BINGLEY v. BINGLEY

• Decision Date: 29 September 2010
• Docket Number: No. 02S03-1002-CV-122.,02S03-1002-CV-122.
• Citation: 935 N.E.2d 152
• Parties: Anne M. BINGLEY, Appellant (Defendant below), v. Charles B. BINGLEY, Appellee (Plaintiff below).
• Court: Indiana Supreme Court

935 N.E.2d 152

Anne M. BINGLEY, Appellant (Defendant below),

v.Charles B. BINGLEY, Appellee (Plaintiff below).

No. 02S03-1002-CV-122.

Supreme Court of Indiana.

Sept. 29, 2010.

Stephen P. Rothberg, Fort Wayne, IN, Attorney for Appellant.

Lindsey A. Grossnickle, Columbia City, IN, Attorney for Appellee.

On Petition to Transfer from the Indiana Court of Appeals, No. 02A03-0904-CV-187

SHEPARD, Chief Justice.

Charles Bingley filed to dissolve his marriage with appellant Anne Bingley. Charles had retired from his employment with Navistar Corp., which paid premiums to a health insurance company on Charles's behalf as part of his pension plan. Anne argued that the premiums constituted property subject to division. The trial court held that the benefits Charles was receiving did not constitute a marital asset.

Because we conclude that employer-provided health insurance benefits do constitute an asset once they have vested in a party to the marriage, we reverse.

Facts and Procedural History

On May 9, 2006, Charles Bingley filed to dissolve his marriage with Anne Bingley, his wife of thirty-seven years. At the time of filing, Charles was seventy-five years old and had retired from Navistar Corp. During Charles's retirement, Navistar paid him a monthly stipend as part of his participation in a defined-benefit pension plan.

Under the pension plan, Navistar also paid a health insurance company $845.74 per month in premiums on Charles's behalf and had promised to do so for the remainder of Charles's life. (App. at 19.) Charles did not elect this arrangement in lieu of a larger monthly stipend, nor did he have the choice to do so. (App. at 17, 19.) His right to health insurance benefits was not subject to divestiture, division, or transfer. (App. at 17, 19.)

After the final hearing, the trial court left the record open so the parties could submit additional information about Charles's health insurance benefits. Anne filed a supplement to the record in which she argued using actuarial principles that the premiums had a present value of $101,556. (App. at 25, 39, 44.) The trial court considered this value a contention instead of evidence because Charles limited his response to arguing that the premiums did not constitute property (he did not address the question of valuation). ¹ (App. at 25.)

When the trial court issued its decree of dissolution, it held that the premiums did not constitute property within the meaning of Indiana Code § 31-9-2-98(b) (2008). The court reasoned that because Charles's premiums had no cash surrender value, they more closely resembled employer-provided group term life insurance than pension payments. (App. at 25); see also Metropolitan Life Ins. Co. v. Tallent, 445 N.E.2d 990, 991 (Ind.1983).

Anne appealed, and the Court of Appeals affirmed. Bingley v. Bingley, 915 N.E.2d 1006 (Ind.Ct.App.2009). We granted transfer, thereby vacating the decision of the Court of Appeals. Bingley v. Bingley, 929 N.E.2d 785 (Ind.2010) (table); Ind. Appellate Rule 58(A).

Standard of Review

[1] [2] [3] We review a trial court's valuation of an asset in a marriage dissolution for an abuse of discretion. Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind.1996) (citing Cleary v. Cleary, 582 N.E.2d 851 (Ind.Ct.App.1991)). With respect to findings of fact about an asset's value, a trial court has not abused its discretion if sufficient evidence and reasonable inferences support that valuation. Id. (citing Porter v. Porter, 526 N.E.2d 219 (Ind.Ct.App.1988)). Questions of law, however, are subject to de novo review. Fobar v. Vonderahe, 771 N.E.2d 57 (Ind.2002).

I. The Health Insurance Benefits Are Property.

When a trial court dissolves a marriage, it must divide the property of the parties between them. Ind.Code § 31-15-7-4(a). For the purposes of such a dissolution, “property” means

all assets of either party or both parties, including:

(1) a present right to withdraw pension or retirement benefits;

(2) the right to receive pension or retirement benefits that are not forfeited upon termination of employment or that are vested (as defined in Section 411 of the Internal Revenue Code) but that are payable after the dissolution of marriage; and

(3) the right to receive disposable retired or retainer pay (as defined in 10 U.S.C. § 1408(a)) acquired during the marriage that is or may be payable after the dissolution of marriage.

Ind.Code § 31-9-2-98(b) (emphasis added). The trial court may divide the property by awarding parts of the property to one of the parties and requiring either party to pay an amount to the other to achieve a just and proper distribution. Ind.Code § 31-15-7-4(b)(2).

Anne argues that health insurance premiums being paid for Charles constitute retirement benefits that Charles earned during marriage, so the trial court should have included them in the marital property subject to division. (Appellant's Br. at 2.) She further argues that Navistar's paying premiums on Charles's behalf is analogous to a retirees receiving pension benefits. (Appellant's Br. at 3-4.) Finally, Anne argues that because Charles's right to his health insurance benefits had vested, the premium payments are analogous to vested pension benefits. (Appellant's Br. at 4.)

Charles responds that his health insurance premiums do not constitute marital assets because he cannot transfer or alienate his health insurance benefits, nor did he choose to receive them in lieu of a larger monthly stipend under his pension plan. (Appellee's Br. at 4.) Charles also argues that the value of the premiums is speculative because of the possibility that Navistar may someday file for bankruptcy or cancel his health insurance benefits. (Appellee's Br. at 4.)

Framing the question as whether the premiums constitute property misconceives the question. Rather than analyze whether Charles's health insurance premiums constitute retirement benefits within the meaning of subsection (2), we think it plain enough that Charles's health insurance benefits constitute an intangible asset.

[4] The phrase “all assets” is broadly inclusive and is not limited to the list of examples that follows it. See Beckley v. Beckley, 822 N.E.2d 158, 163 (Ind.2005) (holding lump sum payment for lost wages and pain and suffering was an asset to the extent it compensated for pain and suffering). It has been customary to view the statute's list of examples simply as instances falling within the ambit of “all property” rather than as suggestions that “all” is somehow less than all-inclusive. ² See, e.g., Helm v. Helm, 873 N.E.2d 83 (Ind.Ct.App.2007) (lottery payments); Henry v. Henry, 758 N.E.2d 991 (Ind.Ct.App.2001) (stock options); Sedwick v. Sedwick, 446 N.E.2d 8 (Ind.Ct.App.1983) (structured settlement annuity).

[5] [6] Whether a right to a present or future benefit constitutes an asset that should be included in marital property depends mainly on whether it has vested by the time of dissolution. Compare Hill v. Hill, 863 N.E.2d 456, 460-61 (Ind.Ct.App.2007) (holding pension plan was an asset when party was receiving payments at time of dissolution); with Bizik v. Bizik, 753 N.E.2d 762, 767-68 (Ind.Ct.App.2001) (holding retirement plan was not an asset when it had not vested by time of dissolution). In other words, vesting is both a necessary and sufficient condition for a right to a benefit to constitute an asset. See Helm, 873 N.E.2d at 88 (“The common denominator ... is whether the interest in the future payment is vested.”).

A right to a benefit can vest either in possession or in interest. In re Marriage of Preston, 704 N.E.2d 1093, 1097 (Ind.Ct.App.1999) (“Vesting in possession connotes an immediate[ly] existing right of present enjoyment, while vesting in interest implies a presently fixed right to future enjoyment.”). Vested pension rights represent “ ‘intangible assets of a spouse [that] have been earned during the marriage, either through the contributions of the spouse [that] otherwise would have been available as assets during the marriage, or through contributions of the employer [that] constitute deferred compensation.’ ” Preston, 704 N.E.2d at 1097 (quoting 2 Homer H. Clark, Jr., The Law of Domestic Relations in the United States § 16.6, at 208 (2d ed.1987)).

[9] [10] A similar theory explains why disability payments received after a marriage dissolution are not assets for the purposes of a marriage dissolution. Leisure v. Leisure, 605 N.E.2d 755 (Ind.1993) (holding workers' compensation payments were not assets to the extent they replaced lost future wages after marriage dissolution); see also Beckley, 822 N.E.2d at 162 (holding person did not have a vested interest in future wages). The exception to this rule occurs when a party purchases or contributes to disability insurance with marital assets, namely, wages in which the party had a present interest. Gnerlich v. Gnerlich, 538 N.E.2d 285, 286 (Ind.Ct.App.1989).

Vesting also explains our holding that employer-provided group term life insurance is not an asset. Tallent, 445 N.E.2d at 991 (Ind.1983). In Tallent a husband changed the beneficiary on his life insurance policy from his wife to his mother after his wife filed to dissolve their marriage and just before he committed suicide. Id. The husband was subject to an order restraining him from disposing of his property, but we held that the life insurance policy was not an asset of the husband's. Id. The beneficiary, not the insured, had “ ‘a defeasible vested interest in the policy, a mere expectancy, until after the death of the insured.’ ” Id. at 992 (quoting Bronson v. Northwestern Mut. Life Ins. Co., 75 Ind.App. 39, 129 N.E. 636, 639 (1921) (emphasis in original)).

[11] We think Charles's health insurance benefits constitute an asset in the plain meaning of the word. Charles has a right to the medical services his health insurance will cover for the rest of his life. Because Navistar has assumed a monthly liability that Charles would...