Court Opinion

ID: 4265644
Source: CourtListenerOpinion
Date Created: 2018-04-19 19:48:14.310659+00
Date Added: 2024-06-11T07:49:16.087684
License: Public Domain

[Cite as Collins v. Collins, 2018-Ohio-1512.]

                 Court of Appeals of Ohio
                                    EIGHTH APPELLATE DISTRICT
                                       COUNTY OF CUYAHOGA

                                   JOURNAL ENTRY AND OPINION
                                           No. 105945

                                      JACQUELINE G. COLLINS

                                                         PLAINTIFF-APPELLEE

                                                   vs.

                                      LINCOLN W. COLLINS, SR.

                                                         DEFENDANT-APPELLANT

                                                JUDGMENT:
                                                 AFFIRMED

                                        Civil Appeal from the
                               Cuyahoga County Court of Common Pleas
                                    Domestic Relations Division
                                      Case No. DR-15-355643

        BEFORE: E.T. Gallagher, J., Kilbane, P.J., and Celebrezze, J.

        RELEASED AND JOURNALIZED: April 19, 2018
ATTORNEYS FOR APPELLANT

Stuart H. Lippe
Ann B. Maschari
55 Public Square, Suite 1550
Cleveland, Ohio 44113

ATTORNEY FOR APPELLEE

Sanjay K. Bhatt
Bhatt Law Office, Ltd.
2935 Kenny Road, Suite 225
Columbus, Ohio 43221
EILEEN T. GALLAGHER, J.:

         {¶1} Defendant-appellant, Lincoln Collins, appeals an order finding him in contempt of

court for failure to comply with a judgment entry of divorce. He raises four assignments of

error:

         1. The trial court (magistrate and judge) abused its discretion, acted contrary to
         the law and facts, and committed reversible error by not dismissing appellee’s
         motion to show cause, allowing appellee to invoke the contempt process, and
         finding appellant in contempt of court.

         2. The trial court abused its discretion and acted unreasonably, arbitrarily, and
         contrary to the law and facts in its determination that it was defendant-appellant
         who had the duty to perfect liens on the specified assets listed in Article 12 of the
         judgment entry of divorce.

         3. The trial court acted contrary to law and evidence, arbitrarily, unreasonably,
         and abused its discretion in holding appellant in contempt for non-payment of the
         said $80,000 to appellee and its determination that appellant provided no valid
         defense thereto.

         4. The trial court (magistrate and judge) abused its discretion and acted
         unreasonably, arbitrarily, and contrary to the law and evidence in ordering, for the
         alleged contempt, a 30-day jail sentence and purge orders consisting of $40,000 or
         $30,000, respectively, lump sums to be paid by appellant within 30 days of the
         magistrate’s and judge’s orders, and $1,000 per month starting within 30 days
         thereafter.

         {¶2} We find no merit to the appeal and affirm the trial court’s judgment.

                                 I. Facts and Procedural History

         {¶3} Plaintiff-appellee, Jacqueline Collins, filed a complaint for divorce in February

2015. Shortly thereafter, in June 2015, the parties reached a settlement agreement that was

incorporated into the court’s judgment entry of divorce. According to the judgment entry of

divorce, Lincoln operated a business referred to as Mad Hatter Automotive Service Center. The

Mad Hatter was owned by a trust, and Lincoln was the trustee of the trust. The parties also
owned a 2007 Hyundai Vera Cruz, a 2001 Honda Accord, a 1998 Lexus GS 300, a house, and

other unspecified property.

        {¶4} Article 12 of the judgment entry of divorce settled the distribution of marital

property and provided that “Husband shall pay the Wife Eighty Thousand dollars ($80,000)

within 60 days of June 4, 2015 or by August 4, 2015 as settlement.” Article 12 states that “[i]f

Husband fails to give Wife this settlement amount of $80,000[,] this amount shall be considered

a lien against the Mad Hatter and the Vera Cruz * * * and Honda vehicles.” The judgment entry

of divorce also prohibited Lincoln from selling the Mad Hatter “without court approval as long as

he owes Wife the $80,000 or any portions of it or owes the wife spousal support.”1 Finally,

Article 12 provided that the trial court “retain[ed] jurisdiction to modify and amend this

provision in conformity with the intent of the parties.”

        {¶5} Lincoln failed to pay Jacqueline the $80,000 by the August 4, 2015 deadline, and

Jacqueline filed a motion to show cause. Lincoln subsequently filed a Chapter 7 petition for

bankruptcy in the United States Bankruptcy Court for the Northern District of Ohio, which was

resolved a few months later.

        {¶6} Following resolution of the bankruptcy proceedings, a magistrate held a hearing on

Jacqueline’s motion to show cause. Based on the parties’ testimony, the magistrate found that,

after the discharge of Lincoln’s debts in bankruptcy, Lincoln continued to operate the muffler

shop that he has operated for the last 22 years. At the time of the hearing, Lincoln had three

employees and owned real property located at 3025 Superior Avenue in Cleveland, where the

Mad Hatter was located. Based on this evidence, the magistrate found Lincoln in contempt of

1
  The judgment entry of divorce required Lincoln to pay Jacqueline spousal support in the amount of $500 per
month for 24 months.
court for failure to pay Jacqueline the $80,000 required by the judgment entry of divorce and

sentenced him to 30 days in jail. Lincoln could purge the contempt by paying Jacqueline

$40,000 by March 1, 2017, and $1,000 per month for 40 months thereafter until the $80,000

marital property obligation is satisfied.

       {¶7} Lincoln filed timely objections to the magistrate’s decision.           He argued the

magistrate erred in ordering him to pay Jacqueline a specific sum of money because Article 12 of

the judgment entry of divorce provided that any amount of the $80,000 that remained unpaid by

the due date was considered a lien against the Mad Hatter and the Vera Cruz and Honda vehicles.

 Lincoln argued that the liens “provided a built-in remedy” for failure to pay the $80,000, and

that the magistrate lacked authority to sentence him to jail for contempt.

       {¶8} The trial court overruled the objections and found, in relevant part:

       A review of the transcript of proceedings establishes that Defendant has failed to
       pay his former spouse anything towards the $80,000 obligation. There was no
       mention made at hearing the he had complied with lien safeguards to protect
       Plaintiff’s interest. The Court is unclear whether Mr. Collins has any ownership
       in this business known as the Mad Hatter but the testimony at trial suggests that
       he is operating the business as though it were his. At a minimum, the Defendant
       should have perfected liens on the specified assets. The Court is left to wonder
       why no mention was made at [the] Hearing before [the magistrate] of liens. The
       Court is left wondering whether Mr. Collins had the legal authority to even make
       these liens effective.

       Obviously, when Defendant filed his Bankruptcy Petition under Chapter 7[,] he
       was experiencing severe financial problems. But the Court notes that the
       Bankruptcy Stay was not effective until April 7, 2016. Defendant was to have
       completed payment to Ms. Collins by August 15, 2015, which is more than eight
       (8) months beforehand. Defendant is in contempt for having failed to pay Ms.
       Collins anything towards the $80,000 that he owes her.

       {¶9} As previously stated, the trial court retained jurisdiction in the judgment entry of

divorce “to modify and amend” the settlement of marital property outlined in Article 12.
Accordingly, the trial court modified the magistrate’s decision and the judgment entry of divorce

as follows:

       The Defendant is ordered to prepare a Promissory Note, in the sum of $80,000,
       with simple interest at a rate of 4% per annum from the date of the journalization
       of this Entry. Defendant’s obligation under the note is to pay Plaintiff the sum of
       $20,000 on or before July 1, 2017. Defendant may make monthly payments of
       $1,000 on the balance of his obligation commencing August 1, 2017. Defendant
       shall secure the note by giving Plaintiff a mortgage lien within thirty (30) days
       from the date of this Order. The Mortgage shall adhere to Defendant’s interest in
       the real property located at 3025 Superior Avenue Cleveland, Ohio 44114.
       Terms of the note shall be $80,000, payable in accordance with the terms set forth
       in this Order, until paid in full.

       {¶10} Lincoln now appeals the trial court’s contempt order.

                                     II. Law and Analysis

                                     A. Standard of Review

       {¶11} Civ.R. 53(D)(4)(d) directs that a trial court “shall undertake an independent review

as to the objected matters to ascertain that the magistrate has properly determined the factual

issues and appropriately applied the law.” On appeal, the reviewing court will not disturb the trial

court’s rulings on objections to a magistrate’s decision absent an abuse of discretion. Hissa v.

Hissa, 8th Dist. Cuyahoga Nos. 99498 and 100229, 2014-Ohio-1508, ¶ 17.                An abuse of

discretion implies a decision that is unreasonable, arbitrary, or unconscionable. State ex rel.

DiFranco v. S. Euclid, 144 Ohio St. 3d 571, 2015-Ohio-4915, 45 N.E.3d 987, ¶ 13.

                              B. Invocation of Contempt Process

       {¶12} In the first assignment of error, Lincoln argues the trial court erred in proceeding

on Jacqueline’s motion to show cause because the judgment entry of divorce automatically

provided liens against the Mad Hatter and the Vera Cruz and Honda vehicles upon Lincoln’s
failure to pay the $80,000. He contends the liens provided “a built-in remedy,” and that the

judgment entry of divorce does not authorize contempt proceedings.

       {¶13} However, it was unclear whether Lincoln owned the Mad Hatter because the

judgment entry of divorce states that a trust owned the Mad Hatter. Indeed, the Mad Hatter was

named as a defendant in the divorce proceedings. Moreover, the judgment entry of divorce does

not describe how the liens would be perfected on the marital assets. Therefore, the liens

provision was not a “built-in remedy” since the liens did not automatically attach to the marital

assets upon Lincoln’s failure to comply with the judgment entry of divorce.

       {¶14} The purpose of contempt is to secure compliance with the court’s lawful orders.

Robinson v. Robinson, 168 Ohio App. 3d 476, 2006-Ohio-4282, 860 N.E.2d 1027 ¶ 27 (2d Dist.),

citing Windham Bank v. Tomaszczyk, 27 Ohio St. 2d 55, 271 N.E.2d 815 (1971). Lincoln

admitted at the contempt hearing that he had not paid Jacqueline any part of the $80,000 required

by the judgment entry of divorce and that no liens had been perfected on the marital assets.

Therefore, Lincoln failed to comply with Article 12 of the judgment entry of divorce, and the

trial court was authorized to use its contempt power to enforce compliance with its prior order.

       {¶15} Lincoln nevertheless argues that the trial court could not sentence him to a jail term

for failure to pay the $80,000 marital property obligation. He cites Sizemore v. Sizemore, 12th

Dist. Warren No. CA2009-04-045, 2010-Ohio-1525, to support his argument.

       {¶16} In Sizemore, the Twelfth District held it was unconstitutional to hold a party in

contempt for failing to pay a child support arrearage that had been reduced to a lump sum

arrearage. The Sizemore court concluded that using contempt to imprison a party for failing to

pay a lump sum judgment would violate Article I, Section 15 of the Ohio Constitution, which
provides: “No person shall be imprisoned for debt in any civil action, on mesne or final process,

unless in cases of fraud.” Sizemore at ¶ 18.

          {¶17} However, we are not bound by the Twelfth District, and the Ohio Supreme Court

has held that “punishment for violation of divorce decree provisions does not impinge upon the

constitutional prohibition against imprisonment for debts.” Pugh v. Pugh, 15 Ohio St. 3d 136,

142, 472 N.E.2d 1085 (1984), citing Harris v. Harris, 58 Ohio St. 2d 303, 390 N.E.2d 789

(1979).     The court in Pugh specifically held that both alimony and property settlement

provisions of a divorce decree “‘are orders of the court, and represent more than a debt of one

spouse to the other.’” Id. at 142, quoting Harris at 311. Therefore, an order holding a spouse

in contempt of court and sentencing him to jail for failure to pay a property settlement provision

does not violate constitutional provisions against imprisonment for debts. Id.

          {¶18} Neither the lien provision in the judgment entry of divorce nor the constitutional

prohibition against imprisonment for debts prohibited the trial court from holding Lincoln in

contempt of court for his failure to pay his $80,000 marital property obligation.

          {¶19} Therefore, the first assignment of error is overruled.

                                      C. Duty to Perfect Liens

          {¶20} In the second assignment of error, Lincoln argues the trial court erred in finding he

was obligated to perfect liens on the marital assets specified in Article 12 of the judgment entry

of divorce.

          {¶21} In his objections to the magistrate’s decision, Lincoln argued that the liens

provided Jacqueline’s sole remedy and that she should have perfected the liens on the marital

assets. In overruling Lincoln’s objections, the trial court observed that Lincoln might have

avoided a contempt finding if he had perfected liens on the marital assets. However, the trial
court did not find Lincoln in contempt for failing to perfect the liens; it found him in contempt

for failing to pay Jacqueline the $80,000 required under the divorce decree for her share of the

parties’ marital property.

          {¶22} Moreover, the trial court concluded that perfection of liens on the assets specified

in the divorce decree might not have been feasible. The trial court found that it was “unclear

whether [Lincoln] has any ownership in this business known as the Mad Hatter but the testimony

at Trial suggests that he is operating the business as though it was his.” It was also unclear

“whether [Lincoln] had the legal authority to even make these liens effective.”              Because

ownership of the assets was uncertain, the trial court exercised its jurisdiction to modify and

amend the judgment entry of divorce by fashioning a more specific remedy that no longer

required anyone to perfect liens on the marital assets.

          {¶23} Therefore, the second assignment of error is overruled.

                                         D. Inability to Pay

          {¶24} In the third assignment of error, Lincoln argues the trial court abused its discretion

in disregarding evidence submitted in support of his defense that he was unable to pay the

$80,000 marital property obligation.

          {¶25} In Pugh, the court distinguished between the failure to make a court-ordered

payment versus an inability to make the court-ordered payment. Pugh, 15 Ohio St. 3d at 140,

472 N.E.2d 1085. The inability to make a court ordered payment is a defense to a contempt

charge.     Liming v. Damos, 133 Ohio St. 3d 509, 2012-Ohio-4783, 979 N.E.2d 297, ¶ 20.

However, the Pugh court explained that the divorce decree “‘imports a finding of the court that

he is able to pay,’” and the burden of proving an inability to pay is on the party subject to the
contempt order. Pugh at 140, quoting State ex. rel. Cook v. Cook, 66 Ohio St. 566, 64 N.E. 567

(1902).

          {¶26} “[P]roof of purposeful, willing or intentional violation of a court order is not a

prerequisite to a finding of contempt.” Pugh at 140. The trial court’s order fixing the amount

to be paid and a party’s failure to comply with that order constitutes prima facie evidence of

contempt. Liming at ¶ 20. In other words, there is a presumption in favor of an ability to pay a

court-ordered obligation, and the party charged with contempt bears the burden of rebutting that

presumption. Id.

          {¶27} Although the record shows that Lincoln filed a petition for bankruptcy, there is no

evidence in the record establishing his inability to pay the $80,000 marital property obligation.

Lincoln testified that the Mad Hatter is busy enough to employ three workers, including himself.

(Tr. 17.) Although title to the business is in the name of a trust, Lincoln admitted that the

business generates an income. (Tr. 16.) Lincoln also admitted that he owns the real property

where the business is located. (Tr. 17.)

          {¶28} Lincoln nevertheless argues that business has been slow and that he does not earn

sufficient income from the business to make the court ordered payments. He also asserts that he

has other expenses that consume the profits generated from the business. However, in Liming,

the Ohio Supreme Court held that bare assertions claiming an inability to make payments are

insufficient to meet satisfy the contemnor’s burden of proving an inability to pay. Id. at ¶ 21.

Despite the bankruptcy proceedings and Lincoln’s self-serving testimony that he is unable to pay

the $80,000 obligation, there was evidence that Lincoln has assets with which he could make

court-ordered payments.
       {¶29} Moreover, Lincoln offered no documentary evidence other than the bankruptcy

trustee’s final report that Lincoln had “no property available for distribution from the estate over

and above that exempted by law.” Lincoln did not produce any documents establishing his

current income and expenses such as bank statements, bills, or tax returns, nor did he offer any

documentary evidence regarding his assets and liabilities following the discharge of his debts in

bankruptcy. He admitted that the Mad Hatter generates income and that he owns real property,

but he failed to provide any documentary evidence establishing an inability to pay the $80,000

marital property obligation. Therefore, the trial court acted within its discretion when it

concluded that Lincoln failed to meet his burden of proving an inability to pay his marital

property $80,000 obligation.

       {¶30} The third assignment of error is overruled.

                                       E. Civil Contempt

       {¶31} In the fourth assignment of error, Lincoln argues the trial court abused its

discretion by imposing a 30-day jail sentence and a purge order requiring him to pay a $20,000

lump sum followed by periodic payments of $1,000 per month. Again, Lincoln asserts that a jail

term violates Article I, Section 15 of the Ohio Constitution, which states, in relevant part that

“[n]o person shall be imprisoned for debt in any civil action * * * .”

       {¶32} However, as previously explained, punishment for violation of a divorce decree

does not violate the constitutional prohibition against imprisonment for debts. Pugh, 15 Ohio

St.3d at 140, 472 N.E.3d 1085. And Lincoln failed to meet his burden of establishing that he

lacks the ability to pay a lump sum of $20,000 followed by monthly payments in the amount of

$1,000. If a $20,000 lump sum payment is beyond Lincoln’s means, he should have provided

documentary evidence to establish that fact. But in the absence of evidence establishing an
inability to make the court ordered payments, we cannot say that the trial court abused its

discretion by holding Lincoln in contempt and requiring him to make a lump sum payment of

$20,000 followed by monthly payments of $1,000 month until the entire $80,000 is paid in full to

purge the contempt order.

       {¶33} The fourth assignment of error is overruled.

       {¶34} Judgment affirmed.

       It is ordered that appellee recover from appellant costs herein taxed.

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to the Cuyahoga County Court of Common

Pleas, Domestic Relations Division, to carry this judgment into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the

Rules of Appellate Procedure.

EILEEN T. GALLAGHER, JUDGE

MARY EILEEN KILBANE, P.J., and
FRANK D. CELEBREZZE, JR., J., CONCUR