Wolk v. Wolk, Unpublished Decision (9-25-2001)

CourtOhio Court of Appeals
DecidedSeptember 25, 2001
DocketCase No. 98 CA 127.
StatusUnpublished

This text of Wolk v. Wolk, Unpublished Decision (9-25-2001) (Wolk v. Wolk, Unpublished Decision (9-25-2001)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law.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
Wolk v. Wolk, Unpublished Decision (9-25-2001), (Ohio Ct. App. 2001).

Opinion

OPINION
Defendant-appellant Marcia Wolk appeals the decision of the Mahoning County Common Pleas Court, Probate Division, which removed her as the custodian of plaintiff-appellee Joshua Wolk's custodial account. For the following reasons, appellant's first, third and fourth assignments of error are overruled; however, appellant's second assignment of error, dealing with the amount of attorney fees, is reversed and that issue is remanded for further proceedings.

STATEMENT OF FACTS
Joshua was born on August 5, 1980. In early 1996, Joshua became the beneficiary of a custodial account created under the Ohio Transfers to Minors Act, R.C. 1339.31 et seq.1 The account consisted of approximately $20,000 in Coca-Cola stock. Mrs. Wolk, who is Joshua's aunt through marriage, was named the custodian of the account.2

In August 1997, Mrs. Wolk sold stock from the custodial account to pay for Johsua's senior year tuition at Cardinal Mooney High School. (Tr. 146). When Mrs. Wolk called the school to find out why Joshua's senior year was more than the prior year, which she had paid for as a gift out of her separate assets, she was informed about graduation fees. Collaterally, she was upset to learn that financial aid was an option but that Joshua's father had failed to apply. (Tr. 153, 154, 191). Due to this and due to her claim that the account was established for college rather than high school expenses, she decided that she would not pay the tuition with the funds received from the sale of custodial stocks. Instead, she deposited those funds into an account belonging to the estate of Sally Finklestein for which she was the fiduciary and beneficiary. (Tr. 149). She admitted that she did this to reimburse herself for past tuition gifts made to Joshua. Ultimately, she returned the money to the custodial account.

On November 10, 1997, Joshua filed a petition with the probate court requesting $3,325 from the custodial account for tuition and graduation fees. He also asked for an accounting and urged that his aunt be removed as custodian of the account. The case was tried on April 28, 1998. Joshua filed a motion for attorney fees on May 15, 1998. The court released a judgment entry on May 28, 1998 sustaining the petition in all respects. The court found that Mrs. Wolk acted capriciously, willfully, in bad faith, and contrary to Joshua's best interests in refusing to pay his tuition, in diverting his funds to her account, and then in delaying the return of these funds. The court ordered Mrs. Wolk to amend her accounting to reflect lost dividends, fees and commissions charged and other losses that resulted from the diversion of funds. The court then removed Mrs. Wolk as custodian, appointed a successor custodian and ordered the successor to immediately pay $3,325 to the school for Joshua's tuition and fees. The court also ordered Mrs. Wolk to pay the costs of the action, including $2,100 in attorney fees. An amended entry was filed on May 29, 1998 to correct an error in the name of the institutional successor custodian.

After Mrs. Wolk filed notice of appeal, she filed a Civ.R. 60 (B) motion to vacate. This court remanded the case in order for the probate court to rule on that motion. The probate court could not immediately rule on that motion because a petition to disqualify the probate judge based on alleged bias in the prior proceedings was pending in the Ohio Supreme Court. On May 21, 2001, Mrs. Wolk (hereinafter appellant) notified this court that the probate court's proceedings on remand were complete, allowing this court to address the appeal.

ASSIGNMENT OF ERROR NUMBER ONE
The first assignment of error alleges:

"THE PROBATE COURT ABUSED ITS DISCRETION BY REMOVING DEFENDANT-APPELLANT, MARCIA S. WOLK, AS CUSTODIAN OF THE ACCOUNT ESTABLISHED THROUGH THE OHIO GIFTS TO MINORS ACT AND BY ORDERING THAT FUNDS FROM THE ACCOUNT BE USED TO PAY CARDINAL MOONEY HIGH SCHOOL, AND THE COURT FURTHER ABUSED ITS DISCRETION BY MISINTERPRETING THE PLAIN MEANING OF R.C. 1339 ET SEQ."

Under this assignment, appellant states that she handled the account competently. She cites the testimony of an investment broker who stated that the account's stock in Coca-Cola has done well and characterized appellant as a "relatively sophisticated investor." (Tr. 107-109). Appellant also contends that the court erred in refusing to find that the custodial account was intended for college expenses. She again points to the broker's testimony that he thought appellant's "intentions were to have the money put aside for Josh to use for college." (Tr. 106).

Appellant notes that Joshua's father signed a paper in favor of the school, obligating him to pay tuition. She notes his failure to apply for financial aid. She points to R.C. 1339.34 (B), which provides that in expending money for the minor, the custodian may, but need not, consider the duty or ability of any other person to support the minor. This section also states that an expenditure from the account is not a substitute for the obligation of any person to support the minor. Appellant then contends that the court misconstrued this section and complains that the court improperly excluded relevant evidence concerning Joshua's parents' ability to pay the tuition.

In conclusion, she claims that she acted in Joshua's best interests and that there was no justification for the court to remove her as custodian. She urges this court to find that the probate court abused its discretion in removing her, misinterpreting the statute, excluding relevant evidence, and ordering that the tuition be paid.

LAW ANALYSIS FOR ASSIGNMENT OF ERROR NUMBER ONE
A gift made under the Transfers to Minors Act is irrevocable and conveys to the minor vested legal title to the gift. R.C. 1339.33(A). After the transfer, the gift and its proceeds become known as custodial property. R.C. 1339.31(D). The named custodian holds, manages and invests the custodial property. R.C. 1339.34(A).

As for spending the custodial property, R.C. 1339.34 provides in pertinent part:

"(B) The custodian shall pay over to the minor for expenditure by the minor, or expend for the use or benefit of the minor, as much of or all of the custodial property as the custodian considers advisable for the use and benefit of the minor in the manner, at the time or times, and to the extent that the custodian in his discretion considers suitable and proper, with or without court order, with or without regard to the duty or ability of the custodian or of any other person to support the minor or his ability to do so, and with or without regard to any other income or property of the minor that may be applicable or available for any purpose. Any payment or expenditure that is made under this division is in addition to, is not a substitute for, and does not affect the obligation of any person to support the minor for whom the payment or expenditure is made."

From this passage, it appears that the custodian has broad discretion in making expenditures and may, but need not, consider various factors in making these expenditures. However, the next division provides:

"(C) The court, on the petition of a parent or guardian of the minor or of the minor, if he had attained the age of fourteen years, may order the custodian to pay

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Bluebook (online)
Wolk v. Wolk, Unpublished Decision (9-25-2001), Counsel Stack Legal Research, https://law.counselstack.com/opinion/wolk-v-wolk-unpublished-decision-9-25-2001-ohioctapp-2001.