Court Opinion

ID: 2696906
Source: CourtListenerOpinion
Date Created: 2014-08-04 15:45:28.24563+00
Date Added: 2024-06-11T12:39:20.995855
License: Public Domain

[Cite as Strasburg v. Strasburg, 2010-Ohio-3672.]

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

CINDRA K. STRASBURG,

        PLAINTIFF-APPELLEE,                               CASE NO. 2-10-12

        v.

RONALD STRASBURG,                                         OPINION

        DEFENDANT-APPELLANT.

                Appeal from Auglaize County Common Pleas Court
                           Domestic Relations Division
                          Trial Court No. 2009 DR 0059

                                      Judgment Affirmed

                             Date of Decision: August 9, 2010

APPEARANCES:

        James A. Roeder for Appellant

        William E. Huber for Appellee
Case No. 2-10-12

ROGERS, J.

       {¶1} Defendant-Appellant, Ronald Strasburg, appeals the judgment of the

Court of Common Pleas of Auglaize County, Domestic Relations Division,

granting Plaintiff-Appellee’s, Cindra Strasburg, complaint for divorce. On appeal,

Ronald argues that the trial court erred in finding that certain farmland was marital

property; in failing to deduct ordinary and reasonable expenses from the gross

receipts of his business income; and, in calculating his spousal support obligation

despite Cindra’s failure to provide her expenses. Based upon the following, we

affirm the judgment of the trial court.

       {¶2} In June 1970, Ronald and Cindra married. In April 2009, Cindra

filed a complaint for divorce. All children born of the marriage had emancipated

as of the filing.

       {¶3} In October 2009, Ronald was deposed and stated that he was self-

employed selling insurance and investments; that his accountant designed a setup

for his business whereby income he generated through his self-employment was

issued to him personally by an IRS 1099 form; that the 1099 form from his

personal return was “crossed” to his Subchapter S Corporation, Legacy; that

Legacy recognized the income and the operating expenses; that he was the sole

shareholder, director, and decision maker of Legacy; that Legacy had not issued

him a paycheck in two years because “business has been down”; that, accordingly,

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he had not received a W-2 in 2007 or 2008; and, that Legacy currently had no

assets and had a negative equity.

       {¶4} Ronald continued that he, his brother Thomas, and his sister Carol,

were each the beneficiaries of an undivided one-third interest in farmland from his

father’s estate; that all three beneficiaries executed a quitclaim deed transferring

the farmland to Cindra in December 2005; that the farmland was solely in

Cindra’s name, with no conditions or restrictions of ownership; that, also in 2005,

he and Cindra mortgaged the farmland and used the proceeds to pay off an

outstanding farm credit loan balance from his father’s estate; that the money he

paid to his father’s estate was the same amount he owed his father from a previous

loan in 1983 when he started his business; that Cindra signed the $35,000

mortgage, but not the note; that she signed the mortgage because her name was on

the deed for the farmland; and, that he rented the farmland to his brother and

placed the proceeds into Legacy’s account.

       {¶5} In December 2009, the trial court held a final hearing, at which the

following testimony was heard.

       {¶6} Cindra testified that she was currently collecting unemployment of

$122 per week after being laid off from the public library; that she was paying

$144.99 per month for COBRA health care insurance; that she was paying for

several charge cards with an aggregate balance of approximately $25,000,

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Case No. 2-10-12

groceries, and gasoline; that she was currently supporting herself, except that

some of her friends were “feeding” her; that she was still residing in the marital

residence, for which Ronald was paying virtually all of the expenses, but that she

would be vacating in forty-five days; that she did not know where she would be

moving until she received her divorce settlement because she had no money; that

she owned approximately one hundred fifty Longaberger baskets; that she had

sold some of the baskets for approximately $15 to $20, but that there was really no

market for them; that she had worked for nearly the entire thirty-nine year

marriage; that she had a high school degree and had attended two quarters of

college, but did not complete a degree; that Ronald had a bachelor’s degree; that

the parties enjoyed a very good standard of living throughout the marriage; that

Ronald had titled the farmland in her name; that the farmland came from his

family; and, that, even though she held title to the farmland, Ronald managed it,

and his brother and son-in-law farmed it.

       {¶7} Ronald testified that, in 2004, his father died and he inherited one-

third of his $939,844 estate; that, in 2005, he, his brother, and his sister deeded the

farmland inherited from the estate via quitclaim to Cindra; that he put the farmland

into Cindra’s name because he was concerned about the risk that he would be

sued; that he believed he and Cindra had a conversation concerning that risk and

believed that she knew this was why the property was titled in her name; that he

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Case No. 2-10-12

did not believe he ever relinquished ownership, control, or dominion over the

farmland; that he never intended to waive his rights to the property; that neither he

nor Cindra had improved the farmland or exerted control over the farming; that the

farmland was never entirely titled in his name, but was owned equally by him, his

brother, and his sister as heirs to the estate; that he leased the farmland to his

brother to grow crops in 2007, 2008, and 2009 for $11,532, $11,856, and $11,856,

respectively; that the parties filed taxes jointly in 2007, 2008, and, 2009, so both

paid taxes on the rental income; that, in 2007, Cindra earned $13,207 in income;

and, that, after calculations, depreciation, and payments to banks, he incurred a

loss of $2,329.

       {¶8} Ronald further testified that his consulting business was called

Strasburg Consulting; that Strasburg Consulting was organized as a sole

proprietorship; that he earned his income from commissions paid to him by

insurance companies for the policies he sold; that his gross income in operating

Strasburg Consulting in 2003, 2004, 2005, 2006, and 2007, was, respectively,

$161,568, $112,478, $77,168, $88,868, and $138,386; that his business expenses

in operating Strasburg Consulting, consisting of paid commissions and fees, in

2003, 2004, 2005, 2006, and 2007, were, respectively, $161,568, $112,478,

$77,168, $88,868, and $138,386; that, since approximately 1996, all of the money

he earned through Strasburg Consulting was transferred to Legacy, the pass-

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Case No. 2-10-12

through operating entity Subchapter S corporation for which he was the sole

shareholder; that his accountant organized his sole proprietorship and corporation

in this manner for tax advantage purposes; that, in past years, he had paid himself

a salary from Legacy, but had not taken a salary for three years because there was

not enough money; that he paid his personal bills by taking money out of Legacy

and listing them as loans from Legacy to the sole shareholder; that Legacy paid his

office rent, payroll, insurance, taxes, utilities, advertising, and all the other costs of

running a financial planning business; that Legacy had only one employee besides

himself, a secretary whom Legacy paid $22,000 per year; and, that Legacy

reimbursed him for mileage and other business-related expenses that he paid out-

of-pocket.      The individual tax returns submitted by both Ronald and Cindra

reflected that the income or loss for Legacy in 2003, 2004, 2005, 2006, and 2007,

was, respectively, $16,617, - $5,061, -$9,712, $6,796, and $31,866.1

         {¶9} James Siefring, Ronald’s CPA, testified that he prepared the

Strasburgs’ tax returns for 2003 through 2008; that Ronald operated his business

through Legacy; that Ronald passed his income over to Legacy as its income; that

this was the manner in which he recommended the Strasburgs handle their income

1
  Ronald’s written closing argument submitted to the trial court claims that the tax forms establish Ronald’s
income in 2004, 2005, 2006, and 2007 was, respectively, $64,285, $11,760, $7,423, $13,207; however,
Ronald and Cindra filed jointly, and Ronald testified at the hearing that the $13,207 represented Cindra’s
W-2 wages and that he had not received a W-2 in several years.

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Case No. 2-10-12

because it benefitted them financially and was permitted by the tax code; and, that

Legacy’s expenses were “legitimate.” (Hearing Tr., p. 74).

       {¶10} In January 2010, the parties submitted to the trial court written

closing arguments. Cindra asserted that, regarding spousal support, this was a

long-term marriage; that Ronald had a much higher earning ability and had been

the primary source of income for the parties during the marriage; that she had

recently undergone heart surgery, which affected her ability to obtain health

insurance because it was a pre-existing condition; that the parties enjoyed a high

standard of living throughout the marriage; that the average annual sum of

commissions earned by Ronald from 2003 to 2007 was $115,693. Regarding the

farmland, Cindra asserted that the property was never transferred to Ronald, but

was purchased and granted to Cindra via quitclaim deed in December 2005; that a

mortgage of $136,650 on the farmland was executed by both Ronald and Cindra;

and, that the proceeds of the mortgage were used to pay off a marital debt—the

loan extended to Ronald by his father to equalize the estate with his sister.

       {¶11} Ronald asserted in closing that Cindra’s request for spousal support

should be denied, as she did not assert her request until the day of the hearing; that

Cindra wrongfully characterized his income as his gross income without taking

into consideration his business expenses; that Cindra’s health conditions would not

prevent her from performing office work; that the value of Cindra’s basket

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Case No. 2-10-12

collection should be credited against any support obligation; and, that Cindra was

likely receiving support from a boyfriend. Next, Ronald argued that Cindra was

not entitled to the farmland as marital property because he inherited the property

as a one-third undivided interest of his father’s estate; that, because the property

was an inheritance, it was his traceable separate property; that the farmland had

not been comingled because he had no donative intent to gift the property to

Cindra, but merely put it in her name to protect his assets in case he was sued; that

there was no relinquishment of ownership, dominion, or control of the farmland;

that the joint mortgaging of the farmland did not necessarily transmute the

property into marital property pursuant to Welsh-Pojman v. Pojman, 3d Dist. No.

3-03-12, 2003-Ohio-6708; that the titling of the property in Cindra’s name was not

conclusive as to whether the property was marital or separate; and, that, as the

property was his separate property, the $82,650 passive appreciation of the

property was also his separate property pursuant to Middendorf v. Middendorf

(1998), 82 Ohio St.3d 397.

       {¶12} Thereafter, the trial court entered the Divorce Decree. The trial

court found that Cindra was the owner of the 97.5 acre parcel of real estate in

Auglaize County (the “farmland”) via a quitclaim deed recorded on December 13,

2005; that the value of the property was $380,250; that Ronald had never owned

the farmland; that the farmland was a one-third undivided interest in the estate of

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Case No. 2-10-12

Ronald’s deceased father, which he never took ownership of, but conveyed via

quitclaim deed to Cindra, giving her full ownership of the farmland; that Ronald

then used marital assets in mortgaging the farmland to put money into his business

and pay his siblings for the share of their deceased father’s estate to which they

were entitled; that, when Ronald transferred the one-third undivided interest in

three parcels of real estate into full ownership in one parcel of real estate, the

property was no longer identifiable as separate property and became marital

property; that the parties treated the farmland as marital property as they both

entered into a mortgage on the property and cash rent earned from the farmland

was used as marital income; and, that, in making its finding that the farmland was

marital property, the trial court considered R.C. 3105.171.

       {¶13} Regarding Ronald’s income, the trial court found that the average

gross annual income deposited into Legacy was $115,693.60, and that the same

amount was Ronald’s potential gross income. The trial court reasoned that:

      [Ronald] is self employed selling investments and insurance. * *
      * All sales made by [Ronald] result in a Federal Form 1099
      being issued to him personally. He then turns this income over
      to a Subchapter S corporation known as Legacy Planning, inc.
      [Ronald] is the sole shareholder, sole officer and sole decision
      maker with regard to Legacy Planning, inc. Legacy Planning,
      inc. then had expenses by way of “Commissions and Fees” * * *
      that exactly match its income. [Ronald] testified that he takes
      “draws” from Legacy as needed but earns no income from
      Legacy. There was no testimony from any source as to what
      “Commissions and Fees” consist of. * * * It appears that both
      marital and business obligations were paid from the accounts of

                                        -9-
Case No. 2-10-12

      Legacy, inc., although no specific bank account records were
      presented to the Court for review. * * * [Ronald] was paying
      much, if not all of the expenses to service both business and
      family debt out of the income deposited by [Ronald] into the
      accounts of Legacy, inc. The average gross income of [Ronald]
      deposited into Legacy, inc. accounts as shown on [Cindra’s]
      exhibits 9 – 13 is $115,693.60

(Jan. 2010 Decree of Divorce, p. 3).

      {¶14} Regarding spousal support, the trial court stated that it had

considered all factors in R.C. 3105.18 including that Ronald was more educated

than Cindra and had a much higher earning potential; that Cindra had recently

undergone open-heart surgery leaving her with vocal difficulties; and, that the

marriage was thirty nine and one-half years in duration. Consequently, the trial

court concluded that Ronald should pay Cindra $3,200 per month for one hundred

and eighteen months.

      {¶15} It is from this judgment that Ronald appeals, presenting the

following assignments of error for our review.

                            Assignment of Error No. I

       THE TRIAL COURT ERRED AND ABUSED ITS
       DISCRETION BY CONCLUDING THE INHERITED
       FARMLAND HAD BECOME UNIDENTIFIABLE AS THE
       SEPARATE PROPERTY OF THE DEFENDANT AND HAD
       BECOME MARITAL PROPERTY.

                           Assignment of Error No. II

       THE TRIAL COURT ERRED AND ABUSED ITS
       DISCRETION BY FAILING TO DEDUCT THE ORDINARY

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Case No. 2-10-12

       AND REASONABLE EXPENSES FROM THE GROSS
       RECEIPTS OF THE DEFENDANT’S BUSINESS INCOME.

                           Assignment of Error No. III

       THE TRIAL COURT ERRED AND ABUSED ITS
       DISCRETION WHEN IT CALCULATED DEFENDANT’S
       SPOUSAL    SUPPORT    OBLIGATION  WHEN  THE
       PLAINTIFF’S EXPENSES WERE NOT PROVIDED.

       {¶16} Due to the nature of Ronald’s arguments, we elect to address his

second and third assignments of error together.

                             Assignment of Error No. I

       {¶17} In his first assignment of error, Ronald argues that the trial court

erred and abused its discretion in concluding that the farmland was not his

separate property, but had become marital property. Specifically, Ronald argues

that he presented evidence from his father’s estate’s final accounting, a certificate

of transfer, and the quitclaim deed to Cindra, sufficient to demonstrate that this

property was traceable to his inheritance; that the state of the property never

changed; that Cindra was listed on the mortgage of the farmland, but not the note;

that the record is devoid of any indication that he made an inter-vivos gift of the

farmland to Cindra; and, that, consequently, the farmland was his traceable,

separate property.

       {¶18} “In determining whether the trial court has appropriately categorized

property as separate or marital, the standard of review is whether the classification

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Case No. 2-10-12

is against the manifest weight of the evidence.” Eggeman v. Eggeman, 3d Dist.

No. 2-04-06, 2004-Ohio-6050, ¶14, citing Henderson v. Henderson, 3d Dist. No.

10-01-17, 2002-Ohio-2720, ¶28. Accordingly, the trial court’s judgment will not

be reversed if the decision is supported by some competent, credible evidence.

Eggeman, 2004-Ohio-6050, at ¶14, citing DeWitt v. DeWitt, 3d Dist. No. 9-02-42,

2003-Ohio-851, ¶10. In determining whether competent, credible evidence exists,

“[a] reviewing court should be guided by a presumption that the findings of a trial

court are correct, since the trial judge is best able to view the witnesses and

observe their demeanor, gestures, and voice inflections, and use those observations

in weighing the credibility of the testimony.” Barkley v. Barkley (1997), 119 Ohio

App.3d 155, 159, citing In re Jane Doe I (1991), 57 Ohio St.3d 135.

       {¶19} In a divorce proceeding, a trial court must classify property as either

marital or separate and then award each spouse his or her separate assets. R.C.

3105.171(B),(D). Marital property includes “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.” R.C. 3105.171(A)(3)(a)(i).

R.C. 3105.171(A)(6)(a) describes separate property, stating, in pertinent part:

      “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:
      ***
      (i) An inheritance by one spouse by bequest, devise, or descent
      during the course of the marriage;

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Case No. 2-10-12

        **
        (vii) Any gift of any real or personal property or of an interest in
        real or personal property that is made after the date of the
        marriage and that is proven by clear and convincing evidence to
        have been given to only one spouse.

        {¶20} In addition, “[t]he commingling of separate property with other

property of any type does not destroy the identity of the separate property as

separate property, except when the separate property is not traceable.”                             R.C.

3105.171(A)(6)(b).          Therefore, traceability is the main issue in determining

whether separate property has become marital property due to commingling.

Earnest v. Earnest, 151 Ohio App.3d 682, 2003-Ohio-704, ¶38, citing Peck v.

Peck (1994), 96 Ohio App.3d 731, 734. Additionally, R.C. 3105.171(H) provides

that “[e]xcept as otherwise provided in this section, the holding of title to property

by one spouse individually or by both spouses in a form of co-ownership does not

determine whether the property is marital property or separate property.”2

However, “title can be some evidence of the parties’ intent as to the nature of the

asset being marital or separate.” Gallo v. Gallo, 11th Dist. No. 2000-L-208, 2002-

Ohio-2815, ¶25. Finally, “the party seeking to establish an asset as separate

property * * * has the burden of proof, by a preponderance of the evidence, to

trace the asset to separate property.” Id.

2
  This author wishes to emphasize that, despite R.C. 3105.171(H) and some courts’ holdings, long-
established case law holds that a formally executed deed in the correct form is presumed valid and may not
be set aside except upon the challenger’s demonstration of fraud, undue influence, or lack of capacity by
clear and convincing evidence. See Neville v. Neville, 3d Dist. No. 9-08-37, 2009-Ohio-3817, ¶¶36-42
(Rogers, J., concurring in part and dissenting in part).

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Case No. 2-10-12

       {¶21} In Neighbarger v. Neighbarger, 10th Dist. No. 05AP-651, 2006-

Ohio-796, the Tenth Appellate District examined a situation where a husband

transferred farmland via quitclaim deed to his wife shortly prior to their marriage.

As the husband acquired the farmland prior to the marriage, it was his separate

property that would normally not be subject to equitable distribution.          The

husband claimed that, upon the parties’ divorce, the farmland was his traceable

separate property because he had not intended to make a gift to the wife by

transferring the property to her, but that his motive was to shield the farmland

pending criminal charges and possible civil judgments against him. The Tenth

District rejected the husband’s argument, finding that, “[t]here is no question that

[husband] intended, in 1990 [when he transferred the property to wife], to create a

legal barrier between himself and the property. His stated objective was to shelter

his assets from any financial risk arising from the criminal charges against him. If

the outcome of the criminal trial had been different, he most certainly would have

argued that he had no assets to satisfy whatever financial liability might have

arisen * * * [.] Having made that choice for his own benefit in 1990, to the

detriment of his children and creditors, we will not allow appellant to turn his

deliberate action into a legal fiction for his own benefit again. He intended to

transfer the property and, as evidenced by the quitclaim deed, he did transfer the

property.” Neighbarger, 2006-Ohio-796, at ¶25.

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Case No. 2-10-12

       {¶22} Initially, we emphasize that, as Ronald is the party seeking to

establish that the farmland is his separate property, he bears the burden of

demonstrating its traceability by a preponderance of the evidence. See Earnest,

supra. Ronald testified that, in 2004, during the marriage, he inherited farmland

from his father’s estate, and that he conveyed the property to Cindra via quitclaim

deed because he was concerned about the risk that he would be sued. We find the

situation sub judice to be analogous to Neighbarger, supra.             Similar to

Neighbarger, we note that Ronald transferred his inherited farmland via quitclaim

deed immediately upon his inheritance, and that, had Ronald been sued, he

doubtlessly would have argued that the farmland was Cindra’s sole property, and

was not an asset subject to any ensuing financial liability. Although the farmland

at issue in Neighbarger was transferred to the wife prior to the marriage, and thus,

was the wife’s separate property upon divorce, we nevertheless find the reasoning

to be persuasive.    Here, the farmland was transferred to Cindra during the

marriage via quitclaim deed, but the trial court found the property to be marital

property. Regardless of Ronald’s testimony that he did not intend to relinquish

ownership or waive his rights to the property, the fact remains that Ronald deeded

the farmland to Cindra solely via quitclaim deed, and did not retain any reserved

rights or joint rights to the property. Thus, Ronald’s testimony about his motives

for the transfer was wholly inconsistent with his actions in making the transfer.

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Case No. 2-10-12

As Ronald’s testimony established that he relinquished all legal rights to the

farmland upon its transfer to Cindra, we cannot find that the trial court erred in

concluding that the farmland was not Ronald’s separate property.3

        {¶23} Accordingly, we overrule Ronald’s first assignment of error.

                            Assignments of Error Nos. II and III

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

erred and abused its discretion in failing to deduct the ordinary and reasonable

expenses from the gross receipts of his business income. Specifically, Ronald

contends that the trial court calculated his spousal support obligation to Cindra

based upon a potential income of $115,693.60, which he claims did not account

for any of his ordinary and reasonable business expenses demonstrated by his tax

returns, and that “one cannot dispute that a business does have expenses.” In his

third assignment of error, Ronald argues that the trial court erred and abused its

discretion in calculating Cindra’s spousal support obligation without any evidence

of her expenses. We disagree with both of Ronald’s arguments.

        {¶25} We review a trial court’s determination of spousal support under an

abuse of discretion standard. Siekfer v. Siekfer, 3d Dist. No. 12-06-04, 2006-Ohio-

5154, ¶15, citing Heitzman v. Heitzman, 3d Dist. No. 3-05-11, 2005-Ohio-4622,

¶3. An abuse of discretion “connotes more than an error of law or judgment; it

3
  We note that Cindra did not cross-appeal the issue of determination that the real estate was marital
property, or argue that the real estate was her separate property.

                                                -16-
Case No. 2-10-12

implies that the court’s attitude is unreasonable, arbitrary, or unconscionable.”

Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219. When applying the abuse

of discretion standard, a reviewing court may not simply substitute its judgment

for that of the trial court. Id.

       {¶26} 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. Schalk v. Schalk, 3d Dist. No. 13-07-13, 2008-Ohio-829, ¶28, citing Lee

v. Lee, 3d Dist. No. 17-01-05, 2001-Ohio-2245. The factors are as follows:

       (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;

       (c) The ages and the physical, mental, and emotional
       conditions of the parties;

       (d) The retirement benefits of the parties;

       (e) The duration of the marriage;

       (f) The extent to which it would be inappropriate for a party,
       because that party will be custodian of a minor child of the
       marriage, to seek employment outside the home;

       (g) The standard of living of the parties established during the
       marriage;

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Case No. 2-10-12

      (h) The relative extent of education of the parties;

      (i) The relative assets and liabilities of the parties, including
      but not limited to any court-ordered payments by the parties;

      (j) The contribution of each party to the education, training,
      or earning ability of the other party, including, but not limited
      to, any party’s contribution to the acquisition of a professional
      degree of the other party;

      (k) The time and expense necessary for the spouse who is
      seeking spousal support to acquire education, training, or job
      experience so that the spouse will be qualified to obtain
      appropriate employment, provided the education, training, or
      job experience, and employment is, in fact, sought;

      (l) The tax consequences, for each party, of an award of
      spousal support;

      (m) The lost income production capacity of either party that
      resulted from that party’s marital responsibilities;

      (n) Any other factor that the court expressly finds to be
      relevant and equitable.

R.C. 3105.18(C)(1)(a)-(n).

      {¶27} Although the trial court must consider all of these factors, it is not

required to specifically enumerate all of the factors. Hendricks v. Hendricks, 3d

Dist. No. 15-08-08, 2008-Ohio-6754, ¶31, citing Schalk, 2008-Ohio-829, at ¶28.

However, the trial court must “make specific findings in order ‘to enable a

reviewing court to determine the reasonableness of its order to grant or deny a

request for spousal support and that the relevant factors within R.C. 3105.18 were

                                      -18-
Case No. 2-10-12

considered.’” Malloy v. Malloy, 3d Dist. No. 8-08-15, 2009-Ohio-1918, ¶11,

citing Hendricks, 2008-Ohio-6754, at ¶31.

      {¶28} In determining the income of the parties, courts have particularly

scrutinized situations where a spouse is the sole shareholder of his corporation,

and, accordingly, has “unlimited control over the distribution of the corporation’s

profits and assets.” Burkart v. Burkart, 10th Dist. No. 06AP-1169, 2007-Ohio-

3992, ¶22, citing Bowen v. Thomas (1995), 102 Ohio App.3d 196, 201. Courts

have found a need to “‘pay particular attention to the possibility that a spouse who

is the sole shareholder of a business is engaged in “creative accounting” designed

to cloak net income.’” Burkart, 2007-Ohio-3992, at ¶22, quoting Offenberg v.

Offenberg, 8th Dist No. 78885, 2003-Ohio-269, ¶30, quoting Corrigan v.

Corrigan, 8th Dist. No. 74088, 1999 WL 304523.

      {¶29} Here, Ronald presented testimony that his financial consulting

business, Strasburg Consulting, was a sole proprietorship; that his entire income

earned from Strasburg Consulting was transferred to Legacy, a pass-through

operating entity Subchapter S corporation; that he had followed this procedure

since approximately 1996 for tax advantage purposes; that he was the sole

shareholder of Legacy; that he was the sole officer, director, and decision-maker of

Legacy; that his gross income in operating Strasburg Consulting in 2003, 2004,

2005, 2006, and 2007, was, respectively, $161,568, $112,478, $77,168, $88,868,

                                       -19-
Case No. 2-10-12

and $138,386; that his business expenses in operating Strasburg Consulting,

consisting of paid commissions and fees, in 2003, 2004, 2005, 2006, and 2007,

were, respectively, $161,568, $112,478, $77,168, $88,868, and $138,386; that he

paid his personal bills by taking money out of Legacy and listing the withdrawals

as loans from Legacy to the sole shareholder; that Legacy reimbursed him for

business-related expenses that he paid out-of-pocket; and, that Legacy’s business

expenses were “legitimate” expenses that included licenses and permits, dues and

subscriptions, and staff meeting expenses.

      {¶30} We cannot find, based on the evidence Ronald presented at the

hearing, that the trial court abused its discretion in imputing an income to him

calculated by averaging the gross income of Strasburg Consulting from 2003

through 2007.    Although Ronald testified that his entire gross income from

Strasburg Consulting was deducted as a “paid commissions and fees” expense

when it was passed to Legacy, as reflected on his tax forms, neither he nor his

accountant could testify as to what specific amount of business expenses either

Strasburg Consulting or the pass through entity, Legacy, had incurred. Further, we

do not disagree with Ronald’s argument that a business doubtlessly has expenses;

however, Ronald failed to present evidence to the trial court’s satisfaction

demonstrating the ordinary and reasonable expenses he incurred in operating his

business. As such, we cannot find that the trial court abused its discretion in

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Case No. 2-10-12

declining to consider an unidentified amount of expenses when it calculated

Ronald’s income.

      {¶31} Next, we turn to Ronald’s argument that the trial court erred in

ordering him to pay Cindra spousal support when she did not provide evidence of

her expenses.

      {¶32} Testimony was heard at the hearing that Cindra’s sole source of

income was unemployment of $122 per week; that she was paying $144.99 per

month for health insurance; that she was paying on several charge cards with a

balance of approximately $25,000; and, that she was paying for groceries and

gasoline. Additionally, testimony was heard that, at the time of the hearing,

Cindra was still living in the marital residence for which Ronald was paying the

expenses, but that she was required to vacate within forty-five days; and, that

Cindra did not know where she would be moving until she received her divorce

settlement. Based upon the foregoing, we cannot find that the trial court had

insufficient evidence of Cindra’s expenses, assets, and liabilities to award her

spousal support. The trial court had specific evidence about Cindra’s income,

health insurance costs, and credit card costs. Further, we cannot see how Cindra

could have presented more specific evidence of her living costs in light of the fact

that she was required to vacate the marital residence soon after the hearing, and

did not yet know where she would be moving.

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Case No. 2-10-12

         {¶33} Accordingly, we overrule Ronald’s second and third assignments of

error.

         {¶34} Having found no error prejudicial to the appellant herein, in the

particulars assigned and argued, we affirm the judgment of the trial court.

                                                                Judgment Affirmed

SHAW and PRESTON, J.J., concur.

/jlr

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