Szokan v. Stevens , 2020 Ohio 7001 ( 2020 )


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  • [Cite as Szokan v. Stevens, 2020-Ohio-7001.]
    IN THE COURT OF APPEALS
    ELEVENTH APPELLATE DISTRICT
    LAKE COUNTY, OHIO
    LINDA C. SZOKAN, EXECUTOR                         :        OPINION
    OF THE ESTATE OF DOLORES A.
    STEVENS,                                          :
    CASE NO. 2020-L-020
    Plaintiff-Appellee,             :
    - vs -                                    :
    LINDA C. SZOKAN, et al.,                          :
    Defendants                      :
    DONALD H. STEVENS,                                :
    Defendant-Appellant.            :
    Civil Appeal from the Lake County Court of Common Pleas, Case No. 2017 CV 01098.
    Judgment: Affirmed.
    Gary D. Zeid, Sternberg & Zeid Co., L.P.A., 7547 Mentor Avenue, Suite #301, Mentor,
    Ohio, 44060-5466 (For Plaintiff-Appellee).
    Timothy H. Snyder, 12373 Kinsman Road, Suite 105, P.O. Box 386, Burton, Ohio 44021
    (For Defendant-Appellant).
    THOMAS R. WRIGHT, J.
    {¶1}      Appellant, Donald H. Stevens, appeals the trial court’s declaratory judgment
    regarding the ownership of certain U.S. Savings Bonds that were bought during his
    marriage to the deceased, Delores A. Stevens. He contends the court misinterpreted
    their separation agreement in concluding that the bonds should be distributed as part of
    deceased’s estate. We affirm.
    {¶2}   Appellant and the deceased were married for approximately 27 years and
    had no children. During a 16-year period beginning in 1986, the couple purchased
    numerous U.S. Savings Bonds Series EE and I. Each bond expressly lists appellant and
    the deceased as co-owners. As of the date of the Stevens’ dissolution in November 2002,
    the bonds were valued at more than $60,000.
    {¶3}   Prior to terminating their marriage, appellant and the deceased negotiated
    a separation agreement that was ultimately incorporated into the dissolution decree. In
    its preamble, the agreement provides that it was their mutual desire to “completely settle
    and determine” their respective rights “to any and all property, real and personal, each
    may have by virtue of their marriage * * *.’ Article 7(D) of the agreement states that the
    document “constitutes the entire understanding of the parties, and there are no
    representations, warranties, covenants or undertakings other than those expressly set
    forth herein * * *.” In addition, Article 8 states that to be effective a modification or waiver
    of any agreement provision must be in writing and executed with the same formality as
    the agreement itself.
    {¶4}   Article 3 of the separation agreement governs the distribution of the marital
    property. Although section (E) of that provision is titled “RETIREMENT/PENSION, I.R.A.,
    SHARES, STOCKS AND BONDS,” it makes no reference to their collection of U.S.
    Savings Bonds. In fact, there is no reference to the bonds in Article 3 or throughout the
    entire agreement.
    {¶5}   In regard to property not expressly listed in the agreement, section (H) of
    Article 3 sets forth a catchall provision, which states: “The parties have effected, to their
    2
    mutual satisfaction, a division of all property, real and personal, of whatever kind or
    description, and wheresoever situation.”
    {¶6}   As to the implementation of the separation agreement, Article 12(A) states:
    “Upon the signing of this Agreement, each party shall deliver to the other party, or permit
    the other party to take possession of all items or property to which he or she is entitled
    under the terms of this Agreement * * *.”
    {¶7}   From the issuance of the dissolution decree in November 2002 until her
    death in May 2017, the deceased had exclusive possession of all bonds purchased during
    the marriage. Although a federal statutory procedure exists for removing a person’s name
    from a U.S. Savings Bond when his co-ownership has been terminated, the deceased did
    not attempt to invoke the procedure. Moreover, she did not cash any of the bonds.
    {¶8}   Approximately one month before her death, the deceased executed a Last
    Will and Testament, in which she bequeathed her entire estate to her sister, Linda C.
    Szokan. In stating the bequest, the will does not cite or list any specific asset, but instead
    only refers to the “estate.” As a result, there is no reference to the bonds in the will.
    {¶9}   The will also names Szokan as executor of the estate. Within three weeks
    of her sister’s death, Szokan submitted the will to probate. One month later, Szokan filed
    a separate action on behalf of the estate seeking a declaratory judgment regarding the
    status of the bonds. Her complaint alleges that appellant claims ownership of the bonds
    because he is the surviving co-owner. Challenging his claim, the complaint alleges that
    the bonds should be declared estate assets because they were distributed to the
    deceased under the terms of the separation agreement.
    {¶10} After Szokan amended her complaint by attaching copies of the separation
    3
    agreement, dissolution decree, will, and an inventory of the bonds, appellant moved for
    summary judgment on the declaratory judgment claim. In an affidavit accompanying the
    motion, appellant avers that at the time they negotiated the separation agreement in 2002,
    he and the deceased also reached an understanding that the bonds would remain titled
    in both of their names until one of them died, and that the survivor would become sole
    owner. He further states that the deceased retained possession of the bonds during her
    lifetime only as a matter of convenience and that she intended to send the bonds to him
    prior to her death.   In addition, appellant argues that even though the separation
    agreement does not reference the bonds, its terms are consistent with their oral
    agreement that the survivor would become sole owner.
    {¶11} Szokan filed a competing motion for summary judgment. As to appellant’s
    averment of a separate understanding concerning the disposition of the bonds, Szokan
    asserts that the averment could not be considered because the terms of the separation
    agreement were plain and unambiguous. She further asserts that since the agreement
    had no specific reference to the bonds, Article 3(H) of the agreement, governing
    unenumerated property, controls.      Construing that term, Szokan argues that the
    deceased’s sole possession of the bonds after the dissolution was sufficient to establish
    her entitlement to sole ownership.
    {¶12} In ruling in favor of Szokan, appellee, on both summary judgment motions,
    the trial court first held that under federal law ownership of the bonds can be modified
    through a property agreement that is incorporated into a divorce/dissolution decree. Next,
    the court concluded that the terms of the subject separation agreement were sufficient to
    establish that appellant and the deceased intended for her to receive the bonds as part
    4
    of the property distribution. Relying primarily upon Articles 3(H) and 12(A), the court held
    that the couple not only intended to divide all of their marital property, but also intended
    for the distribution to occur immediately; thus, the deceased’s continuous possession of
    the bonds since the dissolution demonstrates that she became sole owner. Thus, the
    court found that the bonds were probate assets that would be distributed in accordance
    with the deceased’s will.
    {¶13} In challenging this decision, appellant asserts two assignments:
    {¶14} “[1.] Reviewing both parties’ motions for summary judgment de novo, the
    record is clear and convincing that the trial court erred to the prejudice of the appellant by
    granting the appellee-plaintiff’s motion for summary judgment and denying the appellant-
    defendant’s motion for summary judgment in favor of the appellee.
    {¶15} “[2.] The trial court erred to the prejudice of the appellant by granting the
    appellee-plaintiff’s motion for summary judgment as it lacked jurisdiction over the subject
    matter or otherwise and by failing to even rule thereupon.”
    {¶16} Since our ruling on appellant’s jurisdictional argument could render his first
    assignment moot, we address his second assignment first. In arguing that the trial court
    did not have subject matter jurisdiction over the bond issue, he notes that in order to
    determine whether the deceased was the sole owner of the bonds prior to her death, it
    was necessary for the trial court to interpret the couple’s 2002 separation agreement. He
    contends that as a probate court, the trial court lacked the authority to do so because
    once the agreement was incorporated into the dissolution decree, exclusive jurisdiction
    to construe and apply the agreement lies with the domestic relations court. We disagree.
    {¶17} R.C. 2101.24(A)(1) sets forth an extensive list of judicial acts that a probate
    5
    court has exclusive jurisdiction to perform, including:
    {¶18} “(a) To take proof of wills and to admit to record authenticated copies of wills
    executed, proved, and allowed in the courts of any other state, territory, or country * * *.
    {¶19} “* * *
    {¶20} “(c) To direct and control the conduct and settle the accounts of executors
    and administrators and order the distribution of estates;
    {¶21} “* * *
    {¶22} “(k) To construe wills;
    {¶23} “(l) To render declaratory judgments * * *.”
    {¶24} Furthermore, a probate court “has plenary power at law or in equity to
    dispose fully of any matter that is properly before the court, unless the power is expressly
    otherwise limited or denied by a section of the Revised Code.” R.C. 2101.24(C).
    {¶25} Given these statutory provisions, a declaratory judgment proceeding can be
    maintained in a probate court for the purpose of determining title to alleged estate assets.
    Wosniak v. Wosniak, 
    90 Ohio App. 3d 400
    , 408, 
    629 N.E.2d 500
    (9th Dist.1993). Such a
    proceeding is permissible so long as the disputed assets are related to the administration
    of the estate.
    Id. {¶26}
    Furthermore, emphasizing the probate court’s “plenary power” under R.C.
    2101.24(C), Ohio appellate courts have concluded that such a court has the authority to
    interpret a separation agreement when such a declaration is necessary to determine the
    extent and ultimate distribution of estate assets. Estate of LaMar v. LaMar, 9th Dist.
    Medina No. 2070-M, 
    1992 WL 150277
    , *2 (June 24, 1992); Johnson v. Wheeler, 10th
    Dist. Franklin No. 95APF07-839, 
    1996 WL 112641
    , *4-5 (Mar. 14, 1996).
    6
    {¶27} Here, it is undisputed that the deceased had sole possession of the bonds
    during the 15-year period prior to her death. Given these circumstances, a legitimate
    issue existed as to whether the bonds are estate assets. As a result, the determination
    of ownership of the bonds fell within the trial court’s subject-matter jurisdiction as a
    probate court. Moreover, in making that determination, the trial court had the authority to
    construe and apply the terms of the 2002 separation agreement.
    {¶28} As a separate argument under his second assignment, appellant contends
    that even if the trial court acted within the scope of its power in construing the separation
    agreement, it still should have deferred the issue to the domestic relations court under
    the jurisdictional-priority rule. That rule provides that when the same issue has been
    properly raised in two state courts of concurrent jurisdiction, the court that had its
    jurisdiction invoked first acquires exclusive authority to adjudicate the issue. State ex rel.
    Consortium for Economic and Community Dev. for Hough Ward 7 v. Russo, 151 Ohio
    St.3d 129, 2017-Ohio-8133, 
    86 N.E.3d 327
    , ¶ 8. However, the rule only applies when the
    two actions are pending at the same time.
    Id. at ¶ 11.
    Here, not only did the jurisdiction
    of the domestic relations court end in November 2002 with the issuance of the dissolution
    decree, but also there is nothing establishing that its jurisdiction was re-invoked via a
    motion regarding the ownership of the bonds. Thus, since the bond issue was only
    pending before the trial court, the jurisdictional-priority rule does not apply, and the trial
    court had the authority to resolve the parties’ dispute regarding the interpretation of the
    separation agreement.
    {¶29} Because the trial court did not exceed the scope of its jurisdiction by
    addressing the declaratory judgment claim, appellant’s second assignment lacks merit.
    7
    Thus, we address appellant’s challenge to the trial court’s interpretation of the 2002
    separation agreement set forth in his first assigned error.
    {¶30} He asserts that since the separation agreement had no specific provision
    concerning the distribution of the bonds, it is evident that he and the deceased intended
    to continue their co-ownership notwithstanding the dissolution of their marriage.
    Appellant further asserts that since their co-ownership had not been altered, he became
    the sole owner of each bond immediately upon her death.
    {¶31} In support, appellant emphasizes that pursuant to Title 31, Sections 353.50
    and 360.50 of the Code of Federal Regulations (C.F.R.),1 the manner in which a savings
    bond is registered is conclusive proof of its ownership. Thus, since all of the bonds bought
    during appellant’s marriage were registered to him “or” the deceased, they were legally
    co-owners under the foregoing provisions. Nevertheless, appellant also acknowledges
    that federal law allows for modification of ownership rights through the terms of a
    settlement agreement. Title 31, Sections 353.22(a) and 360.22(a) both provide: “The
    Department of the Treasury will recognize a divorce decree that ratifies or confirms a
    property settlement agreement disposing of bonds or that otherwise settles the interests
    of the parties in a bond.”
    {¶32} Although Title 31, Sections 353.2 and 360.2 set forth definitions of various
    terms used in the two sets of regulations, a definition for the term “divorce” is not provided.
    However, under Ohio law, a “decree of dissolution of marriage has the same effect upon
    the property rights of the parties, including rights of dower and inheritance, as a decree
    1.
    The bonds purchased by appellant and the deceased included Series EE U.S. Savings
    Bonds and Series I U.S. Savings Bonds. Title 31, Section 353.01 et seq. govern the
    Series EE bonds, while Section 360.01 et seq. govern the Series I bonds.
    8
    of divorce.” R.C. 3105.65(B). More generally, it has been noted that “[a]lthough some
    states attach different legal requirements to the termination of a marriage by divorce and
    dissolution * * *, the plain meaning of the word ‘divorce’ includes both procedures. See
    e.g., 27A C.J.S. Divorce [Section] 2 (‘When used without qualification, the term “divorce”
    imports a dissolution of the marriage relation between a husband and a wife, that is, a
    complete severance of the tie by which the parties are united.’) * * *.” Hall v. France,
    S.D.Ohio No. 2-12-CV-726, 
    2013 WL 1703358
    , *3 (April 18, 2013).
    {¶33} Given the absence of any regulatory definition limiting the scope of the term
    divorce in Title 31, Sections 353.22(a) and 360.22(a), and given that the incorporation of
    a separation agreement into a dissolution decree has the same effect on the distribution
    of marital property as the incorporation of a settlement agreement into a divorce decree,
    the two sections likewise apply to a dissolution decree. Hence, if the terms of a separation
    agreement, as incorporated into a dissolution decree, alter the ownership of a bond as
    between the two original co-owners, the modification will be enforceable in seeking
    payment on the bond from the Department of the Treasury.
    {¶34} In his brief, appellant does not contest the applicability of Sections 353.22(a)
    and 360.22(a) to the 2002 separation agreement he executed with the deceased. Rather,
    he asserts the trial court erred in holding that the agreement altered their relationship as
    co-owners. Thus, the dispositive issue is the proper interpretation of that agreement.
    {¶35} “A separation agreement is a contract and its interpretation is a matter of
    law. Forstner v. Forstner, 
    68 Ohio App. 3d 367
    , 372, 
    588 N.E.2d 285
    (11th Dist.1990).
    Review of a matter of law is de novo. Arnott v. Arnott, 
    132 Ohio St. 3d 401
    , 2012-Ohio-
    3208, 
    972 N.E.2d 596
    , ¶ 14.
    9
    {¶36} “The cardinal principle in contract interpretation is to give effect to the intent
    of the parties. Skivolocki v. E. Ohio Gas Co., 
    38 Ohio St. 2d 244
    , 
    313 N.E.2d 374
    (1974),
    paragraph one of the syllabus. Such intent is presumed to reside in the language the
    parties chose to employ in the agreement. Kelly v. Med. Life Ins. Co., 
    31 Ohio St. 3d 130
    ,
    
    509 N.E.2d 411
    (1987), paragraph one of the syllabus. If the language of the contract is
    clear and unambiguous, the contract must be enforced as written. Corl v. Thomas & King,
    10th Dist. No. 05AP-1128, 2006-Ohio-2956, ¶ 26. Ambiguity exists only when the terms
    of an agreement cannot be determined within the four corners of the contract or where
    the language of the agreement is susceptible to two or more reasonable interpretations.
    United States Fid. & Guar. Co. v, St. Elizabeth Med. Ctr., 
    129 Ohio App. 3d 45
    , 55, 
    716 N.E.2d 1201
    (2d Dist.1998).” Yodzis v. Savercool, 6th Dist. Lucas No. L-12-1159, 2012-
    Ohio-5558, ¶ 9-10.
    {¶37} “‘[A] writing * * * will be read as a whole, and the intent of each part will be
    gathered from a consideration of the whole.’ Foster Wheeler Enviresponse, Inc. v.
    Franklin Cty. Convention Facilities Auth., 
    78 Ohio St. 3d 353
    , 361, 
    678 N.E.2d 519
    (1997).
    ‘Courts should attempt to harmonize provisions and words so that every word is given
    effect.’ Christe v. GMS Mgt. Co., 
    124 Ohio App. 3d 84
    , 88, 
    705 N.E.2d 691
    (9th
    Dist.1997).” Kent State Univ. v. Bradley Univ., 2019-Ohio-2088, 
    136 N.E.3d 774
    , ¶ 39
    (11th Dist.).
    {¶38} In holding that the terms of the 2002 separation agreement are sufficiently
    clear to establish that the deceased became the sole owner of the bonds, the trial court
    relied on three terms. First, the court cites Article 7(D), which provides that the signed
    agreement sets forth “the entire understanding of the parties,” and there were no separate
    10
    covenants or undertakings between them. Second, the trial court notes that under Article
    12(A), appellant and the deceased promised to deliver or allow each other to immediately
    take possession of all property distributed to each under the agreement. The third term
    cited by the trial court is Article 3(H) captioned “Property Not Specifically Enumerated.”
    {¶39} The September 2002 separation agreement states in pertinent part:
    {¶40} “WHEREAS, said husband and wife desire to settle their differences and
    property rights arising out of their marital relationship, and by these presents do, forever
    and completely settle and determine, the following, but not limited to:
    {¶41} “(1) the past, present and future care, maintenance and support of each
    other;
    {¶42} “(2) the right to any and all property, real and personal, each may have by
    virtue of their marriage;
    {¶43} “(3) dower, curtesy, and all rights of descent and distribution;
    {¶44} “(4) payment of debts and taxes; and
    {¶45} “(5) all other benefits and privileges conferred and all obligations imposed
    on each by virtue of their marriage relationship or otherwise.
    {¶46} “NOW THEREFORE, * * * said husband and wife agree that:
    {¶47} “* * *
    {¶48} “ARTICLE 3: DIVISION OF PROPERTY
    {¶49} “* * *
    {¶50} “(E) RETIREMENT/PENSION, I.R.A., SHARES, STOCKS AND BONDS
    {¶51} “[This section does not reference any bonds and does not reference the
    bonds currently in issue.]
    11
    {¶52} “* * *
    {¶53} “(H) PROPERTY NOT SPECIFICALLY ENUMERATED
    {¶54} “The parties have effected, to their mutual satisfaction, a division of all
    property, real and personal, of whatever kind or description, and wheresoever situat[ed].
    {¶55} “* * *
    {¶56} “ARTICLE 7:        FULL DISCLOSURE, COMPLETE AGREEMENT, &
    BINDING EFFECT
    {¶57} “The parties each respectively acknowledge that:
    {¶58} “* * *
    {¶59} “(C) the provisions herein, including the provisions regarding the support
    and division of property are fair, just, and reasonable under all circumstances;
    {¶60} “(D) this Agreement constitutes the entire understanding of the parties, and
    there are no representations, warranties, covenants or undertakings other than those
    expressly set forth herein;
    {¶61} “* * *
    {¶62} “ARTICLE 8: MODIFICATION AND WAIVER
    {¶63} “A modification or waiver of any of the provisions of this Agreement shall be
    effective only if made in writing and executed with the same formality as this Agreement.
    * **
    {¶64} “ARTICLE 9: MUTUAL RELEASES
    {¶65} “Each party releases and discharges the other from all causes of action,
    claims, demands, or rights, which either of the parties had or now has against the other
    arising or growing out of the marital relationship, except any cause of action for divorce
    12
    or dissolution of marriage or as provided within this Agreement. The parties mutually
    agree that each may freely sell or otherwise dispose of his or her property in any manner
    including by gift, deed or Last Will and Testament. Each party does hereby release and
    relinquish to the other and is by those presents barred from any and all rights or claims
    by way of dower, curtesy, or any probate rights caused by the death of a spouse, and will
    be treated as if having predeceased and not been married to the other spouse.
    {¶66} “* * *
    {¶67} “ARTICLE 12: IMPLEMENTATION OF AGREEMENT
    {¶68} “(A) Upon the signing of this Agreement, each party shall deliver to the other
    party, or permit the other party to take possession of all items of property to which he or
    she is entitled under the terms of the Agreement * * *.” (Emphasis added.)
    {¶69} First, to the extent that Article 7(D) states that the separation agreement is
    meant to delineate all promises and understandings between appellant and the deceased
    in regard to the termination of their marriage, it does not permit an oral agreement to the
    contrary.   Therefore, even if, as appellant asserts, he and the deceased orally agreed to
    maintain co-ownership of the bonds until either of them died, such a covenant directly
    conflicts with Article 7(D) and is unenforceable. If the couple wanted to continue as co-
    owners notwithstanding the dissolution, such an agreement had to be included in their
    written agreement.
    {¶70} Second, given its caption and concise language, Article 3(H) was patently
    intended to be a catchall provision applicable to all marital assets not delineated in the
    separation agreement. Since the bonds are not mentioned, the catchall provision applies.
    Furthermore, under that provision, appellant and the deceased determined how they were
    13
    going to divide the unenumerated assets. Again, given the use of the word “divide” in
    Article 3(H), continuing co-ownership of an asset is not permissible. Hence, the bonds,
    like all other marital assets, were subject to distribution between them.
    {¶71} Third, pursuant to both Article 3(H) and Article 12(A), this distribution was
    to occur immediately upon the execution of the separation agreement. Appellant agreed
    to either deliver to, or allow the deceased to keep possession of, all assets which were
    distributed to her under the agreement. As a result, the intended distribution of an
    unenumerated asset under Article 3(H) was established through a party’s continued
    possession of the asset after the dissolution of the marriage.
    {¶72} In relation to the bonds, there is no dispute that the deceased maintained
    sole possession during the 15-year period between the dissolution and her death.
    Appellant did not present any evidence showing he ever contested her possession of the
    bonds. Accordingly, under the unambiguous catchall provision in Article 3(H), the bonds
    were distributed to the deceased in 2002, and she was their sole owner when she died in
    2017.
    {¶73} In challenging the trial court’s interpretation of Article 3(H), appellant argues
    that the language of the catchall provision is too general and broad to deprive him of his
    ownership rights in the bonds. Citing Klan v. Klan, 8th Dist. Cuyahoga No. 86897, 2006-
    Ohio-1738, he contends that the separation agreement had to have express language in
    regard to the bonds before his ownership rights could be extinguished.
    {¶74} Klan is distinguishable on the grounds that it involved the termination of a
    beneficiary’s rights to the proceeds of a life insurance policy. Notwithstanding the manner
    in which appellant’s name was printed on each bond as a co-owner, his legal interest in
    14
    the bonds was no different than his interest in any other marital asset that he purchased
    with the deceased during their marriage. Since appellant has not shown that the catchall
    provision in Article 3(H) is generally unenforceable, the bonds were properly distributed
    to the deceased in accordance with the provision.
    {¶75} Upon reading the parties’ separation agreement as a whole, Article 3(H),
    the language in the preamble, and Article 12(A), regarding possession of the property,
    dictate that the bonds in the decedent’s continued possession 15 years after the
    agreement belonged to her, and according to Article 7(D) and Article 8, any alleged oral
    agreement to the contrary is unenforceable.
    {¶76} Accordingly, appellee was entitled to summary judgment on her declaratory
    judgment claim because: (1) there is no genuine issue as to any material facts; (2) she
    is entitled to prevail as a matter of law; and (3) even when the evidence is construed in a
    manner most favorable to appellant, a reasonable person can only reach a conclusion
    adverse to him. Civ.R. 56(C); Klan, 206-Ohio-1738, at ¶ 9
    {¶77} Therefore, appellant’s first assignment lacks merit, and the judgment of the
    Lake County Court of Common Pleas, Probate Division, is affirmed.
    CYNTHIA WESTCOTT RICE, J., concurs,
    MATT LYNCH, J., dissents with a Dissenting Opinion.
    15
    _____________________________
    MATT LYNCH, J., dissents with a Dissenting Opinion.
    {¶78} I respectfully dissent and would reverse the decision of the probate court
    declaring the savings bonds to the assets of the decedent’s estate. These bonds were
    registered in Stevens’ name and the decedent’s name and, under federal law, became
    Stevens’ property upon the decedent’s death unless disposed of otherwise by the
    Separation Agreement. The probate court frankly acknowledged that “[t]he Separation
    Agreement did not * * * list or mention for division the U.S. Savings Bonds co-owned by
    the couple” (sic). Despite the absence of anything in the Agreement identifying the bonds
    or providing for their division, the majority affirms “that the terms of the 2002 separation
    agreement are sufficiently clear to establish that the deceased became the sole owner of
    the bonds.” Supra at ¶ 38. They do no such thing. Rather, the conclusion that the
    Agreement gave the bonds to the decedent rests on nothing more than the lower court’s
    invention of provisions in the Agreement to effect what it presumes the parties must have
    intended. This exercise in the creation of terms for the purpose of giving ownership of
    the bonds to the decedent is contrary to both federal and Ohio law. Accordingly, I dissent.
    {¶79} The essential facts and applicable law in this case are as follows: The bonds
    in question were purchased during the course of the marriage and registered in the names
    of “Delores A Stevens or Donald H Stevens.” The ownership of bonds is governed by
    federal regulations. Under those regulations, “[r]egistration is conclusive of ownership.”
    31 C.F.R. 353.5(a). Registration of a bond in the form “A or B” is indicative of co-
    ownership. 31 C.F.R. 353.7(a)(2). “If one of the coowners named on a bond has died,
    the surviving coowner will be recognized as the sole and absolute owner * * *.” 31 C.F.R.
    16
    353.70(b)(1). “The Department of the Treasury will recognize a divorce decree that
    ratifies or confirms a property settlement agreement disposing of bonds or that otherwise
    settles the interests of the parties in a bond.” 31 C.F.R. 353.22(a). Inasmuch as the
    parties’ Separation Agreement does not “list or mention” the division of the bonds and co-
    owner Delores has died, co-owner Stevens remains the “sole and absolute” owner. Thus,
    the declaration that the bonds are the property of the decedent’s estate is contrary to
    federal law.
    {¶80} The failure of the Separation Agreement to provide for the disposition of the
    bonds violated Revised Code 3105.63(A)(1) which provides: “The separation agreement
    shall provide for a division of all property * * *.” Lanzara v. Lanzara, 8th Dist. Cuyahoga
    No. 75751, 
    2000 WL 336540
    , *3 (“[p]ursuant to R.C. 3105.63(A)(1), a separation
    agreement must contain a division of all property, not just property jointly owned by
    husband and wife”).      “When a separation agreement omits assets that are both
    substantial in relative amount and material to an informed and deliberate agreement
    about an equitable division of the property, such omissions render the dissolution decree
    voidable, and the decree can be vacated by motion for relief filed under Civ.R. 60(B)(5).”
    In re Murphy, 
    10 Ohio App. 3d 134
    , 
    461 N.E.2d 910
    (1st Dist.1983), paragraph two of the
    syllabus; Salundari v. Permadi, 9th Dist. Medina No. 15CA0040-M, 2016-Ohio-7818, ¶ 7-
    8 (cases cited).
    {¶81} In the present case, neither party sought to vacate the Separation
    Agreement to provide for a division of the bonds (such relief, in any event, is beyond the
    scope of the probate court’s jurisdiction). Instead, the probate court determined that the
    Agreement “adequately disposed of the bonds” not because there is any provision in the
    17
    Agreement that did so but because “[s]ixty thousand dollars in savings bonds is a
    substantial amount, which would not have been overlooked by the parties.” The parties
    may have declared that they “effected, to their mutual satisfaction, a division of all
    property,” and they may (or may not) have intended to do so, but their Agreement does
    not substantiate their claim.
    {¶82} The Separation Agreement provides in relevant part:
    [3.](E) RETIREMENT/PENSION, I.R.A., SHARES, STOCKS
    AND BONDS
    Husband has a retirement account with the Ohio Police
    and Fire Pension Fund. Wife is currently on Social Security
    Disability that will become a private pension at the age of fifty-
    five (55). As Wife and Husband each have their own
    retirement accounts, they agree that each shall retain their
    respective accounts free and clear of all claims of the other
    and shall execute any documents necessary to enforce this
    agreed disposition.
    ***
    [3.](H) PROPERTY NOT SPECIFICALLY ENUMERATED
    The parties have effected, to their mutual satisfaction,
    a division of all property, real and personal, of whatever kind
    of disposition, and wheresoever situated.
    ***
    [7.](D) This Agreement constitutes the entire understanding of
    the parties, and there are no representations, warranties,
    covenants or undertakings other than those expressly set
    forth herein * * *.
    {¶83} It should be clear from the foregoing that the Agreement does not directly
    or indirectly mention the bonds or provide for their division. It follows that the bonds were
    not divided, that Stevens and the decedent remained co-owners, and that, upon the
    decedent’s death, Stevens became sole owner.
    {¶84} The majority affirms the probate court’s award of the bonds to the decedent
    18
    based on the provision concerning unenumerated assets. The majority writes: “[U]nder
    that provision, appellant and the deceased had already determined how they were going
    to divide the unenumerated assets. Again, given the use of the word ‘divide’ in Article
    3(H), continuing co-ownership of an asset is not permissible. Hence, the bonds, like all
    other marital assets, were subject to distribution between them.” Supra at ¶ 70.
    {¶85} Contrary to the majority’s reading, Article 3(H) does not explain “how they
    were going to divide the unenumerated assets.” The declaration in the Agreement that
    “[t]he parties have effected * * * a division of all property” simply does not explain or
    elucidate “how they were going to divide the unenumerated assets.” Rather, it is a
    declaration that they had effected such a division to their mutual satisfaction. In light of
    the fact that the Agreement is silent with respect to the bonds’ existence and that, after
    separating, the bonds continued to be registered in the names of both parties, this
    declaration is either false or, as Stevens maintains, the parties intended to continue joint-
    ownership of the bonds. Either way, the parties, contrary to R.C. 3105.63(A)(1), did not
    dispose of all their property in the Agreement. This failure, however, does not authorize
    the probate court or this court to effect what the parties themselves failed to do. As
    explained above, the proper remedy would have been a motion for relief from judgment.
    In the absence of such relief, the Agreement must be applied as written, not as it ought
    to have been written. As written, the bonds were not divided or otherwise disposed of.
    Ownership of the bonds remained as it had during the course of the marriage.
    {¶86} The majority then asserts that the use of the word “divide” or “division”
    (which merely tracks the language of the statute) precludes the possibility of continuing
    co-ownership. No authority is cited for this proposition which would significantly restrict
    19
    the freedom of parties to a dissolution from disposing of their property in a manner they
    deem equitable or appropriate.       At least one court has expressly rejected such an
    interpretation.
    The purpose * * * of R.C. 3105.63’s mandate is not to literally
    divide all property owned by the parties but rather to ensure
    that the separation agreement has accounted for all of the
    parties’ assets. Clearly, in electing joint ownership of this
    particular piece of realty, the appellant and appellee
    considered and dealt with the property. The separation
    agreement, therefore, satisfies the mandate of R.C. 3105.63.
    Daidone v. Daidone, 9th Dist. Lorain No. 3980, 
    1986 WL 9346
    , *1.
    {¶87} Such an interpretation is also contrary to actual practice in domestic
    relations law where, for various reasons, parties to a dissolution intentionally retain joint-
    ownership of property. See, e.g., Stone v. Stone, 3d Dist. Hardin No. 6-04-12, 2006-
    Ohio-1996, ¶ 2 (“[a]s part of the dissolution agreement and division of property, the parties
    agreed to continue jointly owning a two-unit duplex”); Wymer v. Wymer, 11th Dist. Portage
    No. 1354, 
    1984 WL 7298
    , *1 (“[i]n the decree of dissolution which ended their marriage,
    the parties agreed the residence should remain the joint property of the parties until sold
    by mutual agreement”). Again, this writer is aware of no authority that would render such
    agreements invalid or impermissible under R.C. 3105.63.
    {¶88} Assuming, arguendo, that the parties’ declaration that they had divided all
    property to their satisfaction may be construed to mean that they intended to divide the
    bonds as well, there is no legitimate basis for simply awarding the decedent full
    ownership. The majority affirms this “distribution” based on a provision in the Agreement
    that “each party shall * * * permit the other party to take possession of all items of property
    to which he or she is entitled under the terms of this Agreement” and the decedent’s
    20
    physical possession of the bonds after dissolution. The argument seems to be that, since
    she retained possession of the bonds after separation, she must have been entitled to
    them under the Agreement. The logic, however, is circular inasmuch as the Agreement
    does not actually entitle her to possession of the bonds. Regardless, federal law is clear
    that “[r]egistration is conclusive of ownership.” The fact that the decedent retained
    possession of the bonds for fifteen years after dissolution and never attempted to alter
    their registration inspires no confidence in the conclusion that the bonds were distributed
    to the decedent in 2002 and that she was their sole owner at the time of her death in
    2017.
    {¶89} In sum, the following points should be considered: The Separation
    Agreement makes no reference to the existence of the bonds. The Agreement makes no
    provision for the division of unenumerated property. The Agreement does not state that
    the parties are entitled to keep whatever property remains in their possession. Under
    federal law, registration, not possession, is determinative of ownership. Despite this, the
    majority maintains that the Agreement “dictate[s] that the bonds in the decedent’s
    continued possession 15 years after the agreement belonged to her.” Supra at ¶ 75. I
    must respectfully dissent.
    21
    

Document Info

Docket Number: 2020-L-020

Citation Numbers: 2020 Ohio 7001

Judges: Wright

Filed Date: 12/31/2020

Precedential Status: Precedential

Modified Date: 4/17/2021