Miller v. Miller

• Decision Date: 28 June 1990
• Parties: Karen R. MILLER, Appellee, v. Kurtz J. MILLER, Appellant.
• Court: Pennsylvania Superior Court

Page 205

577 A.2d 205

395 Pa.Super. 255

Karen R. MILLER, Appellee, v. Kurtz J. MILLER, Appellant.

Superior Court of Pennsylvania.

Argued March 8, 1990.

Filed June 28, 1990.

Arthur T. McDermott, Carlisle, for appellant.

Ellen M. Averett, Gettysburg, for appellee.

Before WIEAND, TAMILIA and POPOVICH, JJ.

POPOVICH, Judge:

This appeal stems from the May 15, 1989, order of the Court of Common Pleas of Adams County granting a decree in divorce and directing an award of equitable distribution. Appellant raises the following issues:

1) Did the court properly evaluate the factors set forth in 23 Pa.S.A. § 401(d) in awarding appellee the bulk of the marital estate?

2) May the court treat that portion of appellant's pension waived in order to receive veterans' disability benefits as marital property?

3) Should a vested, matured, and currently being received pension be distributed on an "actuarially based current value?"

4) Was appellant's military pension properly evaluated since service beyond thirty (30) years does not increase the percentage of the pension?

5) If the court's decision to award the "present value" of appellant's military pension was appropriate, should the present value be determined on the date of valuation or on the date of distribution?

6) Should appellant be given a reasonable opportunity to present his case?

For the following reasons, we vacate that part of the order as it pertains to equitable distribution, and remand for further proceedings consistent with this opinion. The provision granting the parties' divorce is affirmed.

The parties married on November 10, 1967. Upon appellant's retirement as a Colonel in October of 1973, the parties and their two (2) sons moved to New Oxford, Adams County. In 1979, they purchased and moved to a large farm near the Eisenhower farm in Gettysburg. The family remained there until July of 1984, when appellee and her sons left.

On November 2, 1984, appellee filed a complaint in divorce, seeking a property distribution, alimony, alimony pendente lite, counsel fees and expenses. Appellant filed an answer on May 19, 1987, and a motion to bifurcate on November 10, 1987. On December 21, 1987, appellee answered the motion, and the trial court ruled that the lack of information caused the matter to be continued at the call of either party.

Appellant filed an amendment to the answer and an affidavit under section 201(d) of the Pennsylvania Divorce Code on December 23, 1987. On March 14, 1988, appellant requested another hearing on his motion to bifurcate. The court granted his request and scheduled a hearing for April 25, 1988. Three (3) days later, the court ruled that questions existed and continued the matter at the call of either party.

A master's hearing was to be held on September 23, 1988. One (1) week prior, appellant informed the master that his health and lack of counsel precluded his attendance. The master informed appellant that she would grant a continuance upon the receipt of a doctor's excuse. No excuse was presented and appellant did not attend. The hearing was conducted as scheduled and on December 2, 1988, the master filed her report, recommending that appellee receive 60 percent of the marital estate.

Both filed exceptions to the report and the court ordered a February 22, 1989, hearing on the exceptions. The lower court issued its ruling on March 10, 1989, and ordered the parties to submit proposed distribution schemes. On April 10, 1989, the lower court awarded appellee 55 percent of the marital property. This order was incorporated into the May 15, 1989, final divorce decree, from which appellant takes this timely appeal.

Initially, when reviewing a trial court's determination of equitable distribution, an appellate court's scope of review is whether an abuse of discretion occurred. In Johnson v. Johnson, 365 Pa.Super. 409, 529 A.2d 1123 (1987), allocatur denied, 517 Pa. 623, 538 A.2d 877 (1988), we stated:

Under this standard, we do not usurp the hearing court's duty as fact finder. Rather we apply the legislative guidelines of the Divorce Code to the record to determine whether or not the hearing court has abused its discretion. An abuse of discretion is not found lightly, but only upon a showing of clear and convincing evidence.... However, an abuse of discretion will be found by this Court if the trial court failed to follow proper legal procedure or misapplied the law. (Citations omitted).

Id., 365 Pa.Super. at 412, 529 A.2d at 1124.

We will first address the issue upon which we vacate and remand. Appellant argues that the portion of his pension waived to receive veteran's disability benefits cannot be treated as marital property. We agree and vacate and remand for the court to re-determine the equitable distribution of appellant's pension.

The recent United States Supreme Court decision in Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989), has been followed by this Court in Martin v. Martin, 385 Pa.Super. 554, 561 A.2d 1231 (1989). In Mansell, the Court held:

....that the Former Spouses Protection Act does not grant state courts the power to treat, as property divisible upon divorce, military retirement pay that has been waived to receive veterans disability benefits.

Mansell, supra, 109 S.Ct. at 2031.

Following the directive in Mansell, this Court stated that:

....to the extent Pennsylvania's Divorce Code allows equitable distribution of VA disability retirement pay, or pay waived to receive disability pay, the Code is pre-empted by federal law and cannot be given effect.

Martin, supra, 385 Pa.Super. at 562, 561 A.2d at 1235.

Instantly, VA disability benefits were included in the determination of the military pension distributed to the parties. Box one (1) of plaintiff's (appellee's) exhibit (15), dated March of 1988, reflects the appellant's retirement entitlement. This amount, $4096.00, was used by appellee's expert witness and The Office of The Assistant Secretary of Defense to determine appellant's pension value. See plaintiff's exhibits (3) and (4). Box two (2) of plaintiff's exhibit (15) reflects a deduction in the entitlement of $289.00. The description contained in box two (2) is "VA" and corresponds with plaintiff's exhibit (16), detailing appellant's disability compensation award.

Under the mandate of the United States Supreme Court, the disability compensation award should have been excluded from the value of appellant's pension. The sum contained in box eight (8) of plaintiff's exhibit (15), total entitlement, should have been utilized. This figure of $3,807.00 is the difference between box one (1) and box two (2). Therefore, we vacate and remand to the lower court for re-determination of appellant's pension available for equitable distribution in compliance with Martin. However, the court must also determine the amount of disability compensation appellant is receiving, since plaintiff's exhibit (16) indicates that the disability compensation has increased.

Appellant also argues that the court erred in evaluating the factors set forth in 23 Pa.S.A. § 401(d) in awarding appellee the majority of the marital estate. We find no error. The factors were discussed in the master's report filed on December 2, 1988, and by the lower court in its March 10, 1989, ruling on the exceptions to the master's report. However, since this case is remanded, the lower court must examine 23 Pa.S.A. § 401(d) in light of the new distribution.

Next, appellant argues that he was not given a chance to present his case. We disagree. Appellant believes he should have received a continuance of the September 23, 1988, master's hearing. The master informed appellant (1) week prior to the hearing that a continuance would be granted if he obtained a medical excuse outlining his ill health. Appellant failed to secure an excuse nor did he attend the hearing. Therefore, any perceived unfairness was the result of appellant's failure.

Additionally, appellant was allowed to present his case at the February 22, 1989, hearing on exceptions to the master's report. Appellant claims that he did not receive enough notice to secure his witnesses, a real estate appraiser, a pension evaluator and a medical expert. This case has been ongoing for five (5) years, and, in light of the master's report filed in December of 1988, appellant was aware of the issues. Also, he failed to ask for a continuance to secure these witnesses. We do not accept that appellant was that unprepared. The court has been tolerant and has afforded him chances to present his case. Accordingly, this issue is meritless.

Further, appellant argues that the lower court erred by distributing his vested, matured and currently being received pension on an actuarially based current value. In other words, it was error to award appellee a lump sum share of his pension. We disagree. In Braderman v. Braderman, 339 Pa.Super. 185, 488 A.2d 613 (1985), this Court discussed the two methods used to distribute retirement benefits classified as marital property. As we noted:

One method, the immediate offset method, divides the benefits at the time the equitable distribution order is entered by assigning a present value to them.... As we stated above, only those benefits attributable to the period commencing with the marriage and ending on the date of separation are marital property.... The present value must be multiplied by the "coverture" fraction to reach the present value of the entitlement which was acquired during the marriage....

Next, the court must determine how the sum available for equitable distribution should be apportioned between the spouses according to the Divorce Code. After determining the non-employee spouse's interest in the benefits, the court awards these benefits to the employee spouse and offsets this by distributing other marital property or by ordering payment to the non-employee spouse.

The second method is labeled the deferred...