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Soley v. Soley

Court of Appeals of Ohio, Sixth District, Huron

May 12, 2017

Robert Stephen Soley Appellee
Katalin Terezia Soley, et al. Appellant

         Trial Court No. CV 2012 0481

          Robert W. Gentzel and James J. Martin, for appellee.

          Kathleen M. Amerkhanian, for appellant.


          JENSEN, P.J.

         I. Introduction

         {¶ 1} Appellant, Katalin Soley, appeals the judgment of the Huron County Court of Common Pleas, adopting the decision of the magistrate, which found that certain real property located in Huron County was appellee's, Robert Soley, separate property. Because we find that the trial court erred in classifying the property, we reverse.

         A. Facts and Procedural Background

         {¶ 2} This is the second time these parties have appeared before this court in this action. In the first appeal, we resolved a dispute concerning Katalin's sale of the Huron County property located at 231 Butler Rd., New London, Ohio. Soley v. Soley, 6th Dist. Huron No. H-13-028, 2014-Ohio-3965. In our decision, we recited the relevant facts as follows:

Robert and Katalin were married on December 23, 1990. During the course of their marriage, Robert decided to deed a portion of his real property to Katalin in an effort to evade creditors. According to Robert, the property was conveyed to Katalin, free of charge, under a constructive trust in which Katalin was to hold title of the real estate for Robert's benefit and deed the property back to him upon demand.
Subsequent to the transfer, Robert and Katalin began experiencing marital difficulties. As a result, Robert recorded an affidavit of dower with the Huron County Recorder on March 30, 2008, evidencing the fact that Katalin was the owner of the property and that he was entitled to a dower interest as her husband. Eventually, the parties separated and divorce proceedings were initiated in Budapest, Hungary, which is where the parties were living at the time. According to a translated judgment entry from the Hungarian court, the parties were ultimately divorced on May 10, 2011. However, the division of the marital assets had not yet occurred. Notably, the court expressly declined to distribute the real property located in Huron County, as the court found that property within the United States was beyond its jurisdiction.
Four months after the parties were divorced, but before the Hungarian assets were distributed, Katalin reached an agreement with [Robert and Mary Lou] Harris to sell the real property located in Huron County for $170, 000. The property was then transferred to Mr. and Mrs. Harris by warranty deed.
Seeking to set aside the conveyance, Robert filed his complaint in the underlying action on June 3, 2012, alleging that the transfer was fraudulent because the property was subject to a constructive trust. Moreover, Robert alleged that Mr. and Mrs. Harris knew or should have known that the property was subject to a constructive trust in Robert's favor. As a result, Robert sought damages in excess of $25, 000 and also petitioned the court to set aside the conveyance and restore title to the real estate in his name.
On January 7, 2013, [Katalin, along with Mr. and Mrs. Harris, ] filed a motion for summary judgment. In their motion, [the movants] argued that Katalin, as the sole owner of the property, lawfully conveyed the property to Mr. and Mrs. Harris. Because the marriage was dissolved prior to the conveyance, [the movants] asserted that Robert had no interest in the property. Further, [the movants] averred that Mr. and Mrs. Harris were bona fide purchasers for value insofar as they were without actual or constructive notice of Robert's claimed interest in the property. As to Robert's constructive trust argument, [the movants] contended that the argument must fail under the statute of frauds because the agreement was not reduced to writing. Finally, [the movants] argued that Robert was not entitled to recover on the basis of any dower interest he may have had in the property, because such interest was extinguished by operation of law as of the date the marriage was dissolved.
In response to [the movants'] arguments, Robert argued that the marriage was not dissolved at the time of the conveyance because the marital estate had not been divided by the Hungarian court. Thus, he contended that he possessed a dower interest in the property at the time of the sale. Moreover, Robert noted the fact that the property had not been classified as Katalin's separate property at the time of the sale as the marital assets had not yet been divided. He contended that the property was in fact his own separate property because he owned the property prior to the marriage. In the alternative, Robert claimed that the property would at least amount to marital property, entitling him to a share in the proceeds from its sale. Robert also took issue with [the] argument that the constructive trust must be in writing in order to be enforceable under the statute of frauds. He argued that a constructive trust is unwritten by its very nature. In supporting his arguments, Robert submitted several affidavits. In his own affidavit, he averred that he transferred the property to Katalin "with the specific understanding by both parties that the sole purpose of the transfer was to avoid [his] creditors and that Katalin * * * would deed the property back to [him] upon demand."
Upon consideration of the parties' arguments, the trial court issued its decision on July 1, 2013. In its decision, the trial court granted Mr. and Mrs. Harris' motion for summary judgment, thereby quieting title to the property in their name. At this point, Katalin had been dismissed from the action due to service of process issues. When she was later properly served, she renewed her motion for summary judgment, which was granted on December 4, 2013. In granting Katalin's motion for summary judgment, the trial court found that Robert's claim of a constructive trust was barred by the statute of frauds. The court further found that the parties were divorced at the time of the sale and that, as such, Robert's dower interest was extinguished. Robert's timely appeal followed. Soley, 6th Dist. Huron No. H-13-028, 2014-Ohio-3965, at ¶ 2-8.

         {¶ 3} On appeal, we concluded that Robert deeded the Huron County property to Katalin "'for the sole purpose of placing the property beyond the reach of his creditors.'" Id. at ¶ 22. We found no evidence of any wrongdoing in Katalin's acquisition or retention of the property, and thus concluded that the trial court did not err in rejecting Robert's constructive trust argument. Id. However, we found that the matter needed to be remanded to the trial court because a determination as to whether the real property was marital property or separate property had not been made. Id. at ¶ 25. We noted that the Hungarian court, in which the divorce proceedings were initiated, expressly declined to exercise jurisdiction over the property. Id. Ultimately, we remanded the matter for "a determination of whether the property is marital or separate, and a concomitant equitable division of the property, if necessary, under R.C. 3105.171(B)." Id.

         {¶ 4} On remand, the parties appeared for an evidentiary hearing before a magistrate on the issue of whether the subject property was marital or separate. At the hearing, several individuals testified, including Robert and Katalin. The magistrate issued his decision, in which he concluded that the subject property was Robert's separate property. The magistrate specifically found that Robert's transfer of the property to Katalin did not constitute a gift and therefore did not convert the separate property into marital property. The magistrate determined that Robert did not possess the requisite donative intent when he executed the quitclaim deed for the purpose of avoiding his creditors. Moreover, the magistrate stated that, "because the parcel remained wholly traceable from prior to the Soley marriage until sale to Defendants Harris, the execution of the quitclaim deed conveying [Robert's] interest therein to [Katalin] had absolutely no impact on the separate property characterization of the Butler road property." Consequently, the magistrate found that Robert was entitled to the $85, 000 in proceeds from the sale of the property that were being held in escrow, as well as a judgment against Katalin for the remaining $85, 000 that she had already received.

         {¶ 5} Two weeks after the magistrate issued his decision, Katalin filed objections with the trial court. Upon consideration, the trial court overruled Katalin's objections and adopted the magistrate's decision. In its judgment entry, the court directed the following:

1. After expiration of the appeal period following entry of judgment, Attorney Mark Coriell shall be and hereby is directed to disburse the amount of Eighty-five Thousand ...

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