Ward v. Ward ( 2020 )

[Cite as Ward v. Ward, 2020-Ohio-3415.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
MARION COUNTY
JOSEPH J. WARD,
PLAINTIFF-APPELLEE, CASE NO. 9-19-24
v.
SHANNON L. WARD, OPINION
DEFENDANT-APPELLANT.
Appeal from Marion County Common Pleas Court
Family Division
Trial Court No. 2017 DR 0198
Judgment Affirmed
Date of Decision: June 22, 2020
APPEARANCES:
Rocky Ratliff for Appellant
Case No. 9-19-24
PRESTON, J.
{¶1} Defendant-appellant, Shannon L. Ward (“Shannon”), appeals the
March 27, 2019 judgment of the Marion County Court of Common Pleas, Family
Division. For the reasons that follow, we affirm.
{¶2} Shannon and plaintiff-appellee, Joseph J. Ward (“Joseph”), were
married on March 4, 2000. (Doc. Nos. 1, 11, 92). Two minor children were born
as issue of the marriage. (Id.). On September 1, 2017, Joseph filed a complaint in
the trial court requesting a divorce from Shannon. (Doc. No. 1). On September 25,
2017, Shannon filed her answer to Joseph’s complaint and a counterclaim for
divorce. (Doc. No. 11).
{¶3} The final hearing in the matter commenced on March 14-15, 2019.
(Doc. No. 92). On March 27, 2019, the trial court filed its judgment entry granting
Joseph’s complaint for divorce. (Id.). In the judgment entry, the trial court also
divided the parties’ property. (Id.). Relevant to this appeal, the trial court
determined that all of the property acquired by the parties during the marriage, with
the exception of the shares of stock in Ohigro, Inc. (“Ohigro”) held by Joseph, is
marital property subject to equitable division by the court. (Id.). The trial court
determined that Joseph’s 3,267 shares of Class B non-voting stock in Ohigro were
“obtained pursuant to a defined pattern of gifting to transfer ownership of a ‘closely-
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held’ family business to family members only,” and were thus separate property that
was not subject to equitable division. (Id.).
{¶4} Additionally, the trial court ordered that Shannon retain the 2016 Honda
Odyssey van titled in Joseph’s name and assume responsibility for paying the loan
on the van. (Id.). Further, the trial court ordered that Joseph be held harmless from
payment on the van. (Id.).
{¶5} On April 26, 2019, Shannon filed her notice of appeal. (Doc. No. 95).
She raises three assignments of error, which we address together.
Assignment of Error No. I
The trial court erred by ruling that the 3,267 shares of Class B
non-voting shares of stock received from Ohigro by Plaintiff-
Appellee were non-marital and as such, were not subject to
division by the Court, as the shares were actually marital in
nature.
Assignment of Error No. II
Even if the Court was correct in classifying this property as a gift
and separate property, the stock was converted to marital
property status due to increase in value during the marriage, and
the Appellant should have been awarded one-half (1/2) of any
appreciation of the improved value as the improved value would
be marital in nature.
Assignment of Error No. III
The trial court’s award of the 2016 Honda Odyssey Van to
Appellant resulted in an inequitable division of this asset and/or
debt, as Appellant did not have the means to make the payment
on the loan associated with said vehicle and Appellant had five
(5) times the amount of income as Appellant.
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{¶6} In her first assignment of error, Shannon argues that the trial court erred
by determining that Joseph’s shares of stock in Ohigro were separate property and,
therefore, not subject to division. Specifically, Shannon argues that a portion of
Joseph’s stock in Ohigro was marital property because it was acquired during the
marriage and was received, in part, due to his employment at Ohigro. In her second
assignment of error, Shannon argues that even if the trial court did not err by
classifying Joseph’s shares of stock in Ohigro as separate property, the trial court
subsequently erred by not awarding her one-half of any appreciation of the
improved value of the stock. Specifically, Shannon contends that the value of the
stock improved due to the work Joseph performed as an employee of Ohigro, and
thus, the trial court should have equitably divided the appreciation of the improved
value of the shares of stock between the parties. In her third assignment of error,
Shannon contends that the trial court’s award of the 2016 Honda Odyssey to her
resulted in an inequitable division of marital property because she does not have the
means to make payments on the vehicle and her income is substantially lower than
Joseph’s income.
{¶7} “In divorce proceedings, the trial court must determine which property
is marital and then divide that property in an equitable manner.” Dabis v. Dabis, 3d
Dist. Mercer No. 10-97-17, 1998 WL 391938, *2 (July 9, 1998); R.C. 3105.171.
Marital property does not include separate property. R.C. 3105.171(A)(3)(b).
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Following the classification of assets as marital or separate property, the separate
property is generally awarded to the party that owns that property regardless of
whether the separate property was acquired before or during the marriage. R.C.
3105.171(D).
{¶8} “The trial court’s classification of property as marital or separate is a
factual determination.” Worden v. Worden, 3d Dist. Marion No. 9-16-54, 2017-
Ohio-8019, ¶ 17, citing Rinehart v. Rinehart, 4th Dist. Gallia No. 96 CA 10, 1998
WL 282622 (May 18, 1998). “An appellate court reviews the trial court’s
classification of property as marital or separate property under a manifest weight of
the evidence standard.” Mousa v. Saad, 3d Dist. Marion No. 9-16-43, 2017-Ohio-
7116, ¶ 24, citing Brandon v. Brandon, 3d Dist. Mercer No. 10-08-13, 2009-Ohio-
3818, ¶ 11, citing Gibson v. Gibson, 3d Dist. Marion No. 9-07-06, 2007-Ohio-6965,
¶ 26, quoting Eggeman v. Eggeman, 3d Dist. Auglaize No. 2-04-06, 2004-Ohio-
6050, ¶ 14. “An appellate court will not reweigh the evidence introduced at trial;
rather, we will uphold the findings of the trial court if the record contains some
competent, credible evidence to support the trial court’s conclusions.” Eggeman at
¶ 27. “In determining whether competent, credible evidence exists, ‘[a] reviewing
court should be guided by a presumption that the findings of a trial court are correct,
since the trial judge is best able to view the witnesses and observe their demeanor,
gestures, and voice inflections, and use those observations in weighing the
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credibility of the testimony.’” Bey v. Bey, 3d Dist. Mercer No. 10-08-12, 2009-
Ohio-300, ¶ 15, quoting Barkley v. Barkley, 119 Ohio App. 3d 155, 159 (4th
Dist.1997).
{¶9} R.C. 3105.171(A)(3)(a) defines marital property as follows:
(i) All real and personal property that currently is owned by either
or both of the spouses, including, but not limited to, the retirement
benefits of the spouses, and that was acquired by either or both of the
spouses during the marriage;
(ii) All interest that either or both of the spouses currently has in any
real or personal property, including, but not limited to, the retirement
benefits of the spouses, and that was acquired by either or both of the
spouses during the marriage;
(iii) Except as otherwise provided in this section, all income and
appreciation on separate property, due to labor, monetary, or in-kind
contribution of either or both of the spouses that occurred during the
marriage;
(iv) A participant account, as defined in section 148.01 of the
Revised Code, of either of the spouses, to the extent of the following:
the moneys that have been deferred by a continuing member or
participating employee, as defined in that section, and that have been
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transmitted to the Ohio public employees deferred compensation
board during the marriage and any income that is derived from the
investment of those moneys during the marriage; the moneys that
have been deferred by an officer or employee of a municipal
corporation and that have been transmitted to the governing board,
administrator, depository, or trustee of the deferred compensation
program of the municipal corporation during the marriage and any
income that is derived from the investment of those moneys during
the marriage; or the moneys that have been deferred by an officer or
employee of a government unit, as defined in section 148.06 of the
Revised Code, and that have been transmitted to the governing board,
as defined in that section, during the marriage and any income that is
derived from the investment of those moneys during the marriage.
Furthermore, R.C. 3105.171(A)(3)(b) indicates that marital property “does not
include separate property.” R.C. 3105.171(A)(6)(a) defines separate property, in
relevant part, as any interest in real or personal property that the court finds to be
any of the following:
(i) An inheritance by one spouse by bequest, devise, or descent
during the course of the marriage;
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(ii) Any real or personal property or interest in real or personal
property that was acquired by one spouse prior to the date of the
marriage;
(iii) Passive income and appreciation acquired from separate
property by one spouse during the marriage;
(iv) Any real or personal property or interest in real or personal
property acquired by one spouse after a decree of legal separation
issued under section 3105.17 of the Revised Code;
***
(vii) Any gift of real or personal property or of an interest in real or
personal property that is made after the date of the marriage and that
is proven by clear and convincing evidence to have been given to only
one spouse.
{¶10} Generally, “‘the party seeking to establish an asset as separate property
* * * has the burden of proof, by a preponderance of the evidence, to trace the asset
to separate property.’” Strasburg v. Strasburg, 3d Dist. Auglaize No. 2-10-12,
2010-Ohio-3672, ¶ 20, quoting Earnest v. Earnest, 11th Dist. Portage No. 2002-P-
0010, 2003-Ohio-704, ¶ 38. “A ‘preponderance of the evidence means the greater
weight of the evidence that is necessary to destroy the equilibrium.’” Golan-Elliott
v. Elliott, 3d Dist. Union No. 14-17-01, 2017-Ohio-8524, ¶ 53, quoting Reed v.
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Reed, 3d Dist. Allen No. 1-09-63, 2010-Ohio-4550, ¶ 10. In general, “the holding
of title to property by one spouse individually or by both spouses in a form of co-
ownership does not determine whether the property is marital property or separate
property.” R.C. 3105.171(H).
{¶11} In her first assignment of error, Shannon argues that a portion of
Joseph’s shares of stock in Ohigro is marital property. Shannon contends that the
shares of stock were received in consideration for Joseph’s employment at Ohigro
and thus constitute marital property.
{¶12} With respect to the shares of stock in Ohigro, the trial court found as
follows:
All property acquired by the parties during the term of the marriage is
marital property subject to equitable division by the Court with the
exception of the shares of stock in Ohigro held by Plaintiff subject to
the Buy/Sell Agreement dated November 29, 2013, and the prior
agreement containing the same restrictive covenants for same.
Plaintiff’s Three thousand two hundred sixty-seven (3,267) shares of
Class B non-voting stock in Ohigro were obtained pursuant to a
defined pattern of gifting to transfer ownership of a “closely-held”
family business to family members only. All of Plaintiff’s stock
shares were acquired by him in this fashion, and therefore are separate
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property not subject to distribution by this Court. IT IS SO
ORDERED.
(Doc. No. 92).
{¶13} In 1965, Joseph’s grandfather, James H. Ward (“James”), founded
Ohigro, an agricultural services and products company. (Mar. 14-15, 2019 Tr. at
15, 45-46, 236). Joseph began working at Ohigro in January 2001. (Id. at 237, 288).
At the time of the final divorce hearing, Joseph held the position of Vice President
of Operations. (Id. at 59-60, 237). Joseph’s brother, Jeffrey Ward (“Jeffrey”), is
the Controller of Ohigro and primarily oversees the company’s finances and human
resources. (Id. at 26-27). Joseph and Jeffrey’s father, Jerry A. Ward (“Jerry”),
despite being partially retired, holds the title of President of the company and
oversees the business. (Id. at 28, 59-60). (See Defendant’s Ex. V).
{¶14} As an employee of Ohigro, Joseph receives a base salary. (Mar. 14-
15, 2019 Tr. at 39-42, 97-98). (See Plaintiff’s Ex. 1). Additionally, Joseph receives
an annual bonus. (Mar. 14-15, 2019 Tr. at 36-37); (Plaintiff’s Ex. 1). Although the
annual bonus is not guaranteed, Joseph has received an annual bonus most years,
and Joseph received an annual bonus in 2016, 2017, and 2018. (Mar. 14-15, 2019
Tr. at 36-37); (Plaintiff’s Ex. 1). Ohigro’s annual bonuses are determined by the
company’s profitability for the fiscal year and the employee’s seniority and job
performance. (Mar. 14-15, 2019 Tr. at 41-42). Additionally, Joseph is a fully-
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vested participant in Ohigro’s savings and retirement profit sharing plan. (Id. at 53,
94); (Plaintiff’s Exs. 2, 11). The profit sharing plan is completely company funded,
and employees are not able to allocate other amounts from their checks. (Mar. 14-
15, 2019 Tr. at 54-55). Joseph is also enrolled in Ohigro’s 401k plan, and the
company matches a percentage of Joseph’s contribution to the plan. (Id. at 91-94);
(Plaintiff’s Ex. 10).
{¶15} Beginning in the late 1990s, James asked Jeffrey to assist him in
facilitating the transfer of stock in Ohigro as gifts to his family members. (Mar. 14-
15, 2019 Tr. at 22). James’s intention in making the gifts was to allow James to
witness his children and grandchildren enjoy the gift or “inheritance” while he was
alive. (Id.). James and Jeffrey enlisted legal counsel to assist in making these gifts
and to manage the tax implications. (Id. at 27-28). At the advice of counsel, James
made his gifts of stock to his family members over a number of years, with the goal
of not exceeding the statutory gifting limits and triggering gift tax implications for
the recipients. (Id.).
{¶16} As of December 31, 1998, Joseph owned 364 shares of Class B
nonvoting stock in Ohigro. (Plaintiff’s Ex. 3). Joseph’s 364 shares constituted
0.552% of the total shares in Ohigro. (Id.); (Mar. 14-15, 2019 Tr. at 235). On
January 1, 1999, James made the first transfer of stock to his family members,
including Joseph and his siblings under the gifting scheme. (Plaintiff’s Ex. 3); (Mar.
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14-15, 2019 Tr. at 22). On that date, James transferred 464 shares of Class B
nonvoting stock in Ohigro each to Joseph, Jeffrey, and Joseph’s sister, Julie A. Ward
(“Julie”). (Plaintiff’s Ex. 3). As of January 1, 1999, Joseph’s stock in Ohigro
constituted a 1.255% ownership interest in the company. (Plaintiff’s Ex. 3); (Mar.
14-15, 2019 Tr. at 22). On March 1, 1999, following a corporate buyout of James
W. Ward, Jr., Joseph’s ownership interest in Ohigro increased to 1.775% of the
company. (Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at 23).
{¶17} On January 1, 2000, James transferred an additional 268 shares of
stock in Ohigro to each of Joseph and his siblings. (Plaintiff’s Ex. 3); (Mar. 14-15,
2019 Tr. at 23). As of January 1, 2000, Joseph’s total shares of Class B nonvoting
stock in Ohigro numbered 1,096 and constituted a 2.350% interest in Ohigro.
(Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at 23). On May 1, 2001, Joseph’s interest
in the company increased to 3.712% due to a corporate buyout of the shares of Class
B nonvoting stock of Joseph’s uncle, Michael J. Ward (“Michael”). (Plaintiff’s Ex.
3); (Mar. 14-15, 2019 Tr. at 18, 78-79). However, Joseph did not receive additional
shares of stock in Ohigro on that date. (Plaintiff’s Ex. 3).
{¶18} On January 1, 2002, James transferred 71 shares of Class B nonvoting
stock in Ohigro to Joseph, bringing Joseph’s total number of shares of Class B
nonvoting stock to 1,167 and constituting a 3.952% interest in the company. (Id.);
(Mar. 14-15, 2019 Tr. at 24, 308-309). Following the January 1, 2002 transfer,
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James no longer owned any shares of stock in Ohigro. (Plaintiff’s Ex. 3); (Mar. 14-
15, 2019 Tr. at 24).
{¶19} Following James’s final transfer of stock, no shares of stock in Ohigro
changed hands for more than ten years. (Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at
24). In 2012, Jerry and Jacqueline K. Ward (“Jacqueline”), Joseph’s mother, began
the process of transferring their shares of stock in Ohigro to their three children:
Joseph, Jeffrey, and Julie. (Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at 18-19, 24-
25). Accordingly, on December 1, 2012, Jerry and Jacqueline transferred 2,100
shares of Class B nonvoting stock to Joseph, 2,100 shares to Jeffrey, and 1,100
shares to Julie. (Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at 25, 75, 80-81, 309). As
a result of the gifting, Joseph’s aggregate number of shares of Class B nonvoting
stock in Ohigro was 3,267 shares, constituting an 11.065% interest in the company.
(Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr. at 24, 236). No additional transfers of
stock in Ohigro were made between December 1, 2012 and the time of the final
divorce hearing. (Mar. 14-15, 2019 Tr. at 62, 136-137); (Plaintiff’s Ex. 3).
{¶20} With respect to the discrepancy in the number of shares of stock that
Joseph and Jeffrey received, versus the number of shares of stock that Julie received,
on December 1, 2012, Jeffrey testified that it was his belief that he and Joseph
received more shares of stock in Ohigro than Julie received because they are
involved with the company, and Julie does not have the same day-to-day
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involvement in the company. (Mar. 14-15, 2019 Tr. at 81-82). As a result of Joseph
and Jeffrey’s day-to-day involvement in the company, their parents reasoned that
the shares of stock in Ohigro would be more meaningful to them than they would
be to Julie. (Id.). Jeffrey recalled that because of this, Jerry and Jacqueline gifted
Julie other assets that totaled the same value and would hold more personal meaning
to her. (Id.).
{¶21} As of December 1, 2012, five individuals held shares of stock in
Ohigro—Jerry, Jacqueline, Jeffrey, Joseph, and Julie. (Id. at 16); (Plaintiff’s Ex. 3).
As of that date, Jerry owned all 980 shares of Class A voting stock and an additional
9,205 shares of Class B nonvoting stock. (Plaintiff’s Ex. 3); (Mar. 14-15, 2019 Tr.
at 72). Jerry’s total shares of stock in Ohigro constituted an ownership interest of
34.495%. (Plaintiff’s Ex. 3). Jacqueline’s interest in the company totaled 9,350
shares of Class B nonvoting stock for a total ownership interest of 31.667%. (Id.).
Jeffrey owned a total of 4,457 shares of Class B nonvoting stock, which represented
a 15.095% interest in Ohigro. (Id.). Joseph owned a total of 3,267 shares of Class
B nonvoting stock for a total interest of 11.065%. (Id.). Finally, Julie owned a total
of 2,267 shares of Class B nonvoting stock for a total ownership interest of 7.678%.
(Id.).
{¶22} Joseph and Jeffrey testified that at no point was money exchanged in
consideration for the shares of stock. (Mar. 14-15, 2019 Tr. at 21, 28, 234). Joseph
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and Jeffrey stated that they both understood that they received the shares of stock as
part of a gifting or advanced inheritance process from their parents and
grandparents. (Id. at 23, 28, 234, 265, 309). Moreover, Jeffrey testified that at no
time has Ohigro stock been earned by shareholders. (Id. at 63). Jeffrey further
stated that it has never been the procedure of Ohigro that individuals receive shares
of stock in Ohigro for job performance or upon completion of a corporate goal.
(Id.).
{¶23} The transfer of stock in Ohigro is governed by a Buy-Sell Agreement,
which each of the shareholders signed. (Id. at 29, 65). (See Plaintiff’s Ex. 4). The
current version of the agreement was executed on November 29, 2013. (Plaintiff’s
Ex. 4). However, there was a prior version of the Buy-Sell Agreement which was
executed in 1998. (Mar. 14-15, 2019 Tr. at 64-65). Joseph provided the 2013
version of the Buy-Sell Agreement as part of the record; however, the 1998 version
of the Buy-Sell Agreement is not part of the record. (Id. at 65). (See Plaintiff’s Ex.
4). However, Jeffrey testified that the content of the 1998 version of the agreement
is identical to that of the 2013 version. (Mar. 14-15, 2019 Tr. at 65). (See Plaintiff’s
Ex. 4). According to Jeffrey, who worked with counsel to produce the documents,
the only difference between the two versions of the Buy-Sell Agreement is the name
and signature of the current shareholders, which was updated in 2013 to reflect the
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names and signatures of the current shareholders. (Mar. 14-15, 2019 Tr. at 65).
(See Plaintiff’s Ex. 4).
{¶24} Joseph and Jeffrey described Ohigro as a “closely held company.”
(Mar. 14-15, 2019 Tr. at 103, 130, 140, 237). Jeffrey testified that the Buy-Sell
Agreement was created out of the desire to ensure that the shares of stock stay within
the immediate family. (Id. at 29). The Buy-Sell Agreement was therefore created
to ensure that a shareholder that was in need of money or that was the subject of
legal proceedings could not sell their stock in Ohigro to individuals outside of the
immediate family. (Id. at 29-30). Jeffrey testified that he reviewed the 2013 Buy-
Sell Agreement with each of the shareholders and that he considered his review of
the Buy-Sell Agreement with each of the shareholders as a vehicle to educate the
shareholders on the company’s guidelines for the transfer of shares of stock in
Ohigro. (Id. at 65).
{¶25} The Buy-Sell Agreement provides that the shareholder agrees “that he
or she will not, during his or her lifetime, give, sell, transfer, trade, pledge or
otherwise encumber, or permit to be encumbered by liens, or the legal or equitable
interest of another” his or her shares of stock in Ohigro, except as in accordance
with the provisions of the agreement. (Plaintiff’s Ex. 4). The Buy-Sell Agreement
details the process by which the shareholders can dispose of their shares of stock in
Ohigro during their lifetime or at death. (Id.). The Buy-Sell Agreement mandates
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that a living shareholder must first make a written offer of sale to the Board of
Directors of Ohigro offering to sell his or her shares to the company. (Id.). The
Buy-Sell Agreement provides that if the Board of Directors rejects the offer, the
shareholder may offer the shares for purchase to the remaining shareholders by a
process outlined in the agreement. (Id.).
{¶26} Additionally, the Buy-Sell Agreement provides that Ohigro shall have
a valuation of the common stock of the company completed every five years by a
Certified Public Accounting firm which has expertise in providing independent
business valuations including “valuation of stock of closely held businesses.” (Id.).
At the time of the final hearing, the last valuation of Ohigro stock was performed
on June 30, 2012. (Id. at 69-70). (See Defendant’s Ex. R). Jeffrey testified that, at
the advice of the accounting firm, Ohigro did not perform a valuation of stock five
years after the 2012 valuation of stock because there were no plans for the stock to
change hands, whether by gifting or otherwise. (Mar. 14-15, 2019 Tr. at 70-74).
{¶27} The Buy-Sell Agreement also states that “[t]he parties agree that the
rights protected by this agreement cannot be quantified and reduced to money
damages. The corporation and the shareholders each agree that, in any action
against any of them to enforce any provision of this agreement, there is no adequate
remedy at law and neither they nor any agent will raise to attempt to raise that
defense.” (Plaintiff’s Ex. 4). Although the Buy-Sell Agreement does not
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specifically mention the word “divorce,” Jeffrey and Joseph both testified that it was
their understanding that divorce is included in the provision that one cannot “give,
sell, transfer, trade, pledge, or otherwise encumber” shares of stock in Ohigro. (Mar.
14-15, 2019 Tr. at 67-68, 310). (See Plaintiff’s Ex. 4).
{¶28} The Buy-Sell Agreement references a shareholder ledger attached to
the Buy-Sell Agreement as “Schedule A.” (Plaintiff’s Ex. 4); (Mar. 14-15, 2019 Tr.
at 66). However, the copy of the Buy-Sell Agreement presented at the final hearing
and included in the record does not have any attachments, including a document
labeled “Schedule A.” (Mar. 14-15, 2019 Tr. at 66). (See Plaintiff’s Ex. 4).
However, Jeffrey testified that the document referenced as “Schedule A” is the
Shareholder Ledger which contains the same information as Plaintiff’s Exhibit 3.
(Mar. 14-15, 2019 Tr. at 66). (See Plaintiff’s Ex. 3). Additionally, although the
Buy-Sell Agreement references physical certificates of stock, Jeffrey testified that
the company has not had physical certificates of stock for many years. (Mar. 14-
15, 2019 Tr. at 102-103). Rather, due to the restrictive nature of the Buy-Sell
Agreement and the relative rarity of the transfer of shares of stock in Ohigro, the
stock ownership is tracked through the shareholder ledger. (Mar. 14-15, 2019 Tr.
at 73). (See Plaintiff’s Ex. 3).
{¶29} After reviewing the record, we conclude that competent, credible
evidence supports the trial court’s determination that all of Joseph’s shares of stock
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in Ohigro are separate property. First, Joseph directly testified that he understood
that he received his shares of stock in Ohigro as part of a pattern of gifting from his
grandparents and parents that was intended to function as an advanced inheritance.
Jeffrey, who worked directly with his father, grandfather, and legal counsel in the
execution of the gifting, and who received shares of stock in this manner himself,
testified to the gifting process and the considerations his parents and grandparents
undertook with respect to the gifting. For instance, Jeffrey testified that his
grandparents gifted their children and grandchildren shares of stock over the course
of several years to avoid gift tax implications. Additionally, no money was
exchanged in consideration for Joseph’s shares of stock in Ohigro.
{¶30} Although Joseph is an employee at Ohigro, he receives compensation
for his employment through his salary, annual bonus, corporate profit sharing plan,
and his 401k contribution match, which the trial court determined was marital
property. Additionally, Jeffrey testified that employees cannot earn shares of stock
in Ohigro through job performance, such as meeting personal or corporate goals.
{¶31} Moreover, the evidence at the final hearing showed that a number of
Ohigro employees are not immediate family members and that, at the time of the
final hearing, only Joseph, his two siblings, and his parents owned shares of stock
in Ohigro. This provides additional evidence that Ohigro is a closely-held
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corporation and that Joseph’s shares of stock in Ohigro were not acquired in
consideration for Joseph’s employment at Ohigro.
{¶32} Additionally, Ohigro’s Buy-Sell Agreement provides additional
evidence that Joseph’s shares of stock in Ohigro are separate property. The Buy-
Sell Agreement details the process by which the shares of stock in the closely-held
corporation can be sold by a living shareholder, and provides that the shareholder
must offer his or her shares of stock to the corporation and to the remaining
shareholders, thus ensuring that the shares of Ohigro remain in the hands of the
current shareholders.
{¶33} Shannon contends that provisions of the Buy-Sell Agreement are not
binding on Joseph’s shares of stock because all of Joseph’s shares of stock in Ohigro
predate the November 29, 2013 Buy-Sell Agreement. However, Jeffrey testified
that the current version of the Buy-Sell Agreement was predated by a previous
version of the agreement that contained identical content to the current version of
the agreement. According to Jeffrey’s testimony, the only difference between the
two documents were the names and signatures of the current shareholders. Shannon
also argues that Joseph’s stock was not subject to the restrictive terms in the Buy-
Sell Agreement because Joseph did not produce stock certificates containing the
restrictions on transfer. However, as Jeffrey testified, Ohigro has not utilized
physical stock certificates for many years. Rather, due to the restrictive nature of
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the Buy-Sell Agreement and at the advice of counsel, Ohigro has maintained a
shareholder ledger to track the ownership of the shares of stock rather than issuing
physical certificates of stock. Thus, the fact that the restrictions referenced in the
Buy-Sell Agreement were not present on physical certificates of shares of stock does
not mean that Joseph’s shares of stock in Ohigro were not subject to the transfer
restrictions referenced in the Buy-Sell Agreement.
{¶34} Shannon further argues that the Buy-Sell Agreement is defective
because the copy of the Buy-Sell Agreement presented at the final hearing does not
have Schedule A attached thereto, as referenced in the Buy-Sell Agreement.
However, although Schedule A was not physically attached to the copy of the Buy-
Sell Agreement presented to the trial court, Jeffrey testified that Schedule A referred
to the shareholder ledger. Jeffrey stated that the shareholder ledger is attached to
the original version of the Buy-Sell Agreement. Further, a copy of the shareholder
ledger, containing the same figures contained in Schedule A was admitted into
evidence as Plaintiff’s Exhibit 3. Thus, the information contained in Schedule A is
part of the record. Moreover, Joseph’s failure to physically attach Schedule A to
the copy of the Buy-Sell Agreement admitted as evidence at the final hearing does
not render the Buy-Sell Agreement invalid. See generally McCamon-Hunt Ins.
Agency, Inc. v. Med. Mut. of Ohio, 7th Dist. Mahoning No. 02 CA 23, 2003-Ohio-
1221, ¶ 9, 11-12. We are also not persuaded by Shannon’s arguments that the Buy-
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Sell Agreement is defective because the document does not specifically reference
“divorce” and does not contemplate unrelated events, such as possible bankruptcy
proceedings of a shareholder. Moreover, we are not persuaded by Shannon’s
argument that the Buy-Sell Agreement is invalid because the company’s last
valuation of stock occurred more than five years ago. Accordingly, the trial court
did not err by determining that Joseph’s shares of stock in Ohigro, which are subject
to the Buy-Sell Agreement, are separate property.
{¶35} Shannon also argues that Joseph’s increased interest in Ohigro
following the corporate buyout of Michael’s shares of stock in 2001 was marital
property because the increase was not the result of a pattern of gifting. Specifically,
Shannon contends that Joseph’s increased relative interest in the company on May
1, 2001 was not received in accordance with a pattern of gifting. We disagree. On
January 1, 2001, Joseph owned 1,096 shares of stock in Ohigro, which constituted
a 2.350% interest in the company. However, on May 1, 2001, Joseph’s 1,096 shares
of stock in Ohigro constituted a 3.712% interest in the company. This increase in
Joseph’s ownership interest in Ohigro was not due to an increase in the number of
Joseph’s shares of stock but rather was the result of a decrease in the total number
of shares of stock in Ohigro due to a corporate buyout of Michael’s shares of stock.
Thus, although Joseph’s relative ownership interest increased due to a decrease in
the total number of shares of corporate stock, Joseph’s total number of shares of
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stock in Ohigro remained the same. Accordingly, we reject Shannon’s argument
that the corporate buyout of another shareholder’s stock transformed Joseph’s
existing shares of stock in Ohigro into marital property. To the extent that Shannon
argues that any increase in value of Joseph’s existing shares of stock in Ohigro is
marital property, we will address that argument in our discussion of Shannon’s
second assignment of error.
{¶36} Finally, Shannon argues that at least a portion of Joseph’s shares of
stock in Ohigro is marital property because that portion was obtained in
consideration for his employment at Ohigro. Specifically, Shannon points to the
fact that on December 1, 2012, Joseph and Jeffrey each received 2,100 shares of
stock in Ohigro. In contrast, their sister, Julie, who is not involved in the day-to-
day operations of the company, received only 1,100 shares of stock. Shannon
argues that the discrepancy in the number of shares in the stock received by Joseph,
Jeffrey, and Julie indicates that the 1,000 additional shares of stock in Ohigro were
given to Joseph and Jeffrey as consideration for their employment at Ohigro. Thus,
Shannon reasons, at least 1,000 of the 2,100 shares of stock that Joseph received on
December 1, 2012 are marital property. We disagree.
{¶37} First, Jerry and Jacqueline had the right to give away their shares of
stock in Ohigro to their children in whatever proportions they so choose. They were
not required to gift their shares of stock in Ohigro to their children in equal shares.
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Moreover, Shannon’s argument that Joseph’s additional shares of stock in Ohigro
were given in consideration for his employment at Ohigro is undermined by
Jeffrey’s testimony that Julie received other assets in an amount equal to the
additional 1,000 shares of stock in Ohigro that Jacqueline and Jerry gifted their sons.
Further, as discussed above, Joseph was compensated for his employment at Ohigro
with his base salary, annual bonus, 401k contribution matching, and the corporate
profit-sharing program. Moreover, Jeffrey testified that shares of stock in Ohigro
were not and could not be earned through job performance. Accordingly, the trial
court did not err in determining that Joseph’s shares of Ohigro stock were obtained
pursuant to a defined pattern of gifting.
{¶38} Thus, for the foregoing reasons, we conclude that the trial court’s
findings that Joseph’s shares of stock in Ohigro are separate property was supported
by competent, credible evidence.
{¶39} Accordingly, Shannon’s first assignment of error is overruled.
{¶40} In her second assignment of error, Shannon argues that even if the trial
court did not err by classifying Joseph’s shares of stock in Ohigro as separate
property, the trial court abused its discretion by not equitably dividing the
appreciation of said shares of stock. Shannon contends that any appreciation of the
shares of stock was due to Joseph’s labor and was, therefore, a marital asset.
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{¶41} However, here, the record indicates that neither party raised the issue
below or presented evidence as to the value of any appreciation of Joseph’s shares
of stock in Ohigro. Although at the final hearing, the parties testified and presented
evidence as to the classification of the shares of stock in Ohigro as either separate
or marital property, the parties did not specifically raise the issue of the appreciation
of the shares of stock in Ohigro. Additionally, a detailed valuation of Ohigro and
Joseph’s interest therein did not address the issue of the appreciation of Joseph’s
shares of stock in Ohigro. (See Defendant’s Ex. V). In addition to not raising the
issue at the final hearing, the parties also did not raise the issue in their pretrial
briefs. In fact, Shannon did not even file a pretrial brief with the trial court despite
the trial court’s request that both parties submit pretrial briefs seven days prior to
the commencement of the final hearing. (Mar. 14-15, 2019 Tr. at 14-15).
{¶42} Thus, because the parties failed to raise the issue of the appreciation
of Joseph’s shares of stock in Ohigro below, the issue is waived for purposes of
appeal. See Lassiter v. Lassiter, 1st Dist. Hamilton No. C-010309, 2002-Ohio-3136,
¶ 26; Dolan v. Dolan, 11th Dist. Trumbull Nos. 2000-T-0154 and 2001-T-0003,
2002-Ohio-2440, ¶ 6-7.
{¶43} Accordingly, Shannon’s second assignment of error is overruled.
{¶44} In her third assignment of error, Shannon argues that the trial court
abused its discretion by awarding her the 2016 Honda Odyssey van. Specifically,
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Shannon argues that by awarding the van to her, the trial court did not equitably
divide the assets or debts of the marriage. Shannon reasons that, because Joseph’s
income was greater than hers, the trial court should have awarded the van, and its
associated debt, to Joseph. Shannon argues that, in the alternative, the trial court
should have ordered the van sold and any profit or loss divided equitably between
the parties.
{¶45} Generally, trial courts should divide marital assets and debts equally
between the spouses. R.C. 3105.171(C)(1). However, where equal division of the
marital assets and debts would be inequitable, “the trial court must ‘divide the
marital * * * property equitably between the spouses * * *.’” Siferd v. Siferd, 3d
Dist. Hancock No. 5-17-04, 2017-Ohio-8624, ¶ 25, quoting R.C. 3105.171(B).
“Trial courts generally have broad discretion in determining the equitable
distribution of property in divorce cases; and therefore, we review the overall
appropriateness of the trial court’s property distribution under an[] abuse of
discretion standard.” Dindal v. Dindal, 3d Dist. Hancock No. 5-09-06, 2009-Ohio-
3528, ¶ 6, citing Martin v. Martin, 3d Dist. Marion No. 9-03-47, 2004-Ohio-807, ¶
6, citing Lust v. Lust, 3d Dist. Wyandot No. 16-02-04, 2002-Ohio-3629, Bisker v.
Bisker, 69 Ohio St. 3d 608 (1994), and Martin v. Martin, 18 Ohio St. 3d 292 (1985).
See also Welsh-Pojman v. Pojman, 3d Dist. Crawford No. 3-03-12, 2003-Ohio-
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6708, ¶ 25 (“We are aware that rigid rules to determine value cannot be established,
as equity depends on the totality of the circumstances.”).
{¶46} “‘Although Ohio’s divorce statutes do not specifically articulate debt
as an element of marital and separate property, the rules concerning marital assets
are usually applied to marital and separate debt as well.’” Siferd, at ¶ 26, quoting
Schwarck v. Schwarck, 3d Dist. Auglaize No. 2-11-24, 2012-Ohio-3902, ¶ 20, citing
Vonderhaar-Ketron v. Ketron, 5th Dist. Fairfield No. 10 CA 22, 2010-Ohio-6593,
¶ 34. “‘The property to be divided in a divorce proceeding includes not only the
assets owned by the parties but also any debts incurred by the parties.’” Id., quoting
Forman v. Forman, 3d Dist. Marion No. 9-13-67, 2014-Ohio-3545, ¶ 31, citing
Marrero v. Marrero, 9th Dist. Lorain No. 02CA008057, 2002-Ohio-4862, ¶ 43.
Like property acquired during a marriage, debts incurred during a marriage are
presumptively marital debts unless it can be proved that they are not. Schwarck at
¶ 21, citing Vergitz v. Vergitz, 7th Dist. Jefferson No. 05 JE 52, 2007-Ohio-1395, ¶
12, citing Knox v. Knox, 7th Dist. Jefferson No. 04 JE 24, 2006-Ohio-1154, ¶ 25-
26.
{¶47} Shannon asks this Court to review the trial court’s award of the 2016
Honda Odyssey van to her without reference to the overall division of marital
property. However, “‘“[i]n determining whether the trial court abused its discretion,
a reviewing court should not examine the valuation and division of a particular
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marital asset or liability in isolation.”’” Siferd v. Siferd, 3d Dist. Hancock No. 5-
18-05, 2018-Ohio-3616, ¶ 14, quoting Siferd, 2017-Ohio-8624, at ¶ 27, quoting
Harris v. Harris, 6th Dist. Lucas No. L-02-1369, 2004-Ohio-683, ¶ 19, citing
Briganti v. Briganti, 9 Ohio St. 3d 220, 222 (1984). Rather, “‘“[t]he reviewing court
must, instead, view the property division under the totality of the circumstances to
determine whether the property division reflects an unreasonable, arbitrary or
unconscionable attitude on the part of the domestic relations court.”’” Id., quoting
Siferd, 2017-Ohio-8624, at ¶ 27, quoting Harris at ¶ 19, citing Briganti at 222.
{¶48} With respect to the parties’ vehicles, the trial court made the following
orders:
Defendant shall retain the 2016 Honda Odyssey Van currently titled
in Plaintiff’s name and be responsible for the indebtedness of same
and Plaintiff shall be held harmless from payment of same. Plaintiff
shall transfer the title to Defendant by May 1, 2019. Plaintiff shall
retain the 2016 Honda Civic and the 2016 Chevrolet Corvette, both
titled in his name, and be responsible for any indebtedness on same
and hold Defendant harmless from any payment for said indebtedness.
The parties testified and submitted evidence as to the value of said
vehicles and agreed there was no equity in the 2016 Honda Odyssey
or the 2016 Chevrolet Corvette. There is approximately Six thousand
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dollars ($6,000.00) in equity in the 2016 Honda Civic, which is used
by [the parties’ oldest child], and Defendant is hereby credited Three
thousand dollars ($3,000.00) for her equity in same. Plaintiff shall
also retain the John Deere mower valued at Two thousand dollars
($2,000.00), and the zero turn mower, valued at Three thousand
dollars ($3,000.00), along with the Go-cart valued at Two hundred
dollars ($200.00), all of which he requested to keep. The golf cart,
which “hardly runs” and two (2) four-wheelers, kids 50 cc and Honda,
were not assigned a value so they will be sold with the household
goods and other personal property at auction, which can be purchased
by either party, if they wish, and the proceeds divided equally between
the parties. Defendant’s total equity in the items specified herein, in
the sum of Five thousand six hundred dollars ($5,600.00) shall be paid
by Plaintiff by June 1, 2019, or shall be deducted from his share of the
equity in the marital residence proceeds. IT IS SO ORDERED.
(Doc. No. 92).
{¶49} At the time of the final hearing, the parties owned many vehicles and
equipment that were acquired during the course of the marriage. (Mar. 14-15, 2019
Tr. at 191-193, 217-224). Shannon primarily drove a 2016 Honda Odyssey van that
was registered in Joseph’s name. (Id. at 193, 220). The parties purchased the
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vehicle new and financed it, and at the time of the final hearing, several years
remained on the term of the loan. (Id. at 193, 220-221, 374). The Kelley Bluebook
trade-in value of the van is $15,663 to $17,238. (Id. at 221); (Plaintiff’s Ex. 15).
The parties owed approximately $25,000 to $30,000 on the vehicle. (Mar. 14-15,
2019 Tr. at 221). Thus, the vehicle “is considerably under water.” (Id.). At the
time of the final hearing, Joseph was maintaining payments on the van. (Id. at 252).
Shannon testified that the monthly payments for the van are approximately $760 a
month and that she could not afford to keep the vehicle. (Id. at 193, 374). However,
when asked what she recommended that the trial court do with the vehicle, she stated
that she was going to “leave that up to the Court to decide,” but that she could not
afford the monthly payments. (Id. at 374).
{¶50} The parties also owned a 2016 Chevy Corvette. (Id. at 191, 217).
Joseph primarily drove the vehicle, and the vehicle was registered in his name. (Id.
at 191, 217, 374-375). The parties financed the vehicle on an eight-year loan. (Id.
at 217). At the time of the hearing, the loan on the 2016 Chevy Corvette had not
yet been paid off. (Id.). Joseph testified that he agreed with the Kelley Blue Book
trade-in value of the Corvette, which was listed at between $37,318 and $40,699.
(Id. at 218); (Plaintiff’s Ex. 13). Joseph testified that due to the eight-year term of
the loan, there was no equity in the vehicle. (Mar. 14-15, 2019 Tr. at 218-219). At
the hearing, Joseph, who was maintaining payments on the 2016 Chevy Corvette,
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requested that the trial court award him the vehicle. (Id. at 218, 252). Shannon
agreed that Joseph should retain the vehicle. (Id. at 375).
{¶51} The parties’ third vehicle was a 2016 Honda Civic, which is registered
in Joseph’s name, but was primarily driven by the parties’ oldest child. (Id. at 161,
191, 219). The parties purchased the 2016 Honda Civic new and financed the
vehicle. (Id. at 219). At the time of the hearing, Joseph was maintaining payments
on the vehicle. (Id. at 252). The parties owed approximately $6,500 on the vehicle
and the trade-in value of the vehicle was approximately $12,398 to $13,581. (Id. at
219-220); (Plaintiff’s Ex. 14). Both of the parties expressed a desire for their oldest
child to continue driving the vehicle. (Mar. 14-15, 2019 Tr. at 220, 374). Joseph
requested that the trial court order Shannon to pay for half of the Honda Civic
payments. (Id. at 220). However, Shannon testified that due to uncertainty
regarding her financial situation, she was unable to commit to making a financial
contribution toward the vehicle. (Id. at 374).
{¶52} The parties also owned a 2010 John Deere lawn mower, which Joseph
requested that the trial court award to him. (Id. at 191-192, 222). Joseph estimated
that the John Deere lawn mower was worth approximately $1,500 to $2,000. (Id. at
222). In addition, the parties owned a zero-turn lawn mower, which Joseph
requested that the trial court award to him. (Id. at 222-223). Joseph estimated that
the zero-turn lawn mower is worth approximately $3,000. (Id. at 222). During the
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course of the marriage, the parties also purchased a go-cart, which Joseph estimated
was worth several hundred dollars. (Id. at 192, 223). Joseph requested that he retain
the go-cart for the parties’ children. (Id. at 223-224). In addition, the parties owned
a golf cart and two four-wheeler vehicles. (Id. at 222-223).
{¶53} Reviewing the totality of the facts and circumstances in the record, we
cannot conclude that the trial court abused its discretion by awarding the 2016
Honda Odyssey van, with its associated debt, to Shannon. As this court has held,
“[t]he mere fact that a property division is unequal, does not, standing alone, amount
to an abuse of discretion.” Kimmey v. Kimmey, 3d Dist. Allen No. 1-01-68, 2001
WL 1338847, *6 (Oct. 31, 2001). Here, the parties owned two vehicles that did not
contain equity, the 2016 Honda Odyssey van and the 2016 Chevy Corvette, and the
trial court awarded each of the parties one of the vehicles. At the final hearing, the
parties did not supply the trial court with exact figures for the balance remaining on
the loans associated with the 2016 Honda Odyssey van or the 2016 Chevy Corvette,
but instead provided the trial court with broad estimations of the same.
Additionally, the trial court equally divided the equity associated with the remaining
vehicles and equipment.
{¶54} Furthermore, the division of the equity and debt associated with the
parties’ vehicles was part of a larger property settlement. Aside from the
classification of Joseph’s shares of stock in Ohigro as separate property, which we
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addressed above, and the award of the 2016 Honda Odyssey van, Shannon does not
argue that the trial court’s division of property, which includes the parties’
retirement accounts, Ohigro profit sharing, and real estate, is inequitable.
{¶55} Shannon reasons that the trial court abused its discretion by awarding
her the Honda Odyssey van because, at the time of the final hearing, her wages were
lower than Joseph’s wages. However, the trial court addressed the disparity in its
findings related to spousal support. The trial court acknowledged that “there exists
a significant disparity in incomes of the parties” and that Shannon’s income was
significantly diminished by the parties’ agreement that she would stay home with
the parties’ children. (Doc. No. 92). The trial court also considered Shannon’s
earning potential at the time of the final hearing and in the future. (Id.). The trial
court then ordered Joseph to pay Shannon $2,000 per month in spousal support
effective April 1, 2019 to January 1, 2021. (Id.). The trial court further ordered that
Joseph pay Shannon a monthly spousal support order of $1,500 effective from
January 1, 2021 to January 1, 2023. (Id.). The trial court ordered that the spousal
support award would reduce to $1,000 per month from January 1, 2023, to January
1, 2030, at which time the spousal support award would terminate. (Id.). Thus, the
trial court did properly consider the disparity in income of the parties and factored
the disparity into its overall property distribution.
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{¶56} After reviewing the totality of the facts and circumstances in the
record, we cannot conclude that the trial court’s award of the 2016 Honda Odyssey
van and its associated debt to Shannon was so unreasonable, arbitrary, or
unconscionable as to constitute an abuse of discretion. See Kimmey, 2001 WL
1338847, at *6; Clark v. Clark, 7th Dist. Noble No. 03 NO 308, 2004-Ohio-1577, ¶
30 (“[W]ithout more, a difference of $1,500 in the property division does not
constitute a clear abuse of discretion.”); Speck v. Speck, 6th Dist. Wood No. WD-
09-005, 2009-Ohio-6684, ¶ 50-51; Hancock v. Hancock, 6th Dist. Williams No.
WM-02-011, 2002-Ohio-7106, ¶ 15 (finding that the trial court did not err by
awarding appellant “a significantly larger portion of debt”).
{¶57} Accordingly, Shannon’s third assignment of error is overruled.
{¶58} Having found no error prejudicial to the appellant herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
WILLAMOWSKI and ZIMMERMAN, J.J., concur.
/jlr
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