2020 Ohio 22
Ohio Ct. App.2020Background
- Husband (John) is an attorney and financial advisor who owned closely held businesses (Symphony Financial Services, Inc. and Kim & Associates, LLC); Wife (Shana) was a long‑term stay‑at‑home parent.
- Wife filed for divorce in October 2015; trial addressed property division, treatment of life‑insurance policies in an irrevocable trust, Husband’s income for spousal support, distributive award for alleged financial misconduct, and attorney fees.
- Husband created the John Y. Kim Irrevocable Trust in 1999; its corpus consisted of life insurance policies later purchased with marital funds; Husband drafted the trust, named his brother trustee, and exercised control (including loans against cash value).
- Trial court found (among other things) that the cash value of the life insurance policies was marital property, Husband engaged in financial misconduct (including substantial gifts to his parents and unexplained dissipations), spousal support should be calculated from Husband’s three‑year average income, and awarded Wife attorney fees.
- Husband appealed multiple rulings and separately moved to correct the appellate record under App.R. 9(E); the trial court denied the record‑correction motion and granted Wife fees related to that motion.
- The Ninth District consolidated the appeals and affirmed the trial court in all respects.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Whether cash value of life insurance in Husband’s irrevocable trust is marital property | Policies were funded with marital monies and Husband retained control, so cash value should be credited as marital property | Trust is a third‑party entity and policies are not property of either spouse | Affirmed: cash value treated as marital property based on marital funding, Husband’s control and use, and Wife’s lack of knowledge |
| Classification of Yamaha piano | Piano bought for children/family use and thus marital property | Piano was a gift to Husband from his mother (separate property) | Affirmed: Husband failed to prove by clear and convincing evidence it was a gift to him; piano classified marital |
| Financial misconduct / distributive award (gifts to parents; dissipations) | Husband dissipated/disposed of marital funds (gifts totaling ~$254,000, sale proceeds, tax refund, Symphony account) and should be compensated | Gifts were cultural/familial and funds were used for marital/business needs; no wrongful intent | Affirmed: trial court’s findings supported by record; distributive award for Wife was not an abuse of discretion |
| Income base for spousal support / double‑dipping | Use expert’s normalized owner compensation + K&A distributions to avoid double‑dipping against business valuation | Court should use Husband’s actual three‑year average income (higher) to reflect disparity and Husband’s control over pay/distributions | Affirmed: trial court used three‑year average income and declined double‑dip offset given income disparity and Husband’s discretion/control |
| Attorney fees (trial and fees for App.R.9(E) motion) | Wife requested fees as equitable remedy given discovery burden, Husband’s conduct, and defense of record‑correction motion | Husband argued proceedings were mutually acrimonious and his motions had merit | Affirmed: trial court acted within equitable discretion under R.C. 3105.73(A)/(B) to award fees (including fees for opposing record‑correction motion) |
Key Cases Cited
- Eastley v. Volkman, 132 Ohio St.3d 328 (Ohio 2012) (manifest‑weight standard and deference to factfinder credibility determinations)
- Goswami v. Goswami, 152 Ohio App.3d 151 (Ohio Ct. App.) (marital funds used to purchase property held by third parties can create marital property interests)
- Baker v. Baker, 83 Ohio App.3d 700 (Ohio Ct. App.) (treatment of property held by third parties/trusts in divorce context)
- Maloney v. Maloney, 160 Ohio App.3d 209 (Ohio Ct. App.) (domestic relations court’s equitable powers and jurisdiction over property division)
- Bittner v. Tri‑County Toyota, Inc., 58 Ohio St.3d 143 (Ohio 1991) (lodestar approach — hours reasonably expended × reasonable hourly rate — for attorney fee awards)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (hourly rate × hours as starting point for fee awards)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard)
- State v. Schiebel, 55 Ohio St.3d 71 (Ohio 1990) (trial court’s authority to weigh conflicting evidence when correcting the record under App.R. 9(E))
- State v. Ishmail, 54 Ohio St.2d 402 (Ohio 1978) (appellate courts may not add matter to the record that was not part of trial court proceedings)
- Pons v. Ohio State Medical Board, 66 Ohio St.3d 619 (Ohio 1993) (review of discretionary decisions — appellate court may not substitute its judgment)