Johnson v. Johnson
| Decision Date | 20 December 1994 |
| Docket Number | No. 9410DC227,9410DC227 |
| Citation | 117 N.C.App. 410,450 S.E.2d 923 |
| Parties | Wayne Robin JOHNSON, Plaintiff, v. Sandra E. JOHNSON, Defendant. |
| Court | North Carolina Court of Appeals |
Gary S. Lawrence and John H. McWilliam, Raleigh, for plaintiff-appellee Wayne Robin Johnson.
Meredith J. McGill, Raleigh, for defendant-appellant Sandra E. Johnson.
Defendant argues on appeal that the "disability retirement benefits" retained their classification as marital property even though disability rather than age caused plaintiff's retirement. G.S. 50-20(b)(1) classifies vested "pension, retirement, and other deferred compensation rights" as marital property. Whether "disability retirement benefits" fall within the definition of marital property is an issue of first impression in North Carolina. We have carefully considered defendant's contentions but are not persuaded and accordingly, we affirm.
Different jurisdictions have adopted different methods for determining whether to label property as marital or separate. Our Supreme Court has adopted an analytic approach for classifying personal injury awards. Under the analytic approach, the key to determining whether benefits are separate property rather than marital property is to ask what plaintiff's benefits were intended to replace. Johnson v. Johnson, 317 N.C. 437, 446-47, 346 S.E.2d 430, 435 (1986). In Johnson, our Supreme Court found that a lump sum personal injury award could be classified as partially marital and partially separate property. Id. at 454, 346 S.E.2d at 440. There the court stated that courts which use the analytic approach "consistently hold that the portion of [a personal injury] award representing compensation for non-economic loss--i.e., personal suffering and disability--is the separate property of the injured spouse; the portion of an award representing compensation for economic loss ... during the marriage ... is marital property." Id. at 437-38, 346 S.E.2d at 436. While damages paid to a spouse for personal injuries are not precisely the same as "disability retirement benefits" paid to a spouse, the two situations are in some respects analogous. Accordingly, the issue here, employing the analytic method, is whether the benefits that plaintiff received were truly disability benefits or were retirement benefits (compensation for economic loss).
Here, the trial court's pertinent findings of fact are:
[T]he local Governmental Employee's Retirement system under which the Plaintiff is covered is such that if ... [p]laintiff obtains gainful employment, and earns on a monthly basis a sum greater than the difference between the amount ... [p]laintiff was earning at the time of his retirement and the amount which ... [p]laintiff is receiving in disability retirement, then ... [p]laintiff's monthly disability award will be reduced dollar for dollar for each dollar earned by ... [p]laintiff over and above the difference between his income while employed and his disability payment.... [I]f ... [p]laintiff were to become gainfully employed earning the same amount he was earning at the time he was placed on disability, then [he] would only receive the amount which he had contributed to his plan.... [S]hould ... [p]laintiff recover from his disability and resume employment from a participating local governmental agency, then ... [p]laintiff would receive no further disability benefits until such time as his normal retirement.
By employing the analytic method, the trial court found that the amount of plaintiff's "disability retirement benefits" above $97.75 per month was clearly attributable to his physical disability because it was intended to reimburse plaintiff for his loss of earning capacity due to his disability. Accordingly, the trial court found that this amount was plaintiff's separate property.
On appeal, our review is limited to whether there was any competent evidence to support the trial court's findings. Taylor v. Taylor, 92 N.C.App. 413, 417, 374 S.E.2d 644, 646 (1988). If there was competent evidence to support the findings, they are conclusive on appeal "even though the evidence might sustain findings to the contrary." Matter Of Estate Of Trogdon, 330 N.C. 143, 147, 409 S.E.2d 897, 900 (1991). Here, plaintiff presented evidence at the equitable distribution hearing that if plaintiff recovered from his disability and resumed employment with the City of Raleigh or a participating member in the Retirement System, plaintiff would no longer receive any "disability retirement benefits." Plaintiff would simply resume his contributions to the retirement fund like all other employees and would receive retirement benefits when he retired due to age or number of years of service.
There also was evidence that once an employee's right to retirement benefits vests (plaintiff's right to retirement benefits here vested after five years of service) and the employee retires, the employee "can earn any amount and it [will not] affect [the employee's] retirement benefit[s]." However, under the Local Governmental Employees Retirement System, plaintiff would stop receiving "disability retirement benefits" if plaintiff's disability ended. All of this evidence supports the conclusion that the "disability retirement benefits" are not true retirement benefits.
The better practice would have been for the trial court to specifically state that the monthly disability benefits received by plaintiff were due to his medical disability and were to replace his loss of earning capacity. Here, the trial court stated that the ...
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