TERESA LOVELASS f/k/a TERESA HUTCHINSON v. CHRISTOPHER HUTCHINSON , 250 So. 3d 701 ( 2018 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
TERESA N. LOVELASS f/k/a TERESA HUTCHINSON,
Appellant,
v.
CHRISTOPHER HUTCHINSON,
Appellee.
No. 4D17-1905
[June 27, 2018]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Rosemarie Scher, Judge; L.T. Case No. 2016 DR 6120 FH.
John D. Boykin of Ciklin Lubitz & O’Connell, West Palm Beach, for
appellant.
Robert D. Burgs of Robert D. Burgs, P.A., Plantation, for appellee.
LEVINE, J.
The wife appeals a final judgment of dissolution of marriage. She raises
three issues: whether the trial court incorrectly valued the martial portion
of the husband’s pension, whether the trial court erred in not allowing her
to reopen the evidence to place an exhibit into evidence relating to the
husband’s accrued vacation and sick leave, and finally whether the trial
court erred in sua sponte eliminating the unequal distribution the trial
court previously awarded to the wife. We find the trial court did not err in
valuing the husband’s pension by using a 2.5% multiplier rather than the
3% multiplier that would become effective only upon the husband accruing
twenty years of service. However, it did err in not allowing the admission
of the husband’s accrued vacation and sick leave and in eliminating the
unequal distribution award on the basis that it was not pled. Thus, we
affirm on the first issue and reverse on the second and third issues.
The parties were married in 2003 and a petition for dissolution of
marriage was filed in 2016. At the time the petition was filed, the husband
had been working for as a fireman for the City of Delray Beach for sixteen
years. As a fireman, the husband received a pension that accrued from
the beginning of his employment at a rate of 2.5% per year worked. The
husband intended to work for twenty-five years as a fireman for the city.
When the husband reached twenty years of service, the annual rate for the
computation of retirement benefits would increase to 3% per year, and this
higher multiplier would apply from the beginning of service. Nevertheless,
at the time of filing, the husband had accrued only the multiplier of 2.5%
per year.
The only expert who testified at trial was the husband’s expert, Timothy
Voit. Using the 2.5% multiplier, Voit calculated that the gross monthly
benefit accumulated in the pension plan during the marriage was
$2,254.80, of which the wife was entitled to one-half or $1,127.40. Voit
used the 2.5% multiplier because his calculation was based on the amount
of benefit that accrued as of the date of filing of the petition and did not
take the husband’s post-marital efforts into consideration.
The parties returned a week and a half after the close of evidence for
closing arguments. At that time, the wife sought to reopen trial to
introduce an exhibit reflecting the husband’s accrued vacation and sick
leave. The husband had not disclosed his accrued vacation and sick leave
on his financial affidavits. The trial court declined to reopen trial and
declined to admit any further evidence.
The trial court entered a final judgment of dissolution of marriage and
later entered an amended and second amended judgment. The second
amended judgment found that the wife was entitled to $1,127.40 per
month for the husband’s pension. Although the original final judgment of
dissolution of marriage awarded an unequal distribution of marital assets
in favor of the wife, the second amended judgment awarded an equal
distribution, stating that the trial court was unable to award an unequal
distribution because an unequal distribution was not pled. From this
judgment, the wife appeals.
As to the first issue, we review de novo the determination of assets being
either marital or non-marital, see Witt-Bahls v. Bahls, 193 So. 3d 35, 37
(Fla. 4th DCA 2016), whereas the valuation of a marital asset is reviewed
for competent substantial evidence, see Jordan v. Jordan, 127 So. 3d 794,
796 (Fla. 4th DCA 2013).
The wife argues that the trial court erred in valuing the husband’s
pension utilizing the 2.5% annual multiplier rather than the 3% multiplier
that will apply once the husband reaches twenty years of service. The
husband testified that he intended to work for twenty-five years.
The husband argues that the trial court correctly valued his pension.
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He points to the fact that there is no penalty provision in his pension and
that the trial court correctly valued the pension using the annual 2.5%
multiplier at the time of filing with sixteen years of service.
Our analysis of this issue begins with the statute. Marital assets are
defined by statute to include “[a]ssets acquired . . . during the marriage,
individually by either spouse or jointly by them.” § 61.075(6)(a)(1), Fla.
Stat. (2016). Marital assets also include “[a]ll vested and nonvested
benefits, rights, and funds accrued during the marriage in retirement,
pension, profit-sharing, annuity, deferred compensation, and insurance
plans and programs.” Id.
“Two principal methods have evolved whereby courts distribute and
divide pensions: the ‘immediate offset’ method and the ‘deferred
distribution’ method.” Trant v. Trant, 545 So. 2d 428, 429 (Fla. 2d DCA
1989) (citation omitted). Under the immediate offset method, one spouse
receives the present value of his or her interest in the other spouse’s
pension either in cash or as an offset to the share of marital property. Id.Under the deferred distribution method,
the court determines what the employee’s benefit would be if
he retired on the date of the final hearing without any early
retirement penalty. The court then multiplies this dollar
amount by the percentage to which the other spouse is
entitled. This method yields a fixed dollar amount which the
awarded spouse receives from each of the employee’s pension
payments after retirement. Although it prolongs contact
between the parties and raises the possibility of enforcement
problems, this approach equally distributes the risk of
forfeiture between the parties.
Id.Both parties cite to Boyett v. Boyett, 703 So. 2d 451 (Fla. 1997), as
supporting their argument. Thus, Boyett is key to our analysis of this
issue.
In Boyett, the issue was the value of the husband’s retirement pension
using the deferred distribution method. Under the terms of the plan, the
husband would receive yearly benefits of 75% of his highest annual
salaries. Id. at 451. He would incur a 2% penalty for each year he retired
before the age of sixty-two. Id. at 453.
The Florida Supreme Court in Boyett stated that “the valuation of a
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vested retirement plan is not to include any contributions made after the
original judgment of dissolution.” Id. at 452. The Florida Supreme Court
also adopted the view that “it is more equitable for the valuation to be made
excluding any penalty for early retirement.” Id. at 453. Thus,
[b]y valuing the retirement plan without penalty, the valuation
recognizes that both parties are entitled to share in the
benefits that have accrued during the marriage but which
cannot be presently received without penalty. Both parties
also get the benefit of the growth of that value simply because
the payments are not received beginning at the time of
dissolution.
Id. The court determined the “proper valuation to be the present value
without penalty for early retirement because of the deferred distribution.”
Id.Thus, the decision in the instant case turns on whether awarding 2.5%
instead of 3% is a “penalty.” We find that the application of a 2.5%
multiplier instead of the 3% multiplier the husband could achieve after
four years additional service is not a “penalty.” Rather, the 3% is a bonus
for the additional service the husband must perform in order to qualify for
the enhanced retirement multiplier. This is consistent with the basic
premise of Boyett that the “valuation of a vested retirement plan is not to
include any contributions made after the original judgment of dissolution.”
Id. at 452. Clearly, in order to get the benefit of the enhanced multiplier,
the husband needs to continue working during a period of time after the
dissolution. Thus, we find the enhanced multiplier to be akin to a bonus
for longevity in the husband’s employment and unlike the penalty in
Boyett.
Regarding the second issue, the wife contends that the trial court
abused its discretion in refusing to reopen the trial to allow her to present
evidence of accrued vacation and sick leave, which were not listed on the
husband’s financial affidavits. The denial of a motion to reopen a case is
reviewed for abuse of discretion. Loftis v. Loftis, 208 So. 3d 824, 826 (Fla.
5th DCA 2017).
In deciding whether to grant a motion to reopen to present additional
evidence, a trial court should consider whether granting the motion “would
unfairly prejudice the opposing party and whether it would ‘serve the best
interests of justice.’” Id. (citation omitted). Factors to consider in deciding
whether to reopen a case include: “(1) the timeliness of the request, (2) the
character of the evidence sought to be introduced, (3) the effect of allowing
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the evidence to be admitted, and (4) the reasonableness of the excuse
justifying the request to reopen.” Grider-Garcia v. State Farm Mut. Auto.,
73 So. 3d 847, 849 (Fla. 5th DCA 2011).
In this case, the interests of justice favored reopening the case to allow
the wife to introduce the exhibit into evidence. Although the husband was
required to report any possible assets including accrued vacation and sick
leave, he left this section of his financial affidavits blank. See Fla. Family
Law Form 12.902(c); Dye v. Dye, 17 So. 3d 1278, 1281 (Fla. 2d DCA 2009).
Because of the husband’s non-disclosure of these potential assets, the wife
did not learn of their existence until after the close of the evidence. The
husband cannot claim that he would be unfairly prejudiced by reopening
the evidence when his own non-disclosure caused the wife’s delay in
seeking to introduce this exhibit.
In her last issue, the wife asserts that the trial court erred in sua sponte
eliminating the unequal distribution it previously awarded to her on the
basis that unequal distribution was not pled. A trial court’s equitable
distribution is generally reviewed for abuse of discretion, but is reviewed
de novo to the extent the issue on appeal concerns a pure question of law.
Mathers v. Brown, 21 So. 3d 834, 837 (Fla. 4th DCA 2009).
The wife is correct that the trial court incorrectly found that it was
unable to grant an unequal distribution because it was not pled. In David
v. David, 58 So. 3d 336, 338 (Fla. 5th DCA 2011), the court rejected the
claim that the trial court “lacked the jurisdiction” to enter an unequal
distribution of the parties’ assets and liabilities because the wife did not
plead for unequal distribution in her counter-petition. The David court
noted that section 61.075(1) “expressly authorizes trial courts to enter an
unequal distribution of marital assets and liabilities based upon relevant
factors.” Id. As such, we reverse for the trial court to reconsider the
distribution award in light of David.
In sum, we affirm issue 1 and reverse issues 2 and 3 for further
proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
WARNER and TAYLOR, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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