Darwish v. Darwish, Docket No. 43172

• Citation: 100 Mich.App. 758,300 N.W.2d 399
• Decision Date: 22 October 1980
• Docket Number: Docket No. 43172
• Parties: Fatima DARWISH, Plaintiff-Appellee, v. Kenneth J. DARWISH, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 399

300 N.W.2d 399

100 Mich.App. 758

Fatima DARWISH, Plaintiff-Appellee, v. Kenneth J. DARWISH, Defendant-Appellant.

Docket No. 43172.

Court of Appeals of Michigan.

Oct. 22, 1980.

Released for Publication Jan. 29, 1981.

Elizabeth B. Burch, Dearborn, for defendant-appellant.

Roy J. Daniel, Berkley, for plaintiff-appellee.

Before DANHOF, C. J., and CYNAR and MacKENZIE, JJ.

CYNAR, Judge.

Following trial, a judgment of divorce was entered on June 9, 1978. Defendant's motion for a new trial was denied on January 2, 1979, and defendant now appeals from the terms of the judgment of divorce.

On appeal, defendant contests the division of certain personal property as well as the determination of his interest in the marital residence and claims the trial court erred in not granting a new trial.

The parties were married on June 2, 1973, and separated in September of 1977. One child, a daughter, was born to the parties on August 13, 1976.

Plaintiff was employed as a secretary by Ford Motor Company. At the time of the divorce proceedings, she had been employed for five years, earning an annual gross income of $15,120. Defendant had been employed with the Wayne County Sheriff's Department for three years before the hearing on the divorce, earning about $14,900 per year.

During the marriage, the parties acquired a home in Dearborn Heights. The home was purchased in January of 1977 for $42,500. A jointly earned sum of $20,000 was used by the parties as a deposit on the house. Defendant's parents advanced the balance of the amount due and took a mortgage from the parties in the amount of $23,000 at seven percent interest per annum. Approximately $6,000 had been spent on improvements to the home, in addition to work done gratis by defendant's father.

The trial court ruled that the objects of matrimony had broken down. Plaintiff was awarded custody of the minor child with rights of reasonable visitation to defendant. Defendant was ordered to pay $55 per week support for the child as well as to pay for the necessary medical, dental, and hospital expenses of the child until she reached the age of 18 years.

Each party was awarded their own automobile. Plaintiff was awarded certain Ford stock and bonds. Further, plaintiff was awarded a bedroom set, a Panasonic AM transistor radio, a Hamilton dryer, a sofa-type chair, dinnerware and silverware sets, and all wedding gifts. Defendant was awarded a Sony digital clock, a Sony color television set and the garden tools. All other personal belongings of the parties were to be retained by the party having possession.

Plaintiff was awarded possession of the marital residence, subject to certain conditions, and the court ruled that the defendant was entitled to a $12,700 share of the equity in the house, payable under certain conditions. Following the filing of the judgment of divorce on June 9, 1978, plaintiff filed a motion for a new trial. The trial judge signed an order on August 3, 1978, approved for entry by both counsel, which provided that: (1) the court would hold the motion for a new trial in abeyance pending appointment by the court of one Thomas O'Brien as appraiser of the marital home; and (2) the appraisal value would be used to determine the fair market value of the home. Upon fixing the value, the court would provide in the judgment that the plaintiff shall buy the defendant's interest in the marital home and remortgage the marital home to pay off the first mortgage. The question of support and visitation was ordered submitted to the Friend of the Court for investigation and recommendation. In addition, the order provided that the attorney for defendant was to present a memorandum of law within 30 days concerning the award of Ford stock and bonds. The trial judge wrote a letter to both counsel on September 29, 1978, acknowledging the submission of a memorandum of law dated September 11, 1978, as had been requested, concerning the Ford stock, and suggested that further proofs be submitted to the court in the event the parties were unable to dispose of the problem between themselves. The lower court records indicate no further disposition relative to the order dated August 3, 1978, or the letter of the trial judge dated September 29, 1978. Defendant's motion for a new trial was denied on January 2, 1979.

Plaintiff was a participating member in a stock purchase plan provided by her employer, Ford Motor Company, having enrolled in the plan on January 1, 1974. Under said plan, for every dollar contributed by an employee toward the acquisition of Ford stock, Ford Motor Company contributed 50 cents. The plan was available to all Ford salaried employees and was an additional income benefit with a deferred tax benefit. Automatic payroll deductions and plaintiff's participation in the stock purchase plan would continue until she either retired, terminated her employment, or chose no longer to engage in the program. The fair market value of the stock was estimated to be in excess of $9,000. In addition, the plaintiff acquired seven $25 savings bonds through the payroll deduction plan, which bonds are held by Ford Motor Company until they reach face value.

The trial court, in rendering its property division, awarded the stock and bonds solely to the plaintiff on the apparent reasoning that, if it came out of her paycheck, it was her separate property.

Defendant contends that he contributed to the acquisition and accumulation of the stock because he used his salary to support and maintain the family while at the same time plaintiff's salary was used to accumulate the stock savings. Defendant further maintains that the defendant's parents loaned money to the parties to help facilitate the purchase of the stock.

There are no Michigan cases which deal directly with the precise issue of whether stocks and bonds purchased by a party through a payroll deduction plan are a part of the marital estate subject to division upon dissolution of the marriage. However, the rationales of a number of cases are helpful to our analysis of this issue in the case at bar.

In Hutchins v. Hutchins, 71 Mich.App. 361, 248 N.W.2d 272 (1976), this Court held that the trial court erred and thus abused its discretion when it failed to take into account the husband's retirement pension in calculating the total assets of the parties subject to distribution. The Court reached its conclusion based upon the premise that the pension benefits were created by deductions from the husband's salary, which would otherwise have been income of the parties during the marriage. Since the husband received a vested right to the pension plan during the marriage, that vested right became part of the marital estate. The Court in Hutchins did not direct an actual apportionment of that specific pension fund; rather the amount was to be examined and valued as one element to be included in determining the entire allocable assets of the parties. See also Chisnell v. Chisnell, 82 Mich.App. 699, 267 N.W.2d 155 (1978), lv. den. 403 Mich. 844 (1978), cert. den. 442 U.S. 940, 99 S.Ct. 2881, 61 L.Ed.2d 310 (1979).

In Miller v. Miller, 83 Mich.App. 672, 269 N.W.2d 264 (1978), this Court followed Hutchins, supra, in finding that pension interests funded solely by the employer are also part of the marital estate subject to distribution upon divorce. In both Hutchins and Miller, it was concluded that before pension benefits may be considered to be distributable they must have a reasonably ascertainable present value.

The rationale set forth in Hutchins and Miller can be extended to the instant case. There is no question that stocks and bonds, even more so than pension benefits, have a reasonably ascertainable value which can easily be calculated. As plaintiff herself testified, she had a right to withdraw from the purchase plan at will and convert the stock into cash. Moreover, as in Hutchins, supra, the stock and bonds were acquired by deductions from plaintiff's salary, which otherwise would have been income to the parties during the marriage. Therefore, the stock and bonds in issue here should have been examined and valued as part of the marital assets to be allocated between the parties. ¹

Upon remand, the trial court is to make a determination of the precise value of the stock and bonds and make an equitable distribution thereof.

Plaintiff and defendant purchased the marital home on January 27, 1977, for the sum of $42,500, making a $20,000 down payment and arranging a $23,000 mortgage at seven percent interest per annum with the parents of the defendant to cover the balance of the purchase price. Improvements made to the home were in the vicinity of $6,000. In addition, defendant's father testified that he did a substantial amount of work to maintain or improve the home and placed a value on his labor in the area of $5,000.

At trial, defendant presented as a witness John J. Brennan, an expert appraiser, who placed the fair market value of the marital home at $55,000. No appraisal or valuation was submitted to the trial court by the plaintiff during the trial. However, two days after the close of proofs, over the strenuous objection of defendant, plaintiff was allowed to submit to the court an appraisal based on a letter from Garlings of Dearborn, which appraisal placed the value of the marital home at $46,000. The court in its opinion fixed the present value of the home for purposes of property settlement and disposition by taking the difference between the Brennan and Garlings appraisals, $9,000, multiplying that $9,000 by 60 percent, which equalled $5,400, and then by adding $5,400 to the purchase price, thus establishing the present value of the house at $47,900. Each party was awarded an equity of $12,700, which was arrived at by taking each party's initial contribution of $10,000 and adding to it one half of $5,400 or $2,700. Plaintiff had a choice of either paying defendant $12,700 as of the date of...