Allan v. Allan

[Cite as Allan v. Allan, 2019-Ohio-2111.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
TAREQ AHMED ALLAN, :
Plaintiff-Appellant, :
No. 107142
v. :
RAIDA A. ALLAN, :
Defendant-Appellee. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: May 30, 2019
Civil Appeal from the Cuyahoga County Court of Common Pleas
Domestic Relations Division
Case No. DR-15-355865
Appearances:
John V. Heutsche Co., L.P.A., and John V. Heutsche; and
Reminger Co., L.P.A., Holly M. Wilson, Brian D. Sullivan,
and Katie Lynn Zorc, for appellant.
Raslan & Pla, L.L.C., and Lila D. Raslan, Jorge Luis Pla,
and Nadia Zaiem; Dinn, Hochman & Potter, L.L.C., and
Edgar H. Boles, for appellee.
MARY J. BOYLE, J.:
Plaintiff-appellant, T.A. (“husband”), appeals from the final divorce
decree entered by the Cuyahoga County Common Pleas Court, Domestic Relations
Division, terminating his marriage to defendant-appellee, R.A. (“wife”). Husband
raises two assignments of error for our review:
1. The trial court erred in awarding patently unreasonable legal fees in
the amount of $300,000 to wife.
2. The trial court erred in concluding that businesses sold years prior
to the initiation of these divorce proceedings in 2015 constitute marital
property.
Finding no merit to his arguments, we affirm.
I. Procedural History and Facts
Husband filed for divorce in February 2015. Wife answered
husband’s complaint and filed counterclaims against husband and cross-claims
against husband’s brother, Q.A. (“Q.A.”) whom she joined as a third-party
defendant. Wife also joined businesses, Pearl Road, Inc. and 871 Rocky River Drive,
Inc., as third-party defendants. Q.A., Pearl Road, Inc., and 871 Rocky River Drive,
Inc. filed counterclaims and cross-claims against both husband and wife as well.
On June 30, 2015, Q.A. filed a lawsuit in the Cuyahoga County Court
of Common Pleas against husband and Tallan, L.L.C., for $188,085. See Cuyahoga
C.P. No. CV-15-847754. The common pleas court dismissed Q.A.’s complaint
without prejudice in May 2018.
Before the parties’ divorce trial began, the trial court issued a
judgment dismissing wife’s cross-claims against Q.A.’s wife’s counterclaims against
husband that involved tort and contract claims, wife’s claims against the two
businesses, and Q.A.’s claims against wife and husband. The trial court made clear,
however, that Q.A. and the businesses remained properly joined parties “but only as
stakeholders of property.”
After a 14-day trial that took place in July, September, and November
2017, the trial court issued a 38-page judgment entry in April 2018. The following
facts were presented at trial.
A. Previous Marriages
Wife became a naturalized citizen of the United States in 1986. She
married her first husband, and they had three children together. Wife’s first
husband died in 1993. Wife received life insurance money for his death, which she
immediately invested.1 Wife also inherited a grocery store from her first husband.
Additionally, wife became the sole owner of a home on Devon Drive in North
Olmsted that she had owned with her first husband.
Wife married a second time, but this marriage was annulled.
1 The trial court found that wife’s investment accounts originating from her first
husband’s life insurance money was separate property. The trial court noted that wife
“was cross-examined at length about the rollovers and transfer of funds.” The trial court
found that “[t]he tracing of the rollovers and transfers were obvious and the records
provided. There is no reason other than obfuscation or harassment that the separate
nature of these funds could not have been stipulated prior to trial.” Husband does not
challenge this finding and, thus, wife’s investment accounts are not at issue on appeal.
Husband came to United States in 1989. He married his first wife,
who was a United States citizen, in 1992. Husband and his first wife had one child
in 1995.
Husband and his first wife filed for dissolution in May 1999, but later
dismissed the petition. Wife (R.A.) contends that husband paid his first wife to
dismiss the dissolution until he became a United States citizen. Husband denies
wife’s contention and claims that he did not want his first marriage to end. Husband
agreed, however, that if his first wife would have gone through with the dissolution,
he would not have obtained his citizenship. Husband became a United States citizen
in October 2000. Husband and his first wife obtained a dissolution in February
2001.
B. Husband’s and Wife’s Early Years
Although husband was still married to his first wife, husband and wife
(R.A.) began dating sometime in the mid-1990s. Wife testified that she and husband
were religiously wed in a mosque in July 1996. Wife explained that in the Arab
culture, religious ceremonies were more important than civil ceremonies. Wife
testified that husband moved into her house on Devon Drive, North Olmsted after
they were religiously wed. Although husband disputed this fact at trial, the trial
court found that there was “much evidence” presented that husband moved in with
wife and had lived with her “since the 1990s.”
Husband assisted wife in selling her grocery store. Wife took that
money and, with two business partners, purchased a gas station business with a
convenience store located on Pearl Road in November 1996, for a purchase price of
approximately $75,000. Wife and her partners, however, did not purchase the land
on which the gas station sat. Wife contributed $56,500 to the purchase of the Pearl
Road gas station, which was money that she had received from selling her grocery
store. Wife eventually became the sole owner of the Pearl Road gas station after she
bought out her business partner for $57,500.2 Husband began working at the Pearl
Road gas station sometime in 1997. Husband and wife had their first child in April
1998.
In March 2001, husband purchased 51 shares of wife’s Pearl Road gas
station. Wife claims that husband coerced her into selling him part of the gas station
because he was embarrassed that he did not have any money and could not sponsor
his brother, Q.A., to come to the United States. According to a March 1, 2001 stock
purchase agreement, husband purchased 51 shares of the Pearl Road gas station for
$510. Husband claims that he actually purchased the 51 shares for $80,510 because
his father wired $80,000 to wife for the purchase. Husband agreed, however, that
the stock purchase agreement only stated $510. According to a May 10, 2002 stock
purchase agreement, husband purchased wife’s remaining 49 shares of the Pearl
Road gas station for $980. Wife claims that she never received $510 or $980 for the
shares, let alone $80,000. Husband did not present any evidence showing that he
paid these amounts to wife.
2Wife testified that she originally had two business partners with the Pearl Road
gas station. But the evidence is not clear as to what happened to the third business
partner.
Husband and wife were legally married in October 2002. In August
2003, wife deeded her residence to herself and husband as joint and survivor
owners. At the time of the deed, the value of the North Olmsted home was $159,500
and the home was debt free. The parties agree that the home is marital property.
They further stipulated that at the time of the divorce, the value of the marital home
was $155,000.
Husband and wife’s second child was born in December 2003 and,
thus, was still a minor at the time of the divorce.
C. Husband Purchases Rocky River Drive Gas Station
In October 2004, husband purchased a gas station at 871 Rocky River
Drive for $385,000. The sale included the property, all equipment, and the building.
Husband said that he purchased the gas station on Rocky River Drive in part based
on a ten-year loan from Charter One Bank for $269,500. Husband stated that he
also put $120,000 down on the Rocky River Drive gas station from money that he
had “saved” from the Pearl Road gas station.
Husband incorporated the Rocky River Drive gas station business
under the name 871 Rocky River Drive, Inc. The real estate, including the land and
building of the Rocky River Drive gas station, was titled to husband’s company
Tallan, L.L.C. that he incorporated on June 18, 2004.
D. Renovations to the Rocky River Drive Gas Station
Husband testified that he decided to renovate the Rocky River Drive
gas station sometime in 2007. According to husband, wife did not want him to
renovate the gas station, and did not want anything to do with the renovations.
Husband hired an architect to draw up the plans and Skliros Construction to
renovate the entire gas station for $635,000. Construction began around June
2009.
Husband testified that he chose Skliros to perform the renovations
because Skliros agreed to finance the project and did not require a down payment
or any money up front. Husband also stated that he did not pay Skliros at any time
during the construction. Husband testified that their arrangement was that once
the gas station reopened, he would make payments to Skliros.
Despite husband’s testimony regarding payment to Skliros, on
October 5, 2009, husband and wife took out a ten-year mortgage of $120,000 on the
marital home from U.S. Bank for the renovations of the Rocky River Drive gas
station. Husband and wife both signed the document as “borrower” and initialed
each page. On the third page, the document states that “By signing this mortgage,
[wife] agrees to subordinate her interest to U.S. Bank, N.A.” Husband testified that
he used this money for the canopy and the refurbished pumps of the gas station.
Further, wife testified that she and husband paid Skliros $50,000 in
cash to start the renovation. Tom Skliros, the owner of Skliros Construction,
testified that he could not recall if he received a cash deposit of $50,000.
Wife testified that she also took $50,000 from her annuity on
January 6, 2010, for the renovation project. Wife submitted documents showing
that she removed this money from her annuity. Husband denies this occurred even
though Tallan, L.L.C.’s bank records show that $50,000 was deposited on
January 12, 2010.
Husband testified that the Rocky River Drive gas station was closed
for most of 2010, because he had run out of money. Husband agreed, however, that
the gas station had purchased 1,088,555 gallons of gasoline for retail sale in 2010.
In 2011, the gas station purchased 1,358,104 gallons.
Husband testified that the renovations were completed by
October 10, 2010, which is when husband stated that the gas station reopened.
Husband agreed that the gas station convenience store was open throughout the
construction.
E. Wife Files for Divorce in September 2010
Husband and wife separated in June 2010, after an incident where
the police were called. Husband moved out of the parties’ marital home at that time
pursuant to a domestic violence petition filed by wife (that she later dismissed).
Wife filed for divorce in September 2010. Wife dismissed this divorce proceeding
on April 14, 2011, after the parties filed a joint reconciliation with the court. Wife
testified that she did so because husband told her, among other things, that he would
go to marriage counseling. Wife testified that husband walked out of their first
session, halfway through the session, and never returned. Husband never moved
back into the parties’ North Olmsted home.
F. Sale of Rocky River Drive Gas Station
Husband explained that he had to sell the Rocky River Drive gas
station to his brother (Q.A.) because he had run out of money and Skliros had placed
a mechanic’s lien on the property. Husband testified that he sold the Rocky River
Drive gas station business to his brother in part for $310,000, but he did not sell the
real estate to Q.A. (which Tallan, L.L.C., husband’s company, still owned). Although
husband’s testimony was somewhat contradictory, husband said that he sold the
Rocky River Drive gas station to Q.A. in two transactions. Husband stated that
sometime between November 2010 and March 2011 (this is our summary of the
many dates that he gave during trial), Q.A. purchased 49 percent ownership of the
gas station for improvements that Q.A. had made to the store that husband could
not afford to complete himself because he had run out of money. Husband testified
that his brother bought it “right after we opened [in October 2010], and when we
did that promissory note with Skliros.” The $300,000 Skliros promissory note
(which we will discuss below) was dated March 7, 2011.
Husband further testified that he sold the remaining 51 shares of
stock to his brother on September 14, 2012, for $175,000. Husband explained that
he transferred it in two parts so that his brother would not lose the liquor license.
Husband further stated that his brother paid him $10,000 for good faith.
G. Q.A.
Q.A. came to the United States in August 2001. He stated that before
he came, he wired $60,000 to wife, but that wife never paid him the money back.
Q.A. testified that in 2004, wife told him that she would not give the money to him
and that he should get the “f#ck out of her house.”
Q.A. first worked at the Pearl Road gas station and then in 2004, he
also worked at the Rocky River Drive gas station. Q.A. stated that when husband
ran out of money to complete the renovations, he asked Q.A. for help. Q.A. and his
wife both testified that they sold Q.A.’s wife’s jewelry for about $84,000 so that Q.A.
could finish the renovations of the Rocky River Drive gas station. Q.A. stated that
he and his wife finished the inside of the building of the Rocky River Drive gas
station with their own funds, including coolers, counters, walls, floors, and security
cameras, as well as the driveway and landscaping. Neither Q.A. nor Q.A.’s wife could
produce any evidence that they paid for these items out of their personal funds.
H. Tom Skliros
Skliros testified that he originally gave husband a price of $635,000
to renovate the entire Rocky River Drive gas station, including the canopy, pumps,
tanks in the ground, and the convenience store. Skliros, however, did not complete
all of the work on the gas station.
Skliros filed a mechanic’s lien against the property for $635,000 in
July 2010. He stated that he filed the lien to protect himself because he heard that
husband was having economic and personal problems.3 Skliros’s July 2010 lien
states that he began working on the property on June 8, 2009 and completed it on
3Skliros filed the first mechanic’s lien approximately two weeks after wife filed a
domestic violence petition against husband in June 2010.
July 13, 2010. Skliros filed a satisfaction of mechanic’s lien on October 5, 2010,
because he stated that he did not end up renovating the entire gas station. Skliros
explained that he just renovated the outside structure of the building. Skliros
admitted that the mechanic’s lien was not valid because it represented an estimate
of the work, not the actual work. Skliros also did not demand payment from
husband before filing the lien. Skliros further admitted that when he filed this lien,
he was not done with the work.
On October 5, 2010, Skliros filed a second mechanic’s lien against the
property for $330,580. In it, he explained that he started the work on June 8, 2009,
and completed it on September 25, 2010. Skliros stated that he could not recall if
he demanded payment from husband. Further, there was no notice of furnishing
labor and materials filed. On February 7, 2011, Skliros filed a release of this
mechanic’s lien, stating that the $330,580 debt had been “satisfied, released and
discharged.”
Skliros filed a third mechanic’s lien against the property in February
2011, for $330,580. In it, he stated that he began the work on June 8, 2009, and
completed it in November 2010. Skliros did not remember why he filed the third
mechanic’s lien, but thought it was “probably” because he had completed more work
on the project after he filed the other mechanic’s liens.
Husband testified that he talked Skliros into accepting $300,000,
which is why Skliros came back to him with the $300,000 promissory note.
Husband signed a promissory note in favor of Skliros on March 7, 2011 and secured
it with a mortgage on the real estate where the Rocky River Drive gas station was
located, which Tallan, L.L.C. owned.
When Skliros was shown the $300,000 promissory note at trial, he
said that he was “confused.” Skliros testified that he did not know anything about
the $300,000 note. Skliros testified that he had never seen the document.
Upon further questioning from husband’s counsel, Skliros said that
he remembered from his deposition that husband was not going to pay him up front
and that he agreed to finance the project.
Skliros further agreed that he signed an “Assignment and Assumption
Agreement” on October 1, 2012, with husband as the sole member of Tallan, L.L.C.,
and Q.A. as president of 871 Rocky River Drive, Inc. This agreement states that
husband assigned the remaining amount of the $300,000 promissory note that he
owed to Skliros ($174,621) to 871 Rocky River Drive, Inc., and that 871 Rocky River
Drive, Inc. agreed to assume the debt. Skliros testified that although he did sign the
assignment and assumption agreement, he did not know what the document was.
Skliros agreed that in his deposition, he testified that he did not remember ever
seeing the substitute promissory note.
Skliros testified on cross-examination that he entered into a written
contract with husband for the renovation project, but stated that he could not find
the contract. When Skliros started the project, he did not know if husband or Q.A.
owned the business. He said that he thought it was “a family thing.”
Skliros agreed that he was paid monthly during the project on checks
made from the bank account of “871 Rocky River Drive Inc, Grocery.” Skliros stated
that the construction contract was for $360,580. He received a total amount of
$263,000 from the checks.
I. Sale of Pearl Road Gas Station
Husband purchased the leasehold from Sunoco in March 2009 for the
Pearl Road gas station for $250,000. Husband testified that he decided to sell the
Pearl Road gas station to his brother on November 22, 2013, for $150,000 because
he could not negotiate a new lease with Tober, Inc. Tober, Inc. owned the land on
which the gas station sat. Husband stated that he “negotiated so many times, and
[they] had emails back and forth between” their lawyers “nonstop to come to
arrangement.” Husband claimed that without a valid lease, no one would purchase
the property, and that is why he believed $150,000 was a fair price even though it
was $100,000 lower than what he had paid for the leasehold from Sunoco just four
years previously.
Husband agreed that during his deposition, he stated that Kurt Tober
wanted to increase his monthly rent to somewhere between $6,500 and $8,300. But
husband agreed that the actual agreement proposed was $4,000 per month for the
first five years, $4,500 for the next 5 years, and $5,000 for the third five years.
Husband also agreed that Pearl Road, Inc. continued to pay $2,464 per month to
Tober.
Husband testified that for the Pearl Road gas station, Q.A. paid him
$100,000 by check as a down payment for the Pearl Road gas station and then
signed a promissory note in the amount of $50,000. Husband agreed that the
November 22, 2013 agreement between he and Q.A. did not have a purchase price
in it because it was contingent upon his brother negotiating a new lease with Tober.
Husband stated, “No agreement, no sale.” Husband later testified that was not true.
Husband explained that he sold the Pearl Road gas station to his brother “as is” and
that his brother was “on his own” to negotiate a new lease with Tober. Husband
stated that is why he and Q.A. entered into a second purchase agreement on
September 12, 2014. The second agreement between husband and Q.A. had the
purchase price of $150,000 in it, but it did not acknowledge that brother had already
made a $100,000 payment. Husband’s and Q.A.’s testimony was not
straightforward regarding the sale of the Pearl Road gas station.
J. Kurt Tober’s Testimony
Tober, the president of Tober, Inc., testified that his company owns
the land on which the Pearl Road gas station sits. Tober stated that when Sunoco
notified him that they assigned their leasehold to husband, Tober’s attorney sent a
new lease agreement to husband in September 2009. Tober stated that he did so at
his attorney’s suggestion. Tober testified that when husband rejected that proposal,
Tober immediately agreed to continue the monthly rent at the same terms as the
lease they had been operating under with Sunoco, which was $2,464 per month until
May 20, 2015.
Tober testified that when he spoke to husband after he learned that
husband had rejected the higher rent, Tober told him on the phone, “That’s fine[.]
* * * Throw the lease away. Let’s just continue the present lease[.]” Tober testified
that he did not agree with his attorney to increase the rent in the first place. Tober
said that he does not “like to have squabble in [his] life. And it wasn’t all that
important to be, to be very honest. So whatever money that was being sent to [him]
was satisfactory[.]”
Tober denied that he ever threatened to cancel husband’s lease.
Tober denied that he and husband ever had a “battle” over the lease. Tober further
denied that he ever proposed a monthly rent of $6,500 to $8,300 per month as
husband had testified to in his deposition. Tober agreed that it was “totally false”
that husband had a chance of losing the lease. Finally, Tober said that there were
never any emails back and forth between him and husband regarding a new lease,
let alone over the course of two years.
Tober testified that husband contacted him in 2013 and said that he
was selling the Pearl Road gas station to his brother. Husband told Tober that he
would send him the amendment to the lease, and if he agreed, Tober should sign it
and send it back, which Tober said that he did. In the 2013 amendment, Q.A.
proposed beginning the new lease on May 1, 2014, for an initial term of five years at
$2,464 per month; for $2,540 during the first five-year extended term; and $2,618
for the second five-year extended term. Tober said the terms of the 2013
amendment were fine with him. But Tober denied that he ever negotiated any terms
with Q.A. Tober said that he simply received the new lease and signed it.
K. Charter One Note
The Charter One note for $269,500 that husband had taken out in
2004 to purchase the Rocky River Drive gas station became due in the fall of 2014.
Charter One Bank sent a letter to Tallan, L.L.C. in May 2014, stating that the loan
balance of $180,140.11 was due in full by October 25, 2014. Husband claimed he did
not know that this note was going to be due in the fall of 2014, despite the original
loan documents stating so as well as each monthly statement. Husband testified
that he went to Charter One Bank and Key Bank and neither would loan him the
money or permit him to refinance the loan. The original loan was guaranteed
personally by husband as well as 871 Rocky River Drive (the real estate) and Pearl
Road, Inc.
Husband testified that he borrowed $188,088 from Q.A. in
November 2014 to pay the Charter One loan. Q.A. corroborated husband’s
testimony, stating that he paid the remaining balance of the Charter One loan, and
husband signed a promissory note to pay the money back to him. Husband agreed
that he secured the promissory note to Q.A. with two “mortgages on real estate” —
the land on which the Rocky River Drive gas station sat (owned by Tallan, L.L.C.,
which was owned by husband) and the marital home. Husband executed the two
mortgages on February 4, 2015, just before he filed his complaint for divorce on
February 18, 2015. According to the promissory note, husband was supposed to pay
his brother $4,500 per month beginning on December 1, 2014. Husband agreed
that he never made any payments to his brother.
L. Trial Court’s Judgment Entry
The trial court aptly stated that the issue that involved most of the
court’s time in trial were the questions: (1) what was marital property, (2) what was
separate property, and (3) whether Q.A. “purchased the two gas stations at fair
market value or at all.”
The trial court concluded that the duration of the marriage was from
February 9, 2001 (when husband’s marriage to his first wife dissolved) until the first
day of trial, June 10, 2016. The court found that it was not equitable to use the
parties’ legal marriage date as the commencement of the marriage due to the parties’
“financial relationship and entanglement.”
Regarding the marital home, the trial court stated:
Neither party argued that the residence on Devon Drive was not joint
property. Although owned by [wife] and mortgage free prior to
[husband] and [wife’s] civil marriage, [wife] transferred that residence
into joint names. [Wife] also agreed to mortgage it to renovate [the
Rocky River Drive gas station] in October 2009. [Wife] did argue that
the court could trace her premarital portion of $159,000 so that given
the current value of $155,000, there would be no marital value
remaining. Given the overall equities in this matter and in
consideration of the duration of marriage finding, the court declines to
use a tracing method to exclude [husband’s] interest in this property
[that] the parties used, in part, to finance the renovation of [the Rocky
River Drive gas station]. However, the court does hold that the
subsequent mortgage signed by [husband] in favor of [Q.A.] signed
immediately prior to the filing of this action and without the signature,
knowledge, or consent of [wife], is financial misconduct by [husband].
With respect to the Pearl Road gas station, the trial court found that
husband did not prove that this property was separate property.4 The court
explained that wife “solely owned the asset” until March 1, 2001, which was after the
parties’ de facto marriage date. The court noted that since wife’s transfers of the
Pearl Road gas station stock to husband occurred “during the marriage,” the Pearl
Road gas station was not separate property. The court disagreed, however, with wife
that the Pearl Road gas station was her separate property.
The trial court found that Tallan, L.L.C. owned the real property at
the Rocky River Drive gas station. Based on expert testimony, the court found that
the real property was marital property worth $520,800, which was what Cuyahoga
County (“the most neutral value,” according to the trial court) valued the land for
tax purposes in 2014. The court further found that the $188,080 promissory note
signed by husband “immediately before the filing” of the divorce in favor of Q.A. and
secured by a mortgage in part on the Rocky River Drive real estate was “part of the
financial misconduct” by husband and was “questionable” debt that “should not be
included in any division of property.”
Regarding the two gas station businesses, the trial court stated that it
had “no faith” in husband’s testimony. The court explained that “[t]he
inconsistencies, illogic and self-serving nature of [husband’s] testimony requires the
4 The trial court did not order any party to transfer the title of either gas station.
questioning of the alleged validity of the documents and the veracity of the
assertions.” The court further explained:
[T]he Court finds that much of the testimony by [husband] was a
moving target. The testimony of [Q.A.] parroted much of [husband’s]
testimony with some of the same discrepancies. While there were some
credibility gaps in [wife’s] testimony, on the whole her testimony was
more credible. The testimony of [Q.A.] and, especially, of [husband],
and the contradictory and confusing documents they provided, lacked
credibility.
The court found that the initial transfer of the Rocky River Drive gas
station occurred in violation of a restraining order put in place by the court when
wife filed the first divorce action in 2010. The court explained that “despite the
documents presented by [husband] and [Q.A.] and in some ways, because of them,
the court must find that the value of the business operating at 871 Rocky River Drive
is marital.”
In valuing the Rocky River Drive gas station, the court reviewed the
testimony of three experts presented by wife, husband, and Q.A. Wife’s expert,
however, testified that he could not give his opinion as to the value of the business
due to the “inaccuracy of the tax returns, the lack of certain documents, and the fact
that the documents that do exist do not match up with the alleged transactions.” The
court noted, however, that it had to assign a value. The trial court ultimately used
Q.A.’s expert, valuing the Rocky River Drive gas station business at $306,000. In
doing so, however, the court explained that “in choosing this value, the court notes
the financial misconduct of the husband in providing documents which were used
to create the tax returns upon which this value is based.”
The court also used Q.A.’s expert to value the Pearl Road gas station,
which was $207,000. The court also noted for this gas station that it was taking into
consideration the “financial misconduct of husband in providing documents which
were used to create tax returns upon which this value is based and for failing to
provide cash register receipts for either business.”
In dividing the gas stations, the trial court found that it was “not
desirable to split the businesses between these parties even if it was appropriate to
divest [Q.A.] of title in this court.” The court found that selling the businesses would
only diminish the properties. The court further found that husband “has engaged in
financial misconduct in that he transferred the two gas station businesses with
convenience stores and the liquor licenses to his brother to avoid an equitable
division of property.” The court explained:
The husband’s extreme behaviors to avoid sharing assets with his wife
must be considered in this matter as an equitable consideration. His
bank statements, credit cards and other financial indicators of lifestyle
show that his recorded expenditures did not diminish until this case
was underway. Meanwhile, he only paid $229.18 toward his temporary
child support which created lack of cash flow for [wife] who was forced
to use credit cards and separate property to sustain herself and the
children during the pendency of this action.
The court found the following property in husband’s name or
possession to be marital: husband’s car worth $6,000; Tallan, L.L.C. worth
$520,800; Pearl Road, Inc. valued at $207,000; 871 Rocky River Drive, Inc. valued
at $306,000; a boat valued at $4,000; and firearms worth $1,850. The court found
that the following property in wife’s name or possession to be marital: the North
Olmsted home valued at $145,000 (the amount of equity in the home) and wife’s
pension valued at $5,733. The court concluded that “[a]n equal division of the
property based on [its] findings would require husband to pay wife $447,458.50 to
equalize them.”
In dividing the marital property, the court awarded wife the marital
home, her pension, and Tallan, L.L.C., and awarded husband his car, the boat, and
the three firearms.
The court further explained:
In addition to the above [equalization] figure, [husband] owes [wife]
$105,806.40 for the temporary support arrearages through July 10,
2017, plus he owes the state of Ohio an additional $4,038.40 for cash
medical. The arrearage of$105,806.40, plus the amount owed to [wife]
of $447,458.50 totals $553,264.90. By awarding [wife] all of
[husband]’s interest in Tallan, LLC (871 Rocky River Drive), the debt
will be paid and the arrearage reduced to $32,464.90, so long as the
lien is removed from the property. If the lien remains or is in some way
executed upon, then the value of the property in Tallan, LLC would be
reduced to $339,712. In which case, [husband] would owe [wife] the
full amount of the arrearage, $105,806.40, plus an additional $107,746
($447,458.50 less $339,712). The division of property as identified
above is substantially equal. So long as the property is divided as above
and the mortgages of $181,088 are removed, this is not inequitable.
The trial court also awarded wife $2,000 per month in spousal
support for five years as well as child support for the party’s minor child and ordered
that each party pay the debts in his or her name. The trial court further ordered
husband to pay any debt allegedly owed to Q.A. and hold wife harmless for any such
debt. The trial court further ordered Q.A. to release the mortgages on the marital
home and on the real estate of the Rocky River Drive gas station, which was located
at 871 Rocky River Drive, Berea, Ohio. And the trial court awarded wife $300,000
in attorney fees.
It is from this judgment that husband now appeals.5 We will address
husband’s assignments of error out of order for ease of discussion.
II. Marital Property
A. Gas Station Businesses
In his second assignment of error, husband argues that the trial court
abused its discretion when it determined that the Pearl Road and Rocky River Drive
gas station businesses were marital property. Husband does not argue that the gas
stations were his separate property. Rather, he contends that the evidence he
presented at trial established that he transferred ownership of both gas station
businesses to his brother and therefore cannot be considered marital property.
R.C. 3105.171(A)(3) defines marital property generally as property or
interest in property that is owned by either or both of the spouses and that was
acquired by either or both of the spouses during the marriage. Once a trial court has
classified the property as either marital or separate, review of that determination is
limited to the standard of manifest weight of the evidence. Marcum v. Marcum, 116
Ohio App.3d 606, 612, 688 N.E.2d 1085 (2d Dist.1996). “This standard of review is
highly deferential and [only] some evidence is sufficient to sustain the judgment and
prevent a reversal.” Barkley v. Barkley, 119 Ohio App.3d 155, 159, 694 N.E.2d 9895 Q.A. also appealed the trial court’s judgment. See companion case T.A. v. R.A.,
8th Dist. Cuyahoga No. 107166.
(4th Dist.1997). Moreover, a court has broad discretion to determine what property
division is equitable. Cherry v. Cherry, 66 Ohio St.2d 348, 421 N.E.2d 1293 (1981),
syllabus.
The manifest weight standard in a civil case is the same as it is in a
criminal case. Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d
517, ¶ 17. In Eastley, the Ohio Supreme Court explained:
Weight of the evidence concerns “the inclination of the greater amount
of credible evidence, offered in a trial, to support one side of the issue
rather than the other. It indicates clearly to the [factfinder] that the
party having the burden of proof will be entitled to their verdict, if, on
weighing the evidence in their minds, they shall find the greater
amount of credible evidence sustains the issue which is to be
established before them. Weight is not a question of mathematics, but
depends on its effect in inducing belief.”
Id. at ¶ 12, quoting State v. Thompkins, 78 Ohio St.3d 380, 678 N.E.2d 541 (1997).
When conducting a manifest weight review, this 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.” Id. at ¶ 20. “In weighing the evidence,
the court of appeals must always be mindful of the presumption in favor of the finder
of fact.” Id. at ¶ 21, citing Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 461
N.E.2d 1273 (1984).
Husband was required to move out of the marital home in June 2010,
after wife filed a civil protection order against him. Wife filed for divorce in
September 2010. There was no dispute in this case that when wife filed the first
divorce action, both gas stations were marital property.
Despite the first divorce action against him as well as a temporary
restraining order forbidding him to do so, husband, almost immediately, began to
try to divest himself of ownership of the gas stations. Husband testified that
sometime as early as October 2010, just after wife had filed the divorce action, he
sold 49 percent of the Rocky River Drive gas station to Q.A. Again, husband was not
permitted to sell or transfer any property pursuant to the temporary restraining
order in the first divorce. Indeed, husband testified that he had actually agreed to
sell the entire gas station business to his brother at that point, but he decided to
transfer it in two steps so that his brother did not lose the liquor license.
Husband claims that he had to sell the Rocky River Drive gas station
to his brother because he ran out of funds to complete the renovation of the gas
station. This is after husband had taken out a $120,000 loan for the renovation
project in October 2009, using the marital residence to secure the loan. Wife agreed
to “subordinate her interest” in the marital home to secure the loan. In January
2010, wife also took $50,000 out of her individual investment accounts to give to
husband for the renovation project. Husband never explained where the $120,000
went that he obtained from mortgaging the marital residence. It is also unclear
where the $50,000 of wife’s annuity was used in the renovations.
Husband still claims, however, that he ran out of money to finish the
project. Skliros testified that he heard husband was having personal issues, which
is why he filed the first improper mechanic lien against the Rocky River Drive gas
station. It is telling that Skliros recorded the first mechanic’s lien against the
property for $635,000 on July 15, 2010, approximately two weeks after husband
was ordered to leave the marital residence. Wife then filed the first divorce a couple
months later.
On March 7, 2011, husband entered into the Skliros promissory note
for $300,000, which was secured by “real estate located at 871 Rocky River Drive.”
Wife’s divorce action, however, was still pending. Husband and Q.A. claim that Q.A.
agreed to pay this $300,000 debt to Skliros as part of his payment for the gas station.
Notably, however, the $300,000 note was paid by checks written from the Rocky
River Drive gas station account. Brother signed most of the checks to Skliros from
this account. It is interesting that the Rocky River Drive gas station account had
sufficient funds to pay the Skliros note when husband testified that he could not pay
it because he ran out of funds. Husband’s reasoning is highly suspect. Further,
husband was prohibited from entering into this promissory note pursuant to the
temporary restraining order. Although wife dismissed the first divorce action, the
trial court could consider it as part of the overall financial misconduct of husband.
We also find it interesting that Skliros could not identify the
$300,000 note and was “confused” by it. In fact, Skliros stated that he had never
seen the promissory note before trial.
At some point after wife filed the first divorce action, husband and
wife reconciled. Wife testified that husband talked her into dismissing her
complaint because, among other things, husband promised to go to marriage
counseling with her. Wife dismissed her complaint on April 14, 2011. Wife testified
that husband went to one session and walked out halfway during the session.
Husband did not dispute this fact. Husband never moved back into wife’s house.
Q.A. and husband also testified that Q.A. paid to complete the inside
of the gas station business before he even entered into the purchase agreement to
buy the business, including some of the outside renovations such as the black top
finishing. Q.A. and his wife testified that they sold her gold jewelry to do so, but they
did not submit any such proof. Wife, however, submitted checks from the Rocky
River Drive grocery account showing that many companies during the renovation
were paid from this account, including one where the memo line stated, “black top
balance.” Husband could not explain why this had occurred.
Q.A. and husband did not sign a purchase agreement for the Rocky
River Drive gas station business until September 14, 2012. Husband stated that this
was when he sold the remaining 51 percent of the business to Q.A. Husband
submitted a document that was recorded on October 7, 2014, titled “release of
mortgage,” for the $300,000 note to Skliros. Husband and Q.A. then signed an
assignment and assumption agreement, in which husband assigned, and Q.A.
assumed, the note to Skliros.
But notably, the assignment and assumption agreement provides that
Skliros Construction Company consents to the assignment and assumption
agreement and “agrees to release and discharge Tallan, LLC from the original
March 2, 2011 Promissory Note so long as the existing Mortgage continues to secure
the new Substitution Promissory Note.” The existing mortgage was “secured by a
mortgage on real estate located at 871 Rocky River Drive, Berea, Ohio 44107.”
Further, the substitute promissory note (where Q.A. agreed to assume the balance
of the debt that husband owed Skliros) further provides that “this note is secured by
a mortgage on real estate located at 871 Rocky River Drive, Berea, Ohio 44107 owned
by Tallan, LLC.” Husband owns Tallan, L.L.C. Thus, husband, who was the sole
owner of Tallan, L.L.C., still ultimately secured the substitute promissory note from
Q.A. to Skliros.
Husband’s sale of the Pearl Road gas station to Q.A. is just as suspect.
Husband testified that he decided to sell the Pearl Road gas station to his brother in
November 2013 for $150,000 — even though husband had paid $250,000 to Sunoco
for the leasehold in 2009 — because husband said that he could not negotiate a lease
with Kurt Tober. Husband testified ad nauseam that he and Tober went back and
forth with numerous emails and phone calls, trying to negotiate a new lease. Tober,
however, contradicted nearly everything that husband testified to. In fact, Tober
stated that he was fine with husband paying the original amount of the lease.
Husband’s entire testimony regarding the sale of the Pearl Road gas station to his
brother simply did not make sense.
In this case, the trial court found that the gas stations were marital
property for purposes of its distributive award because it found that husband had
committed financial misconduct in attempting to divest himself of any property so
that he did not have to share any of it with wife — despite the fact that it was wife
who originally owned the first gas station and despite the fact that wife had
transferred title of that first gas station to him for mere pennies compared to what
she paid for it. We further note that the trial court did not order any party to transfer
title of either gas station to wife. Instead, the trial court awarded wife the real estate
of the Rocky River Drive gas station (i.e., Tallan, L.L.C.), which husband
undisputedly owned.
Further, the trial court found that husband and Q.A. lacked
credibility. The trial court sat through 14 days of trial and was in the best position
to determine the credibility of the witnesses. The trier of fact is best able “to view
the witnesses and observe their demeanor, gestures, and voice inflections, and use
these observations in weighing the credibility of the proffered testimony.” State v.
Wilson, 113 Ohio St.3d 382, 2007-Ohio-2202, 865 N.E.2d 1264, ¶ 24. The trier of
fact may take note of any inconsistencies and resolve them accordingly, “believ[ing]
all, part, or none of a witness’s testimony.” State v. Raver, 10th Dist. Franklin No.
02AP-604, 2003-Ohio-958, ¶ 21, citing State v. Antill, 176 Ohio St. 61, 197 N.E.2d
548 (1964). Moreover, husband’s questionable documentary evidence as well as
Skliros’s and Tober’s testimonies further support the trial court’s findings.
After reviewing the record before us, we conclude that the trial court’s
findings that the two gas station businesses should be considered marital property
for purposes of totaling the marital estate and equally dividing it — despite the fact
that the two gas station businesses were titled in Q.A.’s name — were supported by
the record and are not against the manifest weight of the evidence. Again, the trial
court did not award wife the two gas stations; it awarded her the real estate on which
the Rocky River Drive gas station sits, which husband owned as the sole shareholder
of Tallan, L.L.C.
We further note that not only does the record support the trial court’s
findings and division of property, the trial court could have, in its sound discretion,
awarded wife with a “greater award of marital property” or a “distributive award” —
on top of what it awarded her as part of her share of the marital estate — to
“compensate” wife for husband’s serious financial misconduct. See R.C.
3105.171(E)(4) (“If a spouse has engaged in financial misconduct, including, but not
limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent
disposition of assets, the court may compensate the offended spouse with a
distributive award or with a greater award of marital property.”).
B. Commencement of the Marriage
Husband further argues in his second assignment of error that the
trial court erred in finding that the marriage commenced on February 10, 2001,
rather than when they were legally married. At the crux of this argument, husband
maintains that the trial court erred when it determined that wife sold the Pearl Road
gas station to him “during the marriage” because wife sold her interest in the Pearl
Road gas station to him before they were actually legally married.
R.C. 3105.171(A)(2)(b) provides the court with authority to select a
date other than the ceremonial wedding date for purposes of equitably determining
what comprises the marital estate for a division of property assessment. D’Hue v.
D’Hue, 8th Dist. Cuyahoga No. 81017, 2002-Ohio-5857, ¶ 48. This statute provides:
(2) “During the marriage” means whichever the following is applicable:
(a) Except as provided in division (A)(2)(b) of this section, the period
of time from the date of the marriage through the date of the final
hearing in an action for divorce or in an action for legal separation.
(b) If the court determines that the use of either or both of the dates
specified in division (A)(2)(a) of this section would be inequitable, the
court may select dates that it considers equitable in determining
marital property. If the court selects dates that it considers equitable
in determining marital property, “during the marriage” means the
period of time between those dates selected and specified by the court.
This court reviews a trial court’s determination of a de facto marriage
date for an abuse of discretion. Berish v. Berish, 69 Ohio St.2d 318, 323, 432 N.E.2d
183 (1982); Gullia v. Gullia, 93 Ohio App.3d 653, 666, 639 N.E.2d 822 (8th
Dist.1994).
“‘The term discretion itself involves the idea of choice, of an exercise
of the will, of a determination made between competing considerations.’” State v.
Jenkins, 15 Ohio St.3d 164, 222, 473 N.E.2d 264 (1984), quoting Spalding v.
Spalding, 355 Mich. 382, 94 N.W.2d 810 (1959). To find that a trial court abused
that discretion, “the result must be so palpably and grossly violative of fact or logic
that it evidences not the exercise of will but the perversity of will, not the exercise of
judgment but the defiance of judgment, not the exercise of reason but instead
passion or bias.” Nakoff v. Fairview Gen. Hosp., 75 Ohio St.3d 254, 256, 662 N.E.2d
1 (1996).
In this case, the trial court found:
[Husband] and [wife] were civilly and legally married October 16,
2002. However, they lived together before that marriage for six years.
[Husband] was married to [his first wife] during that time, until
February 9, 2001. During that time, [husband] had assisted [wife] in
selling her grocery store, he had worked at the Pearl Road Sunoco, and
was living in [wife’s] home. They even had [a] religious marriage
ceremony in 1996. This Court cannot say that the legal commencement
of the marriage was 1996. However, given their financial relationship
and entanglement, it would be inequitable for this Court for the
purposes of division of property and the interpretation of “duration of
the marriage” to use the date of legal marriage. This Court must
commence the division of property in this case after the divorce from
[husband’s first wife] on February 9, 2001. R.C. 3105.171(A); Bryan v.
Bryan, [8th Dist. Cuyahoga No. 97817], 2012-Ohio-3691. The parties
separated in 2010, but given the facts of this case, the Court cannot find
that date equitable, but must use the first day of trial. Therefore, for
the purposes of division of property, the duration of the marriage is
from February 10, 2001 to July 10, 2016.
Husband contends that the facts in this case are not analogous to
those in Bryan, where the trial court determined that the de facto marriage date was
six years prior to the date the parties legally married. The husband and wife in
Bryan moved in together and became engaged six years prior to their legal marriage.
The wife in Bryan testified that she and husband split the costs of their living
expenses. The husband in Bryan testified that he paid almost everything. This court
affirmed the trial court’s decision because the “trial court was presented with two
different versions of the parties’ financial life prior to being married and concluded
that wife was more credible than husband.” Id. at ¶ 14.
Here, husband claims that the facts in this case are more similar to
those in Drummer v. Drummer, 3d Dist. Putnam No. 12-11-10, 2012-Ohio-3064. In
Drummer, the court determined that there was no reasonable basis to find that the
marriage began six years prior to the date they were legally married. The wife argued
that the trial court erred, relying on a case from this court, Bradley v. Bradley, 8th
Dist. Cuyahoga No. 78400, 2001 Ohio App. LEXIS 3028 (July 5, 2001). The court
in Drummer analyzed Bradley and explained:
In Bradley, the parties became romantically involved in 1979, which
resulted in the birth of their son in 1980. After the birth of their son,
Mrs. Bradley remained at home to raise the parties’ son instead of
pursuing gainful employment. On June 22, 1991, the parties had a
ceremonial marriage, but never obtained a marriage license. In 1995,
Mrs. Bradley filed for divorce. Based on the evidence adduced during
trial, the trial court determined that the parties were married at
common law on June 22, 1991, and that the duration of the marriage
spanned from 1979 to 1995. Mr. Bradley appealed the trial court’s
decision. On appeal, the court of appeals, noting the trial court’s broad
discretion on the matter, focused on length of time the parties had been
together and the fact that Mrs. Bradley was financially dependent on
Mr. Bradley. Based on these facts, the court of appeals determined that
the trial court did not abuse its discretion.
Having considered Bradley, we find that it is distinguishable from the
present case. In Bradley, the parties cohabitated for approximately
thirteen years before their common law marriage. Here, William and
Shirley cohabitated for approximately six years. In Bradley, the parties
had a son shortly after they began a relationship and well before their
common law marriage. Here, William and Shirley had their first and
only child in 1998, nearly four years after their marriage. Last, Mrs.
Bradley was financially dependent on Mr. Bradley because she stayed
home to raise their son. Here, Shirley was gainfully employed at Taco
Bell between 1988 and 1995, and there was no evidence that she was
financially dependent on William to the degree Mrs. Bradley was
financially dependent on Mr. Bradley. Given these differences, we
decline to follow Bradley.
Certainly, the record in the instant case contains evidence that could
persuade a trial court that, for purposes of property division, the
beginning date of the marriage was prior to July 1994. However, the
trial court did not reach that conclusion, finding that William and
Shirley married on July 28, 1994. Having considered the record and
being mindful of the trial court’s broad discretion in determining
whether the beginning and ending dates of the marriage are
inequitable, we find that the trial court did not abuse its discretion
when it did not select October 1988 as the equitable beginning date of
the marriage.
Drummer at ¶ 52-54.
The key to the Third District’s decision in Drummer and our decisions
in Bryan and Bradley is that this court and the Third District court were affirming
the trial courts’ decisions because trial courts have broad discretion to determine the
beginning and ending dates of the parties’ marriage.
In this case, the parties began living together in the mid-1990s.
Husband moved into wife’s home that she had inherited from her first husband
sometime in 1996, when they were religiously married in a mosque. Husband and
wife had their first child together soon after they moved in together. They were
financially intertwined. Husband assisted wife in selling her grocery store. He also
assisted wife in finding her business partner to purchase the Pearl Road gas station.
Husband worked at wife’s gas station. The parties held themselves out in their
community as husband and wife for six years prior to their legal marriage.
The trial court has broad discretion to determine what is equitable
upon the facts and circumstances of each case. Kunkle v. Kunkle, 51 Ohio St.3d 64,
67, 554 N.E.2d 83 (1990). Based on the record before us, we find no abuse of that
discretion.
Husband’s second assignment of error is overruled.
III. Attorney Fees
In his first assignment of error, husband argues the trial court
ordered him to pay “an unreasonable and exorbitant award of legal fees to wife.” He
maintains that the trial court did not consider all of the proper factors, including (1)
his inability to pay, (2) wife’s actions in prolonging the divorce, (3) wife’s retention
of multiple experts to value the property, and (4) the fact that “wife, with little to no
assets and only part-time, minimum wage employment incurred nearly half a
million dollars in legal fees (which if not foisted on husband, would never, ever be
paid).”
In an action for divorce, a court may award all or part of reasonable
attorney fees and litigation expenses to either party if the court finds the award
equitable. R.C. 3105.73(A). In determining whether such an award is equitable, “the
court may consider the parties’ marital assets and income, any award of temporary
spousal support, the conduct of the parties, and any other relevant factors the court
deems appropriate.” Id. An award of attorney fees under R.C. 3105.73 lies within
the sound discretion of the trial court and will not be reversed absent an abuse of
that discretion. Huffer v. Huffer, 10th Dist. Franklin No. 09AP-574, 2010-Ohio-
1223, ¶ 19. Under this highly deferential standard of review, we “may not freely
substitute [our] judgment for that of the trial court.” Dannaher v. Newbold, 10th
Dist. Franklin Nos. 05AP-172 and 05AP-650, 2007-Ohio-2936, ¶ 33.
Husband cites to Farley v. Farley, 97 Ohio App.3d 351, 646 N.E.2d
875 (8th Dist.1994), in support of his argument that the trial court erred when it
failed to determine that he had the ability to pay wife’s attorney fees. In Farley, this
court held that courts may only award attorney fees in a divorce if it is shown that
the payor spouse has a greater ability to pay. Id. at 355. Farley relied on R.C.
3105.18(H), which husband also cites to. This subsection, however, was repealed in
2005. See Am.Sub.H.B. No. 36, effective April 27, 2005.
Former R.C. 3105.18(H) governing attorney fees in a divorce case was
contained in the spousal support statute. It provided:
In divorce or legal separation proceedings, the court may award
reasonable attorney’s fees to either party at any stage of the
proceedings, including, but not limited to, any appeal, any proceeding
arising from a motion to modify any prior order or decree, and any
proceeding to enforce a prior order or decree, if it determines that the
other party has the ability to pay the attorney’s fees that the court
awards. When the court determines whether to award reasonable
attorney’s fees to any party pursuant to this division, it shall determine
whether either party will be prevented from fully litigating that party’s
rights and adequately protecting that party’s interests if it does not
award reasonable attorney’s fees.
Attorney fees in a divorce case are now contained in R.C. 3105.73,
which states:
In an action for divorce, dissolution, legal separation, or annulment of
marriage or an appeal of that action, a court may award all or part of
reasonable attorney’s fees and litigation expenses to either party if the
court finds the award equitable. In determining whether an award is
equitable, the court may consider the parties’ marital assets and
income, any award of temporary spousal support, the conduct of the
parties, and any other relevant factors the court deems appropriate.
R.C. 3105.73(A).
In enacting R.C. 3105.73, the Ohio General Assembly set forth “a
different standard for courts to apply when deciding whether an award of fees is
warranted.” Dunham v. Dunham, 171 Ohio App.3d 147, 2007-Ohio-1167, 870
N.E.2d 168, ¶ 90 (10th Dist.); see also Humphrey v. Humphrey, 11th Dist. Ashtabula
No. 2006-A-0083, 2007-Ohio-6738, ¶ 67 (“[T]he latest statute sets out a different
standard relating to whether an award of fees is appropriate.”).
Under former R.C. 3105.18(H), before a trial court could award
attorney fees to a party, it had to find: (1) the other party has the ability to pay the
fees; (2) the party seeking fees needs them to fully litigate his or her rights and
adequately protect his or her interests; and (3) the fees requested are reasonable.
Awarding attorney fees under R.C. 3105.73, however, is “less burdensome” than the
previous requirements of R.C. 3105.18(H). Dannaher, 10th Dist. Franklin Nos.
05AP-172 and 05AP-650, 2007-Ohio-2936, at ¶ 22, citing Karales v. Karales, 10th
Dist. Franklin No. 05AP-856, 2006-Ohio-2963. A court may now award
“reasonable” attorney fees if it determines the award is equitable. Id. In making the
equitable determination, “the court may consider the parties’ income, the conduct
of the parties, and any other relevant factors the court deems appropriate[.]” Id.Contrary to husband’s claim, unlike R.C. 3105.18(H), “R.C.
3105.73(A) does not specifically require the trial court to consider the parties’
abilities to pay attorney fees.” Shetler v. Shetler, 5th Dist. Stark No. 2008CA00036,
2009-Ohio-1581, ¶ 170. “It also does not contain an explicit instruction to the court
to consider a party’s ability to litigate his or her rights fully,” as the previous statute
required. Heyman v. Heyman, 10th Dist. Franklin No. 06AP-1070, 2007-Ohio-
2241, ¶ 15.
We therefore disagree with husband that the trial court abused its
discretion in this case when it failed to consider his ability to pay wife’s attorney fees.
Rather, the trial court merely had to determine whether an award of reasonable
attorney fees to wife was equitable and, in doing so, could “consider the parties’
marital assets and income, any award of temporary spousal support, the conduct of
the parties, and any other relevant factors the court deems appropriate.” R.C.
3105.73(A).
In this case, the trial court found that wife incurred attorney fees in
the amount of $493,885.93, excluding closing arguments. Wife had three attorneys
represent her in the divorce. Two of the attorneys charged $250 per hour, which
was less than their current rate. One charged $175 per hour, plus $110 per hour for
a paralegal. The court found that attorneys’ hourly rates were reasonable based on
their “expertise, experience, and function.” The court even found that the hourly
rates were on the “low end of the range.”
The trial court explained that the issue with wife’s large amount of
fees was that during depositions and trial, wife had all three or four “of these people
in attendance.” The court acknowledged that the team “may have been necessary
under the circumstances,” causing a “higher than usual range.” Wife’s attorneys
agreed to discount the fee by $150,000, which the court reasoned “help[ed] restore
the hourly rate into a more usual range.”
The trial court found that there were “unique issues or procedural
complexities in this case that [were] complicated by the husband’s refusal to
cooperate with discovery, give direct answers at deposition, or recall much of
anything during trial.” One of wife’s attorneys reported that approximately 100
hours of time was expended on husband’s bank records, plus one or two hours of
deposition questioning simply because husband “refused to provide or acknowledge
the bank records.” Wife’s counsel further provided that “hours were spent prior to
trial to obtain stipulations on documents that husband had provided two years”
previously. The trial court found that husband’s “repudiation of his own documents
also occurred during trial.” The trial court further found that husband refused to
acknowledge that his behavior led to the complexity of the case.
Based upon its findings, the trial court stated that although
husband’s fees were reasonable, husband “should not be rewarded for defending his
financial and other misconduct.” The trial court further found:
Based on the foregoing, [wife’s] attorney fees in the amount of
$400,000 are reasonable. In determining the amount of reasonable
attorney fees for this case, consideration was given as to whether all the
legal services rendered were necessary and whether under the facts of
this case the amount of time expended on such services was fully
compensable. This reduction is related to the team cost, but not the
necessity of the expenditure. The court finds that the husband should
be ordered to contribute to the wife’s fees. * * * It is equitable that
Husband pay $300,000 toward wife’s attorney fees and litigation
expenses.
Husband’s arguments that the trial court failed to take wife’s actions
into consideration are unfounded. The court recognized that wife’s fees were
extraordinary, but found that the discounted amount represented a fair cost when
taking husband’s financial misconduct into consideration.
Husband further argues that wife just produced a “laundry list of
legal services” rendered. We disagree. The trial court held a hearing on attorney
fees, where husband’s and wife’s attorneys testified at length about their respective
fees.
Husband further argues that the trial court failed to consider wife’s
delay tactics, stating that even the trial court recognized that “wife pursued this
matter ‘past reason.’” Husband misrepresents the trial court’s statement. The trial
court was not referring to attorney fees when it made that statement. Rather, the
trial court made that statement when it was attempting to value the gas station
businesses based upon the conflicting expert testimony. In doing so, the court
explained:
The opinions and methodologies do not illuminate value for the court
to determine, but each in its own way does provide some insight.
Whether to manipulate for this case, for tax avoidance, due to sloppy
bookkeeping, or some combination of all or some of these reasons, the
records provided are not dispositive of the actual profits generated.
The belief that the profits are so great has driven [wife] to pursue this
matter past reason in that she has expended significant amounts of her
separate property to do so. She has withdrawn over $400,000 from
her separate property to fund this litigation and to pay her and the
children[’s] expenses during the pendency.
Thus, in actuality, the trial court was referring to husband’s
misconduct in hiding or manipulating documents, which forced wife to pursue the
matter “past reason.” If wife would not have done so, husband would have gotten
away with leaving wife with nothing — despite the fact that it was wife who owned a
grocery store and gas station and who enabled husband to build a business in the
first place.
Moreover, the trial court also sat through the 14-day trial and listened
to the testimony. Husband’s testimony was maddening. At one point during wife’s
cross-examination, husband’s attorney moved to strike wife’s answer as
“nonresponsive.” The court denied husband’s request, stating “[a]gain, if we were
going to strike every nonresponsive answer, we would have to strike every answer
[husband] said.” We could also give countless examples of husband’s behavior
during trial, which was almost unbearable. Time and time again, husband would
not acknowledge documents that his counsel had turned over in discovery. More
times than we can count, wife’s counsel would ask husband a question that he could
have answered by a simple “yes” or “no,” but he took ten pages of the transcript to
answer and, many times, would still not answer the question. Indeed, there were
numerous times that wife’s counsel would be forced to move onto another topic
because husband would refuse to answer the most basic questions about his own
exhibits, bank records, and other business documents.
Q.A. was not much better. At one point, even the interpreter got
frustrated with Q.A., telling the court, “Excuse me, Judge, for the record, it seems
like the witness is not capable of understanding the word ‘assets,’ which is all over
the Arabic world.” At another point during Q.A.’s cross-examination, the court
stated, “[w]ell, this could be done a lot simpler, obviously, if we could just stipulate
to some of these documents. This is all going to go to fees at the end of this thing. I
don’t know where we are going, but this is ridiculous. Can we not do this the easy
way? If you produce this sir, then you say you produced this.”
Husband further argues that the trial court failed to consider the fact
that wife made this case complicated by bringing Q.A. into the case and filing
multiple claims against him, all which “were rejected by the trial court as a matter
of law.” We disagree with husband’s characterization of the trial court’s order. The
trial court’s dismissal of wife’s tort claims against husband and Q.A. did not mean
that wife’s claims are meritless. It simply meant that the trial court was considering
only the domestic relations claims before it. Further, husband is ignoring the fact
that it was because of his and Q.A.’s actions of financial misconduct that caused wife
to bring Q.A. into the case in the first place.
This case involved complex business issues that were made more
complicated by husband’s misconduct. One of wife’s attorneys specializes in divorce
cases with “significant business issues.” Wife’s attorney explained that other divorce
cases that he has been involved with, including one where there were 300 marital
assets and “involved the reorganization of 46 subsidiaries * * * so that the parties
could equally divide the marital shares,” were “much simpler” than this case because
there was no “fraud, or misleading of evidence, or complications that would require
you to spend an inordinate amount of time reviewing bank records and other
material.” For example, wife’s attorney explained that during the time that husband
said he sold his business because he had no money, “his bank deposits showed that
approximately $550,000 of deposits had been made into his personal checking
account. And much of those deposits were from unknown sources.” Counsel
concluded, “Forensic accounting in a divorce case takes a tremendous amount of
time.”
After a thorough review of the record in this case, we find no abuse
of discretion on the part of the trial court. Indeed, we find that the trial court’s
judgment awarding wife $300,000 in attorney fees was reasonable and equitable
based on the facts and circumstances of this case. The record clearly establishes that
it was husband’s extreme financial misconduct, untruthfulness, refusal to turn over
discovery, lack of evidentiary support and/or questionable documentation, endless
obstructionist testimony (both in his deposition and trial testimony), and his failure
to pay temporary support to wife that caused the complexities in this case and
resulted in wife’s attorneys having to work many more hours than they normally
would have in a less complex case.
Husband’s first assignment of error is overruled.
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.
MARY J. BOYLE, JUDGE
EILEEN T. GALLAGHER, P.J., and
ANITA LASTER MAYS, J., CONCUR