Cherconis v. Cherconis

[Cite as Cherconis v. Cherconis, 2016-Ohio-1140.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF MEDINA )
DAVID M. CHERCONIS C.A. No. 14CA0086-M
14CA0088-M
Appellant
v.
APPEAL FROM JUDGMENT
CAROLINE CHERCONIS ENTERED IN THE
COURT OF COMMON PLEAS
Appellee COUNTY OF MEDINA, OHIO
CASE No. 13DR0036
DECISION AND JOURNAL ENTRY
Dated: March 21, 2016
MOORE, Judge.
{¶1} David M. Cherconis (“Husband”) appeals from the judgment of the Medina
County Court of Common Pleas, Division of Domestic Relations. This Court affirms in part,
reverses in part, and remands this matter for further proceedings consistent with this decision.
I.
{¶2} Husband and Caroline Cherconis (“Wife”) originally were married on July 21,
1984. Four children were born to the Cherconises during their marriage, the oldest three of
whom are now emancipated. In 2007, the parties divorced. In the 2007 divorce decree, the trial
court awarded Husband the marital residence, ordered him liable for the associated mortgage
debt, and ordered that he pay Wife $29,000 as her share of the equity in the marital residence.
The decree further provided that Wife could reside in the marital home until Husband tendered
her equity payment, and that, if she chose to remain in the marital home, Husband would be
credited rent at the rate of $719.89 per month.
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{¶3} Subsequent to the 2007 decree, Wife continued to reside in the marital residence.
Thereafter, Husband returned to reside with Wife at the marital residence, and, in October of
2010, Husband and Wife remarried. However, in July of 2011, the parties separated, and they
have since lived apart. In June of 2012, the first mortgagee on the marital property filed suit
seeking to foreclose. Thereafter, Husband’s sister, Randi J. Schneider, obtained a personal loan
and paid off the mortgage balance on the home in the amount of $38,550. In 2013, Husband
filed a complaint for divorce. After filing for divorce, Husband quitclaimed his interest in the
marital residence to Ms. Schneider. Thereafter, the trial court joined Ms. Schneider as a party to
the action upon Wife’s motion.
{¶4} The case proceeded to a final contested hearing, where the 2007 divorce decree
was admitted as an exhibit. On August 25, 2014, the trial court issued the second divorce decree.
Husband appealed from the decree, and he now presents three assignments of error for our
review. We have re-ordered the assignments of error to facilitate our discussion.
II.
ASSIGNMENT OF ERROR III
THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
FAILING TO DETERMINE THAT []HUSBAND WAS ENTITLED TO
PAYMENT OR SET-OFF FROM []WIFE DUE TO SEVERE PROPERTY
DAMAGE OR WASTE TO HIS MOTOR VEHICLE WHICH THE TRIAL
COURT ORDERED TO BE RETURNED TO []HUSBAND, WHILE SAID
VEHICLE WAS IN HER POSSESSION, AND BY FURTHER ORDERING
[]HUSBAND TO PAY []WIFE HALF OF THE REMAINING VALUE OF
THAT SEVERELY DAMAGED MOTOR VEHICLE.
{¶5} In his third assignment of error, Husband argues that the trial court abused its
discretion in failing to credit Husband for damage to his car and by ordering him to pay Wife
$300 for one-half of the value of the car. We disagree.
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{¶6} “A trial court has broad discretion in making divisions of property in domestic
cases.” Budd v. Budd, 9th Dist. Summit No. 26132, 2013-Ohio-2170, ¶ 8, quoting Hines v.
Hines-Ramsier, 9th Dist. No. 09CA0022, 2010-Ohio-2996, ¶ 4. “Therefore, we will not reverse
a trial court’s decision regarding the division of property, absent an abuse of discretion.”
Sigman v. Sigman, 9th Dist. Wayne No. 11CA0012, 2012-Ohio-5433, ¶ 5, citing Briganti v.
Briganti, 9 Ohio St.3d 220, 222 (1984). The term “abuse of discretion” connotes “that the trial
court’s attitude [was] unreasonable, arbitrary or unconscionable.” Blakemore v. Blakemore, 5
Ohio St.3d 217, 219 (1983).
{¶7} Here, the trial court concluded that the parties purchased a 1995 Crown Victoria
for $1,500 when they remarried in 2010. Thereafter, when the parties separated, Wife had
possession of the vehicle. Husband regained possession of the vehicle in 2013, and he claimed
that the car suffered damage while it was in Wife’s possession. At the final hearing, Husband
provided pictures of the condition of the car together with his testimony and the testimony of a
police officer, who had prepared a report documenting the damage to the car. Husband testified
that he believed the car to be worth $600 in its damaged state. Wife testified that the car was
damaged when the parties purchased it. The trial court concluded that Husband provided no
evidence that the car suffered the damage after the parties separated.
{¶8} Although Husband frames his third assignment as a challenge to the trial court’s
discretion in dividing marital property, in his argument in support, Husband essentially
challenges the weight the trial court afforded to the parties’ testimony. He maintains that the
court “was unreasonable or arbitrary * * * in rejecting [Husband’s] testimony that the 1995 Ford
Crown Victoria had been severely damaged while in [Wife’s] possession since July of 2011 and
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accepting [Wife’s] testimony that the motor vehicle had those damages when it was purchased
by [Husband] in 2010[.]” When reviewing the manifest weight of the evidence:
The [reviewing] court * * * weighs the evidence and all reasonable inferences,
considers the credibility of witnesses and determines whether in resolving
conflicts in the evidence, the [finder of fact] clearly lost its way and created such a
manifest miscarriage of justice that the [judgment] must be reversed and a new
trial ordered.
(Internal quotations omitted.) Fetzer v. Fetzer, 9th Dist. Wayne No. 12CA0036, 2014-Ohio-747,
¶ 21, quoting Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, ¶ 20.
{¶9} Husband has provided this Court with no indication as to why the trial court
should have believed his testimony over that of Wife, except that he maintains that the car could
not have been driven with such extensive damage and maintains that it would not have been
purchased in such a condition. However, our review of the record reveals no evidence of
damage which we could say necessarily renders the car inoperable and no reason why it would
necessarily not have been purchased at the amount in question in the damaged state. Further,
aside from the parties’ competing testimony, there exists no evidence as to when any of the
damage occurred. We cannot say that the trial court clearly lost its way in in crediting Wife’s
testimony on this issue. See Eastley at ¶ 20.
{¶10} Accordingly, Husband’s third assignment of error is overruled.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
TREATING A $38,550 BANK LOAN OBTAINED BY [MS. SCHNEIDER] TO
PAY OFF THE MORTGAGE DEBT OWED ON THE MARITAL RESIDENCE,
IN ORDER TO SETTLE A PENDING FORECLOSURE CASE BROUGHT BY
THE MORTGAGE HOLDER, AS AN INCREASE IN MARITAL EQUITY IN
THE RESIDENCE, WHERE []HUSBAND TRAN[S]FERRED OWNERSHIP
OF THE RESIDENCE TO HIS SISTER IN EXCHANGE FOR HER PAYMENT
OF THAT MORTGAGE DEBT, AND BY ORDERING []HUSBAND TO PAY
[]WIFE THE SUM OF $19,275.
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{¶11} In his second assignment of error, Husband argues that the trial court erred in
concluding that the satisfaction of the mortgage was active appreciation on Husband’s equity
interest constituting marital property and in awarding Wife one-half of this amount as an increase
in the equity in the home. We agree.
{¶12} As set forth above in our discussion of Husband’s third assignment of error, “A
trial court has broad discretion in making divisions of property in domestic cases.” Budd, 2013-
Ohio-2170, at ¶ 8, quoting Hines, 2010-Ohio-2996, at ¶ 4. R.C. 3105.171(C)(1) provides, in
relevant part, that “the division of marital property shall be equal. If an equal division of marital
property would be inequitable, the court shall not divide the marital property equally but instead
shall divide it between the spouses in the manner the court determines equitable.” However,
unlike “marital property,” “‘separate property’ should be disbursed to the spouse who acquired it
unless the court decides to make a distributive award of all or part of it to the other spouse.”
Charles v. Charles, 9th Dist. Lorain No. 96CA006396, 1997 WL 28247, *3 (Jan. 22, 1997),
citing R.C. 3105.171(D) and R.C.3105.171(E)(1).
{¶13} “Marital property” includes all income and appreciation on separate property, due
to the labor, monetary, or in-kind contribution of either or both of the spouses that occurred
during the marriage. R.C. 3105.171(A)(3)(a)(iii). However, passive income and appreciation
acquired from separate property by one spouse during the marriage, remains that spouse’s
separate property. R.C. 3105.171(A)(6)(a)(iii), (D). Although the division of marital property is
reviewed for an abuse of discretion, “[t]he classification of property as marital or separate is a
question of fact that this Court reviews under a civil manifest weight standard.” Fetzer v. Fetzer,
9th Dist. Wayne No. 12CA0036, 2014-Ohio-747, ¶ 21, quoting Hahn v. Hahn, 9th Dist. Medina
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No. 11CA0064-M, 2012-Ohio-2001, ¶ 20, citing Louis v. Louis, 9th Dist. Wayne No.
10CA0047, 2011-Ohio-4463, ¶ 4. When reviewing the manifest weight of the evidence:
The [reviewing] court * * * weighs the evidence and all reasonable inferences,
considers the credibility of witnesses and determines whether in resolving
conflicts in the evidence, the [finder of fact] clearly lost its way and created such a
manifest miscarriage of justice that the [judgment] must be reversed and a new
trial ordered.
(Internal quotations omitted.) Fetzer at ¶ 21, quoting Eastley v. Volkman, 132 Ohio St.3d 328,
2012-Ohio-2179, ¶ 20. Here, although Husband frames his argument in terms of the trial court
abusing its discretion, his challenge pertains to the trial court’s classification of the mortgage
payoff as marital property. Accordingly, we will review his argument under the manifest-weight
standard. See Fetzer at ¶ 21.
{¶14} In the decree, the trial court determined that the term of the parties’ second
marriage for purposes of the property division was October 22, 2010 to January 14, 2014, the
date of the final hearing. With respect to the marital residence, the trial court noted that the
division of the parties’ assets was complicated by the parties’ failure to execute the terms of the
original divorce decree. The trial court also noted that the division of the marital property was
complicated by Husband’s transfer of the marital residence to Ms. Schneider, an action which the
trial court stated was in violation of a mutual restraining order. The trial court noted that
Husband had failed to pay Wife the $29,000 equity payment as ordered in the first decree, and
Wife had exercised her option to remain at the marital residence, with $719.89 per month being
credited toward the $29,000 equity payment. The trial court concluded that, after appropriate
crediting, Husband still owed Wife $3,803.05 for her equity in the home. Accordingly, the court
determined that the marital residence was Husband’s separate property because he was awarded
the marital residence in the first divorce, making it premarital to the second marriage. However,
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Wife also had a separate property interest in the marital residence in the amount of $3,803.05
still owed to her as her share of marital equity of the residence from the first divorce, which was
her separate property at the time of the second marriage. Husband does not challenge this
portion of the trial court’s order.
{¶15} However, the trial court then proceeded to conclude that Ms. Schneider’s payment
of the mortgage debt associated with the marital residence was “appreciation” in the equity of the
home that occurred during the second marriage. Because the pay-down of the mortgage was
accomplished due to Husband’s “solicit[ation]” of Ms. Schneider’s assistance during the
marriage, the trial court determined that this “appreciation” was not passive, and thus constituted
marital property. See R.C. 3105.171(A)(6)(a)(iii), (A)(3)(a)(iii). Accordingly, the trial court
awarded Wife one-half of the $38,550 pay-off as her share of marital “appreciation[.]”
{¶16} Although the trial court used the term “appreciation” to refer to an increase in
equity, these terms are not properly interchangeable. “Appreciation” refers to the increase in the
value of an asset, not the increase of equity in that asset. See Black’s Law Dictionary 110 (8th
Ed.2004); see also Moore v. Moore, 11th Dist. Portage Nos. 2012-P-0136, 2012-P-0138, 2013-
Ohio-5649, ¶ 29 (a pay down of liabilities encumbering real property increases equity but does
not result in “appreciation”). An asset is “[a]n item that is owned and has value.” (Emphasis
added.) Black’s at 125. “Equity,” as that term was used by the trial court here, relates to “the
amount by which the value of or an interest in property exceeds secured claims or liens; the
difference between the value of the property and all encumbrances upon it[.]” Black’s at 580.
Accordingly, although “appreciation” may cause an increase in equity, the terms are not
synonymous. We clarify the distinction in these terms to stress that there existed no evidence of
any appreciation, i.e. increase in the value, of the marital residence during the second marriage.
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Compare Middendorf v. Middendorf, 82 Ohio St.3d 397, 398 (1998) (addressing appreciation of
stockyard in which Husband had a premarital interest).
{¶17} Despite its utilization of the term “appreciation[,]” it appears that the trial court
essentially determined that the decrease in Husband’s separate mortgage debt was the result of
marital effort, entitling Wife to a credit. See Ray v. Ray, 9th Dist. Medina No. 03CA0026-M,
2003-Ohio-6323, ¶ 8; see also Flynn v. Flynn, 196 Ohio App.3d 93, 2011-Ohio-4714, ¶ 18 (12th
Dist.) (paydown of mortgage attributable to marital effort is marital equity). Husband argues that
the trial court should have treated the payoff as a sale, as he quitclaimed his interest in the
property to Ms. Schneider in exchange for the payoff, because the house was subject to a
foreclosure proceeding. Accordingly, Husband maintains that the payoff of the mortgage was
acquired through his transfer of his separate property interest. See also R.C.
3105.171(A)(6)(a)(ii), (A)(6)(b). Essentially Husband is arguing that his separate property
merely changed in form from his separate property interest in the marital residence to the payoff
of the mortgage obligation. We agree.
{¶18} Here, the property interest at issue is the reduction of Husband’s separate
mortgage debt. The trial court noted that “on January 22, 2013 and through his sole efforts,
[Husband] solicited Ms. Schneider’s help to pay off the mortgage on the home and on February
24, 2013, he unilaterally violated the mutual restraining order by transferring title of the
residence to Ms. Schneider. Whether his intent was to save the house from foreclosure, as he
testified, or whether his real motivation was to thwart any claims of interest by []Wife is
irrelevant. His efforts were successful and now the marital residence is unencumbered by debt.”
{¶19} Despite the undisputed evidence presented at the final hearing that Husband
transferred his interest in the property to Ms. Schneider through quitclaim deed, the trial court
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appears to have disregarded that transaction to conclude that there was an increase in an equity
interest retained by Husband. This determination is not supported by any of the evidence before
the trial court. The testimony of Husband and Ms. Schneider, which was undisputed, and in fact
recognized by Wife at trial, was that Husband quitclaimed his interest in the marital home to Ms.
Schneider in exchange for her paying off the mortgage on the property. Accordingly, there was
no evidence before the trial court that Husband retained an interest in the real property for which
there could be any increase in equity, whether it be achieved through marital effort or otherwise.
{¶20} We emphasize that nothing in our opinion should be read as condoning a party’s
violation of a court order, and the trial court was free to sanction Husband if that was its
intention. Instead, our focus is on the evidence speaking to Husband’s increase of equity, in
accordance with the trial court’s determination, as this purported increase in equity served as a
fundamental basis for the trial court’s award of half of that equity to Wife.
{¶21} Based upon the foregoing evidence presented at the final hearing, we conclude
that the trial court clearly lost its way in determining that Husband’s equity in the marital
residence increased, where it was not disputed, and the trial court appears to have accepted, that
Husband transferred his interest to Ms. Schneider in consideration of her payment of his separate
mortgage debt. Husband’s second assignment of error is sustained. On remand, the trial court is
ordered to vacate the $19,275 award to Wife attributable to Ms. Schneider’s payment of
Husband’s separate property debt, and make any adjustments necessary to the property division
as are within its discretion to make.
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ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
AWARDING INDEFINITE SPOUSAL SUPPORT TO []WIFE IN THE
AMOUNT OF $340 PER MONTH UNTIL THE EARLIER OF THE DEATH OF
EITHER PARTY, WIFE’S REMARRIAGE, OR WIFE’S CO-HABITATION
WITH AN UNRELATED ADULT MALE.
{¶22} In his first assignment of error, Husband contends that the trial court erred in
ordering him to pay Wife $340 per month in spousal support for an indefinite period.
{¶23} “[I]n determining whether spousal support is appropriate and reasonable, the court
must consider, among other factors, ‘[t]he relative assets and liabilities of the parties * * * .’”
Fetzer, 2014-Ohio-747, at ¶ 60, quoting Braidy v. Braidy, 9th Dist. Summit No. 26608, 2013-
Ohio-5304, ¶ 16, quoting R.C. 3105.18(C)(1)(i). Accordingly, based upon our resolution of
Husband’s second assignment of error, this matter must be remanded to the trial court for
reassessing the property division. See id. Therefore, we conclude that our review of the spousal
support award is premature, and we decline to address it.
III.
{¶24} Husband’s third assignment of error is overruled, and Husband’s second
assignment of error is sustained. Our resolution of Husband’s second assignment of error
renders our review of Husband’s first assignment of error premature. The decision of the trial
court is affirmed in part, and reversed in part, and this matter is remanded to the trial court for
further proceedings consistent with this decision.
Judgment affirmed in part,
reversed in part,
and cause remanded.
There were reasonable grounds for this appeal.
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We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
CARLA MOORE
FOR THE COURT
SCHAFER, J.
CONCURS.
CARR, P. J.
CONCURRING IN PART, AND DISSENTING IN PART.
{¶25} I would sustain Husband's third assignment of error. At the outset, Wife did not
file an appellate brief. Therefore, we may accept the facts and issues as stated in Husband's
appellate brief as correct and reverse the judgment if Husband's brief reasonably appears to
sustain such action. See App.R. 18(C). During the pendency of the divorce proceeding, Husband
filed a motion for the court to order the return of a 1995 Crown Victoria automobile he claimed
as separate property. The magistrate who heard the motion ordered Wife to return the car to
Husband by leaving it at a location in Brunswick for him to pick up.
12
{¶26} Instead of leaving the car in Brunswick though as she was ordered, Wife left the
car in a different location in Medina Township. Husband testified at the hearing that Wife
severely damaged the car before she returned it to him. Upon discovering the damage, Husband
took photographs of the claimed damage and filed a police report. The officer who took the
report testified at the hearing and confirmed the reported damage. According to the evidence at
trial, all of the knobs on the dashboard of the car were broken off, including the knobs for the
windshield wipers and the lights. In addition, the front driver’s door would not close; the gas
cover door was missing; the gas release button was broken on the inside of the driver’s door;
the trunk key was broken off inside the lock on driver’s door, the trunk would not open; the
ashtray/cup holder component was ripped out/missing with wires hanging down; the glove box
was broken with the door flying open and swinging; the backseat passenger’s roof handle behind
the driver’s seat was broken and hanging down; and the rear view mirror was missing. Wife
claimed the car was in this state at the time of purchase and no additional damage was done.
{¶27} Although as a reviewing court we defer to the finder of fact, in reviewing the
weight of the evidence and credibility we are not forced to accept the incredible as true. State v.
Apanovitch, 33 Ohio St.3d 19, 23-24 (1987). I find it incredible that anyone would purchase a
car in this condition and, moreover, drive it in that condition for three years without a rearview
mirror or knobs to control the lights and windshield wipers, for example. Moreover, it seems
implausible and incredible to me that all of the knobs on the dashboard were broken off or
missing without an intentional act being done. Consequently, I would sustain Husband’s third
assignment of error.
{¶28} I concur with the remainder of the opinion.
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APPEARANCES:
JOSEPH F. SALZGEBER, Attorney at Law, for Appellant.
CAROLINE CHERCONIS, pro se, Appellee.