T.A. v. R.A.

[Cite as T.A. v. R.A., 2019-Ohio-3179.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
T. A., :
Plaintiff, :
No. 107166
v. :
R. A., :
Defendant-Appellee, :
[Appeal by Q.A., Et al., :
Third-Party Defendants-Appellants.]
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: August 8, 2019
Civil Appeal from the Cuyahoga County Court of Common Pleas
Domestic Relations Division
Case No. DR-15-355865
Appearances:
Raslan & Pla, L.L.C., Jorge Luis Pla, Lila D. Raslan, and
Nadia Zaiem, for appellee.
Dinn, Hochman & Potter, L.L.C., and Edgar H. Boles, for
appellants.
EILEEN T. GALLAGHER, P.J.:
Third-party defendants-appellants, Q.A. (“appellant”) and two
corporations, Pearl Road, Inc. (“Pearl Road”) and 871 Rocky River Drive, Inc.
(“Rocky River Drive”), bring the instant appeal challenging the trial court’s
judgment entry ordering appellant to release mortgages on Devon Drive, North
Olmsted (“marital home”) and Rocky River Drive, properties awarded to defendant-
appellee, R.A. (“wife”) in a divorce action filed by appellant’s brother, plaintiff, T.A.
(“husband”). Appellants also challenge the trial court’s jurisdiction when it ordered
them to remain parties to the proceedings pursuant to Civ.R. 75(B)(1). We find no
merit to the appeal and affirm the trial court’s judgment.
I. Factual and Procedural History
On February 18, 2015, husband filed a complaint for divorce against
wife in the Cuyahoga County Court of Common Pleas, Domestic Relations Division.
See Allan v. Allan, 8th Dist. Cuyahoga No. 107142, 2019-Ohio-2111. On that same
day, the trial court issued a mutual restraining order against both husband and wife.
Husband filed an ex parte restraining order against wife in regard to the contents
within husband’s personal safety deposit box.
On June 19, 2015, wife filed an answer, counterclaim for divorce, and
cross-claims against appellant. In the divorce action, wife joined appellant,
husband’s brother, and two Sunoco gas stations that husband and appellant jointly
owned and operated. Wife asserted that the two gas stations were marital property.
The gas stations were located at 871 Rocky River Drive, Berea, Ohio and 7606 Pearl
Road, Middleburg Heights, Ohio. Wife also joined Tallan, L.L.C., husband’s
corporation, and various financial institutions in the cross-claims. The cross-claims
consisted of several tort claims for fraud, misrepresentation, conversion, and
misappropriation.
Pearl Road was purchased by wife with two other partners in November
1996. The parties purchased the gas station but did not purchase the land on which
the gas station sat. Allan at ¶ 12. In June 1997, wife became the sole owner of the
Pearl Road gas station. Husband and wife were married on October 17, 2002. In
2001, husband entered into a purchase agreement with wife to purchase 51 percent
of the stock in 7606 Pearl Road. In the divorce action, wife claims that in May 2002,
prior to the couple’s marriage, husband coerced her into transferring the remaining
49 percent in the Pearl Road gas station to him and not compensating her for the
transfer.
Sometime in 2004, husband purchased 871 Rocky River Drive. This
purchase included the property, equipment, and the building. Id. at ¶ 16. On May
21, 2004, husband organized Tallan, L.L.C. He is the sole member of Tallan, L.L.C.
On June 17, 2004, husband incorporated 871 Rocky River Drive, and in October
2004, Sunoco, Inc. conveyed the real property to Tallan, L.L.C. The purchase price
was $385,000. On October 25, 2004, Tallan, L.L.C., entered into a term note with
Charter One Bank for $269,500 and an open-end mortgage was recorded for the
same amount. The difference of $120,000 was contributed by husband and wife,
through a mortgage on the parties’ marital home.
According to husband, he operated the gas stations with appellant.
Sometime in 2009, husband renovated 871 Rocky River Drive. However, he and
appellant testified that husband ran out of money and was unable to complete the
renovations. Husband subsequently sold a portion of 871 Rocky River Drive to
appellant, and Tallan, L.L.C. retained ownership of the real estate. Id. at ¶ 26.
The sale of 871 Rocky River Drive was completed through two
transactions. Sometime between October 2010 and March 2011, husband sold
appellant 49 percent of the stock in 871 Rocky River Drive. Both appellant and
husband testified that appellant paid husband $10,000 and assumed the $330,580
debt to the construction company for the renovation work. On September 14, 2012,
husband sold the remaining 51 percent of the stock to appellant for $57,000.
On November 22, 2013, husband also sold Pearl Road to appellant for
$150,000, which husband had originally purchased for $250,000.
In May 2014, Charter One Bank wrote a letter to Tallan, L.L.C., stating
that the commercial loan for the original purchase of 871 Rocky River Drive could
not be extended past the maturity date of October 25, 2014, and $181,088 was owed
on the note. Husband testified that he asked appellant for assistance with payment
on the note. Husband and appellant apparently entered into an agreement in which
appellant was to pay the remaining balance of $181,088, and in an effort to repay
appellant, husband would grant a mortgage in that amount on the marital home.
On February 4, 2015, husband granted appellant a mortgage on the
marital home for $181,088. On that same day, husband, through Tallan, L.L.C., also
granted appellant a second mortgage on 871 Rocky River Drive in the amount of
$181,088. Wife did not sign the mortgage and testified that she did not have
knowledge of it. Husband filed for divorce from wife on February 18, 2015.
Once joined in the divorce action, appellant filed a complaint in
Cuyahoga C.P. No. CV-15-847754 against husband for failure to pay $188,0881 to
appellant. Wife intervened in that matter and filed a stay, pending the outcome of
the divorce proceedings between husband and wife. The trial court dismissed
appellant’s complaint without prejudice in May 2018.
On October 23, 2015, appellant filed a motion to dismiss wife’s
amended counterclaim and cross-claims. The trial court denied the motion to
dismiss on November 19, 2015.
Thereafter, on November 24, 2015, appellant filed a writ of prohibition
to this court and an application for an alternative writ. Allan v. Palos, 8th Dist.
Cuyahoga No. 103815, 2016-Ohio-3073. Appellant argued that the trial court lacked
subject matter jurisdiction over wife’s cross-claims against appellant. On December
10, 2015, this court denied appellant’s application for an alternative writ and
dismissed appellant’s complaint for a writ of prohibition. This court ruled that the
trial court possessed general subject matter jurisdiction, and therefore, “prohibition
is not available to prevent or correct any erroneous judgment, nor is prohibition
available as a remedy for an abuse of discretion or as a remedy in order to prevent
an anticipated erroneous judgment.” Id. at ¶ 12. In addition, it was noted that
1 In C.P. No. CV-15-847754, the complaint dollar amount is inconsistent with the
dollar amount in this case. It is unclear where the discrepancy originated, but the correct
amount should be $181, 088.
appellant possessed “an adequate remedy at law by way of an appeal.” Id., citing
Goldstein v. Christiansen, 70 Ohio St. 3d 232, 638 N.E.2d 541 (1994), and State ex
rel. Pearson v. Moore, 48 Ohio St. 3d 37, 548 N.E.2d 945 (1990).
On remand, in June 2016, appellant filed an answer, counterclaims,
and cross-claims against wife. On July 28, 2016, appellant filed a timely motion to
dismiss wife’s claims, followed by a motion for summary judgment in May 2017. On
June 20, 2017, the trial court issued a judgment entry granting appellant’s motion
to dismiss and motion for summary judgment, thereby disposing of all of wife’s
cross-claims against appellant and all other joined parties.
Subsequently, the divorce action between husband and wife
proceeded to trial. On April 20, 2018, the trial court issued a judgment entry for
divorce. Of significance to appellant’s instant appeal, the trial court determined
Pearl Road and 871 Rocky River corporations to be marital property. The court
further ordered appellant to release the mortgages on both the properties, and
ordered husband to pay $181,088 to wife in the event appellant’s mortgages were
not released. The trial court also ordered appellant to remain in the action pursuant
to Civ.R. 75(B)(1) until all of the orders were complied with. It is from that April 20,
2018 judgment entry that appellant brings the instant appeal, assigning two errors
for our review.
I. The trial court exceeded its subject-matter jurisdiction and thus
erred in its [April 20, 2018 judgment entry] when it ordered “that
[appellant] shall release the mortgages on [the marital home] and 871
Rocky River Drive, [Berea] Ohio.”
II. The trial court exceeded its subject-matter jurisdiction and thus
erred in its [April 20, 2018 judgment entry] when it ordered “that until
all of the above orders are complied with all parties shall remain in this
action,” which included [appellant], Pearl Road, Inc.[,] and 871 Rocky
River Drive, Inc.
II. Law and Analysis
A. Subject Matter Jurisdiction
In appellant’s first assignment of error, he argues that the trial court
lacked subject matter jurisdiction to enter judgment against him, i.e., ordering him
to release the mortgages on the marital home and 871 Rocky River Drive.
We review “issues relating to subject matter jurisdiction de novo, as
such a determination is a matter of law.” In re E.G., 8th Dist. Cuyahoga No. 98652,
2013-Ohio-495, ¶ 9, citing In re K.R.J., 12th Dist. Clermont No. CA2010-01-012,
2010-Ohio-3953, ¶ 16.
In divorce proceedings, R.C. 3105.171(B) requires the trial court to
determine what constitutes marital property and separate property. Therefore, it is
undisputed that the trial court had jurisdiction to determine which of husband’s and
wife’s assets were marital property because that determination is principally a
domestic relations matter. As this court previously noted in Allan, 8th Dist.
Cuyahoga No. 103815, 2016-Ohio-3073, at ¶ 11, the trial court “possesse[d] the basic
subject matter jurisdiction to adjudicate the complaint for divorce and to divide all
marital assets between [husband] and [wife.] R.C. 3105.171(C).” This court further
noted that “[t]he issue of determining whether or not an asset should be categorized
as marital property, and the value of the marital property for the purpose of
distribution, is a matter that is to be determined by [the trial court] in her capacity
as a judge of the domestic relations court.” Id., citing to Durisala v. Durisala, 1st
Dist. Hamilton No. C-130719, 2014-Ohio-3309.
As such, the trial court had jurisdiction to find the $181,088 husband
mortgaged to appellant was exclusively husband’s debt. Specifically, the trial court
stated that the funds used to pay the “debt were proceeds from the businesses, which
were the guarantors of the debt, and means that any debt in this case created by
[husband] is at best questionable and should not be included in any division of
property.” April 20, 2018 Judgment Entry at 17. The trial court also found that
husband’s various actions, including his mortgaging the marital home and 871
Rocky River Drive constituted financial misconduct. The trial court then ordered
that appellant “shall release the mortgages” on the marital home and 871 Rocky
River Drive.
B. Order Releasing the Mortgages
Appellant argues that once the trial court dismissed wife’s cross-
claims against appellant, it thereafter had no jurisdiction to enter judgment against
appellant. In particular, wife’s cross-claim against appellant sought a declaratory
judgment seeking a rescission of the mortgages by husband to appellant. For these
reasons, appellant argues that the trial court’s order mandating that he release the
mortgages is a collateral matter to the divorce, and as such, the trial court lacked
jurisdiction to enter judgment against him.
In support of his argument in this regard, appellant directs this court’s
attention to Shalash v. Shalash, 5th Dist. Delaware No. 12-CAF-110079, 2013-Ohio-
5064. In Shalash, the wife filed for divorce against the husband on March 16, 2010.
The husband owned a drive-thru beverage business and the wife named the business
corporation as a defendant in the divorce complaint. On June 23, 2010, the husband
sold the corporation to his mother. The husband’s mother then created a separate
corporation to run the business. On October 8, 2011, the wife filed an amended
complaint and named the mother’s corporation as a defendant.
Notably, “[t]he trial court stated that in order to properly consider [the
husband’s corporation] as a marital asset, the transaction between [the husband]
and his [m]other must be vacated.” Id. at ¶ 6. The trial court then found the
transaction from the husband to his mother to be a “sham transaction” and the trial
court vacated the transaction as part of the divorce decree. The trial court also found
the mother’s corporation to be a marital asset and ordered mother to transfer the
corporation to the wife.
The Fifth District found that “the trial court had jurisdiction to
determine which assets comprised the marital estate because that determination is
primarily a domestic relations matter.” Id. at ¶ 21. Once the trial court found
evidence that the husband engaged in financial misconduct by disposing of the
business via a sale to his mother, it could have either awarded a distributive award
or a greater award of marital property pursuant to R.C. 3105.171(E)(4). The Fifth
District also noted that if the trial court sought to compensate the wife for the
husband’s financial misconduct, it should have considered the business as part of
the marital estate. Id. at ¶ 29. Furthermore, the trial court should not have vacated
the sale of the business to mother or granted the wife ownership of the business. Id.
To this end, ordering the mother to transfer the business to the wife “was an
inappropriate extension of the trial court’s authority in this case because the court
had alternative remedies to utilize, such as the application of the financial
misconduct statute.” Id.
In the instant matter, appellant argues that we should follow the
Shalash decision and find that the trial court should have only ordered a distributive
award to wife, from husband, of $181,088. As such, appellant appears to argue that
the trial court’s order releasing the mortgages on the marital home and 871 Rocky
River Drive equates to the order in Shalash that vacates the sale of the business from
the mother. We do not agree.
First, the trial court’s order releasing the mortgages is not an order
vacating the actual transaction between appellant and husband. Such an order by
the trial court would be an improper exercise of its jurisdiction over a third-party
defendant pursuant to R.C. 3105.011. See, e.g., Centerburg RE, L.L.C. v. Centerburg
Pointe, Inc., 2014-Ohio-4846, 22 N.E.3d 296, ¶ 53 (5th Dist.) (where a separate
breach of contract action between a husband and wife’s business entities involved
the rights of third parties to a divorce action, and thus, was within the scope of the
general division’s jurisdiction).
Second, this court has previously held that a domestic relations court
has jurisdiction to order a third-party defendant to release funds held in the third-
party’s bank account. Glassman v. Offenberg, 8th Dist. Cuyahoga Nos. 85838,
85863, and 87175, 2006-Ohio-3837. In Glassman, in a divorce action, the husband
was ordered to pay his ex-wife child support. Years after the divorce was finalized,
the husband remarried and filed a motion to modify the support order. The ex-wife
joined the husband’s new wife in the action. The ex-wife also filed a restraining
order against the new wife’s bank account, and the trial court granted a temporary
restraining order.
The trial court noted that the new wife may have colluded with the
husband to conceal his income for purposes of the calculation of the support order.
The trial court ordered funds in the new wife’s account to be released to the ex-wife.
The trial court reasoned that the funds belonged to the husband and the new wife
had held the funds in a constructive trust. Id. at ¶ 16. The new wife argued that the
funds were revenue from her business, PSS, Inc., which had not been joined as a
party.
On appeal, the new wife and husband argued that the trial court
lacked jurisdiction over her and the order releasing funds to the ex-wife was void ab
initio. They further argued that the funds within the new wife’s bank account
belonged to her business. They also argued that the trial court had no authority to
order the funds released to the ex-wife absent a motion on either of their behalf
specifically invoking the trial court’s jurisdiction on the issue.
This court disagreed and noted that the trial court granted the
restraining order, and thus, jurisdiction over the new wife was invoked. Further, the
new wife had defended against the restraining order demonstrating that the trial
court’s jurisdiction over the issue was invoked. Thus, by finding that the funds in
the new wife’s bank account belonged to the husband, the trial court had
jurisdiction, and “[c]onsequently, the proper disposition of the funds was to release
it to satisfy the child support obligations of [the husband.]” Id. at ¶ 35.
In the instant matter, wife alleged that husband engaged in financial
misconduct in an effort to defeat her interests in the marital property. Wife argued
that husband sold his interest in 871 Rocky River Drive and Pearl Road to appellant
and concealed material facts concerning the sale; conspired to create the sale of both
gas stations in order to convert and misappropriate marital property; made
representations to wife regarding business operations that were false in order to
convert and misappropriate the assets and income; and conspired to defeat wife’s
interest in the marital property. As a result of this financial misconduct, wife sought
a greater share of the remaining marital assets based upon the concealment of
marital assets or the improper transfer of marital property from husband to
appellant.
The trial court, in an effort to compensate wife for husband’s financial
misconduct, awarded wife husband’s interest in the marital home and 871 Rocky
River Drive. The trial court further ordered that “any debt owed by husband to
appellant, including the mortgage on 871 Rocky River Drive and the marital home,
shall be paid by husband and that husband shall hold wife harmless on any of said
debts.” The trial court identified, valued, and thereafter distributed the marital
property.
R.C. 3105.171(E)(4) provides:
If a spouse has engaged in financial misconduct, including, but not
limited to, the dissipation, destruction, concealment, or fraudulent
disposition of assets, the court may compensate the offended spouse
with a distributive award or with a greater award of marital property.
Additionally, “[a] trial court has broad discretion to make a distributive award to a
spouse, pursuant to R.C. 3105.171(E), in order to compensate for the financial
misconduct of the other spouse.” Trolli v. Trolli, 8th Dist. Cuyahoga No. 101980,
2015-Ohio-4487, ¶ 51, citing Hvamb v. Mishne, 11th Dist. Geauga No. 2002-G-2418,
2003-Ohio-921, ¶ 14, citing Lassiter v. Lassiter, 1st Dist. Hamilton No. C-010309,
2002-Ohio-3136. Pursuant to R.C. 3105.171(E)(4), a trial court has two remedies to
compensate a spouse for the other spouse’s financial misconduct: (1) a distributive
award, or (2) a greater award of marital property.
As such, the trial court in the instant matter was well within its
authority to compensate wife for husband’s financial misconduct, and thereafter,
award wife a greater award of marital property.
Furthermore, R.C. 3105.171(B) states, in pertinent part, that a trial
“court has jurisdiction over all property in which one or both spouses have an
interest.” The marital home and 871 Rocky River Drive were property in which
husband and wife both had an interest. As such, the trial court had jurisdiction over
these properties. Therefore, the trial court had authority to enter judgment against
appellant and order him to release the mortgages. “A domestic relations court has
the power to ‘grant complete relief in a matter which is primarily a domestic
relations matter.’” Kell v. Verderber, 1st Dist. Hamilton No. C-120665, 2013-Ohio-
4223, ¶ 20, quoting In re Dunn, 101 Ohio App. 3d 1, 5, 654 N.E.2d 1303 (12th
Dist.1995).
Applying Glassman, 8th Dist. Cuyahoga Nos. 85838, 85863, and
87175, 2006-Ohio-3837, to the instant matter, the trial court granted the mutual
restraining order, and thus, its jurisdiction over appellant was invoked. Therefore,
we cannot find that the trial court did more than perform an authorized
apportionment of marital property. Moreover, by finding that the marital home and
871 Rocky River Drive were marital property, and not appellant’s property, the
proper disposition was to order appellant to release the mortgages appellant held on
the properties to satisfy wife’s award of greater marital property. Glassman, 8th
Dist. Cuyahoga Nos. 85838, 85863 and 87175, 2006-Ohio-3837, at ¶ 35.
Accordingly, appellant’s first assignment of error is overruled.
C. Order Requiring Appellant Remain in the Action
In appellant’s second assignment of error, appellant argues that
because the trial court lacked subject matter jurisdiction to enter judgment against
him, the trial court therefore lacked subject matter jurisdiction to order “until all of
the above orders are complied with all parties shall remain in this action.”
On June 20, 2017, the trial court issued a judgment entry granting
appellant’s motion to dismiss and motion for summary judgment. This judgment
entry effectively disposed of all of wife’s cross-claims against appellant and all other
joined parties. The trial court also ordered appellant to remain parties to the action
pursuant to Civ.R. 75(B)(1) “as stakeholders of property from which a party seeks a
division of marital property, a distributive award, or support.”
Civ.R. 75(B)(1) states:
A person or corporation having possession of, control of, or claiming
an interest in property, whether real, personal, or mixed, out of which
a party seeks a division of marital property, a distributive award, or an
award of spousal support or other support, may be made a party
defendant [.]
First, we note that appellant fails to develop any argument nor does
he cite to any authority as required by App.R. 16(A)(7) that would support his
argument that the trial court did not have jurisdiction to order appellant to stay in
the matter until compliance with all orders relating to the release of the mortgages.
By the plain reading of Civ.R. 75(B)(1), the trial court was clearly well within its
jurisdiction to order appellant to remain in the action.
Accordingly, appellant’s second assignment of error is overruled.
III. Conclusion
The trial court had jurisdiction to order appellant to release the
mortgages on the marital home and 871 Rocky River Drive. The trial court
determined these properties were marital property, and therefore was able to award
and distribute the property accordingly. Pursuant to Civ.R. 75(B)(1), the trial court
had jurisdiction to order appellant to stay in the matter until there was compliance
with all its orders.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
EILEEN T. GALLAGHER, PRESIDING JUDGE
MARY J. BOYLE, J., and
ANITA LASTER MAYS, J., CONCUR