Crystal D. Thibeau v. Gregory M. Thibeau (2012)

MEMORANDUM OF DECISION REGARDING MOTION TO COMPEL (126)

A review of the record reveals that the parties were divorced, pursuant to a divorce agreement dated October 12, 2010.   The parties returned to court on February 6, 2012 to argue the plaintiff's motion to compel.   Specifically, the plaintiff was requesting that the defendant husband be compelled to execute a qualified domestic relations order relative to his pension with the state of Connecticut.

The relevant portion of the divorce agreement is paragraph 5 wherein the parties agreed that “husband shall transfer by way of qualified domestic relations order, if necessary, one half of husband's lNG account as of the date of divorce, including gains and losses from the date of judgment to the date of transfer.”   The plaintiff argued that the language was clear and understandable and should be enforced as written.   The defendant argued that his pension has not yet vested but that when it does vest, it will include a premium for “hazardous duty.”   He argues that his ex-wife should only be entitled to one-half of the marital portion of a “normal pension” rather than one-half of the marital portion of the pension which he will actually receive.

LEGAL DISCUSSION

C.G.S. § 46b–81.  Assignment of Property and Transfer of Title.

Subsection (a) provides in relevant part;  “[a]t the time of ․ dissolving a marriage ․ the Superior Court may assign to either the husband or wife all or any part of the estate of the other ․”

Subsection (c) provides, “[i]n fixing the nature and value of the property, if any, to be assigned, the Court, after hearing the witness, if any, of each party ․ shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income.   The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates.”

C.G.S. § 5–173.  Hazardous Duty Service.

Subsection (a) provides in relevant part, “any person engaged in guard ․ duties at the [mentioned] Connecticut correctional institution[s] ․ who has reached his forty-seventh birthday and completed at least twenty years of hazardous duty service for the state or service a ․ guard at said correctional institutions ․ shall be retired on his own application ․”

C.G.S. § 5–192n.  Hazardous Duty Retirement.

Subsection (a) provides, “[e]ach hazardous duty member who has completed twenty-five years of credited service while a hazardous duty member may be retired on his own application on the first day of any future month name on the application ․”

Hazardous duty retirement is a type of retirement benefit that pays extra benefits in addition to one's normal retirement.   If the wage earner satisfies the prescribed conditions, he can retire after twenty (20) years or twenty-five (25) years depending on whether he is enrolled in a Tier I (See § 5–173) or Tier II plan (See § 5–192n).   The employee, upon application, will receive the higher rate of retirement income if he or she has met the prescribed conditions under the respective plan.   Such supplemental retirement benefits are deemed to be part of the employee's regular pension.   For distributive purposes, any portion of which is earned during the marriage will be deemed marital ‘property’ under § 46b–81 subject to equitable distribution.

The distribution of assets in a dissolution is governed by § 46b–81, commonly referred to as the all property equitable distribution scheme.   Ranfone v. Ranfone, 103 Conn.App. 243, 246, 928 A.2d 575;  Krafick v. Krafick, 234 Conn. 783, 792, 663 A.2d 365 (1995).   Although property is not defined under the statute, the Connecticut Supreme Court has defined intangible property as marital property in numerous decisions, and that vested and unvested pension benefits, and other non-matured assets, are classified as property pursuant to § 46b–81 and therefore subject to equitable distribution.   In the present case, the husband's hazardous duty pension may or may not be vested at the time of dissolution, however, whether the additional pension benefit has vested is of no consequence and is deemed marital property and subject to distribution upon application for retirement benefits.   The Supreme Court's most recent decision in Mickey v. Mickey, 292 Conn. 597, 974 A.2d 641 (2009), regarding marital distribution of a pension benefits affirmed the foundation laid in Krafick v. Krafick, supra.   The Krafick decision was followed by several cases affirming and defining pensions that are the subject of equitable distribution.   In Krafick, the Supreme Court concluded that vested but unmatured pension benefits constituted property subject to equitable distribution pursuant to § 46b–81.   In doing so, it emphasized that a broad construction of the term property was necessary.  Krafick v. Krafick, Id. at 795.   There, at the time of dissolution, the defendant husband was eligible to retire under his pension plan, but intended to do so in two years from the date of dissolution.   The court reasoned the pension benefits he will receive represent a form of deferred compensation for services rendered.   Since the employee received a lesser present compensation, during his marriage, plus the contractual right to the future benefits payable under the pension plan, vested pension benefits are contract rights of value despite them being contingent upon future events.  Id. at 794–95.   Although the court did not reach the question of unvested pension benefits, it expressly stated that the same reasoning had been applied by the court to find that such [unvested] benefits also constitute property for the purposes of equitable distribution).  Id. at 799.   Further, the court explained that marriage was a “shared enterprise or joint undertaking in the nature of a partnership to which both spouses contribute directly and indirectly, financially and non financially, the fruits of which are distributable at divorce.”  Id. “Both the non-employed spouse and the wage earning marital partner have the same retirement goals and expectancies regarding the pension benefits as they would if they provided for their later years by using wage income to purchase other investments.   It would be unfair and contrary to the purpose of the statute to strip the non employee spouse of the value of the retirement asset” due to a dissolution of the marriage.  Id. at 796.

In Bender v. Bender, 258 Conn. 733, 785 A.2d 197 (2001), the court built on its foundation in Krafick regarding the issue of unvested pensions, finding that the defendant's unvested pension in that case was property subject to equitable distribution.  Bender v. Bender, supra, 744.   Consistent with its time-honored approach, the court reiterated that presently enforceable rights, based on either property or contractual rights, are sufficient to cause property to be divisible in Mickey v. Mickey, 292 Conn. 597, 625, 974 A.2d 641 (2009), the court affirmed the trial court's decision in awarding the wife fifty percent of the unvested pension benefits earned by the husband through the date of dissolution provided they vest in the future.   The court held that pension benefits, whether vested or unvested, are significant marital assets, and are often the only substantial marital asset as in the present case.   Krafick v. Krafick, supra, 796.   The court reasoned that even a portion of the pension benefits, once vested but earned after dissolution, does not preclude the court from classifying the entire unvested pension as marital property.  Bender v. Bender, supra, 752.  “[J]ust as current and future wages are taken into consideration under the statutes which require the trial court to consider the occupation and amount and source of income of each of the parties when ordering property assignments and alimony, so may non-accrued pension benefits” be considered as a source of income.  Bender v. Bender, supra, 744;  C.G.S. §§ 46b–81(c) and 46b–82.   The court concluded that unvested pension benefits are property for equitable distribution, Bender v. Bender, supra, 745, because the husband's expectation in his pension plan was sufficiently concrete, reasonable and justifiable as to constitute a presently existing property interest for equitable distribution;  any uncertainty regarding vesting was more appropriately handled in the valuation and distribution stages, rather than the classification stage.  Bender v. Bender, supra, 749–50.  C.G.S. § 46b–81.

In Ranfone v. Ranfone, 928 Conn.App. 252, 928 A.2d 575 (2007), the Appellate Court again affirmed the trial court's decision holding that the entirety of the husband's pension was a marital asset.   However, this ruling went further and held that although the general rule that assets should be valued at the date of dissolution is correct, that proposition does not preclude the court from awarding to a spouse a portion of retirement benefits earned by the former spouse subsequent to the date of dissolution citing its reasoning in Bender.   There, the court cited Hansen v. Hansen, 80 Conn.App. 609, 836 A.2d 1228 (2003), stating that the court is not precluded from awarding to a spouse a portion of retirement benefits earned by the former spouse subsequent to the date of dissolution.  Id. at 612.

CONCLUSION

In the present case, the hazardous duty retirement income is not a mere possibility, but is almost certain.   Therefore, the hazardous duty retirement benefit can be sufficiently valued at the date of dissolution for the purposes of distribution and therefore is not a mere expectancy.   Although the husband may be vested in his normal retirement benefit as of the date of the dissolution, it is of no consequence that the hazardous duty retirement benefit is or is not vested at the date of dissolution because, the Connecticut Supreme Court holds that whether the pension is vested or unvested at the time of dissolution, the pension is property under § 46b–81 and is subject to equitable distribution.

Although the agreement does not expressly provide for the wife's interest in the hazardous duty portion, which was unvested at the date of dissolution, it is of no consequence in this matter, because the language in the agreement does not provide for anything less than the entire marital share of the husband's pension owed to the wife.   Construing the agreement the parties stipulated to, in conjunction with the Supreme Court precedent on point, the wife is entitled to her share of the husband's entire pension benefits he has a right to in the future, which implicitly includes any special service credits such as hazardous duty benefits, if and when the husband applies for such benefit.

ORDER

The defendant is ordered to execute a qualified domestic relations order as tendered which provides for the wife to receive one-half of the marital portion of his pension including but not limited to hazardous pay and to pay to the plaintiff $375 in attorneys fees within 30 days.

Shluger, J.

Shluger, Kenneth L., J.