Ohm v. Ohm

• Decision Date: 15 July 1981
• Docket Number: No. 1250,1250
• Citation: 431 A.2d 1371,49 Md.App. 392
• Parties: Norman K. OHM v. June L. OHM.
• Court: Court of Special Appeals of Maryland

Page 392

49 Md.App. 392

431 A.2d 1371

Norman K. OHM v. June L. OHM.

No. 1250.

Court of Special Appeals of Maryland.

July 15, 1981.

Saul E. Kerpelman, Baltimore, for appellant.

Nelson M. Oneglia, College Park, with whom were Horowitz, Oneglia, Goldstein, Foran & Parker, P.A., College Park, for appellee.

Argued before MORTON, THOMPSON and WEANT, JJ.

THOMPSON, Judge.

This is an appeal from a decree of divorce. The principal issues are whether the court below, in dissolving the parties' marriage and dividing their property, was correct in its determination that the husband's vested, matured right to receive benefits under a private, non-contributory pension plan was "marital property" within the meaning of Maryland's Property Disposition in Divorce and Annulment statute (the statute), Md. Cts. and Jud. Proc. Code Ann. § 3-6A-01 et seq. (1980 Repl. Vol., 1980 Cum. Supp.), and thus subject to equitable distribution upon divorce, and if so, whether the court properly valued and divided those benefits. ¹ ] We hold that the retirement benefits were properly included among the parties' marital property but that the chancellor failed to consider various factors relevant in the valuation and division of the benefits.

June L. Ohm, the appellee, was awarded a divorce a vinculo matrimonii from Norman K. Ohm, the appellant, in the Circuit Court for Prince George's County on August 11, 1980. The parties had been married for 39 years and had two sons, both now adults. At the time of the divorce, the husband was 57 years old and had been employed by the C. & P. Telephone Company for 39 years. He was earning a gross salary of $2,399.26 per month. As a result of his employment, he had acquired certain vested rights in a non-contributory pension plan maintained by his employer and was eligible to retire at any time, although his benefits would be increased if he chose not to retire until he was older. Under the plan, Mr. Ohm could elect to receive a pension of $1,019.36 per month, which would terminate upon his death, or he could elect a so-called survivor's benefit, under which he would receive $980.43 per month but which, after his death, would continue to pay $545.22 per month to his survivor until the survivor's death.

At the time of the divorce, Mrs. Ohm had been employed by the University of Maryland for some 10 years and had a gross salary of $1,020.56 per month. She also had acquired pension rights as a result of her employment, although no details concerning such rights are contained in the record.

In accordance with § 3-6A-05(a) of the Courts Article, the chancellor determined the following to be marital property: the marital home, located in Maryland and owned by the parties as tenants by the entireties; a vacation home and four unimproved lots, located in Florida and also held as tenants by the entireties; a C. & P. Telephone contributory savings plan, in the husband's name, having a balance of $13,000; shares of A. T. & T. stock, individually or jointly titled; two $10,000 certificates of deposit, one in the name of the wife only, and the other in the names of the wife and the parties' two sons; a savings account in the name of the wife, having a balance of $3,600; six small insurance policies, two of which insured the lives of the sons; the household furniture located in the marital home; and, the benefits payable under the husband's retirement plan. The marital property, exclusive of the retirement plan, was determined to have a total value of $180,000. The chancellor ordered that the real property listed above be sold and that the proceeds remaining after indebtedness on the properties was discharged be equally divided between the husband and the wife; he ordered that the items of personal property be equally divided as well. With respect to the retirement plan, which he determined to have a present value of $134,224, the chancellor granted the wife a monetary award in the amount of $67,112, or one-half the value of the pension, and entered judgment against the husband in that amount. In addition, the chancellor directed that the parties' two automobiles be titled one in the name of each and awarded the wife alimony in the amount of $150 per month, and attorney's fees. No determination or award was made with respect to the benefits payable under the wife's pension plan.

I Marital Property

Section 3-6A-01(e) of the Courts Article states:

" 'Marital property' is all property, however titled, acquired by either or both spouses during their marriage. It does not include property acquired prior to the marriage, property acquired by inheritance or gift from a third party, or property excluded by valid agreement or property directly traceable to any of these sources."

The question of whether the right to receive benefits under a private pension plan is marital property, which under § 3-6A-05(b) may be the subject of a monetary award "as an adjustment of the equities and rights of the parties" is not directly answered by the statute and has not heretofore been decided either by this Court or by the Court of Appeals. The issue has been addressed by the courts of numerous other states which, upon dissolution of a marriage, divide, either equally or equitably, ² the property acquired by the parties during their marriage. The overwhelming majority of the courts have determined, either expressly or by implication, that vested rights under a private or public pension plan, to the extent such rights were acquired during the marriage, are property subject to division upon dissolution. Rogers and Rogers, 45 Or.App. 885, 609 P.2d 877, 880 (1980); see, Van Loan v. Van Loan, 116 Ariz. 272, 569 P.2d 214 (1977); In Re Marriage of Brown, 126 Cal.Rptr. at 634-35, 544 P.2d 561; In Re Marriage of Mitchell, 579 P.2d 613 (Colo.1978); In Re Marriage of Evans, 85 Ill.App.3d 260, 40 Ill.Dec. 713, 715, 406 N.E.2d 916, 918 (1980); Foster v. Foster, 589 S.W.2d 223 (Ky.App.1979); Sims v. Sims, 358 So.2d 919 (La.1978); Hutchins v. Hutchins, 71 Mich.App. 361, 248 N.W.d 272 (1976); Elliott v. Elliott, 274 N.W.2d 75 (Minn.1978); In Re Marriage of Powers, 527 S.W.2d 949 (Mo.App.1975); In Re Marriage of Miller, 609 P.2d 1185 (Mont.1980); Kruger v. Kruger, 73 N.J. 464, 375 A.2d 659, 662 (1977); Copeland v. Copeland, 91 N.M. 409, 575 P.2d 99 (1978); Hansen v. Hansen, 273 N.W.2d 749 (S.D.1979); Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976); Englert v. Englert, 576 P.2d 1274 (Utah 1978); DeRevere v. DeRevere, 5 Wash.App. 741, 491 P.2d 249 (1971); cf., Stigall v. Stigall, 151 Ind.App. 26, 277 N.E.2d 802, 811 (1972) (pension is evidence to be considered by court in determining amount of award of property settlement); Rogers v. Rogers, 609 P.2d at 881 (retirement benefits, while not marital property to be divided, are marital assets to be considered in formulating decree); Leighton v. Leighton, 81 Wis.2d 620, 261 N.W.2d 457, 463-64 (1978)(under Wisconsin statute, vested and nonvested pension benefits are to be considered in dividing property). But see, Savage v. Savage, 374 N.E.2d 536, 538-40 (Ind.App.1978); Witcig v. Witcig, 206 Neb. 307, 292 N.W.2d 788, 793 (1980); Baker v. Baker, 546 P.2d 1325, 1326 (Okl.1975). See generally, Legislation, Property Disposition Upon Divorce in Maryland: An Analysis of the New Statute, 8 U.Balt.L.Rev. 377, 400-403 (1979); Annot. Pension or Retirement Benefits as Subject to Award or Division by Court in Settlement of Property Rights Between Spouses, 94 A.L.R.3d 176 (1979).

The rationale of these decisions is that retirement benefits are a form of deferred compensation or wage substitute and the right to receive such benefits, being contractual in nature, a chose in action and thus, property. See, e. g., Van Loan v. Van Loan, 569 P.2d at 215-16; In Re Marriage of Hunt, 34 Ill.Dec. at 60-61, 397 N.E.2d at 516-17. In Rogers and Rogers, the Court of Appeals of Oregon stated:

"(V)ested retirement rights are a valuable asset earned through contributions which would otherwise have been available to the parties during the marriage. Even where contributions have been made entirely by the employer, the courts have concluded that retirement benefits are a mode of employee compensation and as such are an earned property right of the marriage. As noted by the California Supreme Court in Brown, 544 P.2d at 566, 126 Cal.Rptr. at 638: ' * * * Over the past decades, pension benefits have become an increasingly significant part of the consideration earned by the employee for his services. As the date of vesting and retirement approaches, the value of the pension right grows until it often represents the most important asset of the marital community. * * * A division of * * * property which awards one spouse the entire value of this asset, without any offsetting award to the other spouse, does not represent (an) equal division of * * * property * * *.' " (Footnote omitted). 609 P.2d at 880.

The courts have also noted the similarities between pension benefits and other sources of deferred income which are undisputably property, the New Jersey Supreme Court observing:

"The right to receive monies in the future is unquestionably ... an economic resource. In most situations its present dollar value can be computed. * * * No one would quarrel with the proposition that the recipient of a life estate created by a testamentary or inter vivos trust owned a valuable asset which would be subject to equitable distribution. So, too, if one purchased or acquired an insurance annuity which paid a weekly sum certain to the beneficiary for life, the right to collect those funds would also be considered property subject to distribution. There are many different types of employee benefits, which employees or former employees receive, which everyone would readily admit are assets that have been acquired during employment. Deferred compensation, stock options, profitsharing and pensions are typical examples." Kruger v. Kruger, 375 A.2d at...