Court of Appeals of Ohio, Eighth District, Cuyahoga
Appeal from the Cuyahoga County Court of Common Pleas
Domestic Relations Division Case No. DR-15-357079
AFFIRMED IN PART, REVERSED IN PART AND REMANDED
O'Shea Legal Group, and Michael J. O'Shea, for
Stafford Law Co., L.P.A., Joseph G. Stafford, and Nichole A.
Cruz, for appellee.
JOURNAL ENTRY AND OPINION
T. GALLAGHER, PRESIDING JUDGE.
Plaintiff-appellant, Matthew Palnik ("Husband"),
appeals the decision of the Cuyahoga County Court of Common
Pleas, Division of Domestic Relations, finding him in civil
contempt of a temporary support order. He raises the
following assignments of error for review:
1. The temporary support order was not based upon Ohio law
and violated federal law.
2. The trial court's failure to hold a modification
hearing in the time required by Ohio Civ.R. 75(N) violated
3. Ohio law permits the modification of a temporary support
order at anytime.
4. There was no proof that the show cause motions were served
according to Ohio Civ.R. 4.1, et seq.
5. Defendant's contempt motions and the evidence
introduced at the hearing, did not comply with Loc.R. 20 of
the Cuyahoga County Domestic Relations Court.
6. Husband clearly demonstrated an inability to completely
comply with the temporary support order.
7. The trial court placed impossible and/or unconscionable
terms on Husband to purge the contempt.
2} After careful review of the record and relevant
case law, we affirm in part, reverse in part, and remand for
proceedings consistent with this opinion.
Husband and defendant-appellee, Kristen Crane
("Wife"), were married on November 25, 2006. They
have two minor children together. In May 2015, Husband filed
a complaint for divorce and a motion for temporary support,
with an accompanying affidavit. In response, Wife filed an
answer brief and a counter motion for temporary support, with
an accompanying affidavit.
4} The trial court held hearings on July 1, 2015,
October 2, 2015, and October 29, 2015, to address the issue
of temporary support. The matter was scheduled to resume on
April 6, 2016, to provide Husband the opportunity to
re-cross-examine Wife "on the issues associated with the
temporary support and temporary parenting plan."
However, on March 28, 2016, Husband filed a motion waiving
his right to present further evidence on the issue of
temporary support. The motion further requested the trial
court to issue the "long-overdue temporary support and
temporary parenting orders."
5} On April 25, 2016, the trial court issued a
temporary support order. In relevant part, the trial court
found that "[Husband] is a self-employed attorney and
for the purposes of temporary support [Husband]'s gross
annual income from all sources is $360, 000 and [Wife] is a
W-2 employee and her annual gross income is $80, 000."
Upon consideration of the factors set forth under R.C.
3105.18(C)(1), including "the disparity in income"
and the "need to maintain status quo," the court
ordered Husband to "pay spousal support to [Wife] in the
sum of $9, 000 per month, plus 2% processing." In
addition, the trial court ordered Husband to pay child
support in the amount of $2, 222 per month. Finally, the
court ordered Husband to pay Wife certain expenses, including
(1) household expenses for cable television, telephone
service, and internet service; (2) Wife's lease payments
for her vehicle; (3) work-related childcare for the children;
(4) Wife's auto-insurance payments; and (5) health
6} On April 28, 2016, just three days after the
temporary support order was issued, Husband filed a motion to
modify the temporary support order. In the motion, Husband
argued the trial court's judgment was not based upon his
current income and expenses for the year 2016. In an attached
affidavit, Husband estimated that his 2016 income would be
approximately $100, 000 lower than the amount relied on by
the trial court. Thus, Husband alleged, "given [his]
current income and expenses," that he "[did] not
have the income to comply with the Divorce Case April 25,
2016 temporary support order and also support myself."
7} In October 2017, the trial court held a two-day
hearing to address Husband's motion to modify the
temporary support order. Ultimately, the trial court
"dismissed" the motion to modify temporary support,
finding that Husband (1) failed to authenticate the 2016 tax
returns referenced in support of his modification request;
and (2) failed to demonstrate a change of circumstances.
Following the trial court's judgment, Husband filed a
second motion to modify the temporary support order on
November 1, 2017.
8} During the pendency of the litigation, Wife filed
separate motions to show cause on June 27, 2016, September
16, 2016, February 2, 2017, and May 1, 2018. In each motion,
Wife alleged that Husband had failed to abide by the terms of
the April 25, 2016 temporary support order. Hearings were
held to address Wife's pending motions to show cause on
May 7, 2018, and May 11, 2018.
9} At the hearing, defense counsel called Husband as
a witness as if on cross-examination. At the onset of his
testimony, Husband was presented with copies of the four
motions to show cause. At that time, plaintiffs counsel
objected to the reference to the show-cause motion filed on
May 1, 2018. Counsel maintained that the motion was not
properly before the court because it had not been served in
compliance with the Ohio Rules of Civil Procedure. Following
a brief discussion on the record, the trial court overruled
the objection and permitted defense counsel to question
Husband about the specific allegations set forth in the May
1, 2018 show-cause motion.
10} Regarding the arguments set forth by Wife in
each motion to show cause, Husband testified that he was
aware of the temporary spousal support order and its
mandates. He agreed with defense counsel that he knowingly
failed to comply with the specific requirements of the court
order. Husband was presented with records from the Cuyahoga
County Child Support Enforcement Agency ("CSEA"),
which reflected that he owed arrearages in the amount of
$159, 960.80. Husband did not dispute the record or the
amount reflected as due and owing.
11} Wife provided testimony in support of her
show-cause motions. When presented with copies of her motions
to show cause, Wife stated that Husband continuously failed
to comply with the court's order to pay certain
"extracurricular/medical" expenses and various
household expenses, including telephone, internet, and cable
bills, child-care expenses, and monthly lease payments for
Wife's personal vehicle. In addition, Wife testified that
Husband failed to make all required child support and spousal
support payments. She conceded that Husband had been paying
"approximately $3, 000 a month." However, she
emphasized that he still owes an unpaid balance of support in
the amount of $159, 960.80. Wife opined that Husband
"has the ability to pay the court order," and that
a finding of contempt for Husband's noncompliance was
appropriate because Husband would never comply with the court
order "unless there's a penalty."
12} In the midst of the cross-examination of Wife,
counsel for Husband attempted to challenge the merits of the
underlying temporary support order. Reiterating many of the
arguments previously raised in the dismissed motion to
modify, counsel argued that the temporary support order is
"fundamentally inequitable in violation to a certain
degree of federal law." Counsel asserted that Husband
was "essentially [made] to pay close to 130, 140, 000
dollars a year" when "the evidence will show he
made just around 200, 000 [dollars] in 2016." Counsel
further argued that the insufficiency of the temporary
support order was relevant to the contempt proceedings and
his current ability to comply with the order, stating:
Now why this is all important, Judge, for the purposes you
have what we're here for today because Ms. Wife and/or
her lawyer seek to have this man incarcerated, Judge, found
in contempt because he cannot meet an order that the math
will clearly show you, and had in fact, shown you he cannot
meet, that essentially consumes more than 50 percent of his
gross pretax income.
When given the opportunity to respond, defense counsel
challenged Husband's credibility, suggesting that his
total earnings "could be subject to manipulation"
because Husband is "a self-employed person."
13} Upon resuming cross-examination, Wife stated
that she had no knowledge of Husband's income for the
year 2016. However, she conceded that prior to the hearing on
Husband's motion to modify the temporary support order,
Husband's personal accountant, Frank Krempasky, sent her
a draft of Husband's 2016 tax return in order to
determine whether the parties wished to file their taxes
jointly or individually. Wife testified that she told
Krempasky that she "did not have faith in the
information reported on a federal and state return and
therefore needed to speak with [her] attorney." Wife
further conceded that CSEA records reflect that from June 1,
2016 to May 6, 2018, Husband paid $131, 185.32 towards his
temporary support obligation.
14} Husband then testified on his own behalf.
Husband provided extensive testimony concerning his
employment as an attorney and the unpredictable nature of his
annual income under the payment structure utilized by his law
firm. Husband explained that pursuant to his partnership
agreement, when one of the partners "draws against
[their] respective operating account," the other partner
is entitled to 20 percent of those funds. Husband was
presented with the parties' federal and state joint-tax
returns for the years 2014 and 2015. For the year 2014,
Husband confirmed that Wife's salary was $80, 000, and
that his Schedule C income was $13, 259, and his Schedule K-1
income was $373, 112. For the year 2015, Husband confirmed
that Wife's salary was $80, 000, and that his Schedule C
income was $3, 512, and his Schedule K-1 income was $360,
15} When questioned about the spike in his income
during 2014 and 2015, Husband explained that he inherited
approximately 400 workers' compensation cases from a
retired colleague. He indicated that at the time the
temporary spousal support was issued in April 2016, his
annual income at that time was no longer $360, 000. In an
effort to corroborate Husband's testimony, counsel
introduced Husband's 2016 federal tax return. Viewing his
"Two Year Comparison Report" for the years 2015 and
2016, Husband testified that while his total
"partnership/S Corp. income" for the year 2015 was
$360, 015, his total "partnership/S Corp. income"
for the year 2016 was only $183, 177 - a reduction of income
in the amount of $176, 838. Taking in consideration the
increase in Husband's "business income" of $26,
013 in 2016 versus his "business income" of $3, 512
in 2015, the exhibit reflects that Husband's "total
income" income was $363, 574 in 2015, and $209, 252 in
2016 - a difference of $154, 322. (Plaintiffs exhibit No.
NNN-2.) Counsel also introduced Husband's 2016 state tax
return, which designated Husband's adjusted gross income
as being $120, 870. (Plaintiffs exhibit No. OOO.) Husband
testified that the 2016 tax returns accurately reflected his
income for the year 2016 and that the exhibits reflected the
"actual tax return[s]" he filed for the year 2016.
16} At the time of the contempt hearing, Husband had
yet to file his 2017 tax returns. However, counsel introduced
a draft IRS Schedule K-1 for the year 2017 that reflected
Husband's "self-employment earnings" in the
amount of $248, 055. (Plaintiffs exhibit No. SSS.)
17} Husband confirmed that the CSEA records
accurately represented the amount of spousal support payments
he has made since the temporary spousal support order was
issued. Thus, Husband agreed that he has not paid the full
amount of support required by temporary support order. In an
effort to explain why he has not been able to comply with the
court's order, Husband testified, in relevant part:
Well, one, I don't make currently the money I made in
2014 and 2015. I haven't made that kind of money since
2016. It was a little over $200, 000-and 2017 it's going
to go up, but it's probably going to be about $250, 000,
somewhere around there give or take. * * * And  will
probably be similar in that range too, between 200 or 210 or
the 250, and I don't know.
18} Husband asserted that due to the reduction in
his annual income, he could not renew his lease agreement and
was forced to move in with his parents. Husband stated that
he made the decision to move in with his parents because he
wanted to comply with his "ethical obligation to try and
meet the order." In light of these circumstances,
Husband testified that he filed the motion to modify the
temporary support order and the motion to stay because he
"couldn't afford to pay it all."
19} During his cross-examination, Husband agreed
that for the year 2016, he paid a total of $44, 339.32
towards his support obligation. He further agreed that $9,
800 of the amount was paid towards his child support
obligation, and $24, 539.32 was paid towards his spousal
support obligation. However, when presented with plaintiffs
exhibit No. NNN-2, Husband agreed that the exhibit reflected
that in 2016 he claimed to have paid $54, 668 towards
"alimony," an amount significantly higher than the
$24, 539.32 actually paid through CSEA. In light of this
information, Husband agreed with the trial court that
"something is very, very wrong here." In an effort
to explain this oversight, Husband suggested that plaintiffs
exhibit No. NNN-2 may not have been the actual tax return he
filed in 2016. Husband maintained that he did not
intentionally manipulate the information set forth in his
2016 tax return, and that he assumed his tax return was
drafted by his accountant to "match up with CSEA."
20} Regarding his draft IRS Schedule K-1 for the
year 2017, as reflected in plaintiffs exhibit No. SSS,
Husband admitted that the exhibit did not include his
Schedule C income. Thus, Husband agreed that his total income
in 2017 "will be more" than that reflected in the
draft Schedule K-1 form. Husband further conceded that in
April 2018, he made a payment in the amount of $50, 000
towards his estimated tax liability for the year 2017. In
light of this payment, Husband agreed that he ...