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Smith v. Smith

Court of Appeals of Ohio, Twelfth District, Clermont

September 5, 2017

PAULETTE SMITH, Plaintiff-Appellee,
v.
LINK SMITH, Defendant-Appellant.

         APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS DOMESTIC RELATIONS DIVISION Case No. 2014 DRA 1222

          Susan Mineer, for plaintiff-appellee.

          Kroener & Hale, Angela Penick, for defendant-appellant.

          OPINION

          RINGLAND, J.

         {¶ 1} Defendant-Appellant, Link Smith ("Husband"), appeals from the decision of the Clermont County Court of Common Pleas, Domestic Relations Division, that distributed certain marital property and awarded spousal support to Paulette Smith ("Wife"). For the reasons detailed below, we affirm in part, reverse in part, and remand this matter to the trial court.

         {¶ 2} Husband and Wife married in 1976 and are the adoptive parents of their seven- year-old grandson. During the marriage, both Husband and Wife operated several small businesses. Pertinent to this case, Husband was self-employed working for L. Smith Pallets, LLC. Wife provided funds to start up the business and assisted with certain administrative functions.

         {¶ 3} In February 2013, the pallet company building was destroyed in a fire. Husband had allowed the liability insurance on the property to lapse and therefore the fire resulted in a complete loss. In order to continue operations, Husband secured a significant line of credit and rebuilt the building.

         {¶ 4} Wife filed for divorce on October 3, 2014. A trial was held in February 2016 where evidence was introduced as to the parties' various properties. There was also evidence introduced with respect to custody, child support, and spousal support. Following its review of the evidence, the trial court named Wife residential parent of the child and awarded child support. Pertinent to this appeal, the trial court also granted spousal support and divided the parties' marital property. The trial court determined that the pallet company was marital property and valued the company at $176, 494. The trial court's decision allowed Husband to continue operation of the business. However, because of Husband's failure to maintain liability insurance on the property, the trial court found that Wife should not be liable on the remaining pallet company debts. Husband now appeals the decision of the trial court, raising two assignments of error for review.

         {¶ 5} Assignment of Error No. 1:

         {¶ 6} A COURT ABUSES ITS DISCRETION WHEN IT FINDS FINANCIAL MISCONDUCT PURSUANT TO R.C. 3105.171 (E)(4) WHERE AN ACCIDENTAL OUTSIDE FORCE DAMAGED AND DEPRECIATED MARITAL PROPERTY WITHOUT ANY WRONGDOING BY A PARTY.

         {¶ 7} In his first assignment of error, Husband argues the trial court erred by finding that he had committed an act of financial misconduct by failing to have insurance on the marital business.

         {¶ 8} Property division in a divorce proceeding is a two-step process that is subject to two different standards of review. Grow v. Grow, 12th Dist. Butler Nos. CA2010-08-209, CA2010-08-218, and CA2010-11-301, 2012-Ohio-1680, ¶ 11. Initially, pursuant to R.C. 3105.171(B), "the court shall * * * determine what constitutes marital property and what constitutes separate property." "Although the statute does not mention debt as an element of marital and separate property, the rules concerning marital assets have been consistently applied to marital and separate debt." Ohmer v. Renn-Ohmer, 12th Dist. Butler No. CA2012-02-020, 2013-Ohio-330, ¶ 35. An appellate court reviews the trial court's classification of property or debt as marital or separate under the manifest-weight-of-the-evidence standard. Oliver v. Oliver, 12th Dist. Butler No. CA2011-01-004, 2011-Ohio-6345, ¶ 8;

         {¶ 9} After classifying the property as separate or marital, "the court shall disburse a spouse's separate property to that spouse" and divide the marital property equally. R.C. 3105.171(C)(1) and (D). However, if the court finds an equal division would be inequitable, then the court must divide the property in a manner it determines is equitable. R.C. 3105.171(C)(1); Roberts v. Roberts, 12th Dist. Clinton Nos. CA2012-07-015 and CA2012-07-016, 2013-Ohio-1733, ¶ 34. As mentioned above, the concepts related to "property" relate to both the parties' assets and debts. Ohmer at ¶ 35. The trial court is given broad discretion in fashioning a property or debt division and will not be reversed absent an abuse of discretion. Williams v. Williams, 12th Dist. Warren No. CA2012-08-074, 2013-Ohio-3318, ¶ 54. To find abuse of discretion, we must determine that the trial court's decision was unreasonable, arbitrary, or unconscionable, and not merely an error of law or judgment. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).

         {¶ 10} Findings as to whether a party has engaged in financial misconduct are reviewed pursuant to the manifest-weight-of-the-evidence standard. Robinson v. Robinson, 12th Dist. Warren No. CA2012-11-118, 2013-Ohio-4435, ¶ 14. Under this standard, the reviewing court weighs the evidence and all reasonable inferences, considers the credibility of witnesses, and determines whether in resolving conflicts in the evidence, the finder of fact "clearly lost its way and created such a manifest miscarriage of justice that the [judgment] must be reversed and a new trial ordered." Id., quoting Eastley ...


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