Reed v. Reed ( 2023 )

[Cite as Reed v. Reed, 2023-Ohio-756.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HARDIN COUNTY
KATHY B. REED,
PLAINTIFF-APPELLEE/
CROSS-APPELLANT, CASE NO. 6-22-03
v.
DOUGLAS R. REED,
OPINION
DEFENDANT-APPELLANT/
CROSS-APPELLEE.
Appeal from Hardin County Common Pleas Court
Domestic Relations Division
Trial Court No. DRB 2020 3080
Judgment Affirmed in Part, Reversed in Part and Cause Remanded
Date of Decision: March 13, 2023
APPEARANCES:
Paul Giorgianni for Appellant/Cross-Appellee
Tim Steinhelfer and Sheila E Minnich for Appellee/Cross-Appellant
Case No. 6-22-03
WALDICK, J.
{¶1} Husband-appellant-cross appellee, Douglas R. Reed (“Douglas”), and
wife-appellee-cross appellant, Kathy B. Reed (“Kathy”), both appeal the Hardin
County Common Pleas Court, Domestic Relation Division’s February 28, 2022
decree of divorce dividing the parties’ assets and ordering Douglas to pay Kathy
spousal support. On appeal, Douglas challenges, inter alia, the trial court’s
determinations that he engaged in financial misconduct, and the trial court’s award
of spousal support to Kathy. In her appeal, Kathy also challenges the trial court’s
award of spousal support, arguing that it was too low, and she challenges other
divisions of marital assets by the trial court. For the reasons that follow, the trial
court’s judgment is affirmed in part, and reversed in part.
Background
{¶2} Douglas and Kathy were married in November of 2003. They had no
children together. During the parties’ marriage, they acquired a substantial amount
of assets including multiple residences and numerous parcels of farmland.
{¶3} Kathy had a lucrative career selling natural gas, which she retired from
in 2013. However, in 2018 Kathy took a job at Edward Jones so that the parties
could have health insurance when Douglas’s employment no longer provided it.
Meanwhile, Douglas managed the parties’ significant farming operation, and he was
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also the owner/operator of Silver Creek Supply. Additionally, the parties earned
income from wind turbines on their property and from cash-renting farmland.
{¶4} In 2020, both parties filed for divorce. Temporary orders were
instituted, which ordered Douglas to pay Kathy temporary spousal support of $8,500
per month. Although the parties were able to agree on the division of many of their
assets, the matter proceeded to a final hearing on the division of their remaining
assets and on the issue of spousal support. The final hearing was held over four days:
August 11-12, 2021, October 7, 2021, and November 5, 2021.
{¶5} On February 28, 2022, the trial court filed a lengthy judgment entry
discussing the numerous stipulations and agreements of the parties, then analyzing
the remaining pending issues. As relevant to this appeal, the trial court determined
that Douglas had engaged in financial misconduct during the pendency of the
divorce. As a result of Douglas’s financial misconduct, the trial court awarded
Kathy additional compensation from Douglas’s distribution of the parties’ assets.
The trial court also awarded Kathy $4,000 in spousal support per month.
{¶6} Both parties appealed the trial court’s judgment. Douglas asserts the
following assignments of error for our review.
Douglas’s First Assignment of Error
The court erred by finding that Doug committed financial
misconduct related to stored grain and by imposing a $283,100
financial misconduct award against Doug.
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Douglas’s Second Assignment of Error
The trial court erred by finding that Doug’s failure to make
estimated federal income-tax payments constituted financial
misconduct, and by imposing a $34,752 financial-misconduct
award against Douglas.
Douglas’s Third Assignment of Error
The court erred by making the termination date of Doug’s
obligation to pay permanent spousal support contingent upon
exercise of appellate rights, the uncertainty of the real estate
market, and Kathy’s whim.
Douglas’s Fourth Assignment of Error
The court erred in determining the amount of permanent spousal
support.
Douglas’s Fifth Assignment of Error
The court erred to the extent the court ordered Doug alone to bear
the carrying costs of the real estate that the court ordered the
Reeds to sell.
Douglas’s Sixth Assignment of Error
The court erred by failing to characterize as a distribution of
property to Kathy $10,000 for a forensic accounting expert even
though Kathy never retained or paid a forensic accounting expert.
{¶7} Kathy’s appeal from the trial court’s judgment asserts the following
assignments of error for our review.
Kathy’s First Assignment of Error
The trial court erred by ordering an equal division [of] marital
assets Douglas willfully failed to disclose.
Kathy’s Second Assignment of Error
The trial court abused its discretion with regard to 2020 taxes by
finding that a stipulation for equal division existed.
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Kathy’s Third Assignment of Error
The trial court abused its discretion in the amount of periodic
spousal support by fashioning the award too low.
{¶8} Where the parties’ assignments of error are related, we will address
them together.
Douglas’s First Assignment of Error
{¶9} In Douglas’s first assignment of error, he argues that the trial court erred
by finding that he committed financial misconduct related to the sale of grain
harvested in 2020. Further, he argues that the trial court erred by imposing a
$283,100 financial-misconduct award against him for his dissipation of the martial
grain.
Standard of Review
{¶10} The burden of proving financial misconduct rests with the
complaining spouse. Davis v. Davis, 11th Dist. Geauga No. 2011-G-3018, 2013-
Ohio-211, ¶ 104. The term “financial misconduct” includes “the dissipation,
destruction, concealment, nondisclosure, or fraudulent disposition of assets[.]” R.C.
3105.171(E)(4). “ ‘Financial misconduct implies some type of wrongdoing which
results in the offending spouse either profiting from the misconduct or intentionally
defeating the other spouse’s distribution of marital assets.’ ” (Citations omitted.)
Cianfaglione v. Cianfaglione, 11th Dist. Lake No. 2017-L-134, 2019-Ohio-71, ¶ 51,
quoting Chattree v. Chattree, 8th Dist. Cuyahoga No. 99337, 2014-Ohio-489, ¶ 18.
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{¶11} A trial court’s finding that financial misconduct has been committed
is reviewed under the manifest weight of the evidence standard. Guagenti v.
Guagenti, 3d Dist. Allen No. 1-16-47, 2017-Ohio-2706, ¶ 84. On review
for manifest weight, the standard in a civil case is identical to the standard in a
criminal case: a reviewing court is to examine the entire record, weigh the evidence
and all reasonable inferences, consider the credibility of witnesses and determine
whether in resolving conflicts in the evidence, the factfinder clearly lost its way and
created such a manifest miscarriage of justice that the conviction must be reversed
and a new trial ordered. Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179,
¶ 20.
{¶12} In weighing the evidence, however, we are always mindful of the
presumption in favor of the trial court’s factual findings. Eastley at ¶ 21. This
presumption arises because the trial court is in the best position “to view the
witnesses and observe their demeanor, gestures and voice inflections, and use these
observations in weighing the credibility of the proffered testimony.” Seasons Coal
Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 80 (1984). Accordingly, “[a] reviewing
court should not reverse a decision simply because it holds a different opinion
concerning the credibility of the witnesses and evidence submitted before the trial
court.” Id. at 81.
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{¶13} In the event that the trial court finds that financial misconduct was
committed, we will “not reverse an award to compensate for financial misconduct
absent an abuse of discretion.” Guagenti at ¶ 84 . Under the abuse of discretion
standard, an appellate court is not to substitute its judgment for the trial court’s
judgment. Schroeder v. Niese, 3d Dist. Putnam No. 12-16-05, 2016-Ohio-8397, ¶ 7.
Thus, a mere error of judgment does not rise to the level of an abuse of
discretion. Siferd v. Siferd, 3d Dist. Hancock No. 5-17-04, 2017-Ohio-8624, ¶ 16.
“[T]o constitute an abuse of discretion, the trial court’s decision must be
unreasonable, arbitrary, or capricious.” Southern v. Scheu, 3d Dist. Shelby No. 17-
17-16, 2018-Ohio-1440, ¶ 10.
Controlling Statute
{¶14} Financial misconduct in a divorce proceeding is governed by R.C.
3105.171(E)(4) and (E)(5), which read as follows:
(4) If a spouse has engaged in financial misconduct, including, but
not limited to, the dissipation, destruction, concealment,
nondisclosure, or fraudulent disposition of assets, the court may
compensate the offended spouse with a distributive award or with
a greater award of marital property.
(5) If a spouse has substantially and willfully failed to disclose
marital property, separate property, or other assets, debts,
income, or expenses as required under division (E)(3) of this
section, the court may compensate the offended spouse with a
distributive award or with a greater award of marital property
not to exceed three times the value of the marital property,
separate property, or other assets, debts, income, or expenses that
are not disclosed by the other spouse.
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Analysis
{¶15} In determining that Douglas engaged in financial misconduct with
regard to dissipating stored grain from the 2020 harvest, the trial court conducted
the following analysis:
FINANCIAL MISCONDUCT/DISTRIBUTIVE SHARE
***
From the evidence herein it is clear that Husband was in total
control of the farming operations. As such, the evidence supports
that the parties always had stored grain carried over from year to
year. [Trial court lists the values of stored grain for the years 2010
– 2019, which range from a low of $87,000 in 2017 to a high of
$929,000 in 2011.] * * *
Average per year for ten years: $566,200.00 per year.
Average per year for the most recent five years: $450,800.00
No credible explanation was given concerning why, after a
long history of yearly significant amounts of stored grain, during
farming years that appeared to be normally lucrative (gross
receipts in 2019 of $2,857,648.00, and in 2020 of $1,539,059.00)
there should be absolutely no stored grain at this time. The Court
can only draw the conclusion that Husband has acted in a manner
as to dissipate, destroy, conceal, fail to disclose, or fraudulently
dispose of grain which should be in existence.
Additionally, as previously stated, after separation of the
parties Husband failed to make estimated payments for income
taxes to the tune of an average of $69,504.25 per year.
Using the ten-year average of stored grain of $566,200.00
plus the average of $69,504.25 estimated taxes that should have
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normally been paid, it appears that Husband has converted a total
of $635,704.25 to his own use.
Husband may claim that he was paying Wife $8,500.00 per
month ($102,000.00 per year) per the temporary order #2 * * *
but a yearly payment of $102,000.00 is far less than $635,704.25.
Therefore, the Court therefore [sic] specifically finds that
Husband has engaged in financial misconduct, and substantially
and willfully failed to disclose marital property in the minimum
sum of $566,200, being the average stored grain from 2010 to
2019, and in failing to pay estimated payments for income tax in
the amount of $69,504.25.
(Emphasis sic.) (Doc. No. 103).
{¶16} Douglas argues that the trial court’s determination regarding financial
misconduct was against the manifest weight of the evidence for numerous reasons.
First, he argues that the only evidence in the record indicates that there was no stored
grain from 2020 at the time of the final hearing because he had sold all the grain
from the 2020 harvest in December of 2020 and January of 2021. Second, Douglas
argues that there was no evidence that he willfully failed to disclose the sale of any
of the 2020 grain, particularly given that the money he received was used, at least
in part, to pay Kathy’s spousal support and to pay the mortgages on the farms. In
addition, Douglas argues that any sales of grain were shown on his financial ledger,
which was provided in discovery.
{¶17} In reviewing Douglas’s arguments, we emphasize that it was the
established practice of the parties to carry-over significant amounts of stored grain
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each year from their harvest in order to sell the grain at a higher price. The trial court
entered temporary orders while the divorce was pending for the parties to continue
to act according to prior custom.1 Rather than store some, or any, of the grain from
the 2020 harvest to sell later at a higher price, Douglas unilaterally decided to sell
all the grain from 2020 in December of 2020 and January of 2021, keeping no stored
grain.2 By selling the grain early, Douglas admitted that he effectively devalued it.
At the May 6, 2021, pretrial hearing Douglas testified: “Normally I would have
carried that grain, I would have had it all right now. And to be honest, if I had that
grain right now, we would have got twice as much money out of it.” (May 6, 2021,
Tr. at 31).
{¶18} A ledger of Douglas’s financial transactions was introduced into
evidence at trial, illustrating Douglas’s grain sales from the 2020 harvest. (Pl.’s Ex.
69). In December of 2020, Douglas’s financial account showed “Grain deposit[s]”
of $76,591.69, $93,870.12, $37,026.24, $116,163.99, $47,694.61, $85,818.01, and
$103,107.59. In early January of 2021, when Douglas indicated he sold the last of
the grain from the 2020 harvest, Douglas’s account showed deposits that had no
description for $47,981.16, $16,638.44, $153,359.38, and $54,428.38.
1
At the first temporary orders hearing, the trial court stated, “You should continue to do your business in the
manner that you’ve done your business in the recent past.” (Oct. 8, 2020, Tr. at 44).
2
As Doug suggests in his argument, the only evidence in the record did indicate that all stored grain had been
sold by January of 2021 at the latest. Kathy may have speculated that there was additional stored grain
somewhere but we have no actual evidence to support this claim.
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{¶19} Douglas thus sold all the 2020 grain, including some amount that the
parties normally would have stored, without consulting Kathy, and without any
order by the trial court. Douglas claims that he decided to unilaterally sell the 2020
grain that he normally would have stored in order to pay mortgages and to pay his
court-ordered spousal support. However, some of the parties’ marital assets were
sold during the pendency of the divorce by agreement and by order of the trial court
such as grain bins and a pole barn in order to pay the parties’ obligations. Moreover,
even if Doug needed to sell some of the stored grain, there is no indication that
Douglas had to determine to unilaterally sell all of the grain he normally would have
stored early.
{¶20} Furthermore, it is not clear what money received from the 2020 grain
went to pay for marital debt. For example, Douglas’s ledger shows that he was also
paying significant amounts of money to Silver Creek for “bills,” which was his
wholly owned corporation that he took separately in the divorce.3 In addition,
Douglas paid his attorney’s fees from this case and a prior unrelated case out of the
account where the grain deposits were present.4
3
The ledger entries for “bills” to Silver Creek are separate and distinct entries in the ledger from payments
on “Silver Creek Debt.”
4
In a journal entry the trial court filed May 7, 2021, the trial court stated:
It is undisputed that since the filing of this action Defendant-Husband has received
and transferred large sums of money, hundreds of thousands of dollars going to the
Silver Creek business of which he is the sole owner; approximately $30,000.00 in legal
fees for this case and other legal matters; $10,000.00 paid to a forensic accountant; as
well as pre-paying his mortgage expense until the month of trial. Husband has
approximately $30,000.00 in cash deposits, and has sold all the stored grain.
(Doc. No. 72).
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{¶21} After reviewing the record, and Douglas’s claims related to the lack of
stored grain for 2020, the trial court determined that “no credible explanation was
given” as to why Douglas had no stored grain at the time of the final hearing. (Doc.
No. 103). Stated differently, the trial court did not find Douglas credible in his
contention that he had no choice but to unilaterally decide to sell all his stored grain
from the 2020 harvest earlier than prior customs would dictate. The trial court
determined that it could only draw the conclusion that Douglas had acted in a
manner as to “dissipate, destroy, conceal * * * or fraudulently dispose of grain which
should be in existence.” (Id.) As Douglas, by his own admission, sold the grain at a
lower price than he could have, in contravention of his custom, we do not find that
the trial court clearly lost its way by finding that he committed financial misconduct.
See Smith v. Smith, 9th Dist. Summit No. 26013, 2012-Ohio-1716, ¶ 21 (affirming
finding of financial misconduct wherein, inter alia, husband “made critical and
unilateral decisions concerning the parties’ retirement funds and other assets”).
{¶22} With this decided, we must determine whether the trial court abused
its discretion by compensating Kathy for Douglas’s financial misconduct. Douglas’s
sale of the 2020 grain contrary to his prior practice of storing it made it difficult for
the trial court to determine how much value Douglas had effectively dissipated. As
a result, the trial court used the averages of the prior 10 years of stored grain to
determine an amount that seemed appropriate. We do not find that the trial court’s
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use of averages from prior years was an abuse of discretion where the prior years of
stored grain were meticulously calculated and acknowledged by Douglas as
accurate.5 For all of these reasons, Douglas’s first assignment of error is overruled.
Douglas’s Second Assignment of Error
{¶23} In Douglas’s second assignment of error, he argues that the trial court
erred by determining that his failure to make estimated federal income-tax payments
constituted financial misconduct. In addition, Douglas argues that even if he did
commit financial misconduct for failing to pay “estimated taxes” ahead of time, the
taxes were ultimately paid, thus the only actual “damages” from any misconduct
were the late penalties from the IRS, not the amount of estimated taxes.
Analysis6
{¶24} After a hearing on temporary orders in this case wherein the parties’
tax liabilities for 2020 were discussed, the trial court issued the following order:
10) Each party shall deposit with the Internal Revenue Service the
appropriate amount of quarterly estimated taxes based on income
received or controlled by that party.
(Doc. No. 53).
{¶25} Pursuant to the trial court’s temporary order, and because the evidence
established that Douglas was “in total control” of the farming operation, Douglas
5
In fact, the trial court’s average amount is significantly less than taking the amounts received from grain
sales in December of 2020 and the unattributed deposits from January of 2021 and multiplying them by 2
(because Doug testified if he held on to the grain he could have received twice as much for it).
6
The same standard of review applied in the first assignment of error applies here as well.
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should have paid quarterly estimated taxes in this case. However, Douglas failed to
comply with the trial court’s order despite the fact that the parties’ established
practice was to make significant estimated income tax payments in the years
preceding their separation. Based on these actions, the trial court found that
No evidence was adduced concerning why Husband failed to pay
the normal amount of estimated taxes on farm income in [2019
and 2020]. Failure to do so resulted in more taxes being due at the
time of ultimate filing.
Radical changes in established financial practices after
separation of the parties are always of interest and concern to the
Court in any divorce.
(Doc. No. 103).
{¶26} The trial court determined that Douglas failed to pay estimated taxes
of $69,504.25 in contravention of its prior order and in contravention of the parties’
established practice. Thus the trial court determined that Douglas engaged in
financial misconduct, awarding Kathy $34,752.13 (one-half of the amount of
estimated taxes Douglas failed to prepay).
{¶27} Douglas now argues that the trial court’s determination was against
the manifest weight of the evidence. He contends that failing to make estimated tax
payments did not constitute financial misconduct; he contends that failing to comply
with the temporary order cannot form the basis of an award because the order was
filed in January of 2021 but Douglas was being held accountable for estimated taxes
he did not pay in 2019 and 2020; he contends that Kathy also failed to make
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estimated tax payments in 2019 and 2020; and he contends that the amount of the
award is contrary to law given that the taxes were actually paid.
{¶28} In reviewing Douglas’s arguments, we emphasize that his decision not
to pay estimated taxes was completely against the parties’ established practice. It
was also in contravention of the trial court’s temporary orders. For these reasons
alone we find that the trial court’s financial misconduct finding was supported by
the record.
{¶29} However, we emphasize that while Douglas did not pay estimated
taxes in advance as ordered, the taxes were ultimately paid-in-full. As a result of
Douglas’s failure to pay estimated taxes, the parties were assessed penalties,
according to the record, of just over $1,000. Despite the parties’ only being
penalized just over $1,000 for Douglas’s failure to pay estimated taxes in advance,
the trial court awarded Kathy $34,752.13—one half of the estimated taxes that
Douglas did not pay early. Though, again, the taxes were ultimately paid here.
{¶30} The trial court could have properly compensated Kathy for Douglas’s
failure to pay estimated taxes, but ordering him to pay her roughly 30 times the
amount is punitive in nature. In Eggeman v. Eggeman, 3d Dist. Auglaize No. 2-04-
06, 2004-Ohio-6050, we reversed the amount of an award of financial misconduct
where the award was not directly commensurate with a financial loss, but rather
punitive in nature. We held, “the purpose of R.C. 3105.171(E)(3) is to neutralize
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losses caused by the offending spouse’s conduct and not to simply reward one
spouse for the other’s wrongdoing when no loss in value has occurred.” Eggeman
at ¶ 26.
{¶31} Here, compensating Kathy with over $34,000 when her losses were,
at most, just over $1,000 (or half of this amount), is punitive in nature and not
reflective of the loss in value of marital funds. See Walker v. Walker, 3d Dist.
Marion No. 9-12-15, 2013-Ohio-1496 (reversing the amount of a financial
misconduct award for being too speculative and inequitable). Thus based on the
record before us, we find that the amount awarded by the trial court for Douglas’s
failure to pay estimated taxes that were ultimately paid was unreasonable.
Accordingly, Douglas’s second assignment of error is sustained.
Douglas’s Third Assignment of Error
{¶32} In Douglas’s third assignment of error, he argues that the trial court
erred by ordering him to pay Kathy $4,000 in monthly spousal support for an
indefinite period until the parties’ real estate was sold.
Standard of Review
{¶33} Trial courts have broad discretion concerning an award of spousal
support. Schwieterman v. Schwieterman, 3d Dist. Logan No. 8-19-49, 2020-Ohio-
4881, ¶ 69. Therefore, a trial court’s decision related to spousal support will not be
reversed absent an abuse of discretion.
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Analysis
{¶34} With regard to spousal support in this case, the trial court ordered
Douglas to pay Kathy $4,000 per month, but only “until all properties are sold, all
debts are paid and refinanced as ordered herein, and all distribution made according
to the terms of this order.” (Doc. No. 103). The trial court then provided detailed
orders regarding the properties and their distribution as follows:
2) Wife shall quit claim her interest in the properties described in
attached Exhibit B and C to Husband within 30 days of the
expiration of the appeal periods to this order, upon the condition
that within the same period Husband shall remove Wife’s liability
on the mortgages thereon to Liberty National Bank, and save
Wife harmless therefrom.
3) Husband shall quit claim his interest in the property described
in attached Exhibit D to Wife within 30 days of the expiration of
all appeal periods to this order, upon the condition that within the
same period Wife shall remove Husband’s liability on the
mortgage thereon to Liberty National Bank, and save Husband
harmless therefrom.
4) All remaining real estate (Assets 4, 5, 6, and 7) shall be sold at
public sale upon the following terms, and from the proceeds of
sale shall be paid the mortgages or land contracts thereon (Debuts
D, E and F) and all expenses of sale and costs of closing. The
remaining proceeds shall immediately upon sale be escrowed
equally (50-50) with each attorney of record.
Note: Each tract of land shall be sold or transferred subject to all
wind turbines contracts for equipment on said tract.
The terms of sale shall be as follows:
a) The parties shall jointly attempt to sell each property at
private sale for a period of 90 days after the expiration of all
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appeal periods for this journal entry, for any amount mutually
agreeable to each party.
b) Should any tract fail to sell during said period of 90 days, then
the said property or properties shall be sold at public auction
to the highest bidder, equaling or exceeding the value listed in
the Balance Sheet, upon the condition that no family member
within the fourth degree of consanguinity or affinity shall be
permitted to bid on or purchase any said property. The parties
shall employ Devin Dye, of Lima, Ohio, to advertise and
conduct said sale according to best practices to obtain the
highest price[.]
The parties may, however, mutually agree to another
auctioneer/broker or other terms of sale, but only as set forth in
writing signed by each party. Additionally, upon written waiver of
appeal by both parties, the parties may then immediately proceed
pursuant to the terms set forth herein.
Until sold the parties shall proceed to farm said real estate
according to their prior practice. Mutually agreed costs of
farming shall be paid from the escrow account held herein until
sale of the properties. All net profits of the farming operation shall
be equally divided between the parties, subject to further orders
herein.
(Emphasis sic.)7 (Doc. No. 103).
{¶35} Douglas now takes issue with the indefinite duration of the trial court’s
spousal support order, arguing, inter alia, that the order gives Kathy the power to
prolong her spousal support by being obstinate and not agreeing to a sale price for
the real estate, or by pursuing an appeal. He also argues that the trial court’s decree
7
The section italicized by this Court was bold in the trial court’s judgment entry.
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is ambiguous as to what the “appeal periods” mean. Further, Douglas argues that
the decree effectively forces him to farm against his will.
{¶36} In reviewing the trial court’s spousal support order, we emphasize that
there is nothing unlawful about the indefinite award that is set to end after an express
event. See Houck v. Houck, 11th Dist. Trumbull No. 97-T-0025, 1997 WL 800923.
Here, spousal support was only awarded to Kathy until the properties in this case
are sold, at which point she will have enough liquid assets to support herself in the
future. We see nothing arbitrary about the trial court’s decision here.
{¶37} Moreover, contrary to Douglas’s argument, there is nothing
ambiguous about “appeal periods” in the trial court’s entry given that App.R. 4
contains the dates to file an appeal as of right and S.Ct.Prac.R. 7.01(A) contains the
timeline for filing a jurisdictional appeal.
{¶38} Finally, we note that Douglas’s argument that the trial court’s entry
forces him to farm against his will is simply inaccurate. Although the trial court
ordered the parties to continue to act as they had previously until the property is
sold, Douglas’s testimony at the final hearing was that he had largely given up
farming and had been allowing his son to farm his land through cash-rent. Thus this
is the most recent practice.
{¶39} In sum, we find nothing arbitrary or unreasonable about the trial
court’s award of spousal support until all real estate is sold. The trial court set forth
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numerous contingencies for the parties and there is nothing unlawful about the trial
court’s order. Therefore, Douglas’s third assignment of error is overruled.
Douglas’s Fourth Assignment of Error;
Kathy’s Third Assignment of Error
{¶40} In Douglas’s fourth assignment of error he argues that the trial court
erred by awarding Kathy the amount of $4,000 per month in spousal support. In
Kathy’s third assignment of error, she argues that the trial court erred by awarding
a spousal support amount that was too low.
Relevant Authority8
{¶41} Revised Code 3105.18 governs the award of spousal support in
divorce cases. “ ‘[S]pousal support’ means any payment or payments to be made to
a spouse or former spouse, or to a third party for the benefit of a spouse or a former
spouse, that is both for sustenance and for support of the spouse or former spouse.”
R.C. 3105.18(A). “In divorce * * * proceedings, upon the request of either party and
after the court determines the division or disbursement of property * * *, the court
of common pleas may award reasonable spousal support to either party.” R.C.
3105.18(B).
8
The same standard of review applied in the third assignment of error is applicable here.
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{¶42} Importantly, an award of spousal support is not based solely on the
need of a party. Schwieterman at 69. An award of spousal support must be balanced
against the obligor’s ability to pay. Id.{¶43} In order to determine whether spousal support is appropriate and
reasonable, R.C. 3105.18(C)(1) provides a list of factors that a trial court must
consider. These factors read as follows:
(a) The income of the parties, from all sources, including, but
not limited to, income derived from property divided, disbursed,
or distributed under section 3105.171 of the Revised Code;
(b) The relative earning abilities of the parties;
(c) The ages and the physical, mental, and emotional conditions
of the parties;
(d) The retirement benefits of the parties;
(e) The duration of the marriage;
(f) The extent to which it would be inappropriate for a party,
because that party will be custodian of a minor child of the
marriage, to seek employment outside the home;
(g) The standard of living of the parties established during the
marriage;
(h) The relative extent of education of the parties;
(i) The relative assets and liabilities of the parties, including but
not limited to any court-ordered payments by the parties;
(j) The contribution of each party to the education, training, or
earning ability of the other party, including, but not limited to,
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any party’s contribution to the acquisition of a professional
degree of the other party;
(k) The time and expense necessary for the spouse who is seeking
spousal support to acquire education, training, or job experience
so that the spouse will be qualified to obtain appropriate
employment, provided the education, training, or job experience,
and employment is, in fact, sought;
(l) The tax consequences, for each party, of an award of spousal
support;
(m) The lost income production capacity of either party that
resulted from that party’s marital responsibilities;
(n) Any other factor that the court expressly finds to be relevant
and equitable.
Analysis
{¶44} In this case, the trial court explicitly analyzed all of the factors in R.C.
3105.18(C)(1) and determined that Douglas should pay Kathy $4,000 per month
until all the parties’ properties that had been ordered to be sold in the final divorce
decree were sold, all debts were paid or refinanced as ordered, and all distributions
had been made according to the trial court’s final order.
{¶45} Douglas contends that the trial court should not have awarded spousal
support at all because Kathy would ultimately be receiving over $3 million in assets
in the property division. At the very least, Douglas argues that the spousal support
award was too high. By contrast, Kathy argues that the award was too low given,
inter alia, Douglas’s earning potential.
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{¶46} In our own review of the matter, we emphasize that the trial court’s
judgment entry addressed each and every factor of R.C. 3105.171(C)(1).9 The trial
court considered the income of the parties, their earning abilities, their age and
health, their retirement benefits, the duration of the marriage, their standard of
living, the education of the parties, and the assets and liabilities being distributed.
{¶47} The parties’ claims to individual erroneous statements in the trial
court’s analysis are either inaccurate or do nothing to undermine the trial court’s
analysis in its entirety. For example, Douglas argues that the trial court improperly
determined that he was receiving “income producing properties,” but he ignores the
fact that he was receiving Silver Creek in the distribution.10 For Kathy’s part, she
ignores the significant assets that she was receiving in the division of property, and
the significant amount of money she would receive once the parties’ properties were
sold.
{¶48} The trial court fashioned a spousal support award that took into
account the parties’ “upper-middle class lifestyle” and determined that Douglas, the
primary earner for the prior decade of the relationship, should pay Kathy $4,000 per
month essentially until she had the money from the sale of the parties’ assets. When
9
Some of the factors were found to be inapplicable to the parties.
10
Douglas also argues that the trial court erred by determining that Douglas should only spend $25 per month
on life insurance when he had made significant investments prior to, and during the marriage, in life
insurance. While the trial court did discuss Douglas’s life insurance expenditures in its entry, it was not
specifically mentioned in the trial court’s spousal support analysis. Moreover, we emphasize that the trial
court analyzed each parties’ expenditures and reduced some of them or equalized them.
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reviewing the record as a whole, we cannot find that the trial court abused its
discretion. See Brown v. Brown, 8th Dist. Cuyahoga No. 100499, 2014-Ohio-2402,
¶ 39 (holding the trial court’s consideration of all the factors in R.C. 3105.18(C)(1)
supported spousal support award). Therefore, Douglas’s fourth assignment of error
and Kathy’s third assignment of error are overruled.
Douglas’s Fifth Assignment of Error
{¶49} In Douglas’s fifth assignment of error, he argues that the trial court
erred by ordering “Doug alone to bear the carrying costs of the real estate that the
court ordered the Reeds to sell.” (Appt.’s Br. at 23). Despite this statement in his
brief, Douglas then readily acknowledges that “[n]othing in the Decree suggests that
Doug alone bears the post-decree carrying costs.” (Appt.’s Br. at 23). These
contradictory statements alone are enough to defeat his assignment of error.
{¶50} Nevertheless, we emphasize that Douglas’s assignment of error is
simply not reflective of the record. The trial court indicated that mutually agreed
costs of farming shall be paid from the escrow account and the net profits should be
divided equally between the parties. Thus the farming costs, including, presumably,
mortgages and property taxes, were covered by the trial court. The equity in those
farms will be divided equally once the properties are sold, so we see no error here.
Therefore, Douglas’s fifth assignment of error is overruled.
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Douglas’s Sixth Assignment of Error
{¶51} In Douglas’s sixth assignment of error, he argues that the trial court
erred by failing to make a distributive award to Douglas in the amount of $5,000,
one-half of the amount Kathy received during the pendency of the case to retain a
forensic accountant.
Analysis
{¶52} Douglas’s sixth assignment of error is entirely undermined by a
stipulation the parties entered into on the first day of the final hearing. The parties
stipulated that, “[H]usband is not going to be reimbursed for any money that he has
given to the wife. You had ordered him to pay 12,500 in attorney fees. He’s not
getting reimbursed for that. And you ordered him to pay 10,000 on the accountant
fees. Everybody’s paying their own, and he’s not getting reimbursed.” (Tr. at 104-
105).
{¶53} As Douglas entered into an agreement regarding the accountant fees
and that agreement was presented to the trial court without objection, we can find
no error here. See Bispeck v. Battin Insurance Agency, Inc. 11th Dist. Trumbull No.
3453, 1985 WL 10189 (holding that oral stipulations are binding if understood by
the parties and relied upon.) Therefore, Douglas’s sixth assignment of error is
overruled.
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Kathy’s First Assignment of Error
{¶54} In Kathy’s first assignment of error, she argues that the trial court erred
by ordering an equal division of the marital assets, including those Douglas willfully
failed to disclose.
Analysis
{¶55} Contrary to Kathy’s argument, Douglas was ordered to compensate
Kathy for his financial misconduct. Pursuant to R.C. 3105.171(E), the trial court
could have awarded Kathy a greater distributive share of the marital assets, and the
trial court did, in fact, order Douglas to pay Kathy from his share of the division as
a result of his financial misconduct. Thus Kathy’s argument is an inaccurate
characterization of the record. Here, the trial court’s determination to compensate
Kathy was entirely discretionary, and there was nothing arbitrary or unreasonable.
Therefore, Kathy’s first assignment of error is overruled.
Kathy’s Second Assignment of Error
{¶56} In Kathy’s second assignment of error, she argues that the trial court
abused its discretion regarding the 2020 taxes by finding that a “stipulation” for
equal division existed.
Analysis
{¶57} Kathy’s second assignment of error claims that the trial court erred by
finding that a “stipulation” for an equal division of the 2020 taxes existed. However,
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she does not cite to the record where the trial court found such a stipulation. Her
failure to cite to the record is in contravention of App.R. 16(A)(3). Moreover, as the
cross-appellee states, the record does not reflect that such a stipulation exists.
Rather, the record reflects that the parties’ 2020 taxes were paid out of their escrow
account, effectively dividing the tax burden, which would be an equitable result. We
can find no error in the record here. Therefore, Kathy’s second assignment of error
is overruled.
Conclusion
{¶58} For the foregoing reasons Douglas’s first, third, fourth, fifth, and sixth
assignments of error are overruled, and his second assignment of error is sustained.
Kathy’s assignments of error are all overruled. Therefore, the judgment of the
Hardin County Common Pleas Court is affirmed in part, reversed in part, and this
cause is remanded for the trial court to determine the proper award for Douglas’s
financial misconduct in failing to prepay the parties’ taxes as ordered.
Judgment Affirmed in Part,
Reversed in Part and
Cause Remanded
MILLER, P.J. and ZIMMERMAN, J., concur.
/jlr
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