text:
    Gary A. RUBEL, et al., Plaintiffs-Appellants, v. John Richard JOHNSON, et al., Defendants-Appellees.
    NO. 17 MO 0009
    Court of Appeals of Ohio, Seventh District, Monroe County.
    Dated: December 18, 2017
    Atty. Richard A. Yoss, Atty. Ryan M. Regel, Atty. Jordan C. Croucher, Yoss Law Office, 122 North Main Street, Woodsfield, Ohio 43793, For Plaintiffs-Appellants.
    Atty. Eric C. Johnson, Johnson & Johnson Law Offices, 12. W. Main St., Canfield, Ohio 44406, For Defendants-Appellees.
   JUDGES: Hon. Carol Ann Robb, Hon. Gene Donofrio, Hon. Cheryl L. Waite

OPINION

ROBB, P.J.

{¶ 1} Plaintiffs-Appellants Gary and Nancy Rubel appeal the decision of the Monroe County Common Pleas Court finding Defendant-Appellee Sheila Johnson owned 1/3 of the mineral interest underlying Appellant's property. The sole issue is whether a 1966 deed transferring property to Appellants contained a mineral reservation where it stated: "Subject, however, to all right, title and interest of the grantor herein in the above three tracts in all minerals rights thereunder including coal, gas and oil." Appellants argued this clause merely conditioned the transfer on what the grantor had the ability to grant and limited the warranty in the deed. Appellee argued the clause constituted a mineral reservation, and the trial court agreed. For the following reasons, the trial court's judgment is affirmed.

STATEMENT OF THE CASE

{¶ 2} In 1912, Luella Roe and her husband, Francis, conveyed sixty acres in Monroe County "excepting and reserving from the same the undivided one half oil royalty, being the one sixteenth of the oil produced from said premises * * *." In 1948, an estate was opened in the Guernsey County Probate Court for Paul Johnson who died owning four tracts of land including the sixty-acre tract (called tract III). In 1949, the probate court's certificate of transfer was recorded showing ownership of the real estate transferred to three devisees: Ethel Johnson (the decedent's wife), James W. Johnson, and John R. Johnson (the decedent's two children). The description of tract III recited: "EXCEPTING

AND RESERVING from the same the undivided one-half oil royalty, being the 1/16th of the oil produced from said premises."

{¶ 3} In 1966, John and James Johnson sold the 2/3 interest they inherited in tracts I, II, and III to Appellant Gary Rubel. As Appellee Sheila Johnson was married to James Johnson, she was listed in the deed as his wife and a grantor. After the description for tract III, the deed contained a paragraph with the aforementioned "EXCEPTING AND RESERVING" clause concerning the oil royalty. In a separate paragraph was the disputed clause: "Subject, however, to all right, title and interest of the grantor herein in the above three tracts in all minerals rights thereunder including coal, gas and oil." The deed then noted the property was part of the premises transferred from the estate of Paul Johnson with reference to the recordation of the prior deed.

{¶ 4} Recorded on the same day was an executor's deed wherein Gary Rubel purchased the remaining 1/3 interest in these tracts (plus three other tracts) from the executor of Jennie Johnson's estate. Pertinent to the sixty-acre tract transferred in the 1912 deed and the 1949 certificate of title, the 1966 executor's deed contained the same "EXCEPTING AND RESERVING" and "Subject, however, to" clauses as the 1966 general warranty deed executed by John, James, and Sheila Johnson (for their 2/3 interest). Jennie Johnson had obtained her 1/3 interest via a quitclaim deed recorded in 1949, wherein Ethel Johnson (her daughter-in-law) transferred the 1/3 share in the three tracts Ethel had just inherited from her husband. The 1949 deed repeated the "EXCEPTING AND RESERVING" clause describing the oil royalty, and this deed is said to be the first time the "Subject, however, to" clause was used in Appellants ' chain of title. However, this 1949 quitclaim deed and the subsequent 1966 executor's deed is not part of Appellee's chain of title. It is the 1966 general warranty deed from John and James Johnson to Gary Rubel on which Appellee's claim is based.

{¶ 5} James Johnson died in 1985. The parties agreed Appellee would have inherited her husband's 1/3 mineral interest if it was reserved by James in the 1966 deed transferring his 1/3 share in the property to Gary Rubel. John Johnson created a trust naming Ohio University Foundation as a beneficiary. In 2011, John filed a claim to preserve the minerals underlying the three tracts transferred to himself, his mother (Ethel), and his brother (James) by Paul Johnson's estate. His incorporated affidavit stated he inherited his mother's 1/3 mineral interest when she died in 2004.

{¶ 6} In 2006, Gary Rubel executed a deed transferring his property to himself and his wife, Nancy Rubel, joint and survivor. The deed did not contain either the "excepting and reserving" or the "subject, however, to" clause. In 2013, the Rubels caused to be recorded an "affidavit on facts relating to title" under R.C. 5301.252 and then filed a complaint against Sheila Johnson and John R. Johnson, individually and as trustee. The complaint sought a declaratory judgment that the clause beginning with "subject, however, to" was not a reservation and did not create a new severed mineral interest. (The complaint also sought a declaration that any mineral interests were abandoned under the 1989 version of the Dormant Mineral Act. After the Supreme Court's decision in Corban was released, this count was withdrawn.)

{¶ 7} A successor trustee and then Ohio University Foundation were substituted as parties in place of John Johnson, who had died in 2012. On October 15, 2015, a settlement was entered regarding any mineral interest claimed to be derived from John Johnson (which included the 1/3 he claimed he reserved in the 1966 deed and the 1/3 he said he inherited from Ethel who was said to have reserved her mineral interest in the 1949 deed). Under the confidential settlement agreement, Ohio University Foundation quitclaimed whatever interest John had in the minerals under the three tracts to Appellants. This left in dispute the 1/3 mineral interest claimed by Appellee as having been reserved by her husband (James) in the 1966 deed.

{¶ 8} On December 8, 2016, the parties filed agreed stipulations "so as to avoid the necessity of any trial in the matter and to permit the Court to decide the matter upon the submission of written briefs to be submitted by the parties * * *." The agreement set deadlines for the briefs and for any responding briefs. The parties stipulated to various facts and to the admissibility of exhibits attached to the agreed stipulations. They agreed the sole issue was whether the "subject to" language in the 1966 warranty deed was effective as a reservation of mineral rights. If so, then Appellee was the owner of a 1/3 mineral interest under the three tracts; if not, then Appellants owned this 1/3 (and already owned the other 2/3).

{¶ 9} Appellants filed a brief arguing the phrase "subject to" is used in order to refer to what has already transpired, which in this case would simply be a reference to the 1912 oil royalty and any other overlooked events. Appellants emphasized how the deed used "excepting and reserving" (and capitalized it) when describing the prior oil royalty and suggested the grantors would have used this type of language again if they intended to create affirmative rights and reserve a mineral interest. It was claimed the "subject, however, to" clause merely represented the grantors' intent to condition the transfer on what they had the ability to give and was common language used to protect the grantor against a breach of warranty claim. They cited a Texas appellate court case for the proposition that the phrase "subject to" in a conveyance does not create affirmative rights. Appellants concluded the language clearly and unambiguously did not create a new mineral reservation and alternatively argued any ambiguity should be construed in their favor as the grantee.

{¶ 10} Appellee filed what was labeled a motion for summary judgment. Appellee urged that although a "subject to" clause is sometimes used to avoid liability on a breach of warranty claim, the use of the phrase does not preclude the reservation of an interest. She insisted the only logical reading of the disputed clause is that the "grantor herein" was reserving "all mineral rights" in the "three tracts." Appellee pointed out that the disputed clause only referred to mineral interests and suggests a typical limiting clause would provide the transfer is "subject to restrictions, covenants, conditions, reservations, etc. existing of record." Appellee posited the grantors had no need to warn the grantee about the prior oil royalty issue via the "subject to" clause because the prior clause had just disclosed the oil royalty by quoting it.

{¶ 11} Emphasis was also placed on the deed's concluding paragraph which stated: "title so conveyed is Clear, Free and Unencumbered; And Further, That they do Warrant and will Defend the same against all claim or claims, of all persons whomsoever; Excepting all taxes and assessments due and payable after the December 1965 tax installment, which taxes and assessments after said installment, the Grantee herein assumes and agrees to pay." Appellee reasoned if the disputed clause was meant to protect the grantors from a warranty claim, it would have appeared at this location, rather than after the property description. Appellee also noted the use of the word "excepting" (with regards to taxes) in order to make the point that words must be read in context as this use of "excepting" was not a retention by the grantor.

{¶ 12} Appellee cited Ohio cases involving deeds which used the phrase "subject to" when creating an interest. She emphasized the law does not require the "magic" words "excepting" or "reserving" in order for a grantor to retain their mineral interest during a property transfer. Appellee stated the capitalization of the words "excepting and reserving" was not significant as this was copied from the last document in the chain of title (the certificate of title issued by the probate court). Appellee explained that the 1966 deed's use of the "subject, however, to" clause would not have been a mere reference to Ethel's prior use of the term in 1949 because the 1949 deed is not in her chain of title. Although the 1949 deed (from Ethel to Jennie Johnson) lies outside of Appellee's chain of title and the pertinent 1966 transaction involved a warranty deed, Appellee noted the 1949 deed contained the same clause even though it was a quitclaim deed with no need to limit liability.

{¶ 13} Appellants replied by pointing out this was extrinsic evidence; they also asserted quitclaim deeds have been known to contain "subject to" clauses (with general references to prior transactions) even though such deeds contain no warranty. Appellants acknowledged "subject to" can preface the creation of a reservation if the grantor has a pre-existing document which is referred to or if the clause contains additional language such as a form of the word "reserve." They also pointed to distinguishing aspects of the case law cited by Appellee.

{¶ 14} On April 12, 2017, the trial court issued judgment in favor Appellee declaring she was the owner of the disputed 1/3 mineral interest under the three tracts. The court found the relevant language in the 1966 deed clearly and unambiguously created a reservation of the mineral interest. The court concluded there was no other logical interpretation. The within appeal followed.

GENERAL LAW

{¶ 15} Appellants begin by setting forth the standard of review for summary judgment. For instance, summary judgment can be granted where there remain no genuine issues of material fact for trial and where, after construing the evidence most strongly in favor of the non-movant, reasonable minds can only conclude that the moving party is entitled to judgment as a matter of law. Byrd v. Smith , 110 Ohio St.3d 24, 2006-Ohio-3455, 850 N.E.2d 47, ¶ 10, citing Civ.R. 56(C). The appellate court reviews the trial court's application of the summary judgment standard de novo. Doe v. Shaffer , 90 Ohio St.3d 388, 390, 738 N.E.2d 1243 (2000). While arguing summary judgment was improperly granted in favor of Appellee, Appellants also ask for summary judgment in their favor (which would make them the movants for this argument).

{¶ 16} Appellee points out the parties' stipulations agreed to submit the matter to the trial court on the stipulated facts, exhibits, and briefs in lieu of trial. As aforementioned, the stipulations specified they were submitted "so as to avoid the necessity of any trial in the matter and to permit the Court to decide the matter upon the submission of written briefs to be submitted by the parties * * *." Appellee therefore concludes our review does not require reference to summary judgment standards, while noting there would still be a de novo review on legal issues involving construction of the deed. An appellate court's review is more limited if the trial court had to make factual determinations.

{¶ 17} "Unlike determinations of fact which are given great deference, questions of law are reviewed by a court de novo." Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm , 73 Ohio St.3d 107, 108, 652 N.E.2d 684 (1995). "If a contract is clear and unambiguous, then its interpretation is a matter of law and there is no issue of fact to be determined." Id. , quoting Inland Refuse Transfer Co. v. Browning-Ferris Industries of Ohio, Inc. , 15 Ohio St.3d 321, 322, 474 N.E.2d 271 (1984). "However, if a term cannot be determined from the four corners of a contract, factual determination of intent or reasonableness may be necessary to supply the missing term." Inland Refuse , 15 Ohio St.3d at 322, 474 N.E.2d 271. These principles apply even in a case involving an agreement to submit stipulations and briefs in lieu of an evidentiary hearing. See, e.g. , Taylor v. Kemp , 7th Dist. No. 05 BE 13, 2005-Ohio-6787, 2005 WL 3489759, ¶ 24-27.

{¶ 18} The purpose of contract or deed construction is to ascertain the intent of the parties which is presumed to reside in the language they chose to use in their agreement. Graham v. Drydock Coal Co. , 76 Ohio St.3d 311, 313, 667 N.E.2d 949 (1996). In determining the intent of the parties to the deed, extrinsic evidence is admissible if the contract is unclear or ambiguous or if circumstances surrounding the agreement give the plain language special meaning. Id. at 313-314, 667 N.E.2d 949, citing Shifrin v. Forest City Ent., Inc. , 64 Ohio St.3d 635, 638, 597 N.E.2d 499 (1992). "If we are able to determine the intent of the parties from the plain language of the agreement, then there is no need to interpret the contract." Saunders v. Mortensen , 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 452, ¶ 9.

{¶ 19} "[C]ommon words appearing in a written instrument are to be given their plain and ordinary meaning unless manifest absurdity results or unless some other meaning is clearly intended from the face or overall contents of the instrument." Alexander v. Buckeye Pipe Line Co. , 53 Ohio St.2d 241, 245-46, 374 N.E.2d 146 (1978). "Even though most words in the English language have multiple meanings, ambiguity should not be created where it does not exist." Dominish v. Nationwide Ins. Co. , 129 Ohio St.3d 466, 2011-Ohio-4102, 953 N.E.2d 820, ¶ 7. Words or phrases should not be read in isolation. Id. at ¶ 8. If intent cannot be determined from the contract or if a provision is "reasonably susceptible of more than one meaning," then it is ambiguous. Lightning Rod Mut. Ins. Co. v. Southworth , 151 Ohio St.3d 70, 2017-Ohio-7438, 86 N.E.2d 274, ¶ 12. If parol evidence is then employed and it fails to clarify the meaning of the contract, then the contract is strictly construed against the drafter; interpreting the written instrument against the drafter is a secondary rule of contract construction.

Cadle v. D'Amico , 2016-Ohio-4747, 66 N.E.3d 1184, ¶ 33 (7th Dist.) ("Construing a contract against the drafter is a secondary rule of contract construction, and is applicable when the primary rules of contract construction * * * fail to clarify the meaning of the contract."); Envision Waste Services, LLC v. County of Medina , 2017-Ohio-351, 83 N.E.3d 270, ¶ 15. "In case of doubt, it is said, the conveyance is to be construed most strongly as against the grantor, or in favor of the grantee on the theory, it seems, that the words used are to be regarded as the words of the grantor rather than of the grantee." Pure Oil Co. v. Kindall , 116 Ohio St. 188, 202-203, 156 N.E. 119 (1927) (in cases where the contractual language is ambiguous and the drafter is unknown).

{¶ 20} The sole issue is whether any mineral interest was conveyed to the grantee in the 1966 general warranty deed. The parties agreed the mineral interest was not conveyed to the grantee if the following clause constitutes an exception or a reservation of the grantor's mineral interest: "Subject, however, to all right, title and interest of the grantor herein in the above three tracts in all minerals rights thereunder including coal, gas and oil." We stop to point out that the parties note the difference between an exception and a reservation, but they then proceed under the premise that the use of either word would have precluded the mineral interest from being conveyed. An exception exists when the grantor retains a part of the estate that can be enjoyed separate from the estate conveyed to the grantee; the grantor retains title to the excepted part of the realty. Clark v. Guest , 54 Ohio St. 298, 303, 43 N.E. 862 (1896). A reservation is said to be the mere right or privilege, reserved by the grantor, to use the estate which is not part of the realty itself but issues out of it (such as rent or the right to timber as it is cut); the title to the whole estate passes to the grantee, but it is burdened by the right reserved. Id. at 303-304, 43 N.E. 862. Even though the terms mean different things, excepting and reserving are often used interchangeably or at the same time. See, e.g. , American Energy Corp. v. Datkuliak , 174 Ohio App.3d 398, 2007-Ohio-7199, 882 N.E.2d 463, ¶ 75 (7th Dist.).

{¶ 21} The particular term used will not necessarily establish whether an exception or a reservation has been created. Id. "Whether the language used in a deed creates a reservation or exception from the grant depends upon the intention of the parties as evinced by a construction of the whole instrument in the light of the circumstances of each case." Gill v. Fletcher , 74 Ohio St. 295, 78 N.E. 433 (1906), syllabus. See also Sloan v. Lawrence Furnace Co. , 29 Ohio St. 568 (1876), syllabus ("The words 'reserving all the minerals underlying the soil,' in the granting clause of a deed for the conveyance of real estate, constitute, prima facie, an exception of the minerals from the operation of the grant.")

{¶ 22} Similarly, Appellants seem to acknowledge the use of a certain word or phrase (such as "subject to") does not per se establish there was no exception or reservation. Although Appellants point out the deed did not use the term "excepting" and/or the term "reserving" when referring to the grantor's minerals, Appellant acknowledges there is no magic language required to create an exception or a reservation. Again, the parties are not asking us to differentiate between an exception or a reservation. Rather, both sides agree that if the language is an exception or a reservation, then Appellant was not granted the mineral interest when the property was conveyed in the 1966 deed. In other words, Appellant admits that either an exception or a reservation would have precluded the minerals from being conveyed in the 1966 deed. Finally, we note the term mineral "reservation" is used by the parties to cover either an exception or a reservation. See generally Chesapeake Expl., L.L.C. v. Buell , 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 185, ¶ 23 ("The owner who conveys the surface estate may retain an interest in the mineral estate by reservation"; upon such severance, neither the surface nor the minerals actually has full ownership as each has rights subject to the other). With these standards and agreements in mind, we proceed to the disputed points.

ASSIGNMENTS OF ERROR

{¶ 23} Appellants set forth the following three assignments:

"The Trial Court erred in interpreting the contract language used in the 1966 Deed between John Richard Johnson, James Johnson, Sheila Johnson, and Gary & Nancy Rubel and misapplied contract law as a result."

"The Trial Court erred in granting Appellee's Motion for Summary Judgment, finding that 'subject to' language used in a Warranty Deed created a reservation of a mineral interest."

"The Trial Court erred in finding the contract language unambiguous in favor of Appellee."

{¶ 24} As touched on above, Appellants note the deed's use of "excepting" and "reserving" when referring to a prior oil royalty reservation on track III and the lack of such words when referring to the entire mineral interest. Appellants insist the "subject to" clause does not plainly show the grantor's intent to except or reserve the mineral interest. They say their argument does not ask for the clause to be ignored but asks for the clause to be interpreted as merely conditioning the transfer on what the grantor had the ability to give (at least when it came to the minerals). Appellants note the clause was placed after the recitation of the prior oil royalty reservation. They conclude the clause is a reference to any events that may have already transpired.

{¶ 25} Appellants say the "subject to" clause was a mere limitation on the warranty granted in the deed (i.e., a fail-safe) in case there were other mineral reservations besides the oil royalty on tract III, stating this is a common use of the clause. Appellants state Appellee cited no case where the phrase "subject to" created a mineral reservation on its own (without other words of import). Appellants define "subject to" as meaning conditional or dependent upon something, concluding its use requires the thing referred to in the clause to already exist and insisting the bare phrase does not affirmatively create a right. They rely on Walker from a Texas appellate court. Although they insist the disputed clause is clearly and unambiguously not an exception or reservation of the grantor's mineral interest, they alternatively posit the clause must be construed against the grantor (and now Appellee) if we conclude it is ambiguous.

ANALYSIS

{¶ 26} A "subject to" clause can be used as a precaution to limit a grantor's liability under the deed's warranty in order to avoid a future breach of warranty claim. The parties refer to the following example: "subject to restrictions, covenants, conditions, limitations, easements, rights of way, and reservations existing of record * * *."See generally Miller Lakes Community Servs. Assn., Inc. v. Schmitt , 9th Dist. No. 15AP0010, 2016-Ohio-339, 2016 WL 515641, ¶ 6. See also Edwards v. Ohio State Students' Trailer Park Co-operative , 84 Ohio App. 518, 519, 88 N.E.2d 187 (2d Dist.1949) ("This deed is executed and delivered by the grantor herein and accepted by the grantee herein subject to all easements, exceptions and conditions of record in any manner affecting the use of said premises."). When used in this manner, the clause is considered "a type of savings clause limiting the general warranty," and if there were no such restrictions previously created, the sentence has no meaning except as a "precautionary measure." Wilson v. Tuttle & Son Construction, Inc. , 3d Dist. No. 2-81-14, 1982 WL 6736 (Feb. 18, 1982) ("Said premises are conveyed subject to the restrictions and conditions contained in former deeds for this lot and effective at this date.").

{¶ 27} In urging a "subject to" clause is a reference to any events that may have already transpired, Appellants distinguish cases cited by Appellee where courts found a reservation in the "subject to" clause. Appellants state the "subject to" clause in some cases was referring to or incorporating an easement, dedicated road, or document that was pre-existing rather than creating a new right. See, e.g. , Miller v. Romanauski , 8th Dist. No. 100120, 2014-Ohio-1517, 2014 WL 1408215, ¶ 6 ("subject to all legal highways and 25 feet off the south side thereof for Fernhall Road, proposed."); Parker v. Parker , 4th Dist. No. 99CA845, 2000 WL 1520046 (Sept. 28, 2000) ("This transfer is subject to rights as stated in the Decree of Dissolution of Marriage * * *").

{¶ 28} Nonetheless, "subject to" has been utilized in deeds for other purposes. As the parties agree, prefacing a clause with "subject to" does not preclude the clause from containing an exception or reservation. Still, Appellants suggest that in order for the grantor to own the minerals, the clause would have to include words akin to "subject to the grantor excepting his mineral rights" or "subject to the grantor reserving his mineral rights" or even "subject to: the grantor is not conveying his mineral rights in this transaction." See, e.g. , Lone Star Steakhouse & Saloon of Ohio, Inc. v. Ryska , 11th Dist. No. 2003-L-192, 2005-Ohio-3398, 2005 WL 1538259, ¶ 26 ("Subject to Lessor reserving a twenty-four foot easement for the length of the property on the Westerly side"); Slaine v. Drevon , 5th Dist. No. CA-5713, 1981 WL 6602 (Dec. 23, 1981) ("Subject however to a reservation for street purposes of a strip of land twenty feet in width off the west end of this tract."); Bowers v. Kerman , 35 Ohio App. 44, 45, 171 N.E. 604 (9th Dist.1930) ("This property is conveyed subject to the following restrictions and limitations which are reserved by the said grantor * * *").

{¶ 29} As aforementioned, Appellants agree magic words are not required and a variation of "except" or "reserve" is not required. See Gill , 74 Ohio St. 295, 78 N.E. 433 at syllabus ("Whether the language used in a deed creates a reservation or exception from the grant depends upon the intention of the parties as evinced by a construction of the whole instrument in the light of the circumstances of each case."). For instance, this court found coal was clearly excepted from the conveyance by the second half of the clause, "All coal underlying said lands has been heretofore transferred and no rights to coal are intended to be conveyed by this deed." Stobbs v. Johnson , 7th Dist. No. 88-B-3, 1989 WL 33685 (Apr. 6, 1989) (even though only one seam of coal had been transferred previously). Appellants state the language, "no rights to coal are intended to be conveyed" is clearer than the language in the clause at issue in the case at bar, while Appellee points out the first part of the clause in Stobbs was untrue and thus made the second part less clear than Appellants suggest.

{¶ 30} There are cases finding a clause in a deed created a new easement (as opposed to merely referencing any prior easements) via a "subject to" clause without the addition of the term "reservation" or "exception" or the phrase "the grantor does not convey" or "the grantor retains." See Clark v. Butler , 4th Dist. No. 12CA3315, 2012-Ohio-5618, 2012 WL 6018027, ¶ 9 ; Dagrosa v. Calabro , 105 N.Y.S.2d 178, 181 (1951). Appellants believe the creation of an easement is different than the creation of a mineral reservation, and Appellee responds that Appellants' position on this particular topic is not explained or supported. This parallel between easements and mineral reservations was recognized by a Kentucky appellate case which found a mineral reservation was created by a "subject to" clause; the case is addressed further below. Kelley v. Haas , 262 S.W.2d 687, 688-689 (Ky.App.1953), citing Dagrosa , 105 N.Y.S.2d 178. On the topic of life estates, there are cases where the courts presuppose a phrase such as "subject to a life estate in the grantor" created a reservation. See, e.g. , Nelson v. Parker , 687 N.E.2d 187 (Ind.1997) (where the issue before the Indiana Supreme Court was whether the state would maintain the common law rule that a new reservation cannot be made in favor of a third party or "stranger to the deed").

{¶ 31} Appellants rely on the following statements in a Texas appellate case regarding the phrase "subject to" as used in a deed: "The principal function of the 'subject to' clause in the conveyance of a mineral interest is to protect the grantor against a claimed breach of warranty"; the ordinary meaning of the phrase is "limited by" or "subordinate to"; and the phrase "does not have the effect of creating any affirmative rights." Walker v. Foss , 930 S.W.2d 701, 706 (Tex.App.1996). Before reviewing Walker , we note the Texas Supreme Court has also made the first two observations, agreeing the principal function of a subject to clause in a deed is to protect a grantor against a claim for breach of warranty. Wenske v. Ealy , 60 Tex. Sup. Ct. J. 1433, 521 S.W.3d 791, 796 (2017), relying on Smith, The "Subject To" Clause , 30 Rocky Mtn. Min.L.Inst., Section 15.01 (1984).

{¶ 32} But, the Texas Supreme Court also recognized "subject-to clauses are widely used for other purposes" and shunned the employment of "magic words" or mechanical rules. Id. at 796-797 (in a case asking which portion of the mineral interest was burdened by a prior royalty). Although the majority in Wenske found the clause before the court indicated an intent to avoid a breach of warranty claim under the facts of that case (rather than an attempt to make a reservation free of the pre-existing oil royalty), they refused to overrule a prior case finding a "subject to" clause limited the estate granted and did not merely protect against warranty claims. Id. at 794-795, citing Bass v. Harper , 441 S.W.2d 825 (Tex.1969) (partly relying on the location of the subject to clause in the deed so that it was tied to the grant rather than the warranty). An emphasized premise underlying the results of each case is embodied in the following statement: "Given the enormous power of context to transform the meaning of language, courts should resist rulings anchored in hyper-technical readings of isolated words or phrases." Wenske , 521 S.W.3d at 797.

{¶ 33} Returning to the cited Walker case it should be pointed out that after finding the first two instances of "subject to" did not create an affirmative right (because the language after the clause merely referred to a prior recorded life estate and a prior recorded oil and gas reservation), the Texas appellate court concluded an affirmative right was created by a third use of the clause in combination with the subsequent wording. Walker , 930 S.W.2d at 707. That is, after finding a "subject to" clause mentioning a prior recorded life estate and a prior recorded mineral reservation did not create new rights, the court found a new interest was created by a "subject to" clause followed by a "[r]eservation of a 1/16th over-riding royalty for a period of 20 years from the date hereof unto the grantor herein." Id. at 706-707 (emphasizing "and" after the quoted clauses to show the phrase "subject to" applied to each of the three disputed clauses). In support of Appellants' argument, we recognize the Walker deed contained the word "reservation" in the pertinent "subject to" clause. On the other hand, we note the Walker court emphasized the reference to "the grantor herein" in finding a new reservation was created. Id. at 707.

{¶ 34} Similarly, an Arkansas appellate court held the clause "[s]ubject to reservation of all oil, gas, and other minerals" (in the granting clause immediately following the legal description) unambiguously reserved a valid mineral interest in the grantor. Barger v. Ferrucci , Ark. App. No. CA 10-797, 2011 Ark. App. 105, 2011 WL 514662. The court emphasized the word "all" and noted the "subject to" clause did not refer to a prior limitation or any other recordings. Id. ("Despite appellants' argument that 'subject to' may not create an affirmative right, our examination of this deed from its four corners convinces us otherwise."). Again, we recognize the deed in the Barger case contained the word "reservation" in the "subject to" clause.

{¶ 35} Even if the bare phrase "subject to" does not denote the creation of affirmative rights, affirmative rights can be created due to the words used in conjunction with the phrase. Different "subject to" clauses in the same deed can have different meanings depending on their context. The first paragraph of the secondary source cited in Walker and Wenske states the use of a subject to clause "as a mechanism for retaining an interest in the grantor" is "likely to introduce an element of ambiguity into the deed * * *." Smith, The "Subject To" Clause , 30 Rocky Mtn. Min. L. Inst. Yet, the cases of Bass , Walker , and Barger did not find an ambiguity by the use of the phrase when creating a reservation. Still more on point, there are instances of courts around the country finding the use of the phrase "subject to" did not make it ambiguous as to whether a reservation was created and instead found the language in the clause unambiguously showed the grantor retained the right listed after the clause, even where a word such as "reservation" was not used in the clause.

{¶ 36} For instance, in the Nebraska Supreme Court's Bulger case, the granting clause of the deed contained the legal description of the property which concluded by stating, "together with all appurtenances to the same belonging, and all the estate, title, dower, right of homestead, claim or demand whatsoever of the said grantors, of, in or to the same, or any part thereof; subject to ONE-HALF OF ALL OIL AND MINERAL RIGHTS." Bulger v. McCourt , 179 Neb. 316, 318, 138 N.W.2d 18 (1965). The grantee argued the "subject to" clause was not an exception or a reservation of one-half of the mineral rights "but was merely a limitation on the liability of the grantors under the warranty deed." Id. at 319, 138 N.W.2d 18. The Nebraska Supreme Court disagreed and upheld the entry of summary judgment in favor of the grantor's successors.

{¶ 37} The state supreme court explained the phrase "subject to" was "often used by nonlawyers to cover exceptions, reservations, and exclusions." Id. at 322, 138 N.W.2d 18. The court stated the phrase has "no well-defined meaning, although ordinarily it will mean subordinate to, subservient to, or governed or affected by." Id. , citing Black's Law Dictionary, 1594 (4th Ed.). The court noted its prior general definition for the phrase as "dependent upon" or "limited by" but then announced: "the expression 'subject to' is a term of qualification which acquires its meaning from the context in which it appears." Bulger , 179 Neb. at 322, 138 N.W.2d 18. The Nebraska Supreme Court concluded:

the ordinary person would readily interpret the conveyance as a retention by the grantor of one-half of all oil and mineral rights. To hold that the questioned language in the granting clause, without more appearing, was solely a limitation on the liability of the grantors under the warranties in the deed, would actually be a strained and unnatural construction.

Id. at 321-322, 138 N.W.2d 18 (finding it "evident" the grantor created a mineral reservation by stating the grant was "subject to one-half of all oil and mineral rights").

{¶ 38} An aforementioned Kentucky appellate decision is another case on point where the court ruled on the effect of a deed which stated the conveyance "is subject to * * * all mineral rights * * *." Kelley v. Haas , 262 S.W.2d 687, 688-689 (Ky.App.1953). The issue was "simply whether the quoted language constituted an exception of all the mineral rights, or only of such as had previously been conveyed to others, which happened in this case to be the coal rights only." Id. at 688. The successors to the grantors argued "the deed shows a clear intent to exclude 'all' mineral rights, and they maintain that the words 'subject to' are just as competent as any other words to effectuate an exception or reservation." Id. The grantees' successors argued the "subject to" clause was a protective clause "inserted only for the purpose of making clear that the grantors were not purporting to sell something they did not own." Id. The trial court agreed with the latter argument, but the appellate court reversed the holding:

It is reasonably clear to us that the deed excepts or reserves all the mineral rights, unless the words 'subject to' are not capable in law of accomplishing that purpose. While we are favored with the citation of numerous cases involving construction or application of the words, 'subject to,' none of the cited cases are authority for the proposition that these words cannot ever create an exception or reservation in favor of a grantor. * * * We have, in the deed before us, the phrase, 'subject to * * * all mineral rights'. To say that this was not effective to except or reserve all mineral rights would be to attach an unwarranted importance to the technicalities of the language of conveyancing. It is our opinion that no mineral rights passed to the grantees under this deed.

Id. at 688-689.

{¶ 39} Once again, the disputed clause before us reads: "Subject, however, to all right, title and interest of the grantor herein in the above three tracts in all minerals rights thereunder including coal, gas and oil." As set forth supra, the use of a "subject to" clause is not dispositive; the clause can introduce notice of a prior reservation or it can create a new reservation. Use of the word reservation or exception is not an absolute requirement in order for a grantor to create a new affirmative right during a conveyance. Context, rather than talismanic incantation, is the consideration. In other words, magic words are not required. See Gill , 74 Ohio St. 295, 78 N.E. 433 at syllabus (consider the whole instrument reading the language in its context to ascertain if it created an exception or a reservation of minerals).

{¶ 40} The language before us is even more indicative of a reservation or exception of the grantor's mineral interests than that used in the deeds in the Kelley and Bulger cases, which fully support Appellee's position and are persuasive authority. The reference to "grantor herein" after the "subject, however, to" clause is a factor leaning toward the reservation or exception from the conveyance as opposed to a mere limitation on the warranty. See Walker , 930 S.W.2d at 706-707. The clause refers to the grantor's right, title, and interest in a specific severable item. In addition, the clause refers to "all" title of the grantor herein in "all" mineral rights. It also provides examples such as coal, gas, and oil. The prior reservation of record referred before this clause was merely an oil royalty. Also, the prior reservation of the oil royalty only related to tract III but the "subject, however, to" clause relates to all mineral rights under all "three tracts" being described. Moreover, the clause was immediately after the legal description of the property being conveyed and is not connected to the warranty clause.

{¶ 41} Contrary to Appellant's initial contention, the "subject to" clause in the pertinent deed does not refer to a mere limitation on the warranty. Rather, the mineral rights were clearly and unambiguously excepted or reserved by the particular "subject to" clause involved in the context of this case. This court comes to a conclusion similar to the Kentucky appellate court in Kelley and the Nebraska Supreme Court in Bulger : An "ordinary person would readily interpret the conveyance as a retention by the grantor of * * * mineral rights" and to hold the clause was "solely a limitation on the liability of the grantors under the warranties in the deed, would actually be a strained and unnatural construction." See Bulger , 179 Neb. at 321-322, 138 N.W.2d 18. In accordance, the trial court's judgment is affirmed.

Donofrio, J., concurs.

Waite, J., concurs.

      There was no dispute between these parties regarding the 1912 oil royalty, and their stipulations claimed it expired upon the death of the 1912 grantor under the law as it existed at that time (because it did not contain a reference to "heirs and assigns"), citing Holdren v. Mann , 7th Dist. No. 592, 1985 WL 10385 (Feb. 13, 1985) ("Prior to the enactment of G.C. 8510-1, now R.C. 5301.02, in 1925, if a reservation in a deed was to be anything other than a life estate in the grantor, the deed must have contained words of inheritance.").

      The trial court thereafter issued an entry stating the parties agreed this motion for summary judgment would serve as the brief the parties agreed to submit in the stipulations. The entry also said the parties agreed the brief filed by Appellant as contemplated by the parties' stipulations may be viewed by the court as a summary judgment motion.

      In the past, an exception did not require words of inheritance to survive the grantor's death, but a reservation expired with the grantor unless there were words of inheritance. The requirement of words of inheritance was eliminated by a 1925 statute as set forth in a prior footnote.

      On the other hand, "all right, title, and interest" to "all mineral rights" of the "grantor herein" underlying the property represents a concrete and pre-existing item at the time of the property's conveyance and is further described as including coal, oil, and gas; an easement that is not pre-existing would have to be defined in some way to create it.


source: Caselaw Access Project

license: Public Domain

text:
    Joseph Arthur SOKOLOWSKI, Plaintiff-Appellee, v. Tina Marie SOKOLOWSKI, Defendant-Appellant.
    NO. 16 JE 0028
    Court of Appeals of Ohio, Seventh District, Jefferson County.
    Dated: December 18, 2017
    Atty. Mary F. Corabi, Corabi Law Office, 424 Market Street, Steubenville, Ohio 43952, for Plaintiff-Appellee.
    Atty. Marian D. Davidson, 100 N. 4th Street, Floor 7, Suite 700, Steubenville, Ohio 43952, for Defendant-Appellant.
   JUDGES: Hon. Carol Ann Robb, Hon. Gene Donofrio, Hon. Cheryl L. Waite

OPINION

ROBB, P.J.

{¶ 1} Appellant Tina Marie Sokolowski appeals the decision of the Jefferson County Common Pleas Court. She contends the division of marital assets and debts was an abuse of discretion. She also claims the court abused its discretion in not finding Appellee Joseph Arthur Sokolowski engaged in financial misconduct when he cashed an IRA and expended the funds on debts and marital expenses. For the following reasons, the trial court's decision is affirmed.

STATEMENT OF THE CASE

{¶ 2} The parties were married in October 1984. The husband filed a complaint for divorce (without minor children) on March 23, 2015. After a hearing on temporary matters, the court issued temporary orders in a May 13, 2015 entry. The court granted both parties cross-motions to prohibit the other from selling, transferring, liquidating, or otherwise disposing of any assets during the pendency of the matter. At the same time, the husband received the temporary and exclusive use of the marital residence as requested and was ordered to be responsible for the two mortgages, utilities, real estate taxes, and home owner's insurance. The court also ordered him to be responsible for paying all monthly marital expenses during the pendency of the action. The husband was ordered to pay $576 per month in temporary spousal support with credit for making the monthly payment on the Honda CRV driven by the wife ($326) and the monthly automobile insurance ($150). In addition, he was ordered to pay for the wife's health insurance, uninsured medical expenses, and prescription expenses. The divorce trial was held on December 30, 2015. Besides the 2013 Honda CRV, the parties owned two 2009 Honda Civics; the husband drove one and the parties' adult son drove the other. The husband asked for one Civic and wished to sell the other. The parties acknowledged the household goods were previously divided equally and agreed to divide Appellant's Steelworkers' pension equally. They also agreed not to discharge via bankruptcy any of the debts at issue in the action. The parties stipulated to the value of all marital assets and liabilities, with the exception of whether the husband's father loaned them money.

{¶ 3} On this topic, the husband's father testified and presented a ledger he kept showing various loans granted to his children and any payments received from them. He explained he loaned money to his children interest-free because he was not receiving interest from the bank and he wished to assist his children in avoiding interest on their loans. (Tr. 12-13, 19). His monthly income in retirement was $1,600, and he expected his children to pay him back. (Tr. 13, 19, 29, 31). The husband's father testified to loaning the parties $38,580 during the course of the marriage, for the following items and amounts: $8,000 for a red car when the wife's car was too old to drive; $6,000 for a van; $1,100 for a barn; $3,000 for a pool; $18,000 to pay off a house; and other smaller itemized amounts. (Tr. 16-17, 30-31). He pointed to payments he received from them, bringing the loan down to $19,085 before the recent payment of $10,000, which left the balance at $9,085. (Tr. 18).

{¶ 4} The husband, who was 55 years old, testified their financial condition was poor due to their spending. (Tr. 48, 54). As to a disputed IRA, the husband explained it was a roll-over account from a retirement settlement after the bankruptcy of a steel mill where he worked from 1979 to 1994, making five years of the time earned in the plan pre-marital. (Tr. 49-51). In order to pay bills, the parties withdrew approximately $10,000 (after tax and penalty) from the IRA in 2013. (Tr. 52-53). The husband stated this was after he and his wife went to an adviser's office intending to cash in the entire IRA, but the adviser talked them out of it. (Tr. 53). This testimony was not contradicted.

{¶ 5} The husband testified his wife moved into her father's house and quit her job in February 2015. Her physician had advised she would be off work for some months as she needed knee surgery. The husband expressed concern to his wife they would go bankrupt, and she responded that she did not want to go bankrupt. (Tr. 55-56). He testified, "We said 'Well, we'll cash in the IRA and we'll pay up the bills'." (Tr. 55). A March 10, 2015 check statement showed a full withdrawal of the IRA occurred on that date. The gross balance was $58,866.89; with taxes and fees subtracted, the net amount of the check sent to the husband was $42,996.28. The husband testified he stopped to visit the wife at her father's house to tell her about the check and she asked, "How much of a beating did we take?" and said, "Aww" when he told her the amount. (Tr. 57, 109).

{¶ 6} The husband opened an individual checking account. He said the joint checking account was a disaster due to various overdrafts (as evidenced on bank statements submitted by the wife as an exhibit); he believed the wife caused these issues. He transferred $3,641 from the joint checking account to his new checking account on March 2, 2015 and $1,325.98 on March 12, 2015. (It should be noted his paychecks were still being directly deposited into the joint account at this time, e.g., $1,261.99 on February 26 and $1,251.53 on March 12, 2015, plus a bonus check.)

{¶ 7} The parties' 2014 income tax refund of $7,020 ($6,915 federal plus $105 state) was deposited into the joint checking account on March 12, 2015 and transferred into the husband's individual account on March 13, 2015. The husband wrote a check to the wife for half of the amount of the tax refund (and then discovered they had to repay $742 due to their son's individual tax filing).

{¶ 8} On March 16, 2015, the husband deposited the IRA check into his individual checking account. He submitted a list of marital debts (totaling $35,819.43) toward which he applied the IRA proceeds: credit union loan (from when they bought a new air conditioner), $1,693.87; car loan on one Honda Civic, $7,808.59; car loan on the other Honda Civic, $8,274.97; Discover card, $2,500; Visa card, $1,800; Sam's Club credit card, $700; PNC card, $900 (a result of the automatic overdraft protection for the joint checking account); balance of hardwood flooring contract, $900; repaid tax for claiming their son on their taxes when he claimed himself, $742; payment on loan to father, $10,000; and payment for bowls they purchased from his brother, $500 .

{¶ 9} The husband also testified he could not cover all of the marital expenses (and spousal support) with solely his income and used the remainder of the money to assist in paying regular monthly bills (including recurring monthly payments on marital debts) during the ten months between the filing of the complaint and the divorce hearing. (Tr. 63). For instance, he said he paid: $6,820 for ten months of house payments on the two mortgages; $3,260 for ten months of car payments on the Honda CRV driven by the wife; $3,100 for ten months of car insurance on three vehicles; $900 for house insurance; $500 for prescriptions and co-payments; $830 for moving a fence due to a property line dispute; $1,600 for real estate taxes; $1,000 for dog food and vaccines; $600 for life insurance; and $800 for car repairs. For court-ordered spousal support, in addition to the wife's car payment and insurance, he paid $100 per month. He also said he gave the wife cash prior to the temporary order. He provided amounts he spent on utilities, pool care, and his own activities over the ten-month period since filing the divorce complaint.

{¶ 10} When asked why he did not use the IRA money to pay off the high-interest credit cards, he explained he was hesitant to put more money on the credit cards as he feared the wife would charge more and he believed the wife recently reactivated the Discover card. (Tr. 109-110). He also explained he was going to pay more on the credit cards after the temporary hearing where he sought to prohibit new joint debt, but his wife wanted to be paid for half the tax return (i.e., if she was not using her half to pay the debts, then he was not going to use his half to pay the debts). (Tr. 110).

{¶ 11} The wife, who was 54 years old, testified she had two associate's degrees. She also took a course to become a certified nursing assistant and worked in that field for 14 years. Most recently, she worked two days a week, netting $1,000 per month. (Tr. 54). She stopped working as a result of her need to have knee surgery; her surgery was on March 18, 2015. (Tr. 156). She applied for disability prior to surgery. (Tr. 156). She thereafter began receiving $896 per month in Social Security Disability benefits. (Tr. 163). She needed surgery on her other knee but was waiting until she finished her bachelor's degree in social work. She anticipated being graduated after three more semesters. She received free tuition, books, and gas money after applying for assistance from the Belmont County Department of Jobs and Family Services. (Tr. 158-159). She lived with her father so he would not be placed in a nursing home. (Tr. 159). She consented to the husband refinancing the mortgages and keeping the marital residence. She asked for half of the equity in the house, which they agreed was $46,500.

{¶ 12} Contrary to the husband's testimony, the wife testified she was unaware the husband cashed the IRA when he did. She said he came to see her six days after her surgery and told her he cashed the IRA. She also said she thought he was going to use the money to pay off the credit cards. (Tr. 173). She said, "I did not agree to cashing out all that money. There was going to be too much of a penalty for that and there would be other ways to try to make the bills of the expenses." (Tr. 174). She asked the court to attribute the gross amount of the IRA on the day the husband cashed it as marital property that he already received. (Tr. 174; Def. Ex. H). She then stated she had no issue with the money he paid on the two Honda Civics. (Tr. 185-186). She also opined he should have paid off the high-interest credit cards. (Tr. 182). She complained about various expenses itemized by the husband. It appears she did not realize these were not monthly figures (but were amounts paid during the pendency of the divorce); nor did she realize the amounts were not all paid with the IRA proceeds (rather, the husband was showing all expenditures pending the divorce from all sources, including his paychecks).

{¶ 13} The wife asked the court to give the parties' son the 2009 Honda Civic he had been driving. (Tr. 174). The car loan was paid off due to the large principal payment the husband made with the IRA proceeds. The husband said the son was given the privilege to drive their car. He asked to be awarded one of the Civics and believed they should sell the other (or she could provide him with half of the $7,000 value). (Tr. 74-76). The adult parties' son testified he drove the car with the impression that it had been his sixteenth birthday present, although it was not titled in his name. (Tr. 148). The son recently bought a replacement vehicle but said he would sell it to avoid making car payments if he could keep the Honda Civic.

{¶ 14} As to the money provided to the parties by the husband's father, the wife said she never asked him for a loan and assumed any money from family was a gift. (Tr. 182, 208). Regarding the $18,000 received from the husband's father to pay off a house loan, she testified she thought they paid off the loan themselves. (Tr. 209).

{¶ 15} On October 5, 2016, the court issued its decision granting the parties a divorce. The parties were to equally divide the husband's pension as agreed. They were also ordered to equally divide the $28,000 401(k) from the husband's employment and a $2,900 IRA from the wife's employment. The husband was permitted to keep and refinance the house (to pay off the parties' two mortgages). The residence had an agreed value of $122,500 and an agreed equity of $46,500. The court ordered the husband to provide the wife with $12,250 from the equity (or from elsewhere) within six months of the order. The court ordered the husband to pay the remaining credit card debt (which totaled $23,000).

{¶ 16} The court found the wife was aware of the IRA transaction, finding the husband's testimony credible. The court concluded the husband used $35,819 of the net IRA proceeds to pay outstanding marital debts and the remainder of the IRA proceeds was used to pay marital debts, monthly payments associated with the marital debts, and monthly marital expenses not covered by his salary. The court noted the parties lived beyond their means even when the wife was working. The court found the amounts in the ledger maintained by the husband's father represented loans to the parties accumulated during the marriage which benefited both parties. The court found the wife's claim (that she did not know the various amounts they received were loans) was not credible. Although noting it may be "less than prudent" to pay a large amount on the interest-free loan owed to the husband's father, the court concluded the husband did not engage in financial misconduct. The court ordered the parties to split the $9,085 debt owed to the husband's father.

{¶ 17} The court awarded the wife the 2013 Honda CRV (said to be worth $17,105) and made her responsible for the debt on the vehicle ($13,000). The two Honda Civics were said to be worth $7,000 each. (Tr. 8, 10; Pl.Ex. 7). The husband received the one with no remaining car loan. The wife received the other Civic. At the time of the hearing, the remaining loan on this vehicle was $1,000. (Tr. 71-72, 108, 123). As for spousal support, the husband was ordered to pay $500 per month for five years, beginning October 1, 2016, and the court retained jurisdiction. The wife filed a timely notice of appeal.

ASSIGNMENT OF ERROR ONE: DIVISION OF MARITAL PROPERTY

{¶ 18} The wife sets forth two assignments of error, the first of which provides:

"THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY FAILING TO EQUITABLY DIVIDE MARITAL ASSETS AND DEBTS."

{¶ 19} The wife states the court failed to consider the factors in R.C. 3105.171(F) and claims the decision as to the equity in the marital residence and the allocation of two debt items was against the manifest weight of the evidence. First, the wife argues the court failed to explain why it ordered the husband to pay her an amount that was less than half of the equity in the marital residence. Specifically, the court ordered the husband to pay the wife $12,250 from the refinancing of the marital residence, when the equity was agreed to be $46,500. She had asked for half of the equity ($23,250). Second, the wife argues it was not equitable to assign her all of the $13,000 debt remaining on her 2013 Honda CRV and half of the $9,085 debt owed to the husband's father (assuming the money was a loan). She states the court failed to consider that the husband was in a better position to pay these debts.

{¶ 20} The husband responds by pointing out the marital property division was not equal but the division was in the wife's favor. He provides a chart with the assets and liabilities assigned to each party to show he received $4,105 less than the wife; noting she would owe him $2,052.50 if the division were to be equal. She has not contested this chart.

{¶ 21} A trial court has broad discretion in the allocation of marital assets, and its judgment will not be disturbed absent an abuse of discretion. Neville v. Neville , 99 Ohio St.3d 275, 2003-Ohio-3624, 791 N.E.2d 434, ¶ 5. A reviewing court will not substitute its judgment for that of the trial court as to the division of marital property unless the decision was unreasonable, arbitrary, or unconscionable. Bisker v. Bisker , 69 Ohio St.3d 608, 635 N.E.2d 308 (1994), citing Blakemore v. Blakemore , 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983). "Except as provided in this division or division (E) of this section, the division of marital property shall be equal. If an equal division of marital property would be inequitable, the court shall not divide the marital property equally but instead shall divide it between the spouses in the manner the court determines equitable." R.C. 3105.171(C)(1). An equal division is the starting point. Neville , 99 Ohio St.3d 275 at ¶ 5, 791 N.E.2d 434.

{¶ 22} In making a division of marital property, the court shall consider the following factors: (1) the duration of the marriage; (2) the assets and liabilities; (3) the desirability of awarding the family home, or the right to reside in it, to the spouse with custody of the marital children; (4) the liquidity of the property to be distributed; (5) the economic desirability of retaining intact an asset or an interest in an asset; (6) the tax consequences of the property division upon the respective awards to be made to each spouse; (7) the costs of sale, if it is necessary that an asset be sold to effectuate an equitable distribution of property;(8) any division in a voluntarily entered separation agreement; (9) any retirement benefits of the spouses, excluding Social Security except as may be relevant to divide a public pension; and (10) any other factor the court expressly finds relevant and equitable. R.C. 3105.171(F). "[T]he court shall make written findings of fact that support the determination that the marital property has been equitably divided" and shall specify the dates used to define "during the marriage." R.C. 3105.171(G).

{¶ 23} Here, the trial court's entry provides the date of marriage, October 6, 1984, and the end date for considering what constitutes marital property, the hearing date of December 30, 2015. See R.C. 3105.171(G). This evinces a consideration of the duration of the marriage. See R.C. 3105.171(F)(1). There were no minor children to consider in allowing the husband to refinance the house. See R.C. 3105.171(F)(3). The decision permitting him to refinance to pay the wife from the equity entails a consideration of the desirability of maintaining an asset intact, and in any event, the wife agreed to him refinancing the house to pay her share of the equity. See R.C. 3105.171(F)(5). Sale costs would be avoided by his refinancing. See R.C. 3105.171(F)(7). The liquidity of various assets can be gleaned from their descriptions. See R.C. 3105.171(F)(4). The court set forth the parties' agreement as to the division of household property, which the parties confirmed was equal and equitable. See R.C. 3105.171(F)(2),(8).

{¶ 24} The court set forth the value of the marital residence, the debt thereon, and the equity therein. See R.C. 3105.171(F)(2). The court specified the value of a $2,900 IRA, which the court then divided equally. See R.C. 3105.171(F)(2),(9). The tax consequences of this transaction were not expressly discussed, but the wife's brief does not discuss this factor or explain how this would affect the division. See R.C. 3105.171(F)(6). And, as it was divided equally, the tax consequences would be shared. The court memorialized the agreement to equally divide the husband's pension and the 401K. See R.C. 3105.171(F)(8),(9). See also Pl.Ex. 7; Def. Ex.H. The court ordered the husband to pay the credit card debt and listed the three remaining credit card accounts. Although the court did not set forth the amount of each debt, the court stated the total marital debt was $122,085 (as set forth in Pl.Ex. 7). Even more importantly, the court pointed out the parties stipulated to the values of all assets and liabilities, except a debt to the husband's father, which the court found to be $9,085. See R.C. 3105.171(F)(2), (8). (Tr. 8, 10, 70-72; Pl. Ex. 7).

{¶ 25} Contrary to the wife's suggestion, the trial court did not fail to make written findings of fact to support its determination that the marital property was equitably divided. R.C. 3105.171(G). A court must indicate the basis for its division of marital property in sufficient detail to enable a reviewing court to determine whether the award is fair and equitable but "need not explain in minute detail its reasoning." Cope v. Guehl , 7th Dist. No. 07 CO 35, 2009-Ohio-2891, 2009 WL 1710753, ¶ 38. Although a chart with values and allocations is a helpful feature of a divorce decree, there was an agreement on values and assets in this case and a reviewable end result can be calculated from the court's division.

{¶ 26} As to her argument about the amount she would receive upon the husband's refinancing of the house, this argument appears to be based upon mere semantics. The court ordered the husband to pay an amount from the equity in the house in order to come closer to equalizing the property division. Had the court ordered him to pay her half of the equity as a payment for her share of the remaining marital assets, the property division would have been even more in her favor. This does not mean the court failed to attribute half of the equity in the residence to her as property division. For instance, the court ordered the husband to pay $23,000 in credit card debt, and she was not ordered to be responsible for any of said debt. She also received an extra vehicle worth more than the remaining loan on it. The husband's brief explains how the division of property effectuated by the court's order and the parties' agreement on values shows she received $4,105 more than he did. The wife does not reply otherwise.

{¶ 27} "When reviewing a trial court's property division, this court must consider the distribution in its entirety under the totality of the circumstances." Sanor v. Sanor , 7th Dist. No. 2001 CO 37, 2002-Ohio-5248, ¶ 35, 2002 WL 31170194. The wife's overly narrow argument as to the payment she will receive from the equity in the residence upon the husband's refinancing does not take into consideration the entirety of the distribution. The trial court's decision as to the equity dealt with the equalization payment and its source. The wife is contesting this item "out of context of the entire award." Briganti v. Briganti , 9 Ohio St.3d 220, 222, 459 N.E.2d 896 (1984). The permissible review is whether the trial court's disposition of individual items resulted in a property division which was an abuse of discretion when viewed in its entirety . Id. Accordingly, "a reviewing court should not review discrete aspects of the property division out of the context of the entire award, but should consider the distribution within the context of the entire award." Hawkins v. Hawkins , 2d Dist. No. 2016-CA-26, 2017-Ohio-4201, ¶ 24, 2017 WL 2492786.

{¶ 28} The wife also complains about the allocation of two debts. Contrary to one of her arguments, the trial court's decision was not arbitrary or capricious: one marital debt was divided equally and she was assigned the debt which accompanied the vehicle she desired. As to whether the decision was unreasonable, the wife believes assigning this debt to her is unfair considering the long-term marriage wherein the husband was the primary source of income while she is unable to work and receives only $896 per month on disability. She testified: she lives with her father; she decided to go back to college with plans to obtain a job as a social worker; she received free tuition, books, and gas money; and she is waiting for her other knee surgery until after her college graduation (in three semesters time).

{¶ 29} Regarding the order for the parties to equally divide the $9,085 debt owed to the husband's father, the wife argued at trial there was no debt to the husband's father as all money received over the years constituted gifts. The court found the funds the husband's father provided to the parties constituted loans as alleged by husband. The money was used for marital items, including a car for the wife, a van, a pool, a barn, and an $18,000 home loan payoff. When asked by the court, the wife acknowledged she took care of writing checks for the bills. (Tr. 216-217). As the court suggested, both parties were aware they were living above their means. The husband's father kept a ledger, which pertained to all four of his children. It showed amounts loaned to these parties and payments made by these parties. The existence of the marital debt to the husband's father was a credibility determination within the province of the trial court. See, e.g., Eastley v. Volkman , 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 21 ("If the evidence is susceptible of more than one construction, the reviewing court is bound to give it that interpretation which is consistent with the verdict and judgment, most favorable to sustaining the verdict and judgment"), quoting Seasons Coal Co. v. Cleveland , 10 Ohio St.3d 77, 461 N.E.2d 1273 (1984), fn. 3.

{¶ 30} In fact, the wife does not specifically contest the credibility of the husband's father on appeal. Rather, she contests the decision to allocate half of this debt to her, reasoning she does not have the financial ability to pay this debt along with her vehicle loan. After determining there was an outstanding marital loan, the court's subsequent decision to allocate half of the debt to each party complied with the statutory starting point. The trial court exercised its discretion finding it was equitable to provide an equal division of that loan balance. Indeed, the wife's proposed allocation of marital property asked for an overall equal division of marital property and marital debts (except for the IRA, which she argued was financial misconduct as set forth in the next assignment of error). In any event, the property division is to be viewed in its entirety. Briganti , 9 Ohio St.3d at 222, 459 N.E.2d 896.

{¶ 31} As to the order for the wife to be responsible for the $13,000 car loan on the 2013 Honda CRV, she drove the CRV during the marriage and wished to keep the CRV after the divorce. The court awarded her the CRV and the accompanying debt. She also received a 2009 Honda Civic. She need not keep both vehicles, i.e., she can sell one. Whether she can afford the car payments on her CRV after her monthly spousal support and disability income is her decision to make. In addition, she allocated the car loan to herself in her proposed marital property division. This was a marital debt secured by the vehicle for which the loan was taken. The decision to allocate this debt to the person seeking the vehicle encumbered by that debt would not appear to be an abuse of discretion. And once again, the property division is to be viewed in its entirety. Briganti , 9 Ohio St.3d at 222, 459 N.E.2d 896.

{¶ 32} In sum, assigning the wife responsibility for half of the marital debt owed to the husband's father and the debt on her own vehicle figured into the overall property division discussed above. The order for the husband to pay the wife a certain amount from the equity in the house was the method to come closer to equalizing the property division, and any overall lack of equality leaned in favor of the wife. We refuse to substitute our judgment for that of the trial court on the division of marital property in this case. Accordingly, this assignment of error is overruled.

ASSIGNMENT OF ERROR TWO: ALLEGATION OF FINANCIAL MISCONDUCT

{¶ 33} The wife's second assignment of error contends:

"THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY FAILING TO FIND THAT THE APPELLEE COMMITTED FINANCIAL MISCONDUCT."

{¶ 34} The wife alleges the manifest weight of the evidence clearly demonstrated the husband "siphoned" marital assets days before filing the complaint for divorce. She notes the taxes and penalty due upon the cashing of the IRA, which had a gross amount of $59,866.89 and paid out only $42,996.28. She complains of the "devastating" tax consequences. Although the 10% penalty for withdrawal before age 59.5 was unfortunate, it should be noted the payment of regular taxes on the distribution would occur regardless of when they withdrew the money. On the topic of the penalty for early withdrawal, the parties went to an adviser with plans to cash the IRA in the past and ended up withdrawing $10,000; they paid the 10% penalty at that time as well. In addition, there was no evidence whether any fees (charged by the adviser or the fund) would have been avoided if the fund was divided by the court at the time of the divorce hearing.

{¶ 35} The wife points out how the husband deposited the IRA proceeds into his newly created individual checking account. As set forth in the statement of the case supra, the husband explained the various marital debts (totaling over $35,000) he paid from the proceeds of the IRA. He also testified the wife participated in the decision to cash in the IRA due to her need for surgery, inability to work at the time, and their debt. The trial court found his testimony credible and disbelieved the wife's claim she learned of the IRA cashing after it was completed. The wife urges the husband's testimony lacked credibility because, for instance, he claimed he did not use IRA proceeds to pay his attorney $5,200 in fees. However, his testimony on this payment does not warrant a finding his entire testimony lacked credibility. In fact, the itemization he provided to the wife in discovery and presented by her as an exhibit shows this payment on a list of his total expenditures from both the IRA and his paychecks . Contrary to her suggestion at trial, the list does not admit he spent IRA funds on attorney's fees.

{¶ 36} The wife did not appear to contest that the husband paid various marital debts with the proceeds. Although these payments reduced the total marital assets, they also reduced the total marital debt. The wife notes the temporary order prohibited the parties from disposing of assets during the pendency of the divorce proceedings. Many of the payments from the proceeds were made before the temporary order. His transfer of $3,641 from the joint account to his new account was before the temporary order and could be seen as representing his recent paychecks which were still being deposited into the joint account. He explained his concerns as to multiple overdrafts on the joint account. His transfer of $7,020 from the joint account to his individual account involved the parties' tax refund. She received half of this amount prior to the temporary order, as she requested; he explained he had envisioned them jointly paying down their credit card debt with the tax refund.

{¶ 37} The husband made some recurring monthly debt payments from the IRA proceeds after the temporary order, but the same temporary order made him responsible for all marital expenses. Various expenses she protested as not being marital could be reasonably construed as being covered by his paychecks which were deposited into the same account. She complained other monthly expenses the husband listed seemed too high. Yet, he did not indicate these were monthly expenses; rather, they were amounts he spent in the ten months between the filing of the complaint and the hearing.

{¶ 38} Pursuant to R.C. 3105.171(E)(4), "If a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property." The spouse alleging the application of this division bears the burden of proving allegations of financial misconduct. Bennett v. Bennett , 7th Dist. No. 14 CO 8, 2016-Ohio-462, ¶ 13, 2016 WL 538477 ; Ballas v. Ballas , 7th Dist. No. 04 MA 60, 2004-Ohio-5128, ¶ 50, 2004 WL 2334329. There must be some wrongful intent or scienter on the part of the party being accused. Bennett , 7th Dist. No. 14 CO 8 at ¶ 13, citing Ballas , 7th Dist. No. 04 MA 60 at ¶ 48-53. "Typically, the offending spouse will either profit from the misconduct or intentionally defeat the other spouse's distribution of marital assets." Bennett , 7th Dist. No. 14 CO 8 at ¶ 13, quoting Gentile v. Gentile , 8th Dist. No. 97971, 2013-Ohio-1338, ¶ 55, 2013 WL 1384891.

{¶ 39} In Bennett , we noted even if a financial move could be considered detrimental, it is relevant to analyze whether the move was detrimental to both parties equally. Bennett , 7th Dist. No. 14 CO 8 at ¶ 15 (finding transaction regarding a lease was not financial misconduct). Regarding the husband's withdrawal of funds from certain accounts, the trial court again found no financial misconduct; this court affirmed, observing the wife ultimately benefited regardless of whether she was aware of the withdrawals. Id. at ¶ 16.

{¶ 40} In Hadinger , the Tenth District upheld a trial court's determination that there was no financial misconduct where a spouse cashed in a retirement account without her spouse's knowledge, incurred the early withdrawal penalty, and then paid marital expenses and debts, including $9,000 to her mother. Hadinger v. Hadinger , 10th Dist. No. 15AP-09, 2016-Ohio-821, ¶ 23, 29-31, 2016 WL 853173. As occurred in the case at bar, the Hadinger court noted the parties previously took an early withdrawal from a marital retirement account. See id. at ¶ 30.

{¶ 41} The wife relies on this court's Jeskey case, where this court affirmed the trial court's decision to charge $22,000 a spouse used from a joint savings account toward her share of marital assets; the money was derived from the other spouse's personal injury settlement, which was originally non-marital property. Jeskey v. Jeskey , 7th Dist. No. 14 JE 23, 2015-Ohio-5599, 2015 WL 9693910. The wife emphasizes how our Jeskey case stated the timing of the transactions can provide evidence of financial misconduct. See id. at ¶ 14. Nevertheless, the fact a reviewing court affirms a trial court's decision upon an abuse of discretion review does not mean the same reviewing court would reverse the opposite trial court decision. "An appellate court will not disturb a trial court's rulings regarding financial misconduct, in the context of the division of marital property, absent an abuse of discretion." Id. at ¶ 13. "In reviewing for abuse of discretion, results can often vary in different cases, as there can be more than one reasonable decision from which the trial court could choose." Yancey v. Yancey , 7th Dist. No. 07 MA 33, 2007-Ohio-5045, ¶ 25, 2007 WL 2782627. As we pointed out in Jeskey , the trial court was free to believe or disbelieve a party's claim as to how the money was spent. Jeskey , 7th Dist. No. 14 JE 23 at ¶ 16. In addition, the Jeskey case involved testimony the parties agreed not to touch the account. Id. at ¶ 15-16.

{¶ 42} Here, there was testimony the parties previously took an early withdrawal from the IRA and the husband cashed the IRA due to various occurrences, including the wife's plan for surgery, the wife quitting her job, and the parties decision to rectify their past behavior of living beyond their means without resorting to bankruptcy. In point of fact, a term of the parties' agreement was to refrain from discharging any marital debt in bankruptcy. The husband testified the wife participated in the decision to cash the IRA. The trial court was free to believe or disbelieve the parties' testimony and find the transactions benefitted both parties by decreasing the marital debt. See, generally , Eastley , 132 Ohio St.3d 328 at 21, 972 N.E.2d 517, quoting Seasons Coal Co. , 10 Ohio St.3d at fn. 3, 461 N.E.2d 1273 (every reasonable presumption must be made in favor of the factual judgment). It would appear the trial court was not required to find the husband profited over the wife with wrongful intent or intentionally defeated her distribution of a portion of the marital estate (which would have been decreased by any marital debts that were not paid). The trial court did not abuse its discretion in concluding the husband did not engage in financial misconduct or violate the court's temporary order. This assignment of error is overruled.

{¶ 43} For the foregoing reasons, the trial court's judgment is affirmed.

Donofrio, J., concurs.

Waite, J., concurs.

      The husband's brother testified he crafted artisanal wooden bowls and urns from exotic woods. In the past few years, the parties would choose which pieces they wanted, and he would charge them for his costs (a discount from what the objects were worth). The $500 payment was said to be for objects they previously took but had not yet paid for. (Tr. 34-36, 38). At the end of the hearing when the court was asking the wife's attorney if certain arguments were moot due to the agreement on household goods, the husband said he did not wish to "squabble" about this payment or a $162.56 payment made in order to receive a gun back from being repaired. (Tr. 223-224).

      On November 3, 2016, the husband filed a motion to modify spousal support based on events occurring since the December 2015 hearing such as his income reduction and qualification for Social Security Disability and the resulting equal pension payments to both parties. In a December 12, 2016 entry, the court stated the parties reached an agreement and modified the amount of spousal support to $300, effective November 1, 2016. The husband's motion also asked for clarification of the court's October 5, 2016 divorce decree, noting the distribution was not exactly equal as he received less than the wife (and stating the wife would receive $2,052.50 less if the division was equal). He withdrew this motion prior to the December 12, 2016 entry.

      Division (E) deals with a distributive award, which is defined in division (A).

      The Honda Civic was said to be worth $7,000. At the time of the divorce hearing, the loan balance on this vehicle was $1,000. Notably however, the husband was obligated to make the monthly payments on this vehicle as a marital expense under the temporary order, which would have continued after the December 30, 2015 divorce hearing through the October 6, 2016 decree, presumably decreasing the loan balance on that vehicle.

      Although the trial court did not specify any of the IRA was separate property, the trial court found the husband did not engage in financial misconduct by cashing and using all of the funds in the account to pay marital debts and expenses (thereby making it irrelevant how much was separate property). It should be noted there is no dispute that the entire account was funded by one employer and 5 years of the 15 years the husband worked for that employer occurred prior to marriage.