Kurz v. Kurz

• Decision Date: 16 August 1989
• Docket Number: Docket No. 92993
• Citation: 178 Mich.App. 284,443 N.W.2d 782
• Parties: Karl T. KURZ, Plaintiff-Appellant, v. Marjorie KURZ, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 782

443 N.W.2d 782

178 Mich.App. 284

Karl T. KURZ, Plaintiff-Appellant, v. Marjorie KURZ, Defendant-Appellee.

Docket No. 92993.

Court of Appeals of Michigan.

Submitted June 8, 1988.

Decided March 22, 1989.

Released for Publication Aug. 16, 1989.

Simpson & Moran, P.C. by Kathleen A. Lieder, Cheboygan, for plaintiff-appellant.

Lowell Blumberg, Gaylord, for defendant-appellee.

Before: MAHER, P.J., and MURPHY and BURNS, ^* JJ.

PER CURIAM.

Plaintiff appeals as of right from those portions of the parties' divorce judgment which concerned property distribution, pension benefits, alimony, and attorney fees awarded to defendant. We affirm in part and reverse in part.

The parties were married on August 2, 1958. At the time, plaintiff was almost twenty-three years old and had just completed the four-year cooperative program at General Motors Institute. He had begun working full time for General Motors Corporation approximately six months before. Defendant was twenty years old and a student, majoring in education and sociology, at the University of Michigan-Flint. After the marriage, defendant discontinued her schooling and went to work as a receptionist and dental assistant to support the parties until plaintiff graduated.

In 1960, the parties moved to Birmingham, Michigan, and started a family. A son, Scott, was born in November of 1960 and a daughter, Kristen, was born in November of 1963. After the birth of Scott, defendant went back to college part time but was unable to continue due to the difficulty in commuting and caring for the family.

In the mid-1960s, plaintiff was offered a position with General Motors' foreign division. Plaintiff and defendant mutually decided he should accept the position, as it presented a unique opportunity for the entire family. In the years that followed, plaintiff's employment required the family to live in numerous countries, including Great Britain, West Germany, Brazil, Venezuela, and Argentina. During this time, the family resided in hotels or rented homes and enjoyed an affluent lifestyle.

By March of 1974, plaintiff had been promoted to chief engineer of products engineering for a wholly owned subsidiary of General Motors located in Mexico City, Mexico. The family lived in a three-story, five-bedroom home with a swimming pool. They had a country club membership and were provided live-in domestic help. Around the same time, the family began spending part or all of their summers in Michigan, having purchased a lake front cottage in Cheboygan County in 1972.

In the mid-1970s, as Scott and Kristen neared adulthood, plaintiff's and defendant's interests appraently began to diverge. Consequently, their relationship deteriorated. In March of 1981, plaintiff told defendant he thought their marriage was over and that he would be seeking a divorce. Plaintiff filed his complaint for divorce with the Cheboygan Circuit Court on August 20, 1981.

Defendant filed a countercomplaint for divorce. She later made several motions, including one to adjourn the scheduled trial date. The trial court stated that it would deny the motion unless defendant agreed to forego temporary alimony during the period of adjournment. Defendant refused. On July 27, 1982, the court rejected an ex parte motion from defendant to reconsider its denial of an adjournment.

Trial commenced on July 29, 1982. Neither defendant nor her attorney appeared for trial. Plaintiff did attend, however and presented evidence concerning the parties' relationship and property. The court granted the divorce. In a subsequent opinion and order, plaintiff was awarded exclusive rights in his two employment pensions. Defendant received an alimony award and a substantial portion of the marital property.

In November of 1982, defendant claimed an appeal from entry of the divorce judgment. This Court in an unpublished opinion per curiam affirmed the judgment of divorce and the division of the marital property. However, it held that the trial court had abused its discretion by not considering alternate sanctions short of requiring defendant to forego temporary alimony to obtain an adjournment of the scheduled trial date. Hence, the trial court's ruling as to the alimony award was reversed and remanded for reconsideration. Kurz v. Kurz, unpublished opinion per curiam of the Court of Appeals, decided April 3, 1984 (Docket No. 60948). Defendant appealed that decision to our Supreme Court which, in lieu of granting leave to appeal, summarily reversed that part of this Court's opinion affirming the division of marital property. The Supreme Court held that the questions of alimony and property division should be considered together and, therefore, remanded the case for a new trial. Kurz v. Kurz, 422 Mich. 882, 367 N.W.2d 70 (1985).

While the Supreme Court appeal was pending, the trial court ordered that temporary alimony in the amount of $375 per week should be reinstated to defendant. The trial court later reduced that amount to $261 per week.

On December 19, 1984, defendant's motion to disqualify the original trial judge was granted and a new judge was appointed to preside.

On October 31 and November 1, 1985, a second trial was conducted, focusing on the issues of alimony and property division. On January 29, 1986, the court issued a written opinion which divided the marital property in substantially the same manner as the original property division. As to plaintiff's pensions, though, defendant was granted a fifty percent interest therein. Distribution of the pensions was deferred until plaintiff's retirement. The value of the pensions was to be determined at that time. Regarding alimony, defendant was awarded $350 per week until either party died or until defendant remarried. A second opinion, which addressed objections to the proposed judgment, was entered on April 2, 1986. A final judgment incorporating the two opinions was entered on May 22, 1986. In the judgment, plaintiff was directed to pay defendant's attorney fees and to reimburse her for certain costs incurred during litigation. On June 3, 1986, plaintiff claimed an appeal from the final judgement of divorce and the order taxing costs to him.

On March 1, 1987, plaintiff retired early (the parties dispute whether this was voluntary or not) and, therefore, according to the terms of the divorce judgment, was relieved of the obligation to pay further alimony. Defendant then petitioned this Court, requesting that plaintiff be ordered to continue paying $350 a week as alimony pending the outcome of this appeal. This Court remanded the matter to the trial court for a redetermination of the whole alimony issue.

A hearing on the matter was held on September 16, 1987. The trial court ruled that plaintiff's early retirement constituted a change in circumstances warranting amendment of the divorce judgment. The court explained that its decision regarding alimony and pension distribution was based on the assumption that plaintiff would continue his employment with General Motors until age sixty-five. In keeping with its original intent, the court ruled that defendant is entitled to alimony in the amount of $250 per week until plaintiff reaches age sixty-five or dies, or until defendant remarries or dies. The provision in the divorce judgment awarding defendant fifty percent of the pension benefits remained unchanged.

The case is now before this Court for a decision. Plaintiff raises several issues on appeal concerning alimony, property distribution pension division, and award of attorney fees and costs.

I

Plaintiff first argues on appeal that the trial court abused its discretion in awarding defendant fifty percent of his pensions, as valued at the time of his actual retirement (i.e., March 1, 1987). Although we reject certain valuation figures submitted by plaintiff, we do agree that the trial court should have valuated the pensions using plaintiff's accrued benefit and salary level on the date of the original divorce judgment, ¹ excluding any value which accrued outside the marriage, and awarded defendant a fifty percent share of that amount only.

M.C.L. Sec. 552.18(1); M.S.A. Sec. 25.98(1) provides:

Any rights in and to vested pension, annuity, or retirement benefits, or accumulated contributions in any pension, annuity, or retirement system, payable to or on behalf of a party on account of service credit accrued by the party during marriage shall be considered part of the marital estate subject to award by the court under this chapter. [Emphasis added.]

A necessary corollary of the emphasized language of the above statute is that that portion of a pension attributable to service credit accrued prior to the marriage or after the divorce cannot be considered part of the marital estate subject to award by the court. Kilbride v. Kilbride, 172 Mich.App. 421, 435, 432 N.W.2d 324 (1988).

The trial court in the instant case erred by awarding defendant a straight fifty percent of the pension payments actually received by plaintiff. The court should not have awarded defendant any portion of the pensions which accrued during the two-year period plaintiff worked for General Motors prior to the marriage (part time and full time) or during the four-year and four-month period he worked for the automaker subsequent to entry of the divorce judgment. We therefore remand the matter to the trial court for a redetermination of defendant's share of the pension amounts received by plaintiff. In making this redetermination, we direct the court to employ either the life-annuity method used in Zecchin v. Zecchin, 149 Mich.App. 723, 386 N.W.2d 652 (1986), or the life-expectancy method used in Perry v. Perry, 133 Mich.App. 453, 350 N.W.2d 275 (1984), and Boyd v. Boyd, 116 Mich.App. 774, 323 N.W.2d 553 (1982). ² Those methodologies are to be modified, though, to take into account the pension values which accrued prior to the marriage (i.e., the "coverture factor," Kilbride, supra, 172...