author: MARY EILEEN KILBANE, J.:

text:
    KISLING, NESTICO & REDICK, L.L.C., Plaintiff-Appellee v. PROGRESSIVE MAX INSURANCE COMPANY, et al., Defendants-Appellants
    No. 105287
    Court of Appeals of Ohio, Eighth District, Cuyahoga County.
    RELEASED AND JOURNALIZED: March 29, 2018
    David G. Utley, Collins, Roche, Utley & Garner, L.L.C., 520 S. Main Street-Suite 2551, Akron, Ohio 44311, Richard M. Garner, Collins, Roche, Utley & Garner, L.L.C., 655 Metro Place South-Suite 200, Dublin, Ohio 43017, For Progressive Max Insurance Company
    Christopher J. Van Blargan, John J. Reagan, Kisling, Nestico & Redick, L.L.C., 3412 West Market Street, Akron, Ohio 44333, ATTORNEYS FOR APPELLEE
    Christopher Ankuda, Ankuda, Stadler & Moeller, Ltd., 1100 Superior Avenue-Suite 1120, Cleveland, Ohio 44114, For Todd Anthony Thornton
    Darvale Thomas, 1900 Bairsford Drive, Columbus, Ohio 43232, For Darvale Thomas
    BEFORE: Kilbane, J., E.A. Gallagher, A.J., and Jones, J.
    JOURNAL ENTRY AND OPINION
    ON RECONSIDERATION

      The original announcement of decision, Kisling, Nestico & Redick, L.L.C. v. Progressive Max Ins. Co. , 2017-Ohio-8064, 98 N.E.3d 1166, released October 5, 2017, is hereby vacated. This opinion, issued upon reconsideration, is the court's journalized decision in this appeal. See App.R. 22(C) ; see also S.Ct.Prac.R. 7.01.

   MARY EILEEN KILBANE, J.:

{¶ 1} After reconsideration, the opinion as announced by this court on October 5, 2017, Kisling, Nestico & Redick, L.L.C. v. Progressive Max Ins. Co. , 2017-Ohio-8064, 98 N.E.3d 1166, is hereby vacated and substituted with this opinion.

{¶ 2} Defendant-appellant, Progressive Max Insurance Company ("Progressive"), appeals from the trial court's decision granting summary judgment in favor of plaintiff-appellee, Kisling, Nestico & Redick ("KNR"). For the reasons set forth below, we affirm.

{¶ 3} In 2014, Todd Anthony Thornton ("Thornton") and Darvale Thomas ("Thomas") were involved in an automobile accident. At the time of the accident, Thornton was insured with Progressive. Thomas retained the law firm of KNR to represent him for all claims arising from the accident. Thomas and KNR entered into a contingent fee agreement, which gave KNR a charging lien on the proceeds of any insurance settlement, judgment, verdict award or property obtained on Thomas's behalf. The contract specifically provides that "[KNR] shall have a charging lien upon the proceeds of any insurance proceeds, settlement, judgment, verdict award or property obtained on [Thomas's] behalf." While negotiating with Progressive on Thomas's behalf, KNR presented a settlement package and demand and obtained a settlement offer of $12,500.

{¶ 4} During the course of its representation of Thomas, however, KNR became aware that Thomas discussed his accident with another law firm. KNR contacted both the other firm and Progressive and notified them of its fee agreement and charging lien with Thomas. Progressive concedes it received "communication" from KNR that KNR was asserting a lien against any settlement proceeds paid to Thomas. Despite its prior knowledge of KNR's charging lien, Progressive eventually settled the claim directly with Thomas.

{¶ 5} In November 2015, KNR sought payment of its legal fees and expenses by filing a complaint against Progressive, Thornton, and Thomas. KNR alleged that it met its obligations under the contingent fee agreement with Thomas and obtained a settlement offer from Progressive but did not receive any payment for its services. KNR's claims against Thomas were for breach of contract, breach of fiduciary duty and the implied duty of good faith and fair dealing, and quantum meruit/unjust enrichment. It alleged that Thomas intentionally breached the terms of the contingent fee agreement by settling the claim directly with Progressive after KNR obtained a settlement offer. As a result, Thomas was unjustly enriched by accepting KNR's services and advancement of claim expenses without reimbursing KNR for its services.

{¶ 6} KNR's claims against Progressive and Thornton were to enforce the charging lien and for tortious interference. It alleged that Progressive and Thornton (through his agent, Progressive) had actual knowledge of its charging lien prior to settling directly with Thomas and distributing the proceeds to him solely. KNR further alleged that Progressive and Thornton knew of the contingency fee agreement between Thomas and KNR and intentionally procured Thomas's breach of the fee agreement.

{¶ 7} KNR voluntarily dismissed Thornton from the action and conceded that it did not have a claim of tortious interference against Progressive. The trial court granted default judgment in KNR's favor against Thomas. As a result, the only remaining issues related to Progressive were whether KNR had a right to "enforce the charging lien" and whether KNR was entitled to damages based on quantum meruit/unjust enrichment. Both Progressive and KNR filed motions for summary judgment as they relate to these issues.

{¶ 8} The trial court denied Progressive's motion for summary judgment but granted KNR's motion for summary judgment. It found that Progressive "had a duty to protect [KNR's] interest in the settlement proceeds." The trial court held that Progressive owed KNR the amount of KNR's interest in the settlement proceeds; therefore, Progressive was "liable for the quantum meruit value of [KNR's] legal services which include litigation expense[s]."

{¶ 9} Progressive now appeals, raising the following single assignment of error for our review.

Assignment of Error

The trial court committed reversible error by entering summary judgment in favor of [KNR] and against [Progressive] with respect to [KNR's] claim for an "equitable lien" for contingent attorney fees.

{¶ 10} Progressive argues the trial court erred because it was not in privity of contract with KNR and there is no statute obligating it to assist KNR in the recovery of fees owed to KNR by Thomas. Progressive contends that KNR's remedy lies with KNR pursuing Thomas only, not Progressive.

{¶ 11} Appellate review of summary judgment is de novo. Grafton v. Ohio Edison Co. , 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment is appropriate under Civ.R. 56 when: (1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party. Temple v. Wean United, Inc. , 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977), citing Civ.R. 56(C).

{¶ 12} Once the moving party satisfies its burden, the nonmoving party "may not rest upon the mere allegations or denials of the party's pleadings, but the party's response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Civ.R. 56(E) ; Mootispaw v. Eckstein , 76 Ohio St.3d 383, 385, 667 N.E.2d 1197 (1996). Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg , 65 Ohio St.3d 356, 358-359, 604 N.E.2d 138 (1992).

{¶ 13} In its motion for summary judgment, KNR argued that under the contingent fee agreement it had with Thomas, Thomas assigned his interest in any settlement proceeds to the extent of KNR's fees and expenses, and this assignment created a valid charging lien. Progressive was aware of the charging lien, a point Progressive concedes. As a result, KNR contends that Progressive "remains liable for the quantum meruit value of KNR's services and expenses KNR advanced on [Thomas's] behalf despite its settlement with Thomas and distribution of the settlement proceeds." In support of its motion, KNR submitted the contingent fee agreement entered into between Thomas and the firm, which provides in relevant part that

[t]he Attorneys shall receive as a fee for their services, one-quarter (¼) of the total gross amount of recovery of any and all amounts recovered, and Client hereby assigns said amount to Attorneys and authorizes Attorneys to deduct said amount from the proceeds recovered. Attorney shall have a charging lien upon the proceeds of any insurance proceeds, settlement, judgment, verdict award or property obtained on your behalf. In the event of no recovery, Client shall owe Attorneys nothing for services rendered.

{¶ 14} We note that "Ohio recognizes two types of attorney liens: (1) general, or retaining liens, and (2) special, or charging liens." Putnam v. Hogan , 122 Ohio App.3d 351, 353-354, 701 N.E.2d 774 (10th Dist.1997), citing Fire Protection Resources, Inc. v. Johnson Fire Protection Co. , 72 Ohio App.3d 205, 594 N.E.2d 146 (6th Dist. 1991). An attorney may have a special or charging lien upon a judgment, decree, or award obtained for a client. Putnam at 354, 701 N.E.2d 774, citing Mancino v. Lakewood , 36 Ohio App.3d 219, 223-224, 523 N.E.2d 332 (8th Dist. 1987). "[A] 'charging lien' is a lien upon a judgment or other monies awarded to a client, or former client, for work previously performed by the attorney." Bd. of Commrs. v. Maloof Properties, Ltd. , 197 Ohio App.3d 712, 2012-Ohio-470, 968 N.E.2d 602, ¶ 143 (8th Dist.), citing Petty v. Kroger Food & Pharmacy , 165 Ohio App.3d 16, 2005-Ohio-6641, 844 N.E.2d 869 (10th Dist.) ; Hill Hardman Oldfield, L.L.C. v. Gilbert , 190 Ohio App.3d 743, 944 N.E.2d 264, 2010-Ohio-5733 (9th Dist.) ; First Bank of Marietta v. Roslovic & Partners, Inc. , 10th Dist. Franklin No. 03AP-332, 2004-Ohio-2717, 2004 WL 1172885.

{¶ 15} Ohio courts recognize an attorney's equitable right to enforce a "charging lien for the payment of fees earned in the prosecution of litigation to judgment." Mancino at paragraph three of the syllabus. In Mancino , we stated:

"The right of the attorney to payment of fees earned in the prosecution of litigation to judgment, though usually denominated a lien, rests on the equity of such attorney to be paid out of the judgment obtained by him, and is upheld on the theory that his services and skill created the fund. Although there is no provision in the Code creating or recognizing the right of an attorney to a lien as security for payment of compensation for his services, it is plain from a long line of decisions by the courts of this state that the right exists, and in proper cases the courts will lend their aid to maintain and enforce it.
"* * *
"A special or charging lien may be created by an express agreement on the part of the client that the attorney shall have a lien for his compensation on the amount recovered. While, before judgment, an attorney has no lien upon or interest in the cause of action, in the absence of statute, yet where the parties have contracted that the attorney shall receive a specified amount of the recovery, such agreement will operate as an equitable lien in favor of the attorney." 6 Ohio Jurisprudence 3d (1978), Attorneys at Law, Sections 178 - 179, at 721-722 ; Section 183, at 725. See , also , Foor v. Huntington Natl. Bank (1986), 27 Ohio App. 3d 76, 27 OBR 95, 499 N.E.2d 1297, paragraph two of the syllabus.
An attorney's lien is founded on the equitable principle that an attorney is entitled to be paid his or her fees out of the judgment rendered in the case. See Annotation (1983), 23 A.L.R. 4th 336.
Contingent fee arrangements in civil cases are a widely accepted practice. An attorney and client may lawfully agree upon compensation to the former contingent upon the amount to be recovered, either by settlement or by judgment, and a court will recognize the validity and enforceability of contracts providing for such arrangements. 6 Ohio Jurisprudence 3d (1978), Attorneys at Law, Section 155, at 690.

Id. at 224, 523 N.E.2d 332.

{¶ 16} This right of the attorney to obtain payment from the judgment for work performed on behalf of the client or former client also encompasses the settlement the attorney obtains on the client's behalf. Maloof , 197 Ohio App.3d 712, 2012-Ohio-470, 968 N.E.2d 602, ¶ 15. This right is "based on the theory that the attorney's 'service and skill created the fund.' " Id. , quoting Cohen v. Goldberger , 109 Ohio St. 22, 141 N.E. 656 (1923), paragraph one of the syllabus.

{¶ 17} In Maloof , we also noted that

charging liens are generally superior to the claims of the client's other creditors. Goldberger , 109 Ohio St. at 23, 141 N.E. 656, paragraph two of the syllabus. Indeed, charging liens have been recognized as having a "superpriority" that is superior even to federal tax liens. See Reed & Steven v. Hip Health Plan of Florida, Inc. , 81 F.Supp.2d 1335 (S.D.Fla. 1999). An attorney to whom an interest in the proceeds of a judgment has been assigned may enforce his interest against the judgment debtor if he has notified the judgment debtor of his interest. In re Simms Constr. Servs. Co., Inc. , 311 B.R. 479 (6th Cir. 2004). The court stated:
In allowing for enforcement by notice to the judgment debtor, Ohio law parallels the requirement articulated in the Restatement of the Law Governing Lawyers, i.e. , that "the lien becomes binding on a third party when the party has notice of the lien." Restatement (Third) of the Law Governing Lawyers § 43 (2000) ; see also Restatement (Second) of Agency § 464 cmt. n (1958) ("Unless the judgment is for costs only, the right [of the attorney to be paid from the proceeds of the judgment] exists only if the attorney gives notification of his intent to enforce it * * * to the judgment debtor * * *.").

(Emphasis added.) Id. at ¶ 18. See also Devis v. Pineview Court Condominium Assn. , 8th Dist. Cuyahoga No. 102147, 2015-Ohio-2704, 2015 WL 4043350.

{¶ 18} In the instant case, there is no dispute that Thomas and KNR entered into a contingency fee agreement. The agreement attached to KNR's motion for summary judgment indicates that Thomas signed the agreement on July 10, 2014. KNR presented a settlement package and demand to Progressive on Thomas's behalf. On June 30, 2015, Progressive made an offer to KNR to settle Thomas's claim for $12,500. On July 9, 2015, KNR learned that Thomas had talked to another law firm regarding his claim. That same day, KNR communicated to Progressive that it was asserting a lien against any settlement funds paid to Thomas. Then on July 14, 2015, Progressive, despite knowing that KNR had asserted a charging lien for its expenses and fees on any settlement proceeds paid to Thomas, settled the claim directly with Thomas. Tellingly, Progressive does not dispute that it had notice of the charging lien prior to the disbursement of the funds.

{¶ 19} Based on the foregoing circumstances, we find KNR's charging lien is enforceable against Progressive. Progressive had knowledge of KNR's charging lien before it settled Thomas's claim and, despite this knowledge, distributed the settlement proceeds to Thomas solely.

{¶ 20} Moreover, we find Progressive's reliance on our decisions in Charles Gruenspan Co., LPA v. Thompson , 8th Dist. Cuyahoga No. 80748, 2003-Ohio-3641, 2003 WL 21545134, and Meros v. Rorapaugh , 8th Dist. Cuyahoga No. 77611, 2000 WL 1739297 (Nov. 22, 2000), distinguishable.

{¶ 21} In Gruenspan , Attorney Charles Gruenspan ("Gruenspan") initiated an accounting malpractice lawsuit on behalf of his clients against his clients' accountants. On the eve of trial, Gruenspan's clients terminated his services and retained new counsel, who settled their lawsuit with the accountants. Gruenspan then sued his former clients and their accountants for legal fees owed. The Gruenspan court found that Gruenspan had a right to enforce his equitable lien against his former clients for legal fees he was contractually entitled to prior to the termination of his services, but he could not enforce his lien against the accountants (the third party). Id. at ¶ 52-53. The court reasoned, Gruenspan's "contractual right to fees earned prior to the termination of his legal services did not translate into an equitable lien against the [third-party accountants]." Id. at ¶ 52.

{¶ 22} In Meros , Attorney Thomas Meros ("Meros") obtained a judgment against Grange Mutual Insurance ("Grange") for his clients. Grange paid the judgment without naming Meros as a copayee on the check. To recover his attorney fees, Meros sued both his clients and Grange. Meros subsequently settled with his clients regarding his claim for attorney fees. Grange moved to dismiss Meros's case, arguing that Meros's settlement with his clients extinguished any claim he might have against Grange. The trial court granted Grange's motion. On appeal, we affirmed the trial court's judgment. Id. at *7. The court found that Meros enjoyed an equitable lien on the settlement funds by virtue of his having rendered professional legal services pursuant to a contingency fee contract with his clients. Id. We went on to state that, in order to enforce that lien, Meros's remedy was through his clients, not through Grange. Id. at *7.

{¶ 23} Both Gruenspan and Meros are factually distinguishable from the instant case. In both cases, the attorneys had an equitable lien on the proceeds that was enforceable only against the clients. In both cases, the record does not demonstrate that the attorneys had a specific charging lien with their respective clients. In contrast, in the instant case, the contingency fee agreement KNR entered into with Thomas set forth a specific provision detailing terms of its charging lien. It specifically provides that "[KNR] shall have a charging lien upon the proceeds of any insurance proceeds, settlement, judgment, verdict award or property obtained on [Thomas's] behalf." Charging liens have been recognized as having a "superpriority." Maloof , 197 Ohio App.3d 712, 2012-Ohio-470, 968 N.E.2d 602, ¶ 18. A charging lien " 'becomes binding on a third party when the party has notice of the lien.' Restatement (Third) of the Law Governing Lawyers § 43 (2000)." (Emphasis added.) Id. , quoting In re Simms Constr. Servs. Co., Inc. , 311 B.R. 479 (6th Cir. 2004).

{¶ 24} More importantly, in Gruenspan and Meros there is no indication that notice of the respective equitable liens was given to the third parties (the accountants and Grange Insurance) before settlement was reached. Whereas, in the instant case, there is no dispute in the record that Progressive (third party) had notice of KNR's charging lien before settling the claim with Thomas.

{¶ 25} We are also not persuaded by Progressive's reliance on W. Broad Chiropractic v. Am. Family Ins. , 122 Ohio St.3d 497, 2009-Ohio-3506, 912 N.E.2d 1093. In W. Broad Chiropractic , the patient assigned her rights against the tortfeasor as payment for West Broad's chiropractic treatment, but American Family Insurance ignored the assignment when distributing the settlement proceeds. Subsequently, West Broad sued American Family for a declaration that its patient's assignment of rights against American Family's insured was enforceable and that American Family had to pay West Broad for the patient's treatment.

{¶ 26} The agreement between the patient and West Broad was titled " 'Assignment of Right to Receive Benefits and/or Proceeds of Settlement or Judgment.' " Id. at ¶ 8. This agreement assigned the patient's "right to receive from the tortfeasor's insurance company compensation for [her] injuries in exchange for her treatment." Id.

{¶ 27} The Ohio Supreme Court found that the agreement between the patient and West Broad "could not operate as an assignment because [the patient] had no right in any settlement proceeds to transfer to West Broad." Id. at ¶ 17. The court further held that " R.C. 3929.06 precludes an assignee of prospective settlement proceeds from bringing a direct action against a third-party insurer after the insurer has distributed settlement proceeds in disregard of the written assignment." Id. at ¶ 32.

{¶ 28} W. Broad Chiropractic is easily distinguishable from the instant case. W. Broad Chiropractic involved a document entitled "Assignment of Right to Receive Benefits and/or Proceeds of Settlement or Judgment," which was a future assignment of an interest by the patient to the medical care provider, whereas the instant case involves an actual charging lien set forth in a contingency fee agreement between a law firm and its client.

{¶ 29} "An assignment is a transfer to another of all or part of one's property in exchange for valuable consideration. A vested right in the assigned property is required to confer a complete and present right on the assignee." Id. at ¶ 14, citing Hsu v. Parker , 116 Ohio App.3d 629, 688 N.E.2d 1099 (11th Dist. 1996) ; Christmas v. Griswold , 8 Ohio St. 558 (1858).

{¶ 30} An assignment is distinguishable from a lien. This difference is set forth in Springer v. J. R. Clark Co. , 138 F.2d 722 (8th Cir.1943), where the court stated: "[a] lien is distinguished from an assignment in that it is a charge upon property, while an assignment creates an interest in property." Id. at 726. See also First State Bank v. United States , 166 F.Supp. 204 (D.Minn. 1958).

{¶ 31} Here, KNR's contingent fee agreement with Thomas provided for a charging lien upon property. Specifically, "the proceeds, settlement, judgment, verdict award or property obtained on [Thomas's] behalf." This charge upon property is completely different from the assignment of rights to receive settlement benefits as set forth in W. Broad . Furthermore, " 'Ohio law parallels the requirement articulated in the Restatement of the Law Governing Lawyers * * * that "the [charging] lien becomes binding on a third party when the party has notice of the lien." ' " Maloof , 197 Ohio App.3d 712, 2012-Ohio-470, 968 N.E.2d 602, ¶ 18, quoting In re Simms Constr. Servs. Co., Inc., 311 B.R. 479 (6th Cir. 2004). See also Goldberger, 109 Ohio St. 22, 141 N.E. 656. Therefore, Progressive's reliance on W. Broad is misplaced.

{¶ 32} In light of the above, Progressive's sole assignment of error is not well taken, and we find that the trial court properly granted summary judgment in favor of KNR.

{¶ 33} Judgment is affirmed.

EILEEN A. GALLAGHER, A.J., CONCURS;

LARRY A. JONES, SR., J., DISSENTS (SEE SEPARATE DISSENTING OPINION).

{¶ 34} Respectfully, I dissent and would reverse the trial court's judgment. I agree with the majority that a charging lien is a mechanism by which an attorney may attempt to collect for services rendered, and that it may be used even if counsel was discharged at the time of judgment. The problem I have with this case is against whom the lien was asserted. I do not believe, as the majority does, that it was properly asserted against Progressive. Rather, I believe that any action KNR had in regard to the lien vested with Thomas.

{¶ 35} I think the majority muddles the terms "assignment" and "lien" to reach its conclusion that KNR had a lien it can enforce against Progressive. The attorney-client agreement KNR and Thomas entered into reads: "Client hereby assigns said amount to Attorneys and authorizes Attorneys to deduct said amount from the proceeds recovered." (Emphasis added.) I, therefore, believe that this case is not distinguishable from W. Broad Chiropractic v. Am. Family Ins. , 122 Ohio St.3d 497, 2009-Ohio-3506, 912 N.E.2d 1093, wherein the Ohio Supreme Court held that " R.C. 3929.06 precludes an assignee of prospective settlement proceeds from bringing a direct action against a third-party insurer after the insurer distributed settlement proceeds." Id. at ¶ 6.

{¶ 36} In light of the above, I dissent.

      KNR also sought a declaration that the fee agreement and charging liens were valid and enforceable.


source: Caselaw Access Project

author: CARR, Judge.

license: Public Domain

text:
    Steven CHOJNACKI, Appellant v. Gary MOHR, et al., Appellees
    No. 16CA011021
    Court of Appeals of Ohio, Ninth District, Lorain County.
    Dated: March 30, 2018
    BARRY W. WILFORD, Attorney at Law, for Appellant.
    MICHAEL DEWINE, Attorney General, and B. ALEXANDER KENNEDY, Assistant Attorney General, for Appellee.
    DECISION AND JOURNAL ENTRY
   CARR, Judge.

{¶ 1} Appellant, Steven Chojnacki, appeals the judgment of the Lorain County Court of Common Pleas. This Court reverses and remands.

I.

{¶ 2} In 1994, Chojnacki was convicted of seven counts of rape. In regard to the first count where Chojnacki was convicted of rape of a minor under the age of 13 with a finding that the offense was committed with force, the trial court imposed a sentence of life imprisonment. The trial court imposed a sentence of not less than 10 but not more than 25 years imprisonment on each of the remaining six counts. The trial court ordered that all of the sentences be served consecutively to each other. Chojnacki received 83 days of jail-time credit.

{¶ 3} On February 25, 2014, the Ohio Parole Board released its decision denying parole to Chojnacki and continuing further consideration of the matter until 2024. Chojnacki filed a request for reconsideration that was promptly denied.

{¶ 4} Subsequently, on March 30, 2015, Chojnacki filed a lawsuit challenging the determination of his parole eligibility date. The named defendants in the lawsuit were the Ohio Department of Rehabilitation and Corrections ("ODRC"), as well as Gary Mohr, in his capacity as Director of the ODRC, Cynthia Mausser, in her capacity as Chief of the Ohio Adult Parole Authority, and Andre Imbrogno, in his capacity as Chairman of the Ohio Parole Board. Chojnacki requested a number of declarations relating to his parole eligibility status in addition to other relief. The defendants filed a timely answer.

{¶ 5} With leave of court, Chojnacki filed an amended complaint for declaratory judgment and further relief on August 17, 2015. Chojnacki asked the trial court to make the following declarations in the amended complaint:

Declare that under prevailing Ohio law ( R.C. 2929.41(E)(2) & R.C. 2967.13(F) ), the aggregate indefinite prison term imposed upon [Chojnacki] by the Medina County Common Pleas Court in case no. CR-299909 upon which [Chojnacki] entered ODRC custody was and is: 15 years-to-life.
Declare that [Chojnacki's] earliest eligibility for parole under prevailing Ohio law was in December, 2003.
Declare pursuant to State ex. rel. Keith v. Ohio Adult Parole Auth[.] , 141 Ohio St.3d 375, 2014-Ohio-4270 [24 N.E.3d 1132], that the parole hearing decision resulting from the February 11, 2014 parole hearing was based upon a "substantive error" and "erroneous information" concerning [Chojnacki's] minimum term of imprisonment and as a consequence [Chojnacki's] earliest parole eligibility[.]

{¶ 6} Chojnacki further asked the trial court to order the defendants to schedule a date for a new parole hearing and to order the ODRC to conform all of its computations of inmates' terms of imprisonment to the limitations imposed by former R.C. 2929.41(E) on the aggregation of multiple consecutive terms of imprisonment. Chojnacki also requested that the trial court assess court costs to the defendants and award him any other relief to which he is entitled under the law. The defendants filed an answer to the amended complaint and asserted that there was no miscalculation in determining when Chojnacki was first eligible for parole. The defendants further asserted that the Ohio Parole Board had properly scheduled Chojnacki's first parole eligibility hearing for November 2013 and that the hearing had been rescheduled to February 2014 at Chojnacki's request.

{¶ 7} The parties proceeded with discovery. On April 25, 2016, the defendants filed a motion for summary judgment. Chojnacki filed a memorandum in opposition to the motion for summary judgment as well as a cross-motion for summary judgment against the defendants. The parties attached numerous exhibits to their respective summary judgment filings. Based on its determination that the defendants were correct in their calculation of Chojnacki's parole eligibility date, the trial court concluded that there was no justiciable controversy before the court. In light of this determination, the trial court granted the defendants' motion for summary judgment and denied Chojnacki's motion for summary judgment.

{¶ 8} On appeal, Chojnacki raises one assignment of error.

II.

ASSIGNMENT OF ERROR

THE JUDGMENT ENTERED BY THE TRIAL COURT IS CONTRARY TO LAW.

{¶ 9} In his sole assignment of error, Chojnacki contends that the trial court erred by denying his motion for summary judgment and entering summary judgment in favor of the defendants.

Background

{¶ 10} In their motion for summary judgment, the defendants filed a number of exhibits in support of their contention that, under the relevant statutes, Chojnacki's first parole eligibility hearing was properly calculated for November 2013. In support of his own motion for summary judgment, Chojnacki did not dispute the basic procedural facts of his case. Instead, Chojnacki argued that under a correct application of the pertinent statutes his first parole eligibility hearing date should have been as early as seven years prior to the actual date of his hearing.

{¶ 11} In its August 29, 2016 journal entry disposing of this matter, the trial court acknowledged that there was a legal dispute between the parties, stating:

The point of contention in this matter is the legal framework in calculating parole eligibility. [Chojnacki's] Amended Complaint is premised on his contention that Defendants misapplied the laws governing inmates serving minimum terms of imprisonment longer than 15 years. Defendants dispute [Chojnacki's] interpretation of these laws. As such, the dispute is one merely on the application of these laws and not upon any facts.

{¶ 12} The trial court went on to substantively analyze the issues presented in the amended complaint. Based in part on its application of the Tenth District's decision in McMeans v. Ohio Adult Parole Auth. , 10th Dist. Franklin No. 98AP-42, 1998 WL 767493 (Oct. 27, 1998), in addition to its consideration of numerous statutory provisions, the trial court ultimately concluded that the defendants had correctly calculated Chojnacki's first parole eligibility date. Based on its conclusion that the defendants had properly calculated the parole eligibility date, the trial court determined that there was not a justiciable issue before the court and, therefore, that Chojnacki's claim for declaratory judgment failed as a matter of law. The trial court further noted that Chojnacki's request for a declaration pursuant to State ex rel. Keith v. Ohio Adult Parole Auth. , 141 Ohio St.3d 375, 2014-Ohio-4270, 24 N.E.3d 1132, failed on the same basis. After noting that the case did not present a justiciable issue, the trial court denied Chojnacki's motion for summary judgment and granted summary judgment in favor of the defendants.

Discussion

{¶ 13} The Supreme Court of Ohio has held that a trial court's decision to grant or deny declaratory relief is reviewed for an abuse of discretion. Mid-Am. Fire & Cas. Co. v. Heasley , 113 Ohio St.3d 133, 2007-Ohio-1248, 863 N.E.2d 142, ¶ 14. An abuse of discretion is more than an error of judgment; it means that the trial court was unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore , 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).

{¶ 14} "A declaratory judgment action provides a means by which parties can eliminate uncertainty regarding their legal rights and obligations." Heasley at ¶ 8. As a general rule, "[w]hen a trial court enters a judgment in a declaratory judgment action, the order must declare all of the parties' rights and obligations in order to constitute a final, appealable order." No-Burn, Inc. v. Murati , 9th Dist. Summit No. 24577, 2009-Ohio-6951, 2009 WL 5174077, ¶ 11, quoting Bowman v. Middleburg Hts. , 8th Dist. Cuyahoga No. 92690, 2009-Ohio-5831, 2009 WL 3648757, ¶ 6.

{¶ 15} It is well settled that a party does not have standing to bring a declaratory judgment action when no real justiciable controversy exists. Kuhar v. Medina Cty. Bd. of Elections , 9th Dist. Medina No. 06CA0076-M, 2006-Ohio-5427, 2006 WL 2959468, ¶ 13. Thus, "[i]n an action for declaratory judgment, the trial court must declare the rights of the parties or dismiss the complaint because either (1) no real controversy or justiciable issue exists between the parties or (2) the declaratory judgment will not terminate the uncertainty or controversy." Velasquez v. Ghee , 99 Ohio App.3d 52, 53-54, 649 N.E.2d 1284 (9th Dist. 1994), quoting Miller v. Summit Cty. Bd. of Edn. , 9th Dist. Summit No. 15847, 1993 WL 99998, at *1 (Apr. 7, 1993). "A real, justiciable controversy is a 'genuine dispute between parties having adverse legal interest of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' " Kuhar at ¶ 14, quoting Wagner v. Cleveland , 62 Ohio App.3d 8, 13, 574 N.E.2d 533 (8th Dist. 1988). "The controversy must be a real or actual controversy." Kuhar at ¶ 14, citing Burger Brewing Co. v. Liquor Control Comm. , 34 Ohio St.2d 93, 97, 296 N.E.2d 261 (1973).

{¶ 16} Here, the trial court abused its discretion in concluding that this case did not present a justiciable controversy. Chojnacki requested multiple declarations in his amended complaint. Most notably, Chojnacki sought clarification regarding the length of his minimum term of incarceration as well as when he was first eligible for parole. The trial court analyzed these issues substantively and rejected Chojnacki's position regarding his parole eligibility date. Instead of formally declaring the rights and obligations of the parties, however, the trial court simply entered judgment in favor of the defendants on the grounds that there was not a justiciable issue before the court. Assuming without deciding that there was no error in the defendants' calculation of Chojnacki's parole eligibility date, such a determination would not support the trial court's ultimate conclusion that the case failed to present a "genuine dispute between parties having adverse legal interest of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Kuhar at ¶ 14, quoting Wagner , 62 Ohio App.3d at 13, 574 N.E.2d 533. This case presented a live controversy as the parties sharply disputed when Chojnacki was first eligible for parole and whether Chojnacki was entitled to a second parole hearing in the immediate future. Under circumstances such as this where the declaratory judgment action presented an actual legal controversy, "the plaintiff [was] entitled to a declaration of the parties' rights." Weyandt v. Davis , 112 Ohio App.3d 717, 721, 679 N.E.2d 1191 (9th Dist. 1996). Accordingly, Chojnacki's assignment of error is sustained to the limited extent that this matter must be remanded for the trial court to declare the rights and obligations of the parties.

III.

{¶ 17} Chojnacki's assignment of error is sustained. The judgment of the Lorain County Court of Common Pleas is reversed and the cause remanded for further proceedings consistent with this decision.

Judgment reversed, and cause remanded.

SCHAFER, P.J.

CONCURS.

CALLAHAN, J.

CONCURS IN JUDGMENT ONLY.


author: MARY J. BOYLE, P.J.:

text:
    IN RE: M.C.M., a Minor Child
    [Appeal by N.S., Mother]
    No. 106040
    Court of Appeals of Ohio, Eighth District, Cuyahoga County.
    RELEASED AND JOURNALIZED: April 5, 2018
    Gregory S. Costabile, Buckley King, L.P.A., 1400 Fifth Third Center, 600 Superior Avenue, East, Cleveland, Ohio 44114, ATTORNEY FOR APPELLANT
    Michael C. O'Malley, Cuyahoga County Prosecutor, BY: Amy E. Guilford, Terri M. Hammons-Brown, Assistant Prosecuting Attorneys, 9300 Quincy Avenue, 4th Floor, Cleveland, Ohio 44106, For CJFS-OCSS
    Brandon G. Oliver, 124 Middle Avenue, Suite 500, Elyria, Ohio 44035, For Father, B.M.
    BEFORE: Boyle, P.J., Blackmon, J., and Keough, J.
    JOURNAL ENTRY AND OPINION
   MARY J. BOYLE, P.J.:

{¶ 1} Defendant-appellant, N.S. ("mother"), appeals the trial court's child support order concerning her daughter, M.C.M. (d.o.b. March 22, 2014). On appeal, mother raises three assignments of error:

1. The trial court committed reversible error when it failed to conduct an independent review of the Magistrate's Decision.
2. The trial court erred and abused its discretion in its determination of the annual income levels of the parties.
3. The trial court erred and abused its discretion in its determination of child support the father is to pay to the mother for the minor child.

{¶ 2} Finding merit to mother's second and third assignments of error, we reverse and remand.

Procedural History

{¶ 3} Mother and plaintiff-appellee, B.M. ("father"), were never married. They lived together from the time of M.C.M.'s birth until they separated on February 1, 2016. Father established paternity through an acknowledgment of paternity and mutual agreement.

{¶ 4} In June 2016, mother filed a complaint in juvenile court objecting to an administrative child support order issued by the Cuyahoga County Jobs and Family Services Office of Child Support Services (CJFS-OCSS). In her complaint, she argued that CJFS-OCSS did not properly determine father's income.

{¶ 5} In March 2017, mother filed a motion for retroactive support in the juvenile court, requesting that the effective date of any child support order be February 1, 2016, the date that father and mother separated. The matter went before the juvenile court magistrate, and father and mother both testified as to their respective financial situations. In addition, both parties submitted a number of exhibits demonstrating their income for the previous few years, including tax returns, W-2 forms, and employment records.

{¶ 6} The magistrate found that mother was "compensated well beyond her visible $10,500.00 annual taxable salary" and, thus, voluntarily underemployed. The magistrate imputed a gross income of $30,000 to mother. As for father, the magistrate averaged his annual income from 2014 through 2016, concluding that he had an average income of $62,523. Based on those determinations, the magistrate ordered that father pay monthly child support in the amount of $594.75 plus a two percent fee when health insurance is provided and $558.45 when health insurance is not provided.

{¶ 7} Both mother and father filed timely objections to the magistrate's decision, particularly contesting the magistrate's income determinations. In addition, after obtaining leave to do so, mother supplemented her objections upon completion of the trial transcript, again arguing that the magistrate's income determinations were improper.

{¶ 8} After review of the magistrate's decision, the trial judge issued two judgment entries adopting the magistrate's order for child support. The first entry overruled mother's supplemental objections, which were identical to those she initially raised. The second entry overruled father's objections.

{¶ 9} It is from this judgment that mother now appeals.

Law and Analysis

A. Independent Review

{¶ 10} In her first assignment of error, mother argues that the juvenile court failed to independently review the magistrate's child support decision and order.

{¶ 11} "In reviewing a magistrate's decision, a trial court does not sit in the same manner as an appellate court; rather, it must conduct an independent review of the facts and conclusions made by the magistrate." Haupt v. Haupt , 11th Dist. Geauga No. 2015-G-0049, 2017-Ohio-2719, 2017 WL 1862189, ¶ 26, citing Phillips v. Phillips , 2014-Ohio-5439, 25 N.E.3d 371 (5th Dist). Juv.R. 40(D)(4)(d) provides that "the court shall undertake an independent review as to the objected matters to ascertain that the magistrate has properly determined the factual issues and appropriately applied the law. Before so ruling, the court may hear additional evidence[.]" The trial court must decide " 'whether the magistrate has properly determined the factual issues and appropriately applied the law, and, where the magistrate has failed to do so, the trial court must substitute its judgment for that of the magistrate.' " In re J.M.G., 8th Dist. Cuyahoga No. 98990, 2013-Ohio-2693, 2013 WL 3327565, ¶ 22, quoting Gobel v. Rivers , 8th Dist. Cuyahoga No. 94148, 2010-Ohio-4493, 2010 WL 3722546. "An appellate court reviews a decision of a trial court adopting a magistrate's decision under an abuse-of-discretion standard." In re Estate of Haas , 10th Dist. Franklin No. 07AP-512, 2007-Ohio-7011, 2007 WL 4534528, ¶ 14. Further, "a trial court's ruling on objections to a magistrate's decision will not be reversed absent an abuse of discretion." Gobel at ¶ 16, citing Remner v. Peshek , 7th Dist. Mahoning No. 97-C.A.-98, 1999 WL 803441 (Sept. 30, 1999).

{¶ 12} We presume that the trial court independently reviewed the magistrate's decision "unless the party asserting the error affirmatively shows otherwise." In re J.M.G. at ¶ 23, citing Hartt v. Munobe , 67 Ohio St.3d 3, 615 N.E.2d 617 (1993). The party asserting that the court did not independently review a magistrate's decision has the burden of affirmatively rebutting that presumption. Redmond v. Wade , 4th Dist. Lawrence No. 16CA16, 2017-Ohio-2877, 2017 WL 2257731, ¶ 23, citing Mahlerwein v. Mahlerwein , 160 Ohio App.3d 564, 2005-Ohio-1835, 828 N.E.2d 153 (4th Dist.).

The "affirmative showing" required to rebut our general presumption requires "more than a mere inference"; it requires appellant to provide the reviewing court with specific facts demonstrating that the trial court failed to conduct an independent review of the magistrate's findings.

Id. at ¶ 25, quoting In re Taylor G. , 6th Dist. Lucas No. L-05-1197, 2006-Ohio-1992, 2006 WL 1047474.

{¶ 13} In support of her allegation that the juvenile court failed to independently review the magistrate's decision, mother argues that the court's journal entry is a verbatim copy of the magistrate's decision, specifically pointing to the fact that the juvenile court's decision included a hearing date that already passed.

{¶ 14} While the juvenile court's judgment entries did include a clerical error concerning a past hearing date, "the cutting and pasting of a magistrate's decision into a judgment entry does not show mere rubber-stamping." Marafiote v. Estate of Marafiote , 2016-Ohio-4809, 68 N.E.3d 238, ¶ 32, citing Ramos v. Khawli , 181 Ohio App.3d 176, 2009-Ohio-798, 908 N.E.2d 495 (7th Dist.). Therefore, without additional rebutting evidence and constrained by the presumption of independent review, we find that the inferences that mother makes from the inclusion of an old hearing date are insufficient to rebut the presumption of independent review.

{¶ 15} Accordingly, we overrule mother's first assignment of error.

B. Gross-Income Determinations

{¶ 16} In her second and third assignments of error, mother argues that the trial court abused its discretion when determining the gross incomes for both parties.

{¶ 17} We will not reverse a juvenile court's child support order absent an abuse of discretion, which occurs when that order is unreasonable, arbitrary, or unconscionable. In re K.R.B. , 2017-Ohio-7071, 95 N.E.3d 799, ¶ 16, citing Booth v. Booth , 44 Ohio St.3d 142, 541 N.E.2d 1028 (1989), and Blakemore v. Blakemore , 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983). An abuse of discretion also occurs when the trial court "applies the wrong legal standard, misapplies the correct legal standard, or relies on clearly erroneous findings of fact" or when it is unsupported by competent, credible evidence. Thomas v. Cleveland , 176 Ohio App.3d 401, 2008-Ohio-1720, 892 N.E.2d 454, ¶ 15 (8th Dist.) ; Glassman v. Offenberg , 8th Dist. Cuyahoga Nos. 85838, 85863, and 87175, 2006-Ohio-3837, 2006 WL 2096587, ¶ 27.

{¶ 18} To calculate child support, a juvenile court must determine each parent's gross income and consider the definitions contained in R.C. 3119.01, which provides in relevant part:

(7) "Gross income" means, except as excluded in division (C)(7) of this section, the total of all earned and unearned income from all sources during a calendar year, whether or not the income is taxable, and includes income from salaries, wages, overtime pay, and bonuses to the extent described in division (D) of section 3119.05 of the Revised Code ; commissions; royalties; tips; rents; dividends; severance pay; pensions; interest; trust income; annuities; social security benefits, including retirement, disability, and survivor benefits that are not means-tested; * * * self-generated income;
and potential cash flow from any source.
"Gross income" does not include any of the following: * * *
(e) Nonrecurring or unsustainable income or cash flow items; * * *
(8) "Nonrecurring or unsustainable income or cash flow item" means an income or cash flow item the parent receives in any year or for any number of years not to exceed three years that the parent does not expect to continue to receive on a regular basis. "Nonrecurring or unsustainable income or cash flow item" does not include a lottery prize award that is not paid in a lump sum or any other item of income or cash flow that the parent receives or expects to receive for each year for a period of more than three years or that the parent receives and invests or otherwise uses to produce income or cash flow for a period of more than three years. * * *
(13) "Self-generated income" means gross receipts received by a parent from self-employment, proprietorship of a business, joint ownership of a partnership or closely held corporation, and rents minus ordinary and necessary expenses incurred by the parent in generating the gross receipts. "Self-generated income" includes expense reimbursements or in-kind payments received by a parent from self-employment, the operation of a business, or rents, including company cars, free housing, reimbursed meals, and other benefits, if the reimbursements are significant and reduce personal living expenses.

{¶ 19} Further, the incomes for both parents must be verified by documentation, which can include pay stubs and tax returns. R.C. 3119.05(A). " '[F]ailure to obtain the necessary financial information renders the court's order arbitrary and therefore an abuse of discretion.' " Basham v. Basham , 3d Dist. Allen No. 1-02-37, 2002-Ohio-4694, 2002 WL 31007154, ¶ 6, quoting Aiello v. Aiello , 3d Dist. Seneca No. 13-96-12, 1996 WL 517351 (Sept. 1, 1996).

{¶ 20} To ensure meaningful appellate review, the juvenile court must follow and complete the child support guidelines and applicable worksheet. R.C. 3119.022 ; C.S.E.A. v. Harrison , 8th Dist. Cuyahoga No. 87725, 2007-Ohio-402, 2007 WL 274334, ¶ 9. Additionally, the court must attach the child support worksheet to its journal entry, which the court properly did in this case. Id. at ¶ 10. The amount of child support calculated using the relevant guidelines and worksheet is rebuttably presumed to be correct. R.C. 3119.03.

1. Calculation of Mother's Gross Income

{¶ 21} First, mother argues that the trial court incorrectly calculated her income by finding that she was voluntarily underemployed and imputing additional income to her.

{¶ 22} Imputing additional gross income to a parent requires the court to complete a two-part test. Lord v. Lord , 8th Dist. Cuyahoga No. 89395, 2008-Ohio-230, 2008 WL 192547, ¶ 37. First, the court must determine whether the parent is voluntarily underemployed, which is a question of fact for the juvenile court. Id. ; Rock v. Cabral , 67 Ohio St.3d 108, 112, 616 N.E.2d 218 (1993). "[F]or a parent who is * * * underemployed, the trial court may consider any potential income of that parent, including imputed income that the court determines the parent would have earned if fully employed." Wolf-Sabatino v. Sabatino , 10th Dist. Franklin No. 12AP-1042, 2014-Ohio-1252, 2014 WL 1347737, ¶ 23.

{¶ 23} Second, if the court finds that the parent is voluntarily unemployed or underemployed, that parent's income is "the sum of the gross income of the parent and any potential income of the parent." R.C. 3119.01(A)(5)(b). To determine "potential income," the juvenile court must analyze the statutory factors set forth in R.C. 3119.01(C)(11)(a). Lord at ¶ 37. The factors are:

(i) The parent's prior employment experience;
(ii) The parent's education;
(iii) The parent's physical and mental disabilities, if any;
(iv) The availability of employment in the geographic area in which the parent resides;
(v) The prevailing wage and salary levels in the geographic area in which the parent resides;
(vi) The parent's special skills and training;
(vii) Whether there is evidence that the parent has the ability to earn the imputed income;
(viii) The age and special needs of the child for whom child support is being calculated under this section;
(ix) The parent's increased earning capacity because of experience;
(x) The parent's decreased earning capacity because of a felony conviction;
(xi) Any other relevant factor.

R.C. 3119.01(C)(11)(a).

{¶ 24} At the hearing, mother testified that she takes care of M.C.M. during the day and that she works for her family's corporation performing secretarial and marketing work. The parties produced a number of exhibits, including mother's tax returns showing her taxable income from her secretarial work-which was approximately $10,500 in 2015 and $10,400 in 2016-and mother's lease agreement, which was to run from February 2016 through May 2017 and required her to pay $1,307 in rent. She also testified, however, that she broke that lease agreement in November 2016 after her father paid a penalty cost and currently lives in her parents' house, paying $400 in rent every month.

{¶ 25} Further, mother testified that she had the following monthly expenses: $270 for her car, $100 for car insurance, and approximately $100 in utility bills as well as a couple hundred dollars in expenditures for gas, groceries, and personal items every month. Mother testified that she was on the family corporation's cell phone plan. Mother acknowledged that her secretarial salary was not enough to cover all of her monthly expenses. She testified that her father assists her financially.

{¶ 26} As to the first part of the test, the court found that mother was voluntarily underemployed. Specifically, the court stated,

The Court further finds that the evidence presented at this hearing regarding work history as a secretary with marketing experience, educational background of a high school diploma and 3 years college and no disabilities, the mother is voluntarily underemployed[.]

{¶ 27} As to the second part of the test, the court stated that if mother was "fully employed with compensation without the current assistance of her family and as a shareholder of the family's company, [she] would be reasonably earning at least $30,000.00 per year on her own." The court, believing that mother was "compensated well beyond her visible $10,500.00 annual taxable salary[,]" seemingly came to the $30,000 amount by adding her $10,500 salary to the $19,500 the court imputed to her and itemized under "other income" on the worksheet.

{¶ 28} In support of its findings, the court noted that mother is a shareholder in her family's corporation, has access to a credit card account, receives monetary assistance for her cell phone as well as for other monthly bills, and collects other "untold benefits" from her father. The court also noted that, at one point, mother had "an expensive apartment lease and other reduced monthly expenses, such as gasoline for her car and credit cards paid off every month; yet remain[ed] eligible for food stamps and medical and health insurance from this county."

{¶ 29} Foremost, upon review, we find that the court erred in imputing an additional $19,500 to mother. There was no evidence to establish that mother could have found full-time employment as a secretary or marketer making $30,000. Ohio courts have reversed potential-income determinations where (1) the parties failed to produce evidence concerning prevailing salary levels in the geographic area where the parent resides as well as the availability of job opportunities, and (2) the court has failed to rationalize an additional imputation of income. See Apps v. Apps , 10th Dist. Franklin Nos. 02AP-1072 and 03AP-242, 2003-Ohio-7154, 2003 WL 23024253, ¶ 50 (lower court abused its discretion because it "gave no rationale for imputing $18,000 in income to appellant"); Dillon v. Dillon , 4th Dist. Athens No. 97CA03, 1997 WL 585737, 5 (Sept. 17, 1997) ("There is no evidence in the record to show that appellant could have earned $39,000 as a full time teacher in his community."); English v. Rubino , 8th Dist. Cuyahoga No. 68901, 1996 WL 157342, 3 (Apr. 4, 1996) ("There must be some evidence concerning the prevailing job opportunities and salary levels in the community, or the amount of imputed income determined by the court is merely arbitrary."); Dixon v. Dixon , 8th Dist. Cuyahoga No. 66997, 1995 WL 106137, 2 (Mar. 9, 1995) ("In light of * * * the absence of expert testimony on the issue of prevailing job opportunities and salary levels in Chicago, we find the court's imputation of $75,544 of annual income to the appellant to be arbitrary."). For example, in In re T.S. , 8th Dist. Cuyahoga No. 96657, 2011-Ohio-6756, 2011 WL 6917620, we upheld a decision imputing income to the appellant, who was a certified public accountant ("CPA"), "based on the median wage for CPAs in [the appellant's] geographical area for the years 2003 through 2008, as published by the U.S. Department of Labor, Bureau of Labor Statistics." Id. at ¶ 4.

{¶ 30} While we have previously recognized that a court need not "include a specific and thorough analysis of each R.C. 3119.01(C)(11)(a) factor in its judgment[,]" there must still be a sufficient basis upon which to impute income to a parent. In re T.S. at ¶ 14. We fail to find a sufficient basis here. The record is devoid of any evidence showing how or why the court concluded that mother could earn $30,000 in her particular geographic area with an uncompleted college education other than her W-2 forms. The court's discussion of mother's qualifications, without additional information concerning the geographical area's salaries for similarly qualified individuals, is not enough in this particular case to support its imputed income to mother.

{¶ 31} Second, we feel it is necessary to address the lower court's observation that mother is "compensated well beyond her visible $10,500.00 annual taxable salary[.]" If the court's imputation of the additional $19,500 in potential income was based on the belief that mother was receiving additional compensation from her family's corporation or her father, we still would reverse the court's decision as that finding was not supported by proper documentation as required by R.C. 3119.05(A).

{¶ 32} As stated above, a parent's income must be verified by supporting documentation. R.C. 3119.05(A). Ohio courts have reversed child support orders and calculations based on the lack of documentary evidence. See In re K.R.B. , 2017-Ohio-7071, 95 N.E.3d 799, at ¶ 26 (finding an abuse of discretion because "[t]he child support worksheet * * * [did] not indicate upon what information the figures listed in the worksheet were based."); Montgomery v. Montgomery , 3d Dist. Union No. 14-14-22, 2015-Ohio-2976, 2015 WL 4510904, ¶ 50 ("[T]here is absolutely no documentation to support Heather's testimony regarding her commissions and that is simply not satisfactory pursuant to R.C. 3119.05(A) to create such an extrapolation."); Rymers v. Rymers , 11th Dist. Lake No. 2011-L-064, 2012-Ohio-1675, 2012 WL 1288726, ¶ 29 (finding that the lower court failed to verify the parents' incomes with proper documentation); Jajola v. Jajola , 8th Dist. Cuyahoga No. 83141, 2004-Ohio-370, 2004 WL 171348, ¶ 17-18 (reversing the court's child support determination because the mother did not provide suitable documentation to establish her annual income); Basham , 3d Dist. Allen No. 1-02-37, 2002-Ohio-4694, 2002 WL 31007154, at ¶ 8 ("As we have insufficient documentation to verify Kelly's income in 2001, the figure used by the trial court * * * is arbitrary and we are unable to affirm the trial court's decision."). Furthermore, testimonial evidence concerning a parent's income is insufficient to satisfy R.C. 3119.05(A). Basham at ¶ 7 ; see also Ellis v. Ellis , 7th Dist. Mahoning No. 08 MA 133, 2009-Ohio-4964, 2009 WL 2999354, ¶ 60 ("[P]ursuant to R.C. 3119.05(A) a trial court is restrained to review documents, not testimony, to establish income.").

{¶ 33} Here, besides mother's W-2 forms, neither party offered any evidence concerning the corporation's finances, such as payroll records, bank statements, documents showing dividends paid to the corporation's shareholders or other evidence of the corporation's accounting. Compare Marron v. Marron , 12th Dist. Warren Nos. CA2013-11-109 and CA2013-11-113, 2014-Ohio-2121, 2014 WL 2106731, ¶ 15 (noting that the mother presented testimony of a certified public accountant and expert in forensic accounting to support her claim for additional imputed income to the father). Therefore, the court's observation here is not supported by proper documentation and cannot serve as a sufficient basis to impute potential income to mother.

{¶ 34} Third, even if we assume that mother could have obtained full-time employment with a minimum wage salary, she would only have made $16,536 in 2014 and $16,848 in 2015 and 2016. All of those amounts are much smaller than the $30,000 amount imputed by the juvenile court.

{¶ 35} Finally, we find the court erred in failing to include the cost of childcare in its child support worksheet. When calculating child support for parents with a shared parenting plan, line 19 in the worksheet set forth in R.C. 3119.022 requires the court to consider and include the expenses for childcare. In Varner v. Varner , 170 Ohio App.3d 448, 2007-Ohio-675, 867 N.E.2d 857 (9th Dist.), the court found that the trial court's failure to include the expenses for daycare in its worksheet constituted an abuse of discretion. Id. at ¶ 9.

{¶ 36} In this case, the parties presented testimony reflecting that mother takes care of M.C.M. until 5:00 p.m. Mother's care of M.C.M. during the day certainly may impact her ability to gain additional employment, a fact that the court did not appear to consider when finding that mother was voluntarily underemployed and imputing additional income to her. Further, if mother would gain additional or full-time employment, she would have to find another method of caring for M.C.M., which would mean that she would likely incur additional expenses. Therefore, the court's failure to consider mother's care for M.C.M. as well as any potential childcare expenses constitutes an abuse of discretion.

{¶ 37} In sum, the court abused its discretion when it determined that mother was earning or could have earned $30,000.

2. Calculation of Father's Gross Income

{¶ 38} Mother also argues that the juvenile court incorrectly calculated father's income by averaging the income he earned during 2014, 2015, and 2016. She argues that the court should not have averaged father's income because he did not work for Heartland Payment Systems ("HPS") for the entirety of 2014 and points out that father's 2015 income cannot be verified because he failed to submit his tax returns for that year. As a result, she argues that the court should only have used father's income from 2016 when he worked for HPS and West Geauga Local Schools and made over $80,000 according to documents submitted by father and mother.

{¶ 39} Foremost, " 'a court is not limited to considering the gross income as stated in the tax returns.' " In re Massey v. Lambert , 7th Dist. Columbiana No. 09 CO 29, 2011-Ohio-1341, 2011 WL 1005133, ¶ 57, quoting Staffrey v. Smith , 7th Dist. Mahoning No. 09-MA-107, 2010-Ohio-1296, 2010 WL 1177647. "Although federal and state tax documents provide a proper starting point to calculate a parent's income, they are not the sole factor for the trial court to consider." Glassman , 8th Dist. Cuyahoga Nos. 85838, 85863, and 87175, 2006-Ohio-3837, 2006 WL 2096587, at ¶ 23, citing Foster v. Foster , 150 Ohio App.3d 298, 2002-Ohio-6390, 780 N.E.2d 1041 (12th Dist.), and Houts v. Houts , 99 Ohio App.3d 701, 651 N.E.2d 1031 (3d Dist. 1995). A court may look to supporting documentation, such as W-2 or 1099 forms, as promulgated by R.C. 3119.05(A). Massey at ¶ 57. Therefore, the magistrate was permitted to calculate father's 2015 income by considering his W-2 forms from that year.

{¶ 40} Turning to the court's decision to average father's income, R.C. 3119.05(H) allows a juvenile court to calculate a parent's gross income by averaging the income earned "over a reasonable period of years" "when appropriate." A trial court, having the "best position to weigh the facts and circumstances of the case[,]" must decide if the averaging method is appropriate on a case-by-case basis. Wright v. Wright , 8th Dist. Cuyahoga No. 91026, 2009-Ohio-128, 2009 WL 94758, ¶ 24.

{¶ 41} "The income averaging method permitted by [ R.C. 3119.05(H) ] has been found to offer a useful method for calculating gross income when [a parent's] income is unpredictable or inconsistent." Id. , citing In re Kohlhorst , 3d Dist. Auglaize No. 2-06-09, 2006-Ohio-6481, 2006 WL 3544738.

Nevertheless, while a court may average a parent's annual income when they are commission-based, it may only use income figures that reflect an entire year's salary for a particular job. See id. at ¶ 20 (finding that the court erred in averaging the mother's incomes from 2011 and 2012 because it "only had evidence of [her] income from commissions for part of 2011"); Heuer v. Heuer , 10th Dist. Franklin No. 92AP-1512, 1993 WL 220904, 5 (June 8, 1993) (finding that the court erred in using the father's income from an employment contract because it did not represent a full year of his gross income).

{¶ 42} Here, father did not begin working for HPS until approximately June 2014. In other words, the records he submitted in relation to his commission-based salary from HPS in 2014 did not reflect a complete year. Accordingly, the court should not have used the $48,048 reflected on father's 2014 tax forms when averaging father's income. Therefore, we find that the court's income determination for father was inequitable.

{¶ 43} Although we are reversing the court's income determination for father based on the above discussion, we note that we are unable to discern how the court determined that the average of father's salaries for 2014, 2015, and 2016 was $62,523. To calculate a parent's income, a court must use a parent's gross income. R.C. 3119.01(A)(5)(a) ; see also Ohlemacher v. Ohlemacher , 9th Dist. Lorain No. 02CA008108, 2003 WL 187894, 2 (Jan. 29, 2003) (finding reversible error where "the lower court based the modified child support award on the adjusted gross income of the parties rather than their gross incomes as required by the statute"). Based on our review of the record, it appears that father had a gross income of $48,048 for a partial year in 2014; $50,235.13 in 2015; and $82,733 in 2016. The average of those years salaries is $60,389.15, which is $2,133.85 less than what was listed on the court's child support worksheet. In light of our confusion in this particular case, we urge the lower court to set forth the particular figures that it utilizes when completing the child support worksheet. Accordingly, we sustain mother's second and third assignments of error.

C. Validity of CJFS-OCSS's Order

{¶ 44} There is an additional issue we need to address. In Hannah v. Hannah , 2016-Ohio-1538, 63 N.E.3d 703, we noted that "3119.70 clearly require[s] a determination by the court regarding the validity of the agency's child support calculation before the court may conduct an independent review and order a revised amount." Id. at ¶ 14. In that case, we found that the lower court "made no determination that the agency's revised child support amount was inappropriate when it adopted the magistrate's decision" and, therefore, abused its discretion. Id.

{¶ 45} Here, the juvenile court's judgment entry stated:

The testimony and exhibits were all considered for the primary purpose to review the administrative child support order issued by CJFS-OCSS on May 5, 2016. The Court finds that the administrative order is devoid of any finding of facts how the incomes for both parents were established and thus failing to explain basis for the calculations of child support obligation. The Court finds that a review of the administrative child support order is necessary under these circumstances, no matter who may have requested one.

The court then made a number of its own findings. While the court stated that it would review CJFS-OCSS's order, it did not make a determination as to the validity of that order. Based on our decision in Hannah , we find that the court erred by failing to determine the validity of CJFS-OCSS's child support order and income calculations.

{¶ 46} Judgment reversed and remanded. We remand the matter to the trial court for a new evidentiary hearing to (1) determine the validity of CJFS-OCSS's order, and (2) redetermine mother's and father's incomes for purposes of child support.

PATRICIA ANN BLACKMON, J., and KATHLEEN ANN KEOUGH, J., CONCUR

      These calculations are based on the assumption that mother would work 40 hours per week and 52 weeks per year, using Ohio's minimum wage rates, which were $7.95 per hour in 2014 and $8.10 per hour in 2015 and 2016.

      It is not clear from the record as to whether mother cares for M.C.M. until 5:00 p.m. on weekends as well or whether mother and father split the parenting time a different way on weekends.

      There is a discrepancy as to what father's gross income was for 2016, which we address later in this section.

      Father's gross annual income for 2016 was based on the $77,586.91 and $5,297.40 listed on his W-2 forms, provided in one of mother's exhibits and father's Exhibit I. Father also submitted Exhibit H, which was an earning statement, dated December 30, 2016, from HPS, however, that listed his year-to-date earnings as $82,733. Adding the salary listed on the paystub to the $5,297.40 listed on father's W-2 form from West Geauga schools, results in a gross income of $88,030.40 for 2016. Neither party submitted father's tax returns for 2016 and, thus, we are left with the W-2 forms and earning statement.