In re Kasper , 2014 Ohio 1256 ( 2014 )

[Cite as In re Kasper, 2014-Ohio-1256.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
In the matter of: :
Soraya Hevia Kasper [deceased],
:
Petitioner-Appellee,
: No. 13AP-428
[Omar Hevia, (C.P.C. No. 07DR-1810)
:
Third-Party-defendant/ (REGULAR CALENDAR)
Cross-Appellant], :
v. :
Eric C. Kasper, :
Petitioner-Appellant/ :
Cross-Appellee.
:
D E C I S I O N
Rendered on March 27, 2014
Shumaker, Loop & Kendrick, and Richard D. Rogovin, for
Omar Hevia.
Eric W. Johnson, for Eric C. Kasper.
Joel R. Rovito, for amicus curiae Alexander Kasper.
APPEAL from the Franklin County Court of Common Pleas,
Division of Domestic Relations
O'GRADY, J.
{¶ 1} Appellant, Eric C. Kasper, appeals from the April 25, 2013 judgment of the
Franklin County Court of Common Pleas, Division of Domestic Relations ("domestic
court"), denying his motion for a constructive trust over his former wife's life insurance
No. 13AP-428 2
proceeds held in custodial accounts for testamentary trusts. Appellee, Omar Hevia, the
trustee for the testamentary trusts, appeals the court's May 17, 2013 judgment ordering
him to pay appellant attorney fees. Appellant also filed a cross-appeal from the judgment
regarding attorney fees.1 For the following reasons, we affirm.
I. FACTUAL AND PROCEDURAL HISTORY
{¶ 2} The domestic court dissolved the marriage between appellant and Soraya
Kasper in 2007. The Kaspers had three children as issue of the marriage and executed a
shared parenting plan. The domestic court incorporated the shared parenting plan into a
final judgment. Section IX of the shared parenting plan addresses life insurance, and
provides:
A. Both parties shall maintain life insurance on their lives
until the youngest child completes his post high school
education, military service, or attains the age of twenty five
(25), whichever occurs first. Eric shall maintain a policy/ies in
the amount of $500,000.00, naming Soraya as the
beneficiary and the children as alternate beneficiaries. Soraya
shall maintain a policy/ies in the amount of $500,000.00
naming Eric as the beneficiary and the children as alternate
beneficiaries. At all pertinent times, these policies shall have a
death benefit of no less than $500,000 for each party.
B. The insurance proceeds are to be used to support the
children until the youngest child finishes his post high school
education, military service or attains the age of 25, whichever
first occurs. The proceeds are to be used and allocated on a
pro rata basis per child. The parties shall execute a life
insurance trust(s) naming the other party as trustee in order
to effectuate the above. This Trust shall be in place on or
before the date of final hearing.
C. As any one of the events enumerated in subsection B. above
occurs to an individual child, such child shall receive one-
third (1/3) of the balance of the proceeds in three (3) equal
installments, regardless of such child's age or support need,
on the following dates: the first installment shall be paid on
the day such child completes his post high school education,
military service or turns age 25, whichever first occurs; the
second installment shall be paid five years subsequent to that
1 Although Eric C. Kasper and Omar Hevia have both filed cross-appeals in this matter, for ease of
discussion, we refer to them as "appellant" and "appellee" respectively.
No. 13AP-428 3
date and the third installment shall be paid five years
subsequent to the second installment. The parties shall
execute a life insurance trust(s) naming the other party as
trustee in order to effectuate the above. This Trust shall be in
place on or before the date of final hearing.
D. No later than February 15 of each year, commencing
February 15, 2008, and within ten (10) days of written request
each party shall provide the other with a copy of the insurance
policy/ices and any amendments thereto, and any and all
documentation necessary to show the then current
beneficiary/ies and coverage in effect.
(R. 21, 20-21.)
{¶ 3} The Kaspers also executed a separation agreement which the court
incorporated into the dissolution decree. Section V.G.2. of the separation agreement
provides:
Soraya has a Guardian Life Insurance Term Life Policy #3182.
Soraya shall retain the aforementioned policy or obtain and
maintain an additional policy or replacement policy, naming
Eric as the beneficiary as more fully set forth in the parties'
Shared Parenting Plan filed with this Court.
(R 6, 10.)
{¶ 4} In August 2012, Soraya died. Subsequently, appellant claimed he learned
Soraya had named her brother, Omar Hevia, "as the beneficiary or trustee of the life
insurance trust that is to receive, or has received, the life insurance proceeds set forth in
the shared parenting plan." (R. 38.) On October 17, 2012, appellant filed three motions
with the domestic court under the dissolution case number. First, he asked the court to
join appellee as a third-party defendant in the action. Second, he requested a temporary
restraining order to prevent appellee from using the life insurance proceeds. Third, he
filed a motion for transfer of funds or imposition of a constructive trust, asking the
domestic court to issue one or more of the following orders:
1. that third-party Defendant Omar Hevia immediately
transfer all insurance proceeds received by him in relation to
this matter to Petitioner-Husband upon receipt;
No. 13AP-428 4
2. that a constructive trust be imposed in favor of Petitioner-
Husband and upon any and all life insurance proceeds
received by third-party Defendant Omar Hevia in relation to
this matter;
3. that the life insurance proceeds be ordered to be paid
directly to Petitioner-Husband from the insurance company,
once identified; and
4. that third-party Defendant Omar Hevia be ordered to pay
the attorney fees, costs, and expenses incurred by Petitioner-
Husband.
(R. 40.)
{¶ 5} Appellee filed a limited appearance in response to appellant's motions.
Appellee argued the Franklin County Court of Common Pleas, Probate Division ("probate
court") had exclusive jurisdiction over the proceeds under R.C. 2104.24(A)(1)(c) and (e).
Specifically, appellee noted the probate court admitted Soraya's will to probate on
October 11, 2012. Soraya created testamentary trusts in her will and named appellee as
trustee. On November 5, 2012, the probate court appointed appellee trustee of three
testamentary trusts—one for the benefit of each of the Kasper children. Appellee's letters
of authority state that "[b]ond is dispensed with by law; all checks must be payable to the
trustee and a custodial depository appointed by order of the Court." (R. 49-51, 7.) On
November 9, 2012, the probate court issued orders requiring the payment of Soraya's life
insurance proceeds to Huntington National Bank for deposit into custodial accounts for
the benefit of each child under R.C. 2109.13. The orders state that "[n]one of the funds, in
whole or in part, shall be released by the depositary except upon order of this court." (R.
49-51, 10.) According to appellee, the funds were deposited on November 19, 2012.
{¶ 6} The parties appeared before the domestic court on November 29, 2012 and
orally agreed to submit their arguments via briefs; but, instead of a brief, appellee filed
three motions on January 7, 2013. Appellee asked the court to transfer venue to the
probate court. In the alternative, appellee filed a motion for a full evidentiary hearing and
modification of the shared parenting plan. He also requested appointment of a guardian
ad litem for the children.
No. 13AP-428 5
{¶ 7} Subsequently, appellant filed a brief in support of his October 17, 2012
motions and a motion for attorney fees because he had to defend against appellee's
"frivolous" motions. (R. 68.) Appellee filed a motion for discovery and asked the court to
defer ruling on pending motions until its completion. The domestic court granted this
motion. Then, appellee filed a supplemental memorandum in support of his motion for a
change in venue based on the exchanged discovery. In response, appellant filed a
memorandum contra, motion to strike the supplemental memorandum, and a motion for
sanctions.
{¶ 8} On April 25, 2013, the domestic court issued a decision and entry. The
decision stated the parties appeared before the court that day and "argued their positions
and presented evidence regarding attorneys' fees." (R. 110, 2.) The court denied
appellee's motion to transfer venue, finding, in part, that because the life insurance
proceeds were to act as child support under the shared parenting plan, it had exclusive
and continuing jurisdiction "over any related cause." (R. 110, 5.) The court granted
appellant's motion to join appellee as a third-party defendant.
{¶ 9} Regarding appellant's request for a constructive trust, the domestic court
found the shared parenting plan contained conflicting provisions and interpreted it to
mean the parties intended their life insurance proceeds be held in trust for the support of
the children. However, the court found a constructive trust was not justified. The court
found appellee would not be unjustly enriched in his position as trustee, and no equitable
principles were violated because the "intent is for the support of the children regardless of
who is the trustee." (R. 110, 10.) The court also noted that because it "finds a constructive
trust inapplicable, the proceeds are now under the jurisdiction of the probate court and
this court does not believe it has jurisdiction to change the trustee." (R. 110, 11.)
{¶ 10} On May 17, 2013, the domestic court issued a decision on appellant's
motions for attorney fees and sanctions. The court denied the motion for sanctions but
awarded appellant attorney fees under R.C. 3105.73(B) for expenses he incurred
responding to appellee's motion to appoint a guardian ad litem, motion to modify the
shared parenting plan, and supplemental memorandum in support of the motion to
change venue. The court ordered appellee to pay these fees within 30 days of the court's
decision. The domestic court found the fees were in the nature of a children's expense,
No. 13AP-428 6
and appellee could ask the probate court to approve payment of the fees from the
children's trusts.
II. ASSIGNMENTS OF ERROR
{¶ 11} On appeal, appellant presents this court with one assignment of error for
review:
THE TRIAL COURT ERRED BY DENYING APPELLANT'S
MOTION FOR IMPOSITION OF A CONSTRUCTIVE TRUST.
{¶ 12} Appellee presents this court with one cross-assignment of error for review:
While the Court correctly determined that the Trustee's
Motion to Appoint a Guardian Ad Litem, and Motion for a
Full Evidentiary Hearing and Modification of the Shared
Parenting Plan were (1) not frivolous, and (2) motivated by
the belief that such motions were necessary to protect the
assets of the children, it erred and abused its discretion in
awarding legal fees from the children's funds as equitable
under R.C. § 3105.73(B) and further erred in awarding legal
fees for services claimed but not performed.
{¶ 13} Appellant also presents this court with a cross-assignment of error for
review:
THE TRIAL COURT ERRED IN FAILING TO FIND THE
TRUSTEE'S CONDUCT FRIVOLOUS AND AWARDING
FEES AND SANCTIONS ACCORDINGLY.
{¶ 14} In addition, Alexander Kasper, the Kaspers' oldest child, has filed an amicus
curiae brief in support of appellee.
III. DISCUSSION
A. Constructive Trust
{¶ 15} Under appellant's assignment of error, he contends the domestic court
erred when it denied his motion for imposition of a constructive trust. Appellant
complains the court failed to carry out the intent of appellant and Soraya as evidenced by
the shared parenting plan, and imposition of a constructive trust would be equitable.
{¶ 16} A constructive trust arises by operation of law against one who " 'by fraud,
actual or constructive, by duress or abuse of confidence, by commission of wrong, or by
any form of unconscionable conduct, artifice, concealment, or questionable means, or
No. 13AP-428 7
who in any way against equity and good conscience, either has obtained or holds the legal
right to property which he ought not, in equity and good conscience, hold and enjoy.' "
Estate of Cowling v. Estate of Cowling, 109 Ohio St.3d 276, 2006-Ohio-2418, ¶ 18,
quoting Ferguson v. Owens, 9 Ohio St.3d 223, 225 (1984), quoting 76 American
Jurisprudence 2d, Trusts, Section 221, at 446 (1975). "A constructive trust is considered a
trust because ' "[w]hen property has been acquired in such circumstances that the holder
of the legal title may not in good conscience retain the beneficial interest, equity converts
him into a trustee." ' " Estate of Cowling at ¶ 18, quoting Ferguson at 225, quoting Beatty
v. Guggenheim Exploration Co., 225 N.Y. 380, 386 (1919).
{¶ 17} Instead of challenging the probate court orders, appellant filed a motion in
the domestic court to make appellee the trustee of a constructive trust over Soraya's life
insurance proceeds. In essence, appellant sought an order from the domestic court to
direct and control the conduct of a testamentary trustee and have the trustee pay
appellant life insurance proceeds out of custodial accounts that are subject to the control
of the probate court. But, as we explain below, the domestic court correctly denied the
motion because it lacked jurisdiction to grant the relief appellant requested.
{¶ 18} "Where a matter falls within the exclusive jurisdiction of the probate court,
no other court may exercise jurisdiction over the matter." Biro v. Biro, 6th Dist. No. OT-
10-017, 2010-Ohio-5169, ¶ 13; Caudill v. Caudill, 29 Ohio App.3d 51, 52 (10th Dist.1986).
R.C. 2101.24(A)(1)(e) addresses the probate court's jurisdiction over a testamentary
trustee and provides: "Except as otherwise provided by law, the probate court has
exclusive jurisdiction: * * * (e) To appoint and remove * * * testamentary trustees, direct
and control their conduct, and settle their accounts." (Emphasis added.) Thus, the
probate court has exclusive jurisdiction to direct and control appellee's actions involving
the life insurance proceeds. See by way of analogy Bauman v. Hogue, 160 Ohio St. 296,
297 (1953), quoting former General Code Section 10501-53 (finding probate court had
jurisdiction to consider action of decedent's father, who, in part, requested a finding that
estate administrator lacked authority to give decedent's husband certain estate assets
because, "to use the language" of G.C. 10501-53, it was an action that would " 'direct and
control the conduct of' " an administrator); Rieser v. Rieser, 191 Ohio App.3d 616, 2010-
Ohio-6227, ¶ 1 (2d Dist.) (finding general division of common pleas court lacked
No. 13AP-428 8
jurisdiction to prohibit estate executor from prosecuting an action in federal court based
on a prior settlement agreement the general division approved because such relief
"directs and/or controls the conduct of an executor, which per R.C. 2101.24(A)(1) is
within the exclusive jurisdiction of the probate court"); Biro at ¶ 13, citing In re
Guardianship of Constable, 12th Dist. No. CA99-05-039 (June 12, 2000) (finding that,
while domestic court had jurisdiction over child custody and support matters,
guardianship of divorced couple's son fell within exclusive jurisdiction of probate court).
{¶ 19} Here, the probate court appointed appellee trustee of trusts for each of the
Kasper children. The court issued orders for the payment of Soraya's life insurance
proceeds to custodial accounts for each child. The probate court's orders state none of the
funds, in whole or in part, shall be released except upon the probate court's order. Thus,
while the domestic court could still address matters relating to the separation order, the
probate court had exclusive jurisdiction over the life insurance proceeds.
{¶ 20} Appellant directs this court's attention to a First District Court of Appeals'
case on the issue of jurisdiction of a domestic court. In Kell v. Verderber, 1st Dist. No.
C-120665, 2013-Ohio-4223, the appellant challenged a domestic court's finding that it
lacked jurisdiction to hold her ex-husband in contempt for a violation of a separation
agreement. The First District explained that domestic courts have "full equitable powers
and jurisdiction appropriate to the determination of all domestic relations matters." Id.
at ¶ 19, quoting R.C. 3105.011. The First District cited additional authorities on the
domestic court's power to grant relief in domestic relations matters and ability to
enforce separation agreements. Id. at ¶ 19-20. Ultimately, the First District concluded
that the domestic court "had continuing jurisdiction to enforce the provisions of the
separation agreement incorporated into the divorce decree through a post-decree
motion for contempt." Id. at ¶ 20.
{¶ 21} Unlike the ex-wife in Kell, appellant did not bring an action to directly
enforce a separation agreement against his former spouse, i.e., this is not a contempt
action against Soraya. Instead, appellant seeks to indirectly enforce that agreement by
directing the conduct of a testamentary trustee. Therefore, we find this case
distinguishable from Kell.
No. 13AP-428 9
{¶ 22} For the foregoing reasons, we find the domestic court lacked jurisdiction to
grant appellant the relief he requested—only the probate court could direct and control
appellee's actions as a testamentary trustee. Thus, the domestic court correctly denied
appellant's motion for a constructive trust.
{¶ 23} However, our decision does not mean a domestic court never has
jurisdiction to impose a constructive trust. For instance, in Blevins v. Estate of Blevins,
10th Dist. No. 12AP-554, 2013-Ohio-947, the decedent's ex-wife was supposed to receive
a share of his retirement benefits under an agreed decree of divorce. A domestic court
imposed a constructive trust over funds received by the decedent's new wife as a
beneficiary of the decedent's retirement plan because she knew or should have known
she was receiving funds to which she was not entitled. We found the domestic court had
jurisdiction "to enforce, as best it could, its previous orders with regard to the division of
property" and could create a constructive trust for the decedent's ex-wife. Id. at ¶ 18.
{¶ 24} In addition, our decision does not mean a party to a shared parenting plan
can subvert the terms of that plan or the jurisdiction of the domestic court by simply
creating a testamentary trust. Instead, our decision is limited to the facts before us.
{¶ 25} Accordingly, we overrule appellant's assignment of error.
B. Attorney Fees
{¶ 26} In his cross-assignment of error, appellee contends the domestic court
abused its discretion when it awarded appellant attorney fees under R.C. 3105.73(B).
{¶ 27} R.C. 3105.73(B) provides:
In any post-decree motion or proceeding that arises out of an
action for divorce, dissolution, legal separation, or annulment
of marriage or an appeal of that motion or proceeding, the
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' income, the conduct of the
parties, and any other relevant factors the court deems
appropriate, but it may not consider the parties' assets.
{¶ 28} "An award of attorney fees is generally within the sound discretion of the
trial court and not to be overturned absent an abuse of discretion." Wagenbrenner v.
Wagenbrenner, 10th Dist. No. 10AP-933, 2011-Ohio-2811, ¶ 19, citing Shirvani v.
No. 13AP-428 10
Momeni, 10th Dist. No. 09AP-791, 2010-Ohio-2975, ¶ 22. The phrase "abuse of
discretion" implies the trial court's decision was unreasonable, arbitrary or
unconscionable. Bennett v. Martin, 10th Dist. No. 13AP-99, 2013-Ohio-5445, ¶ 19, citing
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 29} Appellee argues it was inequitable for the domestic court to award attorney
fees. He highlights the fact that the domestic court denied appellant's motion for
sanctions, finding appellee's motions were not frivolous. The court found appellee filed
the motions because he believed he needed to protect the children's money, i.e., he did not
file the motions for an improper purpose. Appellee complains the domestic court "offers
no explanation in its Decision and Entry as to what factors it considered in making this
[fee] award, or the reason why this award is equitable." (Appellee/cross-appellant's brief,
12.) He also complains the court did not make an explicit finding that appellant's counsel
had a reasonable hourly rate and spent a reasonable amount of time on the case.
According to appellee, "[a] court is not entirely free to award legal fees under § 3105.75
(B) without a rational explanation, particularly when making the award to a nonprevailing
party such as Mr. Kasper." (Appellee/cross-appellant's brief, 12.)
{¶ 30} Appellee does not cite to any legal authority to support his suggestion that
the domestic court had to issue explicit findings, as opposed to a general judgment, on the
issue of attorney fees. Moreover, in its May 17, 2013 decision and entry granting attorney
fees, the domestic court stated it conducted a hearing on April 25, 2013, at which time the
parties "argued their positions and presented evidence regarding attorneys' fees and
sanctions." (Emphasis added.) (R. 110, 1.) The court's entry indicates it considered an
affidavit filed by appellant's attorney detailing the fees appellant incurred. We note that
appellant's counsel filed an affidavit on April 25, 2013, which does appear in the record.
{¶ 31} Appellee did not provide this court with a transcript of the hearing on
attorney fees. McAdams v. B&D Concrete Footers, Inc., 10th Dist. No. 12AP-1088, 2013-
Ohio-2456, ¶ 5, citing Knapp v. Edwards Laboratories, 61 Ohio St.2d 197, 199 (1980)
("When portions of the transcript necessary for the resolution of assigned errors are
omitted from the record, an appellate court has nothing to pass upon, and, consequently,
as to those assigned errors, the reviewing court must presume the validity of the trial
No. 13AP-428 11
court proceedings and affirm."). However, the parties did submit a "joint statement of the
evidence and proceedings" under App.R. 9(C).
{¶ 32} In the parties' joint statement, they focus largely on summarizing
background information. Regarding the April 25 hearing, the parties state they "appeared
before the judge" on that date "and, while the purpose and nature of the scheduled
hearing was not entirely clear, each orally argued his position regarding the various
motions then pending before the court." (R. 137-38, 4.) However, the parties fail to detail
what evidence they introduced at the hearing on attorney fees. The joint statement is an
insufficient reconstruction of the April 25 hearing to overcome the presumption of
regularity mandated by the above-cited precedent. Therefore, in the absence of a
transcript or adequate App.R. 9(C) statement, we must affirm the domestic court's finding
regarding the equitable nature of the fee award.
{¶ 33} Additionally, appellee complains that in the April 25, 2013 affidavit on
attorney fees, appellant's attorney "mistakenly claims work performed which could not
have been performed based upon the record." (Appellee/cross-appellant's brief, 13-14.)
Specifically, the attorney averred appellant incurred attorney fees "by being forced to
respond to [appellee's] memorandum filed April 1, 2013." (R. 110, 2.) Appellee argues
the record shows appellant's attorney never filed a response to the April 1 memorandum.
However, it is apparent from the itemization of fees in the April 25 affidavit that appellant
did not actually request attorney fees for a responsive memorandum. Thus, the domestic
court did not award legal fees for services not actually performed.
{¶ 34} Finally, appellee complains he was not provided sufficient notice to properly
analyze the April 25 affidavit and that the itemization was improper. But, again, in the
absence of a hearing transcript or a sufficient App.R. 9(C) statement about what
happened in the hearing on attorney fees, we cannot evaluate these complaints and must
presume the regularity of proceedings.
{¶ 35} Therefore, we overrule appellee's cross-assignment of error. This decision
renders moot appellant's cross-assignment of error, which appellant asked this court to
only consider if we sustained appellee's cross-assignment of error. See App.R. 12(A)(1)(c).
No. 13AP-428 12
IV. CONCLUSION
{¶ 36} For the foregoing reasons, appellant's assignment of error and appellee's
cross-assignment of error are overruled. Appellant's cross-assignment of error is
rendered moot. Accordingly, we affirm the judgment of the Franklin County Court of
Common Pleas, Division of Domestic Relations.
Judgment affirmed.
SADLER, P.J., and DORRIAN, J., concur.