Opinion ID: 1286567
Heading Depth: 2
Heading Rank: 1

Heading: property purchased with veterans' disability benefits during coverture may properly be considered jointly-acquired property subject to division upon divorce

Text: The powers of a trial court to divide property upon the dissolution of a marriage are set forth in 43 O.S. Supp.1992 § 121. In relevant part, § 121 provides: As to such property, whether real or personal, which has been acquired by the parties jointly during their marriage, whether the title thereto be in either or both of said parties, the court shall, . . . make such division between the parties as may appear just and reasonable, by a division of the property in kind, or by setting the same apart to one of the parties, and requiring the other thereof to be paid such sum as may be just and proper to effect a fair and just division thereof. The jointly-acquired property referred to in this section has been defined as that property which is accumulated by the joint industry of both spouses during the marriage. Thielenhaus v. Thielenhaus, 890 P.2d 925, 930 (Okla.1995). There is a rebuttable presumption that property acquired during the marriage is obtained by the joint efforts of husband and wife. Manhart v. Manhart, 725 P.2d 1234, 1240 (Okla.1986). At issue in this case are the two vans and the motor home acquired during the marriage and paid for with the defendant's disability benefits. The trial court ruled that any property purchased with and traceable from the defendant's veterans' benefits is the defendant's separately acquired property. The court found that the two vans and the motor home judgment proceeds were traceable to the defendant's benefits and, therefore, specifically excluded them from the marital property division. The court did not base its decision upon a finding that the vehicles were not jointly-acquired property under § 121. Indeed, the record reveals that although many pieces of property were purchased with the separate funds of either the plaintiff or the defendant, all of the items bought during the marriage were acquired through the joint industry of the parties. Rather, the court erroneously determined that the three vehicles were exempt from equitable division pursuant to 38 U.S.C. § 5301. Section 5301 states in relevant part: (a) Payments of benefits due or to become due under any law administered by the Secretary [of Veterans Affairs] shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. The preceding sentence shall not apply to claims of the United States arising under such laws nor shall the exemption therein contained as to taxation extend to any property purchased in part or wholly out of such payments. In Porter v. Aetna Casualty and Surety Co., 370 U.S. 159, 82 S.Ct. 1231, 8 L.Ed.2d 407 (1962), the Supreme Court considered the circumstances under which benefits paid by the Veterans' Administration retain their exempt status under the statutory predecessor of § 5301(a). [6] The Court held that veterans' disability benefits are the separate property of the beneficiary, exempt from creditors' claims, attachment, levy or seizure, provided the benefit funds . . . are readily available as needed for support and maintenance, actually retain the qualities of moneys, and have not been converted into permanent investments. Id. 370 U.S. at 162, 82 S.Ct. at 1233. The Court noted that: The statutory language reads only that the exemption as to taxation shall not extend to property purchased with benefits. However, in Carrier v. Bryant, 306 U.S. 545, 59 S.Ct. 707, 83 L.Ed. 976 (1939), the Court held that benefits invested in property were also nonexempt from creditor actions, since they were not `payments of benefits' due or to become due and thus did not fall within the initial immunizing language. Porter, 370 U.S. at 161 n. 3, 82 S.Ct. at 1232 n. 3. We recognize that the defendant's veterans' disability benefits were his own separate property. However, once he converted those benefits to personal property the exempt status of those funds was lost. Under the teachings of Porter, when the defendant applied his disability benefits toward the purchase of the two vans and the motor home, those funds were no longer readily available as needed for support and maintenance, they did not actually retain the qualities of moneys, and they were converted into permanent investments. Once spent, the funds were no longer payments of benefits due or to become due pursuant to Carrier. [7] Accordingly, the two vans and the motor home judgment proceeds [8] are subject to equitable division by the trial court. The trial court has wide latitude in determining what part of jointly-acquired property shall be awarded to each party. Teel v. Teel, 766 P.2d 994, 998 (Okla.1988); Phillips v. Phillips, 556 P.2d 607, 610 (Okla. 1976). However, all property acquired during marriage by the joint industry of the husband and wife must be fairly and equitably divided by the trial court. 43 O.S. Supp. 1992 § 121; Thielenhaus, 890 P.2d at 930. This is true regardless of how title to the property is held. 43 O.S. Supp.1992 § 121; Manhart, 725 P.2d at 1240. The marital estate need not necessarily be equally divided to be an equitable division because the words just and reasonable in § 121 are not synonymous with equal. Teel, 766 P.2d at 997 n. 6. An appellate court will not disturb the trial court's property division absent a finding of abuse of discretion or a finding that the decision is clearly contrary to the weight of the evidence. Id. at 998; Kiddie v. Kiddie, 563 P.2d 139, 140-41 (Okla.1977). The trial court's property division in this case is clearly contrary to the weight of the evidence. As detailed above, the property division should have included the two vans and the motor home judgment proceeds. The trial court also erred in deducting $12,000.00 from the value of the home as a lien because no such lien existed, and by including the 1989 Ford Mustang as part of the marital estate because there was no evidence to indicate the vehicle was owed by either party. We also find that the trial court erred in its valuations of the personal property items. [9] On remand, the trial court is directed to recalculate the property division consistent with the views expressed herein.