Striefel v. Striefel

• Citation: 689 N.W.2d 415,2004 ND 210
• Decision Date: 19 November 2004
• Docket Number: No. 20040072.,20040072.
• Parties: Ann Kathleen STRIEFEL, Plaintiff, Appellee, and Cross-Appellant v. Edward Charles STRIEFEL, Defendant, Appellant, and Cross-Appellee.
• Court: North Dakota Supreme Court

689 N.W.2d 415

2004 ND 210

Ann Kathleen STRIEFEL, Plaintiff, Appellee, and Cross-Appellant v. Edward Charles STRIEFEL, Defendant, Appellant, and Cross-Appellee.

No. 20040072.

Supreme Court of North Dakota.

November 19, 2004.

Todd L. Cresap, Kenner Sturdevant & Cresap, P.C., Minot, ND, for plaintiff, appellee, and cross-appellant.

Gary H. Lee, Olson Burns Lee, Minot, ND, for defendant, appellant, and cross-appellee.

MARING, Justice.

[¶ 1] Edward Charles Striefel appealed and Ann Kathleen Striefel cross-appealed from the judgment entered in their divorce action. We conclude that the trial court's findings of fact about spousal support are not clearly erroneous and the trial court's finding of fact about Edward's CalPERS benefits is contrary to California law. We affirm in part, reverse in part and remand the case to the trial court for further proceedings consistent with this decision.

I

[¶ 2] The parties married in 1986 while they were attending college, and are the parents of two children, who were born in August 1986 and October 1990. Edward began employment with the California Department of Corrections in 1987. In 1992, Edward began to have problems resulting from his pre-existing degenerative hip disease for which he had had corrective surgery in 1982. In 1993, the California Public Employees Retirement System ("CalPERS") approved Edward's request for disability benefits. After Edward was placed on disability status, the family returned to North Dakota. California workers compensation funds paid all of Edward's expenses to complete his college education under a rehabilitation program. Edward's rehabilitation ended when he completed college in May 1994. He then began drawing CalPERS disability benefits, which pay him 50% of his salary for life, tax-free, with a cost-of-living raise each year. At the time of trial, Edward was receiving a monthly payment of $2,219 from CalPERS.

[¶ 3] After Edward graduated from college in 1994, Ann began working outside the home. Ann sued for divorce in December 2002. At the time of the divorce, Ann was an assistant manager at McDonald's earning $22,254 per year. Edward works in the Minot Public School system and earns about $14,000 per year. When they divorced, Edward was 39 years old and Ann was 36.

[¶ 4] After trial, the trial court: (1) found that "[w]ith $26,000 of his $40,000 annual income tax exempt, Edward effectively has an annual income twice that earned by Ann. Thus, it goes without saying that Edward will find it much easier to `make ends meet' in the post-divorce era than will Ann;" (2) found the gross value of the marital estate was $101,460 and the marital debt was $103,300; (3) found the CalPERS payments are marital property; (4) concluded "the primary purpose of the monthly CalPERS benefits Edward presently receives did not come about until he completed his rehabilitation, and so the CalPERS benefits are that of an early retirement program payment and meant to replace the regular longevity based retirement program payments had Edward remained or returned to work, and not taken early retirement;" and (5) found Ann should receive "one-fourth of whatever Edward's CalPERS benefits are in the future." The court found Ann is a disadvantaged spouse and also found her to be capable of rehabilitation:

Based on the assets available for division in this case, Edward's earning ability, Ann's departure from MSU and her absence from the workforce during the parties['] marriage, the 20 plus year period until Ann reaches the typical age of retirement, the modest standard of living the parties enjoyed during their marriage, and the present disparity in the parties' earning abilities, the equitable division of marital property, all together strongly indicate that Ann, who is a healthy high school graduate with management experience, is capable of rehabilitation.

[¶ 5] The judgment (1) granted the parties a divorce; (2) granted the parties joint custody of the children, with Edward having primary physical custody and Ann having reasonable visitation; (3) ordered Ann to pay child support of $723 per month, starting February 1, 2004, and $492 per month, starting September 1, 2004, based on her projected monthly net income of $2,538; (4) ordered Edward to pay Ann rehabilitative spousal support of $400 per month from February 1, 2004, through August 1, 2004, and $200 per month from September 1, 2004, through October 2008; (5) awarded Ann "one-fourth of Edward's CalPERS benefits which are payable now and in the future;" and (6) divided the parties' other property and debts.

[¶ 6] Edward appealed, contending the trial court's findings that the CalPERS payments were divisible marital property and that Ann is a disadvantaged spouse entitled to spousal support are clearly erroneous. Ann cross-appealed, contending the trial court's award to her of only one-fourth of Edward's CalPERS payments is clearly erroneous.

II

[¶ 7] "When a divorce is granted, the court shall make an equitable distribution of the property and debts of the parties." N.D.C.C. § 14-05-24. Although a property distribution need not be equal to be equitable, the trial court must explain a substantial disparity. Reineke v. Reineke, 2003 ND 167, ¶ 5, 670 N.W.2d 841. "A homemaker's contributions deserve equivalent recognition in a property distribution upon dissolution." Fox v. Fox, 1999 ND 68, ¶ 7, 592 N.W.2d 541. In dividing marital property in a divorce action, the trial court normally starts with an equal distribution of the property, Sommers v. Sommers, 2003 ND 77, ¶ 6, 660 N.W.2d 586, and must explain a substantial disparity in the property division, Amsbaugh v. Amsbaugh, 2004 ND 11, ¶ 23, 673 N.W.2d 601. "A trial court's determinations regarding division of property are treated as findings of fact and will not be reversed unless they are clearly erroneous." Reineke, at ¶ 5. Section 14-05-24.1, N.D.C.C., authorizes a trial court in a divorce case to "require one party to pay spousal support to the other party for any period of time." A trial court's spousal support determination is reviewed as a finding of fact and will be overturned only if clearly erroneous. Reineke, at ¶ 7. Property division and spousal support ordinarily must be dealt with together. Id.

[T]he Ruff-Fischer guidelines apply to both property division and spousal support, which ordinarily must be considered together, and a trial court's spousal support and property division determinations are findings of fact that are subject to the clearly erroneous standard of review. Under the Ruff-Fischer guidelines, the following factors should be considered:

the respective ages of the parties to the marriage; their earning abilities; the duration of the marriage and the conduct of each during the marriage; their station in life; the circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and income-producing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material.

Shields v. Shields, 2003 ND 16, ¶ 7, 656 N.W.2d 712 (quoting Mellum v. Mellum, 2000 ND 47, ¶ 15, 607 N.W.2d 580).

Reineke, at ¶ 8.

[¶ 8] "`A trial court's findings of fact are presumptively correct, and we view the evidence in the light most favorable to the findings.'" Reineke, 2003 ND 167, ¶ 12, 670 N.W.2d 841 (quoting Schmidt v. Schmidt, 2003 ND 55, ¶ 5, 660 N.W.2d 196). "The burden is on the complaining party to demonstrate on appeal that a trial court's finding of fact is clearly erroneous." Marschner v. Marschner, 2002 ND 67, ¶ 4, 642 N.W.2d 857. "`We ... do not reweigh evidence or reassess credibility if there is evidence supporting the trial court's findings.'" Oldham v. Oldham, 2004 ND 62, ¶ 13, 677 N.W.2d 196 (quoting Kautzman v. Kautzman, 2002 ND 118, ¶ 12, 647 N.W.2d 684). "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence, we are left with a definite and firm conviction that a mistake has been made." Oppegard-Gessler v. Gessler, 2004 ND 141, ¶ 7, 681 N.W.2d 762.

A.

[¶ 9] Edward contends his CalPERS benefits are disability benefits and the trial court's finding that they are divisible marital property is clearly erroneous.

[¶ 10] "[P]ensions and retirement benefits are marital assets subject to equitable distribution by the court." Fox v. Fox, 1999 ND 68, ¶ 9, 592 N.W.2d 541. However, "disability payments do not constitute marital property, because they are intended as replacement for income the disabled spouse would be earning currently and would be able to earn in the future had the spouse not become disabled." Id.

[¶ 11] The California Supreme Court in In re Marriage of Stenquist, 21 Cal.3d 779, 148 Cal.Rptr. 9, 582 P.2d 96, 103 (1978), concluded military retirement pay based on disability has two components: (a) compensation for loss of earning power and personal suffering, and (b) retirement support. The court further concluded that the retirement support component, "to the extent that it is attributable to employment during marriage, is community property." Id. A disability pension recipient's continued work after retiring on a disability pension is evidence that the pension's purpose to replace retirement benefits predominates over the pension's purpose to compensate for the economic loss and personal suffering occasioned by his disability. See In re Marriage of Justice, 157 Cal.App.3d 82, 204 Cal.Rptr. 6, 10 (1984):

It thus appears that a police officer's disability pension is intended to replace service retirement benefits as well as to compensate the officer for economic loss and personal suffering occasioned by his disability. The former purpose doubtless is the predominate function served by Harold's disability pension in

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