HEDWIG C. CUTTER v. ROBERT M. CUTTER
No. 96375
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
RELEASED AND JOURNALIZED: February 2, 2012
2012-Ohio-358
Civil Appeal from the Cuyahoga County Court of Common Pleas Domestic Relations Division Case No. D-261799
BEFORE: Stewart, J., Blackmon, A.J., and Cooney, J.
Joseph G. Stafford
Anne C. Fantelli
Stafford & Stafford Co., L.P.A.
55 Erieview Plaza, 5th Floor
Cleveland, OH 44114
ATTORNEYS FOR APPELLEE
Carl A. Murway
Brian E. Ambrosia
Taft, Stettinius & Hollister, L.L.P.
3500 BP Building
200 Public Square
Cleveland, OH 44114
MELODY J. STEWART, J.:
{1} Plaintiff/cross-appellee, Hedwig Cutter, and defendant/cross-appellant, Robert Cutter, were divorced in 1999 under the terms of a settlement agreement that the domestic relations division reduced to judgment. The settlement agreement provided that Robert would pay Hedwig spousal support for seven years based on a formula that incorporated a base amount of support and incremental percentages of Robert‘s earned income in excess of certain predetermined amounts. The parties agreed that the court would not have jurisdiction to modify the terms of spousal support unless Robert “retired” during the term of spousal support.
{3} Hedwig appeals, claiming that the court erred by finding that Robert had not retired and further erred by awarding her an amount of attorney fees that were considerably less than she requested; Robert cross-appeals, claiming that he should not have been required to pay any attorney fees at all and that the court erred when determining the support arrearage.
I
{4} The settlement agreement that the court incorporated into the divorce decree provided that Robert would pay spousal support of $5,100 per month (inclusive of poundage), in bimonthly installments, through a period ending August 31, 2007. The divorce decree states: “This court shall not retain jurisdiction to modify the amount or duration of the foregoing base spousal support order.”
{5} In addition to the base amount of spousal support, the parties agreed that Robert would pay as additional spousal support 30 percent of the first $100,000 of “annual earned income” that Robert might earn above $225,000 per year; 25 percent of the second $100,000 of Robert‘s annual earned income in excess of $225,000 per year;
{6} On July 6, 2007, Hedwig filed a motion to modify spousal support and sought an accounting of sums owed to her. In response, Robert filed a motion asking the court to enter an order terminating spousal support. The issues were ordered to trial before a magistrate.
{7} The magistrate found the evidence showed that on February 3, 2006, Robert “retired” from his job at an accounting firm and immediately began working full time for another firm. He explained that he had been looking to make a job change, but feared that preexisting medical conditions (cancer) would be excluded from medical coverage under a new employer‘s health plan. Having met certain longevity requirements necessary to qualify for retiree medical coverage with his old employer, Robert chose to characterize his cessation of employment as a retirement so that he could qualify for
{8} The magistrate concluded that Robert had retired, thus giving the court jurisdiction to modify the percentage component of the spousal support award. She found, however, that modification of support could in no way extend beyond August 31, 2007, so she would only consider modification of support from July 6, 2007 (the date of the motion to modify spousal support) through August 31, 2007. The magistrate reviewed Hedwig‘s financial condition and found that she had mismanaged her $600,000 share of the marital assets and over $700,000 in spousal support. Hedwig‘s liabilities exceeded her assets; she had no current income and was waiting to collect social security benefits, leaving her functionally bankrupt. Robert, on the other hand, was earning a salary with his new employer that exceeded the base amount of his salary with his prior employer, although he was not receiving the substantial bonuses that he earlier enjoyed. The magistrate thus found that Hedwig‘s circumstances had changed and that she was entitled to a modification of spousal support granting her an additional $5,000 per month, but only for the period of July 6, 2007 through August 31, 2007, for a total of $9,150. The magistrate combined this modification with support arrears owing from Robert, and ordered a total payment of $12,579.01. Finally, the magistrate awarded Hedwig $20,000 in attorney fees for prosecuting her motion to modify.
{9} Both parties filed objections to the magistrate‘s decision. Hedwig argued that the magistrate erred by finding it only had jurisdiction to modify spousal support for
{10} The court sustained in part and denied in part objections from both parties. It found that the magistrate‘s decision contained a typographical error in the computation of support arrears and that the amount Robert owed was $13,092.98. As for modification of support, it found that Robert‘s “change of employment did not constitute retirement.” It thus found it lacked jurisdiction to modify spousal support and overturned the magistrate‘s decision to do so. Finally, the court found that Hedwig was entitled to only $5,000 for attorney fees.
II
{11} Hedwig‘s first and second assignments of error collectively challenge the court‘s finding that Robert did not retire from his earlier employment in a manner that would vest the court with jurisdiction to modify spousal support.
{12}
{14} The separation agreement provided that the base amount of spousal support was not subject to modification under any circumstances. The parties agreed that the percentage aspect of spousal support could be modified, but only in the event that “Husband shall have voluntarily retired during the time period within which spousal support is otherwise agreed to be due and payable.”
{15} At dispute was the interpretation of the word “retire.” In the employment context, a voluntary “retirement” means to conclude one‘s working or professional career. Giving this word its plain meaning, we find that the court correctly found that Robert did not retire in a manner that would grant the court jurisdiction to modify the percentage aspect of spousal support. The evidence showed that Robert had simply switched jobs — he did not conclude his working or professional career. While it was true that he characterized his departure from his former employer as a retirement, he did so for the sole purpose of qualifying for retiree health benefits. He offered substantial testimony to
{16} If Robert did not “retire” from employment, it follows that the condition precedent stated in the separation agreement for vesting jurisdiction with the court to modify the percentage aspect of spousal support did not occur. The court correctly found that it lacked jurisdiction to modify spousal support in any manner. Our conclusion that the court lacked jurisdiction to modify spousal support makes it unnecessary for us to consider whether Hedwig‘s loss of capital through poor or mismanaged investments constituted a change of circumstances justifying a modification of spousal support.
III
{17} The third, fourth, and fifth assignments of error and the first cross-assignment of error are based on the court‘s determination of Robert‘s support arrears stemming from the percentage payments he was obligated to make on income in
{18} Hedwig‘s argument that the court failed to properly calculate Robert‘s income in excess of $225,000 is premised on her belief that the parties would use Robert‘s “gross” wages for the calculation. The parties did not, however, agree that they would use Robert‘s gross wages when determining the percentage of any income in excess of $225,000. Instead, the separation agreement used the term “earned income.”
{19}
{20} Hedwig referred to an “earnings summary” prepared in conjunction with Robert‘s W-2s that listed “gross pay” including Robert‘s salary and certain non-taxable earnings. The Internal Revenue Service does not consider non-taxable earnings as part of Medicare wages for purposes of Box 5 of the Form W-2, so we presume the parties knew that Robert‘s additional payments would be based on percentages of his earned income. Maher v. Cleveland Union Stockyards Co., 55 Ohio App. 412, 418, 9 N.E.2d 995 (8th Dist.1936). We therefore reject Hedwig‘s claims that the court erred by not using Robert‘s gross income for percentage support calculation.
{21} What remains for decision is whether the court erred in its calculations of Robert‘s support arrears. Our review of the evidence lists Robert‘s earned income as shown by the Medicare wages listed on his W-2 forms and the amount of percentage payments he owed:
| Tax Year | Earned Income | Amount Over $225,000 | Percentage Owed |
| 1999 | $415,242 | $190,242 | $52,561 |
| 2000 | $330,4781 | $105,478 | $31,370 |
| 2001 | $337,7562 | $112,756 | $33,189 |
| 2002 | $327,3663 | $102,366 | $30,592 |
| 2003 | $307,0964 | $82,096 | $24,629 |
| 2004 | $273,6005 | $48,600 | $14,580 |
| 2005 | $318,8516 | $93,851 | $28,155 |
| 2006 | $303,0237 | $78,023 | $23,407 |
| 20078 | $293,584 | $68,584 | $13,717 |
| Total Percentage Owed: | $252,200 |
{22} Robert agreed to pay $5,000 per month in base spousal support. The amount of base spousal support that he owed over the 102-month duration of the settlement agreement was $510,000. Documentation from the Cuyahoga Support Enforcement Agency showed that he paid $520,562, for an overpayment of $10,562. Neither party contests the amount of this overpayment.
{23} Using the correct figures for earned income, we find that Robert owed Hedwig a total of $252,200 in percentage payments for spousal support. The parties disputed the total amount of money that Robert paid yearly in spousal support: Hedwig used her tax returns for documentation; Robert provided his tax returns and other documentation. The magistrate decided what figure to use based on the quality of each party‘s supporting documentation. Because the magistrate made a credibility
{24} The magistrate found that Robert paid a combined total of $750,773 in spousal support. Of that amount, $4,600 was attributable to two spousal support checks that were written before the effective start date of Robert‘s spousal support obligation, so the magistrate deducted that amount from the total amount paid, leaving a total amount paid of $746,173. Robert owed Hedwig the total sum of $762,200 ($510,000 + $252,200). He was thus in arrears in the amount of $16,027. We sustain the third, fourth, and fifth assignments of error and the first cross-assignment of error and remand with instructions for the court to issue judgment to Hedwig in the amount of $16,027.
IV
{25} The sixth assignment of error and the second cross-assignment of error complain that the court abused its discretion by ordering Robert to pay Hedwig attorney fees in the amount of $5,000. Hedwig argues that the amount is too low; Robert argues that the amount is too high.
{26}
{27} The magistrate originally awarded Hedwig the amount of $20,000 for her attorney fees. That award was premised on the successful nature of Hedwig‘s motion for an accounting of spousal support payments balanced against Hedwig‘s unsuccessful motion to extend spousal support beyond the deadline stated in the separation agreement.
{28} When ruling on objections to the magistrate‘s decision, the court overturned the magistrate‘s finding that Robert had “retired” in a manner that would vest the court with jurisdiction to modify spousal support. It thus vacated the magistrate‘s finding that Hedwig was entitled to any additional spousal support. The court did, however, find that the magistrate made a computational error in setting forth Robert‘s support arrearage — a finding that benefitted Hedwig.
{29} Our discussion of the assignments of error make it clear that Robert was in arrears with his support obligation, though not to the extent determined by the court. In all other respects, we have affirmed the court‘s judgment. On that basis, we have no reason for finding that the court abused its discretion in ordering Robert to pay $5,000 for Hedwig‘s attorney fees.
{30} We note that Hedwig‘s argument in support of a higher award of attorney fees is based on her claim that Robert “has substantial assets and income, which clearly justifies the award of attorney fees requested by Hedwig.” See Appellant‘s Brief at 19.
{31} This cause is affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion.
It is ordered that the parties bear their own costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the Cuyahoga County Court of Common Pleas — Domestic Relations Division to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MELODY J. STEWART, JUDGE
PATRICIA ANN BLACKMON, A.J., and COLLEEN CONWAY COONEY, J., CONCUR