Vanderbilt v. Vanderbilt

[Cite as Vanderbilt v. Vanderbilt, 2014-Ohio-3652.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF MEDINA )
BARBARA A. VANDERBILT C.A. No. 13CA0084-M
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
SHANE W. VANDERBILT COURT OF COMMON PLEAS
COUNTY OF MEDINA, OHIO
Appellant CASE No. 09 DR 0086
DECISION AND JOURNAL ENTRY
Dated: August 25, 2014
HENSAL, Presiding Judge.
{¶1} Appellant, Shane Vanderbilt, appeals the order of the Medina County Court of
Common Pleas, Domestic Relations Division, that ordered him to pay spousal support. This
Court reverses.
I.
{¶2} Barbara and Shane Vanderbilt married in 1999 after a long relationship.
Immediately before they married, the couple executed a prenuptial agreement that governed the
division of their property and included a mutual waiver of spousal support in the event of
divorce. In anticipation of marriage, the couple also designed their dream home, which they
built and furnished to their specifications early in the marriage. Throughout their relationship,
Wife worked full-time for a county agency and owned a modest home that she shared with
Husband. Wife maintained this employment before and throughout the marriage, and her job
provided a steady level of income, no-cost health benefits for her, and a public employee
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pension. During the marriage, Wife used her earnings to fund the couple’s living expenses. She
supplemented her stream of income with approximately $60,000 that resulted from the sale of
her premarital home, from which she paid for a portion of her children’s college education, an
extra automobile, and various living expenses.
{¶3} Wife filed a complaint for divorce in 2009. During the divorce proceedings,
Husband moved the trial court to implement the terms of the prenuptial agreement. The trial
court determined that the agreement was valid, but that it did not control with respect to spousal
support. Husband appealed, and this Court concluded that the trial court erred by awarding
spousal support without determining whether application of the prenuptial agreement at the time
of the divorce was unconscionable. Vanderbilt v. Vanderbilt, 9th Dist. Medina No. 11CA0103-
M, 11CA0104-M, 2013-Ohio-1222, ¶ 39-41. On remand, the trial court awarded spousal support
to Wife in the amount of $3,500 per month for 49 months. The trial court based its
determination in large measure on the conclusion that because “[t]hrough the marriage the
[W]ife’s lifestyle dramatically changed. * * * Enforcement of said provisions would return the
[W]ife to her prior standard of living, which would be a hardship on her.” Husband filed this
appeal.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED IN DETERMINING THE SPOUSAL SUPPORT
PROVISION OF THE PARTIES’ PRENUPTIAL AGREEMENT TO BE
UNCONSCIONABLE.
{¶4} Husband argues that the trial court erred by determining that the parties’ lifestyle
during the marriage rendered the prenuptial agreement unconscionable as of the time of the
divorce. We agree.
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{¶5} Prenuptial agreements may contain provisions related to spousal support, but “a
party may challenge the spousal support provisions contained therein by demonstrating that the
terms related to spousal support are unconscionable at the time of the divorce.” Vanderbilt at ¶
39, citing Gross v. Gross, 11 Ohio St.3d 99, 109 (1984). This determination does not go to the
validity of the prenuptial agreement itself, but to the question of whether spousal support
provisions may be enforced at the time of the divorce. See Gross at 100.
{¶6} The statutory considerations that govern an award of spousal support under R.C.
3105.18(C)(1) guide this conscionability analysis. Vanderbilt, 2013-Ohio-1222, at ¶ 39.
Consequently, the trial court must consider the income, assets, and liabilities of the parties; their
relative earning capacities, educational attainments, and retirement benefits; the ages and health
of the parties; the duration of the marriage and the parties’ standard of living; the contribution of
one spouse to the education or training of the other and, conversely, the resources necessary for
one spouse to obtain appropriate employment; and whether either party lost employment
capacity as a result of marital responsibilities. R.C. 3105.18(C)(1). This list of factors is
nonexclusive. See R.C. 3105.18(C)(1)(n).
{¶7} The critical factor in this determination, however, is whether there are “changed
circumstances which render the provisions unconscionable as to one or the other at the time of
the divorce[.]” (Emphasis added.) Gross at 109. In this respect, the Ohio Supreme Court has
explained:
Unconscionability of a provision for maintenance and sustenance contained in an
antenuptial agreement may be found in a number of circumstances, examples of
which might be an extreme health problem requiring considerable care and
expense; change in employability of the spouse; additional burdens placed upon a
spouse by way of responsibility to children of the parties; marked changes in the
cost of providing the necessary maintenance of the spouse; and changed
circumstance of the standards of living occasioned by the marriage, where a
return to the prior living standard would work a hardship upon a spouse.
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Id. at 109, fn.11. Put simply, the conscionability analysis considers whether a couple’s
circumstances have changed during the marriage to such a degree that the spouse seeking spousal
support should be relieved of the agreement he or she made regarding spousal support. Because
a valid prenuptial agreement is one that the parties enter into freely and with full disclosure, see
Vanderbilt at ¶ 7, this analysis presumes that the changed circumstances would not have been
contemplated at the time of the agreement. When a trial court declines to apply a spousal
support provision without first determining that such changed circumstances exist, it errs as a
matter of law, and our review is de novo. See Saari v. Saari, 9th Dist. Lorain No. 08CA009507,
2009-Ohio-4940, ¶ 11.
{¶8} Two cases illustrate the importance of a true change in circumstances to our
analysis. In Gross, the Ohio Supreme Court considered the validity of prenuptial agreements
under Ohio law for the first time. In that case, the Husband enjoyed a substantial income from a
number of beverage franchises. Gross, 11 Ohio St.3d at 100. Before they married, the Wife was
employed by the Husband’s company as a secretary. Id. Both had been married before, and they
executed a prenuptial agreement in anticipation of marriage. The agreement provided that in the
event of divorce, the Wife would be entitled to $200 per month in spousal support for ten years.
Id. at 101. During the couple’s fourteen-year marriage, the Husband’s assets increased in value
from approximately $550,000 to $8 million. Id. at 101-102. Although the Court upheld the
prenuptial agreement, it concluded that changed circumstances over the course of the marriage
rendered application of the spousal support provisions unconscionable. Id. at 111. Specifically,
the Court noted that magnitude of the Husband’s increase in assets and the “opulent” nature of
the couple’s lifestyle when compared to the $200 per month to which the Wife would be entitled
under the prenuptial agreement “could well occasion a hardship or be significantly difficult for
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the former [W]ife.” Id. at 110. In other words, the Court recognized that an increase in the
assets of one party coupled with a dramatic change in lifestyle during the course of a marriage
could, in comparison to the amount of spousal support permitted under a prenuptial agreement,
render the support provisions unconscionable at the time of the divorce.
{¶9} This Court considered similar issues, but reached the opposite result, in Saari. In
that case, the Husband and Wife were both employed in the financial sector prior to their
marriage. Saari at ¶ 2. They executed a prenuptial agreement that provided, in part, that each
party agreed to forgo the right to spousal support. Id. Although the Wife lost her job shortly
before the wedding, she later obtained work in the same industry. Id. at ¶ 2-3. Throughout their
marriage, which lasted only three years, the parties “enjoyed what they referred to as a
‘comfortable’ and ‘upper class’ style of living, free of financial worries.” Id. at ¶ 3. When they
divorced, the trial court concluded that spousal support provision in the prenuptial agreement
was unconscionable based on the parties’ respective earning capacities and awarded the Wife
$4,000 per month in spousal support for twelve months. Id. at ¶ 5.
{¶10} On appeal, this Court concluded that the trial court erred as a matter of law
because it failed to consider the factors set forth in R.C. 3105.18(C) and awarded spousal support
when there had not been a change in circumstances over the course of the marriage. Id. at ¶ 13,
15. We also determined that when the evidence was examined in light of R.C. 3105.18, it
mitigated in favor of enforcing the agreement. Id. at ¶ 14. Specifically, this Court noted:
Here, the record reveals that it was a second marriage for both parties that
produced no children and lasted only three years. Before the marriage, Wife was
employed in a full-time management position at a bank, and while being
terminated from that position approximately a month before their wedding, she
continued to work part-time throughout the beginning of the marriage, first as a
business consultant with a start up company, then as an accountant with a jewelry
store, only to later return to a full-time position as a financial analyst in the
banking industry. Wife admits that before the marriage, she lived in the same
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house and sent her two children to the same private school as she did at the end of
the marriage. She admits that the parties did not travel extensively or belong to
any country clubs while she was married to Husband. Furthermore, there is no
testimony that she suffered from any health conditions, incurred any additional
burdens for the care of any children, or had a marked change in her standard of
living or cost of necessary maintenance expenses, as alluded to in Gross.
Id. Because there had been no change in circumstances that would render application of the
support provision unconscionable, this Court reversed. Id. “In short, there was no significant
change in circumstances between the time she signed the prenuptial agreement, which the court
found to be valid, and the time she sought a divorce.” Id.
{¶11} This case presents a situation more like Saari than Gross. With respect to Wife’s
employment and earning capacity, there has been no change that would warrant deviation from
the terms of the prenuptial agreement. Wife was employed full-time at the time the prenuptial
agreement was executed and has been continuously employed in the same position since.
Although Wife did sell her home before the marriage, the proceeds from that sale appear to have
been used, at least in part, to fund the higher education of her adult children – a potential expense
that has now been eliminated. Wife did not invest her own financial resources or sacrifice her
career to benefit Husband’s business interests, and she has no barriers to continued employment
in the same capacity that she enjoyed before and during the marriage. Although Wife maintained
in the course of the previous appeal that she made significant indirect contributions to Husband’s
success, this Court rejected that position in light of the prenuptial agreement. Vanderbilt, 2013-
Ohio-1222, at ¶ 32.
{¶12} To the extent that Wife’s standard of living has changed, it is significant that the
change occurred over the course of the couple’s lengthy relationship and not merely as a result of
the marriage. Due in part to Husband’s higher income, the couple enjoyed a higher standard of
living than Wife did on her own, but the record indicates that the higher standard of living was
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established before the marriage. In other words, Wife enjoyed a higher standard of living as a
result of her relationship with Husband at the time that she executed the prenuptial agreement. It
was neither drastic nor unanticipated, but was, instead, part and parcel of the couple’s lengthy
pre-marital relationship. Even considering a higher standard of living after the marriage, that
fact alone would not be the type of change in circumstances that justifies setting aside part of a
valid prenuptial agreement. If that were so, it is hard to imagine a situation in which a spousal
support limitation in a prenuptial agreement would be valid, especially given that such
agreements are often the product of income inequality. Compare Fletcher v. Fletcher, 68 Ohio
St.3d 464, 467 (1994) (emphasizing that a prenuptial agreement can be valid even when the party
challenging the agreement would receive disproportionally less than would result from an
equitable distribution).
{¶13} As in Saari, therefore, we agree with Husband that the trial court erred in this case
by setting aside the spousal support provisions of the prenuptial agreement apart from changed
circumstances that rendered their application unconscionable. Husband’s first assignment of
error is sustained.
ASSIGNMENT OF ERROR II
THE COURT ERRED IN NOT CREDITING [HUSBAND] FOR COSTS PAID
DURING THE PENDENCY OF THE CASE.
{¶14} Husband has also argued that, in the event that this Court overrules his first
assignment of error, we should conclude the trial court erred by failing to offset his spousal
support award by expenses that he paid while the divorce case was pending. This Court has
sustained his first assignment of error, so his second assignment of error is moot. See App.R.
12(A).
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III.
{¶15} Husband’s first assignment of error is sustained. His second assignment of error
is moot. The judgment of the Medina County Court of Common Pleas, Domestic Relations
Division, is reversed.
Judgment reversed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellee.
JENNIFER HENSAL
FOR THE COURT
WHITMORE, J.
MOORE, J.
CONCUR.
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APPEARANCES:
STEVE C. BAILEY, Attorney at Law, for Appellant.
JAMES MCILVAINE, Attorney at Law, for Appellee.