In re the Marriage of Cardona
316 P.3d 626
| Colo. | 2014Background
- Wife and Husband divorced; trial court in 2009 treated Husband’s accrued vacation and sick leave (451.61 hours) as marital property and awarded Wife half the cash value ($11,616). Husband appealed and Colorado Court of Appeals reversed. The Supreme Court granted certiorari on whether accrued leave is marital property under the UDMA.
- Husband’s pay stub showed hours accrued but no employer policy or contract was introduced proving entitlement to cash payment for unused leave.
- At hearing Husband testified uncertainly that he would be paid if terminated; no employment agreement or policy was submitted as evidence.
- The trial court allowed Wife to relocate; Wife initially argued leave could be treated as an economic circumstance (because Husband might need it for parenting time) but later sought half the cash value.
- The legal question presented: when, if ever, accrued vacation/sick leave earned during the marriage is “property” subject to equitable division under Colo. Rev. Stat. § 14-10-118 (UDMA).
Issues
| Issue | Castro (Wife) — Argument | Cardona (Husband) — Argument | Held |
|---|---|---|---|
| Whether accrued vacation/sick leave can be "property" under the UDMA | Accrued leave earned during marriage is a form of deferred compensation and thus marital property subject to division | Accrued leave is an alternative form of wages or a speculative expectancy and not divisible marital property | Where an employee has an enforceable contractual right to payment for accrued leave, leave earned during marriage is marital property; otherwise it is not property but may be an economic circumstance |
| Whether courts may value accrued leave at dissolution | If an enforceable right to payment exists, the value can be ascertained from the employment agreement or circumstances and divided | Valuation is speculative because leave may be used and never converted to cash | If value can be reasonably ascertained at dissolution, it must be valued and equitably divided; if not, treat the right as an economic circumstance under §14-10-118(1)(c) |
| Burden/evidence needed to treat leave as marital property | Trial court may infer marital value from accrued hours and wage rate | Court should require evidence of an enforceable payout right (policy/contract) before treating it as property | A party must present competent evidence (agreement/policy) showing an enforceable right to payment; mere testimony or assumption is insufficient |
| Remedy where value is uncertain | Use equitable tools (deferred distribution, etc.) to effect fairness | Present-value calculation is often infeasible; better to treat as non-divisible until cashable | If value cannot reasonably be ascertained, do not divide as property; consider it among economic circumstances; court has latitude to address parenting needs when dividing |
Key Cases Cited
- In re Marriage of Balanson, 25 P.3d 28 (Colo. 2001) (enforceable contractual rights treated as property under UDMA)
- In re Marriage of Grubb, 745 P.2d 661 (Colo. 1987) (vested pension rights are marital property as deferred compensation)
- In re Marriage of Gallo, 752 P.2d 47 (Colo. 1988) (vested military retirement earned during marriage is marital property)
- Suastez v. Plastic Dress-Up Co., 647 P.2d 122 (Cal. 1982) (vacation pay is deferred wages for services performed)
- Schober v. Schober, 692 P.2d 267 (Alaska 1984) (unused leave treated as marital asset where contract or policy creates payment right)
- Forrester v. Forrester, 953 A.2d 175 (Del. 2008) (accrued compensatory time divisible where convertible to cash during employment)