Marriage of Hunt, In re

• Decision Date: 18 December 1995
• Docket Number: Nos. 93SC565,93SC631,s. 93SC565
• Citation: 909 P.2d 525
• Parties: In re the MARRIAGE OF John S. HUNT, Petitioner, and Dianna L. Hunt, Respondent. In re the MARRIAGE OF Mark Stephen RAIMER, Petitioner, and Melissa Harte-Raimer, Respondent.
• Court: Colorado Supreme Court

Page 525

909 P.2d 525

In re the MARRIAGE OF John S. HUNT, Petitioner and Dianna L. Hunt, Respondent In re the MARRIAGE OF Mark Stephen RAIMER, Petitioner and Melissa Harte-Raimer, Respondent.

Nos. 93SC565, 93SC631.

Supreme Court of Colorado.

Dec. 18, 1995.

Rehearing Denied (93SC631) Jan. 29, 1996.

Thomas, Porter, Spence & Patin, P.C., Arthur W. Porter, Bryan L. Hunt, Colorado Springs, for Petitioner John S. Hunt.

Susemihl, Lohman & McDermott, P.C., Richard V. Lohman, Catherine Woelk-Rudisill, Colorado Springs (William L. Carew, Colorado Springs, of counsel), for Respondent Dianna L. Hunt.

John E. Kirchner, Colorado Springs, for Amicus Curiae Nelson O. Kelm.

Gregory John Hock, P.C., Gregory John Hock, Colorado Springs, for Petitioner Mark Stephen Raimer.

Greg Van Culin, Colorado Springs, for Respondent Melissa Harte-Raimer.

Justice MULLARKEY delivered the Opinion of the Court.

We granted certiorari in In re Marriage of Hunt, 868 P.2d 1140 (Colo.App.1993), and in In re Marriage of Raimer, No. 92CA0759 (Colo.App. Aug. 5, 1993), to determine whether pension increments based on post-dissolution increases in rank are included in determining what portion of a military pension is subject to division as marital property. In both cases, the court of appeals affirmed the trial courts' deferred distribution of military pensions based on the "time rule" formula which includes distribution of benefits attributable to post-dissolution increases in rank. The petitioners, in both instances the husbands, petitioned the court to review the distributions. We issued a consolidated opinion on May 15, 1995, reversing judgment in both cases and remanding with directions. By order dated June 19, 1995, we granted the respondents' motions for rehearing and withdrew our previously issued opinion. After requesting and receiving additional briefs, we now affirm the court of appeals' decision in Hunt and approve the trial court's distribution in that case. We reverse the court of appeals' decision in Raimer. We find that the trial court in Raimer abused its discretion in altering the "time rule" formula.

I.

A. In re Marriage of Hunt

The petitioner, John Hunt (Husband), and the respondent, Dianna Hunt (Wife), were married in 1977 and divorced fourteen years later in 1991. During their marriage, Husband earned ten years of creditable service, of the required twenty years, towards retirement from the United States Air Force. At the time of their divorce, Husband had achieved the rank of Captain. In October 1991, the trial court entered permanent orders dividing the parties' property. The trial court deferred distribution of Husband's military pension and determined that Wife should receive fifty percent of 10/20 of his pension on an as-received basis at the time he retires. In effect, the trial court's ruling grants Wife a portion of Husband's pension based upon the rank he achieves at the time of retirement rather than his rank of Captain at the time of the divorce. Husband appealed that portion of the trial court's distribution.

The court of appeals affirmed the trial court's division noting that Husband's "limited view of the value of the retirement benefit earned during marriage will not result in an equitable distribution." Hunt, 868 P.2d at 1142. In so holding, the court of appeals cited authority for the proposition that advancements resulting in higher benefits are " 'developed and enhanced throughout the course of the parties' ... years of marriage.' " Id. (quoting Bullock v. Bullock, 354 N.W.2d 904, 910 (N.D.1984)). The court of appeals also reaffirmed "the trial court's discretion to fashion an equitable division." Hunt, 868 P.2d at 1142.

B. In re Marriage of Raimer

The petitioner, Mark Stephen Raimer (Husband), and the respondent, Melissa Harte-Raimer (Wife), received a decree of dissolution on November 6, 1990, thereby ending their sixteen-year marriage. At the time of divorce, Husband was a member of the military and held the position of Major. He had accumulated eighteen years and six months towards his retirement. Of those, fourteen years were accumulated during his marriage to Wife. The military pension was the only asset of any real value accumulated during the course of the marriage.

On July 1, 1991, the trial court initially awarded Wife twenty-five percent of Husband's pension attributable to the rank and longevity attained by Husband on the date of dissolution. ¹ Thereafter, the trial court, on Wife's motion to amend and clarify its judgment, amended its decision and accorded Wife forty percent of the marital fraction (fourteen years over the number of years of service when Husband retires) of the benefit on an as-received basis. The trial court explained that it used forty percent instead of fifty percent in allocating the marital portion of the pension because of what it deemed Wife's "lukewarm" support of Husband's military career.

The court of appeals denied Husband's appeal of the trial court's amended order, summarily invoking its decision in Hunt. Raimer, slip. op. at 5.

II.

A.

A trial court's distribution of property between spouses upon dissolution is controlled by the Uniform Dissolution of Marriage Act (the UDMA), §§ 14-10-101 to -133, 6B C.R.S. (1987 & 1995 Supp.), and, more specifically, the criteria enumerated in section 14-10-113, 6B C.R.S. (1987), which sets forth in relevant part that:

(1) In a proceeding for dissolution of marriage or in a proceeding for legal separation or in a proceeding for disposition of property following the previous dissolution of marriage by a court which at the time of the prior dissolution of the marriage lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, the court shall set apart to each spouse his property and shall divide the marital property, without regard to marital misconduct, in such proportions as the court deems just after considering all relevant factors including:

(a) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;

(b) The value of the property set apart to each spouse;

(c) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children; and

(d) any increases or decreases in the value of separate property of the spouse during the marriage or the depletion of the separate property for marital purposes.

The UDMA establishes a two-part inquiry. Upon dissolution, a court first must determine whether an interest is "property." If so, the court next determines whether the property is "marital," i.e., acquired during the marriage and subject to distribution, or "separate" and shielded from distribution.

The UDMA incorporates a presumption that any property acquired by a spouse subsequent to the marriage, regardless of the form of ownership, is marital property. § 14-10-113(3). Separate property is distinguished from marital property in section 14-10-113(2) which states that:

(2) For purposes of this article only, "marital property" means all property acquired by either spouse subsequent to the marriage except:

(a) Property acquired by gift, bequest, devise, or descent;

(b) Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;

(c) Property acquired by a spouse after a decree of legal separation; and

(d) Property excluded by valid agreement of the parties.

Property is valued "as of the date of the decree or as of the date of the hearing on disposition of property if such hearing precedes the date of the decree." § 14-10-113(5).

B.

Pension plans come in many complex varieties and forms, including vested or unvested pensions, matured or unmatured pensions, defined benefit or defined contribution pensions, contributory or noncontributory pensions, etc. ² A military pension has certain unique attributes. A military pension is a defined benefit plan and is non-contributory in nature because only the employer contributes. In a military pension, an employee earns "credits" towards a pension based on, for example, years of active service. 10 U.S.C. § 1405 (1983). A military pension vests after twenty years of creditable service. There is no partial vesting; a member of the military must attain twenty years of service or forfeit the entire pension. 3 William M. Troyan et al., Valuation & Distribution of Marital Property § 46.32 (1995). Pension benefits are computed as a specific percentage of the active duty pay for the rank held at the date of retirement for each year of creditable service. 10 U.S.C. §§ 1406, 1407 (1983 & 1995 Supp.).

We have held that pension plans, including military pensions, are "property" under the UDMA and, if marital, are subject to division. In re Marriage of Gallo, 752 P.2d 47, 54 (Colo.1988) ("vested and matured military retirement pay, which has accrued during all or part of a marriage, constitutes marital property subject to equitable division in a dissolution proceeding"); In re Marriage of Grubb, 745 P.2d 661, 665 (Colo.1987) ("vested but unmatured employer-supported pension plan, to the extent that such plan has been funded by employee and/or employer contributions during the course of a marriage, is marital property subject to equitable distribution in a dissolution proceeding") (footnote omitted).

Here, we are faced with noncontributory defined benefit pension plans that are both unvested and unmatured. Such plans are affected by different contingencies from those considered in Gallo and Grubb in which the plans were vested. In particular, if a plan is not vested, the amount of the benefit is unknown: it can increase or decrease depending on a number of variables. Consequently, some courts that have...