Tate v. Tate , 2018 Ohio 1243 ( 2018 )


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  • [Cite as Tate v. Tate, 2018-Ohio-1243.]
    COURT OF APPEALS
    HOLMES COUNTY, OHIO
    FIFTH APPELLATE DISTRICT
    ROBYN M. TATE                                :       JUDGES:
    :       Hon. Patricia A. Delaney, P.J.
    Plaintiff-Appellee                   :       Hon. W. Scott Gwin, J.
    :       Hon. Earle E. Wise, Jr., J.
    -vs-                                         :
    :
    BRUCE E. TATE                                :
    :
    Defendant                            :       Case No. 17CA001
    :
    and                                          :
    :
    TATE FARMS COMPANY, LTD AND                  :
    TATE FARMS, A PARTNERSHIP                    :
    :
    Defendants-Appellants                :       OPINION
    CHARACTER OF PROCEEDING:                             Appeal from the Court of Common
    Pleas, Domestic Relations Division,
    Case No. 15DR019
    JUDGMENT:                                            Affirmed
    DATE OF JUDGMENT:                                    March 29, 2018
    APPEARANCES:
    For Plaintiff-Appellee                               For Defendants-Appellants
    LON R. VINION                                        GRANT A. MASON
    3431 Commerce Parkway                                The Lincoln Building
    Suite C                                              88 South Monroe Street
    Wooster, OH 44691                                    Millersburg, OH 44654
    R.J. Helmuth
    343 South Crownhill Road
    P.O. Box 149
    Orrville, OH 44667
    Holmes County, Case No. 17CA001                                                      2
    Wise, Earle, J.
    {¶ 1} Defendants-Appellants, Tate Farms Company, Ltd. and Tate Farms, a
    Partnership, appeal the February 13, 2017 judgment entry denying their motion for
    sanctions and the March 30, 2017 decree of divorce of the Court of Common Pleas of
    Holmes County, Ohio, Domestic Relations Division. Plaintiff-Appellee is Robyn M. Tate.
    FACTS AND PROCEDURAL HISTORY
    {¶ 2} On February 14, 1998, defendant, Bruce Tate, and appellee were married.
    No children were born as issue of the marriage. On March 10, 2015, appellee filed a
    complaint for divorce against defendant, and also named appellants, two entities
    defendant had interests in.      The other individuals involved with the entities were
    defendant's father, mother, and brother. Appellants filed an amended answer on May 1,
    2015, asserting lack of jurisdiction over the person and the subject matter.
    {¶ 3} On June 23, 2015, appellants filed a motion to dismiss challenging the
    jurisdiction issue. The trial court took the matter under advisement.
    {¶ 4} Hearings were held on September 19, 21, 22, 23, 29, and October 10,
    2016. At the conclusion of the September 29, 2016 hearing, appellants moved for a
    directed verdict. By judgment entry filed October 11, 2016, the trial court granted the
    motion and dismissed appellants from the case. Appellants were aware of the trial
    court's ruling prior to the October 10, 2016 hearing.
    {¶ 5} On October 28, 2016, appellants filed a motion for sanctions followed by
    an affidavit detailing the attorney fees incurred.
    Holmes County, Case No. 17CA001                                                          3
    {¶ 6} On February 13, 2017, the trial court issued a statement of the case,
    findings of fact, and conclusions of law. In a separate judgment entry filed same date,
    the trial court denied appellant's motion for sanctions. Appellants filed an appeal.
    {¶ 7} On March 30, 2017, the trial court issued a decree of divorce, attaching
    referenced Exhibits A and B, but not C.1
    {¶ 8} On April 4, 2017, defendant filed a notice of appeal.
    {¶ 9} On April 7, 2017, appellants filed an amended notice of appeal to
    incorporate the divorce decree.
    {¶ 10} On April 25, 2017, defendant filed with the trial court a motion for a nunc
    pro tunc order to address the missing Exhibit C. The trial court did not rule on this
    motion.
    {¶ 11} On May 15, 2017, defendant filed with this court a motion to correct the
    record under App.R. 9(E), seeking a limited remand to address the missing Exhibit C.
    By judgment entry filed June 8, 2017, this court granted the motion and remanded the
    matter to the trial court to address the missing exhibit. On June 26, 2017, the trial court
    filed a nunc pro tunc statement of the case, findings of fact, conclusions of law, and
    decision, attaching the missing Exhibit C. The trial court made substantive changes to
    its previous decision which is the subject of separate appeals (App. Nos. 17CA13 and
    17CA14).
    {¶ 12} This matter is now before this court for consideration of the trial court's
    judgment entry filed February 13, 2017, and the divorce decree filed March 30, 2017
    with the added Exhibit C. The pertinent parts of the decision and the relevant facts will
    1We note the decree did not specifically reference Exhibit C, although it did adopt and
    incorporate the February 13, 2017 filing which did.
    Holmes County, Case No. 17CA001                                                            4
    be addressed under each of the corresponding assignments of error. Assignments of
    error are as follows:
    I
    {¶ 13} "THE TRIAL COURT ERRED AND DEPRIVED TATE FARMS OF ITS
    RIGHT TO APPEAL THE TRIAL COURT'S DENIAL OF ITS MOTION FOR
    SANCTIONS PURSUANT TO R.C. § 2323.51 BY VIRTUE OF THE 'HOLD
    HARMLESS' LANGUAGE INCORPORATED IN THE DECREE OF DIVORCE."
    II
    {¶ 14} "THE TRIAL COURT ERRED IN DENYING TATE FARMS' MOTION FOR
    SANCTIONS UNDER R.C. § 2323.51 WITHOUT A HEARING, WHERE APPELLEE
    ERRONEOUSLY MADE TATE FARMS A PARTY TO THE DIVORCE LITIGATION
    UNDER CIV.R. 75(B)(1) AND ASSERTED AND PURSUED CLAIMS AGAINST TATE
    FARMS THAT WERE NOT WARRANTED UNDER EXISTING LAW."
    III
    {¶ 15} "THE TRIAL COURT ERRED BY IMPOSING A JUDICIAL LIEN AGAINST
    REAL PROPERTY HELD SOLELY BY TATE FARMS."
    I
    {¶ 16} In their first assignment of error, appellants claim the trial court erred and
    deprived them of their right to appeal the trial court's denial of their motion for sanctions
    by virtue of the hold harmless provision in the decree of divorce. We disagree.
    {¶ 17} We do not find anything in the trial court's hold harmless provisions that
    effectively prevents appellants from filing an appeal in this matter. Appellants have filed
    an appeal and this court will address the merits.
    Holmes County, Case No. 17CA001                                                           5
    {¶ 18} Assignment of Error I is denied.
    II
    {¶ 19} In their second assignment of error, appellants claim the trial court erred in
    denying their motion for sanctions without a hearing, where appellee made them parties
    to the divorce action and asserted and pursued claims against them that were not
    warranted. We disagree.
    {¶ 20} R.C. 2323.51 governs sanction awards.         Subsection (B)(1) states the
    following:
    Subject to divisions (B)(2) and (3), (C), and (D) of this section and
    except as otherwise provided in division (E)(2)(b) of section 101.15 or
    division (I)(2)(b) of section 121.22 of the Revised Code, at any time not
    more than thirty days after the entry of final judgment in a civil action or
    appeal, any party adversely affected by frivolous conduct may file a
    motion for an award of court costs, reasonable attorney's fees, and other
    reasonable expenses incurred in connection with the civil action or appeal.
    The court may assess and make an award to any party to the civil action
    or appeal who was adversely affected by frivolous conduct, as provided in
    division (B)(4) of this section.
    {¶ 21} "Frivolous conduct" is defined in subsection (A)(2) as:
    Holmes County, Case No. 17CA001                                                       6
    (a) Conduct of an inmate or other party to a civil action, of an
    inmate who has filed an appeal of the type described in division (A)(1)(b)
    of this section, or of the inmate's or other party's counsel of record that
    satisfies any of the following:
    (i) It obviously serves merely to harass or maliciously injure another
    party to the civil action or appeal or is for another improper purpose,
    including, but not limited to, causing unnecessary delay or a needless
    increase in the cost of litigation.
    (ii) It is not warranted under existing law, cannot be supported by a
    good faith argument for an extension, modification, or reversal of existing
    law, or cannot be supported by a good faith argument for the
    establishment of new law.
    (iii) The conduct consists of allegations or other factual contentions
    that have no evidentiary support or, if specifically so identified, are not
    likely to have evidentiary support after a reasonable opportunity for further
    investigation or discovery.
    (iv) The conduct consists of denials or factual contentions that are
    not warranted by the evidence or, if specifically so identified, are not
    reasonably based on a lack of information or belief.
    {¶ 22} As explained by the Supreme Court of Ohio in State ex rel. DiFranco v.
    South Euclid, 
    144 Ohio St. 3d 571
    , 2015-Ohio-4915, 
    45 N.E.3d 987
    , ¶ 15:
    Holmes County, Case No. 17CA001                                                           7
    Frivolous conduct, as contemplated by R.C. 2323.51(A)(2)(a), is
    judged under an objective, rather than a subjective standard, Striker [v.
    Cline, 
    130 Ohio St. 3d 214
    , 2011-Ohio-5350, 
    957 N.E.2d 19
    ], ¶ 21, and
    must involve egregious conduct. Frivolous conduct is not proved merely
    by winning a legal battle or by proving that a party's factual assertions
    were incorrect. Ohio Power Co. v. Ogle, 4th Dist. Hocking No. 12CA14,
    2013-Ohio-1745, 
    2013 WL 1803895
    , ¶ 29-30 (" 'A party is not frivolous
    merely because a claim is not well-grounded in fact. * * * [R.C. 2323.51]
    was designed to chill egregious, overzealous, unjustifiable, and frivolous
    action. * * * [A] claim is frivolous if it is absolutely clear under the existing
    law that no reasonable lawyer could argue the claim' "), quoting Hickman
    v. Murray, 2d Dist. Montgomery No. CA1–5030, 
    1996 WL 125916
    , *5
    (Mar. 22, 1996).
    {¶ 23} In their motion for sanctions, appellants argued appellee improperly
    named them as party defendants, her claims against them had no basis under Ohio law,
    and she forced them to incur substantial attorney fees in defending the action. By
    judgment entry filed February 13, 2017, the trial court denied the motion without
    comment and without hearing.
    {¶ 24} Appellee joined appellants in her divorce complaint pursuant to Civ.R.
    75(B) which governs joinder of parties in divorce actions. Subsection (1) states: "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
    Holmes County, Case No. 17CA001                                                         8
    marital property, a distributive award, or an award of spousal support or other support,
    may be made a party defendant[.]"
    {¶ 25} The 2001 Staff Note to the statute, as discussed by appellants in their
    brief at 12, states the following:
    Civ. R. 75(B) provides that Civ. R. 14 (third-party practice), Civ. R.
    19 (joinder of parties needed for just adjudication), Civ. R. 19.1
    (compulsory joinder), and Civ. R. 24 (intervention) are generally
    inapplicable in divorce, annulment, or legal separation actions. Division
    (1) of Rule 75(B), however, permits a corporation or person to be made a
    party defendant to such an action if that corporation or person has
    possession or control of or claims an interest in property out of which
    another seeks an award. Civ. R. 75(B)(1) thus permits the court to protect
    both the person seeking an award and the corporation or person who has
    possession or control of or claims an interest in property. See Huener v.
    Huener, 
    110 Ohio App. 3d 322
    , 327, 
    674 N.E.2d 389
    , 393 (1996) (trial
    court abused its discretion by attempting to divest parents of party of legal
    title to property without joining them as parties; purpose of Civ. R. 75(B)(1)
    joinder "is to allow individuals to join whose interests need to be
    protected").
    Division (B)(1) was amended effective July 1, 2001 to track more
    precisely the language of R.C. 3105.171, which provides for division of
    marital property and, in appropriate circumstances, a distributive award,
    Holmes County, Case No. 17CA001                                                          9
    and R.C. 3105.18, which provides for spousal support. The amendment is
    intended to make clear that the joinder of a corporation or person is proper
    whether a division of marital property, a distributive award, or an award of
    spousal support is the underlying issue. The reference to "other support"
    is retained in order to avoid foreclosing the use of Civ. R. 75(B)(1) when,
    e.g., child support is the underlying issue.
    {¶ 26} Defendant owned 25% of the partnership and 24.5% of the company.
    Clearly defendant had an interest in the two entities which had possession of, control of,
    or claimed an interest in the property out of which appellee sought a division of marital
    property and an award of spousal support. Business entities other than "corporations"
    can be joined under this section. Gest v. Gest, 9th Dist. Lorain No. 96CA006580, 
    1998 WL 208872
    (Apr. 29, 1998) (joinder of dairy farm partnership).
    {¶ 27} In this case, the trial court was charged with determining the extent of
    defendant's ownership in the two entities, the value of his ownership interests, and
    whether his interests constituted marital property subject to division between the parties
    in their divorce action.   The trial court heard from various experts regarding the
    interrelationship between the parties, their marriage, and appellants. The interests of all
    the parties were "intertwined and comingled." Appellee's Brief at 15. It was necessary
    for the trial court to determine through all the testimony and exhibits presented just what
    those interests were. As noted by the trial court in its November 2, 2015 judgment entry
    addressing appellants' motion to dismiss them as parties, it was the trial court's
    "responsibility in presiding over any divorce case to be certain that the entire financial
    Holmes County, Case No. 17CA001                                                        10
    picture is transparent prior to making final equitable orders for both parties." The real
    and personal property used in appellants' operations and defendant's interests in and
    income from the entities were all at issue in determining the allocation of marital
    property in the divorce and any possible support obligation.
    {¶ 28} After the September 29, 2016 hearing, the trial court granted appellants'
    motion for directed verdict. See Judgment Entry filed October 11, 2016. The trial court
    relieved appellants as legal parties, but permitted them to remain as "interested" parties
    if they so desired. Although appellants' counsel was aware of the trial court's ruling, he
    was present during the final hearing held on October 10, 2016, to "simply protect the
    interest of Mr. [Hal] Tate." T. at 1086, 1092-1093. In fact, appellants' counsel objected
    when appellee's counsel asked Mr. Hal Tate about not filing any gift tax returns. T. at
    1158-1159.    In the decree of divorce, the trial court noted appellants "had the full
    opportunity and in fact did present evidence with respect to the legal and equitable
    issues involved in this case." By being joined in the action, appellants were provided
    due process, and were given the opportunity to present evidence, cross-examine
    witnesses, and protect their interests in the case.
    {¶ 29} Using an objective standard, we do not find egregious conduct and find it
    is not "absolutely clear under the existing law that no reasonable lawyer could argue the
    claim." 
    DiFranco, supra
    . We do not find any evidence of frivolous conduct as set forth
    in R.C. 2323.51(A)(2) under either a de novo standard of review or an abuse of
    discretion standard or review. Daniels v. Daniels, 5th Dist. Licking No. 14-CA-74, 2015-
    Ohio-1674, ¶ 26.
    Holmes County, Case No. 17CA001                                                          11
    {¶ 30} Appellants make much ado about appellee being a judgment creditor and
    needing to obtain a charging order. This is a divorce case involving a division of assets
    and liabilities. Appellee is not a judgment creditor in this case, she is a party receiving
    her own portion of assets accumulated with her spouse over a number of years. In their
    reply brief at 13, appellants cite to several cases to support their argument that "multiple
    domestic relations cases have referred to the spouse who is awarded money as a
    'judgment creditor'."   The "awards" in these cases relate to after-the-fact child and
    spousal support arrearages and attorney fees, not awards pursuant to a division of
    assets.
    {¶ 31} As noted by appellants in their motion for sanctions, citing Sheridan v.
    Harbison, 
    101 Ohio App. 3d 206
    , 
    655 N.E.2d 256
    (1995), an evidentiary hearing is
    required "only on those motions which demonstrate arguable merit, and that a motion
    for sanctions may be denied without hearing when the trial court determines that there
    is no basis for imposition of sanctions."
    {¶ 32} As explained by this court in Miller v. Evans, 5th Dist. Stark No.
    2015CA00042, 2015-Ohio-4571, ¶ 18:
    It has been uniformly held that a hearing on a motion for sanctions
    under R.C. 2323.51(B)(2) is only required when the trial court grants the
    motion. Galena v. Delaware Cty. Regional Planning Comm., 5th Dist.
    Delaware No.2011-CAE-07-0068, 2012-Ohio-182, ¶ 28 (Delaney, J.
    dissenting), citing Shields v. City of Englewood, 
    172 Ohio App. 3d 620
    ,
    2007-Ohio-3165, 
    876 N.E.2d 972
    (2nd Dist.); McKinney v. Aultman Hosp.,
    Holmes County, Case No. 17CA001                                                            12
    5th Dist. Stark No. CA-8603, unreported, 
    1992 WL 100451
    (Apr. 27,
    1992); McPhillips v. United States Tennis Assoc. Midwest, 11th Dist. Lake
    No.2006-L-235, 2007-Ohio-3595; Avon Poured Wall, Inc. v. Boarman, 9th
    Dist. Lorain No. 04CA008448, 2004-Ohio-4588; Coretext Ltd. v. Pride
    Media Ltd., 10th Dist. Franklin No. 02AP-1284, 2003-Ohio-5760. A trial
    court must schedule a hearing only on those motions which demonstrate
    arguable merit; if the trial court determines there is no basis for the
    imposition of sanctions, it may deny the motion without hearing. 
    Id. at ¶
    12. Such a determination is subject to the sound discretion of the trial
    court. 
    Id. at ¶
    15.
    {¶ 33} In order to find an abuse of discretion, we must determine the trial court's
    decision was unreasonable, arbitrary or unconscionable and not merely an error of law
    or judgment. Blakemore v. Blakemore, 
    5 Ohio St. 3d 217
    , 
    450 N.E.2d 1140
    (1983).
    {¶ 34} The trial court had the benefit of presiding over the entire case and was
    familiar with the issues involved. Appellants' motion did not demonstrate arguable merit
    requiring the trial court to schedule a hearing.
    {¶ 35} Upon review, we find the trial court did not abuse its discretion in denying
    appellants' motion for sanctions without a hearing.
    III
    {¶ 36} In their third assignment of error, appellants claim the trial court erred in
    imposing a judicial lien against real property held solely by the entities. We disagree.
    Holmes County, Case No. 17CA001                                                          13
    {¶ 37} Specifically, appellants are challenging the judicial lien the trial court
    imposed on defendant's interest in a home located on SR 754. Appellants argue they
    own the entire property.
    {¶ 38} Defendant admitted to building a separate home for himself on the SR 754
    property. T. at 43. The home sits on land owned by appellant company. T. at 96.
    Defendant signed a promissory note to pay back appellants for the cost they incurred in
    building the new home. T. at 114; Plaintiff's Exhibit K1. Defendant made two payments
    totaling $55,000 toward the obligation. T. at 115; Plaintiff's Exhibit K2.       Defendant
    agreed the home was not in any way gifted to him and he was making payments on it.
    T. at 118. Mr. Hal Tate testified the land the home sits on is still titled in appellant
    company's name.      T. at 1143.    He indicated there were no current agreements to
    transfer the land to defendant, but appellants did have a demand note from defendant
    for the home. 
    Id. {¶ 39}
    The trial court found appellant built a home on land owned by appellants,
    and diverted $55,000 from his retirement account to pay appellants for monies
    borrowed to build the home. Finding of Fact Nos. 49 and 50. The trial court awarded
    defendant the real estate on SR 754, except for $55,000 which was deemed marital
    property. Conclusion of Law No. 16. The trial court placed a judicial lien on defendant's
    separate property, including his interest in the SR 754 home, in order to prevent
    defendant from interfering with appellee or the trial court's ability to enforce its orders.
    Conclusion of Law No. 36. In the divorce decree, the trial court awarded defendant all
    of his interest in the home constructed on the SR 754 property, and incorporated the
    Holmes County, Case No. 17CA001                                                           14
    judicial lien in its divorce decree "until such time as the obligations contained herein with
    respect to the property and debt distributions are satisfied."
    {¶ 40} We find the trial court did not place a lien on all of the property, just
    defendant's interest in the home located on the property.
    {¶ 41} Upon review, we find the trial court did not err in imposing a judicial lien on
    the subject home in order to enforce its orders.
    {¶ 42} Assignment of Error III is denied.
    {¶ 43} The judgment of the Court of Common Pleas of Holmes County, Ohio
    Domestic Relations Division is hereby affirmed.
    By Wise, Earle, J.
    Delaney, P.J. and
    Gwin, J. concur.
    EEW/db
    

Document Info

Docket Number: 17CA001

Citation Numbers: 2018 Ohio 1243

Judges: Wise, E.

Filed Date: 3/29/2018

Precedential Status: Precedential

Modified Date: 4/17/2021