Polly v. Polly

• Decision Date: 12 May 1992
• Docket Number: No. A-90-271,A-90-271
• Citation: 487 N.W.2d 558,1 Neb.App. 121
• Parties: Dennis J. POLLY, Appellant, v. Linda L. POLLY, Appellee. . Filed
• Court: Nebraska Court of Appeals

Page 558

487 N.W.2d 558

1 Neb.App. 121

Dennis J. POLLY, Appellant, v. Linda L. POLLY, Appellee.

No. A-90-271.

Court of Appeals of Nebraska.

Filed May 12, 1992.

Mark S. Bertolini, of Bertolini, Schroeder & Blount, Bellevue, for appellant.

Lisa C. Lewis, of Byrne, Rothery, Lewis, Tubach, Zielinski & Peterson, Omaha, for appellee.

Before SIEVERS, C.J., and HANNON and WRIGHT, JJ.

WRIGHT, Judge.

This is an appeal from the trial court's order directing the petitioner husband to pay attorney fees, alimony based on a pension plan, and all uninsured medical, dental, and orthodontic care, and the court's division of the marital property and allocation of the marital debts.

Appellate review of a dissolution of marriage is de novo on the record to determine whether there has been an abuse of discretion by the trial court, whose judgment will be upheld in the absence of any When the evidence is in conflict, the appellate court considers, and may give weight to, the fact that the trial court heard and observed the witnesses and accepted one version of the facts rather than another. Beran v. Beran, 234 Neb. 296, 450 N.W.2d 688 (1990).

abuse of discretion. Druba v. Druba, 238 Neb. 279, 470 N.W.2d 176 (1991).

FACTS

Dennis J. and Linda L. Polly were married July 15, 1972, and two children were born of the marriage, Chad Russell, born June 2, 1973, and Teresa Ann, born June 30, 1975. The dissolution proceeding was transferred to the separate juvenile court of Sarpy County on November 20, 1989.

Custody of Chad was awarded to Dennis subject to visitation, and Linda was ordered to pay $50 per month for support until Chad reached the age of 19. Teresa remained in the custody of the court, with placement by the Department of Social Services. Dennis was ordered to maintain both children on his health insurance policy and to pay all medical, dental, orthodontic, and optical expenses not covered by insurance.

Dennis was ordered to pay alimony of $300 per month for 12 months and then $400 per month for 48 months, terminable upon the death of either party or Linda's remarriage. In addition, Dennis was ordered to pay alimony to Linda of $250 per month for life, not subject to termination upon her remarriage. The $250 alimony payments were ordered to commence in the year 2004, at which time Dennis would receive $850 per month from his pension plan.

The court assigned the following values and debts to the parties:

Dennis Linda

Household goods and

personal property $6,990.00 $3,600.00

Car equity 1,400.00 2,500.00

Stock 2,313.29 -0-

TOTAL $10,703.29 $6,100.00

Less debts -12,817.51 -10,191.91

NET DISTRIBUTION ($2,114.22) ($4,091.91)

To further equalize the estates, the court ordered Dennis to pay Linda $988.84 and ordered Linda to pay Dennis $993. The court found that Linda's basic needs totaled $1,109 per month. At full-time employment, she was earning a net of $580 per month. Dennis' basic needs for himself and his son were $1,080 monthly. He had additional payments of $981 per month for a total of $2,061 per month, and his net monthly income was $2,296.

At the time of the decree, Dennis was age 40 and worked as a technical support troubleshooter for computer systems at US West Communications. Linda worked for a short time as a cook and cleaner at a service station and testified that she would be working full time in another month.

Dennis assigned as error that the trial court's decision was contrary to the evidence and the law and the court abused its discretion (1) by ordering him to pay $1,250 toward Linda's attorney fees and all of the court costs; (2) by ordering him to pay alimony based on his unvested pension plan; (3) by awarding alimony that was excessive for too long a period of time; (4) by requiring him to pay all uninsured medical, dental, and orthodontic care; and (5) in the division of the personal property and marital debts.

PENSION PLAN

The court ordered Dennis to pay $250 per month as alimony from his pension plan beginning in the year 2004, to be terminated only upon the death of either party. Neb.Rev.Stat. § 42-366(8) (Reissue 1988) requires the court to "include as part of the marital estate, for purposes of the division of property at the time of dissolution, any pension plans, retirement plans ... whether vested or not vested." Pension plans shall be included as a part of the marital estate for purposes of the division of property at the time of dissolution. Kullbom v. Kullbom, 209 Neb. 145, 306 N.W.2d 844 (1981).

The problem is when and how to value the pension plan for purposes of dividing In the present case, the court attempted to divide the pension plan by awarding Linda $250 per month alimony to commence in the year 2004. The problem with such an award was that at the time of the decree the value of the plan, if Dennis were to voluntarily retire from his employment, was $76 per month. If he continued his present employment, his pension plan would pay him $850 per month in 2004.

the marital property at the time of the dissolution. The plans are often unmatured and subject to change in value depending upon whether the employee continues to work, the age of retirement, and a variety of other factors that may apply to a specific plan. Prior to the adoption of § 42-366(8), the pension plan of one party was not a joint fund for the benefit of the other party and was not ordinarily divided in the property settlement. In certain situations, it was considered as a source for the payment of alimony. Witcig v. Witcig, 206 Neb. 307, 292 N.W.2d 788 (1980); Howard v. Howard, 196 Neb. 351, 242 N.W.2d 884 (1976).

Section 42-366(8) requires pension plans to be included as a part of the marital estate. The value of the plan should be determined at the time of the decree. In Raley v. Raley, 218 Neb. 644, 357 N.W.2d 470 (1984), the court awarded the wife $200 per month as one-half of the amount the husband would receive as a retirement benefit if he were to retire from the U.S. Postal Service as of the date of the decree. The court made the award based upon the value of the plan at the time of the decree.

The reason for considering pension plans in the award of alimony was prompted by the decision of the U.S. Supreme Court in McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981), which held that military pensions could not be considered part of the marital estate. Thus, alimony became the vehicle by which pension plans were considered in the division of the marital assets. In Pyke v. Pyke, 212 Neb. 114, 321 N.W.2d 906 (1982), the court recognized that the spouse required to pay alimony may have income from a military pension from which the spouse would be able to make alimony payments, although the court was prohibited from making an award of part of the pension to the nonmilitary spouse.

The effect of the Uniformed Services Former Spouses Protection Act, 10 U.S.C. § 1401 et seq. (1988), passed in 1982, is that nondisability military pensions need no longer be treated differently than nonmilitary pensions. The nonmilitary spouse is now entitled to an interest in the military pension. Taylor v. Taylor, 217 Neb. 409, 348 N.W.2d 887 (1984).

Alimony has been used for the division of pension plans, but it is the exception and not the rule. The Nebraska Supreme Court has not favored lifetime awards of alimony, Albers v. Albers, 213 Neb. 471, 329 N.W.2d 567 (1983), but it has approved the trial court's use of such awards, Hildebrand v. Hildebrand, 239 Neb. 605, 477 N.W.2d 1 (1991). Hildebrand recognized that the awarding of alimony in a specified amount to one spouse for his or her lifetime was an appropriate method of dealing with the other spouse's pension funds.

In Hildebrand, the husband was scheduled to retire from the U.S. Air Force on February 1, 1991, with gross retirement pay of $1,711 per month. The trial court awarded the wife alimony of $500 per month for 6 months, then $200 per month for her lifetime, regardless of whether she remarried. The court had estimated that the wife's share of the pension for her 6 years of marriage was approximately $200 per month. The Supreme Court recognized the trial court's attempts to estimate the wife's share of the pension which accrued during the marriage, but modified the award and gave the wife $400 per month for the rest of her life. This would compute to about 23 percent of the retirement benefits. Hildebrand did not have the problem of valuation of the pension plan because the retirement was nearly contemporaneous with the divorce and no substantial amount of additional worktime was needed before the monthly pension was established at the level of $1,711 per month, the basis the court used for its award. In the present case, Dennis must The Supreme Court of Wisconsin in Bloomer v. Bloomer, 84 Wis.2d 124, 267 N.W.2d 235 (1978), discussed methods of valuing pension plans, depending upon the circumstances and status of the parties in each case. The court noted that it was clear that any contributions to the retirement fund after the divorce, whether made by employee or employer, would not be an asset of the marital estate subject to division. Only that part of the fund or the benefits under it which are attributable to the marriage should be considered. This finding is in accordance with Hildebrand, where the court noted that the portion of the pension earned during the couple's first marriage was not a marital asset and only the part of the pension earned during their second marriage was subject to distribution as a marital asset. See § 42-366(8).

remain employed for another 15 years in order to increase the value of the pension plan from $76 per month to $850 per month.

Bloomer correctly recognized that in many divorces the pension plans are the most significant marital asset. As noted by the court, the problems of valuing a pension plan are numerous...