Kaechele v. Kaechele

• Decision Date: 10 February 1988
• Docket Number: No. 87-42,87-42
• Citation: 518 N.E.2d 1197,35 Ohio St.3d 93
• Parties: KAECHELE, Appellee v. KAECHELE, Appellant.
• Court: Ohio Supreme Court

Page 93

35 Ohio St.3d 93

518 N.E.2d 1197

KAECHELE, Appellee v. KAECHELE, Appellant.

No. 87-42.

Supreme Court of Ohio.

Feb. 10, 1988.

Syllabus by the Court

1. In making a sustenance alimony award, the trial court must consider all the factors listed in R.C. 3105.18(B) and not base its determination upon any one of those factors taken in isolation.

2. In allocating property between the parties to a divorce and in making an award of sustenance alimony, the trial court must indicate the basis for its award in sufficient detail to enable a reviewing court to determine that the award is fair, equitable and in accordance with the law.

Sharon E. Kaechele, appellee herein, filed for divorce against appellant, David F. Kaechele, on October 24, 1984. David counterclaimed for divorce on February 25, 1985. On March 4, 1986, the trial court granted the divorce based upon appellee's claim of gross neglect of duty, and on the ground that the parties had lived separate and apart without interruption or cohabitation for a period of more than one year.

The parties married in 1964, while in their early twenties. Shortly thereafter, David began his rise to a successful career in the insurance industry. Sharon agreed to cease employment as a beautician to become a full-time homemaker and mother. The parties have two daughters, both of whom were emancipated when the divorce decree was rendered.

At the time of the divorce, Sharon was working part-time at an hourly wage of $5.25 with no benefits. The trial court found that, if working full time, her maximum earning potential would be $14,000. David had attained the position of executive vice president of Physicians Insurance Company of Ohio (hereinafter "PICO"). His base salary was $78,645 in 1984, $92,000 in 1985, and $99,100 in 1986. He received executive incentive bonuses in excess of $20,000 per year in 1984 and 1985, and earned director's fees of over $10,000 in 1985. Up to ten percent of his base salary could be contributed to various savings plans provided by PICO.

In 1984, David received a separate bonus (hereinafter "Brown-McNeely" bonus) in the amount of $52,250 in recognition of his participation in a reinsurance transaction in 1983 that was favorable to PICO. He is entitled to receive the Brown-McNeely bonus of $52,250 each year from 1987 through 1992 if he remains employed by PICO and if the reinsurance company remains solvent. If he becomes disabled, he still receives the payments. If he dies, his estate is entitled to the payments. The dispute between the parties relates to the effect this bonus has on the awards made to the parties.

From its final decree, it appears that the trial court made the following allocation of assets:

                                     ASSETS
                Assest (Equity)  Sharon      David
                Residence    $  9,746.00  $ 9,746.00    $ -0-
                Car             2,677.00    2,677.00      -0-
                Furniture       8,000.00    8,000.00      -0-
                Furniture       5,000.00     -0-        5,000.00
                PICO Stock      1,800.00      900.00      900.00
                PRORECO           375.00      187.50      187.50
                Retirement     87,651.00   43,825.50   43,825.50
                Pension        18,211.34    9,105.67    9,105.67
                Tax Savings     9,700.00    7,500.00    2,200.00
                             -----------  ----------  ----------
                      TOTAL  $143,160.34  $81,941.67  $61,218.67
                

In addition to what she received in the division of assets, Sharon was awarded $2,200 per month in sustenance alimony. David was ordered to maintain a $150,000 life insurance policy with Sharon as the beneficiary so long as he was under an obligation to pay alimony.

The court of appeals upheld the property division; however, it found that the trial court abused its discretion in the amount of sustenance alimony awarded, because it failed to consider the Brown-McNeely bonus. The court of appeals vacated the trial court's judgment in part and remanded the cause to that court for further consideration.

The cause is before this court pursuant to the allowance of a motion to certify the record.

Luper, Wolinetz, Sheriff & Neidenthal, Barry H. Wolinetz and Mark S. Miller, Columbus, for appellee.

Porter, Wright, Morris & Arthur, Earl F. Morris, Thomas R. Sant, Columbus, Stebelton, Aranda & Snider and Gerald L. Stebelton, Lancaster, for appellant.

HERBERT R. BROWN, Justice.

This appeal presents two related issues: (1) whether the trial court abused its discretion in making a sustenance alimony award which does not place the parties in complete parity, and (2) whether the failure of the trial court to specifically mention the Brown-McNeely bonus in its alimony award constitutes an abuse of discretion.

" 'The term "abuse of discretion" connotes more than an error of law or judgment; it implies that the court's attitude is unreasonable, arbitrary or unconscionable. * * * [Citations omitted.]' " Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 482, 450 N.E.2d 1140, 1142. (Quoting State v. Adams [1980], 62 Ohio St.2d 151, 157, 16 O.O.3d 169, 173, 404 N.E.2d 144, 149.) In Martin v. Martin (1985), 18 Ohio St.3d 292, 294-295, 18 OBR 342, 344-345, 480 N.E.2d 1112, 1114-1115, we said that a domestic-relations award should be fair, equitable, and in accordance with law. The reviewing court should measure the lower court's adherence to that test but it should not substitute its judgment for that of the trier-of-fact, unless the lower court's decision amounts to an abuse of discretion.

I

In the case sub judice, the court of appeals held that R.C. 3105.18 ¹ " * * * mandates consideration of the standard of living of the parties established during the marriage with the apparent intent to have both parties maintain the standard of living established during the marriage." From this, the court of appeals concluded that the failure of the trial court to place the parties in complete parity amounted to an abuse of discretion. We do not agree.

In Ohio, alimony is comprised of two components: a division of marital assets and liabilities, and periodic payments for sustenance and support. Cherry v. Cherry (1981), 66 Ohio St.2d 348, 352, 20 O.O.3d 318, 321, 421 N.E.2d 1293, 1297. After the division of property is made, the trial court may consider (1) whether an additional amount is needed for sustenance and (2) the duration of such necessity. Wolfe v. Wolfe (1976), 46 Ohio St.2d 399, 414, 75 O.O.2d 474, 482, 350 N.E.2d 413, 423.

In Cherry, supra, we rejected a flat equal-property-division rule and held that equal division should be the starting point of the trial court's analysis when it considers the factors listed in R.C. 3105.18 and all other relevant factors. An unequal property division does not, standing alone, amount to an abuse of discretion. Equitable need not mean equal.

This reasoning applies to sustenance alimony awards. The standard of living achieved by the parties during their marriage is often altered upon termination. While we recognize that " * * * [n]either party should make a profit at the expense of the other * * *," Cherry, supra, 66 Ohio St.2d at 355, 20 O.O.3d at 322, 421 N.E.2d at 1299, we do not interpret R.C. 3105.18 to require an alimony award that provides the parties with an equal standard of living or a standard of living equivalent to that established during the marriage. Sustenance alimony is based on need, and the trial court must have latitude to examine all the evidence before it awards an amount that is reasonable and equitable to both parties.

Appellee does not contend that the sustenance alimony awarded is inadequate to meet her living expenses; instead, she argues that it is inequitable and unreasonable not to allow her to share in the higher standard of living that appellant enjoys as his income increases.

R.C. 3105.18(B) lists standard of living as one of eleven factors a trial court is to consider in determining the amount of alimony. Some of the factors enumerated in R.C. 3105.18(B) are more pertinent than others in the process of reaching an equitable property division, while some are more relevant in ascertaining the need for and amount of sustenance alimony. See Cherry, supra, 66 Ohio St.2d at 355-356, 20 O.O.3d at 322-323, 421 N.E.2d at 1299; Wolfe, supra, 46 Ohio St.2d at 414, 75 O.O.2d at 482, 350 N.E.2d at 423. However, all the statutory factors must be considered. The goal is to reach an equitable result. The method by which the goal is achieved cannot be reduced to a mathematical formula. Therefore, we hold that in making a sustenance alimony determination, the court must consider all the factors listed in R.C. 3105.18(B) and not base its determination upon any one of those factors taken in isolation.

We conclude that the court of appeals erred in its suggestion that an alimony award must establish an equal standard of living for the parties.

II

The real controversy in this case centers on the alleged failure of the trial court to weigh the Brown-McNeely bonus in making its alimony award. The court of appeals points out that the amount of the bonus and the right to receive it appear to be fixed and, therefore, should have been considered by the trial court either as part of the division of property or in setting sustenance alimony. Appellant argues that because of its contingent nature, the bonus could not be deemed a marital asset capable of division at the time of divorce.

The Brown-McNeely bonus is contingent upon (1) appellant's continued employment with PICO and (2) the solvency of the reinsurance company. The amount of the award is certain ($313,500 payable in six equal installments of $52,250 from 1987 throug...