Marriage of Evans, In re

• Court: Appellate Court of Illinois
• Writing for the Court: SCOTT; STENGEL; BARRY; BARRY
• Citation: Marriage of Evans, In re, 406 N.E.2d 916, 85 Ill.App.3d 260, 40 Ill.Dec. 713 (Ill. App. 1980)
• Decision Date: 20 June 1980
• Docket Number: No. 79-355,79-355
• Parties: , 40 Ill.Dec. 713 In re the MARRIAGE of Rae A. EVANS, Petitioner-Appellant, and Duane E. Evans, Respondent-Appellee.

Page 916

406 N.E.2d 916

85 Ill.App.3d 260, 40 Ill.Dec. 713

In re the MARRIAGE of Rae A. EVANS, Petitioner-Appellant and Duane E. Evans, Respondent-Appellee.

No. 79-355.

Appellate Court of Illinois, Third District.

June 20, 1980.

James L. Hafele, Peoria, for petitioner-appellant.

Joe Billy McDade, Peoria, for respondent-appellee.

SCOTT, Justice:

On June 15, 1978, in the circuit court of Peoria County, the marriage of the petitioner, Rae A. Evans, and the respondent, Duane E. Evans, was dissolved. Following several contested hearings the trial court entered a property settlement order on December 11, 1978. The petitioner-wife filed a post-trial motion which the court denied.

The petitioner has appealed only from the property settlement order of the trial court. On appeal the petitioner has put her issues as follows:

"(1) Whether the trial court erred and thereby abused its discretion in failing to award to wife:

A. Any interest in Husband's retirement income plan and social security benefits accrued during the marriage.

B. Any interest in Husband's non-vested shares in his employee's investment plan accrued during the marriage.

C. Any maintenance.

(2) Was the trial court's valuation of the marital home contrary to the manifest weight of the evidence."

Contrary to the narrow issue lastly phrased by the petitioner, the more general issue she argues is whether the trial court erred in failing to equitably apportion all marital assets of the parties.

The marriage of the parties to this appeal had endured for 28 years. There were no minor children. The petitioner was 50 years of age at the time of the dissolution and was employed as a tenured school teacher in the Peoria school district. The respondent was 49 years old at the time of the trial court proceedings. He has a college degree in mechanical engineering and has been employed with the Caterpillar Tractor Company since 1952. The parties own a residence in Peoria which had an approximate value of $45,000. Both parties had acquired substantial non-marital property which the trial court awarded to each respectively. The marital settlement order included as marital property the respondent's nonvested shares of stock in the Caterpillar Employees Investment Program which the trial court awarded to the respondent. Also listed in the marital settlement order were the pension benefits of both parties which the trial court awarded to each respectively. The respondent-husband's pension benefits, which are in issue, were vested and were wholly funded by his employer, Caterpillar. He was not entitled to receive his retirement benefits at the time of the dissolution of marriage because he was not then eligible to retire.

The wife's first argument is that the trial court erred in failing to award to her an interest in her husband's retirement benefits. Mrs. Evans computed her husband's total interest in his Caterpillar employees' pension by using standard life expectancy tables showing his life expectancy at age 49 to be 23.2 years. Computation by the husband's employer, Caterpillar, in July of 1978 showed the respondent at age 65 will receive $805 per month from his Caterpillar pension, and in addition $380 per month would be available to him from social security benefits based upon his past Caterpillar earnings. The monthly figures were based upon only the period of time during the respondent's employment with Caterpillar and during the life of their marriage. The petitioner asserts that the pension benefits from her husband's employer and his social security benefits are marital property and that she is entitled to one-half of the pension dollar from both sources that have accrued during their marriage.

At the outset we reject the argument that petitioner should be entitled to one-half of her husband's social security benefits. The record contains almost no argument or facts which aid in determining either party's projected social security retirement benefits, and under the federal social security law, it is well settled that the petitioner, as a divorced wife, having been married to the respondent for 28 years, will be entitled to receive retirement benefits from her divorced husband's social security account. Her receipt of these benefits is not altered by the divorce and does not reduce the respondent's social security benefits in any way. The right to receive social security benefits is derived from statute and not from the common law. The federal statute, consistent with its remedial purpose, provides for the various contingencies of life including the dissolution of marriage. Since the statute itself provides for an equitable distribution of its benefits to dependents, spouses, divorced spouses, and other family members in the event certain contingencies occur, we will not disturb the statutory scheme by suggesting any award of any part of the actual social security retirement benefits to which respondent may be entitled upon his reaching retirement age.

As indicated, the petitioner contends that the trial court erred in failing to award her an interest in the respondent's vested Caterpillar employee retirement benefits. The petitioner argues that a property settlement order, which was drafted by the respondent's attorney, listed the Caterpillar pension benefits and other benefits of the respondent as marital property, and therefore precludes his argument on appeal that the pension benefits are not property. We reject this argument. The pension rights of the parties are not labeled specifically as either marital property or non-marital property in the order finally entered. We also believe that such a classification by the trial court in its order, whether drafted by one of the parties to the litigation or by the trial judge himself, would not be binding upon us in our decision of the nature of the parties' pension rights upon the dissolution of their marriage.

In the case at bar, the trial court awarded each party their own respective pension benefits. Our Marriage and Dissolution of Marriage Act (Ill.Rev.Stat.1977, ch. 40, pars. 101-802) does not mention pension rights and therefore does not specify them to be either marital or non-marital property. In order to determine certain issues presented in this appeal we set forth for purposes of clarification the following definitive material:

"An employee's interest in a pension or profit sharing plan is said to be 'vested' if it is not forfeited by the discharge or voluntary retirement of the employee prior to retirement age. (In re Marriage of Brown (1976), 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561.) A vested interest should be distinguished from a 'matured' interest, that is, an unconditional right to immediate payment. (Brown.) An employee's right to pension or profit sharing benefits, for example, may vest after a term of service, but not mature until the employee reaches the age of retirement and elects to retire. Finally, a 'non-contributory' pension or profit sharing plan is one which is funded solely by the employer." (In re Marriage of Hunt (1st Dist., 1979), 78 Ill.App.3d 653, 658, 34 Ill.Dec. 55, 59, 397 N.E.2d 511, 515.) (Emphasis added.)

In the instant case at the date of the dissolution of the marriage of the parties the respondent had certain vested pension rights resulting from his employment with Caterpillar Tractor Company. This court has recently held that pension rights are marital property even though the same are not vested. (In re Marriage of Donley (1980), 83 Ill.App.3d 367, 38 Ill.Dec. 733, 403 N.E.2d 1337.) In arriving at the result in Donley reliance was had upon the decision in the case of In re Marriage of Hunt (1979), 78 Ill.App.3d 653, 34 Ill.Dec. 55, 397 N.E.2d 511. In Hunt the reviewing court stated:

"We hold that an employee spouse's contractual right to a pension or profit sharing interest is "property" under section 503 of the Illinois Marriage and Dissolution of Marriage Act (Ill.Rev.Stat.1977, ch. 40, par. 503), regardless of whether the interest is matured, vested or nonvested, or contributory or non-contributory." (34 Ill.Dec. at 60, 397 N.E.2d at 516.)

As we did in Donley, we conclude in the instant case that the trial court erred in not classifying the respondent's pension rights as marital property.

The petitioner-wife further contends that the respondent-husband's nonvested 72.4121 shares of Caterpillar Tractor Company common stock should have also been classified as marital property when a disposition of property was effected pursuant to the terms of the Marriage and Dissolution of Marriage Act (Ill.Rev.Stat. (1977), ch. 40, par. 503).

In view of our previous holding in Donley and reliance on the case of Hunt we agree with petitioner's contention. We are aware of the vexatious problems inherent in determining the value of nonvested property rights. An in-depth discussion of such problems was set forth by the supreme court of California in the case of In re Marriage of Brown (1976), 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561, and this case was recognized as "most important" by the reviewing court in Hunt (In re Marriage of Hunt (1979), 78 Ill.App.3d 653, 34 Ill.Dec. 55, 397 N.E.2d 511) which determined that rights in a pension or profit sharing plan are property whether the same be vested or nonvested. The fact that the ascertainment of the respondent's nonvested interest in the Caterpillar stock may be difficult does not result in it being considered non-marital property. The nonvested rights are susceptible to a determination as to their value and should be considered as marital property for purposes of a property division in a marriage dissolution proceedings. We set forth no guidelines for the trial court to follow in determining the valuation of rights in pension and profit sharing plans, since each case of necessity may result in the evolution of different procedures. We note, however, that there is no paucity of suggested...