COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 61125 JULIE S. KRUEGER : : Plaintiff-appellee : : JOURNAL ENTRY -vs- : AND : OPINION JAMES P. KRUEGER : : Defendant-appellant : : DATE OF ANNOUNCEMENT : OF DECISION : NOVEMBER 12, 1992 CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. D-187850 JUDGMENT : AFFIRMED IN PART, : REVERSED IN PART, : AND REMANDED. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellee: For defendant-appellant: HERBERT PALKOVITZ, ESQ. SUSAN BIRMINGHAM BROOKS, ESQ. 1600 Standard Building BROOKS & BEEBE 1370 Ontario Street 14819 Detroit Avenue Cleveland, Ohio 44113 Lakewood, Ohio 44107 - 2 - J.F. CORRIGAN, J., Defendant James Krueger appeals from the alimony and child support obligations entered in connection with the parties' divorce decree. For the reasons set forth below, we affirm in part, reverse in part and remand. I. The parties were married on September 29, 1984 and had two children, Emily (d.o.b. October 3, 1986) and Andrew (d.o.b. December 18, 1987). In August 1986, the parties purchased their marital home for $82,000. It is encumbered by a first mortgage for $41,000 and a loan from plaintiff's parents for $32,000. The parties subsequently purchased Blue Sky Subs, Inc. which owns and operates a Subway Sandwich Store in Westlake, Ohio. This purchase was financed by a second mortgage on the marital property for $38,000, a loan from plaintiff's parents for $7,500, and $3,100 of the parties' own funds. Each party owned a 50% interest in the corporation. In July 1988, plaintiff filed a complaint for divorce, and the matter proceeded to trial on January 2, 1990. For her case, plaintiff testified in her own behalf and also presented the testimony of defendant upon cross-examination, and accountant Thomas Fiola. Defendant testified that following high school, he worked as a union asbestos worker. He then left this employment to start his own home improvement business. Defendant worked on and off - 3 - with this company for a year and a half, then worked briefly as a roofing appraiser, construction worker, and carpenter. Thereafter, plaintiff looked into obtaining a Subway Sandwich franchise. Several months after the parties purchased the franchise for the Westlake store, the parties separated. Defendant then unilaterally removed plaintiff's name from the corporate checking account and refused to allow her to enter the store. Later, approximately one and one-half years after plaintiff filed for divorce, defendant purchased, in his sole name, a franchise for a second Subway Sandwich Store at West 65th Street in Cleveland. Defendant further stated that the Westlake store had recently been appraised at $90,000, that he agreed with this figure, and that he expected the second store to do as well as the first. He further claimed that he earns only $280 per week from the Westlake store and has no other earnings from any other source. He admitted, however, that he has recently moved into a more expensive apartment than he had been living in, and now has a car phone and beeper. Fiola, the accountant for both of the stores, testified that although defendant claims a "salary" of only $280 per week from the Westlake store, the store also pays defendant's rent and temporary child support obligations which total an additional $1,000 per month. In addition, defendant took $3,500 from the corporation to repay a personal loan, and over the course of the - 4 - parties' seventeen month separation, took an additional $44,000 to apply toward the "owner's loans" which financed the purchase of the corporation. Of this sum, however, defendant actually repaid only $15,850 on the loan obligations, thereby giving defendant an additional $28,000 for this time period. Fiola opined, however, that $5,000 of this sum was expended prior to the parties' separation, and defendant therefore enjoyed only $23,000 from the "owner's loan" account. Plaintiff testified that the parties began operation of the Westlake store in February 1988. Thereafter, in June of 1988, defendant barred her from the store and refused to share its profits with her. In August 1988, plaintiff wrote a check for $7,000 on the corporate account at National City Bank. Because defendant had removed her name from this account, the bank subsequently sued her and obtained a judgment against her in this amount. Plaintiff further testified that she is a 50% share holder in the corporation which operates the Westlake store and that she did not consent to the removal of her name from the account, or the numerous disbursements to defendant. Plaintiff next established that she currently works as a sales representative for USA Mobil and has earned $19,000 from May 1989 to December 1989. Since the parties' separation, she has paid approximately $1,700 of the marital debt. The mortgage payments on the marital home are not current however, and she has - 5 - borrowed $22,000 from her parents for living expenses incurred since the separation. Plaintiff admitted on cross-examination that in October 1985, she borrowed money from her parents and purchased a monogram machine in order to start her own monogramming business. This company has never generated a significant profit, however, and although the machine is currently worth $5,000, she still owes her parents $8,200 for this purchase. Finally, plaintiff introduced as joint exhibit one an appraisal of the West 65th Street store which was prepared by an expert retained by defendant. Within this report, the expert indicates that although he cannot be certain due to the short amount of time which the store has been in operation, the store has a potential value of approximately 115% of that of the Westlake store, i.e. $103,500. For his case, defendant presented the testimony of Frederick Fitzhugh and Thomas Fiola. Fitzhugh, the Developmental Agent for Subway, testified that he helps franchisees find appropriate locations for their stores and helps them to keep their stores running. He claimed, however, that he would only expend $45,000 to purchase the West 65th Street store, but he hoped that the store would be profitable. Fiola testified that defendant borrowed $6,700 from the Westlake store to make the new store operational. He also stated - 6 - that based upon the records he was given, the new store was losing money. Plaintiff then called defendant upon rebuttal and defendant admitted that he never obtained plaintiff's permission to borrow money from the Westlake store, and that he is spending less than one-half of the time to develop the West 65th Street store than he spent in developing the Westlake store. Following the presentation of all of the evidence, the trial court issued a divorce decree which, inter alia, awarded the marital home and the Westlake store to plaintiff, awarded the West 65th Street store to defendant, ordered defendant to pay child support in the amount of $450 per month, per child retroactive to September 1988, and further ordered defendant to pay $13,578 as alimony for the payment of plaintiff's attorney fees. Herein, defendant challenges these orders. II. For his first assignment of error, defendant asserts that the trial court erred in awarding plaintiff attorney fees as alimony because he claims this award is not justified as a support or property division award. An award of alimony may be made in the form of an allowance for reasonable attorney fees. Swanson v. Swanson (1976), 48 Ohio App.2d 85, 89. In making an award of attorney fees as alimony, consideration must be given to the reasonableness of the fees awarded and to the criteria used in granting of an alimony award - 7 - (R.C. 3105.18). Id. at 90. Upon appeal, the only questions for inquiry are whether the factual conclusions upon which the trial court based the exercise of its discretion were against the manifest weight of the evidence or whether there was an abuse of discretion. Id.; See, also Birath v. Birath (1988), 53 Ohio App.3d 31, 39. In this case, the necessity and reasonableness of the fees is not disputed. Rather, defendant contends that the award cannot be sustained because, with reference to the factors set forth n R.C. 3105.18, the assets awarded plaintiff have a value of $124,000 whereas the assets awarded defendant are worth "nothing." This contention is not supported by the record. For although plaintiff did receive the marital home and the Westlake store which have a combined net value of $124,000, the assets which defendant received far exceed this sum. First, defendant admitted on cross-examination that the Westlake store had been appraised at $90,000 and that he expected the West 65th Street store to do as well as the Westlake store. Second, although defendant now claims that the West 65th Street store is worth "nothing," defendant's expert opined that the store had a potential value of 115% of the value of the Westlake store, i.e. $103,500. Defendant then sought to impeach this evidence on the basis that Fitzhugh was willing to expend only $45,000 to purchase the store and that Fiola asserted that the store was losing approximately $1,200 per month. As no - 8 - contrary expert testimony was presented, and the evidence suggested the possibility of collusion between Fitzhugh and defendant, and also plainly indicated that defendant readily depleted the marital funds generated at the Westlake store, the trial court was free to reject defendant's claims and accept the expert's evaluation. Third, despite the undisputed evidence that defendant depleted thousands of dollars of marital and/or corporate property, the trial court did not order any repayment to plaintiff, or any set-off against defendant's award. Thus, the value of the assets distributed to the parties is as follows: Plaintiff Defendant Marital home: $34,000 West 65th Street $103,500 (Equity remaining Store after 1st, 2nd mortgage) Depleted marital/corporate assets: Westlake Store $90,000 Monthly expenses $17,000 subtotal $124,000 paid by corporation Attorney fees $13,578 Unaccounted for $23,000 as alimony "owner's loans" TOTAL $137,578 Repayment of $3,500 "owner's loans" TOTAL $147,000 - 9 - Accordingly, defendant's first assignment of error lacks merit. III. Defendant next claims that the trial court erred in determining the amount of child support to be paid by defendant because: it relied upon defendant's employment as an asbestos worker after defendant had abandoned this employment; its calculations even using this employment, were erroneous; and defendant's main income source, i.e., the Westlake store, was taken away. In this case, the trial court indicated that defendant had been an asbestos worker and that he had ability to earn $35,000 per year. Although defendant's past experience as a asbestos worker is relevant and his earning potential may properly be considered, see R.C. 3113.215(A)(5), the court's projected earnings of $35,000 are insufficient support to support the child support award of $450 per month per child, in light of the child support schedule set forth in R.C. 3113.218. In addition, there is no indication from the court that it is inappropriate and against the best interests of the children to adhere to the award figures set forth in the schedule. R.C. 3113.218. While plaintiff correctly notes that the trial court may consider as income reimbursements and in-kind payments received by defendant from the Westlake store, see Pruden-Wilgus v. Wilgus (1988), 46 Ohio App. 13, 15, and could also consider whether - 10 - defendant was voluntarily underemployed, cf. Boltz v. Boltz (1986), 31 Ohio App.3d 214, 216, it is impossible to sustain the child support award on the basis of these principles, because no figures relevant to these principals are cited in the trial court's journal entry. Accordingly, the child support award must be reversed and remanded for redetermination in light of defendant's recent income from the Westlake store, potential income from the West 65th Street store, and R.C. 3113.215. IV. Finally, defendant contends that the trial court erred in entering a final child support award which greatly exceeded the temporary child support award. As an initial matter, child support awards may be made retroactive due to the substantial amount of time it takes to determine such obligations. Cf. Murphy v. Murphy (1984), 13 Ohio App.3d 388. Further, temporary orders are by their very nature subject to modification upon the entry of the final decree. See Civ. R. 75(M); cf. Spence v. Spence (1981), 2 Ohio App.3d 280, 281. Accordingly, the validity of a final order of child support is not to be measured against the court's temporary order. Defendant's third assignment of error is therefore without merit. However, as was set forth with respect to defendant's second assignment of error, the figures from which the court derived its - 11 - final support order are unclear, and we must therefore reverse and remand the award in this instance. It is ordered that appellant and appellee equally share the costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the 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. NAHRA, P.J., CONCURS. JAMES D. SWEENEY, J., CONCURS IN PART AND DISSENTS IN PART. (SEE ATTACHED CONCURRING AND DISSENTING OPINION) JOHN F. CORRIGAN JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 61125 JULIE S. KRUEGER : : : : PLAINTIFF-APPELLEE : DISSENTING IN PART : vs. : AND CONCURRING IN PART : JAMES P. KRUEGER : : : : DEFENDANT-APPELLANT : DATE: NOVEMBER 12, 1992 JAMES D. SWEENEY, J., DISSENTING IN PART AND CONCURRING IN PART: I respectfully dissent from the majority's determination of the first assignment of error as I believe that the trial court abused its discretion in the valuation of property used to support the award of alimony toward attorney's fees. Birath v. Birath (1988), 53 Ohio App.3d 31, 39; R.C. 3105.18. The item which raises concern is the valuation of the West 65th Street store at $103,500. This valuation is sheer speculation by defendant's expert based on a potential value of 115% of the value of the established Westlake store. See Joint Exhibit One offered by plaintiff. The testimony at trial indicated that defendant hoped that the new store would do well. Hopes are not reliable evidence. Defendant's expert's report - 2 - indicated that it was difficult to place a reliable value on the store because it was new and did not have an adequate sales history upon which to reliably project future growth. It was unreasonable of the trial court to rely on the 115% valuation. Accordingly, I would affirm the first assignment of error. I would also take issue with the trial court's finding that the defendant has the ability to earn $35,000 per year as an asbestos worker as a basis for alimony as and for attorney fees. There is no testimony as to whether asbestos related employment is available at present for the defendant or whether the health of defendant would permit his employment in such a field even if said employment opportunities exist. Thus, I separately concur in reversing and remanding the child support determination as raised in the second assignment of error. .