Title: Hayden v. Hayden

State: vermont

Issuer: Vermont Supreme Court

Document:

Hayden v. Hayden (2002-235); 176 Vt. 52; 838 A.2d 59

2003 VT 97

[Filed 10-Oct-2003]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2003 VT 97

                                No. 2002-235

  Janis Hayden	                                 Supreme Court

                                                 On Appeal from
       v.	                                 Addison Family Court

  Rex Hayden	                                 September Term, 2003 (FN1) 

  Matthew I. Katz, J.

  Susan M. Murray and Abby C. Moskovitz of Langrock Sperry & Wool, LLP,
    Middlebury, for Plaintiff-Appellant.
    
  Rex Hayden, Pro Se, Newmarket, Alabama, for Defendant-Appellee.	

  PRESENT:  Amestoy, C.J., Johnson and Skoglund, JJ., and Gibson, J. (Ret.),
            Specially Assigned

        
       ¶  1.  JOHNSON, J.   Plaintiff Janice Hayden appeals from an order
  of the Addison Family Court ordering defendant Rex Hayden to pay plaintiff
  $1000 per month in spousal maintenance and dividing the parties' marital
  property between them.  Plaintiff contends that the maintenance award is
  insufficient to meet her reasonable needs and that the property division is
  inequitable.  She argues that the family court erred: (1) in valuing
  defendant's 401(k) plan on the date the parties separated instead of on the
  date of the final hearing in this matter; (2) in excluding funds
  contributed to defendant's IRA before his marriage when valuing the IRA for
  purposes of property division; (3) in considering a "hypothetical" real
  estate commission on a potential sale of the marital home in determining
  defendant's rightful share of the parties' property; (4) in failing to
  divide the parties' assets on an "essentially equal" basis even though it
  had expressed an intent to do so; and (5) in ordering a maintenance award
  that subordinated plaintiff's need for spousal maintenance to defendant's
  desire to avoid bankruptcy.  We reverse. 

       ¶  2.  The parties were married in 1985, and separated in 2000. 
  Defendant is a mechanical engineer currently earning $81,000 per year. 
  Plaintiff has an associate's degree in health information technology and
  has worked sporadically in various administrative assistant jobs, but at
  the time of the final hearing she held no steady employment.  Plaintiff's
  ability to work was a contested issue at the final hearing.  Due to various
  health problems, her doctor testified that she would have difficulty in an
  employment situation requiring prolonged concentration or physical
  activity.  Nevertheless, the trial court found that she could successfully
  handle part-time employment. 

       ¶  3.  The parties' marriage produced one child, a daughter who was
  four-and-one-half years old at the time of the final hearing in this case. 
  Plaintiff has custody of the child, and defendant has visitation rights. 
  The court found that "[c]ustody of the child is not a bar to the wife's
  working.  The child is presently in full-time daycare . . . . The mother
  testified the full-time daycare is 'for her good and mine.' "  Thus the
  trial court determined that despite its finding that plaintiff suffers from
  sleep apnea, degenerative arthritis, depression, and reflux/hiatal hernia,
  and given that her daughter was in day care, plaintiff should be able to
  work part-time. 
   
       ¶  4.  The parties have come to an agreement regarding parental
  rights and responsibilities and related issues; thus, the only outstanding
  issues on appeal are property valuation, property division, and spousal
  maintenance.  The existence of almost $70,000 in credit card debt, held
  separately by the parties, complicates the situation.  Defendant holds
  slightly more debt than plaintiff, but both face significant minimum
  monthly payments. 

       ¶  5.  The court awarded defendant an IRA, a 401(k) retirement
  account, a truck, the marital home, and tools and equipment, which the
  trial court valued at $82,000, while awarding plaintiff two IRAs, a car,
  and a trailer with a total value of $78,000.  In its conclusions, the court
  stated that the "[a]ssets of the parties should be divided equally," and
  the decision noted that the distribution made by the court was "essentially
  equal."  The trial court did not state explicitly how it valued the
  retirement accounts awarded to defendant.  The parties disagreed over the
  appropriate valuations for these two accounts, each proposing different
  values based on different assumptions about the extent to which the
  accounts were marital property.  Both parties agree, however, that the
  court accepted defendant's suggested assessment, valuing the 401(k) account
  at the date of separation and excluding money contributed to the IRA by
  defendant prior to the parties' marriage.  As a result, the value
  attributed to the accounts by the trial court was $31,246 less than the
  total amount of money in the accounts on the day of the final hearing. 
  Considering the retirement accounts awarded to defendant to be worth their
  value on the day of the final hearing, the court awarded defendant assets
  worth $113,000, and awarded plaintiff assets worth $78,000.  This means
  that defendant received 59% of the assets, and plaintiff received 41% of
  the assets. 
   
       ¶  6.  The court also awarded plaintiff spousal maintenance in the
  amount of $1000 per month.  The trial court stated that the maintenance
  award was intended to comply with this Court's holding that spousal
  maintenance is intended to correct the vast inequality of income resulting
  from the divorce, Russell v. Russell, 157 Vt. 295, 299, 597 A 2.d 798, 800
  (1991), and should be awarded "to equalize the standard of living of the
  parties for an appropriate period of time."  Downs v. Downs, 159 Vt. 467,
  469, 621 A 2.d 229, 230 (1993).  The court found that based on the monthly
  budget presented by defendant detailing expenses of $5,548 per month,
  defendant could afford to pay $1000 in maintenance while still making $770
  monthly minimum credit card payments.  Plaintiff had submitted monthly
  expenses of $6,935, but this included $4,185 in credit card debt that the
  trial court found plaintiff would be unable to repay. (FN2)  Excluding credit
  card payments, plaintiff's actual monthly expenses total $2,757.  The
  court's maintenance award of $1000 per month, when added to the $771 per
  month she receives in child support payments, leaves plaintiff with a
  monthly shortfall of $986.  The trial court concluded that plaintiff "will
  be able to meet her reasonable needs if she pursues even part-time
  employment."

                                     A.
   
       ¶  7.  Plaintiff first contends that the court erroneously treated a
  significant portion of the funds contained in retirement accounts awarded
  to defendant as nonmarital property.  The trial court valued defendant's
  401(k) retirement account on the date the parties separated in March 2000
  rather than on the date of the final hearing in January 2002, thus
  attributing $13,568 less to the account than the amount of money it
  actually contained on the date of the final hearing.  Similarly, the trial
  court undervalued defendant's IRA account by attributing a value to the
  account that excluded the amount that defendant had accrued in this account
  prior to the parties' marriage.  Defendant's submissions to the trial court
  describe the value for the account used by the trial court as the IRA's
  "marital value."  The so-called marital value of the IRA was $17,678 less
  than the monetary value of the account on the date of the final hearing. 

       ¶  8.  The court erred when it failed to consider the entire monetary
  value of the retirement accounts at the time of the final hearing as assets
  to be distributed between the parties.  Under Vermont law, "[a]ll property
  owned by either or both of the parties, however and whenever acquired,
  shall be subject to the jurisdiction of the court."  15 V.S.A. § 751(a);
  Wall v. Moore, 167 Vt. 580, 581,