Chattree v. Chattree , 2014 Ohio 489 ( 2014 )

[Cite as Chattree v. Chattree, 2014-Ohio-489.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99337
MANORAMA CHATTREE
PLAINTIFF-APPELLEE and
CROSS-APPELLANT
vs.
ARUN K. CHATTREE
DEFENDANT-APPELLANT and
CROSS-APPELLEE
JUDGMENT:
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Domestic Relations Division
Case No. D-321775
BEFORE: Celebrezze, P.J., Jones, J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: February 13, 2014
ATTORNEY FOR APPELLANT/CROSS-APPELLEE
Carl A. Murway
Taft Stettinius & Hollister, L.L.P.
200 Public Square, Suite 3500
Cleveland, Ohio 44114
ATTORNEY FOR APPELLEE/CROSS-APPELLANT
Jonathan A. Rich
Victoria A. Glowacki
Zashin & Rich Co., L.P.A.
55 Public Square, 4th Floor
Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEES
For Canada Life
Suzanne M. Jambe
Baker & Hostetler, L.L.P.
3200 PNC Center
1900 East Ninth Street
Cleveland, Ohio 44114
For Ritu R. Chattree
Ritu R. Chattree, pro se
61 Jane Street
Apartment 14-B
New York, New York 10014
For Libman Ryder & Co., Inc., et al.
Walter F. Ehrnfelt
Waldheger-Coyne
1991 Crocker Road, Suite 550
Westlake, Ohio 44145
FRANK D. CELEBREZZE, JR., P.J.:
{¶1} Defendant-appellant, Arun Chattree (“Arun”), appeals from a judgment entry
of divorce that awarded temporary and permanent spousal support and attorney fees and
divided marital assets. Plaintiff-appellee, Monorama Chattree (“Mona”), cross-appeals
from the judgment entry of divorce and challenges the valuation of Arun’s business, the
division of marital assets, and the court’s order allowing Arun to maintain possession of
his passport. For the following reasons, we affirm in part, reverse in part, and remand to
the trial court for further proceedings consistent with this opinion.
Factual and Procedural History
{¶2} Arun, now 79 years old, and Mona, now 78 years old, were married in India
on November 14, 1961. In 1963, their only child, a daughter, Ritu Chattree, was born.
Shortly after Ritu’s birth, Arun went to the United States to further his education.
Approximately four years later, Mona and Ritu joined Arun in the United States. Mona
maintained employment as a bacteriologist until she retired in 1995. Arun worked at
various companies until 1995 when he started his own business called Community
Behavioral Health Center, Inc. (“CBHC”). CBHC is licensed by the state of Ohio to
provide mental health services to patients through various providers and agencies.
{¶3} After 48 years of marriage, Mona and Arun became estranged. On June 19,
2008, Mona filed her complaint for divorce, naming seven defendants, seeking a divorce
from Arun and restraining orders against Arun and the other defendants. On December
9, 2008, Mona filed an amended complaint for divorce and named only four defendants,
Arun and three business entities in which he had an interest. After numerous pretrial
hearings and an interloculatory appeal, the matter proceeded to trial, beginning March 8,
2010. Trial occurred on 27 separate days, over a span of seven months, before
concluding on October 4, 2010.
{¶4} At the conclusion of trial, written closing arguments were filed by Mona on
November 4, 2010, and by Arun on December 16, 2010. On April 3, 2012, the
magistrate issued a decision, making findings of fact and conclusions of law. On
November 30, 2012, the trial court ruled on the parties’ objections, adopting in part and
modifying in part the magistrate’s decision.
{¶5} Arun now brings this timely appeal, raising eight assignments of error for
review. In her cross-appeal, Mona raises six cross-assignments of error for review.1
Law and Analysis
Arun’s Appeal
I. Standard of Review
{¶6} For the purpose of judicial clarity, we consider Arun’s assignments of error
out of order. We review a trial court’s determination in domestic relations cases under
an abuse of discretion standard. Booth v. Booth, 44 Ohio St.3d 142, 144, 541 N.E.2d
1028 (1989).
Since it is axiomatic that a trial court must have discretion to do what
is equitable upon the facts and circumstances of each case, * * * it
Appellant’s assignments of error and appellee’s cross-assignments of error are included in the
1
appendix to this opinion.
necessarily follows that a trial court’s decision in domestic relations matters
should not be disturbed on appeal unless the decision involves more than an
error of judgment.
Id., citing Cherry v. Cherry, 66 Ohio St.2d 348, 355, 421 N.E.2d 1293 (1981). This
same standard applies to orders relating to spousal support and the division of marital
property. Id., citing Blakemore v. Blakemore, 5 Ohio St.3d 217, 218, 450 N.E.2d 1140(1983), and Martin v. Martin, 18 Ohio St.3d 292, 294, 480 N.E.2d 1112 (1985). An
abuse of discretion implies that the court’s attitude is unreasonable, arbitrary, or
unconscionable. Blakemore at 219.
II. Division of Marital Property
{¶7} In a divorce proceeding, marital property includes the following:
(i) All real and personal property that currently is owned by either or both of
the spouses, including, but not limited to, the retirement benefits of the
spouses, and that was acquired by either or both of the spouses during the
marriage;
(ii) All interest that either or both of the spouses currently has in any real or
personal property, including, but not limited to, the retirement benefits of
the spouses, and that was acquired by either or both of the spouses during
the marriage;
(iii) Except as otherwise provided in this section, all income and
appreciation on separate property, due to the labor, monetary, or in-kind
contribution of either or both of the spouses that occurred during the
marriage * * *.
R.C. 3105.171(A)(3)(a)(i)-(iii).
{¶8} R.C. 3105.171(C)(1) mandates an equal division of marital property, or, “if
an equal division is inequitable, the court must divide the marital property equitably.”
Strauss v. Strauss, 8th Dist. Cuyahoga No. 95377, 2011-Ohio-3831, ¶ 37, citing Neville v.
Neville, 99 Ohio St.3d 275, 277, 2003-Ohio-3624, 791 N.E.2d 434. In order to
determine what is equitable, the trial court must consider the factors outlined in R.C.
3105.171(F). Id. Such factors include, among others, the duration of the marriage, the
assets and liabilities of the spouses, tax consequences of the property division, and any
retirement benefits of the spouses. R.C. 3105.171(F)(1)-(10). Moreover, the trial court
must take into account the parties’ marital debt when dividing marital property. Kehoe v.
Kehoe, 2012-Ohio-3357, 974 N.E.2d 1229, ¶ 14 (8th Dist.).
{¶9} Marital property, however, does not include separate property. R.C.
3105.171(A)(3)(b). “Separate property” is any real and personal property and any
interest in real or personal property that was acquired by one spouse prior to the date of
the marriage. R.C. 3105.171(A)(6)(a)(ii). The commingling of separate property with
other property does not destroy the identity of the separate property “except when the
separate property is not traceable.” R.C. 3105.171(A)(6)(b). The party seeking to have
certain property classified as “separate property” has the burden of proof in tracing the
separate property. Strauss at ¶ 49, citing Peck v. Peck, 96 Ohio App.3d 731, 734, 645
N.E.2d 1300 (12th Dist.1994).
{¶10} The marital assets in this case consist of both personal and real property.
However, within his appeal, Arun limits his arguments to the trial court’s division of the
following: (1) his interest in a cooperative apartment in New York, New York; (2) the
common pleas judgment award in the amount of $254,399.09; (3) the parties’ retirement
benefits; and (4) his interest in CBHC.
A. The Cooperative Apartment
{¶11} During the pendency of the parties’ marriage, Arun gifted his daughter Ritu
a sum in excess of $550,000 for the purchase and renovation of a cooperative apartment
located at 61 Jane Street, New York, New York. Ritu subsequently asked for additional
money to cover the costs of renovations needed for the apartment that exceeded her
original budget. Arun agreed to loan Ritu the money provided that she first execute a
promissory cognovit note for the full amount of the loan, which was $187,000, plus
interest. In 2009, Ritu and her father had a “falling out,” and Arun sued his daughter in
federal court regarding the purchase and renovation of the cooperative apartment and in
Ohio state court over his unsatisfied demand that she pay the cognovit note in full.
{¶12} Arun prevailed, to some extent, in both lawsuits. On February 9, 2010, in
Chattree v. Chattree, N.D. Ohio No. 1:08 CV 2039, 2010 U.S. Dist. LEXIS 45885 (May
11, 2010), the U.S. District Court issued a decision in favor of Arun on his causes of
action for breach of fiduciary duty, fraudulent misrepresentation, concealment, and breach
of contract. Zero dollars were awarded to Arun, however, Ritu was ordered to effectuate
a transfer of title so that it named her and Arun as “tenants-in-common of the premises
know as Cooperative Apartment 14B on 61 Jane Street, New York, New York.”
{¶13} On March 31, 2010, in Chattree v. Chattree, Cuyahoga C.P. No.
CV-09-696460 (Mar. 31, 2010), the common pleas court issued a judgment against Ritu
in favor of Arun in the amount of $254,399.09 on the cognovit note that she signed for
$187,000. This court affirmed the judgment of the trial court in Chattree v. Chattree, 8th
Dist. Cuyahoga, No. 95051, 2011-Ohio-1995.
{¶14} In dividing the parties’ marital property, the magistrate held that Arun and
Mona had no separate property. With respect to the cooperative apartment, the
magistrate determined that Ritu was entitled to “one-half of any equity Arun receives
from the Jane Street property” because its purchase and renovation derived from the
parties’ joint bank accounts during the pendency of their marriage. Further, the court
found that the common pleas court’s award of $254,399.09 for payment of the cognovit
note was marital property. However, in dividing the property, the court awarded Mona
the full $254,399.09, but reduced Arun’s outstanding spousal support arrearage by
$127,199.50, representing one-half of the cognovit judgment.
1. The Federal Court Judgment
{¶15} In his second assignment of error, Arun argues that the trial court erred in its
division of property by not finding that his interest in the cooperative apartment, as
ordered by the federal court, constituted his separate property. As stated, property
acquired during a marriage is presumed to be marital property unless it can be shown to
be separate. Huelskamp v. Huelskamp, 185 Ohio App.3d 611, 2009-Ohio-6864, 925
N.E.2d 167, ¶ 13 (3d Dist.).
{¶16} Arun does not dispute that the cooperative apartment was purchased during
the parties’ marriage with marital funds. Instead, he contends that this court should find
that the interest awarded to him by the federal court is his “separate property” because he
suffered damages in an individual capacity. Arun’s argument relies on R.C.
3105.171(A)(6)(a)(vi), which defines separate property as all real property and personal
property that is found by the court to be “compensation to a spouse for the spouse’s
personal injury * * *.” Generally, R.C. 3105.171(A)(6)(a)(vi) applies to situations
where, unlike here, a party is awarded monetary damages following a personal-injury
lawsuit. Nevertheless, Arun contends that the damages he suffered as a result of Ritu’s
conduct “are akin to personal injuries” contemplated under R.C. 3105.171(A)(6)(vi).
Arun’s contention is without merit.
{¶17} In our view, the language used in R.C. 3105.171(A)(6)(vi) does not
encompass an individual who suffers a legal injury in an individual capacity. Moreover,
even if it did, Arun did not suffer an injury in an individual capacity. R.C.
3105.171(A)(6)(a)(ii) defines marital property as any interest in real or personal property
that was acquired by either or both spouses during the marriage. Here, Arun’s interest in
the cooperative apartment was obtained with funds transferred from the parties’ marital
accounts during their marriage. Consequently, Mona had an interest in the funds used to
purchase and renovate the cooperative apartment.
{¶18} Next, Arun argues that this court should find that Mona’s actions during the
entirety of the federal lawsuit constituted “financial misconduct.” R.C. 3105.171(E)(3)
provides that if a spouse has engaged in financial misconduct, including but not limited to
the dissipation, destruction, concealment, or fraudulent disposition of assets, the court
may compensate the offended spouse with a distributive award or with a greater award of
marital property. “Financial misconduct implies some type of wrongdoing which results
in the offending spouse either profiting from the misconduct or intentionally defeating the
other spouse’s distribution of marital assets.” Carpenter v. Carpenter, 7th Dist. Noble
No. 06-NO-331, 2007-Ohio-1238, ¶ 15, citing Wideman v. Wideman, 6th Dist. Wood No.
WD-02-030, 2003-Ohio-1858, ¶ 34.
{¶19} Here, Arun contends that because Mona actively participated in the federal
lawsuit and testified on behalf of Ritu, her conduct was the equivalent of dissipating
marital assets. We find no merit to Arun’s argument. In our view, the mere fact that
Mona disagreed with Arun suing their daughter in federal court does not equate to a
finding that Mona committed financial misconduct. Mona committed no wrongdoing in
testifying truthfully at trial.
{¶20} Finally, Arun contends that the trial court failed to consider the $843,750
mortgage encumbering the cooperative apartment when it awarded Mona an interest in
the apartment as a marital asset. However, the trial court’s judgment order specifically
requires Ritu to make all payments on the loan and hold Arun harmless on any debt
associated with the property. Thus, it is clear that the trial court did not ignore the
mortgage encumbering the apartment and any future liability associated with said
mortgage.
{¶21} Based on the foregoing, we find that the trial court did not err in concluding
that Arun’s interest in the cooperative apartment was marital.
{¶22} Arun’s second assignment of error is overruled.
2. The Common Pleas Court Judgment
{¶23} In his sixth assignment of error, Arun argues that the trial court erred by
concluding that the cognovit judgment against Ritu was marital property. However, as
discussed above, the funds loaned to Ritu derived from marital accounts. Accordingly,
the trial court properly determined that the cognovit judgment in the amount of
$254,399.09 was a marital asset.
{¶24} Arun further argues, without support in the record, that because the trial
court’s arrearage calculation was inequitable and unlawful, the provision in the trial
court’s order requiring Arun to transfer his interest in the cognovit judgment to Mona to
reduce the arrearage amount was also contrary to law. However, Arun provides no basis
for this contention. Although addressed in greater detail below, because we find that the
trial court’s spousal support order was appropriate, we find no merit to Arun’s position
that the value of the cognovit judgment could not be utilized to reduce the outstanding
spousal support arrearage.
{¶25} Arun’s sixth assignment of error is overruled.
B. Retirement Funds
{¶26} In his fifth assignment of error, Arun argues that the trial court erred by not
dividing the parties’ retirement benefits equally and by guaranteeing a “minimum”
amount of benefits to Mona. Specifically, Arun alleges that the trial court erred in
dividing his CBHC defined benefit pension equally while allowing Mona to retain the
entirety of her annual OPERS benefits of $24,875.76, which Arun argues far exceed his
annual OPERS benefits of $8,237.71.
{¶27} As stated, the division of marital property includes retirement benefits that
were acquired during the marriage. R.C. 3105.171(A)(3)(a)(ii). However, R.C.
3105.171(C) clearly provides that where an equal division would be inequitable, a trial
court may not divide the marital property equally but instead must divide it in the manner
that the court determines to be equitable. In order to determine what is equitable, a trial
court must consider the factors set forth in R.C. 3105.171(F).
{¶28} In the instant case, the trial court stated that although the division of
property in this matter was unequal, “it was equitable due to the financial misconduct
committed by [Arun] during the course of this litigation.” Pursuant to R.C.
3105.171(E)(4), “if a party has engaged in financial misconduct, including the
dissipation, concealment or nondisclosure of assets, the court may compensate the other
party with a greater share of marital assets.” Thus, an “equal” distribution of the parties’
retirement benefits was not required in this matter.
{¶29} Nevertheless, we find, on due consideration of all retirement benefits at
issue in this matter, that the trial court equally divided the parties’ retirement benefits.
While Arun argues that Mona’s annual OPERS benefits far exceed his own, he fails to
account for the large disparity between the parties’ social security benefits. See R.C.
3105.171(F)(9) (requiring consideration of Social Security benefits when “relevant for
purposes of dividing a public pension”). Therefore, we cannot say that the trial court
abused its discretion in allowing Mona to retain her annual OPERS benefits in full.
{¶30} Furthermore, Arun’s challenges to the division of his pension plan are
without merit. In its opinion, the trial court awarded Mona a one-half marital interest in
Arun’s CBHC defined pension plan to be set aside in her name through the use of a
Qualified Domestic Relations Order. The court found that the value of the pension was
$1,630,904 as of December 31, 2009, and that Mona was entitled to no less than
$815,452. Here, Arun argues that it was an abuse of discretion to “guarantee” Mona no
less than a fixed amount where there was significant evidence presented at trial that the
pension plan was underfunded.
{¶31} Arun cites plan actuary Catherine Wolford’s testimony on March 9, 2010, to
support his argument that the pension plan’s liabilities were greater than its assets.
However, while the pension was underfunded in late 2008, CBHC vice-president of
finance and acting executive director, Luan Hutchinson’s subsequent testimony
demonstrated that the pension’s underfunding had been remedied by September 2010.
Moreover, given the amount of control Arun has over the CBHC pension plan, it was not
unreasonable or arbitrary for the trial court to award Mona a minimum amount under the
plan. Thus, we conclude that the trial court’s division of the parties’ retirement benefits
did not constitute an abuse of discretion.
{¶32} Arun’s fifth assignment of error is overruled.
C. CBHC
{¶33} In his first assignment of error, Arun raises several arguments relating to the
trial court’s determination that his interest in CBHC had a value of $1,500,000.
Similarly, in her first cross-assignment of error, Mona argues that the trial court abused its
discretion in determining that the value of CBHC was $1,500,000 when evidence
presented at trial established that the fair market value of the business was $1,900,000.
Because these arguments are closely related, we will address them together.
1. Arun’s Motion in Limine
{¶34} Initially, Arun claims that the trial court improperly denied his March 8,
2010 motion in limine. In his motion, Arun urged the magistrate to prohibit Mona from
offering any evidence or testimony regarding the valuation of CBHC, including the
valuation report submitted by Mona’s expert witness, Robert Ranallo. Arun argued that
preclusion was appropriate based on Ranallo’s failure to appear at a scheduled deposition.
{¶35} At the outset, we note that “[t]he denial of a motion in limine is within the
sound discretion of the trial court.” State v. Werfl, 11th Dist. Lake Nos. 2002-L-101 and
2002-L-102, 2003-Ohio-6958, ¶ 64. Accordingly, we shall not disturb the trial court’s
ruling absent an abuse of discretion. Id.{¶36} Here, the record reflects that Ranallo did not appear at the March 4, 2010
deposition because he had not yet completed his expert report. As discussed further
below, Ranallo’s inability to complete his expert report was attributed to Arun’s failure to
timely provide Mona with financial records for the year 2008. For this reason, the
magistrate declined to exclude Ranallo’s testimony and valuation report. Instead, the
magistrate found that Arun had sufficient time following the submission of Ranallo’s
report, but before Ranallo was scheduled to testify, to reschedule a deposition for Ranallo
that would work for all parties involved. However, Arun made no such attempt
following the court’s order. Under these limited circumstances, we find that the trial
court acted within its discretion in denying Arun’s motion in limine.
2. Timeliness of the Expert Reports
{¶37} Next, Arun maintains that the trial court abused its discretion in admitting
Ranallo’s expert report and allowing Ranallo to testify at trial where his report was not
submitted to defense counsel until after trial had commenced. Arun further contends that
it was “inequitable, contrary to law, and simply unfair” to exclude the expert report and
rebuttal testimony of Arun’s expert witness, Bernard Agin. We disagree.
{¶38} A trial court’s ruling as to the admission or exclusion of testimony is within
its broad discretion and will not be disturbed absent an abuse of discretion. Miller v.
Bike Athletic Co., 80 Ohio St.3d 607, 687 N.E.2d 735 (1998).
{¶39} After a careful review of the extensive procedural history of this case, we
agree with the magistrate’s detailed discussion attributing the delay in Ranallo’s
submission of his expert report to Arun’s conduct. The record reflects that although
Arun was ordered on May 11, 2009, to advance Mona $5,000 so that she could retain an
expert, those funds were not delivered to Mona until November 10, 2009. Further, once
Mona retained Ranallo, Arun continuously delayed Ranallo’s ability to complete his
valuation report by failing to provide necessary documentation, including vital tax
returns, and by refusing to cooperate with Ranallo’s repeated requests to conduct a
management interview and site visit at CBHC. Thus, Ranallo’s ability to produce and
submit a timely expert report was thwarted by Arun’s conduct throughout the discovery
process and his repeated failure to comply with orders of the lower court. Thus, we are
unable to conclude that the trial court abused its discretion in accepting Ranallo’s expert
report.
{¶40} Moreover, we are unable to conclude that the trial court abused its discretion
in excluding the valuation report of Arun’s expert, Bernard Agin. Throughout these
proceedings, the parties were well aware that the value of CBHC was a highly contested
issue in this divorce. Nevertheless, Arun waited until late September 2010, or six and
one-half months into trial, before disclosing Agin as a witness and submitting his expert
report. Based on the untimely nature of Arun’s disclosure of Agin’s report, the
magistrate excluded the portion of Agin’s report relating to his valuation of CBHC, but
permitted Agin to provide rebuttal testimony in relation to the methodology employed by
Ranallo in valuing CBHC.
{¶41} We find that the trial court acted within its discretion in limiting the scope of
Agin’s rebuttal testimony. While the record demonstrates that many of the delays
associated with the production of Ranallo’s expert report are attributable to Arun’s
conduct, Arun’s untimely production of Agin’s expert report was not caused by Mona’s
conduct. Thus, the magistrate properly determined that Mona would have been
prejudiced by the admission of such a late report. See Hissa v. Hissa, 8th Dist. Cuyahoga
Nos. 79994 and 79996, 2002-Ohio-6313, ¶ 15.
3. The Business Valuation
{¶42} Finally, Arun argues that the trial court erred in valuing his interest in
CBHC at $1,500,000. Arun contends that, given the business liabilities and limited
assets, the trial court should have determined that CBHC had no fair market value.
{¶43} When determining the value of marital assets, a trial court is not confined to
the use of a particular valuation method, but can make its own determination as to
valuation based on the evidence presented. James v. James, 101 Ohio App.3d 668, 681,
656 N.E.2d 399 (2d Dist.1995). Thus, we must affirm a trial court’s determination if it is
supported by competent, credible evidence and is not otherwise an abuse of discretion.
Moro v. Moro, 68 Ohio App.3d 630, 637, 589 N.E.2d 416 (8th Dist.1990). An abuse of
discretion implies that the court’s attitude is arbitrary, unreasonable, or unconscionable.
Blakemore, 5 Ohio St.3d at 219, 450 N.E.2d 1140 (1983).
{¶44} In challenging the trial court’s reliance on Ranallo’s opinion of CBHC’s
value, Arun argues that Ranallo’s expert report failed to comply with evidentiary
mandates of Evid.R. 702(C), and therefore should have been excluded.
{¶45} “A ruling concerning the admission of expert testimony is within the broad
discretion of the trial court and will not be disturbed absent an abuse of discretion.”
State v. Primeau, 8th Dist. Cuyahoga No. 97901, 2012-Ohio-5172, ¶ 57.
{¶46} Evid.R. 702 governs the admissibility of expert testimony. It provides:
A witness may testify as an expert if all of the following apply:
(A) The witness’ testimony either relates to matters beyond the knowledge
or experience possessed by lay persons or dispels a misconception common
among lay persons;
(B) The witness is qualified as an expert by specialized knowledge, skill,
experience, training, or education regarding the subject matter of the
testimony;
(C) The witness’ testimony is based on reliable, scientific, technical, or
other specialized information. * * *
{¶47} Here, Arun does not challenge Ranallo’s qualifications. Instead, he argues
that Ranallo’s methodology was unreliable due to his unfamiliarity with CBHC and its
business structure.
{¶48} Whether an expert’s opinion is admissible depends on whether the
principles and methods employed by the witness to reach his opinion were reliable and
not on whether his conclusions are correct. Bike Athletic Co., 80 Ohio St.3d at 611,
1998-Ohio-178, 687 N.E.2d 735 (1998). See also Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 592-593, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).
{¶49} In the case at hand, Ranallo opined, using the “capitalization of earnings
method,” that the value of Arun’s interest in CBHC was $1,919,000 as of December 31,
2008. In arriving at this value, Ranallo added back the annual cost of the CBHC defined
pension plan and the cash surrender value of the CBHC officer life insurance policies
valued at $601,738. In adding back the costs of the pension plan and life insurance
policies, Ranallo testified that they were non-operating or non-recurring assets that are
“discretionary in nature.” As such, Ranallo made a “normalized adjustment” to add back
the costs of the assets in each of the years analyzed.
{¶50} Although Ranallo testified that his valuation opinion was based on a
reasonable degree of accounting certainty, he admitted in his expert report that
[d]ue to limited access to information and management, [his] analysis was
not subject to the development or reporting standards set forth in the
American Institute of Certified Public Accountants Statement of Standards
for Valuation Services No. 1 (AICPA) nor the valuation standards as
promulgated by the National Association of Certified Valuation Analysts
(NACVA).
In particular, Ranallo stated that, although requested, he was not furnished the following
information that could have impacted his determination of value:
(1) access to management or the opportunity to interview management * *
*; (2) detail of certain balance sheet and income statement accounts; (3)
corporate governance documents, significant contractual relationships, and
other relevant business information; (4) details of previous ownership
transactions; (5) budgets and/or projections for the company; and (6)
organizational chart depicting corporate structure.
{¶51} In developing his report, Ranallo relied on CBHC’s tax returns and financial
statements from December 31, 2005 through December 31, 2008. Arun alleges that,
because Ranallo’s opinion was based primarily on financial documents, Ranallo had a
lack of knowledge concerning CBHC’s day-to-day operations, and therefore an
insufficient foundation to construct an opinion as to its value. Specifically, Arun
contends that Ranallo was unfamiliar with relevant aspects of CBHC, including Medicare
and Medicaid regulations, the funding requirements for CBHC’s defined pension plan,
and the transferability of the company’s license. However, Ranallo’s testimony at trial
demonstrates that his lack of knowledge concerning the intricacies of CBHC derived
primarily from Arun’s refusal to consent to a site visit or a management interview, as
evidenced by a letter sent to plaintiff’s counsel dated April 28, 2010.
{¶52} In our view, Arun should not be rewarded for such conduct. As the
magistrate noted, “[this] court cannot allow [Arun’s] refusal to grant a management
interview to prevent [Mona] from establishing a crucial part of her case, the value of the
business.” Accordingly, we find any error associated with the basis of Ranallo’s
opinion to be invited. Tyler v. Tyler, 8th Dist. Cuyahoga No. 93124, 2010-Ohio-1428, ¶
32 (“If a party elects to be less than forthcoming in the presentation of evidence, he has a
right to do so, and any error resulting therefrom must be ‘invited’”).
{¶53} Thus, within the confines of the information provided to him, we find that
Ranallo’s testimony and valuation report were reliable and based on a reasonable
application of his disciplines, practices, and knowledge of the facts of this case. The
record demonstrates that Ranallo considered relevant literature in his field and all
financial data available to him, including CBHC’s relevant tax returns and audited
financial statements. Accordingly, we find no abuse of discretion in the court’s reliance
on Ranallo’s opinion as to the value of CBHC.
{¶54} With respect to Mona’s cross-appeal, we note that on cross-examination,
Ranallo was asked to hypothetically consider the difference in CBHC’s value if he did not
make a normalized adjustment for the defined pension plan. Although reluctant to
answer hypothetical questions, Ranallo determined that, if he did not “normalize out” the
pension plan, CBHC would have a hypothetical value of $231,188. Once Ranallo made
this hypothetical calculation, the following statements were made:
DEFENSE COUNSEL: Okay, that’s 231 versus 1.9 million, correct?
RANALLO: No. No. That’s — that’s 231 against a million five thirty.
DEFENSE COUNSEL: 231 against a million five thirty?
RANALLO: Because the million five thirty or the 231, we would add the
normalizing adjustment for the —
DEFENSE COUNSEL: I didn’t want you to state to us —
RANALLO: I’m trying to be real clear.
DEFENSE COUNSEL: So, it’s 231 now versus 1.5, correct?
RANALLO: Correct.
{¶55} Based on this exchange, the magistrate determined that
Ranallo modified his opinion based on certain assumptions regarding the
pension plan given to him by defendant’s counsel and reduced his opined
value to 1.5 million dollars. The court finds that the assumptions he was
asked to assume are applicable in this case as they reflect the financial
realities of CBHC and that his reduced opined value of $1,500,00 is the
appropriate value for the parties’ business entities.
{¶56} After a careful review of the record and the entirety of Ranallo’s
cross-examination, we find that the magistrate erred in concluding that Ranallo had
modified his opinion as to the value of the company. At no point during his
cross-examination did Ranallo express that the posed hypothetical questions “reflected
the financial realities of CBHC,” nor did he affirmatively state that he had reduced his
opinion of the value to $1,500,000. Moreover, this court finds that the magistrate’s
interpretation of Ranallo’s statements does not accurately reflect the context of his
testimony. In our view, when Ranallo stated that the value changed from “231 versus a
million five thirty,” he was referring to the value of the company before the normalized
adjustment for the life insurance policy, worth $601,738, was made. In fact, the above
exchange reflects that Ranallo attempted to explain this to defense counsel when he
stated, “[b]ecause the million five thirty or the 231, we would add the normalizing
adjustment for the —.” However, Ranallo was cut off before he could clarify that the
“million five thirty or the 231” did not include the adjustment made for the life insurance
policy.2
{¶57} Based on the foregoing, we find that the trial court erred in concluding that
the appropriate value of CBHC was $1,500,000. Consequently, we reverse the trial
court’s valuation of Arun’s interest in CBHC and remand to the trial court to determine
whether Ranallo’s opined value of $1,919,000 is appropriate.
{¶58} Arun’s first assignment of error is overruled. However, Mona’s first
cross-assignment of error is sustained.
Ranallo’s expert report supports this court’s finding. In his report, Ranallo explains that when the
2
adjustments for the pension plan were made, “the value of CBHC on a marketable, controlling interest
basis is $1,530,00, as set forth in Exhibit 4.” However, Ranallo then explains that when he made the
adjustment for the CSV life insurance policy, he arrived at a “controlling, marketable interest value of
* * * approximately $2,132,000.” Ranallo then applied a 10 percent discount for lack of marketability
to the $2,132,000 figure, to arrive to his opined value of $1,919,000.
III. Support Orders
A. Temporary Spousal Support
{¶59} On filing for divorce, Mona requested temporary spousal support. On
December 2, 2008, the trial court ordered Arun to pay $8,000 per month as support
pendente lite commencing June 19, 2008. Within 30 days of this order, Arun placed
himself on medical leave from CBHC and stopped drawing a salary. At the conclusion of
trial, the magistrate reduced the temporary support order to $7,000 per month retroactive
to January 15, 2009. The magistrate reasoned that the decision to reduce the support
order by $1,000 per month was equitable given the fact that Arun was no longer receiving
wages from CBHC.
{¶60} In his third assignment of error, Arun argues that the trial court erred by
failing to reduce the temporary spousal support order to zero during the pendency of the
divorce action based on Arun’s disability, age, and lack of earned income.
{¶61} R.C. 3105.18(B) authorizes the trial court to award reasonable temporary
spousal support to either party during the pendency of any divorce or legal separation
proceeding.
{¶62} In challenging the temporary spousal support order, Arun initially argues
that the order was improper based on the court’s failure to hold a hearing on the issue, as
required under Civ.R. 75(N).3 In the instant case, Arun filed a motion challenging the
Civ.R. 75(N)(1) authorizes the trial court to grant spousal support pendente lite to either party
3
without oral hearing upon the filing of a motion and supporting affidavit. The opposing party may
then submit counter affidavits within 14 days of the filing of the motion. Civ.R. 75(N)(2).
temporary spousal support order pursuant to Civ.R. 75(N)(2) on December 11, 2008.
Civ.R. 75(N)(2) states, in relevant part:
Upon request, in writing, after any temporary spousal support * * * is
journalized, the court shall grant the party so requesting an oral hearing
within twenty-eight days to modify the temporary order. A request for
oral hearing shall not suspend or delay the commencement of spousal
support or other support payments previously ordered or change the
allocation of parental rights and responsibilities until the order is modified
by journal entry after the oral hearing.
{¶63} After a careful review of the record, it is clear that a Civ.R. 75(N)(2) hearing
was not completed in this matter. Here, the magistrate held a hearing on May 19, 2009,
after several continuances, to address Arun’s motion to modify the temporary support
order. In fact, the magistrate stated at the onset of the hearing that “this hearing is solely
for the purpose of hearing the arguments about the order for support.” However, defense
counsel failed to address the merits of Arun’s Civ.R. 75(N)(2) motion. Instead, defense
counsel raised matters unrelated to the temporary support order, including issues
concerning Mona’s domicile and the jurisdiction of the court. In our view, such conduct
equates to invited error. The invited error doctrine states that “a party is not entitled to
take advantage of an error that he himself invited or induced.” State ex rel. Kline v.
Carroll, 96 Ohio St.3d 404, 2002-Ohio-4849, 775 N.E.2d 517; State v. Smith, 148 Ohio
App.3d 274, 2002-Ohio-3114, 772 N.E.2d 1225 (8th Dist.).
{¶64} Moreover, even if this court were to find that the trial court acted improperly
by failing to complete the hearing within 28 days of Arun’s motion pursuant to Civ.R.
75(N)(2), this failure does not necessarily constitute a reversible error. It is incumbent
upon Arun to demonstrate that he was prejudiced by the failure of the court to hold a
hearing. Thorp v. Thorp, 11th Dist. Trumbull No. 2010-T-0038, 2011-Ohio-1015, ¶ 39.
“When a party is able to fully litigate the issues regarding temporary support orders
during the final divorce trial, the trial may constitute the Civ.R. 75(N)(2) hearing on
temporary support orders.” Id., citing Doody v. Doody, 11th Dist. Lake No. 2006-L-200,
2007-Ohio-2567, ¶ 44.
{¶65} Here, Arun was not prevented from litigating the issue of temporary support
at trial and, in fact, the issue was raised during the testimony of both parties and
addressed in the magistrate’s decision, as evidenced by the court’s order to reduce the
temporary support order by $1,000 from the date Arun went on medical leave. Thus,
“[t]he divorce trial itself became a Civ.R. 75[(N)] hearing on the amount of reasonable
temporary support.” Doody at ¶ 44. Given these circumstances, the court’s failure to
hold a pretrial hearing on the temporary order did not constitute an abuse of discretion.
{¶66} With respect to the amount of support ordered, Arun claims that the court
erred in calculating the temporary support at $7,000 based on the significant reduction in
his income following his retirement.
{¶67} After a careful review of the relevant documentation evidencing the parties’
income during the relevant time periods, we find no merit to Arun’s reliance on his
retirement in early 2009. At trial, Mona presented Arun’s 2007 and 2008 tax returns,
which indicated that while Arun was serving as the president of CBHC he earned a total
estimated income of $796,653 in 2007 and $478,856 in 2008. The evidence further
demonstrated that Arun continued to derive a substantial income, even after his medical
leave on January 15, 2009. While Arun was no longer receiving a salary, he was receiving
social security and OPERS benefits, income from his business, and funds from his
pension and annuities. This amounted to a total estimated income of $440,926 in 2009
and $193,114 in 2010. In contrast, Mona’s total estimated income was $22,557 in 2007,
$23,406 in 2008, and $24,875.76 in 2009. Based on these figures, the court’s temporary
sposual support order was reasonable and did not equate to an abuse of discretion.
{¶68} Arun’s third assignment of error is overruled.
B. Permanent Spousal Support
{¶69} In his fourth assignment of error, Arun argues that the trial court erred by
awarding unreasonable and inappropriate spousal support to Mona.
{¶70} In determining whether to grant spousal support and in determining the
amount and duration of the payments, the trial court must consider the factors listed in
R.C. 3105.18. Robinson v. Robinson, 8th Dist. Cuyahoga No. 97933, 2012-Ohio-5414.
The factors the trial court must consider include: each party’s income, earning capacity,
age, retirement benefits, education, assets and liabilities, and physical, mental, and
emotional condition; the duration of the marriage; their standard of living; inability to
seek employment outside the home; contributions during the marriage; tax consequences;
and lost income due to a party’s fulfillment of marital responsibilities. R.C.
3105.18(C)(1)(a)-(m). In addition, the trial court is free to consider any other factor that
the court finds to be “relevant and equitable.” R.C. 3105.18(C)(1)(n).
{¶71} The trial court is not required to comment on each statutory factor; the
record need only show that the court considered the statutory factors when making its
award. Kaletta v. Kaletta, 8th Dist. Cuyahoga No. 98821, 2013-Ohio-1667, ¶ 22, citing
Kaechele v. Kaechele, 35 Ohio St.3d 93, 96, 518 N.E.2d 1197 (1988). If the record
reflects that the trial court considered the statutory factors, and if the judgment contains
details sufficient for a reviewing court to determine that the support award is fair,
equitable, and in accordance with the law, the reviewing court will uphold the award.
Daniels v. Daniels, 10th Dist. Franklin No. 07AP-709, 2008 Ohio App. LEXIS 772 (Mar.
4, 2008), *9, citing Schoren v. Schoren, 6th Dist. Huron No. H-04-019, 2005-Ohio-2102,
¶ 11.
{¶72} In this matter, the trial court sufficiently considered each of the factors set
forth in R.C. 3105.18. In its decision, the court found that “it is appropriate and
reasonable for [Arun] to pay spousal support to [Mona]” based on the following factors:
“[t]he age of the parties; the relative earning potential of the parties in the future; the
length of the marriage; [Arun]’s pretrial refusal to pay support to [Mona]; and other
factors listed in the Magistrate’s Decision.” Accordingly, the trial court ordered Arun to
pay “the sum of $7,000 per month, plus 2 [percent] processing charge, for an indefinite
term, commencing 11/26/2012.” The trial court further ordered Arun to pay an
additional $500 per month toward the existing arrearage.
{¶73} In challenging the trial court’s analysis, Arun argues that the trial court erred
in finding that his income is “measurably greater that Mona’s.” Arun contends that the
trial court’s order does not consider potential retirement plan liabilities and other debts,
such as the mortgage on the Jane Street cooperative apartment. Further, Arun submits
that the trial court’s analysis ignores the fact that Mona was awarded a substantial interest
in CBHC and one-half of his pension plan as part of the parties’ property division. Thus,
Arun states “the term ‘double dip’ does not even begin to describe how unreasonable,
inappropriate and inequitable the [court]’s decision is with regard to the findings of
income and conclusions concerning payment of temporary and permanent spousal
support.”
{¶74} With respect to Arun’s personal liability for proper funding of the CBHC
pension plan, the record reflects that there was no underfunding of the plan at the time the
trial concluded. Without evidence to support any notion that the pension was
underfunded, we are unable to conclude that the trial court erred with respect to its
consideration of the parties’ retirement benefits, pursuant to R.C. 3105.18(C)(1)(d).
Moreover, despite Arun’s argument to the contrary, the trial court did consider his
potential liabilities associated with the mortgage on the cooperative apartment. In its
opinion, the trial court ordered Ritu to pay the mortgage and hold Arun harmless on any
debt associated with this property.
{¶75} Finally, we find no merit to Arun’s theory of “double dipping.” Generally, a
trial court may be found to have abused its discretion by allowing the payee spouse to
“double dip” when a marital pension is divided as part of the property distribution and is
subsequently included as income for purposes of establishing the support obligations of
the payor spouse because the payee spouse receives a portion of that pension in two
different forms. Frederick v. Frederick, 11th Dist. Portage No. 98-P-0071, 2000 Ohio
App. LEXIS 1458 (Mar. 31, 2000). However, in the case at hand, the trial court’s support
order avoided the issue of double dipping by stating that Arun’s obligation to make
spousal support payments will terminate once one-half of the marital interest in the
CBHC pension plan is transferred to Mona pursuant to a Qualified Domestic Relations
Order. Although unusual, we find the framework of the trial court’s spousal support
order was necessary, under the narrow circumstances of this case, to compel compliance
with the divorce decree given Arun’s refusal to be forthcoming with his full financial
information and his history of failing to follow court orders.
{¶76} Based on the foregoing, we conclude that the decision of the trial court is
well supported in the record, and there is competent, credible evidence going to all of the
statutory elements for establishing a spousal support order. Therefore, we find no abuse
of discretion in connection with this award.
{¶77} Arun’s fourth assignment of error is overruled.
IV. Attorney Fees
{¶78} In his seventh assignment of error, Arun argues that the trial court erred by
requiring him to pay a portion of Mona’s litigation expenses and substantially all of her
attorney fees.
{¶79} An award of attorney fees in a domestic relations action is within the sound
discretion of the trial court and will not be reversed on appeal absent an abuse of
discretion. Wildman v. Wildman, 5th Dist. Licking No. 12-CA-21, 2012-Ohio-5090.
R.C. 3105.73(A) governs the award of attorney fees and litigation expenses in domestic
relations cases and provides:
In an action for divorce * * * or an appeal of that action, a court may
award all or part of the 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.
{¶80} In the instant case, the court determined
that due to [Arun]’s conduct during this matter, his refusal to comply with
various pretrial orders and discovery, and the fact that [Arun] had control
over the vast majority of the parties’ assets and income, that it would be
equitable for [Arun] to pay a portion of [Mona’s] attorney fees and
litigation expenses.
Accordingly, the court ordered Arun to pay “as additional property division” $110,000 in
attorney fees and $20,000 in litigation costs.
{¶81} After a careful review of the record, we find ample evidence to support the
trial court’s finding that Arun’s conduct caused Mona to incur additional fees and
expenses. Under these circumstances, we find that the trial court did not abuse its
discretion, and the decision regarding attorney fees and costs is supported by competent,
credible evidence. See, e.g., Klayman v. Luck, 8th Dist. Cuyahoga Nos. 97074 and
97075, 2012-Ohio-3354; Bain v. Levinstein, 8th Dist. Cuyahoga No. 94313,
2010-Ohio-5596.
{¶82} Arun’s seventh assignment of error is overruled.
V. Contempt
{¶83} In his eighth assignment of error, Arun argues that the trial court erred by
finding him in contempt in regard to the temporary support issues. Specifically, Arun
contends that the trial court’s failure to conduct a Civ.R. 75(N) hearing rendered the
temporary support order void and invalid. Thus, Arun submits it was unlawful to find
him in contempt and impose sanctions where the underlying order was void.
{¶84} In its opinion, the trial court found Arun to be in contempt “for failing to
pay the temporary support orders, to obey other pretrial court orders, and produce a
signed and notarized pretrial statement.” The court sentenced Arun to 30 days in jail or,
in the alternative, to perform not less than 200 hours of community service in lieu of
actual incarceration. The court stipulated that the sentence would be purged provided
Arun pays spousal support in the sum of $150,000.
{¶85} At the outset, we recognize that an appellate court will not overturn a trial
court’s finding of contempt absent an abuse of discretion. State ex rel. Ventrone v.
Birkel, 65 Ohio St.2d 10, 11, 417 N.E.2d 1249 (1981). “Contempt is a disregard of, or
disobedience to, an order or command of judicial authority.” First Bank of Marietta v.
Mascrete, Inc., 125 Ohio App.3d 257, 263, 708 N.E.2d 262 (4th Dist.1998). The
contempt process was created “to uphold and ensure the effective administration of
justice[,] * * * to secure the dignity of the court[,] and to affirm the supremacy of law.”
Cramer v. Petrie, 70 Ohio St.3d 131, 133, 637 N.E.2d 882 (1994).
{¶86} “[T]he burden of proof for civil contempt is clear and convincing evidence.”
Delawder v. Dodson, 4th Dist. Lawrence No. 02CA27, 2003-Ohio-2092, ¶ 10. Before
the imposition of a sentence for civil contempt, the trial court must afford the contemnor
an opportunity to purge himself of the contempt. Id. “The contemnor is said to carry
the keys of his prison in his own pocket since he will be freed if he agrees to do as so
ordered.” Brown v. Executive 200, Inc., 64 Ohio St.2d 250, 253, 416 N.E.2d 610 (1980).
Typically, a failure to pay court-ordered spousal support is a civil contempt. Lemke v.
Lemke, 8th Dist. Cuyahoga No. 94557, 2011-Ohio-457, ¶ 44.
{¶87} Initially, we note that, as previously addressed, the absence of a Civ.R.
75(N) hearing in this matter did not render the temporary support order void. As
discussed, the trial court scheduled a Civ.R. 75(N) hearing, but Arun failed to argue the
merits of his motion during said hearing. Nevertheless, the issues that would have been
raised at the Civ.R. 75(N) hearing were ultimately addressed at trial. Thus, the failure to
hold a Civ.R. 75(N) hearing does not render the temporary spousal support order void,
and any raised error associated with the trial court’s failure to hold a Civ.R. 75(N) hearing
prior to trial was invited by Arun and his counsel.
{¶88} With respect to the merits of the trial court’s contempt order, we note that a
party establishes a prima facie case of contempt by showing the non-payment of a spousal
support order. See King v. King, 11th Dist. Geauga Nos. 2012-G-3068 and
2012-G-3079, 2013-Ohio-2038, ¶ 24. Once non-payment has been established, the
burden shifts to the alleged contemnor to establish any defense he may have for
non-payment, including his inability to pay. Id. See also Pugh v. Pugh, 15 Ohio St.3d
136, 472 N.E.2d 1085 (1984).
{¶89} In the case at hand, Arun was ordered to pay $8,000 per month as temporary
spousal support commencing June 19, 2008. However, Arun simply refused to comply
with the terms of the court’s order and has not met his burden of establishing an inability
to pay. Further, Arun has failed to present any evidence or case law to support his
position that the trial court’s purge conditions were unreasonable or impossible for him to
satisfy. Marx v. Marx, 8th Dist. Cuyahoga No. 82021, 2003-Ohio-3536, ¶ 22.
{¶90} For these reasons, the trial court did not abuse its discretion in finding Arun
in contempt for failing to comply with the court’s temporary spousal support order.
{¶91} Arun’s eighth assignment of error is overruled.
Mona’s Cross-Appeal
I. Shareholder Loan
{¶92} In her second cross-assignment of error, Mona argues that the trial court
erred and abused its discretion in omitting the shareholder loan from the property division
and not awarding it to Mona or Arun or allocating it between the parties. We agree.
{¶93} As reflected in CBHC’s 2008 tax return, CBHC has a shareholder loan
payable to Arun in the sum of $405,071 as of December 31, 2008. In our view, the
shareholder loan was made from funds acquired during the parties’ marriage, and
therefore must be considered marital property. In completing his expert report, Ranallo
considered the shareholder loan as a liability of CBHC. As explained by Ranallo, if a
hypothetical buyer purchased CBHC for its fair market value, it would assume the
liability owed under the shareholder loan. In other words, in addition to paying Arun the
fair market value of CBHC, the purchaser “would come in immediately owing [Arun] the
[value of the loan].”
{¶94} Because the shareholder loan was made with marital funds during the
parties’ marriage, we find that the trial court erred in failing to allocate the value of the
loan when dividing the parties’ marital property.
{¶95} Accordingly, Mona’s second cross-assignment of error is sustained, and the
matter is remanded for equitable division of the shareholder loan.
II. Marital Debt
{¶96} In her third cross-assignment of error, Mona argues that the trial court erred
and abused its discretion in determining that the line of credit account with KeyBank is a
marital debt. Mona contends that the trial court’s consideration of the line of credit as a
marital debt greatly impacted the determined equity in the parties’ marital home, located
at 6584 SOM Court, Mayfield Village, Ohio 44143 (“SOM Court property”).
{¶97} The property to be divided in a divorce proceeding includes not only the
assets owned by the parties, but also any debts incurred by the parties. Marrero v.
Marrero, 9th Dist. Lorain No. 02CA008057, 2002-Ohio-4862, ¶ 43. “Marital debt has
been defined as any debt incurred during the marriage for the joint benefit of the parties
or for a valid marital purpose.” Gupta v. Gupta, 8th Dist. Cuyahoga No. 99005,
2013-Ohio-2203, ¶ 51, citing Ketchum v. Ketchum, 7th Dist. Columbiana No. 2001 CO
60, 2003-Ohio-2559, ¶ 47.
{¶98} For the purpose of clarifying some apparent confusion associated with the
lines of credit at issue in this matter, we find it necessary to note that, as evidenced by
defendant’s exhibit HHH, Arun obtained two separate home equity lines of credit during
the parties’ marriage. The first line of credit was with KeyBank. The KeyBank line of
credit was taken out in the names of Arun and Mona and had a balance of $224,650.07 at
the time Mona’s complaint for divorce was filed. However, the evidence presented at
trial demonstrated that this line of credit had an outstanding balance of $225,106.28 as of
December 15, 2009.
{¶99} The second line of credit was with National City Bank. The record reflects
that the National City line of credit was taken out by Arun, individually, on November 20,
2007, and had an outstanding balance of $235,970.13 as of December 18, 2009. The
National City line of credit was secured by the SOM Court property.
{¶100} With respect to the line of credit with KeyBank, the record reflects that its
outstanding balance was paid in full on December 18, 2009. Nevertheless, the trial court
determined that the KeyBank line of credit was a marital debt, and it utilized the paid-off
value of $225,106.28 to determine the available equity in the SOM Court property.
{¶101} After a careful review of the record in its entirety, we find that the trial
court erred in utilizing the KeyBank balance to determine the parties’ marital debt. As
stated, at the time of trial, the outstanding balance on the Key Bank account had been paid
in full from the proceeds from the November 2009 sale of the parties’ property at 6770
Sandalwood Drive, Mayfield Village, Ohio. (Plaintiff’s exhibit No. 55.) Therefore, the
trial court’s use of the $225,106.28 figure was improper because the marital debt
associated with the KeyBank account no longer existed and had been paid in full with
marital assets.
{¶102} Accordingly, the National City line of credit secured against the SOM
Court property was the only outstanding marital debt the trial court should have
considered when determining the equity in the property. It appears that the trial court’s
error in utilizing the KeyBank account to determine the equity in the SOM Court property
was caused by the magistrate’s statements at page 31 of its decision, where the court
seems to have commingled the two separate accounts, with two separate banks, and
treated them as one account.
{¶103} Based on the foregoing, we find it necessary to remand this matter so that
the trial court can properly determine the appropriate value of the marital debt associated
with the outstanding balance of the National City line of credit. We note that on remand,
the trial court will be required to address Mona’s arguments relating to Arun’s
withdrawals against the National City line of credit while a court-ordered temporary
restraining order was in place. As argued by Mona, the National City line of credit had
an outstanding balance of $124,438 as of June 18, 2008. However, as evidenced by
plaintiff’s exhibit No. 48 and defendant’s exhibit HHH, Arun made numerous
withdrawals against the National City line of credit, thereby increasing the outstanding
balance of the line of credit to $235,970.13 as of December 18, 2009. Accordingly, on
remand, the trial court must consider whether Arun’s withdrawals against the National
City line of credit following the imposition of the temporary restraining order were done
for a “valid marital purpose” in order to determine the value of the parties’ marital debt in
the account.
{¶104} We note that the burden of proof lies with Mona to establish that the
withdrawals made after June 19, 2008, were not made for a marital purpose. See Gupta at
¶ 51 (“[t]he party seeking to establish a debt is separate rather than marital bears the
burden of proving this to the trial court”).
{¶105} Mona’s third cross-assignment of error is sustained.
III. Valuation of Marital Home
{¶106} In her fourth cross-assignment of error, Mona argues that the trial court
erred and abused its discretion in determining that the fair market value of the SOM Court
property was $351,500.
{¶107} In the case at hand, Arun purchased the SOM Court property for $399,900
on April 3, 2007. However, the record reflects that, prior to trial, the SOM Court
property was appraised and valued at $351,500. In determining the value of the property
for the purposes of dividing the marital property, the magistrate concluded that the
appraisal was “the best evidence available as to the current value of the marital
residence.”
{¶108} In a divorce proceeding, the trial court must place a value on each
contested item of property in order to divide the property equitably. Pawlowski v.
Pawlowski, 83 Ohio App.3d 794, 615 N.E.2d 1071 (10th Dist.1992). Valuing property
involves factual inquiries requiring an appellate court to apply a manifest weight of the
evidence standard of review. Gentile v. Gentile, 8th Dist. Cuyahoga No. 97971,
2013-Ohio-1338, ¶ 73, citing Kapadia v. Kapadia, 8th Dist. Cuyahoga No. 94456,
2011-Ohio-2255. Thus, an appellate court will not reverse a trial court’s valuation if it is
supported by some competent, credible evidence. Id., citing Haynes v. Haynes, 8th Dist.
Cuyahoga No. 92224, 2009-Ohio-5360.
{¶109} Moreover, a trial court has broad discretion to develop a measure of value
when dividing marital property. Id. at ¶ 16. Under the circumstances presented herein,
we are unable to conclude that the trial court abused its discretion in utilizing the
appraisal to measure the value of the SOM Court property. Although Mona may wish
that the home retained its value, the magistrate was well within her discretion to find that
the purchase price was not an accurate refection of the property’s present value.
Accordingly, we find that the magistrate’s determination that the fair market value of the
SOM Court property was $351,500 is supported by competent, credible evidence.
{¶110} Mona’s fourth cross-assignment of error is overruled.
IV. Incorporation of Magistrate’s Findings
{¶111} In her fifth cross-assignment of error, Mona argues that the trial court erred
when it failed to incorporate the magistrate’s recommendation regarding the allocation of
the federal court judgment.
{¶112} In its decision, the magistrate stated: “The court finds that Arun’s unknown
amount of equity in the Jane Street property is marital. * * * Both parties shall equally
share the equity Arun has in 61 Jane Street, New York, New York, which exact dollar
amount is unknown to the Court.”
{¶113} In his response brief, Arun concedes that the trial court incorporated the
magistrate’s findings regarding the federal court judgment when it overruled his objection
to the magistrate’s opinion regarding that issue. See Judgment Entry at 3 (“The Court
hereby OVERRULES Defendant’s 5th, 6th, 7th, and 8th Objections”). Therefore, we
find that the trial court incorporated the magistrate’s recommendation in its final entry.
{¶114} Mona’s fifth cross-assignment of error is overruled.
V. Arun’s Passport
{¶115} In her sixth cross-assignment of error, Mona argues that the trial court
abused its discretion in sustaining Arun’s objection to the magistrate’s recommendation
that he surrender his passport to the trial court’s bailiff.
{¶116} A trial court’s ruling on objections to a magistrate’s decision will not be
reversed absent an abuse of discretion. Gobel v. Rivers, 8th Dist. Cuyahoga No. 94148,
2010-Ohio-4493, ¶ 16, citing Remner v. Peshek, 7th Dist. Mahoning No. 97-C.A.-98,
1999 Ohio App. LEXIS 4802 (Sept. 30, 1999).
{¶117} After a careful review of the record and the concerns raised by Mona in her
appellate brief, we cannot say that the trial court abused its discretion by sustaining
Arun’s objection to the magistrate’s order requiring him to surrender his passport. While
the trial court’s order does not address the constitutionality of the magistrate’s order, there
is nothing in the record to support the magistrate’s concern that Arun, a 79-year-old man,
is a flight risk.
{¶118} Accordingly, Mona’s sixth cross-assignment of error is overruled.
{¶119} The trial court’s judgment is affirmed in part and reversed in part. We
remand this case to the trial court to correct the errors set forth in Mona’s first, second,
and third cross-assignments of error.
It is ordered that appellee and appellant split the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court, domestic relations division, to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., PRESIDING JUDGE
LARRY A. JONES, SR., J., and
EILEEN T. GALLAGHER, J., CONCUR
APPENDIX
Appellant’s Assignments of Error:
I. The trial court erred in its division of property by admitting the expert report of
appellee, by determining that the value of appellant’s business was $1,500,000, and by
allocating the asset to appellant.
II. The trial court erred in its division of property by not finding that Arun Chattree’s
interest in the New York “cooperative apartment” was Arun Chattree’s separate property
and by ignoring a $843,750 liability associated with the asset.
III. The trial court erred by failing to reduce the temporary spousal support order to zero
based on Arun Chattree’s disability, age, and lack of earned income.
IV. The trial court erred by awarding unreasonable and inappropriate spousal support to
appellee.
V. The trial court erred by not dividing appellant’s retirement benefits equally and by
guaranteeing a “minimum” amount of benefits to appellee.
VI. The trial court erred by concluding that the cognovit judgment against Ritu Chattree
was a marital asset and awarding Manorama Chattree and Arun Chattree each a one-half
interest in the judgment.
VII. The trial court erred by requiring Arun Chattree to pay a portion of Manorama
Chattree’s litigation expenses and substantially all of her attorney fees.
VIII. The trial court erred by finding Arun Chattree in contempt in regard to the
temporary support order.
Appellee’s Cross-Assignments of Error:
I. The trial court erred and abused its discretion in determining the value of Community
Behavioral Health Center was $1,500,000 when the evidence demonstrated that the fair
market value of the business was $1,919,000.
II. The trial court erred and abused its discretion in omitting the shareholder loan from
the property division and not awarding it to appellee or appellant or allocating it between
the parties.
III. The trial court erred and abused its discretion in determining that the line of credit
balance of $224,650.07 is a marital debt.
IV. The trial court erred and abused its discretion in determining that the fair market
value of the real property located at 6584 SOM Court, Mayfield Village, Ohio 44143 is
$351,500 and consequently decreasing the equity associated with the real property.
V. The trial court erred when it failed to incorporate the magistrate’s recommendation
regarding the allocation of the federal court judgment.
VI. The trial court abused its discretion in sustaining appellant’s objection to the
magistrate’s recommendation that he surrender his passport to the trial court’s bailiff.