T. A., Plaintiff, v. R. A., Defendant-Appellee, [Appeal by Q.A., Et al., Third-Party Defendants-Appellants.]
No. 107166
COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
August 8, 2019
2019-Ohio-3179
Civil Appeal from the Cuyahoga County Court of Common Pleas Domestic Relations Division Case No. DR-15-355865
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: August 8, 2019
Appearances:
Raslan & Pla, L.L.C., Jorge Luis Pla, Lila D. Raslan, and Nadia Zaiem, for appellee.
Dinn, Hochman & Potter, L.L.C., and Edgar H. Boles, for appellants.
EILEEN T. GALLAGHER, P.J.:
{¶ 1} Third-party defendants-appellants, Q.A. (“appellant“) and two corporations, Pearl Road, Inc. (“Pearl Road“) and 871 Rocky River Drive, Inc.
I. Factual and Procedural History
{¶ 2} On February 18, 2015, husband filed a complaint for divorce against wife in the Cuyahoga County Court of Common Pleas, Domestic Relations Division. See Allan v. Allan, 8th Dist. Cuyahoga No. 107142, 2019-Ohio-2111. On that same day, the trial court issued a mutual restraining order against both husband and wife. Husband filed an ex parte restraining order against wife in regard to the contents within husband‘s personal safety deposit box.
{¶ 3} On June 19, 2015, wife filed an answer, counterclaim for divorce, and cross-claims against aрpellant. In the divorce action, wife joined appellant, husband‘s brother, and two Sunoco gas stations that husband and appellant jointly owned and operated. Wife asserted that the two gas stations were marital property. The gas stations were located at 871 Rocky River Drive, Berea, Ohio and 7606 Pearl Road, Middleburg Heights, Ohio. Wife also joined Tallan, L.L.C., husband‘s corporation, and various financial institutions in the cross-claims. The cross-claims
{¶ 4} Pearl Road was purchased by wife with two other partners in November 1996. The parties purchased the gas station but did not purchase the land on which the gas station sat. Allan at ¶ 12. In June 1997, wife became the sole owner of the Pearl Road gas station. Husband and wife were married on October 17, 2002. In 2001, husband entered into а purchase agreement with wife to purchase 51 percent of the stock in 7606 Pearl Road. In the divorce action, wife claims that in May 2002, prior to the couple‘s marriage, husband coerced her into transferring the remaining 49 percent in the Pearl Road gas station to him and not compensating her for the transfer.
{¶ 5} Sometime in 2004, husband purchased 871 Rocky River Drive. This purchase included the property, equipment, and the building. Id. at ¶ 16. On May 21, 2004, husbаnd organized Tallan, L.L.C. He is the sole member of Tallan, L.L.C. On June 17, 2004, husband incorporated 871 Rocky River Drive, and in October 2004, Sunoco, Inc. conveyed the real property to Tallan, L.L.C. The purchase price was $385,000. On October 25, 2004, Tallan, L.L.C., entered into a term note with Charter One Bank for $269,500 and an open-end mortgage was recorded for the same amount. The difference of $120,000 was contributed by husband and wife, through a mortgage on the parties’ marital home.
{¶ 6} According to husband, he operated the gas stations with appellant. Sometime in 2009, husband renovated 871 Rocky River Drive. However, he and
{¶ 7} The sale of 871 Rocky River Drive was completed through two transactions. Sometime between October 2010 and March 2011, husband sold appellant 49 percent of the stock in 871 Rocky River Drive. Both appellant and husband testified that appellant paid husband $10,000 and assumed the $330,580 debt to the construction company for the renovation work. On September 14, 2012, husband sold the remaining 51 percent of the stock to appellant for $57,000.
{¶ 8} On November 22, 2013, husband also sold Pearl Road to appellant for $150,000, which husband had originally purchased for $250,000.
{¶ 9} In May 2014, Charter One Bank wrote a letter to Tallan, L.L.C., stating that the commercial loan for the original purchase of 871 Rocky River Drive could not be extended past the maturity date of October 25, 2014, and $181,088 was owed on the note. Husband testified that he asked appellant for assistance with payment on the note. Husband and appellant apparently entered intо an agreement in which appellant was to pay the remaining balance of $181,088, and in an effort to repay appellant, husband would grant a mortgage in that amount on the marital home.
{¶ 10} On February 4, 2015, husband granted appellant a mortgage on the marital home for $181,088. On that same day, husband, through Tallan, L.L.C., also granted appellant a second mortgage on 871 Rocky River Drive in the amount of
{¶ 11} Once joined in the divorce action, appellant filed a complaint in Cuyahoga C.P. No. CV-15-847754 against husband for failure to pay $188,0881 to appellant. Wife intervened in that matter and filed a stay, pending the outcome of the divorce proceedings between husband and wife. The trial court dismissed appellant‘s complaint without prejudice in May 2018.
{¶ 12} On October 23, 2015, аppellant filed a motion to dismiss wife‘s amended counterclaim and cross-claims. The trial court denied the motion to dismiss on November 19, 2015.
{¶ 13} Thereafter, on November 24, 2015, appellant filed a writ of prohibition to this court and an application for an alternative writ. Allan v. Palos, 8th Dist. Cuyahoga No. 103815, 2016-Ohio-3073. Appellant argued that the trial court lacked subject matter jurisdiction over wife‘s cross-claims against appellant. On December 10, 2015, this court denied appellant‘s application for an alternative writ and dismissed appellant‘s complaint for a writ of prohibition. This court ruled that the trial court possessed general subject matter jurisdiction, and therefore, “prohibition is not available to prevent or correct any erroneous judgment, nor is prohibition available as a remedy for an abuse of discretion or as a remedy in order to prevent an anticipated erroneous judgment.” Id. at ¶ 12. In addition, it was noted that
{¶ 14} On remand, in June 2016, appellant filed an answer, counterclaims, and cross-claims against wife. On July 28, 2016, appellant filed a timely motion to dismiss wife‘s claims, followed by a motion for summary judgment in May 2017. On June 20, 2017, the trial court issued a judgment entry granting appellant‘s motion to dismiss and motion for summary judgment, thereby disposing of all of wife‘s cross-claims against appellant and all other joined parties.
{¶ 15} Subsequently, the divorce action between husband and wife proceeded to trial. On April 20, 2018, the trial court issued a judgment entry for divorce. Of significance to appellant‘s instant appeal, the trial court determined Pearl Road and 871 Rocky River corporations to be marital property. The court further ordered appellant to release the mortgages on both the properties, and ordered husband to pay $181,088 to wife in the event appellant‘s mortgages were not released. The trial court also ordered appellant to remain in the action pursuant to
I. The trial court exceeded its subject-matter jurisdiction and thus erred in its [April 20, 2018 judgment entry] when it ordered “that [appellant] shall release the mortgages on [the marital home] and 871 Rocky River Drive, [Berea] Ohio.”
II. The trial court exceeded its subject-matter jurisdiction and thus erred in its [April 20, 2018 judgment entry] when it ordered “that until all of the above orders are complied with all parties shall remain in this action,” which included [appellant], Pearl Road, Inc.[,] and 871 Rocky River Drive, Inc.
II. Law and Analysis
A. Subject Matter Jurisdiction
{¶ 16} In appellant‘s first assignment of error, he аrgues that the trial court lacked subject matter jurisdiction to enter judgment against him, i.e., ordering him to release the mortgages on the marital home and 871 Rocky River Drive.
{¶ 17} We review “issues relating to subject matter jurisdiction de novo, as such a determination is a matter of law.” In re E.G., 8th Dist. Cuyahoga No. 98652, 2013-Ohio-495, ¶ 9, citing In re K.R.J., 12th Dist. Clermont No. CA2010-01-012, 2010-Ohio-3953, ¶ 16.
{¶ 18} In divorce proceedings,
{¶ 19} As such, the trial court had jurisdiction to find the $181,088 husband mortgaged to appellant was exclusively husband‘s debt. Specifically, the trial court stated that the funds used to pay the “debt were proceeds from thе businesses, which were the guarantors of the debt, and means that any debt in this case created by [husband] is at best questionable and should not be included in any division of property.” April 20, 2018 Judgment Entry at 17. The trial court also found that husband‘s various actions, including his mortgaging the marital home and 871 Rocky River Drive constituted financial misconduct. The trial court then ordered that appellant “shall release the mortgages” on the marital home and 871 Rocky River Drive.
B. Order Releasing the Mortgages
{¶ 20} Appellant argues that once the trial court dismissed wife‘s cross-claims against appellant, it thereafter had no jurisdiction to enter judgment against appellant. In particular, wife‘s cross-claim against appellant sought a declaratory judgment seeking a rescission of the mortgages by husband to appellant. For these reasons, appellant argues that the trial court‘s order mandating that he release the mortgages is a collateral matter to the divorce, and as such, the trial court lacked jurisdiction to enter judgment against him.
{¶ 22} Notably, “[t]he trial court stated that in order to properly consider [the husband‘s corporation] as a marital asset, the transaction between [the husband] and his [m]other must be vacated.” Id. at ¶ 6. The trial court then found thе transaction from the husband to his mother to be a “sham transaction” and the trial court vacated the transaction as part of the divorce decree. The trial court also found the mother‘s corporation to be a marital asset and ordered mother to transfer the corporation to the wife.
{¶ 23} The Fifth District found that “the trial court had jurisdiction to determine which assets comprised the marital estate becаuse that determination is primarily a domestic relations matter.” Id. at ¶ 21. Once the trial court found evidence that the husband engaged in financial misconduct by disposing of the business via a sale to his mother, it could have either awarded a distributive award or a greater award of marital property pursuant to
{¶ 24} In the instant matter, appellant argues that we should follow the Shalash decision and find that the trial court should have only ordered a distributive award to wife, from husband, of $181,088. As such, appellant appears to argue that the trial court‘s order releasing the mortgages on the marital home and 871 Rocky River Drive equates to the order in Shalash that vacates the sale of the business from the mother. We do not agree.
{¶ 25} First, the trial court‘s order releasing the mortgages is not an order vacating the actual transaction between appellant and husband. Such an order by the trial court would be an improper exercise of its jurisdiction over a third-party defendant pursuant to
{¶ 27} The trial court noted that the new wife may have colluded with the husband to conceal his income for purposes of the calculation of the support order. The trial court ordered funds in the new wife‘s account to be released to the ex-wife. Thе trial court reasoned that the funds belonged to the husband and the new wife had held the funds in a constructive trust. Id. at ¶ 16. The new wife argued that the funds were revenue from her business, PSS, Inc., which had not been joined as a party.
{¶ 28} On appeal, the new wife and husband argued that the trial court lacked jurisdiction over her and the order releasing funds to the ex-wife was void ab initio. They further argued that the funds within the new wife‘s bank account belonged to her business. They also argued that the trial court had no authority to order the funds released to the ex-wife absent a motion on either of their behalf specifically invoking the trial court‘s jurisdiction on the issue.
{¶ 30} In the instant matter, wife alleged that husband engaged in financial misconduct in an effort to defeat her interests in the marital property. Wife argued that husband sold his interest in 871 Rocky River Drive and Pearl Road to appellant and concеaled material facts concerning the sale; conspired to create the sale of both gas stations in order to convert and misappropriate marital property; made representations to wife regarding business operations that were false in order to convert and misappropriate the assets and income; and conspired to defeat wife‘s interest in the marital property. As a result of this financial misconduct, wife sought a greater share of the remaining marital assets based upon the concealment of marital assets or the improper transfer of marital property from husband to appellant.
{¶ 31} The trial court, in an effort to compensate wife for husband‘s financial misconduct, awarded wife husband‘s interest in the marital home and 871 Rocky River Drive. The trial court further ordered that “any debt owed by husband to appellant, including the mortgage on 871 Rocky River Drive and the marital home,
{¶ 32}
If a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property.
Additionally, “[a] trial court has broad discretion to make a distributive award to a spouse, pursuant to
{¶ 33} As such, the trial court in the instant matter was well within its authority to compensate wife for husband‘s financial misconduct, and thereafter, award wife a greater award of marital property.
{¶ 34} Furthermore,
{¶ 35} Applying Glassman, 8th Dist. Cuyahoga Nos. 85838, 85863, and 87175, 2006-Ohio-3837, to the instant matter, the trial court granted the mutual restraining order, and thus, its jurisdiction over appellant was invoked. Therefore, we cannot find that the trial court did more than perform an authorized apportionment of marital property. Moreover, by finding that the marital home and 871 Rocky River Drive were marital property, and not appellant‘s property, the proper disposition was to order appellant to release the mortgages appellant held on the properties to satisfy wife‘s award of greater marital property. Glassman, 8th Dist. Cuyahoga Nos. 85838, 85863 and 87175, 2006-Ohio-3837, at ¶ 35.
{¶ 36} Accordingly, appellant‘s first assignment of error is overruled.
C. Order Requiring Appellant Remain in the Action
{¶ 37} In appellant‘s second assignment of error, appellant argues that because the trial court lacked subject matter jurisdiction to enter judgment against him, the trial court therefore lacked subject matter jurisdiction to order “until all of the above orders are complied with all parties shall remаin in this action.”
{¶ 39}
A person or corporation having possession of, control of, or claiming an interest in property, whether real, personal, or mixed, out of which a party seeks a division of marital property, a distributive award, or an award of spousal support or other support, may be made a party defendant [.]
{¶ 40} First, we note that appellant fails to develop any argument nor does he cite to any authority as required by
{¶ 41} Accordingly, appellant‘s second assignment of error is overruled.
III. Conclusion
{¶ 42} The trial court had jurisdictiоn to order appellant to release the mortgages on the marital home and 871 Rocky River Drive. The trial court determined these properties were marital property, and therefore was able to award and distribute the property accordingly. Pursuant to
{¶ 43} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court 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.
EILEEN T. GALLAGHER, PRESIDING JUDGE
MARY J. BOYLE, J., and
ANITA LASTER MAYS, J., CONCUR