Ohio Case Law Review by Topic: February 1, 2021 through March 31, 2021

Gerdes v. Gerdes, 12th Dist. Butler No. DR17 10 0903, CA2020-07-076, 2021-Ohio-344

Spousal Support: modification (change in circumstances), tax liability

Dated: February 8, 2021
Affirming

Following a contentious divorce and a separate criminal proceeding for Wife, Husband sought to modify the trial court’s spousal support order and reduce the property equalization payment ordered of him to offset Wife’s child support arrearage. Both parties then filed motions for contempt related to non-payment of child support (Wife) and spousal support (Husband).

In his motion to modify the trial court’s spousal support order, and testimony during the trial court’s evidentiary hearing, Husband cited changes in the Internal Revenue Code (from the Tax Cuts and Jobs Act (TCJA), previously blogged about here) which prevented him from deducting his spousal support payments, as had been the intention of the parties, per decree provisioning.

Both parties testified that the other had failed to make their respective support payments, and as to their inability to meet their own support obligations. The trial court then dismissed the majority of Husband’s motions, and further clarified its dismissal on subsequent remand.

Husband appealed, arguing the trial court erred in its decision not to modify his spousal support obligation, both to offset against Wife’s unpaid child support and to account for changes in the tax code under which his payments could no longer be tax deductible. The Court overruled both assignments of error, finding the trial court did not abuse its discretion, and Husband had failed to show how an offset would serve the children’s interest. As for the changes to the tax code, the Court found that the evidence submitted by Husband did not meet the standards required to establish that a change in circumstances merited modification of spousal support. The Court further pointed to Husband’s own role in protracting the proceeding, absent which the decree might have been entered prior to TCJA changes to the tax code.

Lelak v. Lelak, 2nd Dist. Montgomery No. 1982-DR-1530, 28872, 2021-Ohio-519

Attorney Fees: abuse of discretion
DOPO: contempt, impermissible modification, market experiences (gains/losses)
Marital Property: bankruptcy, vesting

Dated: February 26, 2021
Reversing and Remanding

As part of the parties’ 1983 divorce, Wife was awarded $10,363 as her share of Husband’s pension. Because the pension benefits were not yet payable, Husband was also ordered to make payments of $50 per week toward the award and was prohibited from taking any benefits without providing ten days written notice to Wife.

In a subsequent bankruptcy proceeding later that year, Husband’s weekly obligation was discharged in a limited ruling that stated: “the judgment by this [bankruptcy] court should not be deemed an alteration of or interference in the implementation of the division of the retirement benefits property as vested on the date of the state court Decree, when payable.”

In 2016, Wife discovered Husband had withdrawn monies from the pension, and filed a motion to hold Husband in contempt for failing to provide her notice of the same, pursuant to the decree. The magistrate found Husband in civil contempt, and ordered him to pay Wife her awarded share, growth thereon, and attorney fees. The trial court, however, overturned the magistrate’s decision, finding that Husband’s obligation had been vacated by the bankruptcy court’s 1983 order. Wife’s subsequent appeal resulted in a remand to the trial court on the basis it misinterpreted the 1983 order. The trial court upheld its dismissal of Wife’s motion, stating: (1) Husband’s failure to provide notice was inherently a matter of criminal contempt, “because it required a single act of [Husband] to be performed at a single moment in time;” (2) Husband had no means of notifying Wife; (3) payment to Wife was barred by the doctrine of laches; and (4) payment to Wife would be an impermissible modification to the decree, as it did not provide for an alternative method of payment.

The Court sustained Wife’s first assignment of error, finding that the trial court erred in its consideration of Husband’s conduct as a matter criminal contempt (punishment for offenses against the court), as opposed to civil contempt (remediation for offenses against a party for whose benefit an action or payment is awarded). The Court further found that Wife had established a prima facie case of contempt, and noted that Husband admitted his failure to comply with the decree:

At the hearing, [Husband] insisted his failure to comply had been based upon his belief that the bankruptcy court’s order had eliminated his duties to [Wife] regarding the pension account. However, with civil contempt, intent is irrelevant. The Ohio Supreme Court has held that a party acting innocently so that his conduct is not an intentional disregard of a court order cannot use that innocence as a defense to a charge of civil contempt. Tomaszczyk, 27 Ohio St.2d 55, 271 N.E.2d 815, at paragraph three of the syllabus.

The Court further wrote that Husband’s own discovery responses demonstrated his understanding of his obligations under the decree and dismissed Husband’s claim that he could not have located Wife to provide notice, noting his communications with the parties’ adult children.

In her second assignment of error, Wife argued that the trial court erred in its application of the doctrine of laches, and in its discussion of Civ. R. 60(B). The Court found the latter argument irrelevant, as Wife’s claim was not filed under Civ. R. 60(B) provisions. The Court sustained Wife’s former argument, noting that Husband failed to establish that monies from his pension fund had been depleted, and therefore would not be materially prejudiced by the payment of Wife’s award.

The Court sustained in part and remanded in part Wife’s third assignment of error, which sought an award of growth on her award based on expert testimony and stock market performance. While the Court agreed Wife was entitled to such growth, it found the period of growth began on the date the benefits became payable (and remanded to the trial court to determine such date), and that interest on the award was governed under R.C. 1343.03.

The Court also sustained Wife’s fourth and last assignment of error, which sought attorney fees related to her contempt motion. Because the trial court based its denial of Wife’s request on its erroneous contempt finding, so too -the Court wrote- was its decision concerning attorney fees.

Editor’s Note: this case was subject to a prior appeal summarized in this blog here, as well as a subsequent appeal summarized in this blog here.

Kubasco v. Kubasco, 5th Dist. Stark No. 2010DR00911, 2020 CA 00122, 2021-Ohio-1031

QDRO
Spousal Support: modification (change in circumstances), retirement benefits

Dated: March 29, 2021
Reversing and Remanding

Husband and Wife married in 1987, Husband was incarcerated in 1996 for sexually assaulting one of Wife’s children from a prior relationship, and Wife filed for divorce in 2010. In 2011, Wife was awarded and began receiving Husband’s full pension as spousal support, via QDRO. In the same magistrate’s decision, Wife was ordered to submit a judgment entry of divorce consistent with the decision within 30 days, barring timely objections.

Over both parties’ objections, the trial court subsequently approved and adopted the magistrate’s decision, but no judgment entry of divorce was entered. During Husband’s appeal of the trial court’s decision, this lapse was not brought to the Court’s attention, and the Court ultimately affirmed the trial court’s decision.

In 2019, Husband filed a motion to modify spousal support, which stated that the end of his incarceration represented a substantial change in circumstances. In its decision the following year, the trial court denied Husband’s request on the basis that there was no decree, writing: “the authority of the [trial] court to address the issue of spousal support was to flow through the Final Entry Decree of Divorce which has not been filed herein.” Husband appealed, arguing that the trial court erred in its determination that it lacked jurisdiction.

The Court conceded that the trial court lacked authority absent a decree, but found that ensuring entry of the same was ultimately the trial court’s responsibility, and remanded the matter for this purpose.

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