FROM CAMPBELL CIRCUIT COURT HONORABLE RICHARD A. WOESTE,
JUDGE ACTION NO. 14-CI-00800
AND ORAL ARGUMENT FOR APPELLANT: Steven Joseph Megerle
AND ORAL ARGUMENT FOR APPELLEE: William G. Knoebel Florence,
BEFORE: COMBS, D. LAMBERT, AND NICKELL, JUDGES.
Baas appeals from orders of the Campbell Circuit Court,
Family Division, enforcing and incorporating a mediated
agreement into the decree dissolving her marriage to Edward
Baas. Issues include: whether a "bullet-point"
mediated agreement may be incorporated directly into a decree
of dissolution as a separation agreement under
403.180, whether mediator or attorney misconduct renders the
mediated agreement unconscionable, and whether the mediated
agreement is unconscionable. Having reviewed the record, we
discern no error and affirm.
business banker, sought divorce from Edward, a construction
entrepreneur. The couple had one child together. The divorce
proceedings were highly contentious.
discovery, both parties had retained and deposed experts to
appraise Edward's business interests. Erin hired Lori
Wilhelmy, a professional business appraiser with a
master's degree in business administration. Edward hired
Joy L. Hall, a tax attorney. Both experts noted Edward owned
a thirty percent, non-voting interest in American Facade
Restoration, LLC ("AFR"). Hall valued AFR at $638,
517 on the date of separation and Edward's thirty percent
stake in the company at $77, 419, heavily discounting the
value due to Edward's lack of voting control. Wilhelmy
valued AFR using two different valuation methods, reaching an
average value of $3, 790, 000 and valued Edward's share
at $1, 137, 000, considering both Edward's lack of voting
control and integral role in operation of the business.
Wilhelmy also valued Edward's thirty percent non-voting
interest in another business, EML Properties, LLC
("EML"), a real estate holding company whose sole
asset is the warehouse it leases to AFR. Rent paid by AFR
comprises EML's entire income. Hall was only retained to
valuate AFR and did not render an opinion as to the value of
Edward's interest in EML. However, the parties ultimately
stipulated Edward's share of EML was worth $120, 000.
trial court ordered the parties to attend mediation prior to
the final hearing. The parties selected a mediator, a
practicing attorney with substantial experience in domestic
parties, their counsel and the mediator, executed an
agreement to mediate, which set out the terms under which the
mediation would be conducted. Section two of this agreement
specified, "[t]he Mediator is responsible for managing
the process of mediation[, ]" and "[t]he Mediator
will not make decisions for the participants nor advise them
as to what should or should not be decided on any
issue." Section four of the agreement permitted
consultation with outside experts, such as accountants or
actuaries, during the mediation. Section six provided the
mediator would not give legal advice.
mediation took place at the office of Edward's counsel.
The parties were never in the same room together. The
mediator relayed communications between the parties. The
mediation exceeded four hours.
counsel left the mediation to run personal errands and
remained absent for approximately one hour. Even so, the
mediator continued to move the mediation forward through
direct communication with Erin-no evidence was presented that
the mediator communicated directly with Erin's attorney
during her absence from the mediation. During counsel's
absence, Erin was able to maintain contact with her attorney,
as evidenced by several text messages the two exchanged
regarding the mediator's communications. Negotiations
continued through Erin's attorney's absence and after
her counsel's return but prior to reaching an agreement,
Erin prepared to leave the proceedings and donned her coat.
It was at that point Erin claims the mediator relayed
Edward's offer to allow Erin to claim their
three-year-old daughter on her future income tax returns if
she would accept his valuation of his business interests.
According to Erin, the mediator stated the value of the
resulting tax credit would range from $3, 000-$5, 000
annually, with the total tax savings offsetting the disparity
between the couple's conflicting valuations of
Edward's business interests. Also, according to Erin, her
attorney did not dispute the exemption was worth the range
presented by the mediator. Erin alleges she agreed to
Edward's offer based on these valuations. A
"bullet-point" written mediation agreement was
prepared, with both parties, their respective attorneys, and
the mediator executing the document. Edward's counsel was
to prepare a formal separation agreement based on the
"bullet-point" mediated agreement listed several
agreements related to division of the couple's property.
Among these: Erin waived her right to maintenance; Erin
received a Toyota vehicle; Edward received the marital
residence as well as another piece of real property the
couple owned; Edward assumed liability, if any, for amounts
owing on the couple's 2014 Ohio state income taxes and
waived entitlement to any refund; Edward waived his right to
reimbursement for their child's 2015 medical bills and
for fees he paid to the court-appointed parenting
coordinator; and both parties waived any marital interest in
the retirement/pension accounts of the other. Most
importantly for purposes of this appeal, Edward agreed to
allow Erin to claim their child on her tax returns and Erin
agreed to accept as her portion of Edward's business
holdings a one-time lump sum payment of $120, 000, plus
monthly payments of $1, 000 for five years.
days following the mediation, Edward circulated a proposed
"Separation and Property Settlement Agreement"
formally reciting the terms listed in the mediation
agreement. Erin refused to execute the document upon learning
the negotiated tax exemption was not as valuable as she had
understood at the mediation, and because she alleged it
addressed issues not previously discussed or agreed upon. In
her affidavit, Erin also alleged her attorney "pressured
[her] to take the deal after the fact by stating in a text
message how 'conservative' Judge Woeste was and how
he'd basically never award [her] the amount of money that
was agreed upon in the mediation or anywhere close ...