Bailey v. Marrero-Bailey

[Cite as Bailey v. Marrero-Bailey, 2012-Ohio-894.]
STATE OF OHIO, BELMONT COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
C. SHELTON BAILEY ) CASE NO. 10 BE 16
)
PLAINTIFF-APPELLANT )
)
VS. ) OPINION
)
TERESA C. MARRERO-BAILEY )
)
DEFENDANT-APPELLEE )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Belmont County, Ohio
Case No. 08 DR 384
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellant: Atty. Jack J. Kigerl
P.O. Box 248
157 East Main Street
St. Clairsville, Ohio 43950
For Defendant-Appellee: Atty. John A. Vavra
132 West Main Street
P.O. Box 430
St. Clairsville, Ohio 43950
JUDGES:
Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich
Hon. Mary DeGenaro
Dated: February 27, 2012
[Cite as Bailey v. Marrero-Bailey, 2012-Ohio-894.]
WAITE, P.J.
{¶1} Appellant C. Shelton Bailey appeals the judgment of divorce issued by
the Belmont County Court of Common Pleas. Prior to the marriage, Appellant owned
and operated a dairy farm which had been in his family for several generations. The
division of the farm property is the subject of the instant appeal. The case was heard
before a magistrate who decided that the farm was Appellant’s separate property.
Appellee filed objections to the magistrate’s decision, but did not file any transcript or
memorandum of law supporting the objections. The trial court disagreed with the
magistrate and held that the farm had become marital property due to large amounts
of money contributed to the farm by Appellee Teresa C. Marrero-Bailey and due to
the large debt associated with the property.
{¶2} Appellant raises three assignments of error. First, Appellant contends
that the trial court failed to make an independent assessment of the facts because
Appellee did not file a transcript of the magistrate’s hearing. The record shows that
the judge used a recording of the magistrate’s hearing instead of a transcript, and
thus, was able to review all of the facts in this case. The second argument is that the
trial court should have sustained Appellant’s motion to dismiss Appellee’s objections
due to Appellee’s failure to follow various aspects of Civ.R. 53, which governs the
filing of objections to a magistrate’s decision. Even if Appellee may have made
errors in filing and supporting her objections, the trial court retained the authority to
review and modify, or even reject, the magistrate’s decision, and that is what
happened in this case. Finally, Appellant argues that the trial judge improperly relied
on the doctrine of transmutation rather than the concept of traceability of property
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when it ruled that the farm had been converted to marital property. Appellant is
incorrect. The trial court specifically stated that the separate nature of the farm
property could not be traced. The burden was on Appellant to prove the separate
nature of the property and that it was kept as separate property during the marriage.
According to the trial court’s interpretation of the facts, Appellant did not meet that
burden. Appellant has not established any reversible error in the trial court’s
judgment, and therefore, the judgment is affirmed.
Case History and Factual Background
{¶3} Appellant and Appellee were married in St. Clairsville, Ohio on June 21,
2004. Appellant filed a complaint for divorce on December 23, 2008. Appellant was
sixty-two years old at the time of the divorce. No children were born of that marriage.
The divorce hearing was held before a magistrate on September 17, 2009. It is
uncontested that prior to the marriage, Appellant was the sole owner of a dairy farm
which had been in his family for “a couple of hundred years.” (Tr., p. 13.) Appellant
had operated the farm nearly all of his life. (Tr., p. 12.) At that time, the farm was
subject to two mortgages through Wesbanco Bank. (Tr., p. 19.) After two years of
marriage, the parties formed a limited liability company, Bailey Dairy Farm, LLC
(“Farm LLC”), at the suggestion of Appellee. (Tr., p. 21.) Appellant conveyed four
tracts of property, including the deed for the farm, to the Farm LLC on or about March
21, 2006. He testified that he never intended to make a gift of the property to
Appellee. (Tr., p. 23.) Appellant was under the impression that the Farm LLC was
formed in order to protect the farm in case something happened, or for liability
purposes. (Tr., p. 20.) He also testified that the only reason Appellee was named
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fifty-one percent owner of the Farm LLC was due to the fact that her minority status
allowed her to get a better rate on a business loan. (Tr., p. 39.)
{¶4} The parties gave conflicting testimony about their finances and
expenditures. They are in agreement that a third mortgage was granted to them
through Farm Service Credit for $135,000.00, which reduced the equity of the farm.
(Tr., p. 24.) Appellant testified that he was under the impression that the farm service
loan was to be used as start-up money for a number of supplies and businesses that
Appellee attempted, but never successfully started. A list of these enterprises
include: an organic farm, a cheese house for the community, a bed and breakfast,
and other miscellaneous interests. (Tr., p. 41.) Appellant stated that the organic
farming venture negatively impacted his dairy business, as the cows deteriorated and
were not producing milk due to the organic farming methods. (Tr., p. 40.)
Additionally, he claimed that the cheese business never got off the ground. (Tr., p.
41.) Notably, Appellant gave testimony that Appellee initiated a number of
remodeling efforts in order to improve the house and turn it into a viable bed and
breakfast. (Tr., p. 42.) Unfortunately, due to a lack of funding, the repairs were never
completed and the house is currently in a state of disarray. (Tr., p. 45.) Appellant’s
sister also offered testimony and photographs regarding the state of the house, and
she agreed that the value of the property has “[c]ompletely deteriorated” since
Appellee began the improvements. (Tr., p. 129.)
{¶5} Appellant contends that he contributed a significant amount of his own
money for Appellee’s business ventures, for various living and farming expenses, and
for insurance and medical bills from Appellee’s pregnancy attempts. Appellant sold
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real estate for a total of $80,000.00 in order to pay some of the bills. (Tr., p. 29.) He
also sold nearly $90,000.00 in stock and surrendered the value of a life insurance
policy for approximately $6,000.00. (Tr., p. 32.) Between the mortgages, the farm
service credit, miscellaneous credit cards, debt from medical bills, farming expenses,
and investments made into Appellee’s failed businesses, Appellant submitted
documentation that he is currently $241,655.00 in debt. (Tr., p. 48.)
{¶6} Appellee testified that immediately prior to the marriage, she was a
realtor and that she sold real property that netted her $189,185.98 in proceeds. (Tr.,
p. 136.) She states that she brought that money into the marriage and used it for
improvements around the farm and the residence, for medical expenses in an
attempt to get pregnant, for a new car, and for other various living and operational
expenses. As for the Farm LLC, Appellee testified that her business education led
her to suggest to Appellant that the two form a limited liability corporation as a
protection against potential lawsuits. (Tr., p. 144.) With regard to the debts incurred
by Appellee while attempting to start up a number of businesses, she believes that
there were no substantial losses and that any remodeling efforts improved the
property. (Tr., p. 165.)
{¶7} Appellant and Appellee disagree as to how the money was spent on
remodeling the home. Appellant argues that the money Appellee brought into the
marriage was primarily spent on her own personal and miscellaneous costs.
Appellant contends that the residence has completely deteriorated due to the
numerous unfinished remodeling efforts, yet Appellee believes the efforts improved
the property. Regardless of the conflicting testimony, it is clear that substantial debt
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accumulated during the marriage. Appellee requested that the entire farm and its
contents be sold at auction, with any proceeds to be used to pay off the debts. (Tr.,
p. 168.) In contrast, Appellant wanted to keep the property and revive the dairy farm
operation in order to pay down some of the bills. (Tr., p. 104.) However, Appellant
was willing to sell a small portion of the acreage in order to pay off the creditors. (Tr.,
p. 192.)
{¶8} The magistrate issued its decision on January 25, 2010. The
magistrate determined “that the real estate equipment and fixtures known as the
Bailey Dairy Farm L.L.C. are traceable as [Appellant’s] separate property and as
such are awarded to [him].” (1/25/10 Magistrate’s Decision, p. 9.) The magistrate
decided that neither party would be reimbursed for their contributions, and ordered
Appellee to convey her 51% interest in the Farm LLC to Appellant.
{¶9} Appellee filed objections to the magistrate’s decision. Three out of the
five objections related to the disputed real estate. Appellant filed a motion to dismiss
the objections of Appellee because: (1) Appellee never requested a specific finding
of fact or conclusions of law from the magistrate; (2) the objections filed were too
brief and did not specify the nature of the alleged error; and (3) Appellee failed to file
a memorandum of law in support of the objections even after being given a 14-day
extension. Additionally, Appellant argued that Appellee never ordered a transcript of
the proceedings to support the objections. Appellant’s motion to dismiss was
overruled by the trial court.
{¶10} The trial court ruled on the objections on April 1, 2010. The judge did
not adopt the magistrate’s decision, but rather, crafted an independent judgment that
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modified some aspects of the magistrate’s rulings. The judge found that the farm
property could not be traced as separate property and declared it to be marital
property. (4/1/10 J.E., p. 5.) The judge agreed with the magistrate that both parties
expended massive sums of money to operate and maintain the farm. Despite the
large influx of cash, the debt of the farm increased from $150,000 at the time they
were married to $241,655 at the time of the divorce. The court determined that the
large sums of money contributed by both parties during the marriage had
transformed the farm from Appellant’s separate property to marital property. As
such, the court gave the parties ten months to make a sale of the property or to reach
a mutually agreeable alternative. The court directed that the proceeds were to pay
off the debts, and any remaining assets would be divided evenly between the parties.
{¶11} Appellant filed a timely appeal from that decision and submits three
assignments of error. Appellee has not filed a brief in this appeal. Appellant’s first
two assignments of error are related and will be treated together.
ASSIGNMENTS OF ERROR NOS. 1 AND 2
{¶12} “The Trial Court Erred By Failing To Make An Independent Review (de
novo) Of The Facts Upon Which The Magistrate’s Decision Was Based.
{¶13} “The Trial Court Erred In Failing To Sustain The Plaintiff-Appellant’s
Motion To Dismiss The Objections Of Defendant-Appellee Based Upon Appellee’s
Failure To Comply With Civil Rule 53, As To The Specificity Of The Objections,
Providing Any Supporting Brief Of Memorandum Addressing The Objections, and
Failure To File A Transcript Within 30 Days Thereafter.”
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{¶14} Both of these assignments of error deal with the effect that procedural
errors have on the trial court’s ability to rule on objections to a magistrate’s decision.
Appellant contends in his first assignment of error that the trial court judge lacked a
reasonable basis to review the facts of the case or sustain Appellee’s objections to
the magistrate’s decision because no transcript of the magistrate’s hearing was ever
filed. The second assignment of error asserts that Appellant made other procedural
errors in filing the objections that should have forced the trial court to overrule the
objections. Neither assignment of error is meritorious.
{¶15} Civil Rule 53(D)(4)(d) requires the trial court, on objections to a
magistrate’s decision, to undertake an independent review of the matter to ascertain
whether the magistrate properly determined the factual issues and applied the
appropriate law. The objecting party is required to support the objections by filing
any necessary portions of the hearing transcript. Failure to file a supporting transcript
or other alternative record of the magistrate’s hearing is a basis for the trial court to
find that the party waived any objections to the magistrate’s factual findings. Civ.R.
53(D)(3)(b)(iv).
{¶16} In this case, Appellee failed to order and file a transcript of the
testimony offered at the divorce hearing. This could have been used as a reason for
the trial court to overrule the objections. It would also have created a procedural bar
in this appeal if Appellee had been the party attempting to allege error in the trial
court proceedings. Appellee is not asserting any errors in this appeal, though. It is
Appellant who filed this appeal and who must establish that the trial court committed
reversible error. Our standard of review in cases involving the trial court's adoption,
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modification or rejection of a magistrate's decision is whether the trial court abused
its discretion. Spain v. Hubbard, 7th Dist. No. 02 BA 15, 2003-Ohio-2555, ¶27, citing
State ex rel. Hrelec v. Campbell (2001), 146 Ohio App.3d 112, 117, 765 N.E.2d 402.
“The term ‘abuse of discretion’ connotes more than an error of law or of judgment; it
implies that the court's attitude is unreasonable, arbitrary or unconscionable.”
Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 450 N.E.2d 1140.
{¶17} We cannot find any abuse of discretion in the record with respect to
Appellee’s failure to file a hearing transcript. Even though the trial court did not have
a transcript of the magistrate’s hearing, it did review a recording of the magistrate’s
hearing when it looked at the record of the case. (4/1/10 J.E.) The Ohio Rules of
Civil Procedure specifically contemplate that the trial judge may use something other
than a hearing transcript to review the record of the hearing: “alternative technology
or manner of reviewing the relevant evidence may be considered.” Civ.R.
53(D)(3)(b)(iii). Because the trial judge had access to the trial testimony through the
recording of the hearing, its review was not hampered by the lack of a transcribed
document. Therefore, Appellant’s first assignment of error is overruled.
{¶18} Appellant alleges that Appellee made other errors during the objections
phase of the proceedings. Appellant contends that her objections were not specific
enough, were not supported by any legal argument or memorandum of law, and were
not supported by reference to any evidence in the record. Civ.R. 53 provides that
“[a]n objection to a magistrate’s decision shall be specific and state with particularity
all grounds for objection.” Civ.R. 53(D)(3)(b)(ii). It also provides that “[a]n objection
to a factual finding * * * shall be supported by a transcript of all the evidence
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submitted to the magistrate relevant to that finding or an affidavit of that evidence if a
transcript is not available.” Civ.R. 53(D)(3)(b)(iii).
{¶19} The record reflects that the trial court undertook a thorough
independent review of the magistrate’s decision (including the recording of the
magistrate’s hearing) and corrected a number of aspects of that decision. A trial
court always retains the right to independently review a magistrate’s decision,
regardless whether any objections are filed: “Whether or not objections are timely
filed, a court may adopt or reject a magistrate's decision in whole or in part, with or
without modification. A court may hear a previously-referred matter, take additional
evidence, or return a matter to a magistrate.” Civ.R. 53(D)(4)(b). As we have
recently held: “Civ.R. 53(D)(4)(b) allows a trial court to modify a magistrate's
decision whether or not objections have been raised regarding the basis for the
modification. * * * [T]he rule plainly permits the modification of the magistrate's
decision on the basis of the trial court's own review and determination.” Donofrio v.
Whitman, 191 Ohio App.3d 727, 2010-Ohio-6406, 947 N.E.2d 715, ¶24. In this case,
the trial court disagreed with the magistrate on a number of issues and ultimately
ruled in favor of Appellee with respect to the division of the farm property. In short,
the trial court was simply doing its job by independently reviewing the magistrate’s
decision, and there is no error in that action. The trial judge may venture outside of
the objections in reviewing the magistrate’s decision and may sua sponte correct the
decision based on its own judgment. Id. at ¶23. Accordingly, Appellant’s second
assignment of error is also without merit and is overruled.
ASSIGNMENT OF ERROR NO. 3
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{¶20} “The Trial Court Erred In Finding The Separate Property Owned By
Appellant Prior To The Marriage Had Been Converted To Marital Property Subject To
Division Under Section 3105.171, O.R.C., By Applying The Concept Of
Transmutation Of Property, Rather Than The Now Accepted Theory Of Traceability
Of Property.”
{¶21} In Appellant’s third assignment of error he alleges that the trial court
improperly applied the doctrine of transmutation when it determined that the 1.6 acre
homestead tract as well as the farm real estate, equipment and fixtures were marital
rather than separate property. The classification of property as marital or separate is
one of the fundamental aspects of a divorce proceeding. “In dividing property in
divorce proceedings, the trial court is required to classify assets as marital or
nonmarital and then award each spouse his or her separate, nonmarital property.”
Peck v. Peck (1994), 96 Ohio App.3d 731, 734, 645 N.E.2d 1300.
{¶22} R.C. 3105.171 sets forth the basic rules regarding the classification and
division of marital and separate property. Separate property is defined in R.C.
3105.171(A)(6)(a):
{¶23} “(6)(a) ‘Separate property’ means all real and personal property and
any interest in real or personal property that is found by the court to be any of the
following:
{¶24} “(i) An inheritance by one spouse by bequest, devise, or descent during
the course of the marriage;
{¶25} “(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;
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{¶26} “(iii) Passive income and appreciation acquired from separate property
by one spouse during the marriage;
{¶27} “(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;
{¶28} “(v) Any real or personal property or interest in real or personal property
that is excluded by a valid antenuptial agreement;
{¶29} “(vi) Compensation to a spouse for the spouse's personal injury, except
for loss of marital earnings and compensation for expenses paid from marital assets;
{¶30} “(vii) Any gift of any 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.
{¶31} Generally, “* * * the holding of title to property by one spouse
individually * * * does not determine whether the property is marital property or
separate property.” R.C. 3105.171(H). Thus, “[t]he party [who] seek[s] to have a
particular asset classified as separate property has the burden of proof, by a
preponderance of the evidence, to trace the asset to separate property.” Peck at
734, 645 N.E.2d 1300. Otherwise, “ ‘marital property is presumed to include all
property acquired during the marriage or those assets produced or earned as a result
of the parties' mutual efforts.’ ” Moro v. Moro (1990), 68 Ohio App.3d 630, 636, 589
N.E.2d 416, quoting Avis v. Avis (May 23, 1985), 9th Dist. No. 48832, at *6.
{¶32} Under prior law, property that was commingled between the married
couple was considered to be transmuted to marital property. “Transmutation is [the
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term] generally used ‘to describe the process by which independent or nonmarital
property has changed to marital property * * *.’” Kampf v. Kampf (May 3, 1991), 11th
Dist. No. 90-A-1503. “Numerous appellate districts in Ohio have recognized that
separate real property can be transformed by the grantor spouse into marital property
by a gratuitous transfer to the grantee spouse of a present interest in the property.”
Helton v. Helton (1996), 114 Ohio App.3d 683, 686, 683 N.E.2d 1157.
{¶33} The application of the transmutation principle to marital property
changed somewhat in 1991 with the passage of R.C. 3105.171(A)(6)(b), which
allowed property to retain its separate nature if the history of the property could be
accurately traced as separate property both before and during the marriage. R.C.
3105.171(A)(6)(b) states: “The commingling of separate property with other property
of any type does not destroy the identity of the separate property as separate
property, except when the separate property is not traceable.” Thus, after 1991,
commingled separate property is not transmuted to marital property if the relevant
financial and legal history of the property is traceable to show that the separate
nature of the property was maintained during the marriage. Fincannon v. Fincannon
(Aug. 7, 1997), 7th Dist. No. 231. Transmutation still occurs if there is commingling
of separate and marital property and the history of the separate property cannot be
traced. The starting point for tracing the history of the property is to determine the
source of the funds. Goodman v. Goodman, (2001), 144 Ohio App.3d 367, 375, 760
N.E.2d 72.
{¶34} It is not entirely clear that the trial court used the doctrine of
transmutation in its judgment. The judgment simply concludes that the property was
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not traceable as separate property. Unless parties keep accurate and distinct
financial records of their contributions to separate property, traceability becomes
difficult or impossible. In this case, neither party kept accurate records of either their
financial additions to the property or to the money or resources that were taken out of
the property. It was unmistakably clear from the record that both parties made
substantial contributions to the property after they were married, and both parties
were also responsible for the added debt burden placed on the property after the
marriage began. However, records containing the exact details of those contributions
were not kept. Without such records to specifically detail how the farm property that
was brought into the marriage was kept exclusively as separate property, the trial
court could not trace the separate nature of the property and correctly ruled that the
farm and the 1.6 acre homestead were marital property. Appellant has not shown
any error in the trial court’s ruling that the separate nature of the property was not
traceable. Therefore, we overrule his third assignment of error.
CONCLUSION
{¶35} Appellant has failed to show any abuse of discretion in the trial court’s
judgment. The court made an independent review of the magistrate’s decisions,
which included a review of a recording of the magistrate’s hearing. Any errors in
Appellee’s filing of objections to the magistrate’s decision had no bearing on the trial
judge’s ability and duty to independently review the magistrate’s decision as provided
by Civ.R. 53. Finally, the trial court did not err in finding that the separate farm
property that Appellant brought into the marriage was not traceable as separate
property once both parties began making substantial contributions to the property.
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The record indicates that the parties did not attempt to keep their contributions
separate and distinct, and thus, the nature of the property was changed to marital
property. All three of Appellant’s assignments of error are overruled, and the
judgment of the trial court is affirmed.
Vukovich, J., concurs.
DeGenaro, J., concurs in part and dissents in part; see concurring in part and
dissenting in part opinion.
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DeGenaro, J., concurring in part and dissenting in part.
{¶36} I write separately for two reasons. First, while I concur with my
colleagues' disposition of the procedural issues in this case, the interplay between
the trial court's discretion and the mandates of Civ.R. 53 merits further analysis.
Second, I respectfully dissent from the majority's resolution of the third assignment of
error concerning the trial court's division of the marital property.
{¶37} This case reveals a glaring tension in Civ.R. 53. Although (D)(3)(b)(ii)
provides that a party's objections to a magistrate's decision must be specific and
(D)(3)(b)(iii) requires that the party support objections to factual findings with any
relevant portions of the hearing transcript, (D)(4)(b) allows the trial court to adopt,
reject or modify the magistrate's decision regardless of whether the objecting party
follows these procedural mandates. This tension between the rule's procedural
requirements and the trial court's broad discretion in reviewing magistrates' decisions
is noteworthy here because of the facts of this case.
{¶38} A comparison of the facts to a recent case from the Third District,
Tewalt v. Peacock, 3d Dist. No. 17–10–18, 2011-Ohio-1726, is instructive. In Tewalt,
the Appellee filed a motion to correct a clerical error in the magistrate's decision,
which was actually an attempt to challenge a substantive part of the decision. Id. at ¶
9, 19. Although Appellee did not file a hearing transcript, the trial court obtained a
DVD of the hearing. The trial court viewed the DVD in the presence of both parties'
counsel, and the Appellant did not object to the court's use of the DVD. The trial
court also took live testimony from both parties. Id. at ¶ 10. The appellate court found
that the motion to correct a clerical error was actually an objection to the magistrate's
decision and analyzed whether the trial court erred in considering this objection
despite Appellee's failure to file transcripts. Id. at ¶ 19-20.
{¶39} The Third District began its analysis by noting that Civ.R. 53 allows a
trial court to consider "alternative technology" in lieu of a written transcript when
ruling upon objections to a magistrate's decision, and the court found that the DVD
was an acceptable alternative to a transcript. Id. at ¶ 24. (D)(3)(b)(iii) provides that:
"With leave of court, alternative technology or manner of reviewing the relevant
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evidence may be considered." (Emphasis added.) However, the court noted that
although the rule requires "leave of court," Appellee had not filed a motion or
requested leave for the trial court to consider alternative technology. The appellate
court concluded that the trial court's use of the DVD was outside of the procedures of
Civ.R. 53, but the rule affords great latitude to a trial court in reviewing a magistrate's
decision. Thus, the trial court had discretion to sua sponte obtain alternative
technology when reviewing objections to the magistrate's decision. Id. at ¶ 25-26.
{¶40} Similarly here, the procedure the trial court followed in reviewing the
objections to the magistrate's decision was contra to Civ.R. 53. There is no evidence
in the record that Appellee requested leave of court to file alternative technology for
the court to consider in lieu of a transcript. However, unlike in Tewalt, it does not
appear that the parties were informed of the trial court's decision to listen to a
recording of the hearing nor did the trial court take additional testimony from the
parties. In fact, Appellant filed a motion to dismiss the objections due to Appellee's
failure to file a transcript and lack of specificity in her objections. Instead of affording
Appellant a chance to defend against the objections, the trial court sua sponte
obtained the recording of the hearing, denied Appellant's motion to dismiss and ruled
on the merits of Appellee's objections in simultaneous entries.
{¶41} Furthermore, the use of alternative technology like an audio recording
raises considerations about credibility determinations. I understand that the trial
court must perform an independent review of the magistrate's decision and consider
the credibility of the witnesses. I am mindful that trial judges are the elected judicial
officers, and magistrates' decisions are not final judgments until adopted by the trial
court. Thus, a compromise was reached in crafting Civ.R. 53, balancing the policy
interests to have magistrates assist trial courts in managing their dockets against a
less than ideal record from which a trial court can make credibility determinations.
However, the fact remains that while the trial court apparently listened to an audio
recording of the hearing, the magistrate viewed the parties' testimony and
experienced the most complete opportunity to gauge witness credibility. In this case,
neither party provided expert testimony or appraisals to show the value of the
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property at the beginning and end of the marriage. Instead, the parties provided
mostly conflicting testimony regarding the property's value, the reason for creating
the LLC, and their contributions to the property during the marriage. Therefore,
credibility determinations were critical in this case. The trial court had a less than
complete ability to exercise its independent judgment of the parties' credibility upon
an audio-only, single dimension record consisting of he said, she said evidence. And
the objecting party and trial court deviated from the procedure of Civ.R. 53. As a
result, these circumstances reinforce the internal tension of the rule.
{¶42} Accordingly, I agree with the majority's conclusion that the trial court
had discretion to rule on the objections to the magistrate's decision despite
Appellee's failure to follow the procedural requirements of Civ.R. 53. Notwithstanding
this discretion, it must be emphasized that the best practice in most cases is for the
trial court and litigants to completely comply with these requirements. See Tewalt at
fn.2. Appellant was placed at a disadvantage in responding to Appellee's objections
for the reasons discussed above. I do not believe the drafters of Civ.R. 53 intended
this consequence.
{¶43} Regarding the merits of the third assignment of error, the trial court's
determination that the 1.6 acre homestead and the Bailey Dairy Farm, LLC were not
traceable as separate property and therefore marital property was a very close issue;
thus, I am not prepared to say that the trial court's finding is against the manifest
weight of the evidence. As the majority correctly notes, Appellant bore the burden of
proof because he sought to have these assets deemed his separate property; the
conflicting testimony and lack of financial records from both parties rendered
traceability difficult.
{¶44} However, the trial court abused its discretion in dividing the marital
property. R.C. 3105.171(C)(1) directs courts to divide marital property equally
between the parties, but "[i]f 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. In
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making a division of marital property, the court shall consider all relevant factors,
including those set forth in division (F) of this section."
{¶45} R.C. 3105.171(F) provides: "In making a division of marital property * *
*, the court shall consider all of the following factors:
{¶46} "(1) The duration of the marriage;
{¶47} "(2) The assets and liabilities of the spouses;
{¶48} "(3) The desirability of awarding the family home, or the right to reside
in the family home for reasonable periods of time, to the spouse with custody of the
children of the marriage;
{¶49} "(4) The liquidity of the property to be distributed;
{¶50} "(5) The economic desirability of retaining intact an asset or an interest
in an asset;
{¶51} "(6) The tax consequences of the property division upon the respective
awards to be made to each spouse;
{¶52} "(7) The costs of sale, if it is necessary that an asset be sold to
effectuate an equitable distribution of property;
{¶53} "(8) Any division or disbursement of property made in a separation
agreement that was voluntarily entered into by the spouses;
{¶54} "(9) Any retirement benefits of the spouses, excluding the social
security benefits of a spouse except as may be relevant for purposes of dividing a
public pension;
{¶55} "(10) Any other factor that the court expressly finds to be relevant and
equitable."
{¶56} A review of the totality of circumstances in this case leads to the
conclusion that an equal division of the marital property was inequitable, and thus,
the trial court's division of the marital property was an abuse of discretion. Before the
parties' four-year marriage, the dairy farm had been in Appellant's family for
generations. (Tr., p. 13.) At the time of the divorce, Appellant was 62 years old, and
his life's occupation a dairy farmer on his family property. (Tr., p. 12.) The highest
level of education he attained was a high school diploma and he had never worked
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for anyone besides himself. (Tr., p. 68-69.) He testified that he desired to attempt to
continue the dairy farming operation and was willing to assume all of the marital debt.
(Tr., 70, 104.) Appellant also testified that currently his only source of income was
his Social Security of $580 a month. (Tr., p. 14.)
{¶57} The parties married after Appellee placed an advertisement in a farming
publication seeking a husband. Appellee testified that she interviewed 60 men to
determine whether they would "qualify" to be her husband and chose Appellant
because he met most of her criteria. Her intention was to pool her assets and skills
with those of Appellant and most importantly, to have a child. (Tr., p. 146.) Appellee
had received two years of college education in business administration but did not
obtain a degree or certification. (Tr., p. 182.) She also testified that she currently
had no income but received monthly food stamps in the amount of $200. (Tr., p. 162-
163.)
{¶58} The trial court's decision was unreasonable considering the unique
facts of this case: the short length of the marriage; the fact that the property belonged
to Appellant's family for generations; Appellant's willingness to assume all of the
marital debt; and that Appellee was seeking assets and to have a child, not a marital
union. Thus, the magistrate's decision properly divided the assets and debt
equitably; the farm remained in Appellant's family, as it had for generations, and
Appellant was also responsible for the large amount of debt incurred during the
parties' short marriage.
{¶59} Because the trial court should have ordered an equitable distribution of
the dairy farm assets and debts by awarding them to Appellant, I must dissent in part
from the majority's opinion and would reverse the trial court's division of the marital
property and reinstate the magistrate's decision.