[Cite as Reed v. Reed,

.]

IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT ALLEN COUNTY

PETER W. REED,

PLAINTIFF-APPELLEE, CASE NO. 1-09-63

v.

SUSAN B. REED, OPINION

DEFENDANT-APPELLANT.

Appeal from Allen County Common Pleas Court Domestic Relations Division Trial Court No. DR-2008-0691

Judgment Affirmed

Date of Decision: September 27, 2010

APPEARANCES:

Douglas B. Dougherty and Michael J. Malone for Appellant

James C. King for Appellee Case No. 1-09-63

SHAW, J.

{¶1} Appellant Susan B. Reed (“Susan”) appeals the October 1, 2009

judgment of the Allen County Court of Common Pleas allocating a marital and a

non-marital percentage to two investment accounts owned by Appellee Peter W.

Reed (“Peter”) and concluding that Peter met his burden in tracing a significant

portion of these accounts to his separate property.

{¶2} The parties were married on March 31, 1991. No children were born

from their union. Both parties had acquired a substantial amount of separate

property prior to their marriage. At the time of the marriage, Peter was employed

as a Radiologist. Peter began his career in Lima in 1965, retiring in 1999. Prior to

the marriage, Susan was employed as a registered nurse, a career she began 1968.

Shortly after the parties married, they agreed that it would be more conducive to

their lifestyle for Susan to quit her job. For the duration of their marriage, Susan

was not employed outside the home.

{¶3} On November 13, 2008, Peter filed for divorce. On December 17,

2008, Susan filed her answer and a counterclaim. The primary contention in the

divorce proceedings focused on the division of the parties’ separate and marital

property. Specifically at issue were six investment accounts owned by Peter prior

to the parties’ marriage. Even though Peter established these accounts before

marrying Susan, he periodically made contributions to some of the accounts while

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they were married. Peter acknowledged that some marital funds were deposited in

the accounts. However, Peter also maintained that these accounts retained a

considerable non-marital component that could be traced to his separate property

held before the marriage. Both parties conducted extensive discovery regarding

these accounts.

{¶4} On June 22 and 23, 2009, the trial court held the final divorce

hearing. Both parties offered expert testimony regarding the traceability of these

accounts to Peter’s pre-marital property. Peter and Susan also took the stand to

testify on their own behalves. At the close of the evidence, the court asked the

parties to submit their respective written arguments by July 8, 2009.

{¶5} On October 1, 2009, the court issued a sixteen-page decision. With

respect to the investment accounts, the court found that Peter met his burden in

tracing a significant amount of the assets to his separately held property. The

court then allocated a marital and a non-marital component to these accounts

accordingly. Susan contended that Peter did not sufficiently trace the assets held

in the two largest accounts to his separately held property. As a result, Susan filed

this appeal with the following assignments of error.

ASSIGNMENT OF ERROR I

THE TRIAL COURT ERRED IN ITS DIVISION OF THE ASSETS CONTAINED IN THE HUSBAND’S UBS ACCOUNT BECAUSE IT ERRONEOUSLY ANALYZED TWO SEPARATE PROPERTY ISSUES.

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ASSIGNMENT OF ERROR II

THE TRIAL COURT ERRED IN ITS DIVISION OF THE ASSETS CONTAINED IN THE HUSBAND’S J.P. MORGAN CHASE ACCOUNTS BECAUSE IT ERRONEOUSLY ANALYZED TWO SEPARATE PROPERTY ISSUES.

{¶6} Because both of Susan’s assignments of error address the trial

court’s decision to classify a significant portion of the two investment accounts in

dispute as Peter’s separate property, we elect to discuss them together.

{¶7} This Court reviews the trial court’s classification of property as

marital or separate property under a manifest weight of the evidence standard.

Gibson v. Gibson, 3rd Dist. No. 9-07-06,

, quoting

Eggeman v. Eggeman, 3rd Dist. No. 2-04-06,

, citing

Henderson v. Henderson, 3rd Dist. No. 10-01-17,

, ¶28.

Accordingly, the trial court’s judgment will not be reversed as being against the

manifest weight of the evidence if the court’s judgment is supported by some

competent, credible evidence. Barkley v. Barkley,

,

. “This highly deferential standard of review permits the affirmation of

the trial court’s judgment if there is even ‘some’ evidence to support the court’s

finding.” Huelskamp v. Huelskamp,

,

,

citing DeWitt v. DeWitt, 3rd Dist. No. 9-02-42, 2003-Ohio-

851, ¶10.

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{¶8} In a divorce proceeding, the trial court must determine whether

property is marital or separate property. Gibson v. Gibson, 3rd Dist. No. 9-07-06,

, ¶ 29 citing R.C. 3105.171(B), (D). Marital property includes

property that is currently owned by either or both spouses and that was acquired

by either or both of the spouses during the marriage. See R.C. 3105.171(A)(3)(a).

Property acquired during a marriage is presumed to be marital property unless it

can be shown to be separate. Huelskamp,

, 2009-Ohio-

6864, ¶15,

.

{¶9} Separate property is statutorily defined by R.C. 3105.171(A)(6)(a) in

the following manner:

‘Separate property’ means all real and personal property and any interest in real or personal property that is found by the court to be any of the following:

(i) An inheritance by one spouse by bequest, devise, or descent during the course of the marriage;

(ii) Any real or personal property or interest in real or personal property that was acquired by one spouse prior to the date of the marriage;

(iii) Passive income and appreciation acquired from separate property by one spouse during the marriage;

(iv) Any real or personal property or interest in real or personal property acquired by one spouse after a decree of legal separation issued under section 3105.17 of the Revised Code;

(v) Any real or personal property or interest in real or personal property that is excluded by a valid antenuptial agreement;

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(vi) Compensation to a spouse for the spouse's personal injury, except for loss of marital earnings and compensation for expenses paid from marital assets;

(vii) Any gift of any real or personal property or of an interest in real or personal property that is made after the date of the marriage and that is proven by clear and convincing evidence to have been given to only one spouse.

R.C. 3105.171(A)(6)(a). (Emphasis added).

{¶10} The statute further states that “the commingling of separate property

with other property of any type does not destroy the identity of the separate

property as separate property, except when the separate property is not traceable.”

R.C. 3105.171(A)(6)(b). Thus, traceability is the key to determining whether

separate property has lost its separate character after being commingled with

marital property. Ward v. Ward, 3rd Dist. No. 01-03-63,

, ¶ 4

citing Peck v. Peck (1994),

,

. The party

seeking to have a particular asset classified as separate property has the burden of

proof, by a preponderance of the evidence, to trace the asset to separate property.

Peck,

. “Preponderance of the evidence means the greater

weight of evidence that is necessary to destroy the equilibrium.” State v. Stumpf

(1987),

,

. It is that proof which leads the

trier of fact to find that the existence of the contested fact is more probable than its

nonexistence.

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{¶11} Because Peter maintained during the divorce proceedings that the

two investment accounts at issue contained a substantial separate property

component, Peter had the burden to prove, by a preponderance of the evidence,

that the disputed portions of the accounts could be traced to Peter’s separate

property. In attempting to meet this burden, Peter engaged the services of Jared

Walsh, a licensed CPA.

{¶12} Walsh testified that he used the same methodology to analyze each

of the original six accounts in contention at the divorce proceedings—including

the two disputed on appeal. Walsh gathered data from his interviews with Peter.

Peter also provided Walsh with a substantial amount of documentation associated

with each of the accounts which included the statements issued from the banks or

entities managing the funds. With respect to one of the accounts in question, Peter

also kept a personal ledger. Peter testified that he used this ledger to record each

transaction that resulted in the sale or acquisition of a new security. From these

resources, Walsh reduced the voluminous amount of documentation into a detailed

report. As part of his report, Walsh prepared spreadsheets that tracked the level of

growth and decline of the accounts from the time of the parties’ marriage in 1991

to the end of 2008 around the time this action was filed.

{¶13} Walsh’s spreadsheets began with the pre-marital balance

documented in 1991. In most cases, each statement generated from the managing

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bank or entity during the duration of marriage was included in the spreadsheets

associated with a particular account. Walsh used the information in the statements

to apportion a marital and a non-marital component of the funds held in a

particular account. Walsh tracked a running balance of the marital and the non-

marital components of the account which he allocated into two distinct columns

contained in his report labeled “marital balance” and “non-marital balance.” If

there was a deposit made into the account during the marriage, it was considered

as part of the marital component of the account and added to the overall “marital

balance.” If Walsh could trace the origins of particular account funds to Peter’s

pre-marital property, the funds were added to the “non-marital balance.”

{¶14} Walsh also used these statements to calculate a rate of return. Walsh

testified that deposits as well as withdrawals on the accounts were included in the

rate of return. The rate of return was calculated according to the frequency of the

statements. Therefore, a rate of return would reflect the respective growth or

decline according to a monthly or quarterly interval—depending on what the

statement associated with that particular account stated. Once Walsh calculated

the rate of return for that statement period, he then apportioned the rate between

the marital and non-marital balances.

{¶15} As stated above, Walsh used this methodology to trace Peter’s

separate property in the two investment accounts at issue in this case: (1) X-Ray,

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Inc. pension rollover accounts and (2) the UBS account, formerly McDonald’s and

Company Securities account. According to the testimony at the divorce

proceedings, both of these accounts were funded with cash or cash equivalents.

X-Ray, Inc. Pension Rollover Accounts

{¶16} Peter testified that he began his career in Lima as a Radiologist in

1965. From that time until his retirement in 1999, Peter worked for X-Ray, Inc., a

professional corporation comprised of physicians employed in the field of

Radiology. In 1978, thirteen years before the parties’ married, Peter began

participating in a pension fund established by X-Ray, Inc. The fund permitted the

participants to contribute up to $30,000 annually into the account. Peter testified

that from 1978 until 1996, he contributed $30,000 a year into the pension fund.

The pension fund was managed by a secession of banks throughout the years. On

July 31, 1999, Peter rolled over the pension fund into two IRAs managed by Bank

One and eventually Bank One’s successor JP Morgan.

{¶17} With respect to the X-Ray, Inc. account, Peter provided Walsh with

all but five of the monthly statements generated by the managing banks from

November 1, 1991 to December 31, 2008. The statements reflected that Peter

made an annual contribution of $30,000 in the years of 1992, 1993, 1994, 1995,

and 1996. The statements indicated that no further deposits were made into the X-

Ray, Inc. pension fund during the marriage. Walsh also testified that the

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statements reflected that Peter began making withdrawals in 1999 when Peter

attained the age of seventy and a half—the age of which Peter was required by law

to begin making withdrawals on the retirement account. Even though these

withdrawals were consumed during the marriage, Walsh included them in the

periodic rate of return which was applied to both the marital and non-marital

balances.

{¶18} Walsh tracked the pension fund to a pre-marital balance of

$955,425.81 based on a statement dated November 1, 1991. At the end of 2008,

the X-Ray, Inc. account contained a total amount of $1,105,707.50. Using the

monthly statement balance and the periodic rate of return reflected in each

statement, Walsh determined that the X-Ray, Inc. account had a marital

component of $127,894.91 (approximately 11.57%) and a non-marital component

of $977,812.59 (approximately 88.43%).

{¶19} Based on the evidence presented at the final divorce hearing, the trial

court concluded that Peter met his burden in proving, by a preponderance of the

evidence, that a substantial portion of the X-Ray, Inc. account could be traced to

his separately held property. However, the trial court found that Peter’s testimony

established that he made a $30,000 contribution to the account every year from

1978 until 1996. Therefore, the evidence supported a finding that a $30,000

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contribution was made in 1991 even though there was no statement submitted into

evidence from that year documenting such a contribution.

{¶20} The trial court apportioned the 1991 $30,000 contribution between

the marital and non-marital balances according to the parties’ marriage date of

March 31, 1991. Thus, three-quarters ($22,500) of the contribution was added to

the marital balance and the remaining quarter ($7,500) was added to the non-

marital balance. Applying the applicable rate of return for the 1991 contribution,

the trial court found that an additional $38,334 should be included in the overall

marital balance of the X-Ray, Inc. account. The court then modified Walsh’s

conclusions accordingly and found that 13.7% of the X-Ray, Inc. account was

marital and 86.3% was non-marital.

{¶21} The trial court then ordered that the X-Ray, Inc. account be divided

among the parties in those percentages as of June 22, 2009—the date of the

parties’ divorce. Peter received the non-marital percentage plus half of the marital

percentage for a total of 93.15%. Susan received half of the marital percentage for

a total of 6.85%.

UBS Account

{¶22} The testimony at the final hearing revealed that Peter held a stock

and bond brokerage account with McDonald and Company Securities. This

account was eventually transferred to be under the management of UBS. Over the

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course of the years, Peter purchased and sold many stocks and bonds. Peter kept a

contemporaneous ledger (“log book”) in which he recorded the securities that he

purchased and sold. In the log book, Peter recorded the purchase price per unit,

the money he received upon a sale, the brokerage commission, and the capital

gains accrued for tax purposes. Peter’s handwritten log book begins in 1969 and

tracks the transfer of specific securities until the account is transferred to UBS

sometime between 2006 and 2008. During the parties’ marriage, Peter deposited

some of these securities into the UBS account. Peter maintained that some of

these deposits could be traced to his separate property purchased before the

marriage and offered Walsh’s testimony to prove this point.

{¶23} Walsh testified that he used Peter’s log book, brokerage slips and

UBS/McDonald account statements to determine if Peter acquired a particular

security held in the account prior to the parties’ marriage. Peter provided Walsh

with every statement for the account generated by the managing entity during the

parties’ eighteen-year marriage. Walsh considered all cash deposits made into the

account during the marriage as marital deposits which he added to the “marital

balance.” Walsh further explained his method of tracing for the particular

transfers of securities contained in the UBS account in the following manner:

I started with the statement, if it showed a transfer in of securities, I would then refer back to the securities log book. If the transfer in of securities was able to be traced to the securities log book it may have been . . .it may have been in the log book as

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purchased before March of [19]91, or it may have been in the log book as purchased after March of [19]91. If it was before and I could trace it to the log book I would include that deposit in the non-marital column. It if was after and I could trace it to the log book after March of [19]91, I would put it in the marital column. If it wasn’t able to be found in the log book at all, I would put it in the marital column.

(Hrg. Trans., June 22, 2006, at 91).

{¶24} Walsh testified that Peter also provided him with brokerage slips

reflecting the deposit of a particular security into the UBS account. Based on the

brokerage slips, Peter’s log book and the UBS account statements, Walsh testified

that he was able to identify whether a specific security held in the UBS brokerage

account was Peter’s pre-marital property that was later deposited into the UBS

account during the marriage. As Walsh stated above, the only contributions to the

account that he considered to be non-marital were the ones that he could trace to a

pre-marital purchase date using these resources. Walsh included all other deposits

into the account during the marriage as part of the marital balance.

{¶25} Walsh further testified that he used the same method in calculating

the periodic rate of return as he did for the other accounts. In this instance, Walsh

used the quarterly account statements issued by the managing entity to determine

the periodic rate of return. Further, any withdrawals made on the account during

the marriage were included in the periodic rate of return. Walsh applied the

periodic rate of return to both the marital and non-marital balances.

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{¶26} Walsh established that the UBS account had a pre-marital balance of

$58,518.03 based on a statement dated March 28, 1991—three days before the

parties married. As of December 31, 2008, the account had a balance of

$613,032.14. Based on the methodology previously described, Walsh traced

several substantial deposits into the UBS account to property Peter acquired prior

to the parties’ marriage. Walsh concluded that the UBS account contained a

marital component of 53.17% and a non-marital component of 46.83%.

{¶27} The trial court found that Peter had also met his burden in tracing his

separate property in the UBS account and accepted Walsh’s conclusions as the

percentages allocating marital and separate components of the UBS account. The

trial court then ordered Susan to receive one-half of the marital component

(26.83%) and ordered Peter to receiving the remaining portion of the account

(73.17%) as of June 22, 2009—the date of the parties’ divorce.

Appeal

{¶28} Susan now claims on appeal that the trial court erred when it found

that Peter met his burden in proving that a portion of these accounts remained

Peter’s separate property. Specifically, Susan contends that Peter failed to

sufficiently trace his separate property held in these accounts. Susan also

maintains that Peter failed to prove that the appreciation and income generated

from assets in these accounts were caused by solely passive factors.

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{¶29} In making this claim, Susan directs our review to our prior case law.

In reviewing these cases, we note that the factual basis for the trial court’s ruling

in these decisions is readily distinguishable from the case at hand. Specifically, in

the cases cited by Susan, the party asserting that a particular asset remained

separate property provided either no evidence or incomplete evidence to support

the claim.1 However, the present case is not plagued with the same lack of an

evidentiary record as the cases Susan cites.

{¶30} On the contrary, Peter kept detailed records of the funds in these

accounts which established that these accounts existed prior to the parties’

marriage. Furthermore, from these statements both a pre-marital value and a value

at the time of the divorce proceedings could be ascertained. Based on Peter’s

meticulous record keeping, Walsh was able to quantify a precise portion of the

accounts as Peter’s separate property. These records gave Walsh the necessary

resources to calculate the percentage of the appreciation in the funds attributable to

both Peter’s separate property and the marital property contained in the accounts.

1 For example, in Schalk v. Schalk, 3rd Dist. No. 13-07-13,

, we held that the trial court did not err in finding that the appellant failed to meet his burden in establishing that shares of stock were his separate property where there was evidence to show that the stock was acquired after the parties marriage. Further, the appellant provided no documents to substantiate that the stock could be traced to his separate property. The only evidence presented was the appellant’s own testimony which the trial court determined that alone, without more, was not sufficient to support appellant’s contention that the stock was his separate property. Likewise, Ward v. Ward, 3rd Dist. No. 01-03-63,

, we upheld the trial court’s finding that the appellant failed to meet his burden in establishing that a savings account was his separate property where the evidence showed that the balance of the account fluctuated throughout the marriage reflecting ongoing marital transactions. Additionally, the appellant in that case provided no evidence nor made any attempt at the proceedings to trace specific pre-marital deposits held in the account.

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{¶31} The record is supported by an ample amount of evidence provided

by Peter to prove that he could trace a significant portion of the X-Ray, Inc. and

UBS accounts to property that he acquired prior to his marriage to Susan.

Therefore, the evidentiary record in this case is greatly dissimilar from the cases

cited by Susan where little or no evidence was in the record to support the party’s

contention that a particular asset retained a separate property component.

{¶32} Susan also takes issue with the particular method of tracing

employed by Walsh in reaching his conclusions. Specifically, she maintains that

Walsh failed to trace the actual pre-marital asset throughout the parties’ marriage.

In support of this contention, Susan again directs our review to case law.

{¶33} In Sanor v. Sanor, 7th Dist. No.

,

, the

Seventh District reversed the trial court’s ruling that the husband sufficiently

established that certain farm equipment was his separate property. The evidence

showed that the husband was given farm equipment as a gift and was, therefore,

his separate property. During the course of the marriage, the husband traded-in

the equipment and applied the proceeds toward the purchase of new farm

equipment. However, marital funds were used to pay the balance of the purchase

price to buy the new equipment—clearly indicating that the proceeds of husband’s

separate property had been comingled with marital property. The appellate court

held that the husband did not establish that the new equipment was his separate

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property because the husband failed to provide any information indicating what

percentage of the proceeds from the sale/trade-in of his separate property were

contributed to the purchase of the new equipment.2

{¶34} The present case is readily distinguishable from the case law cited by

Susan. Here, the assets in the X-Ray, Inc. and UBS accounts were not equipment

that depreciated over time and were eventually replaced with new assets partially

purchased with marital funds. Rather, the assets in Peter’s accounts were cash or

cash equivalents and therefore easily quantifiable. Based on the extensive records

kept by Peter, Walsh was able to calculate the percentages of money held in the X-

Ray, Inc. and UBS accounts which constituted Peter’s separate property held prior

to the parties’ marriage.

{¶35} Susan also argues that Peter failed to sufficiently trace the

appreciation in the X-Ray, Inc. and the UBS accounts to his separate property.

Specifically, Susan maintains that Walsh’s method of calculating the rate of return

was flawed. Susan alleges that Walsh improperly used the “average rate of return”

instead of the “actual rate of return.” Susan cites Mays v. Mays, 2nd Dist. No.

2 Susan also cites Balogh v. Balogh (1995), 11th Dist. No. 94-P-0099 in support of her claim that Walsh did not sufficiently trace the actual pre-marital assets in the X-Ray, Inc. and UBS accounts. In Balogh, the husband established that he owned three trucks and one trailer prior to the marriage which he used in his trucking business. After the parties married, the wife quit her job and began working for her husband’s trucking business. During the course of the Baloghs’ fifteen-year marriage, the trucks that were originally the husband’s separate property had been traded-in and replaced with upgraded models which were also partially purchased with marital funds. As in Sanor, the appellate court reversed the trial court’s ruling that the husband met his burden in establishing the trucks and trailer were his separate property because husband did not quantify what percentage of the proceeds from his separate property were contributed to the purchase of the new trucks and trailer acquired during the marriage.

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2000-CA-54,

as authority that Walsh used an impropriate rate of

return in his calculations.

{¶36} In Mays, the husband owned an IRA prior to the parties’ marriage.

Shortly after the parties married, the husband rolled over the IRA funds into an

investment account. As in the present case, the husband maintained that the pre-

marital value of the investment account and any passive income attributed to the

pre-marital amount remained his separate property. The husband hired a CPA

who concluded that a specific portion of the investment could be traced to the

husband’s separate property.

{¶37} The CPA testified that, despite having the actual rates of return

available to him, he used a ten-year “average rate of return” to calculate the

income growth of the account for ten out of the thirteen years the parties were

married. The CPA then used a one year rate of return with respect to each of the

three remaining years of the marriage. The Second District was particularly

concerned with the CPA’s method because he chose to use “hypothetical

numbers” instead of the actual numbers which were readily available to him in

reaching his conclusions. Mays, 2nd Dist. No. 2000-CA-54, *5,

.

The appellate court remanded the case to the trial court with instructions that the

actual rates of return be used to determine the passive income attributable to the

husband’s separate property.

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{¶38} Contrary to Susan’s assertion, Walsh’s method of calculating the

rate of return differs significantly from method used in the Mays case. As stated

above, Walsh testified that he used the statements issued from the managing bank

or entity associated with the accounts that were generated on either a monthly or

quarterly basis. Based on the actual numbers listed in the statements, Walsh

calculated the rate of return for the respective month or quarter reflected in the

statement. Unlike in the Mays case, there was no evidence before the court that

Walsh declined to use the actual numbers in favor of using hypothetical figures.

Therefore, we find no error in the trial court’s decision to accept Walsh’s

calculation of the rate of return as a valid method.

{¶39} Susan alternatively argues that Peter failed to prove that the

appreciation in the accounts constituted passive income and, therefore his separate

property, because he did not prove that the appreciation resulted from solely

passive factors. The statutory definition of separate property includes “[p]assive

income and appreciation acquired from separate property by one spouse during the

marriage.” R.C. 3105.171(A)(6)(a)(iii). Passive income is further defined as

“income acquired other than as a result of the labor, monetary, or in-kind

contribution of either spouse.” R.C. 3105.171(A)(4).

{¶40} On appeal, Susan insinuates that Peter actively monitored and

managed the accounts which resulted in an “active” appreciation of the funds held

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in the X-Ray, Inc. and the UBS accounts and, therefore, should be considered

marital property. After reviewing the record before us it is apparent that Peter

engaged in the following activities with regard to monitoring and managing the

funds in the accounts in question: Peter kept a contemporaneous log book of his

stocks and bonds; Peter periodically called his stock broker to discuss his

portfolio; and Peter read financial literature and watched television programs

focusing on financial matters.

{¶41} At the hearing on the divorce proceedings, Peter admitted that he

viewed investing as an “interest” but further stated in response to questioning by

Susan’s counsel that it was not a “second career.” Moreover, the record provides

no evidence that Peter aggressively “played the market” and took extreme risks

which resulted in a roller coaster of losses and returns.3 Rather, the record

revealed that Peter used a simple, conservative approach maintaining the level of

growth of the investments that he had spent his career building and which now

3 See Hanna v. Hanna, 6th Dist. No.L-01-1446,

(The record revealed evidence that the husband actively “played” the stock market causing extreme fluctuations of the balance in the disputed brokerage account. The court held that the husband’s active management of the account constituted “labor” within the meaning of R.C. 31015.171(A)(3)(a)(iii) because the husband routinely made aggressive purchases and sales of stocks which resulted in great losses that depreciated the account balance to below the pre-marital balance. Husband then reinvested marital funds to raise the account to the divorce balance which was substantially higher than the pre-marital balance. Based on the evidence, the court ruled the appreciation was marital property.). See, also, Bryant v. Bryant (1999), 5th Dist. No. 97CA8, 98CA1, (holding that the disputed accounts did not represent passive income and appreciation, but rather, were the result of the investment of marital funds and labor expended on those accounts during the marriage. As in Hanna, the evidence showed that the account balance fell below the pre-marital balance as a result of the parties’ transaction activity on the account during the marriage. The balance was subsequently raised with the reinvestment of marital funds and active management of the account).

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provided him with a means of support during his retirement. Consequently, the

trial court was not persuaded by Susan’s assertion that Peter’s activities with

regard to these investment accounts amounted to a labor, monetary, or in-kind

contribution resulting “active” income. Accordingly, we also find no error in the

trial court’s conclusion that the appreciation attributable to Peter’s pre-marital

property was passive income and remained Peter’s separate property.

{¶42} Based on the foregoing, we find that there was ample competent,

credible evidence before the trial court to conclude that Peter met his burden in

proving, by the preponderance of the evidence, that a significant portion of the X-

Ray, Inc. and UBS accounts could be traced to his separate property. Therefore,

we find no error in the trial court’s decision that Peter sufficiently traced a

quantifiable component of these accounts to his separate property.

{¶43} For all of these reasons, the assignments of error overruled. The

judgment of the Allen County Court of Common Pleas is affirmed.

Judgment Affirmed

ROGERS and PRESTON, J.J., concur.

/jlr

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