Coffman v. Coffman, WD 66204.

• Decision Date: 27 February 2007
• Docket Number: No. WD 66204.,WD 66204.
• Citation: 215 S.W.3d 309
• Parties: Sandra Ray COFFMAN, Respondent, v. Elvin Cale COFFMAN, Appellant.
• Court: Missouri Court of Appeals

215 S.W.3d 309

Sandra Ray COFFMAN, Respondent, v. Elvin Cale COFFMAN, Appellant.

No. WD 66204.

Missouri Court of Appeals, Western District.

February 27, 2007.

Dennis J. Campbell Owens, Kansas City, MO, for appellant.

David Slaby, Nevada, MO, for respondent.

Before THOMAS H. NEWTON, Presiding Judge, PATRICIA BRECKENRIDGE, Judge, and JOSEPH M. ELLIS, Judge.

JOSEPH M. ELLIS, Judge.

Elvin Coffman ("Husband") appeals from a judgment entered in the Circuit Court of Bates County dissolving his marriage to Sandra Coffman ("Wife"). Specifically, Husband challenges the trial court's finding that Husband's benefit payments from the General Motors pension fund, for which he was eligible as a result of being determined permanently and totally disabled, should be categorized as marital property. For the following reasons, we reverse and remand for further proceedings.

Husband and Wife were married on March 28, 1982,¹ and subsequently resided in Hume, Missouri. Husband had been employed at the General Motors plant in Kansas City, Kansas, for approximately four and a half years prior to marriage, and he continued to work at that plant until December 2002.² While so employed, Husband participated in the company pension plan.

In 2001, Husband began wildly spending money, depleted the couple's assets, and built up a large amount of debt. After Husband had accumulated approximately $750,000 in debt, the couple declared bankruptcy. During this time, Husband's behavior became increasingly erratic.

On April 6, 2002, Wife filed a petition of dissolution of marriage in the Circuit Court of Bates County, and the couple formally separated on April 24, 2002. Husband responded with an answer and counter-petition for dissolution. Both parties requested that they be awarded maintenance from the other.

In May 2002, Husband was admitted to a psychiatric hospital. Later that month, Husband's father, James Coffman, was named Husband's guardian and conservator by order of the probate division of the Bates County Circuit Court.

Husband received temporary disability payments while on leave from General Motors and eventually began receiving Social Security disability benefits. Ultimately, based upon physical and mental problems, Husband was deemed to be permanently and totally disabled and, on that basis, was approved to receive benefit payments from the pension plan. When he officially retired from General Motors, on March 1, 2003, Husband was 45 years old and had worked there for 24 years.

When the dissolution was tried on November 29, 2004, the primary issue litigated was whether Husband's pension benefits should be characterized as a marital or a nonmarital asset. After taking the matter under advisement, on April 6, 2005, the trial court issued its judgment dissolving the couple's marriage, setting aside their nonmarital property and dividing the marital property. The court found that Husband's pension benefits were retirement funds that were a marital asset to the extent they were accumulated during the marriage. Accordingly, the court awarded Wife one-half of 19/24ths of Husband's pension payments, to be provided for in a qualified domestic relations order. The court also ordered each party to pay the other $1.00 per month in modifiable maintenance and ordered Husband to pay $3,000.00 of Wife's attorney's fees. On April 15, 2005, the court issued a qualified domestic relations order granting Wife one-half of 19/24ths of Husband's pension payments. An amended order was later entered allowing Wife to receive her share of the disability benefits payable in the form of an annuity over her lifetime.

In his sole point on appeal, Husband claims that the trial court erred in finding that his pension payments from General Motors were marital property and in awarding Wife a portion of those payments. He contends that the trial court's conclusion was not supported by the evidence and was contrary to the weight of the evidence because the record established that the pension payments were being made as a result of his permanent and total disability and were meant to be a substitute for earnings lost due to his inability to work. He argues that, under Missouri law, such payments are not marital.

"Appellate review of the classification of property in a dissolution action is governed by the principles set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)." In re Marriage of Cranor, 78 S.W.3d 150, 153 (Mo.App. S.D.2002). Accordingly, we will affirm the trial court's judgment "unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law." Id.

Ordinarily, pension and retirement plan benefits are deemed to be marital property to the extent they are accumulated during the marriage and are subject to division in a dissolution proceeding. Hall v. Hall, 118 S.W.3d 252, 259 (Mo.App. W.D.2003). On the other hand, disability benefits are not considered to be marital property if they serve as a substitute for earnings lost due to the recipient's inability to work. In re Marriage of Thomas, 21 S.W.3d 168, 173 (Mo.App. S.D.2000).

"Missouri follows an `analytical approach' to determine whether awards or benefits are properly classified as marital or non-marital property." In re Marriage of Cranor, 78 S.W.3d at 153. "Under this approach, the focus is on what the benefits are intended to replace." Id. "`[I]f disability payments are merely a substitute for earnings lost due to the recipient's inability to work, they are the same as post-dissolution earnings and are nonmarital property.'" Id. (quoting In re Marriage of Thomas, 21 S.W.3d at 173). "Conversely, pension or retirement benefits that merely act as deferred compensation for past services are considered marital property to the extent they were acquired during the marriage." Id. Furthermore, in some instances, benefits may be a hybrid, containing both a disability and a retirement component, and the trial court must separate the nonmarital disability portion from the marital deferred compensation portion. Id. at 155-56.

The uncontroverted evidence reflects that Husband could not receive benefits under the pension plan absent his designation as totally and permanently disabled. The evidence reveals that Husband became eligible to receive such...