Jones v. Jones

[Cite as Jones v. Jones, 2022-Ohio-3074.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
DIANA LYNN JONES :
:
Plaintiff-Appellee : Appellate Case No. 29439
:
v. : Trial Court Case No. 2016-DR-127
:
JEFFREY T. JONES : (Appeal from Common Pleas
: Court – Domestic Relations Division)
Defendant-Appellant :
:
...........
OPINION
Rendered on the 2nd day of September, 2022.
...........
CATHERINE H. BREAULT, Atty. Reg. No. 0098433 & JON PAUL RION, Atty. Reg. No.
0067020, 130 West Second Street, Suite 2150, P.O. Box 10126, Dayton, Ohio 45402
Attorneys for Plaintiff-Appellee
THOMAS G. EAGLE, Atty. Reg. No. 0034492, 3400 North State Route 741, Lebanon,
Ohio 45036
Attorney for Defendant-Appellant
.............
DONOVAN, J.
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{¶ 1} Defendant-appellant Jeffrey T. Jones appeals from a final judgment and
decree of divorce issued by the Montgomery County Court of Common Pleas, Domestic
Relations Division, on March 14, 2022. Jeffrey filed a timely notice of appeal on March
16, 2022.
{¶ 2} We set forth the history of the case in Jones v. Jones, 2020-Ohio-6851, 165
N.E.3d 379 (2d Dist.) ( “Jones II”), and we repeat it herein in pertinent part:
Jeffrey and Diana Jones were married in February 2008. They have
no children together.
Both parties used to work for the Montgomery County Engineer's
Office. Jeffrey worked there from 1991 until he was fired in 2007. Diana
worked in the Engineer's Office from 2002 until she was fired in 2009. Diana
believed that she was improperly fired on the basis of her gender and in
retaliation for filing discrimination complaints with the County Engineer, the
Ohio Civil Rights Commission, and the Equal Employment Opportunity
Commission. As a result, in 2013, Diana and Jeffrey filed a civil suit against
the Engineer's Office and the County Engineer. The suit sought damages
for sex and gender discrimination, retaliation, intentional infliction of
emotional distress, loss of consortium, breach of contract, reckless conduct,
and malice; it also sought punitive damages. The complaint alleged that
Diana had been bypassed for promotions and raises and that she had been
subject to gender discrimination. The complaint also alleged that, before
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their marriage, Jeffrey was Diana's supervisor, and he was fired in
retaliation for his attempt to intercede on her behalf with the County
Engineer. The matter was settled in June 2015. The settlement agreement
stated that the settlement was the “result of bona fide adversarial
negotiations to resolve a tort based case involving Plaintiff, Diana Jones'
physical sickness.” The agreement further provided that, in exchange for
the dismissal of all claims made by both Jeffrey and Diana, the Engineer's
Office would pay $750,000 in checks payable to Diana.
In February 2016, Diana filed for divorce. She maintained that the
2015 settlement proceeds were her separate property, but Jeffrey
maintained that they were marital. Jeffrey subpoenaed documents related
to the settlement from the Engineer's Office and from the Montgomery
County Prosecutor's Office (which represented the County Engineer and
the Engineer's Office in the action), which he said contained information
supporting his claim. The Prosecutor's Office moved to quash the
subpoenas, arguing that the documents sought were confidential. The trial
court ultimately reviewed the documents in camera and decided not to
release any to Jeffrey.
The final divorce hearing was conducted over two days in late 2017
and early 2018. On June 26, 2018, the trial court issued a final judgment
and decree of divorce. The court concluded that the settlement proceeds
were Diana's separate property, because by statute, “[c]ompensation to a
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spouse for the spouse's personal injury” is that spouse's separate property,
R.C. 3105.171(A)(6)(a)(vi), and the settlement agreement provided that the
payments were made to Diana for her “physical sickness.” The trial court
also divided the parties' other property, including Jeffrey's interest in two
businesses, a farming business and a snow removal/trucking business.
Diana's expert valued both businesses combined at $202,477. The court
found that the value of the farming business was $110,000 and the value of
the snow removal/trucking business was $92,477. The court awarded Diana
half of both values ($55,000 and $46,238.50). The court also ordered
Jeffrey to pay spousal support of $900 per month for 36 months. [1]
Jeffrey appealed the final judgment and divorce decree, arguing that
the trial court erred by failing to release the subpoenaed documents to him,
erred in the division of property, and erred by ordering him to pay spousal
support. We agreed that the trial court should have permitted Jeffrey to
inspect the subpoenaed documents; we also agreed that the trial court erred
in its property division. Jones v. Jones, 2019-Ohio-2355, 138 N.E.3d 634(2d Dist.). We first concluded that the court's determination on the
settlement proceeds constituted an abuse of discretion. Noting that the trial
court's finding that the proceeds were Diana's separate property was based
on the language of the settlement agreement, which referred to Diana's
1 There was no temporary order of spousal support while the parties’ divorce was
pending, and Diana paid her own attorney fees. Furthermore, the record establishes that
Jeffrey did not pay Diana any spousal support during the litigation.
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“physical sickness,” and on the fact that the settlement checks were payable
to her, we held that the court should have also considered the other
evidence regarding the nature of the proceeds, including the subpoenaed
documents and the parties' testimony. Id. We then concluded that by
denying Jeffrey the right to review the subpoenaed documents, the trial
court had wrongly denied him an opportunity to establish the marital nature
of the settlement proceeds. As for the division of Jeffrey's businesses, we
concluded that the trial court erred by awarding Diana half of the snow
removal/trucking business; Jeffrey had acquired that business before the
marriage and there was no evidence as to the value of the business at the
time of the marriage, so the trial court could not have determined that there
was any increase in its value. Lastly, we concluded that, because our
decision regarding the property division might [a]ffect * * * the spousal-
support determination, the award of spousal support needed to be
reconsidered. We reversed and remanded. Id.At the end of October 2019, after having given Jeffrey an opportunity
to examine the subpoenaed documents, the trial court held a hearing on the
nature of the settlement proceeds. In early February 2020, the trial court
issued a judgment in which it again determined that the settlement proceeds
were entirely Diana's separate property. The court found that the language
of the settlement agreement plainly and unambiguously showed that the
settlement proceeds were for Diana's “physical sickness,” and the court
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refused to consider any other evidence. As for spousal support, the court
again awarded Diana $900 per month for 36 months, retaining jurisdiction
to make modifications if there were a change in circumstances of either
party. On March 4, 2020, the trial court entered a new final judgment and
decree of divorce that incorporated its property-division and spousal-
support determinations. The court entered the new judgment nunc pro tunc
to the original 2018 judgment. The trial court again ordered Jeffrey to pay
Diana her share of the marital property within six months of the divorce
decree.
Id. at ¶ 3-8.
{¶ 3} Jeffrey appealed a second time, and we affirmed in part and reversed in part
the decision of the trial court. Jones II, 2020-Ohio-6851, 165 N.E.3d 379. Specifically,
we held that the trial court had failed to consider all the relevant evidence and erred in its
determination that proceeds from the civil-action settlement were Diana’s separate
property. Based on all the evidence, we found that the settlement proceeds were marital
property as a matter of law, and we ordered the trial court to “make an equitable division
of the proceeds.” Id. at ¶ 24. We also held that the trial court did not err by awarding
spousal support to Diana in the amount of $900 per month for a period of 36 months.
Lastly, we held that the trial court erred in entering a new final judgment and decree of
divorce nunc pro tunc.
{¶ 4} Upon remand, using the date of the final divorce hearing (November 14,
2017) for valuation purposes, the trial court found that only $403,000 was left from the
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settlement proceeds out the original sum of $750,000. Decision, September 2, 2021, p.
3. The trial court also found that Diana had not spent the settlement proceeds frivolously.
Rather, Diana had been unemployed, and the settlement proceeds had been the only
income she had on which to survive. Additionally, the trial court found that some of the
proceeds from the settlement had been spent before the parties separated and therefore
were not solely utilized by Diana. Therefore, the trial court divided the remaining
$403,000 in half and awarded each parties $201,500 “as their equitable share.” Id. at p.
4. Notably, the trial court did not award Jeffrey attorney’s fees for the amounts he
purportedly paid before the final settlement was reached in June 2015, finding that the
evidence provided by Jeffrey was insufficient “to assess the reasonableness of the fees.”
Id. at p. 5. The trial court also failed to award Jeffrey any interest on his marital portion
of the settlement proceeds. On March 14, 2022, the trial court issued a final judgment
and decree of divorce incorporating its findings regarding the settlement proceeds from
the decision issued on September 2, 2021.
{¶ 5} Jeffrey now appeals from that judgment.
{¶ 6} Because they are interrelated, Jeffrey’s first, second and third assignments
of error will be discussed together as follows:
A TRIAL COURT IN A DIVORCE CASE ERRS, AND VIOLATES
THE APPELLATE MANDATE TO DIVIDE THE DECIDED $750,000.00
CIVIL SETTLEMENT, BY DIVIDING A DIFFERENT AMOUNT THAN THE
PREVIOUSLY LITIGATED AND DECIDED AMOUNT OF THE ASSET,
AND/OR BY USING A DIFFERENT “VALUATION” DATE THAN OTHER
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ASSETS, BOTH OF WHICH HAD ALREADY BEEN FINALLY DECIDED.
A TRIAL COURT IN A DIVORCE CASE ERRS, ABUSES ITS
DISCRETION, FAILS TO DIVIDE A CIVIL SETTLEMENT FUND
ACQUIRED BY THE PARTIES IN AN EQUITABLE MANNER, AND DOES
SO WITHOUT SUFFICIENT SUPPORT, WHERE THE COURT DIVIDES
LESS THAN THE ENTIRE AMOUNT OF THE SETTLEMENT, AND AFTER
IT WAS SPENT OR TRANSFERRED BY ONE SPOUSE WHILE A TRO
WAS IN EFFECT TO PROHIBIT SPENDING THE MONEY DIVIDED.
A TRIAL COURT IN A DIVORCE CASE ERRS, ABUSES ITS
DISCRETION, FAILS TO DIVIDE A CIVIL SETTLEMENT FUND
ACQUIRED BY THE PARTIES IN AN EQUITABLE MANNER, AND DOES
SO WITHOUT SUFFICIENT SUPPORT, WHERE THE COURT DIVIDES
ALL OTHER MARITAL ASSETS ON AN EQUAL BASIS, BY DIVIDING THE
SETTLEMENT UNEQUALLY.
{¶ 7} In these assignments of error, Jeffrey essentially contends that the trial court
erred when it did the following: 1) divided the amount of $403,000 of the settlement
proceeds instead of the original amount of $750,000; 2) used the date of the final divorce
hearing for valuing the settlement proceeds; 3) failed to “equitably” divide the settlement
proceeds as it did with all of the other marital assets at issue in the parties’ divorce; and
4) allowed Diana to spend some of the settlement proceeds in violation of temporary
restraining orders (TROs) that were in effect without proportionately reducing her final
award of said proceeds.
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{¶ 8} “Appellate courts review a trial court's division of property under an abuse of
discretion standard, but a trial court's classification of property as marital or separate must
be supported by the manifest weight of the evidence.” Hall v. Hall, 2d Dist. Greene No.
2013-CA-15, 2013-Ohio-3758, ¶ 12, citing Mays v. Mays, 2d Dist. Miami No. 2000-CA-
54, 2001 WL 1219345 (Oct. 12, 2001). When considering the evidence's weight, we
“ ‘review the evidence, and * * * determine whether, when appropriate deference is given
to the factual conclusion of the trial court, the evidence persuades us by the requisite
burden of proof.’ ” Id., quoting Cooper v. Cooper, 2d Dist. Greene Nos. 2007-CA-76 and
2007-CA-77, 2008-Ohio-4731, ¶ 25.
Equitable Division of the Settlement Proceeds
{¶ 9} “In any divorce action, the starting point for a trial court's analysis is an equal
division of marital assets.” Neville v. Neville, 99 Ohio St.3d 275, 2003-Ohio-3624, 791
N.E.2d 434, ¶ 5, citing R.C. 3105.171(C). Under R.C. 3105.171(A)(3)(a), and as relevant
here, “marital property” includes:
(i) All real and personal property that currently is owned by either or both of
the spouses, including, but not limited to, the retirement benefits of the
spouses, and that was acquired by either or both of the spouses during the
marriage;
(ii) All interest that either or both of the spouses currently has in any real or
personal property, including, but not limited to, the retirement benefits of the
spouses, and that was acquired by either or both of the spouses during the
marriage;
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(iii) Except as otherwise provided in this section, all income and appreciation
on separate property, due to the labor, monetary, or in-kind contribution of
either or both of the spouses that occurred during the marriage[.]
{¶ 10} R.C. 3105.171(B) requires that marital property be divided equitably, and
an equal division is presumed to be equitable. “If an equal division of marital property
would be inequitable, the court shall not divide the marital property equally but instead
shall divide it between the spouses in the manner the court determines equitable.” R.C.
3105.171(C)(1). “Equality” is the “starting point” for dividing any marital assets and
debts; however, the court may divide the marital assets and debt in some other fashion if
it finds that an equal division would be inequitable. Kraft v. Kraft, 2d Dist. Montgomery
No. 25982, 2014-Ohio-4852, ¶ 62, citing Arnett v. Arnett, 2d Dist. Montgomery No. 20332,
2004-Ohio-5274, ¶ 8; see also Neville v. Neville, 99 Ohio St.3d 275, 2003-Ohio-3624, 791
N.E.2d 434, ¶ 5. In order to determine what is equitable, a trial court must consider the
factors set forth in R.C. 3105.171(F).
{¶ 11} Because a trial court must consider the assets and liabilities of both parties,
dividing marital property requires the trial court to also divide marital debt. See R.C.
3105.171(F)(2). Moreover, a reviewing court should not review discrete aspects of the
property division out of the context of the entire award, but should consider the distribution
within the context of the entire award. James v. James, 101 Ohio App.3d 668, 680, 656
N.E.2d 399 (2d Dist.1995).
{¶ 12} “In reviewing the trial court's judgment, it is well established that every
reasonable presumption must be made in favor of the judgment and findings of fact.”
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Shemo v. Mayfield Hts., 88 Ohio St.3d 7, 10, 722 N.E.2d 1018 (2000). An appellate
court must give deference to a trial court's findings because the trial court 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.” Seasons Coal
Co. v. Cleveland, 10 Ohio St.3d 77, 80, 461 N.E.2d 1273 (1984). Any issues relating to
witness credibility and/or the weight to be given to their testimony are for the trier of fact
to determine. Bechtol v. Bechtol, 49 Ohio St.3d 21, 23, 550 N.E.2d 178 (1990); Seasons
Coal at 80. Thus, a judgment that is supported by competent, credible evidence will not
be reversed on appeal. C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279, 280, 376
N.E.2d 578 (1978).
{¶ 13} Because of its discretion, “[a] trial court has some latitude in the means it
uses to determine the value of a marital asset.” Kevdzija v. Kevdzija, 166 Ohio App.3d
276, 2006-Ohio-1723, 850 N.E.2d 734, ¶ 23 (8th Dist.). “When valuing a marital asset,
a trial court is neither required to use a particular valuation method nor precluded from
using any method.” James at 661.
{¶ 14} In Jones II, after finding that the settlement proceeds were marital property,
we directed the trial court to “make an equitable division of the proceeds.” Id. at ¶ 24.
We did not order the trial court to utilize the original amount of $750,000 from the civil
settlement when dividing the proceeds, as Jeffrey suggests in his brief. There was no
mandate from this Court to use any specific amount as a starting point when dividing the
settlement proceeds. Rather, we merely directed the trial court to “equitably” divide the
proceeds based upon the evidence submitted by the parties at the final divorce hearing.
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Id.
{¶ 15} With that in mind, we must now address whether the trial court abused its
discretion when it divided the amount of $403,000 of the settlement proceeds instead of
the original amount of $750,000, awarding each of the parties $201,500. As previously
stated, R.C. 3105.171(A)(3)(a)(i) defines “marital property” to include: “All real and
personal property that currently is owned by either or both of the spouses, including, but
not limited to, the retirement benefits of the spouses, and that was acquired by either or
both of the spouses during the marriage.” “During the marriage” means “the period of
time from the date of the marriage through the date of the final hearing in an action for
divorce,” except that if the court determines that either of those dates “would be
inequitable, the court may select dates that it considers equitable in determining marital
property.” R.C. 3105.171(A)(2)(a) and (b). Furthermore, if a spouse has engaged in
financial misconduct, including dissipation of assets, the court may compensate the
offended spouse with a distributive award or a greater share of marital assets. R.C.
3105.171(E)(4).
{¶ 16} In State v. Hittle, 181 Ohio App.3d 703, 2009-Ohio-1286, 910 N.E.2d 1042(2d Dist.), we found that the trial court acted in a fair and equitable fashion when it refused
to award the wife funds from the husband’s 401k retirement account that he had
withdrawn during the pendency of their divorce to pay expenses and bills. At the time
he withdrew the funds from his 401k account, the husband was unemployed and had no
way to generate income. No evidence was adduced that the husband placed the funds
in a personal account or that he attempted to hide the funds from the wife. Therefore,
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we ultimately held that because the retirement fund was not property husband “currently
owned” on the dates of the final hearing, the court had no statutory duty to divide it.
{¶ 17} Similarly, in Troutwine v. Troutwine, 2d Dist. Clark No. 2009-CA-14, 2010-
Ohio-994, both parties testified that they had spent funds from their respective personal
bank accounts to pay their living expenses following their separation. Id. at ¶18. Those
funds having been exhausted, we found that they were not marital assets the court could
divide because they were not property or an interest therein which either spouse
“currently owned.” Id. Additionally, no misconduct or dissipation of marital assets was
found. Id. Therefore, we held that the trial court had had no statutory authority to divide
the amounts that the parties had spent from their respective bank accounts or to credit
either with that amount in dividing the marital property. Id. Rather, we concluded that
only the amounts remaining in these bank accounts could have been divided as marital
property. Id.
{¶ 18} Here, the record establishes that Diana had been unemployed since being
fired from the Montgomery County Engineer's Office in 2009. The parties received the
proceeds from the settlement in June 2015. The parties separated in October 2015, and
Diana filed for divorce in January 2016. During this time and throughout the pendency
of the divorce, Diana’s only source of income came from the settlement proceeds.
Evidence was adduced that, by the time the trial began in November 2017, the proceeds
from the settlement had been diminished from $750,000 to $403,000. Diana testified
that she only spent the settlement proceeds on bills and other necessities. Like in Hittle
and Troutwine, there was no evidence presented regarding misconduct or unlawful
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dissipation of the settlement proceeds. Significantly, there was unrefuted evidence that
approximately $75,000 of the settlement proceeds was spent during the parties’ marriage
before they separated on medical bills and improvements to one of their residences. An
additional $50,000 was placed by Diana in a joint bank account for use by both parties.
{¶ 19} Thus, at the time of trial, approximately $347,000 of the settlement proceeds
had been expended and therefore was not “currently owned” and did not exist for
purposes of an equitable division of property. See State v. Keene, 2d Dist. Montgomery
No. 25070, 2012-Ohio-5213, ¶ 20 (a tax refund for the year 2009 that the parties received
in 2010 was owned by both of the spouses, but it was not currently owned, having been
exhausted to pay bills and purchase a truck that husband was awarded; therefore, the
trial court erred when it divided property - the tax refund – that the parties no longer
owned). Here, the trial court correctly found that only the remaining $403,000 was
subject to equitable division, and it awarded each party half of that amount.
Valuation Date for the Settlement Proceeds
{¶ 20} The valuation of the marital estate for purposes of equitable division and
support is the duration of the marriage, which is defined by statute. R.C. 3105.171(A)
provides, in relevant part:
(2) “During the marriage” means whichever of 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
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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.
{¶ 21} In Dorsey v. Dorsey, 2d Dist. Montgomery No. 27338, 2017-Ohio-5826, we
stated the following:
A “domestic relations court may use alternate valuation dates to
achieve the equitable distribution of marital assets.” Berger v. Berger, 1st
Dist. Hamilton No. C-030631, 2004-Ohio-5614, ¶ 12, citing R.C.
3105.171(A)(2) and 3105.171(C). (Other citation omitted.) In Berger, the
court found no abuse of discretion in the use of alternative valuation dates
because of the extended course of the litigation. Id. (stressing that “[t]he
court has broad discretion in determining these dates, and its decision will
not be reversed absent an abuse of that discretion”). See also Heyman v.
Heyman, 10th Dist. Franklin No. 05AP-475, 2006-Ohio-1345, ¶ 32 (“a trial
court is permitted to determine and apply different valuation dates, such as
the time of permanent separation or the de facto termination of the
marriage. Moreover, a court's determination as to when to apply a de facto
termination date falls well within the broad discretion of the trial court and
will not be disturbed on appeal absent an abuse of that discretion.”) * * *
Id. at ¶ 84.
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{¶ 22} “Equity may occasionally require valuation as of the date of the de facto
termination of the marriage. The circumstances of a particular case may make a date
prior to trial more equitable for the recognition, determination and valuation of relative
equities in marital assets.” Berish v. Berish, 69 Ohio St.2d 318, 320, 432 N.E.2d 183(1982). “In order to do equity, a trial court must be permitted to utilize alternative
valuation dates, such as the time of permanent separation or de facto termination of the
marriage, where reasonable under the facts and circumstances presented in a particular
case. In this fashion, the trial court will have the necessary flexibility to exercise its
discretion in making truly equitable awards consistent with legitimate expectations of the
parties.” Id. at 321.
{¶ 23} Based upon the record before us, we conclude that the trial court did not err
when it employed alternative valuation dates for the parties’ marital property.
Specifically, the trial court did not err when it utilized the date of the final divorce hearing
(November 14, 2017) for valuing the settlement proceeds. Furthermore, the trial court
was free to utilize varying valuation dates for the parties’ other marital property, including
but not limited to the parties’ farms, residences, farming equipment, and vehicles. The
trial court’s use of the hearing date for valuation of the settlement proceeds took into
account that the funds had been diminished and only $403,000 remained in the account
from the original $750,000 award. As previously stated, some of the proceeds were
spent by the parties prior to their separation and eventual divorce, while the proceeds
spent solely by Diana were for bills and other necessities of life. We also note that there
was no temporary order of spousal support while the parties’ divorce was pending, and
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Diana paid her own attorney fees. The trial court could have reasonably concluded that
Diana had not unlawfully dissipated the settlement proceeds or committed any financial
wrongdoing. Even though a TRO against Diana had been in effect since March 8, 2016,
ostensibly restricting her use of the settlement proceeds for personal use, the trial court
reasonably concluded that Diana’s use of the funds was justified. Furthermore, the
record is devoid of any evidence that Jeffrey filed any motions, in contempt or otherwise,
to enforce the TRO against Diana, even after he became aware that she had spent a
portion of the settlement proceeds for living expenses. Thus, we find that the trial court
acted equitably and well within its discretion when it utilized the date of the final hearing
for valuing the settlement proceeds.
{¶ 24} Jeffrey’s first, second, and third assignments of error are overruled.
{¶ 25} Jeffrey’s fourth assignment of error is as follows:
A TRIAL COURT IN A DIVORCE CASE ERRS, ABUSES ITS
DISCRETION, FAILS TO DIVIDE A CIVIL SETTLEMENT FUND
ACQUIRED BY THE PARTIES IN AN EQUITABLE MANNER, AND
DOES SO WITHOUT SUFFICIENT SUPPORT, WHERE THE
ASSET IS A MONETARY FUND THAT HAS INVESTMENT
EARNINGS DURING THE MARRIAGE AND PRIOR TO DIVISION,
WITHOUT ALSO DIVIDING THE INVESTMENT EARNINGS ON
THE SAME MARITAL ASSET.
{¶ 26} Jeffrey argues that the trial court erred when it failed to award him a portion
of the investment earnings or passive income (interest) that Diana received from the
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settlement proceeds in her possession. We note, however, that the record contains no
evidence establishing that Diana had invested any of the settlement proceeds with
brokers or in the stock market. Rather, the evidence presented at trial established that
Diana had placed the settlement proceeds in her personal bank account, where it they
ostensibly accrued interest during the litigation, in which Jeffrey was entitled to share.
{¶ 27} Diana argues that any claims regarding investment earnings or passive
income (interest) that she received from the settlement proceeds is barred by res judicata,
because Jeffrey failed to raise the issue in his prior appeals. Upon review, however, we
find that he raised the issue of investment earnings from the settlement proceeds,
however briefly, in his appellate brief in his first appeal to this Court (Montgomery App.
No. 28074, Appellant’s Brief, p. 25). Furthermore, regarding property found by the trial
court to be a marital asset, any division would necessarily include interest earned thereon.
Therefore, res judicata does not bar Jeffrey’s claim in this regard.
{¶ 28} R.C. 1343.03(A) provides in pertinent part that:
[W]hen money becomes due and payable * * * upon all judgments, decrees,
and orders of any judicial tribunal for the payment of money arising out * * *
a contract or other transaction, the creditor is entitled to interest at the rate
per annum determined pursuant to section 5703.47 of the Revised Code,
unless a written contract provides a different rate of interest in relation to
the money that becomes due and payable, in which case the creditor is
entitled to interest at the rate provided in that contract.
{¶ 29} In Dorsey, 2d Dist. Montgomery No. 27338, 2017-Ohio-5826, we stated:
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Courts have held that under R.C. 1343.03, “a party receiving a
definite money judgment is entitled to interest at ten percent per year as a
matter of law. * * * This right is equally applicable to obligations arising out
of a divorce decree.” Rizzen v. Spaman, 106 Ohio App.3d 95, 111, 665
N.E.2d 283 (6th Dist.1995), citing Koegel v. Koegel, 69 Ohio St.2d 355, 432
N.E.2d 206 (1982), syllabus. (Other citation omitted.)
Id. at ¶ 95.
{¶ 30} Thus, Jeffrey was entitled to any investment earnings accrued over the
statutory interest rate on his $201,500 portion of the settlement proceeds after the
valuation date utilized by the trial court, November 14, 2017. Jeffrey’s fourth assignment
of error is therefore sustained. On remand, the trial court shall hold a hearing to
determine the investment earnings accrued over the statutory interest rate, if any, on
Jeffrey’s marital portion of the settlement proceeds, and it shall render judgment regarding
any additional amount he is owed, using the valuation date of November 14, 2017, as a
starting point for calculations. But if the investment income was less than the amount
realized using the statutory interest rate, Jeffrey is instead entitled to interest at the
statutory rate starting on November 14, 2017.
{¶ 31} Jeffrey’s fifth and final assignment of error is as follows:
A TRIAL COURT IN A DIVORCE CASE ERRS, ABUSES ITS
DISCRETION, FAILS TO DIVIDE A CIVIL SETTLEMENT FUND
ACQUIRED BY THE PARTIES IN AN EQUITABLE MANNER, AND DOES
SO WITHOUT SUFFICIENT SUPPORT, WHERE LEGAL FEES AND
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COSTS ARE INCURRED AND/OR PAID BY ONE SPOUSE TO
GENERATE THE SETTLEMENT OF A CIVIL LAWSUIT THAT IS A
MARITAL ASSET, BY NOT DIVIDING THE LEGAL FEES AND COSTS
BETWEEN THE SPOUSES AS PART OF OR SEPARATELY FROM THE
MARITAL ASSETS.
{¶ 32} Jeffrey argues that the trial court erred by not awarding him an additional
$193,000 for attorney fees and legal expenses used to fund the civil suit that yielded the
settlement proceeds. Specifically, Jeffrey argues that Diana should have to pay half of
the attorney fees and expenses from her portion of the settlement proceeds.
{¶ 33} In her decision denying Jeffrey an additional amount of proceeds from the
settlement for attorney fees, the trial court cited to Montgomery D.R. Rule 4.27(G)(2),
which states as follows:
(G) Attorney Fee Hearing Requirements.
***
(2) Prior to any attorney fee hearing, both parties shall make a detailed
written disclosure of attorney fees incurred, including hourly rates charged,
time expended, fees paid, the source of fees paid, amounts due, and
additional litigation expenses incurred. In order to minimize each party’s
litigation expenses and litigation in the court generally, counsel shall apply
their own experience and make every good faith effort to reach agreement.
If a fee hearing is necessary, the moving party must provide testimony from
an expert witness (another attorney with domestic relations experience) as
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to the reasonableness of the request, based on Rule 1.5 of the Ohio Rules
of Professional Conduct and Swanson v. Swanson (1976), 48 Ohio App. 2d
85.
{¶ 34} In Defense Exhibit GG, Jeffrey introduced the following self-prepared list in
an effort to document his legal fees and related expenses for the civil settlement:
Attorney fees/costs summary
Attorney Fees $197,622.22
Expenses $3520.31
Deposition TBA [$]2000+
Bogumil $7000+
(forensic psychologist)
Forensic Psy Cincinnati $5000 (?)
Forensic Psy Dayton $2500 (?)
217,000
-24,000
193,000
{¶ 35} Other than his “Attorney fees/costs summary,” Jeffrey submitted no other
documentation establishing the actual costs of the legal fees. As shown above, Jeffrey’s
summary contains question marks, estimates of certain costs, and a “TBA.” Jeffrey
failed to submit any invoices, canceled checks, or credit card statements as proof of
payment to his attorney for fees and costs associated with securing the settlement
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proceeds. We agree with the trial court that Jeffrey submitted insufficient documentation
for the trial court to adequately determine the reasonableness of the fees and costs he
claimed.
{¶ 36} Additionally, at the final divorce hearing, evidence was presented that
Jeffrey’s attorney had been paid in full using Jeffrey’s earned income and a farming line
of credit. Furthermore, it is unrefuted that Jeffrey’s attorney was paid before the
settlement proceeds were received by Diana and while the parties were still married.
Jeffrey provided no documentation or other evidence regarding how much of the legal
fees were paid from his earned income or from the line of credit. Jeffrey’s earned income
generated during the parties’ marriage was clearly marital property. The trial court also
factored Jeffrey’s farming line of credit into the value of the parties’ farming business,
which reduced the value of the business and resulted in a loss of equity for both Jeffrey
and Diana. Pursuant to the divorce decree, Diana was awarded $55,000 for her interest
in the farming business. This amount was offset by the farming line of credit, which was
partially used to pay for the legal fees. Thus, both parties essentially “paid” for the
attorney fees and costs through a reduced marital-equity valuation of their farming
business. Because both parties paid for the legal fees associated with procuring the
settlement proceeds using Jeffrey’s marital earned income and the marital farming line of
credit, he was not entitled to an award of attorney fees from Diana’s portion of the
settlement proceeds.
{¶ 37} Jeffrey’s fifth assignment of error is overruled.
{¶ 38} In light of the foregoing, the judgment of the trial court is affirmed in part and
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reversed in part. The matter is remanded to the trial court for a hearing to determine
whether investment earnings on the settlement proceeds, if any, exceeded the statutory
interest rate; the court will then render judgment based on either the investment earnings
or the statutory interest rate attributable to Jeffrey’s marital portion of the settlement
proceeds.
.............
TUCKER, P.J. and LEWIS, J., concur.
Copies sent to:
Catherine H. Breault
Jon Paul Rion
Thomas G. Eagle
Hon. Denise L. Cross