Weaver v. Weaver

431 N.W.2d 476, 172 Mich. App. 257

• Court: Michigan Court of Appeals
• Decided: October 17, 1988
• Docket: Docket 97301
• Status: Published

Opinions

Gillis, P.J.

Defendant appeals as of right from the trial court’s order denying his motion for elimination of alimony on the basis of Walker v Walker, 155 Mich App 405; 399 NW2d 541 (1986). Defendant also appeals the trial court’s award of attorney fees to plaintiff on these motions. We remand.

The parties were married on November 30, 1951, and the consent judgment was entered on September 27, 1985. Defendant was fifty years old when the divorce judgment was entered. Both plaintiff and defendant were employed by General Motors Corporation. Plaintiff was receiving disability benefits from gmc at that time. Under the divorce judgment, defendant was to pay plaintiff $150 per week in alimony until she died or remarried. Under the property settlement portion of the divorce judgment, plaintiff received the marital home, the parties’ other property and the trailer thereon, most of the marital furniture, a 1978 Pontiac automobile, her bank accounts and $3,000. Defendant received a 1983 and a 1984 Cadillac Seville, a 1983 Chevrolet pickup truck, a 1977 Browning boat, limited marital furnishings, his bank accounts and his gmc stock. Each party also received his or her gmc pension benefits free and clear of any claim of the other party.

On August 6, 1986, defendant moved to eliminate his obligation to pay alimony as of September 1, 1986, the date he retired from gmc. Defendant argued that under the terms of the divorce judgment he should receive his pension benefits free and clear from any claim of plaintiff and that his obligation to pay alimony should cease because he had no other source of income.

At the hearing on defendant’s motion, defendant claimed that he was told to take an early retirement because gmc was attempting to reduce its work force. Defendant also claimed that he received $1,800 per month in pension benefits and that plaintiff received $1,050 per month in gross income from gmc as disability pay. Plaintiff had not yet elected to take her pension.

Plaintiff stated that gmc paid her $937.78 per month in disability; however, gmc was deducting $40 per month until she paid $3,000 for some training she had received. Plaintiff argued that defendant’s early retirement was not contemplated by the parties and that defendant should not be able to avoid paying the agreed-to alimony obligation because he had chosen to retire early. Plaintiff also argued that defendant had income from the stock he was awarded and that the court should consider defendant’s ability to continue to earn income because he was only fifty-one years old.

The court agreed with plaintiff, holding that defendant had agreed to pay her $150 per week in alimony. The court also awarded plaintiff $150 in attorney fees.

Defendant moved for rehearing on the basis of this Court’s opinion in Walker, supra. In Walker, the defendant-husband moved to modify his obligation to pay alimony in light of the fact that he was planning on retiring and, therefore, his income would be reduced. The parties’ judgment of divorce was entered on June 17, 1980, and the defendant’s motion was made in 1985. Under the terms of the divorce judgment, the defendant received his pension and retirement benefits free and clear of any claim by the plaintiff. The trial court denied the defendant’s motion. This Court reversed and remanded, noting that, absent fraud, mistake or unconscionable advantage, consent judgments cannot be set aside or modified without the parties’ consent. This Court then held that, because the plaintiff had agreed that the defendant’s pension benefits were to be awarded to him as part of their property settlement, she could not claim that they should be reclassified as income in determining his ability to pay alimony. Walker, supra.

At the hearing on defendant’s motion for rehearing, plaintiff again argued that defendant’s decision to retire early was voluntary and that she was deceived when she entered into the property settlement because she believed that she would receive alimony for fifteen years until defendant retired at age sixty-five. Defendant argued that there was no misrepresentation regarding the property settlement and that plaintiff traded her interest in defendant’s pension benefits for the parties’ real estate.

The trial court held:

The Walker case is really aimed at someone coming in after the fact, and wanting a piece of the pension, which is not the case here. Here, I can recall the parties very well being in open court, and there was a lot of negotiations. The parties contemplated the possible retirement, and that was even discussed. It was part of the contemplation of the parties in arriving at this divorce settlement that was placed on the record.

The alimony was based upon an ability to pay both then, and if in fact he took retirement, subsequently. This was not something that has arisen all of a sudden today. This was a matter that preceded the judgment. It is not a change of heart. This is not now suddenly deciding, well, here he has a pension, we want part of that. The property settlement would probably have been completely different if — because of the health of the wife and so forth, it was necessary that some provision be made for her, and therefore the property was divided as it was.

The court still feels he has the ability to support his wife just as he did at the time, and when what was originally decreed, and therefore deny the motion for rehearing.

The trial court then awarded plaintiff $150 in attorney fees.

We disagree with the trial court’s implication that Walker was intended to apply only where the nonemployee spouse seeks alimony after the employee spouse begins to receive his pension. As noted from the Walker facts discussed above, the defendant was paying alimony before he retired and sought to eliminate his obligation thereafter. Moreover, we agree with the reasoning in Walker. We note that the trial court must determine the respective rights of the parties in pension benefits accrued during the marriage. MCL 552.18(1) and 552.101(4); MSA 25.98(1) and 25.131(4). Hence, it must be assumed that, when the trial court awards a spouse his or her pension benefits free and clear of claims of the other spouse as part of the property settlement, the other spouse has received sufficient property to offset the value of the pension awarded. We agree with Walker that to reclassify this property award as income for purposes of determining alimony would allow the spouse not receiving the pension to obtain part of an asset which was already awarded to the pension-receiving spouse and for which the spouse not receiving the pension had already obtained offsetting property.

On remand, the trial court shall determine whether the parties contemplated defendant’s early retirement at the time their divorce judgment was entered. If the trial court finds that they did and that defendant’s only source of income is his pension, its earlier orders should be set aside and defendant’s obligation to pay alimony eliminated. On the other hand, if the trial court finds that the parties did not contemplate defendant’s early retirement, its orders are affirmed because defendant and plaintiff would have been mistaken as to when defendant was to retire or because defendant would acquire an unconscionable advantage by his early retirement. We note that in the event the trial court orders are affirmed, defendant remains free to move to modify the amount of his alimony payments, rather than to eliminate them, given that his income is much less now that he is retired.

In order to prevent this problem from arising in the future, we publish this opinion to alert attorneys and trial courts of the need to fully consider the ramifications of awarding one party his or her pension as part of a property settlement free and clear from the other party’s claims in light of the fact that the party receiving the pension may opt for or be forced to accept early retirement. Remanded. We retain no further jurisdiction.

H. R. Gage, J., concurred.