[Cite as Schwarck v. Schwarck, 2012-Ohio-3902.]




                     IN THE COURT OF APPEALS OF OHIO
                         THIRD APPELLATE DISTRICT
                             AUGLAIZE COUNTY




WENDY LYNN SCHWARK,

        PLAINTIFF-APPELLEE/
        CROSS-APPELLANT,                                CASE NO. 2-11-24

        v.

JOHN CHRISTIAN SCHWARK,
                                                        OPINION
        DEFENDANT-APPELLANT/
        CROSS-APPELLEE.




                Appeal from Auglaize County Common Pleas Court
                           Domestic Relations Division
                          Trial Court No. 2010-DR-146

                                    Judgment Affirmed

                           Date of Decision: August 27, 2012




APPEARANCES:

        William E. Huber for Appellant/Cross-Appellee

        John A. Poppe for Appellee/Cross-Appellant
Case No. 2-11-24


WILLAMOWSKI, J.

        {¶1} Defendant-Appellant/Cross-Appellee,       John    Christian   Schwarck

(“Chris”), appeals judgment of the Auglaize County Court of Common Pleas,

Domestic Relations Division, granting a divorce from Plaintiff-Appellee/Cross-

Appellant, Wendy Lynn Schwarck (“Wendy”). On appeal, Chris contends that the

trial court abused its discretion in the division of debt and in the allocation of

corporate property as marital property, and that the trial court failed to properly

apply R.C. 3105.171(F) in making a distributive award.          In her cross-appeal,

Wendy claims that the trial court erred in failing to consider the gross deposits into

Chris’ business as income for purposes of determining spousal support. For the

reasons set forth below, the judgment is affirmed.

        {¶2} The parties were married on May 23, 1992, and have two minor

children who were ages 16 and 13 at the time of the hearing. The parties separated

in November 2008, but a complaint for divorce was not filed until July 9, 2010. A

hearing on the divorce was held before the trial court on August 1 and August 18,

2011.    The trial court heard testimony from both of the parties, primarily

concerning financial matters and issues concerning the children. Several relatives

testified as to the parties’ parenting abilities. There was also testimony from a

C.P.A., who handled the parties’ personal and Subchapter S corporate income tax




                                         -2-
Case No. 2-11-24


returns, and from a certified property appraiser, who testified about the reports he

had prepared concerning the values of the parties’ personal and real property.

       {¶3} The parties owned no residential real estate and each resided, rent free,

in property owned by family members. (Oct. 3, 2011 J.E., ¶ 6) They were joint

owners of land, valued at $35,750, upon which Chris operated his cabinetry

business. (Id. at ¶ 7; Tr., p. 349). There was personal property to be divided that

was valued by the property appraiser and broken down into categories stating

which party was entitled to receive the property. (Id. at ¶ 8; Exhibit U). Wendy

had a deferred compensation plan through her current employer, Edward Jones,

valued at $1,200, and the parties had three cash value life insurance policies

valued at approximately $15,185.

       {¶4} During the marriage, most of the parties’ income was derived from

several businesses that were set up as Subchapter S corporations, on the advice of

Chris’ tax accountant, for the purpose of tax savings and liability issues. (Tr., p.

350)   Chris formed and dissolved several of these corporations, which were

primarily involved in Commercial Driver’s License (“CDL”) testing services,

Chris’ cabinet making businesses, and some farming. At the time of the marriage,

Chris was self-employed as a cabinet maker, operating a sole proprietorship

known as Schwarck Cabinets. (Tr. p. 322) He later incorporated that business

into Tri-Max Building Supplies, Inc.           Subsequently, he formed another


                                        -3-
Case No. 2-11-24


corporation known as Tri-Max Enterprises, Inc., which was involved in the CDL

testing business. Around 2008, Tri-Max Building Supplies, Inc. was dissolved but

the cabinet-making business continued to operate, changing its name to Tri-Max

Enterprises, Inc. (Tr. p. 230-232; 336)         Wendy assisted with the CDL business

venture, but that business ended several years ago. Chris owned 100% of the

stock in the companies, was president, was the sole employee, and received a

salary from the businesses. (Tr. p. 351) In his deposition, Chris testified that the

business currently was not worth anything other than the assets in the shop, which

consisted of “obsolete woodworking equipment.” (Deposition of Chris Schwarck,

pp. 21-24, admitted as Plaintiff’s Exhibits 1 and 2)

       {¶5} The parties also had credit card debt that was nearly $27,000 when

they separated in 2008, although the debt had been subsequently consolidated and

paid down to less than $22,000 by Wendy. The credit card debt was allegedly

created primarily to fund the Mary Kay cosmetic sales business that Wendy

participated in from 1999 through 2007. (Tr., p. 22) Chris testified that he never

wanted Wendy to sell Mary Kay products, that he thought it was a “pyramid

scheme,” that the business lost money every year, and that he believed Wendy

should be solely responsible for that debt. (Tr., pp. 263-272)

       {¶6} Wendy, however, testified that money was always tight and Chris

controlled all of the finances. (Tr. pp. 23, 37) Once she started the Mary Kay


                                          -4-
Case No. 2-11-24


business, Chris stopped giving her any spending money and limited her money for

groceries to $100 a week. (Tr. p. 28) She testified that Chris told her to use the

money from Mary Kay, and that she had to utilize the Mary Kay money to help

pay for the groceries, vehicle repairs, medical bills, prescriptions, and anything

that was needed.          (Id.)     Therefore, Wendy would charge her Mary Kay

merchandise purchases on a credit card, but when she received payment from her

customers, she would only pay a minimum amount on the credit card balance and

would use the remainder of the money from the cosmetics sales to pay for family

expenses.1 (Tr., pp. 30-31)

        {¶7} On October 3, 2011, the trial court filed its Judgment Entry granting

the divorce. The trial court denied Chris’ motion for shared parenting, finding that

the animosity and lack of communication between the parties would make a

shared parenting plan impossible. (J.E., ¶ 11) Wendy was named the residential

parent, and Chris was ordered to pay $244.76 per child for monthly child support.

(Id.)

        {¶8} The trial court found that Wendy had been earning approximately

$25,000 per year working for Edward Jones, but was temporarily laid off. The

trial court utilized the tax records provided to calculate that Chris’ average salary

from 2008 through 2010 was $28,292. After considering the factors in R.C.


1
 There was no evidence in the record as to whether or not there was any Mary Kay inventory left to be
considered in the property division.

                                                -5-
Case No. 2-11-24


3105.18, the trial court did not find that spousal support was appropriate. (J.E., ¶¶

4-5)

       {¶9} In dividing the assets, the trial court utilized the list of property and

valuations from the Appraiser’s Report (Plaintiff’s Exhibit 30; Defendant’s

Exhibit U), and the real estate comparable analysis (Plaintiff’s Exhibit 31). The

trial court awarded Wendy personal property, consisting mostly of household

goods, worth $1,154.30, and it awarded Chris personal property, consisting mostly

of vehicles and equipment/inventory related to his business, valued at $37,764.25.

Chris was also awarded the jointly owned real property upon which his business

was located, worth $37,764.25, for a total of $73,514.25 in assets. In addition to

the personal property, Wendy was awarded the retirement account and life

insurance policies, for a total of $17,541.10 in assets. In order to equalize the

division of assets, Chris was ordered to pay Wendy $27,986.57.

       {¶10} The trial court also found that the credit card debt attributed to the

Mary Kay purchases was entirely a marital debt and should be divided, utilizing

the valuation as of the date of the separation. (J.E. ¶9) Wendy was ordered to be

responsible for repayment of the entire $26,919.12 debt, but Chris was ordered to

pay Wendy half of that amount, $13,459.56, to equalize the debt.

       {¶11} Therefore, in order to effect an equal division of the value of the

assets and debts between the parties, Chris was ordered to pay Wendy


                                         -6-
Case No. 2-11-24


$41,746.13.2 The trial court ordered the payment to be made within 90 days, with

the judgment carrying the statutory rate of interest if not paid within 90 days.

        {¶12} It is from this judgment that Chris timely appeals, raising the

following three assignments of error.

                                   First Assignment of Error

        The trial court abused [its] discretion in its division of debt.

                                 Second Assignment of Error

        The trial court abused [its] discretion in allocating corporate
        property as personal and marital property.

                                  Third Assignment of Error

        The trial court failed to properly apply Ohio Revised code
        3105.171(F) in making a distributive award.

        {¶13} In her cross-appeal from the judgment, Wendy raises the following

single assignment of error for our review.

                          Cross-Appellant’s Assignment of Error

        The trial court erred in failing to consider the gross deposits into
        [Chris’s] business as income for purposes of determining spousal
        support.

                                            Chris’ Appeal

        {¶14} Chris’ assignments of error all involve the division of the parties’

property and debt. The Ohio Revised Code requires a trial court to “determine


2
  This amount also included $300 in attorney fees, due to extra legal fees incurred by Wendy and attributed
to discovery violations by Chris. (J.E., ¶ 11)

                                                   -7-
Case No. 2-11-24


what constitutes marital property and what constitutes separate property.” R.C.

3105.171(B).    The court is then required to “divide the marital and separate

property equitably between the spouses[.]” Id. The Revised Code further requires

that a trial court divide the marital property equally unless an equal division would

be inequitable, in which case “the court shall not divide the marital property

equally but instead shall divide it between the spouses in the manner the court

determines equitable.” R.C. 3105.171(C)(1).

       {¶15} Trial courts have “broad discretion to determine what property

division is equitable in a divorce proceeding.” Cherry v. Cherry, 66 Ohio St.2d

348, 421 (1981), paragraph two of the syllabus. A trial court's decision allocating

marital property and debt will not be reversed absent an abuse of discretion.

Jackson v. Jackson, 3rd Dist. No. 11–07–11, 2008–Ohio–1482, ¶ 15, citing

Holcomb v. Holcomb, 44 Ohio St.3d 128 (1989).

       {¶16} An abuse of discretion is more than an error in judgment; it signifies

that the trial court's attitude was unreasonable, arbitrary, or unconscionable.

Timberlake v. Timberlake, 192 Ohio App.3d 15, 2011-Ohio-38, ¶ 9 (3d Dist.),

citing Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). A trial court will

be found to have abused its discretion when its decision is contrary to law,

unreasonable, not supported by the evidence, or grossly unsound. Bruce v. Bruce,

3d Dist. No. 9-10-57, 2012-Ohio-45, ¶ 13, citing State v. Boles, 2d Dist. No.


                                         -8-
Case No. 2-11-24


23037, 2010–Ohio–278, ¶ 17–18, citing Black's Law Dictionary (8 Ed.Rev.2004)

11. When applying an abuse-of-discretion standard, an appellate court may not

substitute its judgment for that of the trial court. Blakemore; Berk v. Matthews, 53

Ohio St.3d 161, 169 (1990).

       {¶17} Although appellate courts review a trial court's division of property

under an abuse of discretion standard, a trial court's classification of property as

marital or separate must be supported by the manifest weight of the evidence.

Henry v. Henry, 3d Dist. No. 8-11-04, 2012-Ohio-655, ¶ 31. When we consider

manifest weight arguments, we “review the evidence, and * * * determine

whether, when appropriate deference is given to the factual conclusion of the trial

court, the evidence persuades us by the requisite burden of proof.” Henderson v.

Henderson, 3d Dist. No. 10-01-17, 2002-Ohio-2720 ¶ 28, citing Howard v.

Howard, Montgomery App. No. 16542 (Mar. 20, 1998).           Accordingly, the trial

court's judgment will not be reversed if the decision is supported by some

competent, credible evidence. Eggeman v. Eggeman, 3d Dist. No. 2-04-06, 2004-

Ohio-6050, ¶ 14, citing DeWitt v. DeWitt, 3d Dist. No. 9-02-42, 2003-Ohio-851, ¶

10.

                 Chris’ First Assignment of Error – Debt Division

       {¶18} In his first assignment of error, Chris complains that it was not

equitable to divide the $26,919.12 credit card debt equally between the parties


                                        -9-
Case No. 2-11-24


because he claims that Wendy had complete control over the credit cards and she

used them solely to finance purchases of products and to pay expenses for her

Mary Kay cosmetic business. Chris represents that their tax records show that her

business never showed a profit and that it lost money every year. He maintains

that the marriage never derived any benefit from her activities and there was no

evidence that she ever used any of her Mary Kay commissions to support the

family. Therefore, he asserts that it was inequitable to classify the debt as a

marital debt to be allocated equally between the parties.

       {¶19} Marital property includes property that is currently owned by either

or both spouses and that was acquired by either or both of the spouses during the

marriage. See R.C. 3105.171(A)(3)(a). Property acquired during a marriage is

presumed to be marital property unless it can be shown to be separate. Huelskamp

v. Huelskamp, 185 Ohio App.3d 611, 2009–Ohio–6864, ¶ 15 (3d Dist.). The trial

court's characterization of property as separate or marital is a mixed question of

law and fact, which must be supported by sufficient credible evidence. Kelly v.

Kelly, 111 Ohio App.3d 641, 642 (1st Dist.1996).

       {¶20} The property to be divided in a divorce proceeding includes not only

the assets owned by the parties, but also any debts incurred by the parties.

Marrero v. Marrero, 9th Dist. No. 02CA008057, 2002-Ohio-4862, ¶ 43. Although

Ohio's divorce statutes do not specifically articulate debt as an element of marital


                                        -10-
Case No. 2-11-24


and separate property, the rules concerning marital assets are usually applied to

marital and separate debt as well. Vonderhaar-Ketron v. Ketron, 5th Dist. No. 10

CA 22, 2010-Ohio-6593, ¶ 34.         Therefore, the same principles that govern the

analysis of the disposition of assets also direct the analysis of the disposition of the

parties' debts. Schiesswohl v. Schiesswohl, 9th Dist. No. 21629, 2004-Ohio-1615,

46.

       {¶21} Marital debt has been defined as any debt incurred during the

marriage for the joint benefit of the parties or for a valid marital purpose.

Ketchum v. Ketchum, 7th Dist. No.2001 CO60, 2003–Ohio–2559, ¶ 47, citing

Turner, Equitable Distribution of Property (2 Ed.1994, Supp.2002) 455, Section

6.29. Debts incurred during the marriage are presumed to be marital unless it can

be proved that they are not. Vergitz v. Vergitz, 7th Dist. No. 05JE52, 2007–Ohio–

1395, ¶ 12, citing Knox v. Knox, 7th Dist. No. 04JE24, 2006–Ohio–1154, ¶ 25–26.

The party seeking to establish a debt as separate rather than marital bears the

burden of proving this to the trial court by a preponderance of the evidence. Id.,

citing Hurte v. Hurte, 164 Ohio App.3d 446, 842 N.E.2d 1058, 2005–Ohio–5967,

¶ 21 (4th Dist.); Lucas v. Lucas, 7th Dist. No. 11 NO 382, 2011-Ohio-6411, ¶ 33;

Kranz v. Kranz, 12th Dist. No. CA2008-04-054, 2009-Ohio-2451, ¶ 24.

       {¶22} Wendy’s Mary Kay business activities took place during the

marriage.   As such, all income and all losses from her business venture are


                                         -11-
Case No. 2-11-24


presumed to be marital. Just because the business may have suffered a loss, does

not mean that its debt is not marital.           Furthermore, testimony from Wendy

indicated that the debt that was accumulated was not necessarily from losses from

operating her business but from utilizing the money she obtained through the

business to pay for household and family expenses. Chris did not present any

evidence that would satisfy his burden to prove that the debt should have been

classified as Wendy’s separate debt.

       {¶23} The trial court heard the testimony of the witnesses and examined the

exhibits and depositions of the parties. The trial court stated that it “accepts the

testimony of [Wendy] as to the use of the credit cards and Mary Kay commissions

to the benefit of her family.” (J.E., ¶ 9) Although it acknowledged that Wendy

may have been a “poor business woman,” it found that she was not using the credit

cards for a devious or selfish purpose.” (Id.) It is for the trier of fact to determine

the credibility of the witnesses based on the evidence before it, and the trial court

found Wendy’s testimony to be more credible than Chris’ testimony.

       {¶24} There was credible evidence in the record to support the trial court’s

determination that the credit card debt was marital, and the trial court did not

abuse its discretion when it divided that debt equally between the parties. Chris’

first assignment of error is overruled.

        Chris’ Second Assignment of Error – Corporate Property Division


                                          -12-
Case No. 2-11-24


       {¶25} In his second assignment of error, Chris asserts that the trial court

erred by arbitrarily setting aside the corporate ownership and declaring the assets

of the corporation to be marital property. He states that the corporation was a

separate entity, and that the value of the corporation should have been determined

by a proper expert valuation utilizing an accepted method for valuing a

corporation. Chris contends that no proper valuation was given to the business

and that it was improper for the trial court to deem the assets of the corporation as

marital property subject to division.

       {¶26} When dividing property in domestic cases, the trial court is vested

with broad discretion, which will be upheld absent an abuse of discretion.

Middendorf v. Middendorf, 82 Ohio St.3d 397, 401, 1998-Ohio-403.                R.C.

3105.171(C)(1) mandates that a trial court divide marital property equally, or, if an

equal division is inequitable, that the court divide the marital property equitably.

To comply with that duty, a trial court must generally assign and consider the

values of marital assets in order to equitably divide those assets. Beagle v. Beagle,

10th Dist. No. 07AP–494, 2008–Ohio–764, ¶ 41; Hightower v. Hightower, 10th

Dist. No. 02AP–37, 2002–Ohio–5488, ¶ 22. Ohio courts have recognized several

different methods for valuing a business. Kuper v. Halbach, 10th Dist. No. 09AP-

1099, 2010-Ohio-3020, ¶ 13. When valuing a business, a trial court is not required




                                        -13-
Case No. 2-11-24


to use a particular valuation method nor is it precluded from using any method.

Id.

       {¶27} The valuation of property in a divorce case is a question of fact.

Herron v. Herron, 3d Dist. No. 1-04-23, 2004-Ohio-5765, ¶ 23, citing Covert v.

Covert, 4th Dist. No. 03CA778, 2004-Ohio-3534, ¶ 6. Accordingly, a trial court's

decision pertaining to the valuation of property will be reviewed under a manifest

weight of the evidence standard and will not be reversed so long as it is supported

by some competent and credible evidence. Id.

       {¶28} The trial court determined that the business was marital property, and

determined the valuation of the business to the best of its ability based upon the

limited information that it had before it. The trial court found:

       The Court does not accept [Chris’s] premise that some property is
       owned by the corporation and should be excluded as marital
       property or that the Court has no jurisdiction over those assets. * * *
       He is the sole shareholder and the corporation only exists to give
       him a tax break with regard to tax liability that he has on money that
       is earned. The corporation, in one form or another, has existed
       throughout the parties’ marriage. The court, therefore considers the
       assets of the corporation as assets of the parties subject to an
       equitable division just as if it were a sole proprietorship.

(Oct. 3, 2011 J.E., ¶ 8)

       {¶29} It was uncontroverted that Chris formed the corporations that existed

after the date of the parties’ marriage in 1992. Although Chris did conduct a

cabinet business prior to the marriage, there was no definitive evidence that assets


                                         -14-
Case No. 2-11-24


were transferred to the corporation or that the corporation’s current value was in

any way derived from the pre-marital business. Since the creation and operation

of the corporation occurred during the marriage, and there were no other outside

shareholders involved, the trial court did not err in finding that the entire value of

the corporation was marital property, subject to an equitable division between the

parties.

       {¶30} Next we need to determine whether or not the trial court correctly

valued the corporation.     On appeal, Chris incorrectly argues that “the court

arbitrarily determined that it was essentially setting aside the corporation

ownership and declaring any assets the corporation had to be marital property.”

(Appellate Br., p. 13) The trial court did not set aside any corporate ownership,

but merely valued the assets of the corporation as if it were a sole proprietorship

because, in essence, that is how it was actually being operated. Chris casually

moved his various business ventures back and forth between the corporate entities

he had set up, with little regard for what corporate name a business was operating

under. Confusion was caused because Chris never bothered to change the name of

the corporations on his bank accounts and Quick Book accounts, even when a

corporation ceased to exist. At the time of the divorce, Chris was essentially

operating a cabinet making business, which he himself had stated had no value




                                        -15-
Case No. 2-11-24


other the value of the equipment. (Deposition of Chris Schwarck, pp. 21-24,

admitted as Plaintiff’s Exhibits 1 and 2)

       [Chris] is the sole owner of the stock in the Subchapter S
       corporations and neither party had an expert testify as to the value of
       any business or as to the value of any stock held by [Chris]. Due to
       the nature of [Chris’s] business, the Court finds the Subchapter S
       corporation and the shares of stock held by [Chris] to have no value
       beyond equipment and inventory. The Court can only make findings
       based upon evidence given to it by the parties.

(J.E., ¶ 4)

       {¶31} The trial court’s ruling allowed the business to remain intact, and

allowed Chris to maintain his business as he had been operating it, while still

giving Wendy financial credit for her marital share of this property. This is

precisely the manner that the Eleventh District Court of Appeals ordered the trial

court to employ in order to effectuate an equitable distribution while keeping the

business intact, if at all possible. See Humphrey v. Humphrey, 11th Dist. No.

2000-A-0092, 2002-Ohio-3121, ¶ 41.

       {¶32} The trial court had no expert testimony to utilize for valuing the

stock and utilized the only information it had before it: the testimony of Chris and

the valuation of the business property and inventory that was done by the certified

appraiser. While this might not be the best method to utilize to value a Subchapter

S corporation, based on the facts in this case, the casual manner in which the

business was operated, the lack of viable expert testimony as to the value of the


                                        -16-
Case No. 2-11-24


business, and the limited information provided by the parties, we cannot say that

the trial court abused its discretion. The second assignment of error is overruled.

            Chris’ Third Assignment of Error – “Distributive Award”

       {¶33} In his final assignment of error, Chris complains that the trial court

erred in ordering a lump sum “distributive award” of $41,746.13 to be paid in

ninety days. Chris complains that he does not have any liquid assets with which to

pay this award and will be forced to sell some of the assets of the corporation,

which will result in a negative tax impact. He asserts that the trial court failed to

take into consideration the factors in R.C. 3105.171(F), some of which include:

the assets and liabilities of the parties; the liquidity of the property to be

distributed; the tax consequences of the property division; and any other factor the

court finds relevant. He contends that being ordered to pay a lump sum within

ninety days is burdensome and impossible.

       {¶34} Pursuant to R.C. 3105.171(A)(1), a “distributive award” means “any

payment or payments, in real or personal property, that are payable in a lump sum

or over time, in fixed amounts, that are made from separate property or income,

and that are not made from marital property and do not constitute payments of

spousal support, as defined in section 3105.18 of the Revised Code.”            R.C.

3105.171(E)(2) provides that the court may make a distributive award in lieu of a

division of marital property in order to achieve equity between the spouses, if the


                                        -17-
Case No. 2-11-24


court determines that a division of the marital property in kind or in money would

be impractical or burdensome. Ruttmann v. Ruttmann, 3d Dist. No. 16-95-2, 1995

WL 577822. Moreover, the court must consider the factors enumerated in R.C.

3105.171(F) in deciding whether or not to order a distributive award. Guziak v.

Guziak, 80 Ohio App.3d 805, 813 (9th Dist.1992).

       {¶35} Chris is mistaken when he states that the trial court erred in ordering

a distributive award, because no such award was made. Here, the trial court

determined that all of the parties’ assets were marital assets and ordered a division

of the marital assets to equalize the division of the marital property between the

parties. The trial court did not make a “distributive award,” because there was no

award of separate property involved. See O’Rourke v. O’Rourke, 4th Dist. No.

08CA3253, 2010-Ohio-1243, ¶ 19 (the court’s award was not a distributive award

made from the husband’s separate property, but an award to equalize the division

of the marital property.)

       {¶36} Furthermore, Chris is not necessarily required to sell the

corporation’s assets and suffer tax consequences. If Chris fails to pay the amount

due within 90 days, he will be required to pay interest on the outstanding amount

due. Wendy is currently paying interest on the credit card debt, so we do not see

how that ruling is inequitable to Chris. And, while it may be difficult for Chris to




                                        -18-
Case No. 2-11-24


refinance the property or come up with the money he was ordered to pay, it is not

an impossibility.

       {¶37} Chris was awarded the bulk of the parties’ assets in order to allow

him to keep his business intact. It was within the trial court’s discretion to award a

lump sum equalization of the marital assets, even if it might cause some hardships,

and especially when there were insufficient liquid assets to otherwise effectuate an

equitable distribution of property between the parties. The third assignment of

error is overruled.

                Wendy’s Cross-Appeal – Denial of Spousal Support

       {¶38} In her cross appeal, Wendy sets forth a single assignment of error

asserting that the trial court erred when it failed to award her spousal support. She

alleges that Chris’ income was considerably higher than what was determined by

the trial court, which utilized his income tax returns to calculate his average annual

income. Wendy cites to several cases where courts have found that a spouse who

is the sole shareholder of a business may sometimes engage in “creative

accounting” in order to “cloak net income.” See e.g., Strasburg v. Strasburg, 3d

Dist. No. 2-10-12, 2010-Oho-3672, ¶ 28. Wendy claims that the bank deposit

records from 2008 to 2010 (Plaintiff’s Exhibit 3) show deposits greatly in excess

of his reported income during that period, and that there was a lack of proof as to

expenses to off-set that income.


                                        -19-
Case No. 2-11-24


       {¶39} R.C. 3105.18 governs the trial court's award of spousal support and

requires the court to consider fourteen factors set forth in R.C. 3105.18(C)(1)

when determining whether spousal support is “appropriate and reasonable” and

when determining the nature, amount, terms of payment, and duration of the

support. Strasburg, 2010-Ohio-3672, at ¶ 26. Trial courts are granted broad

discretion concerning awards of spousal support. Tremaine v. Tremaine, 111 Ohio

App.3d 703, 706 (2d Dist.1996); Siekfer v. Siekfer, 3d Dist. No. 12-06-04, 2006-

Ohio-5154, ¶ 15. See also, Kunkle v. Kunkle, 51 Ohio St.3d 64, 67 (1990). Their

orders will not be reversed on appeal absent an abuse of that discretion. Id.

       {¶40} The record demonstrates that the trial court considered the

appropriate factors and found that spousal support was not warranted because the

parties had similar educations, similar earning capacities, were in reasonably good

health, and had similar living arrangements. Additionally, the trial court noted

that the parties had lived separately for almost two and one-half years before filing

for divorce, indicating that neither was relying on the other for support. (J.E., ¶ 5)

However, Wendy claims that the trial court made an erroneous decision because it

failed to consider “undeclared income.”

       {¶41} The trial court did address Wendy’s arguments in its judgment entry,

stating:

       [Wendy] has attempted to show that [Chris] has earned more income
       than he has reported. In order to do that, [Wendy] has presented the

                                        -20-
Case No. 2-11-24


       bank account statements of [Chris] from his various corporations and
       personal accounts. [Wendy] presented no testimony from a forensic
       accountant to support her position. A simple examination of the
       records is not sufficient to support [Wendy’s] position.

(J.E., ¶ 4). The record shows that the trial court carefully considered Wendy’s

arguments, but that she failed to provide sufficient evidence to prove her

allegations.

       {¶42} Although the parties’ presented voluminous financial records as

exhibits, including years of bank statements, Quick Book records, and tax returns,

there was little in the way of organization or explanation as to their significance.

Furthermore, the record keeping was poor in several respects, such that Chris did

not even change the names of his bank accounts or computer records when he

changed his businesses and he operated different businesses out of one account.

Although Wendy is correct in stating that the total deposits are considerably higher

than the total income reported, there are many reasonable explanations for the

difference. Monthly bank statements often showed that checks paid out in any




                                       -21-
Case No. 2-11-24


given month were nearly equal to, or even in excess of the deposits.3 The tax

returns listed the gross income, but then also subtracted the cost of goods sold,

depreciation, costs for utilities, legitimate business expenses, etc. There was no

evidence that the tax returns were inaccurate or fraudulent.                           While the record-

keeping may have been careless, we cannot dispute the trial court’s conclusion

that there was no definitive evidence of financial misconduct that would warrant

imputing additional income to Chris.4

         {¶43} Based on the above, we do not find any error in the trial court’s

determination that spousal support was not appropriate. Wendy’s assignment of

error on cross-appeal is overruled.

         {¶44} Having found no error prejudicial to the Appellant or Cross-

Appellant herein in the particulars assigned and argued, we affirm the judgment of

the trial court.

                                                                                    Judgment Affirmed

PRESTON and ROGERS, J.J., concur.

/jlr



3
  Copies or details of the check payments were not provided. However, Plaintiff’s Exhibit 33 provided
over 40 pages of “Expenses by Vendor Detail” from 2004 through 2010 for the various entities. Again,
without expert testimony to compare the deposits to the disbursements, we cannot come to any conclusion
as to the significance of these records.
4
  The trial court stated that, “[i]n listening to the parties, the court is also convinced that [Chris] does not
possess the intelligence required to under-report income to the extent as alleged by [Wendy]. If there was
an under-reporting of income, it was as a result of poor record keeping skills and mistakes or carelessness.
(J.E., ¶ 4)

                                                     -22-
