Oliekan v. Oliekan

• Decision Date: 05 October 2006
• Docket Number: No. 20050310-CA.,20050310-CA.
• Citation: Oliekan v. Oliekan, 147 P.3d 464, 2006 UT App 405 (Utah App. 2006)
• Parties: Brenda Joy OLIEKAN, Petitioner, Appellant, and Cross-appellee, v. Ronald Y. OLIEKAN, Respondent, Appellee, and Cross-appellant.
• Court: Utah Court of Appeals

Page 464

147 P.3d 464

2006 UT App 405

Brenda Joy OLIEKAN, Petitioner, Appellant, and Cross-appellee, v.Ronald Y. OLIEKAN, Respondent, Appellee, and Cross-appellant.

No. 20050310-CA.

Court of Appeals of Utah.

October 5, 2006.

COPYRIGHT MATERIAL OMITTED

Stephen W. Cook, Cook & Associates PC, Salt Lake City, for Appellant.

Rodney R. Parker, Snow Christensen & Martineau, Salt Lake City, for Appellee.

Before Judges GREENWOOD, McHUGH, and ORME.

OPINION

GREENWOOD, Associate Presiding Judge:

¶ 1PetitionerBrenda Joy Oliekan(Wife) appeals the decision of the trial court evaluating and dividing three Individual Retirement Accounts (IRAs) in a divorce action.On appeal, Wife raises three issues.First, she argues that the trial court abused its discretion by failing to recognize that the parties' retirement interests were commingled.¹Second, she contends that the trial court abused its discretion by applying a coverture² fraction to divide two of the parties' IRA accounts.Finally, Wife argues that the trial court erred by denying her reasonable attorney fees.Consequently, she contends that she is entitled to reasonable attorney fees incurred at trial, as well as on appeal.

¶ 2 On cross-appeal, RespondentRonald Y. Oliekan(Husband) raises two arguments.He first contends that the trial court erred by awarding Wife a portion of his Deferred Compensation Plan as part of the marital estate.Husband also argues that the trial court erred by considering his entire collection of Lenox porcelain figurines part of the marital estate.We affirm.

BACKGROUND

¶ 3 Wife and Husband were married February 13, 1993.They have no children together.However, Husband adopted Wife's two minor children from a previous marriage.

¶ 4 The couple separated on or about December 15, 2002, and subsequently divorced.At the time of the divorce, Wife was fifty-four years old.She was employed as an office manager and supervisor in the Adult Probation and Parole Department.Her gross monthly income was $3896.71.Husband was fifty-seven years old at the time of the divorce.He was retired from Utah Power & Light Company(Utah Power) and its successor, PacifiCorp, where he was a construction supervisor in line work and substation construction.Husband began working for Utah Power in 1969 and took an early retirement package on March 1, 2001, as part of the company's workforce reduction plan.After retiring, he continued to consult with PacifiCorp.His gross monthly income from consulting was $5204.39.

¶ 5 Prior to his retirement, Husband participated in three retirement plans offered by his employer.Husband had a Basic Retirement Plan (BRP) and a Deferred Compensation Plan (DCP), as well as a 401(k) plan.The trial court found that both the BRP and the DCP were defined benefit plans and accordingly "had no relevant account balances prior to [their] conversion to a lump sum on March 1, 2001" — the date of Husband's retirement.The 401(k) was a defined contribution plan that involved "contributions from salary, employer matching contributions, and earnings on investments."³

¶ 6 As part of its Workforce Transition Retirement Program, PacifiCorp provided Husband the opportunity to retire early with enhanced benefits.Husband opted to participate and received a lump sum distribution in the total amount of $583,358.48 on March 1, 2001, the date he retired.He placed the distribution into three separate IRA accounts, each consisting of the amount in one of the three retirement plans.

¶ 7 In its findings, the trial court stated that it was applying the formula set forth in Woodward v. Woodward,656 P.2d 431(Utah1982), to divide Husband's BRP and DCP retirement accounts.Seeid. at 433.The court's formula "attempted to identify the marital portion earned during the eight years [of the] marriage prior to March 1, 2001, by giving equal credit for each year of [Husband's] service in the plans."However, the court noted that the formula it was applying was not a "strict[ ]Woodward formula[ ] because the benefits accrued were converted to lump sums before the end of the marriage."The court also stated its intention to make equitable adjustments because "a large amount of the retirement benefits accrued during the marriage during [Husband's] last years of service."

¶ 8The trial court divided the 401(k) funds in the IRA account using a different formula.Because this account represented a defined contribution plan rather than a defined benefit plan, Husband received his premarital interest, plus appreciation on that amount.

¶ 9The trial court rejected Husband's contention that the funds in the DCP were entirely premarital.Rather, the court stated that "there needs to be some recognition that, even though the plan's benefit level was frozen under the DCP prior to marriage, the parties['] work together during the years of the marriage allowed [Husband] to retire, and [Husband] was required to be an employee on the date of retirement" to qualify for the benefit.Therefore, the court stated that its decision to consider the entire DCP a marital asset was "an equitable adjustment for the time of [Wife's] contribution to the marriage."

¶ 10The court also rejected Wife's claim that the BRP could be calculated "based on the amount that would have been distributed under the plan's benefit formula if [Husband] had been permitted to retire on February 13, 1993," because Husband would not yet have been eligible to retire on that date and therefore could not have received that amount.Additionally, the court found that "adopting that calculation would result in years of service for benefit accrual not being treated equally."

¶ 11 At trial, Husband produced expert testimony by Roger Smith, a certified public accountant who performed forensic accounting services.Smith separated the marital and premarital portions of Husband's three accounts and conducted a retirement analysis on each account.He testified that he believed it would be possible to distinguish between the marital and post-marital interests, "particularly in the 401(k) balance."

¶ 12 Ultimately, the trial court found that Wife should be awarded one-half of the marital portion of the 401(k) account balance as of June 16, 2004.The court also found that Wife should be awarded one-half of the marital portion of the DCP account as of June 16, 2004.Finally, the court found that Wife should be awarded one-half of the marital portion of the BRP account balance as of June 16, 2004.

¶ 13 In addition to the issues involving Husband's retirement assets, the trial court determined the value of a collection of Lenox porcelain figurines.Husband testified that he began collecting the Lenox figurines in 1971 or 1972.He further testified that he had started a collection for his mother prior to the parties' marriage.Wife did not dispute that certain figurines in the collection had been purchased as a gift for Husband's mother and were later inherited by Husband after his mother's death.Nonetheless, the court found that the entire collection of Lenox porcelain figurines was marital property and that it was valued at $4650.The trial court awarded the collection to Husband as part of his share of the marital estate.

¶ 14 Regarding attorney fees, the court stated that both parties had incurred substantial attorney fees.At the beginning of the fourth day of trial, the court found that Wife had incurred approximately $25,000 in fees and Husband had incurred attorney and expert fees in excess of $40,000.Noting the difficulty of the matter, as well as Husband's greater ability to pay and Wife's greater need, the court awarded attorney fees to Wife, but reduced the requested amount, awarding her $7500.

¶ 15 Wife's appeal and Husband's cross-appeal followed.

ISSUES AND STANDARDS OF REVIEW

¶ 16 Wife first argues that the trial court abused its discretion by rejecting her argument that the BRP and DCP funds in the retirement accounts were commingled.Second, Wife contends that the court abused its discretion by using a coverture fraction method of dividing the funds because it "resulted ... in a serious inequity.""A trial court has considerable discretion considering property [division] in a divorce proceeding, thus its actions enjoy a presumption of validity."Elman v. Elman,2002 UT App 83, ¶ 17, 45 P.3d 176(alteration in original)(quotations and citation omitted).We will disturb the trial court's division only if there is a misunderstanding or misapplication of the law such that a manifest injustice or inequity results, indicating an abuse of discretion.SeeBurge v. Facio,2004 UT App 54, ¶ 12, 88 P.3d 350.

¶ 17 Third, Wife argues she is entitled to reasonable attorney fees for the trial below, as well as attorney fees on appeal.A trial court has the power to award attorney fees in divorce proceedings.SeeRasband v. Rasband,752 P.2d 1331, 1336(Utah Ct.App.1988)."The decision to make such an award and the amount thereof rests primarily in the sound discretion of the trial court.However, the award must be based on evidence of both financial need and reasonableness."Id.(citations omitted)."In divorce actions `where the trial court has awarded attorney fees and the receiving spouse has prevailed on the main issues, we generally award fees on appeal.'"Elman,2002 UT App 83 at ¶ 43, 45 P.3d 176(quotingRosendahl v. Rosendahl,876 P.2d 870, 875(Utah Ct.App.1994)).

¶ 18 On cross-appeal, Husband raises two issues.⁴First, he argues that the trial court erred by treating his interest in the DCP as a marital asset.Second, he contends that the court erred in treating his entire collection of Lenox figurines as marital property.We review Husband's claims for abuse of discretion.Seeid.at ¶ 17.

ANALYSIS

I.The Trial Court's Division of Assets

A.Commingling

¶ 19 On appeal, Wife first argues that the parties' retirement funds became commingled following marriage and that as a result, ...