COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 72919 MICHELLE KOTOCH : : JOURNAL ENTRY Plaintiff-Appellee : : and -vs- : : OPINION JOSEPH KOTOCH : : Defendant-Appellant : : DATE OF ANNOUNCEMENT JULY 9, 1998 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Domestic Relations Division of Common Pleas Court Case No. D-204543 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: APPEARANCE: For Plaintiff-Appellee: ROSEMARY SWEENEY, ESQ. 1400 Bank One Center Cleveland, Ohio 44114-2652 For Defendant-Appellant: RICHARD MESSERMAN, ESQ. JANE C. MURPHY, ESQ. 1940 Huntington Building 925 Euclid Avenue Cleveland, Ohio 44115 PATRICIA ANN BLACKMON, A.J.: Defendant-appellant Joseph Kotoch appeals a decision by the trial court in favor of plaintiff-appellee Michelle Kotoch on -2- several post-divorce decree motions. Joseph Kotoch assigns nine assignments of error for our review.1 Having reviewed the record and the legal arguments of the parties, we affirm the decision of the trial court. The apposite facts follow. Michelle and Joseph Kotoch were married on May 24, 1980. They had three children, Joseph Jr. (D.O.B. 04/22/81), Alexandria (D.O.B. 05/30/84), and Jaclyn (D.O.B. 12/07/85). As of November 26, 1991, the date of the divorce, Michelle Kotoch was 34 years old and Joseph Kotoch was 36 years old. Joseph Kotoch was employed at Detroit Deli earning $22,000 per year. Michelle Kotoch was also employed at Detroit Deli earning $22,000 per year. The parties entered into a separation agreement which included the following property settlement: Joseph Kotoch was awarded his Ameritrust IRA, his 72.789 shares of stock in Centerior Energy, his McDonald account, and the cash value of his life insurance policy issued through Jackson National Life Insurance. Michelle Kotoch was to retain her Ameritrust IRA, her Nautica Limited Partnership, a Mercedes automobile, and her 49% stock ownership in Detroit Deli, Inc. dba Max's Deli. Joseph Kotoch agreed to sell his 51% interest in Max's Deli to Michelle Kotoch for $200,000 cash, $12,000 cash from the proceeds of the sale of the liquor license to Ina Brothers, Inc., and $100,000 (payable over five years) pursuant to a non-competition agreement between Joseph Kotoch and Max's Deli. The marital home was awarded to Michelle Kotoch. The parties 1 See Appendix. -3- waived spousal support and agreed to pay their own debts, attorney fees, health insurance. Joseph Kotoch agreed to maintain his $600,000 life insurance policy with the children as beneficiaries. Custody of the children was awarded to Michelle Kotoch. Joseph Kotoch agreed to pay $500 per month in child support for one year. Joseph Kotoch's child support payments were to be re-evaluated annually. Michelle Kotoch was to receive two tax deductions for the parties' children and Joseph Kotoch was to receive one tax deduction. The tax deductions were to be re-evaluated annually along with the amount of child support. The agreement provided that if Wife and Husband have similar earnings, the parties shall alternate deductions with one party receiving two deductions one year and one deduction the following year. On October 26, 1992, Michelle Kotoch filed a motion to show cause, motion to modify child support, and a motion for attorney's fees. She alleged that Joseph Kotoch failed to pay the children's medical bills totaling $1500 and their summer camp costs. She also alleged he continually violated the visitation agreement, failed to obtain medical insurance for the children, continually paid his child support late, and harassed her by telephone. The parties also filed numerous motions reflecting a dispute about the $200,000 due in connection with the sale of Joseph's interest in Max's Deli. In an agreed journal entry dated 3/16/94, the parties agreed that Joseph would obtain health insurance for the children and that $1800 of the $2400 deductible would be paid by Joseph and the balance ($600) was to be paid by Michelle. Each party agreed to -4- split the cost of the children's medical bills and the cost of summer camp. At the time of the agreed journal entry, Michelle Kotoch was employed at Max's Deli earning $65,000 per year and Joseph Kotoch was employed at Cooperman's Deli earning $35,000 per year. Joseph's child support obligation was modified to $700.00 per month plus poundage effective 2/1/93. Joseph agreed to pay the resulting arrearage of $2000 immediately. The parties also agreed that Joseph could decrease the amount of his life insurance policies to $300,000, keeping the children as beneficiaries. On April 25, 1994, Michelle Kotoch filed a motion to show cause and a motion for attorney's fees, alleging that Joseph was in arrears on payments for child support, the children's medical bills, and the children's extracurricular activities. In an agreed journal entry filed 9/12/94, Joseph agreed to accept $67,500 instead of the $200,000 owed him for his execution of a non-competition agreement in connection with the sale of his interest in Max's Deli. Upon receipt of the payment, Joseph paid his child support arrearages totaling $8000.00 and agreed to pay one-half of the medical bills for the children ($3875) and $1000 toward the cost of the 1994 summer camps for the children. The parties also agreed to split all uninsured medical costs for the children. On November 17, 1994, Joseph filed a motion to modify child support. In an attached affidavit, Joseph argued that he suffered a substantial change in circumstances that resulted in an almost total lack of income and that he could no longer maintain the child -5- support payments, health insurance coverage, and life insurance payment on behalf of the children. He listed his income as $18,000 per year. On February 6, 1995, Michelle filed a motion to show cause, a motion for modification of child support, and a motion for attorney's fees. She disputed Joseph Kotoch's claim that his income was only $18,000 per year, arguing that the $65,700 Joseph Kotoch received for the non-competition agreement should be considered as income. Joseph Kotoch argued that the $65,700 should not be considered income, but rather as part of the parties' property settlement. In a decision issued 2/2/96, the referee modified Joseph's child support obligation to $42.72 per month per child plus poundage. The tax exemptions for all three children were awarded to Michelle. Joseph was also ordered to pay an additional $128.16 per month towards the arrearage and to pay the first $100 per year per child in medical expenses plus 16% of the remaining balances. Joseph was held in contempt of court, found failure to abide by prior court orders, and was sentenced to 30 days in jail or, alternatively, to perform 200 hours of community services. Contempt was to be purged upon receipt of $1082.43 plus 2% fee within 30 days. Michelle was awarded $555.50 as additional child support for her attorney's fees. Michelle Kotoch filed objections to the magistrate's report on July 8, 1996 which included an argument that the magistrate's calculation of the amount of child support was erroneous. The -6- objections were sustained and the motions were reset for another hearing. The parties entered into an agreed journal entry waiving their right to a further hearing and agreeing that the court shall rule de novo on all pending motions based upon the transcript of the prior hearing. On June 26, 1997, the trial court issued a journal entry granting Michelle's motion to increase child support, finding Joseph Kotoch in contempt of court and ordering him to pay $3000 toward Michelle Kotoch's attorney's fees. The court found that Michelle Kotoch's income was $100,000 per year ($65,000 salary plus a $35,000 bonus) from her employment at Cuisine & Company ( C&C ) dba Max's Deli. Joseph Kotoch's salary was found to be $56,424 per year from his employment at the Rockefeller Deli. In calculating Joseph Kotoch's income, the court included Joseph Kotoch's salary as well as monthly payments made by Rockefeller Deli for his car phone, credit cards, football tickets, health insurance premium, rent, car lease, utilities, car insurance, child support, and food. Michelle's child care costs were determined to be $6000 for purposes of the child support calculation. The court ordered Joseph to pay child support of $826.00 per month plus poundage (total $843 month). Joseph Kotoch was found to be $18,792.00 in arrears on his child support. He was also found to owe $3380.00 for the children's medical bills for a total arrearage of $22,172.00. He was ordered to pay an additional $408.00 per month on the child support arrearage. He was also ordered to post a cash bond of $2000.00. -7- The tax dependency exemptions for the three children were granted to Michelle. Joseph was ordered to provide health insurance coverage for the children and to provide life insurance for the benefit of the children. Joseph was also ordered to pay the first $100.00 of the medical, dental and optical expenses for the children and 35% of the remaining expenses. Joseph was held in contempt of court and sentenced to thirty days in jail. The court held that the contempt could be purged and the sentence suspended if Joseph was to pay $10,000 plus a 2% fee within 30 days of the court's order. The court also ordered Joseph to pay $3000.00 toward Michelle's attorney fees. This appeal followed. In his first assignment of error, Joseph Kotoch argues the trial court erred in imputing income to him in the amount of $56,424.00. Joseph Kotoch testified that his salary was $350.00 per week. The trial court calculated his monthly salary as $1516.00. However, Joseph Kotoch also testified that the Rockefeller Deli paid him the following additional amounts for his monthly expenses: Car phone $ 100.00 Credit cards 1,000.00 Football tickets 80.00 Health insurance premium 200.00 Rent 450.00 Automobile lease 406.00 Utilities 50.00 Automobile insurance 50.00 Child support 700.00 Meals and Food 150.00 TOTAL $3,186.00 The trial court added $3186.00 to Joseph Kotoch's reported salary of $1516.00 for a total salary of $4702.00 per month or $56,424.00 per year. -8- R.C. 3113.215 defines gross income to include earned and unearned income from all sources including income from salaries, wages, overtime pay and bonuses during a calendar year. It also includes self-generated income which includes expense reimbursement or in-kind payments received by a parent from self- employment, the operation of a business, or rents, including, but not limited to, company cars, free housing, reimbursed meals, and other benefits, if the reimbursements are significant and reduce personal living expenses. R.C. 3113.215(A)(3). The statute clearly authorized the trial court to include the benefits received from Rockefeller Deli as income to Joseph Kotoch for purposes of computing child support. There was evidence that Michelle Kotoch had a 1994 Jeep Cherokee that was leased by Cuisine & Company. She testified that she used the Jeep for her personal use about fifteen to twenty percent (20%) of the time. She also stated that the Jeep was driven by her employees to make deliveries, to perform off-premise catering, and to pick up supplies used in connection with the business. She also testified that the corporation owned a Mercedes Benz that was originally purchased by Joseph Kotoch. Michelle Kotoch denied using the car for personal use and stated that it had been in storage since the divorce except for a brief period of time when it was being repaired. Accordingly, we cannot say that the trial court abused its discretion by failing to include the cost of the car as income to Michelle Kotoch. -9- With respect to Joseph Kotoch's credit card debt, he testified at trial that the debt was his personal debt. He stated that he used his credit line to attempt to keep Yankee Tavern afloat. However, the testimony made it clear that it was Joseph Kotoch personally, not Yankee Tavern, who became obligated to the credit card company. Despite Joseph Kotoch's claim that the payments were not being made on his behalf, it is clear that Joseph Kotoch, not Yankee Tavern, was the debtor on the line of credit. Accordingly, the trial court properly considered the credit card payments as income to Joseph Kotoch. Joseph Kotoch's first assignment of error is without merit. In his second assignment of error, Joseph Kotoch argues the trial court erred and abused its discretion by failing to impute additional income to Michelle Kotoch based on the retained earnings of her business. In Williams v. Williams (1991), 74 Ohio App.3d 838, the court held that the statutory definition of income was broad enough to encompass the retained earnings of a corporation. The court held that the retained earnings of the obligor father should have been considered when deciding his motion for modification of child support. Id. at 843. However, in Williams, the obligor father had voluntarily ceased drawing a salary from his corporation and then filed a motion to reduce the amount of the child support order. The court stated that [u]nder these circumstancesand in light of the expansive definition of `income' above, it would be grossly inequitable to allow appellee to sit upon his assets, hide behind the shield of corporate business -10- decisions, and prevent his children from enjoying the standard of living they would have enjoyed had the marriage continued. Id. See also Emary v. Emary (Oct. 23, 1996), Lorain App. No. 96CA006353, unreported ( While it is inequitable to base child support on retained business earnings which provide no disposable income to the parent, it is just as inequitable to permit a parent to reduce his personal income and resulting support obligations by leaving income in a privately held business. ) In Riepenhoff v. Riepenhoff(1989), 64 Ohio App.3d 135, another case cited by Joseph Kotoch, the court determined that it was error to include retained business earnings as income when calculating child support payments where there is no evidence of an attempt to shelter the retained earnings in order to reduce a support obligation. In this case, Michelle Kotoch testified that she paid herself a salary of $65,000 from Cuisine & Company, the corporation of which she was sole shareholder. She testified that her salary was consistently $65,000 per year since the day she took over Max's Deli. In contrast to the cases cited by Joseph Kotoch, there is no evidence that Michelle Kotoch ever used the retained business earnings of Cuisine & Company as a scheme to reduce her salary. Accordingly, the trial court did not err in failing to consider the retained business earnings of Cuisine & Company when calculating Michelle Kotoch's income for purposes of child support. Joseph Kotoch's second assignment of error is not well taken. In his third assignment of error, Joseph Kotoch argues the trial court erred in determining that $6000 was an appropriate -11- amount for work-related child care expenses. Michelle Kotoch testified that she was looking for an adult to supervise the children because her son had been experiencing some behavioral problems that made him difficult to handle. She also testified that she was looking for someone who was able to drive the children to their after school activities. She testified that she could not find an adult who could drive unless she paid at least $8.00 per hour. She stated that, because of her long hours at work, she needed someone to watch the children after school and on Saturdays. She also testified that, on some occasions, she needed someone to watch the children before school and on Sundays. She testified that she needed child care, on the average, for fifteen hours a week. This is based on her testimony that the first of her children got home from school at 2:45 p.m. She testified that she got home at or after 5:30 p.m. during the school week. That would mean that she required someone to watch the children for 2.75 hours a day or 13.75 hours a week. At $8.00 an hour for 13.75 hours a week, her annual child care costs would be $5720.00 just for weekday care. In light of Michelle Kotoch's testimony that she also needed day care on Saturdays and sometimes on Sundays and before school, we cannot find that the trial court abused its discretion in using $6000.00 as the amount of Michelle Kotoch's child care expenses for the purpose of computing child support. Joseph Kotoch's third assignment of error is not well taken. In his fourth assignment of error, Joseph Kotoch argues the trial court erred and abused its discretion in ordering him to pay -12- child support in the sum of $843.00 per month as of September 1, 1995. In his fifth assignment of error, Joseph Kotoch argues the trial court erred and abused its discretion in failing to grant his motion to modify child support. The basis of his argument in support of these assignments of error is that the trial court erred in calculating the respective income of the parties. Because we determined that the trial court did not abuse its discretion in determining the parties' income, these assignments of error are moot and not well taken. See Hirsh v. Hirsh (Nov. 22, 1995), Cuyahoga App. No. 67977, unreported. In his sixth assignment of error, Joseph Kotoch argues the trial court erred in finding that, as of June 30, 1997, he had a child support arrearage of twenty two thousand one hundred seventy-two dollars ($22,172.00) and ordering him to pay an additional four hundred eight dollars ($408.00) per month for the arrearage and to post a two thousand dollar ($2000.00) cash bond. To the extent that this assignment of error is based upon an alleged error by the trial court in calculating the income of the parties, it is not well taken. Joseph Kotoch also argues that the trial court erred in ordering him to post a $2000 cash bond to secure his child support obligation. We agree with Michelle Kotoch that R.C. 3113.04(A) does not apply to this case since Joseph Kotoch was not convicted of non-support under R.C. 2919.21. The trial court's bond order was authorized under R.C. 3113.21(D)(3), which provides that a cash bond shall be not less than five hundred nor more than ten thousand dollars. Joseph Kotoch's sixth assignment of error is not well taken. -13- In his seventh assignment of error, Joseph Kotoch argues the trial court erred in finding him to be in contempt of the court's prior orders and imposing sentence for the contempt. He argues the trial court erred in finding he was in arrears in his child support obligation. Civil contempt is defined as that which exists in failing to do something ordered to be done by the court in a civil action for the benefit of the opposing party therein. Sancho v. Sancho (1996), 114 Ohio App.3d 636, 642. (Citations omitted.) In light of our disposition of Joseph Kotoch's first assignment of error, we decline to address this assignment of error to the extent that it is based upon Joseph Kotoch's argument that the trial court improperly calculated his income. Joseph Kotoch also argues that the trial court erred in finding him to be in arrears on paying $3380.00 in medical expenses for the minor children. The trial court's 3/16/94 order required Joseph Kotoch to pay half of the medical bills for the children. The evidence revealed that the bills totaled $6752.62. Accordingly, by the court's order, Joseph Kotoch should have paid $3376.31 in medical bills for the children. However, during the hearing, Michelle Kotoch testified that Joseph Kotoch made no payments on the medical bills. (Tr. 326.) Joseph Kotoch admitted that he did not pay the medical bills as required by the trial court's 3/16/94 order. (Tr. 319.) Based upon the evidence presented, the trial court properly determined that Joseph Kotoch was in contempt of that order. In his eighth assignment of error, Joseph Kotoch argues the trial court erred and abused its discretion in awarding Michelle -14- Kotoch's attorney's fees in the amount of three thousand dollars ($3,000.00). After a divorce decree is entered, the trial court is authorized to award reasonable attorney's fees in post-decree modification proceedings related to the support of minor children on the marriage. Hughes v. Hughes (1991), 72 Ohio App.3d 286, 292. Joseph Kotoch argues that the trial court's contempt finding was erroneous and, therefore, there was no basis for an award of attorney's fees. As set forth in our discussion of Joseph Kotoch's seventh assignment of error, we have determined that the trial court's contempt finding was proper. Accordingly, the trial court did not abuse its discretion in awarding attorney's fees to Michelle Kotoch. Joseph Kotoch's eighth assignment of error is not well taken. In his ninth assignment of error, Joseph Kotoch argues the trial court erred and abused its discretion in awarding Michelle Kotoch the federal tax dependency exemptions for the parties' three minor children. R.C. 3113.21(B)(10) provides that when it reconsiders a child support order, a court may reconsider which parent may claim the children as dependents for federal income tax purposes and shall make its decision a part of the child support order. However, the statute also provides that a court may not award the dependency exemption to a noncustodial parent if the parent's child support payments are not current in full for the year in which the exemption is sought. See Davis v. Davis (1996), 112 Ohio App.3d 518, 520. As discussed above, Joseph Kotoch was properly found to be in arrears in his child support payments. -15- Accordingly, the trial court properly awarded the income tax exemptions to Michelle Kotoch. Joseph Kotoch's ninth assignment of error is not well taken. Having found that none of Joseph Kotoch's assignments of error are well taken, we hereby affirm the decision of the trial court. Judgment affirmed. It is ordered that appellee recover of appellant her 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 Domestic Relations Division of Common Pleas Court 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. Exceptions. DYKE, J., and ROCCO, J., CONCUR. PATRICIA ANN BLACKMON ADMINISTRATIVE JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also S.Ct.Prac.R. II, Section 2(A)(1). APPENDIX I. THE TRIAL COURT'S IMPUTATION OF INCOME TO APPELLANT IN THE AMOUNT OF FIFTY SIX THOUSAND FOUR HUNDRED TWENTY FOUR DOLLARS ($56,424.00) WAS AN ERROR, ABUSE OF DISCRETION AND AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION WHEN IT FAILED TO IMPUTE ADDITIONAL INCOME TO APPELLEE BASED ON THE RETAINED EARNINGS OF HER BUSINESS. III. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN FINDING THAT SIX THOUSAND DOLLARS ($6,000.00) IN WORK RELATED CHILD CARE EXPENSES WAS APPROPRIATE. IV. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN ORDERING APPELLANT TO PAY CHILD SUPPORT IN THE SUM OF EIGHT HUNDRED FORTY THREE ($843.00) PER MONTH AS OF SEPTEMBER 1, 1995. v. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN FAILING TO GRANT APPELLANT'S MOTION TO MODIFY CHILD SUPPORT. VI. THE TRIAL COURT'S FINDING THAT AS OF JUNE 30, 1997, APPELLANT HAD A CHILD SUPPORT ARREARAGE OF TWENTY TWO THOUSAND ONE HUNDRED SEVENTY TWO DOLLARS ($22,172.00) IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE AND THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN ORDERING DEFENDANT TO PAY AN ADDITIONAL FOUR HUNDRED EIGHT DOLLARS ($408.00) PER MONTH FOR THE FICTITIOUS ARREARAGE AND FURTHER ERRED AND ABUSED ITS DISCRETION IN ORDERING APPELLANT TO POST A TWO THOUSAND DOLLAR ($2000.00) CASH BOND. VII. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN HOLDING APPELLANT IN CONTEMPT OF THE COURT'S PRIOR ORDERS, SENTENCING APPELLANT TO THIRTY (30) DAYS IN JAIL AND SUSPENDING APPELLANT'S SENTENCE PROVIDED THAT APPELLANT PAY TEN THOUSAND DOLLARS ($10,000.00) WITHIN THIRTY DAYS OF THE COURT'S JUDGMENT ENTRY. VIII. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN AWARDING APPELLEE ATTORNEY'S FEES IN THE AMOUNT OF THREE THOUSAND DOLLARS ($3,000.00). IX. THE TRIAL COURT ERRED AND ABUSED ITS DISCRE- TION IN AWARDING APPELLEE THE FEDERAL TAX .