Early v. Early

• Decision Date: 09 December 1992
• Citation: 604 N.E.2d 17,413 Mass. 720
• Parties: Barbara A. EARLY v. Gerald J. EARLY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 17

604 N.E.2d 17

413 Mass. 720

Barbara A. EARLY v. Gerald J. EARLY.

Supreme Judicial Court of Massachusetts Plymouth.

Argued Oct. 7, 1992.

Decided Dec. 9, 1992.

Frank J. McGee, Marshfield, for Gerald J. Early.

Carol A. Witt, Brockton, for Barbara A. Early.

Before LIACOS, C.J., and NOLAN, LYNCH and GREANEY, JJ.

GREANEY, Justice.

Barbara A. Early (wife) filed a complaint in the Probate and Family Court seeking to terminate her twenty-seven year marriage to Gerald J. Early (husband). Following a trial, a judgment of divorce nisi was entered which included an order, pursuant to G.L. c. 208, § 34 (1990 ed.), for division of the two principal marital assets, the marital home and the husband's pension rights, in a ratio of sixty per cent to the wife and forty per cent to the husband. The judgment also ordered the husband to pay $200 per week in alimony to terminate upon the happening of specific contingencies, including the wife's receipt of benefits from the husband's pension plan when the husband retires. The husband has appealed claiming that the judge lacked authority to include his public employee pension rights in the division of marital property, and that the division of property and award of alimony were plainly wrong and excessive. We transferred the case to this court on our own motion and now affirm the judgment as corrected.

The following are the pertinent facts. The parties were married in 1962. At the time of trial in November, 1990, the wife was fifty-six and the husband fifty-one. The couple has one child, a daughter, nineteen years of age. Although the daughter was emancipated, she lived with her mother and did not contribute towards room or board. The long term marriage fell apart as a result of the husband's distrust of the wife and infidelity on the husband's part.

The marriage had been a traditional one. The husband, a parole supervisor and twenty-five year employee of the Commonwealth's parole board, provided the primary financial support throughout the marriage. At the time of the divorce, his gross salary was $821 per week. The husband has no significant health problems that will affect his ability to work until retirement expected at age sixty-five. The wife has a ninth grade education. She held a factory position prior to the daughter's birth, and later held various clerical positions. The wife also has a real estate sales license, but worked as an agent for about six months in 1982, and sold only one house during that time. Following her unsuccessful attempt at a career in real estate, the wife began a business selling household products by arranging living room home shows. She was engaged in this manner at the time of the trial, earning an average of no less than $150 per week. The wife suffered various minor health problems and a long term inner ear problem which affects her ability to operate a motor vehicle. Despite her medical condition and extremely limited opportunities for employment, the wife could work in entry level clerical jobs and earn more than $150 per week until age sixty-five. The judge found that both parties contributed to the marriage and to the middle class style of living they enjoyed.

Except for the marital home and husband's pension rights under the Commonwealth's public employee retirement system, the couple had no significant assets and neither party could expect any inheritance. The fair market value of the marital home was $139,400, and the home was subject to a $15,500 mortgage which the wife had been paying since the husband moved out. Based on an exhibit to which both parties stipulated, the judge found that the present value of the husband's pension interest was $196,174. ¹ The decision to divide the value of the home and pension in a ratio of sixty per cent to the wife and forty per cent to the husband was based on the judge's finding that, because of her limited earning capacity, physical condition, and expected Social Security benefits upon retirement of only $106 per week, the wife's future needs far outweighed the husband's.

In fashioning his order, the judge took the combined values of the house and the husband's pension ($335,574), ² and applied the sixty-forty ratio to award $201,344 to the wife and $134,230 to the husband. Because the value of the house was not sufficient to satisfy the wife's share, the judge determined that the wife should be assigned a portion of the husband's pension interest. The remaining asset value owed to the wife, $61,944, amounted to 31.6 per cent of the present value of the husband's pension. The judge entered a qualified domestic relations order (QDRO), ³ directing the plan administrator of the husband's pension to establish a separate account for the wife and to transfer to that account 31.6 per cent of the husband's interest in his pension as of the date of the divorce. Although the wife's account is separate and distinct from the husband's, a major purpose of the QDRO was to provide the wife with support when the payment of alimony ceases.

1. Public pension rights. We reject the husband's argument that the judge lacked authority to include his public pension interest in the marital estate for purposes of division under G.L. c. 208, § 34. That statute expressly includes as part of the marital estate all vested and unvested retirement benefits, see Feathler v. Feathler, 33 Mass.App.Ct. 924, 924 n. 1, 598 N.E.2d 671 (1992), and makes no distinction between public and private pensions. ⁴ The judge found that the husband's pension interest, like the marital home, had been acquired during the marriage, and that both parties were entitled to a divided share in accordance with their future needs. It was clearly within the judge's discretion to include the present value of the husband's public pension interest in the marital estate which was subject to the division unless that action was precluded by law.

The husband points to G.L. c. 32, § 19 (1990 ed.), and argues that the assignment is invalid thereunder. Section 19, which is quoted in part in the margin, ⁵ allows assignments of public pension rights only in certain situations. We are concerned with the last paragraph of the statute concerning an assignment to satisfy a support order under G.L. c. 208.

In Contributory Retirement Bd. of Arlington v. Mangiacotti, 406 Mass. 184, 547 N.E.2d 21 (1989), we held that § 19 permitted a public employee to assign a portion of his pension pursuant to a marital separation agreement which was supported by a court order under G.L. c. 208, § 34, calling for the division of marital assets. We rejected the position of the board, which asked us to read "the last paragraph of § 19 narrowly and literally so as to permit an assignment of public pension rights to satisfy a support order under G.L. c. 208 but not an assignment of such rights as a division of property under G.L. c. 208." Id. at 186, 547 N.E.2d 21. With respect to that paragraph, we stated the following: "Matters of support and the division of property are so closely interrelated under G.L. c. 208, § 34, that it is difficult to see why they should be treated differently when considering the assignability of public pension rights. The board's construction of [the last paragraph of § 19] could hinder the equitable resolution of agreements and court orders for alimony and property division, particularly when pension rights are the major marital asset. Moreover, because most pensions are earned by men, the board's construction of § 19 would burden former wives more than former husbands, a result the Legislature was not likely to have intended." (Footnote omitted.) Id. at 186, 547 N.E.2d 21. We concluded that "the general intention of the Legislature in enacting the 1981 amendment to § 19 was to facilitate the resolution of the financial aspects of divorce." Id.

While we did not deal in Mangiacotti with the question presented here, see id. and n. 5, 547 N.E.2d 21, we can perceive no good reason why this assignment is prohibited by § 19, as that statute has been explained in the Mangiacotti case. The assignment was necessitated by the lack of assets in the marriage to complete an adequate equitable division, was made in the context of such a division under G.L. c. 208, § 34, and was intended to provide support for the wife when the husband's alimony obligation ceased. The assignment, therefore, fairly comes within the language of the last paragraph of § 19, because it sets aside a portion of the husband's pension interest to satisfy an obligation of marital support. Further, the entry of the QDRO had the added benefit of providing for an "immediate settlement of the pension distribution problem" and relieving the court of any further supervision with regard to the husband's pension. See Dewan v. Dewan, supra, 399 Mass. at 757, 506 N.E.2d 879. We conclude that the assignment in this case is lawful under § 19.

Finally, we reject the husband's argument that the method used by the judge to determine the assignment was improper. A judge may assign pension benefits "either as a present assignment of a percentage of the present value of the future pension benefits or as a percentage of the pension benefits attributable to the marriage if and when the benefits are actually received." Dewan v. Dewan, supra at 755, 506 N.E.2d 879. The first method is preferred because it provides for an immediate settlement. This method is customarily employed when there is a known present value of the pension, and the spouse with the pension has sufficient available assets to buy out the interest of the other spouse in the pension. The award of pension benefits "if and when received," on the other hand, avoids the difficult problem of determining the present value of the pension as well as the practical problem presented when there are insufficient assets to divide the present value of the pension benefits. See id. at 756-757, 506 N.E.2d 879. See also 2A Kindregan and Inker,...