[Cite as Hilbert v. Hilbert, 2016-Ohio-8099.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
WESLEY HILBERT, : CASE NOS. CA2015-10-182 Plaintiff-Appellant/Cross-Appellee, : CA2015-11-185
: OPINION - vs - 12/12/2016 :
STEPHANIE A. HILBERT, :
Defendant-Appellee/Cross-Appellant. :
APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS DOMESTIC RELATIONS DIVISION Case No. DR11-05-0613
Fred S. Miller, Baden & Jones Bldg., 246 High Street, Hamilton, Ohio 45011, for appellant/cross-appellee
Nicole M. Stephenson, 30 North "D" Street, Hamilton, Ohio 45013, for appellee/cross- appellant
PIPER, J.
{¶ 1} Plaintiff-appellant/cross-appellee, Wesley Hilbert ("Father"), appeals a decision
of the Butler County Court of Common Pleas, Domestic Relations Division, ordering him to
pay child support. Defendant-appellee/cross-appellant, Stephanie Hilbert ("Mother"), appeals
the same trial court's decision awarding Father tax exemptions.
{¶ 2} The parties were married in 2004 and had two children born issue of their Butler CA2015-10-182 CA2015-11-185
marriage before divorcing in 2011. The parties agreed to a shared parenting plan, with each
parent having the children approximately 50 percent of the time. At first, Father's and
Mother's incomes were similar, and each had the children for an equal time. Therefore,
neither party was ordered to pay child support, and the court approved a downward deviation
to zero from the standard support order.
{¶ 3} In 2013, Mother requested a modification of the child support orders, and the
Butler County Child Support Enforcement Agency ("CSEA") performed an administrative
review. CSEA recommended that Father pay child support equal to the standard guidelines,
without any downward deviation. The trial court reviewed the recommendation, but found
that no change of circumstances had occurred to warrant a new support order, and that
Father was still entitled to a downward deviation.
{¶ 4} In 2015, Mother again requested a modification of child support, and stated that
she was no longer employed. CSEA performed a review, and determined that Father earned
$248,222.91 a year, and set his child support obligation at $3,029.97 per month. Father
challenged CSEA's determination, and the trial court held a hearing on the matter. A
magistrate found that Father's income had been incorrectly determined by CSEA, and set
Father's income at $109,322.57 with a corresponding child support obligation of $1,434.27
per month. The magistrate also split the tax exemptions for the children between Mother and
Father. Father filed objections to the magistrate's decision specific to the support order and
tax exemption determination. The trial court overruled Father's objections regarding child
support, but did not address the tax exemption issue.
{¶ 5} Father then filed a motion for clarification, asking the trial court to address his
objection to the magistrate's allocation of tax exemptions. The trial court recognized its
failure to address the issue, and then issued an order awarding Father both tax exemptions
every year. Father now appeals the trial court's child support orders, and Mother appeals the -2- Butler CA2015-10-182 CA2015-11-185
trial court's determination of tax exemption entitlement.
{¶ 6} Father's First Assignment of Error:
{¶ 7} THE TRIAL COURT ERRED TO THE PREJUDICE OF PLAINTIFF-
APPELLANT WHEN IT DETERMINED HIS INCOME FOR PURPOSES OF CHILD
SUPPORT TO BE $109,322.57 PER YEAR.
{¶ 8} Father argues in his first assignment of error that the trial court erred in
determining his income for purposes of the child support determination.
{¶ 9} It is well-established that the purpose of the child support system is to protect
children and their best interests. Mannerino v. Mannerino, 12th Dist. Butler No. CA2010-08-
210, 2012-Ohio-1592, ¶ 9. To that end, the trial court possesses considerable discretion in
child support matters. Brown v. Brown, 12th Dist. Butler No. CA2014-09-184, 2015-Ohio-
1930, ¶ 10. Therefore, matters involving child support are reviewed under an abuse of
discretion standard. Van Osdell v. Van Osdell, 12th Dist. Warren No. CA2007-10-123, 2008-
Ohio-5843, ¶ 20. More than mere error of judgment, an abuse of discretion requires that the
trial court's decision was unreasonable, arbitrary, or unconscionable. Blakemore v.
Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 10} R.C. 3119.01(C)(5)(a) defines "income" for purposes of calculating child
support as "the gross income of the parent." Benjelloun v. Benjelloun, 12th Dist. Butler No.
CA2012-01-004, 2012-Ohio-5353, ¶ 10. "'Gross income' is the total of all earned and
unearned income from all sources during a calendar year, whether or not the income is
taxable, and includes income from salaries, wages, overtime pay, and bonuses to the extent
described in [R.C. 3119.05(D)]; commissions; royalties; tips; rents; dividends; severance pay;
pensions; interest, and all other sources of income." R.C. 3119.01(C)(7); Marron v. Marron,
12th Dist. Warren No. CA2013-11-109, 2014-Ohio-2121, ¶ 12. According to R.C.
3119.01(C)(13), self-generated income means: -3- Butler CA2015-10-182 CA2015-11-185
gross receipts received by a parent from self-employment, proprietorship of a business, joint ownership of a partnership or closely held corporation, and rents minus ordinary and necessary expenses incurred by the parent in generating the gross receipts. "Self-generated income" includes expense reimbursements or in- kind payments received by a parent from self-employment, the operation of a business, or rents, including company cars, free housing, reimbursed meals, and other benefits, if the reimbursements are significant and reduce personal living expenses.
{¶ 11} A court has authority to rely on information other than a tax return in order to
examine business expenses and deductions, especially if the party is self-employed, and
should consider living expenses or other personal use of business funds with "sharp scrutiny
of all available records to prevent avoidance of child support." Marder v. Marder, 12th Dist.
Clermont No. CA2007-06-069, 2008-Ohio-2500, ¶ 64.
{¶ 12} We begin by noting that the magistrate found Father's testimony lacking
credibility regarding his self-employment income, as well as business expenses. The
magistrate noted in its opinion,
Before discussing the specifics of Father's mistake of fact issues, the court is compelled to comment on the credibility, or lack thereof, of Father's testimony. At the beginning of Father's direct testimony, he stated his name and current address. Having considered the matter, the court finds this to be the only part of Father's testimony that was believable or credible.
{¶ 13} The magistrate also stated that Father's claims regarding his business profits
was "spurious," and called Father's testimony regarding his net profit "incredulous." The
magistrate also stated that Father's claims regarding his expenses was "utterly absurd."
Later in the magistrate's opinion, the magistrate stated, "once you get past the smoke and
mirrors of Father's claim, it is clear to the court Father is * * * hiding income that should
otherwise be considered for child support purposes." Further, the magistrate referred to
Father's explanation of business profits and expenses as "voodoo business accounting
practices." -4- Butler CA2015-10-182 CA2015-11-185
{¶ 14} During its independent review, the trial court referenced the magistrate's
findings as "colorful," but nonetheless agreed with and adopted the findings regarding
Father's income. We agree with the trial court that the magistrate's findings were animated
and somewhat dramatic. Even so, we also agree with the trial court that the evidence
deduced at the hearing supports the magistrate's decision that Father's income should be
calculated at a higher amount than the approximate $17,000 per year Father claimed as his
salary. As such, and despite Father's argument on appeal that the magistrate's language
tends to "obfuscate" the problems contained in the magistrate's opinion, we find that Father
suffered no prejudice from the magistrate's "colorful" explanation of its determination that
Father's testimony lacked credibility, especially where the trial court performed an
independent review of the facts and evidence.
{¶ 15} Regarding Father's salary, the record demonstrates that Father is self-
employed and that he grossly underestimated his salary for purposes of child support
calculations. The company Father owns and operates is organized as a sole proprietorship.
Father submitted tax information that indicated the business had gross receipts of $287,762.
Even so, Father claimed that his business expenses totaled $226,673, and the net profit for
the year was a little over $30,000. However, the magistrate considered that 94 percent of
Father's business expenses were identified as "other," and that Father did not submit any
documents in support of the "business necessity or reasonableness" of the expenditures as
specifically connected to Father's business. While Father offered testimony that the
expenses were legitimately related to his business, the magistrate discounted this testimony
as "unsubstantiated" and "self-serving."
{¶ 16} Father admitted in his testimony that he regularly used his business' bank
account to pay for his personal expenses, and that he withdrew large cash amounts from his
business' bank account for his personal use. When asked why he withdrew cash amounts -5- Butler CA2015-10-182 CA2015-11-185
ranging from $100-$500 at a time, Father responded that it was for "pop, water, whatever, I
don't know." Father also testified that he used funds from his business account to pay for
personal items such as a passport, a veterinarian bill, massages, hats, flowers, liquor, and a
limousine rental. Moreover, bank records for the business account show deposits in excess
of the gross income the business claimed. The magistrate relied on these undisputed facts
to conclude that not all of Father's claimed expenses were truly related to the business and
that his accounting was not an honest representation of his true salary.
{¶ 17} The magistrate also noted that Father's personal expenses, such as mortgage
interest and property taxes, far exceeded the amount Father claimed he earned each year,
$17,735. The magistrate concluded, "Father offered no explanation, credible or otherwise, to
account for the disparity between his living expenses and claimed income." Moreover, and
despite having an alleged income that did not meet his expenses, Father bought two vehicles
that year, paying cash for both. Father also testified that he went on vacation to Cancun,
Florida, and a cruise, and that he gambles between $100-$200 monthly. Father also owns a
rental property, and rather than rent it, he used it for storage. Father also testified that he
paid for some of his girlfriend's schooling.
{¶ 18} In total, Father wrote checks to himself totaling $80,675, which the magistrate
treated as income. The magistrate concluded that Father did not deny that he wrote the
checks to himself, and that Father offered "no credible explanation as to the business
purpose of these payments." As such, the magistrate added $80,675 to the total claimed as
salary by Father, and determined that Father's income for child support calculation purposes
was $109,322.57. After an independent review, the trial court adopted the magistrate's
finding in full.
{¶ 19} After reviewing the record, we find that the trial court did not err in calculating
Father's child support obligation as it did. The record clearly indicates that Father did not -6- Butler CA2015-10-182 CA2015-11-185
offer a complete and credible accounting of his self-employment salary, and that he earned
much more than the $17,735 he claimed. The trial court took into consideration that some of
the business expenses were legitimate, and also relied on evidence in the record when
adding $80,675 to Father's claimed income. As such, we find no abuse of discretion in the
trial court's determination of Father's income. Father's first assignment of error is therefore
overruled.
{¶ 20} Father's Second Assignment of Error:
{¶ 21} THE TRIAL COURT ERRED TO THE PREJUDICE OF PLAINTIFF-
APPELLANT WHEN IT DID NOT IMPUTE INCOME TO APPELLEE AT A LEVEL
COMMENSURATE WITH HER EARNING CAPACITY.
{¶ 22} Father argues in his second assignment of error that the trial court erred by not
imputing income to Mother, who was unemployed at the time of the hearing.
{¶ 23} A trial court's decision specific to whether a parent is voluntarily
underemployed will not be disturbed on appeal absent an abuse of discretion. McLaughlin v.
Kessler, 12th Dist. Fayette No. CA2011-09-021, 2012-Ohio-3317, ¶ 13-14. For an
unemployed or underemployed parent, income is the "sum of the gross income of the parent
and any potential income of the parent." R.C. 3119.01(C)(5)(b). Potential income includes
imputed income that a trial court determines the parent would have earned if fully employed
based upon the criteria set forth in R.C. 3119.01(C)(11)(a)(i)-(xi), which includes the parent's
prior employment experience, education, skills and training, employment availability, and
local wages. Before a trial court may impute income to a parent, however, it must first find
that the parent is voluntarily unemployed or voluntarily underemployed. R.C. 3119.01(C)(11);
Kessler at ¶ 13. The parent who claims the other parent is voluntarily underemployed bears
the burden of proof. Reynolds-Cornett v. Reynolds, 12th Dist. Butler No. CA2013-09-175,
2014-Ohio-2893, ¶ 10. -7- Butler CA2015-10-182 CA2015-11-185
{¶ 24} The record indicates that Mother, a former social worker, lost her job at a child
services agency. Mother provided a letter from her former employer, which stated that
Mother's position at the agency had been "abolished," and that she was laid off effective
November 10, 2014. Mother's income, as figured by the magistrate for child support
purposes, was therefore comprised of unemployment compensation.
{¶ 25} Father did not submit any evidence indicating that Mother was voluntarily
unemployed. In fact, during his testimony, he acknowledged that Mother lost her job
involuntarily. The law is well-settled that the parent who claims the other parent is voluntarily
underemployed bears the burden of proof, and Father failed to present any evidence that
Mother was voluntarily unemployed. As such, Father's second assignment of error is
{¶ 26} Father's Third Assignment of Error:
{¶ 27} THE TRIAL COURT ERRED TO THE PREJUDICE OF PLAINTIFF-
APPELLANT WHEN IT DID NOT ORDER A DOWNWARD DEVIATION REGARDING
CHILD SUPPORT.
{¶ 28} Father argues in his third assignment of error that the trial court erred in not
giving him a downward deviation in child support.
{¶ 29} Pursuant to R.C. 3119.22, a trial court may deviate from the standard child
support order if, after considering the factors and criteria set forth in R.C. 3119.23, such an
order would be unjust or inappropriate and would not be in the best interest of the children.
Brown v. Brown, 12th Dist. Butler No. CA2014-09-184, 2015-Ohio-1930, ¶ 7. In determining
if a deviation is in the best interest of the children, R.C. 3119.23 sets forth a number of
factors that the court may consider. Id. Pertinent to the case at bar, such factors include:
"extended parenting time or extraordinary costs associated with parenting time; disparity in
income between parties or households, the relative financial resources, other assets and -8- Butler CA2015-10-182 CA2015-11-185
resources, and needs of each parent," as well as any other factor for consideration. R.C.
3119.23(D), (G), (K), and (P).
{¶ 30} Although a trial court is permitted to deviate from the standard child support
worksheet upon finding that one or more of the factors listed in R.C. 3119.23 are present, a
party is not automatically entitled to a downward deviation merely because a factor is
present. Keith v. Keith, 12th Dist. Butler No. CA2010-12-335, 2011-Ohio-6532, ¶ 18. Absent
an abuse of discretion, a trial court's decision on whether or not to deviate from the child
support guidelines will not be reversed. Kitchen v. Kitchen, 12th Dist. Butler No. CA2006-01-
013, 2006-Ohio-6542, ¶ 10.
{¶ 31} The magistrate reviewed the relevant factors, and determined that a downward
deviation was not in the children's best interests. Instead, the court noted that while
parenting time remained essentially the same so that each parent had the children about 50
percent of the time, other circumstances had changed since the deviation was initially
granted. Specifically, the record indicates that since the time of the deviation, Mother and
Father's income is no longer similar, and Father's income far exceeds Mother's. The court,
establishing Mother's adjusted gross income as $14,820, concluded that Father, whose
adjusted gross income is $109,322.57 a year, is in a "much better" position to handle any
additional costs of having the children more than the standard parenting order given his high
salary.
{¶ 32} After reviewing the record, we find that the trial court did not abuse its
discretion in finding that a deviation was not in the children's best interest. The amount of
time the children spend with their parents, although it has not changed since the time of the
deviation, is but one factor for consideration, and the record patently indicates that Father's
salary far exceeds Mother's. Moreover, the record indicates that Father lives with someone
who helps pay expenses, thus making his financial capacity and ability to pay child support -9- Butler CA2015-10-182 CA2015-11-185
even greater. As such, and finding no abuse of discretion, Father's third assignment of error
is overruled.
{¶ 33} Mother's Cross-Assignment of Error:
{¶ 34} THE TRIAL COURT ERRED TO THE PREJUDICE OF THE CROSS-
APPELLANT BY MODIFYING THE ORDER GRANTING FATHER THE RIGHT TO CLAIM
BOTH CHILDREN AS DEPENDENTS AND RECEIVE BOTH TAX EXEMPTIONS.
{¶ 35} Mother argues in her cross-assignment of error that the trial court lacked
jurisdiction to award the tax credits to Father while an appeal of the trial court's decision was
pending before this court.
{¶ 36} The record indicates that the trial court did not initially address Father's
objection to the magistrate's decision to split the tax exemptions between the parties. Father
then moved the court to clarify the tax exemption decision, and in the meantime, Father
perfected his appeal with this court. While Father's appeal was pending, the trial court held a
hearing on the tax exemption issue, and recognized that it had failed to address the issue
when overruling Father's objections. As such, the trial court considered the issue at the
hearing, and calculated which party would benefit more from the tax exemption, finding that
the best interests of the children would be served by awarding the exemptions to Father.
{¶ 37} As a general rule, when a notice of appeal is filed, the trial court is divested of
jurisdiction except to take action in aid of the appeal. Webb v. Pewano, Ltd., 12th Dist.
Fayette App. Nos. CA2008-10-036 and CA2008-12-042, 2009-Ohio-2629, ¶ 29. However,
the trial court does retain jurisdiction over issues not inconsistent with the appellate court's
power to review, affirm, modify, or reverse the appealed judgment. Foppe v. Foppe, 12th
Dist. Warren App. Nos. CA2008-10-128 and CA2009-02-022, 2009-Ohio-6926.
{¶ 38} Although Father's appeal was pending at the time the trial court issued its
decision regarding the tax exemptions, we find that the trial court had jurisdiction to issue the - 10 - Butler CA2015-10-182 CA2015-11-185
order. The question of tax exemptions was not before this court on Father's appeal, and
therefore, the trial court's order did not impact this court's power to review, affirm, modify, or
reverse the appealed judgment. Instead, the issues raised by Father were specific to the
way in which the trial court determined his child support obligation and had nothing to do with
the tax exemption.1
{¶ 39} The Internal Revenue Code creates a presumption in favor of awarding the tax
exemption to the residential parent. Boyer v. Hacker, 12th Dist. Brown No. CA2013-08-009,
2014-Ohio-760, ¶ 8. In shared parenting arrangements, both parties are, in essence,
deemed to be residential parent of the children, and the trial court must allocate the tax
dependency exemption based on the children's best interest. Rainey v. Rainey, 12th Dist.
Clermont No. CA2010-10-083, 2011-Ohio-4343, ¶ 40.
{¶ 40} Specific to allocating tax exemptions, the best interest of the children is
furthered when the allocation of the exemption produces a net tax savings for the parents.
Tuttle v. Tuttle, Butler App. Nos. CA2006-07-176 and CA2006-07-177, 2007-Ohio-6743, ¶
21. A net tax savings to the parent usually equates to more money being available for the
care of the child, and is one of the five factors that a court is required to weigh according to
R.C. 3119.82. Rainey at ¶ 40. Other factors include, "the relative financial circumstances
and needs of the parents and children, the amount of time the children spend with each
parent, the eligibility of either or both parents for the federal earned income tax credit or other
state or federal tax credit, and any other relevant factor concerning the best interest of the
children." This court reviews a trial court's decision allocating tax exemptions for an abuse of
discretion. Rainey at ¶ 38.
1. Mother also alleges that the trial court's decision was barred by res judicata. However, and as previously stated, the trial court had not yet entered a final decision regarding the tax exemption issue, and recognized as much at the hearing. - 11 - Butler CA2015-10-182 CA2015-11-185
{¶ 41} The record indicates the trial court properly considered the statutory factors
before determining that awarding the tax exemptions to Father was in the children's best
interest. Before determining that Father should have the tax exemptions, the trial court
specifically noted that it had done a de novo review of the issue, including consideration of
the R.C. 3119.82 factors, and the record indicates the trial court held a hearing on the issue.
During this hearing, the trial court determined that the net tax benefit would be greater for
Father, and minimal for Mother. As such, we find no abuse of discretion in the trial court's
order regarding the tax exemptions. Mother's cross-assignment of error is therefore
{¶ 42} Judgment affirmed.
M. POWELL, P.J., and HENDRICKSON, J., concur.
- 12 -