Folberth v. Folberth, CA2021-05-047

CourtUnited States Court of Appeals (Ohio)
Writing for the CourtPIPER, J.
Citation2022 Ohio 3384
PartiesPETER JAMES FOLBERTH, Appellee and Cross-Appellant, v. PAMELA GAIL FOLBERTH, Appellant and Cross-Appellee.
Docket NumberCA2021-05-047,CA2021-05-049
Decision Date26 September 2022

2022-Ohio-3384

PETER JAMES FOLBERTH, Appellee and Cross-Appellant,
v.

PAMELA GAIL FOLBERTH, Appellant and Cross-Appellee.

Nos. CA2021-05-047, CA2021-05-049

Court of Appeals of Ohio, Twelfth District, Butler

September 26, 2022


APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS DOMESTIC RELATIONS DIVISION Case No. DR19-01-0008

The Lampe Law Office, and Thomas S. Sapinsley; Stagnaro Hannigan Koop, Co., LPA, and Michaela M. Stagnaro, for appellee and cross-appellant.

Traci Combs-Valerio, LLC, and Traci Combs-Valerio, for appellant and cross-appellee.

OPINION

PIPER, J.

Procedural History

{¶1} On January 8, 2019, James Folberth ("Husband") filed an amended complaint for divorce against Pamela Folberth ("Wife") in the Butler County Court of Common Pleas, Domestic Relations Division. Wife answered and counterclaimed on January 31, 2019.

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The parties resolved significant issues through stipulations, including ownership of the marital residence, property inventories, and, for purposes of this appeal, significant financial accounts that accrued interest, dividends, and other gains.

{¶2} The issue of the amount of spousal support Husband was to provide Wife was not resolved through stipulation or settlement. The trial court held several hearings between August and November 2019. After taking the matter under advisement, the trial court ruled on the remaining disputed issues, set the amount of spousal support, and entered a final decree of divorce on April 19, 2021. Wife filed an appeal and Husband filed a cross-appeal. The appeals were consolidated. Subsequently, Wife moved to dismiss her appeal. On December 15, 2021, this court issued an entry reinstating Husband's pending claims. As a result, this appeal only addresses Husband's assignment of error.

Relevant Facts

{¶3} Husband and Wife married on July 31, 1999. Prior to their marriage, the parties entered into an antenuptial agreement. Under the terms of the agreement, the parties agreed to waive claims to each other's separate property held at the time of their marriage including any appreciation upon those assets as stated in paragraph 3.02. Paragraph 3.03 of the agreement provided:

In the event of a legal separation or a termination of the parties' marriage by annulment, divorce, or dissolution proceeding in a court of competent jurisdiction, this agreement shall thereupon be conclusive as to the ownership of the property listed in Exhibit A, and neither party shall take, demand, claim or receive any such property listed in Exhibit A in a division of property or as spousal support and maintenance

Paragraph 3.05 of the agreement further addressed spousal support in the event of a termination of the marriage by providing:

This agreement does not preclude spousal support, if appropriate, in the event the parties ever divorced; however this
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agreement is not intended to create a right to spousal support if none exists at the time the parties ever divorced.

The agreement also specified that any assets acquired after the marriage should be designated as marital property:

All assets acquired after the marriage, including interest, dividends and appreciation earned on such after acquired assets, shall be designated as marital property unless specifically excluded herein or designated as non-marital property by statute.

{¶4} Husband filed his complaint for divorce nearly 20 years later. Since their marriage, the parties have accumulated more assets. At the time the parties entered into the antenuptial agreement, Husband listed net assets in the amount of $1,748,344, while Wife had net assets in the amount $215,300. By the time of their divorce, the trial court calculated that Husband retained $3,573,759 in assets while Wife retained $1,139,986.[1]

{¶5} Although the parties had reached agreement on a number of issues, they were not able to resolve the issue of spousal support. A portion of testimony was spent focusing on Husband's financial maneuverings. This included the introduction of testimony concerning Husband's separate assets that have since evolved from the assets listed in "Exhibit A" in the antenuptial agreement. Initially, there was discussion below about the need to obtain expert testimony concerning the valuation or tracing of the accounts below. There is no dispute that the identity of the accounts listed in "Exhibit A" have changed in the two decades since the parties were married. The record reflects that, over the years, Husband moved some marital assets into different accounts while preserving much of his own separate accounts. There was also evidence that Husband controlled the parties' finances and that Wife's business had operated at a loss in certain years, which was then

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claimed as a business loss on their joint income tax returns. Despite some uncertainty below, the parties determined there was no longer a need for expert testimony after they entered into their stipulations. In relevant part, the parties agreed that several accounts should be shared while others should remain Husband's separate property. The parties' stipulated ownership interests and approximate valuations of the accounts are listed below: .

Husband's interest

Property [2]

Wife's interest

100%

Ameriprise 0154

($1,602,621.31)

0%

100%

Ameriprise 6918

($1,202.18)

0%

65%

Ameriprise 5754

($488,525.92)

35%

50%

Ameriprise 4190

($131,635.06)

50%

50%

Huntington Bank 5776

($52,368.80)

50%

50%

Raymond James 1914

($84,430.20)

50%

{¶6} In addition to these accounts, the parties also entered into a stipulation regarding Husband's pension from Northrup Grumman that was to be divided by a Qualified Domestic Relations Order ("QDRO").

{¶7} At the time of the final hearing, both parties were 62 years old and had no significant health problems. Husband testified that he retired in 2015 and was no longer employed in any capacity. Husband has an engineering degree and previously worked as an engineer for Northrop Grumman and BIT Systems. Husband's income is derived from his interest and dividends on investments, along with his monthly pension from Northrop Grumman. When considering Husband's income, the trial court noted that there were irregularities in some of the transactions that had occurred over the years. The trial court

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found that the most reliable evidence for determining investment income came from the parties' tax returns. The trial court also noted that Husband has a trust that provides income. The trial court stated that review of the 2016 tax return revealed that Husband received gross income in the amount of $37,001 in dividends. The trial court also noted that Husband failed to include all schedules in his 2017 and 2018 tax returns and that it was unable to determine the specific source of all his income or the status of his investments for those years. Therefore, the trial court averaged the additional sources of income from 2016 through 2018 and determined that Husband could reasonably expect an additional $44,447 annually.

{¶8} Wife testified that she earned a high school diploma and was raised in her family sewing business, Sew-Ezy, which she operated prior to the marriage. Wife testified that she did not have any retirement accounts and that the mutual funds that she once had are now gone. Wife testified that her business has been declining due to several factors, including internet sales and the loss of a larger sewing machine contract. The trial court noted that Wife filed her own separate tax return for 2017, which showed more reasonable expenses than past years, and determined that the business could generate a reasonable net income for her of $16,454.

{¶9} In determining spousal support, the trial court placed significant emphasis upon the parties' income from all sources, their relative earning abilities, retirement benefits, and relative assets and liabilities. The trial court averaged the interest and dividend income for the accounts and calculated the amount of annual income the parties could expect in determining the award of spousal support. The trial court also found that Husband had other sources of income based upon review of his tax returns. Thus, the trial court found the parties could expect annual income from various sources as follows:

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Income source

Husband

Wife

Northrop Grumman pension

$8,468.04

$8,468.04

Sew-Ezy

$0

$16,454

Ameriprise 0154

$28,982

$0

Ameriprise 4190

$4,898.50

$4,898.50

Ameriprise 5754

$9,595

$5,166.35

Other income

$44,447

$0

{¶10} The trial court also placed significant emphasis on the assets held by the parties in deciding to award Wife spousal support. The trial court observed that Husband retains a significant investment in his firearms collection, which was purchased with a combination of marital and non-marital funds. Husband also retains the marital residence with a value of $400,000 and no mortgage encumbrance.

{¶11} The trial court found that Wife has no retirement savings other than what she was allocated from Husband's pension. It also noted that Wife operates a business which is not highly profitable and has nominal income besides the income she receives from the allocation of the Ameriprise accounts. Wife was allocated her business assets and real estate at their stipulated value.

{¶12} Following a thorough review of the evidence introduced below, the trial court determined that Husband's reasonable monthly expenses were $3,568 and that Wife's reasonable monthly expenses were $4,384. The trial court found that Wife should...

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