Bowers v. Bowers, 0421-86-3

• Citation: 4 Va.App. 610,359 S.E.2d 546
• Decision Date: 18 August 1987
• Docket Number: No. 0421-86-3,0421-86-3
• Court: Virginia Court of Appeals
• Parties: Mary R. BOWERS v. Stanley Roger BOWERS. Record

Page 546

359 S.E.2d 546

4 Va.App. 610

Mary R. BOWERS v. Stanley Roger BOWERS.

Record No. 0421-86-3.

Court of Appeals of Virginia.

Aug. 18, 1987.

Alvin B. Marks, Jr. (Poindexter, Burns, Marks & Massie, Waynesboro, on brief) for appellant.

Stuart C. Sullivan III (Humes J. Franklin, Jr., Franklin, Franklin, Denney, Heatwole & Ward, Waynesboro, on brief) for appellee.

Panel: COLE, COLEMAN and MOON, JJ.

COLEMAN, Judge.

This appeal requires that we construe portions of the equitable distribution statute, Code § 20-107.3. In 1982, Virginia joined the majority of states when it enacted legislation authorizing divorce courts to distribute marital property based upon a partnership theory and equitable principles. Most states enacted similar legislation soon after the Commissioners on Uniform State Law proposed the Uniform Marriage and Divorce Act in 1970. That model act encouraged states to reform their divorce laws in a manner which would recognize that property rights could be created in marital assets without regard to legal ownership or title. Virginia previously followed the common law approach which provided that legal title or ownership controlled property rights between divorcing parties. Under the common law approach, Virginia's trial courts had no means of dividing or transferring marital property; they were limited to awarding periodic or lump sum support, which served a separate purpose from equitable distribution awards. Regardless of a party's monetary or nonmonetary contributions to the acquisition, maintenance or improvement of property, or the efforts made toward the well being of the family or the marriage, divorce courts were powerless to divide or transfer property. With the adoption of the equitable distribution statute, Virginia courts obtained limited authority to adjust the marital wealth by granting to one party a monetary award based upon the rights and equities of the parties, with the amount and method of payment governed by enumerated statutory factors. Williams v. Williams, 4 Va.App. 19, 23, 354 S.E.2d 64, 66 (1987); Rexrode v. Rexrode, 1 Va.App. 385, 394, 339 S.E.2d 544, 549 (1986). While Virginia's courts remain powerless to divide property or to order the transfer of ownership, they do have limited power to approve the transfer of title or ownership of property in satisfaction of all or part of a monetary award, or to partition property in the divorce proceeding. Morris v. Morris, 3 Va.App. 303, 309, 349 S.E.2d 661, 664-65 (1986); Venable v. Venable, 2 Va.App. 178, 185, 342 S.E.2d 646, 650-51 (1986).

In the present case, the trial court granted the wife a monetary award but specifically excluded any value for the husband's "retirement pension and profit sharing plan." The appellant-wife asserts that her contributions to the marriage which qualified her for a monetary award from other marital property entitled her to some reasonable value for the husband's retirement plan and for the shares of stock which he acquired through an employment benefit plan. She contends that the court's failure to consider these assets was an abuse of discretion. The trial court assigned insufficient evidence "to determine entitlement or value" as its reason for excluding the "retirement pension and profit sharing plan." Thus, we consider whether a trial court which has determined to grant a monetary award must consider the total value of the marital assets, or whether the court may, under certain circumstances, exclude the value of one or more marital assets in granting and calculating a monetary award.

After a seventeen year marriage, the parties were divorced on no-fault grounds. The trial judge granted Mary Bowers a lump sum monetary award of $17,500 pursuant to Code § 20-107.3 and ordered that Mr. Bowers could satisfy this award by transferring his one-half interest in the jointly owned residence. ¹ The equity in the marital residence was valued at $35,000. The court further ordered that Mrs. Bowers receive a sum equal to one-half the value of their marital tangible personal property valued at approximately $11,000, which Mr. Bowers could satisfy by the transfer of his one-half interest in the home furnishings. The court made no finding of which items were included as "home furnishings" or their values; however, the total value of those items retained by the wife which would qualify was $2,700. Additionally, the court directed that Mrs. Bowers receive $4,700 from insurance proceeds for damage to a 1980 Pontiac automobile which she used.

The record is clear that in calculating the award the trial court did not include any value for Mr. Bowers' retirement plan with UPS acquired during the marriage. However, central to the dispute between the parties is whether the court included as marital property the value of 1,931 shares ² of UPS stock acquired during the marriage, valued at $30 per share or $57,930.

I. UPS STOCK

The trial court stated: "The only item not accepted was the evaluation of the retirement pension and profit sharing plan." The trial court ruled as it did because "there was no evidence presented either to explain the plan and the rights and entitlements under it or to establish its value." Appellant relies upon the separate reference to a "profit sharing plan" and upon her calculation that the award she received constituted one-eighth of the marital assets to support her argument that the stock's value was not included in making the monetary award. We disagree. First, the court clearly indicated that the retirement pension and profit sharing plan was "the only item" not considered. Second, the UPS retirement plan was totally funded by employer contributions. As such it would generally be considered a profit sharing plan because it would be funded by corporate profits. We believe this accounts for the trial court's characterization of the benefits as a "profit sharing plan." Third, the value of the stock was not disputed, the identical values being designated in the parties' disclosure schedules and was easily obtainable. Fourth, and most important, contrary to appellant's contention, had the stock been excluded in calculating the monetary award, the actual award would have given Mrs. Bowers an inordinate portion of the marital estate. Excluding the stock, the remaining marital estate was valued at $46,000, consisting of $35,000 realty and approximately $11,000 for tangible personalty. The monetary award to Mrs. Bowers was $17,500, plus one-half the value of the tangible personalty or $5,500, totaling $23,000. Her monetary award, combined with the value of the moiety which she already held in the jointly owned realty and her one-half interest in the jointly owned tangible personalty, would result in her receiving virtually the entire marital estate. On the other hand, assuming the $57,930 stock was included, as we believe that it was, the net result after the monetary award would leave Mrs. Bowers with approximately $46,000 of the marital assets and Mr. Bowers with $57,930, or 45% and 55% respectively. ³

For the foregoing reasons we conclude that the trial court did include the UPS stock as marital property in calculating the monetary award, and only excluded the UPS retirement plan. Thus, we limit our consideration of alleged error to the court's exclusion of the UPS retirement plan from the marital estate for failure to prove "entitlement and value."

II. ENTITLEMENT

As previously noted, the trial court stated that there was insufficient evidence to determine "entitlement" or value of the retirement plan. By "entitlement" it is unclear whether the trial court concluded that the evidence was insufficient to classify the pension as marital property or whether as marital property, the wife failed to establish any rights or equities in that asset justifying a monetary award upon consideration of the factors under Code § 20-107.3(E). In either instance the court was incorrect, but for reasons hereinafter expressed, the ruling does not affect our holding.

Property acquired during marriage is presumed to be marital property in the absence of satisfactory evidence that it is separate property. Code § 20-107.3(A)(2). Since 1985, Code § 20-107.3 has specifically stated that pensions are personal property which may be classified as marital property. Prior to the 1985 clarifying amendment, pensions were held to be property subject to inclusion as marital property. Mitchell v. Mitchell, 4 Va.App. 113, 120, 355 S.E.2d 18, 22 (1987) (citing Sawyer v. Sawyer, 1 Va.App. 75, 78, 335 S.E.2d 277, 280 (1985)). A spouse is deemed to have rights and interests in the marital property of the other. Code § 20-107.3(B).

Pensions or retirement plans present somewhat different considerations than other property under the equitable distribution statute. The present value of a pension and whether it is vested or nonvested are factors along with others specified in Code § 20-107.3(E) in determining the amount and method of payment of the monetary award. McLaughlin v. McLaughlin, 2 Va.App. 463, 471, 346 S.E.2d 535, 539 (1986). Under Code § 20-107.3(G) prior to the 1985 amendment, the payments for any part of a monetary award based upon inchoate pension rights must necessarily be separately designated because payment is deferred until the recipient actually receives benefits, and the award may not exceed fifty percent of the cash benefits. Mitchell, 4 Va.App. at 121, 355 S.E.2d at 22.

The retirement plan's value which Mr. Bowers obtained during the marriage and through the date of separation is presumed to be marital property. The record contains no evidence which rebuts that presumption. While the court has broad discretion in making a monetary award, both parties "shall be deemed to have rights and interests" in the marital property. Code § 20-107.3(B). Since the trial court found that a monetary award should be granted, unless the evidence of the pension's value was insufficient, we find nothing...