Simon v. Underwood , 2017 Ohio 2885 ( 2017 )

[Cite as Simon v. Underwood, 2017-Ohio-2885.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
CHAMPAIGN COUNTY
SUSAN C. SIMON, et al. :
:
Plaintiffs-Appellees : C.A. CASE NO. 2016-CA-18
:
v. : T.C. NO. 14CV131
:
JAY A. UNDERWOOD, et al. : (Civil Appeal from Common
: Pleas Court)
Defendants-Appellants :
:
...........
OPINION
Rendered on the ___19th __ day of _____May_____, 2017.
...........
DAVID A. SKROBOT, Atty. Reg. No. 0018668 and ROBERT J. SIMON, Atty. Reg. No.
0091519, 471 East Broad Street, Suite 1810, Columbus, Ohio 43215
Attorneys for Plaintiffs-Appellees
WAYNE E. SOUTHWARD, Atty. Reg. No. 0009439 and GREGORY R. FLAX, Atty. Reg.
No. 0081206, One S. Limestone Street, Suite 800, P. O. Box 1488, Springfield, Ohio
45501
Attorneys for Defendants-Appellants Jay A. Underwood and John J. Underwood
.............
DONOVAN, J.
{¶ 1} This matter is before the Court on the Notice of Appeal of brothers Jay A.
Underwood and John J. Underwood, filed July 15, 2016 (collectively, “the brothers”).
The brothers appeal from the June 30, 2016 decision of the trial court overruling their
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objections to the report of the Commissioner, which concluded that property devised by
their father’s Last Will and Testament (“will”) to them and their sisters, Susan Simon and
Sara Thompson (collectively, “the sisters”), as life-tenants-in-common, cannot be
equitably partitioned between the four siblings. We hereby affirm the judgment of the
trial court.
{¶ 2} The sisters filed a complaint against the brothers on August 5, 2014. Jay,
John, Susan and Sara are the children of J.A. Underwood (“Underwood”). Pursuant to
Underwood’s June 8, 1981 will, the siblings each received an equal and undivided life
estate in: 1) a 25 acre lot identified as parcel no. G21-07-11-09-00-016-00; 2) a 115 acre
lot identified as parcel nos. G21-07-11-24-00-014-00; and 3) a 6.7 acre lot identified as
parcel nos. G21-07-11-09-00-002-01 and G21-07-11-10-00-008-00 (collectively, “the
Property”).
{¶ 3} A copy of the will is attached to the complaint and provides in relevant part
as follows:
***
I give and devise all of my real property of my real estate,
wheresoever situate, to my wife, Alice L. Underwood, for and during the
term of her natural life or so long as she may remain unmarried.
After the death of my wife, or in the event or her remarriage, the
interest in remainder in said real estate in which I have devised to her a life
estate, I give and devise to my four children, Susan C. Simon, Sara Beth
Underwood, John Jeffry Underwood and Jay A. Underwood for and during
the term of their natural lives.
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After the death or remarriage of my wife and upon the death of all of
my four children, the interest in remainder in said real estate I give, devise
and bequeath to all of my grandchildren living at the death of the last of my
four children, equally, share and share alike, absolutely and in fee simple.
***
{¶ 4} The complaint further alleges that on December 20, 2007, the siblings
created the Underwood Family Partnership (“UFP”), an Ohio general partnership.
According to the complaint, the “UFP has failed to be an effective way to manage the
Property as the Property is not being properly managed, the partners are deadlocked on
major decisions, the financial potential of the Property is not being met, and the partners
of the UFP are not acting in the best interests of the UFP.” Specifically, the complaint
alleges that on January 1, 2013, the Property was appraised at $763,000.00, but in 2012,
the UFP made a profit of only $5,466.00, to be divided between the siblings.
{¶ 5} According to the complaint, the brothers refuse to cooperate in the efficient
operation of the UFP and to pay reasonable rental values for the Property. The complaint
sets forth the following rents, which are allegedly “well below fair market value”: 1) Jay
rents 20.27 acres of the 115-acre lot for $80.00 per acre per year; 2) Jay rents a 25-acre
lot and pays rent of $200.00 per acre per year; 3) John rents 30.23 acres of the 115-acre
lot and pays $80.00 per acre per year; and 4) John “does not pay rent for approximately
2 acres of the 115 acre [lot] where his home resides, approximately 18 acres of the 115
acre lot for grazing cattle, and approximately 4.3 acres of the 115 lot for growing hay.”
The complaint alleges that the rental prices are below market value and “the UFP could
not reach an agreed upon rental amount for the Property and the Defendants have used
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the Property without the UFP’s consent.”
{¶ 6} The complaint further alleges that the brothers “have also misused and
devalued the buildings and assets located on the Property.” Specifically, the complaint
alleges that John has harvested timber from the 115-acre lot. The complaint also alleges
that on December 30, 2007, Jay’s son, Lucas, entered into a rental agreement for the
farmhouse on Eris Road, a condition of which required him to pay rent or “spend a certain
amount of money on maintenance and improvement of the farmhouse. However, after
August 2008 rental payments stopped and no receipts were provided showing repairs or
improvements to the farmhouse.” The complaint provides that on January 9, 2010, a
“Family Partnership House Agreement was executed wherein Defendants agreed to be
responsible for the maintenance of the farm house and its gravel lane.” The complaint
alleges that “the farmhouse has steadily deteriorated and Plaintiffs are informed and
believe the farmhouse is now a safety hazard and a potential liability to all.”
{¶ 7} The complaint alleges the brothers “benefit from the Property more than the
Plaintiffs despite the intentions of the UFP and Defendants refuse to change or alter the
current arrangement.” According to the Complaint, “the UFP is currently in a voting
deadlock and the future of the Property is being jeopardized.” The sisters asserted a
request for partition, and claims for an accounting, unjust enrichment, breach of fiduciary
duty, and dissolution of the partnership.
{¶ 8} Six joint stipulations for extensions of time for Jay and John to answer the
complaint were filed. On April 16, 2015, the sisters filed “Plaintiffs’ Motion for Injunctive
and Declaratory Relief.” Therein they sought an order authorizing them “to rent certain
farm land to a third party and for a preliminary injunction restricting Defendants Jay and
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John Underwood * * * from personally using this land.” Ten exhibits were attached to the
motion. The brothers opposed the motion on April 21, 2015, and the sisters replied on
April 27, 2015.
{¶ 9} On April 29, 2015, the trial court issued a “Journal Entry Denying Plaintiff’s
Motion for Injunctive and Declaratory Relief.” The court initially noted that “it must be
mentioned that any claim of irreparable harm is undercut by Plaintiffs’ willingness to
extend the time for filing an answer on six occasions. Furthermore, Plaintiffs have known
of the need to plan for the upcoming growing season since at least last fall’s harvest.”
The court further noted that the sisters “have not explained why any harm resulting from
Defendants’ alleged failure to pay the market rate for the use of the Troy Fields cannot
be addressed through their causes of action for breach of fiduciary duty and unjust
enrichment.” The court determined that since the sisters “have not explained why
monetary damages for Defendants’ alleged self-dealing would be an inadequate remedy,
they are not entitled to a preliminary injunction.” Finally, the court concluded that “if this
Court were to find in favor of Plaintiffs on their partition claim, the source of the parties’
disagreements (i.e., the farm) would be gone. The possible availability of this remedy to
Plaintiff[s] is further reason not to grant a preliminary injunction.”
{¶ 10} On May 11, 2015, the sisters filed a “First Amended Complaint.” Therein
they asserted that pursuant to Underwood’s will, “the children of the Plaintiffs’ and
Defendants’ or their issue may obtain an interest in the Property,” and that “[a]s all of the
Plaintiffs and Defendants are still living, the identities of the remaindermen are not known
and may change based [upon] when the last life tenant passes.” The sisters requested
the court “appoint a disinterested person to act as a representative or guardian ad litem
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for the unknown remaindermen who may have a contingent future interest * * *.”
{¶ 11} On May 15, 2015, the brothers filed a motion to dismiss the amended
complaint, “for failure to file a preliminary judicial report, pursuant to Civ.R. 12(B)(1),
12(B)(6), (12)(B)(7), 19(A)(2), and R.C. § 2329.191.” Alternatively, the brothers
requested that “the court order Plaintiffs to file a preliminary judicial report and join all
necessary parties.” On the same date, the sisters filed a “Notice of Filing Title
Commitment.”
{¶ 12} On May 22, 2015, the court issued a “Journal Entry Setting Response
Time,” ordering the sisters to respond to the motion to dismiss by May 29, 2015. In the
sisters’ response, they asserted as follows:
Rather than forcing potential remaindermen to be parties to this
action, Plaintiffs believe a guardian or representative can be appointed to
act in the best interest of the class. Such appointment would satisfy
Defendants’ belief all potential remaindermen must be represented in this
action. Plaintiffs hope the Court will consider this option as a way of
addressing the unknown remaindermen while protecting what remains of
the existing family relationships.
{¶ 13} On June 4, 2015, the court issued a “Journal Entry Granting Plaintiffs Leave
to File Second Amended Complaint.” The court noted that the filing of the commitment
for title insurance rendered moot the brothers’ argument regarding the failure to file a
preliminary judicial report. Citing R.C. 5303.22, the court further noted that “[n]o distinction
is made between vested and contingent future interests. Instead, all persons in being
who are interested in the estate or may become interested in the estate must be made
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parties to the action.” The court found Underwood’s 13 grandchildren to be “essential
parties” to the action.
{¶ 14} On June 8, 2015, the “Reply of Defendants Jay A. Underwood and John J.
Underwood in Support of Their Motion to Dismiss Plaintiffs’ Amended Complaint” was
filed. On June 26, 2015, the sisters, James Patrick Thompson, Steven Charles
Thompson, Isabelle Jean Thompson-Demoss, Amy Caroline Yeager, Robert Joseph
Simon, and Christen Beth Simon Fails filed a “Second Amended Complaint” against the
brothers, Nathan Jeffry Underwood, Heath Asbury Underwood, Zachary Ryan
Underwood, Lucas Wayne Underwood, Levi Russell Underwood, Logan Lowell
Underwood, and Eli Asbury Underwood, asserting a request for partition, and claims for
an accounting, unjust enrichment, breach of fiduciary duty, and dissolution of the
partnership.
{¶ 15} On July 10, 2015, the brothers answered the amended complaint. On
August 24, 2015, the “Answer of Defendants Nathan J. Underwood, Heath A. Underwood,
Zachary R. Underwood, Lucas W. Underwood, Levi R. Underwood, Logan L. Underwood,
and Eli A. Underwood to Plaintiffs’ Second Amended Complaint” was filed.
{¶ 16} On September 2, 2015, the “Motion of Plaintiffs Susan Simon and Sara
Thompson for the Appointment of a Commissioner and to Issue a Writ of Partition” was
filed, attached to which is a proposed order. The motion provides in part as follows:
* * * As Plaintiffs have a legal right to the Property, they request the
Property be partitioned and a commissioner appointed to determine if the
Property can be partitioned.
After the Court’s appointment, R.C. 5307.06 states “the
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commissioner or commissioners shall view and examine the estate and, on
their oaths and having due regard to the improvements, situation, and
quality of the different parts, set it apart in lots that will be most
advantageous and equitable.” Plaintiffs request upon appointment, the
commissioner should investigate and examine the Property to determine if
partition is possible. Plaintiffs ask that any physical partition of the Property
take into consideration the interests of the Remaindermen as potential heirs
to the Property.
In the event the Commissioner determines the partitioning of the
Property would cause a manifest injury to the value of the Property or the
physical partitioning of the Property is impossible or impractical, Plaintiffs
request the Commissioner to appraise the Property and provide a just
valuation so the parties have an opportunity to exercise their right to
purchase the Property.
{¶ 17} The Magistrate set the motion for a hearing on October 6, 2015, and the
brothers moved for a continuance, or in the alternative, to set the matter for a scheduling
conference. On September 30, 2015, the “Magistrate’s Order Denying Defendants’
Motion to Continue Hearing” was filed. Therein the Magistrate noted in part that the
“Court’s need to clarify the legal basis for Count One of the Second Amended Complaint
was one of the reasons for scheduling a hearing on Plaintiffs’ motion. This need remains
unfulfilled.”
{¶ 18} Also on September 30, 2015, “Plaintiffs’ Partial Opposition to Joint Motion
of Defendants to Continue Hearing on Plaintiffs’ Motion for Partial Summary Judgment
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and/or Convert Same into a Scheduling Conference” was filed. Therein, the Plaintiffs
asserted that they do not oppose the request for a scheduling conference, that mediation
should not delay the appointment of a Commissioner, and that they have every right to
move for the appointment of a Commissioner.
{¶ 19} On October 9, 2015, a “Magistrate’s Order Setting Scheduling Conference”
was issued after the hearing on October 6th. The order provides in part as follows:
***
Extensive discussion was held concerning Count One of the Second
Amended Complaint. Although captioned as a partition claim, Count One
may actually be seeking relief under the disentailment statute, R. C.
5303.21, since it seeks the sale of real property, with the proceeds held in
trust. There was also discussion about whether Count One should
proceed separately from the remaining claims, which concern the
partnership that the Underwood siblings * * * created to manage the day-to-
day activities of the farm after they took possession as co-life tenants.
{¶ 20} The court scheduled a conference before the Magistrate on December 2,
2015, and indicated that it “anticipates resolving the following issues”:
(1) Whether Count One of the Second Amended Complaint seeks
the partition of the life estate, the partition of the entire fee, disentailment
pursuant to R.C. 5303.21, or some other form of relief. Plaintiffs may seek
leave to amend their complaint.
(2) The names of persons to serve as commissioners should Count
One of the Second Amended Complaint proceed as a partition action.
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(3) Whether Count One of the Second Amended Complaint should
proceed separately from the remaining causes of action.
{¶ 21} On November 5, 2016, a “Consent for Plaintiffs to File Third Amended
Complaint” was filed, along with a “Third Amended Complaint.” Paragraph 24 of the
newly amended complaint provides: “As Plaintiffs believe the Property cannot be
physically partitioned without creating undue hardship, manifest injury, and/or substantial
damage to the value of the Property, Plaintiffs respectfully request the Property be
partitioned.” [Sic.] Section (b) of the prayer for relief of the newly amended complaint
provides that Plaintiffs request “that the net proceeds from the sale of the Property or the
respective life estates be distributed as the Court determines appropriate.”
{¶ 22} On November 9, 2015, “Plaintiffs Susan Simon and Sara Thompson’s
Renewed Motion for the Appointment of a Commissioner to Issue Writ of Partition” was
filed. On November 20, 2015, the “Answer of Defendants Nathan J. Underwood, Heath
A. Underwood, Zachary R. Underwood, Lucas W. Underwood, Levi R. Underwood,
Logan L. Underwood, and Eli A. Underwood to Plaintiff’s Third Amended Complaint” was
filed.
{¶ 23} On November 24, 2015, a “Memorandum of Defendants J. A. Underwood
and John J. Underwood in Opposition to Plaintiffs’ Renewed Motion for Partial Summary
Judgment,” was filed. The Magistrate then set a scheduling conference to be held on
December 16, 2015. On January 5, 2016, a “Motion of Defendants for Leave to File their
Answer to Third Amended Complaint Instanter,” and “Agreed Entry,” and the “Answer of
Defendants Jay. A. Underwood and John J. Underwood to Plaintiffs’ Third Amended
Complaint” were filed.
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{¶ 24} On February 23, 2016 the court issued a “Journal Entry Ordering Partition
and Appointing Commissioner.” The entry provides in part as follows (footnotes
omitted):
Plaintiffs Susan Celia Simon and Sara Beth Thompson, and
Defendants, Jay A. Underwood and John J. Underwood, are co-life-tenants
currently in possession of real property located in Champaign County * * *.
Upon the passing of the last life tenant, their children, if they survive all of
the life tenants, will obtain a fee simple interest in the Property. If a child
should predecease the last life tenant with issue, such issue shall take the
deceased’s child’s share of the Property.
Each co-life tenant possesses an undivided one-quarter interest in
the Property for the remainder of their lives. Plaintiffs, Susan Celia Simon
and Sara Beth Thompson, seek to hold their respective one-quarter
interests in the Property severally from the interests of Defendants, Jay A.
Underwood and John J. Underwood. Wherefore, Plaintiffs, Susan Celia
Simon and Sara Beth Thompson, are entitled to partition of their interests
in the Property as prayed for in the Third Amended Complaint.
IT IS THEREFORE ORDERED that partition of the co-life tenants’
interest in the Property shall take place.
IT IS FURTHER ORDERED that Jerry Simpson, a suitable
disinterested person, is appointed Commissioner to divide the co-life
tenants’ interests in the Property. The Commissioner shall view and
examine the Property, taking into account the improvements, situations,
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location, and quality of the different parts of the Property.
If the co-life tenants’ interest in the Property can be equitably divided,
the Commissioner shall report that to the Court and shall set off each co-life
tenants’ one-quarter interest in the Property.
In dividing the Property, the Commissioner shall set off to each co-
life tenant his or her interest in each of the several tracts comprising the
Property, or the Commissioner may set off the share of any co-life tenant,
in all tracts comprising the Property, according to the Commissioner’s best
discretion.
If the Commissioner divides one or more of the tracts comprising the
Property, said tract(s) shall be surveyed and platted in accordance with
sections 711.001 to 711.15 of the Revised Code and with the rules adopted
pursuant to these sections.
If the Commissioner is of the opinion that these interests cannot be
equitably divided among the life tenants, the Commissioner shall report that
to the Court with a just valuation of the fee simple interest of the Property.
This figure will be used to determine the value of the co-life tenants’
interests in the Property. The Commissioner shall also report the reasons
for concluding that the co-life tenants’ interests in the Property cannot be
equitably divided.
Upon receipt of the Commissioner’s report, Plaintiffs’ request for
partition of the co-life tenants’ interests in the Property will proceed in
accordance with Chapter 5307 of the Revised Code.
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{¶ 25} On April 7, 2016, the court issued a “Journal Entry” that provides that the
Commissioner viewed and examined the Property and forwarded his report to the Court.
The entry provides in part as follows:
In his report, Commissioner Simpson concludes that * * * the co-life
tenants’ interests in the Property cannot be equitably divided. He has also
fixed the value of the fee simple interest of the Property.
The Second District Court of Appeals has characterized the
commissioner’s report in a partition action to be akin to a magistrate’s
decision. See McGill v. Roush, 87 Ohio App.3d 66, 77, [6]21 N.E.2d 585(2d Dist. 1993). Given this characterization, the Court will give the parties
the opportunity to file written objections to Commissioner Simpson’s report.
{¶ 26} The Commissioner’s report is attached to the “Journal Entry.” The first
page of the report provides:
On March 1[,] 2016, I physically viewed the five parcels owned by
Susan C. Simon Etal, [sic] Further described in the attached Legal
Description, being case number 2014 C.V. 131, in the Champaign County
Common Pleas Court.
The purpose of this viewing is to determine if it is possible to equally
divide the five parcels into four equal parts.
The five parcels are approximately 2 to 4 miles apart.
A parcel on Old Troy Pike is Parcel Number G22-07-11-09-00-016-
00, consisting of approximately 25.05 acres, more or less. Most of which
is tillable. This is a highly productive parcel of farm land, with a good
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natural drainage.
Two parcels on State Route 560, being Parcel Number G22-07-11-
09-00-001-01 with approximately 1.362 acre[s], more or less. This parcel
has no road frontage. Parcel [N]umber G22-07-11-10-00-008-01 has
approximately 5.352 acres, more or less with road frontage.
The two parcels join and are tree covered and may be in a flood
zone. A surveyor could determine if these[] parcels are in a flood zone.
Land on Eris Road consists of two parcels.
One being parcel number G21-07-11-24-00-014-000 which is
approximately 105.22 acres more or less.
The other parcel on Eris Road is parcel number G21-07-11-18-00-
009-00 and is 10 acres, more or less.
The parcels join. Of this acreage, approximately 55 acres is tillable,
according to the Champaign County FSA Office.
This farm lays in an L shape.
There is an old, two story house and various out buildings on the site.
There is also a mobile home on the site.
Some of the subject land is very rolling and classified as Highly
Erosive. Due to the distance between the five parcels and the difference
in production potential and the small amount of road frontage of the [Eris]
Road parcels, it is my opinion, that I cannot divide the subject land into four
equal parcels.
{¶ 27} On the following page, a “Letter of Transmittal” provides that the Eris Road
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parcels have an estimated market value of $490,000.00; that the vacant land on State
Route 560 has an estimated market value of $16,500.00; and that the parcel on Old Troy
Pike has an estimated market value of $230,000.00. All estimated values are as of
March 8, 2016.
{¶ 28} Regarding the property on Old Troy Pike, the report provides as follows:
The subject lays in one field.
The topography is mostly level.
The soil type is Fox Silt. This is a highly productive soil type and has a
good natural drainage.
This subject is a very desirable parcel of land.
There are no signs of development in the immediate subject area.
Due to this fact, I see no reason to believe there will be a land use change
in the near future.
{¶ 29} The land appraisal report for the property on State Route 560 provides:
“The subject is in a flood zone. None of the comparables are in a flood zone. It is my
opinion [d]ue to this fact * * * an adjustment should be made as to value. Due to the fact
a potential home builder would have the expense of flood insurance.”
{¶ 30} Regarding the Eris Road property, the Report provides:
The subject has two dwellings.
One is an old, one and half story single family residence.
This house appears to be in a fair condition.
The residence has two types of siding.
The roof appears to be in good condition.
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An old bank barn is in a fair to poor condition and does not meet
today[’]s modern farming practices.
An attached lean[-]to on this bank barn is used to store equipment.
Two, small grain bins are on the site.
Other small out buildings contribute no value, in my opinion.
An old, mobile home on a concrete foundation is also on this site.
The subject land shows much deferred maintenance.
The fence rows are over grown with trees.
The open ditches are also over grown with trees and need to be
cleared to work better.
Much of the tillable land is classified as Highly Erosive.
There are no sod water ways in place for drainage.
Many areas of the tillable land show[] erosion taking place.
The fields are sm[a]ll which makes it difficult to operate modern farm
machinery in the acreage.
Much of the subject farm is wooded and there is not very much road
frontage.
{¶ 31} The attached appraisal report for the Eris Road property provide: “This
appraisal is of the real estate and improvements only. No personal property is included
in the estimated value of the subject.”
{¶ 32} On April 21, 2016, the “Objections of Defendants Jay A. Underwood and
John J. Underwood to the Report of Commissioner Jerry L. Simpson” were filed. The
brothers objected as follows:
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1. The Commissioner’s Report over-states the value of the subject
real estate by failing to deduct, therefrom, the value of Defendant John J.
Underwood’s personal property and improvements, including a mobile
home, water well, and septic system.
2. The Commissioner’s Report includes an appraisal of the subject
real estate in fee simple, but does not arrive at a value for the life tenants’
estates. See R.C. § 5307.09 (stating that “the commissioner . . . shall
return . . . to the court of common pleas [ ] a just valuation of the estate”).
Defendants reserve the right to object to such value when it is established.
In its Entry dated February 23, 2016, the Court stated that the fee simple
valuation established by Commissioner Simpson will be used to calculate
“the value of the co-life tenants’ interests in the Property.” It may be
appropriate for the parties to submit briefs setting forth the proposed
methodologies for valuing the life estate.
3. The Commissioner’s Report fails to set forth a plan for equitably
dividing the farm or a finding that it cannot be divided “without manifest
injury to its value” as required by R.C. § 5307.09. See McGill v. Roush, 87
Ohio App.3d 66, 75 (Second Dist. 1993) (stating that a commissioner has a
“duty to explore every reasonable possibility of equitably dividing the
property”). Defendants have previously put forth, to Plaintiffs, a plan for
dividing approximately 43 acres of property occupied by Defendant John J.
Underwood from the balance of the farm and believe that such division can
be made without causing “manifest injury.” Further, such division will
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simplify these proceedings and obviate the need for the Court to determine
the ownership and value of improvements constructed on the premises by
Defendant John J. Underwood.
Defendants respectfully request that the Court schedule a
conference and/or an evidentiary hearing to resolve the issues identified
above.
{¶ 33} On April 28, 2016, a “Memorandum Contra of Plaintiffs’ [sic] to Defendant
Jay A. Underwood and John J. Underwood’s Objections to Report of Commissioner Jerry
L. Simpson” was filed. After noting that they requested the appraisal be reduced based
upon the value of John’s personal property and improvements to the Property, the sisters
asserted that they did not object to reducing the appraisal if the brothers “can produce a
sworn statement identifying which items are his personal property, were not constructed
for the benefit of the family partnership, and/or provide evidence of ownership, all of which
can then be provided to the Commissioner.”
{¶ 34} Regarding the valuation of the life estates, the sisters asserted that briefing
“different methodologies is unnecessary as the valuation only establishes a price at which
the parties can exercise their respective right to elect to purchase the property.” The
sisters further asserted that “R.C. 5307.06 states once the Commissioner’s report is
approved, one or more of the parties can elect to take the property at the appraised value.
If none of the parties elect to purchase, pursuant to R.C. 5307.11, the property can be
sold at auction.” The sisters argued that, in the event of an auction, the “auction will
determine the true value of the life estates.”
{¶ 35} Finally, the sisters noted that “Defendants propose to physically partition
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part of the farm and assign it to one of the life tenants, Defendant John Underwood,” a
proposal the sisters asserted “fails for numerous reasons.” The sisters argued that after
Defendants’ objections, they “are only requesting the partitioning of the four (4) life
estates. Therefore, as soon as the first life tenant passes, the three remaining life
tenants will be back to this court again requesting partition of the property into thirds and
Defendants’ proposal provides no finality.” Further, the sisters argued, “Defendants’
plan offers no plan to distribute the rest of the property amongst the remaining life tenants.
Although Defendant John Underwood can identify what he wants from the farm, there are
three (3) others that need to be equally compensated.” The sisters argued that they have
“previously offered to physically partition the property. However, Defendants have
rejected these offers as they want to trim off the choice parts of the farm for themselves
and dump the carcass on the Plaintiffs.” The sisters asserted that “the value of the farm
is as a single operational farm.” They argued that “Defendants’ proposal does not result
in a single claim being resolved or party being dismissed,” contrary to Defendants’
assertion that “division would simplify these proceedings.” The sisters indicated that
“there is no need for a conference or evidentiary hearing as they have acquiesced to two
of Defendants’ objections and third objection requesting the property be physically
partitioned is impossible and impractical.”
{¶ 36} The trial court scheduled a hearing on the brothers’ objections to the
Commissioner’s report for May 18, 2016. At the hearing, Jerry Simpson testified that he
is a self-employed real estate appraiser, licensed for residential real estate in the State of
Ohio. He stated that he has experience appraising agricultural properties, and that he
“quit farming in 1986. I’ve been appraising full-time since then.” Simpson stated that
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pursuant to the court’s request, he inspected the subject properties on March 1, 2016.
Simpson testified that he concluded that they could not be equitably divided, and that he
sent correspondence to the court expressing his conclusion.
{¶ 37} Simpson identified his report and correspondence. Simpson stated that he
returned to the properties on March 8, 2016, and thereafter submitted appraisals to the
court. He identified three appraisal reports that he completed after his second visit to the
properties. The following exchange occurred on direct examination:
Q. * * * What do you understand all of your obligations as
Commissioner to be?
A. My understanding from what was expected of me as
Commissioner was, one, see if it could be physically divided equally. And
if it could have been, well, I was supposed to go ahead and do it.
I felt that I - - I didn’t think it could be done the way they were laid
out. So then my obligation after that was to go ahead and appraise each
of the three parcels.
***
Q. Other than going out and taking a look at the property, what did
you do to determine that * * * the Underwood property in the instant case,
cannot be equitably divided?
A. It lays in three different places. Each place has different
characteristics.
Q. Any other factors you considered?
A. That was my main factor. Another one was the main farm on
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Eris Road which laid in an L shape. It limited the amount of frontage.
{¶ 38} Simpson stated that there are actually five parcels in the Property, and that
some of them are “contingent.” He stated that altogether the Property is comprised of
about 147 acres. The following exchange occurred:
Q. My question was, are all of the factors and facts that you
considered in reaching your conclusion that the property can’t be equitably
divided are all of those set forth in this letter to the court that is the second
page of defendant’s Exhibit A?
A. Yes. Yes.
Q. I noticed that in that letter it does not include a conclusion that
the property cannot be divided without manifest injury to its value. Did you
reach such a conclusion?
A. Yeah. Yes. It could damage the value because mainly on the
Eris Road property.
Q. In what way may it damage the value?
A. You would have to chop it up. So that it would just make it very
difficult to farm. And there would be - - it was very limited road frontage.
So no parcel would have much frontage at all. It would just be a chopped
up mess if you tried to divide it. It would be something that would be harder
to sell. I’ll put it that way.
Q. Did you reach any - - did you do any calculation or reach any
sort of determination of the amount of injury to the value that might occur if
you divided the property?
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A. No, sir, I didn’t.
Q. Did you set out any alternatives for physically dividing the
property?
A. No.
Q. So, for example, you never considered dividing the 115 acre
parcel on Eris Road into two pieces?
A. No, I didn’t.
Q. And you didn’t formulate any plan for dividing any of the other
properties; is that correct?
A. No.
Q. Why did you decide not to consider any of those alternatives?
A. They just wouldn’t fit the community. It would just make the
farm a mess. It would be a chopped up mess. It would be very difficult for
today’s farming operations. And the farm laying in an L shape made it even
more difficult.
Q. Are you aware that Jeff Underwood lives on part of the property?
A. No, I didn’t know he lived on the property.
Q. Do you know where the mobile home is located on the property?
A. Yes, I do.
Q. * * * And you didn’t consider, did you, cutting off 40 acres of the
115 acre parcel of Eris Road where the mobile home is located, did you?
A. No.
Q. Do you know whether making such a division would manifestly
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injury [sic] the value of the total property?
A. It could. One thing you would have to check, which I didn’t, is
see what your local zoning is as far as frontage.
Q. You didn’t consider the local zoning?
A. No.
Q. Are you aware that the property at issue here is owned by four
life tenants and 13 remaindermen?
A. Yes, I was aware of the four.
Q. * * * Do you have any experience in determining the value of life
estate interests?
A. Life estate interests, no. I’ve never done anything like that.
Q. And your report in this case doesn’t arrive at a value of the life
estate; is that correct?
A. No. I’m doing market value for the properties.
{¶ 39} Simpson stated that in reaching a conclusion about the fair market value of
the properties, he included the value of the mobile home. He stated that he attributed
the depreciated value of $13,895.00 for the mobile home in the appraisal of the Eris Road
parcel. He stated that he included the mobile home “since they considered it. Now, this
mobile home appeared to be sitting on a permanent foundation of some kind. And it
looked like it was being taxed as real estate. But it’s still a mobile home.” Simpson
further stated that he included in the appraisal of the Eris Road parcel the value of the
well and septic system, attributing the depreciated value of $9,000.00. He stated that he
did not include a value for livestock fencing.
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{¶ 40} On cross-examination, the following exchange occurred regarding the 6.7
acre parcel:
Q. In your appraisal you valued 6.7 acres at $16,500: is that
correct?
A. Yes.
Q. And can you give me an idea why you valued it at $16,500?
A. A normal six-acre parcel sitting out in the country like that with a
few trees is a very desirable building site. But this one is in a flood zone.
The whole thing. And if anyone builds there, they would have to pay flood
insurance for the entire time of the loan, which costs a lot of money. So in
my opinion, that is an adverse affect on the market value of the property.
Q. That is residential use; is that correct?
A. Yes.
Q. What about agricultural use?
A. It doesn’t have the affect [sic]. But the way the thing is laid out,
it wouldn’t be a good five-acre parcel to farm.
Q. But could it be converted to an agricultural use?
A. It could be by going in and removing - - all tree and brush cover
it right now.
Q. And if that improvement was made could your evaluation of the
6.7 acres increase?
A. It probably would have increased a little. Being a small parcel
that is always going to set the agricultural value.
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{¶ 41} John Underwood testified that he has resided at 770 Eris Road in the mobile
home on the property “someplace around 30 some years.” He stated that the property
where the mobile home is located is part of the 115-acre parcel. John stated that he paid
for the mobile home, and he identified the title thereto, in his name, reflecting that he
purchased the home in 1982. He further identified a Champaign County tax bill for the
mobile home. John stated that he pays the taxes on the mobile home, and that the UFP
does not.
{¶ 42} John further identified an exhibit which he testified reflects “just the stuff that
I’ve spent” at 770 Eris Road installing a well on July 25, 2012. Additionally, John testified
that he “spent most of my time clearing brush and cleaning up dead stuff. Trees. Just
keeping up the lane. Just keeping stuff mowed up.” John stated that he installed a septic
system in 2011, as well as some fencing.
{¶ 43} The following exchange occurred:
Q. Now, the property where your mobile home is located is part of
the 115 acre parcel; is that correct?
A. Yes.
Q. And you rent part of that parcel or have rented part of that parcel
from the partnership; is that correct?
A. Yes.
Q. How many acres do you rent?
A. 30.
Q. And who rents the rest of it?
A. Jay, my brother.
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Q. * * * So even now the 115 acres is divided into two rental units;
is that correct?
A. Yes.
Q. Can the - - do you believe that the part of the parcel where you
live can be physically divided off of the 115 acres?
A. Yes.
{¶ 44} On cross-examination, John testified that the UFP paid the property taxes
on the land where his mobile home is located. When asked how much rent he has paid
to the UFP “since 2007 for placing your mobile home on the partnership on the land,”
John responded, “[n]one.” When asked if he made improvements, including the well and
the septic system, in exchange for free rent, John responded, “Nobody brought up the
question until now.”
{¶ 45} John testified that he signed an agreement with the UFP to take
responsibility for the “lane” on the property. John stated that he believes the 115 acres
can be divided. The following exchange occurred:
Q. What is your plan?
A. From the center of the lane just back to the fence to the end of
the property.
THE COURT: Center of the lane to what?
THE WITNESS: To the end of the property to the west. To the
west end line.
Q. So your goal is to take from the center to [sic] the lane, one side
of yours. And the other approximately 72 acres, what will happen to that?
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A. Whoever wants it. If Jay doesn’t and if you guys don’t sell it I
guess.
Q. The center of the lane is the only access point to the 72 acres;
is that correct?
A. Yes.
Q. So if you were to take the center of the lane over for your 43
acres, whoever would take that 72 acres would have to enter into an
agreement with you to access their land, correct?
A. Yes.
Q. * * * And how would that lane be maintained? Who would pay
for it?
A. Whomever owns it. Half of it would just take care of half and
then I’d take care of the other half.
Q. So under your proposal whoever owns the 72 acres left over
after you take your 43 acres would have to share in the maintenance and
upkeep of the lane?
A. Yes.
Q. And they would also share ownership of the lane?
A. Yes.
Q. Under your plan are you taking your 43 acres as a life estate?
A. Yes.
***
Q. Under your plan or proposal what happens if you pass away
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first?
A. Then it goes to the other folks. Or Susan and Jay and Sara.
Q. So the entire property, the 115 acres plus the 32 on Old Troy
Pike, would have to be divided three ways at that time; is that correct?
A. I suppose.
***
Q. So every time a life tenant would pass away you would have to
come back to the court and file a petition action; is that your understanding?
A. I don’t understand that stuff. Not that much yet.
***
Q. Are you aware that the Plaintiffs have made a proposal whereby
you and your brother would take the 115 acre property on Eris Road for the
rest of your lives and your sisters would take approximately 32 acres on Old
Troy Pike for the rest of their lives?
A. Yes.
Q. What is wrong with that plan?
A. Well, I don’t really know at this present time.
Q. But you would be getting the 43 acres you want; is that correct?
A. Uh-huh.
Q. And then your brother and you would own the whole 115 acres
for the rest of your lives. And then if one of you were to pass, it would go to
the other one. So you would never be disturbed from your property.
A. It would just have to be discussed between me and Jay.
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Q. And without revealing any sort of confidences, do you
understand that if you and your brother would take that 115 acre parcel, you
and your brother could work out some sort of accommodation as to how you
owned your 43 acres?
A. Uh-huh.
Q. So you could give him $100 every month. Or he could pay you
for renting one of the fields on your 43 acres.
A. Uh-huh.
{¶ 46} On redirect examination, the following exchange occurred:
Q. Following up on Mr. Simon’s question about proposals that have
been discussed, is it your understanding as well that we have proposed to
Plaintiffs that you would take the 43 acre parcel, they would take the
balance of the 115 acre parcel, and Jay would take the 25 acre parcel? Do
you recall making that proposal?
A. Yes.
Q. And do you understand that they rejected that proposal?
A. Yes, sir.
{¶ 47} On re-cross-examination, the following exchange occurred:
Q. The proposal that he was just speaking of whereby the Plaintiffs
would receive the 72 remaining acres of the 115 acre parcel, do you recall
talking to your Counsel just now?
A. Yes.
Q. Under that proposal the Plaintiffs would have to share a lane
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with you; is that correct?
A. Yes.
Q. They would have to share an easement with you; is that correct?
A. That’s correct.
Q. And share maintenance of the property of the lane; is that
correct? Of the lane?
A. Yes.
{¶ 48} The following exchange occurred on redirect examination:
Q. If you are to divide the property, divide 115 acres into 43 acres
and 72 acres approximately, the 72 acre parcel isn’t landlocked, is it?
A. No.
Q. It has frontage, correct?
A. Yes.
Q. Where a driveway could be constructed.
A. Yes.
{¶ 49} At the conclusion of the hearing, the court asked counsel for the brothers if
they disputed the Commissioner’s testimony that the mobile home is affixed to a
permanent foundation. After conferring with John, counsel indicated, “I understand the
unit is affixed to the foundation with hurricane straps. There are no wheels on the unit,
but it could be picked up and moved.”
{¶ 50} Also at the conclusion of the hearing, the following exchange occurred
between the court and counsel for the brothers:
THE COURT: * * *
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How does Defendant propose that the Commissioner is to
value a life estate?
MR. FLAX: Well, Your Honor, there is a methodology. I
think it’s intended to apply to charitable and remainder trust and internal
revenue code. We’ve done some preliminary calculations. It takes into
account the ages of the - -it takes into account the ages of each of the life
tenants. And based on the appraised value of the property, as reported by
Mr. Simpson, the life estate values under that formula would range from 50
to $57,000.
So Jeff Underwood is the youngest. His life estate would
have the greatest value. And Susan, I believe, is the oldest and her life
estate would have the least. But the range is 50 to $57,000 based on that
methodology. * * *
{¶ 51} On May 31, 2016 a “Status of Settlement Discussions” was filed by counsel
for the sisters that provides:
Following the hearing on Defendants’ Objections of Defendants Jay
A. Underwood and John J. Underwood to the Report of Commissioner Jerry
L. Simpson, the parties met to discuss settlement. Plaintiffs offered several
options for settlement including an offer to purchase the property from
Defendants for an amount higher than Defendants’ offer. Defendants
declined said offer. Defendants refused Plaintiffs’ offers to physically
partition the Property or to simply sell or buy the parties’ respective life
estates and avoid the need to go through the timely and expensive partition
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process. At this time, Plaintiffs believe settlement is highly unlikely.
{¶ 52} On June 15, 2016, “Plaintiffs’ Partial Motion for Summary Judgment to
Dissolve Partnership” was filed. Citing R.C. 1776.61, the sisters argued that the UFP
“no longer has any economic purpose or function. Originally the Partnership collected
rents from Defendants and paid the insurance and taxes on the Property and for the
Partnership. However, since Defendants have not paid for the use of the Property since
2013, the Partnership has had no income.” The sisters further asserted that “the
Partnership is not a practical vehicle through which to carry on the Partnership’s business.
As set forth above, Defendants have usurped any and all purpose of the Partnership by
keeping for themselves all income derived from the Property and assuming all expenses.”
Finally, the sisters argued that “even if Defendants relinquished control over the profits
and expenses of the Property, the management of the Partnership has been deadlocked
on all major issues since 2013.”
{¶ 53} In its decision in favor of the sisters, the trial court addressed the availability
of the remedy of partition, the Commissioner’s failure to set forth a plan of partition, the
valuation of the Property in fee simple, and the valuation of the life estates. Regarding
the remedy of partition, the court noted that “the life estate is the only interest in the
Property that can be partitioned at this time. In order to obtain partition, the plaintiff must
have both title to some part of the realty and an immediate right to possession.”
According to the court, “the life estate prevents the remaindermen from seeking partition
since they lack an immediate right to possess the Property.” The court further noted in
a footnote that the number of remaindermen is uncertain, since “survivorship of the last
life tenant, or predeceasing said individual with issue, is a condition of taking possession
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* * *. The actual number of grandchildren surviving the last life tenant (i.e.,
remaindermen) may be more or less than the present number of thirteen.”
{¶ 54} The court determined that partition “is also dependent upon common
ownership of the realty,” and that a “life tenant cannot compel the remaindermen to suffer
partition of their interests. Nor can a remainderman have partition where there is an
outstanding life estate.”
{¶ 55} The court noted that partition is not only available to holders of a fee simple
interest. According to the court, the “only requirement is co-tenancy with an immediate
right to possess the premises. Thus, an owner for life of an undivided interest in real
property may compel partition, but the decree will be limited to partition of the life estate.”
The court concluded that if tenants in common have “a legal right in an estate and
request[] a partition, the court must grant the request,” and the fact that “another partition
action will likely be filed within a generation does not constitute sufficient grounds to refuse
partition.” The court therefore rejected the brothers’ “assertion that their sisters should
be denied partition.”
{¶ 56} Regarding the Commissioner’s failure to set forth a partition plan, the court
noted that the borthers’ arguments were “focused primarily on the 115 acres located on
Eris Road.” The court determined as follows:
Commissioners are not required to offer a plan of partition if they
have made a good faith effort to make a most equitable partition but find
they cannot. * * * In such situations, the commissioner’s report must provide
a sufficient factual basis for concluding that an equitable division of the
property is not possible. * * *
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With regard to Eris Road, Commissioner Simpson stated in his report
that “the fields are small which makes it difficult to operate modern farm
machinery in the acreage.” He also observes that only 55 of 115 acres are
tillable and that much of this land is highly erosive and shows signs of
erosion in some areas.
***
While the Underwood brothers dispute whether Eris Road can be
equitably divided, they do not dispute Commissioner Simpson’s
characterization of the land. They do not dispute his conclusion that only
55 of the 115 acres are tillable land. Nor do they dispute his observation
the fields are small and subject to erosion. The brothers are also silent
regarding the commissioner’s statement that Eris Road shows deferred
maintenance, including overgrown fence rows and drainage ditches.
If Eris Road was the only tract under consideration, the Court would
readily agree with Commissioner Simpson that partitioning this property
among the four siblings would cause manifest injury to its value. Eris Road
has a variety of uses scattered throughout its 115 acres, with only 55 tillable
acres. Splitting the tract among the Underwood siblings would result in fields
too small for modern farming practices. The Court would also find that the
State Route 560 tract cannot be partitioned, due to its small size and limited
utility. * * * While no inquiry was made regarding the Old Troy Pike tract at
the objections hearing, splitting the 25 acres into four smaller fields,
approximately six acres in size, might make modern farming methods more
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difficult, not unlike the Eris Road situation.
Ohio law, however, favors partition of the subject realty over its sale.
* * * Furthermore, the partition statute allows multiple tracts to be partitioned
in a single action and also allows the commissioner to make a global
division of the property where, as in this case, the interested parties own
the same percentage in each tract subject to partition. * * *
In apparent reliance on this provision, the Underwood brothers have
proposed assigning the 43 acres currently occupied by John Underwood to
him as his portion of the life estate. Jay Underwood would be assigned the
State Route 560 and Old Troy Pike tracts in their entirety, with the sisters
splitting the remaining 72 acres of Eris Road. * * * The brothers further claim
that any inequality resulting from the division can be remedied by an award
of owelty. [Footnote omitted.]
The Underwood sisters characterize their brothers’ proposed division
as an attempt “to trim off the choice parts of the farm for themselves and
dump the carcass on [them].” * * * The sisters also contend that the proposal
is incomplete and made solely [for the purpose] of further delaying these
proceedings. * * *
***
While R.C. 5307.07 allows commissioners to make a global division,
instead of simply assigning to each interested party their respective interest
in each tract, the statute does not mandate consideration of such divisions.
* * * Thus, Commissioner Simpson had the discretion to make a global
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division of the Property but was not required to do so.
Finding that R.C. 5307.07 requires consideration of global divisions
could also have the effect of needlessly delaying resolution of partition
actions. For example, if Commissioner Simpson were to find that the 43-
72 split proposed for Eris Road would cause manifest injury to the value of
the Property, the Underwood brothers could respond with yet another
proposal. As was mentioned at the objections hearing, an infinite number
of partitions are possible when the interested parties own the same
percentage of multiple tracts, as in this case.
There is also significant reason to believe that the Underwood
brothers’ proposed division is not equitable and works to the detriment of
their sisters. For example, the only access to the 72 acres is a lane that
passes over the acreage that would be retained by John Underwood. If
the sisters want to use this lane, they would have to secure an easement
from John Underwood, in order to reach their property and would also have
to contribute to its upkeep. * * * In the alternative, the sisters could construct
a lane across their 72 acres, further reducing the usable acreage awarded
to them. * * *
Other aspects of the proposal call into question whether the
proposed distribution is equitable. As mentioned previously, Jay
Underwood would receive the Old Troy Pike and State Route 560 parcels
under this proposal. Yet the fee value of these parcels, as determined by
Commissioner Simpson, is $246,500.00 ($230,000.00 + $16,500.00),
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slightly more than one-third the value of the Property as a whole.
There is also evidence that supports * * * the Underwood sisters’
characterization of the remaining 72 acres as “the carcass.” John
Underwood testified this acreage would run from the center of the existing
lane to the end of the property to the west. * * * Commissioner Simpson
has incorporated in his report an aerial photograph depicting the likelihood
of soil erosion. This photograph, taken by the Farm Service Agency during
the 2014 crop year, shows that much of the western part of Eris Road – the
portion to be awarded to the sisters – is wooded and less valuable on a per
acre basis than the land retained by John Underwood. [Footnote omitted].
Also, the Old Troy Pike and State Route 560 parcels that would be assigned
to Jay Underwood represent one-third of the Property’s value, further
reason to agree with the sisters’ characterization of the proposed division.
Nor would an award of owelty to the Underwood sisters remedy
these inequities. * * * In this case, the Court cannot characterize the 72
acres set aside for the Underwood sisters as slightly less equal than the
acreage given to their brothers. Instead, the acreage is considerably less
equal than their brothers’ portions.
For these reasons, the Court agrees with Commissioner Simpson
that the Property cannot be equitably divided among the siblings without
causing manifest injury to its value. The Court overrules the Underwood
brothers’ objection that the commissioner failed to set forth a plan for
equitably dividing the Property. The Court also adopts as its own the
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commissioner’s conclusion that the Property cannot be equitably divided
[among] the siblings without causing manifest injury to its value.
{¶ 57} Regarding the valuation of the Property in fee simple, the court concluded
as follows:
***
The Underwood brothers contend that the mobile home located on
Eris Road is the personal property of John Underwood and should not have
been included in the calculation of the Property’s value. As support for this
contention, they presented the certificate of title for the mobile home * * *
and the current manufactured homes tax bill for this home at the objections
hearing.
A manufactured home is generally considered personal property,
unless it is affixed to real property. Once a manufactured home is affixed
to personal property, Ohio law treats it as a fixture that is part of the real
estate. * * * Three elements [must] be shown before a chattel will be
considered a fixture: (1) the chattel must be annexed to the realty to some
extent; (2) the chattel must be appropriate for the purpose of the realty to
which it is attached; and (3) the party making the annexation must intend to
make the chattel a permanent part of the realty. * * *.
The tax classification of a manufactured home does not control
whether it is or is not a fixture. Surrender of the certificate of title is not a
necessary prerequisite to a valid fixture being created in the home. * * *
Ohio law distinguishes between classification for tax purposes and common
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law fixture analysis. * * *
The record contains ample evidence that John Underwood intended
to make * * * the mobile home a permanent part of the Eris Road property.
Commissioner Simpson testified at the objections hearing that the mobile
home sat on a permanent foundation. The commissioner’s report also
mentions that an addition had been made to the home. John Underwood
confirmed that the home is affixed to the foundation with hurricane straps
and that its wheels have been removed. He also testified that he
purchased the mobile home in 1982 and that he has lived in the home for
at least 30 years. * * * He also installed a new septic system in 2011 and a
new well in 2012. * * * These expenditures are further evidence of John
Underwood’s intent to make the mobile home a permanent part of the realty.
The facts of this case are similar to those present in Morris v.
Dickinson County Bank (In re Moore), Bank. D. Kan. 09-11051 (Adversary
No. 09-5157), * * *. In Morris, a mobile home sitting on concrete piers and
securely strapped to the ground was found to be a fixture. The home, like
the one occupied by John Underwood, was permanently attached to
electricity, water, propane, and a septic system. A mud room had been
added to the Kansas structure, not unlike the addition noted by
Commissioner Simpson in his report.
The Court finds that the mobile home should be classified as a
fixture, given John Underwood’s obvious intent to make the structure a
permanent part of the Eris Road property. The well and septic system
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should also be classified as “fixtures” since they allow the mobile home to
function as a permanent residence. Since the mobile home, well, and
septic system are fixtures, Commissioner Simpson properly included them
in the valuation of Eris Road.
A life tenant who makes improvements with knowledge of his title is
presumed to have made those improvements for his benefit. Thus, a life
tenant has no right to recover the cost of an improvement from the
remaindermen, unless ordered by a governmental entity. * * * If a life tenant
has no right to recover the cost of improvements from the remaindermen, it
follows that these costs cannot be deducted from the value of the fee since
the fee is vested in the remaindermen, not the life tenant. * * *.
A trial court, during partition proceedings, may reimburse a cotenant
for improvements even if they were made without the consent of the other
cotenants, in order to avoid unjust enrichment. * * * The right to an
accounting for improvements is secondary to and dependent on the right to
partition. * * *
The Court therefore finds that Commissioner Simpson properly
included the improvements made to Eris Road in his calculation of the
tract’s value, in fee simple. The Court overrules the Underwood brothers’
objection that the commissioner overstated the fee simpl[e] value of the
Property, by including these improvements. The Court defers
consideration of whether John Underwood’s siblings should reimburse him
for these improvements until an election or sale of the Property takes place.
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{¶ 58} Regarding the valuation of the life estates, the court determined as follows:
In situations where the estate cannot be divided without manifest
injury to its value, the commissioner or commissioners shall return that fact
to the court of common pleas with a just valuation of the estate. R.C.
5307.09. The Underwood brothers contend that Commissioner Simpson
should have determined the value of the life estate, in accordance with R.C.
5307.09, instead of determining the value of the fee.
The Fourth District Court of Appeals has discussed at length the
inherent difficulty of valuing life estates [as follows],
It is virtually impossible to precisely value a life interest in real estate.
The most that can be done is to approximate the value by taking into
account all contingencies and surrounding circumstances including similar
or comparable land value and life expectancy. The difficulty in valuing life
estates is readily seen in its historical treatment. One old common law rule
computed the value of a life interest by simply assigning it one-third the
value of the fee. Another rule valued life estates at “seven years’ purchase
of the fee.” The more modern practice is to estimate the value of a life
estate with reference to the life tenant’s life expectancy as shown by
recognized mortality tables. Cook v. Ohio Dep’t of Job & Family Servs.,
4th Dist. Jackson No. 02CA22, 2003-Ohio-3479, ¶ 16 (internal citations
omitted). In this case, there are four life tenants, who range in age from 60
to 64 years, further complicating the valuation process.
For these reasons, the Court directed Commissioner Simpson to
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provide a just valuation of the fee simple interest of the Property, with the
expectation that this figure would be used by the Court and the parties to
determine the value of the co-life tenants’ interests in the Property.
The Underwood sisters have also indicated that they do not object to
the utilization of their brothers’ preferred method of valuing the life estates.
* * *. At the objections hearing, counsel for [the] Underwood brothers
stated that each sibling’s interest in the life estate is worth between
$50,000.00 and $57,000.00, based upon the fee value of $736,500.00.
[footnote omitted.] The sisters’ willingness to use their brothers’
methodology is further reason to overrule any objection that the
commissioner should have reported the value of the life estate, not the value
of the fee.
The Court therefore overrules the Underwood brothers’ objection
that Commissioner Simpson should have determined the value of the life
estate, instead of the value of the fee.
{¶ 59} The court concluded that “Commissioner Simpson’s report and testimony
amply support his conclusion that the Property cannot be equitably divided among the
Underwood siblings. The record also supports the commissioner’s valuation of the
Property, in fee simple, at $736,500.00.” The court adopted the commissioner’s report
and determined that “the siblings’ interest in the Property shall be sold, unless one or
more sibling[s] exercises their right of election.”
{¶ 60} Finally, the court determined as follows:
The court ORDERS the Underwood brothers to file and serve their
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valuation of the life estate, including the calculations used to arrive at those
amounts, by Friday, July 15, 2016. These valuations shall use the
commissioner’s assessment that the Property, in fee simple, is worth
$736,500.00. The sisters will be given until Monday, July 25, 2016 to file
and serve any objections. If the brothers’ valuations are acceptable to all
parties, the Court anticipates using those numbers, for the sale or exercise
of the right of election.
***
Since adoption of the commissioner’s report precludes the
Underwood brothers from having their interest in the Property set aside for
them, this entry shall be designated a final appealable order. Wherefore,
the Court finds that “there is no just reason why the judgment should be
delayed as a final judgment.” Civ.R. 54(B).
{¶ 61} We note that on September 28, 2016, the brothers filed a “Motion for Stay
of Proceedings Pending Appeal without Bond.” The motion indicates that the brothers
were granted a stay by the trial court on the condition that they post a $20,000.00
supersedeas bond, and that they “believe it was error to require a bond.” On October 18,
2016, this Court overruled the motion, noting that “[w]e decline to modify the trial court’s
decision to grant a stay upon the posting of a $20,000.00 bond.”
{¶ 62} The brothers assert three assignments of error herein. Regarding their
first assigned error, in the “Assignments of Error” section of their brief, the brothers assert
the following first assignment of error:
THE TRIAL COURT ERRED BY ADOPTING THE
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COMMISSIONER’S REPORT DATED APRIL 7, 2016. THE
COMMISSIONER’S REPORT FAILED TO CONSIDER ALL POSSIBLE
ALTERNATIVES TO SALE OF THE FAMILY FARM, AND FAILED TO
PROVIDE A FACTUAL ANALYSIS AS TO WHY PHYSICAL PARTITION
WAS IMPOSSIBLE WITHOUT CAUSING MANIFEST INJURY TO THE
FAMILY FARM AS REQUIRED BY R.C. § 5307.09.
{¶ 63} In the “Argument” section of their brief, the brothers assert the following first
assignment of error:
THE TRIAL COURT ERRED BY ACCEPTING THE
COMMISSIONER’S REPORT DATED APRIL 7, 2016. THE
COMMISSIONER’S REPORT WAS DEFICIENT IN THAT IT DID NOT
MEET THE STANDARDS SET FORTH IN R.C. § 5307.09.
{¶ 64} In the body of their brief, the brothers argue as follows:
***
In the case at bar, the trial court should not have accepted the
Commissioner’s Report, as no factual analysis or basis upon which the
Commissioner based his determination was included. The Commissioner
failed to consider “all possible alternatives” and simply jumped to the
conclusion that the Family Farm could not be partitioned. Given the
serious deficiencies in the Commissioner’s Report, the trial court had no
way of determining whether the requirements of R.C. § 5307 et seq. had
been satisfied by the Commissioner.
When the Commissioner was asked about the process and
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methodology he used in coming to his recommendation, the Commissioner
testified that he did not consider splitting off parcels to partition the property,
did not consider local zoning requirements, did not consider the value of the
life estates and did not do any calculations regarding how the value of the
property might be diminished if it was partitioned.
The Commissioner’s only statement in the Report regarding partition
of the property was that he “cannot divide the subject land into four equal
parts”. * * * The Commissioner did not provide any factual analysis as to
why he came to that conclusion as required by Ohio law. * * * Ohio law does
not require that the partition recommended by the commissioner be
perfectly equitable. Rather, “it is up to the trial court, not the
commissioners, to produce true equity in partition, since the commissioners’
report is advisory and subject to court approval.” * * *
{¶ 65} The Appellees assert that the “Commissioner made a good faith effort to
partition the Property, but there is no way to physically divide this family farm into four
sections based on the lack of frontage, the inconsistent and varying nature and uses of
the land, and the physical location of the parcels.” Regarding the proposed partition by
the brothers, Appellees assert that under “this proposal the Appellees would take for their
share the scraps of land remaining after most of the tillable fields had been taken. Not
only would such land be landlocked, not surprisingly, these are the same acres that have
not been maintained or improved over time.” Appellees note the trial court’s
determination that “Appellant’s proposal would provide to Appellant Jay Underwood over
one-third of the appraised value of the entire Property for his single life estate interest.”
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Appellees argue that if all they “were to receive was this landlocked 72 acre tract and
owelty, the amount of owelty would be almost equal to the value of an entire life estate
interest.” Appellees assert that “Appellants’ ‘plan’ for physical partition fails to resolve
issues relating to access, the expense of the physical division, or what would happen
upon the passing of the first life tenant.”
{¶ 66} As this Court has previously noted, an “action for partition is equitable in
nature, but it is controlled by statute.” Thrasher v. Watts, 193 Ohio App.3d 569, 2011-
Ohio-2844, 952 N.E.2d 1207, ¶ 24 (2d Dist.), citing McGill v. Roush, 87 Ohio App.3d 66,
79, 621 N.E.2d 865 (2d Dist. 1993). As this Court further noted in McGill, at pgs. *80-81:
The right of partition, whether under statute or in equity, is remedial
and should be liberally construed. Black v. Sylvania Producing Co. (1922),
105 Ohio St.346, 137 N.E. 904. “Since the partition of property is to be
favored over the sale of property, when a party objects to a commissioner’s
report, that party should have a right to a hearing to contest the
commissioner’s findings before the property is appraised and subsequently
sold.” [Stiles v. Stiles, 3d Dist. Auglaize No. 2-89-3, 1991 WL 82894, *3
(May 10, 1991)].
{¶ 67} R.C. 5307.6 governs the duty of commissioners in making partition. It
provides: “In making a partition, the commissioner * * * shall view and examine the estate
and, on their oaths and having due regard to the improvements, situation, and quality of
the different parts, set it apart in lots that will be most advantageous and equitable.” R.C.
5307.07 governs the partition of more than one tract of land and provides: “When partition
of more than one tract is demanded, the commissioner * * * shall set off to each plaintiff
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or interested party the plaintiff’s or interested party’s proper proportion in each of the
several tracts unless the tracts are owned by the same proprietors in like proportion in
each tract, in which case the share of any proprietor, in all the tracts, may be set off to the
proprietor according to the best discretion of the commissioner * * *.” R.C. 5307.09
governs the commissioner’s duty to appraise land when the commissioner cannot divide
it and provides: “When the commissioner * * * is of the opinion that the estate cannot be
divided according to the demand of the writ of partition without manifest injury to its value,
the commissioner * * * shall return that fact to the court of common pleas with a just
valuation of the estate.” R.C. 5307.09 further provides that if “the court approves the
return and if one or more of the parties elects to take the estate at its appraised value, it
shall be adjudged to them, upon their paying to other parties their proportion of its
appraised value, according to their respective rights * * *.”
{¶ 68} As this Court noted in McGill (footnotes omitted):
R.C. 5307.06 has been construed as creating “a mandatory duty” on
commissioners to “come forward with a plan for the division of the property,”
and if the commissioners “remain of the opinion that the division will damage
the value,” they must “be prepared to state the facts upon which their
opinions are based.” Hendrix v. Hendrix (Aug. 26, 1981), Warren App. No.
422, unreported, 1981 WL 5176.
We agree with the reasoning of the Hendrix court. However, we
note that it is doubtful that there is a “mandatory” duty for commissioners to
provide a plan of partition after the commissioners have made a good faith
effort to make a most equitable partition but find that, ultimately, they
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cannot. Then, a failure to provide a plan of partition to the trial court would
not violate R.C. 5307.04 et seq., provided that the commissioners’ report
contained a sufficient factual basis to allow the trial court to review the
commissioners’ efforts. We agree with the Hendrix court’s holding that the
commissioners must provide a factual basis for their conclusions.
It is also reasonable to consider commissioners as having
responsibilities analogous to those of referees. As contemplated by Civ.R.
53(E), referee reports must contain sufficient information to enable a trial
judge to render his own decision. Loque v. Wilson (1975), 45 Ohio App.2d
132, 74 O.O.2d 140, 341 N.E.2d 641. Because insufficient information
impedes appellate analysis, the trial court cannot adopt a referee’s report
unless a statement showing the basis for the referee’s decision is included.
Zacek v. Zacek (1983), 11 Ohio App.3d 91, 93-94, 11 OBR 143, 145-146,
463 N.E.2d 391, 395-396. The partition power of commissioners has been
characterized as “quasi-judicial.” Forest Park Properties, Inc. v. Pine
(1966), 9 Ohio App.2d 348, 355, 38 O.O.2d 427, 431, 224 N.E.2d 763, 768.
Commissioners have “very large powers” in making partition. Terrell v.
Leonard (1910), 17 C.C.(N.S.) 89, 92. However, as with referees,
commissioners’ powers are ultimately subject to court authority;
commissioner partition reports may be rejected, modified, or approved by
the trial court. An order partitioning property extinguishes a tenant’s rights
in the whole property, and establishes the tenant’s exclusive right of
ownership in the part of the property set off to him. Since it is an order
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creating and extinguishing rights in specific property, it is an exercise of the
judicial power, and cannot be entirely delegated to a nonjudicial officer. A
judge must remain ultimately responsible for the exercise of the power of
partition.
We find that in partition proceedings, commissioners must provide a
sufficient factual analysis, similar to the report and recommendation
provided for in Civ.R. 53(E), in order to allow the trial court to make an
independent determination of the basis for the partition. Otherwise, it
would be impossible for any court to discover whether R.C. 5307.06 has
been complied with.
It would be sufficient for the commissioners to answer the question:
why is it impossible to divide the land? They may successfully answer that
question by testifying or reporting that the “assembly valuation” is “greater
than the total value” of the land if divided. See Forest Park, supra, 9 Ohio
App.2d at 354, 38 O.O.2d at 431, 224 N.E.2d at 768.
We observe that the commissioners cannot comply with R.C.
5307.04 et seq. without making some factual findings supported by
calculations or the facts themselves, regarding the manifest injury resulting
from a partition. The injury must be shown, not merely stated as a
conclusion.
Cases of inequitable partition generally feature one of two types of
injury to the land value. For example, the sum of the divided property may
be less than the value of the whole. See Forest Park, supra. Or, the
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commercial use of a property may be prevented upon any partition. See
Miller v. Rouse (1900), 7 Ohio N.P. 300, 2 Ohio Dec. 358. In either case,
it would be improper for commissioners merely to state their conclusion
without showing their calculations or concrete reasons for deciding that
partition is impossible.
Finding partition impossible cannot be accomplished without (1)
calculating the amounts demonstrating that the land cannot be divided
without the sum of its parts remaining less than the value of the whole, or
(2) determining the particular reasons why a commercial operation on the
land would be prevented from continuing if the land were partitioned.
***
R.C. 5307.06 does not require the commissioners to achieve perfect
equity. It is up to the trial court, not the commissioners, to produce true
equity in partition, since the commissioners’ report is advisory and subject
to court approval. Nor does R.C. 5307.04 et seq. allow commissioners to
choose not to make partition if the land is very difficult to divide. Instead,
the commissioners are required to make partition unless there is no way to
avoid manifest injury to the value of the property. R.C. 5307.09.
Ohio law favors the partition of the property over the sale of the
property. Stiles v. Stiles (May 10, 1991), Auglaize App. No. 2893, 1991
WL 82894. The “primary object of the statute is to effect an actual division
of the property amongst the owners.” Tabler v. Wiseman (1853), 2 Ohio
St. 207, 213. Because Ohio law favors partitions and because partitions
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must ultimately be equitable, owelty is an important tool for a trial court to
produce “perfect” equity from a “most” equitable partition by
commissioners.1
Where commissioners make a partition which is not perfectly
equitable, but the trial court finds that the partition is most equitable, under
R.C. 5307.06, and adopts the commissioner’s report, the trial court, acting
in equity, may award an owelty to a coparcener who, in the trial court’s
estimate, is receiving the slightly less equal parcel of land. According to
R.C. 5307.04 et seq., the trial court may approve a partition which is “most”
equitable, as provided by the commissioners, or, instead the court may use
its inherent power in equity.
Equitable partition proceedings originated in the English High Court
of Chancery and are, unlike partitions dealing with controverted titles, within
the equitable jurisdiction of courts. See Gay v. Parpart (1883), 106 U.S. 679,
688-693, 1 S.Ct. 456, 463-468, 27 L.Ed. 256, 260-261. The remedy of
partition, throughout the United States, is statutory, and partition is generally
held to be one of the subjects of settled equitable jurisdiction. Partition,
American Jurisprudence 2d (1987) 66, Partition, Section 97. At least one
other jurisdiction has allowed a court sitting in equity to award owelty where
the partition statute did not expressly provide for a payment of owelty. See
1
“Where the common property of coparceners was not susceptible of equal partition of
their several moieties, and a larger portion to one or more coparceners was agreed upon
by the parties, or authorized by the court, the other coparceners to be paid therefor, such
excess was known to the common law as owelty of partition.” Huseman v. Fingermeyer,
106 Ohio St. 113, 117, 139 N.E. 862 (1922).
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Rothert v. Rothert (1982), 109 Ill.App.3d 911, 65 Ill.Dec. 387, 441 N.E.2d
179. In Rothert, the Fourth District Court of Appeals in Illinois held that “the
inherent power of the court sitting in equity to make such a division has long
been recognized.” Rothert, Id., 109 Ill.App.3d at 916, 65 Ill.Dec. at 390,
441 N.E.2d at 182.
Although owelty may improve the equality of a partition, it is not
applicable where commissioners provide the court with facts supporting the
commissioners’ conclusion that there is no way to produce even a “most”
equitable partition. In that instance, or when the commissioners provide a
factually based partition plan, the trial court’s adoption of the
commissioner’s report should not be disturbed unless there is an error
“apparent upon the face of the record.” See Smith v. Barber (1836), 7
Ohio, Pt. II, 118, 122.
The general rule is that the trial court will seldom fail to approve the
action of the commissioners except in the case of intentional misconduct,
corruption, partiality, an exceeding of their authority, gross inequality, or the
like. Forest Park Properties, supra, 9 Ohio App.2d at 353-354, 38 O.O.2d
at 430-431, 224 N.E.2d at 767-768. And where commissioners
recommend partition and the trial court so orders, the trial court’s order will
be affirmed unless the record shows that the partition is defective. Kirby v.
Kirby (1895), 12 Ohio C.D. 736.
McGill, pgs. 75-79.
{¶ 69} We will first address the brothers’ assertion that the trial court erred in
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adopting the commissioner’s report based upon the commissioner’s alleged failure to
provide a factual analysis as to why partition is impossible without causing manifest injury
to the value of the Property. We disagree with the brothers. The court ordered partition
“[i]f the co-life tenants’ interest in the Property can be equitably divided.” The
commissioner indicated in his report that the “purpose” of his viewing the Property was
“to determine if it is possible to equally divide the five parcels into four equal parts.”
{¶ 70} The Commissioner’s report provides that the parcels are not contiguous
and “are approximately 2 to 4 miles apart.” He testified that each parcel has “different
characteristics.” Specifically, the commissioner noted that the 25.05 acre parcel on Old
Troy Pike is mostly tillable, highly productive farm land “with a good natural drainage.” In
contrast, the two smaller parcels on State Route 560, of 1.362 acres and 5.352 acres, are
tree covered and in a flood zone, according to the Commissioner, and the 1.362 acre
parcel has no road frontage. He testified that the State Route 560 parcel is not suited for
agricultural use based upon its size. His report provides that as to residential usage, the
trees and brush there would have to be removed, and “a potential home builder would
have the expense of flood insurance.”
{¶ 71} Regarding the L-shaped Eris Road property, the commissioner reported
that 55 acres of the 115.22 are tillable, much of the property is wooded, and that “the
subject land is very rolling and classified as Highly Erosive,” with visible erosion in the
tillable portion. He noted that “there is not very much road frontage,” that the small size
of the fields makes “it difficult to operate modern farm machinery in the acreage,” and that
the “subject land shows much deferred maintenance.” The commissioner concluded that
due “to the distance between the five parcels and the difference in production potential
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and the small amount of road frontage of the [Eris] Road parcels, it is my opinion that I
cannot divide the subject land into four equal parts.” The commissioner testified that he
concluded that the property could not be divided without manifest injury to its value. He
testified that division could damage the value, especially on the Eris Road property, since
“you would have to chop it up. So that would make it very difficult to farm. * * * It would
just be a chopped up mess if you tried to divide it. It would be something that would be
harder to sell.”
{¶ 72} Having reviewed the record before us, we conclude that the commissioner
provided a sufficient factual analysis to allow the trial court to make an independent
determination regarding equitable partition. While there was no testimony regarding the
parcel on Old Troy Pike, we note that although the property is a “highly productive parcel
of farmland,” partitioning it into four distinct portions could make modern farming methods
more difficult, as the trial court noted. Additionally, we agree that the State Route 560
parcel cannot be partitioned due to its small size and limited utility for both agricultural
and residential purposes, due to its location in a flood zone.
{¶ 73} Regarding the Eris Road parcel, we agree with the trial court’s observation
that the brothers did not dispute the Commissioner’s characterization thereof, namely that
only 55 of the 115 acres on Eris Road are tillable, that the fields are small and subject to
erosion, and that the land exhibits deferred maintenance. We further agree with the trial
court’s conclusion that partitioning the tract four ways would result in fields too small for
modern farming practices. In other words, the value of the “chopped up” parcel would
be less than the whole, and division would prevent the commercial use of any individual
parcels due to their small size.
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{¶ 74} Regarding the brothers’ assertion that the commissioner failed to consider
all possible alternatives to the sale of the property, we note that in their objections, the
brothers asserted that they “have previously put forth * * * a plan for dividing approximately
43 acres of property occupied by Defendant John J. Underwood from the balance of the
farm and believe that such division can be made without causing ‘manifest injury.’ ” The
brothers further argued that such a division “will simplify these proceedings and obviate
the need for the Court to determine the ownership and value of improvements constructed
on the premises” by John.
{¶ 75} R.C. 5307.07, by its plain language, gave the commissioner the discretion,
based upon the fact that the parties each have an equal life estate in each parcel herein,
to consider the whole of the properties when considering partition, as opposed to setting
off to each sibling a separate interest in each tract. As the trial court noted, “the statute
does not mandate consideration of such divisions.” The Commissioner testified that he
did not consider dividing the 115 acre parcel on Eris Road into two pieces, as John
proposed, and we agree with the trial court that such a division would have been
inequitable to the sisters for the reasons set forth in the trial court’s decision, namely that,
by John’s own admission, the center of the lane is the only access point to the 72 acres,
and the sisters would be required to obtain an easement from him to access their portion
of the land or construct a driveway thereon. Further, the wooded portion of the acreage
is less valuable per acre, as reflected in the commissioner’s report. As the trial court
noted, under John’s proposal, if Jay received the Old Troy Pike and State Route 560
parcels, Jay would receive more than one-third of the fee simple value of the entire
Property. Finally, given the disparity in utility between the 43 acres John sought and the
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remaining acreage on the Eris Road parcel, we cannot agree that owelty is applicable.
{¶ 76} Since intentional misconduct, corruption, partiality, an exceeding of the
commissioner’s authority, or gross inequality are not demonstrated, and in the absence
of an error apparent on the face of the record, we will not disturb the trial court’s adoption
of the commissioner’s conclusion that the Property cannot be equitably partitioned without
manifest injury to its value. The brothers’ first assigned error is overruled.
{¶ 77} The brothers’ second assignment of error is as follows:
THE TRIAL COURT ERRED BY ACCEPTING THE
COMMISSIONER’S REPORT WHERE THE REPORT CONTAINED AN
APPRAISED VALUE FOR THE PROPERTY IN FEE SIMPLE, BUT FAILED
TO PROVIDE AN APPRAISED VALUE FOR THE LIFE ESTATE.
{¶ 78} The brothers assert as follows:
The trial court, in its Order adopting the Commissioner’s report, notes
that the value ascribed to the life estates by counsel for Appellants
appeared to be an appropriate value for said interest. * * * Counsel for
Appellants is not a certified appraiser, and he was merely discussing one
possible methodology for determining the life estate. That job is * * *
tasked to the commissioner to present a valuation of the estate for the
court’s consideration pursuant to R.C. § 5307.09. In his case, the
Commissioner failed to do so, returning to the court instead a value in fee
simple which is grossly different than the value of the relevant life estates.
Accordingly, the decision of the trial court should be reversed and remanded
for further proceedings.
-57-
{¶ 79} The sisters respond that the brothers’ argument “ignores the Trial Court’s
Journal Entry which specifically stated the Commissioner was instructed to determine the
value of the fee only.” The sisters further note that the trial court “then ordered the parties
to submit briefing on their preferred methodology to calculate the value of the life estate
interests. Once the methodology was determined, the Trial Court could either direct the
Commissioner to consult with an expert or appoint a second Commissioner.” The sisters
assert that the next step is determined by “Appellants’ disclosure of their preferred
methodology to calculate the value of the life estates. Depending on the preferred
method, the Trial Court or Commissioner may require the assistance of an accountant,
economist, or some other type of expert.”
{¶ 80} In a footnote, the sisters assert as follows:
As long as the values are applied equally, Appellees have deferred
to Appellants on this issue as they feel the appraised value does not need
to be absolutely accurate. Unlike other partition cases where one party is
only looking to sell, Appellees have offered to sell their life estate interests
or purchase Appellants’ interests. Appellants have stated they wish to
keep the Property. If the appraisal comes in high or low, the Property will
proceed to public sale wherein the parties can bid what they feel is the true
value of the life estates.
{¶ 81} We agree with the sisters that the brothers’ argument lacks merit. As noted
above, R.C. 5307.09 requires that a commissioner of the opinion that an estate cannot
be divided without manifest injury to its value “return that fact to the court of common
pleas with a just valuation of the estate,” and the trial court so ordered. The court further
-58-
ordered the brothers to file and serve their valuation of the life estates as well as their
calculations thereof, based upon the Commissioner’s determination, pursuant to R.C.
5307.09, of the fee simple value of the entire estate ($736,500.00.) The sisters indicate
that they defer to the brothers’ methodology for calculating the value of the life estates,
and the trial court granted them an opportunity to object thereto. Any argument that the
trial court erred in adopting the Commissioner’s valuation of the fee simple value of the
Property ignores the requirements of R.C. 5307.09, and any argument that the matter be
reversed for further proceedings for the Commissioner to determine the value of the life
estates not only ignores R.C. 5307.09, but is also premature, based upon the trial court’s
order. The brothers’ second assignment of error is accordingly overruled.
{¶ 82} The brothers’ third assignment of error is as follows:
THE TRIAL COURT ERRED BY ACCEPTING THE
COMMISSIONER’S REPORT WHERE THE REPORT OVERSTATED THE
VALUE OF THE SUBJECT REAL ESTATE BY FAILING TO DEDUCT THE
VALUE OF IMPROVEMENTS MADE BY APPELLANTS.
{¶ 83} The brothers assert that the Commissioner’s report “over-states the value
of the subject real estate by failing to deduct, therefrom, the value of Defendant John J.
Underwood’s personal property and improvements, including a mobile home, water well,
and septic system.” According to the brothers, “the testimony at the hearing revealed that
the mobile home is taxed separately from the real property on which it sits.”
{¶ 84} The sisters respond that the trial court “clearly considered whether the
mobile home had become a fixture and whether Appellants were entitled to
reimbursement.” The sisters further assert that “Appellants’ only argument appears to
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be the mobile home is taxed separately from the Property, a fact the Trial Court
considered.”
{¶ 85} In Holland Furnace Co. v. Trumbull Savings & Loan Co., 135 Ohio St. 48,
19 N.E.2d 273 (1939), at syllabus, the Supreme Court of Ohio noted as follows:
1. A fixture is an item of property which was a chattel but which has
been so affixed to realty for a combined functional use that it has become a
part and parcel of it.
2. A fixture is to be determined by the consideration of a
combination of the following tests: (1) To become a fixture it is essential that
the chattel in question be annexed to some extent to realty. (2) The chattel
must have an appropriate application to the use or purpose to which the
realty to which it is attached is devoted. (3) There must be an actual or
apparent intention upon the part of the owner of the chattel in affixing it to
realty to make such chattel a permanent part of such realty. * * *
{¶ 86} As the trial court noted, the record supports a conclusion that John intended
to make the mobile home a permanent part of the Eris Road property. He testified that
he resided in the home “someplace around 30 some years,” having purchased it in 1982,
and the Commissioner testified that the mobile home “appeared to be sitting on a
permanent foundation,” and that it includes an addition. In response to questions by the
court, counsel for the brothers, after conferring with John, advised the court that the
mobile home is affixed to the foundation with hurricane straps and that it is without wheels.
We further agree with the trial court that the installation of the septic system and the well,
which allowed the mobile home to function as a permanent residence on the farm, further
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supports our conclusion that John intended to make the mobile home a permanent part
of the Eris Road property, and that the septic system and well are also fixtures.
{¶ 87} For the foregoing reasons, we conclude that the brothers’ third assignment
of error lacks merit, and it is overruled. The judgment of the trial court is affirmed.
.............
FROELICH, J. and WELBAUM, J., concur.
Copies mailed to:
David A. Skrobot
Robert J. Simon
Wayne E. Southward
Gregory R. Flax
Donald Mayer
Hon. Nick A. Selvaggio