Worden v. Worden
2017 Ohio 8019
| Ohio Ct. App. | 2017Background
- Stephanie's mother (Jonelle Matthews) transferred a family home to Stephanie; a buyer's agreement (Sept. 29, 2011) and deed (recorded Jan. 17, 2012) name only Stephanie as buyer/owner.
- Matthews testified the transfer was an early inheritance (an inter vivos gift); she asked Stephanie to pay $10,000 to cover transfer costs and mortgage payoff.
- Stephanie alone signed the promissory notes for financing; Chad signed a mortgage to release dower but was not liable on the loans.
- After transfer, Stephanie borrowed $112,200 (in her name) to build an addition; at transfer equity was ~$130,000, at divorce equity was ~$64,302 despite appraised value rising from $140,000 to $170,000.
- Chad paid monthly mortgage payments during the marriage (with his earnings); parties separated Nov. 2015 and Stephanie filed for divorce Mar. 2016.
- Trial court awarded the house to Stephanie as her separate property and denied Chad any share; on appeal the court affirmed in part, reversed in part, and remanded.
Issues
| Issue | Stephanie's Argument | Chad's Argument | Held |
|---|---|---|---|
| Whether the house was an inter vivos gift / separate property | Gift from Matthews to Stephanie; transfer documents and intent show sole gift | Payment of $10,000 was consideration — a purchase; transfer occurred after marriage so property is marital | Affirmed: competent, credible evidence supports finding of an inter vivos gift and classification as Stephanie's separate property |
| Whether timing (transfer after marriage) makes property marital | Even if transferred during marriage, a proven gift to one spouse remains separate under R.C. 3105.171(A)(6)(a)(vii) | Transfer after marriage -> marital property | Affirmed: timing does not defeat gift; still separate property when established by clear and convincing evidence |
| Whether Chad is entitled to 1/2 of active appreciation from improvements (increase from $140k to $170k) | Appreciation is active (improvement) and should be split | Improvements funded/financed by Stephanie's separate equity and debt; awarding half would unjustly benefit Chad without him bearing corresponding debt | Affirmed: trial court did not abuse discretion in denying 1/2 of the $30,000 appreciation to Chad given encumbrance and financing structure |
| Whether Chad is entitled to half of equity traceable to marital mortgage payments | House is separate but mortgage paydown with Chad's marital earnings created marital equity that should be shared | Majority of remaining equity traces to Stephanie's separate gift; only a small portion (increase of $6,501.66 after construction) is marital | Reversed in part: portion of equity attributable to marital funds ($6,501.66) is marital; Chad awarded 1/2 ($3,250.83). Trial court's complete denial on this point was against manifest weight and an abuse of discretion |
Key Cases Cited
- Williams v. Ormsby, 966 N.E.2d 255 (Ohio 2012) (elements and burden to prove an inter vivos gift)
- Middendorf v. Middendorf, 696 N.E.2d 575 (Ohio 1998) (active appreciation of separate property can be marital)
- Kaechele v. Kaechele, 518 N.E.2d 1197 (Ohio 1988) (equitable division need not be equal)
- Cherry v. Cherry, 421 N.E.2d 1293 (Ohio 1981) (broad trial-court discretion in equitable property division)
- Bolles v. Toledo Trust Co., 4 N.E.2d 917 (Ohio 1936) (historical framing of elements of an inter vivos gift)