Zilko v. Zilko

2011 Ohio 2140

• Court: Ohio Court of Appeals
• Decided: May 4, 2011
• Docket: 10-CA-015
• Status: Published

Opinion

[Cite as Zilko v. Zilko, 2011-Ohio-2140.]

COURT OF APPEALS ASHLAND COUNTY, OHIO FIFTH APPELLATE DISTRICT

DAVID ZILKO JUDGES: Hon. William B. Hoffman, P.J. Plaintiff-Appellee/Cross-Appellant Hon. Sheila G. Farmer, J. Hon. John W. Wise, J. -vs- Case No. 10-CA-015 LISA ZILKO

Defendant-Appellant/Cross-Appellee OPINION

CHARACTER OF PROCEEDING: Appeal from the Ashland County Court of Common Pleas, Domestic Relations Division, Case No. 08-DIV-235

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: May 4, 2011

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

JAMES M. RICHARD JOSEPH P. KEARNS, JR. Richard Law Office LLC Mason, Mason & Kearns 127 East Liberty Street, Suite 100 P.O. Box 345 P.O. Box 1207 153 West Main Street Wooster, Ohio 44691 Ashland, Ohio 44805 Ashland County, Case No. 10-CA-015 2

Hoffman, P.J.

{¶1} Defendant-appellant/cross-appellee Lisa Zilko (“Wife”) appeals the May

13, 2010 Judgment Entry-Decree of Divorce entered by the Ashland County Court of

Common Pleas, Domestic Relations Division, relative to the trial court’s calculation of

child support as well as its decision not to award spousal support. Plaintiff-

appellee/cross-appellant David Zilko (“Husband”) appeals the same relative to the trial

court’s division of the marital debts and assets.

STATEMENT OF THE FACTS AND CASE

{¶2} Husband and Wife were married on June 5, 1993, in Parma, Ohio. Two

children were born as issue of said marriage, to wit: Jamie Lynn Zilko (DOB 1/4/97) and

Timothy Allen Zilko (DOB 1/3/99). Husband filed a complaint for divorce on October 20,

2008. Wife filed a timely answer and counterclaim. The trial court issued temporary

orders ordering the parties to pay their individual living expenses. Husband also was

ordered to pay child support in the amount of $381.58/month for both children. In

addition, Husband was responsible for all expenses related to the marital residence, all

expenses of the parties’ business, and the payment for the parties’ vehicles. The trial

court ordered Wife to pay her credit card indebtedness. The matter came on for final

hearing on February 17 and 25, 2010.

{¶3} When the parties married, Husband worked as an unskilled laborer. In

1995, the parties purchased a 50% share in Hilltop Villa, a home for disabled veterans,

and the land upon which the facility is located from Ronald and Terry Kaufman. The

parties and the Kaufmans set up two Ohio corporations in association with the

purchase. Hilltop Villa Enterprises, Inc. served as the operational company. K & Z Ashland County, Case No. 10-CA-015 3

Properties, Inc. owned the real estate, which it rented to Hilltop Villa. The monthly rent

Hilltop Villa paid to K & Z Properties was between $3,000.00 and $4,000.00/month. In

2002, the parties bought out the Kaufmans’ half of the business for $143,500.00, by way

of share redemption agreements. Of the purchase price, $137,000.00 was allocated to

the real estate, and $6,500.00 was allocated to the business.

{¶4} As the division of property was at issue at trial, each party presented

his/her own expert to offer evidence of the value of the business. Jack Gant, a

broker/real estate salesman testified on behalf of Husband. Gant stated he was unable

to do an income evaluation of the business because the home was not continually

occupied as each veteran is there on a thirty day basis. Gant placed the value of the

property in today’s market between $120,000.00 and $130,000.00. Gant explained the

$10,000 price range was due to the uniqueness of the property. For example, a 2000

gallon heating fuel storage tank was buried on the property and an environmental

investigation would be required prior to a bank loaning money to an individual to

purchase the business. Wife offered an appraisal prepared by Robert Race in

November, 2001, which the parties used to set the price for their buyout for the

Kaufmans’ share of the business. Race appraised the business and land at

$283,000.00.

{¶5} Husband received a yearly salary of $33,000.00 from Hilltop Villa

Enterprises. K & Z Properties paid $2,100.00/month to the Kaufmans on the land

contract debt. A Schedule K-1 IRS tax form reported K & Z Properties had a net income

of $23,194.00 in 2008. Ashland County, Case No. 10-CA-015 4

{¶6} On April 26, 2010, the trial court issued its decision. The trial court

awarded the business to Husband, valuing such at $130,000.00, and assessing the

liability on the Kaufman note ($60,582.00) to Husband as well. The trial court denied

Wife’s request for spousal support. The trial court further ordered Husband to pay child

support in the amount of $222.71/child/month plus poundage. The trial court utilized a

figure of $33,000.00 as Husband’s self-employment income.

{¶7} Via Judgment Entry-Decree of Divorce filed May 13, 2010, the trial court

granted each party a divorce on the ground of incompatibility. The trial court allocated

parental rights and responsibilities, naming Wife as the residential parent of the

children. The trial court ordered Husband to pay Wife $450.33/month as and for child

support. The trial court awarded Husband all interest in K & Z Properties and Hilltop

Villa Enterprises. Husband was also ordered to assume the entire unpaid balance due

and owing on the promissory note due to the Kaufmans. Additionally, Husband was

solely responsible for “all business indebtedness pertaining to Hilltop Villa Enterprises,

Inc. and K & Z Properties, Inc., including, but not limited to, any charge card

indebtedness.” May 13, 2010 Judgment Entry-Decree of Divorce section 6 (A)(VIII).

{¶8} It is from this judgment entry Wife appeals, raising the following

assignments of error:

{¶9} “I. THE TRIAL COURT ABUSED ITS DISCRETION BY NOT INCLUDING

OTHER INCOME OF THE APPELLEE IN COMPUTING CHILD SUPPORT.

{¶10} “II. THE TRIAL COURT ABUSED ITS DISCRETION IN NOT AWARDING

THE APPELLANT SPOUSAL SUPPORT.”

{¶11} Husband cross-appeals the same, asserting the following errors: Ashland County, Case No. 10-CA-015 5

{¶12} “I. THE TRIAL COURT ABUSED ITS DISCRETION BY OMITTING AN

AGREED TO BUSINESS DEBT IN DETERMINING THE TOTAL DIVISION OF

PROPERTY AND DEBT ORDER.

{¶13} “II. THE TRIAL COURT’S CALCULATION OF THE TOTAL DIVISION OF

PROPERTY AND DEBT ORDER IS AGAINST THE MANIFEST WEIGHT OF THE

EVIDENCE.”

Appeal

I

{¶14} In her first assignment of error, Wife maintains the trial court abused its

discretion in failing to include all of Husband’s income in its child support computation.

{¶15} A trial court's decision regarding a child support obligation will not be

reversed on appeal absent an abuse of discretion. Pauly v. Pauly, 80 Ohio St.3d 386,

390, 1997-Ohio-105, 686 N.E.2d 1108, citing Booth v. Booth (1989), 44 Ohio St.3d 142,

144, 541 N.E.2d 1028. An abuse of discretion is more than an error of law, it connotes

that the court's attitude is unreasonable, arbitrary, or unconscionable. Blakemore v.

Blakemore (1983), 5 Ohio St.3d 217, 450 N.E.2d 1140. Moreover, as long as the

decision of the trial court is supported by some competent, credible evidence, the

reviewing court will not disturb it. Masitto v. Masitto (1986), 22 Ohio St.3d 63, 488

N.E.2d 857.

{¶16} A trial court must calculate the amount of child support using the basic

child support schedule and the applicable child support computation worksheet. R.C.

3119.02. Here, the trial court appropriately relied on the worksheet set forth in R.C.

3119.022, which applies to situations in which one parent is designated the residential Ashland County, Case No. 10-CA-015 6

parent and legal custodian. To complete that worksheet, a trial court must first

determine each party's income. For a parent who is employed to full capacity, “income”

means “the gross income of the parent.” R.C. 3119.01(C)(5). According to R.C.

3119.01(C)(7), “gross income” is “the total of all earned and unearned income from all

sources during a calendar year, whether or not the income is taxable, and includes * * *

self-generated income.” R.C. 3319.01(C)(13) defines “self-generated income” as “gross

receipts received by a parent from self-employment, proprietorship of a business, joint

ownership of a partnership or closely held corporation, and rents minus ordinary and

necessary expenses incurred by the parent in generating the gross receipts.” “Ordinary

and necessary expenses incurred in generating gross receipts” include “actual cash

items expended by the parent or the parent's business.” R.C. 3119.01(C)(9)(a).

{¶17} Wife submits the trial court abused its discretion in failing to consider

income Husband received from K & Z Properties which was evidenced in a 2008

Schedule K-1. The K-1 indicated K & Z Properties had a net income of $23,194.00, in

2008, and Wife argues said amount should be included in Husband’s gross income in

computing the child support order.

{¶18} While we agree with Wife net income generated by the business should

be included in Husband’s gross income, we find no evidence to support a determination

K & Z Properties had net income prior to 2008, and/or in 2009, or 2010. Husband

testified the monies were the result of one time pay backs by Veteran’s Administration

to a number of the disabled veterans housed at Hilltop Villa. Ashland County, Case No. 10-CA-015 7

{¶19} Based upon the foregoing, we find the trial court did not abuse its

discretion in only utilizing a gross annual income of $33,000 for Husband in calculating

child support.

{¶20} Wife’s first assignment of error is overruled.

II

{¶21} In her second assignment of error, Wife contends the trial court abused its

discretion in failing to award her spousal support.

{¶22} An award of spousal support is in the trial court's sound discretion. Kunkle

v. Kunkle (1990), 51 Ohio St.3d 64, 554 N.E.2d 83. In order to find an abuse of

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, 450 N.E.2d 1140.

{¶23} R.C. 3105.18(C)(1)(a) thru (n) sets forth the factors a trial court must

consider in determining whether spousal support is appropriate and reasonable and in

determining the nature, amount, terms of payment, and duration of spousal support.

These factors include:

{¶24} “(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 of the Revised Code;

{¶25} “(b) The relative earning abilities of the parties;

{¶26} “(c) The ages and the physical, mental, and emotional conditions of the

parties;

{¶27} “(d) The retirement benefits of the parties; Ashland County, Case No. 10-CA-015 8

{¶28} “(e) The duration of the marriage;

{¶29} “(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;

{¶30} “(g) The standard of living of the parties established during the marriage;

{¶31} “(h) The relative extent of education of the parties;

{¶32} “(i) The relative assets and liabilities of the parties, including but not limited

to any court-ordered payments by the parties;

{¶33} “ * * *;

{¶34} “(l) The tax consequences, for each party, of an award of spousal support;

{¶35} “* * *;

{¶36} “(n) Any other factor that the court expressly finds to be relevant and

equitable.”

{¶37} Wife maintains based upon the factors set forth in R.C. 3105.18, an award

of spousal support was appropriate. Wife noted the length of the marriage, the affluent

life style in which the parties lived, and the fact Husband had a greater income and

greater income potential.

{¶38} Based upon our review of the record, we find the trial court did not abuse

its discretion in denying Wife’s request for spousal support. Both parties acknowledged

many of the family expenses were paid by the business prior to the parties’ separating.

Excess monies in the business accounts were distributed to the parties during the

course of the proceedings. Hilltop Villa was not running at full capacity with only Ashland County, Case No. 10-CA-015 9

thirteen residents. Although some of the R.C. 3105.18 factors weighed in favor of

spousal support, other factors weighed against such an award.

{¶39} Based upon the foregoing, we do not find the trial court abused its

discretion by not ordering spousal support. Wife’s second assignment of error is

overruled.

Cross-appeal

I, II

{¶40} Because Husband’s first and second assignments of error in his cross-

appeal are interrelated, we shall address said assignments of error together. In his first

assignment of error, Husband argues the trial court abused its discretion in omitting an

agreed to business debt in determining the total division of marital property and debt. In

his second assignment of error, Husband contends the trial court’s total division of

martial property and debt was against the manifest weight of the evidence. We

disagree with both.

{¶41} At the final hearing, both parties testified the Advanta line of credit was

used to pay business expenses when cash was unavailable. Both parties

acknowledged the balance due was a business obligation. Husband contends the trial

court failed to include the Advanta line of credit in the division of marital property and

debt.

{¶42} Pursuant to the temporary orders, Husband was responsible for all of the

business expenses, which would include payments on the Advanta debt. In the final

divorce decree, the trial court awarded all interest in the business to Husband. The trial

court also allocated “all business indebtedness…including, but not limited to, any Ashland County, Case No. 10-CA-015 10

charge card indebtedness” to Husband. We find the trial court’s use of this general

language indicates it considered the Advanta line of credit part of the business

indebtedness for which Husband was responsible and apportioned it appropriately as

part of its overall division of martial property.

{¶43} Husband’s first and second assignments of error on cross-appeal are

{¶44} The judgment of the Ashland County Court of Common Pleas is affirmed.

By: Hoffman, P.J.

Farmer, J. and

Wise, J. concur

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

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

s/ John W. Wise _____________________ HON. JOHN W. WISE Ashland County, Case No. 10-CA-015 11

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

DAVID ZILKO : : Plaintiff-Appellee/Cross-Appellant : : -vs- : JUDGMENT ENTRY : LISA ZILKO : : Defendant-Appellant/Cross-Appellee : Case No. 10-CA-015

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

Ashland County Court of Common Pleas is affirmed. Costs assessed to

Appellant/Cross-Appellee.

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

s/ Sheila G. Farmer___________________ HON. SHEILA G. FARMER

s/ John W. Wise______________________ HON. JOHN W. WISE