Court Opinion

ID: 4352807
Source: CourtListenerOpinion
Date Created: 2018-12-20 16:07:52.886999+00
Date Added: 2024-06-11T14:44:57.454002
License: Public Domain

FILED
                                                              Dec 20 2018, 5:42 am

                                                                   CLERK
                                                               Indiana Supreme Court
                                                                  Court of Appeals
                                                                    and Tax Court

ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEE
George S. Brasovan                                        George R. Livarchik
Law Office of George S. Brasovan, P.C.                    Livarchik & Farahmand
Merrillville, Indiana                                     Chesterton, Indiana

Renee M. Ortega
ROK Legal Group, LLC
Crown Point, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Celene I. Bock,                                           December 20, 2018
Appellant-Petitioner,                                     Court of Appeals Case No.
                                                          18A-DR-38
        v.                                                Appeal from the Lake Superior
                                                          Court
Dale F. Bock,                                             The Honorable Elizabeth F.
Appellee-Respondent                                       Tavitas, Judge
                                                          The Honorable Thomas P. Hallett,
                                                          Magistrate
                                                          Trial Court Cause No.
                                                          45D03-1512-DR-849

Crone, Judge.

                                        Case Summary
Celene I. Bock (“Wife”) appeals the trial court’s division of property in

proceedings dissolving her marriage to Dale F. Bock (“Husband”). She alleges
Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018                    Page 1 of 13
      that the trial court erred in including as a marital asset her survivor benefit from

      Husband’s pension. She also challenges the valuation of the survivor benefit as

      well as the trial court’s equal division of the marital estate. Finding that Wife’s

      survivor benefit was properly included and valued and that the trial court acted

      within its discretion in equally dividing the marital estate, we affirm.

                                   Facts and Procedural History1
[1]   Husband and Wife married in August 1985 and separated in December 2015.

      Before the marriage and until his 2005 retirement, Husband was employed at

      the Lake County Sheriff’s Department. He had accrued ten years of service on

      his Sheriff’s Department pension prior to the marriage and began taking

      disbursements in 2005. He made an election for Wife to receive a survivor

      benefit (“SBP”) under the pension plan, and the election was irrevocable once

      he began taking disbursements. The SBP election resulted in a lower monthly

      disbursement under the plan.

[2]   In December 2015, Wife filed a verified petition for marital dissolution. The

      trial court conducted hearings on three different dates, the last of which was

      March 1, 2017, and the parties waived the time limit for issuance of the

      dissolution decree. Three weeks later, Wife filed a motion to re-open her case

      in chief, and following a hearing, the trial court granted Wife’s motion and

      1
        In conducting our review, we have found several deviations by both parties from the Indiana Rules of
      Appellate Procedure, e.g., including argument in the facts section of the brief, print and spacing issues, and
      reliance on outdated rules concerning word count. See Ind. Appellate Rules 43, 44(D). We also observe the
      use of improper citation form. See Ind. Appellate Rule 22. We admonish counsel to consult the current
      Rules of Appellate Procedure as well as the current edition of The Bluebook, A Uniform System of Citation.

      Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018                                Page 2 of 13
      permitted her to submit additional evidence concerning the value of Husband’s

      pension.

[3]   In April 2017, Wife sought and was granted permission to file a pension

      evaluation and analysis. Both parties filed proposed dissolution decrees, with

      Wife seeking to exclude her SBP from the marital estate and requesting fifty-

      eight percent of the marital estate and Husband seeking the pre-coverture

      portion of his property. Wife filed a motion to strike Husband’s amended

      proposed decree, which the trial court denied. On July 20, 2017, the trial court

      issued its dissolution decree with findings of fact and conclusions thereon. The

      court valued Husband’s pension at $460,211.60, to be divided equally pursuant

      to its finding that the parties had failed to prove any grounds for deviating from

      the statutory fifty/fifty presumptive split. The court included as marital

      property Wife’s SBP, valued at $83,401, and awarded it to her as part of the

      property division.

[4]   Both parties filed motions to correct error, and Husband sought clarification

      and correction of a clerical error in the trial court’s decree and a stay of

      execution. The court corrected a clerical error in paragraph 15 2 of its order and

      otherwise denied Husband’s motions. Wife withdrew her assertion of error

      related to paragraph 15, and the court denied the balance of her motion to

      2
        The trial court revised paragraph 15 of the dissolution decree to read, in relevant part, “Husband requests
      that he be awarded all property acquired prior to the marriage” instead of “Husband requests that he be
      awarded all property acquired during the marriage[.]” Appealed Order at 1.

      Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018                               Page 3 of 13
      correct error. Wife now appeals. Additional facts will be provided as

      necessary.

                                      Discussion and Decision

      Section 1 – The trial court did not err in including Wife’s SBP
                       interest in the marital estate.
[5]   Wife contends that the trial court erred in including the SBP in the marital

      estate. Where, as here, the trial court enters findings of fact and conclusions

      sua sponte, the specific findings control only with respect to the issues they

      cover, and we apply a general judgment standard to all issues on which there

      are no findings. In re Marriage of Sutton, 16 N.E.3d 481, 484-85 (Ind. Ct. App.

      2014). The findings or judgment will be set aside only if they are clearly

      erroneous, meaning that there are no facts or inferences drawn therefrom to

      support them. Id. at 485.

[6]   Wife admits that, “[u]pon analysis, the [SBP] is vested and is a marital asset.”

      Appellant’s Br. at 15. Notwithstanding, she claims that it should have been

      excluded from the marital pot.

              It is well settled that in a dissolution action, all marital property
              goes into the marital pot for division, whether it was owned by
              either spouse before the marriage, acquired by either spouse after
              the marriage and before final separation of the parties, or
              acquired by their joint efforts. Ind. Code § 31-15-7-4(a). For
              purposes of dissolution, property means “all the assets of either
              party or both parties.” Ind. Code § 31-9-2-98 (emphasis added).
              The requirement that all marital assets be placed in the marital
              pot is meant to insure that the trial court first determines that

      Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018         Page 4 of 13
              value before endeavoring to divide property. Indiana’s “one pot”
              theory prohibits the exclusion of any asset in which a party has a
              vested interest from the scope of the trial court’s power to divide
              and award. While the trial court may decide to award a
              particular asset solely to one spouse as part of its just and
              reasonable property division, it must first include the asset in its
              consideration of the marital estate to be divided.

      Falatovics v. Falatovics, 15 N.E.3d 108, 110 (Ind. Ct. App. 2014) (citations and

      quotation marks omitted).

[7]   Wife essentially argues that her SBP must be excluded because it is subject to

      complete defeasance if she predeceases Husband and therefore is too

      speculative and remote to constitute marital property. She relies on the recent

      case of Harrison v. Harrison, in which another panel of this Court affirmed the

      trial court’s decision to exclude from the marital estate a wife’s interest in her

      family trusts. 88 N.E.3d 232, 235 (Ind. Ct. App. 2017), trans. denied (2018).

      The Harrison court emphasized that the wife’s interest was subject to a complete

      defeasance if she predeceased her parents and that even during her lifetime, she

      was not entitled to any disbursements and would receive a disbursement only

      upon a majority vote of the co-trustees. Id.

[8]   We find Harrison distinguishable. While Harrison’s discussion of remoteness

      and defeasance is instructive, the distinction between the family trusts in that

      case and the pension benefits in this case cannot be ignored. Our legislature

      and our courts have spoken directly and specifically where the asset at issue is a

      present or future interest in a pension plan. Indiana Code Section 31-9-2-98(b)

      Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018        Page 5 of 13
       includes the following within the definition of property to be included in the

       marital estate:

               (1) a present right to withdraw pension or retirement benefits;
               [and]

               (2) the right to receive pension or retirement benefits that are not
               forfeited upon termination of employment or that are vested (as
               defined in Section 411 of the Internal Revenue Code) but that are
               payable after the dissolution of marriage[.]

[9]    As previously noted, it is undisputed that Husband’s pension rights vested

       during the marriage. In fact, Husband took monthly disbursements for ten

       years prior to the dissolution, and his election to provide a SBP benefit for Wife

       meant a decrease in his monthly disbursements. As of the date of initial

       disbursement, the SBP election became irrevocable. Nevertheless, in

       characterizing her interest as defeasible, remote, and speculative, Wife appears

       to argue that for her SBP interest to be deemed marital property, it too must be

       vested during the marriage, which would be impossible because it would vest

       only on Husband’s death.

[10]   In Carr v. Carr, another panel of this Court reversed the trial court’s exclusion of

       the wife’s SBP interest from the marital estate. 49 N.E.3d 1086, 1087 (Ind. Ct.

       App. 2016), trans. denied. There, the Court explained that it is the pension-

       earner’s right to the pension, not the SBP designee’s right, that must vest during

       the marriage for the property to be considered part of the marital estate. Id. at

       1090. The Carr panel further emphasized that the vesting of the pension-

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018        Page 6 of 13
       earner’s interest is not only a necessary condition but also a “sufficient condition

       for a right to a benefit to constitute an asset.” Id. at 1089 (emphasis added).

               To hold that SBPs are not marital property would be to remove
               any incentive a pension-earner would otherwise have to elect the
               benefit. By making the election, the pension-earner reduces the
               income he or she would have received during his or her lifetime;
               if the SBP is not counted in the marital pot, the pension-earner
               would clearly benefit financially by not making the election.
               Electing a SBP provides value to the other spouse, which the law
               acknowledges by counting that value as part of the marital pot.

       Id. at 1090-91.

[11]   In Leonard v. Leonard, another panel of this Court found the spouses’ reciprocal

       SBPs to be marital assets subject to division. 877 N.E.2d 896, 901 (Ind. Ct.

       App. 2007). There, the husband had a military pension and the wife had a civil

       service pension, both of which included mandatory SBPs. The Leonard panel

       found that the trial court had properly included in the marital estate both the

       present net value of the pensions and the SBPs and ordered an even split of the

       SBP premiums:

               The survivor benefit plan is designed to provide financial security
               to a designated beneficiary of a military member, payable only
               upon the member’s death in the form of an annuity. Upon the
               death of the member, all pension rights are extinguished, and the
               only means of support available to survivors is in the form of the
               survivor benefit plan.

       Id. (quoting Smith v. Smith, 438 S.E.2d 582, 584 (W. Va. 1993)).

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018        Page 7 of 13
[12]   Both Carr and Leonard illustrate that present and future pension interests are

       properly includable in the marital estate despite the inherently uncertain nature

       of both parties’ interests. A pension holder who has vested but has not yet

       taken distributions would suffer a complete defeasance if he/she were to die

       and would not be entitled to any further benefits if he/she is already taking

       distributions. Similarly, the SBP designee receives benefits only if he/she

       outlives the pension holder and therefore would suffer a complete defeasance

       for predeceasing the pension holder. In other words, where pensions are

       involved, both parties’ interests are, to a certain extent, remote and speculative.

       At the same time, pension interests often represent a significant portion of the

       marital estate, particularly when the parties are older and one or both spouses

       have participated in the pension plan(s) for a significant length of time. Our

       legislature and our courts have recognized the uniqueness of pension interests

       and have determined that they are properly includable in the marital estate.

       The trial court did not clearly err in including Wife’s SBP interest in the marital

       estate.

        Section 2 – Wife has failed to establish clear error in the trial
                    court’s valuation of her SBP interest.
[13]   Wife maintains that the trial court erred in valuing her SBP interest at $83,401.

                 Valuing a pension requires a court to determine (1) what
                 evidence must be presented to establish the value of the benefit,
                 (2) what date must be used to assign a dollar amount to the
                 benefit, and (3) how much of the benefit’s value was the result of
                 contributions made after the final separation date.

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018        Page 8 of 13
       Leonard, 877 N.E.2d at 900.

[14]   Wife challenges the trial court’s reliance on Husband’s expert witness, Dr.

       Jonathan Furdek, in arriving at its valuation of her SBP interest. “A valuation

       submitted by one of the parties is competent evidence of the value of property in

       a dissolution action and may alone support the trial court's determination in

       that regard.” Alexander v. Alexander, 927 N.E.2d 926, 935 (Ind. Ct. App. 2010)

       (quoting Houchens v. Boschert, 758 N.E.2d 585, 590 (Ind. Ct. App. 2001), trans.

       denied (2002)), trans. denied.

[15]   Dr. Furdek, an economist with a PhD from Purdue University, testified

       concerning his experience and his methodology used in determining the present

       value of a SBP. He explained that he “relied on U.S. Life Expectancy Tables,

       the Mortality Tables the United States provides, to determine the life

       expectancy of [Husband] and [Wife].” Tr. Vol. 2 at 123. In explaining his

       conclusions, he reported, “Essentially what I was able to determine, based on

       U.S. Life Tables, is that [Wife] had roughly 4.1 additional years of life

       expectancy beyond the life expectancy of [Husband], and so there would be 4.1

       years that she would be receiving a survivor benefit.” Id. at 126. He also

       indicated that to ascertain the specifics of Husband’s pension plan, he relied on

       information contained in an affidavit submitted by the pension plan

       administrator, which indicated, among other things, that Husband had already

       accepted a 100% survivor option that was irrevocable as of the date he retired.

       Respondent’s Ex. C. Dr. Furdek also testified that he considered the amount of

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018         Page 9 of 13
       the pension benefit that Husband was currently receiving as well as a cost of

       living adjustment built into the pension.

[16]   Dr. Furdek’s lengthy testimony concerning his methodology for arriving at the

       present value of the SBP includes the following:

               [T]o determine that present value, I need to determine an
               appropriate discount factor. The method and the model is (sic)
               very standard and very uniform. It’s found in any undergraduate
               textbook. It’s the model for calculating present value. What I do
               in these cases, however, is I calculate a present value for each and
               every year. I don’t just generalize and come up with one interest
               rate and project that to the future and then proceed to find a
               value. Rather, what I do is, I consult U.S. treasury securities
               which is the most widely accepted set of interest rates, minimizes
               risks in every sense, as it’s most widely accepted by economists
               …. There’s no guess work involved here. There’s no estimating
               or projection. I could go into the marketplace and buy U.S.
               treasur[y] securities that would provide that yield and would
               enable me to payoff that pension if I were in that business. So
               those are firm rates that are available and I used a different rate
               for each year[.]

       Id. at 130-31.

[17]   Wife alleges that her SBP interest was valued too high, considering that she

       might never receive it at all and that even the actuarial tables show her life

       expectancy to exceed Husband’s by only 4.1 years. The trial court addressed

       this concern, finding that “[t]he restriction on [Wife’s] right to receive the [SBP]

       benefit was considered as a factor in the value of the asset.” Appellant’s App.

       Vol. 2 at 15. Wife offers no alternate methodologies or figures and instead

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018       Page 10 of 13
       simply revisits her argument that the SBP should not have been considered

       marital property in the first place. The trial court did not clearly err in its

       valuation of Wife’s SBP interest.

           Section 3 – The trial court acted within its discretion in
        dividing the property according to the statutory presumption
               favoring an equal division of the marital assets.
[18]   Finally, Wife contends that the trial court abused its discretion in dividing the

       marital property equally. The division of marital assets lies within the trial

       court’s discretion, and as such, we reverse only on a showing that the court has

       abused its discretion. Fischer v. Fischer, 68 N.E.3d 603, 608 (Ind. Ct. App.

       2017), trans. denied. An abuse of discretion occurs where the trial court’s

       decision is clearly against the logic and effect of the facts and circumstances

       before it. Id. In conducting our review, we neither reweigh evidence nor

       reassess witness credibility; rather, we consider only the evidence most

       favorable to the trial court’s disposition. Id.

[19]   Indiana Code Section 31-15-7-5 reads,

               The court shall presume that an equal division of the marital
               property between the parties is just and reasonable. However,
               this presumption may be rebutted by a party who presents
               relevant evidence, including evidence concerning the following
               factors, that an equal division would not be just and reasonable:

               (1) The contribution of each spouse to the acquisition of the
               property, regardless of whether the contribution was income
               producing.

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018         Page 11 of 13
               (2) The extent to which the property was acquired by each
               spouse:

               (A) before the marriage; or

               (B) through inheritance or gift.

               (3) The economic circumstances of each spouse at the time the
               disposition of the property is to become effective, including the
               desirability of awarding the family residence or the right to dwell
               in the family residence for such periods as the court considers just
               to the spouse having custody of any children.

               (4) The conduct of the parties during the marriage as related to
               the disposition or dissipation of their property.

[20]   Per the statute, a trial court starts with the presumptive fifty/fifty division of

       marital assets and then determines whether the presumption has been rebutted

       by relevant evidence indicating that an equal division would not be just and

       reasonable. Barton v. Barton, 47 N.E.3d 368, 379 (Ind. Ct. App. 2015), trans.

       denied (2016). If the court deviates from the presumptive equal division, it must

       state its reasons for that deviation in its findings and judgment. Id.

[21]   Wife requested that the trial court award her 58% of the marital estate due to

       the disparity in the parties’ economic circumstances. While Wife correctly

       points out that her weekly wages of $187 are substantially less than Husband’s

       $480, both are retired, both are employed only part time, and their weekly

       earnings are a small portion of their income, when considered in conjunction

       with their social security benefits and equal division of Husband’s pension. The

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018        Page 12 of 13
       court also noted the part-time earnings disparity, but reasoned that due to

       Husband’s advanced age of 67, his part-time earnings potential was uncertain,

       especially in the field of law enforcement. Appellant’s App. Vol. 2 at 17.

       Husband requested all property that he acquired prior to the marriage,

       including the pre-coverture portion of his pension. Appealed Order at 1. See

       also Appellant’s App. Vol. 2 at 17 (“Husband accrued ten years of service on his

       pension prior to the marriage.”). The trial court denied Husband’s request and

       divided the entirety of his pension (valued at $460,211) equally without respect

       to any contributions by Husband prior to the marriage. Appealed Order at 1;

       Appellant’s App. Vol. 2 at 17.

[22]   To the extent that Wife cites as unfair Husband’s receipt of the marital

       residence, a present enjoyment, in contrast to her SBP, a future defeasible

       interest, we will not revisit her argument that the SBP should not have been

       included in the marital estate. The trial court was unpersuaded by either party’s

       argument concerning property division and found, “Neither party has proven

       by a preponderance of the evidence that an equal division of the marital estate

       would not be fair and reasonable such that the statute should be rebutted.” Id.

       We agree, especially in light of the thirty-year duration of their marriage. The

       trial court acted within its discretion in ordering the equal division of the

       marital estate. Accordingly, we affirm.

[23]   Affirmed.

       Najam, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Opinion 18A-DR-38 | December 20, 2018       Page 13 of 13