Colby v. Colby , 2016 Ohio 2903 ( 2016 )

[Cite as Colby v. Colby, 2016-Ohio-2903.]
COURT OF APPEALS
DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
PATRICIA F. COLBY JUDGES:
Hon. Sheila G. Farmer, P. J.
Plaintiff-Appellant Hon. William B. Hoffman, J.
Hon. John W. Wise, J.
-vs-
Case No. 15 CAF09 0068
RICHARD B. COLBY, JR.
Defendant-Appellee OPINION
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Domestic Relations Division, Case
No. 12 DRA 09 0465
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: May 5, 2016
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
BARRY H. WOLINETZ ROBERT J. BEHAL
WOLINETZ LAW OFFICES LLC JEFFREY A. EYERMAN
250 Civic Center Drive THE BEHAL LAW GROUP LLC
Suite 220 501 South High Street
Columbus, Ohio 43215 Columbus, Ohio 43215
Delaware County, Case No. 15 CAF09 0068 2
Wise, J.
{¶1} Plaintiff-Appellant Patricia F. Colby appeals the judgment of the Delaware
County Court of Common Pleas, Domestic Relations Division, which granted her a
divorce from Defendant-Appellee Richard B. Colby, Jr. The relevant facts leading to this
appeal are as follows.
{¶2} Appellant Patricia and Appellee Richard were married on May 28, 1988.
Three children were born of the marriage. The oldest two children were emancipated as
of the date of the decree. The youngest is deceased.
{¶3} During the marriage, appellant started a political consulting business known
as Colby and Company, Inc. Appellant was president of the company for a time.
Eventually, appellee became president and appellant took on the position of CEO.
{¶4} Appellant filed a complaint for divorce Delaware County on September 12,
2012. Colby and Company, Inc., was thereafter joined as a party to the action.1 Appellee
filed no answer and/or counterclaim.
{¶5} On February 19, 2015, appellant filed a motion to show cause regarding
payment of spousal support under the trial court’s temporary orders. Appellant filed a
second show cause motion on March 6, 2015 regarding appellee’s alleged failure to join
in a filing for bankruptcy, also as required under the temporary orders. In addition,
appellant filed two show cause motions on March 26, 2015 on multiple issues.
{¶6} The divorce action proceeded to a trial before a magistrate on June 22 and
23, 2015. The witnesses called were appellant, appellee, and Reg Martin of Martin
1 Neither party provided an appraisal or evaluation of the company for the court record.
See Magistrate’s Decision at 9.
Delaware County, Case No. 15 CAF 09 0068 3
Management Services, who had been appointed as the receiver for Colby and Company
in March 2015.
{¶7} The magistrate issued a twenty-two page decision on June 26, 2015,
recommending the granting of a divorce and the terms thereof. The decision added a
three-page exhibit listing the parties’ main assets and extensive itemized debts.
{¶8} Among other things, the magistrate determined in her decision that the
parties’ marital residence on Tartan Fields Drive in Dublin, Ohio, was marital property with
an appraised value of $579,000.00, but that “[t]he parties lost any equity in the Tartan
Fields home not only because of [a] foreclosure, but also because of their inability to
cooperate in listing the home for sale and their failure to timely prepare the home for
showing.” Decision at 6. The magistrate also found that the parties’ other real property in
Ashland, Kentucky, currently in use as a rental unit under a U.S. Department of Housing
and Urban Development program, was marital property with an appraised value of
$45,000.00. Id. at 3-4. The Kentucky property was ultimately awarded to appellant. Id. at
17.
{¶9} The magistrate also determined, in regard to property division, that appellee
would be “awarded all stock and ownership of Colby and Company, Inc., free and clear
of any claim by [appellant] and subject to all business debt thereon.” Id. at 18. In regard
to spousal support, the magistrate recommended that appellee pay appellant $3,000.00
per month for nine years, effective July 1, 2015.
{¶10} On July 10, 2015, appellant filed objections to the magistrate’s decision.
{¶11} On August 12, 2015, the trial court issued a judgment entry denying all of
appellant’s objections.
Delaware County, Case No. 15 CAF 09 0068 4
{¶12} On August 13, 2015, the trial court issued a final judgment entry of divorce.
{¶13} On August 26, 2015, appellant filed a motion for relief from judgment
pursuant to Civ.R. 60(B) and a motion for a new trial pursuant to Civ.R. 59. Via a judgment
entry issued September 9, 2015, the trial court denied both motions.
{¶14} On September 10, 2015, appellant filed a notice of appeal as to the
aforesaid decree of divorce. She herein raises the following seven Assignments of Error:
{¶15} “I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WITH
REGARD TO ITS SPOUSAL SUPPORT AWARD.
{¶16} “II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FAILED TO AWARD WIFE DISTRIBUTIONS FROM COLBY & COMPANY, INC. FOR
THE YEARS 2013, 2014 AND 2015 WHILE SHE WAS A 50% OWNER.
{¶17} “III. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FAILED TO ORDER THAT WIFE BE HELD HARMLESS ON CORPORATE TAXES
OWED DUE TO DISTRIBUTIONS THAT WIFE DID NOT RECEIVE.
{¶18} “IV. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FOUND WIFE WAS NOT ENTITLED TO A SEPARATE PROPERTY INTEREST IN
THE REAL PROPERTY LOCATED AT 3929 BLACKBURN AVENUE, ASHLAND,
KENTUCKY.
{¶19} “V. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FOUND WIFE WAS NOT ENTITLED TO A SEPARATE PROPERTY INTEREST IN
THE REAL PROPERTY LOCATED AT 8447 TARTAN FIELDS DRIVE, DUBLIN, OHIO
AND FAILED TO OTHERWISE ADEQUATELY COMPENSATE HER FOR HER
INTEREST.
Delaware County, Case No. 15 CAF 09 0068 5
{¶20} VI. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FAILED TO FIND HUSBAND IN CONTEMPT AND FAILED TO ORDER HUSBAND
TO REIMBURSE WIFE AND TO AWARD ATTORNEY'S FEES TO WIFE.
{¶21} VII. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT FAILED TO COMPENSATE WIFE FOR HUSBAND'S MISCONDUCT.”
I.
{¶22} In her First Assignment of Error, appellant contends the trial court erred and
abused its discretion in establishing the spousal support obligation payable by appellee.
We disagree.
{¶23} A trial court's decision concerning spousal support may only be altered if it
constitutes an abuse of discretion. See Kunkle v. Kunkle (1990), 51 Ohio St. 3d 64, 67,
554 N.E.2d 83. An abuse of discretion connotes more than an error of law or judgment; it
implies that the court's attitude is unreasonable, arbitrary or unconscionable. Blakemore
v. Blakemore, 5 Ohio St. 3d 217, 450 N.E.2d 1140 (1983). It has been aptly recognized
that “[w]hile each case is unique, and hard and fast rules are not applicable, courts
generally award spousal support for lengthy periods after marriages of long duration.”
Barrientos v. Barrientos, 3rd Dist. Hancock No. 5–12–13, 2013-Ohio-424, ¶ 36.
{¶24} R.C. 3105.18(C)(1)(a) through (n) provides as follows in regard to a trial
court’s adjudication of the issue of spousal support:
{¶25} “(C)(1) In determining whether spousal support is appropriate and
reasonable, and in determining the nature, amount, and terms of payment, and duration
of spousal support, which is payable either in gross or in installments, the court shall
consider all of the following factors:
Delaware County, Case No. 15 CAF 09 0068 6
{¶26} “(a) The income of the parties, from all sources, including, but not limited to,
income derived from property divided, disbursed, or distributed under section 3105.171
of the Revised Code; (b) The relative earning abilities of the parties; (c) The ages and the
physical, mental, and emotional conditions of the parties; (d) The retirement benefits of
the parties; (e) The duration of the marriage; (f) The extent to which it would be
inappropriate for a party, because that party will be custodian of a minor child of the
marriage, to seek employment outside the home; (g) The standard of living of the parties
established during the marriage; (h) The relative extent of education of the parties; (i) The
relative assets and liabilities of the parties, including but not limited to any court-ordered
payments by the parties; (j) The contribution of each party to the education, training, or
earning ability of the other party, including, but not limited to, any party's contribution to
the acquisition of a professional degree of the other party; (k) The time and expense
necessary for the spouse who is seeking spousal support to acquire education, training,
or job experience so that the spouse will be qualified to obtain appropriate employment,
provided the education, training, or job experience, and employment is, in fact, sought; (l)
The tax consequences, for each party, of an award of spousal support; (m) The lost
income production capacity of either party that resulted from that party's marital
responsibilities; (n) Any other factor that the court expressly finds to be relevant and
equitable.”
{¶27} While R.C. 3105.18(C)(1), supra, does set forth fourteen factors the trial
court must consider, if the court does not specifically address each factor in its order, a
reviewing court will presume each factor was considered, absent evidence to the contrary.
Carroll v. Carroll, 5th Dist. Delaware No. 2004–CAF–05035, 2004-Ohio-6710, ¶ 28, citing
Delaware County, Case No. 15 CAF 09 0068 7
Watkins v. Watkins, 5th Dist. Muskingum No. CT 2001–0066, 2002-Ohio-4237, ¶ 21
(additional citations omitted).
{¶28} In the case sub judice, we reiterate the magistrate ordered spousal support
to appellant in the amount of $3,000.00 per month for a term of nine years, and said
amount was adopted by the trial court upon appellant’s Civ.R. 53 objections. At the time
of trial, both parties were in their mid-fifties, and the marriage duration was twenty-seven
years. Both have an educational level of master’s degree. Tr. at 153, 226. Neither party
had built up very large retirement accounts: appellant’s total was found to be about
$36,000.00, while appellee’s was found to be about $44,000.00. The parties were
apparently living well above their means during the marriage, accumulating a substantial
amount of consumer, tax, and mortgage debt.2 While appellant, presently unemployed,
has battled cancer in the past and has applied for SSD, the magistrate found no evidence
of inability to be employed. Appellant proposed a personal post-divorce monthly budget
of more than $7,400.00 per month, which was found to be unreasonable. Appellee
continues to work for Colby and Company, presently receiving a salary of $72,000.00 per
year while the company is in receivership, although the magistrate appeared to have
determined that the funds available to appellant annually from company operations,
based on a three-year past average, would be $161,880.00, but for the receivership. The
magistrate specifically noted that appellee would be taking on about $170,000.00 in
company debt.
2 In fairness, we also observe that the family unfortunately incurred substantial medical
expenses over time.
Delaware County, Case No. 15 CAF 09 0068 8
{¶29} Appellant’s challenge to the spousal support order is clearly the top priority
of her brief. She has provided a multi-prong argument on the issue, which, in the interest
of judicial economy, we will herein summarize and answer simultaneously: We find the
trial court did not abuse its discretion in finding upon objection that the addition of $3,000
in monthly company income ($22,000.00 versus $19,000.00) was immaterial as to its
spousal support calculation. The trial court also acted within its discretion in finding
appellant was not entitled to a portion of any future company distributions, as she will no
longer be a shareholder of the company and will have no responsibility for the company's
debt. We find the trial court, in its establishment of a spousal support obligation via its
application and discussion of all the relevant statutory factors, also fully acknowledged
and considered the company benefits appellee receives. Finally, in regard to the trial
court’s decision not to obligate appellee to providing life insurance for appellant, such a
decision is clearly within the discretion of the trial court on a case-by-case basis (see
Forchione v. Forchione, 5th Dist. Stark No. 2012CA00085, 2013-Ohio-1761, ¶13), and
we find no compelling reason to alter same in the case sub judice.
{¶30} Upon careful review of the record, we are unpersuaded the trial court
abused its discretion in adopting the magistrate's award of spousal support to appellant
of $3,000.00 per month to be paid over nine years under the facts and circumstances of
this case.
{¶31} Appellant’s First Assignment of Error is therefore overruled.
II., III.
{¶32} In her Second Assignment of Error, appellant contends the trial court erred
in declining to award her certain alleged distributions from Colby and Company for the
Delaware County, Case No. 15 CAF 09 0068 9
years 2013, 2014, and 2015. In her Third Assignment of Error, appellant argues the trial
court erred in failing to order that she would be held harmless on corporate taxes owed
on such alleged distributions. We disagree on both counts.
{¶33} An appellate court generally reviews the overall appropriateness of the trial
court's property division in divorce proceedings under an abuse-of-discretion standard.
Cherry v. Cherry (1981), 66 Ohio St. 2d 348, 421 N.E.2d 1293. In order to find an abuse
of discretion, we must determine that the trial court's decision was unreasonable,
arbitrary, or unconscionable and not merely an error of law or judgment. Blakemore,
supra. Furthermore, as an appellate court, we are not the trier of fact. Our role is to
determine whether there is relevant, competent, and credible evidence upon which the
factfinder could base his or her judgment. Tennant v. Martin–Auer, 188 Ohio App. 3d 768,
936 N.E.2d 1013, 2010-Ohio-3489, ¶ 16, citing Cross Truck v. Jeffries, 5th Dist. Stark No.
CA–5758, 1982 WL 2911.
{¶34} Where a business entity is structured as a Subchapter S corporation, profits
pass through directly to the corporation’s shareholders on a pro rata basis and are
reported on the shareholders' individual tax returns. See Tetlak v. Bratenahl, 92 Ohio
St.3d 46, 54, 748 N.E.2d 51, 2001-Ohio-129, citing Gitlitz v. Commr. of Internal Revenue
(2001), 531 U.S. 206, 209, 121 S. Ct. 701, 148 L. Ed. 2d 613; 26 U.S.C.A. § 1363.
{¶35} In the case sub judice, appellant takes the position that even though she
remained a fifty-percent owner of Colby and Company until finalization of the divorce, she
received no formal profit distributions in 2013, 2014, or partial-year 2015, but the trial
court nonetheless assigned more than $30,000.00 of the 2013 tax liability to her based
on her supposed “receipt” of $109,000.00 in Schedule K-1 income. Appellant thus
Delaware County, Case No. 15 CAF 09 0068 10
maintains that it was error either to fail to award her with fifty percent of the 2013, 2014,
and partial 2015 distributions or to fail to “hold her harmless” on taxes during this time
period.
{¶36} In addressing these issues upon appellant’s objection to the decision of the
magistrate, the trial court found as follows:
As for the wife's claim that she did not receive in 2013 the income
that she should have received from the company, the record before me
suggests that both parties received whatever income the company
generated that year, and then they promptly spent it. Presumably each year
the company's income was attributable to her and to the husband in their
roles as the company's sole shareholders -whether they actually received
checks from the company for the attributed amount or not - and then the
two of them (first as a couple and later as separate householders) used the
company's income to pay their day-to-day living expenses. I am not willing
to find that the husband must pay additional money to the wife now when
other court orders have already adequately addressed payments that he
ought to make to her. The company's and the parties' assets are what they
are at this point, and I cannot compel the husband to pay money to the wife
when that money has already been spent by the two of them for their daily
living expenses.
{¶37} Judgment Entry, August 12, 2015, at 6-7 (emphasis added).
{¶38} A trial court should be given wide latitude in dividing property between the
parties. See Koegel v. Koegel (1982), 69 Ohio St. 2d 355, 432 N.E.2d 206. Upon review,
Delaware County, Case No. 15 CAF 09 0068 11
we are unable to find an abuse of discretion either in the magistrate’s redress of these
issues of Subchapter S corporate tax liabilities or in the trial court’s above holding in ruling
upon appellant’s Civ.R. 53 objection.
{¶39} Appellant’s Second and Third Assignments of Error are therefore overruled.
IV., V.
{¶40} In her Fourth and Fifth Assignments of Error, appellant contends the trial
court erred in determining she had no separate property interests in the Kentucky realty
and the Tartan Fields residence. We disagree.
{¶41} Pursuant to R.C. 3105.171(B), “[i]n divorce proceedings, the court shall ***
determine what constitutes marital property and what constitutes separate property. In
either case, upon making such a determination, the court shall divide the marital and
separate property equitably between the spouses, in accordance with this section. * * * ”
{¶42} Trial court decisions in divorce actions regarding the classification of
separate and marital property are not reversed unless there is a showing of an abuse of
discretion. See Valentine v. Valentine, 5th Dist. Ashland No. 95COA01120, 1996 WL
72608, citing Peck v. Peck, 96 Ohio App. 3d 731, 734, 645 N.E.2d 1300 (12th Dist.1994).
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, supra.
{¶43} In support of her claim regarding the Kentucky property, appellant directs
us to her unrefuted testimony at trial that she supplied the down payment (15%) from an
inheritance she received in 1995. As to the Tartan Fields residence, appellant testified
that she used another portion of the inheritance money to pay a $35,000.00 down
Delaware County, Case No. 15 CAF 09 0068 12
payment on said property. See Tr. at 75-76, 101-102, 227-233. However, appellant does
not presently dispute that she provided no written documentation at trial of these alleged
transactions.
{¶44} The characterization of property as separate or marital must also be
supported by sufficient, credible evidence. See Chase–Carey v. Carey, 5th Dist.
Coshocton No. 99CA1, 1999 WL 770172. The party to a divorce action seeking to
establish that an asset or portion of an asset is separate property, rather than marital
property, has the burden of proof by a preponderance of evidence. Cooper v. Cooper, 5th
Dist. Licking No. 14 CA 100, 2015-Ohio-4048, ¶ 45, citing Zeefe v. Zeefe (1998), 125
Ohio App. 3d 600, 614, 709 N.E.2d 208. Furthermore, the trier of fact is in a far better
position to observe the witnesses' demeanor and weigh their credibility. See, e.g., Taralla
v. Taralla, Tuscarawas App. No. 2005 AP 02 0018, 2005-Ohio-6767, 2005 WL 3484130,
¶ 31, citing State v. DeHass (1967), 10 Ohio St. 2d 230, 227 N.E.2d 212.
{¶45} Upon review, we find no reversible error or abuse of discretion in the trial
court’s characterization of the real property in question.
{¶46} Appellant’s Fourth and Fifth Assignments of Error are overruled.
VI.
{¶47} In her Sixth Assignment of Error, appellant contends the trial court erred in
declining to find appellee in contempt regarding aspects of the court’s temporary orders.
We disagree.
{¶48} Our standard of review regarding a finding of contempt is limited to a
determination of whether the trial court abused its discretion. Wadian v. Wadian, 5th Dist.
Stark No. 2007CA00125, 2008-Ohio-5009, ¶ 12, citing In re Mittas, 5th Dist. Stark No.1994
Delaware County, Case No. 15 CAF 09 0068 13
CA 00053, 1994 WL 477799. Likewise, an award of attorney fees lies within the sound
discretion of the trial court. Rand v. Rand (1985), 18 Ohio St. 3d 356, 359, 481 N.E.2d
609. However, “*** because the purpose of a civil contempt motion is to compel
compliance with the court's order rather than to punish disobedience, when compliance
becomes moot, the contempt proceeding is also moot.” Robinette v. Bryant, 4th Dist.
Lawrence No. 14CA28, 2015-Ohio-119, ¶ 47, citing Sheridan v. Hagglund, 4th Dist. Meigs
No. 13CA6, 2014–Ohio–4031, ¶ 22.
{¶49} Appellant concedes in her brief that all of her contempt motions were based
on the temporary orders issued on December 30, 2014, while the divorce was pending.
The magistrate’s decision recommending divorce, issued June 26, 2015, specifically
terminated said temporary orders, except that appellee was ordered to pay a past-due
arrearage of spousal support by December 31, 2015. See Magistrate’s Decision at 21.
Under these circumstances, we find appellant’s arguments as to appellee’s alleged failure
to file for bankruptcy and provide certain company documents for trial, are, as to the
question of contempt, now moot for purposes of this direct appeal, as an appellate court
is not required to render an advisory opinion or to rule on a question of law that cannot
affect matters at issue in a case. See Ambrose v. Galena, 5th Dist. Delaware No. 15 CAH
01 0011, 2015-Ohio-3157, ¶ 29, citing State v. Bistricky (1990), 66 Ohio App. 3d 395, 584
N.E.2d 75. See, also, Robinette, supra. In regard to the rulings on appellee’s alleged
failure to pay her $1,000.00 concerning a payment from Amgen, one of the company’s
clients, and to pay certain cell phone and house expenses during the pendency of the
divorce, we find the court’s determinations to be within its discretion. Finally, as to the
issue of unpaid temporary spousal support, we find the court’s remedy of setting a date
Delaware County, Case No. 15 CAF 09 0068 14
certain for payment in lieu of a contempt finding was also within the bounds of its
discretion.
{¶50} Accordingly, appellant’s Sixth Assignment of Error is overruled.
VII.
{¶51} In her Seventh Assignment of Error, appellant contends the trial court erred
in failing to compensate her for appellee’s alleged misconduct.
{¶52} R.C. 3105.171(E)(4) directs that “[i]f a spouse has engaged in financial
misconduct, including, but not limited to, the dissipation, destruction, concealment,
nondisclosure, or fraudulent disposition of assets, the court may compensate the
offended spouse with a distributive award or with a greater award of marital property.”
However, Civ.R. 53(D)(3)(b)(iv) provides that except for cases of plain error, “[a] party
shall not assign as error on appeal the court's adoption of any factual findings or legal
conclusion * * * unless the party has objected to that finding or conclusion * * *.” See, e.g.,
Stamatakis v. Robinson, 5th Dist. Stark No. 96CA303, 1997 WL 115878. Such objections
to a magistrate's decision must be specific. North v. Murphy, 5th Dist. Tuscarawas No.
2000AP050044, 2001 WL 246419.
{¶53} As appellee notes in his response brief, appellant’s objections to the
decision of the magistrate, while naturally making a number of references to appellee’s
actions during the marriage and divorce proceedings, make no specific challenge to the
magistrate’s actual finding of no financial misconduct as to appellee (see Decision at ¶54).
Furthermore, we find no basis to invoke the doctrine of plain error on this assigned error.
Delaware County, Case No. 15 CAF 09 0068 15
{¶54} Appellant’s Seventh Assignment of Error is therefore overruled.
{¶55} For the reasons stated in the foregoing opinion, the judgment of the Court
of Common Pleas, Domestic Relations Division, Delaware County, Ohio, is affirmed.
By: Wise, J.
Farmer, P. J., and
Hoffman, J., concur.
JWW/d 0414