## Facts

- Max and Pat Middendorf married in December 1986 and separated in March 1992.
- Before the marriage, Max owned a closely held interest in a family livestock business, Middendorf Stockyard Company, Inc.
- During the marriage, Max actively worked in the business as a co-owner and livestock buyer, making frequent buying and selling decisions and participating in management.
- Pat largely performed household and childcare responsibilities, including care for Max’s children from a prior marriage; her business-related assistance was limited.
- At marriage, Max’s business interest was valued at about $201,389; at divorce it was valued at about $309,930, an increase of $108,541.
- Max contended the increase resulted primarily from general hog-market conditions rather than spousal labor.
- After remand in the domestic relations proceedings, a court-appointed expert valued the interest and the trial court treated the $108,541 appreciation as marital property, awarding Pat one-half of the increase.

## Issues

1. Under R.C. 3105.171, when is appreciation in a spouse’s separate property during marriage classified as marital property rather than separate property?
2. Must both spouses contribute significant funds or labor, or must the non-owning spouse provide substantial direct work on the separate asset, before appreciation can be treated as marital property?

## Decision

- The Supreme Court of Ohio affirmed the judgment classifying the $108,541 increase in Max’s premarital business interest as marital property.
- The court held that appreciation in separate property is marital property when the increase is due to the labor, monetary, or in-kind contribution of either spouse during the marriage.
- The court rejected the argument that both spouses must contribute, or that the non-owning spouse must provide substantial direct work on the separate asset, for appreciation to be marital.
- The court concluded there was competent, credible evidence that Max’s active management and labor contributed to the increase, supporting the trial court’s classification.

## Legal Principles

- Under R.C. 3105.171, “all income and appreciation on separate property” is marital property to the extent it is due to the labor, monetary, or in-kind contribution of either or both spouses during the marriage.
- “Passive” appreciation—growth not resulting from either spouse’s labor or contributions—remains separate property.
- The statutory phrase “either or both” does not require joint spousal contribution, substantial non-owner contribution, or expenditure of significant marital funds as a prerequisite to classifying appreciation as marital.
- Classification of property as marital or separate is a factual determination reviewed deferentially; an appellate court will uphold the trial court’s classification when supported by competent, credible evidence.

## Conclusion

The court held that the increase in value of a spouse’s premarital business interest during marriage is marital property to the extent the increase is attributable to the labor or contributions of either spouse, and it affirmed treating the proven, labor-related appreciation as subject to division.


Middendorf v. Middendorf, 82 Ohio St. 3d 397, 696 N.E.2d 575 (Ohio 1998)