         [Cite as Lanzilotta v. Lanzilotta, 2013-Ohio-4050.]

                           IN THE COURT OF APPEALS
                  FIRST APPELLATE DISTRICT OF OHIO
                            HAMILTON COUNTY, OHIO




JENNIFER A. LANZILLOTTA,                            :          APPEAL NOS. C-120796
                                                                           C-120835
        Plaintiff-Appellant/Cross-                  :          TRIAL NO. DR-1000288
         Appellee,
                                                    :             O P I N I O N.
  vs.
                                                    :
JEFFREY A. LANZILLOTTA,
                                                    :
    Defendant-Appellee/Cross-
    Appellant.                                      :




Civil Appeal From: Hamilton County Court of Common Pleas, Domestic Relations
                   Division

Judgment Appealed From Is:                Affirmed in Part, Reversed in Part, and Cause
                                          Remanded

Date of Judgment Entry on Appeal: September 20, 2013



The Farrish Law Firm and Michaela M. Stagnaro, for Plaintiff-Appellant/Cross-
Appellee,

Donovan Law and Michael P. McCafferty, for Defendant-Appellee/Cross-Appellant.




Please note: this case has been removed from the accelerated calendar.
                      OHIO FIRST DISTRICT COURT OF APPEALS




SYLVIA S. HENDON, Presiding Judge.

       {¶1}     Jennifer Lanzillotta and Jeffrey Lanzillotta have both appealed from

the trial court’s judgment entry granting their decree of divorce. Because the trial

court failed to consider Jennifer’s overtime pay when determining her income for

purposes of calculating child and spousal support, and because the court failed to

consider the tax consequences of its property division award, we remand this cause

for the trial court’s reconsideration of these issues. The judgment entry and decree

of divorce issued by the trial court is otherwise affirmed.

                                 Factual Background


       {¶2}   Jennifer and Jeffrey were married on July 6, 1996. The termination

date of their marriage was March 14, 2010.          Three children were born of the

marriage. The parties agreed on most parenting issues and submitted a shared

parenting plan to the court, which was incorporated into its final entry and decree of

divorce. The parties also agreed on a myriad of property issues and submitted a joint

property stipulation. Various other property matters were tried before the court.

The trial court’s final entry resolved the property issues, granted the parties a decree

of divorce, and incorporated the parties’ shared parenting plan.

                                     Jennifer’s Appeal


                                 A. Property Distribution


       {¶3}   Jennifer argues in her first assignment of error that the trial court

failed to equitably divide the parties’ property. A trial court has broad discretion in

determining an equitable division of property in divorce proceedings, and will not be


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reversed absent an abuse of discretion. Kenning v. Gundrum, 1st Dist. Hamilton No.

C-060921, 2007-Ohio-4706, ¶ 5. An abuse of discretion “connotes more than an

error of law or of judgment; it implies an unreasonable, arbitrary or unconscionable

attitude on the part of the court.” Pembaur v. Leis, 1 Ohio St.3d 89, 91, 437 N.E.2d

1199 (1982).

       {¶4}    Jennifer first argues that the trial court incorrectly determined her

interest in the parties’ marital home. The parties had stipulated that Jeffrey was to

retain the home following the divorce, but had not agreed upon Jennifer’s equity

interest in the home. In addition to the first mortgage on the home, the parties had

obtained an equity line of credit. When determining Jennifer’s equity interest, the

trial court had subtracted both the first mortgage and the balance on the equity line

of credit from the home’s fair market value. The court then additionally subtracted

Jeffrey’s uncontested premarital interest in the home.        The court divided the

resulting value in half to determine each party’s separate interest in the property.

The trial court further ordered that Jennifer and Jeffrey were each responsible for

half of the debt remaining on the equity line of credit. Jennifer argues that the trial

court ordered her to pay twice for the equity line debt because her value in the home

had already been reduced by the debt.

       {¶5}    We are not persuaded by Jennifer’s argument. The trial court correctly

determined the parties’ equity in the home by subtracting both the first mortgage

and the equity line debt from the home’s fair market value. And because the equity

line debt had been incurred on marital expenses, the trial court correctly ordered the

parties to equally share responsibility for this debt. Jennifer’s argument fails to

recognize that the trial court’s entry treats both parties equally with respect to the




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equity line debt. Both parties’ equity in the home was decreased by this debt, and

both parties were ordered to shoulder the debt equally. We note that even if the trial

court had not subtracted the balance of the equity line debt from the home’s fair

market value when determining the parties’ equity interest, the overall equalization

payment between the parties would remain the same because each party’s equity

interest would have increased by the same amount.

       {¶6}   Jennifer next argues that the trial court erred in its valuation of her

engagement ring and by deeming the ring a marital asset. She contends that this

issue was not properly before the trial court for review because the parties had

submitted a property stipulation to the court that did not list the engagement ring as

a disputed item. Jeffrey argues that because the ring had been purchased in part

with funds from the equity line of credit, which the parties agreed was a disputed

issue, valuation and division of the ring was properly before the trial court for its

consideration.   We are persuaded by Jeffrey’s argument and find that issues

concerning the engagement ring were properly before the trial court for review.

       {¶7}   Testimony provided at the property division hearing indicated that

Jennifer’s engagement ring had been either lost or stolen during the marriage.

Jeffrey testified that the parties had received approximately $2,700 in insurance

proceeds for the ring, and that they had paid an additional four to six thousand

dollars for Jennifer to obtain a new ring. He indicated that he was not in favor of

spending this additional money on the ring. Jeffrey further testified that the new

ring had been appraised for $9,500. The trial court allowed his testimony but

declined to admit the appraisal into evidence. Jennifer testified that she and Jeffrey

had been in agreement that she should “upsize” her ring after the original was lost.




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                     OHIO FIRST DISTRICT COURT OF APPEALS



She testified that, including the insurance proceeds, they paid a total of four to five

thousand dollars for the new ring. Jennifer indicated that the ring’s appraisal had

been inflated because the jeweler was a friend of the family.

       {¶8}   The trial court valued the ring at $9,500 and found it to be marital

property. No abuse of discretion occurred in the trial court’s valuation of the ring,

which was supported by testimony in the record. Nor did the trial court abuse its

discretion in considering the ring to be marital property. Generally, an engagement

ring is considered a gift and is the separate property of the party who received it.

Derrit v. Derrit, 163 Ohio App.3d 52, 2005-Ohio-4777, 836 N.E.2d 39, ¶ 48-49 (11th

Dist.). But in this case, the original engagement ring was lost or stolen, and the

parties replaced the ring by purchasing a new one with marital funds. The trial court

believed Jeffrey’s testimony that he had not desired to spend additional funds on the

new ring and that he had not intended it to be a gift to Jennifer.

       {¶9}   Jennifer argues that, at the very least, she is entitled to receive as her

separate property the $2,700 insurance proceeds received for the lost ring. The trial

court considered this argument and determined that the insurance proceeds were

likewise marital property because the insurance premiums had been paid with

marital funds. We agree with the trial court’s determination.         See Burkhart v.

Burkhart, 2013-Ohio-157, 986 N.E.2d 45, ¶ 20-21 (10th Dist.), affirming a lower

court’s decision that “proceeds from an insurance policy for which the premiums

were paid from marital funds should be considered a marital asset.”

       {¶10} Jennifer last argues that the trial court erred in calculating the parties’

equalization payment and in failing to consider the tax consequences associated with

that payment. The trial court ordered Jeffrey to pay Jennifer a property equalization




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payment of $36,694 from his 401(K) account. Jennifer argues that this payment

should be increased based on her previous arguments concerning the equity line debt

and the engagement ring. Based on our determination that these prior arguments

were without merit, we hold that the trial court correctly determined the amount of

the equalization payment.

       {¶11} Jennifer next argues that the trial court failed to consider the tax

consequences that she will incur when she withdraws the transferred funds as cash

from her own 401(K) account. She is correct. R.C. 3105.171(F) contains a list of

factors that the trial court shall consider when making a distributive award. One

factor to be considered is “the tax consequences of the property division upon the

respective awards to be made to each spouse.” R.C. 3105.171(F)(6). Because the

statute provides that the trial court “shall consider” the listed factors, trial courts are

mandated to consider each factor. See Thomas v. Thomas, 171 Ohio App.3d 272,

2007-Ohio-2016, 870 N.E.2d 263, ¶ 6 (1st Dist.); Williams v. Williams, 12th Dist.

Warren No. CA2012-08-074, 2013-Ohio-3318, ¶ 38. If the parties fail to present

evidence on any of the factors provided in R.C. 3105.171(F), the trial court bears the

burden of directing them to present such evidence. Here, the trial court erred in

failing to consider the tax consequences associated with the ordered equalization

payment.

       {¶12} Jennifer’s first assignment of error is sustained in part and overruled

in part. On remand, the trial court must consider the tax consequences associated

with a potential equalization payment before awarding the payment.




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                     OHIO FIRST DISTRICT COURT OF APPEALS


                    B. Child-Support Deviation and Tax Exemptions


       {¶13} In her second assignment of error, Jennifer argues that the trial court

erred in determining her child-support obligations and in allocating tax exemptions.

We review the trial court’s decision on both matters for an abuse of discretion.

France v. France, 1st Dist. Hamilton Nos. C-100468 and C-100489, 2011-Ohio-3025,

¶ 13; Cwik v. Cwik, 1st Dist. Hamilton No. C-090843, 2011-Ohio-463, ¶ 67.

       {¶14} Jennifer first contends that the trial court erred in not awarding a

greater child-support deviation. An appropriate deviation cannot be determined

until the amount of child-support has been calculated. Because we are remanding

this cause for a determination of Jennifer’s child-support obligations utilizing an

income that includes her overtime pay (which we discuss and hold in response to

Jeffrey’s first assignment of error), we find that this argument is moot.

       {¶15} Jennifer next argues that the trial court erred in allocating tax

exemptions. The magistrate had awarded Jennifer two children to claim for tax

exemption purposes each year until the parties’ oldest daughter became

emancipated. The trial court modified the magistrate’s award, specifically holding

that Jeffrey was entitled to claim two children for tax exemption purposes for the

year 2011. For each year following, the court held that the parties would alternate

claiming two children. Jennifer contends that the trial court’s modification was in

error because she will benefit more from the exemptions because she pays a majority

of the children’s expenses.

       {¶16} R.C. 3119.82 concerns the designation of a parent to claim a federal tax

deduction. It provides that if the parents do not agree on which parent may claim the

children, the court, when determining which party to grant the deduction, “shall




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consider * * * any net tax savings, the relative financial circumstances and needs of

the parents and children, the amount of time the children spend with each parent,

the eligibility of either or both parents for the federal earned income tax credit or

other state or federal tax credit, and any other relevant factor concerning the best

interest of the children.” R.C. 3119.82.

       {¶17} In this case, both parents were designated as residential parents.

Although the oldest child resides solely with Jennifer, the younger children spend

their time equally between parents. Accordingly, no error occurred in the trial

court’s determination that the parties’ should alternate claiming two children. Nor

did the trial court abuse its discretion in granting Jeffrey two children to claim as tax

exemptions in the year 2011. Jennifer had claimed two children in the year 2010,

and the court equitably determined that Jeffrey should be entitled to claim two

children the following year. Jennifer’s second assignment of error is overruled.

                                Jeffrey’s Cross-Appeal


                 A. Calculation of Child Support and Spousal Support


       {¶18} In his first assignment of error, Jeffrey argues that the trial court erred

in calculating Jennifer’s income for purposes of child support and allocation of

expenses.

       {¶19} The magistrate determined that Jennifer’s income was $135,500.

Jeffrey objected to this amount, arguing that the magistrate had failed to include

Jennifer’s overtime pay when calculating her income. With respect to overtime,

Jennifer had testified that in the year 2011, the year in which she testified, she had

received a substantial amount of overtime pay to date. Jennifer further testified that




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                     OHIO FIRST DISTRICT COURT OF APPEALS



she did not expect there to be much overtime available in the future because her

employer had hired additional employees. When ruling on Jeffrey’s objection to the

calculation of Jennifer’s income, the trial court determined that the magistrate had

correctly found Jennifer’s income to be $135,500. In so concluding, the court cited

Jennifer’s testimony that the overtime was unlikely to occur in the future.

       {¶20} R.C. 3119.01(C) defines the term gross income for purposes of

determining child support. It provides that gross income means “the total of all

earned and unearned income from all sources during a calendar year, whether or not

the income is taxable, and includes income from salaries, wages, overtime pay, and

bonuses.” See R.C. 3119.01(C)(7). This provision requires the trial court to consider

a party’s overtime pay when calculating the party’s income. But Jennifer contends

that the trial court properly calculated her income without including overtime pay

because the overtime pay was nonrecurring income pursuant to R.C. 3119.01(C)(8).

       {¶21} R.C. 3119.01(C)(7) lists various types of income and benefits that

should not be included when calculating a party’s gross income, including

nonrecurring or unsustainable income. R.C. 3119.01(C)(7)(e). Nonrecurring income

is defined in R.C. 3119.01(C)(8) as “an income or cash flow item the parent receives

in any year or for any number of years not to exceed three years that the parent does

not expect to continue to receive on a regular basis.” Jennifer asserts that because

she is not likely to receive overtime pay in the future, it is nonrecurring income and

should not be included in a calculation of her gross income.

       {¶22} We are not persuaded. R.C. 3119.05(D) provides how to determine the

actual amount of overtime earned by a parent when calculating that parent’s gross

income. It provides that the calculation should utilize the lesser of the following as




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                     OHIO FIRST DISTRICT COURT OF APPEALS



income from overtime pay: “[t]he yearly average of all overtime * * * received during

the three years immediately prior to the time when the person’s child support

obligation is being computed” or “[t]he total overtime * * * received during the year

immediately prior to the time when the person’s child support obligation is being

computed.” R.C. 3119.05(D)(1) and (2). The child support computation worksheet

tracks this language and provides for the inclusion of overtime pay as determined by

these methods. Both the statute and worksheet mandate that any overtime earned in

the three-year period prior to the calculation of child support be included in a party’s

gross income.

        {¶23} Consequently, the trial court was required to include overtime pay

when calculating Jennifer’s gross income, and it abused its discretion in failing to do

so. On remand, the trial court must recalculate Jennifer’s child-support obligations

and include her overtime pay as part of her gross income. The trial court must also

determine the percentages that each parent is required to pay for the children’s

expenses utilizing an income for Jennifer that includes overtime pay. Jeffrey’s first

assignment of error is sustained.

        {¶24} In his second assignment of error, Jeffrey argues that the trial court

erred by failing to include Jennifer’s overtime pay as part of her income when

determining spousal support.        The trial court possesses broad discretion in

establishing an award of spousal support and will not be reversed absent an abuse of

discretion. Coors v. MacEachen, 1st Dist. Hamilton No. C-100013, 2010-Ohio-4470,

¶ 13.

        {¶25} R.C. 3105.18 provides that a trial court may award spousal support

when it is “fair and reasonable,” and it provides various factors to be considered




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when determining whether an award of spousal support should be granted. See R.C.

3105.18(C)(1). One factor that the trial court is mandated to consider with respect to

spousal support is “[t]he 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.” R.C. 3105.18(C)(1)(a). Unlike the statute

applicable for the calculation of child support, R.C. 3105.18 does not specifically

require the trial court to consider overtime pay or bonuses when determining a

party’s income. But the statute does direct the court to consider the party’s income

“from all sources.” Here, the record is clear that Jennifer had earned a substantial

amount of overtime pay in the year 2011. And Jennifer provided no evidence other

than her testimony that the overtime was not likely to occur in the future. We hold

that, in light of these circumstances, equity required the trial court to include

Jennifer’s overtime pay when calculating her income for spousal support purposes,

and that the court abused its discretion by failing to do so.        Jeffrey’s second

assignment of error is sustained.

                              B. Property Division of Debt


       {¶26} In his third assignment of error, Jeffrey argues that the trial court

erred by failing to equitably divide the parties’ property. He specifically argues that

the trial court erred by ordering him to pay half of the parties’ credit card debt and

equity line debt, and half of the portion of Jennifer’s student loans that had been

used for marital expenses.

       {¶27} With respect to the credit card and equity line debts, Jeffrey contends

that Jennifer should be required to pay two thirds of these debts because they had

increased during the time period that she had been in school. We are not persuaded.



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The credit card and equity line debts were marital debts. No abuse of discretion

occurred in the trial court’s determination that these marital debts should be split

equally.

       {¶28} Jeffery next contends that Jennifer should be held solely responsible

for the portion of her student loans that had been spent on household expenses.

Again, we disagree.     This portion of the loans had not been spent on Jennifer’s

education, but rather on marital expenses for the benefit of both parties. The trial

court did not abuse its discretion in ordering the parties to be held equally

responsible for this debt. See Lassiter v. Lassiter, 1st Dist. Hamilton No. C-010309,

2002-Ohio-3136, ¶ 22. Jeffrey’s third assignment of error is overruled.

                                       Conclusion


       {¶29} This cause is remanded for the trial court to recalculate child-support

and spousal-support obligations utilizing an income for Jennifer that includes

overtime pay.    On remand, the trial court must also consider the potential tax

consequences of the ordered property equalization payment. The judgment of the

trial court is otherwise affirmed.

                    Judgment affirmed in part, reversed in part, and cause remanded.



CUNNINGHAM and FISCHER, JJ., concur.



Please note:
       The court has recorded its own entry on the date of the release of this opinion.




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