Court Opinion

ID: 3776914
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:27:14.123993+00
Date Added: 2024-06-11T18:09:33.903676
License: Public Domain

I respectfully dissent from the judgment and opinion sustaining appellant's second assignment of error and reversing the judgment of the court below. Appellant's second assignment of error asserts that the trial court's failure to consider appellee's pension plan as a marital asset was against the manifest weight of the evidence and an abuse of discretion.
At trial, the uncontroverted expert testimony of economics professor Richard Vedder was that since the Ohio Operating Engineers Pension Plan, of which appellee was a member, had vested benefits after ten service years and appellee had only worked the equivalent of seven and a half service years, there was no present value to such pension plan. The pension plan was non-contributory and completely funded by appellee's employer. On February 27, 1987, the trial court filed a memorandum opinion which stated, in pertinent part, as follows: *Page 146 
"Very little dispute exists as to the extent and value of marital assets of the parties. The Court finds from the evidence that the pension contribution of the Plaintiff has no market value at the present time."
The trial court then proceeded to divide the marital property and award sustenance alimony to appellant. On June 9, 1987, the trial court entered a judgment which essentially reflected its earlier memorandum decision, but did not explicitly refer to appellee's pension plan.
In reviewing a judgment of the trial court awarding and distributing property in a divorce action, the reviewing court is limited to determining whether, considering the totality of the circumstances, the trial court abused its discretion. Verplatse
v. Verplatse (1984), 17 Ohio App.3d 99, 17 OBR 161,477 N.E.2d 648; Teeter v. Teeter (1985), 18 Ohio St.3d 76, 18 OBR 106,479 N.E.2d 890. An abuse of discretion connotes more than just an error in judgment; it implies that the court's attitude is unreasonable, arbitrary or unconscionable. Teeter, supra at 76-77, 18 OBR at 107, 479 N.E.2d at 891; Blakemore v. Blakemore
(1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 482, 450 N.E.2d 1140,1142.
In determining whether alimony is necessary, and in determining the nature, amount, and manner of payment of alimony, the court shall consider all relevant factors, including, but not limited to, the retirement benefits of the parties. R.C. 3105.18(B)(3). The position of the majority opinion herein is that an unvested pension plan has value inherently and that it is the trial court's responsibility to determine the value of an unvested pension plan as a marital asset.
A spouse's vested interest in a profit-sharing and pension plan earned during marriage constitutes a marital asset subject to division pursuant to R.C. 3105.18(B) by the court in a divorce action. Teeter, supra; Moser v. Moser (1982), 5 Ohio App.3d 193, 5 OBR 427, 450 N.E.2d 741; Bohnlein v. Bohnlein (1983), 11 Ohio Misc.2d 16, 11 OBR 179, 463 N.E.2d 666. With respect to the issue of whether an unvested interest in a profit-sharing and pension plan earned during marriage constitutes a marital asset, there appears to be a split of authority.
One Ohio treatise states that vested or non-vested pension and retirement benefits to the extent they were earned during marriage are marital property, regardless of (1) how payments were made to the fund, i.e., by payroll deduction and/or by employer contributions; (2) whether they have matured; (3) when and under what contingencies the benefits are payable; and (4) when the fund can be subjected to garnishment or execution. Baldwin's Ohio Domestic Relations Law (1987) 260, Section 25.02. Conversely, retirement or pension benefits that have not vested at all have been held explicitly or implicitly by courts in other noncommunity property states having statutes providing for equitable division of the spouses' property upon divorce, not to be subject to division or direct consideration in making such equitable property divisions. Annotation, Pension or Retirement Benefits as Subject to Award or Division by Court in Settlement of Property Rights Between Spouses (1979), 94 A.L.R. 3d 176, 242.
In the instant case, there appear to be two distinct considerations involved: (1) the consideration of unvested pension plans in the R.C. 3105.18 division of marital property, and (2) the valuation of such property. As noted in Alexander v.Alexander (1985), 20 Ohio App.3d 94, 20 OBR 115,484 N.E.2d 1068, there is a distinction between a court's duty to *Page 147 
consider a party's assets and a court's power to divide property. Assuming arguendo that an unvested pension plan is properly considered a marital asset, Baldwin's Ohio Domestic Relations Law, supra, it is not apparent herein that the trial court failed to consider the unvested pension plan. Indeed, in its memorandum opinion, the trial court specifically considered "pension contributions" in its opinion. However, based upon the uncontroverted expert testimony at trial, the court below then determined that the value of the plan was zero. Therefore, the trial court considered the pension plan, i.e., it did not automatically equate its unvested nature to mean that it was not a marital asset, but rather, based upon the uncontroverted evidence at trial, determined that its present value was zero.
Possible solutions to this valuation problem are outlined in Inre Marriage of Hobbs (Ill.App. 1982), 442 N.E.2d 629, 632, where the court stated, in pertinent part, as follows:
"Appellate decisions of this state have established that pension rights, whether matured, vested or not vested, contributory or non-contributory, are property under section 503 of the Act (Ill. Rev. Stat. 1979, ch. 40, par. 503). (See In rethe Marriage of Bodford (1981), 94 Ill. App.3d 91, 92, 49 Ill. Dec. 633, 634, 418 N.E.2d 487, 488.) Where one spouse has acquired a right to potential pension benefits, there is no way the other spouse may be awarded a defined interest in the benefits without a determination of their value (In re theMarriage of Evans (1981), 85 Ill.2d 523, 55 Ill. Dec. 529,426 N.E.2d 854), at least in the case of a present award based on the discounted value of the future payments. This presents a problem when the actual value of the benefits depends on future contingencies.
"An excellent discussion of this problem and a well-conceived solution to it are found in In re the Marriage of Fairchild
(1982), 110 Ill. App.3d 470, 66 Ill. Dec. 131, 442 N.E.2d 557. As the Fairchild court concluded:
"`The dilemma, then, is that while it is unfair to ignore thevalue of nonvested benefits in the division of marital property,those benefits in some instances being the only significantmarital asset, it is also unfair to effect a present division ofthe marital property utilizing an actuarial value of thosebenefits computed in reliance on speculative, albeit actuarilyaccepted assumptions. * * *
"`(R)eserving jurisdiction over the future benefits and effecting a subsequent division of the actual monetary benefits had the dual advantage of allocating equally between the parties the risk that the rights may never vest and enabling the court to better determine the actual proportion of future benefits that accrued to each party during the marriage.'" Keating, RecentDecisions, Ill. Bar J., Vol. 70, No. 9, page 582, 585.
"(In re the Marriage of Fairchild [1982],110 Ill. App. 3d at 475, 66 Ill. Dec. at 134, 442 N.E.2d at 560.)
"A similar concept had been suggested earlier:
"`In those instances where it is difficult to place a present value on the pension or profit-sharing interest due to uncertainties regarding vesting or maturation, or when the present value can be ascertained but the type, or lack, of other marital property makes it impractical or impossible to award sufficient offsetting marital property to the non-employee spouse, then the trial court in its discretion may award each spouse an appropriate percentage of the pension to be paid "if, as and when" the pension becomes payable. (In re Marriage ofBrown [1976], 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561; Kalcheim, Marital Property, *Page 148 Tax Ramifications, and Maintenance: Practice Under the IllinoisMarriage and Dissolution of Marriage Act — A Comparative Study,
66 Ill. B.J. 324, 335 [1978]; 42 Mo. L. Rev. 143, 150 [1977].)'
"It can be seen that both solutions share the common advantage of dividing the pension benefits at a time when, at least in terms of periodic payments, they are certain. Given this common advantage, we direct the trial court, upon the necessary remand of this cause, to reserve jurisdiction over the future benefits. Whether it makes a present percentage allocation of those benefits, or reserves this decision for the future, is left to the court's sound discretion." (Emphasis added.)
The approach taken by the majority opinion herein would place the trial court in the unenviable position of assigning a present value to unvested pension benefits where there is no evidence in the record of any present value of such benefits and where the vesting of benefits would be, in part, based upon contingencies and speculation. Under these circumstances, it might have been preferable for the trial court to have ordered additional sustenance alimony to appellant in an amount equal to a percentage of the pension that would vest after two and one-half more service years. Alexander, supra, at 97, 20 OBR at 118,484 N.E.2d at 1071; Hobbs, supra. However, as noted in Hobbs,supra, the trial court retains jurisdiction to entertain a motion to modify sustenance alimony in the future, Blair v. Blair
(1983), 11 Ohio App.3d 117, 119, 11 OBR 171, 174,463 N.E.2d 423, 425, once the pension funds become payable. In this limited context, the trial court did not abuse its discretion in assessing a zero present value to the unvested pension plan and failing to divide the same where the overall property distribution appears to have been properly entered.