Irwin v. Irwin
| Decision Date | 21 December 1995 |
| Docket Number | No. 14216,14216 |
| Citation | 1996 NMCA 7,910 P.2d 342,121 N.M. 266 |
| Parties | Barbara A. IRWIN, Petitioner-Appellee, v. Charles Douglas IRWIN, Respondent-Appellant. |
| Court | Court of Appeals of New Mexico |
1. Respondent (Husband) appeals from the trial court's division of community property and allocation of community debts in a divorce action. We address Husband's claims that (1) the trial court failed to apportion the community property equally between the parties, and (2) the trial court erred in failing to value and apportion properly the survivor's benefit provisions of Husband's state educational retirement plan. For the reasons discussed herein, we reverse.
2. In August 1988 Husband and Petitioner (Wife) permanently separated after a marriage of almost thirty years. Wife filed for divorce from Husband on January 31, 1989. Upon motion of Husband, the trial court entered an interim order on April 25, 1991, dissolving the marriage of the parties but expressly reserving jurisdiction to decide all other issues, including the division of community property, division of community indebtedness, and Wife's request for an award of alimony.
3. At the time of the divorce, Husband was a retired professor from Eastern New Mexico University (ENMU), aged fifty-six, and Wife was a real estate agent, aged fifty-four. On February 20, 1992, the New Mexico Educational Retirement Board (Board) moved to intervene in the divorce proceedings, alleging that the Board "has an interest relating to the division, disposition, alteration and distribution of educational retirement benefits" of Husband and that the Board's interest was not "adequately represented by [the] existing parties." Thereafter, an order allowing intervention was entered by the trial court.
4. Following a hearing on July 16, 1991, the trial court entered findings of fact and conclusions of law, an order, and a supplemental order apportioning the community property and community debts between the parties. The trial court found, among other things, that Husband was employed at ENMU from August 1963 through May 13, 1988; that he earned 26.92 years educational retirement credit with the Board during his marriage; that the retirement benefits were entirely community property; and that such benefits should be equally divided between the parties. The trial court also found:
12. On or about March, 1989, [Husband] falsely and without the consent of [Wife] represented himself to be a single man to the New Mexico Educational Retirement Board and made an election of benefit that pays him alone a monthly benefit of $2,499.49 until his death with nothing payable to [Husband's] Beneficiary, his son ..., except the residual of his last monthly benefit or the balance of contributions if any, whichever is greater.
13. Since July 1, 1988, through August 1, 1991, [Husband] has received retirement income in his name alone in the total amount of $94,984.62.
14. [Husband] has paid to [Wife] from the retirement benefits he has received, a total of $25,714.16 which leaves a sum withheld from [Wife] in the amount of $21,776.15 which would represent the balance of her 50% interest in [Husband's] retirement income.
15. Under Option "B" of the Retirement Benefit Plan ... [Husband] would receive a benefit of $1,932.61 with a like benefit to [Husband's] survivor. Had [Wife] an opportunity to participate in the selection of the Retirement Benefit as required by the ... Board and of which she was fraudulently deprived by [Husband], [Wife] would have selected Option "B".
5. The trial court ordered that both Husband and Wife receive fifty percent of the gross benefits or contributions accrued in Husband's name and that Husband should be ordered to refund to the Board approximately $14,000, representing the difference between the option "B" retirement benefit amount and the straight-life benefit amount Husband received since the date of his retirement.
6. Based on its finding, the trial court ordered that Husband re-elect retirement benefit option "B," so that Husband would receive a monthly retirement benefit of $2,169.31 with a like monthly benefit payable as survivor benefits to Wife. In accordance with the trial court's order, the Board began dividing payments of Husband's monthly retirement benefits so that fifty percent of the gross benefits are payable to each party.
7. In making its allocation of community assets, the trial court also found that the parties earned the following amounts during the years listed:
1988 1989 1990 1991
Wife $ 6,244.27 $ 9,842.39 $ 6,000.00 $ 4,000.00
Husband $33,787.09 $46,257.15 $44,347.92 $29,567.36
Based in part on the above finding, the trial court ordered that Wife should be awarded $69,696.08 as a fifty-percent community interest in Husband's earnings for the period of August 1988 to the date of divorce in 1991.
8. Husband contends that the trial court erred in awarding Wife fifty percent of his earnings during the period of their separation and covering the time period from August 1988 to April 25, 1991, when their marriage was dissolved. Husband argues that earnings spent by either spouse prior to dissolution of their marriage, and which are no longer in existence, may not be categorized as community assets subject to distribution between the parties. The trial court found, and Husband does not dispute, that he earned $139,392.16, and Wife earned $26,086.66 during the period in question. It is also undisputed that each party spent his or her own earnings during the separation, and that no portion of such income remains either in the form of unexpended funds or other assets.
9. The parties gave conflicting testimony concerning how they spent their respective earnings during the period of their separation. Husband testified that he spent approximately $95,500 of his earnings on the payment of various community debts and the balance on living expenses, and that no part of the funds are currently remaining. Husband argues that both he and Wife had the unrestricted use of their respective incomes after their separation and continuing until the time their marriage was dissolved. He asserts that they paid their living expenses and had community debts consisting of, among other things, expenses in connection with community rental property. Husband also contends he used his earnings to pay taxes, to make payments on the residence occupied by Wife, to make monthly payments on rental property owned by the community, to pay utility bills, and to pay gasoline and auto insurance for Wife's car. Wife disputes Husband's claims concerning the amounts expended by him on behalf of the community following their separation and testified that Husband spent only approximately $51,900 of his total earnings for the payment of community debts, including income taxes.
10. Under New Mexico law the trial courts are required in divorce proceedings to divide the community property equally. Foutz v. Foutz, 110 N.M. 642, 644, 798 P.2d 592, 594 (Ct.App.1990). The division of property, however, need not be computed with mathematical exactness. See Ridgway v. Ridgway, 94 N.M. 345, 346, 610 P.2d 749, 750 (1980); Bustos v. Gilroy, 106 N.M. 808, 813, 751 P.2d 188, 193 (Ct.App.1988). In order to apportion the community property equitably between the parties, the trial court must determine the extent and value of the community property and then deduct the amount of any community indebtedness. NMSA 1978, § 40-3-11 (Repl.Pamp.1994). In performing this function, the community property, including personalty, should be valued according to its fair market value at the time of the dissolution of marriage. Madrid v. Madrid, 101 N.M. 504, 505, 684 P.2d 1169, 1170 (Ct.App.1984).
11. The trial court, in dividing the community property, assigned to Husband as an award of property the sum of one-half of $139,392.16 (or $69,696.08) as representing "Wife's community interest in [H]usband's earnings 1988-1991 (50%)," covering the period of their separation prior to the dissolution of their marriage. Husband argues that the trial court, in making its distribution of community property, erred in awarding $69,696.08 of nonexistent funds to him and then awarding Wife an equal amount of existing community property in an attempt to equalize the distribution between the parties. Husband also notes that the trial court did not similarly award Wife the amount of her expended community earnings during the same period and then award him community property of equal value. Neither party argues on appeal that Husband's income during the period of their separation was utilized to acquire other assets which were actually available for distribution at the time of divorce, nor that Husband's disposition of such earnings was contrary to a court order. Nor did the trial court find that Husband violated any fiduciary responsibility to Wife concerning the disposition of his earnings during the separation of the parties.
12. Wife asserts that the trial court's allocation of community assets and the award of Husband's earnings to him during their separation, with a corresponding award of other assets to her, was correct because during coverture each spouse has a present vested interest in half of all the community property, including community income, and she was deprived of the use of one-half of this income. See DeTevis v. Aragon, 104 N.M. 793, 798, 727 P.2d 558, 563 (Ct.App.1986) (); Hakkila v. Hakkila, 112 N.M. 172, 182, 812 P.2d 1320, 1330 (Ct.App.), cert. denied, 112 N.M. 77, 811 P.2d 575 (1991).
13. Wife is...
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