Cook v. Cook

[Cite as Cook v. Cook, 2019-Ohio-1961.]
COURT OF APPEALS
DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JUDGES:
JULIE M. COOK : Hon. W. Scott Gwin, P.J.
: Hon. Craig R. Baldwin, J.
Plaintiff-Appellee : Hon. Earle E. Wise, J.
:
-vs- :
: Case No. 18 CAF 09 0072
NORMAN G. COOK :
:
Defendant-Appellant : OPINION
CHARACTER OF PROCEEDING: Civil appeal from the Delaware County
Court of Common Pleas, Domestic
Relations Division, Case No. 16 DR B 12
0585
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: May 20, 2019
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant
DOUGLAS WARNOCK JOHN COUSINS IV
20 East Central Avenue 32 W. Hoster Street
Delaware, OH 43015 Suite 100
Columbus, OH 43215
[Cite as Cook v. Cook, 2019-Ohio-1961.]
Gwin, P.J.
{¶1} Husband appeals the August 30, 2018 judgment entry of the Delaware
County Court of Common Pleas, Domestic Relations Division, overruling his objections
to the May 21, 2018 magistrate’s decision.
Facts & Procedural History
{¶2} On December 14, 2016, appellee Julie Cook (“Wife”) filed a complaint for
divorce against appellant Norman Cook (“Husband”). The parties were married on June
16, 2014. The parties did not have any children with each other, but each had children
from previous marriages. On June 14, 2017, Husband filed a motion for contempt against
Wife. Wife filed a motion for contempt against Husband on July 27, 2017. On August 17,
2017, the magistrate found Husband in contempt for failing to make the premium
payments required to maintain health insurance coverage for Wife. Husband filed
objections to the magistrate’s decision, which the trial court overruled on October 10,
2017. Husband was granted exclusive possession of the residence located at 9030
Shaffer Drive in Powell, Ohio on July 12, 2017. As of the date of the trial, Husband has
not yet listed the property for sale.
{¶3} Husband filed a motion for summary judgment on October 11, 2017, asking
the trial court to declare that the $501,246 death benefit, received by Wife as the
beneficiary of her ex-husband’s life insurance policy, is marital property. Wife filed a
memorandum contra on October 25, 2017. The magistrate issued an order denying the
motion on November 1, 2017. Husband filed a motion to set aside the magistrate’s order
on November 10, 2017. The trial court denied the motion on November 15, 2017.
Delaware County, Case No. 18 CAF 09 0072 3
{¶4} The magistrate held a trial on the complaint for divorce on November 29,
2017 and November 30, 2017.
{¶5} On cross-examination, Husband stated he is fifty years old and holds a
bachelor’s degree in business administration. In 2012, Husband was the president of
Timilon Technologies making $150,000 per year. After Timilon, Husband worked for
Renegade Brands, making $150,000 per year with an additional $40,000 in bonuses.
Husband then went to work for Morgan Stanley. Husband is not sure what he made at
Morgan Stanley, but approximately $150,000 per year. There were a few months during
the marriage where Husband was unemployed, but he could not recall how long.
Husband left Morgan Stanley in June of 2017 and went to work for Halite Partners, where
he is currently employed as president and chief marketing officer. Husband described
Halite Partners as a start-up company. He did not receive payment for several months,
but currently his net pay is $6,000 every two weeks. Husband does not know what his
gross pay is from Halite. Husband stated he is in great health.
{¶6} Husband testified Wife owned properties at 226 South Marion Street and
208 South Marion Street in Waldo prior to the marriage. Husband stated these are rental
properties and “were a disaster.” Husband testified he did incur a significant tax liability
at the end of 2014 and while he acknowledged he and Wife offset that tax liability by using
the losses from Wife’s rental properties, Husband stated he could still amend and re-file
the 2014 tax return. Husband knew Wife had loss carryovers from previous years on the
rental properties and knew if they filed separate tax returns, he could not use those losses.
Husband acknowledged that in 2014 and 2016 he and Wife used Wife’s loss carryovers
to offset income he otherwise would have paid taxes on.
Delaware County, Case No. 18 CAF 09 0072 4
{¶7} Husband bought the property at 9030 Shaffer Drive, in Powell, Ohio in May
of 2014, a month before he and Wife got married. The property is deeded in his name
only. Husband testified he and Wife discussed that it was going to be their home together.
Husband paid approximately $800,000 for the home. It was Husband’s understanding
that Wife was going to sell her home on Glanmore Drive that she owned prior to the
marriage. The actual down-payment for the Shaffer Drive home came from a withdrawal
from Husband’s IRA that he deposited into his Chase bank account. Husband stated
since Wife had created such financial disarray, including foreclosure of her home on
Glanmore, that she wanted to assure him that she was not going to be as irresponsible
financially, so Wife wanted him to have the money to be able to move forward with since
she knew he had to withdraw money from his IRA to pay for the down-payment. Husband
testified Wife paid him the $203,969 proceeds from the sale of her pre-marital home to
be sure Husband married her and thus the $203,969 was a gift from Wife. Husband
stated after he discovered Wife had financial problems, his trust in her declined and this
payment was Wife’s financial assurance to Husband so that he would marry Wife.
Husband testified the money from Wife’s house was going to be a contribution to the
financial part of their family. Wife sold her pre-marital home for $203,969 and the money
was deposited into Husband’s Chase account. Husband stated Wife paid him this money
as a gift. He does not have any written evidence this money was a gift.
{¶8} Husband testified his IRA is valued approximately at $365,666. The parties
stipulated that is Husband’s separate property. The parties also agreed Wife’s IRA of
$51,616.65 is her separate property.
Delaware County, Case No. 18 CAF 09 0072 5
{¶9} Husband stated he has no money. Husband has paid all his mortgage
payments on his house and utility bills at Shaffer Drive; he had paid all expenses related
to the upkeep of the house; and has paid his car loan. As to the 2014 loan from his
parents, Husband testified neither he nor Wife signed the purported loan document. As
to the loan in May of 2017 from his parents, Husband testified Wife was part of the loan
because the money went to pay her debts. However, Husband testified Wife did not know
about this loan because he did not tell her about the loan. Husband knew there was a
restraining order against charging credit, but he made a document that purported to
obligate Wife on the loan since it was used to pay her debts. Similarly, Husband sought
to obligate Wife on a loan from Mr. Shaffer in August of 2017 that Wife did not know about
because Husband stated the funds were used to pay her debts.
{¶10} On direct examination, Husband testified the properties Wife owned in
Waldo were a disaster because Wife had not collected rent for over a year from either
tenant and she had not paid the mortgage payments in months. The purpose of Wife
putting the proceeds from the house she owned on Glanmore into his checking account
was so they could get married. Husband testified he and Wife took a loan of $32,000
from his parents. Husband stated at the time of the marriage, he did not have any debt
and he had assets in the form of his income and retirement account. Husband cannot
afford to pay spousal support because he is servicing all of the debt created because of
Wife’s lack of work, plus the outflow of cash for Wife’s personal property that has
accumulated debt. Husband testified Wife’s rental properties in Waldo were a “large cash
sucking machine.” Husband wanted Wife to sell the properties, but Wife said she could
not because they were properties her mother had.
Delaware County, Case No. 18 CAF 09 0072 6
{¶11} Husband considered the $203,969 down payment from Wife’s premarital
house a gift. Husband received the benefit of being able to use that money to reinsert
money back into his IRA. Husband was not happy when Wife ended her employment in
2015. Husband was not aware during the marriage that Wife was paying a monthly
premium for a life insurance policy insuring the life of her ex-husband Richard Spicer
(“Spicer”). Husband became aware of this policy after Spicer died. Husband is asking
the death benefit to be marital property subject to division and is asking the $203,969
down payment that originated from Wife’s premarital home to be his separate property as
a gift. Husband testified Wife removed multiple items from the home, in violation of the
temporary orders. Husband stated he and Wife borrowed money from his parents several
times and Wife knew about all these loans. Even though the loans are not specifically in
Wife’s name, Husband is asking the court to consider them marital debts.
{¶12} Husband testified if he didn’t have the debt created during the marriage, he
would have put the money in 529’s for his daughters. Husband stated while Wife’s
daughters go on vacations and have new phones, his daughters cannot go on vacation
and do not have new phones.
{¶13} Chad Baker (“Baker”) is a certified financial planner and licensed insurance
agent employed by the New York Life Insurance Company. Baker sold Spicer an
insurance policy in 2001. Wife was present for this transaction, as Baker was doing
financial planning for Wife and Spicer. Baker testified the life insurance policy was part
of their family’s financial planning in 2001 to protect Spicer’s income if he passed away
to take care of Wife and the children. When Spicer and Wife divorced, Spicer agreed to
turn the ownership of the policy over to Wife. Baker testified the policy did not change
Delaware County, Case No. 18 CAF 09 0072 7
and was the same policy, same document, and, on January 28, 2008, Wife became the
sole owner of that policy. Baker testified that all times when this policy was in effect, Wife
was the named beneficiary. The face amount of the policy is $500,000 and it was straight
term life insurance. Baker stated the policy never had any savings, investment, or growth
factor in it; never acquired any cash value; and never would acquire any cash value.
Baker described the five-year renewable term policy that Spicer had as an insurance
policy where the premium is locked in for five years at a time, every fifth year the premium
increases, and is guaranteed renewable to age 90, but builds no cash value. During the
time the policy was in force, the policy number did not change, the face amount did not
change, and the death benefit did not change. Baker testified it is generally accepted in
the insurance industry that a five-year renewable term policy like this one is the same
policy, as opposed to new policies every five years because if there were a new policy,
the insured would have to go through medical underwriting. Baker did not believe a new
policy would have been issued after New York Life became aware of Spicer’s addiction
problem.
{¶14} Baker testified that since 2014, premium payments were made on the policy
by automatic deduction from Wife’s U.S Bank account. Baker is not aware of any
payments Husband made for this policy. As a result of Spicer’s death in 2017, Wife was
issued a check in the amount of $501,246.58, which represented the face amount of the
policy, plus interest.
{¶15} On cross-examination, Baker testified the term “renewable” refers to the fact
the insurance company cannot cancel the policy and you have the right to keep the policy
until age 90, as long as you pay the premiums. Baker stated he does not consider the
Delaware County, Case No. 18 CAF 09 0072 8
policy itself to be an asset before payment of the death benefit because there is no cash
value. Baker was not aware that any monthly premium payments were made by
Husband, but was aware of monthly premium payments made by Wife. In December of
2016, the third five-year term lapsed and the monthly premium payment increased. There
were no other conditions attached to the renewal of the five-year term, other than the
increase in monthly premium.
{¶16} Wife testified she is forty-eight (48) years old with an associate’s degree.
Wife is not currently employed. Wife did independent recruiting and consulting for several
months in 2015, but has not worked since then. Prior to her marriage to Husband, she
worked, making approximately $150,000 per year for Quick Solutions and Limited Brands.
Wife testified she and Husband began looking for a house in 2014. Wife stated she and
Husband agreed she would either not work or work at a very flexible job. Wife testified
after Husband got the job at Morgan Stanley, the two of them reached the agreement that
she would not work due to his travel schedule and they agreed she would manage the
house. Wife stated she has been looking for work and has made more than fifty
applications in the last six months. Wife has chronic myeloid leukemia, but the medication
she takes is controlling it.
{¶17} Wife claims a marital interest in the Shaffer Drive property because she
invested sale proceeds in the amount of $203,969 from the sale of her separate, non-
marital property into the purchase of Shaffer Drive. Wife testified that in 2002, she
purchased a home at 7713 Glanmore Court in Dublin, Ohio, while married to Spicer.
{¶18} Wife testified her rental properties in Waldo did not make money. Wife and
Spicer originally purchased the properties for Wife’s parents’ to live in. Husband did not
Delaware County, Case No. 18 CAF 09 0072 9
tell Wife that he intends to file amended tax returns for 2014, 2015, or 2016. Wife stated
she and Husband benefited from the loss carryovers from the Waldo properties. Wife
testified she did get behind on the mortgage at the Glanmore house because she had
difficulties in her life, such as her mother passing away and Spicer becoming addicted to
drugs. Wife cleared up her foreclosure problems with the Glanmore home in February
2014, prior to her marriage to Husband.
{¶19} Wife stated her credit was adversely affected by the Glanmore foreclosure
and Husband had good credit. Wife testified there was no discussion about whether she
was going to make a gift to Husband of the Glanmore proceeds and it was not her
intention to make a gift of the Glanmore sale proceeds to Husband. Her intention was
that it was her investment in their property and she considered it a joint venture together.
Husband bought the Shaffer Drive property before they were married. Wife stated there
was never any conversation about this money being a gift, but there were conversations
with Husband about this being her investment. There was no written evidence of a gift,
and no gift tax return filed.
{¶20} Wife testified she and Spicer took out the life insurance policy in 2001 when
doing financial planning. When her marriage to Spicer ended, she got the policy. Wife
was the beneficiary on the policy, but the policy was designed to take care of Spicer and
Wife’s two daughters. Wife stated Spicer led a risky lifestyle and she wanted to protect
her girls. Wife testified this policy never came up during her marriage to Husband. Wife
stated Husband never made any payments on this policy and she and Husband never
discussed this policy in relation to their financial planning with each other. Wife
understood that the policy was term insurance and had no cash value. Wife testified the
Delaware County, Case No. 18 CAF 09 0072 10
U.S. Bank checking account, in her name only, has always been solely in her name, and
all the payments for the New York Life policy since prior to her marriage to Husband came
out of that account. The payments for the policy continued to come out of that account
during her marriage to Husband. From the time she and Spicer got divorced until Spicer
died, Spicer was paying Wife child support on a regular basis, initially paying $812 per
month, and then $550 or $575 per month. All child support payments were deposited into
the U.S. Bank checking account solely in her name. Wife utilized the child support
payments to pay for the life insurance premiums, which were initially $49.50 per month
and then increased to $184 per month.
{¶21} Wife testified she never took a loan from Husband’s parents in May of 2014.
Wife first stated she was not Julie Cook on that date, as is stated in the purported loan
agreement, because she and Husband were not yet married. Wife’s signature is not on
the purported loan document. Wife also denies taking a loan from Husband’s parents in
May of 2017. Wife stated she did not sign the document, and she had moved out of the
home in April of 2017 and had no communication with Husband after that. Wife stated
she was aware that Steve Haxton gave Husband $20,000, but it was not a loan she was
involved with and she did not sign a promissory note or loan agreement.
{¶22} Wife stated she did not beg Husband to get married and take care of her.
She considered Husband to be high-risk because his first two marriages ended when he
had affairs and Husband engaged in other behaviors that were high-risk.
{¶23} On cross-examination, Wife testified she does not know whether Husband
knew she was paying life insurance premiums. Wife stated the monthly premium was
paid by Spicer’s child support because every month the child support came into her U.S.
Delaware County, Case No. 18 CAF 09 0072 11
Bank account and the life insurance premiums were paid from that account. Further, that
the account exceeded the premiums at all times. Wife stated she transferred money
during the marriage from their joint account into her U.S. Bank account because she was
the one who paid all the bills. Wife stated she could testify with one-hundred percent
certainty that none of Husband’s money and none of the money she earned from her
employment during the marriage ever paid the life insurance premium.
{¶24} Wife stated she physically gave the check for $203,969 to Husband and
intentionally gave him the check, but it was not a gift. Wife testified Husband wanted her
to stay home and not work, and there was another point where Husband was upset at her
staying home. Wife stated Husband “loved it when I was benefitting him. And then, flip
of a switch, it changed and everything was awful.”
{¶25} On re-direct, Wife testified that she and Husband agreed that, during the
marriage, she would do all the banking for the family. Wife had Husband’s permission to
sign his name to checks. Wife testified both she and Husband took cash out of the joint
account and that is how they conducted their marital business.
{¶26} Courtney White, a business valuation and litigation support and forensic
accounting expert who was retained by Husband to look at the marital balance sheet and
look at various assets and liabilities on that balance sheet testified as to her opinion of
how the assets and liabilities should be divided.
{¶27} The exhibits introduced at trial demonstrate the Shaffer Drive property is
titled only in Husband’s name and is mortgaged to Huntington National Bank. The
residence was purchased prior to the marriage, on May 19, 2014, by Husband for
$790,000. The first contract for the sale of the Glanmore property fell through on May 21,
Delaware County, Case No. 18 CAF 09 0072 12
2014, two days after the closing and purchase of Shaffer Drive. Wife entered into a
second contract to sell the Glanmore property on June 8, 2014, prior to the marriage to
Husband, and the property sold on July 1, 2014, after the marriage to Husband. Husband
paid $232,154.33 from his Raymond James IRA as the down-payment for the Shaffer
Drive property.
{¶28} The magistrate issued a decision on May 21, 2018. The magistrate found
that, pursuant to R.C. 3105.171(H), Husband’s holding of the Shaffer Drive property in
his name only is not determinative of whether the property is marital or separate. The
magistrate stated there is no dispute that the source of the $203,000 was Wife’s separate
property, as it was proceeds from the sale of her premarital residence. The magistrate
considered the totality of the circumstances and found Wife did not intend the $203,000
proceeds to be a gift to Husband, but rather her contribution to the purchase of the home
that were traceable.
{¶29} The magistrate found Husband was not entitled to reimbursement for funds
lost on the Waldo property because he failed to trace such expenditures by a
preponderance of the evidence, and there was no reciprocal analysis of the benefit the
Waldo property losses brought to the marriage, as evidenced by the offset against the
parties’ joint tax liability which was created when taxes were not withheld from Husband’s
earnings. The magistrate found no evidence of financial misconduct by Wife and found
that by Husband’s own testimony he was fully aware of the “disastrous” financial condition
of the Waldo properties and was aware of the benefit the property losses brought to the
tax obligations of the parties. The magistrate noted Husband attempted to introduce
Delaware County, Case No. 18 CAF 09 0072 13
White’s testimony in isolation without a complete analysis of the totality of the
circumstances.
{¶30} The magistrate denied Husband’s motion for contempt, finding Wife was
more credible than Husband.
{¶31} As to the $500,000 from the New York Life Insurance policy upon Spicer’s
death, the magistrate found the death benefit is the asset, not the policy, and there would
be no death benefit unless the premiums had been paid. Further, that the portions of a
separate, non-martial life insurance policy purchased with marital funds may be marital
property, as may be a portion of the insurance proceeds paid if the insurance premiums
are paid with marital funds. The magistrate found at the time of Spicer’s death, there had
been a total of 182 premium payments, of which 32 were paid during the marriage. Thus,
if those 32 premiums were paid with marital funds, then the marital interest in the
insurance proceeds would be $85,211.92. However, the magistrate determined that
since income does not include child support received for children who were not born or
adopted during the marriage pursuant to R.C. 3119.01(C)(7)(c), it was not marital
property. Further, that any commingling of marital funds with the child support deposits
did not convert the child support payments to marital funds pursuant to R.C.
3105.171(A)(6). The magistrate found Wife was able to trace the payments for the life
insurance policy to her separate funds, and establish by a preponderance of the evidence
that the insurance policy proceeds are her separate property because they were paid for
by child support payments. Further, that the monthly insurance premium paid never
exceeded the monthly child support received, and the monthly child support was always
paid.
Delaware County, Case No. 18 CAF 09 0072 14
{¶32} The magistrate found the following “loan agreements” Husband claims are
debts are suspect because they are not actually signed by the parties: $32,000 loan from
Husband’s parents; $5,000 from Husband’s parents; $1,000 loan from Husband’s
parents; $20,000 loan from Husband’s parents; $25,000 loan from Phil Shaffer; and
$10,000 loan from Halite. The magistrate stated the loan agreements “appear to be
fabricated copies in an attempt by [Husband] to once again create false debt to offset
marital assets.” The magistrate stated that since the parties failed to provide the trial
court with the balances of the financial accounts and debts as of the date of separation
and, in particular, because Husband refused to provide evidence of his actual current
income and attempted to create false debts, it is impossible for the magistrate to
determine the values of such assets and debts for purposes of an equal distribution, or to
determine an equitable distribution.
{¶33} The magistrate found neither party should pay spousal support to the other
party. The magistrate ordered Husband to pay Wife the amount of $203,963.39 as her
interest in the real property on Shaffer Drive and the amount of $10,732 to equalize the
property distribution.
{¶34} Husband filed objections to the magistrate’s decision on June 4, 2018. Wife
filed objections to the magistrate’s decision on June 14, 2018. Husband and Wife both
filed supplemental objections on August 1, 2018.
{¶35} The trial court issued a judgment entry on August 30, 2018. As to the
magistrate’s determination with regards to the $203,000, the trial court found the
magistrate made a clerical error as to Wife’s separate property interest, but otherwise
made appropriate findings and conclusions. The trial court found Wife’s separate
Delaware County, Case No. 18 CAF 09 0072 15
property interest should be in the amount of $203,969.39, not $203,000. The trial court
found Wife presented sufficient evidence to establish she lacked the requisite donative
intent to make a gift. The trial court stated Wife’s testimony that the money was not a gift
was cooberated by her testimony that since Husband did not have the funds to make the
down payment, she would provide the down payment and he would provide the credit
needed for the mortgage and Husband’s testimony regarding a loan from his parents
supports Wife’s position that the funds were not a gift.
{¶36} As to Husband’s objection that the magistrate erred by refusing to grant him
a distributive award because Wife caused him to incur massive debt and used marital
funds to secure the $500,000 death benefit, the trial court found that evidence at trial did
not support a distributive award in favor of Husband. The trial court stated that, contrary
to Husband’s position, evidence was presented to establish the parties agreed Wife would
be a stay-at-home mom for the parties’ blended family and nothing presented at trial
suggests Wife was responsible for incurring massive amounts of marital debt. Further,
the loss created by Wife’s rental properties benefited Husband, as the parties were able
to carry a loss forward on their tax returns. The trial court also found it would not be
equitable to award Husband a distributive share based upon his actions throughout the
case. Specifically, Husband attempted to create marital debts by presenting supposed
loan agreements between the parties and other people that are not credible.
{¶37} Regarding Husband’s objection to the $500,000 death benefit, the trial court
determined the evidence supported Wife’s position, including a letter from New York Life
Insurance Company confirming all the premiums paid on the policy were withdrawn each
month from Wife’s U.S. Bank account and the statements of Wife’s U.S. Bank accounts
Delaware County, Case No. 18 CAF 09 0072 16
showing monthly direct deposits of Spicer’s child support payments. The trial court stated
that, based upon the exhibits, the child support payments were deposited biweekly and
always exceeded the monthly premium payments. While the trial court found the
evidence clearly established that marital funds were commingled into Wife’s separate
funds, Wife proved that the insurance premiums were paid with her separate funds by a
preponderance of the evidence, as the magistrate found Wife credible and because the
amount of child support coming into the account was never less than the amount leaving
the account to pay the insurance premiums.
{¶38} The trial court overruled Wife’s objections with regard to spousal support
and attorney fees.
{¶39} Husband appeals the judgment entries of the Delaware County Court of
Common Pleas, Domestic Relations Division, and assigns the following as error:
{¶40} “I. THE TRIAL COURT ABUSED ITS DISCRETION AND RULED AGAINST
THE MANIFEST WEIGHT OF THE EVIDENCE IN CONCLUDING THAT JULIE HAD A
$203,969 SEPARATE PROPERTY INTEREST IN THE SHAFFER DRIVE RESIDENCE.
{¶41} “II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
CLASSIFYING THE $500,000 DEATH BENEFIT RECEIVED BY JULIE DURING THE
MARRIAGE AS JULIE’S SEPARATE PROPERTY.
{¶42} “III. ALTERNATIVELY, THE TRIAL COURT ABUSED ITS DISCRETION
BY REFUSING TO GRANT NORM A DISTRIBUTIVE AWARD FROM JULIE’S
SEPARATE PROPERTY, OR A GREATER AWARD OF MARITAL PROPERTY.”
Delaware County, Case No. 18 CAF 09 0072 17
I.
{¶43} In his first assignment of error, Husband argues the trial court abused its
discretion in concluding Wife had a $203,969 separate property interest in the Shaffer
Drive residence. Husband contends Wife gave him the $203,969 as a gift.
{¶44} Property acquired during the marriage is presumed to be marital in nature,
while separate property includes any property acquired prior to the marriage. R.C.
3105.171. Commingling of marital and separate property does not destroy the character
of the separate property unless its identity is no longer traceable. R.C. 3105.171.
However, “it is well-settled that a spouse can change the nature of property, through
conduct performed during the marriage.” Nethers v. Nethers, 5th Dist. Guernsey No. 18
CA 000005, 2018-Ohio-4085. The mostly commonly recognized method for changing the
nature of property is through an inter vivos gift of the property from the donor spouse to
the donee spouse. The essential elements of an inter vivos gift are: (1) the intent of the
donor to make an immediate gift; (2) delivery of the property to the donee; and (3)
acceptance of the gift by the donee. Id. In this case, Wife delivered the property to
Husband by giving him a check and Husband accepted the check. The key issue in
determining the nature of the property is “typically whether the donor spouse had the
requisite donative intent to transfer an interest to the donee spouse at the time of transfer.”
Rank v. Rank, 10th Dist. Franklin No. 10AP-273, 2010-Ohio-5717. “Donative intent is
established if a transferor intends to transfer a present possessory interest in an asset.”
Brate v. Hurt, 174 Ohio App.3d 101, 2007-Ohio-6571, 880 N.E.2d 980 (12th Dist.
Warren).
Delaware County, Case No. 18 CAF 09 0072 18
{¶45} Husband first contends the trial court did not properly apply the “family gift
presumption.” In Davis v. Davis, a civil action, this Court held that “when a transaction is
made that benefits a family member, there is a presumption that the transaction was
intended as a gift.” 5th Dist. Stark No. 2003CA00243, 2004-Ohio-820.
{¶46} However, this Court has not applied the family gift presumption in the
context of domestic relations proceedings. Instead, this Court has consistently held that,
in the domestic relations context, the donee spouse has the burden of proving by clear
and convincing evidence that the donor spouse made an inter vivos gift. Nethers v.
Nethers, 5th Dist. Guernsey No. 18 CA 000005, 2018-Ohio-4085; Sayegh v. Khoury, 5th
Dist. Muskingum No. CT2017-0010, 2017-Ohio-2889; Smith v. Smith, 5th Dist.
Muskingum Nos. CT2003-0008, CT2003-0020, 2004-Ohio-408; Byrd v. Byrd, 5th Dist.
Stark No. 2013CA00005, 2013-Ohio-4450; Howcroft v. Howcroft, 5th Dist. Fairfield No.
2010 CA 25, 2010-Ohio-6410. We have characterized clear and convincing evidence as
evidence “which will provide in the mind of the trier of facts a firm belief or conviction as
to the facts sought to be established.” Id., citing Cross v. Ledford, 161 Ohio St. 469, 120
N.E.2d 118 (1954). This Court has further held that while the holding of title is not
determinative of whether the property is marital or separate property pursuant to R.C.
3105.171(H), such evidence may be considered on the issue of whether the property is
marital or separate. Gibson v. Gibson, 5th Dist. Tuscarawas No. 2006 AP 01 0009, 2007-
Ohio-2087.
{¶47} There is no dispute in this case that the source of the $203,969 came from
Wife’s separate property and that Wife delivered the check to Husband and Husband
accepted the check. Thus, the inquiry focuses on whether the trial court was factually
Delaware County, Case No. 18 CAF 09 0072 19
correct in finding Wife lacked the requisite donative intent to transfer a present possessory
interest in the money to Husband. We find the trial court’s determination as to Wife’s lack
of donative intent is not against the weight of the evidence. While Husband testified that
Wife paid him the $203,969 to be sure he would marry her despite her financial issues
and Husband’s declining trust in her and thus the $203,969 was a gift, Wife testified it
was not her intention to make a gift of the sale proceeds to Husband, and there were
never any conversations between her and Husband about the proceeds being a gift. Wife
stated there were conversations between her and Husband about this being her
investment. Wife also testified that since Husband did not have the funds to make the
down payment for the Shaffer Drive residence and she did not have the credit to secure
the mortgage for the Shaffer Drive residence, they agreed she would provide the down
payment and he would provide the credit to secure the mortgage.
{¶48} The magistrate specifically found Wife to be more credible than Husband.
The weight to be given to the evidence and credibility of the witnesses are issues for the
trier of fact. State v. Jamison, 49 Ohio St.3d 182, 552 N.E.2d 180 (1990), certiorari
denied, 498 U.S. 881, 111 S.Ct. 228, 112 L.Ed.2d 183 (1990). The trier of fact “has the
best opportunity to view the demeanor, attitude, and credibility of each witness, something
that does not translate well on the written page.” Davis v. Flickinger, 77 Ohio St.3d 415674 N.E.2d 1159 (1997).
{¶49} Further, the trial court did address the “family gift presumption” and
determined that if the “family gift presumption” applied, Wife sufficiently rebutted the
presumption by presenting sufficient evidence that she lacked donative intent. Based
Delaware County, Case No. 18 CAF 09 0072 20
upon the evidence as reviewed above, we find there was competent and credible
evidence to support the trial court’s determination.
{¶50} Husband’s first assignment of error is overruled.
II.
{¶51} In his second assignment of error, Husband contends the trial court abused
its discretion in classifying the $500,000 death benefit received by Wife during the
marriage as her separate property.
{¶52} Pursuant to R.C. 3105.171(B), “[i]n divorce proceedings, the court shall * *
* determine what constitutes marital property and what constitutes separate property. In
either case, upon making such a determination, the court shall divide the marital and
separate property equitably between the spouses, in accordance with this section.” The
party to a divorce action seeking to establish that an asset or portion of an asset is
separate property, rather than marital property, has the burden of proof by a
preponderance of evidence. Zeefe v. Zeefe, 125 Ohio App.3d 600, 709 N.E.2d 208 (8th
Dist. Cuyahoga 1998). The characterization of property as separate or marital is a mixed
question of law and fact, and the characterization must be supported by sufficient,
credible evidence. Chase-Carey v. Carey, 5th Dist. Coshocton No. 99CA1, 1999 WL
770172. “Trial court decisions on what is presently separate and marital property are not
reversed unless there is a showing of an abuse of discretion.” Vonderhaar-Ketron v.
Ketron, 5th Dist. Fairfield No. 10 CA 22, 2010-Ohio-6593.
{¶53} Husband argues the death benefit is marital property because it was an
asset acquired during the marriage, either upon Spicer’s death in 2017 or upon renewal
of the policy in 2016. We find there is competent and credible evidence to support the
Delaware County, Case No. 18 CAF 09 0072 21
trial court’s determination. A life insurance policy that has a cash value is an asset, and
if the cash value was generated by using marital funds, the cash value is a marital asset.
Goswami v. Goswami, 152 Ohio App.3d 151, 2003-Ohio-803, 787 N.E.2d 26 (7th Dist.
Belmont). However, Baker testified the policy at issue in this case was straight term life
insurance and the policy never had any savings, investment or growth factor in it. Further,
that the policy never acquired any cash value and never would acquire any cash value.
Baker stated that since the policy was purchased in 2001, Wife has always been the
named beneficiary. Wife acquired the policy and her interest in the policy prior to the date
of the marriage to Husband.
{¶54} Baker described the policy as one where the premium is locked in for five
years at a time, and every fifth year the premium increases, but builds no cash value.
Baker testified that, during the time the policy was in force from 2001 to when Spicer died,
the policy number did not change, the face amount did not change, and the death benefit
did not change. Baker testified it is generally accepted in the insurance industry that a
five-year renewable policy is the same policy, not a new policy issued every five years
when it is renewed, because if there were a new policy issued every five years upon
renewal, the insured would have to go through medical underwriting every five years.
{¶55} Alternatively, Husband contends the death benefit became marital property
once Wife utilized marital funds to pay for the premiums, as Wife deposited marital funds
into the U.S. Bank account from which she paid the premiums. Portions of insurance
policies paid for with marital funds are marital assets. Babka v. Babka, 83 Ohio App.3d
428, 615 N.E.2d 247 (9th Dist. Summit 1992); Burkhart v. Burkhart, 10th Dist. Franklin
No. 11AP-39, 2013-Ohio-157. We find there is competent and credible evidence to
Delaware County, Case No. 18 CAF 09 0072 22
support the trial court’s determination that Wife was able to trace the premium payments
to her separate funds and establish by a preponderance of the evidence that the proceeds
are her separate property because they were paid for by child support payments.
{¶56} Wife testified Husband never made any payments on the policy and she
and Husband never discussed the policy. Wife stated all the policy premiums before and
after her marriage to Husband came from her U.S. Bank account. Wife testified that from
the time she and Spicer got divorced until Spicer died, Spicer paid her child support on a
regular basis, initially paying $812 per month and then either $550 or $575 per month.
Wife stated all of Spicer’s child support payments were deposited in the U.S. Bank
account solely in her name. Wife testified she utilized the child support payments to pay
for the life insurance premiums, which were initially $49.50 per month and then increased
to $184 per month.
{¶57} Baker testified the premium payments were made on the policy by
automatic deduction from the U.S Bank account. Baker is not aware of any payments
Husband made for this policy. Although income received by either spouse during the
marriage is considered marital property, the definition of “income” in the child support
context does not include child support received by an obligee. R.C. 3119.01(C)(7)(c).
{¶58} Husband contends since Wife acknowledges that she sometimes placed
marital funds into the U.S. Bank account to pay bills, the trial court’s determination that
the death benefit was her separate property was an abuse of discretion. However, R.C.
3105.171(A)(6)(b) states, “the commingling of separate property with other property of
any type does not destroy the identity of the separate property as separate property,
except when the separate property is not traceable.”; See also Cooper v. Cooper, 5th
Delaware County, Case No. 18 CAF 09 0072 23
Dist. Licking No. 14 CA 100, 2015-Ohio-4048. We find the trial court’s determination that
the premium payments and child support payments were traceable to be supported by
competent and credible evidence. A letter from the New York Life Insurance Company
confirmed all premiums paid from the policy were withdrawn each month from Wife’s U.S.
Bank account. Further, the statements from Wife’s U.S. Bank account show monthly
direct deposits of Spicer’s child support payments. The child support payments were
deposited biweekly and always exceeded the amount for the monthly premium payment.
The amount of child support coming into the account was never less than the amount
leaving the account to pay the insurance premium. Additionally, the magistrate found
Wife’s testimony that she utilized the child support payments to pay for the life insurance
premiums credible. The weight to be given to the evidence and credibility of the witnesses
are issues for the trier of fact. State v. Jamison, 49 Ohio St.3d 182, 552 N.E.2d 180(1990), certiorari denied, 498 U.S. 881, 111 S.Ct. 228, 112 L.Ed.2d 183 (1990). The trier
of fact “has the best opportunity to view the demeanor, attitude, and credibility of each
witness, something that does not translate well on the written page.” Davis v. Flickinger,
77 Ohio St.3d 415 674 N.E.2d 1159 (1997).
{¶59} Husband’s second assignment of error is overruled.
III.
{¶60} In his third assignment of error, Husband argues the trial court erred when
it failed to grant him a distributive award from Wife’s separate property or a greater award
of marital property. We disagree.
{¶61} R.C. 3105.171(B) requires the trial court to determine what constitutes
marital property and what constitutes separate property. The Revised Code further
Delaware County, Case No. 18 CAF 09 0072 24
requires that a trial court divide the marital property equally unless an equal division would
be inequitable, in which case “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). The court may make a distributive award to facilitate, effectuate, or
supplement a division of martial property. R.C. 3105.171(E)(1). A trial court in any
domestic relations action has broad discretion in fashioning an equitable division of
marital property. Berish v. Berish, 69 Ohio St.2d 318, 432 N.E.2d 183 (1982). The trial
court’s judgment cannot be disturbed on appeal absent a showing that the trial court
abused its discretion. Id.{¶62} Husband contends a greater award of marital property to him or a
distributive award from Wife’s separate property is required because Wife caused him to
incur a “mountain of debt.” The trial court found Husband’s position is contradicted by the
evidence. We find the trial court’s determination is supported by competent and credible
evidence. We first concur with the magistrate that since the parties failed to provide the
trial court with balances of the financial accounts and debts are of the date of separation
and because Husband refused to provide evidence of his actual current income and
attempted to create false debts, it is impossible to determine the value of assets and debts
for purposes of an equal or equitable distribution.
{¶63} Husband described Halite, his current employer, as a start-up company.
Husband testified his current net pay is $6,000 every two weeks, but then stated that
amount is his gross pay. He did not submit any other evidence as to his current salary.
{¶64} Wife testified the parties agreed she would be a stay-at-home mom and be
responsible for the home and blended family. The only evidence of a “mountain of debt”
Delaware County, Case No. 18 CAF 09 0072 25
incurred is the testimony of Husband of multiple loans from his parents, a loan from
Shaffer, and a loan from Halite. However, Husband testified that Wife did not know about
several of these purported loans, but he felt they were marital debt because they were
used to pay Wife’s debts. Wife testified she did not know about these loans. The
purported loan agreements are not signed by either Husband or Wife. Additionally,
though Husband claims Wife’s Waldo properties caused Husband to incur debt, the loss
incurred on Wife’s Waldo properties actually benefited Husband because the parties were
able to carry a loss forward on their joint tax returns. The trial court also found a
distributive award was not appropriate, given Husband’s attempt to create marital debts
by presenting supposed loan agreements between he and Wife and other people that are
not credible. We find such a determination is not an abuse of discretion.
{¶65} Husband’s third assignment of error is overruled.
{¶66} Based on the foregoing, Husband’s assignments of error are overruled.
{¶67} The August 30, 2018 judgment entry of the Delaware County Court of
Common Pleas, Domestic Relations Division, is affirmed.
By Gwin, P.J.,
Baldwin, J., and
Wise, Earle, J., concur
_________________________________
HON. W. SCOTT GWIN
_________________________________
HON. CRAIG R. BALDWIN
_________________________________
HON. EARLE E. WISE, JR.
WSG:clw 0507
[Cite as Cook v. Cook, 2019-Ohio-1961.]