SARAH GROSS v. DENNIS GROSS
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RENDERED: December 17, 1999; 10:00 a.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002009-MR
SARAH GROSS
APPELLANT
APPEAL FROM BRACKEN CIRCUIT COURT
HONORABLE ROBERT GALLENSTEIN, JUDGE
ACTION NO. 97-CI-00005
v.
DENNIS GROSS
APPELLEE
OPINION
VACATING AND REMANDING
** ** ** ** **
BEFORE:
COMBS, JOHNSON, and McANULTY, Judges.
COMBS, JUDGE:
Sarah Gross1 appeals from the portion of a July
11, 1998, order of the Bracken Circuit Court that she challenges
as erroneous for its refusal to consider an award of Social
Security disability benefits made to Dennis Gross in its
evaluation of the parties' marital estate.
We vacate and
remand.2
1
Pursuant to the divorce action, Sarah Gross was restored to
her former name of "Ketron." However, the notice of appeal and
brief to this court refer to her as "Sarah Gross." We follow
suit.
2
Dennis is proceeding pro se and has not filed an appellee's
brief. Kentucky Rule of Civil Procedure (CR) 76.12 (8)(c)
(continued...)
Sarah and Dennis Gross were married on November 2,
1992.
They separated on November 12, 1996.
a dissolution of the marriage soon followed.
Sarah's petition for
After a period of
discovery, the parties entered into a separation agreement
dividing their personal property and debts.
A decree of
dissolution incorporating the separation agreement was entered on
February 13, 1998.
However, the agreement specifically reserved
for a determination by the trial court the issue of whether
Dennis’s Social Security benefits should be classified as marital
property subject to equitable distribution.
Dennis had filed an
application for SSI and SSD benefits that had not been
adjudicated as of the date of the decree of dissolution; the
trial court ruled that Sarah was not entitled "to any portion of
his future benefits nor his back-pay benefits."
Order of April
2, 1998.3
2
(...continued)
provides:
If the appellee's brief has not been
filed within the time allowed, the court may:
(i) accept the appellant's statement of the
facts and issues as correct; (ii) reverse the
judgment if appellant's brief reasonably
appears to sustain such action; or (iii)
regard the appellee's failure as a confession
of error and reverse the judgment without
considering the merits of the case.
Based on the merits of the case as set forth in appellant’s
brief, we have concluded that the circuit court's ruling must be
vacated and remanded.
3
The record suggests that Dennis had been previously awarded
disability benefits covering a period from December 29, 1993
through January 5, 1995. No claim is made by Sarah in this
proceeding for any part of that award, however.
-2-
After the entry of the parties' final divorce decree,
the Social Security Administration determined that Dennis was
entitled to full disability benefits dating from January 6, 1995.
In a post-dissolution order, the Bracken Circuit Court determined
that Dennis's "back pay" benefit award was not includable in the
parties' marital estate and thus was not subject to equitable
distribution pursuant to KRS 403.190.
In reaching this
conclusion, the court found that Section 407(a) of the Social
Security Act preempted the application of Kentucky's equitable
distribution statute.
On appeal, Sarah contends that the award of "back pay"
benefits — or that portion of the disability income award that is
non-prospective —
constitutes a part of the parties' marital
estate subject to equitable distribution.
She claims to be
entitled to a portion of that part of the "back pay" benefits
that accrued during the parties' marriage.
The Social Security Act provides an explicit and
extensive benefit plan, including a scheme by which divorced
spouses may be entitled to a portion of their former spouse's
benefits.
See 42 U.S.C. §402(b)(1)(1991).
Additionally, the Act
includes an anti-alienation clause providing that
[t]he right of any person to any future
payment . . . shall not be transferable or
assignable, at law or in equity, and none of
the moneys paid or payable or rights existing
. . . shall be subject to execution, levy,
attachment, garnishment, or other legal
process . . . .
42 U.S.C. §407(a)(1998).
-3-
Given the exhaustive nature of the act and in view of
the language cited above, courts in many jurisdictions have
concluded that anticipated Social Security benefits may not be
valued by the court and included as part of a couple's marital
estate.
See Mahoney v. Mahoney, 425 Mass. 441, 681 N.E.2d 852
(1997).
While holding that anticipated Social Security benefits
are not true marital assets and are, in essence, insulated from
equitable distribution, many courts have nevertheless held that a
trial court may consider a spouse's anticipated Social Security
benefits as one factor — among others — in dividing the over-all
marital estate.
See 24 Am. Jur. 2d Divorce and Separation § 541
(1998).
For example, in In re Marriage of Boyer, 538 N.W.2d 293
(Iowa 1995), the Supreme Court of Iowa held that section 407(a)
preempts state laws allowing direct division of Social Security
benefits as well as any direct set-off in consideration of such
benefits.
However, the court concluded that consideration of the
existence of these benefits is not foreclosed by section 407(a)
and declared as follows:
a state court is not required to pretend to
be oblivious of the fact that one party
expects benefits that will not be enjoyed by
the other. This contrasting economic
security can be weighed as a factor in fixing
the economic terms of a dissolution decree.
In Re Marriage of Boyer, 538 N.W.2d at 293-294.
Similarly, in
Pongonis v. Pongonis, 606 A.2d 1055 (Me. 1992), Maine's highest
court upheld the trial court's consideration of a wife's Social
Security income in dividing marital assets.
The court's decision
in Pongonis focused on the fact that the trial court
-4-
(notwithstanding the prohibition of section 407(a) against
assignment and transfer of benefits) had made no attempt to
divide directly or to distribute Social Security benefits;
instead, it considered the anticipated benefits as a "relevant
factor" in dividing the rest of the marital property.
See
Pongonis at 606 A.2d at 1058.
Finally, we view our decision in Rowe v. Cowherd, Ky.
App., 796 S.W.2d 866 (1990), as providing support — if only
indirectly — for a trial court's consideration of the benefits in
determining an equitable distribution of marital property.
In
Rowe, we considered whether a step-father's monthly Social
Security disability benefit could be taken into account in
determining the eligibility of his step-children to receive AFDC.
While affirming that Rowe's Social Security disability benefit
was not transferable or assignable, we concluded that the benefit
could nevertheless be considered in assessing the children's AFDC
eligibility.
We held that mere consideration of the benefit did
not constitute a transfer, assignment, or "other legal process"
as prohibited by the anti-alienation provisions of the Act.
Id.
at 867.
Therefore, we conclude that a trial court's
consideration of non-prospective Social Security benefits in
formulating a division of marital property is not preempted by
federal law — although the actual benefits themselves are not
subject to division or set-off.
Thus, we conclude that the
Bracken Circuit Court was at liberty to consider Dennis's award
of non-prospective Social Security benefits in assessing the
-5-
over-all fairness of the parties' property settlement agreement.
In light of our conclusion, we vacate and remand to the trial
court for such additional consideration.
ALL CONCUR.
BRIEF FOR APPELLANT:
Ronald L. McDermott
Covington, KY
-6-
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