Young v. YoungYoung v. Young
JOSE M. LOPEZ, Atty. Reg. #0019580, and JONATHAN S. ZWEIZIG, Atty. Reg. #0069381, Lopez, Severt & Pratt Co., L.P.A., 18 East Water Street, Troy, Ohio 45373
Attorney for Plaintiff-Appellant
ANDREW H. ELDER, Atty. Reg. #0030235, Elder & Elder, 2233 North Limestone Street, Springfield, Ohio 45503
Attorney for Defendant-Appellee
O P I N I O N
BROGAN, J.
{¶ 1} This is a consolidated appeal from a domestic-relations court’s final decree of divorce. Both parties, Sandra and Randy,1 contend that in the division of marital property the trial court abused its discretion.
{¶ 2} A trial court is accorded broad discretion in its division of marital property.
I
{¶ 3} Marital property is statutorily considered to be owned equally by both spouses. See
First Assignment of Error
{¶ 4} “THE TRIAL COURT ERRED IN FAILING TO RECOGNIZE THE INTERPLAY BETWEEN APPELLANT’S WRIGHT PATT CREDIT UNION ACCOUNTS AND APPELLANT’S 403B ACCOUNT WITH GREEN HEALTH PARTNERS.”
{¶ 5} Sandra contends that the trial court awarded her the same marital property twice. The court valued Sandra’s 403(b) retirement account at $44,371.39, which reflects the value stated on a June 2006 account statement. Sandra testified, however,
{¶ 6} While the value assigned by the court appears to be a simple mistake of double counting, we cannot be certain because the court fails to explain how it arrived at these values.3 “A fair and reasonable valuation,” we have said, is critical to an equitable division of marital property. Rammel v. Rammel (Jan. 20, 1995), Montgomery App. No. 14362. So a trial court’s failure to explain how it arrived at a particular value “in sufficient
Second Assignment of Error
{¶ 7} “THE TRIAL COURT ERRED IN FAILING TO PROPERLY DIVIDE IN THE JUDGMENT ENTRY AND DECREE OF DIVORCE THE 2006 TAX REFUNDS OF THE PARTIES.”
{¶ 8} Sandra contends here that the trial court failed to equitably divide federal and state income tax refunds. Based on their jointly-filed 2006 tax returns, Randy and Sandra were entitled to a combined refund of $3,382. The trial court found that it was fair and equitable to award Randy the entire amount and to give Sandra credit for one-half. Sandra argues that she did not receive the $1,691 of marital property the court intended to award her.
{¶ 9} The court’s use of the word “credit” here is somewhat ambiguous. What the trial court intended, it seems, is to offset Randy’s total marital property award by $1,691. Crunching the numbers, we find that Sandra is correct that the court failed to apply an offset, or “credit.” When a trial court’s division of marital property is contested, “[t]he question on appellate review is whether the trial court‘s division of property,
Third Assignment of Error
{¶ 10} “THE TRIAL COURT ERRED IN FAILING TO PROPERLY ACCOUNT FOR THE TEN SHARES OF STOCK IN NEW CARLISLE DEVELOPMENT CORPORATION AND IN ALLOCATING THE EQUITY FROM THE MARITAL RESIDENCE.”
{¶ 11} Sandra contends that the trial court failed to equitably divide ten shares of corporate stock. The court found that it was fair and equitable to award ten shares of stock, which it valued at $3,020,4 to Randy and “to take into account its [the shares’] value in the property division herein.” August 11, 2008 Final Judgment and Divorce Decree, p. 10. Sandra contends that the court did not take the value of the shares into account. She appears to be correct. It appears that Randy was awarded the entire value of this marital asset while Sandra received nothing. On remand the trial court should correct this error or explain why it is not an inequitable division of the property.
{¶ 12} Sandra contends next that the court mis-allocated the equity she and
{¶ 13} Sandra and Randy granted a mortgage to AMC Mortgage Services in exchange for a loan to purchase the home. On March 1, 2005, they granted a second mortgage to Fifth Third Bank in exchange for a $30,165 debt consolidation loan. Roughly half of this amount, $15,043.61, went to pay off the debt they had incurred to purchase a Subaru Baja (pick-up truck) for Randy. The rest paid off various other unspecified debts and expenses.
{¶ 14} In December 2006, after divorce proceedings had begun, the trial court issued temporary orders granting Sandra exclusive use of the home and making Randy responsible for the monthly payment of both mortgages. It also directed that the residence be sold. The last monthly payment Randy made was in March 2007. Randy admitted that he failed to make a total of nine months of mortgage payments (April - December). In early May 2007, AMC sent Sandra a letter saying that it intended to foreclose if it did not receive payment soon. Sandra, jointly with their son Ryan, consolidated the mortgages into one with the Wright-Patt Credit Union. The payoff was $112,716.81 to AMC and $17,283.39 to Fifth Third Bank. There was also a $4,226.12 payoff to the Clark County Treasurer for delinquent taxes.
{¶ 15} In 2005, Randy, who had dabbled in real estate from many years, invested $7,623 of the parties’ money in a business called HouseValues. The money came from
{¶ 16} “* * *
{¶ 17} “Q. Did you authorize this investment?
{¶ 18} “A. No, I knew nothing about it until much later after the fact I discovered it.” (1/7/2008 Tr. 14).
{¶ 19} Sandra testified that, while she agreed that the first mortgage and the delinquent taxes were joint obligations, she did not believe the same of the second mortgage. She said, “I’m not sure that I believe that second mortgage was a joint obligation because we had the payoff check to pay off that [pickup] that he bought with the second mortgage and instead he used it on a gamble without my knowledge and still I’m stuck with the second mortgage and paying it off. And it’s like for money that was used on a gamble on something that I didn’t agree to or did not know about. I, no, I don’t feel that that was my obligation.” (1/7/2008 Tr. 24). The trial court says in its decree that it agrees with Sandra that the second mortgage obligation should be entirely
{¶ 20} The trial court then explains how it is going to divide the proceeds from the sale of the residence:
{¶ 21} “If this Court were to award the entire net real estate sale proceeds of $38,670.45 to Ms. Young, then the total value of marital assets awarded to her would be $108,344.08.
{¶ 22} “Likewise, the total value of all marital assets awarded to Mr. Young would be $80,499.91. The difference between these two amounts is $27,844.17, one-half of which is $13,922.08. In other words, to exactly equally allocate the assets, thus far, between the parties if this Court were to award all real estate proceeds to Ms. Young, she would thereafter owe Mr. Young the sum of $13,922.08, however, because Mr. Young should have been responsible, in this Court’s opinion, for the payoff of the second mortgage with Fifth Third Bank which was refinanced in August of 2007 for $17,283.39, for the reasons set forth hereinbefore, this Court finds that it is both fair and equitable to award the entire net real estate sale proceeds to Ms. Young and not require any additional distributive award between either of the parties in order to achieve equity in this matter.” August 11, 2008, Judgment Entry and Decree of Divorce, p. 13-14.
{¶ 23} Sandra contends that, because the court found that Randy should have been solely responsible for paying off the second mortgage, it also should have found that she was entitled to a credit of $17,283.39 (the balance at pay off). Instead, the trial court awarded her, she claims, what is in essence, a credit of only $13,922.08. As a
{¶ 24} The second mortgage is not marital property. “Marital property” means all real and personal property that “currently is owned by either or both spouses,” and all interest in real and personal property that “either or both of the spouses currently has.”
{¶ 25} Accordingly, the property at issue in this section of the decree is the proceeds from the sale of the residence, which may be described loosely as the home’s “equity.” After paying off the mortgage, and the settlement expenses, there remained $38,670.45. Neither party disputes that these proceeds, or equity, are marital property. Thus, Sandra and Randy are each entitled to one-half of the proceeds unless equitable considerations demand otherwise.
{¶ 26} The court discusses the second mortgage precisely to explain why equitable considerations favor an unequal division. When dividing marital property, a
Fourth Assignment of Error
{¶ 27} “THE TRIAL COURT ERRED IN FAILING TO PROPERLY ALLOCATE APPELLANT’S ENTITLEMENT TO APPELLEE’S OP&F RETIREMENT BENEFITS.”
{¶ 28} The trial court awarded Sandra one-half of the retirement benefits Randy receives from the Ohio Police & Fire Pension Fund (OPFPF). Randy, however, is currently eligible to receive disability benefits from the OPFPF, having suffered an on-the-job injury in April 2007 that forced him to resign the same month from the Springfield Fire Department. Randy testified that the OPFPF had approved maximum partial disability benefits of $2,674 per month, which he was to begin receiving soon. It is not clear from the evidence in the record whether, provided Randy remains “disabled,” the disability benefits will end this side of his grave. Sandra says that if she must wait until Randy actually receives retirement benefits, she may never get her marital share. As
{¶ 29} The trial court correctly recognized that disability benefits are separate property, not subject to division. The court cites our decisions in Bauser v. Bauser (1997), 118 Ohio App.3d 31, and Criswell v. Criswell (Sept. 29, 2000), Montgomery App. Nos. 18101, 18111, for the proposition that, to be entitled to the marital portion of retirement benefits in this situation, the non-participant spouse has the burden to prove that the disability benefits are being received in lieu of retirement benefits or that the retirement benefits the participant spouse would otherwise be entitled to receive are being reduced by the receipt of disability benefits. The court found that Sandra had failed to meet this burden of proof.
{¶ 30} The trial court correctly states the law, but it needed to go one step further in its analysis.
{¶ 31} While retirement benefits earned during the marriage generally are divisible as marital property, disability benefits are not.
{¶ 32} Having accumulated 24 years 11 months and 2 days of service, Randy is entitled to receive an OPFPF service-commuted retirement pension. The marital portion of his pension has a stipulated present-value of $387,744.72, or $1,636.48 per month. According to the OPFPF documents in the record, it appears that a member can begin receiving retirement benefits from a service-commuted pension at 48 years of age or when 25 years have elapsed from the day the member was initially hired, whichever comes last. When he resigned in April 2007, Randy (born in 1953) was over 50 years of age, and it was less than one month shy of 25 years since he began his service. Hence, it appears that Randy was eligible to begin receiving retirement benefits already in May 2007.
{¶ 33} The situation here is similar to that in Mueller v. Mueller, Montgomery App. No. 20847, 2005-Ohio-5915. There, the final divorce decree stated that a former wife was entitled to receive her marital share of her former husband’s Public Employee Retirement System (PERS) retirement benefits when the latter received them. Sometime after the divorce, the former wife argued to a magistrate that her former husband had retired but refused to provide her with her share of the retirement benefits.
{¶ 34} On remand the trial court should determine the date on which Randy was eligible for retirement benefits and then fashion an appropriate order directing him to begin making payments to Sandra of her marital share. The fourth assignment of error is sustained.
II
{¶ 35} We now turn to Randy’s two assignments of error.
First Assignment of Error
{¶ 36} “THE TRIAL COURT ERRED IN CHARACTERIZING THE PARTIES’ SECOND MORTGAGE AS APPELLEE’S SOLE OBLIGATION.”
{¶ 37} Randy’s arguments here are premised on the idea that the second mortgage was allocated by the trial court as marital property. This, he contends, the
Second Assignment of Error
{¶ 38} “THE TRIAL COURT ERRED IN FAILING TO CONSIDER PLAINTIFF/ APPELLANT’S SOCIAL SECURITY BENEFITS AS AN OFFSET IN THE PROPERTY DIVISION.”
{¶ 39} Randy contends that the trial court’s failure to consider an offset based on Sandra’s Social Security retirement benefits is an abuse of discretion. The idea of an offset was raised in the parties’ testimony and in the joint expert-valuation reports submitted to the trial court, in which the parties stipulated that the present value of the marital portion of Sandra’s Social Security retirement benefit is $161,810.21, while Randy’s is only $10,105.85. Yet the court never mentions these benefits in the divorce decree.
{¶ 40} To help ensure an equitable division, we have said, “the domestic relations court should consider the parties’ Social Security benefits in relation to other retirement accounts that are divided.” Hardy v. Hardy, Montgomery App. No. 20865, 2005-Ohio-5528, at ¶13. The failure to consider Social Security retirement benefits as an offset to
III
{¶ 41} Sandra’s first, second, and fourth assignments of error are sustained, and her third assignment of error is sustained in part and overruled in part. Randy’s first assignment of error is overruled, but his second assignment of error is sustained. The trial court’s judgment is Affirmed in part, Reversed in part, and Remanded for further proceedings.
FAIN and FROELICH, JJ., concur.
Copies mailed to:
Jose M. Lopez
Jonathan S. Zweizig
Andrew H. Elder