Court Opinion

ID: 9955972
Source: CourtListenerOpinion
Date Created: 2024-03-29 20:10:12.463526+00
Date Added: 2024-06-11T08:15:46.836528
License: Public Domain

[Cite as Rinehart v. Rinehart, 2024-Ohio-1221.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Stephanie Rinehart,                               :

                 Plaintiff-Appellee,              :               No. 23AP-233
                                                              (C.P.C. No. 21DR-2804)
v.                                                :
                                                             (REGULAR CALENDAR)
Jacob Rinehart,                                   :

                 Defendant-Appellant.             :

                                           D E C I S I O N

                                     Rendered on March 29, 2024

                 On brief: Mary C. Ansbro, for appellee. Argued: Mary C.
                 Ansbro.

                 On brief: Jonathan M. Pope, Dmitriy Borshchak, and Hank
                 Sonderman, for appellant. Argued: Jonathan M. Pope.

                 APPEAL from the Franklin County Court of Common Pleas,
                             Division of Domestic Relations

JAMISON, J.
        {¶ 1} Defendant-appellant, Jacob Rinehart, appeals from a judgment of the

Franklin County Court of Common Pleas, Division of Domestic Relations, in favor of

plaintiff-appellee, Stephanie Rinehart. For the following reasons, we reverse.

I. FACTS AND PROCEDURAL HISTORY

        {¶ 2} Appellant and appellee were married on October 17, 2015. Appellee filed her

complaint for divorce on August 11, 2021. Appellant filed his answer and counterclaim for

divorce on September 16, 2021. Trial on the merits was conducted on March 2 and March
No. 23AP-233                                                                                2

3, 2023. Prior to the trial, the parties executed an agreed shared parenting plan and

submitted stipulations regarding numerous issues. Consequently, the sole issues for trial

were the amount of child support, a determination of attorney fees, and the division of

proceeds from the sale of the marital residence.

       {¶ 3} The parties purchased the marital residence just prior to their marriage. They

closed on the residence located on Cypress Creek Drive, Columbus, Ohio, 43228, on August

5, 2015. Though the parties were not yet married, the deed to the property identified the

parties as joint tenants with a right of survivorship. It is undisputed that the down payment

in the amount of $40,348.64 was paid solely out of funds in appellant’s premarital savings

account.1 At trial, appellant testified that he made the down payment exclusively from his

premarital wages and other income. Appellee testified that the parties were living together

prior to the marriage and sharing expenses at their rented apartment.

       {¶ 4} The parties stipulated that they had a marital interest in the home, but that

appellant would be afforded the opportunity to present evidence as to his separate property

interest in the home. In the March 16, 2023 divorce decree, the court adopted the parties’

stipulations and incorporated them into the decree by reference. In the divorce decree, the

trial court determined that, except for the reduction in the principal balance of the mortgage

that occurred during the marriage, the marital residence was the parties’ separate property.

Accordingly, the trial court ordered the proceeds of the sale to be divided equally between

the parties. As a result of the property division in the divorce decree, appellant recovered

only half of the down payment.

1 Three separate accounts owned by appellant were used to meet the down payment.
No. 23AP-233                                                                            3

       {¶ 5} Appellant timely appealed to this court from the March 16, 2023 judgment.

On June 28, 2023, appellee moved this court to dismiss the appeal as moot because

appellant voluntarily instructed the title company to release sale proceeds to appellee in

accordance with the divorce decree. This court issued a journal entry denying the motion

on July 27, 2023.

II. ASSIGNMENTS OF ERROR

       {¶ 6} Appellant assigns the following as trial court errors:
              [1.] In light of the parties’ stipulations, the trial court erred in
              finding that appellee possessed a separate property interest in
              the real property owned by the parties that was purchased prior
              to the marriage.

              [2.] The trial court erred in finding that appellee traced her
              separate property interest in the property owned by the parties
              that was purchased prior to the marriage.

              [3.] The trial court erred in finding that appellant failed to trace
              his separate property interest in the real property owned by the
              parties that was purchased prior to the marriage.

III. STANDARD OF REVIEW

       {¶ 7} In Lindsey v. Lindsey, 10th Dist. No. 15AP-733, 2016-Ohio-4642, ¶ 5, this

court set out the appropriate standard of review as follows:

              In divorce proceedings, a trial court must divide marital
              property and debt equally or, if an equal division is
              inequitable, equitably. A trial court has broad discretion in the
              allocation of marital assets and debt, and an appellate court
              will not disturb a trial court’s judgment absent an abuse of
              discretion. An abuse of discretion implies that the court’s
              attitude is unreasonable, arbitrary, or unconscionable.

(Internal citations omitted).

IV. LEGAL ANALYSIS

A. Appellant’s first assignment of error
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       {¶ 8} In appellant’s first assignment of error, appellant contends that the trial court

erred in finding that appellee possessed a separate property interest in the subject real

property because it was purchased prior to the marriage and the parties had stipulated that

only appellant had the right to claim a separate interest.

       {¶ 9} It is axiomatic that marital property does not include separate property. R.C.

3105.171(A)(3)(b). Separate property is statutorily defined in R.C. 3105.171(A)(6). Hetzner

v. Hetzner, 10th Dist. No. 23AP-176, 2023-Ohio-3951, ¶ 11.

       {¶ 10} R.C. 3105.171(A)(6)(a)(ii) defines Separate property in relevant part as

follows:

              “Separate property” means all real and personal property and
              any interest in real or personal property that is found by the
              court to be any of the following:

              (ii) Any real or personal property or interest in real or
              personal property that was acquired by one spouse prior to
              the date of the marriage [.]

(Emphasis added.)
       {¶ 11} Conversely, R.C. 3105.171(A)(3)(a)(i) and (ii) defines marital property in

relevant part as follows:

              “Marital property” means, subject to division (A)(3)(b) of this
              section, all of the following:

              (i) All real and personal property that currently is owned by
              either or both of the spouses, * * * and that was acquired by
              either or both of the spouses during the marriage;

              (ii) All interest that either or both of the spouses currently has
              in any real or personal property, * * * and that was acquired
              by either or both of the spouses during the marriage[.]

(Emphasis added.)
No. 23AP-233                                                                                   5

       {¶ 12} “When parties contest whether an asset is marital or separate property, the

asset is presumed marital property unless it is proven otherwise.” Lindsey at ¶13, citing

Dach v. Homewood, 10th Dist. No. 14AP-502, 2015-Ohio-4191, ¶ 33. The burden is on the

spouse seeking to have certain property declared separate property to prove the property is

separate, not marital, property. Id., citing Alderman v. Alderman, 10th Dist. No. 10AP-

1037, 2011-Ohio-3928, ¶ 23. “This requires showing by a preponderance of the evidence

that one of the R.C. 3105.171(A)(6)(a) ‘separate property’ definitions applies to the asset.”

Hetzner at ¶ 13, citing Beagle v. Beagle, 10th Dist. No. 07AP-494, 2008-Ohio-764, ¶ 23.

Under R.C. 3105.171(A)(6)(b), the commingling of separate property with any other type of

property does not destroy its identity, unless the separate property is not traceable. “The

characterization of property as marital or separate is a factual issue and is therefore

reviewed under the manifest weight of the evidence standard.”                Lindsey at ¶ 13.

Accordingly, the trial court’s classification of property will not be reversed if it is supported

by some competent, credible evidence. Id.

       {¶ 13} In appellant’s affidavit of property and debt, filed on September 16, 2001,

appellant claimed a separate interest in the subject real property of $40,348.64,

representing the “[d]ownpayment on house.” (Sept. 16, 2021 Aff. of Property and Debt at

5.) In her affidavit of property and debt, appellee claimed $1,300 of the premarital equity

was her separate property because she contributed that sum to the “[d]own payment on

house.” (May 15, 2023 Stips., Ex. 2 at 5.)

       {¶ 14} The stipulations filed in conjunction with the trial provide in relevant part as

follows:

              The parties presently have marital interest in a certain
              parcel of real estate located [on] * * * Cypress Creek Drive,
No. 23AP-233                                                                           6

              Columbus, OH 43228. Title to said property is in the name of
              Plaintiff and Defendant. See Exhibit A attached hereto and
              incorporated herein. The real Franklin County Ohio Clerk of
              Courts of the real estate shall be listed for sale. Defendant
              reserves the right to argue that he has a separate property
              interest.

(Emphasis added.) (May 15, 2023 Stips., Joint Ex. 1A at 1-2.)

       {¶ 15} Pursuant to the above-quoted stipulation, the right to claim a separate

property interest in the marital home at trial was reserved to appellant. The trial court

subsequently adopted the parties’ stipulations and incorporated the stipulations into the

divorce decree.

       {¶ 16} The trial court nevertheless made the following determination regarding the

real property division:

              In their initial filings with the Court, each party affirmed his
              and her belief that he/she held a separate interest in this real
              estate. Stephanie asserted a separate interest of $1,300. Jacob
              asserted a separate interest of $40,348.64. At the time of trial,
              Jacob reaffirmed his position while Stephanie asserted that
              the evidence does not support the contention that either party
              holds an identifiable and traceable separate interest. No
              mortgage payments were made on the residence until after the
              parties’ marriage in October 2015. The purchase price of the
              real estate was $195,000. The balance owed on the mortgage
              at the time of the parties’ marriage was $156,000. The equity
              at the time of marriage is therefore found to be $39,000.

              ***

              The Court finds that each party had a one-half 50% separate
              interest in the real estate at the time of their marriage and
              neither party has identified the value of any marital interest
              in the property. Any pay down on the mortgage would be
              marital and should be equally allocated and divided between
              the parties. The parties have stipulated and agreed to list the
              real estate for sale. Without evidence of increase in value the
              Court finds that any increase in value, if any, would be passive
              and therefore would remain each parties’ separate property.
              Any equity resulting after sale of the residence, whether it is
No. 23AP-233                                                                               7

              from passive growth or marital paydown of the mortgage,
              should be equally divided and allocated between the parties.

(Emphasis added.) (Mar. 16, 2023 Jgmt. Entry-Decree of Divorce at 3-4.)

       {¶ 17} The trial court found the premarital equity in the home of $39,000, was the

parties’ separate property. The trial court further found that any increase in the value of

the home was the separate property of each party, but the reduction in principle during the

marriage was marital property. The trial court then ordered all proceeds from the sale of

the property be divided equally between the parties upon sale, regardless of when or how

acquired.

       {¶ 18} Because Ohio law does not recognize common law marriage, and because the

parties purchased the home prior to marriage, it was reasonable for the trial court to

conclude that the premarital equity in the home was separate property, as each party

acquired an interest in the subject real property prior to the marriage.           See R.C.

3105.171(A)(6)(a)(ii), Hetzner at ¶ 22.

       {¶ 19} Appellant contends that the trial court’s property division is contrary to the

parties’ stipulation because appellee waived her right to claim a separate interest in the

down payment. Our review of the stipulations reveals that appellant reserved a right to

assert a separate interest in the subject real property, but appellee did not. Appellant

nevertheless acknowledged at trial that his separate property interest should be reduced by

the $1,300 contribution appellee claimed to have made toward the down payment in her

affidavit of property and debt. Thus, we perceive no trial court error in permitting appellee

to assert a separate property interest in the premarital down payment. We also disagree

with appellant’s claim that the parties stipulated the home was entirely marital property, as

the stipulation merely states that “the parties presently have a marital interest” in the
No. 23AP-233                                                                                8

property. (May 15, 2023 Stips., Joint Ex. 1A at 1.) The trial court found the parties had both

a marital interest and a separate interest in the subject real property. That finding is

consistent with the stipulations.

       {¶ 20} For the foregoing reasons, we overrule appellant’s first assignment of error.

B. Appellant’s second assignment of error

       {¶ 21} In appellant’s second assignment of error, appellant contends that the trial

court erred when it divided the proceeds from the sale of the real property equally, because

the premarital equity was largely his separate property. We agree.

       {¶ 22} There is no disagreement with the trial court’s finding that the premarital

equity in the home was $39,000. Rather, appellant disagrees with the trial court’s decision

to divide the premarital equity equally. Appellant argues that the premarital equity was

entirely his own separate property, less appellee’s $1,300 contribution, because he made

the down payment out of his own funds. The trial court found as follows:

              In support of his claim for separate property, Jacob presented
              a Uniform Residential Loan Application, the Settlement
              Statement for the real estate, the parties’ joint credit report
              from July 2015 and his Chase Acct #5020 statement dated
              September 23, 2015. Plaintiff argues that the loan application
              identifies three accounts with total liquid assets of $80,512 at
              the time of the loan application and testified that the funds
              paid on line 301 of the Settlement Statement in the amount of
              $40,348.54 came from these accounts.

              ***

              Pursuant to title, both Stephanie and Jacob had a one-half
              interest in the real estate at the time of their marriage.
              Stephanie testified that prior to the marriage the parties
              shared expenses and their funds may have been commingled.
              Jacob presented no other evidence to directly trace the source
              of the down payment. Further, Jacob’s Chase checking
              account     demonstrates     miscellaneous      deposits    of
              approximately $3,655 made into his Chase account prior to
No. 23AP-233                                                                                9

              the parties’ marriage (although after the purchase of the real
              estate) that he could not identify the source.

              ***

              The Court finds that each party had a one-half 50% separate
              interest in the real estate at the time of their marriage and
              neither party has identified the value of any marital interest
              in the property.

(Emphasis added.) (Mar. 16, 2023 Jgmt. Entry-Decree of Divorce at 3-4.)

       {¶ 23} The trial court found that one-half of the premarital down payment was the

separate property of appellant, and the other half was the separate property of appellee.

The trial court also awarded the parties passive appreciation attributable to their respective

contributions to the down payment on the house. In other words, the trial court found that

appellee proved, by a preponderance of the evidence, she contributed one-half of the down

payment.

       {¶ 24} Appellant contends that the evidence does not support a finding that appellee

contributed $19,500 toward the down payment. We agree with appellant.

       {¶ 25} As noted earlier, the party seeking to have a particular asset or assets

classified as separate property bears the burden, by a preponderance of the evidence, of

tracing the asset or assets to separate property. R.C. 3105.171(A)(6)(b). See also Peck v.

Peck, 96 Ohio App.3d 731 (10th Dist.1994). Here, the burden was on each party to trace all

or part of the down payment to their own separate property. See Hemming v. Hemming,

10th Dist. No. 02AP-94, 2002-Ohio-4735, ¶ 10.

       {¶ 26} It is undisputed that the entire down payment for the home was paid from an

account wholly owned by appellant. Appellant testified that the funds in the account were

derived from his premarital wages. Appellee testified that each party maintained their own
No. 23AP-233                                                                             10

separate accounts, and they did not have a joint account. Appellee argues that even though

the down payment was paid from an account owned by appellant, she must have

contributed more than $1,300 to the down payment because she shared living expenses

with appellant prior to acquiring the real property in question. This is a logically flawed

argument.

       {¶ 27} Appellee testified as follows:

              [COUNSEL]. And the actual funds that were paid to the -- at
              the time of closing, where did those funds come from?

              [APPELLEE]. They were requested to be in one cashier’s
              check, and they were from the account that Jacob had.

              [COUNSEL]. How much money did you give to Mr. Rinehart
              in order to pay a portion of that downpayment?

              [APPELLEE]. As I said, the expenses we have were shared.

              THE COURT: That's not -- his question was how much money
              did you give him?

              [APPELLEE]: I don't recall the exact amount.

(Mar. 2, 2023 Tr. Vol. II at 47.)

       {¶ 28} Appellee’s testimony merely proves she shared in the parties’ living expenses

prior to marriage. Absent evidence that appellee paid all or a disproportionate share of the

parties’ living expenses prior to the marriage, the mere fact that she helped appellant meet

the parties’ living expenses does not prove that she contributed additional funds toward the

down payment. Similarly, the fact that the parties’ may have comingled their premarital

funds in the process of sharing living expenses does not relieve appellee of her burden of

proving she contributed additional funds for the down payment. See Lindsey at ¶ 15.
No. 23AP-233                                                                             11

       {¶ 29} Here, the evidence conclusively shows that the entire down payment for the

home was paid from an account owned by appellant. Our review of the evidence reveals

appellee was unable to identify any funds she contributed to the account from which the

down payment was drawn or that she otherwise provided funds to appellant for the purpose

of funding the down payment, beyond the $1,300 she itemized in her August 11, 2021,

affidavit of property and debt. Appellee was unwilling to provide even an estimate of the

amount of money she allegedly gave to appellant for the purpose of the down payment.

Appellee testified on cross examination as follows:

              [COUNSEL]. So why did you believe on August 11th or August,
              I believe, 11th, 2021, that you had only paid $1,300?

              [APPELLEE]. I was asked to fill out this paperwork to file for
              the divorce, and at the time that was the information I could
              recall.

(Mar. 2, 2023 Tr. Vol. II at 49.)

       {¶ 30} On redirect, appellee could not provide any further detail about the amount

she contributed toward the down payment:

              [COUNSEL]. Stephanie, do you believe that you contributed
              other funds to the downpayment besides the 1,300 in your
              affidavit?

              [APPELLEE]. I can’t recall the exact amount.

              [COUNSEL]. Do you believe it was more?

              [APPELLEE]. Yes.

(Mar. 2, 2023 Tr. Vol. II at 57.)

       {¶ 31} Though the trial court noted in the divorce decree that appellant could not

identify the source of miscellaneous deposits of approximately $3,655 to his Chase checking
No. 23AP-233                                                                                12

account, the trial court acknowledged that those deposits were made after the purchase of

the home. Appellee did not claim to be the source of those deposits.

       {¶ 32} Given the parties’ stipulations, appellee’s affidavit, and appellee’s testimony

at trial, a finding that appellee contributed $19,500 toward the down payment is

unsupportable and amounts to pure speculation. On this record, it was not reasonable to

conclude that appellee’s separate interest in the premarital down payment was greater than

$1,300.

       {¶ 33} For the foregoing reasons, appellant’s second assignment of error is

sustained.

C. Appellant’s Third Assignment of Error

       {¶ 34} In his third assignment of error, appellant argues that the trial court erred by

concluding appellant failed to prove, by a preponderance of the evidence, that his separate

interest in the down payment exceeded $19,500. The trial court essentially determined that

appellant was required to provide his bank account records to support his claim that his

wages were the source of the funds in the account from which the down payment was made.

We disagree.

       {¶ 35} Traceability becomes the focus when determining whether separate property

has lost its separate character after being commingled with marital property. Peck at 734.

In such cases, the party seeking to have a particular asset classified as separate property has

the burden of proof, by a preponderance of the evidence, to trace the asset to separate

property. Id. Here, the down payment for the home was made prior to the marriage from

funds in appellant’s account. Because the parties were not married at the time of the

purchase, the down payment did not lose its character as separate property. See Hetzner
No. 23AP-233                                                                                            13

at ¶ 18. This is not a case where the down payment for the marital residence was drawn

from the sale of real property owned by one spouse prior to the marriage, or from one

spouse’s premarital inheritance, or from funds held in a jointly owned account. In such

cases, the quality and quantity of evidence required to trace one spouse’s separate property

to the down payment for the marital residence is necessarily greater. See Peck at 735.

       {¶ 36} Appellant testified that the funds in his personal bank accounts in 2015 were

derived from his own premarital wages. Appellee acknowledged that she maintained her

own personal accounts, and the parties did not have a joint account. The evidence in this

case established there were only two possible sources of the funds in appellant’s account:

appellant’s wages, and appellee’s wages.2 Under the circumstances, appellee’s failure to

produce any evidence to support a finding that her contribution was greater than $1,300,

or to even specify the amount of the contribution, supports the conclusion of the remaining

funds used for the down payment were appellant’s separate property. See Matic v. Matic,

11th Dist. No. 2000-G-2266, 2001 Ohio App. LEXIS 3360 (10th Dist.1994.) (Where the

parties were the only two sources of the funds used for a down payment, that one spouse

deposited certain traceable funds in a joint account from which the down payment was

made proves, circumstantially, that the other spouse contributed the remaining funds, even

though that spouse could not trace every deposit.)

       {¶ 37} In our view, appellant’s evidence that the down payment was drawn from his

separate account containing his premarital wages, combined with appellee’s admission that

2 Appellant testified that he was employed by Universal Measurement Inc., and he made $75,000 in 2022

and in 2023, plus reimbursements for health care and fuel. Appellee testified that she works at The Ohio
State University, and she made $54,000 in 2023. The evidence in the record regarding the relative incomes
of the parties reveals that both parties have been gainfully employed and, historically, appellant’s income
has been roughly twice that of appellee’s income throughout the marriage.
No. 23AP-233                                                                               14

the down payment was drawn entirely from an account owned by appellant, was sufficient

to meet appellant’s initial burden of proof. Because appellant met his burden of proving

the funds used for the down payment were his separate property, the burden shifted to

appellant to show that the funds were appellee’s separate property.           See Yarosz v.

Montgomery, 7th Dist. No. 23 JE 0006, 2024-Ohio-652, citing Victor v. Kaplan, 8th Dist.

No. 108252, 2020-Ohio-3116. Appellee’s argument to the contrary unfairly distorts the

burden of proof by requiring appellant to disprove appellee’s claim that she contributed

some undisclosed portion of the funds in his separate account.

      {¶ 38} Appellee also contends that the trial court must have decided to divide the

premarital down payment equally, because the trial court did not find appellant credible.

The divorce decree does not support such a conclusion, as the only specific credibility

determination made by the trial court involved appellant’s testimony about his current

income for purposes of child support. The trial court made the following finding in the

divorce decree:

             In addition to his wages, Jacob receives reimbursement for
             Health Insurance and Gasoline/Car usage. These funds are
             received by Jacob as a nontaxable stipend. Jacob testified, and
             not credibly, that he did not know how much he received each
             month from this benefit.

(Mar. 16, 2023 Jgmt. Entry-Decree of Divorce at 6.)

      {¶ 39} It is not reasonable to conclude, based on this finding, that the trial court did

not believe appellant’s testimony and documentation regarding the source of the 2015

down payment, particularly where appellee agreed appellant was the sole owner of the

account from which the down payment was paid.

      {¶ 40} For the foregoing reasons, we sustain appellant’s third assignment of error.
No. 23AP-233                                                                           15

IV. CONCLUSION

       {¶ 41} Having overruled appellant’s first assignment of error, but having sustained

appellant’s second and third assignments of error, we reverse the judgment of the Franklin

County Court of Common Pleas, Division of Domestic Relations, and remand the matter

for further proceedings consistent with this decision.

                                                                     Judgment reversed;
                                                                       cause remanded.

                     BEATTY BLUNT and EDELSTEIN, JJ., concur.