[Cite as Smith v. Smith,
2016-Ohio-3223.]
STATE OF OHIO, CARROLL COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
SHERIE KAY SMITH )
)
PLAINTIFF-APPELLEE )
) CASE NO. 14 CA 0901
VS. )
) OPINION
RICKY KEATH SMITH )
)
DEFENDANT-APPELLANT )
CHARACTER OF PROCEEDINGS: Appeal from the Court of Common
Pleas, Domestic Relations Division of
Carroll County, Ohio
Case No. 13 DR B 27522
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellee Attorney Jennifer Thomas
26 Second Street SE
PO Box 235
Carrollton, Ohio 44615
For Defendant-Appellant Attorney Michael Boske
122 Central Plaza North
Canton, Ohio 44702
JUDGES:
Hon. Mary DeGenaro
Hon. Gene Donofrio
Hon. Cheryl L. Waite
Dated: May 31, 2016
[Cite as Smith v. Smith, 2016-Ohio-3223.]
DeGENARO, J.
{¶1} Defendant-Appellant, Ricky Keath Smith appeals the judgment of the
Carroll County Court of Common Pleas granting a divorce between he and Plaintiff-Appellee, Sherie Kay Smith. Ricky asserts that the trial court erred by finding that the
appreciation in value of real estate parcels purchased and improved during the
marriage with premarital, separate funds, constituted marital property. Second, he
asserts the trial court erred by failing to properly divide a signing bonus of an oil and
gas lease. For the following reasons, Ricky's arguments are meritless, and the
judgment of the trial court is affirmed.
Facts and Procedural History
{¶2} Sherie and Ricky Smith were married on July 30, 2010. On May 7,
2013, Sherie filed a Complaint for Divorce. Ricky filed his Answer and Counterclaim.
At trial, the parties stipulated to incompatibility as the grounds for a divorce and that
there were no children from this marriage. The main dispute was whether the
appreciation in value of three parcels purchased during the marriage with Ricky's
premarital funds was marital, or Ricky's separate property.
{¶3} Ricky made a living by buying and then reselling real estate. Prior to
the marriage, Ricky had obtained a line of credit secured by a premarital parcel he
owned on Pacific Road in Carrollton. During the marriage, Ricky financed the
purchase of three parcels using the premarital line of credit, one on Fifth Street in
Carrollton, one in Minerva, and one in Jewett.
{¶4} Ricky and Sherie agreed to the purchase and appraisal prices of all
three parcels. The Fifth Street property was purchased for $46,000 and appraised at
$107,720. The King Street property was purchased for $35,000 and appraised at
$57,890 post-renovation. The Cross Street property was purchased for $10,000 and
appraised at $14,520. Both Ricky and Sherie testified that they improved the value
of all three parcels during the course of the marriage by providing either labor or
funding.
{¶5} Ricky and Sherie also signed an oil and gas lease for the property
located on Pacific Road in Carrollton, for which Ricky received a $56,000.00 bonus.
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{¶6} In the divorce decree, the trial court ordered Sherie to quitclaim her
interest in all three parcels, and ordered Ricky to pay Sherie as follows for each
property: $30,917 for the Fifth Street property in Carrollton; $11,319.00 for the King
Street property in Minerva; and $2,260.00 for the Cross Street property in Jewett.
{¶7} Regarding the oil and gas leases, the trial court ruled:
The Court further finds that the Defendant received during the
marriage an advanced royalty or bonus money in the sum of
$56,000.00. The Court finds the $56,000.00 to be ordinary income.
The Court finds that the money was deposited into the line of credit and
used to pay marital expenses.
The Court further finds any royalty money to be received in the
future from Defendant's separate real estate to be his separate
property.
Improper Cross-Appeal
{¶8} While the substance of Ricky's second assignment of error will be
addressed below, Sherie's response amounts to an improper cross-appeal. As
Sherie did not file a notice of cross-appeal, we will not address Sherie's argument.
{¶9} App.R. 3(C)(1) provides as follows:
A person who intends to defend a judgment or order against an appeal
taken by an appellant and who also seeks to change the judgment or
order or, in the event the judgment or order may be reversed or
modified, an interlocutory ruling merged into the judgment or order,
shall file a notice of cross appeal within the time allowed by App. R. 4.
{¶10} Sherie attempts to raise an argument that would change or modify the
judgment of the trial court regarding the oil and gas leases. She asserts the trial
court incorrectly applied the law, and argues what should have been awarded under
each lease. An appellee may assert arguments as a shield to defend a judgment
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and prevent reversal without filing a cross-appeal. However, an appellee may not
assert arguments as a sword to destroy or modify a judgment; to do so necessitates
the filing of a cross-appeal. Harper v. Dog Town, Inc., 7th Dist. No. 08 NO 348, 2008-
Ohio-6921, ¶ 51, citing Duracote Corp. v. Goodyear Tire & Rubber Co., 2 Ohio St.3d
160,
443 N.E.2d 184 (1983).
{¶11} Sherie's arguments challenge the trial court's order and seek a reversal.
As such, she was required to file a notice of cross-appeal to properly vest this court
with jurisdiction to consider her arguments. Because she failed to do so we are
precluded from addressing the merits of her arguments, insofar as they seek to
modify the trial court's order regarding the oil and gas leases. We will consider any
arguments she raises in support of affirming the trial court's order.
Marital Property and Traceability
{¶12} In his first of two assignments of error Ricky states:
The trial court's finding that the appreciation in value of the Appellant's
pre-marital real property was marital property was an abuse of
discretion.
{¶13} Trial courts must divide marital property equitably. R.C. 3105.171(B).
However, a trial court possesses broad discretion in determining what is equitable.
Bisker v. Bisker, 69 Ohio St.3d 608, 609,
635 N.E.2d 308 (1994). Thus, a reviewing
court applies an abuse of discretion standard of review. Booth v. Booth,
44 Ohio
St.3d 142, 144,
541 N.E.2d 1028 (1989). An abuse of discretion means the trial
court's decision is unreasonable based upon the record; that the appellate court may
have reached a different result is not enough to warrant reversal. Downie v.
Montgomery, 7th Dist. No.
12 CO 43, 2013–Ohio–5552, ¶ 50.
{¶14} There are statutorily enumerated factors a trial court must address in its
judgment when dividing marital property, so that the "division of property [is] in
sufficient detail so as to permit a meaningful review on appeal." Heslep v. Heslep,
7th Dist. No. 825, 2000 WL 818909, *2 (June 14, 2000), citing Kaechele v. Kaechele,
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35 Ohio St.3d 93,
518 N.E.2d 1197 (1988); R.C. 3105.171(G).
{¶15} Real property is considered to be marital property if it is: 1) currently
owned by one or both spouses and was acquired during the marriage, 2) either or
both spouses has a current interest in the property, and the interest was acquired
during the marriage, or 3) the value of appreciation in real property is "due to the
labor, monetary, or in-kind contribution of either or both of the spouses that occurred
during the marriage." R.C. 3105.171(A)(3)(a). Marital property does not include
"separate property." R.C. 3105.171(A)(3)(b).
{¶16} Separate property is defined as any real or personal property or interest
in property found by a trial court to be within any of the seven categories listed under
the statute. R.C. 3105.171(A)(6)(a)(i-vii). "In its simplest terms, separate property
includes all real and personal property that was acquired by one spouse prior to the
marriage." Frederick v. Frederick, 11th Dist. No. 98-P-0071, 2000 WL 522170, *6
(Mar. 31, 2000). "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." Mills v. Mills, 7th Dist. No. 98-CO-75,
1999 WL
1138584, *2 (Dec. 7, 1999).
{¶17} "The 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). This analysis
starts with the source of the funds at issue; commingled separate property does not
become marital property "if the relevant financial and legal history of the property is
traceable and shows the separate nature of the property was maintained during the
marriage." Akers v. Akers, 7th Dist. No. 14 NO 419, 2015-Ohio-3326, ¶ 13.
{¶18} Ricky asserts that the application of the doctrine of traceability prevents
a finding that any of the parcels' appreciation is marital. Particularly, he argues that
because the funds used to improve the parcels were drawn on a premarital line of
credit, secured by a premarital parcel, and most of the improvements were the result
of his labor, the appreciation is his separate property.
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{¶19} The three parcels at issue were purchased during the marriage with
funds from Ricky's premarital line of credit. The trial court's award to Sherie relative
to the three parcels represents approximately one-half of the appreciation in value
during the course of the marriage, calculated as the difference between the purchase
price and appraised value.
{¶20} R.C. 3105.171(A)(3)(a)(iii) explicitly states that improvements made
during the course of the marriage are marital property. Ricky's argument that the
doctrine of traceability destroys the marital property status of appreciation due to the
labor of one or both spouses is contrary to our holding in Akers.
{¶21} In Akers, we held that one half of the purchase price from the wife's
separate, premarital property used to purchase the marital residence during the
marriage remained her separate property. We explained that the doctrine of
traceability supported the trial court's finding that funds used from the wife's
premarital settlement of an automobile accident, kept in a separate account during
the marriage, were separate and identifiable. Id. at ¶ 22. Particularly pertinent to this
appeal we noted that there was "no evidence in this record that the increase in value
of the property was due to any marital efforts." Id. at ¶ 21. Therefore, the question of
whether the funds were separate or marital property in Akers was resolved by the
concept of passive income, which is defined and categorized as separate property.
R.C. 3105.171(A)(4) – (A)(6).
{¶22} Unlike Akers, this case does not involve passive income or
appreciation. Here, the increase in value of the three parcels was found by the trial
court to have been due to labor of one or both spouses during the marriage.
{¶23} We cannot ignore the explicit statutory mandate when applying the
doctrine of traceability. R.C. 3105.171(A)(3)(a)(iii) states that marital property
includes "all income and appreciation on separate property, due to the labor,
monetary, or in-kind contribution of either or both of the spouses that occurred during
the marriage." While the doctrine of traceability may help ascertain that the funds
used to purchase and improve the parcels came solely from Ricky, that fact is not in
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dispute.
{¶24} When one or both spouses' efforts contribute to the appreciation of
separate premarital property, "the requirements of R.C. 3105.171(A)(3)(a)(iii) are
met, as the statute requires the contribution of only one spouse." Middendorf v.
Middendorf, 82 Ohio St.3d 397, 403,
1998-Ohio-403,
696 N.E.2d 575 (1998). Here,
there is sufficient evidence in the record to show that both Ricky and Sherie
contributed labor and/or funds to the improvement of the three parcels purchased
with Ricky's pre-marital funds. Thus, the appreciation on the three parcels became
marital property under R.C. 3105.171(A)(3)(a)(iii). Therefore, the trial court did not
abuse its discretion in awarding equitable amounts of this appreciation to Sherie.
{¶25} Finally, there is sufficient detail in the decree to comply with R.C.
3105.17(G). The trial court found that the marriage was of short duration, that the
parties were married on July 30, 2010, and that the parties agreed as to both the
purchase price and appraisal value of all three parcels at issue in the action. There
is no procedural flaw or deficiency as to this requirement. As such, Ricky's first
assignment of error is meritless.
Oil and Gas Lease Error
{¶26} In his second and final assignment of error, Ricky asserts:
The trial court abused its discretion by awarding the Appellee
one half interest in the signing bonus Appellant received for an oil and
gas lease on a [sic] his pre-marital real property.
{¶27} The one-half interest in the signing bonus at issue here, relates to the
$56,000 payout from the lease executed in relation to premarital real property,
located on Pacific Road in Carrollton. However, the trial court found that the bonus
had already been received, and "deposited into the line of credit and used to pay
marital expenses." Thus, the trial court did not divide the signing bonus.
{¶28} Ricky further argues that any future royalty payments from this parcel
are his separate property and the trial court abused its discretion by ruling otherwise.
-7-
However, the trial court explicitly held that such funds were Ricky's separate
property. Thus, the trial court found in Ricky's favor on this issue.
{¶29} As such, Ricky does not direct us to any cognizable or alleged error
relating to the division of marital property under any oil and gas lease agreement.
Assignments of error should designate specific rulings which the appellant wishes to
challenge on appeal. Taylor v. Franklin Blvd. Nursing Home, Inc., 112 Ohio App.3d
27, 32,
677 N.E.2d 1212 (8th Dist.1996). Thus, there are no errors that can be
addressed with regard to the oil and gas leases, especially since we have held that
Sherie cannot challenge the trial court's holding on this issue due to her failure to file
a cross-appeal.
{¶30} Thus, for the foregoing reasons, Ricky's assignments of error are
meritless; Sherie's arguments are barred from merit determination; and the judgment
of the trial court is affirmed.
Donofrio, P. J., concurs.
Waite, J., concurs.
