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Ohio Supreme Court Decision Confirms Key Jurisdictional and Property Division Principles in Divorce Lawsuits

September 10, 2021
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Background: Ostanek v. Ostanek

The Ohio Supreme Court’s recent decision in Ostanek v. Ostanek, Case No. 2021-Ohio-2319 (“Ostanek”), although legally technical, serves as a good reminder of certain significant jurisdictional and property division principles in divorce and dissolution actions. Specifically, the Court’s decision in Ostanek clarifies its prior precedent and confirms that, in Ohio, when a domestic relations court acts outside the parameters of a governing statute—but within its statutorily-defined, case-specific jurisdiction—the resulting court order may be subject to timely challenge, but it is not inherently void or invalid for lack of subject matter jurisdiction. In this way, the Court’s decision in Ostanek draws an important distinction between a domestic relations court’s complete lack of subject matter jurisdiction in a case versus a mere error in the court’s exercise of its jurisdiction.

In its most basic form, a court’s subject matter jurisdiction refers to the ability of the court to hear a particular case or type of case. Ultimately, identifying a court’s subject matter jurisdiction is critical because, if a court is without subject matter jurisdiction over a case, then any orders issued by the court in that case are inherently void or invalid. In contrast, however, if a court has subject matter jurisdiction over a case, but simply errs in exercising the same—for example, by acting outside the parameters of a governing statute—then any resulting orders issued by the court are merely voidable, and thus, subject to a timely challenge.

In Ohio, a court’s subject matter jurisdiction is statutorily defined, meaning that the same is a product of statutes promulgated by the Ohio General Assembly pursuant to that body’s powers under the Ohio Constitution. In relevant part, the General Assembly has exercised this power to, by statute, expressly allocate to Ohio’s common pleas courts—and in particular, the courts’ domestic relations divisions—exclusive subject matter jurisdiction over divorce and dissolution lawsuits, as well as the division of marital property.

The division of marital property is a critical component in any divorce or dissolution lawsuit. Indeed, in connection with the termination of a marriage, one of the main tasks that a domestic relations court must complete is to address and otherwise resolve the parties’ property and financial issues. This includes classifying the parties’ assets and debts as either marital or separate (i.e non-marital), and equitably dividing the marital assets and debts in order to result in a final property division, which is then incorporated into a final decree of divorce or dissolution.

Notably, however, the relevant statutes make clear that a domestic relations court cannot later disturb or modify a final property division that has already been incorporated into a final decree of divorce or dissolution, except in certain limited circumstances. To be sure, R.C. 3105.171(I) provides that a domestic relations court can only subsequently modify a final property division upon the express, written consent or agreement of the parties.

These legal points are of particular importance to the Ostanek case. Specifically, the circumstances underlying Ostanek involved a divorce action which followed a long-term marriage of twenty-three (23) years. In connection with the divorce action, the parties in Ostanek had agreed that the marital portion of husband’s federal pension benefit would be divided equally, with each party receiving 50% of the same. However, the parties’ final agreement was silent on several other relevant terms, including whether the wife was to also receive a survivor benefit in connection with her receipt of her portion of husband’s federal pension benefit.

In order to divide qualified funds such as retirement and pension benefits in connection with a divorce or dissolution action, a separate court order is typically required. In Ostanek, the separate court order dividing the husband’s federal pension benefit (in that case, known as a Court Order Acceptable for Processing or “COAP”) was not provided to the domestic relations court until nearly 12 years after the divorce proceeding had concluded. The COAP—which was adopted by the domestic relations court and entered as a court order—correctly directed the administrator of the husband’s federal pension benefit to pay the wife 50% of the marital portion of the husband’s monthly retirement benefit. Importantly, however, the COAP also provided that the wife was to receive a survivor benefit in connection with husband’s federal pension benefit, with the cost of the same shared equally between the parties.

Unfortunately, the husband was not properly served with the COAP. As a result, the husband was unaware of the terms of the same—including the terms relating to the survivor benefit for the wife—until such time as he retired. Instead, it was at that time that the husband first claimed to have discovered that the wife was, in fact, receiving 45% of his monthly federal pension benefit, versus the originally agreed-upon 50% of the benefit as set forth in the parties’ final property settlement incorporated into their divorce decree. At least in part, this discrepancy could be traced to the court’s inclusion in the COAP of the survivor benefit for the wife.

As a result, the husband eventually filed a motion to vacate the COAP with the domestic relations court, arguing in part, that the COAP was void because the court had acted outside of its subject matter jurisdiction when it enlarged—and thus, modified—the terms of the parties’ divorce decree on this particular issue. In pertinent part, the husband argued that, in issuing the COAP, the domestic relations court had improperly modified the parties’ final property division, as set forth in the divorce decree. The specific modifications at issue in the COAP included adding a survivor benefit for wife with respect to the husband’s federal pension benefit, as well as requiring him to pay 50% of the cost thereof. Upon review, the domestic relations court denied the husband’s motion to vacate for several reasons, thus retaining the COAP as an order of the court.

Thereafter, the husband appealed the domestic relations court’s decision on this issue to the Eleventh District Court of Appeals. In relevant part, the Eleventh District reversed the decision of the lower court. In doing so, the Eleventh District placed great weight on the fact that the survivor benefit terms were not expressly included in the divorce decree, nor was there any evidence that the parties had intended for them to be included. As a result, the Eleventh District reasoned that the lower court’s subsequent inclusion of those terms in the COAP amounted to an improper modification of the parties’ property division in violation of R.C. 3105.171(I). Importantly, however, the Eleventh District further concluded that the lower court’s violation of R.C. 3105.171(I) in issuing the COAP, for all intents and purposes, also resulted in the lower court acting outside of its subject matter jurisdiction, thus rendering the COAP inherently void and invalid.

On the appeal of the wife, the Ohio Supreme Court accepted the Ostanek case for review. Notably, in its decision in Ostanek, the Court—after a substantial amount of legal analysis—rejected the Eleventh District’s reasoning and the husband’s arguments concerning the lower court’s subject matter jurisdiction. Specifically, while the Court declined to review whether the domestic relations court’s actions with respect to the COAP had amounted to an improper modification of the parties’ divorce decree, the Court determined that, even if it had, the COAP was, at most, only voidable (i.e. subject to a timely challenge), and was not inherently void or invalid on its face. Importantly, the Court’s basis for this determination was that, in issuing the potentially problematic COAP, the trial court had still acted within its subject matter jurisdiction over the underlying divorce lawsuit, even if, in doing so, it had violated the terms of the governing statute—specifically, R.C. 3105.171(I).

The crux of the Court’s analysis on this point centered around a critical distinction—the distinction between a court’s errant exercise of its statutorily-provided jurisdiction versus a court’s operation outside of its statutorily-defined subject matter jurisdiction. In order to tease out this distinction in each particular case, the Court opined that the starting point of the requisite analysis should be to look to the terms of the statute at issue in order to gauge whether the same explicitly divests the court of jurisdiction to hear the relevant claims. In this way, absent an express divesture in the statute or the vesting of exclusive jurisdiction over such claims to another court, then the court at issue will retain subject matter jurisdiction, even if it errantly exercises its jurisdiction by failing to comply with the relevant statute.

Using this analysis, the Court in Ostanek confirmed that the domestic relations court had operated within its subject matter jurisdiction when it issued the COAP, as that order—even if legally problematic and potentially in violation of the terms of R.C. 3105.171(I)—fell within the court’s statutorily-defined authority to hear and decide the underlying divorce action and address the division of the parties’ marital property. Therefore, as the lower court was operating within its subject matter jurisdiction when it issued the COAP, the order was not inherently void or invalid, but instead, was, at most, only voidable or subject to a timely challenge. Based on this analysis, the Court reversed the Eleventh District’s decision and remanded the matter for further review.

What does this mean for divorce law in Ohio?

For what it’s worth, the Ohio Supreme Court’s analysis and decision in Ostanek is highly fact specific and legally complex. In this way, it is apparent that the complexity of the legal issues involved in that case is not necessarily the norm for or typical in the vast majority of domestic relations cases. Nevertheless, the Ostanek decision further clarifies and otherwise provides a worthwhile reminder about the various significant jurisdictional and property division principles that can arise in divorce and dissolution actions.

Do you need assistance navigating a factually or legally complex domestic relations case? At KJK Family Law, we have the experience and skill to help you and your family through similarly complicated legal matters. If you need guidance on these or other domestic relations matters, please contact John Ramsey at jdr@kjk.com or Janet Stewart at js@kjk.com or by phone at (216) 696-8700.

 

 

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