Lansing v. Lansing
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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE IN RE THE MARRIAGE OF MARLEEN MARY LANSING, Petitioner-Appellee, v. MARK LANSING, Respondent-Appellant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) DIVISION ONE FILED: 04/29/10 PHILIP G. URRY,CLERK BY: JT 1 CA-CV 09-0388 DEPARTMENT E MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. FC 2007-005014 The Honorable Dean M. Fink, Judge AFFIRMED Joseph C. Richter, P.C. by Joseph C. Ritcher Attorneys for Appellant Scottsdale Thayer & Thayer, P.C. by Teresa S. Thayer Attorneys for Appellee Phoenix W E I S B E R G, Judge ¶1 Mark court s order Lansing ("Husband") allocating his appeals retirement from the benefits superior in a dissolution action and ordering that he make a lump sum payment to Marleen retirement Mary Lansing benefits ("Wife"). could have Husband been argues accurately that divided the by a domestic relations order ("DRO") directing his pension plan to pay Wife her community share of the pension on a monthly basis. For reasons that follow, we affirm the superior court s judgment. BACKGROUND ¶2 The parties were married in December 1991. Husband retired from his employment with Maricopa County in 2002 but elected to ("DROP"). participate in a Deferred Retirement Option Plan Thus, he continued to work for an additional five years in which he did not accrue retirement benefits. He did, however, receive a lump sum of approximately $157,000 when he ceased working in April 2002, and he deposited the lump sum into a 457 Plan between April and June 2007, bringing that account balance to $170,021.84. 1 Husband began receiving monthly retirement benefits from the Public Safety Personnel Retirement System ("PSPRS") in May 2007. 1 Husband withdrew $8,800 from the account between July and December 2007. He withdrew $19,000 between January and June 2008 so that by June 30, 2008, the account balance was $137,124.35. Between July and August 2008, he withdrew $2,000, leaving a balance of $135,100.15. In slightly over one year, Husband had withdrawn $29,800. He also testified that he used $15,000 from a home equity credit line to pay off the loan on Wife s vehicle. Wife testified that she had incurred approximately $30,000 in debt during the pendency of the dissolution and had withdrawn $6,000 from the home equity line of credit to pay credit card debt. 2 ¶3 Wife filed a petition for dissolution in June 2007. The parties reached agreement about many aspects of the decree but were unable to agree on how to allocate Husband s pension. The matter went to trial in August 2008. ¶4 Richard Underwood, an attorney specializing in pension matters, testified that Husband s PSPRS plan does not permit the award of a survivor benefit to a former spouse but only permits division of a member s lifetime benefit. He had calculated the pension s scenarios: value assuming three possible no future cost of living increases ("COLA"), an average increase of 2%, and the maximum allowed increases of 4%. He acknowledged that future COLAs would be paid only if the pension fund had excess earnings and that the percentage of any COLA was somewhat speculative, but he added that the fund had paid a 4% COLA in each of the last ten years. He further acknowledged that the assumed 4.6% Treasury bill interest rate was an estimate that had been approved by the IRS for purposes of calculating lump sum valuations. ¶5 The parties had agreed during mediation that the funds in Husband s 457 plan before deposit of the DROP funds would be divided equally and that after the DROP funds had been deposited, Husband would receive 75% of the account and Wife 25% (50% as Husband s sole and separate and 25% as his half of the 3 community s share). The parties also agreed that Husband would retain the marital home and pay Wife $80,000 for her interest. 2 ¶6 After hearing testimony from both parties, the court concluded that because Wife could not receive a survivor benefit if Husband passed away prematurely, she should receive her portion of the pension ($119,963.75) up front and that Husband had sufficient liquid assets to pay out her interest in a lump sum. Husband moved for a new trial and argued that the court had abused its discretion both by ordering him to pay Wife a present value of her pension rights when he had insufficient liquid assets to do so and by using a 2% COLA in valuing the pension. The court denied the motion. We jurisdiction have pursuant to Husband timely appealed. Arizona Revised Statutes (A.R.S.) section 12-2101 (B) (2003). DISCUSSION ¶7 When apportioning community property at dissolution, the superior court has broad discretion to equitably divide the assets, and we will not disturb its allocation absent an abuse of discretion. Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13, 167 P.3d 705, 708 (App. 2007). On appeal, we view the evidence in the light most favorable to upholding the superior court's apportionment and will 2 sustain it if the evidence Husband refinanced the house to obtain funds to pay Wife for her share. 4 reasonably supports the ruling. Id. We have held, too, that there may well be more than one method or formula which the trial court can use in dividing pension rights. Woodward v. Woodward, 117 Ariz. 148, 150, 571 P.2d 294, 296 (App. 1977). ¶8 This case involves a matured and vested pension right. See Boncoskey, 216 Ariz. at 451-52, ¶¶ 15-16, 167 P.3d at 708-09 (a pension right is mature when employee has unconditional right to immediate payment); Johnson v. Johnson, 131 Ariz. 38, 41 n.2, 638 P.2d 705, 708 (1981) (a vested right is one not subject to forfeiture if the employee retires). employment relationship ends before the As our supreme court held in Johnson, 131 Ariz. at 41, 638 P.2d at 708, a court may award the non-employee spouse her community interest in her husband s pension benefits in a lump sum. The trial court must first determine the community s interest in the pension and calculate the present cash value of that interest; it then may award half of that value to the non-employee spouse in a lump sum, usually in the form of equivalent property; the employee thus entire pension right free of community ties. receives Id. the In that case, however, the husband did not expect to retire for at least fifteen years, id. at 40, 638 P.2d at 707, which would postpone substantially the former wife s pension benefits. 5 access to her share of the ¶9 Here, Husband had begun receiving his monthly pension benefits, and thus Wife also could have received her portion of those benefits on a monthly basis. But the significant risk posed by this distribution method is that if Husband were to die before Wife had received her community share of the pension, she would receive no further payments because Husband s plan would not allow former spouses to qualify for survivor benefits. Husband could have suggested other options to protect against this risk. For example, Husband might have purchased a life insurance policy payable to Wife with a decreasing benefit to account for Wife s progressive receipt of her community share. Or, Husband ordered, it might be have made asked that payable in even if several protected by a lien for any unpaid portion. a lump sum were installments and Instead, Husband simply contended that by awarding Wife a cash lump sum, his cash reserves would be depleted and that he wished to use the DROP money for his children s college educations and weddings. Under the circumstances, there was no abuse of the court s discretion in finding that a lump sum distribution to Wife was equitable. ¶10 Husband Underwood s also valuation challenges of the Husband s estimated average COLA increases. court s pension acceptance using 2% as of the This was less than the COLAs that the plan had awarded its members for the last ten years but took into account the possibility 6 that the plan might award either no or smaller increases in the future. no contrary evidence. ¶11 We also Husband offered There was no abuse of discretion. note that although Husband suggests that Underwood utilized a number of assumptions about the interest rate and his life expectancy, which resulted in a speculative valuation, Husband did not raise any objection to the valuation at trial nor did he produce his own valuation. Moreover, Husband has not suggested any way in which the trial court could more precisely foretell the future. Neither Underwood, the parties, nor the trial judge could know how long Husband will live, and thus a number of the variables used to value this pension necessarily represent an approximation. But, we cannot say that the approximation adopted here constitutes reversible error. ¶12 For superior court s distribution the of reasons stated, discretion her in community we find awarding share of no Wife abuse a Husband s of the lump sum pension. Accordingly, we affirm the court s ruling. /s/__________________________ SHELDON H. WEISBERG, Presiding Judge CONCURRING: /s/_________________________________ PHILIP HALL, Judge /s/_________________________________ JOHN C. GEMMILL, Judge 7
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