IN RE the MARRIAGE OF: Karl James WEBERG, Petitioner-Appellant-Cross Respondent, v. Mary Ann WEBERG, Respondent-Cross Appellant.
No. 89-2124
Court of Appeals
Submitted on briefs July 18, 1990.—Decided October 4, 1990.
463 N.W.2d 382
For the respondent-cross appellant the cause was submitted on the briefs of Kenneth W. Forbeck of Forbeck & Monahan, S.C. of Beloit.
Before Eich, C.J., Gartzke, P.J., and Sundby, J.
EICH, C.J. Karl Weberg appeals from a judgment of divorce. He raises two issues: (1) whether his disability benefits are available for payment of maintenance to his former wife, Mary Ann Weberg; and (2) whether the trial court abused its discretion in failing to limit the maintenance to a specific term of years. Mary Ann Weberg cross-appeals, challenging the court‘s ruling that a worker‘s compensation settlement received by Karl
The Webergs were married for twenty-one years. At the time of the divorce, Karl Weberg was forty-four years old and Mary Ann Weberg was forty years old. They have two children, both of whom are adults. Prior to the marriage, Karl Weberg was severely wounded in Vietnam. He was discharged from the army with a physical disability rating of seventy percent. In spite of this disability, he worked for the Chrysler Corporation for ten years during the marriage. After he ended his employment at Chrysler in 1979, his physical status was re-evaluated by the Veterans’ Administration as 100 percent permanently disabled. His current income is derived solely from disability payments. He receives Veterans’ Administration benefits of $1,469 per month, social security disability benefits of $854 per month, and a disability benefit from Chrysler of $221 per month.
Mary Ann Weberg enjoys good physical and emotional health. She has been employed outside the home since 1980 and presently works forty hours per week at a clinic, earning $5.86 per hour ($234 per week).
The trial court awarded Mary Ann Weberg maintenance of $746 per month for an indefinite period. The maintenance payment, when combined with her employment income, gives her approximately forty-five percent of the parties’ total combined income. The marital assets were divided fifty-fifty, each party receiving assets valued at $14,649. Karl Weberg retained as separate property the sum of $10,737, representing the remainder of a lump-sum worker‘s compensation settlement he had received for injuries incurred during his employment at Chrysler.
Karl Weberg argues first that his federal military disability payments and social security disability pay
Leighton held that a veteran‘s disability pension is income to be considered in allowing maintenance rather than property to be divided at divorce. Id. at 637, 261 N.W.2d at 465; see also Richardson v. Richardson, 139 Wis. 2d 778, 783-84 n.2, 407 N.W.2d 231, 234 (1987). The Leighton court stated that a military disability pension “is a federally-provided replacement for earning
We also reject Weberg‘s assertion that Leighton is no longer persuasive because of McCarty v. McCarty, 453 U.S. 210 (1981), and its progeny, notably Mansell v. Mansell, 490 U.S. 581 (1989), on which he places principal reliance. The issue in Mansell, however, was whether “military retirement pay waived by the retiree in order to receive veterans’ disability benefits” could be treated as property to be divided between divorcing parties under the language of the Uniformed Services Former Spouses Protection Act,
In this case we are not asked to divide Weberg‘s benefits or award any portion thereof to his wife. We are to decide only whether the payments Weberg is presently receiving may be considered by the court as a factor in assessing his ability to pay spousal maintenance. We thus consider Mansell to be distinguishable on the facts and reject Weberg‘s claim that it mandates reversal.
Weberg next argues that the trial court abused its discretion by awarding maintenance to Mary Ann Weberg without considering her needs, his ability to pay, and the effects of the property division. He also maintains that the award disregarded the fairness objectives of LaRocque v. LaRocque, 139 Wis. 2d 23, 33, 406 N.W.2d 736, 740 (1987), because it did not take into account the source of his income (disability payments) and was not limited in time.
Whether to award maintenance—and the duration and amount thereof if an award is to be made—are matters committed to the sound discretion of the trial court. Bahr v. Bahr, 107 Wis. 2d 72, 77, 318 N.W.2d 391, 395 (1982). Generally, we look for reasons to sustain the trial court‘s discretionary decision, Loomans v. Milwaukee Mut. Ins. Co., 38 Wis. 2d 656, 662, 158 N.W.2d 318, 320 (1968), and we need not agree with the decision to sustain it. Independent Milk Producers Co-op v. Stoffel, 102 Wis. 2d 1, 12, 298 N.W.2d 102, 107 (Ct. App. 1980). Because the exercise of discretion “is not the equivalent of unfettered decision-making,” in order to sustain a discretionary determination we must be able to see that the court made a “reasoned application of . . . the appropriate legal standard[s] to the relevant facts in the case.” Hedtcke v. Sentry Ins. Co., 109 Wis. 2d 461, 471, 326 N.W.2d 727, 732 (1982), quoting Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16, 20 (1981). Thus, “if the record shows that discretion was in fact exercised and we can perceive a reasonable basis for the court‘s decision,” we will affirm. Prahl v. Brosamle, 142 Wis. 2d 658, 667, 420 N.W.2d 372, 376 (Ct. App. 1987).
When fixing maintenance, the starting point is
The record satisfies us that the trial court properly exercised its discretion. The court gave careful and extensive consideration to each of the statutory factors in light of the facts of the case and reached a reasoned and reasonable result. Although the court did not make a specific finding of Mary Ann Weberg‘s needs, it considered those needs as reflected in her budget in arriving at its decision. And despite Weberg‘s contrary assertion, the trial court repeatedly referred to the property agreement in its findings.
We also believe that the fairness objective of LaRocque was met by the court‘s award. The court did not mechanically apply a fifty-fifty formula to determine maintenance. It considered whether each party was likely to attain a pre-divorce standard of living in the future, taking into account the nature and the sources of their incomes, their future earning potential, and the taxes each must pay. The court then awarded Mary Ann Weberg forty-five percent of their total combined income, stating that the less-than-equal award would give her “an incentive to apply herself . . . [and] utilize the talents that . . . she has.” The court also stated that, because of Karl Weberg‘s disability, “it is fair and equitable to give him a larger share of the total income of the parties.” The court‘s discretionary determination was thus the “product of a rational mental process by which the facts of record and law relied upon [were] stated and . . . considered together for the purpose of achieving a reasoned and reasonable determination.” LaRocque, 139 Wis. 2d at 27, 406 N.W.2d at 737. There was no abuse of discretion.
As we have noted, the trial court denied Mary Ann Weberg‘s request that a bank account containing the remainder of a worker‘s compensation settlement for job-related injuries suffered by Karl several years prior to the divorce be treated as marital property and divided equally between them. We reject her challenge to that ruling.
Decisions relating to the division of marital property are reviewed for abuse of the trial court‘s discretion under the standards we have discussed earlier in this opinion. Asbeck v. Asbeck, 116 Wis. 2d 289, 293, 342 N.W.2d 750, 752 (Ct. App. 1983).
Karl Weberg suggests, however, that the supreme court in Richardson and Krebs created a presumption that personal injury settlements remain the property of the injured spouse. Richardson did establish such a presumption; but the language of the opinion limited its application to inchoate claims—those which, at the time of the divorce “[have] not resulted in either a judgment or a settlement . . . .” Id., 139 Wis. 2d at 785, 407 N.W.2d at 234. Krebs applied the “logic of Richardson” to payments to be made in the future to one spouse under a structured settlement of a personal injury claim. Krebs at 57, 435 N.W.2d at 243.
In this case, we believe the logic of Richardson and Krebs would make the presumption equally applicable to
[C]ompensation for loss of bodily function, for pain and suffering and for future earnings replaces what was lost due to a personal injury. Just as each spouse is entitled to leave the marriage with his or her body, so the presumption should be that each spouse is entitled to leave the marriage with that which is designed to replace or compensate for a healthy body. We therefore conclude that the statutory presumption of equal division should be altered . . . . Instead of presuming equal distribution of a personal injury claim, the court should presume that the injured party is entitled to all of the compensation for pain, suffering, bodily injury and future earnings. Richardson, 139 Wis. 2d at 786, 407 N.W.2d at 234-35.3
In Krebs, however, the court appears to have dropped the qualification, for there the structured settlement did not distinguish among the various elements of damage, yet the court applied the Richardson presumption. After quoting the rule—and its limitation—from Richardson, the Krebs court stated: “In spite of the lack of identification of separate amounts making up the structured settlement, we believe that the logic of Richardson applies and the trial court should employ the presumption that the injured [spouse] is entitled to the remainder of the settlement.” Krebs, 148 Wis. 2d at 57, 435 N.W.2d at 243.
The same is true here. The record of Weberg‘s settlement does not disclose any division or separation based on type of damage. Under Krebs, that fact is immaterial and the presump
The trial court, of course, must still consider the factors set out in
Here, Mary Ann Weberg contends that the settlement funds are marital property because they were comingled with marital funds when they were transferred to a joint account and used, in part at least, “for joint and family purposes.”
The trial court, rejecting that argument, found that: (1) the funds with which the account was opened were the proceeds of Weberg‘s worker‘s compensation settlement; (2) while they were placed in a joint account, these funds “were not co-mingled” with marital assets; and (3) although some monies withdrawn from the account were used for alleged “family” purposes, the account was held jointly only “for the purpose of protecting [Mary Ann Weberg] in the event of [Karl‘s] death.”
Karl Weberg testified that the settlement funds were placed in a joint account with his wife so that she would be the beneficiary of the account in case something happened to him. There also was evidence that occasional withdrawals from the account were used to pay the couple‘s debts.
There was no evidence that the funds were co-mingled with other marital assets. Nor do we believe that the fact that Weberg may have used some of the interest generated by the account, and some of the principal, to pay marital debts invalidates the court‘s findings.
In In re Popp, 146 Wis. 2d 778, 432 N.W.2d 600 (Ct. App. 1988), a divorcing wife attempted to have her husband‘s interest in a corporation—he had received several shares of stock as a gift—declared a marital asset available for division. While gifted property is exempt from division by statute, and a personal injury settlement is presumptively exempt by court decision, we see little difference in principle between the two when the issue is whether the exemption is lost by reason of co-mingling or, in the words of Popp, “[t]ransmutation of non-marital property to marital property.” Popp at 788, 432 N.W.2d at 603.
In Popp, the wife sought access to the stock on grounds that certain assets of the corporation had been used by the husband for marital purposes, and the trial court found in her favor. We overruled, holding that while the corporate assets used for marital purposes and to purchase “marital items” were lost to the husband, the remaining shares had retained their identity as gifted property and could not be considered part of the marital estate. Id. at 788-89, 432 N.W.2d at 603. In reaching that conclusion, we also noted the absence of any “donative intent (actual or constructive) on [the husband‘s] part” which would support a finding that he “expressly or impliedly indicated that he wished or intended to . . . convert [the shares] to marital property.” Id. at 789, 432 N.W.2d at 603.4
By the Court.—Judgment affirmed.
SUNDBY, J. (concurring). This appeal presents an important family law question which is not answered by any Wisconsin decision: Does a Wisconsin court have jurisdiction under
In Leighton, the wife contended that in dividing the parties’ property, the trial court should have considered the present value of the monthly veterans’ disability benefits that the husband was receiving. The court rejected her contention explaining, “We . . . view the disability benefits in the case before us as income to the [husband], material only to his ability to pay alimony, if alimony were awarded.” Id. at 637, 261 N.W.2d at 465. The court relied on Kronforst v. Kronforst, 21 Wis. 2d 54, 123 N.W.2d 528 (1963) where the court treated the husband‘s social security disability benefit as income in determining an appropriate alimony award and not as an asset in the division of the marital estate.
Neither Kronforst nor Leighton considered
Payments of benefits due or to become due under any law administered by the Veterans’ Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary . . .
However, the Pfeil court was not faced with the question of whether
In In re Gardner, 220 Wis. 493, 264 N.W. 643 (1936), the court held that a divorced wife awarded child support was not a “creditor” of the disabled veteran within the federal exemption statute, and hence was entitled to payment of accrued support money from accumulated government payments made to the veteran‘s guardian. At that time, however, the predecessor to
In Rose, the Court held that a Tennessee statute allowing state courts to require veterans to pay child support out of federal veterans’ disability benefits was not preempted by federal law. One of the federal statutes the appellant in Rose relied on was
The Court held that neither purpose was constrained by allowing the state court to hold appellant in contempt for failing to pay child support. The Court said that “the exercise of state-court jurisdiction over appellant‘s disability benefits [did not] deprive appellant of his means of subsistence contrary to Congress’ intent, for these benefits are not provided to support appellant alone.” The Court pointed to S. Rep. No. 98-604, at 24 (1984) which states that veterans’ disability benefits are intended to “provide reasonable and adequate compensation for disabled veterans and their families.” Rose, 481 U.S. at 630 (emphasis supplied by Rose court). The Court further said that, “as evidenced by
It was on this basis that the Court distinguished such cases as Wissner v. Wissner, 338 U.S. 655 (1950)
We construed these amendments to “expressly override” the anti-attachment provision for support claims, finding it “logical to conclude that Congress . . . thought that a family‘s need for support could justify garnishment, even though it deflected other federal benefit programs from their intended goals, but that community property claims, which are not based on need, could not do so.”
Id. (quoting Hisquierdo, 439 U.S. at 587).
The Court noted that the critical difference between Ridgway and the case before it was that Congress had not made appellant the exclusive beneficiary of the disability benefits. Rose, 481 U.S. at 634.
As we have demonstrated, these benefits are intended to support not only the veteran, but the veteran‘s family as well. Recognizing an exception to the application of
sec. 3101(a) ‘s prohibition against attachment, levy, or seizure in this context would further, not undermine, the federal purpose in providing these benefits.
These cases convince me that Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989) does not place veterans’ disability benefits beyond the reach of a Wisconsin trial court in determining a maintenance award. Appellant argues that the result in Mansell—exclusion of waived military retirement pay from property divisible upon divorce—“is a clear indication that Congress did not intend that veterans’ disability payments would be included in assets divided in a divorce.” However, the Former Spouses’ Protection Act deals only with military retirement pay, not disability payments. As the Mansell Court notes, the Act was enacted “[i]n direct response to McCarty.” Mansell, 104 L. Ed. 2d at 682. McCarty held that the federal statutes then governing military retirement pay prevented state courts from treating military retirement pay as community property. Had the congress intended that the Act was to apply to military disability pay, it presumably would have said so.
Congress must be presumed to have been aware of the decisions distinguishing between retirement pay and disability pay, insofar as such pay is subject to the anti-attachment statute. The Act authorized state courts to treat “disposable retired or retainer pay” as community property. Id. (citing
Unlike the appellant, I find nothing in the Former Spouses’ Protection Act or Mansell which provides any indication, clear or otherwise, that Congress did not intend that veterans’ disability benefits would be included in assets divided in a divorce. The Act and Mansell are simply silent as to disability pay except that any retirement pay waived to receive disability benefits may be treated by state courts as community property military retirement pay. Presumably, the same result would be reached in an equitable distribution state. See Mansell, 104 L. Ed. 2d at 682 n.2.
I conclude from the foregoing that veterans’ disability benefits continue to be benefits available to the veteran and his or her family. Such benefits are therefore subject to a Wisconsin state court‘s authority to consider veterans’ disability benefits in determining child support or maintenance.