In re Marriage of Zappanti

• Decision Date: 19 June 2003
• Docket Number: No. 02CA0918.,02CA0918.
• Citation: 80 P.3d 889
• Parties: In re the MARRIAGE OF Victoria ZAPPANTI, Appellee, and Larry J. Zappanti, Sr., Appellant.
• Court: Colorado Court of Appeals

80 P.3d 889

In re the MARRIAGE OF Victoria ZAPPANTI, Appellee,

and

Larry J. Zappanti, Sr., Appellant.

No. 02CA0918.

Colorado Court of Appeals, Div. 1.

June 19, 2003.

Rehearing Denied August 14, 2003.

Certiorari Denied December 1, 2003.

Devon A. McFarland, Trinidad, Colorado, for Appellee.

Rodolfo Reveles, P.C., Rodolfo Reveles, Trinidad, Colorado, for Appellant.

William L. Carew, Colorado Springs, Colorado, Amicus Curiae. Opinion by Judge TAUBMAN.

Larry J. Zappanti, Sr. (husband) appeals from the trial court's permanent orders entered in connection with the dissolution of his marriage to Victoria Zappanti (wife). We affirm in part, reverse in part, and remand for further proceedings.

The decree terminating the parties' twenty-three-year marriage was entered on January 22, 2002. The permanent orders hearing occurred in February, and the court signed the written orders on March 13, 2002.

Among other provisions, wife received her PERA retirement pension and was assigned responsibility for various marital debts. Husband also received his entire railroad pension, which included a current benefit of $2031 per month, and was assigned liability for the remaining marital debt.

The trial court allocated sole decision-making authority for the parties' minor child to wife and ordered husband to pay child support in the amount of $358 per month.

Husband challenges the trial court's valuation of wife's pension, the classification of his retirement, the valuation of the marital portion of his pension, and the calculation of child support. We find no reversible error as to the wife's pension and child support, but we reverse as to husband's railroad pension.

I.

Husband first contends that the trial court erred as a matter of law in valuing wife's PERA retirement fund based solely upon the amount of her contributions. We agree that the court erred in its valuation, but find no basis for reversal.

In its bench order, the trial court found that wife's PERA retirement was vested, but not matured, and therefore, if she left her job, the only money she could withdraw would be the amount of her contributions. Wife had testified that she had contributed $60,349.22 to her PERA fund. That same amount was listed as the value on her financial affidavit. The court, basing its valuation on wife's contributions, found that her PERA fund was worth $60,000.

Because PERA combines elements of defined benefit and defined contribution plans, the present value of a PERA account cannot be based purely upon the contributions as of the date of dissolution. Rather, a determination of present value requires application of a series of actuarial and investment assumptions relating to the employee's life expectancy and probable retirement age to the contractual or statutorily awarded benefit. In re Marriage of Kelm, 912 P.2d 545 (Colo. 1996).

Thus, it appears that the trial court erred in valuing wife's pension based solely upon her contributions. However, we conclude that husband acquiesced in this error.

Normally, the valuation of future retirement payments is the subject for expert testimony, usually from an actuary. Perry v. Perry, 133 Mich.App. 453, 350 N.W.2d 275 (1984). It is the parties' duty to present the trial court with the requisite data that would allow it to make a sufficient valuation of the retirement fund, and any failure by the parties in that regard should not provide them with grounds for review. In re Marriage of Smith, 114 Ill.App.3d 47, 69 Ill.Dec. 827, 448 N.E.2d 545 (1983). Accordingly, a party who fails to present sufficient evidence at trial should not be allowed on appeal to challenge the inadequacy of the evidence. Hartland v. Hartland, 777 P.2d 636 (Alaska 1989).

Here, not only did husband fail to present any evidence of the value of wife's PERA pension, he also made no objection or argument challenging wife's valuation during the permanent orders hearing. In addition, husband's counsel informed the trial court that his client was eager to have the proceeding concluded and stated that he felt comfortable with the court resolving the issues based on the information before it.

A trial court is required to find the approximate current value of all property owned by the parties. In re Marriage of Weaver, 39 Colo.App. 523, 571 P.2d 307 (1977). Here, the trial court fulfilled that obligation by relying upon the only evidence available to it. See In re Marriage of Eisenhuth, 976 P.2d 896 (Colo.App.1999)

(in reaching an equitable division of marital property, the court is required to consider the evidence before it). Given husband's failure to contest wife's valuation or present any evidence whatsoever, including any evidence of a valuation conforming to the requirements set forth in In re Marriage of Kelm, supra, we hold that the trial court's error provides no basis for reversal. See Hartland v. Hartland, supra (by not raising at trial the calculation he advocated for the valuation of wife's pension, husband waived his right to contest the issue on appeal); see also In re Marriage of Eisenhuth, supra (trial court properly based its valuation of property upon the limited evidence before it, which consisted of wife's testimony and financial affidavit).

II.

Husband next argues that the trial court erred in classifying, valuing, and dividing his railroad retirement. We agree.

Under the Uniform Dissolution of Marriage Act, § 14-10-101, et seq., C.R.S. 2002, a court must make an equitable division of marital property after considering all relevant factors. In making this division, the court must first determine whether an interest constitutes property; if so, the court must then determine whether the property is marital or separate. In re Marriage of Hunt, 909 P.2d 525 (Colo.1995). Once property has been deemed to be marital, the court must value the property. In re Marriage of Balanson, 25 P.3d 28 (Colo.2001).

Errors by the trial court in determining the property division are reversible only when overall they affect the parties' substantial rights. In determining whether the substantial rights of the parties have been affected, a reviewing court must consider the trial court's overall property distribution. See In re Marriage of Balanson, supra.

An error affecting only a small percentage of the overall marital estate is harmless, whereas an error affecting a large percentage of the marital estate requires remand of the case to the trial court to correct such errors. In re Marriage of Balanson, supra.

A.

Husband initially contends that the trial court erred as a matter of law by classifying his entire railroad retirement benefits as marital property. He refers to several out-of-state cases, and the United States Supreme Court decision in Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979), in explaining that the benefits he receives are divided into two categories: Tier I benefits, which under controlling federal law are not considered marital property subject to division; and Tier II benefits, which can be classified as marital property subject to distribution. Husband maintains that the trial court did not distinguish between these two types of benefits and exceeded its jurisdiction in treating Tier I benefits as marital property. We agree.

At the permanent orders hearing, the general counsel of the Railroad Retirement Board testified that husband received a monthly railroad pension or annuity of $2,031. Of that amount, he explained, $1,354 was a Tier I benefit not divisible as marital property, while the remaining $677 would be divisible because it was a Tier II benefit. The $677, he stated, would have been received by family members if husband's earnings were subject to the Social Security Act. That amount was attributable to the parties' son, but was paid directly to husband.

In addition, the general counsel explained that when the parties' son became emancipated, husband would receive a Tier I benefit of $1,354 per month plus a reduced Tier II benefit of $286 per month. Finally, he testified that either the entire amount, or at a minimum the $286 component, was subject to annual cost of living increases.

In closing arguments, wife's counsel urged that a present value be applied to the Tier II benefit using the mortality tables listed in § 13-25-102, C.R.S.2002. Husband's counsel stated that he was unable to obtain a value for the retirement benefits and that he would accept the court's finding on that issue. In its bench order, the trial court found that the present value of the entire retirement exceeded $600,000, that the child's portion of the monthly benefit had a net present value of at least $50,000, and that based upon husband's projected life expectancy of twenty-nine years, his Tier II benefit would have a net present value of approximately $100,000. The court then concluded that the entire railroad pension was a marital asset and awarded it to husband. In reaching this conclusion, the trial court erred.

Although husband's counsel stated during the permanent orders hearing that he would rely on the trial court's determination of the value of the railroad retirement annuity, he did not concede that all of the railroad retirement benefits were marital property. Further, in husband's post-trial motion, he requested that the trial court amend its findings and judgment with respect to the railroad pension. At a later status conference, husband's counsel emphasized that he was not requesting the court to hear further evidence as to the railroad retirement pension. Accordingly, we conclude that husband sufficiently raised before the trial court the issue as to whether any or all of the railroad retirement pension was marital property.

Further, although the testimony presented by the general counsel of the Railroad Retirement Board was sparse, it indicated that only $677 of husband's $2,031 monthly annuity was divisible as marital property. Thus, there was a sufficient...