Mick v. Mick, 12842

• Citation: 836 P.2d 93,1992 NMCA 59,114 N.M. 174
• Decision Date: 28 May 1992
• Docket Number: No. 12842,12842
• Parties: Norman E. MICK, Petitioner-Appellant, v. Hazel J. MICK, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

Page 93

836 P.2d 93

114 N.M. 174

Norman E. MICK, Petitioner-Appellant, v. Hazel J. MICK, Respondent-Appellee.

No. 12842.

Court of Appeals of New Mexico.

May 28, 1992.

Certiorari Granted July 9, 1992.

[114 N.M. 175] Darrell N. Brantley, Alamogordo, for petitioner-appellant.

Jefferson R. Rhodes, Burroughs & Rhodes, Alamogordo, for respondent-appellee.

OPINION

BIVINS, Judge.

This case is a domestic relations action involving the division of the parties' retirement benefits upon the dissolution of their marriage. Husband is presently retired and is receiving civil service retirement benefits. The trial court awarded each party half of Husband's retirement benefits. Although Wife's civil service retirement benefits have vested, Wife has not yet retired and at trial indicated that she had no present intention to retire. Husband contended at trial that the court should award him his portion of Wife's retirement benefits when Wife becomes eligible to retire even if Wife chooses to continue working. The trial court awarded Husband his interest in Wife's retirement benefits when Wife retires.

The sole issue in this appeal is whether the trial court erred in holding that Husband would not receive his interest in Wife's retirement benefits until Wife's retirement. This case is controlled by our recent decision in Ruggles v. Ruggles, --- N.M. ----, 834 P.2d 940 (Ct.App.1992). In Ruggles, we held that "pay as it comes in" under Schweitzer v. Burch, 103 N.M. 612, 711 P.2d 889 (1985), means that pensions should be divided when actually received, not, as argued by Husband here, at the earliest date they could potentially be received. We therefore affirm the decision of the trial court.

Judge Donnelly's dissent makes a strong argument for immediate distribution to a non-employee spouse of his or her community interest in the employee-spouse's retirement benefits, which are vested and matured, when the employee-spouse postpones distribution of those benefits by electing to continue to work. This court in Mattox v. Mattox, 105 N.M. 479, 734 P.2d 259 (Ct.App.1987), was similarly disturbed by the inequity of allowing the employee-spouse to unilaterally delay payment of retirement benefits to the detriment of the other spouse. In that case, we relied on In re Marriage of Gillmore, 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1 (1981), to support immediate division of the retirement benefits. We were only able to reach that result because of the prospective application of Schweitzer v. Burch, 103 N.M. 612, 711 P.2d 889 (1985). See Mattox, 105 N.M. at 484 n. 3, 734 P.2d at 264 n. 3 (where we recognized the "pay as it comes in" method was now mandatory). Mattox slipped through just before the gate closed and should not be read as modifying Schweitzer. See Alexander v. Delgado, 84 N.M. 717, 507 P.2d 778 (1973).

While it may seem unfair to require the non-employee spouse to wait until the employee-spouse retires to receive his or her share of retirement benefits, there is a countervailing inequity, as Judge Donnelly notes in his discussion of Schweitzer, in granting to the non-employee spouse an amount that might not even be received if the employee-spouse dies before the benefits are paid out. Thus, it is easy to see two inequities which result in a "Hobson's Choice."

On the one hand, by delaying distribution until the employee-spouse retires, the non-employee spouse is deprived of his or her share of a community asset distributable in cases where the interest is vested and matured but for the employee-spouse's election to continue working. On the other hand, if the employee-spouse is required to pay the non-employee spouse his or her share of the then vested and matured but not yet received retirement benefits, or set aside property equal in value to that interest the employee-spouse also suffers a detriment. The longer the employee-spouse works, the less retirement benefits that spouse will receive. In other words, the value of the benefits decreases each day the employee-spouse continues to work beyond the date of eligibility. Similarly, the employee-spouse suffers a potential detriment if he or she dies before receiving the retirement benefits. In either case, that spouse will have paid the non-employee spouse his or her share of the benefits without receiving an equivalent share. Moreover, it is certainly conceivable that an employee-spouse could be forced into retirement in situations where the economics would not allow continuation of employment.

This approach finds support in cases dealing with division of other marital assets upon divorce. In Cox v. Cox, 108 N.M. 598, 775 P.2d 1315 (Ct.App.), cert. denied, 108 N.M. 624, 776 P.2d 846 (1989), this court found it more equitable to require a spouse to pay goodwill "in the future as and when it is actually received" rather than pay to his or her spouse a share of current value of the business. Id. 108 N.M. at 601, 775 P.2d at 1318. We reasoned that this approach "precludes having the professional spouse pay a lump sum at the time of the dissolution for goodwill which may never actually be received. It prevents a 'hypothetical forced sale' of the business." Id.

In addition, we believe that implicit in Schweitzer is the recognition that there is no way to achieve total fairness and a policy that favors people continuing to be productive citizens as long as they are able, even beyond retirement eligibility. This policy is consistent with legislation that disfavors job discrimination based on age. See, e.g., NMSA 1978, Sec. 28-1-7(A) (Repl.Pamp.1991).

For the reasons stated, we affirm the trial court.

IT IS SO ORDERED.

ALARID, C.J., concurs.

DONNELLY, J., dissents.

DONNELLY, Judge (dissenting).

I dissent from the decision reached by the majority. In my view the majority misapplies Schweitzer v. Burch, 103 N.M. 612, 711 P.2d 889 (1985), and this court's decision in Ruggles v. Ruggles, 114 N.M. 63, 834 P.2d 940 (Ct.App.1992), to arrive at an inequitable result.

This case involves the issue of whether the district court erred in determining that an employee spouse can indefinitely delay payment of the non-employee spouse's interest in the retirement benefits, where the retirement plan was fully vested at the time of divorce and within a brief period following the divorce the employee spouse's retirement benefits fully matured.

At the time of divorce, Husband had previously retired from his civil service position and Wife was awarded one-half of Husband's retirement benefits. She is currently receiving these benefits from Husband's retirement plan. Wife, who is the same age as Husband, is employed at Holloman Air Force Base. She testified that her civil service retirement benefits have previously vested and she will be entitled to receive her full retirement benefits in May 1992. She testified, however, that she has no present intention to retire and has not determined when she will do so. The question thus presented is whether the district court erred in holding that Wife may unilaterally delay Husband's receipt of his interest in Wife's retirement benefits by continuing to work beyond her retirement eligibility date without paying Husband's share of the retirement benefits.

In Schweitzer the supreme court considered the issue of whether an heir of a deceased, divorced spouse had a right to the community share of the pension of the deceased's former spouse. The court in Schweitzer modified its prior holding in Copeland v. Copeland, 91 N.M. 409, 575 P.2d 99 (1978), stating:

We now modify Copeland prospectively to hold that upon dissolution of marriage, unless both parties agree otherwise, the trial court must divide community property retirement benefits on a "pay as it comes in" basis. We also hold that any order dividing benefits on a "pay as it comes in" basis must be construed as terminating upon the death of either spouse, unless the amount contributed by the community has not yet been paid out in benefits. In that situation, the surviving spouse and the estate of the deceased spouse shall share any continuing payments until the non-employee spouse, or his or her estate, shall have received an amount equal to his or her proportionate share of the community contributions to the retirement plan.

103 N.M. at 615, 711 P.2d at 892.

The court's objective in Schweitzer was to "assure equity and fairness" because, by permitting lump-sum awards at the time of divorce, it "would grant to the non-employee spouse an amount that might not ever be received if either spouse died before the projected benefits had been paid out." Id. Schweitzer noted that under a lump-sum payment option of an employee spouse's retirement benefits, "[t]he inequality [is] compounded if the employee spouse died first, having received only a portion of his or her divided share but having paid the ex-spouse the present value of all his or her estimated lifetime share under the lump sum decree." Id.

I do not believe that the Schweitzer court, in fashioning a rule to achieve greater fairness and equity, intended to require strict adherence to the "pay as it comes in" rule in situations where the pension was vested at the time of divorce and has now fully matured. The end result of extending the decision in Schweitzer so as to unreasonably delay distribution of the community assets after the retirement plan has vested and matured, under the facts of the instant case, is itself contrary to equity and fairness. As Husband points out, the...