In re Marriage of Rockwell

• Decision Date: 27 August 2007
• Docket Number: No. 56954-6-I.,56954-6-I.
• Court: Washington Court of Appeals
• Parties: In re the Matter of the MARRIAGE OF Carmen P. ROCKWELL, Respondent, and Peter G. Rockwell, Appellant.

170 P.3d 572

141 Wn. App. 235

In re the Matter of the MARRIAGE OF Carmen P. ROCKWELL, Respondent, and

Peter G. Rockwell, Appellant.

No. 56954-6-I.

Court of Appeals of Washington, Division 1.

August 27, 2007.

Publication Ordered October 19, 2007.

Patricia S. Novotny, Attorney at Law, Seattle, WA, for Appellant.

Cynthia B. Whitaker, Law Offices of Cynthia B. Whitaker, Catherine Wright Smith, Edwards Sieh Smith & Goodfriend PS, Seattle, WA, for Respondent.

APPELWICK, C.J.

¶ 1 Peter Rockwell challenges the fairness of a 60/40 division of property in the dissolution of a long term marriage. He argues the trial court improperly considered his future earning capacity as a factor in the overall fairness of the division. He claims the trial court erred in making an adjustment for social security benefits that his wife would have received but for her type of federal pension. Carmen Rockwell cross-appeals, arguing that the court erred when it chose the subtraction method to characterize and value her federal pension. We reverse the trial court's use of the subtraction method for pension characterization and valuation, but affirm on all other issues and remand for further proceedings.

FACTS

¶ 2 Peter and Carmen Rockwell were married from 1978 until 2004, a total of 26 years. Carmen¹ had been employed in the federal civil service for 16 years prior to the marriage. During those 16 years, she took two breaks from this service, one for a period of about fourteen months, and another for a period of just under five years. She continued in this field for 24 more years during their marriage. Peter has bachelor's degrees in mechanical engineering and liberal arts. He worked as an engineer in Washington, D.C. before seeking a position in technical sales. In order to advance Carmen's career, the couple moved to New York in 1984, and then to Seattle in 1986. Each time, Peter gave up his current employment and sought re-employment in their new location. In 1999, when Peter was 48, he was laid off. In his last year of employment, he had earned a $72,000 salary and a commission of about $18,000. He searched for employment in similar fields but without success, and stopped seeking employment after the spring of 2002.

¶ 3 Carmen retired in 2002 at age 60, testifying to health concerns that kept her from continuing her employment. She had advanced from a position as a GS-3 clerk to a GS-15 executive, for which she earned a $120,000 salary as the head of the Northwest Regional Office of Civil Rights. Because she was enrolled in the Civil Service Retirement System (CSRS), she earned a substantial pension that is in lieu of any social security benefits. This pension is now in "pay status."

¶ 4 In 2004, Carmen filed for dissolution of the marriage. At trial, the parties and their experts presented lengthy testimony regarding Carmen's career and health, Peter's career, job search and health, the future possible income streams of both parties, the community debts, and the tangible assets available to each. The trial court received evidence on various real and personal properties, including the family home, Carmen's IRA and Thrift Savings Plan, Peter's contributory and rollover IRA's, two automobiles, rental proceeds, life insurance policies, Peter's disability insurance policy, frequent flier miles, and Carmen's CSRS pension.

¶ 5 In its oral ruling issued on June 24, 2005,² the trial court stated that it was "back[ing] out the Social Security contribution assessment for — that Mr. Kessler provided, that's $159,464." This is the value of social security that Carmen would have received if she was not receiving her particular type of federal pension. The trial court "compensated" her for that amount in its written findings of fact.

¶ 6 In addressing the division of the pension, the trial court noted Peter's entitlement to Social Security benefits and their potential to increase, Carmen's lack of Social Security benefits due to her type of pension, and Peter's inheritance funds that he gifted to the community. It accepted the "subtraction method" that Peter's actuary expert used to value Carmen's pension, finding that 92 percent of the pension was community property and 8 percent was Carmen's separate property. The trial court concluded that it was fair and equitable to divide the community property portion of the pension 60 percent to Carmen and 40 percent to Peter, and to award Carmen her separate property portion of the pension. This meant that Peter is to receive 36.8 percent of the gross value of the pension.

¶ 7 Both parties moved for reconsideration of the oral ruling filing a motion and response to the same on July 26, 2005. There are no significant differences between what the parties raised in their motions for reconsideration and the issues raised on appeal. The trial court denied Peter's motion for reconsideration in its entirety. The trial court also denied Carmen's motion for reconsideration in its entirety, but did revise the proposed order to reflect that the pension was 8 percent Carmen's separate property and 92 percent community property.

¶ 8 The trial court issued its written findings of fact on August 26, 2005. Based on those findings, the trial court stated "[g]iven the difference in age, earning capacity, physical condition, and that husband had the ability to earn income and save for retirement in the future, it is fair and equitable to divide the community property 60 percent to wife and 40 percent to husband." It also ordered the family home to be sold in order to provide liquidity to both parties.

¶ 9 Neither party moved for reconsideration of the written findings of fact. Peter filed his notice of appeal on September 26, 2005. Carmen filed her notice of cross-appeal on October 4, 2005.

ANALYSIS

I. Standard of Review

¶ 10 Appellate courts apply the substantial evidence standard of review to findings of fact made by the trial judge. See Washington Family Law Deskbook, 2nd Ed. § 65.4(1) at 65-9. As long as the findings of fact are supported by substantial evidence, they will not be disturbed on appeal. Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 575, 343 P.2d 183 (1959). "Substantial evidence exists if the record contains evidence of a sufficient quantity to persuade a fair-minded, rational person of the truth of the declared premise." In re Marriage of Griswold, 112 Wash.App. 333, 339, 48 P.3d 1018 (2002). Where the trial court has weighed the evidence, the reviewing court's role is to simply determine whether substantial evidence supports the findings of fact, and if so, whether the findings in turn support the trial court's conclusions of law. In re Marriage of Greene, 97 Wash.App. 708, 986 P.2d 144 (1999). A court should "not substitute [its] judgment for the trial court's, weigh the evidence, or adjudge witness credibility." Id. at 714, 986 P.2d 144 (citing In re Marriage of Rich, 80 Wash.App. 252, 259, 907 P.2d 1234 (1996)).

¶ 11 The trial court's distribution of property in a dissolution action is guided by statute, which requires it to consider multiple factors in reaching an equitable conclusion. These factors include (1) the nature and extent of the community property, (2) the nature and extent of the separate property, (3) the duration of the marriage, and (4) the economic circumstances of each spouse at the time the division of the property is to become effective. RCW 26.09.080. In weighing these factors, the court must make a "just and equitable" distribution of the marital property. RCW 26.09.080. In doing so, the trial court has broad discretion in distributing the marital property, and its decision will be reversed only if there is a manifest abuse of discretion. In re Griswold, 112 Wash. App. at 339, 48 P.3d 1018 (citing In re Marriage of Kraft, 119 Wash.2d 438, 450, 832 P.2d 871 (1992)). A manifest abuse of discretion occurs when the discretion was exercised on untenable grounds. In re Marriage of Muhammad, 153 Wash.2d 795, 803, 108 P.3d 779 (2005). If the decree results in a patent disparity in the parties' economic circumstances, a manifest abuse of discretion has occurred. In re Marriage of Pea, 17 Wash. App. 728, 731, 566 P.2d 212 (1977).

¶ 12 However, the court is not required to divide community property equally. In re Marriage of White, 105 Wash.App. 545, 549, 20 P.3d 481 (2001). In a long term marriage of 25 years or more, the trial court's objective is to place the parties in roughly equal financial positions for the rest of their lives. Washington Family Law Deskbook, § 32.3(3) at 17 (2d. ed.2000); see also Sullivan v. Sullivan, 52 Wash. 160, 164, 100 P. 321 (1909) (finding that for a marriage lasting over 25 years, "after [which] a husband and wife have toiled on together for upwards of a quarter of a century in accumulating property . . . the ultimate duty of the court is to make a fair and equitable division under all the circumstances"). The longer the marriage, the more likely a court will make a disproportionate distribution of the community property. Where one spouse is older, semi-retired and dealing with ill health, and the other spouse is employable, the court does not abuse its discretion in ordering an unequal division of community property. In re Marriage of Schweitzer, 81 Wash.App. 589, 915 P.2d 575 (1996).

II. Social Security Benefits

¶ 13 Peter assigns error to the trial court's consideration of Carmen's social security benefits. First, he assigns error to the following finding of fact:

2.8.

13.e. Wife is not entitled to receive Social Security benefits as her pension is in lieu of Social Security benefits. The present value of wife's social security benefits is $159,464. The court finds it is fair and equitable to compensate wife in this amount, since husband will receive social security benefits.

¶ 14 Mr. Kessler, Carmen's expert, testified that Carmen's type of federal pension is in lieu of Social Security. He valued the Social Security...