Hann v. Hann, 43A04-9503-CV-77

CourtCourt of Appeals of Indiana
Citation655 N.E.2d 566
Docket NumberNo. 43A04-9503-CV-77,43A04-9503-CV-77
PartiesSandra Eve HANN, Appellant-Respondent, v. Daniel Patrick HANN, Appellee-Petitioner.
Decision Date20 September 1995
OPINION

RILEY, Judge.

STATEMENT OF THE CASE

This is an interlocutory appeal wherein Respondent-Petitioner Sandra Eve Hann (Sandra) appeals the trial court's determination regarding the division of marital property between herself and Petitioner-Appellee Daniel Patrick Hann (Daniel) in their pending marriage dissolution proceeding. We are asked to consider whether Daniel's accrued but unmatured stock options are marital property subject to division.

We affirm.

ISSUE

The following issue of first impression is raised in this appeal: Whether the trial court properly divided the marital property of the parties, particularly Daniel's unvested stock options acquired during the marriage, but not exercisable until dates subsequent to the final decree of dissolution.

FACTS AND PROCEDURAL HISTORY

The parties were married on May 27, 1979, and separated on or about January 17, 1994. Daniel filed his petition for dissolution on January 31, 1994. Although there were two children born of the marriage, this appeal involves property division issues only. On August 19, 1994, Daniel filed a motion for summary judgment seeking a determination, as a matter of law, that only vested stock options which were exercisable on the date of filing the dissolution petition should be considered as marital property subject to division pursuant to IND.CODE 31-1-11.5-11 (1994). Contemporaneous with his motion, Daniel submitted supporting affidavits and various stock option plans and grants of stock made pursuant to such plans.

The parties filed their waiver of final hearing requesting the court to enter a dissolution decree and approve their written agreed Partial Property Settlement, Custody and Support Agreement (hereinafter "Agreement"). The parties further requested that the court bifurcate the proceeding and enter a summary disposition as to the issues settled in the Agreement, holding open for further consideration the division of the remainder of the marital property. On September 12, 1994, the court entered the dissolution decree incorporating the parties' Agreement.

On October 6, 1994, the parties entered into a stipulation of fact to be included in the court's consideration of the pending motion for summary judgment. The parties stipulated that Daniel was employed by Biomet, Inc. as Vice-President, Secretary and General Counsel on July 3, 1989. On October 21, 1994, the court granted Daniel's motion for summary judgment. The court's order in the chronological case summary provided as follows:

... The court finds that there is no material issue of fact necessary for the Court's decision and therefore that the granting of summary judgment is appropriate in this matter and the Court finds upon the facts before it that only the vested stock options granted to the petitioner by employer, Biomet, Inc. that are exercisable upon the date of filing or that become exercisable before the entry of the decree of dissolution on September 12, 1994, are marital property subject to division by the Court pursuant to I.C. 31-1-11.5-11 and further that in making distribution of any stock options that tax consequences to the petitioner upon exercise of such options must be considered. Summary judgment is entered accordingly.

(R. 6-7). Sandra now brings this interlocutory appeal from the above order. Additional facts will be provided as necessary.

DISCUSSION AND DECISION
Standard of Review

Before reaching the merits of this appeal, we recite the familiar standard of review by which we review the granting of motions for summary judgment. When reviewing the trial court's ruling on a motion for summary judgment, this court applies the same standard as the trial court. American Family Mut. Ins. Co. v. Dye (1994), Ind.App., 634 N.E.2d 844, 846 reh'g denied, trans. denied. Thus, no deference is given to the trial court's judgment. Foreman v. Jongkind Bros., Inc. (1994), Ind.App., 625 N.E.2d 463, 467, reh'g denied.

Summary judgment is appropriate if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ind.Trial Rule 56(C). When the parties do not dispute the facts material to the claim, our task is to determine whether the trial court correctly applied the law to the undisputed facts. O'Neal v. Throop (1992), Ind.App., 596 N.E.2d 984, 986, trans. denied.

On appeal, we will carefully scrutinize the trial court's determination to ensure that the non-prevailing party is not improperly denied his day in court. Perryman v. Huber, Hunt & Nichols, Inc. (1994), Ind.App., 628 N.E.2d 1240, 1243, trans. denied. We consider only the materials designated to the trial court to determine whether there is a genuine issue as to any material fact and whether the moving party is entitled to a judgment as a matter of law. T.R. 56(C). We liberally construe all inferences and resolve all doubts in the non-movant's favor.

Unvested, Unmatured Stock Options

Sandra and Daniel managed to divide the majority of their property, both personal and real, and arrange for the custody of their two children by agreement. The one issue upon which the parties diverge is the distribution of Daniel's unvested, unmatured stock options.

Sandra contends that the trial court erred in granting Daniel's motion for summary judgment. Specifically, she argues that Daniel's stock options should be considered as "marital property" and divided accordingly. Sandra does not dispute the facts material to this appeal. Rather, she argues that, as a matter of law, a portion of Daniel's stock option grants should be considered as marital property.

Daniel, an attorney, moved his family to Warsaw, Indiana, in July of 1989, upon accepting employment with Biomet, Inc., in the capacity of Vice-President, Secretary and General Counsel. As the parties stipulated, Daniel was employed by Biomet on July 3, 1989. Daniel's first stock option was granted concurrent with the commencement of his employment. These initial stock options dated July 5, 1989, were terminated by Biomet on February 21, 1990, and replaced with other options on February 21, 1990. The remaining stock options were all granted to Daniel by Biomet before the date of final separation. The relevant stock options granted to Daniel by Biomet periodically during his employment with Biomet are as follows:

(a) February 21, 1990, Stock Option: On January 31, 1994, Daniel was the owner of a stock option agreement granted to him by Biomet, Inc. pursuant to the Employee Stock Option Plan (hereinafter "1990 Stock Option"). After the grant of the option, Biomet declared two 2:1 stock splits which pursuant to paragraph 6(g) of the Biomet, Inc. Employee Stock Option Plan, modified the number of shares subject to the option vesting schedule from 3,125 shares to 12,500 shares and the option price from $20.25 per share to $5.06 per share. On January 31, 1994, pursuant to the terms of the 1990 Stock Option, Daniel was fully vested in 12,500 unexercised options to purchase Biomet stock. These options were exercisable from February 21, 1993, to February 20, 1995.

(b) June 25, 1992, Stock Option: On January 31, 1994, Daniel was the owner of a stock option agreement granted to him by Biomet, Inc. pursuant to the Employee Stock Option Plan (hereinafter "1992 Stock Option"). On January 31, 1994, pursuant to the terms of the 1992 Stock Option, Daniel was fully vested in 1,250 unexercised options at $15.00 per share. These options were exercisable from June 25, 1993, to June 24, 1995.

(c) July 21, 1993, Stock Option: On January 31, 1994, Daniel was the owner of a stock option agreement granted to him by Biomet, Inc. pursuant to the Employee and Non-Employee Directors Stock Option Plan (hereinafter "1993 Stock Option"). On January 31, 1994, pursuant to the terms of the 1993 Stock Option, Daniel was not vested in any unexercised options to purchase Biomet stock under the terms of the 1993 Stock Option. The stock option was for 25,000 shares, but was not vested nor matured.

(R. 13-49). In granting Daniel's motion for summary judgment, the trial court determined that only the vested stock options granted to Daniel by Biomet that were exercisable upon the date of filing the dissolution petition, or that became exercisable prior to the final hearing on the dissolution proceeding, were marital property subject to division pursuant to I.C. 31-1-11.5-11. Therefore, the trial court found that 12,500 shares of the 1990 Stock Option and 1,250 shares of the 1992 Stock Option were to be included in the marital pot. Therefore, Sandra takes issue with the trial court's treatment of the stock options which were accrued but unmatured and unvested at the time of dissolution. Specifically, the 12,500 unvested shares of the 1990 Stock Option; the 8,750 unvested shares of the 1992 Stock Option; and the entire grant of 25,000 shares under the 1993 Stock Option.

On January 31, 1994, upon the filing of the petition for dissolution, Daniel was not vested in the aforementioned options, nor were any of those option shares exercisable. Therefore, these remaining option shares were unmatured, unexercised and Daniel was not vested in the plan. 1

Division of Marital Property

Indiana law provides that when dividing property in a dissolution proceeding, the court shall include property "owned by either spouse prior to the marriage, acquired by either spouse in his or her own right after the marriage and prior to the final separation of the parties, or acquired by their joint efforts." I.C....

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  • Marina Bornemann v. Bornemann
    • United States
    • Connecticut Supreme Court
    • July 21, 1998
    ...which they were granted, stock options that are not exercisable at the end of a marriage are not marital property; see Hann v. Hann, 655 N.E.2d 566 (Ind. App. 1995); Hall v. Hall, 88 N.C. App. 297, 363 S.E.2d 189 (1987); Ettinger v. Ettinger, 637 P.2d 63 (Okla. 1981); and others have decide......
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