Court Opinion

ID: 9753476
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:15:16.428077+00
Date Added: 2024-06-11T10:00:28.282263
License: Public Domain

KELLY, J.,
dissenting.
¶ 11 respectfully depart from the majority disposition because I think the trial court’s decision to value Husband’s pension plan for purposes of equitable distribution as if he retired at age fifty should be affirmed. I also disagree with the majority’s criticism of the trial court’s award of alimony to insure Wife’s portion of the pension benefits. Finally, I take issue with the majority’s assertion that the “monthly benefit is easily calculable and could have been treated separately and payment deferred.” Hence, I dissent.
¶ 2 The majority’s analysis is grounded in the assertion that a trial court must first approximate the pension holder’s retirement date before it may value such a pension. The majority suggests this is the only “realistic” way to value such an asset. However, equitable distribution schemes in Pennsylvania are traditionally assigned to the discretion of the trial court because we recognize that no two estates are identical. See McNaughton v. McNaughton, 412 Pa.Super. 409, 608 A.2d 646 (1992). Thus, Pennsylvania law allows the trial court freedom to apply its equitable tools to the task of distribution to create a fair and “realistic” division given the parties’ assets and abilities. Smith v. Smith, 439 Pa.Super. 283, 663 A.2d 1259, appeal denied, 541 Pa. 641, 663 A.2d 693 (1995). Our limited review of such distribution schemes acknowledges that “value” has many definitions, but so long as the division of the marital estate is fair, the scheme will not be disturbed. See generally id.; McNaughton, supra.
¶ 3 No doubt, the retirement age of fifty was an arbitrary one chosen to maximize the value of this asset. Nevertheless, any *1083estimate of Appellant’s actual retirement date would necessarily be equally arbitrary. Thus, the chance of any other date setting a truer “value” of the pension is no greater than the “arbitrary” date chosen by the trial court. That is so, even where the court picked a valuation age of fifty, but where Appellant is fifty-two and still employed.
¶ 4 Maximizing the purported “value” of Appellant’s pension by choosing to value it at a retirement age of fifty does not penalize Appellant. As the majority admits, the effect this valuation had on the ultimate distribution of the estate is merely speculative. Had the trial court chosen a later date, the distribution of that asset could have changed as well.
¶ 5 Moreover, the majority has not offered any precedent for its assertion that a trial court must first estimate the actual retirement age of the pension holder before the court may value the pension. The cases the majority cites arguably do not support such a procedure under all circumstances. See, e.g., Bucci, supra, and the cases cited by the majority from other jurisdictions; namely, Reike, supra; Fast-ner, supra; McGowan, surpa. Most notably, the court in Reike stated,
The trial court is in the best position to determine the proper date and method of valuation on the basis of the circumstances of each case. We therefore hold that no one valuation method is required; rather, the trial court, when valuing a pension, is obligated to reach a fair and equitable division of the property in light of all the circumstances.
Id. at 292, 497 N.W.2d at 222 (first emphasis added; second emphasis in original).
¶ 6 While the majority’s procedure for valuing a pension plan may work for some cases, it should not be made mandatory for all cases. Such a rigid rule overrides the discretion afforded trial judges and devitalizes their equitable powers when distributing the assets of a marital estate. Moreover, application of the majority’s rule to the instant case needlessly disturbs an otherwise fair and equitable distribution of the parties’ assets.
¶ 7 I now turn to the court’s award of alimony to insure Appellee’s award of a portion of the pension benefits. The majority suggests that the alimony award bears “no relation to the length of the marriage, the relative earning capacities of the parties, the obligations to minor children, the relative assets and liabilities of the parties and the relative needs of the parties.” The majority also states that the twenty-year duration of the award “appears inequitable” considering the length of the marriage and the alimony already paid by Appellant. I disagree.
¶ 8 Appellant’s pension plan does not provide for survivor benefits. If Appellant were to die while he was still employed, then Appellee would receive nothing. If Appellant died in early retirement, then Appellee would receive no further benefits after his death. The parties lacked sufficient assets to offset the pension, the pension is not realistically subject to a Qualified Domestic Relations Order, and the pension lacks survivor benefits. As the date of Appellant’s actual retirement was unknown and the possibility that Appellant’s untimely death or lengthy employment would prevent Appellee from receiving any “value” from the pension as distributed, the court could not simply treat the asset separately and defer the payments. Additionally, had the court treated the pension separately, the distribution of the meager remaining assets of the marital estate would have been inequitable. Rather than gamble on the amount of monthly retirement checks Appellant would actually receive, the trial court ordered Appellant to pay a modest amount to Appellee in the form of an alimony *1084award so that Appellee could purchase a term life insurance policy to protect her award of her marital portion of Appellant’s pension. Casting the award as alimony is favorable to Appellant in the form of a tax break, while it benefits Appellee by funding a policy to protect a portion of an asset she has been awarded but otherwise may never receive.
¶ 9 Moreover, the trial court awarded Appellee an equitable share of that portion of the pension earned during the marriage. In arriving at the size of this share, the court considered the length of the marriage, and the relative earning capacities, assets, liabilities and needs of the parties. The purpose of the alimony award was to insure Appellee’s portion of this asset should Appellant not enjoy a normal retirement. Thus, the alimony award protecting Appellee’s portion of the pension is directly related to the alimony factors of 23 Pa.C.S.A § 3701 cited by the trial court.
¶ 10 It bears repeating that the increased monthly benefits Appellant will receive from continued employment inure principally to him. Arguably, the only person penalized by Appellant’s continued employment is Appellee, who must wait for Appellant to retire before she can receive any monthly benefit from this asset. Other than the house, Appellee essentially receives nothing more in the equitable distribution plan until Appellant decides to retire, a decision entirely under Appellant’s control. By requiring Appellant to pay alimony so that Appellee could insure her share of the pension, the trial court protected Appellee’s financial wellbeing while she waits an indefinite amount of time for the pension distribution.
¶ 11 Additionally, the majority mischar-acterizes Appellant’s pension benefits so that it appears Appellant’s monthly benefits are constant. However, only the marital portion of these benefits remains constant. Appellant’s monthly pension benefits continue to increase the longer he works. Thus, while Appellee’s equitable share of the marital portion of Appellant’s pension is fixed at $435.00 per month, Appellant’s monthly pension benefits if he retired today would be well in excess of $2,000.00. Furthermore, as Appellant continues to work and collect salary, the amount of his monthly retirement benefit grows.
¶ 12 The division of Appellant’s pension as a percentage of the equitable portion of the monthly retirement benefits, coupled with alimony payments to insure the award, allowed the trial court to relinquish jurisdiction. Thus, the court’s decision to order alimony for the purchase of an insurance policy had the added benefit of avoiding the need to retain jurisdiction indefinitely. See Miller, supra (stating immediate settlement of distribution preferred because it avoids continued entanglement between the parties and continued court supervision).
¶ 13 Finally, the trial court compared the valuation of the instant pension plan for distribution purposes to that of a closely-held business. The court said:
There is no established date for valuation of marital property because the court’s objective is to effectuate economic. justice. McNaughton[, supra]. In McNaughton, the Superior Court found that the trial court properly valued appellant’s business at the time of separation rather than at the distribution where appellant’s business was family owned and “largely under the control” of appellant’s influence. In the similar case of Benson v. Benson, 425 Pa.Super. 215, 624 A.2d 644 (1993), the Superior Court determined that the trial court did not abuse its discretion in valuing a former appellant’s business at the time of separation where the equitable nature of the Divorce Code warranted a separa*1085tion date value because the business was “under the sole control” of the former appellant. In the instant case, the marital value of Appellant’s pension is similarly under his control and diminishes as his employment continues. Therefore, the Court properly and equitably valued the marital component of the pension on the date it vested and full benefits first became available.
(Trial Court Opinion at 5). While Appellant’s pension plan is not identical to a closely-held business, the trial court’s comparison of the two is persuasive. As noted, Appellee does not receive any portion of Appellant’s retirement benefits until Appellant chooses to retires. When Appellant retires is solely within his control. Thus, Appellant controls the number of monthly retirement checks Appellee will share, and consequently, the value she will ultimately derive from this asset. To be fair, the court choose a date that will maximize the value of this asset for insurance purposes in the event Appellant suffers an untimely death. In fact, the instant distribution is more favorable to Appellant than he would care to admit.
¶ 14 Based upon the foregoing and viewing the trial court’s equitable distribution as a whole, it is my opinion that the court’s order effects economic justice between the parties while wisely vitiating the need for continued court supervision. Consequently, I do not think that the trial court abused its discretion. See McNaughton, supra; Miller, supra; Lyons, supra. Accordingly, I dissent.