[Cite as Gulley v. Gulley, 2018-Ohio-4192.]


                                        COURT OF APPEALS
                                       STARK COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT



JODY GULLEY                                        JUDGES:
                                                   Hon. John W. Wise, P. J.
        Plaintiff-Appellant                        Hon. Patricia A. Delaney, J.
                                                   Hon. Craig R. Baldwin, J.
-vs-
                                                   Case No. 2018 CA 00013
BENJAMIN GULLEY

        Defendant-Appellee                         OPINION




CHARACTER OF PROCEEDING:                       Civil Appeal from the Court of Common
                                               Pleas, Domestic Relations Division, Case
                                               No. 2016 DR 00930


JUDGMENT:                                      Affirmed



DATE OF JUDGMENT ENTRY:                         October 15, 2018



APPEARANCES:

For Plaintiff-Appellant                        For Defendant-Appellee

JEFFREY V. HAWKINS                             MITCHELL A. MACHAN
One Cascade Plaza, Suite 2210                  3810 West Tuscarawas Street
Akron, Ohio 44308                              Canton, Ohio 44708
Stark County, Case No. 2018 CA 00013                                                    2

Wise, P. J.

       {¶1}   Plaintiff-Appellant Jody A. Gulley appeals from her divorce in the Stark

County Court of Common Pleas, Domestic Relations Division. Defendant-Appellee

Benjamin C. Gulley is her former spouse. The relevant facts leading to this appeal are

as follows.

       {¶2}   The parties herein were married in July 2013 in Canton, Ohio. One child

was born of the marriage.

       {¶3}   On September 28, 2016, Appellant Jody, with the assistance of counsel,

filed a complaint for legal separation in Stark County, along with a motion for temporary

orders. On the same day, the trial court issued a standard restraining order.

       {¶4}   On October 17, 2016, appellant filed a notice of withdrawal of her aforesaid

request for temporary orders. On October 19, 2016, appellant filed a notice of service of

her request for the production of documents.

       {¶5}   However, on January 26, 2017, appellant’s then-counsel filed a motion to

withdraw from representation, stating that appellant “wish[ed] to proceed *** on a pro se

basis or until such time as she obtains new counsel.” The trial court issued a judgment

entry permitting counsel to withdraw on that day.

       {¶6}   On January 30, 2017, appellant’s present counsel filed a notice of

appearance.

       {¶7}   In the meantime, appellee, via counsel, filed for leave to file a responsive

pleading instanter. The trial court granted such leave on January 31, 2017. The same

day, appellee filed a combined answer to appellant’s complaint for legal separation and

a counterclaim for divorce. Appellee also therein claimed the existence of an antenuptial
Stark County, Case No. 2018 CA 00013                                                     3


agreement between the parties. He attached an unsigned copy of same to his

counterclaim.

       {¶8}     On February 21, 2017, appellant filed an answer to appellee’s divorce

counterclaim.

       {¶9}     Following a pre-trial hearing, a domestic relations magistrate issued a

decision on March 9, 2017, finding there had been no demonstration of a valid antenuptial

agreement binding either party.

       {¶10} Appellee filed objections to the aforesaid magistrate's decision on March

16, 2017. However, on April 17, 2017, the trial court overruled the objections of the

appellee.

       {¶11} In the meantime, the court’s assignment commissioner had set the case for

a trial on May 11, 2017. On May 4, 2017, appellant filed a motion to convert the trial

scheduled for May 11, 2017 to a pretrial conference. The trial court denied this request

on May 4, 2017.

       {¶12} Nonetheless, when the parties appeared on May 11, 2017, the assigned

magistrate sustained a renewed motion to convert the trial to a pretrial, and she

rescheduled the divorce trial for July 21, 2017, which ultimately went forward.

       {¶13} The evidence at said trial established that appellee was, at the times

pertinent to the case, the owner of a scrapping and repair business known as Appliance

and More, LLC. At about the time the parties herein separated, appellee had started

another business, selling used automobiles, known as Steadfast Motors.

       {¶14} Appellant presented inter alia the testimony of John P. Davis, CPA. Tr. at

13-46. Furthermore, counsel for appellee stipulated that Davis was qualified to give expert
Stark County, Case No. 2018 CA 00013                                                    4


testimony in this matter. Tr. at 14. Davis thereupon testified using forensic accountancy

techniques, but he emphasized that he had not done a full business valuation.

       {¶15} On October 25, 2017, the magistrate issued a 23-page decision on the

merits. Among other things, spousal support was awarded to appellant in the amount of

$2,100.00 per month for a period of one year. On the child support worksheet, the trial

court inter alia listed appellant’s gross receipts from his businesses as $1,223,903.00,

with ordinary expenses of $1,182,031.00, and an “adjusted AGI” of $39,527.17. His

obligation, with processing charges, was thus calculated as $76.23 per month, with the

provision of insurance.1

       {¶16} Furthermore, appellee was awarded ownership of both of his businesses,

with no marital property interest awarded to appellant. However, appellant was held

harmless on any outstanding business debt.

       {¶17} On November 8, 2017, appellant filed objections under Civ.R. 53. On

January 2, 2018, appellant filed a brief in support of her objections.

       {¶18} On January 8, 2018, the trial court issued a ruling adopting the magistrate's

decision and overruling the objections. A final judgment entry of divorce was approved

and filed on January 22, 2018.

       {¶19} On February 8, 2018, appellant, former wife, filed a notice of appeal. She

herein raises the following two Assignments of Error:

       {¶20} “I. THE TRIAL COURT ERRED IN SUSTAINING THE MAGISTRATE'S

DECISION IN REGARDS TO THE INCOME OF THE DEFENDANT/APPELLEE.



1  On August 8, 2018, while the present appeal was pending, the parties reached an
agreement, approved by the trial court, to modify child support to $433.71 per month,
effective August 1, 2018.
Stark County, Case No. 2018 CA 00013                                                      5


       {¶21} “II. THE TRIAL COURT ERRED IN SUSTAINING THE MAGISTRATE'S

DECISION IN THAT THE DECISION DID NOT PLACE ANY VALUE ON THE MARITAL

BUSINESSES AND ACCORDINGLY ERRED IN NOT AWARDING THE PLAINTIFF A

MONETARY AWARD AS HER INTEREST IN THE MARITAL BUSINESSES.”

                                                I.

       {¶22} In her First Assignment of Error, appellant contends the trial court erred in

calculating appellee’s income for purposes of establishing his spousal support and child

support obligations. We disagree.

       {¶23} R.C. 3105.18(C)(1) provides, in pertinent part, as follows in regard to a trial

court's adjudication of the issue of spousal support:

              In determining whether spousal support is appropriate and

       reasonable, and in determining the nature, amount, and terms of payment,

       and duration of spousal support, which is payable either in gross or in

       installments, the court shall consider all of the following factors: (a) The

       income of the parties, from all sources, including, but not limited to, income

       derived from property divided, disbursed, or distributed under section

       3105.171 of the Revised Code; (b) The relative earning abilities of the

       parties; ***.

       {¶24} While R.C. 3105.18(C)(1), supra, does set forth fourteen factors the trial

court must consider, if the court does not specifically address each factor in its order, a

reviewing court will presume each factor was considered, absent evidence to the contrary.

Carroll v. Carroll, 5th Dist. Delaware No. 2004–CAF–05035, 2004–Ohio–6710, ¶ 28,
Stark County, Case No. 2018 CA 00013                                                      6

citing Watkins v. Watkins, 5th Dist. Muskingum No. CT 2001–0066, 2002–Ohio–4237, ¶

21 (additional citations omitted).

       {¶25} A trial court's decision concerning spousal support may only be altered if it

constitutes an abuse of discretion. See Kunkle v. Kunkle (1990), 51 Ohio St.3d 64, 67,

554 N.E.2d 83. An abuse of discretion connotes more than an error of law or judgment; it

implies that the court's attitude is unreasonable, arbitrary, or unconscionable. Blakemore

v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983).

       {¶26} Also, in regard to issues of child support, the Ohio Supreme Court has

determined that the abuse-of-discretion standard is the appropriate standard of review.

See Booth v. Booth (1989), 44 Ohio St.3d 142, 541 N.E.2d 1028. We likewise apply an

abuse-of-discretion standard to the decision of a trial court to deny a deviation in the

amount of child support owed by an obligor. See Logan v. Gregrow, 5th Dist. Stark No.

2006CA0246, 2007-Ohio-4585, ¶ 38. Furthermore, as an appellate court, we are not the

trier of fact. Our role is to determine whether there is relevant, competent, and credible

evidence upon which the factfinder could base his or her judgment. Tennant v. Martin–

Auer, 188 Ohio App.3d 768, 936 N.E.2d 1013, 2010–Ohio–3489, ¶ 16, citing Cross Truck

v. Jeffries, 5th Dist. Stark No. CA–5758, 1982 WL 2911. We have also recognized that

“[t]he definitions of income under R.C. 3119.01 are broad and expansive to protect the

child's best interests.” Vonderhaar–Ketron v. Ketron, 5th Dist. Fairfield No. 10 CA 22,

2010–Ohio–6593, ¶ 48, citing Bishop v. Bishop, 4th Dist. Scioto No. 03CA2908, 2004–

Ohio–4643, ¶ 16 (additional citation omitted).

       {¶27} In the case sub judice, appellant essentially contends the trial court erred in

relying on appellee’s self-employment income as reported on his tax returns, and not
Stark County, Case No. 2018 CA 00013                                                     7


placing more reliance on the testimony of John Davis, CPA, concerning appellee’s alleged

underreporting of his income, or, in the alternative, deviating from the guideline figure

derived from his reported annual income.

       {¶28} At the evidentiary hearing before the magistrate on July 21, 2017, Davis

noted that he had reviewed several volumes of banking records pertaining to appellee

and/or his companies. Davis opined that appellee’s 2016 Form 1040 Schedule C was

inconsistent with the bank records he had studied. Davis opined that appellee had

underreported his income for tax year 2016 in the amount of $92,479.00. Tr. at 36. Upon

further questioning, Davis indicated that appellee’s underreported income for 2016 “could

possibly be” an amount exceeding $265,000.00. Tr. at 38. Davis also opined that

appellee’s unreported income for tax year 2015 “could be” $130,000.00. Id. In his written

report, Davis stated: “The income understatement may be substantial, possibly in excess

of $265,000 for 2016 and $130,000 for 2015.” Plaintiff’s Exhibit 34, at page 5 (emphasis

added).

       {¶29} Appellant also called appellee’s current tax preparer, David Euele, CPA. In

contrast to Davis’ above assessments, however, Euele testified: “*** I can tell you as a

professional what was reported on the tax (inaudible) is the income [appellee] made

period.” See Tr. at 57.

       {¶30} We have often recited that the trier of fact is in a far better position to

observe the witnesses' demeanor and weigh their credibility. See, e.g., Taralla v. Taralla,

5th Dist. Tuscarawas No. 2005 AP 02 0018, 2005–Ohio–6767, ¶ 31, citing State v.

DeHass (1967), 10 Ohio St.2d 230, 227 N.E.2d 212. Upon review, we are unpersuaded
Stark County, Case No. 2018 CA 00013                                                      8


the trial court abused its discretion in adopting the magistrate's award of spousal support

and child support based upon the income evidence presented at trial.

       {¶31} Appellant's First Assignment of Error is therefore overruled.

                                                II.

       {¶32} In her Second Assignment of Error, appellant contends the trial court erred

in not placing a dollar value on the marital portion of the businesses and thus not awarding

appellant a monetary award representing her marital property interest in the businesses.

We disagree.

       {¶33} An appellate court generally reviews the overall appropriateness of the trial

court's property division in divorce proceedings under an abuse-of-discretion standard.

Cherry v. Cherry (1981), 66 Ohio St.2d 348, 421 N.E.2d 1293. In order to find an 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,

supra. A trial court should be given wide latitude in dividing property between the parties.

See Koegel v. Koegel (1982), 69 Ohio St.2d 355, 432 N.E.2d 206. When determining the

value of a marital asset, a domestic relations court is not required to use a particular

valuation method. Zeefe v. Zeefe, 125 Ohio App.3d 600, 612, 709 N.E.2d 208 (8th Dist.

1998) (additional citations omitted). Furthermore, as an appellate court, we are not the

trier of fact. Our role is to determine whether there is relevant, competent, and credible

evidence upon which the factfinder could base his or her judgment. Tennant v. Martin–

Auer, supra.

       {¶34} R.C. 3105.171(B) states as follows: “In divorce proceedings, the court shall,

and in legal separation proceedings upon the request of either spouse, the court may,
Stark County, Case No. 2018 CA 00013                                                      9


determine what constitutes marital property and what constitutes separate property. In

either case, upon making such a determination, the court shall divide the marital and

separate property equitably between the spouses, in accordance with this section. For

purposes of this section, the court has jurisdiction over all property, excluding the social

security benefits of a spouse other than as set forth in division (F)(9) of this section, in

which one or both spouses have an interest.”

       {¶35} R.C. 3105.171(A)(3)(a)(iii) includes in the definition of “marital property,”

subject to exceptions, “all income and appreciation on separate property, due to the labor,

monetary, or in-kind contribution of either or both of the spouses that occurred during the

marriage.”

       {¶36} Trial court decisions regarding the classification of separate and marital

property are not reversed unless there is a showing of an abuse of discretion. See

Valentine v. Valentine, 5th Dist. Ashland No. 95COA01120, 1996 WL 72608, citing Peck

v. Peck, 96 Ohio App.3d 731, 734, 645 N.E.2d 1300 (12th Dist.1994). The

characterization of property as separate or marital must also be supported by sufficient,

credible evidence. See Chase–Carey v. Carey, 5th Dist. Coshocton No. 99CA1, 1999 WL

770172.

       {¶37} The magistrate’s decision, which was ultimately adopted by the trial court,

includes the following conclusions:

              The increase in value in husband's business was a direct result of

       his labor during the marriage, which makes that increase subject to division

       in a divorce action. However, the court has no business valuations as a

       guide. The court converted the May, 2017 trial to a pretrial and gave wife,
Stark County, Case No. 2018 CA 00013                                                   10


     through her attorney, more time and clear orders in regard to obtaining

     business valuations of both "Appliance and More" and "Steadfast Motors."

     Wife retained CPA John Davis, who testified that he was unable to perform

     business valuations based upon the information provided to him. Instead,

     Davis spent his time forensically examining the tax returns and bank

     accounts of "Appliance and More," and came away with the opinion that the

     business could not be valuated, and that husband's 2015 and 2016 tax

     returns did not accurately report his income for those years.

            ***

            The bottom line is, the court has no current business valuations to

     consider, has contradicting testimony about the accuracy of husband's

     report of income on his two most recent tax returns, and has no value of

     husband’s business prior to marriage. The court can consider, from the tax

     returns presented as evidence, that husband's gross receipts were over one

     million dollars two years in a row, but due to the cost of goods paid out both

     years, there was a loss in 2015, and a profit of just over $45,000 in 2016.

     The court also can consider that husband has a large amount of business

     debt which must be paid on a monthly basis, and that the contracts that

     husband now has as his sources of income fluctuate and may change from

     year to year. When taking all these factors into consideration, the court finds

     that there is no proof that husband’s expanded business has resulted in a

     significant increase in profit, especially in light of the fact that any of

     husband's profits must be eaten away by the payment of business debt.
Stark County, Case No. 2018 CA 00013                                                       11


       Therefore, the court is not convinced that wife should receive any portion of

       husband's business interests in either "Appliance and More” or “Steadfast

       Motors." Further, the court finds that wife should not have to pay any of the

       business debt owed by husband from either of his business ventures.

       {¶38} Magistrate’s Decision, October 25, 2017, at 18-19.

       {¶39} We note that appellee, in his financial statement filed with the trial court on

February 7, 2017, stated that the “net value at acquisition” of Appliance and More, LLC

was unknown, and that its “current net F.M.V.” was also unknown. On cross-examination

during the trial, when appellee was asked why a figure of $175,000.00 had been utilized

for the value of Appliance and More in the unenforced antenuptial agreement, appellee

merely responded that he had thrown “a number out there real quick.” Tr. at 144. But

appellant testified that in her lay opinion the value of Appliance and More was in excess

of $600,000.00. Tr. at 82.

       {¶40} There is a presumption in Ohio that an asset acquired during the course of

the marriage is marital property, unless proved otherwise. Haven v Haven, 5th Dist.

Ashland No. 12-COA-013, 2012-Ohio-5347, ¶ 23. We have recognized that the party to

a divorce action seeking to establish that an asset or portion of an asset is separate

property, rather than marital property, has the burden of proof by a preponderance of

evidence. Cooper v. Cooper, 5th Dist. Licking No. 14 CA 100, 2015–Ohio–4048, ¶ 45,

citing Zeefe, supra, at 614.

       {¶41} In order to fully evaluate this issue in the present case, the magistrate ideally

should have been provided with a proper valuation of the businesses (particularly

“Appliance and More”) at both the time of the marriage and the time of the termination of
Stark County, Case No. 2018 CA 00013                                                     12


the marriage. Unfortunately, none of this was provided by either party.2 Nonetheless, the

magistrate strove to formulate an equitable resolution of the property division issue under

the evidentiary circumstances, as evinced by the above passage from her decision, and

we are unable to find an abuse of discretion either in the magistrate's redress of the issue

or in the trial court's ruling upon appellant's Civ.R. 53 objection.




2  We reiterate that in the case sub judice, appellant filed for legal separation, following
which appellee counterclaimed for divorce. See R.C. 3105.17(A). See appellant’s
complaint for legal separation, filed September 28, 2016, at 2, and appellee’s answer and
counterclaim for divorce, filed August 31, 2017. Both appellant and appellee, in these
pleadings, explicitly requested an equitable division of property. Nonetheless, the
magistrate and judge seem to have primarily put the onus on appellant to prove the value
of the two businesses at issue; in the meantime, appellee could not or would not testify
as to any increase in the value of his businesses during the marriage. See. Tr. at 144,
165. However, we find this concern is not specifically advanced by appellant herein.
Stark County, Case No. 2018 CA 00013                                               13


      {¶42} Appellant's Second Assignment of Error is therefore overruled.

      {¶43} For the reasons stated in the foregoing opinion, the judgment of the Court

of Common Pleas, Domestic Relations Division, Stark County, Ohio, is hereby affirmed.



By: Wise, P. J.

Delaney, J., and

Baldwin, J., concur.



JWW/d 0927
