Mattox v. Mattox, 8319

• Decision Date: 10 February 1987
• Docket Number: No. 8319,8319
• Citation: 734 P.2d 259,1987 NMCA 21,105 N.M. 479
• Parties: , 8 Employee Benefits Cas. 1666 Dolores H. MATTOX, Petitioner-Appellee, Cross-Appellant, v. Donald M. MATTOX, Respondent-Appellant, Cross-Appellee.
• Court: Court of Appeals of New Mexico

Page 259

734 P.2d 259

105 N.M. 479, 8 Employee Benefits Cas. 1666

Dolores H. MATTOX, Petitioner-Appellee, Cross-Appellant, v. Donald M. MATTOX, Respondent-Appellant, Cross-Appellee.

No. 8319.

Court of Appeals of New Mexico.

Feb. 10, 1987.

[105 NM 480] Elizabeth Gabriel, Albuquerque, for respondent-appellant cross-appellee.

Sandra Morgan Little, Atkinson & Kelsey, P.A., Albuquerque, for petitioner-appellee cross-appellant.

OPINION

BIVINS, Judge.

Respondent-appellant (husband) and petitioner-appellee (wife) appeal the decision of the trial court in this divorce proceeding. Husband raises five issues: (1) whether the trial court properly valued his pension plan; (2) whether the trial court properly valued his employee stock option plan; (3) whether the trial court properly valued his employee savings plan; (4) whether the trial court erred in the award of a coin collection as husband's separate property when its value was already included in the award of household goods; and (5) whether the trial court abused its discretion in awarding lump sum alimony in addition to alimony of $500 a month for one year. We affirm on issues 1 and 2 and remand as to issue 3 with instructions. As to issue 4, we grant the parties' request to correct the arithmetic error on the personal property list. We discuss issue 5 in conjunction with wife's cross-appeal since the parties appeal the common issue of alimony.

Wife raises two issues on cross-appeal: (1) whether the trial court erred in awarding alimony for one year only; and (2) whether the trial court erred in not awarding wife attorney fees at trial. We affirm on both issues.

The parties married on September 6, 1953. Husband, aged fifty-two at the time of appeal, has worked at Sandia National Laboratories since 1961 and currently earns approximately $68,500 per year. Wife taught school sporadically during the marriage, but remained at home during most of the marriage. The parties have one married daughter. Since separating in September 1983, wife, aged fifty-two at the time of appeal, has become recertified to teach elementary school in New Mexico. Starting salary for teachers is approximately $13,000 for a nine-month period. On May 31, 1984, the trial court heard issues regarding the property settlement, valuation of property and alimony. On December 27, 1984, the trial court issued its findings of fact, distributing $203,820 of community assets to wife and $187,459 of community assets to husband. The trial court awarded temporary alimony of $500 per month to wife for one year plus the difference in the value of the property award as lump sum alimony. Although the trial court found economic disparity between the parties, it ordered each party to pay his or her own attorney fees. The trial court entered its judgment and final decree of dissolution of marriage on December 27, 1984. We address husband's issues first.

PENSION

Husband contends that the trial court erred in valuing his vested, but unmatured, pension plan. Specific errors alleged include: a) the valuation date; b) the retirement date; c) the discount rate; d) the non-withdrawal of contributions option; and e) failure to consider tax consequences. We address each point separately.

a) Valuation Date

The community's interest in a pension plan that is vested but unmatured is the amount of benefits earned during coverture. Copeland v. Copeland, 91 N.M. 409, 575 P.2d 99 (1978). "The significance of Copeland * * * is that the Court was willing to divide the husband's future retirement benefits at the time of the divorce even though the right to receive them had not yet actually [matured] completely." Hughes v. Hughes, 96 N.M. 719, 723, 634 P.2d 1271, 1275 (1981). To value unmatured pension benefits, the trial court must determine their present value. Ridgway v. Ridgway, 94 N.M. 345, 610 P.2d 749 (1980). Present value is " 'the amount which must be invested at present to produce a required number of annual payments of a given amount, or a required future total investment, including retained interest, at a stated rate of interest over a specified number of years.' " Id. at 346-47 n. 1, 610 P.2d at 750-51 n. 1 (quoting D. Clark & B. Gottfried, University Dictionary of Business & Finance (1967)). "Whether or not the pension is matured, the first step is to determine its future value, expressed as a lump sum. Discount factors are then employed to calculate the present cash value of this sum." In re Marriage of Pilant, 42 Wash.App. 173, 179, 709 P.2d 1241, 1245 (1985).

New Mexico cases state clearly that a spouse is entitled to a community share of the portion of retirement that is vested but unmatured at the date of divorce. Copeland; Madrid v. Madrid, 101 N.M. 504, 684 P.2d 1169 (Ct.App.1984). Accord Hurley v. Hurley, 94 N.M. 641, 615 P.2d 256 (1980), overruled on other grounds, Ellsworth v. Ellsworth, 97 N.M. 133, 637 P.2d 564 (1981). In Madrid, however, husband was already receiving pension benefits; only the status of post-divorce increases was in question. In our case, neither the parties nor the trial court considered further payment by husband after the divorce.

Husband's pension plan is a defined benefit plan.

In a defined benefit plan[,] "the company obligates itself to pay a specified monthly pension at retirement * * *. The employee's present interest * * * is derived from the amount of monthly pension promised at retirement. * * * [We value this] interest * * * by first determining the value of the pension measured at the future retirement date, and then discounting that value back to the present date of valuation * * *."

In re Marriage of Stephenson, 162 Cal.App.3d 1057, 1082-83, 209 Cal.Rptr. 383, 400 (1985) (quoting Projector, Valuation of Retirement Benefits in Marriage Dissolutions, 50 L.A.Bar Bull. 229, 231 (1975)).

The valuation date used in our case was the date of trial. The experts considered only husband's monetary contributions during the marriage. The only uncertainty was whether husband would live twenty-two months until April 1986, the maturity date of the plan. Discounting to present value accounts for the possibility that the pension will not mature. The record indicates that wife's expert valued husband's future right to receive the pension as of the trial date and discounted the pension to present value. This was a proper method. See Stephenson.

We are concerned only with valuing the pension for purposes of dividing the community property, not with apportioning deferred benefits to the parties on a "pay as it comes in" basis. In our case, the trial court found that the present value of husband's pension was $101,239. Neither the findings nor the judgment mentions a valuation date used in reaching this figure. Husband contends that a letter opinion issued by the trial judge on September 13, 1984, uses April 1984, rather than April 1986, as a valuation date. While the letters, remarks, or opinion of a trial judge may be looked to in clarifying ambiguities or inconsistencies in the findings, the formal findings must prevail. Sanders v. Carmichael Enterprises, 57 N.M. 554, 260 P.2d 916 (1953). Here, since the trial court's findings were silent on the valuation date used, the findings contain no ambiguities or inconsistencies, ¹ and so prevail over the letter of the trial court.

The trial court's findings, of course, must be supported by substantial evidence. Berry v. Meadows, 103 N.M. 761, 713 P.2d 1017 (Ct.App.1986). The trial court used wife's expert's figure of the present value in reaching a value. Both experts testified that their calculations did not take into account husband's earnings between the date of trial, May 31, 1984, and the maturity date of the pension, April 1986. The trial court's valuation falls within the range of figures offered through expert testimony. See In re Marriage of Bergman, 168 Cal.App.3d 742, 214 Cal.Rptr. 661 (1985). The substantial evidence requirement is met.

Husband contends that the trial court should have valued the pension as if husband quit working on June 1, 1984, an approach that would invoke early retirement penalties. We disagree. First, no evidence supports this assumption because husband testified that he would continue to work at Sandia. See In re Marriage of Bayer, 687 P.2d 537 (Colo.App.1984). Second, although husband received all of the pension, he wants to value it at the lower figure as if early retirement penalties had been imposed. This would severely penalize the nonemployee spouse. If wife had received one-half of the pension on a "pay as it comes in" basis, the pension would have been valued at the higher figure. Third, husband states several times in his brief-in-chief that even though the experts' calculations assume that husband will not earn any more money, the community is not entitled to use future employment years in valuing the pension. Husband cites no authority for this proposition. We assume no authority was found. In re Adoption of Doe, 100 N.M. 764, 676 P.2d 1329 (1984). Finally, such an approach would come dangerously close to defeating the community interest of the nonemployee spouse. See generally In re Marriage of Gillmore, 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1 (1981). Failing to use future employment years in valuing the pension would not effect an equal division of community property mandated by New Mexico case law. Ellsworth v. Ellsworth, 97 N.M. 133, 637 P.2d 564 (1981).

The fact that a spouse cannot receive any benefits until a certain age does not affect the character of the pension rights which are unmatured but vested. In re Marriage of Bruegl, 47 Cal.App.3d 201, 120 Cal.Rptr. 597 (1975), overruled on other grounds, In re Marriage of Brown, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561 (1976). Husband has a vested right to his defined benefit pension plan. He is irrevocably entitled to collect benefits. Copeland. When the pension plan matures, husband is eligible to retire and is...