Court Opinion

ID: 9902950
Source: CourtListenerOpinion
Date Created: 2023-11-27 15:26:56.276221+00
Date Added: 2024-06-11T09:22:03.603906
License: Public Domain

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                      FIFTH DISTRICT

                                   NOT FINAL UNTIL TIME EXPIRES TO
                                   FILE MOTION FOR REHEARING AND
                                   DISPOSITION THEREOF IF FILED

ELROY CROCKER,

             Appellant,

v.                                      Case No. 5D23-103
                                        LT Case No. 10-2019-DR-000925

ROBIN TRUMAN CROCKER,

             Appellee.

________________________________/

Opinion filed July 21, 2023

Appeal from the Circuit Court
for Clay County,
Angela M. Cox, Judge.

Brian P. North, of Kenny Leigh and
Associates, Pensacola, for Appellant.

Michael J. Korn, of Korn & Zehmer,
P.A., Jacksonville, for Appellee.

WALLIS, J.

      Elroy Crocker (“Husband”) appeals an Amended Final Judgment of

Dissolution of Marriage and an Order on Motions for Rehearing, arguing that
the trial court erred by awarding Robin Crocker (“Wife”) a share of his pre-

age 62 Federal Employee Retirement System (“FERS”) Disability Retirement

benefits as marital property subject to equitable distribution. Because those

benefits are nonmarital disability benefits, we reverse.

                                     Facts

      The parties were married in 2005. Wife petitioned for dissolution in

2019. At trial, the parties agreed that the portions of their retirement benefits

that accrued during the marriage should be equitably distributed. Those

retirement   benefits   included   Husband’s     FERS,     Husband’s     military

retirement, Husband’s ExxonMobil Pension, Wife’s FERS retirement, and

Wife’s Texas Retirement System Pension.

      However, Wife also sought, as equitable distribution, a portion of the

FERS disability benefits Husband was currently receiving. In support of her

claim, Wife presented uncontroverted documentary evidence, including a

letter approving Husband’s disability benefits and his benefits booklet,

entitled, “Your Federal Retirement Benefits.”        Wife also presented the

testimony of Annette Ozuna, an expert in federal retirement benefits. Based

on her review of Husband’s benefits booklet and current materials from the

Office of Personnel Management (“OPM”), Ozuna opined that Husband was

currently receiving “federal disability” benefits and would continue to receive

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such benefits until age 62, at which point his benefits would be recomputed

according to his benefit booklet. Ozuna opined that Wife was entitled to

receive part of Husband’s federal disability payment before he reached age

62, according to the “wording to that effect in the attorney’s handbook.” 1 Her

payments could commence upon the granting of the divorce and proper

application for the payments. Husband’s attorney did not object to this

testimony or conduct any cross-examination of Ozuna. Finally, Wife called

Husband, who confirmed that he was currently unemployed and was

receiving “disability” due to cluster headaches. He also agreed that the trial

court should “fairly and equitably split the retirement between you and your

wife.”

         In its final judgment, the trial court distributed the aforementioned

retirement benefits, but also included Husband’s pre-age 62 FERS disability

benefits in the distribution, stating:

         Husband receives his retirement in the form of Federal Disability
         Payments until he attains the age of 62 years. Pursuant to
         Federal Law, Wife shall be and is entitled to her share of the
         payments prior to the Husband’s attaining the age of 62 years
         commencing with the first payment to be made in the first month
         after the entry of this Final Judgment of Dissolution of Marriage.

        The “attorney’s handbook” that Ozuna referred to was not admitted
         1

into evidence as an exhibit.

                                         3
Husband filed a motion for rehearing, arguing for the first time that under

Florida caselaw, employer disability benefits are considered nonmarital

property and thus not subject to equitable distribution, citing to Hoffner v.

Hoffner, 577 So. 2d 703 (Fla. 4th DCA 1991); Kay v. Kay, 988 So. 2d 1273

(Fla. 5th DCA 2008); Rumler v. Rumler, 932 So. 2d 1165 (Fla. 2d DCA 2006).

After hearing arguments and considering written submissions from the

parties, the court rejected Husband’s argument, stating,

            As to the Respondent’s benefits, the Court has reviewed
     the testimony provided by Annette Ozuna as well as Petitioner’s
     Exhibits 28 and 29. There is competent and substantial evidence
     that the benefit is a retirement benefit. The exhibits are specific
     to the Respondent’s benefit. Petitioners Exhibit 29 is a letter to
     the Respondent from the retirement services office about the
     annuity. Petitioners Exhibit 28 is the Respondent's benefit
     booklet. Throughout the booklet, Respondent’s benefit is
     referred to as a retirement benefit. Although on page 6, the
     benefit is referred to as disability retirement, the booklet goes on
     to refer to the Respondent as a disability retiree. The expert
     witness testified that the Petitioner can get her award before the
     Respondent reaches the age of 62. This testimony is credible
     and unrefuted. Notably, Respondent did not make this argument
     during trial.

The court entered an amended final judgment, again finding that, “[p]ursuant

to Federal Law,” Wife was entitled to her share of Husband’s pre-age 62

FERS benefits beginning after entry of the amended final judgment.

                                      4
                               Preservation

      Under Florida Rule of Civil Procedure 1.530 and Florida Family Law

Rule 12.530, trial courts have discretion to consider and address arguments

raised for the first time in a motion for rehearing, in part to “prevent an

injustice that would be caused by an error or omission by one of the lawyers.”

Fitchner v. Lifesouth Cmty. Blood Ctrs., Inc., 88 So. 3d 269 (Fla. 1st DCA

2012).   And, where a trial court exercises its discretion to address an

argument raised for the first time on rehearing, the argument is considered

preserved for appeal. See Goetz v. AGB Tampa LLC, 335 So. 3d 228, 231

(Fla. 2d DCA 2022) (finding arguments preserved for appeal where “trial

court had discretion to entertain—and did entertain—the arguments

presented” in rehearing motion); Pisano v. Mayo Clinic Fla., 333 So. 3d 782,

788 (Fla. 1st DCA 2022) (“Appellants may have preserved their arguments

through a motion for rehearing because a trial judge has discretion to

consider new arguments raised on rehearing.”). Because the trial court

addressed Husband’s rehearing argument, we find that it was sufficiently

preserved for appeal.

                            Standard of Review

      Appellate courts “review a trial court's characterization of an asset as

marital or nonmarital de novo and any factual findings necessary to make

                                      5
this legal conclusion for competent, substantial evidence.” Sturms v. Sturms,

226 So. 3d 1004, 1006 (Fla. 1st DCA 2017) (quoting Dravis v. Dravis, 170

So. 3d 849, 852 (Fla. 2d DCA 2015)).

                          Applicable Florida Law

      “Generally speaking, an employer-sponsored disability pension does

not constitute a marital asset subject to equitable distribution.” Gibbons v.

Gibbons, 10 So. 3d 127 (Fla. 2d DCA 2009). Instead, a spouse’s “disability

benefits” are considered income, section 61.046(8), Florida Statutes (2019),

and may be considered for alimony purposes. Frank v. Frank, 314 So. 3d

634, 637 n.3 (Fla. 3d DCA 2021); see also Freeman v. Freeman, 468 So. 2d

326, 328 (Fla. 5th DCA 1985) (“[A] disability pension should not be

considered a marital asset subject to equitable distribution. However, the

pension may be considered in determining an award of alimony.”).            In

contrast to disability benefits, a spouse’s retirement benefits accrued during

the marriage are considered marital property subject to equitable distribution.

§§ 61.075(6)(a)1.e., 61.076(1), Fla. Stat. (2019); Acker v. Acker, 904 So. 2d

384, 386 (Fla. 2005).

      Florida courts recognize, however, that disability pensions may serve

different purposes, including compensating a disabled person for the “loss of

earnings resulting from compelled premature retirement and from a

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diminished ability to compete in the employment market”; “for personal

suffering caused by the disability”; or to “replace a retirement pension by

providing support for the disabled worker and his family after he leaves the

job.” Gibbons, 10 So. 2d at 131 (quoting Ciliberti v. Ciliberti, 374 Pa. Super.

228, 542 A.2d 580, 582 (1988)). Only the retirement portion of the disability

pension is subject to equitable distribution. Id. (quoting Rumler, 932 So. 2d

at 1166). Thus, the trial court must determine “what portion of the pension

represents compensation for pain and suffering, disability and disfigurement,

and what portion, if any, represents retirement pay.” Id. (quoting Brogdon v.

Brogdon, 530 So. 2d 1064, 1066 (Fla. 1st DCA 1988)).

      In Weisfeld v. Weisfeld, 545 So. 2d 1341, 1346 (Fla. 1989), the Florida

Supreme Court adopted an analytical approach to determining whether

workers’ compensation benefits and personal injury damages awarded to a

spouse are subject to equitable distribution. This approach was later applied

to determining what portion of disability benefits are subject to equitable

distribution. See, e.g., Kay, 988 So. 2d at 1275; Rosen v. Rosen, 655 So.

2d 153, 154 (Fla. 3d DCA 1995) (holding trial court may not award an interest

in spouse’s disability income to other spouse “absent the appropriate

analysis as set forth in Weisfeld”); Stern v. Stern, 636 So. 2d 735, 739 (Fla.

4th DCA 1993). The analytical approach requires “careful analysis” of the

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“nature and purpose of the benefits at issue.” Gibbons, 10 So. 3d at 131.

“[R]eaching a correct result relative to the equitable distribution of ‘disability

benefits’ requires looking beyond labels to the character and purpose of the

benefit under review.” Id.; see also Gaffney v. Gaffney, 965 So. 2d 1217,

1221 (Fla. 4th DCA 2007) (“Despite its ‘disability pension’ designation, the

marital portion of Husband’s pension was a marital asset subject to equitable

distribution to the extent it does not represent actual compensation for

disability.”); Brogdon, 530 So. 2d at 1065 (“Although it is undisputed that the

husband's pension is denominated a ‘disability’ pension, it appears, based

on the record evidence, that at least some portion of the pension may

actually constitute deferred compensation for the husband's more than 25

years of service to his employer, and thus could be more accurately

described as a retirement benefit.”).

      Application of this analytical approach is reflected in many cases

focusing on the purpose served by disability benefits in a particular case.

See, e.g., Frank, 414 So. 3d at 637 n.3 (“[T]o the extent that benefits payable

under a private disability policy represent a substitute for future lost income,

such benefits are the separate property of the disabled spouse.”); Kay, 988

So. 2d at 1275 (stating it was “clear from Weisfeld, and the cases following

it, that when disability benefits are paid for the loss of future wages and future

                                        8
medical expenses, they are the separate property of the injured spouse”);

Hoffner, 577 So. 2d at 704 (“[W]e are of the view that a disability pension

upon which a spouse is presently receiving benefits, by its very nature

replaces future lost income, and thus is not a marital asset subject to

equitable distribution.”); Freeman, 468 So. 2d at 328 (concluding that a

disability pension is not a marital asset for purposes of equitable distribution

because it is designed to compensate employee for lost earnings and injuries

sustained on job, and thus is “personal to the employee and distinguishable

from a retirement pension”).

                          Applicable Federal Law

      FERS disability retirement benefits are governed by Title 5 United

States Code, Part III, Subpart G, Chapter 84, Subchapter V, sections 8451

to 8456, and by Title 5 Code of Federal Regulations, Chapter 1, Subchapter

B, Part 844, sections 844.101-.404. A review of these statutes and code

rules, and comparison of them to corresponding statutes and code rules

governing other forms of FERS retirement, suggests that Husband’s pre-age

62 FERS disability retirement benefits are disability benefits for purposes of

Florida dissolution cases, despite their frequent references to “retirement.” 2

      2
        Husband properly conceded below that his post-age 62 retirement
benefits accrued during the marriage were subject to equitable distribution

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     Under the United States Code, “[a]n employee who completes at least

18 months of civilian service creditable under section 8411 and has become

disabled shall be retired on the employee’s own application or on application

by the employee's agency.” 5 U.S.C. § 8451(a)(1)(A), “Disability Retirement”

(2020). In other words, federal law characterizes a person receiving FERS

disability benefits as being “retired” and calls the benefits that person

receives “disability retirement.”   However, those federal labels are not

dispositive under Florida dissolution law. See Gibbons, 10 So. 3d at 131.

     Eligibility for such benefits is based on disease or injury that renders

an employee unable to perform “useful and efficient service in the

employee’s position.” 5 U.S.C. § 8451(a)(1)(B). The employee is not eligible

if he or she has declined a reasonable offer of reassignment to a vacant

position in the employee’s agency for which the employee is qualified and

would be able to render useful and efficient service. 5 U.S.C. § 8451(a)(2);

5 C.F.R. § 844.103 (2019). Prior to the age of 62, FERS disability benefits

are based strictly upon a percentage of the employee’s average salary. 5

U.S.C. §§ 8451(c), 8452(a)(1)(A) (2019); 5 C.F.R. § 844.302 (2019). That

amount, however, is reduced by 100% of the annuitant’s “assumed disability

and he does not challenge the trial court’s distribution of those benefits on
appeal.

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insurance benefit” under the Social Security Act. 5 U.S.C. § 8452(a)(2)

(2019); 5 C.F.R. § 844.302 (2019).

      Continued receipt of such benefits is not guaranteed. It is based on

continuing disability. Thus, “[a]n annuitant receiving a disability retirement

annuity” shall receive annual medical exams until age 60, unless the

disability is considered permanent. 5 U.S.C. § 8454 (2019). An FERS

disability retirement annuity terminates if the annuitant: (1) is reemployed by

the (federal) Government; (2) OPM determines that the annuitant has

“recovered”; or (3) the annuitant is restored to an earning capacity fairly

comparable to the current rate of pay for his or her previous position, based

on wages or self-employment income. 5 U.S.C. § 8455 (2019); 5 C.F.R. §§

844.401-.402 (2019).

      On the annuitant’s 62nd birthday, the annuity “shall be redetermined,”

and the redetermined annuity “shall be equal to the amount of the annuity to

which the annuitant would be entitled under section 8415, taking into account

the provisions of subparagraph (B).” 5 U.S.C. § 8452(b)(1)-(2); 5 C.F.R. §

844.305 (2019). In other words, when an FERS disability annuitant reaches

age 62, his or her annuity is recomputed according the FERS “basic

[retirement] annuity” computation, which is “1 percent of that individual’s

                                      11
average pay multiplied by such individual's total service.” 5 U.S.C. § 8415(a)

(2019). 3

      In contrast to FERS disability retirement, the FERS “basic” retirement

annuity is governed by Title 5 United States Code, Part III, Subpart G,

Chapter 84, Subchapters I and II, sections 8401 to 8425, and by Title 5 Code

of Federal Regulations, Chapter 1, Subchapter B, Part 841, sections

842.101-.1204.    See, e.g., 5 C.F.R. § 842.201 (2019) (“This subpart

regulates the statutory provisions on eligibility for nondisability retirement

under the Federal Employees Retirement System (FERS).”).

      An employee must complete five years of creditable civilian service to

be eligible for the basic annuity. 5 U.S.C. § 8410 (2019). The employee

must also attain a minimum retirement age and minimum years of creditable

service to receive immediate benefits under the basic annuity. 5 U.S.C. §

8412 (2019). The basic retirement annuity is not based on disability, does

not require annual medical exams, is not terminable based on recovery from

disability or reemployment, and is “in addition to the benefits payable under

the Social Security Act.” 5 U.S.C. § 8403 (2019). The amount of the benefit

      3
       We note that the substance of the above provisions was explained in
Husband’s approval letter and benefits booklet, which were presented by
Wife without objection or refutation by Husband.

                                     12
is calculated by multiplying one percent of the annuitant’s average pay by

the annuitant’s total service. 5 U.S.C. § 8415 (2019).

                                  This Case

      We are sympathetic to the rulings of the trial court in this case.

Husband’s counsel should have raised this issue at trial. We commend the

trial court for exercising its discretion to consider Husband’s untimely

argument upon rehearing, but we do not believe the court’s findings are

supported by Florida or federal law.       Instead of applying the analytical

approach required by Florida caselaw, the trial court focused on evidence

that Husband’s FERS disability retirement benefits were approved by OPM’s

“retirement services office” and Husband’s benefit booklet referred to him as

a “disability retiree” receiving “disability retirement” benefits. That evidence

does not address the character and purpose of the benefits in question.

      The court also relied on Wife’s expert’s legal opinion in concluding Wife

was entitled to a portion of these benefits under federal law. Again, this is

understandable given Husband’s failure to challenge that opinion at trial. But

the expert’s opinion was based on an “attorney handbook” that does not

appear to have been admitted into evidence and is not part of our record on

appeal. On rehearing, both parties identified the particular provision that the

expert relied upon and it does not appear to us to support her conclusion.

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      Based on the application of Florida and federal law to the

uncontroverted evidence in this case, the benefits at issue here are disability

benefits and thus not subject to distribution because the character and

purpose of these benefits is to replace Husband’s income lost from disability.

No evidence supports the conclusion that these benefits were intended to

“replace a retirement pension by providing support for the disabled worker

and his family after he leaves the job.”

      Accordingly, we reverse that portion of the final judgment equitably

distributing to Wife a portion of Husband’s pre-age 62 FERS disability

retirement benefits and remand for recharacterization of them as a non-

marital asset.

      REVERSED IN PART; REMANDED WITH INSTRUCTIONS.

MAKAR and MACIVER, JJ., concur.

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