Sharber v. Sharber, 1999-CA-001366-MR.

Decision Date12 January 2001
Docket NumberNo. 1999-CA-001366-MR.,1999-CA-001366-MR.
Citation35 S.W.3d 841
PartiesJames R. SHARBER, Appellant, v. Lisa SHARBER, Appellee.
CourtKentucky Court of Appeals

Perry R. Arnold, Bedford, for appellant.

Glenna Jo Curry, LaGrange, for appellee.

Before DYCHE, GUIDUGLI, and TACKETT, Judges.

OPINION

TACKETT, Judge.

James Sharber (James) appeals from the judgment of the Trimble Circuit Court for dissolving his marriage to Lisa Sharber (Lisa). At issue in this case is the division of property between James and Lisa, specifically whether the court acted properly in classifying James' Separation Incentive Bonus (bonus) from the Department of Defense as marital property, and whether it acted properly in awarding Lisa additional monies to repurchase her retirement fund, which she had expended in purchasing the marital residence. We affirm in part, reverse in part, and remand.

With respect to the bonus paid to James by the Department of Defense, some additional background facts are necessary. James was an employee at the Naval Ordnance facility in Louisville. After the dissolution decree had been entered, James was informed of an incentive program for employees who elected to take early retirement. This Separation Incentive Program offered an incentive of up to $25,000, based on either the applicable severance pay formula or a flat $25,000, whichever was less. James qualified for the full $25,000 bonus. He elected to take early retirement in January 1996, receiving the separation incentive bonus in September 1996.

After he received the separation incentive bonus, the trial court, in dividing the property between the parties, held that 11/27ths of the bonus was marital property. (James had worked at Naval Ordnance for 27 years, including the eleven years he was married to Lisa.) The court ruled that Lisa was entitled to half of the marital portion of the bonus.

On appeal, James argues that the bonus could not qualify as marital property because it did not vest during the marriage. The bonus was not available to him during the marriage at all. He argues that even though the severance pay formula is used, the bonus is not severance pay and should not be treated as such. In support of his argument, James cites 5 United States Code (USC) 5597, which reads, in pertinent part, as follows:

Sec. 5597. Separation pay

(a) For the purpose of this section

(1) the term "Secretary" means the Secretary of Defense;

(2) the term "defense agency" means an agency of the Department of Defense, as further defined under regulations prescribed by the Secretary; and

(3) the term "employee" means an employee of a defense agency, serving under an appointment without time limitation, who has been currently employed for a continuous period of at least 12 months, except that such term does not include —

(A) a reemployed annuitant under subchapter III of chapter 83, chapter 84, or another retirement system for employees of the Government; or

(B) an employee having a disability on the basis of which such employee is or would be eligible for disability retirement under any of the retirement systems referred to in subparagraph (A).

(b) In order to avoid or minimize the need for involuntary separations due to a reduction in force, base closure, reorganization, transfer of function, or other similar action affecting 1 or more defense agencies, the Secretary shall establish a program under which separation pay may be offered to encourage eligible employees to separate from service voluntarily (whether by retirement or resignation).

(c) Under the program, separation pay may be offered by a defense agency only —

(1) with the prior consent, or on the authority, of the Secretary; and

(2) to employees within such occupational groups or geographic locations, or subject to such other similar limitations or conditions, as the Secretary may require.

(d) Such separation pay —

(1) shall be paid in a lump sum;

(2) shall be equal to the lesser of —

(A) an amount equal to the amount the employee would be entitled to receive under section 5595(c) if the employee were entitled to payment under such section; or

(B) $25,000;

(3) shall not be a basis for payment, and shall not be included in the computation, of any other type of Government benefit; and

(4) shall not be taken into account for the purposes of determining the amount of any severance pay to which an individual may be entitled under section 5595 based on any other separation.

This section distinguishes the type of bonus James received from severance pay, which is defined in 5 USC 5595(c) as

(c) Severance pay consists of —

(1) a basic severance allowance computed on the basis of 1 week's basic pay at the rate received immediately before separation for each year of civilian service up to and including 10 years for which severance pay has not been received under this or any other authority and 2 weeks' basic pay at that rate for each year of civilian service beyond 10 years for which severance pay has not been received under this or any other authority; and

(2) an age adjustment allowance computed on the basis of 10 percent of the total basic severance allowance for each year by which the age of the recipient exceeds 40 years at the time of separation.

Total severance pay under this section may not exceed 1 year's pay at the rate received immediately before separation.

James also cites 5 USC 5597(g)(1), which provides that if James returned to work with the United States Government, he would be required to repay the entire amount of the separation incentive bonus.

An employee who receives separation pay under this section on the basis of a separation occurring on or after the date of the enactment of the Federal Workforce Restructuring Act of 1994...

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3 cases
  • Normandin v. Normandin
    • United States
    • United States State Supreme Court — District of Kentucky
    • December 17, 2020
    ...Family Court in full. The Court of Appeals held that the RSUs were Scott's separate property relying principally on Sharber v. Sharber , 35 S.W.3d 841 (Ky. App. 2001), and Gallagher v. Gallagher , 2012-CA-00671-MR, 2013 WL 5886028 (Ky. App. November 1, 2013). The Court of Appeals held that ......
  • Gallagher v. Gallagher
    • United States
    • Kentucky Court of Appeals
    • November 1, 2013
    ...parties point to two similar but distinguishable cases as controlling authority on this topic. Andrew points us toward Sharber v. Sharber, 35 S.W.3d 841 (Ky. App. 2001). In Sharber, a husband received an early retirement benefit from his employer after a decree of dissolution had been enter......
  • Normandin v. Normandin
    • United States
    • Kentucky Court of Appeals
    • June 1, 2018
    ...should have classified the RSUs at issue as marital property. Rather than rely on Penner, the trial court here cited Sharber v. Sharber, 35 S.W.3d 841 (Ky. App. 2001), finding the facts were analogous. In Sharber, the husband received a retirement bonus after the divorce decree was entered.......
3 books & journal articles
  • § 7.10 Pensions
    • United States
    • Full Court Press Divorce, Separation and the Distribution of Property Title CHAPTER 7 Property Acquired or Improved with Both Separate and Marital Property
    • Invalid date
    ...benefits can be found in § 7.12[2] infra.[712] Bowman v. Bowman, 357 S.C. 146, 591 S.E.2d 654 (S.C. App. 2004).[713] Sharber v. Sharber, 35 S.W.3d 841 (Ky. App. 2001) (severance was not part of the marital estate).[714] See, e.g., Hardin v. Hardin, 681 S.W.2d 241 (Tex. App. 1984).[715] Will......
  • § 12.03 Military Longevity and Disability Retirement
    • United States
    • Full Court Press Divorce, Separation and the Distribution of Property Title CHAPTER 12 Division of Federal Benefits
    • Invalid date
    ...222 Cal. Rptr. 644 (1986), in which the court accepted this approach regarding involuntary termination pay.[338] Sharber v. Sharber, 35 S.W.3d 841 (Ky. App. 2001). [339] Boedecker v. Larson, 44 Va. App. 508, 605 S.E.2d 764 (2004).[340] Most courts have concluded that federal law does not ba......
  • § 7.12 Other Employee Compensation and Fringe Benefits
    • United States
    • Full Court Press Divorce, Separation and the Distribution of Property Title CHAPTER 7 Property Acquired or Improved with Both Separate and Marital Property
    • Invalid date
    ...Demont v. Demont, 67 So.3d 1096 (Fla. App. 2011).[1033] Bikowitz v. Bikowitz, 104 So.3d 1137 (Fla. App. 2012).[1034] Sharber v. Sharber, 35 S.W.3d 841 (Ky. App. 2001). [1035] Schanck v. Schanck, 717 P.2d 1 (Alaska 1986). It should be noted that in Alaska, the parties actually stop accumulat......

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