Ray v. Ray

• Decision Date: 20 September 1995
• Citation: 916 S.W.2d 469
• Parties: Henry Taylor RAY, Plaintiff/Appellant, v. Brenda Joan RAY, Defendant/Appellee.
• Court: Tennessee Court of Appeals

Page 469

916 S.W.2d 469

Henry Taylor RAY, Plaintiff/Appellant, v. Brenda Joan RAY, Defendant/Appellee.

Court of Appeals of Tennessee,

Middle Section, at Nashville.

Sept. 20, 1995.

Permission to Appeal

Denied by Supreme Court

Jan. 29, 1996.

Appeal from the Chancery Court of Davidson County; at Franklin, Tennessee; The Honorable Cornelia A. Clark, Judge.

Edward P. Silva, R.E. Lee Davies, Hartzog, Silva & Davies, Franklin, for plaintiff/appellant.

Rose Palermo, Cheatham & Palermo, Nashville, for defendant/appellee.

OPINION

CANTRELL, Judge.

In this appeal we are required to determine if the trial judge properly valued the husband's contractual rights as a State Farm insurance agent and the parties' household items and furniture. We affirm the trial court's findings.

I.

After twenty-one years of marriage the parties separated in August of 1993. The three children born of the marriage had reached the age of majority. The husband, then fifty-one years of age, had been an agent for State Farm Insurance for twenty-three years. The wife worked at various low-paying jobs but for much of the marriage she did not work outside the home.

Under the terms of Mr. Ray's contract with State Farm he is not a salaried employee; instead, he receives commissions on the premiums paid State Farm by his customers. Mr. Ray does not own the expiration dates on the State Farm policies nor can he transfer or sell his State Farm agency. The contract may be terminated by either party at any time and will terminate at Mr. Ray's death. At termination Mr. Ray will be entitled to a benefit based on the amount of business on his books. At the time of the trial that benefit would have amounted to approximately $4400 per month for a period of five years. A certified public accountant testified that an asset producing that stream of income would have a present value of $185,000 using an interest rate of nine percent. The trial judge used a different interest rate and found the present value of the asset to be $130,000.

II.

Mr. Ray contends on appeal that his contractual right has no value as a marital asset because it is not vested. But, marital property is no longer defined in terms of vested rights. Instead, it is defined as "all real and personal property, both tangible and intangible, acquired by either or both during the course of the marriage...." Tenn.Code Ann. § 36-4-121(b)(1)(A). We have held that nonvested pension rights are part of the marital estate. Kendrick v. Kendrick, 902 S.W.2d 918 (Tenn.Ct.App.1994).

In addition, we think Mr. Ray's contention rests on a hyper-technical concept of vesting. While it is true that he does not have an indefeasible right to a certain benefit, he does have an accrued contractual right subject only to minimal qualifying conditions (actual termination and delivery of State Farm's property). He may choose to squander it or forfeit it by violating a non-compete provision in the contract, but that should not affect its status as marital property. The same could be said of all marital assets. Therefore, we are persuaded that the State Farm contract had a substantial value and was properly considered as a part of the marital estate.

Mr. Ray also argues that the proper way to treat the contractual right is the retained jurisdiction method which would assign to Mrs. Ray the right to collect a portion of the benefit when and if Mr. Ray's relationship to State Farm is finally terminated. We have chosen that method of distribution in a case involving nonvested pension rights. See Kendrick, supra, 902 S.W.2d at 928. However, we also recognized that the choice is within the court's discretion and it depends on the facts of each particular case. Id. We do not think the trial judge abused her...