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Smoyer v. Smoyer

Court of Appeals of Ohio, Tenth District

August 27, 2019

William E. Smoyer, Plaintiff-Appellant,
Chloe R. Smoyer, Defendant-Appellee.

          APPEAL from the Franklin County Court of Common Pleas, Division of Domestic Relations C.P.C. No. 16DR-1168

         On brief:

          Isaac Wiles Burkholder & Teetor, LLC, and Joanne S. Beasy and Dale D. Cook, for appellant.

          Grossman Law Offices, and Anthony R. Auten, and John H. Cousins, IV, for appellee.


          Joanne S. Beasy.

          John H. Cousins, IV.


          BEATTY BLUNT, J.

         {¶ 1} Plaintiff-appellant William E. Smoyer appeals the April 26, 2018 decision and judgment entry - decree of divorce ("decree") of the Franklin County Court of Common Pleas, Division of Domestic Relations. After reviewing the record and relevant law, we affirm in part and reverse in part the trial court's decision.


         {¶ 2} William Smoyer and defendant-appellee Chloe R. Smoyer were married on May 30, 1992. During their marriage, the parties had three children together, C.S., J.S., and P.S. The youngest child was emancipated on September 29, 2016. On March 22, 2016, William filed a complaint for divorce on the grounds of incompatibility.

         {¶ 3} In the course of the proceedings, the parties agreed to certain stipulations, which they filed with the trial court on November 6, 2017. They agreed that the stipulations should be "incorporated into the Court's Judgment Entry - Decree of Divorce." (Nov. 6, 2017 Stipulations.) Attached to the stipulations was a "balance sheet" that listed the parties' assets, the date of valuation of the assets, and the stipulated fair market value for most of the assets.

         {¶ 4} The parties did not stipulate to the fair market value of several assets, including business interests in Investment Builders of Florida, Ltd. ("IBF, Ltd.") and Investment Builders of Florida, Inc. ("IBF, Inc."). The parties also could not resolve issues relating to spousal support and the division of certain marital property.

         {¶ 5} A trial was held to resolve these remaining issues on November 6, 7, 8, 9, 27, 28 and December 4, 2017.

         A. Division of Marital Assets

         {¶ 6} IBF, Ltd. and IBF, Inc. are family-owned businesses, started by William's father, which invest in securities and real estate. William acquired interests in both companies before the marriage, and the parties acquired interests in both companies during the marriage. The parties do not dispute the number of shares that comprise William's separate property versus those that are marital property. The parties dispute only the value of the shares that are marital property and subject to division.

         {¶ 7} William's sister, who now runs both businesses, testified that IBF, Ltd. has a present total value of $1, 193, 658. She testified that IBF, Inc. has a present total value of $584, 734. Those valuations were not contested. The parties combined marital and separate interest in IBF, Ltd. is 40 percent of the business. The parties do not dispute that the marital interest in IBF, Ltd. totals 13.075 percent of the business. The remainder, approximately 26.925 percent, is William's separate interest in IBF, Ltd. There are 200 shares total in IBF, Inc., of which the parties own 30 shares as marital assets. William owns 50 shares in IBF, Inc. as separate property, acquired before the marriage.

         {¶ 8} The parties both hired experts to testify regarding the valuation of the marital interests in IBF, Ltd. and IBF, Inc.

         {¶ 9} William's accounting expert, Gary Moll, testified that the marital interests in the two businesses should be the amount of martial funds used to acquire the shares with some amount allowed for appreciation, a cost-based approach. For IBF, Ltd., the parties paid $30, 150 to acquire a 13.075 percent marital interest in the business from William's mother. Moll opined that the value of the marital interest in that business was $37, 227.

         {¶ 10} The parties paid $11, 500 to acquire 25 shares in IBF, Inc. from two family members. Allowing for some passive appreciation, Moll attributed a total value of $15, 940 to the marital shares in IBF, Inc.

         {¶ 11} Chloe's accounting expert, Dana Lavelle, used a value-based approach to determine that the 13.075 percent marital interest in IBF, Ltd. is worth $156, 071. Under this approach, he took the total present value of IBF, Ltd. and multiplied that number by the percentage comprising the marital property to arrive at his valuation. For IBF, Inc., Lavelle used the same approach to arrive at marital interest of $87, 710.

         B. Spousal Support

         {¶ 12} William is a pediatric nephrologist. At the time of their marriage, Chloe was a nurse practitioner, working in cardiology. William's approximate total yearly income is $371, 538. Chloe left the workforce when the parties' first child was born in 1995. She has never returned to the workforce, and she was not employed at the time of the divorce. Chloe has never been licensed as a nurse in Ohio, and her former license lapsed in 2008.

         {¶ 13} The parties' middle child, J.S., has Down syndrome and is autistic. The parties dispute the amount of care he requires and will continue to require in the future, as well as the impact his care needs have on Chloe's ability to work outside the home.

         {¶ 14} At the trial, William's expert, Bruce Growick, Ph.D., testified that Chloe could easily become employed full time as a medical assistant with her current skill set. In that role, she could expect to earn $38, 000 per year. With additional retraining and recertification, she could earn $65, 000 as a registered nurse or $82, 000 as a nurse practitioner.

         {¶ 15} Chloe testified that she cannot reenter the work force in any capacity because J.S. requires significant ongoing care. She is his primary caregiver. The parties testified that J.S. is expected the graduate from high school soon and will qualify for full-time adult daycare.

         C. The Court's Decree

         {¶ 16} On April 26, 2018, the trial court issued its decree, granting the parties a divorce and resolving pending issues.

         {¶ 17} As to marital assets, and relevant to this appeal, the trial court found that the parties acquired their interest in IBF, Ltd. "by purchase, as well as gift." (Decree at 8.) Because the acquisition was intrafamilial and occurred 11 years prior to the divorce, the trial court determined that Lavelle's value-based approach provided a more accurate valuation. (Decree at 7.) According to the trial court, a cost-based approach would be more appropriate if the transaction was an "arm's length" transaction made near the time of the divorce proceedings. (Decree at 7.) Accordingly, the trial court attributed a value of $156, 071 to the 13.075 percent marital interest in IBF, Ltd. Applying the same methodology, the court attributed a marital interest value of $87, 710 for IBF, Inc.

         {¶ 18} Regarding spousal support, the trial court conducted an analysis pursuant to R.C. 3105.18. The court considered Chloe's age and health, the length of the marriage, Chloe's present employability, the labor market, the ease of obtaining licensure as a registered nurse or nurse practitioner again, and the length of time Chloe has been unemployed. Despite Chloe's contention that her obligations to care for James prevent her from working at all, the court found that Chloe could obtain full time employment. (Decree at 21.) But the court expressed concern about Chloe's ability to become licensed as a nurse practitioner again. (Decree at 21.) The trial court imputed to Chloe an annual income of $38, 000 per year as a medical assistant. (Decree at 21.) The court then ordered William to pay spousal support in the amount of $11, 000 per month. The trial court noted that its order "shall be indeterminant [sic] subject to the Court's ongoing jurisdiction," and the court specifically "retain[ed] jurisdiction for modification of this provision." (Decree at 19, 21.)

         {¶ 19} Attached to the decree is a spreadsheet, Exhibit 1, of the parties' assets. It reflects the fair market value of the assets, the court's determination regarding which assets are separate versus marital, the value of the marital assets, and the "proposed" division of the marital assets.

         {¶ 20} William appeals the trial court's decree. He argues that the trial court failed to divide all marital assets. He disputes the trial court's valuation of the parties' marital interests in IBF, Inc. and IBF, Ltd. He contends that the trial court should have imputed more income to Chloe, thereby reducing the amount of spousal support she is owed. And he argues that the court failed to require that ongoing costs be shared equally between the parties.

         D. February 21, 2019 Agreed Entry

         {¶ 21} After the trial court issued the decree, after William filed his notice of appeal, and shortly before the oral argument on this case, the parties submitted an agreed entry to the trial court.[1] (See Franklin C. P. No. 16DR-1168, Feb. 21, 2019 Ex. A to Agreed Entry.) The parties addressed several accounts named after two of their children, and the trial court signed the entry. In the entry, the parties agreed as follows:

6.On or before February 28, 2019, Plaintiff shall transfer into [C.S.]'s 529 Account the funds held in the [C.S.] Graduation/Education Account#7227. Once the transfer is complete, and within 14 days of the same, Plaintiff shall then transfer ownership of the [C.S.] 529 Account to Defendant, which Defendant shall keep as her sole property free and clear of any claim of Plaintiff, and Defendant shall hold Plaintiff harmless on the same. This is a final property division of these accounts.
7.Plaintiff shall keep the [P.S.] Graduation/Education Account #0394 and the [P.S.] 529 Account free and clear of any claim of Defendant, and Plaintiff shall hold Defendant harmless on the same. This is a final property division of these accounts.



         {¶ 22} In his appeal, William presents the following ...

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