RICKIE LOTZ, PLAINTIFF-APPELLANT, v. ALICE LOTZ, DEFENDANT-APPELLEE, -and- DONNA J. LOTZ, INTERVENOR-APPELLEE.
CASE NO. 2-14-06
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT AUGLAIZE COUNTY
December 22, 2014
[Cite as Lotz v. Lotz, 2014-Ohio-5625.]
PRESTON, J.
Appeal from Auglaize County Common Pleas Court Domestic Relations Division Trial Court No. 2012-DR-074 Judgment Affirmed
James C. King for Appellant
Matthew J. Kentner for Appellee, Alice Lotz
{¶1} Plaintiff-appellant, Rickie Lotz (“Rickie”), appeals the April 22, 2014 “judgment entry – orders on divorce” of the Auglaize County Court of Common Pleas, Domestic Relations Division, in which the trial court concluded, among other things, that real property located at 20086 Wapakoneta-Cridersville Road in Wapakoneta, Ohio (the “Property”) was “marital property in its entirety.” On appeal, Rickie argues that the Property was an advance on his inheritance and separate property. He also argues that even assuming the Property was marital, the trial court should have valued the Property at ten dollars based on a right of first refusal held by Rickie‘s mother, intervenor-appellee, Donna J. Lotz (“Donna”). For the reasons that follow, we affirm.
{¶2} On May 22, 2012, Rickie filed a complaint for divorce against defendant-appellee, Alice Lotz (“Alice”). (Doc. No. 1). On June 18, 2012, Alice filed an answer and counterclaim for divorce. (Doc. No. 15).
{¶3} On November 28, 2012, Donna filed a “motion to intervene as party defendant.” (Doc. No. 49). In her motion, Donna argued that a right of first refusal gave her a contractual interest in the Property. (Id.).
{¶4} On December 19, 2012, the trial court granted Donna‘s motion to intervene. (Doc. No. 50).
{¶6} On February 25, 2014, the trial court held a final hearing on the merits. (Feb. 25, 2014 Tr. at 4).
{¶7} On April 22, 2014, the trial court filed its “judgment entry – orders on divorce” that is the subject of this appeal. (Doc. No. 124). Among other things, the trial court concluded that the Property was “marital property in its entirety,” subject to a lien on the Property in the amount $149,575.56, and that the Property‘s value was $440,000. (Id.). Concerning Donna‘s purported right of first refusal, the trial court stated “that the domestic relations division has no power to settle a contract dispute between the parties.” (Id.).
{¶8} Rickie filed his notice of appeal on May 21, 2014. (Doc. No. 129). He raises two assignments of error for our review, which we elect to address together.
Assignment of Error No. I
The trial court erred in finding that the marital residence is marital property in its entirety.
The trial court erred in finding that the court had no power to determine the validity of the right of first refusal agreement previously executed between the parties.
{¶9} In his first assignment of error, Rickie argues that the Property is separate property, not marital property, because Donna gifted the Property to Rickie as an advance on his inheritance. He argues, “It is clear from the evidence presented that it was Donna[‘s] intent for this transfer to be an advance on [Rickie]‘s inheritance as she was making similar gifts to her other children and that she intends to equalize the life-time gifts with the amount of inheritance each child receives upon her death.” (Appellant‘s Brief at 7). He also argues that Alice‘s name was included on two deeds transferring the Property “as part of a misguided estate planning measure.” (Id. at 5).
{¶10} In his second assignment of error, Rickie argues that Donna held a right of first refusal on the Property, which was “[f]urther evidence” that Donna intended the transfer to be an advance on Rickie‘s inheritance. (Id. at 7). He also argues that if the Property is marital, then the trial court should have valued it at ten dollars based on Donna‘s right of first refusal. Rickie argues that the trial court erred when it determined “that it had no power to settle a contract dispute between the parties.” (Id. at 8). Based on what Rickie describes as “some discrepancy as to the timing of the execution of both deeds and the Right of First
{¶11} In a divorce proceeding, the division of marital and separate property involves a two-step process governed by
{¶12} At issue under Rickie‘s first assignment of error is the first step of the two-step process set forth in
(i) All real and personal property that currently is owned by either or both of the spouses * * * and that was acquired by either or both of the spouses during the marriage;
(ii) All interest that either or both of the spouses currently has in any real or personal property * * * and that was acquired by either or both of the spouses during the marriage * * * ”
[A]ll real and personal property and any interest in real or personal property that is found by the court to be any of the following:
* * *
(vii) Any gift of any real or personal property or of an interest in real or personal property that is made after the date of the marriage and that is proven by clear and convincing evidence to have been given to only one spouse.
{¶13} “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.’” Williams v. Williams, 3d Dist. Seneca No. 13-12-17, 2012-Ohio-6116, ¶ 16, quoting Barkley at 161, fn. 2, citing
{¶14} “Additionally,
{¶15} “A party who wants an asset classified as separate property bears the burden of tracing that asset to his or her separate property.” Chawla v. Chawla, 10th Dist. Franklin No. 13AP-399, 2014-Ohio-1188, ¶ 43, citing Alexander v. Alexander, 10th Dist. Franklin No. 09AP-262, 2009-Ohio-5856, ¶ 24. As set forth
{¶16} This court reviews the trial court‘s classification of property as marital or separate under a manifest-weight-of-the-evidence standard. Reed v. Reed, 3d Dist. Allen No. 1-09-63, 2010-Ohio-4550, ¶ 7, citing Gibson, 2007-Ohio-6965, at ¶ 26. Accordingly, we will not reverse the trial court‘s judgment if it is supported by some competent, credible evidence. Id., citing Barkley, 119 Ohio App.3d at 159. “‘This highly deferential standard of review permits the affirmation of the trial court‘s judgment if there is even ‘some’ evidence to support the court‘s finding.’” Id., quoting Huelskamp v. Huelskamp, 185 Ohio App.3d 611, 2009-Ohio-6864, ¶ 15 (3d Dist.).
{¶17} In his second assignment of error, Rickie challenges the trial court‘s valuation of the Property. “
{¶19} We begin our analysis by addressing whether the trial court‘s conclusion that the Property was marital property is supported by some competent, credible evidence. Contrary to Rickie‘s assertion that Alice bore the burden of proving that the Property was marital property, it was he who bore the burden of
{¶20} A review of the record reflects that Rickie and Alice married on June 18, 1990. (Doc. No. 15). They moved into the residence on the Property on January 1, 2007. (Feb. 25, 2014 Tr. at 197). On April 3, 2007, Donna executed a general warranty deed for a 70.2% interest in the Property “to Rickie L. Lotz, and Alice Lotz, married, for their joint lives, remainder to the survivor of them.” (Defendant‘s Ex. F). (See also Feb. 25, 2014 Tr. at 192-193). That deed was recorded with the Auglaize County Recorder on August 13, 2007. (Defendant‘s Ex. F). (See also Feb. 25, 2014 Tr. at 193).
{¶21} Donna testified that “probably a few days before Mother‘s Day” in 2007, she “heard about that Alice had said that as soon as she got the deed she was going to sell the property and go to Georgia where her brother lives.” (Feb. 25, 2014 Tr. at 195). After learning that, Donna had her counsel prepare a “right of first refusal agreement,” which Donna, as “Grantee,” executed on June 28, 2007, and which Rickie and Alice, as “Grantors,” executed on July 5, 2007. (Plaintiff‘s Ex. 7); (Feb. 25, 2014 Tr. at 35, 124-126, 195-197, 243-244, 307-308). In it, Rickie and Alice granted to Donna “an exclusive right of first refusal to purchase the real property owned by Grantor [sic] and legally described on ‘Exhibit A’
{¶22} On March 6, 2008, Donna executed a general warranty deed for the remainder of her interest in the Property “to Rickie L. Lotz and Alice Lotz, husband and wife.” (Defendant‘s Ex. G). (See also Feb. 25, 2014 Tr. at 193-194). That deed was recorded with the Auglaize County Recorder on March 12, 2008. (Defendant‘s Ex. G).
{¶23} On July 19, 2008, Rickie and Alice executed a survivorship deed for the Property “to RICKIE L. LOTZ and ALICE L. LOTZ, husband and wife, for their joint lives, remainder to the survivor of them * * *” (Defendant‘s Ex. H). (See also Feb. 25, 2014 Tr. at 129). Rickie and Alice executed the survivorship deed so that they could obtain a home-equity loan against the Property. (Feb. 25,
{¶24} At the February 25, 2014 hearing, Alice‘s counsel asked Donna about her intent at the times she deeded the Property:
[Alice‘s Counsel]: Mrs. Lotz, there was obviously Exhibits F and G, the deeds, they speak for themselves, but was it your intent to deed the property to Rickie and Alice, wasn‘t it, Ma‘am?
[Donna]: Originally, yeah, but not once I heard what Alice said.
[Alice‘s Counsel]: Oh, that you heard Alice wanted to move to Georgia?
[Donna]: Yeah, was going to sell it.
(Id. at 199). On direct examination, Donna testified that she gifted the Property to Rickie and Alice:
[Donna‘s Counsel]: You were the owner of property on 20086 Wapak-Cridersville Road; is that correct?
[Donna]: Yes. [Donna‘s Counsel]: And you decided to give it as a gift to Rick and Alice; is that right?
[Donna]: Yes.
* * *
[Alice‘s Counsel]: Now the only property you gave to Rick and Alice consisted of the property at 20086 Cridersville Road, the seventy (70) acres; is that right?
[Donna]: Yeah.
(Id. at 307-309). According to Donna, the Property was transferred in two deeds “because of the gift tax law.” (Id. at 312). Donna identified Third Party Exhibit A as “an ongoing thing” tallying the gifts she makes to her children and the gifts’ respective values. (Id. at 310). Donna acknowledged that the total value of the gifts she has given to Rickie, as reflected on Third Party Exhibit A, includes “the entire gift of that seventy (70) acres to him.” (Id. at 311).
{¶25} Finally, Rickie admitted on cross-examination that in his “affidavit of property,” which he filed on May 22, 2012 when he filed his complaint for divorce, he listed nothing under the section for “separate property claims,” which includes “gifts to one spouse only.” (Id. at 130-131); (Defendant‘s Ex. C). (See
{¶26} Based on the evidence above, we conclude that the trial court‘s conclusion that the Property was marital property is supported by some competent, credible evidence. Rickie was required to prove by clear and convincing evidence that Donna gifted the Property only to him and intended to exclude Alice from acquiring any interest in the Property through the gift. See Butler, 2012-Ohio-6085, at ¶ 24. Notably, Rickie did not call Donna as a witness at the February 25, 2014 hearing—his only two witnesses were himself and Alice. Later at the hearing, Donna testified that she gifted the Property to Rickie and Alice. At one point, Donna testified that it was her intent to gift the Property to Rickie and Alice until she heard Alice wanted to sell the Property—something she learned after execution of the first deed but before execution of the second deed. The record reflects, however, that Donna addressed her concerns by executing the right of first refusal agreement. Indeed, the second deed transferred the Property to Rickie and Alice notwithstanding Donna‘s learning earlier that Alice wanted to sell the Property. Moreover, Rickie and Alice executed a survivorship deed to
{¶27} Not lost on us is Rickie‘s argument that the Property was not just a gift from Donna to him, but an advancement on his inheritance, which is a specific type of gift. “An advancement of inheritance is an irrevocable gift made by a person during his or her lifetime to an heir, by way of anticipation of the whole or part of the estate which the heir would receive in the event of the person‘s death.”
{¶28} Nevertheless, the distinction between the elements of an inter vivos gift and the elements of an advancement on inheritance are immaterial in this case. See Pudlo v. Pudlo, 3d Dist. Hancock No. 5-2000-29, 2001 WL 730986, *5 (June 29, 2001). As we discussed above, Rickie failed to prove by clear and convincing evidence that, under
{¶29} We next address whether the trial court‘s valuation of the Property is supported by some competent, credible evidence. The trial court assigned a value of $440,000 to the Property and, after factoring in the $149,575.56 lien on the Property, found the Property‘s net value to be $290,424.44. (Doc. No. 124). Rickie argues that the trial court should have relied on the right of first refusal agreement to conclude that the Property‘s value was ten dollars. He also argues that the trial court erred when it concluded that it “had no power to determine the validity of the right of first refusal agreement previously executed between the parties.” (Appellant‘s Brief at 7).
{¶30} Rickie mischaracterizes the trial court‘s conclusion regarding its ability to determine the validity of the right of first refusal agreement. The trial court‘s judgment entry reflects that, after detailing the “number of problems with the right of first refusal”—including its lack of an “Exhibit A,” which the right of first refusal agreement references as describing the property subject to the right of first refusal—the trial court concluded “that the domestic relations division has no power to settle a contract dispute between the parties and has no power to hear a partition action to carve up the real estate interests of the parties, under these unusual circumstances.” (Doc. No. 124).
{¶31} By concluding that it had “no power to settle a contract dispute between the parties” and “no power to hear a partition action to carve up the real estate interests of the parties,” the trial court was merely saying that the issue of whether Donna would be entitled to purchase the Property for ten dollars if the Property is sold was not an issue before the trial court. Rather, as the trial court noted, its duty is to determine what property is marital and “assess and divide the values thereof.” (Id.). To that end, the trial court examined the evidentiary value of the right of first refusal agreement and noted “a number of problems” with it. Indeed, the right of first refusal agreement introduced at trial did not contain the “Exhibit A” referenced in that agreement, so it is impossible to determine from the agreement to which property the agreement applies. And while the parties testified to their understanding of what property was subject to the right of first refusal agreement, the trial court was free, as it apparently did, to assign greater evidentiary weight to the appraisal—offered and identified by Rickie as Plaintiff‘s Exhibit 6—valuing the Property at $440,000. (Feb. 25, 2014 Tr. at 27-28). See Huelskamp, 185 Ohio App.3d 611, at ¶ 27.
{¶32} In support of his second assignment of error, Rickie relies heavily on Lindsay v. Lindsay, which is distinguishable from this case. 6th Dist. Sandusky No. S-11-055, 2013-Ohio-3290. In that case, the Sixth District Court of Appeals concluded that the trial court did not abuse its discretion “in finding the fair market
{¶33} For the reasons above, we conclude that the trial court‘s valuation of the Property is supported by some competent, credible evidence and therefore not against the manifest weight of the evidence.
{¶34} Rickie‘s assignments of error are overruled.
Judgment Affirmed
ROGERS and SHAW, J.J., concur.
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