Whitman v. Whitman , 2012 Ohio 405 ( 2012 )

[Cite as Whitman v. Whitman, 2012-Ohio-405.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HANCOCK COUNTY
JUSTIN P. WHITMAN,
PETITIONER-APPELLEE, CASE NO. 5-11-20
v.
JEFFREY WHITMAN, OPINION
RESPONDENT-APPELLANT.
Appeal from Hancock County Common Pleas Court
Probate Division
Trial Court No. 20074002A
Judgment Affirmed
Date of Decision: February 6, 2012
APPEARANCES:
Dennis M. Fitzgerald for Appellant
Keith L. Faber and Michael E. Gilb for Appellee
Case No. 5-11-20
SHAW, P.J.
{¶1} Respondent-appellant, Jeffrey J. Whitman (“Jeffrey”), appeals the July
1, 2010 judgment of the Hancock County Court of Common Pleas, Probate
Division, finding him in civil contempt and sentencing him to serve three days in
jail as a civil contempt sanction. Jeffrey also appeals the April 7, 2011 judgment
of the same court ordering him to pay as an additional contempt sanction the
attorney fees of petitioner-appellee, Justin P. Whitman (“Justin”), in the amount of
$104,128.57.
{¶2} Justin is the adult son of Jeffrey. Jeffrey is a licensed attorney in the
State of Ohio. Justin initiated this case in 2007 when he filed a petition for an
accounting, alleging that Jeffrey, as Custodian and Trustee on certain accounts
belonging to him, had failed or refused to provide him with an accounting of these
funds as required by R.C. 5814.04 and R.C. 2109.303.1 Justin requested the trial
court to order Jeffrey to provide an accounting for the following four sources of
funds.
1
The record indicates that prior to filing this petition, Justin asked Jeffrey to authorize the brokerage firms
managing these funds to release account statements to him for his inspection. Jeffrey refused to allow
Justin to have access to this information. Justin subsequently filed two lawsuits, one in Lucas County and
one in Allen County, to forcibly obtain this information from the brokerage firms. In both instances,
Jeffrey attempted to intervene in the lawsuits, but was unsuccessful. As a result of these suits, Justin was
given full access to information regarding these funds.
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1. The UGMA/UTMA Accounts
{¶3} The record demonstrates that between 1984 and 1994 Jeffrey
established several custodial accounts in Justin’s name pursuant to the Uniform
Gift to Minors Act (“UGMA”) and the Uniform Transfer to Minors Act
(“UTMA”) and listed himself as the Custodian of these funds. Under these Acts, a
minor can have money, securities, and other property invested in his or her name
with the custodian having a fiduciary responsibility for managing the funds in the
accounts prudently. Once the funds are placed into these accounts it is considered
an irrevocable gift and conveys to the minor indefeasibly vested legal title to the
funds. At the time the minor attains the age of 21, he or she is no longer
considered a minor for the purpose of these accounts and has complete rights to
the funds in the accounts. See R.C. Chapter 5814. Justin turned 21 on January 26,
2005.
2. The College Fund Trust
{¶3} On May 17, 2000, Jeffrey established the College Fund Trust. It is
undisputed by the parties that this trust is comprised entirely of custodial funds
belonging to Justin. Jeffrey established this trust to pay for expenses related to
Justin’s higher educational pursuits.
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3. The Revocable Trust
{¶4} On May 23, 2000,2 Jeffrey established the “Revocable Trust” naming
Justin as beneficiary and himself as Trustee. At all relevant times in these
proceedings, Jeffrey has asserted that the Revocable Trust was funded entirely
with his own personal money that he set aside for estate planning purposes; that
the Revocable Trust did not contain any custodial funds belonging to Justin and
was revocable at any time. In 2004, Jeffrey revoked this trust and transferred the
funds totaling $124,149 into his own personal trust, for which he is named as both
trustee and beneficiary.
4. The Grandfather Trust
{¶5} The Grandfather Trust was established in 1999 pursuant to the last
will and testament of Jeffrey’s father, John P. Whitman. This trust was created for
Justin’s benefit and named Jeffrey as Trustee.
{¶6} On July 21, 2008, the parties appeared for a hearing on Justin’s
petition for an accounting. Jeffrey provided testimony regarding each of the trusts.
Based on the evidence adduced at the hearing, the trial court found that Justin was
2
The report filed by the forensic accountant in this case indicates that this trust was established on May
23, 2000. The trust document submitted by Jeffrey indicates that this trust was established on January 5,
2002. However, the precise date of this trust’s creation is not relevant to the ultimate resolution of this
case.
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entitled to an accounting of the UGMA/UTMA accounts, the College Fund Trust,
the Revocable Trust, and the Grandfather’s Trust. On the record, the trial court
ordered Jeffrey to file an accounting of the College Fund Trust within thirty days
of the hearing, and to file an accounting of the UGMA/UTMA accounts, the
Revocable Trust and the Grandfather’s Trust within sixty days of the hearing. The
trial court journalized its findings in its August 15, 2008 Judgment Entry and
specified that the accounting shall include “a statement of debits and credits and as
the term ‘accounting’ is generally applied in terms of a fiduciary accounting in
probate court.” (JE Aug. 15, 2008 p.3). See R.C. 2109.303.
{¶7} On September 16, 2008, Justin filed a motion for contempt with the
trial court, alleging that Jeffrey failed to comply with the August 15, 2008 order
because he did not submit an accounting for the College Fund Trust within the
thirty-day time frame ordered by the court. Three days later, on September 19,
2008, almost one month past the thirty-day deadline set by the trial court for the
College Fund Trust, Jeffrey filed a signed, two-page document with the trial court
labeled “Accounting.”
{¶8} In this document, Jeffrey provided a short summary paragraph for
each account and attached over forty pages of documents, which consisted of
statements issued by the financial entities holding the funds contained in the
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College Fund Trust, the Revocable Trust, and Grandfather’s Trust, letters written
by representatives of these entities, and a two-page document signed by Jeffrey, as
both the preparing attorney and trustee, which itemized fourteen “disbursements”
from the College Fund Trust for Justin’s benefit over a period of six years. In this
“Accounting,” Jeffrey provided no information about the UGMA/UTMA
accounts, stating only that those funds were now contained in the College Fund
Trust.
{¶9} On November 4, 2008, Justin filed a “Supplement to Motion in
Contempt Coupled with Motion to Strike ‘Accounting’ and Motion to Conduct an
Investigation.” In this motion, Justin alleged that Jeffrey had failed to comply
with the August 15, 2008 order because his September 19, 2008 “Accounting” was
insufficient to constitute an adequate accounting for any of the trusts under R.C.
2109.303.
{¶10} On November 7, 2008, the trial court conducted a hearing on Justin’s
motions for contempt. After a discussion on the record between the trial court and
the parties, Jeffrey conceded that his first accounting was inadequate to comply
with the statute because it was not in the proper format showing all initial account
deposits, all transaction history, including debits and income credits, and the
balances after each transaction. At the hearing, Justin agreed to continue the
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contempt proceedings to allow Jeffrey a second opportunity to comply with the
August 15, 2008 order by filing an accounting sufficient under R.C. 2109.303.
The trial court gave Jeffrey fourteen days to resubmit an accounting with all the
necessary information in the appropriate format.
{¶11} On November 26, 2008, Jeffrey filed a supplemental accounting
entitled “Trust Report” for the College Fund Trust, the Revocable Trust, and the
Grandfather’s Trust. This time, Jeffrey provided more detail regarding the
transactions for each account, including the beginning and end balances as well as
descriptions of several transactions affecting the balances in each account. The
“Trust Reports” also contained a running balance after each transaction. Again,
Jeffrey provided no information about the UGMA/UTMA accounts, but instead
attached an affidavit insisting that he had no records for these accounts prior to
2000 and that his first ex-wife, Justin’s mother, possessed many of these
documents.
A. Contempt Proceedings
{¶12} On December 15, 2008, and January 9, 2009, the trial court
conducted hearings on Justin’s contempt motions. Jeffrey provided the majority
of the testimony. Jeffrey admitted that he initiated the UGMA/UTMA accounts
between 1984 and 1994, but insisted that he had no records for these accounts
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prior to 2000. However, there was evidence before the trial court that Justin’s
counsel had obtained records for the UGMA/UTMA accounts, which dated as far
back as 1994 and were accessible to Jeffrey. Nevertheless, Jeffrey continued to
blame Justin’s mother, who he claimed kept these records from him. However,
there was no evidence that Jeffrey attempted to procure these documents from her.
{¶13} On cross-examination, Justin’s counsel presented evidence relating
to the College Fund Trust, which revealed numerous discrepancies between
Jeffrey’s supplemental accounting and the records maintained by Edward Jones,
the brokerage firm handling the College Fund Trust. In particular, there were
several withdrawals documented on the brokerage account statements which did
not appear in Jeffrey’s supplemental accounting. Jeffrey admitted that at times he
would reimburse himself out of the College Fund Trust in lump sums for expenses
he claimed to have paid for Justin’s benefit out of his own personal funds. He
testified that he had no contemporaneous documentation explaining these
reimbursements and that he simply would make a verbal request to his broker to
withdraw the money. Jeffrey’s broker at Edward Jones also testified confirming
that Jeffrey made several verbal requests for withdrawals from the account.
{¶14} As for the Revocable Trust, Jeffrey continued to maintain that even
though Justin was the named beneficiary for four years that Jeffrey was still
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entitled to revoke the trust at any time because it was funded with his personal
money, as opposed to the College Fund Trust, which contained custodial money.
{¶15} After the two days of testimony, the trial court reached its decision
on whether Jeffrey was in contempt for failing to comply with its August 15, 2008
order.
{¶16} The trial court found that Jeffrey’s accounting and supplemental
accounting relating to the Grandfather’s Trust were sufficient to comply with the
statute and its order. Therefore, Jeffrey was not in contempt regarding this
account.
{¶17} As for the Revocable Trust, the trial court initially found Jeffrey in
contempt because his first accounting was insufficient. However, the trial court
determined that Jeffrey’s supplemental accounting “substantially complied” with
the statute and its order. Therefore, the trial court concluded that Jeffrey had
purged his contempt with respect to the Revocable Trust. In reaching its
conclusion, the trial court relied heavily on Jeffrey’s statements that the Revocable
Trust was funded solely with his own personal money, entitling him to revoke the
trust in 2004.
{¶18} The trial court found Jeffrey’s accounting and supplemental
accounting of the College Fund Trust and the UGMA/UTMA accounts to be more
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problematic. The trial court was not persuaded by Jeffrey’s defense of
impossibility of performance to produce an accurate accounting of the
UGMA/UTMA accounts. Accordingly, the trial court found Jeffrey in civil
contempt for failing to properly account for these funds.
{¶19} As for the College Fund Trust, the trial court found that both
Jeffrey’s initial accounting and his supplemental accounting were insufficient to
comply with the August 15, 2008 order. The trial court found particularly
troublesome the omission of numerous withdrawals in Jeffrey’s supplemental
accounting. Accordingly, the trial court found Jeffrey in civil contempt for failing
to provide an adequate accounting of the College Fund Trust.
{¶20} The trial court then granted Justin’s motion to conduct an
investigation of the College Fund Trust and UGMA/UTMA accounts and
appointed a forensic accountant to construct an accounting of these funds. The
trial court ordered Jeffrey to pay the cost of the investigation and the accounting.
The trial court also ordered Jeffrey to pay all reasonable costs and attorney fees
incurred by Justin in the filing and prosecution of the contempt, with the total
amount to be determined at a later hearing after the forensic accountant completed
the investigation and accounting.
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{¶21} The trial court reserved imposing contempt sanctions for a later date
to allow Jeffrey an opportunity to purge its findings of civil contempt. In
particular, the trial court ordered Jeffrey to fully and promptly cooperate with the
forensic accountant in the review and investigation, “including providing any
authorizations, testimony, information or other items necessary to the same.” (JE
Feb. 17, 2009 at 6).
{¶22} The trial court warned Jeffrey that his cooperation and compliance
would be considered when determining whether he had sufficiently purged its
contempt findings. On the record, the trial court specifically issued the following
notice to Jeffrey. “I will caution you, Mr. Whitman, that the fact that you’re an
attorney is not going to save you from jail if this doesn’t come out to be right.
Whether you’re an attorney or a dad or not, one of the punishments under
contempt is jail.” (Tr. at 669).
{¶23} On March 18, 2009, Jeffrey filed a notice of appeal to this Court,
appealing the trial court’s findings of civil contempt. However, this Court
dismissed the appeal, concluding that the trial court’s order was not a final order
because the amount of attorney fees and the costs associated with the forensic
accountant were to be determined at a later date and remained unresolved.
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{¶24} Discovery in the case continued with the forensic accountant’s
investigation into the administration of the UGMA/UTMA accounts and the
College Fund Trust. On February 22, 2010, the forensic accountant’s report was
filed with the court and the parties were furnished with their respective copies.
B. The Purging Determination
{¶25} On April 30, 2010, the trial court held a hearing to determine
whether Jeffrey had purged himself of the contempt regarding the UGMA/UTMA
accounts and the College Fund Trust. Michelle McHale-Adams, the forensic
accountant who conducted the investigation and created the accounting, testified at
the hearing.
{¶26} McHale-Adams testified that the College Fund Trust was comprised
of the proceeds of four UGMA/UTMA accounts in Justin’s name, totaling
$138,844. In the time period spanning between June 25, 2003 and July 20, 2006,
$61,311 was transferred out of the College Fund Trust. McHale-Adams testified
that she was unable to determine the purpose of these transactions from the
financial documents and that she did not receive any information from Jeffrey
explaining why these transactions had occurred.
{¶27} Jeffrey provided testimony attempting to explain the $61,311 in
withdrawals and transfers from the College Fund Trust identified by McHale-
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Adams. Specifically, Jeffrey admitted as exhibits several personal documents,
some handwritten, providing justification for some of the withdrawals and
transfers out of the College Fund Trust. These exhibits purportedly demonstrated
that most of transactions were made for Justin’s benefit and were related to his
education. However, Jeffrey never shared these documents with McHale-Adams,
despite being ordered by the trial court to fully cooperate with her in creating the
accounting. Notably, all the resources used by McHale-Adams were provided by
Justin’s counsel and obtained through discovery. Jeffrey failed to assist McHale-
Adams in any way during the investigation and the accounting of the funds.
{¶28} McHale-Adams noted that when she initially embarked on the task of
creating this accounting, she was only asked to analyze the funds in the College
Fund Trust and in the UGMA/UTMA accounts titled in Justin’s name. She noted
that, at the time, it was understood that no custodial funds were used to fund the
Revocable Trust. However, as she began to delve into the history of the
UGMA/UTMA accounts, she discovered that $65,085 of Justin’s custodial money
had been placed into the Revocable Trust. This was the largest lump sum of funds
deposited into the Revocable Trust. Because custodial funds belonging to Justin
were used to fund the Revocable Trust, McHale-Adams also conducted an
investigation of the Revocable Trust and created an accounting of those funds.
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{¶29} Jeffrey claimed that he did not know the funds in the Revocable
Trust were custodial in nature and argued that the accounts must have been
“mislabeled.” However, Justin’s counsel admitted into evidence several
documents which proved that Jeffrey was the Custodian on these particular
UGMA/UTMA accounts prior to them being liquidated and deposited into the
Revocable Trust.
{¶30} In addition to the custodial funds, McHale-Adams found two W-2s
issued to Justin by Jeffrey’s Title Company, purporting to reflect income paid to
Justin as an employee. According to these W-2s, Justin was paid $25,000 in
wages and received $18,487.50 in income, after taxes, from the Whitman Title
Security, Inc., in 2001 and 2002. Coincidentally, two deposits were made into the
Revocable Trust in the amounts of $18,488 at the end of 2001 and 2002. Jeffrey
admitted that Justin never worked for his title company and that he issued those
W-2s solely upon the recommendation of his accountant.
{¶31} Notably, Jeffrey stipulated that Justin was entitled to the funds
remaining in the College Fund Trust and that, to the extent the funds in the
Revocable Trust were proven to belong to Justin, Justin was also entitled to those
funds. In fact, after McHale-Adams’ testimony, it became clear that the entire
corpus of the Revocable Trust was comprised of funds belonging to Justin and,
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therefore, Jeffrey was not entitled to revoke the trust in 2004 and place the funds
into his own personal trust account.
{¶32} After hearing the testimony and reviewing the exhibits presented, the
trial court was deeply troubled by the facts that had been elicited. Specifically, the
trial court made the following comments about what had transpired at the hearing.
What I’ve seen here is just outrageous, Mr. Whitman. I know
it’s your son, but you have to be held to the same standards as
any other fiduciary.
Your lack of records, your lack of cooperation—even until today
your answers on your questions, your not knowing answers.
The way you framed your answers, I’m not sure. It’s the best of
my recollection or feigning that you don’t remember questions
that you should know.
I barely believed anything you said. Your cooperation with the
[forensic accountant], you didn’t give [her] anything. And your
attorney’s complaining it’s one-sided. [You] didn’t give [her]
anything.
You taking money-I believe this sham transaction of paying your
son $25,000 for two years of not working, in my mind, that’s tax
evasion, not avoidance. That’s clearly wrong, and then putting
it in your name. I do believe that the IRS has some reason to
look into this. I’m not saying that they should, but your whole
conduct here is certainly subject to question.
All this money, that, up ‘till now, [you] said was yours and
revocable, it appears to me, none of it is.
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So how can I put any stock into what you say, so how can I give
you any benefit in this case. You don’t do anything—you come
in here and you say, I’ll sign a release. I’ll give them my records.
It’s your job. It’s your job to show them. It’s your job to
structure, to show an account and what went out and what went
in and what’s on hand so that they can come into an accounting
and ask that it be objected to, and you haven’t done it.
Just absolutely no cooperation.
And the million dollar question is, what do I do on sentencing?
It is difficult. I consider you an officer of the court and a father
and the standard there is very high and you have violated every
one of them.
(Tr. at 1061-62).
{¶33} On July 1, 2010, the trial court entered its judgment on the case. In
its judgment entry, the trial court found Jeffrey in civil contempt for failing to
account for the UGMA/UTMA accounts and College Fund Trust. The trial court
withdrew its previous finding that Jeffrey had purged himself of civil contempt
with regard to the Revocable Trust, now finding him in civil contempt for failing
to adequately account for the funds held that trust. The trial court ordered Jeffrey
to pay $35,448.75 for the forensic accountant’s fees and sentenced Jeffrey to serve
three days in jail, as sanctions for his contempt. The trial court also ordered Justin
to “recover of [Jeffrey] reasonable attorney fees and costs incurred by [Justin]; and
that a hearing be set by the Court to establish the same.” (JE Jul. 1, 2010 p.7).
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{¶34} The trial court awarded Justin the funds remaining in the College
Fund Trust, $47,000, and ordered Jeffrey to deliver the funds previously held in
the Revocable Trust to Justin, which at the time of the hearing totaled $168,340.3
Both Justin and Jeffrey appealed the July 1, 2010 Judgment Entry of the trial
court. However, this Court also dismissed that appeal because the award of
attorney fees had yet to be resolved.
{¶35} On December 20, 2010, the trial court held a hearing on the attorney
fees issue. On April 7, 2011, the trial court awarded Justin $104,128.57 in
attorney fees.
{¶36} Jeffrey now appeals, asserting the following assignments of error.
ASSIGNMENT OF ERROR NO. I
THE TRIAL COURT ERRED IN FINDING APPELLANT
JEFFREY WHITMAN IN CIVIL CONTEMPT OF COURT.
ASSIGNMENT OF ERROR NO. II
THE TRIAL COURT ERRED IN SENTENCING APPELLANT
JEFFREY WHITMAN TO SERVE THREE DAYS IN JAIL
FOR CIVIL CONTEMPT.
3
There were no withdrawals made from these funds while they were wrongfully contained in Jeffrey’s
personal trust account. The funds were continuously invested and fluctuated due to market activity.
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ASSIGNMENT OF ERROR NO. III
THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S
FEES TO APPELLEE.
First Assignment of Error
{¶37} In his first assignment of error, Jeffrey maintains that the trial court
erred when it found him in civil contempt for failing to provide an accounting for
the College Fund Trust and UGMA/UTMA accounts and when it withdrew its
prior finding that Jeffrey had purged himself of contempt regarding the Revocable
Trust and found him in civil contempt for also failing to account for those funds.
{¶38} Contempt results when a party before a court disregards or disobeys
an order or command of judicial authority. First Bank of Marietta v. Mascrete,
Inc., 125 Ohio App.3d 257, 263, 708 N.E.2d 262 (4th Dist.1998); see R.C.
2705.02. “It is conduct which brings the administration of justice into disrespect,
or which tends to embarrass, impede or obstruct a court in the performance of its
functions.” Windham Bank v. Tomaszczyk, 27 Ohio St.2d 55, 271 N.E.2d 815(1971), paragraph one of the syllabus. The law surrounding contempt was created
to uphold and ensure the effective administration of justice, secure the dignity of
the court, and affirm the supremacy of law. Cramer v. Petrie, 70 Ohio St.3d 131,
133, 1994–Ohio–404, 637 N.E.2d 882. When reviewing a finding of contempt, an
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appellate court applies an abuse of discretion standard. State ex rel. Ventrone v.
Birkel, 65 Ohio St.2d 10, 417 N.E.2d 1249 (1981).
{¶39} In the case sub judice, the trial court found Jeffrey in civil contempt
for his failure to file an adequate accounting as required by its August 15, 2008
order. Civil contempt is remedial or coercive in nature and will be imposed to
benefit the complainant. Pugh v. Pugh, 15 Ohio St.3d 136, 139, 472 N.E.2d 1085(1984). Although not expressly stated by the trial court, the record supports
characterizing Jeffrey’s contempt as indirect, which involves behavior that occurs
outside the presence of the court and demonstrates a lack of respect for the court
or its lawful orders. Sansom v. Sansom, 10th Dist. No. 05AP-645, 2006-Ohio-
3909, ¶ 23.
{¶40} The trial court specified in its August 15, 2008 order that “[Jeffrey]
file an accounting including a statement of debits and credits as the term
‘accounting’ is generally applied in terms of a fiduciary accounting in a probate
court.” (JE Aug. 15, 2008 at 3). Jeffrey does not dispute that he acted as a
fiduciary with respect to these accounts held for Justin’s benefit.
{¶41} Section 2109.303 of the Revised Code provides fiduciaries with
guidance on how to construct an accounting and states, in relevant part:
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Every account shall include an itemized statement of all receipts
of the * * * fiduciary during the accounting period and of all
disbursements and distributions made by * * * the fiduciary
during the accounting period. The itemized disbursements and
distributions shall be verified by vouchers or proof, except in the
case of an account rendered by a corporate fiduciary subject to
section 1111.28 of the Revised Code. In addition, the account
shall include an itemized statement of all funds, assets, and
investments of the estate or trust known to or in the possession
of the fiduciary at the end of the accounting period and shall
show any changes in investments since the last previous account.
***
Upon the filing of every account, the * * * fiduciary, except a
corporate fiduciary subject to section 1111.28 of the Revised
Code, shall exhibit to the court for its examination both of the
following: the securities shown in the account as being in the
hands of the * * * fiduciary, or the certificate of the person in
possession of the securities, if held as collateral or pursuant to
section 2109.13 or 2131.21 of the Revised Code; and a passbook
or certified bank statement showing as to each depository the
fund deposited to the credit of the estate or trust * * *.
{¶42} On appeal, Jeffrey argues that the trial court abused its discretion
when it found him in civil contempt because no principal was missing from the
UGMA/UTMA accounts, the College Fund Trust and the Revocable Trust and all
the funds were identifiable and traceable. Jeffrey also claims that the trial court’s
finding of contempt was arbitrary and unreasonable because its decision was a
“rush to judgment.”
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{¶43} In making this argument, Jeffrey demonstrates a failure to understand
the objectives set forth by the trial court in its August 15, 2008 order. This
appears to be due to either: 1) his continued inability to understand the
fundamentals of a fiduciary’s responsibilities or; 2) his utter disregard for the
duties that he imposed upon himself by electing to be the Trustee and Custodian of
these accounts. The following excerpt from a conversation between the trial court
and Jeffrey at the contempt hearing on January 9, 2009, seems to support the latter
conclusion.
Trial Court: You’re an attorney, licensed in Ohio, correct?
Whitman: Yes.
Trial Court: And you’ve been so how long?
Whitman: 31 years.
Trial Court: And do you do any probate work?
Whitman: I do some but I’ve never done any trust accounting.
Trial Court: Have you ever done an accounting in a probate
estate?
Whitman: On an estate? Yes.
Trial Court: And it is your understanding that you start with an
inventory balance or a given balance and you show all additions
and all deductions from the account?
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Whitman: Oh, sure.
Trial Court: And you come up with a balance, which is then
certified by the bank or the trust fund account holder, Edward
D. Jones, showing that that’s the actual amount.
Whitman: Correct.
(Tr. at 519-20).
{¶44} In addition, the trust agreement establishing the College Fund Trust,
which Jeffrey personally drafted, states the following, in pertinent part, under
Article IV entitled “Rights, Power and Duties of the Trustee,” paragraph 13
labeled “Accounting.”
The Trustee shall keep adequate books of account in which shall
be entered a description of all property from time to time
constituting the assets of each trust and an account of all receipts
and disbursements hereunder, which books of account shall at
all reasonable times be open to the inspection and examination
of the respective beneficiaries * * *. The Trustee shall furnish
the respective beneficiaries * * * as often as may reasonably be
requested, an accurate statement showing the property
constituting the assets of each trust and the income thereof, and
showing all receipts and disbursements.4
{¶45} The instant case was initiated by Justin filing a petition for an
accounting. Accordingly, the primary issue before this Court is simply whether
4
Notably, when Jeffrey was asked about this portion of the trust agreement he responded: “You know,
this was a just standard form trust agreement that I whipped out and put something on it. But, you know, I
never expected pursuant to this agreement * * * that there would be any accounting.” (Tr. at 489).
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Jeffrey fulfilled his fiduciary duty to provide Justin with an adequate accounting of
the funds belonging to him. The issue of any misappropriation of these funds is an
entirely separate matter that Justin chose not pursue at this time. Therefore, the
fact that there is apparently no principal missing from the trusts and that the funds
are traceable and identifiable is completely irrelevant to the trial court’s
consideration of whether Jeffrey should be held in contempt for failing to provide
an adequate accounting of the funds.
{¶46} As demonstrated by his own testimony, Jeffrey purports to
understand what constitutes an accounting in its simplest form. Moreover, the trial
court even permitted Jeffrey to explain the debits and credits without attaching any
supporting evidence, such as receipts, invoices and vouchers, as required by the
statute and the trust document establishing the College Fund Trust. The trial court
gave Jeffrey ample opportunity to accomplish this task, even allowing him to
resubmit the accounting after it was explained to him why his first attempt was
inadequate. Nevertheless, Jeffrey continued to provide various excuses, primarily
in the form of blaming his attorneys, ex-wives, brokers and accountant, for why he
could not produce an accounting that complied with the trial court’s order.
{¶47} Upon finding Jeffrey in civil contempt, the trial court gave him one
final opportunity to demonstrate a good faith compliance with the trial court’s
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order. The trial court did not order him to make a third attempt to file an adequate
accounting, but simply ordered him to fully cooperate with the forensic accountant
in completing that task. It took the forensic accountant over a year to finish the
accounting ordered by the trial court. In that time, Jeffrey offered absolutely no
assistance to the forensic accountant. Instead, he arrived at the purge hearing with
personal documents that purported to explain some of the transactions relating to
the College Fund Trust, documents that the forensic accountant testified would
have been helpful in creating an accurate accounting for the trial court.
{¶48} However, the most egregious fact revealed by the forensic
accountant is that the Revocable Trust was comprised of entirely Justin’s funds.
Jeffrey had previously convinced the trial court that the Revocable Trust contained
only his personal funds and that he was entitled to revoke it in 2004. The trial
court relied on Jeffrey’s representations in finding that he had purged himself of
contempt regarding this trust. Had it not been for the accounting compiled by the
forensic accountant, the trial court and Justin would have never known that these
funds were in fact an irrevocable gift and Justin’s indefeasibly vested property.
{¶49} Based on the foregoing, there is an overwhelming amount of clear
and convincing evidence in the record of this case, for this Court to conclude that
the trial court did not abuse its discretion in finding Jeffrey in indirect civil
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contempt of court. It is evident from the proceedings that Jeffrey had ample
opportunity to both comply with the trial court’s August 15, 2008 order and to
purge himself of any contempt. Accordingly, it was not a “rush to judgment,” but
Jeffrey’s own misconduct, omissions and complete disregard for the legal orders
imposed by the trial court which resulted in him being found in contempt.
Jeffrey’s first assignment of error is overruled.
Second Assignment of Error
{¶50} In his second assignment of error, Jeffrey maintains that the trial
court abused its discretion in sentencing him to serve three days in jail as a civil
contempt sanction. Specifically, Jeffrey claims that his jail sentence is a criminal
contempt sanction that cannot be imposed for a finding of civil contempt.
{¶51} When reviewing a finding of contempt, including a trial court’s
imposition of penalties, an appellate court applies an abuse of discretion standard.
Fidler v. Fidler, 10th Dist. No. 08AP-284, 2008-Ohio-4688, ¶ 11, citing In re
Contempt of Morris, 110 Ohio App.3d 475, 479, 674 N.E.2d 761 (8th Dist.1996).
An abuse of discretion implies the trial court’s attitude is unreasonable, arbitrary
or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d
1140 (1983).
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{¶52} “The court may punish disobedience of its order pursuant to both
R.C. 2705.02(A) and its inherent power to enforce its authority.” Zakany v.
Zakany, 9 Ohio St.3d 192, 459 N.E.2d 870 (1984), syllabus. In particular, R.C.
2705.05 provides, in pertinent part:
(A) In all contempt proceedings, the court shall conduct a
hearing. At the hearing, the court shall investigate the charge
and hear any answer or testimony that the accused makes or
offers and shall determine whether the accused is guilty of the
contempt charge. If the accused is found guilty, the court may
impose any of the following penalties:
(1) For a first offense, a fine of not more than two hundred fifty
dollars, a definite term of imprisonment of not more than thirty
days in jail, or both;
{¶53} As previously mentioned, civil contempt is meant to be remedial or
coercive in nature and is imposed for the benefit of the complainant. Pugh, 15
Ohio St.3d 136, 139, 472 N.E.2d 1085. The burden of proof for civil contempt is
clear and convincing evidence. Flowers v. Flowers, 10th Dist. No. 10AP-1176,
2011-Ohio-5972, ¶ 9. The key distinguishing feature of a civil contempt sanction
from a criminal contempt sanction is that the trial court must give the contemnor
an opportunity to purge the contempt. Carroll v. Detty, 113 Ohio App.3d 708,
712, 681 N.E.2d 1383 (4th Dist.1996). Thus, “[t]he contemnor is said to carry the
keys of his prison in his own pocket * * * since he will be freed if he agrees to do
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as so ordered.” Brown v. Executive 200, Inc., 64 Ohio St.2d 250, 253, 416 N.E.2d
610 (1980).
{¶54} In contrast, criminal contempt sanctions are not coercive, but rather
punitive in nature. State v. ex rel. Corn v. Russo, 90 Ohio St.3d 551, 555, 2001-
Ohio-15, 740 N.E.2d 265. Imprisonment for criminal contempt is unconditional
and serves as punishment for a completed act of disobedience, vindicating the
authority of the court. Brown at 254. In order to constitute criminal contempt, a
sanction must have an “overriding punitive purpose [.]” State v. Kilbane, 61 Ohio
St.2d 201, 206, 400 N.E.2d 386 (1980). The burden of proof for criminal
contempt is proof beyond a reasonable doubt. Flowers, 10th Dist. No. 10AP-
1176, 2011-Ohio-5972, ¶ 10 citing Brown at 251.
{¶55} Constitutional due process requires that an alleged contemnor be
advised of the charges and have a reasonable opportunity to meet them by way of
defense or explanation. Mosler, Inc. v. United Auto., Aerospace & Agr. Implement
Workers of Am., Local 1862, 91 Ohio App.3d 840, 843, 633 N.E.2d 1193 (12th
Dist.1993); see, also, Cincinnati v. Cincinnati Dist. Counsel 51, 35 Ohio St.2d
197, 203, 299 N.E.2d 686 (1973). In order to comply with due process
requirements, notice must set forth the alleged misconduct with particularity. See
R.C. 2705.03. Due process of law does not allow a hearing to be held without
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giving the defendants “ ‘timely notice * * * of the specific issues that they must
meet.’ ” (Emphasis sic.) State ex rel. Johnson v. Perry Cty. Court, 25 Ohio St.3d
53, 57-58, 495 N.E.2d 16 (1986), quoting In re Gault, 387 U.S. 1, 33-34, 87 S.Ct.
1428, 18 L.Ed.2d 527 (1967).
{¶56} Here, Justin filed two motions for contempt apprising Jeffrey of the
nature of the charges against him so that he may prepare a defense. After a two-
day hearing, where he was given sufficient opportunity to present his defenses to
the contempt charges, the trial court found Jeffrey in civil contempt, by clear and
convincing evidence, for failing to provide a proper accounting as required by its
prior order. The trial court gave Jeffrey an opportunity to purge the contempt by
fully cooperating and assisting the forensic accountant with the investigation and
with compiling the accounting of the UGMA/UTMA accounts and College Fund
Trust. And, on the record, the trial court specifically cautioned Jeffrey that it
would not hesitate to put him in jail if he again failed to comply with its orders.
I will caution you, Mr. Whitman, that the fact that you’re an
attorney is not going to save you from jail if this doesn’t come
out to be right. Whether you’re an attorney or a dad or not, one
of the punishments under contempt is jail.
(Jan. 9, 2009 Hrg, Tr. at 669).
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{¶57} The trial court ordered Jeffrey to assist in the forensic accounting so
that a complete and accurate accounting could be created for Justin’s review. The
trial court further put Jeffrey on notice of a potential jail sentence to coerce him
into complying with its order. As previously discussed, the nature of civil
contempt is coercive and remedial and imposed for benefit of the complainant.
We believe it is clearly established in the record that the trial court warned Jeffrey
about the possibility of jail to achieve these ends.
{¶58} In reaching this conclusion, we acknowledge that instead of simply
warning the contemnor in general terms of a possible jail sentence, some courts
have chosen in civil contempt cases to actually impose a jail sentence as a
contempt sanction and then suspend the sentence, as a preferred method to both
coerce the contemnor’s compliance with the court’s order and to provide him an
opportunity to purge. See, e.g., Flowers v. Flowers, 10th Dist. No. No. 10AP–
1176, 2011-Ohio-5972; State ex rel. Cordray v. Tri-State Group, Inc., 7th Dist.
No. 07-BE-38, 2011-Ohio-2719. However, while it might be the preferred
practice for a trial court to formally impose and suspend a specific jail sentence in
certain instances, we found no authority mandating that procedure as the only
permissible method for the opportunity to purge to be framed or for a jail sentence
to be imposed as a civil contempt sanction.
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{¶59} Moreover, in the absence of such authority, we believe that
restricting the trial court to imposing a suspended jail sentence as the only
permissible method for imposing a jail sentence as a civil contempt sanction, is an
unnecessary impingement on the statutory grant given to the trial court to punish
disobedience of its orders and the inherent power of the trial court to enforce its
authority—especially under the circumstances of this case where the trial court
explicitly warned the contemnor of a possible jail sentence as a consequence for
his failure to purge the contempt.
{¶60} In sum, we believe the overall circumstances of this case clearly
support the civil contempt finding and the three day jail sentence as a civil
contempt sanction. Moreover, Whitman was clearly and specifically apprised in
advance by the trial court of the possibility of jail as a sanction if he did not
cooperate with the forensic accountant. As a result, we believe the imposition of
the jail sentence was consistent with the prior warning of the court; that the
warning of jail for failure to cooperate clearly provided both a sufficient due
process apprisal and the necessary opportunity to purge; and thus the jail sentence
constituted a permissible consequence for his failure to purge in this case.
{¶61} Accordingly, we find that the trial court’s jail sentence was supported
by clear and convincing evidence and was consonant with the objectives of civil
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contempt. Therefore, the trial court did not abuse its discretion in sentencing
Jeffrey to three days in jail as a civil contempt sanction. Jeffrey’s second
assignment of error is overruled.
Third Assignment of Error
{¶62} In his third assignment of error, Jeffrey contends that the trial court
erred in awarding attorney fees to Justin in the amount of $104,128.57. Jeffrey
raises three specific arguments relating to the issue of attorney fees: 1) Justin is not
the real party in interest to be awarded the attorney fees; 2) the trial court awarded
fees for the incorrect time period of representation and; 3) the trial court’s decision
runs afoul of the Hancock County Local Rules of Court governing contempt.
{¶63} “A trial court may, within its discretion, include attorney fees as part
of the costs taxable to a defendant found guilty of civil contempt.” Planned
Parenthood Ass’n of Cincinnati, Inc. v. Project Jericho, 52 Ohio St.3d 56, 67, 556
N.E.2d 157 (1990) citing State, ex rel. Fraternal Order of Police, v. Dayton, 49
Ohio St.2d 219, 361 N.E.2d 428 (1977). In particular, the trial court may award
damages to a complainant where it can be proven that the damages were a direct
result of the contempt. RLM Industries, Inc. v. Indep. Holding Co., 83 Ohio
App.3d 373, 377, 614 N.E.2d 1133 (8th Dist.1992) citing Cincinnati v. Cincinnati
Dist. Council 51, 35 Ohio St.2d 197, 299 N.E.2d 686 (1973).
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{¶64} First, Jeffrey argues that Justin is not the “real party in interest” to be
awarded attorney fees as a result of the contempt proceedings. Jeffrey argues that
because Justin’s mother, Jeffrey’s ex-wife, signed as a guarantor on the fee
agreement established between Justin and his counsel, and acted as Justin’s power
of attorney, she—not Justin, is the real party in interest. Notably, Jeffrey fails to
cite to any authority in support of his argument. Instead, he simply makes bald
assertions, which amount to mere conjecture, that Justin’s attorneys were acting
“at the behest” of Justin’s mother in proceeding with this lawsuit.
{¶65} The evidence established at the hearing on the issue of attorney fees
demonstrates that Justin signed the fee agreement in 2006 for his representation by
his attorneys in pursuing the accounting petition and the collection of any
custodial money belonging to him. Justin’s mother signed as a guarantor on the
fee agreement. However, as explained at the hearing by the expert on attorney
fees, an attorney who specializes in litigation involving forensic accounting and
trust matters, it is not unusual for there to be a guarantor of attorney fees in a
matter such as this one. The expert explained that the guarantor is not the client,
but the person who actually signs the fee agreement to be personally represented
by the attorney is the client. In addition, the expert explained that a power of
attorney is utilized in a case for various reasons and does not negate the fact that
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Justin is the client according to the fee agreement. Notably, Jeffrey stipulated to
the expert being qualified to discuss matters relating to assessing the
reasonableness of attorney fees in these particular cases.
{¶66} Jeffrey next argues that the trial court erred in determining the time
frame of attorney fees in its award to Justin. We note that Jeffrey stipulated to the
reasonableness of the rates charged by Justin’s attorneys. The trial court awarded
Justin the attorney fees he incurred from April 18, 2006 to December 20, 2010. At
the hearing on attorney fees, Justin’s attorneys presented a detailed timeline
documenting their representation of Justin relating to the accounting and contempt
proceedings, which spanned four-and-a-half years, as well as all the invoices sent
to Justin describing the legal services performed on his behalf. Expert testimony
also established that the hours expended by Justin’s counsel in this case were
reasonable and commensurate with cases as complex as this one.
{¶67} Moreover, in its judgment entry awarding Justin attorney fees, the
trial court noted that Jeffrey’s conduct, in refusing to cooperate and in creating
obstacles to Justin receiving an accounting from the inception of this case, was the
primary reason Justin accrued these attorney fees. In doing so, the trial court
found that this specific award of attorney fees “puts [Justin] in the position he
should have been, if not for [Jeffrey’s] contemptuous behavior. It also recognizes
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the results achieved. The award is directly attributable to [Jeffrey’s] behavior. He
could have avoided this by providing [Justin] with an accounting at first request.”
(JE April 7, 2011 at 4).
{¶68} Finally, Jeffrey argues that the trial court’s award of attorney fees as
a contempt sanction violates Hancock County Local Rule 2.16, which limits a fine
for a first offense of contempt to $250.00. However, Jeffrey neglects to mention
that this local rule is a domestic relations rule. In addition, the award of attorney
fees is not synonymous with imposing a fine. Therefore, we fail to see how this
rule affects the trial court’s discretion in awarding attorney fees as a contempt
sanction in a probate matter.
{¶69} Based on the foregoing, we conclude that the trial court did not abuse
its discretion in awarding Justin $104,128.57 in attorney fees. The evidence
before the trial court established that Justin was at all times considered the client
under the fee agreement between him and his attorneys. Moreover, the record
supports that the amount of attorney fees awarded was reasonable and incurred by
Justin as a direct result of Jeffrey’s contemptuous conduct. Jeffrey’s third
assignment of error is overruled.
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{¶70} For all these reasons, the judgments are affirmed.
Judgments Affirmed
ROGERS, J. and *FRENCH, J., concurs.
* Judge Judith L. French sitting by assignment from the Tenth District Court
of Appeals
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