Braderman v. Braderman

• Decision Date: 08 February 1985
• Citation: 339 Pa.Super. 185,488 A.2d 613
• Parties: Roslyn S. BRADERMAN v. Jay R. BRADERMAN.
• Court: Pennsylvania Superior Court

Page 613

488 A.2d 613

339 Pa.Super. 185

Roslyn S. BRADERMAN v. Jay R. BRADERMAN.

Superior Court of Pennsylvania.

Argued Jan. 12, 1984.

Filed Feb. 8, 1985.

John F. Lyons, Harrisburg, for appellant.

Arthur L. Goldberg, Harrisburg, for appellee.

Before WICKERSHAM, DEL SOLE and MONTEMURO, JJ.

MONTEMURO, Judge:

These cross-appeals arise from an order of the Dauphin County Court of Common Pleas in a divorce proceeding concerning the equitable distribution of marital property, alimony, and counsel fees. Roslyn S. Braderman, is the appellant in appeal No. 272 and Jay R. Braderman is the appellant in appeal No. 273. In order to avoid the confusion which the terms "appellant" and "appellee" would cause in dealing with these cross-appeals, the term "plaintiff-wife" will be used throughout this opinion to describe Roslyn S. Braderman and Jay R. Braderman will be designed as "defendant-husband".

Roslyn and Jay Braderman were married on April 7, 1963 and two children were born of this marriage. Since the parties' separation in June, 1980, the children, Randi, age five, and Sari, age three, have resided with their mother. Roslyn Braderman, age thirty-nine (39) works part-time as a medical secretary. Jay Braderman, age forty-three (43), is a practicing attorney earning a gross income of approximately $60,000.00 per year. Until 1977, he was employed by the Commonwealth of Pennsylvania and participated in the State Employees' Retirement System from which he now receives monthly benefits.

On July 29, 1981, plaintiff-wife instituted an action for divorce alleging indignities under 23 P.S. § 201(a)(6). She later amended her complaint alleging that the marriage was irretrievably broken under 23 P.S. § 201(c) and both parties filed affidavits of consent. On December 22, 1982, pursuant to defendant-husband's motion, the trial court entered an order granting a decree in divorce and bifurcating and preserving all other issues. The matter was then assigned to a special master who, after conducting hearings on May 18, 1982 and May 21, 1982, filed his report and recommendation. The master's report identified the retirement benefits as marital property and awarded the entire amount of the benefits to defendant-husband. The master then divided the other marital property, and awarded plaintiff-wife alimony in the amount of $150.00 per week for seven (7) years. The master, however, denied plaintiff-wife's request for counsel fees, finding that she would receive at least $20,000 per year from part-time employment, alimony, and child support.

Both parties filed numerous exceptions to the Master's report. Oral arguments on these exceptions were heard by the Honorable Warren G. Morgan who entered an order rejecting the master's inclusion of the retirement benefits as marital property, ¹ and adopting the remainder of the master's proposed property distribution. The trial court also found that the master's award of alimony was insufficient. After evaluating plaintiff-wife's income from part-time employment, child support, and investments, as well as her reasonable expenses, the court awarded her alimony in the amount of $190.00 per week for five (5) years. Furthermore, the court rejected the master's recommendation relating to insurance coverage for the plaintiff-wife, but adopted the master's recommendation that her request for counsel fees be denied. These cross-appeals followed.

On appeal, Roslyn S. Braderman, plaintiff-wife, presents two arguments for our consideration: First, she contends that the defendant-husband's state employee retirement benefits constitute marital property subject to equitable distribution. Second, she argues that the trial court erred in concluding that she was not entitled to an award of counsel fees. In his cross-appeal, Jay R. Braderman, defendant-husband, challenges the determination of the trial court concerning: (1) the property distribution scheme; (2) the alimony award; (3) the division of the stock portfolio; (4) the amount of his weekly net income; and (5) the plaintiff-wife's and defendant-husband's living expenses. We shall consider these issues seriatim.

Before addressing these contentions, we reiterate our scope of review. Awards of alimony, counsel fees, and property distribution are within the sound discretion of the trial court and this court will not reverse, nor interfere with the determination of the trial court unless there has been a clear abuse of discretion. Ruth v. Ruth, 316 Pa.Super. 282, 462 A.2d 1351 (1983). An abuse of discretion is not found lightly, but only upon a showing of clear and convincing evidence. ² As a result, under the abuse of discretion standard, we do not usurp the trial court's duty as fact finder; rather, we carefully scrutinize each of the guidelines to determine whether the lower court has abused its discretion. Ruth, supra. However, an abuse of discretion will be found by this court if the trial court failed to follow proper legal procedures or misapplied the law. Banks v. Banks, 275 Pa.Super. 439, 418 A.2d 1370 (1980). Considering this standard of review, we now address the claims presented.

Plaintiff-wife contends first that the state retirement benefits appellee receives as a result of his employment with the Commonwealth of Pennsylvania should be classified as marital property. The trial court reversed the master regarding the status of the benefits and concluded that the state retirement plan was actually an annuity, since an "annuitant has an interest only in the payments themselves and not in any principal fund or source from which they may be arrived [sic]." Since the trial judge viewed the retirement plan as purely income, its present value was not included in the marital property. We disagree with the trial court's interpretation and conclude that defendant-husband's state retirement benefits constitute marital property.

In many equitable distribution cases, an employee's retirement plan ³ represents one of the most valuable assets accumulated by the marital parties. Often, the marital home is the only other major asset. As a result, questions relating to whether these benefits should be classified as marital property subject to equitable distribution are vital to Pennsylvania's system of equitable distribution. Although the Pennsylvania Appellate Courts have not addressed this matter, ⁴ it has produced vast amounts of litigation in other jurisdictions with varying results, depending on the type of benefits involved.

Pension or retirement benefits are characterized as vested or non-vested, contributory or non-contributory, and matured or unmatured. A critical question concerning these benefits deals with during what stage of the plan the marriage was terminated. A marriage can be terminated during the stage when benefits are non-vested, vested, unmatured or fully matured. Non-vested benefits are subject to a number of contingencies. These benefits have accrued, but are still subject to the condition that the employee continue his employment. They will be forfeited by discharge, voluntary termination or death. An employee's interest is vested if he is entitled to receive them at retirement age, regardless of whether he continues working for the employer. If the benefits have vested, but have not yet matured, the employee has a right to benefits in the future, often upon attainment of a designated age. However, the benefits subject to the least amount of contingencies have matured, meaning the employee is collecting payments from the plan or has met all the requirements for immediate payment. These matured benefits are subject only to the contingency that the employee survive to receive all the payments. Even if the employee terminates his employment, he has a present right to receive these benefits.

The vast majority of jurisdictions hold that vested, unmatured retirement benefits are marital property, ⁵ and the present trend rejects any distinction between these benefits on the basis of vesting, by including vested, as well as unvested rights, as marital property. ⁶ In the case sub judice, however, we deal with retirement benefits that have both vested and matured. During his marriage to plaintiff-wife, defendant-husband was employed by the Commonwealth of Pennsylvania and contributed to the State Employee Retirement System. When he terminated his employment in 1977, he withdrew his contributions to the retirement system amounting to approximately $15,000.00. Defendant-husband elected to withdraw his contribution in a lump sum payment. Under this option, no further lump sum payments are permitted. Defendant-husband, however, has met all the requirements under the plan and currently receives monthly payments in the amount of $99.43 from the State Employee's Retirement System. He has the right to receive these monthly payments for the rest of his life or the life of the surviving beneficiary which is currently plaintiff-wife.

After a study of these concepts, we begin our analysis by focusing on the definition of marital property in our Divorce Code of 1980. Section 401(e) defines marital property as "all property acquired by either party during the marriage". The Code presumes that all property, whether real or personal, acquired by either party during the marriage is marital property. 23 P.S. § 401(e). This presumption, however, is overcome if the property was acquired by one of the methods which are excepted from the marital property definition. These exceptions include:

(1) Property acquired in exchange for property acquired prior to the marriage except for the increase in value during the marriage.

Furthermore, the inclusion of matured retirement benefits as marital property fully comports with the policies and goals of the Divorce Code. Section 102 provides that the goal of the Code is to effectively deal with the realities of marriage and to "[E]ffectuate economic justice between the parties who are divorced or separated...