Timothy Kendrick v. Angela Kendrick
2015 Ind. App. LEXIS 641
| Ind. Ct. App. | 2015Background
- Timothy Kendrick (Husband) and Angela Kendrick (Wife) divorced after an 18-year marriage; final hearing held Oct. 29, 2014; decree entered Nov. 5, 2014.
- Husband worked for IUPUI and has PERF retirement benefits comprised of a defined-benefit pension and a defined-contribution account; valuation report placed present value of the pension at $172,285.30 and the coverture (marital) portion at $116,233.64.
- Trial court awarded Husband the marital residence (net negative equity), most debts, Husband’s PERF accounts (the court listed $116,233.64 for the PERF pension), and awarded Wife smaller retirement accounts and a vehicle.
- Court found the presumption of equal division not rebutted and ordered Husband to pay Wife $62,154.17 as an equalization judgment, payable $500/month (no interest unless default), noting most marital value was Husband’s PERF pension which he could not access until retirement.
- Husband appealed the requirement to begin immediate monthly equalization payments before he receives pension benefits; Wife cross-appealed the court’s exclusion of the premarital portion of Husband’s pension from the marital estate.
Issues
| Issue | Plaintiff's Argument (Husband) | Defendant's Argument (Wife) | Held |
|---|---|---|---|
| Whether the court abused its discretion by ordering Husband to begin equalization payments immediately (before he receives PERF benefits) | Ordering immediate payments forces Husband to prepay pension-derived funds he cannot yet access; excessive burden given monthly obligation plus other debts | Court acted within discretion; installment payments are a permissible equalization method when pension is illiquid and Wife has present need; court avoided interest on judgment recognizing pension illiquidity | Affirmed in part: trial court did not abuse discretion in ordering immediate $500/month installments as part of an offsetting award given the circumstances |
| Whether the trial court erred by excluding the premarital portion of Husband’s PERF pension from the marital estate (valuation/division) | (Wife) Trial court should have included the entire pension in the marital estate under the "one pot" rule and then justified any deviation from equal division | (Husband) Court used the coverture-fraction method to isolate marital portion and effectively awarded marital share to Wife; distribution method appropriate | Reversed in part: court erred by not including the full pension in the marital estate; remanded to include entire pension, make findings on equal-division presumption or rebuttal, and recalculate division/equalization payment as needed |
Key Cases Cited
- Everette v. Everette, 841 N.E.2d 210 (Ind. Ct. App.) (a trial court may offset an illiquid governmental pension by awarding installment equalization payments)
- Hughes v. Hughes, 601 N.E.2d 381 (Ind. Ct. App.) (affirming installment payments to satisfy a spouse's interest in a significant pension without forcing retirement)
- Qazi v. Qazi, 546 N.E.2d 866 (Ind. Ct. App.) (upholding installment payment of present value of significant pension plan over time)
- In re Marriage of Nickels, 834 N.E.2d 1091 (Ind. Ct. App.) ("one pot" theory: trial court must consider all assets when dividing the marital estate)
- Hartley v. Hartley, 862 N.E.2d 274 (Ind. Ct. App.) (court must include assets in marital estate before awarding them solely to one spouse)
- Parham v. Parham, 855 N.E.2d 722 (Ind. Ct. App.) (ERISA QDRO rules govern assignability of private-plan pensions; noted for contrast with governmental plans)
- Von Haden v. Supervised Estate of Von Haden, 699 N.E.2d 301 (Ind. Ct. App.) (discussing ERISA anti-alienation and QDRO exception in pension division contexts)
- In re Marriage of Fisher, 24 N.E.3d 429 (Ind. Ct. App.) (describing the coverture-fraction method for allocating pension value between marital and nonmarital periods)