the FICA tax paid by each of the parties has changed since the divorce decree. Finally, the Court found no abuse of discretion by the trial court in adjusting H’s rental income, including amounts for depreciation, prepaid real estate taxes, and maintenance fees.

Johnson v. McCarthy, 10th Dist. Franklin No. 03DR-1429, 17AP-655, 2019-Ohio-3489

QDRO: ambiguity, coverture (traditional v. frozen), valuation date

Dated: August 29, 2019
Affirming

The Court found that the trial court did not err in finding that the divorce decree unambiguously provided for marital property valuation and division, including the valuation and division of unmatured pension benefits, to occur on the date the marriage terminated. The Court determined that the judgment entry language clearly required the defined benefit plan to be divided using the “frozen” method: the benefit is valued at the time of divorce, not at the time of retirement.

In this case, two retirement plans were divided in the divorce proceedings. One of the plans was an IBM pension, which the judgment entry stated was awarded to W in an equal division and that H shall promptly and fully cooperate with the transfer via QDRO, rollover or another appropriate instrument. Nearly twelve years after the divorce, after H retired, W moved the court for clarification of the judgment entry regarding the IBM pension. W contended that the IBM pension was to be divided using the traditional coverture approach, valuing the marital portion of a pension at retirement. H contended that the frozen method should be used since the judgment entry valued the marital portion of the pension at the date of divorce.

The trial court determined that the language used in the judgment entry was “unambiguous,” thus, it did not require cannons of contract construction to be used in its interpretation. Accordingly, the trial court determined that the clear language of the judgment entry required the IBM pension to be valued on the date of divorce. There was no date of valuation listed, but when a judgment entry fails to designate a valuation date, the date of the marriage’s termination is controlling. Keller v. Keller, 5th Dist. No. 18 CAF 01 0008, 2018-Ohio-3141, ¶ 18; Fernando v. Fernando, 10th Dist. No. 16AP-788, 2017-Ohio-9323, ¶ 8-9; Oberst v. Oberst, 5th Dist. No. 09-CA-54, 2010-Ohio452, ¶ 34.

Walsh v. Walsh, 11th Dist. Trumbull No. 2017-T-0033, 2018-Ohio-2466, 2019-Ohio-3723

Marital Property: retirement benefits
ORC 3105.171(I): consent
Civ. R. 60(B)

Dated: September 18, 2019
Reversing and Remanding

Editor’s Note: to read Eileen’s previous post on this case, from when it was in the Court of Appeals, click here.

The Ohio Supreme Court overturned the 11th District Court of Appeals’ finding that the trial court’s decision to modify the decree to lengthen the term of a marriage from 6 to 10 years was within the court’s power to “clarify and construe its original property division so as to effectuate its judgment.”

Upon W’s motion, the trial court had modified the parties’ decree to change the length of the marriage to 10 years so that direct payments could be made to W from the Defense Finance Accounting Service (DFAS). Notably, the trial court had retained jurisdiction over the order dividing the military retirement benefits, but not the divorce decree itself. The Supreme Court opined that changing the length of the marriage was an impermissible modification pursuant to Ohio Revised Code § 3105.171(l), which prohibits modifying orders, except upon the “express written consent or agreement to the modification by both spouses” and both parties here did not consent to the change. Thus, the Court held the trial court did not have jurisdiction under Civ.R. 60(B) to modify the division of property in the final decree of divorce, as Civ.R. 60(B) is a procedural rule that may not abridge the statutorily created substantive right found under § 3105.171(l).

Grisafo v. Hollingshead, 8th Dist. Cuyahoga No. DR-04-299914, 107802, 2019-Ohio-3763

Attorney Fees
Marital Property: disability, separate property
DOPO: OP&F

Dated: September 19, 2019
Affirming

The Court affirmed the trial court’s judgment denying W’s motions: (1) for relief from judgment, (2) to amend the division of property order, and (3) to order the OP&F Pension Fund to provide H’s personal information. The Court asserted that W did not meet her burden of establishing that H was receiving disability benefits in lieu of age and service retirement benefits and that W may have a claim to a portion of the disability payments after H is eligible for retirement.

The parties executed a separation agreement, which was incorporated into the final divorce decree, providing that W was entitled to 50% of H’s pension benefits from OP&F. The parties completed a Division of Property Order (DOPO), which must be used to divide all State of Ohio retirement benefits, which directed that W would receive part of H’s age and service retirement benefits.

During the pendency of the divorce and the filing of the DOPO, H was awarded full disability benefits. A DOPO has multiple types of benefits that can be selected to divide, but the DOPO filed with OP&F only provided W with a portion of age and service retirement benefits, not disability benefits. W specifically argued that H would never receive retirement benefits, and unless she was awarded a portion of the disability benefits, she would be denied any portion of H’s OP&F benefits. However, the trial court found that at the time W filed her motions, H was not eligible for an age and service retirement and his disability payments were considered income replacement, which is not marital property.

The trial court clarified that if H were still working and not disabled, W would have no claim to his wages. However, the court noted, once H reaches retirement age, W may have a claim to a portion of his disability benefit, if he chooses to continue the disability benefit instead of converting to a retirement benefit. Courts have held that when disability benefits are taken in lieu of retirement that they represent retirement benefits and can be divided, even though the disability benefit is still separate property. See Cockerham v. Cockerham, 2017-Ohio-5563, 83 N.E.3d 999 (5th Dist).

Further, the trial court did not abuse its discretion when it awarded H attorney fees because the trial court properly considered the factors under R.C. 3105.73(B) in determining that the award was reasonable.

Woyt v. Woyt, 8th Dist. Cuyahoga No. DR-16-360863, 107312, 107321, 107322, 2019-Ohio-3758

Marital Property: equitable division, separate property, tracing

Dated: September 19, 2019
Affirming in Part, Reversing in Part and Remanding

The Court ruled that the trial court erred when it determined that H established a separate property claim that was against the manifest weight of the evidence. The Court found H failed to meet his burden of establishing a separate property claim for pre-marital equity in the marital home, because he failed to prove that such equity actually existed prior to the marriage. W argued that the trial court erred by finding that H established a separate property claim for pre-marital equity in the home based on “multiple refinances, home equity loans, and payouts received from equity.”

The trial court found that H established a separate property claim and was entitled to a pre-marital interest in the amount of cash he paid at closing, based on Ockunzzi v. Ockunzzi, 8th Dist. Cuyahoga No. 86785, 2006-Ohio-5741 (refinancing a home after a marriage, if done for reasons other than purchasing the home “does not in any way” convert separate property into marital property). Id. at ¶ 20. The Court distinguished Ockunzzi, where the parties had agreed about the value of the pre-marital equity in the house, from this case, because it is not clear if H had any equity in the home at the time of the marriage.

The Court agreed with W that the trial court erred in its terms of distribution of her share of H’s capital account with his employer. The Court found that the terms of distribution were inequitable and an abuse of discretion. The trial court determined the entire value of H’s capital account was marital property and awarded W 50% of the account; however, the court ordered that W not be immediately compensated, but instead ordered distribution over an indefinite time and in a piecemeal fashion.

Kapp v. Kapp, 2nd Dist. Clark No. 2017-DR-881, 2018-CA-133, 2019-Ohio-4097

Marital Property: deferred distribution, retirement benefits, separate property
QDRO: coverture (defined contribution plan)

Dated: October 4, 2019
Affirming in Part, Reversing in Part, and Remanding

The Court agreed with W that the trial court acted unreasonably in assigning no positive actual value to her 25% interest in two self-storage companies and in awarding that interest to H without any compensation to W. W asserted the trial court erred and used bizarre methodology: subtracted 25% of the undiscounted mortgage debt from the discounted value of W’s 25% interest in the businesses. The Court found it unreasonable to conclude that W’s 25% interest was worthless, or in actuality worth less than zero. The Court noted that the apparent value of W’s interest is “reflected in the fact that both parties desire ownership of it.” There was a Members’ Agreement or Operating Agreement for the business that had a fair market value section for valuation purposes. Additionally, the Court discussed that, although it may be preferable to separate the parties’ business affairs, W should not be compelled to give her interest in the companies to H without any compensation, which is what the trial court ordered. If H truly believed W’s interest has no current market value, as he argues on appeal, then he could allow her to keep that interest, which she testified has financial value to her. The trial court did not err in finding that a minivan, a travel trailer, and a $30,000 down payment for the marital residence were the appellee’s separate property that he received as gifts from his father.

The Court agreed with W that the trial court misstated the balance of H’s 401(k) and abused its discretion in using a coverture fraction computation of value with distribution deferred until H retires or begins drawing benefits. The trial court found W was entitled to “her coverture share of these monies which accrued during the tenure of the parties’ marriage plus her coverture share of any gains of losses which accrue until distribution[.]” At trial, the parties stipulated to the conclusions in an expert report concerning the total value and the marital portion of H’s 401(k). In light of that stipulation, the Court saw no sound reason for the trial court to engage in coverture fraction computation to determine the value of W’s one-half interest in the marital portion of H’s 401(k).

Additionally, the Court saw no sound reasoning to defer distribution of W’s one-half interest until H’s retirement, likely many years in the future. At times, joint ownership of an account after divorce may be necessary to realize the “optimum value” of the benefit based upon the nature and terms of a plan. In such a case, a “trial court should structure a division which will best preserve the fund and procure the most benefit to each party.” Hoyt v. Hoyt, 53 Ohio St.3d 177, 182, 559 N.E.2d 1292 (1990).

The Court discussed that applying a coverture fraction analysis to determine the value of a spouse’s share of a pension benefit, and deferring distribution until the other spouse’s retirement, often makes sense in the case of a defined-benefit plan. Under that type of plan, the value of the marital portion of the benefit may increase dramatically as the working spouse advances in age and accrues additional years of service credit. Here, however, H’s 401(k) account is a defined-contribution plan: the value of the plan is simply the account balance at any given time. Hoyt at 180, fn. 11. Unlike a defined-benefit plan, H’s future longevity and years of additional service with his employer will not themselves impact the value of the marital portion of his 401(k) account, which will rise or fall with the underlying investments.

Lelak v. Lelak, 2nd Dist. Montgomery No. 1982-DR-1530, 28243, 2019-Ohio-4807

Marital Property: bankruptcy, retirement benefits

Dated: November 22, 2019
Reversing and Remanding

W was granted an interest in H’s State Teachers Retirement System (STRS) account as part of the parties’ divorce. At the time of the divorce, H’s retirement benefits with STRS were not subject to a Division of Property Order (DOPO), nor could the benefits be withdrawn as H had not retired.

The trial court ordered H to make advance payments in the sum of $50 per week to W to satisfy her portion of the account. H then filed a Chapter 7 bankruptcy petition. The trial court mistakenly concluded that the bankruptcy proceeding discharged W’s interest in the STRS account, based upon an incorrect interpretation of a decision made by the bankruptcy court during H’s bankruptcy proceeding. The decree of divorce granted W a property interest in the retirement account, and the bankruptcy court’s decision did not divest her of her judicially declared ownership interest.

W’s first two assignments of error relate to her claim that H’s failure to pay her the awarded pension and the failure to give her notice of the withdrawal of the pension benefits constitute contempt. W’s final assignment of error relates to the attorney fees awarded by the magistrate in connection with its finding of contempt. Since the trial court’s assessment of the issues of contempt and attorney fees was based upon an incorrect interpretation of the bankruptcy court’s decision and judgment, the Court concluded that the trial court erred in its review of the magistrate’s decision and H’s objections, requiring a reversal and remand.

Editor’s Note: this case was subject to two additional appeals, both of which are summarized on this blog here, and here.

Dodaro v. Dodaro, 10th Dist. Franklin No. 16DR-3110, 18AP-714, 2019-Ohio-4864

Marital Property: retirement benefits, separate property, tracing

Dated: November 26, 2019
Affirming in Part, Reversing in Part and Remanding

H argued his entire Roth IRA was separate property because the contribution was from his separate property and the remaining portion was pre-marital. The trial court found H did not know the source of the deposit and did not document it to be from an identifiable separate fund. Therefore, the court found the $12k funds, plus growth or loss, was marital property.

On appeal, H argued his unrefuted testimony was that the $12k deposit came from his separate property and his 2015 tax return shows that he had a withdrawal and rollover from a pension and annuity in 2015. However, H's testimony on this issue was very brief, and he clearly testified he did not know the source of the funds for the $12k contribution to the Roth IRA. Accordingly, the Court ruled that it could not find the trial court's determination that the $12k contribution to the Roth IRA was marital property abused its discretion and was against the manifest weight of the evidence.

Noble v. Noble, 9th Dist. Lorain No. 17DU083033, 19CA011472, 2019-Ohio-5372

Marital Property: coverture, separate property, social security

Dated: December 30, 2019
Affirming in Part, Reversing in Part

The Court overturned the trial court’s order that H prepare a QDRO awarding a portion of his social security benefits to W. H filed an appeal arguing that 42 U.S.C. 407(a) explicitly prevents the levy, attachment, garnishment or other taking of a social security benefit. H also argued that Neville v. Neville, 99 Ohio St.3d 275, 2003-Ohio-3624, ruled that social security benefits cannot be divided in a divorce proceeding, and can only be considered as a factor in equitable distribution.

Editor’s Note: Neville has since been overturned, in effect, outside the limited context of public pension benefits. See R.C. 3105.171(B).

H also argued that the trial court incorrectly awarded W half of all his pension benefits, including half of what he earned before the marriage. H notes that the parties had stipulated that he would preserve the pre-marital portion of his pensions by utilizing the coverture approach. However, the trial court did not award W one-half of H’s pre-marital pension benefits as part of its property distribution, it awarded them to W as spousal support. The Court remarked that H had not developed an argument challenging the trial court’s award of part of his pre-marital pension benefits as spousal support, and it declined to develop an argument for him. Cardone v. Cardone, 9th Dist. Summit No. 18349, 1998 WL 224934, *8 (May 6, 1998).

H’s only remaining argument regarding the trial court’s spousal support award was that the court’s order was impossible to perform because it awarded W half of his pre-marital benefits yet retained jurisdiction of the issue of spousal support. According to H, it would not be possible to modify the division of his pre-marital pension benefits if W cohabitates or remarries. However, H failed to explain why the court could not issue an order returning the property to H. Moreover, the Court considered that there might be some other life change, such as H or W returning to work, that could necessitate a modification of the spousal support order beyond a modification of the assignment of H’s pre-marital pension benefits. The Court concluded that H had not established that the trial court exercised improper discretion when it divided the marital property.

Toki v. Toki, 5th Dist. Perry No. 22480, 19-CA-00009, 2020-Ohio-130

Marital Property: laches, retirement benefits

Dated: January 15, 2020
Affirming in Part, Reversing in Part, and Remanding in Part

Editor’s Note: to read Eileen’s previous post on this case, when the Court of Appeals first sent this back to trial court, click here. And to read a case summary of the most recent appeal in this case, click here.

In her sole assignment of error, W argued the trial court’s cursory denial of her Motion to Construe was inconsistent with the Court of Appeals’ remand order. The remand order required the trial court to rule on W’s motion as to whether laches applied as a defense to H paying W retirement benefits assigned to her as part of a 1994 entry dividing H’s OPERS pension. The trial court found that H would suffer a financial hardship if ordered to pay W a portion of his monthly benefits, and therefore, to permit the defense would be prejudicial.

The Court observed that laches has been defined by the Ohio Supreme Court as “an omission to assert a right for an unreasonable and unexplained length of time, under circumstances prejudicial to the adverse party.” Connin v. Bailey (1984), 15 Ohio St.3d 34, 35, 472 N.E.2d 328, quoting Smith v. Smith (1959), 168 Ohio St. 447, 156 N.E.2d 113. The Court then set forth the four elements that must be established for a successful laches defense, by a preponderance of the evidence: (1) unreasonable delay or lapse of time in asserting a right; (2) absence of an excuse for the delay; (3) knowledge, actual or constructive, of the injury or wrong; and (4) prejudice to the other party. The Court further opined that, “delay in asserting a right does not, without more, establish laches. Rather, the person invoking the doctrine must show the delay caused material prejudice.”

Reviewing the record, the Court determined H’s assertion of financial prejudice alone, could not, as a matter of law, carry H’s burden: “The mere inconvenience of having to meet an existing obligation imposed * * * by an order or judgment of a court of record at a time later than that specified in such * * * order cannot be called material prejudice.” H must instead have shown either: 1) delay resulted in a loss of evidence helpful to his case; or 2) a change in his position that would not have occurred if the right had been timely asserted. The Court found that while H may have indeed changed his financial position in reliance upon his belief W would not enforce the 1994 entry, any hardship caused to him today does not meet his burden, nor does it absolve him from his underlying obligation.

Ghanayem v. Ghanayem, 12th Dist. Warren No. 16DR39199, CA2018-12-138, CA2018-12-142, 2020-Ohio-423

Marital Property: retirement benefits (nonqualified), separate property, tax liability, tracing, vesting
Spousal Support: definition of income, modification

Dated: February 10, 2020
Affirming

The Court determined the trial court did not err by including H's long-term incentive bonus in the calculation of child and spousal support, as H's claim that the income was for his retirement was unsupported by the record. Rather, the income received was simply a bonus, which can appropriately be considered in the calculation of his support obligations.

H had accepted a new position with WellCare requiring H to relocate to Florida; initially the family prepared to move with H, but W desired to stay in Ohio with their daughter. During the final hearing on the divorce before the trial court, the parties argued about H's income structure. In relevant part, WellCare compensates H through these three sources: (1) his salary, (2) a Short-Term Incentive ("STI") bonus, and (3) a Long-Term Incentive Program ("LTIP").

The Court found no abuse of discretion in the trial court’s conclusion that H’s LTIP bonus should be considered income for purposes of calculating spousal and child support. See Ornelas v. Ornelas, 12th Dist. Warren No. CA2011-08-094, 2012-Ohio-4106 ¶ 46 (allowing a percentage of bonus in spousal support calculation). The Court noted that H’s description of his LTIP account as a "retirement" account was unsupported by the record. H did not introduce the full LTIP plan into the record, but it was undisputed that the LTIP account was a "non-qualified" plan. H argued that his LTIP account was a "retirement" account that should be excluded from the calculation of child and spousal support. Unlike his salary and STI bonus, H's LTIP bonus was awarded in shares of the company, a publicly traded entity. H's LTIP bonus was set at a target rate of 120% of his base pay, consisting of an award mix of "restricted stock, performance stock units, and market stock units." H testified about two categories of LTIP benefits that he receives. The first is Restricted Stock Units ("RSUs") that are subject to various vesting schedules. The second category of LTIP is Performance Stock Units ("PSUs"). PSUs "cliff vest" every three years, which means that the stocks are not "earned" until the company metrics are calculated three years after the shares are "awarded." After three years, the metrics are calculated, and the shares are either "earned" or "unearned." H explained that the vesting or award of RSUs and PSUs have tax consequences. Each time an RSU vests, or a PSU is earned, H stated that he must pay tax on the fair market value of the stock at the time of vesting. The company can withhold some percentage of stock to cover a portion of the taxes, but according to H, he is in a higher tax bracket and the amount withheld does not reflect the actual amount owed.

H also raised a secondary argument that, if the LTIP benefits are income for purposes of determining support, then the trial court erred by failing to order a more specific methodology or calculation so that W can share the tax consequences. The Court also found this argument without merit. The Court clarified the distinction between the value of the shares in H's LTIP account and the LTIP bonus that H receives each year that is calculable in his support obligation. H vests or earns more shares in his LTIP account each year; when the RSUs vest, or the PSUs are earned, there is a taxable event that H must account for. However, since H was purportedly not selling those shares, it was possible that those shares could gain or decrease in value. Pursuant to the trial court's order, W was entitled to 34% of the "gross income" H received as part of his LTIP bonus over the course of the spousal support order and 7% of the LTIP bonus for child support. The Court clarified that it understood the trial court's order as calculating the support obligations based on the LTIP bonus vested or earned each year. However, it did not understand the trial court's order to suggest that W has a separate property interest in the shares held in the LTIP account. The Court agreed with the trial court that no tax implications were discussed aside from the simple fact that H must, indeed, pay taxes when shares vest or are earned.

The Court found the trial court’s decision that H had a separate property interest in certain retirement accounts to be supported by the manifest weight of the evidence. W argued that H failed to provide documentation referencing an accurate account balance on the date of marriage and that he placed marital assets in the accounts. W also alleged that the trial court relied on inadmissible hearsay and objected to H's testimony regarding the value of the account. H introduced evidence as to his pre-marital contributions to the relevant 401(k) and his testimony with regard to the value of the accounts was permissible. W's arguments with respect to the trial court hearing inadmissible hearsay were speculative and unpersuasive in light of the evidence and testimony presented by H.

Lastly, the Court overruled W’s claim the trial court erred by failing to include necessary language in the spousal support award. Specifically, W argued the trial court should have included language that "[i]t is the intent of the Court that Wife receive 34% of all sources of Husband's income, however that is named, identified, or described by Husband's employer." In the event that W's concerns are realized and there is a change in H's income structure, her recourse would be to file a motion to modify support obligation. See Benjelloun v. Benjelloun, 12th Dist. Butler No. CA2012-01-004, 2012- Ohio-5353, ¶ 15.

Hussain v. Hussain, 12th Dist. Butler No. DR14-01-0046, CA2019-01-024, 2020-Ohio-531

Civ. R. 60(B)
QDRO: attorney fees, abuse of discretion

Dated: February 18, 2020
Affirming in Part, Reversing in Part, and Remanding

The Court found no abuse of discretion in the trial court’s award to W of $13,636.59 in attorney fees incurred in lengthy post-decree litigation regarding the division of H's retirement accounts by QDROs. H asserted the amount awarded is excessive because: (1) all relevant information needed to prepare the QDROs was known at the time of the final divorce hearing; (2) W's former counsel had successfully served subpoenas upon Procter & Gamble (P&G) and received responses, yet W's new counsel issued new and duplicative subpoenas; and (3) actions taken by P&G to quash the subpoenas cannot be attributed to him. H did not challenge the reasonableness of the hourly rate charged by W's counsel. The divorce decree required W's counsel to prepare the QDROs and H to cooperate with and facilitate the preparation of the QDROs, and reserved jurisdiction to award costs and attorney fees against a noncomplying party. H filed a motion for relief from a previous judgment in which he requested that the trial court "assign" the P&G retirement accounts to him because they belonged to him pursuant to India Muslim Law.

When the trial court denied H's motion, his P&G retirement accounts had still not been divided; however, he had withdrawn over $247,000 from one of the accounts. H asserted a pre-marital interest in the accounts, so the parties were ordered to cooperate with any valuation needed to effect the equal division of the marital portion of the retirement accounts. H was further ordered by the trial court to specifically cooperate with a valuation inquiry in a contempt order. The trial court found that H failed to comply and cooperate and provided the remedy of W’s counsel subpoenaing the records from the Plan Administrator from the date of the marriage through the date of separation so QDROs could be drafted. W's counsel subpoenaed records from P&G regarding H's retirement accounts but no QDROs had been filed nearly a year later when W retained new counsel. W's new counsel moved the trial court to file the QDROs, find H in contempt for his ongoing failure to cooperate with the division of his P&G retirement accounts, and for attorney fees. The QDROs were ultimately executed, and evidence was presented at a hearing on W's motion for attorney fees. W presented expert witness testimony regarding the reasonableness and necessity of her attorney fees, the impact of H's "obstreperous" conduct, and the benefits obtained on W's behalf.

The Court found there was no reasonable basis for H to oppose W's subpoenas or the admissibility of his retirement account statements. For example, despite H's long held assertion he had pre-marital interest in the retirement accounts, one exhibit plainly showed he did not participate in the plans until seven years after the parties were married. Given H's opposition and interference with what should have been a relatively simple discovery process and his overall obstruction in facilitating the execution of the QDROs, resulting in additional attorney services and unnecessary incurring of attorney fees by W, the trial court did not abuse its discretion in ordering H to pay W $13,636.59 in attorney fees. See Dragon v. Dragon, 11th Dist. Ashtabula Nos. 2009-A-0058 and 2010-A-0005, 2010-Ohio-4694.

The Court found that the trial court did not abuse its discretion in denying H's Civ. R. 60(B) motion to set aside the divorce decree and property division. The Court noted that H presented no evidence to justify filing his motion more than three years after the divorce decree was filed. Moreover, although he was fully cognizant of his support obligations and the property division set forth in the divorce decree, including its award of the business loans to him, H nevertheless agreed to the specific division of his P&G retirement accounts and the execution of the QDROs a week after filing his Civ. R. 60(B) motion. Civ. R. 60(B)(4) "was designed to provide relief to those who have been prospectively subjected to circumstances which they had no opportunity to foresee or control." Knapp v. Knapp, 24 Ohio St.3d 141, 146 (1986). Civ. R. 60(B)(4) was not designed to relieve parties of the consequences of their voluntary, deliberate choices. Id. at 145. Here, the circumstances were clearly not unforeseeable as H had an opportunity to control the terms of the divorce decree. Nor are the circumstances sufficiently extraordinary or unusual to warrant setting aside the decree under Civ. R. 60(B)(5). Furthermore, it is well established that a Civ. R. 60(B) motion cannot be used as a substitute for filing a direct appeal and the doctrine of res judicata will apply to such motion. Allen v. Allen, 5th Dist. Muskingum No. CT2013-0015, 2013-Ohio-2729, ¶ 4. H appealed from the final divorce decree, challenging the trial court's determination that the parties were validly married in India thereby rendering their marriage valid in Ohio. Any argument regarding the property division could have been raised in the alternative in the direct appeal, but was not. Having failed to raise such argument in the direct appeal of the divorce decree, H is now barred by the doctrine of res judicata.

Ouellette v. Ouellette, 6th Dist. Erie No. 2016-DR-077, E-19-017, 2020-Ohio-705

Civ. R. 60(B): mutual mistake, vacate
Marital Property: jurisdiction
RC 3105.171(I): consent

Dated: February 28, 2020
Affirming in Part, Reversing in Part

The Court found that the trial court had jurisdiction to consider Civ. R. 60(B) motion for relief from judgment, and did not abuse its discretion in finding it a timely motion demonstrating a meritorious defense and mutual mistake, but that the trial court lacked authority to modify the property order by changing the source of the lump sum payment, with remand necessary to consider appropriate remedy under Civ. R. 60(B). The trial court granted H relief from judgment, as provided under Civ. R. 60(B)(1), based on mutual mistake. In appealing the judgment, W argued the trial court was without jurisdiction to modify the property division, erred in granting Civ. R. 60(B) relief, and that it ordered a remedy that was both contrary to law and an abuse of discretion. The trial court changed the consent decree to alter the manner of payment to H, striking the impossible lump sum from OPERS in favor of a cash payment by W to H, within 6 months. While acknowledging the lack of consent, H argued that R.C. 3105.89 provides an exception to the consent requirement under R.C. 3105.171(I). R.C. 3105.89 provides a trial court with “continuing jurisdiction over division of property orders involving public retirement programs.” Enty v. Enty, 8th Dist. Cuyahoga No. 104167, 2017-Ohio-4177, ¶ 9, quoting Hines v. Hines, 3d Dist. Marion No. 9-10-15, 2010-Ohio-4807, ¶ 11 (Emphasis added). An order under R.C. 3105.81 governs a “benefit or lump sum payment * * * from a public retirement program to an alternate payee,” requiring a specific form created under R.C. 3105.90 by the state retirement system.

Continuing jurisdiction over pension disbursements under R.C. 3105.89 is separate from the property division order under R.C. 3105.171. See e.g. Walsh v. Walsh, 157 Ohio St.3d 322, 2019-Ohio-3723, 136 N.E.3d 460 ¶ 27 (reversing the trial court modification of the decree to recite a 10-year marriage term because parties did not both consent to that modification to the property division, which is prohibited by the plain language of R.C. 3105.171(I)). Similar to Walsh, the trial court changed the consent decree to alter the manner of payment to H. Significantly, the trial court struck the OPERS payment from the consent decree entirely, and substituted a non-pension, cash payment in its place. As in Walsh, while the trial court attempted to reach the intended result of the property division order, in this case a lump sum payment to H, the payment ordered by the trial court modified the consent decree, with no facts that permitted a finding that the trial court exercised continuing jurisdiction over a pension plan. The trial court’s modification, in this case, did not fall within the exception under R.C. 3105.89, and the parties clearly did not consent as required by R.C. 3105.171(I).

Editor’s Note: Review my summary of Walsh v. Walsh, above.

The Court found no prohibition within the statute, to a court’s vacating the entire property order or the decree, as appropriate under Civ. R. 60(B)(1), (2), or (3). H requested the trial court vacate the property division order in its entirety, as alternative relief in his motion, so that the parties might return to the bargaining table or proceed to trial on the issue of property division. The Court concluded that the trial court did have jurisdiction to consider H’s Civ. R. 60(B)(1) motion, even if the remedy of modification was improperly ordered. The Court found no abuse of discretion regarding the trial court’s finding of a mistake. W argued that there was no mistake; the consent judgment contained no language of an immediate, lump sum payment, and trial counsel’s failure to include such “essential terms” may not serve as the basis for H’s claim of mutual mistake. The Court considered that the trial court heard and evaluated the testimony of the parties and H’s counsel at the evidence hearing and both parties acknowledged that they contemplated a lump sum payment as a term of the property settlement. Further, while W received contrary advice prior to the settlement conference regarding disbursements from her OPERS account, she either relied on the expert retained for the settlement conference, or knew that H relied on that expert in agreeing to the settlement, and chose to remain silent and reap the benefit from his misunderstanding of the facts. Finally, the Court found no abuse of discretion of the trial court’s determination that either mutual or unilateral mistake existed at the time the parties entered into the consent decree, entitling H to relief from the judgment as it pertained to the property distribution.

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