537 N.E.2d 246 | Ohio Ct. App. | 1988
Lead Opinion
This is an appeal from a judgment of the Hocking County Common Pleas Court granting the parties a divorce and dividing the marital assets between the parties. We reverse.
The record reveals the following facts. On August 25, 1986, Larry Lemon filed a complaint for divorce against Linda Lemon. On September 2, 1986, not yet having received Mr. Lemon's complaint, Linda Lemon filed a similar complaint against Mr. Lemon.1 Each of the complaints alleged gross neglect of duty and extreme cruelty, sought custody of the one unemancipated child and a division of the marital assets and financial obligations.
The trial court held a hearing on the matter on January 12, 1987. One major area of dispute was the disposition of Mr. Lemon's not yet vested pension. On February 27, 1987, the trial court issued a memorandum opinion. On March 6, 1987, Mrs. Lemon requested that the court issue its Findings of Fact and Conclusions of Law. The court denied Mrs. Lemon's request stating that the memorandum opinion contained sufficient findings of fact and conclusions of law pursuant to Civ. R. 52. On June 9, 1987, the trial court filed its formal judgment entry granting a decree of divorce.
In the decree, the court granted both Mr. and Mrs. Lemon a divorce on the grounds of gross neglect. The court divided the personal property of the parties according to their respective requests during the hearing, and ordered the marital home sold for not less than $35,000. If the home did not sell within the time specified by the court, Mr. Lemon was ordered to file a partition action. The court further ordered that the marital obligations of the parties be paid from the proceeds of the sale and that the remaining net balance be equally divided between the parties.
The court granted custody of the minor child to Mrs. Lemon, ordered that Mr. Lemon pay thirty-five dollars per week in child support, and granted him reasonable and liberal visitation rights. The court further ordered that Mr. Lemon pay thirty-five dollars per week to Mrs. Lemon until two years from September 24, 1986. In its memorandum opinion the trial court expressly found that Mr. Lemon's *143 had no present value. Mrs. Lemon appeals the trial court's judgment and assigns four errors.
First Assignment of Error:
"The trial court erred to the prejudice of the Defendant in granting judgment for divorce to Plaintiff on grounds of gross neglect of duty, said decision being against the manifest weight of the evidence and an abuse of discretion."
R.C.
Clearly, it is within the discretion of the court, based on the evidence presented, to decide whether it will grant a divorce to a party or parties and on what grounds that divorce will be granted. An "abuse of discretion" connotes more than just an error in judgment. It implies that the court's attitude is unreasonable, arbitrary or unconscionable. Blakemore v.Blakemore (1983),
The record reveals adequate evidence presented by both Mr. and Mrs. Lemon to support the court's decision to grant each a divorce on the ground of gross neglect of duty. Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence. Ross v. Ross (1980),
Second Assignment of Error:
"The trial court's failure to consider plaintiff's pension plan as a marital asset was against the manifest weight of the evidence and an abuse of discretion and thus constitutes reversible error."
Specifically, Mrs. Lemon asserts that the trial court erred in failing to consider her husband's unvested pension plan a marital asset subject to division upon the parties' divorce. We agree.
The starting point for any court division of marital property or award of alimony is R.C.
"(A) In divorce, dissolution of marriage, or alimony proceedings, the court of common pleas may allow alimony it considers reasonable to either party.
"The alimony may be allowed in real or personal property, or both, or by decreeing a sum of money, payable either in gross or by installments, as the court considers equitable.
"(B) In determining whether alimony is necessary, and in determining the nature, amount, and manner of payment of alimony, the court shall consider all relevant factors, including, but not limited to, the following:
"(1) The relative earning abilities of the parties;
"(2) The ages, and the physical and emotional conditions of the parties;
"(3) The retirement benefits of the parties;
"(4) The expectancies and inheritances of the parties;
"(5) The duration of the marriage;
"(6) The extent to which it would be inappropriate for a party, because he will be custodian of a minor child of *144 the marriage, to seek employment outside the home;
"(7) The standard of living of the parties established during the marriage;
"(8) The relative extent of education of the parties;
"(9) The relative assets and liabilities of the parties;
"(10) The property brought to the marriage by either party;
"(11) The contribution of a spouse as homemaker."
Mrs. Lemon asserts that R.C.
R.C.
An unvested pension plan has value. It is the trial court's responsibility to determine, as best it can, the value of an unvested pension plan as a marital asset. For example, the court should take into consideration the time left before the pension becomes vested, the length of the marriage between the parties, and the contributions of the parties both primarily and secondarily to the pension plan.
This is, of course, likely to be difficult for the trial court because vesting is a contingent event. Nonetheless, contingent events do happen. The trial court found that the pension had "no market value at the present time." However, the unvested pension had some value. Social Security, great unfunded and unvested scheme that it is, provides some benefits and a court must take Social Security benefits into account. Beyer v. Beyer (1979),
Perhaps the most telling proof that this unvested pension had at least some value is Mr. Lemon's introduction of expert testimony on the issue for the purpose of obtaining the pension benefit for himself alone. There is a discussion of how other states have treated this issue in Annotation (1979), 94 A.L.R. 3d 176. While the treatment of this issue by other states is informative, we believe that the language in R.C.
We do not hold that Mrs. Lemon is entitled to division of this unvested pension. We do hold that, in light of the fact that this was a marriage of twenty-five years, that both parties contributed income to the household, that the wife contributed as a homemaker, and that the pension will vest in two and one-half years, the court erred in refusing to consider the unvested pension as a marital asset because it has no present value.
Thus, the trial court erred in not *145 considering the value of Mr. Lemon's pension plan in its division of the marital assets. Mrs. Lemon's second assignment of error is sustained.
Third Assignment of Error:
"The trial court committed prejudicial error and abused its discretion in that the division of property and award of alimony to the defendant is grossly inadequate and against the manifest weight of the evidence."
Trial courts are given broad discretion in matters involving the division of marital assets or the award of alimony. A potentially equal division should be the starting point of analysis for the trial court. Cherry v. Cherry (1981),
Fourth Assignment of Error:
"The trial court erred in its division of the marital assets in failing to consider the element of aggression of the plaintiff in the break up of the marital relationship."
R.C.
Based on this court's ruling on Mrs. Lemon's second assignment of error, we reverse the decision of the trial court on the issue of Mr. Lemon's unvested pension plan and remand the matter for proceedings consistent with this opinion.
Judgment reversed and cause remanded.
ABELE, J., concurs.
STEPHENSON, J., dissents.
Dissenting Opinion
I respectfully dissent from the judgment and opinion sustaining appellant's second assignment of error and reversing the judgment of the court below. Appellant's second assignment of error asserts that the trial court's failure to consider appellee's pension plan as a marital asset was against the manifest weight of the evidence and an abuse of discretion.
At trial, the uncontroverted expert testimony of economics professor Richard Vedder was that since the Ohio Operating Engineers Pension Plan, of which appellee was a member, had vested benefits after ten service years and appellee had only worked the equivalent of seven and a half service years, there was no present value to such pension plan. The pension plan was non-contributory and completely funded by appellee's employer. On February 27, 1987, the trial court filed a memorandum opinion which stated, in pertinent part, as follows: *146
"Very little dispute exists as to the extent and value of marital assets of the parties. The Court finds from the evidence that the pension contribution of the Plaintiff has no market value at the present time."
The trial court then proceeded to divide the marital property and award sustenance alimony to appellant. On June 9, 1987, the trial court entered a judgment which essentially reflected its earlier memorandum decision, but did not explicitly refer to appellee's pension plan.
In reviewing a judgment of the trial court awarding and distributing property in a divorce action, the reviewing court is limited to determining whether, considering the totality of the circumstances, the trial court abused its discretion. Verplatse
v. Verplatse (1984),
In determining whether alimony is necessary, and in determining the nature, amount, and manner of payment of alimony, the court shall consider all relevant factors, including, but not limited to, the retirement benefits of the parties. R.C.
A spouse's vested interest in a profit-sharing and pension plan earned during marriage constitutes a marital asset subject to division pursuant to R.C.
One Ohio treatise states that vested or non-vested pension and retirement benefits to the extent they were earned during marriage are marital property, regardless of (1) how payments were made to the fund, i.e., by payroll deduction and/or by employer contributions; (2) whether they have matured; (3) when and under what contingencies the benefits are payable; and (4) when the fund can be subjected to garnishment or execution. Baldwin's Ohio Domestic Relations Law (1987) 260, Section 25.02. Conversely, retirement or pension benefits that have not vested at all have been held explicitly or implicitly by courts in other noncommunity property states having statutes providing for equitable division of the spouses' property upon divorce, not to be subject to division or direct consideration in making such equitable property divisions. Annotation, Pension or Retirement Benefits as Subject to Award or Division by Court in Settlement of Property Rights Between Spouses (1979), 94 A.L.R. 3d 176, 242.
In the instant case, there appear to be two distinct considerations involved: (1) the consideration of unvested pension plans in the R.C.
Possible solutions to this valuation problem are outlined in Inre Marriage of Hobbs (Ill.App. 1982),
"Appellate decisions of this state have established that pension rights, whether matured, vested or not vested, contributory or non-contributory, are property under section 503 of the Act (Ill. Rev. Stat. 1979, ch. 40, par. 503). (See In rethe Marriage of Bodford (1981),
"An excellent discussion of this problem and a well-conceived solution to it are found in In re the Marriage of Fairchild
(1982),
"`The dilemma, then, is that while it is unfair to ignore thevalue of nonvested benefits in the division of marital property,those benefits in some instances being the only significantmarital asset, it is also unfair to effect a present division ofthe marital property utilizing an actuarial value of thosebenefits computed in reliance on speculative, albeit actuarilyaccepted assumptions. * * *
"`(R)eserving jurisdiction over the future benefits and effecting a subsequent division of the actual monetary benefits had the dual advantage of allocating equally between the parties the risk that the rights may never vest and enabling the court to better determine the actual proportion of future benefits that accrued to each party during the marriage.'" Keating, RecentDecisions, Ill. Bar J., Vol. 70, No. 9, page 582, 585.
"(In re the Marriage of Fairchild [1982],
"A similar concept had been suggested earlier:
"`In those instances where it is difficult to place a present value on the pension or profit-sharing interest due to uncertainties regarding vesting or maturation, or when the present value can be ascertained but the type, or lack, of other marital property makes it impractical or impossible to award sufficient offsetting marital property to the non-employee spouse, then the trial court in its discretion may award each spouse an appropriate percentage of the pension to be paid "if, as and when" the pension becomes payable. (In re Marriage ofBrown [1976],
"It can be seen that both solutions share the common advantage of dividing the pension benefits at a time when, at least in terms of periodic payments, they are certain. Given this common advantage, we direct the trial court, upon the necessary remand of this cause, to reserve jurisdiction over the future benefits. Whether it makes a present percentage allocation of those benefits, or reserves this decision for the future, is left to the court's sound discretion." (Emphasis added.)
The approach taken by the majority opinion herein would place the trial court in the unenviable position of assigning a present value to unvested pension benefits where there is no evidence in the record of any present value of such benefits and where the vesting of benefits would be, in part, based upon contingencies and speculation. Under these circumstances, it might have been preferable for the trial court to have ordered additional sustenance alimony to appellant in an amount equal to a percentage of the pension that would vest after two and one-half more service years. Alexander, supra, at 97, 20 OBR at 118,