Sharp v. Sharp

[Cite as Sharp v. Sharp, 2020-Ohio-3537.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF WAYNE )
LYNNE SHARP C.A. No. 19AP0046
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
GLENN SHARP COURT OF COMMON PLEAS
COUNTY OF WAYNE, OHIO
Appellee CASE No. 2017 DR-B 00337
DECISION AND JOURNAL ENTRY
Dated: June 30, 2020
TEODOSIO, Judge.
{¶1} Lynne Sharp appeals the judgment of the Wayne County Court of Common Pleas.
We reverse and remand.
I.
{¶2} In 2017, Lynne Sharp filed for divorce from her husband, Glenn Sharp. A final
hearing was conducted in October and November of 2018, with both a magistrate’s decision and
judgment entry issuing on February 5, 2019. A nunc pro tunc magistrate’s decision and a nunc
pro tunc judgment entry were subsequently issued on February 7, 2019.
{¶3} At issue during the proceedings was the disposition of certain real property located
in Burbank, Ohio, which had been the marital residence of the parties. The property had been
acquired in a “like-kind” exchange for a Bill Jenkins racecar (“Grumpy’s Toy”), which had been
purchased by Mr. Sharp prior to the marriage. During the marriage, the Sharps took Grumpy’s
Toy to various car shows in order to promote the vehicle and raise interest. After eventually
2
finding a purchaser for the vehicle, an arrangement was made whereby So-Cal Collectibles
purchased real estate in Burbank, Ohio, and transferred their interest in the property to Ms. Sharp,
in her sole name, via a quitclaim deed, in exchange for Grumpy’s Toy. This arrangement was
made, in part, to avoid tax liability.
{¶4} The trial court determined the property was Mr. Sharp’s separate property, and not
marital property, because it was directly traceable to Grumpy’s Toy, which was purchased before
the marriage. The trial court further found that Mr. Sharp lacked the donative intent necessary to
have made an inter vivos gift of the property to Ms. Sharp. Both parties filed objections to the
magistrate’s decision, which were overruled by the trial court on July 19, 2019. Ms. Sharp now
appeals, raising three assignment of error.
II.
ASSIGNMENT OF ERROR ONE
THE TRIAL COURT ERR[ED] WHEN IT FAILED TO RECOGNIZE[] THAT
IF THE RESIDENCE LOCATED AT 13915 FRIENDSVILLE ROAD,
BURBANK, OHIO[,] WAS GLENN SHARP’S SEPARATE PROPERTY UPON
PURCHASE, GLENN THEN GIFTED AN EQUITABLE INTEREST TO
LYNNE SHARP AS AN INTER VIVOS GIFT.
{¶5} In her first assignment of error, Ms. Sharp argues the trial court erred in finding
there was no evidence of Mr. Sharp’s donative intent to gift her an equitable interest in the subject
property, and contends the property “must be considered a marital asset based upon an inter vivos
gift * * *.” We agree.
{¶6} “R.C. 3105.171(B) provides that, in a divorce proceeding, the trial court must
classify the parties’ property as either marital property or separate property, after which it must
divide the property equitably.” Fetzer v. Fetzer, 9th Dist. Wayne No. 12CA0036, 2014-Ohio-747,
¶ 22. Marital property includes all real and personal property owned by the parties that was
3
acquired by either or both of them during the marriage. R.C. 3105.171(A)(3)(a)(i). Marital
property also includes “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[.]” R.C. 3105.171(A)(3)(a)(iii). “Marital property” does not include separate property.
R.C. 3105.171(A)(3)(b). “‘Property acquired during a marriage is presumed to be marital property
unless it can be shown to be separate.’” Collins v. Collins, 9th Dist. Summit No. 27311, 2015-
Ohio-2618, ¶ 38, quoting Reed v. Reed, 3d Dist. Allen No. 1-09-63, 2010-Ohio-4550, ¶ 8.
{¶7} R.C. 3105.171(A)(6)(b) provides: “The commingling of separate property with
other property of any type does not destroy the identity of the separate property as separate
property, except when the separate property is not traceable.” “Accordingly, traceability is the
issue when determining whether separate property remains separate property once it has been
commingled with marital property.” Bucalo v. Bucalo, 9th Dist. Medina No. 05CA0011-M, 2005-
Ohio-6319, ¶ 13, citing Wheeler v. Wheeler, 9th Dist. Medina No. 3188–M, 2001 WL 1581574,
*2 (Dec. 12, 2001). “The party seeking to have the commingled property deemed separate property
has the burden of proof, by a preponderance of the evidence, to trace the asset to his or her separate
property.” West v. West, 9th Dist. Wayne No. 01CA0045, 2002 WL 388845, *5 (Mar. 13, 2002).
{¶8} “[B]y statute, the holding of title to property, even by both spouses in a form of co-
ownership, does not, by itself, determine whether the property is marital property.” Helton v.
Helton, 114 Ohio App.3d 683, 686 (2d Dist.1996), citing R.C. 3105.171(H). However, “title can
be some evidence of the parties’ intent as to the nature of the asset being marital or separate.”
Gallo v. Gallo, 11th Dist. Lake No. 2000–L–208, 2002–Ohio–2815, ¶ 25.
{¶9} Spouses may change separate property into marital property during the course of
the marriage through an inter vivos gift of the property from the donor spouse to the donee spouse.
4
Salmon v. Salmon, 9th Dist. Summit No. 22745, 2006-Ohio-1557, ¶ 19. “The essential elements
of an inter vivos gift are: (1) an intention on the part of the donor to transfer the title and right of
possession of the particular property to the donee then and there and (2) in pursuance of such
intention, a delivery by the donor to the donee of the subject-matter of the gift to the extent
practicable or possible, considering its nature, with relinquishment of ownership, dominion and
control over it.” Id., quoting Helton at 685-686. When the test for an inter vivos gift is applied to
real property, the key issue is donative intent. Louis v. Louis, 9th Dist. Wayne No. 10CA0047,
2011-Ohio-4463, ¶ 8. “When the record contains little direct evidence on the issue of donative
intent we must look to the totality of the circumstances.” Osborne v. Malkamaki, 11th Dist. Lake
No. 2012-L-134, 2014-Ohio-2874, ¶ 30. The burden is on the donee to show by clear and
convincing evidence that an inter vivos gift was made. Wohleber v. Wohleber, 9th Dist. Lorain
Nos. 08CA009402 and 08CA009403, 2009-Ohio-995, ¶ 16.
{¶10} Because the determination of whether property is marital or separate is a fact-based
determination, we review a trial court’s decision under a manifest-weight-of-the-evidence
standard. Morris v. Morris, 9th Dist. Summit No. 22778, 2006-Ohio-1560, ¶ 23. “[B]efore an
appellate court will reverse a judgment as against the manifest weight of the evidence in a civil
context, the court must determine whether the trier of fact, in resolving evidentiary conflicts and
making credibility determinations, clearly lost its way and created a manifest miscarriage of
justice. Boreman v. Boreman, 9th Dist. Wayne No. 01CA0034, 2002-Ohio-2320, ¶ 10. Only
where the evidence presented weighs heavily in favor of the party seeking reversal will the
appellate court reverse. Id. Manifest weight of the evidence pertains to the burden of persuasion.
Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, ¶ 19. “In weighing the evidence, the
5
court of appeals must always be mindful of the presumption in favor of the finder of fact.” Id. at
¶ 21.
{¶11} It is undisputed by either party that Mr. Sharp owned Grumpy’s Toy prior to the
marriage. Furthermore, as determined by the trial court, the sale of Grumpy’s Toy is directly
traceable to the acquisition of the real property in question. Although the real property was thus
traceable to Mr. Sharp’s separate property, Ms. Sharp contends she received an interest in the
property by virtue of an inter vivos gift, and that it must therefore be characterized as marital
property. In support of her argument, Ms. Sharp has pointed us to persuasive authority that this
Court finds relevant to our analysis.
{¶12} In Neighbarger v. Neighbarger, 10th Dist. Franklin No. 05AP–651, 2006–Ohio–
796, the Tenth Appellate District considered a case where a husband transferred farmland via
quitclaim deed to his wife shortly prior to their marriage. Id. at ¶ 21. Because the husband acquired
the farmland prior to the marriage, it would have normally been considered his separate property.
During the divorce proceedings, the husband claimed that the farmland was his traceable separate
property because he had not intended to make a gift to the wife by transferring the property to her;
rather, he contended that his motive was to shield the farmland pending criminal charges and
possible civil judgments against him. Id. at ¶ 17. The Tenth District rejected the husband’s
argument, concluding:
There is no question that [husband] intended, in 1990 [when he transferred the
property to wife], to create a legal barrier between himself and the property. His
stated objective was to shelter his assets from any financial risk arising from the
criminal charges against him. If the outcome of the criminal trial had been
different, he most certainly would have argued that he had no assets to satisfy
whatever financial liability might have arisen * * *. Having made that choice for
his own benefit in 1990, to the detriment of his children and creditors, we will not
allow appellant to turn his deliberate action into a legal fiction for his own benefit
again. He intended to transfer the property and, as evidenced by the quitclaim deed,
he did transfer the property.
6
Id. at ¶ 25.
{¶13} Likewise, in Strasburg v. Strasburg, 3d Dist. Auglaize No. 2-10-12, 2010-Ohio-
3672, the Third Appellate District considered a situation where a husband inherited farmland
during a marriage and conveyed the property to his wife by quitclaim deed because he was
concerned about the risk that he would be sued. Noting the similarities to Neighbarger, the Third
District Court of Appeals concluded the trial court had not erred in determining that the farmland
was marital property, and not the husband’s separate property, observing that “had [husband] been
sued, he doubtlessly would have argued that the farmland was [wife’s] sole property, and was not
an asset subject to any ensuing financial liability.” Id. at ¶ 22. The Court further noted that
“[r]egardless of [husband’s] testimony that he did not intend to relinquish ownership or waive his
rights to the property, the fact remain[ed] that [husband] deeded the farmland to [wife] solely via
quitclaim deed, and did not retain any reserved rights or joint rights to the property.” Id.
{¶14} In Soley v. Soley, 6th Dist. Huron No. H-16-021, 2017-Ohio-2817, the Sixth
Appellate District examined a case where a husband deeded a portion of his real property to his
wife during their marriage in an effort to avoid creditors. Id. at ¶ 2. During divorce proceedings,
the trial court determined that the property did not constitute a gift because the husband did not
possess the requisite donative intent when he executed the quitclaim deed. Id. at ¶ 4-5. The trial
court further determined that because the property was wholly traceable from prior to the marriage,
the execution of the deed had no impact on its characterization as separate property. Id. at ¶ 4.
While the Sixth District Court of Appeals observed that the “mere execution of a deed transferring
title from one spouse to another does not convert property that is otherwise separate property into
marital property[,]” it determined that the trial court erred in completely disregarding the relevance
of the transfer. Id. at ¶ 22-23. The Court concluded that “a transferor of property acts with donative
7
intent when transferring property for the purpose of avoiding creditors.” Id. at ¶ 26. See Wolf-
Sabatino v. Sabatino, 10th Dist. Franklin No. 10AP-1161, 2011-Ohio-6819, ¶ 73, quoting Dever
v. Dever, 12th Dist. Warren No. CA98-07-050, 1999 WL 211772, *6 (Apr. 12, 1999) (“Courts
have held that when ‘a transferor transfers his interest in real property for a specific purpose other
than ownership, the transferor has demonstrated donative intent.’”). Consequently, the Sixth
Appellate District went on to conclude that the trial court’s determination that the husband lacked
donative intent was against the manifest weight of the evidence, as was its classification of the
property as the husband's separate property. Soley at ¶ 26. Compare Sweeney v. Sweeney, 9th
Dist. Summit No. 19709, 2000 WL 799095, *3 (June 21, 2000) (finding no donative intent where
wife was made a joint owner of property by execution of a survivorship deed).
{¶15} In the case presently before our review, Ms. Sharp was listed as the seller of
Grumpy’s Toy and the real property was transferred solely to her by quitclaim deed. This was
done not only with Mr. Sharp’s consent, but at his request. Mr. Sharp testified this arrangement
was made both because he worried about passing away before Ms. Sharp and because of his tax
liability due to his having not paid taxes since the 1980s. When asked if this “like-kind” exchange
was done to avoid the responsibility of paying taxes, Mr. Sharp testified: “We are both guilty of
it. * * *. We both knew it * * *. We were both aware of what we were doing, yes.”
{¶16} We recognize that the holding of title of property is not dispositive of whether the
property is to be considered separate or marital property. See Helton, 114 Ohio App.3d at 686,
citing R.C. 3105.171(H). It may, however, be some evidence of the parties’ intent as to the nature
of the asset. Gallo at ¶ 25. Here, Ms. Sharp claims that an inter vivos gift had been made, and she
must therefore show by clear and convincing evidence an intention on the part of the donor to
transfer the title and right of possession of the property and the delivery by the donor to the donee
8
of the gift, considering its nature, with relinquishment of ownership, dominion and control over it.
Helton at 685. Where there is little direct evidence on the issue of donative intent, we look to the
totality of the circumstances. Osborne at ¶ 30.
{¶17} Mr. Sharp made a deliberate choice for his own benefit and to the detriment of his
creditors, in requesting that the property be placed in Ms. Sharp’s name. See Neighbarger at ¶ 25.
Much like the Tenth District Court of Appeals in Neighbarger, we are not persuaded to allow Mr.
Sharp to turn his deliberate action into a legal fiction for his own benefit. See id. Regardless of
Mr. Sharp’s testimony that he did not intend to make a gift of the property, the fact remains that it
was deeded solely to Ms. Sharp via quitclaim deed. See Strasburg at *7. Under these
circumstances, we conclude that the transfer of the property done with the purpose of avoiding
creditors constitutes clear and convincing evidence of donative intent to convert the property to
marital property. See Solely at ¶ 26. Further, in having the property deeded solely in Ms. Sharp’s
name, Mr. Sharp relinquished ownership and control over the property.
{¶18} We conclude that the trial court’s determination that Mr. Sharp lacked donative
intent was against the manifest weight of the evidence, as was its classification of the property as
Mr. Sharp’s separate property.
{¶19} Ms. Sharp’s first assignment of error is sustained.
ASSIGNMENT OF ERROR TWO
THE TRIAL COURT ERRED WHEN IT AWARDED THE MARITAL
RESIDENCE AT 13915 FRIENDSVILLE ROAD, BURBANK, OHIO[,] TO
GLENN SHARP AS HIS SEPARATE PROPERTY.
{¶20} In her second assignment of error, Ms. Sharp argues the trial court erred in awarding
the marital residence to Mr. Sharp as his separate property. Our resolution of the first assignment
of error renders this assignment of error moot, and we therefore decline to address it.
9
ASSIGNMENT OF ERROR THREE
THE TRIAL COURT ERR[ED] IN FAILING TO GRANT LYNNE SHARP’S
REQUEST THAT GLENN SHARP PAY ALL OF HER LEGAL FEES AND
LITIGATION.
{¶21} In her third assignment of error, Ms. Sharp argues the trial court erred by failing to
award her attorney fees pursuant to R.C. 3105.73.
{¶22} Pursuant to R.C. 3105.73(A):
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.
{¶23} As a result of our determination of Ms. Sharp’s first assignment of error, the status
of the marital property has changed since the trial court determined the issue. Because the marital
assets may be considered as a factor in determining an award of attorney fees, we remand to the
trial court to redetermine the issue of attorney fees pursuant to R.C. 3105.73 in light of our
resolution of the first assignment of error. We therefore decline to further address this assignment
of error because it would be premature.
III.
{¶24} Ms. Sharp’s first assignment of error is sustained. We decline to address Ms.
Sharp’s second assignment of error because it has been rendered moot. We further decline to
address Ms. Sharp’s third assignment of error because to do so would be premature. The judgment
of the Wayne County Court of Common Pleas is reversed and remanded for proceedings consistent
with this opinion.
Judgment reversed,
and remanded.
10
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 Wayne, 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.
THOMAS A. TEODOSIO
FOR THE COURT
CARR, P. J.
CONCURS IN JUDGMENT ONLY.
SCHAFER, J.
CONCURS.
APPEARANCES:
ROSEANNE K. SHRINER, Attorney at Law, for Appellant.
JAMES M. RICHARD, Attorney at Law, for Appellee.