Miller v. Miller , 2017 Ohio 7646 ( 2017 )

[Cite as Miller v. Miller, 2017-Ohio-7646.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
SANDUSKY COUNTY
DANIEL A. MILLER, CASE NO. S-16-27
PLAINTIFF-APPELLANT,
v.
AMY M. MILLER, OPINION
DEFENDANT-APPELLEE.
Appeal from Sandusky County Common Pleas Court
Domestic Relations Division
Trial Court No. 14DR1122
Judgment Affirmed in Part, Reversed in Part,
Cause Remanded
Date of Decision: September 15, 2017
APPEARANCES:
Andrew R. Mayle for Appellant
Lisa M. Snyder for Appellee
Case No. S-16-027
WILLAMOWSKI, J.
{¶1} In this case, Plaintiff-appellant Daniel A. Miller (“Daniel”) appeals the
judgment of the Court of Common Pleas of Sandusky County, challenging (1)
several aspects of the trial court’s distribution of property, (2) the award of
attorney’s fees to the defendant-appellee, Amy M. Miller (“Amy”), and (3) the
award of spousal support. For the reasons set forth below, the judgment of the lower
court is affirmed in part and reversed in part.
Facts and Procedural History
{¶2} Daniel and Amy were married on May 10, 1986. Doc. 1. Three
children were born as issue of this marriage. Tr. 72. All three of these children are
now emancipated. Tr. 72. Shortly after their marriage, Daniel began working at the
concrete company owned by his father. Tr. 12. In 1990, Daniel’s father transferred
ownership of this concrete company to Daniel, who continued to own and operate
the company for the duration of this marriage. Tr. 12. The concrete business
provided the primary source of income for the family, though Daniel, in 2000, began
a second business that provided plowing and salting services. For periods of time
during the course of their marriage, Amy held various part-time jobs while also
serving as the primary caregiver for their children. Tr. 85-86. She also participated
in the operation of the concrete business, performing various administrative tasks.
Tr. 21, 86.
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{¶3} In 1998, the Millers began to build a house in Sandusky County that
was to become the marital residence. Tr. 15. The Millers began living in this home
in 1999. Tr. 19. The concrete business was operated out of another building on this
property. In 2012, upon the passing of her father, Amy inherited property worth
approximately $276,585.00. Doc. 31. Of this total, Amy put $71,175.80 toward
paying off the remaining balance on the mortgage on the marital residence. Id. Amy
also used portions of her inheritance to pay off a vehicle, buy some equipment for
the concrete business, and fund several investment accounts. Tr. 35-36, 87, 98-101.
Doc. 31.
{¶4} In February 2014, Daniel changed the P.O. box to which checks for the
concrete business were sent, cutting Amy off from the family’s primary source of
income. Tr. 96. In March 2014, Daniel started operating the business without Amy,
which left her without a job. Tr. 106. By this point, he realized that his marriage
was not going to survive. Tr. 29. Consequently, he went to the bank where Daniel
and Amy had a joint bank account to withdraw funds for his independent support.
Tr. 28. Thinking this bank account had roughly $50,000 in it, he requested a
cashier’s check for $25,000. Tr. 29. By the time he attempted to cash this check,
however, he was not able to use it because Amy had, by this point, removed the
funds from the joint bank account and placed them in a different account. Tr. 29.
He found out later that the bank account had contained $99,000. Tr. 30. He did not
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have access to these funds during the course of this divorce proceeding as these
monies were under the sole control of Amy. Tr. 29-30.
{¶5} At this time, Daniel took exclusive control over the accounts associated
with the concrete business and was receiving all of the checks from the concrete
business at his P.O. box. Tr. 81. Amy claimed at trial that Daniel had $94,000 in
accounts receivables from the concrete business from a six-month period between
January and June of 2014. Tr. 139. At trial, Daniel testified that he had less income
than Amy had claimed and that he had to live off of a credit card initially during his
separation. Tr. 146. Amy and Daniel separated on June 30, 2014. Doc. 31. On
December 22, 2014, Daniel filed for a divorce in Sandusky County, Ohio. Id. On
April 8, 2015, the trial court issued a temporary order that reads, in its relevant part,
as follows:
The parties shall each provide, through counsel, documentation
verifying any and all account balances and expenditures made for
the benefit of the family for further negotiation of a settlement for
the termination of the marriage. In the meantime, the Defendant
shall be responsible for and pay the household expenses from the
funds secured from the parties’ previous joint checking account
on deposit in Defendant’s name at the Fremont Federal Credit
Union. Defendant shall provide a full accounting of all
expenditures from said funds as part of continuing negotiation.
Doc. 14. Amy testified that she used funds from the joint bank account that had
contained $99,000 to support herself in between February 2014 and the date of the
trial in April 2016. Tr. 137. By the time of the trial, roughly $2,500 was left of the
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$99,000. Id. At trial, Amy testified that she was, at that point, living off of the
inheritance money she received from her father. Id.
{¶6} This case was heard by the trial court on April 12, 2016. Id. Prior to
this hearing, Amy and Daniel had determined through mediation the values and
division of their personal property, the businesses, and their vehicles. Id. One of
the primary issues before the court was the identification of the separate property
inherited by Amy. Id. In particular, this implicated the marital residence since
proceeds from Amy’s inheritance were applied to the mortgage debt on this
property, raising the issue of whether this constituted a gift to Daniel from Amy.
During mediation, the marital residence had been assigned a value of $253,000. Id.
{¶7} At trial, Amy requested an award of spousal support and an award of
attorney’s fees. Tr. 124-125. Regarding the attorney’s fees, Amy submitted a nine-
page, itemized invoice that documented the fees Amy incurred in retaining an
attorney for the divorce proceeding. Tr. 124-126. Ex. R. The invoice listed the
date of each task, the time spent on each task, and the amount billed for each task.
Ex. R. Altogether, Amy’s attorney’s fees amounted to $11,670.00. Id. On cross
examination, Amy stated that she was not sure precisely how much of these fees
had already been paid by her at the time of trial. Tr. 139-140. Amy also stated that
the portion of the attorney’s fees that had been paid were paid with funds that had
been withdrawn from a joint bank account, which contained roughly $99,000.00,
prior to the commencement of this divorce proceeding. Id.
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{¶8} On May 9, 2016, the trial court entered its decision. Doc. 31. In the
judgment entry, the trial court concluded that Amy’s inheritance monies were
separate property and were not a gift to Daniel because Amy was able to trace the
inheritance money into their present form and Daniel was not able to carry the
burden of proving, by clear and convincing evidence, that Amy intended to gift these
monies to him in the process of spending these funds in transactions that would
benefit both of them. Id. For this reason, Daniel was not given any credit for the
sum of money that Amy used to pay off the mortgage. Id. The court also determined
that the $94,000 in accounts receivable that Daniel had and the $99,000 that Amy
had spent supporting herself out of the joint bank account essentially offset each
other and were “a wash.” Id. The court also awarded Amy $5,000 in attorney’s
fees and spousal support of $750.00 per month for seven years. Id.
{¶9} On appeal, Daniel raises three assignments of error:
First Assignment of Error
The trial court purported to equally distribute the parties’
marital property, but (a) failed to give appellant any credit for the
equity in the marital residence or other accounts, (b) failed to
apply the proper legal standard for determining whether
property is separate or marital, (c) failed to give appellant credit
for a large sum of marital cash that appellee depleted unilaterally
before the final divorce decree, and (d) improperly equated cash-
in-hand with pre-tax receivables. These failures caused an
erroneous—and enormously unequal—distribution of marital
property.
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Second Assignment of Error
The trial court erroneously awarded Ms. Miller attorney fees even
though the fees—which were not proven to be reasonable or
necessary—were already paid out of marital property.
Third Assignment of Error
Because of the trial errors addressed in the first two assignments
of error, the award of spousal support must be reversed since any
award of spousal support hinges upon the propriety of other
awards.
We will consider these assignments in the order in which they were presented in the
appellant’s brief.
First Assignment of Error
{¶10} In his first assignment of error, Daniel challenges the distribution of
marital property as ordered by the trial court on the grounds that the division was
inequitable. He alleges and lists four distinct errors in the text of his first assignment
of error, but the subject matter of these four errors fits into two general categories:
the trial court’s (1) division of the equity in the marital residence and (2) treatment
of $99,000 in marital cash and $94,000 in accounts receivable. Each of these two
general categories contain two of the four errors contained in the text of the first
assignment of error. We will first consider the two alleged errors that relate to the
trial court’s division of the equity in the marital residence. We will then consider
the two alleged errors related to the trial court’s treatment of the $99,000 in marital
cash and the $94,000 in accounts receivable.
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The Marital Residence
{¶11} Concerning the marital residence, Amy inherited a sum of money from
her father and used some of the proceeds of this inheritance to pay off the mortgage
on the marital residence. The first issue under this assignment of error is whether
this was a gift from Amy to Daniel. Daniel argues that the trial court incorrectly
determined that this was separate property simply because it was traceable to the
inheritance money. Daniel further argues that the trial court incorrectly placed the
burden on him to establish that this transaction was a gift when the trial court should
have applied the marital gift presumption and, in so doing, placed the burden of
proof on Amy to establish that this was not a gift. In its judgment entry, the trial
court concluded that Daniel did not carry the burden of proving that this transaction
was a gift, making the money used to pay off the mortgage on the marital residence
separate property. This conclusion leads to the second issue, which is that Daniel
was not given a credit for any of the equity in the marital residence. On the basis of
these arguments, Daniel requests that this Court reverse and remand this case to the
trial court to reconsider these issues.
Legal Standard
{¶12} In dividing property between the parties to a divorce action, the trial
court identifies what property is marital and what property is separate. R.C.
3105.171(B). The separate property is retained by the party who obtained the
separate property regardless of whether the separate property was acquired before
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or during the marriage. R.C. 3105.171(D). The marital property is then to be
divided equally between the parties unless such a division would be inequitable.
R.C. 3105.171(C)(1). Separate property includes “an inheritance by one spouse by
bequest, devise, or descent during the course of the marriage.”
3105.171(A)(6)(a)(i). If separate property is commingled with marital property, the
separate property does not become marital property unless “the separate property is
not traceable.” R.C. 3105.171(A)(6)(b).
{¶13} However, “[i]t is well-settled that parties can transmute separate
property into marital property by means of an inter vivos gift.” Kovacs v. Kovacs,
6th Dist. Sandusky No. S-09-039, 2011-Ohio-154, ¶ 12, citing Helton v. Helton, 114
Ohio App. 3d 683, 686, 683 N.E.2d 1157 (2d Dist.1996). “Generally, conversion
occurs when a donor spouse makes an inter vivos gift of the property to the donee
spouse.” Soley v. Soley, 2017-Ohio-2817, --- N.E.3d ---, ¶ 19, citing Helton at 685.
“The essential elements of an inter vivos gift are: ‘(1) [the] intent of the donor to
make an immediate gift, (2) delivery of the property to the donee, [and] (3)
acceptance of the gift by the donee.’” Soley at ¶ 20, quoting Barkley v. Barkley, 119
Ohio App. 3d 155, 694 N.E.2d 989 (4th Dist.1997), fn. 2, citing Bolles v. Toledo
Trust Co., 132 Ohio St. 21, 4 N.E.2d 917 (1936).
“The donee has the burden of showing by clear and convincing
evidence that the donor made an inter vivos gift.” Clear and
convincing evidence is that proof which establishes in the mind of
the trier of fact a firm conviction as to the allegations sought to be
proven. However, “[w]hen a transaction is made that benefits a
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family member, there is a presumption that the transaction was
intended as a gift.”
(Citations omitted.) Kovacs at ¶ 12. See Osborn v. Osborn, 11th Dist. Trumbull
No. 2003-T-0111, 2004-Ohio-6476, ¶ 33, citing Davis v. Davis, 5th Dist. Stark No.
2003CA00243, 2004-Ohio-820, ¶ 8; Williams v. Williams, 3d Dist. Seneca No. 13-
12-17, 2012-Ohio-6116, ¶ 16.
{¶14} Generally, “a trial court’s classification of property as marital or
separate is reviewed under a manifest weight standard.” Miller v. Miller, 6th Dist.
Sandusky No. S-12-035, 2013-Ohio-5071, ¶ 22. “[H]owever, where the trial court
has misstated the law or applied the incorrect law, * * * our review is de novo.”
Shaffer v. Ohio Health Corp., 10th Dist. Franklin No. 03AP-102, 2004-Ohio-63, ¶
6. See State v. Nguyen, 157 Ohio App. 3d 482, 2004-Ohio-2879, 811 N.E.2d 1180,
¶ 16 (6th Dist.). In these situations, the appellate court is faced with a question of
law and does not, therefore, need to give deference to the determination of the trial
court. State v. Today’s Bookstore, 86 Ohio App. 3d 810, 823, 621 Ohio App. 3d
1283, 1292 (2d Dist.1993).
Legal Analysis
{¶15} In this case, Amy inherited $276,585.00 from her father and used
$71,175.80 of this total to pay off the mortgage on the Millers’ marital residence.
Doc. 31. The trial court concluded that the portion of Amy’s inheritance that was
used to pay off the marital residence should be categorized as separate property for
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two related reasons. Doc. 31. First, the trial court determined that Daniel did not
carry the burden of establishing that the funds used to pay off the mortgage were a
gift from Amy to Daniel, making the issue of traceability dispositive in determining
whether this property should be classed as marital or separate. Id. Second, the trial
court determined that Amy was able to establish, by a preponderance of the
evidence, that the funds used to pay off the mortgage were traceable to the money
she inherited from her father. Id.
{¶16} In making this determination, however, the trial court failed to apply
the marital gift presumption. Kovacs at ¶ 12. While the burden is typically on the
donee to establish that the donor intended to give a gift to the donee, a different rule
applies where the transaction is one that benefits a family member. Id. at ¶ 12-13.
In situations where a family member is benefitted by a transaction, a gift is presumed
to have been intended through the transaction. When the marital gift presumption
is applicable, the burden is on the donor to establish that the transaction was not
intended as a gift. In this case, a transaction occurred: Amy paid off the marital
residence with her inheritance money. This transaction benefited a family
member—Daniel. Thus, the marital gift presumption applies, and the trial court
should have placed the burden of proving that this transaction was not a gift on Amy
instead of placing the burden of proving that this transaction was a gift on Daniel.
For this reason, the appellant’s first assignment of error, as to the argument
addressing the trial court’s failure to apply the family gift presumption, is sustained.
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Since the trial court erred as a matter of law in applying the incorrect standard as to
this issue, we reverse this determination and remand this case for consideration
under the proper standard as set forth in this opinion. Coe v. Gamper, 6th Dist. Erie
No. E-77-51, 1978 WL 214754, *1 (June 16, 1978).
{¶17} Under his first assignment of error, Daniel also challenges, in a
separate argument, the trial court’s decision not to give him any credit for the equity
in the marital residence. The trial court’s ruling on the marital residence is closely
related to its determination that the money Amy expended in paying off the
mortgage on the marital residence was not a gift to Daniel. Thus, in light of our
remand, we will not consider whether the trial court erred by not giving any credit
to Daniel for the equity in the marital residence.
Accounts Receivable and Marital Monies
{¶18} The text of Daniel’s first assignment of error also alleges two errors
with regard to how the trial court handled $94,000 in accounts receivables and
$99,000 in marital cash as equivalent, considering them to be “a wash” in the context
of this divorce action. The first alleged error, which is enunciated under section “C”
in the first assignment of error, states that the trial court “failed to give appellant
credit for a large sum of marital cash that appellee depleted unilaterally before the
final divorce decree.” The brief, however, does not contain a corresponding
argument that supports this assertion. The other three alleged errors listed in the
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first assignment of error were separately briefed in accordance with App.R.
12(A)(2).1 App.R. 12(A)(2), 16(A)(7).
{¶19} “It is the duty of the appellant, not this court, to demonstrate [his]
assigned error through an argument that is supported by citations to legal authority
and facts in the record.” Marion v. Cendol, 3d Dist. Marion No. 9-12-59, 2013-
Ohio-3197, ¶ 8, quoting State v. Linzy, 5th Dist. Richland No. 2012-CA-33, 2013–
Ohio–1129, ¶ 33, quoting State v. Taylor, 9th Dist. Medina No. 2783–M, 1999 WL
61619, *3 (Feb. 9, 1999) and citing App.R. 16(A)(7). Appellant does not cite legal
authority or identify facts in the record in support of this assertion. Since this error
alleged in section “C” of the first assignment of error was not separately briefed and
argued, we choose to overrule it pursuant to App.R. 12(A)(2). 2 State v. White, 6th
Dist. Lucas No. L-96-215, 1997 WL 256683 (May 16, 1997), fn. 1.
{¶20} We now turn to the next alleged error included under section “D” of
the first assignment of error, which states that the trial court “improperly equated
cash-in-hand with pre-tax receivables.” Where section “C” primarily challenges the
division of specific assets, section “D” primarily addresses the trial court’s valuation
of these assets. Specifically, section “D” argues that the trial court wrongly
considered these two assets to be equivalent and, thus, capable of offsetting each
1
App.R. 12(A)(2) reads “[t]he court may disregard an assignment of error presented for review if the party
raising it * * * fails to argue the assignment separately in the brief * * *.”
2
We will consider two related issues from section “D”: (1) whether the trial court’s decision to equate the
values of the assets was against the manifest weight of the evidence and (2) whether these funds offset each
other or—in the trial court’s words—were “a wash.” We will not consider issues related to the division of
these assets, such as whether Daniel is entitled a credit for half of the marital monies spent.
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other. Appellant provides arguments that attempt to establish these two sums,
though roughly equivalent in dollar terms, are not equal in value. Daniel contends
that these two sums are not equivalent because the full value of these accounts
receivable may never be realized by payment; Daniel will have to pay taxes on the
proceeds that do come in from these accounts receivable; and these accounts
receivable represent revenue for the concrete business, not pure profit.
Legal Standard
{¶21} The valuation of property in divorce proceedings is reviewed under a
manifest weight standard. Moore v. Moore, 175 Ohio App. 3d 1, 2008-Ohio-255,
844 N.E.2d 1113, ¶ 50 (6th Dist.). “When determining the value of marital assets,
a trial court is not confined to the use of a particular valuation method, but can make
its own determination as to valuation based on the evidence presented.” Chattree
v. Chattree, 2014-Ohio-489, 8 N.E.3d 390, ¶ 43 (8th Dist.), citing James v. James,
101 Ohio App. 3d 668, 681, 656 N.E.2d 399 (2d Dist.1995). “The trial court’s
judgment will not be reversed as being against the manifest weight of the evidence
if the court’s judgment is supported by some competent, credible evidence.” Moore
at ¶ 50, citing C.E. Morris Co. v. Foley Const. Co., 54 Ohio St. 2d 279, 376 N.E.2d
578 (1978).
{¶22} In a divorce proceeding, a trial court, in a domestic relations matter,
has broad discretion in arriving at an equitable distribution of marital property.
Blakemore v. Blakemore, 5 Ohio St. 3d 217, 218, 450 N.E.2d 1140, 1141 (1983),
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citing Berish v. Berish, 69 Ohio St. 2d 318, 432 N.E.2d 183 (1982). In dividing
property between parties to a divorce proceeding, R.C. 3105.171(C)(1) prioritizes
an equitable distribution of property over a strictly equal division of property. R.C.
3105.171(C)(1).
According to R.C. 3105.171(C)(1), the trial court’s division of
marital property shall be equal. However, if an equal division of
marital property would be inequitable, the court shall instead
divide it between the spouses in the manner the court determines
equitable.
Gomer v. Gomer, 2017-Ohio-989, --- N.E.3d ---, ¶ 23 (6th Dist.), citing R.C.
3105.171(C)(1).
{¶23} “It is well-established that an appellate court may not reverse a trial
court’s property allocation decision absent a showing of an abuse of discretion.”
Gomer at ¶ 22, citing Cherry v. Cherry, 66 Ohio St. 2d 348, 421 N.E.2d 1293 (1981).
“An abuse of discretion is more than an error of judgment. It suggests that the trial
court’s ruling was ‘unreasonable, arbitrary or unconscionable.’” State v. Dezanett,
6th Dist. Wood No. WD-14-024, 2015-Ohio-1263, ¶ 9, quoting State v. Xie, 62 Ohio
St.3d 521, 527, 584 N.E.2d 715 (1992). “[W]hen applying this standard, an
appellate court is not free to substitute its judgment for that of the trial judge.” Berk
v. Matthews, 53 Ohio St. 3d 161, 169, 559 N.E.2d 1301, 1308 (1990).
In determining whether the trial court abused its discretion, a
reviewing court should not examine the valuation and division of
a particular marital asset or liability in isolation. The reviewing
court must, instead, view the property division under the totality
of the circumstances to determine whether the property division
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reflects an unreasonable, arbitrary or unconscionable attitude on
the part of the domestic relations court.
(Citations omitted.) Harris v. Harris, 6th Dist. Lucas No. L-02-1369, 2004-Ohio-
683, ¶ 19, citing Briganti v. Briganti, 9 Ohio St. 3d 220, 222, 459 N.E.2d 896 (1984).
Legal Analysis
{¶24} In his first assignment of error, appellant essentially challenges the
equity of the distribution of $99,000 of marital money to Amy and $94,000 of
accounts receivable to Daniel. The arguments of appellant allege that this leads to
an overall distribution that is inequitable as $94,000 in accounts receivable and
$99,000 in a bank account are not equivalent in value even though the nominal
amounts are roughly the same. The appellant compares and contrasts the attributes
of the $99,000 in bank funds and $94,000 in accounts receivable, but these
arguments isolate these assets from the larger context of the divorce proceeding and
the distribution of assets. We find several factors important to understanding the
rationale behind the trial court’s decision.
{¶25} First, we begin by noting that the $99,000 in marital funds was spent
pursuant to a consent order issued by the trial court. On April 8, 2015, the trial court
issued a temporary consent order that required Amy to pay for the expenses of
maintaining the marital residence and directed her to maintain the house using the
funds from the account that had contained $99,000. Doc. 14. Tr. 142. The
temporary consent order also directed Daniel to be responsible for the expenses
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associated with the concrete business. Doc. 14. At trial, Amy testified that she
spent the $99,000 of marital funds down to $2,500 on living expenses pursuant to
this consent order. Tr. 137. She also testified that she had paid for all of the
expenses of the marital residence since the time of the separation in June 2014. Tr.
114.
{¶26} Second, Amy had lost her job at Daniel’s concrete business upon their
separation and, thus, her primary source of income. Daniel continued to have
income from the family business. Tr. 106. The $94,000 in accounts receivable
represented the revenues for Daniel’s concrete business from January 2014 to June
2014. Ex. F. He continued to operate the concrete business and had an income
throughout this period but ceased sharing the proceeds of the business with Amy as
early as February 18, 2016. Tr. 96, 135. Thus, Daniel had more to support himself
than the $94,000 in accounts receivable that came into the concrete business in the
first six months of 2014. While he testified that he initially had to use credit cards
to pay for his living expenses, he did have a source of income through his business
while Amy had no source of steady income. Tr. 30. The trial court does not appear
to have considered these assets merely as stores of marital monies but as sources of
funds for living expenses and business expenses during the duration of the divorce
proceedings. When considered as sources of support, Daniel’s business and the
$99,000 in the bank account are more equivalent than a cursory comparison of the
characteristics of accounts receivable and funds in a bank account would reveal.
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These monies were utilized by each party to give effect to the provisions in the
temporary consent order.
{¶27} Third, Amy changed the account numbers on the bank account
containing $99,000 on the same day that she found out that Daniel had changed the
location where the checks from the concrete business were received to a P.O. box
that Amy could not access. Ex. 7B. Tr. 81. Daniel withheld the accounts receivable
from Amy in the lead up to the separation as Amy, in turn, withheld the funds in the
bank account from him. They each reserved a source of funds to cover living
expenses in the divorce proceeding. Further, by the time of the trial, Amy testified
that she was beginning to live off of her inheritance money to pay for living
expenses. Tr.137. The trial court noted that Daniel did not contribute to Amy’s
support from the proceeds of the family business after she was closed out of the
operation. Doc. 31. Both then relied upon the sources of funds that they had
reserved for themselves prior to the separation. By the time of the divorce
proceeding, these funds had been expended, making them “a wash” in the eyes of
the trial court. Id.
{¶28} Our task in ruling on this particular issue is to determine whether the
trial court made a ruling against the manifest weight of the evidence in determining
that these assets were roughly equivalent. In reviewing the record, we find that the
trial court did not make a decision against the manifest weight of the evidence when
it determined that these assets offset each other in the overall distribution of property
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between the parties in this case. The record provides the context of the trial court’s
decision and shows that there is some competent, credible evidence that supports
the determination that the $99,000 in the bank account and the $94,000 in accounts
receivable were “a wash.” Doc. 31.
{¶29} Depending on whether Amy can carry the burden of establishing that
the funds used to pay off the mortgage on the marital residence were not a gift, it is
possible that the overall distribution of property may be modified by the trial court
on remand. Thus, we cannot consider whether the trial court abused its discretion
in the overall distribution of the property in issuing its May 9 Judgment Entry as the
division of property is not yet finalized. Doc. 31. However, we can say that the
$99,000 in marital funds and the $94,000 in accounts receivable do not affect the
overall balance between the parties in the distribution of property as the trial court
did not abuse its discretion in determining that these funds were countervailing
assets and were, thus, “a wash” with respect to the overall distribution of assets. For
these reasons, Daniel’s first assignment of error, as to this specific argument, is
overruled.
Second Assignment of Error
{¶30} In his second assignment of error, Daniel asserts that the trial court
erred in awarding $5,000 in attorney’s fees to Amy. First, he argues that Amy did
not carry the burden of establishing that the fees incurred were reasonable because
she only submitted the invoices she received from her attorney. Second, he argues
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that the trial court did not properly provide the reasons for granting the award of
attorney’s fees. Third, Daniel argues that the award is inequitable because the
attorney’s fees were paid out of a $99,000 sum that Amy withdrew from a joint bank
account and spent during her separation from Daniel. The trial court considered
these spent funds to be “a wash,” finding this sum to have been offset by the $94,000
in accounts receivables that Daniel had in his concrete business. On the basis of
these arguments, Daniel requests that this Court either vacate the award of attorney’s
fee to Amy or reverse and remand this case to the trial court with instructions to
provide the reasons supporting its decision to award attorney’s fees to Amy.
Legal Standard
{¶31} R.C. 3105.73(A) governs the award of attorney’s fees in actions for
divorce and reads as follows:
In an action for divorce, dissolution, legal separation, or
annulment of marriage or an appeal of that action, a court may
award all or part of reasonable attorney’s fees and litigation
expenses to either party if the court finds the award equitable. In
determining whether an award is equitable, the court may
consider the parties’ marital assets and income, any award of
temporary spousal support, the conduct of the parties, and any
other relevant factors the court deems appropriate.
R.C. 3105.73(A). Thus, this “statute provides some factors that the court may
consider in determining whether an award is equitable.” (Emphasis sic.) Davis v.
Davis, 2016-Ohio-1388, 62 N.E.3d 873, ¶ 19 (6th Dist.). “[A] party is not entitled
to attorney’s fees; rather, the trial court decides on a case-by-case basis whether
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attorney’s fees would be equitable.” Foster v. Foster, 2017-Ohio-4311, --- N.E.3d
---, ¶ 57 (10th Dist.), quoting Cryder v. Cryder, 10th Dist. Franklin No. 07AP-546,
2008-Ohio-26, ¶ 42.
{¶32} “A trial court’s decision regarding the award of attorney’s fees in a
divorce proceeding should not be interfered with absent a clear showing of prejudice
or an abuse of discretion.” Carmony v. Carmony, 6th Dist. Lucas No. L-02-1354,
2004-Ohio-1035, ¶ 28, citing Birath v. Birath, 53 Ohio App. 3d 31, 39, 558 N.E.2d
63, 72 (1988). See Rand v. Rand, 18 Ohio App. 3d 356, 359, 481 N.E.2d 609, 612
(1985). “An abuse of discretion is more than an error of judgment. It suggests that
the trial court’s ruling was ‘unreasonable, arbitrary or unconscionable.’” Dezanett
at ¶ 9, quoting Xie at 527. “[W]hen applying this standard, an appellate court is not
free to substitute its judgment for that of the trial judge.” Berk at 169.
Legal Analysis
{¶33} R.C. 3105.73(A) gives trial court’s the authority to award “all or part
of reasonable attorney’s fees” in an action for divorce. (Emphasis added.) R.C.
3105.73(A). Appellant cites case law from several other districts that places the
burden of proving that attorney’s fees were reasonable on the party requesting
attorney’s fees and claims that Amy did not carry this burden. See Hubbard v.
Hubbard, Defiance App. No. 4-08-37, 2009-Ohio-2194, ¶ 12; Bray v. Bray, 4th
Dist. Ross No. 10CA3167, 2011-Ohio-861, ¶ 46-47; Miller v. Miller, 9th Dist.
Wayne No. 09CA0025, 2010-Ohio-1251, ¶ 29-34; Falk v. Falk, 10th Dist. Franklin
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No. 08AP-843, 2009-Ohio-4973, ¶ 39. However, these cases also generally hold
that “[a] trial court may also use its own knowledge and experience when evaluating
the nature of the services rendered and the reasonableness of the fees charged.” Falk
at ¶ 39, citing McCord v. McCord, 10th Dist. Franklin No. 06AP-102, 2007-Ohio-
164, ¶ 19. Further, of these cases, those in which an award of attorney’s fees was
found to be inappropriate involved situations where no supporting documentation—
such as an invoice, a billing statement, or records of hourly rates—was submitted
for the trial court to evaluate. See Hubbard at ¶ 12; Bray at ¶ 47-48; Miller at ¶ 34.
{¶34} In this case, Amy submitted documents to the court showing that she
incurred $11,670 in attorney’s fees. Ex. R. Consequently, the trial court’s $5,000
award of attorney’s fees does not amount to half of the total that Amy incurred in
attorney’s fees. Id. The nine-page invoice submitted by Amy included a list of all
actions undertaken by her attorney in the course of this representation, how much
time was spent on each of these tasks, and how much the attorney billed Amy for
each of these undertakings. Id. An examination of these records shows that a trial
court judge, based on his or her experience, could have found from these detailed
invoices that the fees charged by Amy’s attorney were reasonable and necessary for
this divorce proceeding. Thus, we find this particular argument against the award
of attorney’s fees to be unpersuasive.
{¶35} Appellant also argues against this award on the grounds that Amy has
paid for a portion of these fees from monies that were in a joint bank account prior
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to the commencement of this action. We find this argument to be unpersuasive as
the fact that some of these fees were paid out of funds reserved for Amy’s living
expenses does not, in itself, make the award of attorney’s fees an abuse of discretion.
While the source of these funds is a factor that can be considered in weighing the
equity of awarding attorney’s fees to a party, the equity of an award of attorney’s
fees depends on a much broader view of the situation surrounding the divorce
proceeding.
{¶36} Appellant also challenges this award on the grounds that the trial court
did not provide the reasons for its decision. Amy requested attorney’s fees at the
same time as she requested spousal support. Tr. 125. In the judgment entry, the
trial court considered a variety of factors that addressed the length of the marriage,
the age of the two parties, the income of both parties, the living situation of the
parties, and the career prospects of both Amy and Daniel. Doc. 31. In two brief
paragraphs following this analysis, the trial court awarded Amy spousal support and
attorney’s fees. Id. From the structure of the judgment entry, it appears that the
trial court arrived at its conclusion in these two matters by way of considering these
factors. Id.
{¶37} Additionally, R.C. 3105.73(A) lists several factors that a trial “court
may consider” in the process of determining whether an award of attorney’s fees is
equitable. R.C. 3105.73(A). However, this statute ultimately commits this
determination to what the trial court, in its discretion, finds to be equitable. Id. As
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we review the record, we find that the trial court did consider a variety of factors
leading up to the award of attorney’s fees that are relevant to the decision to award
attorney’s fees in its May 9, 2016, Journal Entry. Doc. 31. Since we do not find
evidence in the record that shows the trial court abused its discretion in awarding
Amy attorney’s fees, Daniel’s second assignment of error is overruled.
Third Assignment of Error
{¶38} In his third assignment of error, Daniel challenges the award of
spousal support. Daniel argues that the trial court improperly classified and
distributed the property owned by Daniel and Amy at the time of their divorce.
Since the equity of an award of spousal support is partly determined on the basis of
the property distribution at the time of the divorce, Daniel argues that the award of
spousal support should be reconsidered. As this determination relies upon an
equitable distribution of property based upon a proper classification of that property,
Daniel requests that this Court should order the trial court to revisit the issue of
spousal support on remand.
Legal Standard
{¶39} A party to a divorce proceeding may request an award of spousal
support. R.C. 3105.18(B). Any award of spousal support is to be made “after the
court determines the division or disbursement of property under section 3105.171
of the Revised Code * * *.” (Emphasis added.) R.C. 3105.18(B). “R.C.
3105.18(C)(1) governs the award of spousal support and sets forth a number of
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factors that a trial court must consider, first, in determining whether spousal support
is appropriate and reasonable, and, second, in determining the nature, amount, terms
of payment, and duration of such support.” Morse v. Morse, 6th Dist. Ottawa No.
OT-16-023, 2017-Ohio-5690, ¶ 6.
{¶40} “A trial court judgment awarding spousal support need not address
every single one of [the factors listed in R.C. 3105.18(C)(1)], but the judgment must
contain sufficient detail to demonstrate that the trial court considered all the relevant
factors.” Morse at ¶ 7, citing Allan v. Allan, 6th Dist. Sandusky Nos. S-12-017, S-
12-023, 2013-Ohio-1475, ¶ 11. “Absent an abuse of discretion, we will not reverse
a trial court judgment awarding spousal support.” Morse at ¶ 7, quoting Hahn v.
Hahn, 6th Dist. Ottawa No. OT-16-029, 2017-Ohio-4018, ¶ 14. “An abuse of
discretion is more than an error of judgment; it means that the trial court was
unreasonable, arbitrary, or unconscionable in its ruling.” Baldonado v. Tackett, 6th
Dist. Wood No. WD-08-079, 2009-Ohio-4411, ¶ 19, citing Blakemore at 219.
“When applying the abuse of discretion standard, a reviewing court is not free to
merely substitute its judgment for that of the trial court.” In re Jane Doe 1, 57 Ohio
St.3d 135, 138, 566 N.E.2d 1181 (1991).
Legal Analysis
{¶41} In the first assignment of error, we concluded that the trial court erred
in placing the burden of proof on Daniel to establish that the money used to pay off
the mortgage on the marital residence was a gift. We sustained the appellant’s first
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assignment of error and remanded this case to the trial court for reconsideration of
that issue under the proper standard. The distribution of marital property and
income generating assets under R.C. 3105.171 may be affected by whether Amy
can carry the burden of proving that the money she spent from her inheritance to
pay off the mortgage on the marital residence was not a gift. Courts are directed by
statute to consider the propriety of an award of spousal support after the equitable
distribution of property has been determined because the application of the factors
listed in R.C. 3105.171 depends upon the distribution of separate and marital
property between the parties.
{¶42} “Since we cannot determine whether the property distribution was
equitable, we cannot conclude whether the court’s spousal support award constitutes
an abuse of discretion.” Sicilia v. Sicilia, 7th Dist. Columbiana No. 99-CO-66, 2001
WL 1126664 *3 (Sept. 17, 2001). See Taylor v. Taylor, 7th Dist. Belmont No. 01-
BA-17, 2002-Ohio-6884, ¶ 22. For this reason, appellant’s third assignment of error
is sustained. On remand, the trial court must finalize the distribution of property
before the equity of the award of spousal support can be evaluated. After the proper
standard is used to determine whether Daniel is entitled to credit for equity in the
marital residence, the trial court may apply the factors set forth in R.C.
3105.18(C)(1) to determine whether any adjustments to the award of spousal
support are necessary.
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Conclusion
{¶43} Having found no error in the particulars assigned and argued in the
second assignment of error, the judgment of the trial court as to those issues is
affirmed. Having found error prejudicial to the appellant in the particulars assigned
and argued in the first and third assignments of error, the judgment of the trial court
is reversed in part and affirmed in part as to those issues. The matter is remanded
to the Court of Common Pleas of Sandusky County for further proceedings in accord
with this opinion.
Judgment Affirmed in Part,
Reversed in Part
Cause Remanded
PRESTON, P.J. and SHAW, J., concur.
/hls
Judges Vernon L. Preston, John R. Willamowski and Stephen R. Shaw, from the
Third District Court of Appeals, sitting by assignment of the Chief Justice of the
Supreme Court of Ohio.
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