Cornbleth v. Cornbleth
| Decision Date | 06 September 1990 |
| Citation | 397 Pa.Super. 421,580 A.2d 369 |
| Parties | Catherine CORNBLETH v. Terry CORNBLETH, Appellant. |
| Court | Pennsylvania Superior Court |
Eric C. Rome, Pittsburgh, for appellant.
Patricia G. Miller, Pittsburgh, for appellee.
Before CIRILLO, President Judge, and POPOVICH and BROSKY, JJ.
This is an appeal from an order denying appellant's post trial relief in equitable distribution matters. Appellant raises seven numbered issues attacking the valuation of the parties pensions, valuation of the parties' residence, treatment of tax consequences, inclusion of appellant's pension in the marital estate and the treatment of a deduction from a money market account. We reverse the trial court's determination regarding the inclusion of a portion of appellant's pension in the marital estate and the valuation of the pension, in all other respects we affirm.
Appellant/husband and appellee/wife were married on February 2, 1963 and were divorced on January 13, 1987. Appellant is a clinical psychologist at the Veteran's Administration Hospital in Pittsburgh and at the time of trial was earning approximately $46,000 per year. Appellee is a professor at the State University of New York at Buffalo and was earning approximately $48,000 at the time of trial. Previously she held a similar position at the University of Pittsburgh. The parties stipulated to a separation date of December 31, 1983 and also stipulated to a seven percent growth rate for a number of assets. Among the assets in the marital estate were a variety of money market accounts and mutual fund accounts, municipal bonds, a residence and the parties' respective pension plans. The court approved an equitable distribution scheme which allowed each party to maintain possession of the property in their possession. However, this created a substantial imbalance in husband's favor which the court offset by ordering a payment of $75,000 from husband to wife.
Appellant presents an interesting issue regarding the valuation of his pension. As a civil service employee participating in the Civil Service Retirement System (CSRS), appellant does not participate in Social Security. Furthermore, any eligibility for Social Security would result in a commensurate decrease in his pension annuity under the CSRA. 5 U.S.C. § 8349. Appellant argues that since, under federal law, Social Security retirement benefits can not be considered marital property, all or at least a portion of his CSRS pension should be similarly treated. We are inclined to agree that a portion of appellant's pension should be excluded from the marital estate.
The inclusion of pension benefits as marital property is derived from the fact that a pension is considered to be an asset of its owner. Although the benefit of the pension may be delayed until some future time, its value to the owner is undeniable. Further, a present value can be ascribed to it using mathematical techniques, thus providing a means for dividing its value. Further support for inclusion of a pension in the marital estate can be garnered from the fact that income earned during the marriage, which would otherwise become disposable to the couple, is most often utilized to fund the pension. Also, any employer contributions to the pension can easily be viewed as a form of delayed compensation. Of course, compensation of the parties during the marriage constitutes marital property. On the other hand, by virtue of federal policy, Social Security benefits, including retirement benefits, are excluded from treatment as marital property despite the fact that there is a tremendous degree of similarity in the nature of a Social Security retirement benefit and a conventional pension.
In assessing appellant's argument that all or part of his pension should be excluded from the marital estate due to his nonparticipation in Social Security, the trial court focused on the issue of whether federal law requires such an approach and whether there is a preemption of state law by the federal one. 1 However, although, as aptly demonstrated by the trial court, there is no federal preemption obstacle in the way of considering appellant's pension a marital asset, this is only one part of the required analysis. There still remains a need to determine whether the pension should be considered a marital asset under the governing theories of our domestic relations law. In this respect, we have no difficulty in concluding that to the extent appellant's pension is similar to that of a conventional pension the portion of appellant's pension fairly characterized as the equivalent of a conventional pension should be included in the marital estate. 2 However, to the extent part of the pension might figuratively be considered "in lieu of" a Social Security benefit we believe that portion should be exempted from the marital estate.
One of our goals with regard to equitable distribution must be to treat different individuals with differing circumstances in a fashion so as to equate them to one another as nearly as possible, thus, eliminating a bias in favor of, or against, a class of individuals. To the extent individuals with Social Security benefits enjoy an exemption of that "asset" from equitable distribution we believe those individuals participating in the CSRS must, likewise, be so positioned. Consider for example an individual being divorced at approximately age fifty. Assuming a normal work history, that person will likely have accrued a substantial pension as well as a right to Social Security. When the pension is divided in equitable distribution there will be a diminution of the expected retirement income. However, the presence of Social Security will help offset the diminution. In contrast, an individual who was a civil service participant for many years will, if the trial court's approach is approved, be dealt a double blow of sorts. The pension will become part of the marital estate and, thus, divided, yet there will be no Social Security benefit waiting to cushion this financial pitfall. The situation is exacerbated, thus providing a second "blow", in that the money that would, in a conventional setting, be routed into Social Security, and thus into an exempt status, would either have been consumed by the couple, thus providing previous benefits enjoyed by both, or, perhaps, routed into the CSRS or another retirement type vehicle, which, of course, would then be included in the marital estate.
In either scenario, a substantial stream of income which would be used to finance a future Social Security benefit, 3 which for most individuals is excluded from equitable distribution, is not similarly shielded for the CSRS participant. Thus, the CSRS participant is at a disadvantage when compared to the majority of the work force. Consequently, should equity prevail, this difference must be negated if we are to equate the CSRS participant with Social Security participants.
The present case itself establishes the inequity of positions. The parties to this action have both been employed for many years. Appellee has amassed a sizable pension along with the appellant. However, a portion of her income has also been...
To continue reading
Request your trial
-
Peterson v. Peterson (In re Peterson)
...wife] would have received, but for her federal pension." (Id . at p. 245, 170 P.3d 572.)Annette also cites Cornbleth v. Cornbleth (Pa.Super.Ct.1990) 397 Pa.Super. 421, 580 A.2d 369, where the husband participated in CSRS and the wife participated in Social Security. The Superior Court of Pe......
-
Forrester v. Forrester
...finding that a federal pension in lieu of Social Security was a marital asset under state law). 21. See Cornbleth v. Cornbleth, 397 Pa.Super. 421, 580 A.2d 369 (1990) (finding that a state pension plan in lieu of Social Security should be exempt from the marital estate as a matter of equity......
-
Jackson v. Sollie
...Hisquierdo is distinguishable from the case sub judice, and he cites to other state appellate courts, including Cornbleth v. Cornbleth, 397 Pa.Super. 421, 580 A.2d 369 (1990) and Kelly v. Kelly, 198 Ariz. 307, 9 P.3d 1046 (2000), as amended (Oct. 11, 2000), that have held that an indirect c......
-
Herald v. Review
...division—a hypothetical benefit method resembling the approach that the trial court used in this case. In Cornbleth v. Cornbleth, 397 Pa.Super. 421, 580 A.2d 369, 371–72 (1990), where, as in this case, the division of CSRS retirement benefits was at issue, the court described the reasoning ......
-
§ 12.02 Types of Benefits
...Smith, 91 Ohio App.3d 248, 632 N.E.2d 555 (1993). Pennsylvania: Twilla v. Twilla, 664 A.2d 1020 (Pa. Super. 1995); Cornbleth v. Cornbleth, 580 A.2d 369 (Pa. Super. 1990). See also, El hajj v. El hajj, 605 A.2d 1268 (Pa. Super. 1992) (if neither spouse has Social Security rights, no offset i......
-
§ 7.10 Pensions
...459 (Col. App. 1989). But see, Taggart v. Taggart, 552 S.W.2d 422 (Tex. 1977).[732] See § 12.02[3] infra.[733] Cornbleth v. Cornbleth, 397 Pa Super. 421, 580 A.2d 369 (1990). See also, Ably v. Ably, 155 Wis.2d 286, 455 N.W.2d 632 (Wis. App. 1990).[734] Schneeman v. Schneeman, 420 Pa. Super.......
-
Domestic Relations - Barry B. Mcgough and Gregory R. Miller
...portions of pensions from the marital estate. Id. (citing Walker v. Walker, 677 N.E.2d 1252, 1253-54 (Ohio 1996); Cornbleth v. Cornbleth, 580 A.2d 369, 371 (Pa. Super. Ct. 1990)). Utah and West Virginia have not. Id. (citing Jefferies v. Jefferies, 895 P.2d 835, 837-38 (Utah Ct. App. 1995);......
-
Distribution of Marital Assets in Community Property Jurisdictions: Equitable Doesn?t Equal Equal
...for authorizing a significant departure from an equal distribution of the community property). 54. Id. (relying on Cornbleth v. Cornbleth, 580 A.2d 369 (Pa. Super. Ct. 1990)). 30 LOUISIANA LAW REVIEW [Vol. 72 been his social security benefit “had he participated in that plan during the marr......