COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67483 JUDY L. LEHMAN : : Plaintiff-appellee : : JOURNAL ENTRY -vs- : AND : OPINION DALE LEHMAN : : Defendant-appellant : : DATE OF ANNOUNCEMENT : OF DECISION : MAY 4, 1995 CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas, : Division of Domestic Relations Case No. D-137325 JUDGMENT : Judgment reversed and remanded. DATE OF JOURNALIZATION : APPEARANCES: FOR PLAINTIFF-APPELLEE: FOR DEFENDANT-APPELLANT: Herbert Palkovitz, Esq. A.P. Leary, Esq. 1600 Standard Building Newman, Leary & Brice 1370 Ontario Street 214 East Park Street Cleveland, Ohio 44113 Chardon, Ohio 44024 -2- -2- HARPER, J.: Defendant-appellant, Dale Lehman, appeals from the judgment of the Court of Common Pleas of Cuyahoga County, Domestic Relations Division, which ordered him to pay interest on a previously entered judgment of the court. Appellant's six assignments of error focus on the propriety of the order based in part upon equity principles. A careful review of the record compels reversal and a remand of the action. I. Appellant and plaintiff-appellee, Judith Lehman, were married in November 1972. No children were born as issue of the marriage. The marriage was dissolved on January 11, 1983 pursuant to the terms of a separation agreement entered into by the parties. Paragraph four of the separation agreement provided that appellee held a dower interest in the real estate located at 5577 Valley Lane, Solon, Ohio. The interest in the real estate was to be satisfied by appellant's payment to appellee in the amount of one-half the equity in the property at the time of the agreement after the deduction of $6,200, the husband's contribution to the down-payment of the property. Appellant was to pay the amount within one year of the effectiveness of the agreement. The separation agreement also contained a modification provision at paragraph sixteen which required all modifications to be made in writing and signed by the parties. Appellant and appellee continued to reside in the marital home following the dissolution of the marriage. An arrangement existed -3- for the maintenance of the home with appellant responsible for the mortgage, gas and water bills and appellee responsible for the electric and heating oil bills. Moreover, appellee performed most of the house cleaning and all of the gardening chores on the property. Appellee filed a complaint for divorce in the trial court on June 5, 1989, D-194701, based upon a common-law marriage theory. The trial court found no common-law marriage; no written or oral agreement between the parties; and neither party acquired joint property or liability. We affirmed the trial court's conclusions in Lehman v. Lehman (June 4, 1992), Cuyahoga App. No. 60823, unreported. Appellee next filed a motion to show cause in the trial court on August 14, 1992 as to why appellant should not be held in contempt for not complying with paragraph four of the separation agreement. The matter was heard by a referee on September 24, 1993. At the hearing, the parties stipulated that appellant paid appellee the sum of $20,708.50 on July 8, 1993, said sum representing appellee's one-half equity share. Appellant never contested that appellee was owed the one-half equity share of the marital home, minus his non-marital contribution. Appellant challenged, however, appellee's right to recover interest on the sum. Specifically, he proposed that appellee waived her right to the interest because pursuant to a subsequent oral agreement, appellee was allowed to reside in the marital home for nearly ten -4- years, at minimal expense, in return for a deferment of the $20,708.50 payment. Appellant also asserted that the defenses of laches and equitable estoppel precluded her recovery of interest. The referee issued his report on March 14, 1994. The referee first concluded that the defense of laches was not applicable because appellant admitted that he always knew that he owed appellee the one-half equity share of the marital home. He next concluded that the doctrines of waiver and estoppel did not bar appellee's claim because appellant failed to establish the requisite elements to such defenses. The referee specifically concluded: *** Petitioner [appellee] admits that she had a right to one- half of the equity under the 1983 order and that she has had actual knowledge of the existence of that right. However, Petitioner denied and Respondent [appellant] has failed to prove that Petitioner had an actual intention to relinquish her right to the money or that she received consideration of any kind for her alleged relinquishment of the right. Respondent contends further that Petitioner received consideration for the alleged relinquishment of her rights under the 1983 Judgment Entry in that "she remained in the former marital home rent-free." Petitioner's ability to maintain in the former marital home was consideration only for her physical and financial contribution to the maintenance of that property after the parties' dissolution in 1983; it did not constitute consideration for the alleged relinquishment of her rights under the 1983 Judgment Entry. *** (Emphasis added.) Following appellant's filing of objections to the referee's report, the trial court approved the referee's recommendation with a -5- modification regarding the period of interest on June 3, 1994. Appellant assigns error from this ruling as follows: 1. The trial court erred in not remanding the matter back to the referee or otherwise taking additional evidence on the issue of waiver and a subsequent oral agreement. 2. The trial court erred in failing to find a subsequent oral agreement waiving interest. 3. The trial court erred in rejecting the defense of laches. 4. The trial court erred in failing to find an equitable estoppel. 5. The trial court erred in awarding attorneys fees. 6. The trial court erred in failing to invoke equitable principles to reject the claim for interest. II. Appellant does not dispute that he owed the one-half equity share to appellee. He does, however, assert that appellee agreed to defer the payment thereby waiving the interest. Appellant, in his first assignment of error, thus submits that the trial court erred in not ordering that the referee hear additional evidence as to the issue of waiver and the parties' alleged oral agreement concerning the payment of appellee's equity share. In his second assignment of error, appellant proposes that even without the taking of additional evidence, the record demonstrates an oral agreement between the parties which waived the interest. The first two assignments will be reviewed jointly considering they both focus on appellant's argument that appellee waived her right to the interest. -6- Oral separation agreements are valid when acknowledged by the parties "on the record" and in response to "judicial inquiry." See, e.g., May v. May (1993), 63 Ohio Misc.2d 207; Richardson v. Richardson (1990), 10 Va. App. 391, 293 S.E.2d 688. Moreover, oral separation agreements are found to exist when proven by clear and convincing evidence. See, e.g., Pawlowski v. Pawlowski (1992), 83 Ohio App.3d 794. The present case is distinguishable in light of the existence of a written separation agreement which was incorporated into the parties' dissolution decree. The separation agreement contained a modification clause which required all alterations to be in writing and signed by the parties. The agreement specified that appellant was to pay appellee her one-half equity share within one year of the effectiveness of the agreement. The parties were required to reduce a subsequent oral agreement to alter the payment date to writing. Stimburys v. Stimburys (Jan. 21, 1993), Cuyahoga App. No. 63428, unreported; Buckler v. Buckler (Sept. 17, 1990), Stark App. No. CA-8116, unreported; Joyce v. Joyce (May 25, 1978), Cuyahoga App. No. 37304, unreported. Their failure to do so permitted the referee and the trial court to conclude that a subsequent oral agreement failed to alter the original payment period. The subsequent oral agreement could not, therefore, be used to demonstrate that appellee waived the interest on the half-equity payment. Appellant's first and second assignments of error are overruled. -7- III. Appellant, for his third assignment of error, charges that the trial court erred in rejecting the defense of laches. He argues that appellee's failure to demand the payment of the one-half equity share until 1992, nearly ten years from the date of the dissolution of their marriage, combined with material prejudice to him, establishes the applicability of laches. Laches is "'an omission to assert a right for an unreasonable and unexplained length of time, under circumstances prejudicial to the adverse party.'" Connin v. Bailey (1984), 15 Ohio St.3d 34, 35; see, State ex rel. Wean United, Inc. v. Indus. Comm. (1993), 66 Ohio St.3d 272. Delay in and of itself, however, does not constitute laches. Smith v. Smith (1959), 168 Ohio St. 447, paragraph three of the syllabus; see, also, State ex rel. Wean United, Inc.; State ex rel. Case v. Indus. Comm. (1986), 28 Ohio St.3d 383. Rather, in order for a person to invoke the equitable doctrine of laches, it must be shown that the person who will benefit from the doctrine was materially prejudiced by the delay of the person asserting his or her claim. Id. There are four elements to a laches defense. First, there must be an unreasonable delay or lapse of time in asserting a right. Second, there must be absence of an excuse for the delay. Third, the party asserting his or her claim must have actual or constructive knowledge of the injury or wrong. Finally, the other party must suffer material prejudice. State ex rel. N. Olmsted Fire Fighters Assn. v. N. Olmsted (1992), 64 Ohio St.3d 530, 536- -8- 537; Holloman v. Holloman (1993), 91 Ohio App.3d 279; Kennedy v. Cleveland (1984), 16 Ohio App.3d 399. Applying the first element to the instant case, appellee asserted her original right to relief in the separation agreement which became part of the dissolution decree in 1984. Appellee sought enforcement of the right in 1992 when she filed her motion to show cause in the trial court. The record contains evidence that appellee requested payment from appellant through the years; therefore, the first element has not been demonstrated by appellant. The second and third elements of laches requires a showing that appellee inexcusably delayed asserting her right, though she had actual or constructive knowledge of appellant's failure to make the payment. As stated supra, the record moreover contains evidence that appellee requested the payment through the years, and an appellate court should not substitute its judgment for that of a trial court when there exists competent, credible evidence in support of the trial court's findings of fact and conclusions of law. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77. There is, therefore, no inexcusable delay on the part of appellee. Finally, regarding the fourth element, appellant benefited from the delay since he was allowed to use the funds earmarked for appellee throughout the period of delay. Specifically, evidence exists that appellant used the funds to commence a business rather than to pay appellee within one year of the effectiveness of the separation agreement. Appellant thus fails to demonstrate how the -9- ordering of the payment of interest in and of itself prejudiced him. See, Zaperach v. Beaver (1982), 6 Ohio App.3d 17; Singer v. Singer (Apr. 23, 1987), Cuyahoga App. No. 52049, unreported. Appellant's third assignment of error is overruled. State ex rel. Wean United, Inc.; State ex rel. Case. IV. Appellant's fourth assignment of error deals with a second equity argument, i.e., that the trial court erred in failing to find an equitable estoppel. This court will address this assignment of error in conjunction with the argument presented in appellant's fifth assignment of error that general equity principles preclude an award of interest. R.C. 1343.03 entitles a party receiving a definite money judgment to interest upon that award automatically, as a matter of law. Wilson v. Smith (1993), 85 Ohio App.3d 78, 80, citing Testa v. Roberts (1988), 44 Ohio App.3d 161, 168; Jeppe v. Blue Cross of Northeast Ohio (1980), 67 Ohio App.2d 87, 93. Generally, a right to interest on unpaid obligations accrues on the date of scheduled payment, and runs until paid, absent factors making it inequitable. See, e.g., In re Hammond (1992), 78 Ohio App.3d 170; Kern v. Kern (1990), 68 Ohio App.3d 659; Allen v. Allen (1990), 62 Ohio App.3d 621 (cases dealing with an award of interest on unpaid installments of support obligations). In Kern, a referee in the domestic relations court determined that an award of interest would be unfair to a husband because of the wife's failure to earlier pursue the issue. The referee also -10- found that the interest award would be inequitable because it nearly equalled the support arrearage. Kern, 662. The Summit County Court of Appeals, in reviewing the referee's conclusions, referred to Zaperach, wherein the Franklin County Court of Appeals rejected a similar argument, stating that the obligor's failure to fulfill his obligations "for nine years does not confer upon him a right to continue to fail ***." Zaperach, 19. "There, as here, 'there is no change of position on the part of the [obligor] to his own detriment as a result of the inaction of the [obligee]. Rather, [the obligor] has benefited from the delay by not being required to pay support over a number of years.'" Kern, 662, quoting Zaperach, 19. "Moreover, the referee's conclusion that an award of interest equal to the support arrearage would itself be inequitable ignores the simple arithmetic of interest calculation." Kern, 662. Pursuant to R.C. 3105.011, domestic relations courts have full equitable powers and jurisdiction. Ohio domestic relations courts, by both statute and common law, have and may exercise authority in accordance with established rules of equity. Such courts, therefore, do not abuse their discretion when they apply equitable rules. See, Miller v. Miller (1993), 92 Ohio App.3d 340; May. This court recognized in Lehman, slip. op. 60823, that appellant and appellee testified in their respective depositions that appellee "had foregone the settlement sum which represented her equity in the Solon home granted by the trial court in their dissolution of marriage." Appellee testified in her deposition -11- that she allowed appellant to use the equity share to start a business. However, the referee in the present case who heard appellee's motion to show cause refused to allow appellant the opportunity to offer any evidence regarding his arrangement with appellee. Though the arrangement could not alter the written separation agreement (see first and second assignments of error, supra), appellant could not effectively challenge the equitable nature of the interest award without the opportunity to present evidence. Appellant never challenged that portion of the separation agreement which required him to pay appellee the one-half equity share. His sole concern in this assignment of error is whether the trial court erred in ordering him to pay interest on the amount for the period commencing on June 1, 1984. This is an issue which does not affect the validity of the separation agreement, and its resolution does not alter the separation agreement, in contrast to appellant's request in his first two assignments of error. The referee tendered two conclusions with regard to the type of arrangement which existed between appellant and appellee. First, he found that appellant failed to prove that appellee actually intended to relinquish her right to the money or that she received consideration of any kind for her alleged relinquishment of the right. Second, the referee concluded that appellee's remaining in the marital home was consideration only for her physical and financial contribution to the maintenance of that property after the parties' dissolution in 1983; it did not -12- constitute consideration for the alleged relinquishment of her rights under the dissolution decree. The record contains conflicting evidence with regard to the living arrangment between the parties. We find in light of the conflicting evidence, and also the language contained in Lehman, slip op. 60823, i.e., that appellee had foregone the settlement sum, but she could pursue her one-half equity share, that the referee's conclusions and the trial court's adoption of them are not supported by competent, credible evidence. Obviously, the record contains evidence of consideration in exchange for appellee's residence in the marital home. Appellant attempted to show that part of the living arrangement was that appellee would not demand the one-half equity payment. We did not have to review this issue to the extent required herein in Lehman, slip. op. 60823. Since the referee determined the living arrangement between the parties without allowing appellant to present his full evidence, we reverse the interest award, and order the court to conduct a full evidentiary hearing with regard to the issue. Equity requires that evidence be taken with regard to whether an arrangement existed between the parties whereby no interest would accrue on the half-equity share payment contained in the dissolution decree. Appellant's fourth assignment of error and his sixth assignment of error in part are sustained. -13- V. Appellant's fifth assignment of error and a portion of his sixth assignment of error address the trial court's award of attorney fees. Appellant basically argues that appellee's action was totally unwarranted, and principles of equity should preclude the award of attorney fees. A trial court is vested with discretion to order an award of attorney fees to a party in a domestic relations action where the same are incurred in post-decree proceedings. See, Blum v. Blum (1967), 9 Ohio St.2d 92, 94; Kern, supra. Such an award is within the sound discretion of the trial court. Rand v. Rand (1985), 18 Ohio St.3d 356, 359. Reviewing the record before us, appellant did not dispute that he owed appellee the one-half equity share; he admitted that he was always willing and able to pay the share to appellee. Under the circumstances and in conformance with our previous finding that appellant be allowed to introduce evidence regarding any arrangement with appellee, this court finds that the trial court abused its discretion in awarding the appellee attorney fees of $4,267.75. Appellant's fifth assignment of error is sustained, and his sixth assignment of error pertaining to the award of attorney fees is sustained as well. The trial court's determination that appellee was entitled to interest for the period from January 1, 1984 and the award of -14- attorney fees are vacated; the case is remanded to the trial court for proceedings to be consistent with this opinion. -15- It is ordered that the parties absorb their own costs. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court, Division of Domestic Relations 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. BLACKMON, P.J., AND NAHRA, J., CONCUR. JUDGE SARA J. HARPER N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journaliza-tion, .