Alexander v. Alexander , 2014 Ohio 131 ( 2014 )

[Cite as Alexander v. Alexander, 2014-Ohio-131.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
CINDA L. ALEXANDER
Plaintiff-Appellant
v.
CURTIS E. ALEXANDER
Defendant-Appellee
Appellate Case No. 25687
Trial Court Case No. 2010-DR-697
(Civil Appeal from Common
Pleas Court - Domestic Relations)
(
...........
OPINION
Rendered on the 17th day of January, 2014.
...........
REBEKAH S. NEUHERZ, Atty. Reg. No. 0076381, 121 South Main Street, Urbana, Ohio 43078
Attorney for Plaintiff-Appellant
JEFFREY D. SLYMAN, Atty. Reg. No. 0010098, 575 South Dixie Drive, Vandalia, Ohio 45377
Attorney for Defendant-Appellee
.............
2
WELBAUM, J.
{¶ 1} Plaintiff-Appellant, Cinda Alexander, appeals from a judgment and decree of
divorce dividing marital property and awarding spousal support payments to Cinda from
Defendant-Appellee, Curtis Alexander.1 Cinda contends that the trial court failed to address and
equitably divide Curtis’s pension. In addition, Cinda contends that the trial court abused its
discretion in the duration and amount of spousal support. Finally, Cinda contends that the trial
court abused its discretion in failing to impute income to Curtis, based on Curtis’s voluntary
unemployment.
{¶ 2} We conclude that the trial court abused its discretion by failing to consider and
account for Curtis’s pension for purposes of property division and spousal support. The court did
not abuse its discretion in failing to impute income to Curtis, because Cinda did not submit
evidence in support of such a finding. Accordingly, the judgment of the trial court will be
reversed, and this matter will be remanded for further hearing.
I. Facts and Course of Proceedings
{¶ 3} In June 2010, Cinda filed a complaint for divorce, and Curtis counterclaimed,
also seeking a divorce. The trial court filed a temporary support order, but vacated it in part in
August 2010. The parties then filed an agreed order, which required Curtis to pay $550 in
temporary child support and $600 per month in spousal support. At the time, Curtis was
employed as a correctional officer with the State of Ohio, and Cinda was receiving disability
payments.
1
For purposes of convenience, we will refer to the parties by their first names.
3
{¶ 4} In November 2011, the minor child was ordered emancipated, and child support
was terminated, effective May 22, 2011. After a number of continuances, the final divorce
hearing was held in October 2012. At the hearing, the parties stipulated to various matters, but
left the issue of spousal support to the trial court’s determination. After hearing the evidence, the
trial court awarded $450 per month in spousal support to Cinda, for a period of 72 months. The
court noted that it was shortening the normal term of spousal support by 18 months, based on the
fact that Curtis paid temporary spousal support for two years and had paid the majority of the
parties’ debt through their Chapter 13 bankruptcy. The trial court reserved continuing
jurisdiction over spousal support. Cinda appeals from the judgment of the trial court.
II. Did the Trial Court Abuse its Discretion
By Failing to Address Curtis’s Pension and in Awarding Spousal Support?
{¶ 5} Because Cinda’s two assignments of error are interrelated, we will address them
together. Cinda’s First Assignment of Error is as follows:
The Trial Court’s Failure to Address and Equitably Divide the Defendant’s
Pension Constituted an Abuse of Discretion.
{¶ 6} Cinda’s Second Assignment of Error states that:
The Duration and Amount of Spousal Support Awarded to
Plaintiff/Appellant Cinda Alexander by the Trial Court Constitutes an Abuse of
Discretion.
{¶ 7} Under the first assignment of error, Cinda contends that the trial court erred in
failing to consider Curtis’s retirement account, which had a present value at the time of the
4
hearing in excess of $221,000. Cinda contends that the pension was a marital asset and should
have been equitably divided. Under the second assignment of error, Cinda argues that the
amount of spousal support was unreasonably low, and that the court’s failure to award lifetime
support or support for an indefinite time was an abuse of discretion.
{¶ 8} The parties in this case had been married nearly 25 years by the time the divorce
was filed in 2010. When Curtis retired on September 1, 2012, he had been employed for 30 years
by the State of Ohio, (Exhibit I), and had, therefore, accumulated most of his pension during the
parties’ marriage. Curtis retired shortly before the final hearing in this matter occurred, and the
final entry and decree was filed on December 12, 2012. Consequently, the parties were married
when Curtis retired.
{¶ 9} At trial, Curtis testified that he had elected to receive a benefit under “plan A,”
which would pay him an unknown amount per month during his lifetime and would provide
Cinda with 50% of that amount upon his death. Curtis had not yet received a benefit check on
the day he testified, and he could not recall the amount of his monthly benefit. Transcript of
Proceedings, pp. 44-46. Curtis did not provide documentation to support his testimony.
However, Curtis was married on the date of retirement. He was required to receive benefits
under “plan A” unless Cinda executed a waiver permitting him to elect an alternate plan. R.C.
145.46(A)(C)(1) and Ohio Adm.Code 145:2-44(A).
{¶ 10} Curtis attempted to elect a more personally generous single life annuity plan,
which is described in Exhibit X, a retirement application that he had submitted to the Ohio Public
Employees Retirement System on April 15, 2012. This document indicates that Curtis would
retire on August 31, 2012 and had selected a single life annuity under either “plan B” or “E” that
5
would be paid for his lifetime and would terminate at his death with no benefit to Cinda.
According to Exhibit X, this would provide Curtis with a gross monthly benefit of approximately
$4,223.72. There was no substantive evidence as to what Curtis’s monthly benefit was under the
relevant “plan A.”
{¶ 11} Both Cinda and Curtis had worked for the State of Ohio as correctional officers.
Cinda began earning retirement credit with the state in 1994. Transcript of Proceedings, p. 52.
At the date of the hearing, Cinda was entitled to 18 years of retirement service credit. Beginning
in 2008, Cinda was paid retirement disability payments from the State of Ohio, based on injuries
she sustained in an auto accident while traveling to work. Her monthly payments were about
$1,750, and this was her only source of income, other than the temporary spousal support she had
been receiving. Cinda will be eligible to file an application to have her disability transferred to
retirement benefits on November 30, 2025, (Exhibit H), when she is old enough to retire, but no
evidence was submitted to indicate whether the retirement pension would be the same amount, or
what the amount, if any, in Cinda’s retirement account was at the time of the hearing.
{¶ 12} Evidence was presented that Cinda would also be eligible for social security
benefits of approximately $561 per month if she waited until her full retirement age of 67. This
amount would be subject to some decrease due to provisions requiring an offset for public pension
income, but no evidence was submitted to indicate what the amount of the offset would be.
{¶ 13} At the time of the hearing, both Cinda and Curtis were 51 years old. Cinda had
a high school education and no special training. Curtis had an associate’s degree in real estate.
Neither party had any apparent intention of returning to work. Cinda claimed she was unable to
be gainfully employed due to her disability, and Curtis stated that he did not intend to pursue
6
further employment.
{¶ 14} As was noted, the trial court awarded Cinda $450 per month in spousal support
for 72 months, but did not make any provisions with respect to the parties’ retirement accounts,
other than a deferred compensation account that contained approximately $2,938 in August 2011.
Curtis retained this account, by agreement of the parties.2
{¶ 15} Cinda contends that the trial court should have treated the pension as a marital
asset and should have equitably divided it. Curtis contends, on the other hand, that he and Cinda
had both retired, and that Cinda never asserted at trial that his pension should be divided. We do
not agree that Cinda “retired.” Rather, she was receiving retirement disability benefits. (Exhibit
H).
{¶ 16} Cinda testified that her disability status was evaluated every year, and paperwork
had to be filed in order for her to stay on disability. This is unlike a retirement pension, in that
payment is not guaranteed, but is conditioned upon the recipient’s continued satisfaction of
criteria for receiving disability. Furthermore, disability payments represent an income that an
individual receives “in recognition of the fact” that he or she cannot earn income as a result of a
disability. Smith v, Smith, 2d Dist. Montgomery No. 12063, 1990 WL 166983, *3 (Nov. 2,
1990). Accord Elsass v. Elsass, 2d Dist. Greene Nos. 93-CA-0005, 93-CA-0016, 1993 WL
541610, *5 (Dec. 29, 1993) (holding that “disability benefits * * * are a form of wage
continuation designed to compensate the recipient for wages that he would otherwise receive but
for the disability. Thus, such benefits are not to be considered a part of the marital estate except”
2
The deferred compensation document was dated more than a year before the hearing, and was the latest account value provided
to the Court. In general, the documentation submitted by both sides was insufficient to allow a reasoned evaluation of their circumstances.
7
when the retiree accepts the benefits in lieu of retirement pay.)
{¶ 17} No testimony or evidence was submitted to indicate that Cinda had accepted
disability payments in lieu of retirement pay. In fact, Cinda indicated otherwise, by stating that
she could file an application to transfer to a retirement pension when she attained retirement age.
As was noted, the parties failed to present evidence regarding what that amount might be.
{¶ 18} “Retirement benefits acquired during a marriage are marital assets that must be
equitably divided between the spouses in a final judgment of divorce.” Dindal v. Dindal, 3d
Dist. Hancock No. 5-09-06, 2009-Ohio-3528, ¶ 6, citing R.C. 3105.171(A)(3)(a)(i), (ii), and Hoyt
v. Hoyt, 53 Ohio St.3d 177, 178, 559 N.E.2d 1292 (1990). “A vested pension plan accumulated
during marriage is a marital asset and must be considered in conjunction with other factors listed
under R.C. 3105.18 and other relevant factors in dividing marital assets and liabilities to ensure
that the result reached is equitable.” Holcomb v. Holcomb, 44 Ohio St.3d 128, 541 N.E.2d 597(1989), syllabus.
{¶ 19} In Hoyt, the court noted that:
In the instance of vested matured retirement benefits, the amount is
currently due and payable and the value is fixed and easily ascertainable. For
example, where an employed spouse is receiving a pension at the time of the
divorce, the trial court may consider the pension as earnings in determining the
amount of alimony or support. Whether the parties are of retirement age or close
to retirement age, it may be in the parties' best interests for the trial court to
consider the pension or retirement benefits as income. Likewise, in another given
situation it may be more advantageous to determine the present cash value or
8
theoretical liquidation value. The disadvantages of determining a present cash
value are in projecting, deducing and calculating what a future benefit is worth in
terms of today's dollar. This alternative may be viable only when the parties have
other substantial marital assets to offset the nonemployed spouse's share. The
advantage of determining a present cash value is that it disentangles the affairs of
the parties and concludes their economic partnership. Once the trial court has
determined a value, a sum certain, the fund may be liquidated or the employed
spouse could be required to make periodic payments to the non-employed spouse
in an amount equivalent to that person's share. Another alternative would be to
offset the nonemployed spouse's proportionate share with some other marital asset.
(Footnote omitted.) Hoyt at 182.
{¶ 20} Moreover, “[w]hen the only marital asset of the parties is an employed spouse's
pension or retirement benefits, it is difficult for the trial court to structure an equitable property
division without dividing the pension or retirement asset. However, where circumstances permit,
the trial court should attempt to ascertain the optimum value the pension or retirement benefit has
to the parties as a couple, based upon the nature and terms of the plan. The trial court should
structure a division which will best preserve the fund and procure the most benefit to each party.”
Hoyt, 53 Ohio St.3d at 183, 559 N.E.2d 1292.
{¶ 21} In the case before us, the retirement accounts were essentially the only assets, as
the parties had been involved in a Chapter 13 bankruptcy proceeding between 2006 and 2011,
when the bankruptcy proceeding concluded. There appears to be no dispute about the fact that
the marital home would be lost, and that there were no other significant assets. The parties also
9
did not enter into a separation agreement or any written agreement about the distribution of
retirement funds before the divorce hearing; they simply told the court at the hearing that they had
entered into certain stipulations. Most of the stipulations were to documentary evidence, the
distribution of incidental personal property, and the fact that Curtis would be permitted to retain
the money in his deferred compensation account – about $2,938.
{¶ 22} According to Curtis, it logically follows that the parties had already agreed that
retirement benefits would be considered only for purposes of spousal support. If this was the
parties’ agreement, it was not adequately stated on the record. The parties advised the court that,
“The items that are in dispute would be spousal support and personal property.” Transcript of
Proceedings, p. 3.
{¶ 23} Curtis directs our attention to Manning v. Jusak, 8th Dist. Cuyahoga No. 99459,
2013-Ohio-4194. In Manning, the parties excluded mention of the pension in the separation
agreement, but specifically agreed in writing that spousal support was based on each party
receiving an equal share of the parties’ retirement benefits. The court found any error to be
invited by appellant. In this regard, the court held that:
Having induced the court to enter judgment in accordance with the
terms of a separation agreement that funded spousal support with
the pension plan, Manning cannot be heard to complain that the
court did not divide that pension as marital property. Id. at ¶ 10.
{¶ 24} In contrast, here the parties failed to specifically and fully articulate their
intentions, as was found in Manning. Due to the lack of specificity, we decline to infer that
Cinda intentionally waived her rights to property division of Curtis’s pension.
10
{¶ 25} In view of the parties’ failure to specifically raise the pension issue with the trial
court, we could conclude that Cinda unwittingly waived the property division issue. However,
we are troubled by several points, and under the circumstances, we believe that these rise to the
level that should be recognized under the plain error doctrine. See, e.g., Goldfuss v. Davidson, 79
Ohio St.3d 116, 121, 679 N.E.2d 1099 (1997).
{¶ 26} First of all, the trial court abused its discretion when it awarded Cinda only $450
per month for six years, meaning that her share of the pension will end when she is only 57 years
old – 10 years before she would be eligible to collect full social security, and, presumably, seven
years before she would be able to apply for other retirement benefits, if any.
{¶ 27} In the case before us, the record does not contain information about the value, if
any, of Cinda’s retirement account with the State of Ohio. In addition, the figures provided for
Curtis’s retirement account are only current through August 29, 2011 – more than one year prior
to the time that Curtis retired. Additional contributions would have been made after that date.
There was no evidence as to what Curtis’s monthly benefit was under “plan A.” The lack of
current figures and proper documentation provide an insufficient basis for a reasoned decision on
spousal support or division of the respective pensions.
{¶ 28} One method of calculating an equitable division is to use a coverture fraction. “
‘ “The coverture fraction takes the total years of marriage divided by the total years of [the former
spouse's] service. Under this method, [the recipient spouse] receives half of the coverture
fraction multiplied by the value of the pension” at the time of retirement.’ ” Long v. Long, 176
Ohio App.3d 621, 2008-Ohio-3006, 893 N.E.2d 217, ¶ 60, fn. 6 (2d Dist.), quoting Benfield v.
Benfield, 2d Dist. Montgomery No. 19363, 2003-Ohio-5968, ¶ 7, fn.1. (Other citation omitted.)
11
{¶ 29} For purposes of illustration only, and using the outdated figures provided for
Curtis’s retirement account, the value as of August 2011 was $221,777. The total years of
marriage (approximately 25) x Curtis’s years of service (30), results in a coverture fraction of
about .833. One half of this fraction is .416. $221,777 x .416 = 92,259.23 – which is the
amount that Cinda should have received from Curtis’s retirement account. At the rate of spousal
support assessed by the court ($450 per month), the duration of the spousal support award to fund
this amount would have been more than 17 years. Conversely, the amount of potential spousal
support required to fund this amount, based on the six-year term selected by the court, would have
been about $1,281 per month. The figures we suggest may not be appropriate, based on the
amount, if any, of Cinda’s retirement funds. If the trial court intended to account for the equitable
division of property by awarding spousal support, the award was not reasonable, based on the
facts in the record.
{¶ 30} “Trial courts have broad discretion regarding spousal support orders.
Accordingly, an appellate court ordinarily will not disturb those orders absent an abuse of
discretion.” (Citation omitted.) Papp v. Papp, 2d Dist. Montgomery No. 25333,
2013-Ohio-506, ¶ 15. “A trial court abuses its discretion when the court's attitude was
unreasonable, arbitrary, or unconscionable.” Id., citing Blakemore v. Blakemore, 5 Ohio St.3d
217, 219, 450 N.E.2d 1140 (1983).
{¶ 31} The same standards apply to property division. See, e.g., Berish v. Berish, 69
Ohio St.2d 318, 319, 432 N.E.2d 183 (1982), citing Cherry v. Cherry, 66 Ohio St.2d 348, 355,
421 N.E.2d 1293 (1981). Under the circumstances, we must conclude that the trial court abused
12
its discretion in awarding spousal support and in failing to account for both pensions.
{¶ 32} Cinda’s First and Second Assignments of Error are sustained. This case will be
reversed and remanded so that the trial court may fully consider the pension rights of the parties
and make its decision based on proper documentation and evidence.
{¶ 33} Accordingly, the First and Second Assignments of Error are sustained.
III. Did the Trial Court Err in Failing to Impute Income to Curtis?
{¶ 34} Cinda’s Third Assignment of Error states as follows:
The Trial Court Should Have Imputed Income to Mr. Alexander, as He was
Voluntarily Unemployed.
{¶ 35} Under this assignment of error, Cinda contends that the trial court should have
imputed income to Curtis because he was voluntarily unemployed or was under-employed.
Curtis did not respond to this assignment of error.
{¶ 36} In support of her position, Cinda relies on Meyer v. Meyer, 6th Dist. Lucas No.
L-04-1359, 2005-Ohio-6249, in which the trial court based its spousal support award on a
husband’s pre-retirement income. Id. at ¶ 5. The trial court concluded that the husband had
retired early in order to avoid paying spousal support. Id.
{¶ 37} “Ohio courts have determined that earning ability involves ‘both the amount of
money one is capable of earning by his or her qualifications, as well as his or her ability to obtain
such employment.’ ” Seaburn v. Seaburn, 5th Dist. Stark No. 2004CA00343, 2005-Ohio-4722,
¶ 32, quoting Haniger v. Haniger, 8 Ohio App.3d 286, 288, 456 N.E.2d 1228 (10th Dist. 1982).
“When considering the relative earning abilities of the parties in connection with an award of
13
spousal support, Ohio courts do not restrict their inquiry to the amount of money actually earned,
but may also hold a person accountable for the amount of money a ‘person could have earned if he
made the effort.’ ” Id., quoting Beekman v. Beekman, 10th Dist. Franklin No. 90AP-780, *6,
1991 WL 160062 (August 15, 1991).
{¶ 38} Further, “[b]ecause R.C. 3105.18(C) permits inquiry into a party's earning
potential, Ohio courts often impute income to parties who are voluntarily underemployed or
otherwise not working up to their full earning potential.” (Citations omitted.) Id. at ¶ 33.
{¶ 39} The evidence in Meyer indicated that the husband had voluntarily retired from a
job that paid about $90,000 per year in order to avoid paying spousal support. Meyer, 6th Dist.
Lucas No. L-04-1359, 2005-Ohio-6249, at ¶ 5. The trial court did not believe the husband’s
claim that he had retired because of his health. Among other evidence, the wife presented
evidence that, post-retirement, the husband continued to perform manual labor at his
brother-in-law’s business and also did physical volunteer work at his yacht club. Id. at ¶ 4.
{¶ 40} Cinda failed to challenge her husband’s reasons for retiring, and also failed to
present evidence similar to what was presented in Meyer. The trial court cannot be faulted for
failing to consider evidence that was not submitted.
{¶ 41} Accordingly, the Third Assignment of Error is overruled.
IV. Conclusion
{¶ 42} Cinda’s First and Second Assignments of Error having been sustained, and her
Third Assignment of Error having been overruled, the judgment of the trial court is reversed, and
this cause is remanded for further proceedings consistent with this opinion.
14
.............
FROELICH, P.J., and DONOVAN, J., concur.
Copies mailed to:
Rebekah S. Neuherz
Jeffrey D. Slyman
Hon. Timothy D. Wood