Liu v. Tallarico-Liu

2022 Ohio 1088

• Court: Ohio Court of Appeals
• Decided: March 31, 2022
• Docket: 21CA000024
• Status: Published

Opinion

[Cite as Liu v. Tallarico-Liu, 2022-Ohio-1088.]

COURT OF APPEALS GUERNSEY COUNTY, OHIO FIFTH APPELLATE DISTRICT

LOUIS S. LIU JUDGES: Hon. Earle E. Wise, Jr., P. J. Plaintiff-Appellant Hon. John W. Wise, J. Hon. Patricia A. Delaney, J. -vs- Case No. 21CA000024 LOU ANN TALLARICO-LIU

Defendant-Appellee OPINION

CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common Pleas, Domestic Relations Division, Case No. 20DR000211

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: March 31, 2022

APPEARANCES:

For Plaintiff-Appellant For Defendant-Appellee

MILES D. FRIES HERBERT W. BAKER GOTTLIEB, JOHNSTON, 301 Main Street BEAM & DAL PONTE P.O. Box 400 320 South Main Street, P.O. Box 190 Zanesville, Ohio 43702-0400 Zanesville, Ohio 43702-0190 Guernsey County, Case No. 21CA000024 2

Wise, John, J.

{¶1} Plaintiff-Appellant Louis L. Liu appeals the April 29, 2021, decision of the

Guernsey County Court of Common Pleas adopting and approving the April 29, 2021,

Magistrate’s Decision.

{¶2} Defendant-Appellee is Lou Ann Tallarico-Liu.

STATEMENT OF THE FACTS AND CASE

{¶3} The relevant facts and procedural history are as follows:

{¶4} The parties were married on May 7, 2005, and filed for divorce on April 27,

2020. At the time of the divorce hearing, Appellant-Husband was 67 years old and

received a monthly social security benefit of $870.00 and a monthly V.A. benefit of

$3,800.00. Appellee-Wife was 81 years old at the time of the divorce hearing and received

a monthly social security benefit of $1,113.40 and a monthly pension benefit of $261.04.

{¶5} On May 3, 2005, just prior to their marriage, the parties signed an Ante-

Nuptial Agreement. A separate list of assets of each party was attached to the agreement

as follows:

EXHIBIT A Assets of LOU ANN TALLARICO:

1) (a) Real property located at 4945 Cliffrock Drive, Zanesville, Ohio with a value of $250,000; (b) Real property located at 4890 Sugar Grove, Cambridge, Ohio with a value of $144,000; (subject to a mortgage to National City Bank in the amount of $99,000;) 2) A 2002 Honda CRV valued at $18,000; 3) (a) Century National Bank (formerly First Federal Savings Bank) Accounts as follows: (i) Savings Account #701220048 in the amount of $25,142.55; (ii) Checking Account #154402704 in the amount of $1,256.00; (b) Century National Bank Certificates of Deposit, to-wit: (i) One in the amount of $30,285.00; (ii) One in the amount of $35,405.00; Guernsey County, Case No. 21CA000024 3

(c) Community Bank Check Account #987749 in the amount of $5,727.00; (d) Genesis TDA Thrift Plan in the amount of $41,488.00; 4) One complete set of household goods and furnishings located at 4945 Cliffrock Drive, Zanesville, Ohio valued at $2,000.

EXHIBIT B Assets of LOUIS S. LIU:

1) 1991 Honda Accord valued at $2,000; 2) National City Savings Account in the amount of $50; 3) One complete set of household goods and furnishings located at 4890 Sugar Grove, Cambridge, Ohio valued at $2,000.

{¶6} On April 13 and April 26, 2021, an evidentiary hearing was held on Plaintiff’s

Complaint in Divorce and Defendant's Counterclaim.

{¶7} At said hearing, Husband argued that the Ante-Nuptial Agreement should

be set aside as not valid; arguing that English is not his first language, he has difficulty

reading, he was not represented by counsel, and that he was only in Wife's attorney's

office that one time to sign the paperwork and he didn't read it.

{¶8} On April 29, 2021, a Magistrate’s Decision was filed wherein the Magistrate

found that Husband’s argument to have the ante-nuptial agreement set aside failed for

the following reasons:

a. Husband has lived in this country since he was 17 years old. He

was born 01/15/1954 and would have been 51 years old at the time of the

signing of the agreement and would have been in the US for 34 years.

b. Husband graduated from high school in the US.

c. Husband retired from the US military and would have had to pass

a written test to enter. Guernsey County, Case No. 21CA000024 4

d. Husband was actively involved in the creation of the agreement as

his children are listed in the document and Wife did not know his children.

e. The Magistrate finds that Husband's testimony is not credible.

9. Therefore the Magistrate finds that the antenuptial agreement is

valid and enforceable.

{¶9} (Magistrate’s Decision, 4/29/2021, at 2).

{¶10} Finding the Agreement to be valid, the Magistrate then went on to consider

whether the appreciation of the Sugar Grove property was marital property and subject

to division.

{¶11} The Magistrate found that prior to September, 2004, Husband had owned

the Sugar Grove property. However, he was behind on his mortgage payments, was

facing foreclosure, and was unable to refinance the mortgage due to having previously

filed for bankruptcy. At that time the house was valued at $144,000 subject to a $99,000

mortgage.

{¶12} Wife purchased the property from Husband in September, 2004, prior to the

marriage, and took out a $100,000 mortgage on the property

{¶13} In September, 2009, Wife sold her premarital property located at Cliffrock

Drive in Zanesville. At that time, she used $35,000 of her sale proceeds to pay down the

mortgage on the Sugar Grove property, which brought the balance down to $41,115.06.

By August 5, 2011, the mortgage was satisfied.

{¶14} The parties maintained separate bank accounts. Husband testified that he

gave money to Wife every month for the mortgage payment. Wife did not dispute the fact Guernsey County, Case No. 21CA000024 5

that Husband gave her money but testified that the money was for food, clothing and

general household items.

{¶15} The Magistrate found that the funds used to pay the $41,115.06 balance on

the mortgage came from marital income, regardless of the source of the income.

{¶16} The parties agreed that some improvements were made to the property,

and that the property is now valued at $215,000. Husband claimed that he paid for the

improvements, however, he provided no documentation or receipts in support of his

claims. The court noted that Husband had failed to provide any discovery during this

action, despite being ordered multiple times to provide documentation to support his

allegations.

{¶17} Wife, on the other hand, provided the court with receipts showing that she

paid for the new driveway out of her bank account and also paid for the outdoor stove out

of premarital funds. These two improvements totaled over $40,000. Wife provided

testimony and evidence of improvements totaling $59,437.16.

{¶18} In conclusion, the Magistrate found that Husband had no interest in the

Sugar Grove property but that he was entitled to $20,557.53 for his portion of the

reduction of the mortgage.

{¶19} It should also be noted that the Magistrate found that Husband had not been

truthful when listing his assets in the Ante-Nuptial Agreement, failing to disclose that he

owned real estate in Columbus, Ohio.

{¶20} On April 29, 2021, a Judgment Entry and Order Adopting the Magistrate’s

Decision was filed. Guernsey County, Case No. 21CA000024 6

{¶21} On May 13, 2021, Husband filed a Civil Rule 53 Objection to the

{¶22} By Judgment Entry filed August 20, 2021, the trial court overruled the

objections and reaffirmed its adoption and approval of the Magistrate’s Decision.

{¶23} Appellant-Husband now appeals, assigning the following error for review:

ASSIGNMENT OF ERROR

{¶24} “I. THE TRIAL COURT'S DETERMINATION OF THE MARITAL EQUITY IN

THE REAL ESTATE WAS CONTRARY TO LAW AS APPELLEE FAILED TO SUSTAIN

HER BURDEN OF PROOF REGARDING PASSIVE APPRECIATION OF THE REAL

ESTATE.”

I.

{¶25} In his sole assignment of error, Appellant argues the trial court erred in its

determination regarding the division of the equity as to the Sugar Grove property. We

disagree.

{¶26} R.C. §3105.171(B) states in pertinent part that “[i]n divorce proceedings,

the court shall * * * determine what constitutes marital property and what constitutes

separate property. In either case, upon making such a determination, the court shall

divide the marital and separate property equitably between the spouses, in accordance

with this section. For purposes of this section, the court has jurisdiction over all property,

excluding the social security benefits of a spouse other than as set forth in division (F)(9)

of this section, in which one or both spouses have an interest.” There is a presumption in

Ohio that an asset acquired during the course of the marriage is marital property, unless

proved otherwise. Haven v Haven, 5th Dist. Ashland No. 12-COA-013, 2012-Ohio-5347, Guernsey County, Case No. 21CA000024 7

¶ 23. Correspondingly, the definition of “separate property” includes “[a]ny real or

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

prior to the date of the marriage[.]” R.C. §3105.171(A)(6)(a)(ii).

{¶27} The characterization of property as marital or separate must be supported

by sufficient, credible evidence. Kess v. Kess, 5th Dist. Delaware No. 15 CAF 10 0076,

2018-Ohio-1370, 2018 WL 1750932, ¶ 51 citing Chase–Carey v. Carey, 5th Dist.

Coshocton No. 99CA1, 1999 WL 770172. The party to a divorce action seeking to

establish that an asset or portion of an asset is separate property, rather than marital

property, has the burden of proof by a preponderance of the evidence. Passyalia v.

Moneir, 5th Dist. Stark No. 2016 CA 00182, 2017–Ohio–7033, ¶ 18 citing Cooper v.

Cooper, 5th Dist. Licking No. 14 CA 100, 2015–Ohio–4048, ¶ 45, citing Zeefe v. Zeefe,

125 Ohio App.3d 600, 614, 709 N.E.2d 208 (1998).

{¶28} We also note R.C. §3105.171(C)(1) states in pertinent part as follows:

Except as provided in this division or division (E) of this section, the

division of marital property shall be equal. 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. * * *.” Pletcher v. Pletcher, 5th Dist. Muskingum

No. CT2019-0002, 2019-Ohio-3625, 2019 WL 4267781, ¶ 18.

{¶29} In order to make an equitable division of property, the trial court should first

determine the value of the marital assets. Passyalia v. Moneir, 5th Dist. No. 2016 CA

00182, 2017-Ohio-7033, 95 N.E.3d 723, 2017 WL 3263785, ¶ 10 citing Eisler v. Eisler

(1985), 24 Ohio App.3d 151, 152, 493 N.E.2d 975. In performing this function, the trial Guernsey County, Case No. 21CA000024 8

court has broad discretion to develop some measure of value. Berish v. Berish, 69 Ohio

St.2d 318, 432 N.E.2d 183 (1982). Thus, “[t]he valuation of marital assets is typically a

factual issue that is left to the discretion of the trial court.” Roberts v. Roberts, 10th Dist.

Franklin No. 08AP-27, 2008-Ohio-6121, 2008 WL 5049808, ¶ 18, citing Berish, supra.

{¶30} Trial court decisions regarding the classification of separate and marital

property are not reversed unless there is a showing of an abuse of discretion. Pletcher v.

Pletcher, 5th Dist. Muskingum No. CT2019-0002, 2019-Ohio-3625, 2019 WL 4267781, ¶

15 citing Valentine v. Valentine, 5th Dist. Ashland No. 95COA01120, 1996 WL 72608,

citing Peck v. Peck, 96 Ohio App.3d 731, 734, 645 N.E.2d 1300 (12th Dist.1994). In order

to find an abuse of discretion, we must determine that the trial court's decision was

unreasonable, arbitrary, or unconscionable and not merely an error of law or judgment.

Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983).

{¶31} While the characterization of property as separate or marital must be

supported by sufficient, credible evidence, the appellate court is not the trier of fact. Our

role is to determine whether there is relevant, competent, and credible evidence upon

which the factfinder could base his or her judgment. Tennant v. Martin–Auer, 188 Ohio

App.3d 768, 936 N.E.2d 1013, 2010–Ohio–3489, ¶ 16, citing Cross Truck v. Jeffries, 5th

Dist. Stark No. CA–5758, 1982 WL 2911.

{¶32} This Court has consistently held that it cannot substitute its judgment for

that of the trial court, and the Supreme Court has directed us not to conduct piece meal

appeals of property divisions, but rather to look to the total distribution to determine

whether it is equitable. Haynes v. Haynes, 5th Dist. Coshocton No. 2010-CA-01, 2010-

Ohio-5801, 2010 WL 4868078, ¶ 38 citing Briganti v. Briganti, 9 Ohio St.3d 220, 459 Guernsey County, Case No. 21CA000024 9

N.E.2d 896 (1984); Hostetler v. Hostetler, 5th Dist. Stark Nos. 2018CA00052,

2018CA00054, 2019-Ohio-609, ¶ 19.

{¶33} In the case before us, Appellee presented evidence that the Sugar Grove

property was pre-marital property, which at the time of the marriage was valued at

$144,000 and had appreciated to $215,000 by the time of the divorce.

{¶34} “Marital property” includes “[a]ll real and personal property that currently is

owned by either or both of the spouses * * * and that was acquired by either or both of

the spouses during the marriage,” and “[a]ll interest that either or both of the spouses

currently has in any real or personal property * * * and that was acquired by either or both

of the spouses during the marriage.” R.C. §3105.171(A)(3)(a)(i) and (ii). Marital property

also includes “income and appreciation on separate property, due to the labor, monetary,

or in-kind contribution of either or both of the spouses that occurred during the marriage.”

R.C. 3105.171(A)(3)(a)(iii). This is known as active appreciation. Ostmann v. Ostmann,

168 Ohio App.3d 59, 858 N.E.2d 831, 2006–Ohio–3617, ¶ 26. Thus, “when either spouse

makes a labor, money, or in-kind contribution that causes an increase in the value of

separate property, that increase in value is deemed marital property.” Middendorf v.

Middendorf (1998), 82 Ohio St.3d 397, 400, 696 N.E.2d 575. (Emphasis sic.)

{¶35} “Separate property” includes “[a]ny real or personal property or interest in

real or personal property that was acquired by one spouse prior to the date of the

marriage” and “[p]assive income and appreciation acquired from separate property by

one spouse during the marriage.” R.C. §3105.171(A)(6)(a)(ii) and (iii). Appreciation of

separate property “due solely to market forces, such as location and inflation” is passive Guernsey County, Case No. 21CA000024 10

appreciation and remains separate property. Sterbenz v. Sterbenz, 9th Dist No. 21865,

2004–Ohio–4577, ¶ 5.

{¶36} A party who wants an asset classified as separate property bears the

burden of tracing that asset to his or her separate property. Dunham v. Dunham, 171

Ohio App.3d 147, 870 N.E.2d 168, 2007–Ohio–1167 at ¶ 20. When parties contest

whether an asset is marital or separate property, the presumption is that the property is

marital, unless proven otherwise. C.S. v. M.S., 9th Dist. Summit No. 29070, 2019-Ohio-

1876, 2019 WL 2147898, ¶ 16.

{¶37} Here, Appellee presented testimony that at the time of the marriage the

property was encumbered by a mortgage of $100,000. Appellee provided the court with

evidence that she used proceeds from the sale of her pre-marital property to pay down

the mortgage. She further provided the court with evidence establishing that she paid for

significant improvements to the property from pre-marital funds, totaling approximately

$59,437.

{¶38} Based on the testimony evidence presented by Appellee and the lack of

any evidence presented by Appellant, the court found that the Sugar Grove property was

separate, pre-marital property belonging to Appellee, and that Appellant had no interest

in same. The court went on to find that $41,115.06 of marital funds were used to pay the

mortgage and ordered Appellee to pay $20,557 for his share of those payments.

{¶39} “[A] party who fails to provide adequate evidence as to the amount of

passive appreciation fails to meet his burden of tracing the appreciation as separate

property,” and courts should not speculate “when the evidence is devoid of a cause for

the increase.” McLeod v. McLeod, 11th Dist. No. 2000–L–197, 2002–Ohio–3710, ¶ 31. Guernsey County, Case No. 21CA000024 11

(Emphasis sic). [C]ourts should not simply conclude, without any evidence, that some of

the appreciation must be passive. The party claiming the appreciation is due to ‘enhanced

market value’ must prove it first.” Bizjak v. Bizjak, 11th Dist. No. 2004–L–083, 2005–Ohio–

7047. (Emphasis sic).

{¶40} Because competent, credible evidence supports the trial court's designation

of the Sugar Grove property as separate property, we find Appellant's sole assignment of

error not well-taken and overrule same.

{¶41} Accordingly, the judgment of the Court of Common Pleas of Guernsey

County, Ohio, is affirmed.

By: Wise, John, J.

Wise, Earle, P. J., and

Delaney, J., concur.

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