Miller v. Miller

• Decision Date: 05 June 1978
• Docket Number: Docket No. 77-659
• Citation: 83 Mich.App. 672,269 N.W.2d 264
• Parties: Julia M. MILLER, Plaintiff-Appellee, v. George W. MILLER, Defendant-Appellant. 83 Mich.App. 672, 269 N.W.2d 264
• Court: Court of Appeal of Michigan — District of US

Page 264

269 N.W.2d 264

Julia M. MILLER, Plaintiff-Appellee, v. George W. MILLER, Defendant-Appellant.

Docket No. 77-659.

83 Mich.App. 672, 269 N.W.2d 264

Court of Appeals of Michigan.

June 5, 1978.

Released for Publication Sept. 7, 1978.

[83 MICHAPP 673] Ryan & Ryan by Edward J. Ryan, Kalamazoo, for defendant-appellant.

Birkhold, Newland & Hills by Ralph O. Birkhold, Kalamazoo, for plaintiff-appellee.

Before CAVANAGH, P. J., and BRONSON and KELLY, JJ.

BRONSON, Judge.

This is an appeal from a judgment in a divorce action in which the property of the parties was divided by the trial court. The sole [83 MICHAPP 674] issue on appeal is one of first impression in Michigan whether a party's interest in a pension plan which is funded entirely by his employer is distributable pursuant to a divorce and property settlement.

The leading Michigan case on the distribution of a party's interest in a pension pursuant to a divorce is Hutchins v. Hutchins, 71 Mich.App. 361, 248 N.W.2d 272 (1976). In Hutchins, the Court held that a husband's accumulated contributions to a pension plan funded by deductions from his salary was to be considered an asset by a trial court dividing property in a divorce action. The Court's rationale was that the accumulated contributions constituted marital property because they were deducted from the husband's salary and were not forfeitable:

"Returning to the Michigan public safety department pension, Accident and Disability fund leads us, as do other jurisdictions with similar statutes, to the conclusion that it also treats the accumulated deductions in the husband's account in a manner which makes them marital property. Here, the plaintiff-husband's interest was created in most part from his salary, and we agree with the defendant-wife that these deductions would have been available to the parties during their marriage to be invested in stocks, bonds, savings account, annuity and/or other investments. The plaintiff-husband's right in the fund is fully vested and cannot be subjected to divestment or forfeiture, except as herein noted for breach of the public trust. We also hold that it is property that came to the plaintiff by reason of the marriage and therefore should be included in the total assets of the parties. As in New Jersey, our divorce laws make no reference to vesting. ( ¹ ) See MCLA 552.1 Et seq.; [83 MICHAPP 675] MSA 25.81 Et seq. Therefore, it must be included as an asset in the distribution of property." Hutchins, supra, at 370-371, 248 N.W.2d at 277.

Accord, In re Marriage of Pope, 544 P.2d 639 (Colo.App., 1975), Pellegrino v. Pellegrino, 134 N.J.Super. 512, 342 A.2d 226 (1975), Tucker v. Tucker, 121 N.J.Super. 539, 298 A.2d 91 (1972), Schafer v. Schafer, 3 Wis.2d 166, 87 N.W.2d 803 (1958).

We believe the same result should obtain where the pension is funded directly by the employer. I. e., an employee's interest in a pension funded by his employer is distributable pursuant to a divorce only to the extent that the interest is marital property ² with a reasonably ascertainable present value. If the employee's interest is contingent or a mere expectancy it may not be distributed pursuant to a divorce judgment. See, generally, Polate v. Polate, 331 Mich. 652, 50 N.W.2d 190 (1951). Cases from other jurisdictions are in accord with this rule.

In Tucker v. Tucker, supra, the New Jersey court held that a husband's interest in a pension and profit-sharing plan was not distributable pursuant to a divorce judgment because the plan was funded entirely by the employer, the employee had no right of withdrawal and the right to payment in the future was not certain. The court quoted Williamson v. Williamson, 203 Cal.App.2d 8, 11, 21 Cal.Rptr. 164 (1962), with approval:

" 'Pensions become community property, subject to division in a divorce, when and to the extent that the [83 MICHAPP 676] party is certain to receive some payment or recovery of funds. To the extent that payment is, at the time of the divorce, subject to conditions which may or may not occur, the pension is an expectancy, not subject to division as community property.' " 121 N.J.Super. at 549, 298 A.2d at 96.

The same reasoning was applied in White v. White, 136 N.J.Super. 552, 347 A.2d 360 (1975), in which the court held that an employee's interest in a pension plan funded entirely by the employer, with no right of withdrawal and which required full compliance with eligibility requirements as a precondition to payment, was not "property" subject to equitable distribution before the conditions had been met. See, also, In re Marriage of Ellis, 36 Colo.App. 234, 538 P.2d 1347 (1975).

In the case at bar, the trial court's distribution of the pensions of both the husband and wife was based on total contributions to the pension funds. This was improper. Pension interests are distributable only to the extent of their reasonably ascertainable present value. See Hutchins v. Hutchins, supra, 71 Mich.App., at 372, 248 N.W.2d 272. ³

In evaluating the interests at issue in the case at bar, a recent New Jersey case stated the problem as follows:

"On one side is property which, although not without value, constitutes an expectation of receipt of benefits or is subject to a contingency. Tucker v. Tucker, supra; Williamson v. Williamson, 203 Cal.App.2d 8, 21 Cal.Rptr. 164 (1962); White v. White, supra. On the other side of that line is property which, although not cash in hand, is not subject to a contingency, has a reasonably discernible value, and awaits but the decision of the owner to take actual possession. Pellegrino v. Pellegrino, supra; See v. See, 64 Cal.2d [83 MICHAPP 677] 778, 51 Cal.Rptr. 888, 415 P.2d 776 (Sup.Ct.1966); Angott v. Angott, 462 S.W.2d 73 (Tex.Civ.App.1970)."

The court held that only the second type of property was distributable. Blitt v. Blitt, 139 N.J.Super. 213, 216-217, 353 A.2d 144, 146 (1976). ⁴

We therefore must remand this case to the trial court. The court should: (1) find whether the pension interests have a reasonably ascertainable value or...