Court Opinion

ID: 2715216
Source: CourtListenerOpinion
Date Created: 2014-08-06 17:19:55.182124+00
Date Added: 2024-06-11T15:12:59.719288
License: Public Domain

FILED 

                                                                     MARCH 13,2014 

                                                                In the Office of the Clerk of Court 

                                                              W A State Court of Appeals, Division III 

         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                            DIVISION THREE 

In re the Marriage of:                       )
                                             )         No. 31320-4-111
BRIAN DALE HAMOND                            )
                                             )
                     Appellant,              )
                                             )
       and                                   )         UNPUBLISHED OPINION
                                             )
PATRICIA CAROL ABRAMS­                       )

HAMOND,                                      )

                                             )

                     Respondent.             )

       FEARING, J. - In this divorce action, Brian Hamond (Hamond) appeals the trial

court's characterization of his Law Enforcement Officers' and Fire Fighters' (LEOFF)

Retirement plan as entirely community property and the trial court's division of the plan

benefits equally. Hamond argues that a portion of his LEOFF plan represents the amount

of Social Security he would otherwise receive. He labels this portion "in-lieu-of Social

Security." Hamond argues that the court should deduct an "in-lieu-of" amount as his

own separate property prior to dividing his LEOFF plan equally, since he, in tum, is not

entitled to any portion of his wife Patricia Abrams-Hamond's (Abrams) Social Security

payments. Hamond also argues on appeal that the trial court should have, but failed to

use the "time rule" method in determining what portion ofthis LEOFF plan benefits
No. 3l320-4-1I1
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should be available to his wife. We affirm the trial court.

                                          FACTS

       Brian Hamond and Patricia Abrams-Hamond married on July 20, 1985. The

parties separated on March 17,2011, and on June l3, 2011, Hamond petitioned for

dissolution of the marriage. Hamond was 52 years old, and Abrams was 50, upon the

divorce filing.

       Hamond and Abrams agreed to the division of their property, except their

retirement accounts. To resolve this issue, Hamond and Abrams agreed to a trial by

declarations, without oral argument or oral testimony.

       Upon separation, the parties held five retirement accounts. Abrams had three

retirement accounts: a defined benefit plan, a Teachers Retirement System (TERS) III

plan, and a Spokesman Review plan. Hamond had two retirement accounts: a deferred

compensation plan and his LEOFF plan. Both parties asked the court to award Abrams

her defined benefit plan and Hamond his deferred compensation plan, noting the parity in

value at just over $50,000. Both parties also asked the court to divide Abrams' TERS III

and Spokesman Review plans equally. The parties disagreed as to how to divide

Hamond's LEOFF plan.

       Hamond asserts that his LEOFF plan has rendered Hamond ineligible for federal

Social Security benefits. Hamond argues that, because Abrams will receive Social

Security benefits no matter what she receives in retirement benefits and he cannot do so

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     because of the nature of the LEOFF plan, refusing to separate the portion of his LEOFF

I	   retirement which equates to Social Security benefits leaves him disadvantaged. Abrams

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     argues that she cannot be assured of any Social Security payments when she reaches

     retirement age. Abrams asked the trial court to divide Hamond's LEOFF plan equally

j	   without first deducting an "in-lieu-of' amount. No party suggested to the trial court that

     it apply the time rule method for calculating a distribution of benefits.

            Hamond presented the trial court no calculation of the amount of Social Security

     benefits he would receive ifhe was not ineligible. He attached to his affidavit a letter

     from Brian Gosline, in which Gosline calculated the total present value of anticipated

     Social Security benefits for Abrams as $135,160.64. Hamond stated that Gosline could

     later perform a calculation to determine the amount of his LEOFF pension representative

     of Social Security benefits he would otherwise receive. He proposed that the trial court

     make its ruling and Gosline perform his calculation thereafter.

            The affidavit of Brian Hamond does not list any qualifications for Brian Gosline to

     calculate the value of pensions or Social Security benefits. Brian Gosline's letterhead

     identifies him as an attorney and counselor at law, not as a retirement benefits expert.

     The content of his letter discloses none of his background or qualifications. In a motion

     for reconsideration, Hamond asked that the court deduct from his LEOFF account, before

     dividing the account equally, the amount Abrams will receive in Social Security benefits

     rather than the amount he would receive if eligible.

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                                 TRIAL COURT RULING

         After reviewing the declarations from both Hamond and Abrams, the trial court

ruled:

         The parties have various retirement plans and accounts, including a
         deferred compensation plan, a LEOFF plan, a TERS III plan, a defined
         benefit plan and a Spokesman Review retirement plan before the Court for
         division in this dissolution. Here the Court would direct that the
         Respondent wife be awarded in total her defined benefit plan and that the
         Petitioner husband be awarded in total his deferred compensation account.
         The balance of retirement accounts (LEOFF plan, TERS III plan,
         Spokesman Review retirement plan) are entirely community and shall be
         divided equally between Petitioner and Respondent.

Clerk's Papers (CP) at l35 (emphasis added). The trial court thus declared that

Hamond's LEOFF plan was divisible community property.

                                  LAW AND ANALYSIS

                             In Lieu of Social Security Benefits

         Upon a marriage dissolution, all of the parties' property, separate and community,

is before the court for division. RCW 26.09.080; Stokes v. Polley, 145 Wn.2d 341,347,

37 P.3d 1211 (2001); Friedlander v. Friedlander, 80 Wn.2d 293,305,494 P.2d 208

(1972). At issue here are pension benefits. Whether or not they are available at the time

of dissolution, pension benefits, as deferred compensation, constitute property rights

subject to division by the court. In re Marriage o/Chavez, 80 Wash. App. 432, 436, 909
P.2d 314 (1996); In re Marriage o/Pea, 17 Wash. App. 728, 731,566 P.2d 212 (1977).

         Before dividing property, the court must determine the correct character and status

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of the property as community or separate. Baker v. Baker, 80 Wash. 2d 736, 745, 498 P.2d
315 (1972); In re Marriage o/Hadley, 88 Wn.2d 649,656,565 P.2d 790 (1977); In re

Marriage o/DeHollander, 53 Wash. App. 695, 700, 770 P.2d 638 (1989). While the

character of property is not controlling, it is relevant to determine a just and equitable

distribution. Hadley, 88 Wash. 2d at 656. Washington courts refrain from awarding

separate property of one spouse to the other if a just and equitable division is possible

without doing so. Stokes, 145 Wash. 2d at 347. Thus, a trial court's determination of an

item of property as separate or community is an important first step in dividing the

property. A trial court's characterization of property as community or separate is

reviewed de novo by the appellate court. In re Marriage o/Chumbley, 150 Wash. 2d 1, 5,

74 P.3d 129 (2003).

       In Washington, assets acquired during marriage are presumed community

property. Dean v. Lehman, 143 Wash. 2d 12, 19, 18 P.3d 523 (2001); Harry M. Cross, The

Community Property Law (Revised 1985),61 WASH. L. REv. 13,28 (1986); RCW

26.16.030. To rebut the presumption, a party must present clear and convincing evidence

that the acquisition fits within a separate property provision. Chumbley, 150 Wash. 2d at 5;

Dean, 143 Wash. 2d at 20; Cross, supra at 29.

       Brian Hamond's appeal necessitates the consideration of the nature of Social

Security benefits and LEOFF benefits. Despite her pessimism to the contrary, Patricia

Abrams will receive Social Security payments upon the age of retirement. Hamond will

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not. Despite being a pension, a spouse's Social Security account is offlimits in a marital

dissolution. 42 U.S.C. § 407(a) (1998) of the Social Security Act forbids transfer or

reassignment of "[t]he right of any person to any future payment under this subchapter."

While the act permits reassignment of Social Security benefits to pay for alimony or child

support, it categorically excludes any similar payment obligation in conformity with a

community property settlement, equitable distribution of property, or other division

between spouses or former spouses. 42 U.S.C. § 659(i)(3)(B)(ii); In re Marriage of

Zahm, 138 Wn.2d 213,219,978 P.2d 498 (1999). Thus, Social Security benefits are not

subject to division in a marital property distribution case. Zahm, 138 Wash. 2d at 219-20; In

re Marriage ofRockwell, 141 Wash. App. 235, 244, 170 PJd 572 (2007).

       Federal statutes secure Social Security benefits as the separate indivisible property

of the spouse who earned them. Zahm, 138 Wash. 2d at 220. This approach ensures that

the benefits intended for the beneficiary reach that party and that the benefits are

insulated from the occasionally unpredictable fortunes of legal dispute. Zahm, 138
Wash. 2d at 220.

       The trial court correctly characterized Patricia Abrams' Social Security account as

separate property. Brian Hamond wishes a portion of his LEOFF account to be depicted

as separate property, but the law demands otherwise. Retirement benefits are considered

deferred compensation for past services and thus are determined to be community

property to the extent earned during marriage. In re Marriage ofHarris, 107 Wash. App.
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597,602,27 P.3d 656 (2001); In re Marriage o/Knies, 96 Wash. App. 243, 251, 979 P.2d
482 (1999); In re Marriage o/Nuss, 65 Wash. App. 334, 343, 828 P.2d 627 (1992). The

trial court correctly characterized Hamond's LEOFF accrued pension as entirely

community property until the dissolution of the marriage.

       Characterizing Patricia Abrams' Social Security account as separate property and

Brian Hamond's LEOFF account as community property does not end our analysis.

Although the trial court may not distribute any of Abrams' Social Security benefits to

Hamond, we still must address, as requested by Hamond, whether the trial court should

have considered, when distributing assets, the anomaly that Hamond will not receive

Social Security benefits in exchange for higher LEOFF payments.

       Consistent with the objectives ofRCW 26.09.080, while a trial court may not

directly divide Social Security income in a divorce action, a trial court may still properly

consider a spouse's Social Security income within the more elastic parameters of the

court's power to formulate ajust and equitable division ofthe parties' marital property.

Zahm, 138 Wash. 2d at 222; Rockwell, 141 Wash. App. at 245. Although Hamond wishes to

characterize a significant portion of his LEOFF account as separate property, we

recognize that the court could categorize the account entirely as community property yet

distribute the entire or a large percentage of the account to Hamond as part of an

equitable distribution, rather than dividing the LEOFF account in half as the trial court

did.

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            Brian Hamond relies principally upon In re Marriage ofRockwell, 141 Wash. App.
235,240, 170 P.3d 572 (2007), for his argument that the trial court should have

     considered his ineligibility for Social Security and refrain from dividing his LEOFF

     account evenly. In Rockwell, this court affirmed the trial court's consideration, when

     dividing property, of one party's ineligibility for Social Security. As the result of federal

     employment, Carmen Rockwell participated in the federal Civil Service Retirement

     System rendering her ineligible to participate in Social Security. Based upon expert

     testimony, the trial court determined that Carmen lost $159,464 in Social Security

     benefits because of her federal pension. The trial court "compensated" her for that

     amount in its division ofproperty. The trial court noted Peter Rockwell's entitlement to

     Social Security benefits and their potential to increase and Carmen's lack of Social

     Security benefits due to her type of pension. The trial court concluded that it was fair and

     equitable to divide the community property portion of the pension 60 percent to Carmen

     and 40 percent to Peter.

            On appeal, Peter Rockwell assigned error to the trial court's consideration of

     Carmen's Social Security benefits. Relying on In re Marriage ofZahm, Peter argued that

     the trial court could not value and consider Social Security benefits when distributing

     assets. The Rockwell court of appeals agreed that the trial court could not calculate a

     future value of those monies and award that value as a precise property offset as part of

     its property distribution. Nevertheless, the possibility that one or both parties may

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receive Social Security benefits is a factor the court may consider in making its

distribution of property. A trial court cannot properly evaluate the economic

circumstances of the spouses unless it also considers the amount of Social Security

benefits currently received. This court concluded that the trial court properly considered

and compensated for the Social Security benefits that Carmen would have received, but

for her federal pension.

       Rockwell supports the argument that the trial court could have considered, when

dividing the couple's assets, Brian Hamond's lack of participation in Social Security.

Hamond's appeal, however, raises a different issue: must the trial court have deducted an

amount from Hamond's LEOFF pension before awarding Abrams one-half of the pension

balance?

       Rockwell is factually analogous to the instant case, but Hamond misconstrues its

holding. Hamond construes Rockwell to require every trial court to consider and

compensate for each spouse's expected Social Security benefits in order to put her or him

on equal footing prior to dividing property in dissolution. Rockwell imposes no such

burden or uniformity upon Washington's trial courts. While the Rockwell court

concluded "that the trial court properly considered and compensated for the Social

Security benefits that Carmen would have received, but for her federal pension," that

conclusion only acknowledged a lack of error. Rockwell, 141 Wash. App. at 245.

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No. 31320-4-III
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       To support his reading of Rockwell, Hamond cites case law from Pennsylvania and

Arizona-Rimel v. Rimel, 913 A.2d 289,292 (Pa. Super. 2006) and Kelly v. Kelly, 198
Ariz. 307, 309,9 PJd 1046 (2000). In Rimel, the court held that "in order to equate the

income that will be provided to the parties following divorce, [the] husband is entitled to

a set-off against his CSRS pension." In Kelly, the court ruled that the Social Security

portion of each retirement plan would be set aside as the respective spouse's separate

property, whether equal or not, while the remaining benefits earned during marriage

would be divided as community property by the trial court. The Arizona court explained

that its resolution sought to place the parties in the position in which they would have

been had both participated in Social Security.

       Division Two of this court already considered the two foreign cases in In re

Marriage ofSmith, 158 Wash. App. 248, 260, 241 PJd 449 (2010), noting "the holdings in

Rimel and Kelly are not yet reflected in Washington law." In Smith, the court held that

"[c]haracterizing pension received in lieu of Social Security as separate property is not

mandatory in Washington, particularly where the parties never suggested that

characterization." 158 Wash. App. at 260-61. Brian Hamond distinguishes Smith by

arguing that he repeatedly requested such a characterization. But Smith's admonishment

against raising new arguments on appeal does not undermine its holding that backing out

Social Security is not mandatory in Washington.

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          A significant distinction between Rockwell and the case at hand is that Cannen

    Rockwell submitted admissible evidence of the amount of Social Security she lost by

    reason of her employment pension. Brian Hamond never qualified his purported expert,

    Brian Gosline, and that expert never calculated Hamond's lost Social Security benefits.

    A witness must be qualified as an expert for the witness to provide opinion testimony.

    ER 702; In re Detention ofMcGary, 175 Wash. App. 328, 338, 306 P.3d 1005 (2013). The

    opinions of Gosline were not under oath but contained in a letter attached to Hamond's

    affidavit. Letters are inadmissible hearsay. Davis v. Fred's Appliance, Inc., 171 Wn.

    App. 348, 358, 287 P.3d 51 (2012); Patterson v. Kennewick Pub. Hosp. Dist. No.1, 57
Wash. App. 739, 744, 790 P.2d 195 (1990).

          If Brian Hamond wanted the court to consider the amount of Social Security

    benefits lost by his participation in LEOFF, Hamond should have timely provided the

    court evidence of that amount. A party advocating a ruling from the court carries the

    burden ofproviding the evidence needed for the ruling. Johnson v. Nasi, 50 Wash. 2d 87,

    91,309 P.2d 380 (1957); State v. Anderson, 72 Wash. App. 253, 260,863 P.2d

    1370 (1993); Am. States Ins. Co. v. Breesnee, 49 Wash. App. 642, 646, 745 P.2d 518

    (1987). Hamond never asked for a delay in the hearing in order to obtain an opinion from

I   Gosline.

          Because he lacked evidence of the amount of his loss, Brian Hamond, in a motion

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    for reconsideration, asked the court to deduct from his LEOFF account Patricia Abrams'

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     projected Social Security benefits. Nevertheless, a trial court may not calculate or value a

     party's expected future Social Security benefits and then award the other party a precise

     offset based on that amount. Zahm, 138 Wash. 2d at 218. Moreover, that projection was

     inadmissible evidence, because it came from the unqualified expert witness.

            The trial court has broad discretion in distributing the marital property, and its

     decision will be reversed only if there is a manifest abuse of discretion. In re Marriage of

     Kraft, 119 Wn.2d 438,450,832 P.2d 871 (1992); In re Marriage ofGriswold, 112 Wn.

     App. 333, 339, 48 P.3d 10 18 (2002). A manifest abuse of discretion occurs when the

     discretion was exercised on untenable grounds. In re Marriage ofMuhammad, 153

     Wn.2d 795,803, 108 P.3d 779 (2005). Based upon the evidence properly before the trial

     court, we find no abuse of discretion.

                                    THE TIME RULE METHOD

           Brian Hammnd also contends the trial court abused its discretion by failing to use

     the "time rule" method when it divided his LEOFF pension as entirely community

     property. The time rule method is used to divide the community portion of a retirement

     account.

            Washington courts have created unique rules for determining the character of

     pension rights as separate or community property. "The community share of a pension

     may include increased benefits attributable to salary increases following dissolution but

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     not increases due to additional years of service." In re Marriage ofHarris, 107 Wash. App.
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No. 31320-4-111
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597,602,27 P.3d 656 (citing In re Marriage a/Chavez, 80 Wash. App. 432, 437-38, 909

P .2d 314 (1996)). "[T]he community share [of a pension] is calculated by dividing the

number of years of marriage (prior to separation) by the total number of years of service

for which pension rights were earned and multiplying the results by the monthly benefit

at retirement. This is known as the 'time rule method.'" Rockwell, 141 Wash. App. at

251-52 (emphasis added); see also Harris, 107 Wash. App. at 602 (describing the time rule

method as "the typical formula used.") Dividing the monthly benefit the pensioner

receives once retired is an "as-received" award. Such "[a]n award ofpension rights on an

as-received basis is to be encouraged, because it avoids difficult valuation problems and

shares in the risks inherent in deferred income." Chavez, 80 Wash. App. at 437. But as our

Supreme Court noted, "There can be no set rule for determining every case and as in all

other cases of property distribution, the trial court must exercise a wise and sound

discretion." In re Marriage a/Wilder, 85 Wash. 2d 364, 369, 534 P.2d 1355 (1975), quoted

in In re Marriage a/Harris, 107 Wn. App. 597,603,27 P.3d 656 (2001).

       We refuse to address Hamond's claimed error for two related reasons. First,

Hamond did not ask the trial court to apply the time rule method. Second, Hamond

invited any error.

       If the trial court applied incorrect law, Hamond invited the error. In his

declaration for trial, Hamond requested that "[u]pon completion of a determination by

Brian Gosline of what portion of my LEOFF account equates to Social Security benefits,

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No. 31320-4-II1
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I would ask that the remainder be divided equally." CP at 118 (emphasis added). Under

the doctrine of invited error, a party may not materially contribute to an erroneous

application of law at trial and then complain of it on appeal. In re Dependency ofK.R.,

128 Wash. 2d 129, 147,904 P.2d 1132 (1995). Here, Hamond appeals the result he

requested at trial. Gosline never provided the court a calculation.

       This court ordinarily refuses to review a claim of error that was not raised in the

trial court. RAP 2.5(a). Hamond made no mention of the time rule method at trial or in

his motion for reconsideration.

                                    ATTORNEY FEES

       Both parties requested attorney fees under RAP 18.1 and RCW 26.09.140. The

latter reads:

       The court from time to time after considering the financial resources of
       both parties may order a party to pay a reasonable amount for the cost to
       the other party of maintaining or defending any proceeding under this
       chapter and for reasonable attorneys' fees or other professional fees in
       connection therewith, including sums for legal services rendered and costs
       incurred prior to the commencement of the proceeding or enforcement or
       modification proceedings after entry ofjudgment.
              Upon any appeal, the appellate court may, in its discretion, order a
       party to pay for the cost to the other party of maintaining the appeal and
       attorneys' fees in addition to statutory costs.
              The court may order that the attorneys' fees be paid directly to the
       attorney who may enforce the order in his or her name.

"RCW 26.09.140 allows a court to award attorney's fees if a party demonstrates financial

need." In re Marriage ofKonzen, 103 Wash. 2d 470, 478,693 P.2d 97 (1985). An award

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No. 31320-4-III
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under RCW 26.09.140 is discretionary, not mandatory. In re Marriage ofStachofsky, 90
Wash. App. 13 5, 148, 951 P .2d 346 (1998). As of writing, neither party has demonstrated

financial need on appeal. In re Marriage ofCoons, 53 Wash. App. 721, 723, 770 P.2d 653

(1989). Nor has any party filed a financial affidavit. Therefore, we decline any award

for fees.

                                      CONCLUSION

       We affirm the trial court's division of property.

       A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

                                                         :j.
                                                    Fearing,J~
WE CONCUR:

Brown, 1.                                           Kulik, J.P.T.

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