Shockley v. Shockley, S-95-106

• Decision Date: 07 March 1997
• Docket Number: No. S-95-106,S-95-106
• Citation: 560 N.W.2d 777,251 Neb. 896
• Parties: Sandra Kay SHOCKLEY, Appellee and Cross-Appellant, v. Allen Joseph SHOCKLEY, Appellant and Cross-Appellee.
• Court: Nebraska Supreme Court

Page 777

560 N.W.2d 777

251 Neb. 896

Sandra Kay SHOCKLEY, Appellee and Cross-Appellant, v. Allen Joseph SHOCKLEY, Appellant and Cross-Appellee.

No. S-95-106.

Supreme Court of Nebraska.

March 7, 1997.

Syllabus by the Court

1. Divorce: Property Division: Appeal and Error. The division of property in dissolution cases is a matter initially entrusted to the discretion of the trial judge. On appeal, such matters will be reviewed de novo on the record and affirmed in the absence of an abuse of discretion.

2. Divorce: Appeal and Error. Because appeals in domestic relations matters are heard de novo on the record, an appellate court is empowered to enter the order which should have been made as reflected by the record.

3. Divorce: Attorney Fees: Appeal and Error. In a dissolution of marriage case, an award of attorney fees is discretionary, is reviewed de novo on the record, and will be affirmed in the absence of an abuse of discretion.

4. Divorce: Property Division: Pensions. The marital estate includes only that portion of the pension which is earned during the marriage.

5. Divorce: Property Division: Pensions. Contributions to pensions before marriage or after dissolution are not assets of the marital estate.

6. Divorce: Property Division: Pensions. A trial court may exercise discretion in valuing pension rights and dividing such rights between the parties.

7. Divorce: Property Division: Proof. The burden of proof to show the source of all funds claimed as premarital is on the party claiming that those funds are premarital.

8. Divorce: Property Division: Proof. Where there is nothing on the record to show the source of premarital funds, they should be considered part of the marital estate.

9. Divorce: Property Division. In cases where the growth of the marital estate cannot be attributed to one party more than to another, the trial court may divide the estate equally.

10. Attorney Fees: Appeal and Error. On appeal, a trial court's decision awarding or denying attorney fees will be upheld absent an abuse of discretion.

11. Divorce: Attorney Fees: Appeal and Error. The award of attorney fees for services of counsel on appeal depends on multiple factors that include the nature of the case, the amount of property divided and alimony awarded, the earning capacity of the parties, the services performed and results obtained, the length of time required for preparation and presentation of the case, customary charges of the bar, and the general equities of the case.

Michael T. Levy, Omaha, for appellant.

Susan A. Anderson, of Anderson Law Office, Omaha, for appellee.

WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, and GERRARD, JJ., and LUTHER, District Judge.

WHITE, Chief Justice.

Allen Joseph Shockley (Husband) appeals and Sandra Kay Shockley (Wife) cross-appeals the district court of Douglas County's valuation and division of the marital estate in these divorce proceedings. Since we find that the court did indeed err in valuing certain assets of the marital estate, we affirm as modified.

The parties were married on September 15, 1984, and a divorce decree was entered on November 15, 1994. Husband and Wife stipulated that their assets were to be valued as of the date of filing--September 16, 1992.

Both parties worked for US West before and during the marriage. Husband worked for 5.5 years of the parties' marriage and then took early retirement on March 1, 1990, after completing 26.5833 years of service and earning approximately $39,000 per year. He retired on an incentive plan which added 5 years to his age and 5 years to his years of service (5 + 5 enhancement) to compute his lump-sum settlement. Husband placed the proceeds of this settlement into his SCI IRA No. AYR-R09001-A5 account. These were the only funds in that account through the date of filing; the account had a value of $235,254.07 as of that date.

Prior to the marriage, Husband withdrew $14,227 in stock distributions from his employee stock option plan (ESOP). He testified that that amount was placed in two accounts--his Schwab One No. 8120-4039 and his SCI No. OIR-277750-A5. Husband also testified that he took distribution of the remainder of his ESOP and his payroll stock option plan (PAYSOP) at his retirement and rolled that stock into his Schwab One IRA No. 8120-44201.

Wife continued to work at US West throughout these proceedings and was earning approximately $41,000 per year as of the date of filing. On that date, Wife had completed 25.1667 years of service, 8.0833 years of that employment during her marriage. She did not withdraw anything from her ESOP or PAYSOP before the date of filing.

The trial court found that the marital estate had a value of $193,339.80 and allocated $86,929 to Wife and $106,410.80 to Husband. The trial court ordered Husband to pay Wife $9,740.90 to equalize the distribution and $1,000 toward Wife's attorney fees.

On appeal and as summarized, Husband argues that the district court erred in (1) valuing both parties' pensions, (2) failing to deduct premarital assets from two of Husband's investment accounts, (3) valuing a 1964 Ford Falcon awarded to Husband, and (4) ordering Husband to pay $9,740.90 to equalize the estate and $1,000 toward Wife's attorney fees. On cross-appeal, Wife alleges that the district court erred in (1) valuing Husband's pension, (2) valuing one of Husband's IRA accounts, and (3) failing to award Wife an adequate cash settlement.

The division of property in dissolution cases is a matter initially entrusted to the discretion of the trial judge. On appeal, such matters will be reviewed de novo on the record and affirmed in the absence of an abuse of discretion. See, Priest v. Priest, 251 Neb. 76, 554 N.W.2d 792 (1996); Venter v. Venter, 249 Neb. 712, 545 N.W.2d 431 (1996); Ritz v. Ritz, 229 Neb. 859, 429 N.W.2d 707 (1988).

Because appeals in domestic relations matters are heard de novo on the record, an appellate court is empowered to enter the order which should have been made as reflected by the record. Pendleton v. Pendleton, 242 Neb. 675, 496 N.W.2d 499 (1993). In a dissolution of marriage case, an award of attorney fees is discretionary, is reviewed de novo on the record, and will be affirmed in the absence of an abuse of discretion. Venter v. Venter, supra.

The parties' first assignments of error involve the district court's valuation of their respective pensions. We find that the court did err in its calculation of the marital portion of Husband's pension.

We note at the outset that the marital estate includes only that portion of the pension which is earned during the marriage. Reichert v. Reichert, 246 Neb. 31, 516 N.W.2d 600 (1994). Contributions to pensions before marriage or after dissolution are not assets of the marital estate. Priest v. Priest, supra. A trial court may exercise discretion in valuing pension rights and dividing such rights between the parties. Hildebrand v. Hildebrand, 239 Neb. 605, 477 N.W.2d 1 (1991); Sonntag v. Sonntag, 219 Neb. 583, 365 N.W.2d 411 (1985).

In this case, the trial court found that Wife's pension with US West had a total lump-sum value of $18,118.92 as of the date of filing and found the marital portion to be 32.12 percent (Wife's 8.0833 years of service during the marriage, divided by her 25.1667 total years of service). Husband argues that the trial court should have instead determined the marital portion by assuming that Wife would retire after 30 years of service and included those future years of service in finding the marital portion. We have long held that contributions to pensions before marriage or after dissolution are not assets of the marital estate and are not subject to a division. Priest v. Priest, supra. The trial court did not err in determining the marital portion of Wife's pension using the present value of that pension and Wife's actual number of years of service as of the date of filing.

The trial court did, however, err in valuing Husband's pension. Husband took early retirement in a lump sum during the course of the marriage. US West offered a 5 + 5 enhancement for eligible employees in which the company added 5 years to the number of years of service and 5 years to the employee's age in determining the pension. Husband was eligible for early retirement only because the 5 + 5 enhancement increased his years of service from 26.5833 years to 31.5833 years. Wife had to give up her survivor annuity in order for Husband to be eligible for this program. The lump sum was placed in an investment account, SCI IRA No. AYR-R09001-A5, and had a value of $235,254.07 as of the date of filing.

The district court determined the marital portion of Husband's pension by utilizing a two-step procedure. First, the court determined the marital percentage of 20.7 percent without including the 5 + 5 enhancement (Husband's preenhancement 5.5 years of service during marriage, divided by his 26.5833 years of employment). The court multiplied that percentage by the total value of the investment account and found the marital portion to be $48,700. Second, the court determined the value of the buyout incentives. It did so by multiplying the total value of the investment account by a marital percentage of 33.25 percent (Husband's 10.5 years of service as determined by US West and including the 5-year enhancement, divided by Husband's 31.5833 years of employment including the 5-year enhancement) yielding $78,000. The court then subtracted the $48,700 amount to leave $29,300, multiplied that by the 20.7 percent marital percentage, and found the resulting $5,947.80 to be the enhanced value of Husband's pension due to buyout incentives. In other words, instead of using the marital percentage derived either from including the 5 + 5 enhancement (33.25 percent) or from excluding the enhancement (20.7 percent), the court determined that the marital portion of Husband's buyout incentive was approximately one-fifth of the difference...