Marriage of Smith, In re, 79-459

• Decision Date: 03 June 1980
• Docket Number: No. 79-459,79-459
• Citation: 84 Ill.App.3d 446,39 Ill.Dec. 905,405 N.E.2d 884
• Parties: , 39 Ill.Dec. 905 In re the Marriage of Barbara SMITH, Petitioner-Appellant, and Donald C. Smith, Respondent-Appellee.
• Court: United States Appellate Court of Illinois

Page 884

405 N.E.2d 884

84 Ill.App.3d 446, 39 Ill.Dec. 905

In re the Marriage of Barbara SMITH, Petitioner-Appellant and Donald C. Smith, Respondent-Appellee.

No. 79-459.

Appellate Court of Illinois, Third District.

June 3, 1980.

John F. Cirricione, Cirricione, Block, Krockey & Cernugel, P. C., Joliet, for petitioner-appellant.

Harry C. McSteen, McSteen, Phelan & Egan, P. C., Joliet, for respondent-appellee.

STOUDER, Justice:

Petitioner Barbara Smith filed a petition for legal separation, amended by interlineation to a petition for dissolution of marriage, in the circuit court of Will County against the respondent Donald C. Smith. After a hearing on the matters of distribution of property and appropriateness of maintenance, the trial court affirmed its previous judgment for dissolution of marriage, distributed various properties and awarded maintenance in gross as hereinafter set forth. Petitioner perfected this appeal from the property distribution and maintenance provisions of the decree.

The Smiths were married on June 29, 1950 in Manistee, Michigan and have two children, both of whom are emancipated but continue to reside with their mother. Petitioner, a graduate of Purdue University, was employed as a teacher and by two major oil companies during the first four years of the marriage. Respondent was employed as a pilot for United Airlines in 1952 and the couple, after several earlier relocations, purchased a home in Plainfield, Illinois in 1954.

In February, 1969, the Smiths opened a liquor store in Plainfield. Petitioner was active in the operation of the business until October, 1974 and clerked, kept books, and, along with respondent, did janitorial work. Other than her work in conjunction with the liquor store and as a part-time income tax preparer, petitioner has remained unemployed since 1954.

In October, 1974, the parties separated and petitioner continued to occupy the Plainfield residence with the then minor children. Complaints for divorce and separate maintenance were filed by the parties but dismissed for want of equity.

In January, 1976, respondent suffered a heart attack and was subsequently retired by United Airlines as being totally disabled to pilot an aircraft. Respondent receives a disability pension of $2,367.00 and social security payment of $436.00 per month. The liquor store is currently operating at a loss and the income from a rental property is not referenced in the record.

On appeal, petitioner contends the trial court erred in finding respondent's disability pension and loss of license insurance are not marital property, and that its division of life insurance policies, award of maintenance in gross, and overall division of marital property are against the manifest weight of the evidence.

We first consider whether the respondent's disability pension constitutes marital property. The relevant statutory authority is section 503 of the Illinois Marriage and Dissolution of Marriage Act (Ill.Rev.Stat.1977, ch. 40, par. 503.) which defines the concept as follows:

"(a) For purposes of this Act, 'marital property' means all property acquired by either spouse subsequent to the marriage, except the following, which is known as 'non-marital property':

(1) property acquired by gift, bequest, devise or descent;

(2) property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise or descent;

(3) property acquired by a spouse after a judgment of legal separation (4) property excluded by valid agreement of the parties;

(5) the increase in value of property acquired before the marriage; and

(6) property acquired before the marriage.

(b) All property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity or marriage is presumed to be marital property, regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a) of this Section.

* * *"

It can thus be seen that all property acquired after marriage and before dissolution of marriage is marital property, unless it falls into a category excepted by the statute. As the subject disability pension does not expressly fall into an excepted category, it constitutes marital property if it can be characterized as property acquired during the marriage.

The question of whether a disability pension is marital property has not previously been passed upon by the courts of this state. The related question of whether a longevity pension is property was addressed by the court in In re Marriage of Musser (1979), 70 Ill.App.3d 706, 27 Ill.Dec. 240, 388 N.E.2d 1289. In that case, the husband was retired from the military and receiving retirement benefits after a marriage spanning 217 months of the husband's 240 months of service in the military. After reviewing the decisional law of other jurisdictions, the court held that 217/240 of the benefits were marital property as "an earned property right which accrues by reason of the individual's years of military service." In re Marriage of Musser, supra, 27 Ill.Dec. at 242, 388 N.E.2d at 1291.

Subsequent Illinois decisions have similarly found pension benefits to be marital property. In re Marriage of Hunt (1979), 78 Ill.App.3d 653, 34 Ill.Dec. 55, 397 N.E.2d 511 involved a civilian pension and profit sharing plan. In that case, the husband was not retired nor receiving benefits but was apparently eligible to receive benefits from the noncontributory plans at retirement. After a decisional review, the court concluded:

" * * * The cases discussed above convince us that such a contractual pension or profit sharing interest, whether matured, vested or nonvested, contributory or noncontributory, is a chose in action (People for use of Vancil Motor Co. v. Weaver (1942), 313 Ill.App. 317, 40 N.E.2d 83) and 'property' (see 30 Ill.L. & P., Property, sec. 3 (1957)) under section 503 of the Illinois Marriage and Dissolution of Marriage Act. Therefore, any part of such pension or profit sharing interest earned, that is, 'acquired', during marriage is marital property. * * *" In re Marriage of Hunt, supra, at 662, 34 Ill.Dec. at 62, 397 N.E.2d at 518.

Pieper v. Pieper (1979), 79 Ill.App.3d 835, 34 Ill.Dec. 877, 398 N.E.2d 868 involved a police pension. The husband in that case had worked in a police force throughout the marriage and was eligible to retire and draw pension benefits in less than four years. The husband raised no argument concerning the vesting of benefits and the court concluded the future benefits were marital property as "part of the consideration earned by the employed spouse for his service." Pieper v. Pieper, supra, 34 Ill.Dec. at 880, 398 N.E.2d at 871.

In re Marriage of Donley (1980), 83 Ill.App.3d 367, 38 Ill.Dec. 733, 403 N.E.2d 1337 involved a contributory pension which the husband was not receiving and which had not vested. While that case held a valuation of the pension rights was necessary and remanded the cause for that purpose, it adopted the Hunt rationale concerning the unvested nature of the pension in so doing.

Thus it is clear that the Illinois courts have consistently found pension plan benefits to be marital property.

Turning now to the first question at bar, we consider the decisions of other jurisdictions as entitled to respect (Cf. Cooper v. Hinrichs (1957), 10 Ill.2d 269, 140 N.E.2d 293), initially noting those decisions concerning disability benefits which have been found to be community or divisible property.

Busby v. Busby (Tex.1970), 457 S.W.2d 551 involved military disability retirement benefits. The husband in that case began to receive the benefits after the parties were divorced and contended that disability benefits should be distinguished from vested voluntary retirement benefits, which were considered community property under previous Texas decisions. The court held that its analysis of the two types of military benefits dictated the conclusion that the disability payments should similarly be classified as community property. A private employment disability retirement pension based in part on length of employment was similarly considered community property in Copeland v. Copeland (Tex.Civ.App.1976), 544 S.W.2d 183.

Guy v. Guy (1977), 98 Idaho 205, 560 P.2d 876 involved noncontributory private employment disability benefits, stemming from a group term disability insurance policy, which the husband was receiving. The court considered community labor to be the source of the benefits, which it stated were "designed to compensate for loss of earnings" (Guy v. Guy, supra, 560 P.2d at 879) and "paid as partial consideration for past employment" (Guy v. Guy, supra, 560 P.2d at 878) and concluded the benefits were community property.

Other community property jurisdictions holding various disability benefits to be community property include Arizona (Flowers v. Flowers (C.A.1978), 118 Ariz. 577, 578 P.2d 1006) and Louisiana. Succession of Scott (1956), 231 La. 381, 91 So.2d 574.

Disability benefits have similarly been characterized as divisible property in a noncommunity property jurisdiction.

Kruger v. Kruger (1976), 139 N.J.Super. 413, 354 A.2d 340, involved both military retirement and disability benefits which the husband was receiving. The court stated both benefits, to which the husband was irrevocably entitled to receive for life, were assets subject to equitable distribution to the extent the entitlements were based upon military service during the marriage. It further stated the obligation to remit the fraction of each periodic payment awarded to the wife would terminate upon her death, acknowledging this treatment gave the benefits the hybrid attributes of both...