Nelson v. Nelson , 2022 Ohio 658 ( 2022 )


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  • [Cite as Nelson v. Nelson, 
    2022-Ohio-658
    .]
    IN THE COURT OF APPEALS OF OHIO
    ELEVENTH APPELLATE DISTRICT
    LAKE COUNTY
    WILLIAM DAVID NELSON, SR.,                        CASE NO. 2021-L-037
    Plaintiff-Appellant,
    Civil Appeal from the
    -v-                                       Court of Common Pleas,
    Domestic Relations Division
    LISA DIMBERIO NELSON, et al.,
    Defendant-Appellee.              Trial Court No. 2015 DR 000030
    OPINION
    Decided: March 7, 2022
    Judgment: Affirmed
    Ashley Cooper Kirk, Thrasher, Dinsmore & Dolan, 100 Seventh Avenue, Suite 150,
    Chardon, Ohio 44024 and Kevin Randall McMillan, McMillan & Sobel, LLC, 30195
    Chagrin Boulevard, Suite 300, Pepper Pike, Ohio 44124 (for Plaintiff-Appellant).
    Sandra A. Dray, Sandra A. Dray Co., L.P.A., 1111 Mentor Avenue, Painesville, Ohio
    44077 (for Defendant-Appellee).
    JOHN J. EKLUND, J.
    {¶1}    William Nelson (“appellant”) appeals from the Judgment Entry of Divorce of
    the Lake County Common Pleas Court, Domestic Relations Division. Appellant raises
    seven assignments of error relating to the trial court’s calculation of the parties’ income,
    the duration of spousal support, the tax consequences of spousal support, the division of
    property, and the denial of a new hearing. Finding no reversable error, we affirm.
    {¶2}    Appellant and Lisa Nelson (“appellee”) were married in November
    1997.Appellant filed for divorce in the Lake County Domestic Relations Court in January
    2015. Appellant was self-employed as a dentist in Lake County and both appellant and
    appellee owned multiple business ventures making this divorce complex and litigious.
    The trial and hearings the court held on post-trial motions for divorce took place over
    October 13, 2016; October 14, 2016; October 27, 2016; December 16, 2016; December
    22, 2016; January 6, 2017; July 20, 2017; August 24, 2017; and November 6, 2017. The
    trial remained open pending the resolution of certain post-trial motions until the court held
    a final hearing on May 10, 2019, at which time the parties dismissed their post-trial
    pleadings, effective upon the court’s judgment entry of June 18, 2019.
    {¶3}   Thereafter, the magistrate issued a 59-page decision on September 14,
    2019. The decision listed each factor in R.C. 3105.18(C)(1) and discussed the court’s
    consideration of these factors while also referencing and incorporating relevant factual
    discussion into the decision. Appellant filed objections to the decision and the court
    granted leave until January 6, 2020, to supplement the objections and file the transcript
    of proceedings. Appellant timely filed his supplemented objections. Appellee requested
    leave to file her response; thereafter, appellee filed a timely response on February 13,
    2020. On October 6, 2020, the trial court issued an eight-page Judgment Entry adopting
    in part and modifying in part the Magistrate’s September 14, 2019, decision. Appellant
    prematurely appealed and the case was dismissed by this court for lack of jurisdiction.
    On February 17, 2021, the trial court issued its Judgment Entry of Divorce and appellant
    timely filed the instant appeal.
    Assignments of error and analysis:
    {¶4}   Appellant’s seven assignments of error are reviewed under an abuse of
    discretion standard. “The term ‘abuse of discretion’ is one of art, connoting judgment
    exercised by a court which neither comports with reason, nor the record.” State v.
    2
    Case No. 2021-L-037
    Underwood, 11th Dist. Lake No. 2008-L-113, 
    2009-Ohio-208
     [
    2009 WL 1177050
    ], ¶ 30,
    citing State v. Ferranto, 
    112 Ohio St. 667
    , 676-678 [
    148 N.E. 362
    ] (1925).” State v. Raia,
    11th Dist. Portage No. 2013-P-0020, 
    2014-Ohio-2707
    , 
    2014 WL 2881994
    , ¶ 9. Stated
    differently, an abuse of discretion is “the trial court’s ‘failure to exercise sound,
    reasonable, and legal decision-making.’” 
    Id.,
     quoting State v. Beechler, 2d Dist. Clark No.
    09-CA-54, 
    2010-Ohio-1900
    , 
    2010 WL 1731784
    , ¶ 62, quoting Black’s Law Dictionary 11
    (8th Ed.Rev.2004). “When an appellate court is reviewing a pure issue of law, ‘the mere
    fact that the reviewing court would decide the issue differently is enough to find error[.] *
    * * By contrast, where the issue on review has been confined to the discretion of the trial
    court, the mere fact that the reviewing court would have reached a different result is not
    enough, without more, to find error.’” 
    Id.,
     quoting Beechler at ¶ 67.
    {¶5}   The record in this matter is voluminous, including nine days of trial
    transcripts, while the magistrate’s decision and trial court’s review, amendments, and
    adoption of that decision are comprehensive. Under an abuse of discretion standard, this
    court reviews the facts in the record to determine whether the trial court exercised sound,
    reasonable, and legal decision-making. Appellant has not asserted any assignment of
    error that suggests that the trial court made an error of a pure issue of law, and we review
    his assignments accordingly. Therefore, this court will not disturb the discretion of the trial
    court if its findings are supported by the record.
    Spousal Support
    {¶6}   A trial court has broad discretion to decide what award of spousal support
    is equitable based upon the facts and circumstances of each case. Kunkle v. Kunkle, 
    51 Ohio St.3d 64
    , 67, 
    554 N.E.2d 83
     (1990). When determining spousal support, the trial
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    Case No. 2021-L-037
    court must provide sufficient detail for the basis of the award to allow adequate appellate
    review. Kaechele v. Kaechele, 
    35 Ohio St.3d 93
    , 96-97, 
    518 N.E.2d 1197
     (1988). To
    satisfy the Kaechele standard, a trial court must provide some factual support for the
    award rather than simply stating it considered the factors listed in R.C. 3105.18(C)(1).
    Call v. Call, 11th Dist. Portage No. 99-P-0004, 
    2000 WL 522458
    , * 3. In rendering its
    decision, the trial court is in the best position to observe the witnesses, which “cannot be
    conveyed to a reviewing court by a printed record.” Miller v. Miller, 
    37 Ohio St.3d 71
    , 74
    (1988). Moreover, we are “guided by the presumption that the trial court's findings were
    indeed correct.” 
    Id.
    {¶7}   Appellant’s first and second assignments of error are addressed together.
    The first and second assignments state:
    {¶8}   “[1.] The Trial Court committed prejudicial error in determining Plaintiff-
    Appellant’s income for support purposes where it arbitrarily added tax to Plaintiff’s pre-
    tax income, and where it failed to use income averaging to calculate income for spousal
    support purposes.”
    {¶9}   “[2.] The Trial Court committed prejudicial error in its determination of
    Defendant-Appellee’s income for spousal support purposes where it failed to include
    Defendant’s multiple income sources and relied on her self-serving testimony to use an
    income year presenting significantly lower salary than all other available years.”
    {¶10} Appellant claims that the trial court erred in the following ways: first, by
    overcalculating his 2015 gross income by $60,000; second, by arbitrarily using a single
    income year rather than income averaging; third, failing to include certain income sources
    4
    Case No. 2021-L-037
    for appellee when calculating her income; and fourth, improperly weighing appellee’s
    testimony as to her loss in earnings. We will take each of these arguments in turn.
    {¶11} The trial court did not err in calculating appellant’s gross income:
    Appellant argues that the trial court incorrectly included $60,000 that he paid in federal
    taxes in appellant’s pre-tax income. Appellant’s business paid his 2015 estimated income
    tax directly to the IRS. Line 65 of appellant’s 2015 income tax return indicates that
    appellant listed $60,000 as estimated tax payments. Schedule C of the 2015 tax return
    shows the profit and loss of appellant’s business as $191,868, which is the same number
    reported on line 12 of his individual return for business income. The question at issue
    here, then, is whether the $60,000 tax payment was already included on line 12 of
    appellant’s tax return.
    {¶12} We start by noting that the $60,000 figure was not specifically delineated in
    the net profits listed for his business in Schedule C, nor was it specifically delineated in
    the total income reported on line 22 of his 2015 individual tax return. At trial, when asked
    how he paid the income tax payment, appellant testified that the $60,000 came from his
    business accounts and that a check was written directly from the business to the IRS. He
    further clarified that he did not pay the money back to the business and that he considered
    the payment on his behalf a distribution. When asked if this would be considered income
    to him, his trial counsel objected. Further testimony at a later hearing date again
    addressed this issue with appellee’s counsel asking appellant where his taxes show the
    $60,000 came out of his businesses net profits. His response was “I can’t, but that’s what
    happened.” The matter was left for the magistrate to decide whether to impute this sum
    5
    Case No. 2021-L-037
    in addition to the figure listed on appellant’s tax return under his gross income and there
    was no further testimony on the matter.
    {¶13} The trial court adopted the magistrate’s decision to impute the $60,000 as
    additional income to appellant. In so doing, the court observed that appellant testified that
    he did not do his own income taxes and instead gave his accountant the information
    needed to complete his taxes. The court wrote that appellant “could have called his
    accountant as a witness. He did not do so at his peril.” The trial court cited In re Sullivan,
    
    167 Ohio App.3d 458
    , 
    2006-Ohio-3206
    , 
    855 N.E.2d 554
     (11th Dist.), where this court
    stated that “[i]t is not the duty of the trial court to ferret out those expenses that qualify as
    ordinary and necessary. Rather, it is the duty of the obligor to assert that certain items
    are exempt from inclusion as gross income * * *.” Id. at ¶ 25.
    {¶14} The Dissent suggests that appellant’s 2015 income tax filings speak for
    themselves, noting that he signed the filings under penalty of perjury and that the
    document itself provides clear evidence of a party’s income. See Freeland v. Freeland,
    4th Dist. Jackson No. 02CA18, 
    2003-Ohio-5272
    , ¶ 16. Although the record is clear that
    appellant listed $60,000 on line 65 of his 2015 tax filing, what is not clear is whether that
    amount was included on the figure reported as part of the business’ net profit in Schedule
    C to appellant’s 2015 tax return, or as total income. Appellant’s own merit brief notes that
    his tax return “does not break down the reported income to show whether or not such
    draws were included * * *.” (Emphasis added). The documents do not speak for
    themselves in this case.
    {¶15}    The parties do not disagree that the sum should be counted as income.
    Appellant argues that the mere listing of the $60,000 on line 65 of his 2015 individual tax
    6
    Case No. 2021-L-037
    return as estimated taxes paid in 2015 proves that the $60,000 was already included in
    his reported total income of $193,254 and that the trial court double counted the $60,000.
    At oral argument, appellant asserted that Schedule C for his 2015 tax return would
    support his claim, in that the $60,000 is not listed there as an itemized expense. However,
    in reviewing the tax return in evidence, we find that there is no demonstrative proof that
    the $60,000 was separately listed and distributed for appellant’s 2015 estimated tax
    payment.
    {¶16} Appellant argues that there is not a $60,000 itemized expense on Schedule
    C, and that it was included in the total income on his return. But there is a void in the
    evidence that appellant himself created. The $60,000 might be included in the total
    income figure reported on his taxes as he claims – or it might not be reported. There is
    no way to know from the evidence available. Appellant would have us, and the lower
    court, presume of the $60,000, like a jar of Prego sauce, that “It’s in there.” This we cannot
    do.
    {¶17} The Dissent also grants far more credibility to appellant’s testimony than the
    trial court, which characterized appellant’s testimony as unreliable by saying he “could
    recollect almost nothing about the preparation of his federal tax returns with relevant
    schedules.” He, himself, emphasized his own ignorance of his taxes by saying “I don’t do
    my tax returns for exactly this reason. I just give my accountant the information and she
    does the taxes.” Despite this, he failed to call Elizabeth Tilton the Certified Public
    Accountant who prepared his tax returns. It is telling that in his brief, appellant states that
    his tax return “does not break down the reported income to show whether or not such
    draws were included * * *.” (Emphasis added). This statement only reinforces the trial
    7
    Case No. 2021-L-037
    court’s observation that appellant could have called his accountant as a witness to clarify
    this portion of the record and failed to do so at his peril. Under an abuse of discretion
    standard, we cannot find that the trial court did not use sound, reasonable, decision
    making and the mere fact that Dissent would reach a different result is not enough to
    justify overturning the lower court’s decision.
    {¶18} On the record before the court, we do not conclude that the trial court
    abused its discretion by imputing that distribution to appellant’s gross income. The trial
    court was in the best position to weigh the evidence and appellant’s testimony to
    determine the facts based upon the record. As the trial court observed, appellant had an
    opportunity to “assert that” the $60,000 was “exempt from inclusion as gross income” and
    chose not to present evidence demonstrative of that fact. See Id. at ¶ 25.
    {¶19} The trial court used its authority to decide whether to use income
    averaging: Next, appellant argues that the trial court abused its discretion by relying on
    a single year of income rather than income averaging to determine the parties’ income.
    Appellant states that the magistrate discussed the possibility of using income averaging
    to determine income but ultimately relied upon a single year of income. This court has
    held that the “decision regarding when the use of an averaging method is appropriate is
    left to the sound discretion of the trial court because it is in the best position to weigh the
    facts and circumstances.” In re Sullivan, at ¶ 29, citing Cook v. Cook, 11th Dist. Lake No.
    95-L-115, 
    1996 WL 200573
     and Worch v. Worch, 2d Dist. Darke No. 1502, 
    2000 WL 376643
    .
    {¶20} In this case, the trial court referenced and relied upon the parties’ prior
    income years as part of its analysis for determining spousal support. The court stated that
    8
    Case No. 2021-L-037
    appellant had income that “was increasing and demonstrates significantly more earnings
    in 2012 and 2013 than in 2014 and 2015. However, for the purposes of determining
    income, the plaintiff’s 2015 income tax return should be the base, starting point * * *.” In
    reference to appellee’s income, the trial court modified the magistrate’s decision to modify
    appellee’s income upward slightly. However, the court also relied upon testimony from
    appellee that her business had been affected by the passage of the Affordable Care Act
    and that certain provisions went into effect in 2014 which lowered her profits substantially.
    The court found this testimony to be credible and relied upon it to determine appellee’s
    income.
    {¶21} These remarks indicate that the trial court had the necessary information to
    use income averaging and made a specific decision to not use it. The trial court was in
    the best position to weigh the facts and circumstances and we will not disturb that decision
    here when the record demonstrates that the court weighed the appropriateness of income
    averaging and specifically chose not to use it.
    {¶22} The trial court appropriately considered all of appellee’s income
    sources: Although appellant lists several potential sources of income that the trial court
    could have considered in calculating appellee’s income, we do not find that the trial court
    erred in excluding these sources such as appellee’s inheritance, retained business
    earnings, and cash draws from her businesses. The court addressed these specific items,
    weighed the evidence, and determined in each instance that they should not be counted
    as income to the appellee.
    {¶23} In reference to the inheritance, the court declined to impute this as income
    to appellee because she had used significant inheritance monies to improve the marital
    9
    Case No. 2021-L-037
    estate, which appellant received in the distribution of assets. Further, appellee had used
    portions of her inheritance to maintain the status quo both during and after the marriage.
    On this basis, the court declined to include the inheritance as income.
    {¶24} In reference to cash draws from appellee’s businesses, the court did not
    include certain draws as income because appellee’s unrebutted trial testimony reflected
    that she used these draws to pay independent contractors commissions that they were
    owed for business related services. The magistrate found that appellee’s “testimony as
    to commissions paid to independent contractors was highly credible.” In the absence of
    countervailing facts to suggest that the trial court erred, we are “guided by the
    presumption that the trial court’s findings were indeed correct.” Miller, supra, at 74.
    {¶25} In reference to the retained business earnings, the court, again, noted that
    appellee had to use these earnings to keep the financial boat afloat during the pendency
    of the divorce. The trial court’s final judgment entry did make minor modifications on the
    basis that the court found that appellee used $4,352 of business funds for her personal
    expenses rather than business expenses. However, in reference to other payments, the
    court said there was “no evidence to link those payments from the LLC to the personal
    expenses of the Defendant.” Where, as here, the trial court provides specific facts and
    reasoning for its decisions in calculating spousal support, the reviewing court will not find
    error.
    {¶26} The trial court was in the best position to weigh trial testimony:
    Appellant argues that the trial court improperly weighed the trial testimony by relying upon
    appellee’s “self-serving” testimony that provisions of the Affordable Care Act had
    significantly reduced her income. However, the trial court is in the best position to weigh
    10
    Case No. 2021-L-037
    testimony and we presume that the trial court’s findings are correct. Appellee testified that
    her income had been negatively impacted by the Affordable Care Act. She said that
    various provisions of the law went into effect in 2014 which reduced the commissions that
    appellee earned from the sale of health insurance policies. For instance, she said that
    commissions she previously earned ranged from 10-14% per policy prior to the changes
    and that after the changes, the commissions dropped to 4-5% per policy. Appellee
    testified that in the second year after the sale of a health insurance policy, a commission
    for a family of five dropped from $150 to $35. This testimony was unrebutted, and the trial
    court did not err in finding it credible and relying upon it.
    {¶27} Accordingly, Appellant’s first and second assignments of error are without
    merit.
    {¶28} Appellant’s third assignment of error states:
    {¶29} “[3.] The Trial Court committed prejudicial error in determining the duration
    of the term of spousal support when it sustained Plaintiff’s objection to the length of the
    term, but added an additional thirty months without explanation.”
    {¶30} The trial court properly modified the duration of spousal support:
    Although appellant argues that the trial court added an additional thirty months to his term
    of spousal support without explanation, the record does not reflect this. The magistrate’s
    decision ordered a 72-month support term retroactive to January 1, 2016, to December
    31, 2021. The trial court modified this order saying that appellant’s “objection as to
    duration is well taken” and in sustaining that objection ordered appellant to pay spousal
    support for a term of 54 months retroactive to January 1, 2020, to June 30, 2024.
    11
    Case No. 2021-L-037
    {¶31} The trial court’s Judgment Entry specifically discussed the magistrate’s
    decision to order a 72-month spousal support term retroactive to January 1, 2016, with
    the amount $5,000 per month retroactive to January 1, 2016. The court also noted that
    the temporary spousal support order effective March 4, 2015, was only $2,585 per month.
    The court said that a “temporary spousal and/or child support order is to keep the financial
    status quo of the parties pending trial. The transcript shows the Defendant used some of
    her inheritance to pay bills during the pending divorce.” Therefore, the court’s modification
    of support changed the initial 72 months at $5,000 per month retroactive to January 1,
    2016, to a modified duration of 54 months at $5,000 per month retroactive to January 1,
    2020. The total months that appellant is paying the full support order are indeed less than
    the magistrate’s initial order. The court finds no error in the trial court’s modification of the
    support order.
    {¶32} Accordingly, appellant’s third assignment of error is without merit.
    {¶33} Appellant’s fourth assignment of error states:
    {¶34} “[4.] The Trial Court erred in failing to address the tax consequences of the
    award of spousal support in violation of O.R.C. 3105.18.”
    {¶35} Appellant failed to raise the effects of the Tax Cuts and Jobs Act
    during post-trial briefing when he had opportunity to do so: Appellant claims that the
    trial court erred by failing to address the tax consequences of the award for spousal
    support as required by R.C. 3105.18(C)(1)(l). R.C. 3105.18(C)(1)(l) requires the court to
    consider the tax consequences under “the general rule * * * that, ordinarily, ‘if the award
    is such that, in effect, it forces a party to dispose of an asset to meet obligations imposed
    by the court, the tax consequences of that transaction should be considered.’” Rice v.
    12
    Case No. 2021-L-037
    Rice, 11th Dist. Nos 2006-G2716 and 2006-G2717, 
    2007-Ohio-2056
    , ¶ 31, quoting, Day
    v. Day, 
    40 Ohio App. 3d 155
    , 159, 
    532 N.E.2d 201
     (10th Dist. 1988). “[W]here an appellant
    has failed to produce evidence of tax consequences in the trial court * * * tax
    consequences are speculative and need not be considered.” 
    Id.,
     quoting Bauman v.
    Bauman, 6th Dist. Erie No. E-01-025, 
    2002-Ohio-2172
    , ¶ 16. Otherwise, the trial court
    would be engaging “in determining the tax consequences of the transaction based upon
    mere conjecture or speculation.” 
    Id.
     citing White v. White, 9th Dist. Summit No. 18275,
    
    1998 WL 103338
    , * 3.
    {¶36} In Rice, we relied upon Ferrero v. Ferrero, 5th Dist. Stark No. 98-CA-00095,
    
    1999 WL 744431
    , where the court found that the appellant had raised a tax issue to the
    court but failed to produce any evidence as to what the tax consequences would be. Rice.
    at ¶ 32, citing Ferrero, at *15-16. When a party does not present evidence on the tax issue
    beyond argumentation, the trial court need not consider the tax consequences because
    to do so would be speculative. 
    Id.
     The failure to offer evidence on the tax consequences
    waives the right to assert the argument on appeal. 
    Id.
    {¶37} In this case, appellant cites the passage of the Tax Cuts and Jobs Act which
    eliminated the alimony deduction for spousal support for divorces executed after January
    1, 2019. Appellant claims that the length of time between the trial in January 2017 and
    the magistrate’s decision in September 2019 resulted in the passage of a law, the effects
    of which he was unable to argue to the court and which the court did not consider. To
    remedy this, appellant seeks remand for the trial court to consider this issue.
    {¶38} However, the facts of this case reveal that the reason there was a significant
    delay between the conclusion of the trial and the magistrate’s decision was the parties’
    13
    Case No. 2021-L-037
    resolution of all post-trial briefs. The post-trial briefs were not resolved until June 18, 2019,
    and the magistrate’s lengthy decision was issued shortly thereafter on September 14,
    2019. Although the trial ended prior to the passage of the Tax Cuts and Jobs Act,
    appellant had ample opportunity between its passage and the resolution of all post-trial
    briefs to raise this issue and present facts outlining how, if at all, the passage of this act
    would have tax consequences on him or appellee. Appellant did not raise this issue until
    he objected to the magistrate’s decision. At that point, it would have been speculative for
    the court to rule upon this issue because appellant had not presented any facts or
    evidence on the issue.
    {¶39} Contrary to appellant’s claims, he could have raised the issue prior to the
    magistrate’s decision. This is particularly true in this case where post-trial motions were
    pending for an extended period. Appellant did not present evidence on this issue at the
    trial level and the court did not abuse its discretion in not addressing a topic which
    appellant did not raise until after the magistrate’s decision. Moreover, his failure to offer
    evidence or raise the issue prior to the magistrate’s decision waives his right to assert this
    argument on appeal.
    {¶40} Accordingly, appellant’s fourth assignment of error is without merit.
    Division of Marital Property:
    {¶41} A domestic relations court's division of property in a divorce proceeding is
    reviewed under an abuse of discretion standard. Cherry v. Cherry, 
    66 Ohio St.2d 348
    ,
    355, 
    421 N.E.2d 1293
     (1981); Hutchison v. Hutchison, 11th Dist. Lake No.2014–L–048,
    2014–Ohio–5471, ¶ 14. In reviewing the court’s division of property, an appellate court “is
    not required to conduct an item-by-item review of a property division. Fazenbaker v.
    14
    Case No. 2021-L-037
    Fazenbaker, 11th Dist. Trumbull No. 2009-T-0131, 
    2010-Ohio-5400
    , ¶26, citing Winkler
    v. Thomas, 5th Dist. Tuscarawas No. 2000AP03-0031, 
    2001 WL 81701
    , * 4. “[W]hen
    considering whether a trial court has abused its discretion in dividing marital property, a
    reviewing court should not review discrete aspects of the property division out of context
    of the entire award.” Baker v. Baker, 
    83 Ohio App.3d 700
    , 
    615 N.E.2d 699
     (1992), citing
    Briganti v. Briganti, 
    9 Ohio St.3d 220
    , 222, 
    459 N.E.2d 896
     (1984). Instead, a reviewing
    court ‘should consider whether the trial court’s disposition of marital property as a whole
    resulted in a property division which was an abuse of discretion.’ Baker [702].” (Emphasis
    added.) Rice, supra, at ¶ 33.
    {¶42} A “‘trial court's characterization of property, as separate or marital, is a
    question of fact, thus, a reviewing court must apply a manifest weight of the evidence
    standard of review to the trial court's characterization.” Humphrey v. Humphrey, 11th Dist.
    No. 2000–A0092, 
    2002 Ohio 3121
    , at ¶ 16. “‘Under this standard, the judgment of the trial
    court will not be reversed as being against the weight of the evidence if the court's
    decision is supported by competent, credible evidence.’” 
    Id.
     quoting Frederick v.
    Frederick, 11th Dist. Portage No. 98-P-0071, 
    2000 WL 522170
    , *13-14.
    {¶43} Appellant’s fifth and sixth assignments of error both relate to the court’s
    division of marital property, and we analyze them together. Appellant’s fifth and sixth
    assignments of error state:
    {¶44} “[5.] The Trial Court committed prejudicial error when it allocated the division
    of the Fredle Drive LLC business checking account.”
    {¶45} “[6.] The Trial Court committed prejudicial error when it failed to divide the
    marital portion of the Defendant’s personal injury award.”
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    Case No. 2021-L-037
    {¶46} Appellant claims that the trial court incorrectly allocated the division of the
    parties’ “Fredle Drive LLC” business account and that the court abused its discretion by
    not dividing appellee’s personal injury award.
    {¶47} In reference to the allocation of the Fredle Drive LLC business account,
    appellant claims that the lower court improperly divided this asset by ordering it to be
    divided twice. The parties were both owners of Fredle Drive LLC and the bank accounts
    associated with the business. Prior to the divorce filing, appellee managed the accounts,
    but appellant assumed control after the divorce filing and for approximately two years
    thereafter. At trial, appellee testified that at the end of every year, the monies from the
    accounts were distributed to appellant and appellee equally. After appellant took control
    of the account, appellee did not receive the end of year distribution for 2015 or 2016.
    Appellee provided evidence that the balance of the account for the 2015 distribution
    period was $15,492.19 and that the balance for the 2016 distribution period was
    $19,990.00.
    {¶48} The magistrate’s decision weighed the testimony on this issue and found
    that the appellant “was disingenuous as to his position related to this asset as he stated
    he did not remember receiving K1s [distributions] and failed to make even the most
    cursory glance at his prior tax returns that clearly explained these usual distributions.”
    The magistrate’s decision granted appellee a total of $19,263.80, an amount the
    magistrate said was “borne out by the Citizens’ Bank account exhibits and are in line with
    the 2012 and 2013 pay-outs.” In its Judgment Entry, the trial court agreed with this
    assessment saying that appellant “could not provide substantive evidence as to his
    handling of the Fredle Drive account. Based on the evidence adduced at trial, this Judge
    16
    Case No. 2021-L-037
    concurs with the Magistrate’s division as to the Citizen Bank account year end balances
    for 2015 and 2016.”
    {¶49} In reference to the personal injury award, appellee suffered a personal injury
    in Charleston, South Carolina and filed suit to recover for her injuries. Appellant did not
    join this action and did not file a loss of consortium claim. Although the injury and the filing
    of the lawsuit occurred prior to the divorce proceedings, the case was not settled until
    after appellant initiated the divorce proceedings. At trial, appellee testified that she “just
    paid the medical bills as they came in like if they were any other bill.” However, she also
    testified that she was not expecting a windfall saying that the $28,500 settlement she
    expected to receive would only be enough to cover attorneys’ fees, costs, and the
    remaining unpaid medical bills.
    {¶50} R.C. 3105.171(A)(6)(a)(vi) provides that marital property does not include
    “[c]ompensation to a spouse for the spouse’s personal injury, except for loss of marital
    earnings and compensation for expenses paid from marital assets[.]” R.C.
    3105.171(A)(6)(a)(vi) “‘The party seeking to have a particular asset classified as separate
    property has the burden of proof, by a preponderance of the evidence, to trace the asset
    to separate property.’” Campbell v. Campbell, 11th Dist. Lake No. 2014-L-015, 2014-
    Ohio-5614, ¶ 21, quoting Smith v. Smith, 11th Dist. Trumbull No. 98-A-0034, 
    1999 WL 1488950
    , *13. The trial court is required to make findings determining whether the party
    requesting the court to classify an asset as separate property has met the burden. 
    Id.,
    citing Letson v. Letson, 11th Dist. Trumbull No. 95-T-5356, 
    1997 WL 663514
    , *11. Where
    a personal injury settlement is made payable in one check to both husband and wife, the
    parties comingle their separate property. Id. at ¶ 28, citing Modon v. Modon, 
    115 Ohio 17
    Case No. 2021-L-037
    App.3d 810, 816, 
    686 N.E.2d 255
     (1996). In cases where the monies are comingled, the
    party seeking to characterize the property as separate has the “burden of convincing the
    trial court how much of the check was compensation” for personal injuries and associated
    expenses. 
    Id.,
     quoting Modon.
    {¶51} Here, the lower court characterized the personal injury settlement as
    separate property. The parties’ funds were not comingled. Appellant’s name was not on
    the settlement check, and he did not join the action or file his own claim for loss of
    consortium. Therefore, the personal injury settlement itself was properly characterized as
    separate marital property pursuant to R.C. 3105.171(A)(6)(a)(vi) – provided that the
    marital estate did not suffer losses for “expenses paid from marital assets[.]”
    {¶52} In this case, the trial court rejected appellant’s claim that appellee had paid
    medical expenses out of marital funds. The court said that the parties had largely
    separated their finances from 2014 to the present and maintained separate accounts
    through their marriage while appellee paid the greater portion of the medical bills between
    2014 and 2016. The court further found appellee’s statements credible that the award
    was only enough to cover appellee’s outstanding medical expenses. The court said it
    would be inequitable to divide appellee’s settlement when she needed the full amount to
    pay her remaining, separate medical expenses. On this evidence, the court found that
    appellee satisfied her burden of proof to establish the settlement as separate property.
    Thus, the trial court relied upon competent credible evidence to determine that the
    personal injury settlement was separate property under R.C. 3105.171(A)(6)(a)(vi).
    {¶53} We review appellant’s assignments as to the division of marital property
    mindful the reviewing court is not required to engage in item-by-item reviews of the lower
    18
    Case No. 2021-L-037
    court’s division of property. Instead, we are guided by the overall equity of the award. In
    the above instances, we cannot say on this record that the court abused its discretion in
    the disposition of marital property.
    {¶54} Accordingly, appellant’s fifth and sixth assignments of error are without
    merit.
    Civ. R. 53(D)(4)(d) additional evidence:
    {¶55} Appellant’s seventh assignment of error states:
    {¶56} “[7.] The Trial Court committed prejudicial error and abused its discretion in
    failing to grant a new hearing.”
    {¶57} Appellant relies upon Civ. R. 54(D)(4)(d) which deals with the court’s action
    on objections to magistrate’s decisions. Appellant asserts that the trial court abused its
    discretion by not hearing additional evidence that appellant says became available
    between the trial and the magistrate’s decision.
    {¶58} Civ. R. 54(D)(4)(d) provides,
    (D) Proceedings in Matters Referred to Magistrates.
    ***
    (4) Action of Court on Magistrate's Decision and on Any
    Objections to Magistrate's Decision; Entry of Judgment or
    Interim Order by Court.
    ***
    (d) Action on Objections. If one or more objections to a
    magistrate's decision are timely filed, the court shall
    rule on those objections. In ruling on objections, the
    court shall undertake an independent review as to the
    objected matters to ascertain that the magistrate has
    properly determined the factual issues and
    appropriately applied the law. Before so ruling, the
    court may hear additional evidence but may refuse to
    do so unless the objecting party demonstrates that the
    party could not, with reasonable diligence, have
    produced that evidence for consideration by the
    magistrate.
    19
    Case No. 2021-L-037
    {¶59} After the magistrate’s decision, appellant objected and requested a new
    evidentiary hearing pursuant to Civ. R. 53(D)(4)(b) so that the court could hear new
    evidence – namely new income tax returns to determine the parties’ income. Appellant
    cites several cases outside of the Eleventh District which hold that “a court does not have
    discretion to refuse to consider new evidence if the objecting party demonstrates that it
    could not, with reasonable diligence, have presented the evidence to the magistrate.”
    Welch v. Welch, 4th Dist. Athens No. 12CA12, 2012–Ohio–6297, ¶ 12; Morrison v.
    Morrison, 9th Dist. Summit No. 27150, 
    2014-Ohio-2254
    , ¶27 (quoting Welch); Maddox v.
    Maddox, 
    2016-Ohio-2908
    , 
    65 N.E.3d 88
    . ¶ 14 (1st Dist.). (A trial court is required to accept
    “additional evidence if the objecting party demonstrates that with reasonable diligence, it
    could not have produced the evidence for the magistrate’s consideration. See Riley v.
    Riley, 6th Dist. Huron No. H–08–019, 
    2009-Ohio-2764
    , 
    2009 WL 1652837
    , ¶ 20,
    quoting Johnson–Wooldridge v. Wooldridge, 10th Dist. Franklin No. 00AP–1073, 
    2001 WL 838986
     (July 26, 2001).”).
    {¶60} The Eleventh District has held that “‘[w]hile the trial court has the discretion
    to refuse to consider additional evidence, the trial court must first give the offering party
    an opportunity to demonstrate that such evidence could not have been produced before
    the magistrate.’” Porter v. Ferrall, 11th Dist. Portage No. 2002-P-0109, 
    2003-Ohio-6685
    ,
    ¶ 16, quoting McClain v. McClain 11th Dist. No. 98-P-0002, 
    1999 Ohio App. LEXIS 4655
    ,
    12-13 (Sept. 30, 1999).
    {¶61} In Morrison, the court noted that a request for an additional evidentiary
    hearing could be subject to abuse. The court said that Civ. R. 53(D)(4)(d) “‘contemplates
    that new events may arise or be discovered between the time of a magistrate’s decision
    20
    Case No. 2021-L-037
    and a trial judge’s final judgment.’” Morrison, 
    supra, at ¶ 27
    , quoting In re A.S., 9th Dist.
    Summit No. 26462, 2013–Ohio–1975, ¶ 14–15 (analyzing identical language in Juv.R.
    40(D)(4)(d)). The court in Morrison said that a blanket rule requiring a hearing based on
    the invocation of talismanic words “could lead to an abuse of that rule.” Id. at ¶ 28. In that
    case, the court found the moving party had satisfied the requirements of Civ. R.
    53(D)(4)(d) because,
    Wife noted the evidence did not become available until after trial. She
    identified a factual change in circumstances regarding her
    employment. Finally, she detailed that the parties’ legal parental
    rights and responsibilities could be affected by the change. We take
    no position on the merits of Wife’s allegations, but simply find a
    hearing was warranted under the circumstances.
    Id.
    {¶62} The “crux” of the reasonable diligence standard of Civ. R. 53(D)(4)(d) “is
    whether the party was put on notice that they would be reasonably expected to introduce
    the evidence at the hearing before the magistrate. If the party had notice that they would
    be reasonably expected to introduce evidence on the subject, then the trial court has
    discretion to accept or reject that evidence.” (Citations omitted). Maddox, 
    supra, at ¶ 15
    .
    The court should consider whether or not the record demonstrates that an appellant “with
    reasonable diligence, could not have produced that evidence for the magistrate’s
    consideration.” Porter, supra, at ¶ 19. (Holding that appellant “had ample opportunity to
    gather that evidence and present it to the magistrate at the previous evidentiary hearings.
    Thus, the trial court lawfully exercised its discretion in refusing to allow that additional
    evidence, which was by no means ‘newly discovered.’”)
    {¶63} In this case, appellant identified that his evidence of newly filed tax returns
    had become available between the time of trial and the magistrate’s decision. However,
    21
    Case No. 2021-L-037
    as noted above, the cause for the substantial time between trial and the magistrate’s
    decision was that multiple post-trial motions remained pending until the parties resolved
    those issues. Had appellant used reasonable diligence in that period, he would have filed
    an additional post-trial brief prior to the magistrate’s decision seeking to supplement the
    record with newly filed tax returns which were available well before the magistrate’s
    decision. See Id. at ¶ 16.
    {¶64} Appellant has also indicated that a change in income could affect the
    parties’ rights and responsibilities. However, appellant has failed to identify any factual
    change in circumstance regarding the parties’ income. Instead, appellant speculates
    about a change in circumstances and does nothing more than invoke the talismanic words
    of Civ. R. 53(D)(4)(d). See Morrison, 
    supra, at ¶ 28
    .
    {¶65} Finally, in this case, the court retained jurisdiction to modify the spousal
    support order. If there has been a substantial change in circumstances that was not
    contemplated by the parties in the original decree, appellant may present such to the trial
    court. See Riley v. Riley, 11th Dist. Ashtabula No. 2012-A-0037, 
    2013-Ohio-1604
    , ¶ 37-
    38. However, appellant did not present any argument or evidence that would suggest
    there has been a substantial change in circumstances. Rather, he has merely made
    suggestions that new income information from subsequent years could be different. We
    decline to conclude that the trial court abused its discretion under these circumstances.
    {¶66} Accordingly, appellant’s seventh assignment of error is without merit.
    22
    Case No. 2021-L-037
    {¶67} For the foregoing reasons, the judgment of the Lake County Court of
    Common Pleas, Domestic Relations Division, is affirmed.
    THOMAS R. WRIGHT, P. J., concurs,
    MATT LYNCH, J., concurs in part and dissents in part, with a Dissenting Opinion.
    _____________________________
    MATT LYNCH, J., concurs in part and dissents in part, with a Dissenting Opinion.
    {¶68} While I concur with the disposition of the second through seventh
    assignments of error, I dissent from the majority’s decision to affirm the addition of
    $60,000 to appellant’s 2015 income above the amount stated in his tax return. This
    determination results in unfairly counting the $60,000 in question twice, rejects appellant’s
    credible testimony, and places an unreasonable burden on appellant to provide additional
    evidence of his income where his tax return already established such fact. Given the lack
    of any rebuttal evidence establishing this amount was not accounted for in appellant’s tax
    return, the trial court’s determination of appellant’s income must be reversed.
    {¶69} The majority finds that the trial court did not abuse its discretion when
    adding $60,000 to appellant’s 2015 claimed income, finding he failed to “present evidence
    demonstrative of” the fact that the $60,000 was exempt from inclusion as additional
    income. It concludes, like the trial court, that he should have called his accountant as a
    witness to demonstrate whether the $60,000 was included in the reported taxable income.
    There are several flaws in this conclusion. Significantly, it places a burden on appellant
    23
    Case No. 2021-L-037
    that is not required by law and is unwarranted under the facts of this case. Here, appellant
    introduced a copy of his tax return stating his income for 2015, which he signed
    electronically, under penalty of perjury, affirming that the income information was
    accurate. See 26 U.S.C. 6065 (“Except as otherwise provided by the Secretary, any
    return, declaration, statement, or other document required to be made under any
    provision of the internal revenue laws or regulations shall contain or be verified by a
    written declaration that it is made under the penalties of perjury.”). Such a document
    provides credible and clear evidence of a party’s income. It has been held that, “in
    determining what constitutes ‘income,’ * * * a trial court should typically use the figures
    shown on a party’s annual income tax return” and that such figures “are preferred to a
    party’s oral representations in determining what constitutes the party’s ‘income’ for the
    purposes of R.C. 3105.18(C)(1)(a).” Freeland v. Freeland, 4th Dist. Jackson No. 02CA18,
    
    2003-Ohio-5272
    , ¶ 16; Wagshul v. Wagshul, 2d Dist. Montgomery No. 23564, 2010-Ohio-
    3120, ¶ 21. To add $60,000 to appellant’s reported income is essentially to determine
    that he fraudulently stated his income on his tax return, which conclusion the evidence
    simply does not support.
    {¶70} In addition to the tax return, appellant provided testimony in relation to the
    disputed $60,000, which he had used to make a tax payment. Appellant testified that the
    money “came out of that $190,000,” i.e., the amount of his income stated in the 2015 tax
    return. In other words, although he used $60,000 from his business account to pay
    quarterly taxes, this amount was included as part of the approximately $190,000 income
    claimed. This testimony, coupled with the tax return, supports a conclusion contrary to
    that reached by the trial court and demonstrates no additional income should have been
    24
    Case No. 2021-L-037
    added to the amount stated in the tax return. It is irrelevant how appellant spent the
    $60,000; it is only pertinent whether the evidence supports that appellant reported it as
    taxable income.
    {¶71} The decision to increase appellant’s income by $60,000 appears to be
    based solely on a few comments in his testimony which the trial court interpreted to mean
    he had not claimed the $60,000 as income on his tax return. Appellant, when asked how
    his taxes were paid, stated that the money “came from [his] business.” When asked if it
    was a “distribution,” he indicated that he did not understand the question. He explained
    that it was income but when asked if it should have been declared as part of his income
    for tax purposes he explained, “That’s not how this works.” He later clarified that, since
    the money was part of his income, he reported it on the return for tax purposes, and,
    regarding the previous confusion over whether it was a distribution, he was “looking at it
    from a semantic standpoint.” Far from establishing a failure to correctly report his income,
    appellant’s testimony, viewed as a whole, only serves to demonstrate his confusion about
    financial terms and intricacies of tax reporting. While the testimony used by the trial court
    to justify its decision was equivocal and uncertain, when asked questions to clarify, he
    definitively and clearly stated that the $60,000 was part of the $190,000 in income he
    made in 2015. This is also consistent with his statement that he keeps funds in the
    business account that are part of his claimed income. Such testimony is credible, even if
    he was not fully cognizant of the terminology utilized when discussing these matters.
    Appellee argues that, as a businessman, appellant should understand tax-related
    matters, however, a decision to increase appellant’s income by over 25 percent and
    thereby greatly increasing the amount of the support award, cannot be based on
    25
    Case No. 2021-L-037
    conjecture. Appellant is a dentist and there is nothing to indicate he is well-versed on
    matters relating to finances or taxes; he emphasized in his testimony that he is not and
    repeatedly noted his use of an accountant to handle various business matters.
    {¶72} The emphasis on the appellant’s failure to call his accountant as a witness
    is also misplaced. As noted above, given the significance of the tax return itself in
    establishing his income and his own testimony that the $60,000 was part of his reported
    income, such evidence was sufficient to demonstrate his 2015 income. There is no
    authority requiring an accountant’s testimony to establish this fact nor should a party be
    required to have an accountant explain the tax implications of every withdrawal from a
    business account. Such testimony would be cumulative as to the issue in dispute, i.e.,
    whether the amount claimed on the tax return included the $60,000 paid for appellant’s
    quarterly taxes. The accountant would only be able to provide testimony as to what
    appellant reported to her as his income when aiding in the preparation of his return. If
    the accountant had been aware of an additional amount of income, she would have been
    obligated to report it on his return. Thus, the accountant’s testimony would add nothing
    of value to the record that was not already present through appellant’s testimony and the
    return. Further, the accountant signed the tax return electronically and would be subject
    to penalties if she willfully aided in the preparation of a fraudulent or false tax return. See
    26 U.S.C. 7206. It appears that calling the accountant would be fruitless in resolving the
    sole issue in dispute, i.e., whether appellant failed to report income on his tax return, since
    if she had knowledge of his failure to report, she would be admitting she aided in preparing
    a false tax return.
    26
    Case No. 2021-L-037
    {¶73} To the extent that the majority notes it is “not the duty of the trial court to
    ferret out * * * expenses,” supra at ¶ 13, appellant did not ask the court to do so. The
    court had the evidence it needed to reach its decision before it, by way of the tax return.
    No additional evidence or witnesses were required nor was the court asked to look into
    any other evidence to make a finding. The evidence and testimony indicated that funds
    in the business account were part of appellant’s income that he may withdraw for personal
    expenses.
    {¶74} Further, the accountant’s testimony was of little necessity where there was
    no evidence presented by the opposing side to rebut appellant’s testimony and tax return.
    The failure of a party to present evidence to rebut testimony is correctly attributed to that
    party and unrebutted testimony is of significant value. Haynes v. Washington, 
    373 U.S. 503
    , 510, 
    83 S.Ct. 1336
    , 
    10 L.Ed.2d 513
     (1963). See also State v. Edgell, 
    30 Ohio St.2d 103
    , 117, 
    283 N.E.2d 145
     (1972) (O’Neill, J., dissenting) (“[w]hile credibility is a matter to
    be resolved by the trial judge, there is significance in the uncontradicted testimony of the
    defendant”). The burden for additional evidence properly lies with appellee, not appellant.
    {¶75} Finally, the majority argues that we have no way of knowing whether
    appellant reported the $60,000 in the tax return and concludes that the court cannot
    “presume of the $60,000, like a jar of Prego sauce, that ‘It’s in there.’” As outlined above,
    however, there is a way to know whether the $60,000 was reported and that is through
    appellant’s testimony and tax return. The Prego sauce label, like appellant’s tax returns,
    lists its contents, and this court has no evidence to suggest either is inaccurate. In matters
    relating to spousal support, while the trial court is given broad discretion to determine
    what is equitable, “‘such discretion is not unlimited.’” Dilley v. Dilley, 11th Dist. Geauga
    27
    Case No. 2021-L-037
    No. 2019-G-0207, 
    2020-Ohio-984
    , ¶ 12, citing Kunkle v. Kunkle, 
    51 Ohio St.3d 64
    , 67,
    
    554 N.E.2d 83
     (1990). The judgment here, which goes against the evidence presented
    by appellant and is unsupported by any evidence from the opposing party, constitutes an
    abuse of discretion.
    {¶76} For the foregoing reasons, I dissent in part and would reverse the lower
    court’s judgment as to the decision to add $60,000 to the income stated in appellant’s
    2015 tax return.
    28
    Case No. 2021-L-037