[Cite as Young v. Young, 2011-Ohio-2347.]
COURT OF APPEALS TUSCARAWAS COUNTY, OHIO FIFTH APPELLATE DISTRICT
CHARLES R. YOUNG : JUDGES: : Hon. Sheila G. Farmer, P.J. Plaintiff-Appellant/ : Hon. John W. Wise, J. Cross-Appellee : Hon. Julie A. Edwards, J. : -vs- : : RUTH E. YOUNG : Case No. 09AP100049 : Defendant-Appellee/ : Cross-Appellant : OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Domestic Relations Division, Case No. 2007TM090433
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: May 13, 2011
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
PAUL HERVEY SHAWN LINDSAY P.O. Box 1014 P.O. Box 992 New Philadelphia, OH 44663 Uhrichsville, OH 44683 Tuscarawas County, Case No. 09AP100049 2
Farmer, P.J.
{¶1} On June 27, 1986, appellant, Charles Young, and appellee, Ruth Young,
were married. On October 1, 2007, appellant filed a complaint for divorce. Appellee
filed an answer and counterclaim on October 15, 2007.
{¶2} A hearing commenced on November 12, 2008. At the time of the hearing,
appellant was 83 years old and appellee was 62. By judgment entry filed September
29, 2009, the trial court granted the parties a divorce and divided their extensive assets
and debts. In addition, the trial court ordered appellant to pay appellee $30,000.00 for
attorney fees.
{¶3} Appellant filed a notice of appeal on October 5, 2009 and assigned the
following errors:
I
{¶4} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
FAILING TO EQUALLY AND EQUITABLY DIVIDE MARITAL ASSETS, TO
DETERMINE WHETHER SOME ASSETS WERE SEPARATE, AND TO ASSIGN A
VALUE TO THOSE ASSETS."
II
{¶5} "THE TRIAL COURT DENIED THE APPELLANT DUE PROCESS BY
FINDING HIM IN CONTEMPT WITHOUT PROPER NOTICE OF A HEARING ON THE
ISSUE."
III
{¶6} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
FINDING THE APPELLANT IN CONTEMPT." Tuscarawas County, Case No. 09AP100049 3
IV
{¶7} "THE TRIAL COURT ERRED AS A MATTER OF LAW AND ABUSED ITS
DISCRETION BY FINDING FINANCIAL MISCONDUCT ON THE PART OF THE
APPELLANT AND BY SANCTIONING THE APPELLANT IN AWARDING THE
MARITAL RESIDENCE TO THE APPELLEE."
V
{¶8} "THE TRIAL COURT ABUSED ITS DISCRETION IN AWARDING
ATTORNEY FEES TO THE APPELLEE."
VI
{¶9} "THE TRIAL COURT ABUSED ITS DISCRETION IN FAILING TO RULE
ON AND IMPLICITLY OVERRULING OUTSTANDING MOTIONS FOR CONTEMPT
AND FOR SANCTIONS REGARDING THE APPELLEE."
{¶10} Appellee filed a notice of cross-appeal on October 28, 2009 and assigned
the following errors:
CROSS-ASSIGNMENT OF ERROR I
{¶11} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
FAILING TO EQUALLY AND EQUITABLY DIVIDE MARITAL ASSETS AND DEBTS."
CROSS-ASSIGNMENT OF ERROR II
{¶12} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
DENYING CROSS-APPELLANT'S MOTION TO JOIN NECESSARY PARTIES AND TO
IMPOSE A CONSTRUCTIVE TRUST ON CERTAIN PROPERTY TRANSFERRED BY
CROSS-APPELLEE." Tuscarawas County, Case No. 09AP100049 4
CROSS-ASSIGNMENT OF ERROR III
{¶13} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
MAKING THE DISTRIBUTIVE AWARD TO THE CROSS-APPELLANT BASED UPON
ITS FINDING THAT CROSS-APPELLEE ENGAGED IN FINANCIAL MISCONDUCT."
CROSS-ASSIGNMENT OF ERROR IV
{¶14} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
DETERMINING THE AMOUNT OF SPOUSAL SUPPORT OWED BY CROSS-
APPELLEE TO THE CROSS-APPELLANT."
CROSS-ASSIGNMENT OF ERROR V
{¶15} "THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN ITS
DECISION TO ONLY AWARD PARTIAL ATTORNEY FEES TO CROSS-APPELLANT."
{¶16} This matter is now before this court for consideration.
ASSIGNMENT OF ERROR I, CROSS-ASSIGNMENT OF ERROR I
{¶17} Both parties argue the distributive award was not an equal or equitable
division of the marital assets and debts.
{¶18} The trial court is provided with broad discretion in deciding what is
equitable upon the facts and circumstances of each case. Cherry v. Cherry (1981), 66
Ohio St.2d 348. We cannot substitute our judgment for that of the trial court unless,
when considering the totality of the circumstances, the trial court abused its discretion.
Holcomb. v. Holcomb (1989), 44 Ohio St.3d 128. In order to find an abuse of that
discretion, we must determine the trial court's decision was unreasonable, arbitrary or
unconscionable and not merely an error of law or judgment. Blakemore v. Blakemore
(1983), 5 Ohio St.3d 217. Tuscarawas County, Case No. 09AP100049 5
{¶19} We note the trial court filed an extensive and thorough judgment entry on
all the issues, and awarded an unequal distribution based upon appellant's financial
misconduct. The financial misconduct found by the trial court was set forth in Findings
of Fact Nos. 102-110.
{¶20} First, appellant argues the trial court erred in permitting appellee to remain
as the survivorship beneficiary on his OPERS pension plan. We note the trial court did
not award spousal support. We can readily correlate these two decisions (see Cross-
Assignment of Error IV). We therefore conclude that given the well reasoned opinion in
Salmon v. Salmon, Summit App. No. 22745, 2006-Ohio-1557, ¶20, the award was
appropriate:
{¶21} "In the instant matter, Husband gave Wife a survivorship interest in his
pension during the marriage. There is no question that Husband intended such a
benefit to flow to Wife. Further, Husband transferred possession of the gift to the extent
possible by signing the appropriate paperwork to grant the interest to Wife. Therefore,
to the extent that the survivorship interest was funded by Husband's separate property,
the survivorship interest itself was transformed into marital property upon the completion
of Husband's gift."
{¶22} We conclude this issue was not a distributive award of marital assets.
{¶23} Next, appellant argues the trial court erred in finding his strip-mining
company, Surface Mining, Inc. (hereinafter "SMI"), was a marital asset:
{¶24} "Based upon the fluctuation in the value of the assets over the years, the
contribution of both parties and commingling of their funds with SMI, any pre-marital
value of the corporation is no longer traceable. The stock in the corporation is now Tuscarawas County, Case No. 09AP100049 6
marital due to the labor and monetary contributions of both parties during the marriage."
Judgment Entry filed September 29, 2009 at Findings of Fact No. 31.
{¶25} During his career, appellant was Tuscarawas County Engineer, two terms
in the sixties and two terms in the eighties. T. at 72. While appellant was county
engineer, he did not work at his SMI business. T. at 72-76. After the marriage, SMI's
worth varied from $129,824.00 in 1986 to $40,187.00 in 2004. T. at 96, 183-184.
Included as an SMI asset was a loan in the amount of $166,000.00 by appellant to his
grandson to purchase a convenience store. T. at 202-207. Although the loan was on
the SMI books, no collateral was given for the loan. The marriage was of twenty years.
The bulk of SMI's income/assets were acquired during this twenty year period.
{¶26} Although the trial court valued the SMI marital asset at $200,000.00, and
awarded appellee $100,000.00, there was little definitive proof of its actual value
presented by either side. Although both parties protest about the valuation of SMI,
neither provided any expert testimony as to its value. We find the trial court properly
reviewed the tax returns of SMI and averaged its appropriate value. Appellee's
argument relative to SMI's mineral values based on an expired contract with another
company is of no consequence and any attempt to give it value without expert testimony
would be speculative.
{¶27} Appellant also makes a specious argument regarding real property
transfers and loans made to his sons and others, arguing the trial court erred in
deeming them to be marital assets. Appellant's Brief at 21-22. The properties in
question include a portion of the Uhrichsville property with loan to son James and the
Goshen/York properties to sons James and Jeff. The trial court did not award appellee Tuscarawas County, Case No. 09AP100049 7
a share of these properties, but considered the transfers in light of financial misconduct.
Findings of Fact Nos. 45, 64, 65, 68, 105, 106.
{¶28} The Uhrichsville property appellant transferred to his son James some ten
months prior to filing the divorce complaint was part of the marital residence property
which was originally premarital, belonging to appellant. Findings of Fact Nos. 41 and
45. This transfer involved a loan from appellant to James to pay for the property, with
an amount due of $90,200.00, although appellant released the mortgage for this debt in
April of 2007. Findings of Fact Nos. 45 and 106. The trial court did not make a
distributive award of this property as it was owned by James, but merely assigned the
ability to collect on the loan to appellant.
{¶29} As for the Goshen/York properties, the Goshen property was appellant's
premarital acquisition and the York property was a marital acquisition. Findings of Fact
Nos. 62 and 63. Some nine months prior to the filing of the divorce complaint, appellant
transferred the properties to his sons James and Jeff. Findings of Fact No. 64. The trial
court found appellant "coerced" appellee's signature on the deeds, "misrepresenting to
Ruth that the real estate was premarital." Findings of Fact No. 65. The trial court also
found there was no evidence of the sons paying any monies to appellant for the
transfer, and no evidence that the transfer was a gift. Findings of Fact No. 68.
Appellee's expert appraised the property at $384,000.00. T. at 536. The trial court
found the value of the marital portion to be $195,840.00, but could not make a
distributive award of the property as it was owned by James and Jeff. We note
appellee's argument about mineral value in the properties is meritless for the reason
stated supra. Tuscarawas County, Case No. 09AP100049 8
{¶30} Appellant was also "awarded" the amounts of three loans: one to SMI for
his grandson's purchase of the convenience store ($166,000.00), one to his son Scott
($106,096.00), and one to Russ Mulgrew ($161,000.00). Judgment Entry filed
September 29, 2009 at pages 45-46. Appellant argues these were legitimate loans and
valued on their face. In fact, there was concrete evidence that the Mulgrew loan was an
effort by appellant to get "rid" of money. T. at 113. The trial court merely assigned the
ability to collect on the loans to appellant. Given appellant's generosity in the face of
Ohio's marital property law, he is left with the consequences of his own actions.
{¶31} Appellee argues the trial court should have awarded her a larger share of
the outstanding loan on the Clendening lake property because of appellant's financial
misconduct. Appellee purchased the property and entered into a land contract with
three individuals. Findings of Fact Nos. 47-49. Thereafter, appellant and appellee
deeded the property to the individuals five months prior to the filing of the divorce
complaint, and appellant stopped accepting payments on the land contract eight months
after the divorce complaint was filed even though $22,500.00 remained due and owing.
Findings of Fact Nos. 51-52, 55. The trial court divided the outstanding loan equally
between the parties, and ordered appellant to pay appellee $11,250.00 for her share.
Given the fact that the trial court awarded appellee a further distributive award for
appellant's financial misconduct, we cannot find the award on the Clendening lake
property was unfair.
{¶32} In Findings of Fact No. 109, under "Financial Misconduct," the trial court
found, "In September 2007, Charles removed his name from a bank account with Tuscarawas County, Case No. 09AP100049 9
$76,693.27 on deposit, leaving the balance in the names of his son and nephew. These
funds were marital assets." See also, Findings of Facts Nos. 88-91.
{¶33} The trial court awarded appellee the entire marital residence as an extra
distributive award due to appellant's financial misconduct, $75,000.00 being appellant's
share. This amount offsets the amount in the bank account which were marital funds
that appellant chose to give to his son and nephew. In reviewing the distribution of
assets, the parties are equal on the pensions, SMI, and the Clendening lake property.
Appellee was awarded her annuity ($223.04) and the Zanesville property which is not in
dispute ($34,604.00), and appellant was awarded the amounts in his bank accounts
($4,525.00). Appellant was also awarded the ability to collect on outstanding loans
worth $523,296.00. The distributive award, with the inclusion of $75,000.00 awarded to
appellee for appellant's financial misconduct, minus the outstanding loans, becomes
very close to being equal and is clearly equitable, $465,633.76 for appellee versus
$285,332.38.00 for appellant. The over $180,301.38 difference can be attributable to
appellant's financial misconduct involving the Goshen/York properties that had a marital
value of $195,840.00.
{¶34} We conclude the trial court, in an effort to unravel the maze of transactions
created by appellant's attempt to beat the divorce system, was equitable.
{¶35} Assignment of Error I and Cross-Assignment of Error I are denied.
ASSIGNMENTS OF ERROR II, III, VI
{¶36} Both parties conceded at oral argument that the issues relative to the
contempt finding are moot. Tuscarawas County, Case No. 09AP100049 10
ASSIGNMENT OF ERROR IV, CROSS-ASSIGNMENT OF ERROR III
{¶37} Appellant claims the trial court erred in awarding the marital residence to
appellee as a sanction for financial misconduct. Appellee claims the award for financial
misconduct was not enough. We disagree.
{¶38} In its judgment entry filed September 29, 2009 under "Financial
Misconduct" at pages 47-48, the trial court found financial misconduct based upon
appellant's intentional interference with appellee's property rights:
{¶39} "Although Plaintiff's counsel argues Charles was 'estate planning,' the
evidence, including the testimony of Charles and his accountant, fails to support this
argument. The evidence is clear that Charles intentionally interfered with Ruth's
property rights and intentionally defeated her distribution of assets.
{¶40} "The Court has provided for a distributive award for the marital shares of
SMI and the Clendening property debt, which were part of Charles' actions constituting
financial misconduct.
{¶41} "The Court has determined a further distributive award is appropriate due
to Charles' financial misconduct. Based upon the findings herein relating to Charles'
financial misconduct, the Court has also awarded the marital residence to Ruth, as set
forth above. The considerations regarding Charles' financial misconduct have further
been considered by the Court in addressing the issue of attorneys' fees, below."
{¶42} As stated supra, the financial misconduct found by the trial court was set
forth in Findings of Fact Nos. 102-110. The marital residence was valued at
$150,000.00, with appellant's share being $75,000.00. Findings of Fact No. 44. Tuscarawas County, Case No. 09AP100049 11
{¶43} Appellant's actions are numerous. Appellant relinquished the deed to the
Clendening lake property and despite an outstanding debt on the property, refused
payment. T. at 564-565. Appellant transferred the Goshen/York property to his sons
without any consideration or payments, and did not file a gift tax return on the
transaction. Appellee testified she was pressured by appellant to sign over certain
properties, and appellant informed her that she had a dower interest only. T. at 634-
635. Appellant attempted to transfer his interest in SMI when in fact tax returns
identified him as the 100% owner until just before the divorce. T. at 110, 183-184, 192,
196-198. Included in the SMI assets was the convenience store loan which was from
appellant, not the corporation. T. at 113-114, 569-570. Appellant removed his name
from a bank account containing over $76,000.00 which the trial court found to be marital
funds.
{¶44} As testified to by appellee, after appellant's health problems and his visit to
his son Ron in Hawaii in 2005, his attitude totally changed. T. at 636-637. The trial
court viewed appellant's actions as not good estate planning, but part of a scheme to
diminish his assets prior to filing for divorce.
{¶45} From our view, the trial court's decision is well founded by the evidence.
Separate and apart from appellee's own testimony are incidents that lead one to only
one conclusion. Appellant's forgiving of debts to third parties and unsubstantiated "gifts"
to his sons, accompanied by unsecured and uncollected debt, belie his claim of
innocent estate planning. The conclusion that appellee's version was more credible or
believable than appellant's is well substantiated in the record. Tuscarawas County, Case No. 09AP100049 12
{¶46} Appellee claims the extra $75,000.00 distributive award for appellant's
financial misconduct was inadequate. We disagree. A $75,000.00 extra distributive
award is not de minimus and was equal to the bank account amount that appellant
"gave away." The trial court accounted for the Clendening lake property and SMI, and
appellee's distributive award was more than appellant's as discussed supra.
Furthermore, the trial court considered appellant's financial misconduct in considering
attorney's fees as discussed infra.
{¶47} Assignment of Error IV and Cross-Assignment of Error III are denied.
ASSIGNMENT OF ERROR V, CROSS-ASSIGNMENT OF ERROR V
{¶48} Both parties claim the trial court erred in its decision on attorney fees. We
disagree.
{¶49} R.C. 3105.73 governs award of attorney fees and litigation expenses.
Subsection (A) states the following:
{¶50} "In an action for divorce, dissolution, legal separation, or annulment of
marriage or an appeal of that action, a court may award all or part of reasonable
attorney's fees and litigation expenses to either party if the court finds the award
equitable. In determining whether an award is equitable, the court may consider the
parties' marital assets and income, any award of temporary spousal support, the
conduct of the parties, and any other relevant factors the court deems appropriate."
{¶51} An award of attorney fees lies within the trial court's sound discretion.
Huffer v. Huffer, Franklin App. No. 09AP-574, 2010-Ohio-1223; Blakemore, supra.
{¶52} In its judgment entry filed September 29, 2009 under "Attorneys' Fees" at
page 48, the trial court ordered the following with respect to attorney fees: Tuscarawas County, Case No. 09AP100049 13
{¶53} "The Court has considered the case law, above, and specifically the
provisions of R.C. 3105.73 in determining the payment of attorneys' fees. Specifically,
the Court has considered whether the award of attorney fees to either party would be
equitable, and the Court further considered the parties' marital assets and income, the
conduct of the parties throughout the divorce and the other relevant factors, such as the
financial misconduct of Charles.
{¶54} "Based upon the foregoing, it is ORDERED that Charles shall be
responsible for the payment of his own attorney's fees. In addition, Charles shall pay to
Ruth $30,000.00 of the attorney fees due for her attorney's fees, and said payment shall
be made within 90 days of the date of this order
{¶55} "It is ORDERED that Ruth shall be responsible for the payment of the
remaining balance of her own attorney's fees."
{¶56} Two conflicting opinions were given on the attorney's fees issue.
Appellee's witness testified appellee's attorney's fees were high but reasonable given
the amount of discovery, the length of the depositions, and the concealment of assets.
T. at 592-595. Appellee's witness opined the "discovery process in this case basically
failed." T. at 593. Appellant's witness testified the fees were too high and he was
"shocked" by the number ($92,040.50). T. at 492-493. Appellant's witness opined that
one-third of every divorce case includes discovery issues which "were definitely
extensive in this case." T. at 490. From the trial court's decision, it is clear that the trial
court accepted this one-third amount and awarded appellee one-third of her fees. Tuscarawas County, Case No. 09AP100049 14
{¶57} Given the twenty year marriage, the distributive award, appellant's
conduct, and the relative equal income of the parties presently, we find the trial court's
decision was based upon the evidence. We do not find an abuse of discretion.
{¶58} Assignment of Error V and Cross-Assignment of Error V are denied.
{¶59} Appellee claims the trial court erred in failing to impose a constructive trust
over the improperly transferred assets. We disagree.
{¶60} As we noted in Assignment of Error I and Cross-Assignment of Error I, the
trial court created an equitable award by giving appellant the ability to collect on his
outstanding loans, but negating them from the division of assets. We find this was an
attempt to provide finality to the proceedings. The trial court sanctioned appellant for
his purposeful acts to diminish the estate by awarding appellee an extra $75,000.00
distributive award of the marital residence and a higher overall distribution of assets.
{¶61} We find the trial court created a method of resolution that was equitable
and addressed the need for finality.
{¶62} Cross-Assignment of Error II is denied.
{¶63} Appellee claims the trial court erred in failing to award spousal support.
We disagree.
{¶64} R.C. 3105.18 governs awards of spousal support and modification and
states as follows:
{¶65} "(C)(1) In determining whether spousal support is appropriate and
reasonable, and in determining the nature, amount, and terms of payment, and duration Tuscarawas County, Case No. 09AP100049 15
of spousal support, which is payable either in gross or in installments, the court shall
consider all of the following factors:
{¶66} "(a) The income of the parties, from all sources, including, but not limited
to, income derived from property divided, disbursed, or distributed under section
3105.171 [3105.17.1] of the Revised Code;
{¶67} "(b) The relative earning abilities of the parties;
{¶68} "(c) The ages and the physical, mental and emotional conditions of the
parties;
{¶69} "(d) The retirement benefits of the parties;
{¶70} "(e) The duration of the marriage;
{¶71} "(f) The extent to which it would be inappropriate for a party, because that
party will be custodian of a minor child of the marriage, to seek employment outside the
home;
{¶72} "(g) The standard of living of the parties established during the marriage;
{¶73} "(h) The relative extent of education of the parties;
{¶74} "(i) The relative assets and liabilities of the parties, including but not limited
to any court-ordered payments by the parties;
{¶75} "(j) The contribution of each party to the education, training, or earning
ability of the other party, including, but not limited to, any party's contribution to the
acquisition of a professional degree of the other party;
{¶76} "(k) The time and expense necessary for the spouse who is seeking
spousal support to acquire education, training, or job experience, and employment, is in
fact, sought; Tuscarawas County, Case No. 09AP100049 16
{¶77} "(l) The tax consequences, for each party, of an award of spousal support;
{¶78} "(m) The lost income production capacity of either party that resulted from
that party's marital responsibilities;
{¶79} "(n) Any other factors that the court expressly finds to be relevant and
equitable."
{¶80} Both parties were receiving pension funds in pay-out. Appellee was
permitted to keep her excess survivorship interest in appellant's pension (valued at
$237,433.00). Appellee presently substitute teaches two days a week, and had a
taxable income of $6,532.00 in 2006, $6,271.00 in 2007, and $7,489.00 in 2008 up to
the month of November. T. at 7. Her pension amount was $3,000.00 per month. T. at
124-125. Appellant was also assigned appellee's credit card debt which rose during the
pendency of the case. Given the relative age disparity of the parties (21 years) and the
fact that appellee will continue to receive the survivor benefit after appellant's demise,
we find there was no abuse of discretion by the trial court in denying spousal support to
appellee.
{¶81} Cross-Assignment of Error IV is denied. Tuscarawas County, Case No. 09AP100049 17
{¶82} The judgment of the Court of Common Pleas of Tuscarawas County,
Ohio, Domestic Relations Division is hereby affirmed.
By Farmer, P.J.
Wise, J. and
Edwards, J. concur.
_s/ Sheila G. Farmer__________________
_s/ John W. Wise_____________________
_s/ Julie A. Edwards__________________
JUDGES
SGF/sg 218 Tuscarawas County, Case No. 09AP100049 18
IN THE COURT OF APPEALS FOR TUSCARAWAS COUNTY, OHIO
FIFTH APPELLATE DISTRICT
CHARLES R. YOUNG : : Plaintiff-Appellant/ : Cross-Appellee : : -vs- : JUDGMENT ENTRY : RUTH E. YOUNG : : Defendant-Appellee/ : Cross-Appellant : CASE NO. 09AP100049
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Tuscarawas County, Ohio, Domestic
Relations Division is affirmed. Costs to be divided equally between appellant and