Gibson v. Gibson, 16163

• Citation: 437 N.W.2d 170
• Decision Date: 08 March 1989
• Docket Number: No. 16163,16163
• Parties: LaVonne Marie GIBSON, Plaintiff and Appellant, v. Glenn Dale GIBSON, Defendant and Appellee.
• Court: Supreme Court of South Dakota

Page 170

437 N.W.2d 170

LaVonne Marie GIBSON, Plaintiff and Appellant, v. Glenn Dale GIBSON, Defendant and Appellee.

No. 16163.

Supreme Court of South Dakota.

Submitted on Briefs Nov. 30, 1988.

Decided March 8, 1989.

Catherine V. Piersol of Rose & Piersol, Sioux Falls, for plaintiff and appellant.

John E. Burke, Sioux Falls, for defendant and appellee.

SABERS, Justice.

LaVonne Gibson (Wife) appeals a divorce decree claiming error in the division of property and in the amount of alimony. We reverse in part and remand.

Facts

Glenn Gibson (Husband) and Wife were married June 18, 1950, in Brandon, South Dakota. They had two children during the marriage, both are adult and no longer at home. Both parties were fifty-seven at the time of divorce.

Husband was employed at a grocery store in Sioux Falls for the first two years of marriage. In 1954, he began working for the Air Force in a civilian capacity. He had also joined the Air National Guard in 1953. He continued in both capacities as of the time of divorce with a net monthly salary of $2,050.24.

During the first four years of marriage, until their first child was born, Wife worked full-time in clerical and service jobs. She remained at home for the next fifteen years to raise the children and take care of housekeeping duties. In 1969, she began working part-time for Western Bank. At the time of divorce she was working full-time at Western Bank and her net monthly salary was $863.40.

The court found that she suffered from arthritis, back problems, a hearing loss, and ringing of the ears. Husband was in good health. The court found that he was not well-suited for marriage and was primarily at fault for the divorce. Wife was granted the divorce on January 11, 1988 on the grounds of mental and physical cruelty.

The court divided the property by awarding her property with a net equity of approximately $40,000, while he received property with a net equity of approximately $46,000. ¹ The largest asset divided was the marital residence which was valued at $66,000. The home had a net equity of $53,500 and a $310 monthly mortgage payment. The remaining marital property included several vehicles, household furnishings, and some liquid assets. The court ordered the home sold for $66,000, with the parties to divide the proceeds equally. Wife was given a ninety-day option to purchase Husband's share of equity in the home and assume the mortgage. Husband was given the same option upon lapse of Wife's option.

The court did not consider either party's retirement benefits as part of the marital property. Husband's benefits included a civilian pension through the Air Force and a military pension from the Air National Guard. The court determined that he would receive a combined total of $1,970.65 per month for life from both pensions. These fully taxable pensions begin upon Husband's retirement at age sixty and are contingent upon his survival. Wife calculates the value of Husband's pensions over a ten-year period at approximately $235,000. The value of Wife's pension is less certain because it is dependent upon the amount she and her employer contribute until she becomes eligible to receive the pension at age sixty-five. Based on current contributions, she estimates that the total value of her pension at age sixty-five would not exceed $6,241.05.

The court awarded Wife alimony of $525 per month until Husband's mandatory retirement at age sixty. The alimony award is then to be reduced to $330 per month. However, if Husband obtains other employment after retirement, Wife is entitled to twenty percent of the additional net income, with total alimony not to exceed $525 per month.

Failure to include Husband's retirement benefits as

divisible marital property

Wife claims that the trial court erred in not considering Husband's retirement benefits in the division of marital assets. She argues that this was by far the largest asset and it was an abuse of discretion not to include the pensions. Husband argues that the pension plans were not divisible because they were not vested and had no present monetary value.

We review the trial court's division of property under the abuse of discretion standard of review. Cole v. Cole, 384 N.W.2d 312 (S.D.1986); Goehry v. Goehry, 354 N.W.2d 192 (S.D.1984); Guindon v. Guindon, 256 N.W.2d 894 (S.D.1977). While this discretion is broad, it is not uncontrolled and must be soundly and substantially based on the evidence. Goehry, supra; Owen v. Owen, 351 N.W.2d 139 (S.D.1984). The omission of assets which should properly be included as marital property is an abuse of discretion. Guindon, supra.

Although a portion of Husband's pension is military retirement pay, this does not prevent its inclusion as marital property. Hautala v. Hautala, 417 N.W.2d 879 (S.D.1988); Moller v. Moller, 356 N.W.2d 909 (S.D.1984). The state courts have jurisdiction over military retirement benefits and military pensions are not treated differently than other pensions in determining marital assets. Moller, supra.

This court has consistently held that vested retirement accounts and pensions should be included as marital assets and divided between the parties. Caughron v. Caughron, 418 N.W.2d 791 (S.D.1988); Hautala, supra; Arens v. Arens, 400 N.W.2d 900 (S.D.1987); Stubbe v. Stubbe, 376 N.W.2d 807 (S.D.1985). One rationale for including a retirement plan as a divisible marital asset is that it represents consideration in lieu of a higher present salary. Caughron, supra; Stubbe, supra. The fact that Husband's pension is not payable until his retirement and is contingent upon his survival does not destroy the vested nature of his plan. As stated in Stubbe:

[T]his pension plan is vested in the sense that it cannot be unilaterally terminated by his employer, though actual receipt of the benefits is contingent upon his survival and no benefits will accrue to the estate prior to retirement.

Stubbe, supra at 809. Husband's pension may not be unilaterally terminated by his employer and is vested.

Husband also argues that it was impossible for the trial court to include the pension as marital property since the present value of the account was not determinable at the time of trial. The fact of value of Husband's pension upon retirement was well established by the evidence at trial. There is no dispute as to the monthly payment amount of Husband's pension upon his retirement in two years, and its present value can be determined from this amount. Husband's pension plan is similar to that in Stubbe, where the court rejected the argument that the present value of the pension could not be determined.

Finally, Husband argues that Stemper v. Stemper, 403 N.W.2d 405 (S.D.1987), modified on rehearing, 415 N.W.2d 159 (S.D.1987), does not permit the trial court to divide the pension plan and at the same time provide for alimony payments from the pension. Based on his reading of Stemper, he argues that the trial court did not abuse its discretion as it properly awarded Wife alimony out of the pension plan, rather than dividing it as a part of the marital property. The original Stemper case, which denied an alimony payment from the same pension plan which was previously divided as marital property, was modified on rehearing. This court has also severely limited the Stemper holding that the trial court may not consider retirement income in awarding alimony. Hautala, supra. Husband's argument is also defeated by the trial court's Conclusion of Law 6. which states "In determining this alimony award the court has considered the defendant's civilian and military pensions and the court is not awarding the plaintiff any portion of such pensions."

We remand the property division to the trial court to include the pension plans as part of the marital property. The exact value of Husband's pension plans is yet undetermined, but this does not preclude the court from equitably dividing the pensions in the property division. As stated in Hansen v. Hansen, 273 N.W.2d 749, 753 (S.D.1979):

We remand the property division to the trial court for a determination of the present value of the right to receive the retirement account upon retirement. The present value should be included in the property valuation and, if necessary, an equitable division may include a cash settlement payable in installments with interest.

The trial court should include the pensions as marital property, make a finding of present value, and make an equitable division based thereon. Such division may include installment payments in accord with Hansen or in the alternative, a determination of the percentage to which each would be entitled. We remand for this purpose and reserve judgment on the other issues until the trial court has divided the marital property in accordance with this opinion. ²

Wife submits a motion and affidavit for attorney fees and costs on appeal in the amount of $2,429.05. Based on a consideration of the appropriate factors, we award Wife $1,200 for attorney fees. Cole, supra.

Reversed in part and remanded.

WUEST, C.J., and MORGAN and MILLER, JJ., concur.

HENDERSON, J., concurs in part and dissents in part.

HENDERSON, Justice (concurring in result in part; dissenting in part).

First of all, I am astounded by the majority opinion in that it fails to rule upon the issues created by the briefs. Appellant and appellee, although couched in different language, each presented this Court with three issues. The first issue centers around a civil service retirement plan and military retirement plan; the second issue addresses a supposed abuse of discretion on alimony; and the third issue addresses discretion in awarding tangible personal property.

Examining this opinion, in its opening paragraph, I note that this Court is "reverse in part and remand." There is apparently no "affirm in part." As I understand it, when one reads the final page of this opinion, this Court decides one issue: That the trial...