Lam v. Lam

2012 Ohio 4885

• Court: Ohio Court of Appeals
• Decided: October 15, 2012
• Docket: 2012CA00041
• Status: Published

Opinion

[Cite as Lam v. Lam, 2012-Ohio-4885.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

CAROLYN H. LAM JUDGES: Hon. William B. Hoffman, P.J. Plaintiff-Appellee Hon. Sheila G. Farmer, J. Hon. Julie A. Edwards, J. -vs- Case No. 2012CA00041 PERCY K. LAM

Defendant-Appellant OPINION

CHARACTER OF PROCEEDING: Appeal from the Stark County Court of Common Pleas, Domestic Relations Division Case No. 2010DR1001

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: October 15, 2012

APPEARANCES:

For Defendant-Appellant For Plaintiff-Appellee

JOHN JUERGENSEN SUSAN PUCCI John L. Juergensen Co., LPA 4429 Fulton Dr. N.W. Washington Square Office Park Ste 100 6545 Market Ave North Canton, Ohio 44718 North Canton, Ohio 44721 Stark County, Case No. 2012CA00041 2

Hoffman, P.J.

{¶1} Defendant-appellant Percy K. Lam (“Husband”) appeals the January 26,

2012 Judgment Entry entered by the Stark County Court of Common Pleas, Domestic

Relations Division, which granted a divorce to Husband and plaintiff-appellee Carolyn H.

Lam (“Wife”), classified and divided the parties’ property, and ordered Husband to pay

spousal support.

STATEMENT OF THE FACTS AND CASE

{¶2} Husband and Wife were married on November 28, 1982. One child,

Andrew (dob 3/31/83) was born as issue. Although Andrew is biologically past the age

of emancipation, he has been diagnosed with atypical psychosis and is developmentally

disabled. Andrew receives social security disability benefits.

{¶3} Wife filed a Complaint for Divorce on August 5, 2010. Husband was

granted leave to plead and filed his Answer on December 7, 2010. The matter

proceeded to trial over the course of three days, November 30, 2011, December 27,

2011, and January 17, 2012.

{¶4} On the first day of trial, Husband advised the trial court he was voluntarily

retiring from Marathon Petroleum, effective February 1, 2012. Husband, who was 60

years old at the time of the trial, had worked for Ashland Hercules and Marathon

Petroleum for a combined 34 years. He has a Master’s Degree in chemical

engineering. Husband’s Medicare wages were $142,671, in 2008; $139,976, in 2009;

and $144,042, in 2010. Wife, who was 55 years old, has a Bachelor’s Degree in

accounting. She has worked part time for H & R Block preparing tax returns for six Stark County, Case No. 2012CA00041 3

years. She generally earns $10,000/year in that position. Wife is unable to secure full-

time employment due to Andrew’s needs.

{¶5} Wife testified Husband had been threatening retirement for some time.

She acknowledged Husband has been unhappy in the marriage for many years.

Husband is verbally and emotionally abusive to both Andrew and Wife, calling them

“stupid”. Husband blames Wife for failing to teach Andrew how to do things correctly.

Husband acknowledged Andrew could never live on his own.

{¶6} Wife discovered Husband had bank accounts at Hang Seng Bank in Hong

Kong. When she confronted him, Husband indicated he intended to retire and move to

Hong Kong, where he would marry a young Chinese girl who would give him healthy,

smart children.

{¶7} Over the course of the marriage, Husband sent money to his and Wife’s

families in China. Husband generally sent less than $2,000 per year. In October, 2008,

Husband sent $26,000 to his brother. Husband claimed the funds were from an

American bank account his brother had closed.

{¶8} Via Judgment Entry filed January 26, 2012, the trial court granted a

divorce to the parties based upon the grounds of incompatibility. The trial court found

the total value of the marital assets was $2,114,649. These marital assets included the

entire value of an Ashland Hercules Leveraged Employee Stock Ownership Plan and all

of the monies in the accounts in Hang Seng Bank. The trial court made an unequal

division of the marital property, allocating $163,729 of Husband’s share of property to

Wife. The trial court explained the amount was “the net present value of the periodic Stark County, Case No. 2012CA00041 4

spousal support and child support payments.” The trial court found the division of the

marital property was equitable given the facts and circumstances of the case.

{¶9} It is from this judgment entry Husband appeals, raising as error:

{¶10} “I. THE TRIAL COURT ABUSED ITS DISCRETION IN DIVIDING THE

MARITAL PROPERTY.

{¶11} “II. THE TRIAL COURT ABUSED ITS DISCRETION IN AWARDING DE

FACTO SPOUSAL SUPPORT IN THE FORM OF A PROPERTY DIVISION.

{¶12} “III. THE TRIAL COURT ABUSED ITS DISCRETION IN CALCULATING

THE DE FACTO AWARD OF SPOUSAL SUPPORT.

{¶13} “IV. THE TRIAL COURT ABUSED ITS DISCRETION BY DETERMINING

THAT ALL OF THE ASHLAND HERCULES LEVERAGED EMPLOYEE STOCK

OWNERSHIP PLAN WAS A MARITAL ASSET.

{¶14} “V. THE TRIAL COURT ABUSED ITS DISCRETION BY DETERMINING

THAT ALL OF THE FUNDS IN THE HANG SENG BANK ACCOUNT WERE A

MARITAL ASSET.”

I, II

{¶15} Husband’s first and second assignments of error are interrelated and shall

be addressed together. In his first assignment of error, Husband asserts the trial court

abused its discretion in dividing the marital property. In his second assignment of error,

Husband submits the trial court abused its discretion in awarding de facto spousal

support in the form of a property division.

{¶16} We begin by setting forth our narrow standard of review. In domestic

matters, a trial court is vested with broad discretion and its decision will not be Stark County, Case No. 2012CA00041 5

overturned absent a showing of an abuse of discretion. Martin v. Martin (1985), 18 Ohio

St.3d 292, 294-295, 480 N.E.2d 1112. An abuse of discretion occurs when the trial

court's decision is unreasonable, arbitrary, or unconscionable, which is something more

than a mere error of law or judgment. Blakemore v. Blakemore (1983), 5 Ohio St.3d

217, 219, 450 N.E.2d 1140. Under this standard, a reviewing court is not permitted to

substitute its judgment for that of the trial court unless, after considering the totality of

the circumstances, we determine the trial court abused its discretion. Holcomb v.

Holcomb (1989), 44 Ohio St.3d 128, 131, 541 N.E.2d 597.

{¶17} In its January 26, 2012 Judgment Entry, the trial court addressed the

factors set forth in R.C. 3105.18(C) in determining whether an award of spousal support

was appropriate. The trial court specifically noted:

“Husband transferred funds to China throughout the marriage.

Other than the $26,000 check to his brother in 2008, there was little

evidence that Husband aggressively transferred funds to China in the later

years of the marriage or in contemplation of this divorce. However,

Husband did admit that he had falsified financial records to keep Wife in

the dark about his losses in the stock market, and he shredded

documents.

“Wife has alleged that Husband intends to move to Hong Kong as

soon as his retirement is final, find a young wife and have a healthy child.

The Court believes it is more likely than not that he will do so. This will

place him beyond the reach of this Court, making it impossible to enforce

a periodic order of spousal support, child support or medical expenses for Stark County, Case No. 2012CA00041 6

Andrew. On a 29-year marriage, spousal support would normally last for

10 years. The Court would have retained jurisdiction over spousal support

to make adjustments when normal retirement occurred. Husband’s

decision to preemptively retire in the midst of this litigation appears to the

Court to be an attempt by Husband to avoid his obligations to his wife and

disabled son.” January 26, 2012 Judgment Entry at 8.

{¶18} Based upon all of the factors, the trial court found “spousal support would

be appropriate and reasonable in the amount of $2,500 per month or $30,000 per year.”

January 26, 2012 Judgment Entry at 8. The trial court continued, “[u]nder ordinary

circumstances, [it] would order this amount in the form of periodic monthly payments of

$2,500 and retain jurisdiction to modify the order.” Id. However, the trial court found it

more likely than not Husband would move to Hong Kong, placing himself “beyond the

reach of the Court’s contempt powers”, thus rendering the periodic order

“unenforceable.” Given this concern and Husband’s attitude toward Wife and their son,

the trial court was skeptical Husband would voluntarily comply with the periodic order.

As such, the trial court ordered a lump sum distribution of property.

{¶19} R.C. 3105.18(B) provides:

“In divorce and legal separation proceedings, upon the request of

either party and after the court determines the division or disbursement of

property under section 3105.171 of the Revised Code, the court of

common pleas may award reasonable spousal support to either party.

During the pendency of any divorce, or legal separation proceeding, the

court may award reasonable temporary spousal support to either party. Stark County, Case No. 2012CA00041 7

“An award of spousal support may be allowed in real or personal

property, or both, or by decreeing a sum of money, payable either in gross

or by installments, from future income or otherwise, as the court considers

equitable.” (Emphasis added).

{¶20} Husband acknowledges the trial court’s statutory authority pursuant to

R.C. 3105.18(B) to divide marital assets and, thereafter, order a lump sum spousal

support award from one party’s share. Husband contends, however, the trial court

failed to “specifically order that the extra amounts to Wife were for spousal support.”

Brief of Appellant at 7. Husband concludes the “trial court awarded de facto spousal

support through an unequal division of marital assets” and such “constitutes an

improper commingling of the marital property division and the spousal support award.”

Id. We disagree.

{¶21} The trial court calculated the parties’ marital assets, and found such to

total $2,114,649, with a one half share being $1,057,324.50. The parties had no debt.

The trial court noted the property division was not equal as $163,729 was allocated from

Husband’s share to Wife’s share. The trial court specifically stated, “This amount is the

net present value of the periodic spousal support and child support payments as

calculated”. January 26, 2012 Judgment Entry at 11. R.C. 3105.171(C)(1) provides “[i]f

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.” We find the trial court did not abuse its discretion with

respect to either the division of marital property or the lump sum payment of spousal

support through real property. Stark County, Case No. 2012CA00041 8

{¶22} Husband’s first and second assignments of error are overruled.

III

{¶23} In his third assignment of error, Husband contends the trial court abused

its discretion in calculating the de facto award of spousal support.

{¶24} R.C. 3105.18(C)(1) lists 14 factors a trial court must consider in

determining whether spousal support is appropriate and reasonable, including the

“income” and “earning abilities” of each party. R.C. 3105.18(C)(1)(a), (b). “When

considering the relative earning abilities of the parties in connection with an award of

spousal support, Ohio courts do not restrict their inquiry to the amount of money actually

earned, but may also hold a person accountable for the amount of money a ‘person

could have earned if he made the effort.’ “ Seaburn v. Seaburn, Stark App.

No.2004CA00343, 2005-Ohio-4722, ¶ 32; citing Beekman v. Beekman (Aug. 15, 1991),

Franklin App. No. 90AP-780. Therefore, “Ohio courts often impute income to parties

who are voluntarily underemployed or otherwise not working up to their full earning

potential.” Id. at ¶ 33.

{¶25} Whether a party is “voluntarily unemployed or under-employed” is a

factual determination to be made by the trial court based on the circumstances of each

particular case. Rock v. Cabral (1993), 67 Ohio St.3d 108, 112. Similarly, the amount of

income imputed to a person found to be “voluntarily under-employed” is equally a

question of fact, not to be disturbed, absent an abuse of discretion. Id.

{¶26} The trial court imputed Husband’s income at $144,042, his 2010 earnings,

finding Husband was “underemployed based on his voluntary decision to take early

retirement at the age of 60 while in the middle of divorce litigation.” January 26, 2012 Stark County, Case No. 2012CA00041 9

Judgment Entry at 7. Husband maintains there was no evidence presented to establish

he retired solely to avoid his spousal support obligation. Husband testified age 60 is the

“normal” retirement age at his company, he suffers from anemia, a common condition

among chemical plant workers, and he has been exposed to potentially cancer causing

chemicals. Husband had worked for 34 years and had a substantial net worth. He

concludes it was reasonable for him to retire under the circumstances and the trial court

abused its discretion in imputing $144,042 in income to him. We disagree.

{¶27} While Husband testified to the many valid reasons he had for retiring at

the time he chose to do so, Wife testified Husband informed her he intended to move to

Hong Kong as soon as his retirement is finalized. As the trier of fact, the trial court was

free to accept or reject any or all of the testimony of the witnesses. The trial court chose

to believe Wife’s testimony, giving rise to concerns Husband would place himself

beyond the trial court’s powers.

{¶28} Husband further asserts the trial court abused its discretion as it deprived

him of the tax benefits he would receive from paying periodic spousal support. Although

tax consequences are a factor a trial court is to consider under R.C. 3105.18(C)(1)(L),

the fact Husband would have received a tax benefit from his payment of monthly

spousal support does not equate to the trial court’s failure to consider the factor or rise

to the level of an abuse of discretion for not ordering monthly support payments.

{¶29} Husband’s third assignment of error is overruled. Stark County, Case No. 2012CA00041 10

IV

{¶30} In his fourth assignment of error, Husband argues the trial court abused its

discretion in determining all of the Ashland Hercules Leveraged Employee Stock

Ownership Plan (“ESOP”) was a marital asset.

{¶31} A trial court has broad discretion in dividing marital assets and liabilities in

a divorce action. Lee v. Lee, Licking App. No.2008CA112, 2009-Ohio-5250, ¶ 85-87

citing Cherry v. Cherry (1981), 66 Ohio St.2d 348, 421 N.E.2d 1293. Accordingly, an

appellate court is limited to a determination of whether, under the totality of the

circumstances, the trial court abused its discretion in dividing the property. Holcomb v.

Holcomb (1989), 44 Ohio St.3d 128, 131, 541 N.E.2d 597, 599.

{¶32} R.C. 3105.171(A)(6)(a) defines separate property as “(ii) Any real or

personal property or interest in real or personal property that was acquired by one

spouse prior to the date of the marriage.”

{¶33} “The commingling of separate property with other property of any type

does not destroy the identity of the separate property as separate property, except

when the separate property is not traceable.” R.C. 3105.171(A)(6)(b). Therefore,

traceability is central when determining whether separate property has “lost its separate

character” after being commingled with marital property. Peck v. Peck (1994), 96 Ohio

App.3d 731, 734, 645 N.E.2d 1300, 1302. The party seeking to establish an asset as

separate property has the burden of proof, by a preponderance of the evidence, to trace

the asset to separate property. Peck at 734, 645 N.E.2d 1300. The characterization of

property as separate or marital is a mixed question of law and fact, not discretionary,

and the characterization must be supported by sufficient, credible evidence. Kotch v. Stark County, Case No. 2012CA00041 11

Kotch, 178 Ohio App.3d 358, 2008-Ohio-5084, 897 N.E.2d 1191, ¶ 19 citing McCoy v.

McCoy (1995), 105 Ohio App.3d 651, 654, 664 N.E.2d 1012; Kelly v. Kelly (1996), 111

Ohio App.3d 641, 676 N.E.2d 1210. Once the characterization has been made, the

actual distribution of the asset may be properly reviewed under the more deferential

abuse-of-discretion standard.

{¶34} Husband commenced his employment with Ashland in 1977. The parties

were married in 1982. Husband testified, at the time of the marriage, he had

accumulated some value in the ESOP. Husband stated he thought there was “probably

a few thousand dollars”, “[l]ess than $10,000 at the time” in the accounts.

Subsequently, when counsel for Wife presented Husband with evidence from Pension

Evaluators and QDRO Consultants, Husband conceded the ESOP was all marital.

December 27, 2011 Trial Transcript at 51.

{¶35} Based upon Husband’s own admission, we find the trial court did not

abuse its discretion in determining the ESOP was a marital asset. Furthermore,

Husband failed to definitely establish the amount of his pre-marital contribution to the

ESOP.

{¶36} Husband’s fourth assignment of error is overruled.

V

{¶37} In his final assignment of error, Husband contends the trial court abused

its discretion in determining all of the funds in the investment account at Hang Seng

Bank were marital assets.

{¶38} Our standard of review is set forth, supra. Stark County, Case No. 2012CA00041 12

{¶39} The trial court found one-half of the funds in the investment account were

marital. Husband submits only $6,000 of the total funds of $59,399 was his personal

property, and the remainder belonged to his sister. The investment account is in

Husband and sister’s joint names. Husband testified his sister had worked multiple jobs

from the time she was twelve years old.

{¶40} The trial court did not find Husband’s assertions to be credible. The trial

court noted Husband’s long history of sending funds to Hong Kong as well as the fact

Husband’s sister was retired from a low paying job.

{¶41} Husband’s fifth assignment of error is overruled.

{¶42} The judgment of the Stark County Court of Common Pleas, Domestic

Relations Division, is affirmed.

By: Hoffman, P.J.

Farmer, J. and

Edwards, J. concur

s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN

s/ Sheila G. Farmer __________________ HON. SHEILA G. FARMER

s/ Julie A. Edwards___________________ HON. JULIE A. EDWARDS Stark County, Case No. 2012CA00041 13

IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

CAROLYN H. LAM : : Plaintiff-Appellee : : -vs- : JUDGMENT ENTRY : PERCY K. LAM : : Defendant-Appellant : Case No. 2012CA00041

For the reasons stated in our accompanying Opinion, the judgment of the Stark

County Court of Common Pleas, Domestic Relations Division, is affirmed. Costs to

Appellant.

s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN

s/ Julie A. Edwards___________________ HON. JULIE A. EDWARDS