Case Title: METZ v. METZ

Citation: 

Docket Number: 02-110

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-01-13T00:00:00Z

Document:
METZ v. METZ2003 WY 361 P.3d 383Case Number: 02-110Decided: 01/13/2003
OCTOBER TERM, A.D. 2002

                                                                                                
    

ALBERT 
V. METZ, JR.,

Appellant(Defendant),

 

v.

 

KATHRYN 
K. METZ,

Appellee(Plaintiff).

 

Appeal 
from the District Court of Teton County

The 
Honorable D. Terry Rogers, Judge

 

Representing 
Appellant:

            
Frank R. Chapman of Beech Street Law Office, Casper, Wyoming  

 

Representing 
Appellee:

            
Lea Kuvinka of Kuvinka & Kuvinka, P.C., Jackson, Wyoming  

 

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, 
JJ.

 
 
        

            
KITE, Justice.

 
 

[¶1]      Albert V. Metz, 
Jr. (husband) appeals from the property distribution portion of a divorce decree 
awarding his ex-wife, Kathryn K. Metz, now known as Kathryn K. Karst (wife), 
part of his past and future disability insurance benefits.  He also claims the trial court erred in 
presiding over the divorce trial after hearing evidence concerning the parties' 
failed settlement mediation.  We find no error 
and affirm.

 
 
    

ISSUES

 

[¶2]      The husband presents 
the following issues:

 
  
   

            
1.  The trial court committed reversible error when it included 
[the husband's] disability insurance benefits in the marital estate and awarded 
[the wife] one-half of the monthly disability insurance benefits and the sum of 
$75,000 for past disability insurance benefits.

            
2.  The trial court committed reversible error when it heard 
[the wife's] Motion to Enforce a Settlement Agreement and subsequently conducted 
a bench trial in the same divorce action.
         
           
       

The wife restates the issues as follows:
 
     

A.  Did 
the trial court abuse its discretion in making a division of property designed 
to equalize the parties' incomes after they had been married for 35 years and 
the trial court found that both parties should be left in similar economic 
circumstances after the divorce?

            
B.  In absence of any motion to disqualify or objection by the 
Appellant/Husband prior to trial, did the trial judge commit reversible error by 
conducting a trial after finding in favor of the Appellant/Husband and denying 
the Appellee's/Wife's motion to enforce settlement?

 
           
            
            
     

FACTS

 

[¶3]      In October of 
1999, after thirty-three years of marriage, the wife filed for a divorce from 
the husband.  At the time the 
divorce was finalized in January of 2002, both the husband and the wife were in 
their late fifties.  The husband was 
a neurosurgeon who retired from his practice in July 1999 due to a medical 
disability relating to his knee and cervical vertebrae.  Except for working as a medical research 
technician while the husband finished medical school and several part-time jobs 
over the years, the wife primarily stayed home with the couple's two children 
during the marriage.  She also 
managed the family finances throughout the marriage.  At the time of the divorce, neither 
party was, nor did they expect in the future to be, employed full time.  The 
husband estimated the value of the couple's assets at approximately $3,000,000, 
consisting of a residence in Casper; a vacation home in Teton County; various 
investment, retirement, and bank accounts; future disability insurance benefits; 
and numerous items of personal property.

 
       
          
           
          
 

[¶4]      One of the main 
areas of contention in the divorce proceedings concerned the payments from a 
disability insurance policy which the husband began receiving after closing his 
medical practice.  The husband 
applied for the policy in 1986, and the premiums were paid out of family 
funds.  The husband began receiving 
payments after his retirement in 1999.  
Prior to his receipt of the first payment, the parties had 
separated.  At the time of the 
divorce, the husband had received $189,000 from the policy and expected to 
receive an additional $6,500 per month until he reached the age of sixty 
five.  None of 
the disability benefits received up to the time of the divorce had been shared 
with the wife.

 
    
              

[¶5]      The parties 
attempted on two occasions to resolve their differences through mediation, first 
with a retired district judge acting as mediator and then, on October 13, 2001, 
with the parties' certified public account (who is also a licensed attorney) 
acting as mediator.  Following the 
second mediation, the wife filed a motion to enforce the settlement agreement 
claiming the parties had reached a legally enforceable settlement agreement for 
which she paid valuable consideration and the husband reneged on the 
agreement.  A hearing was held on 
the motion on January 4 and 7, 2002.  
After hearing testimony and the arguments of counsel, the trial court 
denied the motion to enforce the settlement agreement, finding there was not a 
mutual assent during the mediation sufficient to create a contract.  The case proceeded to trial on January 
14 through 16, 2002, and on January 23, 2002, the trial court entered findings 
of fact, conclusions of law, and a decree granting the divorce and dividing the 
property as evenly as possible between the parties.  In 
addition to its other findings and conclusions, the trial court made the 
following award which the husband challenges on appeal:

 
       
           
  

2.  [The wife] is awarded the sum of $2112.5[0] 
per month or one half of the monthly disability payments received by [the 
husband], whichever is greater, as a division of property to be paid by the 
[husband] each month so long as the [husband] continues to collect his 
disability benefits . . . ; and the sum of $75,000.00 to compensate the [wife] 
for past disability payments received by the [husband] during the separation and 
not shared with the [wife].

 
 
               
           
               
               
            
         

STANDARD OF REVIEW

 
 
 

[¶6]      The husband 
claims the trial court abused its discretion in awarding the wife a portion of 
the disability benefits and presiding over the divorce trial after hearing 
evidence of the failed settlement.  
The ultimate question in determining whether an abuse of discretion 
occurred is whether the trial court could have reasonably concluded as it 
did.  Horn v. Welch, 2002 WY 138, ¶8, 54 P.3d 754, ¶8 (Wyo. 
2002).  We will not disturb a 
property division in a divorce case, except on clear grounds, as the trial court 
is usually in a better position than the appellate court to judge the parties' 
needs and the merits of their positions.  
Paul v. Paul, 616 P.2d 707, 712 (Wyo. 1980); Warren v. 
Warren, 361 P.2d 525, 526 (Wyo. 
1961).

 
   

  

DISCUSSION

 

A.        
Distribution of Disability Insurance Benefits

 
    

[¶7]      The husband 
claims the trial court abused its discretion when it included the benefits from 
the disability policy in the property distribution.  He argues first that the disability 
benefits should not have been included because they were not property which was 
the product of the marital union acquired during the course of the marriage by 
the joint efforts of the parties as Wyo. Stat. Ann. § 20-2-114 (LexisNexis 2001) 
has been interpreted to require.  
France v. France, 902 P.2d 701, 704 (Wyo. 1995).  He further argues that the disability 
benefits were separate property not subject to division under Wyo. Stat. Ann. § 
20-1-201 (LexisNexis 2001).1

 

[¶8]      Addressing the 
latter statute first, this court has repeatedly held that a married person's 
separately owned property, like jointly owned property, is subject to 
distribution in a divorce action.  
Mann v. Mann, 979 P.2d 497, 499 (Wyo. 1999).  Even 
assuming, therefore, that the husband properly characterizes the benefits from 
the disability insurance policy as separate property, they were subject to 
division by the trial court in the same manner as the parties' jointly owned 
property.

 
     
          
              
       

[¶9]      We turn next to the 
question of whether the trial court properly included the benefits from the 
disability insurance policy as property subject to equitable distribution under 
§ 20-2-114, which provides:

 
    
             
          
   

In 
granting a divorce, the court shall make such disposition of the property of the 
parties as appears just and equitable, having regard for the respective merits 
of the parties and the condition in which they will be left by the divorce, the 
party through whom the property was acquired and the burdens imposed upon the 
property for the benefit of either party and children.  The 
court may decree to either party reasonable alimony out of the estate of the 
other having regard for the other's ability to pay and may order so much of the 
other's real estate or the rents and profits as is necessary be assigned and set 
out to either party for life, or may decree a specific sum be paid by either 
party.

 
       
              
                 
                
        

The 
husband correctly asserts that, under this statute, the property subject to 
division consisted of property which was the product of the marital union and 
was acquired during the course of the marriage by the parties' joint 
efforts.  France, 902 P.2d  at 
704.  Applying this standard, we 
said in France that it was not an abuse of discretion to award the wife 
property she had received as a gift or by inheritance from her parents.  Id.  However, we do not 
find that holding to be particularly relevant to the facts of this case given 
that we are not concerned here with a gift or inheritance but are concerned with 
benefits from a disability policy paid for out of the marital estate during the 
marriage.

 
        
              
              
           

[¶10]   In determining whether those 
benefits were properly included in the property to be divided, we look first to 
that portion of the benefits received by the husband before the divorcebenefits 
totaling $189,000, of which $75,000 was awarded to the wife.  We hold the trial court did not abuse 
its discretion in making that award to the wife.  Under the facts presented here, that 
portion of the disability payments from the insurance policy received by the 
husband prior to the divorce substituted for income he would have otherwise 
earned and was "the product of the marital union and was acquired during the 
course of the marriage by the joint efforts of the parties."  Id.

 

[¶11]   We consider next whether disability 
payments which the insurance policy will provide to the husband until he turns 
sixty-five were properly included in the property division.  In concluding that such payments should 
be included, the trial court said:

            

14.  Due to the length of the marriage, the fact 
that . . . the parties['] assets were accrued exclusively during 
the marriage, and the fact that both parties are, for all practical purposes, 
retired, the Court finds that the parties' incomes should be made as nearly 
equal as possible in a property division so that they will be left in similar 
economic circumstances after the marriage.

 
 
           
            
            
             
             

In 
light of the evidence presented, dividing the benefits of the disability policy 
yet to be received provided the means for leaving the parties in similar 
economic circumstances after the divorce.  

 

[¶12]   Despite the trial court's stated 
purpose, the husband argues the future disability payments were not subject to 
division because they were not received during the marriage.  The husband likens the benefits to money 
a spouse earns subsequent to divorce.  
The husband's analysis fails to take into account the fact that these 
payments will be derived from an insurance policy paid for by his professional 
corporation during the marriage from funds which otherwise could have been used 
for family living expenses or invested for the family's benefit.  In this sense, the disability benefits 
are not like earnings post-divorce, which have no relation to the marriage.  

 

[¶13]   The husband's analysis also fails 
to take into account that Wyoming law gives the trial court broad discretion in 
divorce actions to arrive at a just and equitable property distribution based 
upon the evidence before it.  
Wyoming law also authorizes the trial court to award alimony, although we 
have recognized that a property award is a preferable modern substitute for 
alimony.  Belless v. Belless, 
2001 WY 41, ¶8, 21 P.3d 749, ¶8 (Wyo. 2001).  If the intent is to adjust the equities 
between the parties at the time of the divorce, as was the case here, property 
division, which may encompass a series of payments, is the preferable 
method.  Id.  In evaluating the question of whether a 
property division by the trial court is, in fact, just and equitable, we must 
analyze the situation from the perspective of the overall distribution of the 
marital assets and liabilities rather than narrowly focusing on the effects of 
the disposition of any one particular asset.  Neuman v. Neuman, 842 P.2d 575, 
579 (Wyo. 1992).  Here, the trial 
court could have awarded the wife a greater percentage of some other asset in 
lieu of one-half of the disability payments.  However, we cannot 
conclude that failure to do so was an abuse of discretion. Other considerations, 
such as liquidity and problems with dividing other property, may well have 
played a part in the court's decision.

 
      
              
             
 

[¶14]   Moreover, in dividing property, the 
trial court must assess the parties' respective needs and the merits of their 
positions.  Mann, 979 P.2d  at 
499-500.  In reviewing the 
trial court's determinations in this regard,

 
    
    

"The 
function of this court is not to constitute a reconsideration or retrial of the 
district court's decision unless the same is clearly unjust and 
inequitable."  Kane v. Kane, 
. . . 577 P.2d 172, 174 [(Wyo. 1978)].

            
The trial court exercises a broad discretion in adjusting the rights and 
obligations of parties upon the dissolution of their marriage.  We will not disturb 
the decision of the lower court unless we can say that that discretion was 
abused, that the result was clearly unjust and inequitable.

 
        
              
    

Grosskopf 
v. Grosskopf, 
677 P.2d 814, 823 (Wyo. 1984).  
Considering all the facts and circumstances of this case, the parties' 
respective education and employment backgrounds, the length of their marriage, 
their respective contributionsboth economic and noneconomicto their home and 
family during the marriage, and their age and current financial circumstances, 
we cannot say the result reached by the trial court in this case was clearly 
unjust and inequitable.  We, therefore, 
affirm the property distribution, including the division of disability 
benefits.

 
 
         
 

[¶15]   In reaching this result, we are 
aware that other courts have held disability benefits are not marital property 
and are not subject to distribution upon divorce.  See Gragg v. Gragg, 12 S.W.3d 412 
(Tenn. 2000), for a discussion of the various approaches courts have taken on 
the subject.  However, this other 
precedent does not address the particular facts of this case, and, given 
Wyoming's statutory scheme and prior case law, we decline to adopt a hard and 
fast rule that all disability benefits are, or are not, marital property subject 
to distribution.  Rather, the courts 
must make a determination on a case-by-case basis according to the particular 
facts giving careful consideration to the entire marital property and keeping an 
eye toward a just and equitable distribution.  We are satisfied from the record before 
us that the trial court accomplished that end.  

B.        Bench 
Trial After Hearing on Settlement Efforts
 
     

[¶16]   The husband contends the trial 
court abused its discretion in presiding over the divorce trial after hearing 
evidence concerning the parties' settlement mediation.  He claims the trial court was no longer 
impartial after hearing evidence concerning the failed mediation and should have 
ordered a change of judge for the divorce trial.  The husband cites TZ Land & 
Cattle Co. v. Condict, 795 P.2d 1204, 1211 (Wyo. 
1990), in support of his claim of judicial prejudice warranting a change of 
judge.

 
        
        

[¶17]   The change or disqualification of a 
judge under the circumstances presented here is governed by W.R.C.P. 40.1(b)(2), 
which provides in pertinent part as follows:

 
      
           
      

            
(2) Disqualification for Cause.  
Whenever the grounds for such motion become known, any party may move for 
a change of district judge on the ground that the presiding judge:  . . .  (E) is biased or 
prejudiced against the party or the party's counsel.  The motion shall be supported by an affidavit or affidavits of any person 
or persons, stating sufficient facts to show the existence of such 
grounds.

 
       
            
     

Nothing 
in the record suggests, nor does the husband argue, that he moved for a change 
of judge or filed an affidavit showing the presiding judge was biased or 
prejudiced as required by W.R.C.P. 40.1(b)(2).  The husband asserts his failure to file 
a motion with a supporting affidavit was not fatal because filing a motion is 
discretionary and not mandatory, the issue really fell under W.R.C.P. 40.1(b)(4) 
which provides for a change of judge on the presiding judge's own motion, and 
the first opportunity he had to raise the issue was on appeal.  We 
find no merit in the husband's claims.

 
       

[¶18]   It is clearly the intent of 
W.R.C.P. 40.1(b)(2) that disqualification of a judge be initiated by the filing 
of a motion with a supporting affidavit.  
It is discretionary only in the sense that the filing of a motion is not 
mandated in all cases where a party believes a judge is biased; rather, the 
party may choose to proceed with the presiding judge despite the suspected bias 
or file a motion for a change of judge.  
It is not discretionary, however, in the sense asserted by the husband 
that a party may elect to not seek disqualification by filing a motion; proceed 
with the presiding judge; and then, after an unfavorable outcome at trial, claim 
bias or prejudice for the first time on appeal.  Particularly where, as here, the basis for 
the husband's allegation did not arise during trial but rather arose during the 
hearing on the wife's motion to enforce settlement a full week before trial, we 
can see no justifiable reason for the delay in raising the issue.

 
      
             
              
            

[¶19]   As for the husband's claim that the 
presiding judge should have ordered a change of judge on his own motion pursuant 
to W.R.C.P. 40.1(b)(4), we find nothing in the record before us to support the 
claim that a change of judge was warranted.  The husband points to the trial judge's 
comments which he made at the close of the evidence on the wife's motion to 
enforce the settlement and after closing arguments in the same 
proceeding:

 
       
               
          

I 
want [closing arguments] to be brief because I know exactly what your positions 
are.  I've made up my mind, and 
you're not going to persuade me otherwise, but you're welcome to be 
brief.

                                    
. . . .

. . . These 
parties have used the system to quite an extent and they have been unable to 
resolve their differences.  I'm 
going to resolve those differences and neither one of you may like how it gets 
resolved, and the waffling and all that stuff is over with now.  

And 
there will be no mediation.  And it 
isn't called mediation when a case goes to trial.  I'll sit and listen to this some more 
and then I'm going to decide.  And 
you're not going to have any input in how I decide, and that's the way it's 
going to be and it may be a lot more painful than where this was when you left 
Denver.  

And so the motion to enforce the settlement agreement is 
denied, and this case will go to trial as scheduled.

 
 
              
     

Neither of these comments is sufficient to form a basis for 
disqualification.

 
 
          

[¶20]   We have defined bias and prejudice 
as follows:  "Prejudice involves a 
prejudgment or forming of an opinion without sufficient knowledge or 
examination.  Bias is a leaning of 
the mind or an inclination toward one person over another."  Cline v. Sawyer, 600 P.2d 725, 
729 (Wyo. 1979).  The fair meaning 
of any remark made by the trial judge must be interpreted in light of the 
context in which it was made.  
Brown v. State, 816 P.2d 818, 824 (Wyo. 1991).  From the trial judge's comments, there 
is no evidence of either bias or prejudice.  The first comment asserted by the 
husband, taken in context, simply reflected the trial court heard the evidence 
presented by the parties; understood their positions; and, based upon the 
evidence, reached a decision.  The 
comment further reflected that, while the trial court was willing to allow 
counsel to make closing arguments, it was firmly convinced from the evidence 
there was no mutual assent and the comments of counsel in closing argument would 
unlikely persuade it differently.  
There simply is nothing about the comment to suggest judicial 
prejudice.

 
          

[¶21]   The second comment likewise fails 
to suggest prejudice on the trial court's part.  Rather, it reflects the reality of the 
situationthe parties were unsuccessful in their efforts to settle their 
differences, resolution of the dispute was now in the trial court's hands, and 
the court would decide the matter based upon the evidence presented without the 
parties' consensus.  Again, we find nothing prejudicial in the trial court's 
comment.

 
   
      

[¶22]   Finally, the manner in which the 
hearing on the wife's motion to enforce settlement was conducted convinces us no 
prejudice occurred.  Early in the 
hearing, the husband's counsel objected to testimony concerning the settlement 
terms, pointing out the issue was whether the parties had entered into an 
enforceable contract and whether there was a mutual assent, not the details of 
the failed settlement.  The trial court responded as 
follows:

 
  
   

I 
don't have any problem with it being appropriate that [the mediator] 
testifies.  I'm not certain that I 
need to know that they put a value of "X" dollars on this asset and half went to 
one and half went to the other or anything like that.

I need to know if it was fully explained to them, and what 
evidence there was that there was an acceptance or a meeting of the minds by 
each of them and that sort of thing, and I think I can do that independently of 
the nuts and bolts terms of the agreement.

 
 
                
                 
                 
 

Thereafter, 
both the trial court and the parties' counsel were sensitive to the necessity of 
not getting into the details of the settlement discussions.  Under these circumstances, we find no 
prejudice.  

 

[¶23]   Affirmed.

 

FOOTNOTES

 

1Section 20-1-201 provides:

All property belonging to a married person as his separate property which 
he owns at the time of his marriage or which during marriage he acquires in good 
faith from any person by descent or otherwise, together with all rents, issues, 
increase and profits thereof, is during marriage his sole and separate property 
under his sole control and may be held, owned, possessed and enjoyed by him the 
same as though he were single.  Such 
property is not subject to the disposal, control or interference of his spouse 
and is exempt from execution or attachment for the debts of his spouse if the 
property was not conveyed to him by his spouse in fraud of his creditors.  The necessary expenses of the family and 
the education of the children are chargeable upon the property of both husband 
and wife, or either of them, for which they may be sued jointly or 
separately.