Erter v. Erter ( 2014 )

[Cite as Erter v. Erter, 2014-Ohio-1882.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
LOGAN COUNTY
LISA MARIE MADRID ERTER,
PLAINTIFF-APPELLANT, CASE NO. 8-13-16
v.
GREGORY SCOTT ERTER, OPINION
DEFENDANT-APPELLEE.
Appeal from Logan County Family Court
Domestic Relations
Trial Court No. DR07-06-140
Judgment Affirmed
Date of Decision: May 5, 2014
APPEARANCES:
Jay M. Lopez for Appellant
Kirk D. Ellis for Appellee
Case No. 8-13-16
SHAW, J.
{¶1} Plaintiff-appellant Lisa Marie Madrid f.k.a. Erter (“Lisa”) appeals
the August 12, 2013 judgment of the Logan County Common Pleas Court, Family
Court-Domestic Relations Division, denying her motion for citation in contempt
against her former husband, defendant-appellee Gregory Scott Erter (“Greg”).
Lisa specifically argues that pursuant to the separation agreement incorporated in
the parties’ final divorce decree she was entitled to receive $51,000.00 plus
interest from Greg’s 401(K) plan, and that while Greg’s 401(K) account was split
and she was allocated $51,000.00 on April 28, 2008, by the time she received the
money on December 1, 2008, she only received $29,639.02 due to market losses.
{¶2} The facts relevant to this appeal are as follows. Lisa and Greg were
married June 28, 2003. On June 29, 2007, Lisa filed for divorce, alleging, inter
alia, that the parties were incompatible.
{¶3} On July 2, 2008, a judgment entry was filed wherein the court found
that the parties were incompatible, entitling Lisa to a divorce. Incorporated into
the judgment entry was a separation agreement, which stated, in pertinent part,
EMPLOYMENT BENEFITS: Each party shall retain exclusive
ownership, free and clear of any claims of the other, of any
interest either party may have in * * * 401-K plans * * * except
Wife shall also receive as marital property rights, pursuant to
Qualified Domestic Relations Orders, the sum of $51,000.00
together with interest thereon from 04/28/08 of Husband’s
interest/assets/benefits in the 401-K Plan sponsored by his
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employer, EMI Corp. * * * Wife shall be responsible for all tax
liabilities incurred as a result of cashing in her portion of
Husband’s 401-K.
(Doc. 61).
{¶4} On July 3, 2008, a Qualified Domestic Relations Order (“QDRO”)
was filed. (Doc. 62). The QDRO was amended twice, once on October 27, 2008,
and the second and final time on November 14, 2008. (Docs. 73, 78). The final
amended QDRO read, in pertinent part,
2. The amount to be paid to the Alternate Payee [Lisa] from the
accounts of the Participant [Greg] in the Plan shall be
$51,000.00, plus interest from 04/28/08, such amount hereinafter
referred to as the “Transferred Amount.”
***
4. * * * If the Transferred Amount is in excess of $3,500.00, the
Transferred Amount shall be credited to an account in the name
of Alternate Payee in which she shall be immediately 100%
vested and invested under the terms of the plan.
(Doc. 78).
{¶5} Before the final judgment entry had been filed, and before the final
amended QDRO had been filed, on April 28, 2008, $51,000 was taken out of
Greg’s 401(K) account and put into an account set up for Lisa. Due to the
amendments to the QDRO, Lisa was not able to access the money that was in the
account set up for her until December 1, 2008. When Lisa received the money,
the account had dropped significantly to $29,639.02.
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{¶6} On December 31, 2008, Lisa filed a motion for citation in contempt
and lump sum judgment, contending, inter alia, that Greg “fail[ed] to properly
invest the funds in his 401(K) account which resulted in a substantial decrease in
said account and ultimately insufficient funds * * *.”1 (Doc. 87). As support, Lisa
argued that “[t]he substantial loss in the account could have been avoided had the
Defendant moved and/or transferred the funds to more secure and lower risk
investments within the 401(K).” (Id.) On February 17, 2009, Greg filed a
response opposing Lisa’s contempt motion.
{¶7} On February 17, 2009, Greg filed a “Motion for Finding in
Contempt” alleging that Lisa “wrongfully damaged, destroyed, or converted to her
own personal use several items of real and personal property belonging to [Greg].”
(Doc. 97).
{¶8} On October 26, 2009, a hearing was held on the pending contempt
motions, dealing primarily with issues that are not the subject of this appeal. A
second hearing was held on March 12, 2010, which dealt primarily with the issue
that is subject to this appeal.
{¶9} At that March 12, 2010, hearing, Greg testified that it was his
understanding that from the divorce decree he was supposed to give Lisa the sum
of $51,000.00 plus interest from his 401(K). (Tr. at 15). Greg testified that his
1
There were also multiple other issues in the motion for citation in contempt but none of those are the
subject of this appeal, therefore we decline to address them.
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Case No. 8-13-16
company did, in fact, transfer $51,000.00 plus interest to Lisa according to the
order. (Tr. at 15). In addition, Greg testified that since his 401(K) plan’s
inception, roughly twenty-five years prior, he had not changed how the funds were
allocated as far as investments, and he did not change those investments prior to
the money being transferred to an account set up for Lisa. (Tr. at 14).
{¶10} Gerald Burkhart, who was the Supervisor of Planned Document and
Special Services for the company that dealt with Greg’s 401(K), testified via
telephone at the hearing. Burkhart testified that his company “interpreted [the
court’s order] to be 51 thousand dollars, amount to be allocated into an account for
the alternate payee. And then interest earned on that amount from April 28 until
the date was segregated into the account for the alternate payee.” (Tr. at 33).
Burkhart also testified that the account for Lisa was set up “based on the initial
dollars instructed from the orders.” (Id.)
{¶11} In order to get further clarification, Cheryl Stienhard, who was also
involved in the administration of Greg’s 401(K) plan, also testified. Stienhard
testified that she was the “manager over the plan administration side of the
business” and that she was “also the manager over the trading side of the
business.” (Tr. at 53). Stienhard testified that the amount put into an account for
Lisa was originally $51,115.41. (Tr. at 54). Stienhard further testified that while
the QDRO indicated that Lisa was to receive $51,000.00 plus interest, interest
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could be negative, as interest is lumped together with earnings. (Tr. at 54).
Stienhard testified that whether there were gains or losses in the account, they
were classified as “earnings” on the money and Lisa was entitled to either. (Tr. at
55).
{¶12} At the conclusion of the hearing, the parties elected to submit written
closing arguments. Both Greg and Lisa filed their written closing arguments on
July 6, 2010.
{¶13} After the closing arguments were filed, no action was taken in this
case until April 3, 2013, at which time Lisa filed a request for a hearing to address
a proposed judgment entry Greg’s attorney had submitted. (Doc. 155). A hearing
was then held May 31, 2013. (Doc. 157).
{¶14} On August 12, 2013, a journal entry was filed addressing the issues
of the parties that were pending.2 The trial court held the following regarding the
401(K) issue.
With regards to the 401(K) distribution issue, the Court finds
Defendant’s argument to be persuasive and therefore denies
Plaintiff’s requests for additional funds. Specifically the Court
finds that the final divorce decree states that Plaintiff was to
receive “… the sum [of] $51,000.00 together with interest
thereon from 4/28/08 …” * * * The parties submitted a joint
exhibit (#1) clearly showing that Plaintiff was allocated
$51,000.00 as of 04/28/08. Her own separate account was set up
as of that date and brought forward to the actual distribution
2
The only indication of the reason for delay between the submission of closing arguments in July of 2010
to the final entry in August of 2013 was the trial court’s statement that “[a]dditional conferences were held
between the Court and counsel in an effort to finalize this case.
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date in December of 2008. Plaintiff argues she should have been
insulated from any losses in the market because of the following
language from the final decree: “…Together with interest
thereon.” However, witnesses from the company managing the
401K account clearly explained during their telephonic
testimony that “interest can be negative” and that Plaintiff was
subject to gains and losses on the account (just as Defendant
was). Unfortunately, there were many substantial losses in the
market over that period of time. * * *
(Doc. 159). The court thus denied Lisa’s motion requesting that Greg be found in
contempt. (Id.)
{¶15} It is from this judgment that Lisa appeals, asserting the following
assignment of error for our review
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED IN FAILING TO AWARD
APPELLANT $51,000.00 PLUS INTEREST FROM
DEFENDANT’S 401(K).
{¶16} In her assignment of error, Lisa contends that the trial court erred in
in failing to award her $51,000 plus interest from Greg’s 401(K). Specifically,
Lisa argues that the trial court erred in relying on testimony of Greg’s 401(K) plan
administrators Gerald Burkhart and Cheryl Stienhard.
{¶17} At the outset, we would note that while Lisa argues that the trial
court erred in failing to award her more money, she is appealing from a judgment
denying her motion for a citation of contempt of Greg wherein she claimed, inter
alia, that Greg improperly invested the money in his 401(K) resulting in
substantial losses. An appellate court's standard of review of a trial court’s
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contempt finding is whether the trial court abused its discretion. State ex rel.
Celebrezze v. Gibbs, 60 Ohio St.3d 69, 75 (1991); Kachmar v. Kachmar, 7th Dist.
Mahoning No. 12 MA 179, 2014-Ohio-652, ¶ 10. An abuse of discretion exists if
the trial court’s decision was unreasonable, arbitrary or unconscionable.
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶18} In this case, testimony revealed that Greg’s 401(K) account was split
on April 28, 2008 as was required by the separation agreement incorporated in the
final divorce decree. However, it is undisputed that Lisa was unable to access
those funds that were split from Greg’s account until December 1, 2008, as the
QDRO had to be processed and approved by the company administering the
401(K). Testimony revealed that Greg did not at any time prior to the split of the
funds in his 401(K) attempt to change how the money was invested.
Unfortunately, the account set up for Lisa lost a substantial amount of money.
{¶19} Lisa contends on appeal that a more literal interpretation of the
separation agreement incorporated into the final divorce decree should be taken,
requiring her to specifically receive $51,000 in funds at whatever time she was
able to withdraw funds from the account rather than merely Greg to have
transferred at least $51,000 into the account at the inception of its creation.
However, testimony from Cheryl Stienhard specifically revealed that the company
administering the 401(K) considered all earnings in the account to be lumped in
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with interest, so that any gains or losses on the account set up for Lisa would have
been Lisa’s. Where the only testimony revealed that gains and losses were treated
as interest by the company and the interest could therefore be negative, we cannot
find that the trial court abused its discretion in denying Lisa’s motion for
contempt. Furthermore, we would note that the QDRO also contained language
that if the transferred amount was in excess of $3,500.00, the amount was to be
credited to an account in Lisa’s name, invested under the terms of the plan, which
is exactly what happened. Thus we fail to see how Greg could be found in
contempt of the court’s order. Accordingly, Lisa’s assignment of error is
overruled.
{¶20} For the foregoing reasons the judgment of the Logan County
Common Pleas Court, Family Court-Domestic Relations Division, is affirmed.
Judgment Affirmed
WILLAMOWSKI, P.J. and PRESTON, J., concur.
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