Miller v. Miller
| Decision Date | 11 May 2022 |
| Docket Number | S-17934 |
| Parties | BRIAN EDWARD MILLER, Appellant, v. LORETA MILLER, Appellee. |
| Court | Alaska Supreme Court |
UNPUBLISHED See Alaska Appellate Rule 214(d)
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Homer, Superior Court No. 3HO-19-00022 CI Jason M. Gist, Judge.
Appearances: Jimmy E. White, Hughes White Colbo & Tervooren, LLC, Anchorage, for Appellant.
Elizabeth H. Ledue, Gilman & Pevehouse, Kenai, for Appellee.
Before: Winfree, Chief Justice, Maassen, Borghesan, and Henderson, Justices. [Carney, Justice, not participating.]
Brian and Loreta Miller divorced after nearly 15 years of marriage. During their marriage, Brian served in the United States Navy and worked as an anesthetist, acquiring an education, sizeable earnings, and retirement benefits. Meanwhile, Loreta was primarily a stay-at-home mother working occasional jobs. The superior court divided the marital estate 63/37 in Loreta's favor, emphasizing the parties' disparity in earning capacity. Brian appeals, disputing the court's findings concerning Loreta's limited earning capacity and Brian's substantial earning capacity, the valuation of Brian's significant post-retirement medical benefits, the credit given to Brian for his various post-separation payments, and the overall property division. We affirm the superior court's judgment on all issues.
Brian Miller and Loreta Colaruotolo met in 1993 in Italy while Brian was serving in the United States Navy; they married the following year. Loreta immigrated to the United States with Brian soon afterwards.
Brian and Loreta had two children during their marriage. Prior to the birth of their children, Loreta - who did not have a college education - worked as a preschool teacher while Brian attended college and worked part time. When their first child was born, Brian and Loreta agreed that Loreta would primarily be a stay-at-home parent. Loreta focused on caring for the children, cooking, cleaning the home, and working part-time jobs.
While in the Navy, Brian studied to become a Certified Registered Nurse Anesthetist (CRNA). He obtained two associate's degrees, a bachelor's degree in nursing, and a master's degree in nurse anesthesia. The Navy paid for Brian's educational expenses while he was working toward these degrees; he also received full pay and benefits during this time because he was still enlisted.
Brian retired from the military in 2011, and the family moved to Homer in 2014. Brian continued to work as a CRNA, earning anywhere from $150, 000 to $336, 000 per year. Most recently, in 2019, he earned approximately $180, 000. Loreta testified that when the family moved to Alaska, Brian discouraged her from working because it would only "add to his bottom line" and cost the couple more in taxes.
Upon retirement from the Navy, Brian began receiving a military pension. In 2019 this pension amounted to approximately $52, 502 annually, adjusted for inflation.
Because of his military service, Brian also received and continues to be eligible for lifetime health insurance benefits called TRICARE. Before turning65, Brian can choose from TRICARE Select or TRICARE Prime. TRICARE Select is free. TRICARE Prime has no monthly premium, but instead has an annual enrollment fee of $297. Under TRICARE Prime, roughly 80% of his medical expenses are covered, and his maximum annual out-of-pocket expenses are capped at somewhere between $3, 000 and $5, 000. Once he turns 65, Brian will be entitled to TRICARE for Life, a Medicare supplement policy, for the remainder of his life at no cost to him.
Brian and Loreta separated in 2018. Loreta went back to work, taking jobs as a preschool teacher, a preschool office employee, and a cook at a local restaurant. Most recently, during the winter of 2019, she had a U.S. Postal Service seasonal contract position paying $16 per hour. In her testimony Loreta estimated that her gross income in 2019 was approximately $16, 000, although she later clarified that her income had been $18, 350. She testified that she believed the most she could make working full time was $20, 000 to $25, 000 per year. She also testified that she has very little retirement savings and few contributions to Social Security due the nature of her work history.
During the course of the marriage, the couple acquired a variety of real and personal property, including the marital home in Homer. They had debt at the time of separation, including a mortgage, a credit card balance, and bills for remodeling work done on the marital home. Brian unilaterally closed the couple's joint bank accounts shortly before moving out of the marital home; he also consolidated and paid much of the marital debt by obtaining a consumer loan on the couple's truck. Brian calculated the amount of child support that he would owe between January 1 and May 22, 2019 and paid that to Loreta in a lump sum. He also paid Loreta between $1, 000 and $1, 250 per month in spousal support and paid the $2, 700 monthly mortgage for the marital home during the separation period. After separation Loreta sold some of their other real property in Homer for $150, 000 and saved the proceeds in a separate account.
The parties agree that Loreta was entitled to half of Brian's pension earned during their marriage. They also agree that after the divorce Loreta will remain eligible for one year of free coverage under Brian's TRICARE. She will then be eligible to purchase TRICARE Select on her own out of pocket and at full cost for the next three years. After that period ends, Loreta will no longer be eligible for TRICARE and will have to acquire her own health insurance.
Loreta filed a complaint for divorce in January 2019. At trial, both parties presented expert testimony on the value of Brian's military pension and lifetime health benefits. The experts used different methods to value the pension and benefits. Loreta's expert used an "actuarial approach," which valued the marital portion of Brian's post-retirement medical benefits at $196, 720 and the marital portion of his pension at $983, 339 - a total value of $1, 180, 059. Brian's expert used a "life expectancy" approach, which valued the marital portion of Brian's post-retirement medical benefits at $174, 457 and the marital portion of his pension at $944, 635 - a total value of $1, 119, 092. Each expert testified about the flaws of the other's approach. The superior court ultimately found the actuarial approach more compelling and adopted Loreta's expert's valuation of Brian's post-retirement medical benefits and pension.
The superior court issued its findings of fact and conclusions of law in August 2020. The court considered several factors in its property division, including the health of the parties, conduct by the parties that could have resulted in the unreasonable depletion of marital assets, and the financial circumstances of both parties;[1] however, it emphasized the disparity in earning capacity between Brian and Loreta. It found that Loreta's "lack of education, training, and skills strongly suggest that it is unlikely that she will earn much more than [$25, 000 per year] in the future." On the other hand, the court found that "Brian . . . has the education, training and skillset to earn at least $150, 000 per year, and even well above that." In light of these findings, the court determined that the split Loreta had requested - 65/35 in her favor - was an equitable division of property. The court's actual property division resulted in a 63/37 split in Loreta's favor.
Brian moved for reconsideration on three grounds. First, he argued that the superior court failed to deduct the value of the months that already passed when valuing the military medical benefits that make up a large part of Brian's retirement. Second, he argued that the court had ordered a division of the military pension that was not permissible under federal law.[2] And third, he argued that it had mistakenly found that Loreta is unable to earn more than $25, 000 per year.
The superior court agreed with Brian that he should receive an offset for the year of free medical benefits Loreta received after the divorce. The court also agreed that federal law prohibited it from granting Loreta morethan50%of Brian's pension. Noting that it "continue[d] to find the [63/37] allocation . . . of marital property" to be an "equitable division of assets," the court corrected its error by dividing Brian's pension 50/50 and adjusting other parts of the property distribution to achieve the same overall division. The court declined to reconsider its finding concerning Loreta's earning capacity and noted that even if Loreta could earn as much as $50, 000 per year, Brian would still have a significantly higher earning capacity that would justify the overall division.
Brian appeals, arguing that the superior court clearly erred by finding that Loreta's earning capacity after the divorce is $25, 000 per year while his is $150, 000, and by valuing his TRICARE benefits consistent with the actuarial approach used by Loreta's expert. Brian also contends that the court abused its discretion by improperly weighing his separate contributions to Loreta during the interim period of the divorce and his post-retirement medical benefits. Finally, Brian argues that the court abused its discretion by dividing the marital estate 63/37 in Loreta's favor.
"[Superior] courts have broad discretion in fashioning property divisions."[3]A superior court's division of marital assets involves three steps.[4]
First the superior court determines what property is available for...
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