Lelak v. Lelak

• Decision Date: 30 September 2022
• Docket Number: 29308,29321
• Citation: 2022 Ohio 3458
• Parties: M. ANGELA LELAK (aka SIDDALL) Plaintiff-Appellant-Cross-Appellee v. JOHN W. LELAK, JR. Defendant-Appellee-Cross-Appellant
• Court: Ohio Court of Appeals

1

2022-Ohio-3458

M. ANGELA LELAK (aka SIDDALL) Plaintiff-Appellant-Cross-Appellee v. JOHN W. LELAK, JR. Defendant-Appellee-Cross-Appellant

Nos. 29308, 29321

Court of Appeals of Ohio, Second District, Montgomery

September 30, 2022

Domestic Relations Appeal, Trial Court Case No. 1982-DR-1530

JAMES R. KIRKLAND, Atty., and MICKENZIE R. GRUBB, Atty., Attorneys for Plaintiff-Appellant.

DALMA C. GRANDJEAN, Atty., and JAMES D. MILLER, Atty., Attorneys for Defendant-Appellee.

OPINION

WELBAUM, J.

{¶ 1} This matter is before our court for the third time. Most recently, M. Angela Lelak (aka Siddall) ("Siddall") appealed from a November 2, 2021 trial court judgment awarding her 11% in statutory interest on $10,313 in retirement benefits that her ex-husband, John W Lelak, Jr. ("Lelak") failed to pay. The judgment also awarded Siddall $2,000 in attorney fees based on a contempt finding against Lelak for failing to pay the benefits. That appeal was filed on November 22, 2021, and was designated Montgomery C. A. No. 29308.

{¶ 2} On December 2, 2021, Lelak also appealed from the same judgment; that appeal was designated Montgomery C. A. No. 29321. We consolidated the appeals and designated Siddall as the "appellant/cross-appellee" and Lelak as the "appellee/cross-appellant." Lelak v Lelak, 2d Dist. Montgomery Nos. 29308 and 29321 (Order, Dec. 29, 2021), p. 2.

{¶ 3} According to Siddall, the trial court erred by failing to award her compound interest rather than simple interest. She further contends that the trial court abused its discretion by awarding her only $2,000 in attorney fees for this litigation, which has spanned six years. In addition, Siddall argues that the trial court erred in refusing to consider expert fees and court costs and abused its discretion by only sentencing Lelak to a three-day jail term for contempt.

{¶ 4} Lelak's cross-appeal claims that the trial court should have used a different variable rate to calculate the interest every year since 1989, rather than imposing an 11 % rate from 1989 through all the years thereafter. Lelak further contends that the trial court abused its discretion by awarding Siddall any attorney fees, because evidence of his income was not presented during the remand hearing and was not considered.

{¶ 5} For the reasons discussed below, we conclude that the trial court did not err in awarding simple interest rather than compound interest after finding Lelak in contempt. Lelak was not a fiduciary, and no statutory basis existed on which to award compound interest. The trial court also did not abuse its discretion in imposing only a three-day jail term for the contempt.

{¶ 6} However, the court did abuse its discretion in awarding Siddall only $2,000 in attorney fees and in refusing to consider expert fees and costs. The court's decision incorrectly narrowed the issue on which contempt was based, and its decision on attorney fees was not based on sound reasoning. As a global resolution of these issues, the trial court will be instructed on remand to award Siddall $53,123 in attorney fees, expert fees, and court costs.

{¶ 7} The trial court also erred in imposing a set rate of interest on the amount Lelak was required to pay on the unpaid retirement benefits. The court used an 11% interest rate, which the Ohio Department of Taxation ("ODT") certified as of August 31, 1989, and it carried that rate forward until the judgment was satisfied. However, the court should have used the statutory interest rate that R.C. 1343.03 dictated at that time, which was 10%. The court should have applied that rate from August 31, 1989, until June 2, 2004, when R.C. 1343.03 was amended to provide for a variable rate. From the latter date forward, the court should have imposed interest at variable rates as provided in R.C. 1343.03 and R.C. 5703.47. Accordingly, the trial court will be instructed on remand to enter interest as indicated. The judgment, therefore, will be affirmed in part and reversed in part, and the matter will be remanded to the trial court for further proceedings consistent with our instructions.

I. Facts and Course of Proceedings

{¶ 8} As noted, this case has been in our court twice before. Its history has been outlined in the two prior opinions. In the first, which was issued in 2019, we stated that:

In 1983, Lelak and Siddall divorced after 15 years of marriage. Of relevance hereto, the "final decree and judgment of divorce", issued on January 31, 1983, stated:

"As to the retirement benefits of the parties, the court is mindful that they cannot be withdrawn by either party at the present time so long as the parties are employed. The court finds that the total retirement of both parties is Twenty Thousand Nine Hundred Thirty-Nine Dollars ($20,939.00) which, for simplicity's sake, is rounded off to $20,900. Plaintiff shall keep the $87.00 in her retirement account and shall be entitled to receive from the Defendant the sum of Ten Thousand Three Hundred Sixty-Three Dollars ($10,363.00). The Defendant shall retain the balance. The Defendant shall pay the sum of $10,363.00 to the Plaintiff commencing with the first payday after the closing of the house in the amount of Fifty Dollars ($50.00) per week, unless Plaintiff has been paid in full by that time. * * *

IT IS FURTHER ORDERED that the Defendant is not allowed to withdraw any retirement benefits from either account without ten days written notice to the Plaintiff."

Lelak v. Lelak, 2d Dist. Montgomery No. 28243, 2019-Ohio-4807, ¶ 2 (Lelak I).

{¶ 9} We also noted that the last quoted paragraph was amended a few days later to state, in relevant part, that" 'It is further ordered that the Defendant is not allowed to withdraw any retirement benefits from either account without ten days written notice to the Plaintiff at any time prior to the full payment due to the Plaintiff.'" Id. at ¶ 3.

{¶ 10} Shortly after the divorce decree was issued, Lelak filed a voluntary Chapter 7 petition for relief in bankruptcy court. Lelak's petition named Siddall" 'as an unsecured creditor for "non-alimony obligations arising from the divorce judgment and decree, incl. retirement & Citicorp" in the amount of $18,050.'" Id. at ¶ 4, quoting In re Lelak, 38 B.R. 164, 166 (Bankr. S.D. Ohio 1984).^[1] Siddall then filed a complaint in bankruptcy court, asking the court to decide if her claim for $10,363 in retirement benefits could be discharged. Id. If the $50 payments were considered alimony, maintenance or support as Siddall alleged, they would not be dischargeable. However, they could be discharged if considered a division of property, as Lelak alleged. Id. After reviewing the divorce decree, the bankruptcy court found the weekly payments were dischargeable. Id.

{¶ 11} In its decision, however, the bankruptcy court stressed that it did not intend to interfere with the state court decree or implementation of the retirement benefits. In this regard, the bankruptcy court stated:

"Finding that the weekly advance payments applying to the retirement benefits do not constitute alimony and support, however, should not be construed as interference with the state court Decree as to the division of the marital property in esse. For that reason, this court has specifically iterated and emphasized above the state court prohibition, 'that the Defendant is not allowed to withdraw any retirement benefits from either account without ten days written notice to the Plaintiff [And Plaintiff herein]. The extent to which such funds are vested and the extent to which they may be so encumbered under the Ohio law is not now an issue sub judice, and is a question of state law properly to be determined by the state court. In any event, the judgment by this court should not be deemed any 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.

THEREFORE, IT IS HEREBY ORDERED that the debt from the retirement benefits is dischargeable in bankruptcy as to the advance payments which the state court ordered be paid in weekly installments."

(Footnote omitted.) Lelak I, 2d Dist. Montgomery No. 28243, 2019-Ohio-4807, at ¶ 6, quoting In re Lelak, 38 B.R. at 169.

{¶ 12} Our 2019 opinion further noted that, "[i]n 1998, Lelak, without notice to Siddall, withdrew the pre-tax sum of $181,035.44 from his retirement account." Id. at ¶ 7. Subsequently, "[i]n April 2016, Siddall filed a motion to show cause in which she sought to have Lelak found in contempt for failing to provide her with the 10-day notice required by the decree. Her motion also sought an order requiring Lelak to pay her the monies owed under the decree as well as any growth thereon. Finally, her motion requested an award of attorney fees and costs." Id.

{¶ 13} In response to the contempt motion, Lelak filed a motion to dismiss on October 5, 2016, based on an alleged lack of jurisdiction. A magistrate then held hearings in April 2017, August 2017, and June 2018. During the hearings, Siddall presented expert testimony from a bankruptcy attorney concerning the jurisdictional issue, from an accountant regarding the value of the retirement funds, and from an attorney as to attorney fees she had incurred. Lelak also presented testimony from a bankruptcy attorney and an accountant. Finally, both parties testified.

{¶ 14} After hearing the evidence, the magistrate found Lelak in contempt for failing to pay the appropriate share of his retirement funds and for failing to give notice of his withdrawal of the funds. The magistrate awarded Siddall $90,053.64 as her share of Lelak's retirement as of December 31, 2016, and $14,652 in attorney fees. Id. at ¶ 9.

{¶ 15} Lelak then filed objections and...