Hayden v. Hayden, 02-235.

• Citation: 838 A.2d 59
• Case Date: October 10, 2003
• Court: United States State Supreme Court of Vermont

838 A.2d 59

Janis HAYDEN
v.
Rex HAYDEN

No. 02-235.

Supreme Court of Vermont.

October 10, 2003.

838 A.2d 60

Susan M. Murray and Abby C. Moskovitz of Langrock Sperry & Wool, LLP, Middlebury, for Plaintiff-Appellant

Rex Hayden, Pro Se, Newmarket, AL, Defendant-Appellee.

Present: AMESTOY, C.J., JOHNSON and SKOGLUND, JJ., and GIBSON, J. (Ret.), Specially Assigned.

JOHNSON, J.

¶ 1. Plaintiff Janis Hayden appeals from an order of the Addison Family Court ordering defendant Rex Hayden to pay plaintiff $1000 per month in spousal maintenance and dividing the parties' marital property between them. Plaintiff contends

838 A.2d 61

that the maintenance award is insufficient to meet her reasonable needs and that the property division is inequitable. She argues that the family court erred: (1) in valuing defendant's 401(k) plan on the date the parties separated instead of on the date of the final hearing in this matter; (2) in excluding funds contributed to defendant's IRA before his marriage when valuing the IRA for purposes of property division; (3) in considering a "hypothetical" real estate commission on a potential sale of the marital home in determining defendant's rightful share of the parties' property; (4) in failing to divide the parties' assets on an "essentially equal" basis even though it had expressed an intent to do so; and (5) in ordering a maintenance award that subordinated plaintiff's need for spousal maintenance to defendant's desire to avoid bankruptcy. We reverse

¶ 2. The parties were married in 1985, and separated in 2000. Defendant is a mechanical engineer currently earning $81,000 per year. Plaintiff has an associate's degree in health information technology and has worked sporadically in various administrative assistant jobs, but at the time of the final hearing she held no steady employment. Plaintiff's ability to work was a contested issue at the final hearing. Due to various health problems, her doctor testified that she would have difficulty in an employment situation requiring prolonged concentration or physical activity. Nevertheless, the trial court found that she could successfully handle part-time employment.

¶ 3. The parties' marriage produced one child, a daughter who was four-and-one-half years old at the time of the final hearing in this case. Plaintiff has custody of the child, and defendant has visitation rights. The court found that "[c]ustody of the child is not a bar to the wife's working. The child is presently in full-time daycare.... The mother testified the full-time daycare is `for her good and mine.'" Thus the trial court determined that despite its finding that plaintiff suffers from sleep apnea, degenerative arthritis, depression, and reflux/hiatal hernia, and given that her daughter was in day care, plaintiff should be able to work part-time.

¶ 4. The parties have come to an agreement regarding parental rights and responsibilities and related issues; thus, the only outstanding issues on appeal are property valuation, property division, and spousal maintenance. The existence of almost $70,000 in credit card debt, held separately by the parties, complicates the situation. Defendant holds slightly more debt than plaintiff, but both face significant minimum monthly payments.

¶ 5. The court awarded defendant an IRA, a 401(k) retirement account, a truck, the marital home, and tools and equipment, which the trial court valued at $82,000, while awarding plaintiff two IRAs, a car, and a trailer with a total value of $78,000. In its conclusions, the court stated that the "[a]ssets of the parties should be divided equally," and the decision noted that the distribution made by the court was "essentially equal." The trial court did not state explicitly how it valued the retirement accounts awarded to defendant. The parties disagreed over the appropriate valuations for these two accounts, each proposing different values based on different assumptions about the extent to which the accounts were marital property. Both parties agree, however, that the court accepted defendant's suggested assessment, valuing the 401(k) account at the date of separation and excluding money contributed to the IRA by defendant prior to the parties' marriage. As a result, the value attributed to the accounts by the trial court was $31,246 less than the total amount of money in the accounts on the

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day of the final hearing. Considering the retirement accounts awarded to defendant to be worth their value on the day of the final hearing, the court awarded defendant assets worth $113,000, and awarded plaintiff assets worth $78,000. This means that defendant received 59% of the assets, and plaintiff received 41% of the assets

¶ 6. The court also awarded plaintiff spousal maintenance in the amount of $1000 per month. The trial court stated that the maintenance award was intended to comply with this Court's holding that spousal maintenance is intended to correct the vast inequality of income resulting from the divorce, Russell v. Russell, 157 Vt. 295, 299, 597 A.2d 798, 800 (1991), and should be awarded to equalize the standard of living of the parties "for an appropriate period of time." Downs v. Downs, 159 Vt. 467, 469, 621 A.2d 229, 230 (1993). The court found that based on the monthly budget presented by defendant detailing expenses of $5,548 per month, defendant could afford to pay $1000 in maintenance while still making $770 monthly minimum credit card payments. Plaintiff had submitted monthly expenses of $6,935, but this included $4,185 in credit card debt that the trial court found plaintiff would be unable to repay.¹ Excluding credit card payments, plaintiff's actual monthly expenses total $2,757. The court's maintenance award of $1000 per month, when added to the $771 per month she receives in child support payments, leaves plaintiff with a monthly shortfall of $986. The trial court concluded that plaintiff "will be able to meet her reasonable needs if she pursues even part-time employment."

A.

¶ 7. Plaintiff first contends that the court erroneously treated a significant portion of the funds contained in retirement accounts awarded to defendant as nonmarital property. The trial court valued defendant's 401(k) retirement account on the date the parties separated in March 2000 rather than on the date of the final hearing in January 2002, thus attributing $13,568 less to the account than the amount of money it actually contained on the date of the final hearing. Similarly, the trial court undervalued defendant's IRA account by attributing a value to the account that excluded the amount that defendant had accrued in this account prior to the parties' marriage. Defendant's submissions to the trial court describe the value for the account used by the trial court as the IRA's "marital value." The so-called marital value of the IRA was $17,678 less than the monetary value of the...