Stapleton v. Stapleton

2022 Ohio 3018
CourtOhio Court of Appeals
DecidedAugust 31, 2022
DocketC-210329
StatusPublished
Cited by2 cases

This text of 2022 Ohio 3018 (Stapleton v. Stapleton) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stapleton v. Stapleton, 2022 Ohio 3018 (Ohio Ct. App. 2022).

Opinion

[Cite as Stapleton v. Stapleton, 2022-Ohio-3018.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

KRISSANN STAPLETON, : APPEAL NO. C-210329 TRIAL NO. DR-1901257 Plaintiff-Appellant, :

VS. : O P I N I O N.

SCOTT STAPLETON, :

Defendant-Appellee. :

Appeal From: Hamilton County Court of Common Pleas, Domestic Relations Division

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: August 31, 2022

Roetzel & Andress, LPA, Stephen W. Funk and Emily K. Anglewicz, for Plaintiff- Appellant,

Barbara J. Howard Co., L.P.A., Barbara J. Howard and Rachel H. Myers, for Defendant-Appellee. OHIO FIRST DISTRICT COURT OF APPEALS

WINKLER, Judge.

{¶1} Plaintiff-appellant Krissann Stapleton appeals a divorce decree entered

by the Hamilton County Court of Common Pleas, Domestic Relations Division. She

advances two assignments of error for our review that challenge the trial court’s

decision on property and spousal support. For the reasons set forth below, we affirm

the trial court’s judgment.

I. Procedural and Factual History

{¶2} Krissann and defendant-appellee Scott Stapleton married in 1987 and

had three children, all of whom are now emancipated. Over the course of the

approximately 34-year marriage, the parties owned and operated three related

businesses: Miami Athletic Club, Inc., (“MAC”) a fitness center; Fitness Xpress, LLC,

(“Fitness Express”) a CrossFit gym operated out of MAC; and NTM Enterprises, LLC,

(“NTM”) a company that owns the real estate where MAC and Fitness Express are

located. We collectively refer to as these entities as the “marital businesses” or the

“health club.” The main source of income for the parties during much of the marriage

was the operation of the health club that afforded them a “high standard of living.”

{¶3} In 2019, Krissann filed for divorce and sought spousal support. Scott

counterclaimed. The trial court issued various temporary orders, including support

orders and orders that became necessary for operating the health club due to the

parties’ antagonistic relationship.

{¶4} Although the parties agreed that they should be granted a divorce on

grounds of incompatibility, they could not agree on an equitable property division or

spousal support. The parties had substantial assets in addition to the health club that

the trial court needed to divide and value, such as the marital home in Cincinnati, cars,

2 OHIO FIRST DISTRICT COURT OF APPEALS

a boat and related equipment, bank accounts, insurance policies, and retirement

accounts. The parties also had mortgages and loans related to the health club.

{¶5} During their negotiations to resolve the property issues, the parties

contemplated selling the health club. To inform their decision, they hired business

consultant Robert Caro to evaluate and value the health club. Caro had been involved

in the industry for 47 years, and he had valued over 400 health clubs.

{¶6} The purpose of Caro’s study was to determine the fair market value for

the combined assets of the real estate (land and building),

furniture/fixtures/equipment, and business. Caro issued a comprehensive 97-page

report concerning a valuation date of June 20, 2020, under an income approach. He

used a net stabilized income value that took into consideration the health club’s

financials for the preceding 12 months, along with other relevant data, including the

impact of the COVID-19 pandemic, and assigned a capitalization rate of four. Notably,

Caro concluded that the fair market value of the health club after considering liabilities

was zero. And he advised the parties that it was a very bad time to sell, with a

“minimal” “likelihood of a near-term viable transaction.”

{¶7} As the divorce case proceeded in the domestic relations court, hearings

occurred on seven dates between September 28, 2020, and February 24, 2021. Part

of the extensive evidence presented included Caro’s testimony and report.

{¶8} During Caro’s December 15, 2020 testimony, he opined, in accordance

with his report, that MAC, Express Fitness, and NTM had to be valued as one

“package” due to limitations of the real estate. Moreover, he maintained the only

appropriate approach for valuation was the income approach, and that approach

demonstrated there was no net equity in the health club. Caro indicated that his

3 OHIO FIRST DISTRICT COURT OF APPEALS

analysis considered the actual financials of the health club and property-specific issues

such as much-needed-but-deferred maintenance. His simplified analysis was that

there were “too many liabilities and not enough assets,” resulting in “shareholder

equity of zero,” at best. He added that more recent data on the “real fragility” of the

health club industry due to COVID-19 supported an even lower fair market value than

he had calculated in his report. He expected approximately one quarter of all fitness

clubs to be closed by the end of 2020. Further, he told the court that, “in his view, it

would be a long time before a proper third-party sale can occur.”

{¶9} Caro additionally said his assessment showed the health club could not

afford to pay two owner salaries, and he suggested one party take on running the

business. He warned that running the health club would be a “challenge,” requiring

an owner “who’s willing to be on-site, focused, [and] put all their efforts in.” Even with

those parameters, Caro could not say with confidence that the health club would

survive.

{¶10} Although Scott presented Caro as his expert, Krissann stipulated to

Caro’s qualifications as an expert, told the court she “did not dispute his zero-value

conclusion,” and did not present a competing expert. Her counsel cross-examined

Caro on various aspects of his assumptions and calculations, including his inclusion of

a shareholder loan as a long-term liability without knowing the terms and conditions

of repayment. Caro later confirmed that nothing brought out during his cross-

examination changed his opinions.

{¶11} While Krissann was consistent in her position that the marital

businesses should be sold and the net profits, if any, split equally, she was inconsistent

in her position with respect to whether the marital businesses had to be sold as a

4 OHIO FIRST DISTRICT COURT OF APPEALS

package and the timing for the sale. She seemed to agree that an immediate sale of

the marital businesses was not economically feasible because it would result in a loss.

She testified, however, to having a broker ready to list MAC and Fitness Express, but

not NTM, for almost $800,000. She did not support this representation with any

documentation or details. She also cited 2018 valuation information for NTM, which

was mortgaged for approximately $650,000, but not a valuation reflecting the current

market condition. Krissann clearly articulated, however, that no matter when the

marital businesses were sold, in the interim she sought equal ownership and decision-

making authority, and equal compensation from the money streaming through the

health club.

{¶12} Other evidence presented for the trial court’s consideration on the

issues of property and support showed that for much of the marriage, Krissann was

physically present and heavily involved in operating the health club, developing

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2022 Ohio 3018, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stapleton-v-stapleton-ohioctapp-2022.