Marriage of Holmes, In re

• Decision Date: 08 October 1992
• Docket Number: No. 91CA1415,91CA1415
• Citation: 841 P.2d 388
• Parties: In re the MARRIAGE OF Carole Janine HOLMES, Appellant, and Michael H. HOLMES, Appellee. . I
• Court: Colorado Court of Appeals

Page 388

841 P.2d 388

In re the MARRIAGE OF Carole Janine HOLMES, Appellant,

and

Michael H. HOLMES, Appellee.

No. 91CA1415.

Colorado Court of Appeals,

Div. I.

Oct. 8, 1992.

White, Pickard & Herren, Mary Ray White, Doris A. Waters, Denver, for appellant.

Myers, Hoppin, Bradley and DeVitt, P.C., Charles T. Hoppin, Denver, for appellee.

Opinion by Judge BRIGGS.

In this dissolution of marriage proceeding, Carole Janine Holmes (wife) contends that the trial court erred in determining that a severance plan provided to Michael H. Holmes (husband) does not constitute marital property. We affirm.

I.

The parties were married for approximately twenty-three years when the decree of dissolution was entered. During all but the first four years of the marriage, the husband was employed by Public Service Company at its Fort St. Vrain Nuclear Operations Division.

Two years prior to the dissolution Public Service notified its employees that the nuclear plant was going to be decommissioned. During the decommissioning process employees were to be released in phases.

Under a plan offered to the husband and other employees, an employee would receive a notice of termination. The employee would then have 90 days to choose one of three options. The employee could (1) secure a transfer to another position within the company and receive no severance or additional benefits; (2) choose a career continuation plan and receive an additional 90 days continued salary, career counseling, and benefits, and if unable to transfer to another position in the company within such 90 days, receive a reduced lump-sum severance payment based on length of service plus three months of continued health insurance; or (3) terminate employment after expiration of the 90-day notification period and be entitled to one year's salary plus a benefit supplement to obtain continued health insurance coverage.

The plan was designed as an incentive to retain the work force necessary to complete nuclear operations, defueling, and component removal. It was also intended to provide employees with options concerning career continuation and with a fair and equitable incentive to remain in their positions until their services were no longer required.

To qualify for the options, an employee must receive the notice of termination while still employed. An employee is ineligible for the plan if, before receiving the notice of release, the employee quits, is fired, dies, is disabled, or transfers to another division of the company. At the time of the decree, the husband had not yet received a notice of termination, and it was unknown when he would.

The trial court found that the severance plan was not deferred compensation for work or services that had been performed by the husband during the course of the marriage. It also found that, although the plan was enacted during the marriage and would be valued based upon the length of service performed during the marriage, the right to such severance was dependent on receiving a company termination notice. Thus, the trial court concluded that any benefits under the plan were not marital property.

II.

The wife asserts that the trial court's determination that any payments the husband may receive under the personnel plan do not constitute marital property is contrary to the reasoning and rationale of recent case law expanding the scope of marital property. We disagree.

In a dissolution of marriage, property must be classified realistically based upon the nature of the asset in question. In re Marriage of Grubb, 745 P.2d 661 (Colo.1987). We have adopted an analytical approach under which deferred compensation for past services rendered is marital property to the extent that the benefits are attributable to employment during marriage. Benefits found to be marital property include vested but unmatured pension plans, In re Marriage of Grubb, supra; vested and matured military retirement payments, In re Marriage of Gallo, 752 P.2d 47 (Colo.1988); and non-vested military retirement benefits. In re Marriage of Beckman, 800 P.2d 1376 (Colo.App.1990).

In contrast, workers' compensation benefits which provide compensation for post-dissolution loss of earning capacity are not marital property. In re Marriage of Smith, 817 P.2d 641 (Colo.App.1991). Similarly, payments under a contract for three years employment which were to be received after the date of dissolution are not marital property, but, rather, constitute future income which is not subject to division. In re Marriage of Anderson, 811 P.2d 419 (Colo.App.1990).

In most cases, the ostensible purpose of severance pay is to provide a salary substitute for the worker while he or she searches for a new job. J. McCahey, Valuation & Distribution of Marital Property § 23-04 at 23-62 (1992). Such pay typically compensates the employee for the economic exigencies and detriments resulting from permanent separation from service without fault and is intended primarily to alleviate the consequent need for economic readjustment and to compensate for certain losses attributable to dismissal. In re Marriage of Bishop, 729 P.2d 647 (Wash.App.1986).

The evidence here shows that any payments the husband may receive under the personnel program constitute severance pay to replace expected loss of income and not deferred compensation for services rendered during the marriage. A representative of Public Service explained that the purpose of the plan is "to assist people in finding a job after they have been released from [the] company so that they have some means of support--if they take the severance option--as they look for a new job." He testified that no benefits survive death, a beneficiary of the benefits may not be designated, and the plan is not compensation for past work. Rather, payments under the plan are considered a substitute for unemployment compensation. All payments are subject to normal wage withholdings for federal and state income taxes, social security taxes, and...