Ware v. Ware , 2014 Ohio 2606 ( 2014 )

[Cite as Ware v. Ware, 2014-Ohio-2606.]
COURT OF APPEALS
LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
KENT WARE JUDGES:
Hon. William B. Hoffman, P. J.
Plaintiff-Appellant Hon. John W. Wise, J.
Hon. Patricia A. Delaney, J.
-vs-
Case No. 13 CA 91
BARBARA WARE
Defendant-Appellee OPINION
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Domestic Relations Division, Case
No. 10 DR 554 RPW
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: June 16, 2014
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
EUGENE R. BUTLER PAUL GIORGIANNI
145 Rich Street, Second Floor 1538 Arlington Avenue
Columbus, Ohio 43215 Columbus, Ohio 43212-5550
Licking County, Case No. 13 CA 91 2
Wise, J.
{¶1}. Appellant Kent Ware appeals the decision of the Court of Common Pleas,
Domestic Relations Division, Licking County, which granted his complaint for divorce
from Appellee Barbara Ware. The relevant facts leading to this appeal are as follows.
{¶2}. Appellant and appellee were married in November 19, 1983 in Colorado.
Three children were born of the marriage, two of whom were emancipated as of the
commencement of the present appeal.
{¶3}. On April 7, 2010, appellant filed a complaint for divorce in the trial court.
Appellee filed an answer on May 6, 2010.
{¶4}. The case proceeded to a trial on June 18, 2012. The court first heard the
testimony of pension expert Brian Hogan of QDRO Consultants in Medina Ohio,
followed by the testimony of appellant and appellee.
{¶5}. The basic economic situation of the parties herein is not in factual dispute.
Appellee is employed by Mt. Carmel Health Systems as a registered ER nurse.
Appellant commenced employment in 1985 with the Ohio Department of Health and has
been a participant in the Ohio Public Employment System ("PERS") since that time.
However, in November 2001, appellant fell from a roof and broke several ribs and two
vertebrae, resulting in two spinal fusion surgeries. He has since been diagnosed with
chronic low back pain and arachnoiditis. He was placed on permanent disability status
by PERS on November 17, 2011, while the parties' divorce was pending in the trial
court. He is subject to annual medical re-evaluation.
{¶6}. The trial court issued a final decree of divorce on September 17, 2013. No
spousal support was ordered. As further addressed infra, the trial court further made
Licking County, Case No. 13 CA 91 3
orders regarding the PERS pension benefits, although it retained subject matter
jurisdiction over the matter "in order to achieve an equitable allocation of plaintiff's
PERS retirement consistent with this decision." Divorce Decree at 19.1 In sum, the trial
court set forth $1,653,614.09 in marital assets, the largest being appellant's PERS
pension. The trial court awarded all of the smaller marital assets to appellee, including
both appellant's and appellee's deferred compensation accounts, and divided the PERS
pension such that a near-50/50 division was accomplished as to the aggregate marital
property.
{¶7}. On October 8, 2013, appellant filed a notice of appeal. He herein raises
the following four Assignments of Error:
{¶8}. “I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
DIVIDING THE DISABILITY PENSION BENEFIT.
{¶9}. II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
DIVIDING THE VACATION AND SICK LEAVE OF MR. WARE AND IN FAILING TO
DIVIDE THE VACATION AND SICK LEAVE OF APPELLEE.
{¶10}. III. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
FAILING TO RETAIN JURISDICTION OVER THE ISSUE OF SPOUSAL SUPPORT.
{¶11}. IV. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
FAILING TO ORDER SPOUSAL SUPPORT.”
1
According to R.C. 3105.171(I), “division or disbursement of property or a distributive
award made under this section is not subject to future modification by the court except
upon the express written consent or agreement to the modification by both spouses.”
Neither party appears to presently challenge the retention of jurisdiction over the
property division.
Licking County, Case No. 13 CA 91 4
I.
{¶12}. In his First Assignment of Error, appellant contends the trial court erred
and/or abused its discretion in dividing appellant's PERS pension. We disagree.
{¶13}. An appellate court generally reviews the overall appropriateness of the
trial court's property division in divorce proceedings under an abuse-of-discretion
standard. Cherry v. Cherry (1981), 66 Ohio St. 2d 348, 421 N.E.2d 1293. 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 (1983), 5 Ohio St. 3d 217, 450 N.E.2d 1140. In order to make
an equitable division of property, the trial court should first determine the value of the
marital assets. See Eisler v. Eisler (1985), 24 Ohio App. 3d 151, 152, 493 N.E.2d 975. In
performing this function, the trial court has broad discretion to develop some measure of
value. See Berish v. Berish (1982), 69 Ohio St. 2d 318, 432 N.E.2d 183. 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, Franklin App.No. 08AP–27, 2008–Ohio–6121, ¶ 18
citing Berish, supra. Generally, as an appellate court, we are not the trier of fact. Our
role is to determine whether there is relevant, competent, and credible evidence upon
which the fact finder could base his or her judgment. Tennant v. Martin–Auer, 188 Ohio
App.3d 768, 2010–Ohio–3489, 936 N.E.2d 1013, ¶ 16, citing Cross Truck Equipment
Co. v. Joseph A. Jeffries Co. (Feb. 10, 1982), Stark App. No. CA–5758, 1982 WL 2911.
{¶14}. “Trial court decisions on what is presently separate and marital property
are not reversed unless there is a showing of an abuse of discretion.” Valentine v.
Valentine (Jan. 10, 1996), Ashland App.No. 95COA01120, citing Peck v. Peck (1994)
Licking County, Case No. 13 CA 91 5
96 Ohio App. 3d 731, 734, 645 N.E.2d 1300. Specifically, “[w]hen considering a fair and
equitable distribution of pension or retirement benefits in a divorce, the trial court must
apply its discretion based upon the circumstances of the case, the status of the parties,
the nature, terms and conditions of the pension or retirement plan, and the
reasonableness of the result.” Hoyt v. Hoyt (1990), 53 Ohio St. 3d 177, 559 N.E.2d
1292, paragraph one of syllabus.
{¶15}. Pursuant to R.C. 3105.171(B), “[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. * * *”
{¶16}. R.C. 3105.171(C)(1) further states: “Except as provided in this division or
division (E)(1) 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. In making a division of marital property, the court shall consider
all relevant factors, including those set forth in division (F) of this section.”
{¶17}. The fair and equitable division of pension or retirement benefits in a
divorce matter in Ohio is left to the trial court's discretion. Hoyt, supra, at paragraph one
of the syllabus. Pension or retirement benefits earned during the marriage are marital
assets and a factor to be considered in the just division of property. Id. at 178.
{¶18}. In the case sub judice, the trial court determined the total present value of
the PERS benefits to be $1,073,048.09, based on one of the scenarios Hogan ran in his
trial testimony. The trial court designated this entire amount as "Plaintiff's OPERS"
Licking County, Case No. 13 CA 91 6
under the heading of marital property on its distribution chart attached to the divorce
decree. See Trial Court's Attachment "B." This figure essentially represents the present
value of the PERS pension benefits appellant will receive starting at age 60, applying an
actuarial figure and assuming he will stay on PERS disability until that age.
{¶19}. Specifically, appellant's first monthly PERS disability payment was made
on December 1, 2011, in the amount of $5,003.43. Hogan calculated that the monthly
amount would grow to $6,204.25 per month by the time appellant turns 60 in 2019,
using a set annual cost-of-living adjustment. Hogan then annualized the monthly benefit
($6,204.25 times 12) and multiplied that figure by an actuarial factor of 14.1114 for a
non-social security disabled male, and added an administrative cost load of $22,440.25
to reach the aforesaid $1,073,048.09. See Defendant's Exhibit A.
{¶20}. Appellant commences his argument by proposing that his PERS benefit
consists of two parts: The "normal" retirement benefit component, which appellant
concedes is marital property, and the "wage replacement" component, which appellant
urges is separate property. Appellant's Brief at 12. Appellant notes that under the
provisions of the disability plan applicable to him, PERS granted him an additional
period of roughly eight years of "instant service credit" (see R.C. 145.36) when he went
on disability at age 52, reflective of the number of years left until age 60, when he would
likely have begun his PERS retirement, but for his disability.
{¶21}. In support, appellant directs us to, inter alia, Henderhan v. Henderhan, 5th
Dist. Stark No. 2001CA00330, 2002-Ohio-2674, and a case this Court therein recited,
Elsass v. Elsass, 2nd Dist. Green Nos. 93-CA-0005, 93-CA-0016, 1993 WL 541610. In
Elsass, the Second District Court of Appeals adopted a general rule set forth in the
Licking County, Case No. 13 CA 91 7
article entitled Principles and Guidelines for the Division of Property in Actions for
Divorce in Ohio (Mar.1981), 54 Ohio Bar 491, 505, indicating that disability benefits are
not marital property unless they are accepted by the retiree in lieu of retirement pay, in
which case they are marital property to the extent that retirement pay value is included
therein. (Internal quotations omitted).
{¶22}. We note the parties in this appeal are not disputing that appellant is
entitled to his post-divorce PERS benefits between the ages of 52 and 60 as his
separate property. Appellant's reliance on Elsass is essentially a steppingstone to his
chief argument: that the trial court erred in failing to apply a coverture fraction to his
"post-retirement age" (i.e., after age 60) PERS valuation, assuming we accept the
aforesaid $1,073,048.09 calculation.
{¶23}. A coverture fraction, stated mathematically, is as follows: "The numerator
of the coverture fraction is the number of years the appellant participated in the pension
plan during the marriage and the denominator is the total number of years the appellant
participated in the plan." Ferris v. Ferris, 5th Dist. Fairfield 00 CA 58, 2001 WL 194779.
{¶24}. In the case sub judice, appellant commenced employment with the State
of Ohio in 1985, after the parties were married. If we consider his termination date of
employment to be November 30, 2011, the end of the month in which he became
eligible for PERS disability, then his entire public service career was within the confines
of the marriage, with ended June 18, 2012 per the decree; in that case, the coverture
fraction has no effect. However, appellant chiefly contends the approximately eight-year
instant service credit (reflecting the period of his date of disability eligibility until his 60th
birthday in 2019) should be added to the denominator, i.e., appellant's total time of
Licking County, Case No. 13 CA 91 8
employment under the plan, resulting in a coverture fraction of .787 to be applied to the
$1,073,048.09 figure.
{¶25}. The case appellant cites in support, Thompson v. Thompson, 196 Ohio
App.3d 764, 2011-Ohio-6286, does not mandate that we follow appellant's coverture
theory in the present case. Thompson, which did not involve instant service credits,
merely holds that it was not an abuse of discretion in that case for the trial court to
utilize a coverture fraction methodology based on a calculated post-marriage increase in
benefits for a teacher reaching thirty years under STRS. Id. at 778. Moreover, as a
general rule, we note the Ohio Supreme Court has explained that "flat rules have no
place in determining a property division." See Hoyt at 180, 559 N.E.2d 1292. We
therefore find no basis to reverse, on an abuse of discretion standard, the trial court's
refusal to apply a coverture fraction under the circumstances presented.
{¶26}. Appellant adds two additional arguments to the PERS division issue,
urging that it was error for the trial court to order him (1) to designate appellee as his
sole beneficiary for any pre-retirement survivor benefits and (2) to elect a joint survivor
annuity benefit, where the PERS valuation assumed a single life annuity.
{¶27}. Regarding appellant's first issue, R.C. 145.43(B) states as follows in
pertinent part: "Except as provided in division (C)(1) of section 145.45 of the Revised
Code, should a member die before age and service retirement, the member's
accumulated contributions and any applicable amount calculated under section 145.401
of the Revised Code, shall be paid to the person or persons the member has
designated under section 145.431 of the Revised Code. ***." We note the Ohio
Supreme Court generally recognized in Hoyt, supra, that "[t]o preserve the asset so that
Licking County, Case No. 13 CA 91 9
each party can procure the most benefit, an award of full survivorship benefits under
circumstances of a deferred distribution of a retirement asset may meet this goal." Id. at
185. Appellee responds, inter alia, that appellant failed to raise this issue to the trial
court, even though it is referenced in appellant’s proposed decree. In any case, we are
unpersuaded that the order of designation of appellee as sole beneficiary of pre-
retirement survivor benefits under the circumstances constituted an abuse of discretion.
{¶28}. Regarding appellant's second issue, appellee, citing R.C. 145.36,
concedes that a "life with selected percentage to survivor plan" is permitted for age-and-
service PERS retirees, but not for disability retirees, such as appellant. Thus, assuming
no change in appellant's disability status, we find no prejudicial result to appellant
warranting reversal. Furthermore, because the trial court took the extra step of
maintaining jurisdiction over property division in this matter, appellant will be able to
petition the court should circumstances change in this regard.
{¶29}. Upon review, we are unpersuaded that the trial court abused its discretion
in its distribution of property, particularly the PERS pension benefits, as urged by
appellant.
{¶30}. Appellant's First Assignment of Error is therefore overruled.
II.
{¶31}. In his Second Assignment of Error, appellant argues the trial court erred in
its treatment of the vacation and sick leave amounts of the parties. We disagree.
{¶32}. In the case sub judice, the trial court awarded to appellee "one-half of the
[appellant's] vacation and sick leave accumulated as of December 31, 2011." Decree at
19. Appellant herein maintains that no evidence supports the trial court's finding that
Licking County, Case No. 13 CA 91 10
appellant even has any sick or vacation leave available. On the other hand, appellant
insists that appellee's testimony reveals she has such benefits, worth approximately
$4,000.00, but the trial court failed to include these assets in its division of the parties'
property.2
{¶33}. In conducting our review, we are guided by the presumption that the trier
of fact is best able to view the witnesses and observe their demeanor, gestures, and
voice inflections, and use these observations in weighing the credibility of the testimony.
See Seasons Coal Co. v. Cleveland (1984), 10 Ohio St. 3d 77, 80, 461 N.E.2d 1273.
Furthermore, this Court has expressed its reluctance to engage in piecemeal review of
individual aspects of a property division taken out of the context of the entire award. See
Harper v. Harper (Oct. 11, 1996), Fairfield App.No. 95 CA 56, citing Briganti v. Briganti
(1984), 9 Ohio St. 3d 220, 459 N.E.2d 896.
{¶34}. While the reasoning for equally splitting appellant's amount of vacation
and sick leave benefits while ignoring appellee's is not completely clear, it may simply
have been the trial court's additional means of achieving equity between the parties,
and in light of the entirety of the property division in this instance, we are unpersuaded
that the trial court abused its discretion in such an order.
{¶35}. Appellant's Second Assignment of Error is therefore overruled.
III.
{¶36}. In his Third Assignment of Error, appellant contends that the trial court
erred and/or abused its discretion in declining to retain jurisdiction over the issue of
spousal support. We disagree.
2
A rough calculation indicates that this figure constitutes less than three-tenths of one
percent of the total value of the marital assets.
Licking County, Case No. 13 CA 91 11
{¶37}. R.C. 3105.18(E) mandates that a trial court must specifically reserve
jurisdiction in its divorce decree or a separation agreement incorporated into the decree
in order to modify a spousal-support award. The decision of whether to retain such
jurisdiction is a matter within the domestic relations court's discretion. Smith v. Smith
(Dec. 31, 1998), Lucas App. No. L–98–1027, 1998 WL 904941, citing Johnson v.
Johnson (1993), 88 Ohio App. 3d 329, 331, 623 N.E.2d 1294.
{¶38}. This Court has previously held that a trial court errs in reserving
jurisdiction over the issue of spousal support after finding that spousal support was not
appropriate or reasonable. See Vona v. Vona, 5th Dist. Stark No. 00-CA-00040, 2001
WL 109368; Long v. Long (July 24, 2000), Stark App. No. 1999CA00388, 2000 WL
1027285. We find no compelling reasons to presently deviate from our precedent on
this issue.
{¶39}. We are therefore unpersuaded the trial court abused its discretion in its
decision to not retain jurisdiction over spousal support.
{¶40}. Appellant's Third Assignment of Error is therefore overruled.
IV.
{¶41}. In his Fourth Assignment of Error, appellant contends that the trial court
erred and/or abused its discretion in failing to award spousal support to him.
{¶42}. Appellant originally presented this assigned error as "conditional." In our
review of appellee's response brief and appellant's reply brief, the parties appear to now
have stipulated that redress of this issue is not necessary based on the timing of the
actual commencement of payment of the divided PERS benefits.
Licking County, Case No. 13 CA 91 12
{¶43}. We therefore will not further address appellant's Fourth Assignment of
Error.
{¶44}. For the reasons stated in the foregoing opinion, the judgment of the Court
of Common Pleas, Domestic Relations Division, Licking County, Ohio, is hereby
affirmed.
By: Wise, J.
Delaney, J., concurs.
Hoffman, P. J., concurs separately.
JWW/d 0604
Licking County, Case No. 13 CA 91 13
Hoffman, P.J., concurring
{¶45} I concur in the majority's general analysis and disposition of Appellant's
four assignments of error.
{¶46} I write separately only to note I do not believe the trial court's retention of
jurisdiction over the division of Appellant's PERS retirement benefits is valid. I would
not use the trial court's attempted retention of jurisdiction as justification for overruling
Appellant's first assignment of error.
Licking County, Case No. 13 CA 91 14