Wolff v. Wolff

• Decision Date: 20 December 1996
• Docket Number: No. 26628,26628
• Citation: 929 P.2d 916,112 Nev. 1355
• Parties: Roberta Elwyn WOLFF, Appellant/Cross-Respondent, v. Gerhard Heinz WOLFF, Respondent/Cross-Appellant.
• Court: Nevada Supreme Court

Page 916

929 P.2d 916

112 Nev. 1355

Roberta Elwyn WOLFF, Appellant/Cross-Respondent, v. Gerhard Heinz WOLFF, Respondent/Cross-Appellant.

No. 26628.

Supreme Court of Nevada.

Dec. 20, 1996.

Rehearing Denied March 5, 1997.

Kevin H. Mirch, Reno, for Appellant/Cross-Respondent.

Skelly and Sheehan, Reno, for Respondent/Cross-Appellant.

OPINION

YOUNG, Justice:

Appellant Roberta Elwyn Wolff ("Roberta") and respondent Gerhard Heinz Wolff ("Gerhard") were married on June 18, 1982. On September 10, 1993, Roberta filed a complaint for divorce. On March 5, 1994, after a pre-trial settlement conference, Roberta and Gerhard entered into a written property settlement agreement.

The written property settlement agreement disposed of all the property rights, duties and obligations which Roberta and Gerhard had accumulated during their marriage except for Gerhard's retirement benefits. Roberta and Gerhard agreed to submit a stipulated statement of facts to the court, in addition to arguments regarding the appropriate disposition of those retirement benefits.

On November 1, 1994, the district court entered its decision regarding the disposition of Gerhard's retirement. On November 22, 1994, the district court entered its findings of fact and conclusions of law regarding its decision.

Roberta appeals the district court's decision, arguing that the district court erred by classifying pre-retirement payments as limited temporary spousal support and ordering Gerhard to pay less than Roberta's share of Gerhard's retirement benefits. Gerhard cross-appeals, arguing that the district court erred by (1) awarding limited temporary alimony to Roberta; (2) applying a fatally flawed formula for valuating community retirement benefits; (3) requiring Gerhard to purchase a life insurance policy, naming Roberta as beneficiary; (4) ordering that retirement benefits be paid to Roberta's estate if Roberta predeceases Gerhard; (5) not considering Roberta's payments into social security as an offset to her share of Gerhard's retirement benefits; and (6) improperly distributing community property because compelling reasons existed for an unequal distribution in Gerhard's favor.

We conclude that each of Roberta's arguments has merit. Additionally, we conclude that Gerhard's argument regarding the district court's requirement that Gerhard must purchase a life insurance policy naming Roberta as beneficiary has merit. Accordingly, we reverse the district court's order, in part.

FACTS

Gerhard was first employed by the State of Nevada as a highway patrol officer on July 10, 1972. On June 18, 1982, nearly ten years after Gerhard began working for the Nevada Highway Patrol ("NHP"), Gerhard and Roberta were married. On September 10, 1993, Roberta filed for divorce.

On March 5, 1994, Gerhard and Roberta entered into a property settlement agreement. The agreement settled all disputes between the parties except the distribution of Gerhard's Public Employees Retirement System ("PERS") retirement account.

As of March 3, 1994, the effective date of the parties' divorce, Gerhard had accumulated a total of 21 years and 236 days, or 21.65 years, in his retirement account. The community acquired 11 years and 260 days, or 11.71 years, in Gerhard's retirement, thereby creating a fifty-four percent community interest in Gerhard's retirement.

On June 16, 1994, Gerhard's fiftieth birthday, Gerhard became eligible for his retirement benefits. However, Gerhard elected to continue working. Therefore, pursuant to Chapter 286 of the Nevada Revised Statutes, PERS could not pay Gerhard or Roberta retirement benefits because he still worked for NHP.

During the course of the marriage, Roberta was gainfully employed and contributed to social security. Gerhard, on the other hand, did not contribute to social security because of his state-sponsored retirement with PERS.

On November 1, 1994, the district court made its ruling regarding Gerhard's retirement benefits. That ruling was memorialized in the district court's November 22, 1994 findings of fact, conclusions of law and decree of divorce ("the decree"). The district court found that "[t]he community interest in [Gerhard's] Pension-Retirement benefit is $1,155.12 per month." The court further provided that "[a]ny benefits ordered to be paid by the Court, prior to [Gerhard's] actual retirement, will have to be paid from [Gerhard's] after tax earnings, from [Gerhard's] salary."

Because Roberta elected to immediately receive her portion of Gerhard's retirement benefits, the district court held that Roberta is entitled to receive her share of Gerhard's retirement on the date of Gerhard's eligibility for such benefits. Until such time, the district court ruled, Gerhard must provide a "reasonable equivalency" to Roberta.

According to the district court, an equivalency must reflect Gerhard's obligation to transfer to Roberta his vested community property interest in Roberta's social security benefits. Also, such equivalency was required to reflect that Gerhard is paying taxes on his post-marital revenues. Therefore, the district court ruled that the amount of Roberta's community share of Gerhard's retirement, when Gerhard is entitled to receive it, will never be less than $578.00 per month subject to minor fluctuations.

The decree further provided that Roberta "is awarded $450.00 per month as Limited Temporary Spousal Support, as a 'reasonable equivalency' [to her present share of Gerhard's retirement benefits], until she dies or until [Gerhard] retires, whichever first occurs. [Roberta's] subsequent remarriage does not abrogate the Limited Temporary Spousal Support obligation." The decree further stated that "[Roberta's] vested Community Interest in [Gerhard's] Retirement does not terminate upon [Roberta's] death and continues to her estate until [Gerhard's] death." Additionally, the decree recognized that the $450.00 limited temporary spousal support payment was a "taxable consequence to [Roberta] and a taxable deduction to [Gerhard]."

DISCUSSION

Standard of review

In Shane v. Shane, 84 Nev. 20, 22, 435 P.2d 753, 755 (1968), we stated that "[b]efore the appellate court will interfere Designation of limited temporary spousal support

                with the trial judge's disposition of the community property of the parties or an alimony award, it must appear on the entire record in the case that the discretion of the trial judge has been abused."   This court's rationale for not substituting its own judgment for that of the district court, absent an abuse of discretion, is that the district court has a better opportunity to observe parties and evaluate the situation.  Winn v. Winn, 86 Nev. 18, 20, 467 P.2d 601, 602 (1970)
                

Roberta argues that her share of Gerhard's retirement benefits was improperly designated as limited temporary spousal support. We agree. In Walsh v. Walsh, 103 Nev. 287, 288, 738 P.2d 117, 117 (1987), we stated that "retirement benefits earned during the marriage are community property." In Carrell v. Carrell, 108 Nev. 670, 671, 836 P.2d 1243, 1244 (1992), we were faced with a similar situation as presented by the case at bar. In Carrell, recognizing that the wife's pension was worth less than the husband's pension, the district court required the husband to pay "spousal support" to the wife that "would result in a fifty/fifty division of the pensions." Id. The Carrell court concluded that

[a]s community property, retirement benefits are afforded certain rights which do not attach to spousal support awards. Specifically, community property is not subject to future modification whereas spousal support can be modified upon a change of circumstances, remarriage, or death. NRS 125.150(5), (7). Consequently, the district court erred when it characterized [the wife's] community property as "spousal support," thereby subjecting it to possible future modification.

Id.

We conclude that classifying Roberta's share of the community asset as limited temporary spousal support was an error because the spousal support award, unlike an interest in community property, is subject to possible future modification. See NRS 125.150(7).

In his cross-appeal, Gerhard argues that the award of limited temporary spousal support was improper because Roberta did not qualify for any kind of spousal support. As discussed above, we conclude that Roberta is clearly entitled to her portion of the community's interest in Gerhard's retirement. Further, the classification of that right as temporary limited spousal support was error. Accordingly, Gerhard's argument misinterprets the purpose of the district court's award, and therefore, we need not address this particular argument here.

Gerhard's obligation for Roberta's interest in his retirement

Roberta acknowledges that pursuant to the formula announced by this court in Gemma v. Gemma, 105 Nev. 458, 461, 778 P.2d 429, 431 (1989), the district court properly determined the community property interest in Gerhard's retirement as $1,155.12 per month. See also Sertic v. Sertic, 111 Nev. 1192, 1195, 901 P.2d 148, 149 (1995) (designating three factors to determine the propriety of distributing retirement pension at the time of divorce). However, Roberta argues that the district court arbitrarily reduced her monthly payment to $450.00, instead of $577.56.

We agree with Roberta's argument that the district court arbitrarily reduced Roberta's award. The district court did not adequately describe why it reduced Roberta's $577.56 interest in Gerhard's retirement to the $450.00 "reasonable equivalency" award for temporary spousal support. The decree merely stated that "[t]he taxable consequences of [Gerhard's] payments to [Roberta] have been considered in the 'equivalency' amount [Gerhard] should pay to [Roberta], until [Gerhard] actually retires." We further conclude that Roberta's receipt of $450.00 violates the "equal distribution" presumption governing Nevada's community property laws. See NRS...