RICHARD C. ORGAN v. PATRICIA ORGAN
C.A. No. 26904
IN THE COURT OF APPEALS NINTH JUDICIAL DISTRICT
August 13, 2014
[Cite as Organ v. Organ, 2014-Ohio-3474.]
HENSAL, Judge.
STATE OF OHIO, COUNTY OF SUMMIT ss: APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO CASE Nо. 2010-01-0191
HENSAL, Judge.
{1} Richard Organ appeals a divorce decree entered by the Summit County Court of Common Pleas, Domestic Relations Division. For the following reasons, this Court affirms.
I.
{2} Richard and Patricia Organ married in December 1983. At the time, Wife was 22 years old and about to begin her last semester at Northeastern University, where she obtained a bachelor of science. Husband was 26 years old and about to begin his last semester at Harvard Business School, where he earned a master of business administration. After they finished their degrees, they mоved to Hudson, Ohio and worked full time until March 1985, when Wife gave birth to a son. Because the baby was colicky, Wife quit her job to take care of the child. She went back to work part-time in 1986, and remained employed until a few months after giving birth to a daughter. Over the next few years, Husband continued working full-time and Wife resumed working part-time.
{3} In 1994, a large company that is headquartered in Kentucky hired Husband to be its chief financial officer. After the family moved out-of-state, Wife stayed home for a couple years to help the children adjust to their new community and assist Husband with his company social obligations. Wife eventually went back to work part-time, but quit in 1998 when Husband was hired to be the executive vice president of an Ohio company. The family subsequently moved back to Hudson.
{4} After returning to Ohio, Wife worked part-time for a couple of years, then quit her job to oversee the renovation of a century-home that the parties had purchased. Husband, meanwhile, became president of his company. In 2007, Husband received a multi-million dollar bоnus after the company he worked for was sold. In 2009, Husband and Wife separated. Husband filed for divorce the following year. He continued to serve as president of his company, and received another multi-million dollar bonus in 2011 when the company was sold again. In April 2012, he left the Ohio company and went to work as the chief executive officer for a company in California.
{5} The parties divided most of their assets evenly, receiving over five million dollars each. The case proceeded to triаl, however, on whether the jewelry that Husband had bought for Wife was marital property, whether the stock Husband had acquired in the California company he went to work for and his frequent flier miles were marital property, and whether Wife was entitled to spousal support. Following several days of testimony, the trial court found that the jewelry was Wife‘s separate property. It found that Husband‘s stock in the new company was his separate property, but that any income generated from it could be considerеd for spousal support purposes. Finally, it determined that, for spousal support, Husband must pay Wife $13,525 per month indefinitely plus 50% of any employment bonuses he receives and 33% of
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRONEOUSLY AND ARBITRARILY FAILED TO CONSIDER WIFE‘S INVESTMENT INCOME FOR SPOUSAL SUPPORT PURPOSES WHILE INCLUDING HUSBAND‘S INVESTMENT INCOME FOR SPOUSAL SUPPORT PURPOSES.
{1} Husband argues that the trial court incorrectly calculated its spousal support award. Under
{6} Husband notes that the trial court used a “FIN Plan Analysis” to calculate an equal distribution of the parties’ monthly income. He argues that the court failed to include their investment income, however, in its calculation. He notes that the parties divided substantial assets and that he presented expert testimony that Wife will be able to earn $337,000 a year by investing her share of the assets. According to Husband, the court‘s failure to include Wife‘s investment income in its calculation significantly skewed its result1
{8} Wife contends that Husband‘s livelihood is increasing the vаlue of companies so that they can be sold for profit. She notes that a large part of their income over the last decade has come from the incentives he received when the company he was running was sold. She, therefore, argues that it was appropriate for the court to treat Husband‘s future active income from the stock he has purchased in the California company different than the income she may be able to generate through passive investments. She also аrgues that the fact that Husband will receive 66% of any income or gain that is derived from his investment in the California company offsets the fact that he cannot invest the $500,000 in other ways. She further argues that the fact that the court has retained jurisdiction over the spousal support award mitigates any injustice that might arise if there is a change in Husband‘s circumstances.
{9} In its decree, the trial court noted that one of the factors it had to consider in determining whether to order spousal support was “income derived frоm property divided” by the parties.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED AS A MATTER OF LAW AND ABUSED ITS DISCRETION IN ORDERING HUSBAND TO PAY SPOUSAL SUPPORT BASED ON 50% OF HIS EARNED INCOME AND 33% OF HIS INVESTMENT INCOME.
{11} Husband notes that in Kaechele v. Kaechele, 35 Ohio St.3d 93 (1988), the Ohio Supreme Court wrote that, “in ascertaining the need for and amount of sustenance alimony * * * [t]he method by which the goal is achieved cannot be reduced to a mathematical formula.” (Citations omitted) Id. at 96; see also Kunkle v. Kunkle, 51 Ohio St.3d 64, 70 (1990) (following Kaechele). He notes that, in Burner v. Burner, 9th Dist. Summit No. 19903, 2000 WL 1533898 (Oct. 18, 2000), this Court concluded that, where Wife‘s monthly spousal support award constituted almost exactly one half of Husband‘s base pay and yearly bonuses, the award was improperly based on a mathematical formula, in violation of Kunkle. Id. at *5. He argues that, as in Burner, the trial court‘s 50% spousal support award is improperly based on a mathematicаl formula and is not reasonable and appropriate under
{12} Although Husband has properly interpreted Burner, we do not believe it controls in this case. In Burner, this Court did not analyze the effect that the amendments to
{13} A few months after the Kunkle decision, the General Assembly amended
{14} In Burner, this Court concluded that the spousal support award had to comply with Kunkle. Burner, 2000 WL 1533898 at *5. Kunkle, however, had applied a different version of
{15} In this case, the trial court started with the presumption that both parties were equally responsible for the production of the marital income.
ASSIGNMENT OF ERROR III
THE TRIAL COURT ABUSED ITS DISCRETION IN ORDERING HUSBAND TO PAY SPOUSAL SUPPORT FROM HIS SEPARATE PROPERTY INCOME.
{16} In his third assignment of error, Husband argues that it was impermissible for the trial court to order him to satisfy his spousal support obligation from the stock he has acquired in
{17} In support of his argument, Husband cites Kline v. Kline, 8th Dist. Cuyahoga No. 96734, 2012-Ohio-479. In Kline, Paul and Barbara Kline divorced after 30 years of marriage. Under the terms of their decree, Husband had to pay Wife $2,500 per month in spousal support. After Husband retired, he moved to terminate the spousal support award because his income had diminished. He argued that the income he receives from his pension should not be considered as part of his income because, under the decree, the parties had split his pension evenly. The Eighth District Court of Appeals agreed in part, noting that the decree had ordered the parties to retain their respective pensions “free аnd clear of any claim of the other.” Id. at ¶ 10. It determined that, pursuant to that express language in the decree, Wife could not collect from Husband‘s pension either directly or indirectly. It, therefore, concluded that Husband‘s pension income was not available for purposes of satisfying his spousal support obligation. Id. at ¶ 11. It concluded that his pension income could be considered, however, “for the purposes of determining the appropriate amount of spousal support that сan be satisfied through other sources of income or assets.” Id. Because Husband had income from other sources that could be used to satisfy the spousal support award, the Eighth District concluded that the trial court did not abuse its discretion when it denied his motion to terminate spousal support. Id. at ¶ 13-14.
{18} This case is factually distinguishable from Kline. Although the parties’ separation agreement provides that each party shall retain his or her property free and clear, Husband‘s stock in the California company was not part of their agreemеnt. It, therefore, is not subject to the terms of the agreement despite the trial court‘s finding that it is Husband‘s separate property.
ASSIGNMENT OF ERROR IV
THE TRIAL COURT ERRED IN DISTRIBUTING HUSBAND‘S SEPARATE PROPERTY TO WIFE UNDER THE GUISE OF SPOUSAL SUPPORT.
{19} Husband argues that, by granting Wife 33% of all the income that he earns from the California company stock, the court, in effect, distributed one-third of the stock to her. He argues that, under
{20} In Heller, John and Susan Heller divorced after 30 years of marriage. One of their marital assets was Husband‘s 39.5% interest in the corporation where he worked. The trial court determined the present value of Husband‘s interest in the company, which included a forecast of the company‘s future earnings. It equalized the marital property division by awarding Wife assets that equaled the value of Husband‘s stake in the company. Regarding spousal support, it included the distribution of income that Husband expected to receive from the company when it determined his annual income. On appeal, the Tenth District Court of Appeals held that the court‘s judgment allowed Wife to improperly “double dip” in the future earnings of Husband‘s company because it included them when it valued the marital assets and when it detеrmined Husband‘s income for spousal support purposes. Id. at ¶ 21. It concluded that “courts may treat a spouse‘s future business profits either as a marital asset subject to division, or as a stream of income for spousal support purposes, but not both.” Id. at 23.
{21} Heller is distinguishable because, in this case, the trial court found that Husband‘s stock in the California company was his separate property and did not include it as part of its division of marital property. We also conclude that, just because Husband acquired the stock with his share of the marital assets does not mean the court could not consider it when it determined Husband‘s spousal support obligation.
In determining whether spousal support is appropriate and reasonable, and in determining the nature, amount, and terms of payment * * * of spousal support * * * the court shall consider * * * [t]he income of the parties, from all sources, including * * * income derived from property divided, disbursed, or distributed under
section 3105.171 of the Revised Code [.]
The trial court, therefore, was allowed to consider Husband‘s income from his invеstment in the California company when it determined the amount and designated the “terms of payment” of the spousal support award.
{22} We do not agree with Husband‘s argument that awarding Wife 33% of the income or gain in the California stock is “no different than distributing 33 percent of the * * *stock to Wife.” Under the terms of the decree, Wife is only entitled to a share of any income or gain made on the stock, not its underlying value. It, therefore, is not the same as if the court had distributed 33% of the stock to Wife. Husband‘s fourth assignment of error is overruled.
ASSIGNMENT OF ERROR V
THE TRIAL COURT‘S SPOUSAL SUPPORT AWARD IS INAPPROPRIATE AND UNREASONABLE.
{23} Husband argues that the trial court‘s spousal support award is inappropriate and unreasonable since Wife can maintain the marital standard of living for only $18,000 per month. He notes that, in Estes v. Estes, 2d Dist. Miami No. 96-CA-07, 1996 WL 596539 (Oct. 18, 1996), the Second District Court of Appeals wrote that “[i]n our view, the upper limit for sustenance in
{24} In Estes, the Second District noted that
{25} Estes has not been followed by the Second District in any subsequent cases. More recently, that court has written that, “[a]lthough
{26} Regarding this Court‘s precedent, we note that, in Schieve v. Schieve, 9th Dist. Medina No. 05CA0037-M, 2005-Ohio-5190, a case involving a long-term marriage, this Court
{27} Husband also argues that the facts of this case do not support the amount of spousal support that the trial court awarded. He argues that, even if Wife does not go back to work, she will earn over $300,000 a year by investing her share of the marital assets, and notes that she has no debt or other liabilities. He also argues that, although Wife testified that she has had mental health issues since their separation, she provided no expert testimony or documentary evidence to support her claims. He further argues that she is only 51 years old and does not have any minor children, meaning that she is still young and free enough to seek employment outside the home. According to Husband, the spousal support award is inappropriate and unreasonable because there is no upper limit on the amount of income he might be required to pay and it is not related to Wife‘s actual financial needs. He contends that an award of $6,000 to $10,000 a month would have been more appropriate.
{28} Wife testified that, while the divorce was pending, she was living on a budget of $18,000 a month, but emphasized that she was “just making it.” She also testified that, although
{29} Husband acknowledges that it was a long term marriage and that the parties enjoyed a high standard of living during the marriage. He also acknowledges that he has a higher level of education than Wife and that the parties paid off his student loans during the marriage. It also does not appear to be controverted that, even if Wife resumes working, she will not be able to earn anywhere close to the same level of income as Husband.
{30} The trial court noted that the pаrties had worked as a team throughout their marriage so that they could acquire the marital assets they accumulated and maximize Husband‘s earning capacity. It found that Wife had worked only sparingly during the marriage, focusing on caring for the family and household. It noted Wife‘s testimony that the parties had agreed that they wanted their children raised by them and not by childcare providers. In addition, Husband agreed that the parties had a traditional marriage, that he was the breadwinner while Wife stayed home and took cаre of the home and children. It also found that Husband had reached the peak of his career and earning capacity.
{31} The court in this case characterized the parties as a “team.” It described Wife‘s involvement as a corporate wife who did everything possible to further his career.2 It appears to have been persuaded by the fact that Wife toiled together with Husband when they planted and nursed the seeds of his career, but that he cut her out once the harvest came in. Upоn review of the record, we conclude that, given the length of the parties’ marriage, the disparity in their earning potential, and Wife‘s role in helping Husband advance his career, the trial court did not abuse its discretion when it found that it was equitable for Wife to receive a level of spousal support that will enable her to maintain the same standard of living as Husband. Husband‘s fifth assignment of error is overruled.
III.
{32} The trial court did not violate
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Costs taxed to Appellant.
JENNIFER HENSAL
FOR THE COURT
MOORE, P. J.
BELFANCE, J.
CONCUR.
APPEARANCES:
CHARLES E. GRISI and CHARLES M. BUDDE, Attorneys at Law, for Appellant.
RANDAL A. LOWRY and KENNETH L. GIBSON, Attorneys at Law, for Appellee.