Shearer v. Shearer, S-03-680.

• Decision Date: 22 July 2005
• Docket Number: No. S-03-680.,S-03-680.
• Citation: 270 Neb. 178,700 NW 2d 580
• Parties: DALLAS L. SHEARER, APPELLANT, v. LYNNE R. SHEARER, APPELLEE.
• Court: Nebraska Supreme Court

270 Neb. 178

700 NW 2d 580

DALLAS L. SHEARER, APPELLANT, v. LYNNE R. SHEARER, APPELLEE.

No. S-03-680.

Supreme Court of Nebraska.

Filed July 22, 2005.

Susan C. Williams for appellant.

R. Bradley Dawson, of Dawson & Piccolo, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

GERRARD, J.

NATURE OF CASE

Dallas L. Shearer filed a petition to dissolve the marriage between Dallas and his wife, Lynne R. Shearer. The parties entered into a stipulation and agreement, disposing of their property but reserving the division of a portion of Dallas' railroad disability benefits for the district court. At trial, Dallas argued that the benefits should be awarded solely to him, since the marital estate benefited considerably from proceeds he received during the marriage from a settlement with Union Pacific Railroad Company (Union Pacific) for an injury he sustained while working for Union Pacific. The district court disagreed and divided the benefits at issue equally between the parties. For the reasons that follow, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Dallas and Lynne were married in April 1971. Dallas began working for Union Pacific in late 1975 and continued that employment until he was injured on the job in 1992. Dallas' injury left him occupationally disabled; in other words, he was unable to return to the work he had been trained to do for Union Pacific. Dallas filed a claim against Union Pacific under the Federal Employers' Liability Act and reached a settlement in which he was awarded $525,000 and an additional $50,000 for use in establishing a leatherworking business.

In addition, Dallas continues to receive disability benefits under the Railroad Retirement Act. Annuities under the Railroad Retirement Act consist of independent tiers. Tier I is calculated using Social Security benefit formulas and includes both earnings in the railroad industry and in employment covered by the Social Security Act. Tier II is based on railroad retirement earnings alone. Dallas receives benefits of $1,361 per month under tier I and $398 per month under tier II. Upon reaching retirement age, Dallas' benefits will convert to those provided for railroad retirees. Dallas also receives health insurance through Union Pacific at a monthly cost to him of $275.

Lynne worked at Simon Construction from 1983 through 1996. When the company was sold in 1994, the employees of the company received a share of the profits; Lynne received $134,000 from the sale. When Dallas' injury prevented him from returning to work at Union Pacific, he and Lynne established a leatherworking business called Mill Iron "S" Company.

In 2002, Dallas filed a petition for dissolution of marriage. Dallas and Lynne subsequently entered into a stipulation and agreement prior to trial. In the stipulation, the parties agreed to waive alimony, arranged for the division of marital property, and divided responsibilities with respect to insurance, debts, and attorney fees. The stipulation specifically reserved the disposition of Dallas' tier II annuity benefits for the district court.

A trial was held, and the court entered a decree of dissolution. The court approved the parties' stipulation and agreement and ordered the tier II benefits to be divided equally. The court discussed several factors in support of its decision: Dallas failed to sustain his burden of proof to show that the tier II benefits are nonmarital and should be awarded solely to him; this was a marriage of long duration; Dallas' tier I benefits were roughly equivalent to Lynne's monthly income; during the marriage, Lynne left two jobs at Dallas' request; Dallas is still capable of working and could earn up to $400 per month without affecting his railroad benefits; and both parties experienced "windfalls" as a result of Dallas' Union Pacific settlement and Lynne's employment bonus.

Dallas filed a motion for new trial, which the court overruled. Dallas appeals.

ASSIGNMENTS OF ERROR

Dallas assigns, restated, that the district court erred in (1) equally dividing his tier II benefits, (2) considering Lynne's bonus in its justification for equally dividing his tier II benefits, and (3) considering the respective earning capacities of Dallas and Lynne in dividing Dallas' tier II benefits.

STANDARD OF REVIEW

[1,2] The division of property is a matter entrusted to the discretion of the trial judge, which will be reviewed de novo on the record and will be affirmed in the absence of an abuse of discretion. Mathews v. Mathews, 267 Neb. 604, 676 N.W.2d 42 (2004). In a review de novo on the record, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions with respect to the matters at issue. Bauerle v. Bauerle, 263 Neb. 881, 644 N.W.2d 128 (2002).

[3,4] A motion for new trial is addressed to the discretion of the trial court, whose decision will be upheld in the absence of an abuse of discretion. Smith v. Colorado Organ Recovery Sys., 269 Neb. 578, 694 N.W.2d 610 (2005). A judicial abuse of discretion requires that the reasons or rulings of a trial judge be clearly untenable, unfairly depriving a litigant of a substantial right and a just result. In re Guardianship of Robert D., 269 Neb. 820, 696 N.W.2d 461 (2005).

ANALYSIS

Neb. Rev. Stat. § 42-365 (Reissue 1998) provides for the equitable division of marital property, based upon

the circumstances of the parties, duration of the marriage, a history of the contributions to the marriage by each party, including contributions to the care and education of the children, and interruption of personal careers or educational opportunities, and the ability of the supported party to engage in gainful employment without interfering with the interests of any minor children in the custody of such party.

The parties may enter into a written agreement providing for the disposition of their property. Neb. Rev. Stat. § 42-366(1) (Reissue 2004). Such an agreement is binding on the court unless the agreement is found to be unconscionable. § 42-366(2).

In the present case, the parties entered into a stipulation and agreement for the disposition of their property but reserved the allocation of Dallas' tier II benefits for the court. In its decree, the court approved the stipulation and ordered disposition of the parties' property as called for within the stipulation. The court was then left with the question whether Dallas' tier II benefits should be divided between the parties and, if so, how they should be divided.

In the past, courts were prohibited from awarding one spouse an interest in benefits to which the other spouse became entitled under the Railroad Retirement Act. Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S. Ct. 802, 59 L. Ed. 2d 1 (1979). The act has since been amended, and the Railroad Retirement Board has published regulations that require the board to honor a decree of divorce characterizing tier II benefits as property subject to distribution. 45 U.S.C. § 231m(b)(2) (2000); 20 C.F.R. § 295.1 (2005).

[5] Dallas assigns that the district court erred in dividing his tier II benefits, thereby depriving him of a fair and equitable property division. He argues that he is entitled to the entire amount of his tier II benefits in order to "make up" for the windfall realized by the marital estate when he collected settlement funds from Union Pacific, some of which Dallas claims could have been excluded from the marital assets as compensation for pain and suffering. We note that Dallas did not present evidence to the district court to establish upon what basis his tier II benefits were calculated and that he did not argue in his appellate brief that his tier II benefits should not have been included in the marital estate because they were awarded for disability. As we stated in Parde v. Parde, 258 Neb. 101, 602 N.W.2d 657 (1999), the burden of proof to show that property is nonmarital remains with the person making the claim. Thus, our analysis is confined to Dallas' argument with respect to his settlement funds.

Stipulation and Waiver

Dallas testified that he received $575,000 in his settlement with Union Pacific. Of that amount, he testified that $182,000 went to satisfy legal fees; $41,000 and an additional $5,225 was apportioned for "time lost" and "extra years" needed to qualify for disability benefits from Union Pacific; and $50,000 was used to start Mill Iron "S" Company. Dallas argues that the balance of approximately $296,000 was for pain and suffering and, thus, could have been excluded from the marital assets and reserved for Dallas. He cites Parde v. Parde, 258 Neb. at 109, 602 N.W.2d at 663, in support of his argument: "[C]ompensation for an injury that a spouse has or will receive for pain, suffering, disfigurement, disability, or loss of postdivorce earning capacity should not equitably be included in the marital estate." In his brief, Dallas argues that $293,792 of the $296,000 for pain and suffering can be traced to marital assets, including real estate, personal items, money markets, and expenses related to Mill Iron "S" Company. As a result, Dallas argues, the marital estate received a windfall through his settlement moneys.

In contrast, Lynne argues, inter alia, that by entering into the stipulation and agreement before trial in which the parties disposed of all marital property except for the tier II benefits, Dallas waived issues with respect to the nonmarital nature of his settlement proceeds, and that if Dallas wished...