Koziol v. Koziol

• Decision Date: 11 December 2001
• Docket Number: No. A-00-596.,A-00-596.
• Citation: 636 N.W.2d 890,10 Neb. App. 675
• Parties: Linda L. KOZIOL, Appellee, v. David D. KOZIOL, Appellant.
• Court: Nebraska Court of Appeals

636 N.W.2d 890

10 Neb. App. 675

Linda L. KOZIOL, Appellee, v. David D. KOZIOL, Appellant.

No. A-00-596.

Court of Appeals of Nebraska.

December 11, 2001.

Pamela J. Dahlquist, of Kutak Rock, Omaha, for appellant.

Brent M. Kuhn, of Harris, Feldman, Omaha, for appellee.

HANNON, INBODY, and MOORE, Judges.

HANNON, Judge.

INTRODUCTION

In this dissolution action, the trial court entered a decree settling all of the various issues except the division of David D. Koziol's pension benefits from the Omaha Fire Department. The decree stated that the marital portion of the pension should be equally divided, but reserved jurisdiction to enter a supplemental order in lieu of a qualified domestic relations order (QDRO). Later, the trial court entered a supplemental order, and David appeals from that order. David argues that the court can only divide the marital "value" of the pension, that is, his contribution to the pension while married, and that the supplemental order changed the distribution of the pension from that contained in the previous decree. We conclude that the order entered as a decree was not a final order, but that the supplemental order entered made it final. We also conclude that the court could enter a decree dividing the marital portion of the pension equally, but that the formula used in the supplemental order could give Linda L. Koziol some of the nonmarital portion of the pension. Accordingly, we modify the formula used to divide the marital portion of the pension equally and remand to incorporate our modification.

The parties were married on July 14, 1973. They had one daughter, who had reached the age of majority at the time of decree. Throughout the marriage, David was employed full time by the Omaha Fire Department. Linda held various jobs during the course of the marriage, and at the time of the decree, she was employed full time.

In October 1998, Linda filed a petition for dissolution. A trial was held on April 19, 1999. The trial judge announced his decision by letter shortly thereafter, but the court was confronted with the difficulty of dividing David's pension in view of the fact that the city of Omaha does not recognize a QDRO order. A hearing was held on that issue, and on August 6, 1999, a decree was entered dissolving the parties' marriage and settling all of the other issues, including alimony, property settlement, and attorney fees. The trial court purported to divide the marital portion of David's pension but reserved jurisdiction to enter a supplemental order in lieu of a QDRO order. All of the issues appealed concern the division of David's pension.

SUMMARY OF EVIDENCE

As a result of his work as a firefighter for the city of Omaha, David held two pension funds, which were designated as pre 414h and 414h. (Except for unclear references to a possible difference in their taxability upon withdrawal, the record does not explain why there are two funds rather than one.) A letter from the senior payroll clerk of the city of Omaha to David told him that as of December 31, 1998, the amount of the "Pre 414h" fund was $64,904.09 and the amount of the 414h fund was $62,272.60, for a total of $127,176.69. There is no clear evidence showing the meaning or significance of these figures. The letter from the payroll clerk stating these figures refers to the amounts as contributions, but also refers to interest, and does not clearly state the entire value of David's contributions, or even his contributions plus interest on his contributions. In his testimony, David called these funds "what [I have] paid in." He also testified that since the December 31, 1998, date used by the payroll clerk, he had paid in more money, and that on the day of trial, the pension fund held $129,284. He also testified that if he would retire on the day of the trial and take all of the money out, he would receive his contributions. As will be explained later, this figure is clearly not the value of the pension, but we assume David was correct when he testified that the $129,284 is what he contributed over the course of his employment with the fire department.

In his brief, David called these figures the value of the pension. Linda also refers to these figures as the value of the pension, but at the same time asks for a share of the pension benefits David will receive. Linda's counsel somewhat inconsistently argues that the "payouts over the years can exceed what that value is." Whatever these figures represent, they do not represent the value of David's actual pension benefits.

The letter from the payroll clerk stating the above figures also states the following:

Pre-414h contributions cannot be rolled over, and the interest portion will be taxable to you if you terminate your employment and withdraw your funds. The entire 414h total would be taxable under these circumstances. There are no provisions for withdrawal prior to termination of employment.

Depending on your years of service, you may be able to vest your pension. If you leave employment, please inquire in the Personnel Department to either vest or withdraw your funds.

David takes the position that Linda should receive only slightly less than one-half of the $129,284, or approximately $63,000 in cash, less estimated income taxes, as the marital portion of the pension. We observe that the letter from the payroll clerk shows that not all of the fund (the noninterest portion of the pre 414h contribution) would be taxable, but no evidence shows the actual amount that would be taxable.

An exhibit that accompanied the letter from the payroll clerk, entitled "City of Omaha Pension Estimate," gives an estimate of David's retirement benefits if he should retire and information on how that pension is calculated. This exhibit shows that David was 49 years of age on December 31, 1998, having been born on October 16, 1949, that his "projected retirement date" is October 16, 1999, and that at retirement, he will have 27 years 9 months of service with the fire department. It shows the date of his pension membership is January 3, 1972. The parties were married on July 14, 1973.

This document states that in calculating the pension at the time of retirement, David's last 5 years of income will be reviewed and that the "highest 26 consecutive pay periods will be identified and used." Other evidence shows David is paid 26 times per year. The estimate also states that the pension will vary from the estimate. In this document, it states that for the estimate of his pension, his income over the past 2 years had been reviewed, and that the income for the period from January 1998 to December 12, 1998, was selected as a basis for the estimate. It also states what types of compensation he might receive that will be used to determine his income. The document estimates David's monthly pension will be $3,660.29 upon retirement at age 50.

David was eligible to retire on October 16, 1999, immediately following the April 19 hearing. Thus, if he had retired on October 16, he could have started his pension, or he could have withdrawn his contribution, which is the $129,284 that he paid into the fund plus any sum he contributed after April 19. David testified that he planned on continuing his employment with the Omaha fire department and that he was a battalion chief holding the position of fire marshal. He is in good health except for a bad back and high blood pressure. It is possible that he could be transferred to another position, but if he made a move, it would be a lateral one with no increase in pay. He did not have any capability of advancing. David testified that he took an assistant fire chief's test and placed seventh. He testified that the department has only one or two positions for assistant fire chief and that the city has reduced the positions so there are not going to be tests given in the future. David testified that a new contract between the fire department and the city of Omaha assures him of automatic raises for the next 2 years, but there is no evidence showing the amount or date of these expected pay increases.

David testified that if he works until age 60 and retires, the amount of the money he will receive from his pension will go up. He also testified that the city of Omaha does not have a QDRO and that if he dies, Linda could not get any of his pension even if the court should order it.

During this testimony, the trial court indicated a familiarity with QDRO orders under the federal Employee Retirement Income Security Act and questioned this testimony. David's counsel then stated that he understood the QDRO order was not available because David's employer was exempt from the federal act and that the city of Omaha has a policy of not accepting QDRO's. Linda's counsel suggested the use of a supplemental order, which she asserted could accomplish the same effect as a QDRO.

David asked the court to award him all of his pension. He introduced an exhibit, that he testified was prepared by his accountant, which combined 4 months of his 1999 income ($18,343), an Aetna annuity valued at $98,088 (ultimately awarded to David), and the $129,284 that could be withdrawn from the pension fund upon his retirement to arrive at $245,715. From this figure, the exhibit shows that the standard deduction and personal exemption allowed for income tax were subtracted to get a figure designated as taxable income. David testified that the preparer of the exhibit computed the federal and state income tax on this figure and allocated a portion of the computed tax to the annuity, the pension fund, and the earnings. The exhibit displays the accountant's computation of the net after-tax value of the combined value of the pension fund and annuity at $143,126. David testified that this exhibit shows that the preparer of the exhibit takes the position that if David would retire on the date of trial and take all the money out of his pension fund and the annuity, he would have...