Court Opinion

ID: 4408771
Source: CourtListenerOpinion
Date Created: 2019-06-20 20:03:06.508423+00
Date Added: 2024-06-11T16:25:34.134284
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                  STATE OF FLORIDA
                  _____________________________

                          No. 1D18-2546
                  _____________________________

DAVID MICHAEL MARTIN, Former
Husband,

    Appellant,

    v.

DAWN TURNER MARTIN, Former
Wife,

    Appellee.
                  _____________________________

On appeal from the Circuit Court for Okaloosa County.
Michael A. Flowers, Judge.

                           June 20, 2019

WOLF, J.

     The former husband challenges a final judgment of
dissolution of marriage. He raises four issues regarding the
distribution of his pension. We find his claim seeking an offset for
amounts he would have received in social security benefits if he
had not participated in this particular type of federal pension
plan does not have merit and affirm without further comment.
Johnson v. Johnson, 726 So. 2d 393, 394-96 (Fla. 1st DCA 1999).
The husband also claims that a portion of his pension
attributable to time he worked for the federal civil service prior to
marriage was nonmarital property. Appellant forfeited any value
in this service time when he left civil service and cashed out his
retirement benefits, and he failed to purchase those years of
service when he became reemployed with the government. Thus,
we find no error in this regard. We affirm without discussion the
court’s award of a lump sum to the former wife for her share of
appellant’s retirement benefits that she was owed during the
pendency of dissolution proceedings.

     We find one issue merits discussion - whether the trial court
erred in finding a portion of appellant’s pension that was
attributable to a period of military service prior to the parties’
marriage was marital because those years of service had no
retirement value until they were “purchased” with marital funds
during the marriage to apply towards appellant’s pension. While
we affirm as to this issue, we address it in this opinion because
there is no Florida case directly on point.

                              FACTS

     During an evidentiary hearing the parties presented
evidence pertaining to the amount and nature of appellant’s
pension. Prior to the marriage, appellant worked for the military
for 8 years, 2 months, and 25 days. He then worked for the
federal civil service for 5 months and 6 days prior to the
marriage, and he continued to work for the civil service after the
marriage for just over 4 years. Appellant left that position and
cashed out all of the retirement benefits that he had accrued with
the civil service. Shortly thereafter, he returned to civil service
where he worked for another 24 years, and he retired prior to
dissolution.

     While married, during his second tenure with civil service,
appellant used $9,866 of marital funds to “purchase” his years of
military service so they would count towards his civil service
pension. Appellant testified that he and the former wife jointly
agreed to pay the $9,866, which they paid in installments over an
8-year period prior to his retirement, because it would be better
for both of them down the road financially. Purchasing those
years did not increase appellant’s regular monthly contribution
towards his pension.

     Appellant conceded that he would not have been eligible to
receive any retirement benefits from the military based on his 8
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years of service. The former wife’s accounting expert explained
appellant would have been required to serve in the military for 20
years to receive military retirement benefits. Thus, the expert
testified those 8 years of service had “no value” for purposes of
retirement until appellant purchased them to apply towards his
civil service retirement.

    Purchasing those years resulted in an increase in appellant’s
pension of $908 a month for the rest of his life, according to the
former wife’s expert.

    The trial court found the former wife was entitled to 50% of
appellant’s pension, reasoning that because marital funds were
used to purchase the military years of service, they became a
marital asset.

                     THE MILITARY SERVICE

     “We review de novo a trial court’s legal conclusion that an
asset is marital or nonmarital.” Landrum v. Landrum, 212 So. 3d
486, 487 (Fla. 1st DCA 2017), reh’g denied (Mar. 24, 2017).

     Appellant argues the trial court erred in finding the portion
of his pension attributable to his years of premarital military
service was marital property. He relies on the well-established
principle that retirement benefits accrued prior to marriage are
nonmarital. The former wife argues the court reached the correct
result based on the equally well-established principle that if
marital funds are used to add value to a nonmarital asset, that
added value is marital.

     There is no Florida case law directly on point. Other
jurisdictions are split on the issue, but a slight majority have
found years of premarital employment that are “purchased”
during the marriage using marital funds are a marital asset.

                  Case Law from Other States

    Most jurisdictions, including Pennsylvania, have found that
when marital funds are used to purchase credit for premarital
years of employment, the enhanced value to the pension plan is
marital. These courts primarily relied on the rationale that

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property acquired during a marriage is marital property. See
King v. King, 481 A.2d 913, 918 (Pa. 1984) (determining portion
of marital pension attributable to years of premarital service
purchased during the marriage was marital property due to the
“presumption that all property acquired during marriage is
marital property”); Lodrigue v. Lodrigue, 817 So. 2d 466, 470 (La.
Ct. App. 2002), writ denied, 2002-1604 (La. 10/4/02), 826 So. 2d
1124 (concluding premarital military service purchased during
the marriage with marital funds was marital because under
Louisiana law “property acquired with community things is
considered community property”); Tarver v. Tarver, 916 So. 2d
1222, 1224 (La. Ct. App. 2005) (same result relying on Lodrigue);
Matter of Marriage of Mahaffey, 773 P.2d 806, 808 (Or. Ct. App.
1989) (“Although the purchased four year credit [towards the
marital pension plan] accrued as a result of his military service
before the marriage, the credit was acquired during the marriage
and is a marital asset.”).

     Even where it was apparently unnecessary for the husband
to purchase his premarital military years of service to receive
credit for them through his civil service pension, a Missouri
appellate court found those years of credit were marital because
the husband “would not have been entitled to a civil service
pension if he had not worked as a civil service employee [during
the marriage]. The fact that the amount of the pension may be
increased by virtue of the circumstance of his previous military
service does not affect the status of the civil service pension as
marital property.” In re Marriage of Burns, 903 S.W.2d 648, 651
(Mo. Ct. App. 1995).

    New York and California have reached the opposite result. A
New York appeals court found it was well-established under New
York law that “[w]hether and to what extent a pension benefit is
marital or separate property is determined by the time period in
which the credit for the pension was earned.” Valachovic v.
Valachovic, 9 A.D.3d 659, 660, (N.Y. App. Div. 2004). Thus, it
concluded premarital years of employment purchased during the
marriage were nonmarital property. Id.

    California also found the value of such purchased years of
premarital military service was nonmarital in In re Marriage of

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Green, 302 P.3d 562 (Cal. 2013). The Supreme Court of California
emphasized that the value added to the pension in that case far
exceeded the cost of purchasing those years of service. Id. at 568.
The court also noted the California law permitting the purchase
of military years of service instructed “that this military service
is to be credited ‘as it would be credited if the member had been
in state service during’ that service,” which demonstrated a
“legislative intent to fully credit persons for their military
service.” Id. at 567. Thus, it found the trial court did not abuse its
discretion in awarding the former wife only half of the marital
funds used to purchase those years of employment, plus interest.
Id. at 564, 570.

      We find California’s rationale is inapplicable in Florida for
two reasons. First, it ignores the presumption laid out in Florida
law that assets acquired during the marriage are presumed to be
marital. Second, it overlooks the fact that, as noted by the
Missouri appellate court, the cost to purchase the premarital
employment was not limited to the expense of marital funds. In
re Marriage of Burns, 903 S.W.2d at 651. The former husband
would not have had the option to purchase his military years of
service unless he worked as a civil service employee during the
marriage. He made this purchase during his second tenure with
civil service, which occurred entirely during the marriage.

                            Florida Law

     Our analysis of Florida law begins with statutes relating to
the definition of marital assets and distribution of retirement
plans. Section 61.075(6), Florida Statutes, defines marital assets
to include assets acquired during marriage:

    (a)1. “Marital assets and liabilities” include:

    a. Assets acquired and liabilities incurred during the
    marriage . . . .

    b. The enhancement in value and appreciation of
    nonmarital assets resulting from . . . the contribution to
    or expenditure thereon of marital funds . . . .

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Importantly, subsection (8) of the same statute states all assets
acquired during the marriage are presumed to be marital assets:

    All assets acquired and liabilities incurred by either
    spouse subsequent to the date of the marriage and not
    specifically established as nonmarital assets or
    liabilities are presumed to be marital assets and
    liabilities. Such presumption is overcome by a showing
    that the assets and liabilities are nonmarital assets and
    liabilities. . . .

§ 61.075(8), Fla. Stat.

     Portions of chapter 61 deal specifically with the distribution
of pensions. Section 61.075 states that a pension “accrued during
the marriage” is marital property. § 61.075(6)(a)1.e., Fla. Stat.
(defining “marital property” as including “[a]ll vested and
nonvested benefits, rights, and funds accrued during the
marriage in retirement, pension, profit-sharing, annuity, deferred
compensation, and insurance plans and programs”); see also §
61.076(1), Fla. Stat. (“All vested and nonvested benefits, rights,
and funds accrued during the marriage in retirement, pension,
profit-sharing, annuity, deferred compensation, and insurance
plans and programs are marital assets subject to equitable
distribution.”).

     Based upon these statutes, the years of military service in
this case were originally nonmarital. Brathwaite v. Brathwaite,
58 So. 3d 398, 401 (Fla. 1st DCA 2011) (finding the portion of the
former husband’s retirement attributable to 3 years he spent in
the Navy prior to marriage was nonmarital). Thus, if nonmarital
funds were utilized to purchase these years of service, they would
remain nonmarital. Scott v. Scott, 888 So. 2d 81, 82-83 (Fla. 1st
DCA 2004) (holding past service years purchased with
nonmarital assets remain nonmarital).

     Neither statutory law nor case law specifically address the
situation we have in this case where marital funds were used to
purchase nonvested years of service. It is well-established,
however, that if an asset is purchased during a marriage, there is
a presumption that the asset is marital. § 61.075(8) Fla. Stat. In
construing a statute similar to section 61.075(8), the
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Pennsylvania Superior Court concluded that years of service
purchased during the marriage were marital property regardless
of whether they were served prior to or during the marriage due
to the statutory “presumption that all property acquired during
marriage is marital.” King, 481 A.2d at 918.

     Similarly, this court has determined that a party claiming
that an asset acquired during the marriage is nonmarital bears
the burden of overcoming the presumption. Smith v. Smith, 971
So. 2d 191, 193 (Fla. 1st DCA 2007). The mere fact that
preparations or contractual obligations occurred prior to the
marriage does not preclude an asset from being considered
marital where the actual closing on the property occurred during
the marriage. See Holmes v. Holmes, 613 So. 2d 511, 513 (Fla. 3d
DCA 1993) (concluding that the marital home was a marital
asset, although the down payment was provided entirely by the
wife who had title in her name only, where purchase of the
residence occurred several days after the parties married.).

     The Second, Third, and Fourth Districts have held that
“[t]he burden is on the pensioner ‘to prove whether some portion
of [the] pension benefits accrued prior to marriage and therefore
should not be included as a marital asset.’” Julia v. Julia, 263 So.
3d 795, 798–99 (Fla. 4th DCA 2019) (quoting Childers v.
Childers, 640 So. 2d 108, 109 (Fla. 4th DCA 1994)). See also
Jahnke v. Jahnke, 804 So. 2d 513, 517 (Fla. 3d DCA 2001)
(finding the pension owner was required to prove that some
portion was paid for using premarital contributions); Reyher v.
Reyher, 495 So. 2d 797, 800 (Fla. 2d DCA 1986) (“In order to
exclude any premarital contributions, the ‘owner’ must prove the
value of the premarital contributions (and appreciation of that
value, if any).”).

     In this case the asset, prior years of service, was acquired
totally utilizing marital funds based on the parties’ joint decision
to make 8 years of installment payments because it would be
better for the couple financially in the future. *

    * Appellant testified that money was tight during their
marriage, ultimately resulting in a foreclosure. The former wife
agreed that because appellant had a superior ability to earn
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     The option to purchase and the decision to purchase the
prior service arose out of appellant’s second tenure with civil
service, which occurred entirely during the marriage. The only
testimony concerning the value of his prior military service was
that it had zero value for retirement purposes. Thus, appellant
failed to overcome the presumption that this asset purchased
with marital funds was marital property. We affirm the trial
court’s determination.

LEWIS and WETHERELL, JJ., concur.

                _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

Michael T. Webster of Michael T. Webster, P.A., Shalimar, for
Appellant.

Curtis W. Brannon of Curtis W. Brannon, PA, Crestview, for
Appellee.

income and retirement benefits, she would stay home with the
couple’s seriously disabled daughter, who ultimately died. The
former wife also worked outside of the home, though she was not
able to accrue retirement benefits. The “marital teamwork”
involved in the parties’ decision to make 8 years of installment
payments to purchase those years despite limited finances
further indicates a desire of the parties that this purchase be
considered a marital asset.

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