In re Kasper

Citation: 2014 Ohio 1256Docket: 13AP-428

Court: Ohio Court of Appeals; March 27, 2014; Ohio; State Appellate Court

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Eric C. Kasper appeals the Franklin County Court of Common Pleas' April 25, 2013 judgment, which denied his request for a constructive trust over life insurance proceeds from his deceased former wife, Soraya Kasper. Omar Hevia, the trustee for the testamentary trusts, cross-appeals the May 17, 2013 judgment that ordered him to pay attorney fees to Eric. The court affirms both judgments.

The marriage between Eric and Soraya was dissolved in 2007, and they had three children, for whom they created a shared parenting plan. This plan mandated both parties to maintain life insurance policies of at least $500,000, naming each other as beneficiaries and the children as alternate beneficiaries. The insurance proceeds were designated to support the children until the youngest reached the age of 25 or completed post-high school education or military service. The plan outlined a structured payout of the insurance proceeds in three installments upon certain milestones for each child.

Additionally, each party was required to provide yearly updates on their life insurance policies and beneficiary designations. Soraya's separation agreement specified that she would maintain a life insurance policy naming Eric as the beneficiary, consistent with the shared parenting plan's provisions.

In August 2012, Soraya passed away, leading the appellant to discover that Soraya had named her brother, Omar Hevia, as the beneficiary of a life insurance trust linked to their shared parenting plan. On October 17, 2012, the appellant filed three motions in the domestic court: to join appellee as a third-party defendant, to obtain a temporary restraining order against the use of the life insurance proceeds, and to impose a constructive trust on those proceeds. The appellant sought specific orders directing Omar Hevia to transfer the insurance proceeds to him and to cover his attorney fees.

In response, appellee argued that the probate court had exclusive jurisdiction over the proceeds, having admitted Soraya's will to probate on October 11, 2012, and appointed appellee as trustee of testamentary trusts for Soraya's children. The probate court mandated that the life insurance proceeds be deposited in custodial accounts managed by Huntington National Bank, with restrictions on fund release.

On November 29, 2012, the domestic court received the parties’ arguments, but instead of a brief, appellee filed motions on January 7, 2013, seeking to transfer the case to probate court and requesting a hearing and a guardian ad litem for the children. The appellant countered with a brief supporting his motions and sought attorney fees. Following a discovery motion from appellee, the domestic court delayed ruling on pending motions, eventually deciding on April 25, 2013, to deny the venue transfer based on its jurisdiction over the life insurance proceeds as child support. The court also granted the appellant's motion to join appellee as a third-party defendant.

The domestic court addressed appellant's request for a constructive trust, concluding that while the shared parenting plan had conflicting provisions, it indicated that life insurance proceeds were intended for the children's support. Nevertheless, the court deemed a constructive trust unnecessary, finding no unjust enrichment for the appellee as trustee and determining that equitable principles were not violated. The court stated that the intention to support the children remained intact regardless of the trustee's identity. Consequently, it ruled that the life insurance proceeds fell under probate court jurisdiction, limiting its own jurisdiction over the trustee's role.

On May 17, 2013, the court ruled on appellant's motions for attorney fees and sanctions, denying the sanctions but awarding attorney fees under R.C. 3105.73(B) for expenses related to appellee's motions. These fees were characterized as children's expenses, with the appellee permitted to seek probate court approval for payment from the children's trusts. 

Appellant's appeal includes a single assignment of error challenging the denial of the constructive trust motion. Conversely, the appellee’s cross-assignment asserts that the court incorrectly awarded legal fees from the children's funds and erred in awarding fees for unperformed services. Appellant also cross-appeals, arguing that the court failed to find the trustee's conduct frivolous, which warranted fees and sanctions. Additionally, Alexander Kasper, the oldest child, submitted an amicus curiae brief in support of the appellee.

Appellant contends that the court did not fulfill the intent of the shared parenting plan and that a constructive trust would have been equitable. A constructive trust, as defined, arises under circumstances where the holder of legal title should not retain beneficial interest due to fraud, duress, or other unconscionable conduct. The court referenced the case law to support the notion that equity may transform a legal titleholder into a trustee when retention of the beneficial interest is against good conscience.

Appellant filed a motion in domestic court to appoint appellee as trustee of a constructive trust over life insurance proceeds belonging to Soraya, aiming to direct the trustee to pay these proceeds from custodial accounts under probate court control. The domestic court denied the motion, citing a lack of jurisdiction, as the matter fell exclusively under the probate court's jurisdiction. According to R.C. 2101.24(A)(1)(e), the probate court has exclusive authority to appoint and manage testamentary trustees. The probate court had already designated appellee as trustee for the Kasper children's trusts and ordered that no funds could be released without its directive.

Appellant referenced a precedent, Kell v. Verderber, where a domestic court was found to have jurisdiction over contempt actions related to separation agreements. However, the court distinguished this case, explaining that appellant was not attempting to enforce a separation agreement directly against Soraya but rather sought to control the actions of a testamentary trustee. Thus, the domestic court properly denied appellant's motion for a constructive trust, affirming that only the probate court could regulate appellee’s actions in this context. The ruling does not preclude domestic courts from ever imposing a constructive trust, as illustrated in Blevins v. Estate of Blevins, where such jurisdiction was upheld under specific circumstances concerning property division and enforcement of prior orders.

A party to a shared parenting plan cannot circumvent the plan's terms or the domestic court's jurisdiction by establishing a testamentary trust. The current decision is limited to the specific facts presented. The appellant's error assignment is overruled. Regarding attorney fees, the appellee argues that the domestic court misused its discretion in awarding fees to the appellant under R.C. 3105.73(B), which allows for such awards in post-decree proceedings if deemed equitable. Factors for equity include the parties' income and conduct but exclude their assets. The trial court's decision on fee awards is typically upheld unless there is an abuse of discretion. The appellee claims the award was inequitable, noting the domestic court denied the appellant's motion for sanctions, indicating the appellee's actions were not frivolous and were motivated by a desire to protect the children's interests. The court did not provide specific reasoning for the fee award, leading the appellee to argue that explicit findings were necessary; however, he did not cite any legal authority for this requirement. The court's May 17, 2013 decision noted that a hearing on attorney fees occurred on April 25, 2013, where both parties presented arguments and evidence. The appellant's attorney submitted an affidavit detailing incurred fees, yet the appellee did not provide a transcript of the hearing for appellate review. Without necessary transcript portions, the appellate court must presume the trial court's validity. Although the parties submitted a joint statement summarizing the hearing, it did not adequately reconstruct the proceedings, failing to overcome the presumption of regularity in the trial court's actions.

In the absence of a transcript or an adequate App.R. 9(C) statement, the court affirms the domestic court's finding on the equitable nature of the fee award. Appellee contends that appellant's attorney incorrectly claimed to have performed work that could not have been done, specifically referencing a response to appellee's April 1, 2013 memorandum, which appellant did not actually file. However, the itemization in the April 25 affidavit indicates that appellant did not seek fees for a responsive memorandum. Additionally, appellee asserts that he lacked sufficient notice to analyze the April 25 affidavit and that the itemization was improper. Without a hearing transcript or a proper App.R. 9(C) statement, these complaints cannot be evaluated, leading to a presumption of regularity in the proceedings. Consequently, appellee's cross-assignment of error is overruled, rendering appellant's cross-assignment of error moot. The judgment of the Franklin County Court of Common Pleas, Division of Domestic Relations is affirmed.