Gallo v. Gallo, 2015 Ohio App. LEXIS 938 (March 17, 2015)
Is this the end? First there was Bohme, now there is Gallo, another decision from the Ohio Court of Appeals that sends the clearest signal yet that the Heller double dip approach has lost traction with the court.
In the 2008 Heller decision, the Ohio appeals court said a statutory mandate required it to consider the potential for improper double dipping “where one spouse’s ownership in a going concern is discounted to present value and divided, and where excess earnings arising from that ownership interest will constitute part of the spouse’s stream of income into the future.”
But recently, in Bohme v. Bohme, the same court cast doubt on the continuing validity of the double dip analytical framework. While it “works well for fixed assets that produce an income stream, such as a pension or annuity,” it is less useful when using income from a closely held business, particularly a wholly owned professional practice, both as a tool to value the business and then as actual income for a spousal support calculation, the court said in that case.
In the most recent Gallo decision, the Court of Appeals went further still, finding several reasons for retreating from Heller and overruling Heller to the extent it proclaimed an “outright prohibition of double dipping.”
Importantly, the court in Gallo performed a different analysis than it did in Bohme to arrive at the same conclusion—that double dipping is not per se impermissible.
Reading both decisions together provides valuable insight for divorce experts as to what guides the courts when it comes to the division of marital assets and determination of spousal support.
To read more about this important ruling, click here.