Johnson v. Johnson , 2014 Utah LEXIS 84 ( 2014 )

This opinion is subject to revision before
publication in the Pacific Reporter
2014 UT 21
IN THE
SUPREME COURT OF THE STATE OF UTAH
MARK LAWRENCE JOHNSON,
Respondent and Appellant,
v.
ELIZABETH JOHNSON nka ELIZABETH ZORIC,
Petitioner and Appellee.
No. 20120229
Filed June 20, 2014
On Certiorari to the Utah Court Appeals
Second District, Farmington
The Honorable David M. Connors
No. 840735185
Attorneys:
Troy L. Booher, Erin K. Burke, Salt Lake City, for appellant
Bryce M. Froerer, Ogden, for appellee
ASSOCIATE CHIEF JUSTICE NEHRING authored the opinion of
the Court, in which CHIEF JUSTICE DURRANT, JUSTICE DURHAM,
JUSTICE PARRISH, and JUSTICE LEE joined.
ASSOCIATE CHIEF JUSTICE NEHRING, opinion of the Court:
INTRODUCTION
¶ 1 On certiorari, we consider whether our court of appeals
erred when it held that an action to enforce the ongoing right to
collect a portion of pension retirement benefits was not barred by
the statute of limitations. We also consider whether the court of
appeals erred when it determined that the petitioner‘s argument
concerning laches was inadequately briefed according to the
standards set by the Utah Rules of Appellate Procedure. Lastly,
we consider whether a panel majority of the court of appeals
erred in applying the ―marital foundation‖ approach to determine
the amount of a pension that constitutes marital property. We
JOHNSON v. JOHNSON
Opinion of the Court
affirm the court of appeals in part, reverse in part, and remand to
the district court for further proceedings consistent with this
opinion.
BACKGROUND1
¶ 2 Petitioner Mark Lawrence Johnson and Respondent
Elizabeth Ann Johnson, née Zoric, married in 1974 and divorced
in 1984. During the parties‘ ten-year marriage, Mr. Johnson
accrued approximately ten years of service in the United States
Air Force. At the time of the divorce, he was a staff sergeant with
a pay grade of E-5. Because Mr. Johnson‘s pension required
twenty years to vest, at the time of the divorce the district court
was unable to determine a specific monetary amount that would
be owed to Ms. Zoric as her marital property portion of
Mr. Johnson‘s potential future retirement benefit.2 The district
court‘s decree instead awarded Ms. Zoric ―1/2 of 10 years of
[Mr. Johnson]‘s retirement.‖
¶ 3 Ms. Zoric first attempted to enforce her right to a portion
of Mr. Johnson‘s future retirement benefits in 1998, but her
application was denied by the Defense Financing and Accounting
Service (DFAS) on the grounds that the divorce decree lacked
specificity. Ms. Zoric is alleged to have made statements around
this time to the parties‘ son to the effect that she did not intend to
seek her marital portion of Mr. Johnson‘s retirement. Mr. Johnson
claims that the parties‘ son conveyed these statements to him and
he consequently ―made substantial changes to his life financially.‖
¶ 4 At the time of his retirement in 1999, Mr. Johnson was a
master sergeant with a pay grade of E-7, having completed
twenty-four years of service. His monthly payment under the
pension was calculated based on his pay grade and number of
years of service at retirement. In September 2000, Mr. Johnson
received a veteran‘s disability award for ailments that arose after
his divorce from Ms. Zoric. Mr. Johnson‘s final retirement benefit
1 The background facts are also set forth in the decision of the
court of appeals. See Johnson v. Johnson, 2012 UT App 22, ¶¶ 2–5,
270 P.3d 556.
2 While Mr. Johnson‘s pension required twenty years to vest,
his monthly payments would not start until he retired some time
after it had vested.
2
Cite as: 2014 UT 21
Opinion of the Court
was reduced by the amount that he received under the disability
award.
¶ 5 In October 2008, Ms. Zoric filed in district court for a
Qualified Domestic Relations Order (QDRO) in another attempt
to secure her portion of Mr. Johnson‘s retirement benefit. The
district court, in an effort to comply with the 1984 divorce decree,
awarded Ms. Zoric her marital share of Mr. Johnson‘s actual
monthly benefit, based on his salary at the time of retirement and
his number of years of service, less the disability reduction.3 The
district court determined the doctrine of laches barred Ms. Zoric
from recovering any portion of the benefits that had already been
paid to Mr. Johnson before she filed for the clarifying order in
October 2008. Mr. Johnson appealed. The court of appeals
affirmed the district court‘s order awarding Ms. Zoric ongoing
payments based on Mr. Johnson‘s actual retirement benefit.4
¶ 6 Mr. Johnson petitioned this court for review of the statute
of limitations and laches issues, and in the alternative, which
approach should apply to determine the amount owed to Ms.
Zoric from Mr. Johnson‘s retirement benefit. We granted his
petition and have jurisdiction pursuant to Utah Code section 78A-
3-102(3)(a).
STANDARDS OF REVIEW
¶ 7 ―On certiorari, we review the decision of the court of
appeals, not the decision of the trial court.‖5 We review the court
of appeals‘ determination of the question of whether the statute of
3The district court awarded Ms. Zoric‘s share without first
deducting for federal, state, and local taxes.
4 Johnson, 2012 UT App 22, ¶ 32. The court of appeals
remanded to the district court for the deduction of taxes before
determining Ms. Zoric‘s entitlement amount. Id. ¶¶ 32–33. That
decision is not at issue and we make no changes to that
determination.
5 State v. Harker, 2010 UT 56, ¶ 8, 240 P.3d 780 (internal
quotation marks omitted).
3
JOHNSON v. JOHNSON
Opinion of the Court
limitations6 bars Ms. Zoric‘s claim for correctness, granting no
deference to the court of appeals.7
¶ 8 Mr. Johnson alleges that the court of appeals erred when
it refused to consider his laches argument because the court
determined the argument to be inadequately briefed. ―On
certiorari, we review the decision of the court of appeals for
correctness.‖8 ―It is well established that a reviewing court will
not address arguments that are not adequately briefed.‖9 ―In
deciding whether an argument has been adequately briefed, we
look to the standard set forth in rule 24(a)(9) of the Utah Rules of
Appellate Procedure.‖10 If this court determines that the laches
argument was briefed satisfactorily, the question of laches
presents a mixed question of law and fact.11
¶ 9 The parties also dispute whether the district court‘s
application of the marital foundation approach should be
reviewed for an abuse of discretion or correctness.12 We answer
this question below.
ANALYSIS
I. THE STATUTE OF LIMITATIONS DOES NOT
BAR THE RIGHT TO FUTURE PAYMENTS
¶ 10 The parties‘ divorce decree states: ―That [Ms. Zoric] be,
and is hereby awarded 1/2 of 10 years of [Mr. Johnson]‘s military
6 See UTAH CODE § 78B-2-311.
7 Arnold v. Grigsby, 2009 UT 88, ¶ 7, 225 P.3d 192.
8 Nolan v. Hoopiiaina (In re Hoopiiaina Trust), 2006 UT 53, ¶ 19,
144 P.3d 1129 (internal quotation marks omitted).
9 Schefski ex rel. Coleman v. Stevens, 2000 UT 98, ¶ 7, 17 P.3d
1122 (internal quotation marks omitted).
10 State v. Thomas, 961 P.2d 299, 305 (Utah 1998).
11 Johnson v. Johnson, 2012 UT App 22, ¶ 9, 270 P.3d 556 (―We
review the trial court‘s legal conclusions for correctness and its
factual findings for clear error.‖).
12 A majority of the court of appeals held that the correct
standard of review to be applied to a district court‘s equitable
distribution of pension benefits is abuse of discretion. A minority
of the court of appeals applied a correctness standard of review.
See Johnson, 2012 UT App 22, ¶¶ 6, 36.
4
Cite as: 2014 UT 21
Opinion of the Court
retirement.‖ In 1998, before Mr. Johnson retired from the military,
Ms. Zoric attempted to file the decree with DFAS in an effort to
secure her portion of Mr. Johnson‘s future pension payments.
DFAS denied the request on the basis that the decree lacked the
required specificity. Ms. Zoric did not take any further action to
secure payment until October 2008, when she filed the underlying
action requesting a clarifying order or QDRO.13 In that action, the
district court held the doctrine of laches barred Ms. Zoric from
recovering her portion of the benefits that had been paid to Mr.
Johnson from the time of his retirement until she filed for a
clarifying order, but awarded her a share of the ongoing benefits
paid to Mr. Johnson from when she filed the action for the
clarifying order.14
¶ 11 Mr. Johnson alleges that the statute of limitations serves
to wholly bar Ms. Zoric‘s claim to any portion of Mr. Johnson‘s
retirement benefit.15
13 A QDRO instructs ―the trustee of a retirement plan and
specifies how distributions should be made, to whom, and when.
Although a QDRO cannot order the payment of a benefit which is
not allowed under a particular plan, it can order partial payment
to an alternate payee (an ex-spouse, for example).‖ Bailey v. Bailey,
745 P.2d 830, 832 (Utah Ct. App. 1987).
14 Johnson v. Johnson, 2012 UT App 22, ¶ 5, 270 P.3d 556. In the
district court‘s findings of fact and conclusions of law, the court
concluded:
It is uncontroverted that on August 7, 1998,
[Ms. Zoric] made application to the Air Force to
claim her interest in [Mr. Johnson]‘s retirement.
Because of some improprieties in the manner in
which the claim was submitted, it was rejected. The
evidence is controverted as to whether or not
[Ms. Zoric] ever communicated whether she
intended to give up that retirement or not, but the
parties did not discuss with one another whether or
not [Ms. Zoric] would pursue her claim. It is clear,
however, that in the summer and fall of 1998 she
intended to do so.
15In her briefing to the court of appeals, Ms. Zoric contended
that Mr. Johnson ―failed to raise the issue of the statute of
5
JOHNSON v. JOHNSON
Opinion of the Court
¶ 12 The statute of limitations for judgments states that ―[a]n
action may be brought within eight years upon a judgment or
decree of any court of the United States, or of any state . . . within
the United States‖16 and is intended to ―reflect our understanding
that a party will generally choose to pursue a valid claim, rather
than waiting indefinitely to do so.‖17 Mr. Johnson contends that
Ms. Zoric‘s claim should be denied because she ―failed to do
anything to secure any kind of payment on that decree until 2008,
nearly twenty-four (24) years after the decree had been entered,
but more importantly, more than nine (9) years after [Mr.
Johnson‘s] retirement.‖
¶ 13 To assess whether the statute of limitations bars
Ms. Zoric‘s claim to ongoing payments,18 we must first determine
whether the claim that she is asserting is discrete or continuing.
The United States Court of Federal Claims addressed a similar
issue in Baka v. United States,19 wherein a former member of the
military filed suit against the United States, alleging that DFAS
improperly awarded a portion of his military pension to his
former spouse.20 The court held that each payment challenged by
Mr. Baka was subject to its own statute of limitations:
The continuing claims doctrine operates to save
parties who have pled a series of distinct events—
each of which gives rise to a separate cause of
action—as a single continuing event. In such
cases, the continuing claims doctrine operates to
limitations at trial.‖ Mr. Johnson did not file a reply brief before
the court of appeals. Regardless, because the court of appeals‘
decision addressed Mr. Johnson‘s statute of limitations argument
on its merits and we review the decision of the court of appeals,
we will likewise decide the matter on its merits. See Collins v.
Sandy City Bd. of Adjustment, 2002 UT 77, ¶ 11, 52 P.3d 1267.
16 UTAH CODE § 78B-2-311.
17 Kessimakis v. Kessimakis, 1999 UT App 130, ¶ 18, 977 P.2d
1226.
18Ms. Zoric does not challenge the district court‘s laches ruling
preventing her from collecting her portion of the payments paid
before she filed for the clarifying order.
19 74 Fed. Cl. 692 (2008).
20 Id. at 693.
6
Cite as: 2014 UT 21
Opinion of the Court
save later arising claims even if the statute of
limitations has lapsed for earlier events.21
¶ 14 The court clarified that ―[i]n order for the continuing
claim doctrine to apply, the plaintiff‘s claim must be inherently
susceptible to being broken down into a series of independent and
distinct events or wrongs, each having its own associated
damages.‖22 ―In military pay cases, a threshold question can be
framed as whether the plaintiff is challenging the quantum of pay
to which he is undisputedly entitled, or whether he is challenging
his right to receive pay at all.‖23 The court concluded that
Mr. Baka‘s claim was continuing because ―[t]he claim can be
divided into discrete wrongs, each of which is deemed to have
accrued in the month when the Government withheld a portion of
Mr. Baka‘s retirement pay for the benefit of his former wife.‖24
¶ 15 Mr. Johnson argues that because the parties‘ 1984 divorce
decree did not specify an amount owed by him, Baka does not
serve to establish a continuing claim. Specifically, Mr. Johnson
attempts to find support for his argument in a footnote of Baka:
Cases in which a plaintiff undisputedly is entitled
to some pay more plainly fall into the continuing
claims category. On the other hand, where a
plaintiff has received no pay for the limitations
period, and plaintiff‘s entitlement to pay is itself
disputed, the Government‘s failure to pay plaintiff
has not been regarded as periodic Government
action for purposes of the continuing claims
doctrine.25
¶ 16 Mr. Johnson requests that this court ―hold that where the
legal right unexercised within the limitation period is the right to
establish payment obligations, the failure to exercise that right
forfeits all benefits.‖ We decline to do so.
21 Id. at 695–96 (internal quotation marks omitted).
22Id. at 696 (alteration in original) (internal quotation marks
omitted).
23 Id.
24 Id. at 697.
25 Id. at 696 n.5.
7
JOHNSON v. JOHNSON
Opinion of the Court
¶ 17 While it is clear that Ms. Zoric could, and likely should,
have taken action to secure Mr. Johnson‘s payment obligations
before she filed for the QDRO in 2008,26 she was granted a clear
and unequivocal right to ―1/2 of 10 years of [Mr. Johnson]‘s
military retirement‖ in the parties‘ 1984 divorce decree. The
portion of Mr. Johnson‘s pension that he earned during the
parties‘ marriage constituted an award of marital property,
payment of which was delayed until the time when Mr. Johnson
retired. ―The right to retirement benefits is a right to draw[] from
[a] stream of income that . . . begins to flow on retirement, as that
stream is then defined.‖27 Mr. Johnson argues that Ms. Zoric‘s
claim is itself disputed and therefore not a continuing claim. Ms.
Zoric‘s right to payments as it was established in the divorce
decree was not itself disputed, and it was only her delay in filing
for enforcement of the order that provides Mr. Johnson a basis for
contesting that award. Mr. Johnson‘s reliance on the language
from Baka conflates the preliminary question of whether a claim is
continuing with the argument that the right to payments is now
disputed because the claim was not asserted within a certain
time.28 Mr. Johnson‘s affirmative defenses cannot unilaterally
transform Ms. Zoric‘s claim out of the realm of a continuing claim.
26 The district court acknowledged as much in its Revised
Findings of Fact and Conclusions of Law in its finding that
―[a]lthough a Clarifying Order should have been filed shortly
after the Decree was entered, this matter is properly before the
Court.‖
27 Lehman v. Lehman (In re Marriage of Lehman), 955 P.2d 451, 454
(Cal. 1998) (alterations in original) (internal quotation marks
omitted).
28 To the extent that Mr. Johnson contends that the divorce
decree did not establish Ms. Zoric‘s right to a portion of his
retirement because a further clarifying order was necessary, this
argument is not persuasive. Ms. Zoric was not limited to filing for
a QDRO in order to enforce her right to payments. In its
September 1998 letter, DFAS cited the Code of Federal
Regulations as a basis for denying her claim at that time. The
DFAS letter clarified that it was not that the order itself was
invalid, but rather that ―[a] court order that provides for a
division of retired pay by means of a formula wherein the
elements of the formula are not specifically set forth or readily
8
Cite as: 2014 UT 21
Opinion of the Court
¶ 18 The court of appeals held that Mr. Johnson‘s argument
was ―foreclosed‖ by Seeley v. Park,29 which held that
―[i]nstallments under a decree of divorce for alimony or support
of minor children become final judgments as soon as they are due
and cannot thereafter be modified.‖30 As a result, ―the statute
apparent on the face of the court order will not be honored unless
clarified by the court.‖ (Emphasis added) (citing 32 C.F.R.
63.6(c)(8)).
In its order granting ongoing payments to Ms. Zoric, the
district court held that Ms. Zoric was entitled to payments from
―October 1, 2008 to the present, and payments are to begin May 1,
2009. Application is to be made through the Air Force for those
benefits, but until such time as those deductions are automatically
made, they are to be paid directly by Petitioner to Respondent.‖
Further, under DFAS requirements,
. . . for a former spouse to qualify for direct
payments of retired pay as property . . . , the
former spouse must have been married to the
member for 10 years or more during which the
member performed at least 10 years of service
creditable in determining the member‘s eligibility
for retired pay (the 10/10 requirement). . . . If the
10/10 requirement is not met, it does not mean that
a former spouse’s retired pay award is invalid. It
means only that it cannot be enforced by direct
payments under the USFSPA.
Frequently Asked Questions, DEF. FIN. & ACCT. SERV.,
http://www.dfas.mil/garnishment/usfspa/faqs.html
(Frequently Asked Question #4) (emphasis added) (last updated
Aug. 8, 2013). Therefore, the divorce decree could be
independently valid, separate and apart from the availability of
enforcement options through DFAS. A court could directly hold
Mr. Johnson responsible for payments through its own order, and
application through DFAS serves the supplemental role as a
mechanism for garnishing payments. Further, if the district
court‘s 1984 order had laid out a specific formula for determining
Ms. Zoric‘s future payments, no further clarifying order would
have been necessary.
29 532 P.2d 684 (Utah 1975).
30 Seeley, 532 P.2dat 684.
9
JOHNSON v. JOHNSON
Opinion of the Court
begins to run against the judgment from the time fixed for the
payment of each installment for the part then payable.‖31 We
agree with the analysis of the court of appeals extending the
rationale in Seeley—addressing alimony and child support
payments—to pension payments because ―[a]lthough Seeley did
not expressly address pension benefits, we see no reason . . . why
it should not apply to them.‖32
¶ 19 Mr. Johnson attempts to distinguish this case from Seeley
on the basis that ―the former spouse in Seeley failed to seek a legal
remedy for specific unpaid payment obligations to which she was
legally entitled, whereas Zoric failed to establish her right to
receive specific payments.‖ As a result of the entry of the 1984
divorce decree, Ms. Zoric has retained the right to her portion of
Mr. Johnson‘s pension benefits.33 While DFAS did not honor the
1984 divorce decree as written because it did not specify the pay
grade at which Ms. Zoric should receive ―1/2 of 10 years‖ worth
of Mr. Johnson‘s pension, this circumstance did not put
Ms. Zoric‘s entitlement to payments in dispute. Just as Ms. Zoric
cannot compel her share of Mr. Johnson‘s pension payments to be
paid to her until each is payable to Mr. Johnson, the statute of
limitations does not bar Ms. Zoric‘s share to future payments
before the statute of limitations on each individual payment has
run.34 Therefore, each pension payment Mr. Johnson received
31 Id. at 685.
32 Johnson, 2012 UT App 22, ¶ 27.
33 The delayed nature of the award reflects why the traditional
statute of limitations cases relied on by Mr. Johnson are
distinguishable. See, e.g., Kessimakis, 1999 UT App 130, ¶¶ 17–19;
Lund v. Hall, 938 P.2d 285, 288–91 (Utah 1997). In those cases, a
judgment is clearly and unequivocally enforceable at the time, but
for whatever reason the plaintiff opted not to enforce the order
within the statute of limitations period. Here, Ms. Zoric could not
receive payments under the district court‘s divorce decree until
Mr. Johnson chose to retire.
34 See Koelsch v. Koelsch, 713 P.2d 1234, 1239 (Ariz. 1986)
(―[P]ension plans are a form of deferred compensation to
employees for services rendered, and any portion of the plan
earned during marriage is a community property subject to
equitable division at dissolution. . . . [D]uring marriage[,] a
husband and wife have an equal, immediate, present, and vested
10
Cite as: 2014 UT 21
Opinion of the Court
was subject to its own discrete statute of limitations. The court of
appeals did not err when it affirmed the district court‘s order
holding that Ms. Zoric was entitled to her share of Mr. Johnson‘s
ongoing pension payments from the date that she filed for the
clarifying order.35
II. THE COURT OF APPEALS DID NOT ERR WHEN
IT REFUSED TO ADDRESS MR. JOHNSON‘S
LACHES ARGUMENT BECAUSE IT WAS
INADEQUATELY BRIEFED
¶ 20 We next consider whether the court of appeals erred as a
matter of law when it refused to consider Mr. Johnson‘s laches
argument because it was inadequately briefed.36 ―We have
repeatedly warned that [appellate courts] will not address
arguments that are not adequately briefed, and that we are not a
depository in which the appealing party may dump the burden of
argument and research.‖37 An adequately briefed argument
contains ―the contentions and reasons of the appellant with
respect to the issues presented, including the grounds for
reviewing any issue not preserved in the trial court, with citations
to the authorities, statutes, and parts of the record relied on.‖38
―Mere bald citation to authority, devoid of any analysis, is not
interest in the community assets. When the community property
is divided at dissolution . . . , each spouse receives an immediate,
present, and vested separate property interest in the property
awarded to him or her by the trial court. It is clear that a former
spouse loses any interest in and control over that separate
property.‖ (citations omitted)).
35 Johnson, 2012 UT App 22, ¶ 28; see also id. ¶ 24 & n.6 (stating
that Ms. Zoric does not challenge the district court‘s application of
the doctrine of laches to bar her right to payments received by
Mr. Johnson before she filed for the clarifying order).
36 See State v. Brooks, 908 P.2d 856, 859 (Utah 1995); see also
Valcarce v. Fitzgerald, 961 P.2d 305, 313 (Utah 1998) (―It is well
established that an appellate court will decline to consider an
argument that a party has failed to adequately brief.‖).
37 Hess v. Canberra Dev. Co., LC, 2011 UT 22, ¶ 25, 254 P.3d 161
(internal quotation marks omitted).
38 UTAH R. APP. P. 24(a)(9).
11
JOHNSON v. JOHNSON
Opinion of the Court
adequate. And we may refuse, sua sponte, to consider
inadequately briefed issues.‖39
¶ 21 In his briefing on laches before the court of appeals,
Mr. Johnson cited two New York cases40 but failed to lay out the
elements of laches, did not provide specific citations to analysis
within the cases, did not discuss the elements of laches or apply
them to his case, and failed to discuss whether New York‘s law on
laches is even comparable to Utah law. Utah does not suffer from
a dearth of case law concerning laches.41 While we do not go so
far as to hold that Mr. Johnson was required to cite case law from
Utah in support of his argument, his analysis was so sparse as to
not specify the elements of laches. And while Mr. Johnson‘s brief
contained record citations in another section, his laches argument
failed to engage in any sort of analysis between the case law that
he did cite and the facts of this case.42 We therefore affirm the
State v. Lee, 2006 UT 5, ¶ 22, 128 P.3d 1179 (internal quotation
39
marks omitted).
40O’Dette v. Guzzardi, 204 A.D.2d 291 (N.Y. App. Div 1994);
Cotumaccio v. Cotumaccio, 171 A.D.2d 723 (N.Y. App. Div. 1991).
41 See, e.g., Fundamentalist Church of Jesus Christ of Latter-day
Saints v. Horne, 2012 UT 66, ¶ 29, 289 P.3d 502 (―In Utah, laches
traditionally has two elements: (1) [t]he lack of diligence on the
part of plaintiff and (2) [a]n injury to defendant owing to such
lack of diligence.‖ (alterations in original) (internal quotation
marks omitted)); Fundamentalist Church of Jesus Christ of Latter-day
Saints v. Lindberg, 2010 UT 51, ¶ 27, 238 P.3d 1054 (citing the same
elements); Papanikolas Bros. Enters. v. Sugarhouse Shopping Ctr.
Assocs., 535 P.2d 1256, 1260 (Utah 1975) (citing the same elements);
Nicolds v. Utah Bd. of Pardons & Parole, 2012 UT App 123, ¶ 4, 277
P.3d 652 (citing the same elements); Collard v. Nagle Constr., Inc.,
2002 UT App 306, ¶ 28, 57 P.3d 603 (―Laches bars a recovery when
there has been a delay by one party causing a disadvantage to the
other party.‖); Nilson-Newey & Co. v. Utah Resources Int’l, 905 P.2d
312, 314 (Utah Ct. App. 1995) (―To successfully assert laches one
must establish that (1) plaintiff unreasonable delayed in bringing
an action, and (2) defendants were prejudiced by that delay.‖)..
42 See State v. Thomas, 961 P.2d 299, 305 (Utah 1998)
(―Implicitly, rule 24(a)(9) requires not just bald citation to
authority but development of that authority and reasoned
analysis based on that authority.‖).
12
Cite as: 2014 UT 21
Opinion of the Court
decision of the court of appeals to decline to address
Mr. Johnson‘s laches argument on the basis of inadequate
briefing.
III. THE COURT OF APPEALS ERRED WHEN IT AFFIRMED
THE DISTRICT COURT‘S DETERMINATION OF
MS. ZORIC‘S SHARE OF MR. JOHNSON‘S
RETIREMENT BENEFIT
¶ 22 Mr. Johnson alleges that the court of appeals erred in
applying the marital foundation approach rather than the bright
line or other context-specific approach to determine what portion
of his pension should be awarded to Ms. Zoric. Mr. Johnson also
argues that the court of appeals erred in applying an abuse of
discretion rather than a correctness standard of review, but
contends that under either standard, the district court‘s pension
award determination should be reversed
A. The District Court’s Determination of Equitable Distribution
of Marital Property Is Reviewed for an Abuse of Discretion
¶ 23 An appellate court‘s review of a district court‘s
determination of which pay grade to apply to determine a former
spouse‘s marital portion of an employee spouse‘s retirement
benefit is subject to an abuse of discretion standard. ―A [district]
court has considerable discretion considering property [division]
in a divorce proceeding, thus its actions enjoy a presumption of
validity. We will disturb the [district] court‘s division only if
there is a misunderstanding or misapplication of the law . . .
indicating an abuse of discretion.‖43 As explained below, the
district erroneously believed it was bound by the marital
foundation approach, and in so doing, misunderstood and
misapplied the law.44 Thus, the district court abused its discretion
and we reverse the court of appeals and remand to the district
court for further proceedings consistent with this opinion.
43 Oliekan v. Oliekan, 2006 UT App 405, ¶ 16, 147 P.3d 464
(second alternation in original) (internal quotation marks
omitted); see also Featherstone v. Schaerrer, 2001 UT 86, ¶ 41, 34 P.3d
194 (explaining that applying an incorrect legal standard is an
abuse of discretion).
44 See infra Part III.B.
13
JOHNSON v. JOHNSON
Opinion of the Court
B. The Court of Appeals Erred when It Affirmed the District Court’s
Award Granting Ms. Zoric Her Marital Fraction
of Mr. Johnson’s Actual Retirement Benefits
¶ 24 The district court in this case was faced with the issue of
how to determine the appropriate portion of Mr. Johnson‘s
pension benefits to award Ms. Zoric. Specifically, the parties
disagreed as to whether the district court should include
postdivorce increases to Mr. Johnson‘s pension benefits when
calculating Ms. Zoric‘s pension benefit award. The district court,
relying on our precedent in Woodward v. Woodward,45 held that Ms.
Zoric was entitled to an award that included the postdivorce
increases in Mr. Johnson‘s pension benefits. A divided panel of
the court of appeals affirmed that decision. As discussed below,
the district court‘s reliance solely on Woodward was misplaced. As
such, the district court applied the wrong legal standard, and in so
doing, abused its discretion.46 On this issue, we reverse the court
of appeals and remand to the district court.
¶ 25 On certiorari, Mr. Johnson argues that Ms. Zoric‘s share
of his retirement benefit should be based on his pay grade at the
time of the parties‘ divorce or the present-day salary for his pay
grade at the time of divorce, rather than his pay grade and salary
at the time of his retirement. We begin by noting that a former
spouse is entitled to an equitable distribution of an employee
spouse‘s retirement or pension benefits that ―accrue[] in whole or
in part during the marriage.‖47
¶ 26 We have established that a nonemployee spouse is
entitled to receive ―a portion of the retirement benefits
represented by the number of years of the marriage divided by
the number of years of the [employee spouse‘s] employment.‖48
This has become known as the ―time rule‖ formula. A number of
jurisdictions have adopted this time rule formula to determine the
―marital fraction,‖ which determines the martial interest in
45 656 P.2d 431 (Utah 1982).
46 See Featherstone, 2001 UT 86, ¶ 41 (explaining that applying
an incorrect legal standard is an abuse of discretion).
47 Woodward, 656 P.2d at 433.
48 Id. at 433–34.
14
Cite as: 2014 UT 21
Opinion of the Court
pension benefits.49 The marital fraction is calculated by dividing
the number of years (or months) that the employee spouse has
earned toward the pension during the marriage by the number of
years (or months) of total service toward the pension.50 The
marital fraction is then multiplied by the employee spouse‘s
monthly benefit that is subject to equitable distribution.51 Each
spouse is then awarded one-half of the marital interest in the
pension that is subject to equitable distribution.52
Mathematically, the formula is:
years of service
during marriage x monthly benefit x 1/2
years of total service
When a court invokes this formula, there are two unknowns at
the time of divorce: the years of total service and the amount of
the monthly benefit. Once the employee spouse retires, the years
of total service factor is known and can be plugged into the
equation to determine the marital fraction. In the present case,
the parties were married for ten years, during which time
Mr. Johnson accrued ten years of qualifying service. Mr. Johnson
retired after twenty-four years of qualifying service. Using the
time rule formula above, the parties were married for 41.6 percent
of the time Mr. Johnson was employed by the Air Force, and
Ms. Zoric‘s half of that portion is 20.8 percent. The parties agree
on this calculation.53
¶ 27 The remaining unknown factor at the time of divorce,
and what the parties dispute in this case, is the amount of the
49 See, e.g., In re Marriage of Hunt, 909 P.2d 525, 532 (Colo. 1995);
Stouffer v. Stouffer, 867 P.2d 226, 231 (Haw. Ct. App. 1994); Warner
v. Warner, 651 So. 2d 1339, 1340 (La. 1995); Lynch v. Lynch, 665
S.W.2d 20, 23–24 (Mo. Ct. App. 1983); Rolfe v. Rolfe (In re Marriage
of Rolfe), 766 P.2d 223, 226 (Mont. 1988); Gemma v. Gemma, 778 P.2d
429, 431 (Nev. 1989); Berry v. Meadows, 713 P.2d 1017, 1023 (N.M.
Ct. App. 1986); Welder v. Welder, 520 N.W.2d 813, 817 (N.D. 1994).
50 In re Marriage of Hunt, 909 P.2d at 531.
51 Id.
52 Id.
53 Johnson v. Johnson, 2012 UT App 22, ¶¶ 11–15, 270 P.3d 556.
15
JOHNSON v. JOHNSON
Opinion of the Court
monthly benefit that is to be multiplied by the marital fraction.
Though our decision in Woodward established the time rule
formula as the appropriate method for calculating the marital
fraction, we were not presented with the question of how to
properly determine the amount of the employee spouse‘s monthly
benefit subject to equitable distribution. That question is squarely
presented here. Thus, we must determine whether postdivorce
increases in pension benefits that are predicated on increases in
the employee spouse‘s rank and pay grade following the parties‘
divorce are properly part of the monthly benefit subject to
equitable distribution. The district court had several alternatives
from which to choose.
¶ 28 At one end of the spectrum is the bright line approach—
the approach advocated by Mr. Johnson. The bright line approach
―likens post-divorce pension enhancements to post-divorce
earnings and characterizes all such increases as the separate
property of the employee spouse.‖54 Under this approach,
―pension benefits accruing as compensation for services rendered
after a divorce are not part of the [marital] estate . . . subject to
division on divorce.‖55 This approach treats any subsequent
advancement (and the resulting pay increase) as the separate
property of the employee spouse because any such advances or
increases result solely from the labors of the employee spouse.56
A court applying this approach uses the employee spouse‘s pay
grade at the time of the parties‘ divorce, instead of the pay grade
at the time of retirement to calculate the monthly pension
benefits.57 The bright line approach comports with the long-
established notion that property acquired after the marriage is
generally considered separate property and is, therefore, not
54In re Marriage of Hunt, 909 P.2d at 532.
55 Berry v. Berry, 647 S.W.2d 945, 947 (Tex. 1983) (internal
quotation marks omitted).
56 Koelsch v. Koelsch, 713 P.2d 1234, 1238–40 (Ariz. 1986); Berry,
647 S.W.2d at 947.
57 Shill v. Shill, 765 P.2d 140, 143–46 (Idaho 1988) (applying the
bright line approach where a large increase in pension benefits
was due solely to the employee spouse‘s additional years of work
after the divorce, and any cost of living increases gained in four
years of marriage would be negligible, based on the average
salary of the employee spouse).
16
Cite as: 2014 UT 21
Opinion of the Court
subject to distribution along with the martial estate.58 This
approach is also aligned with our precedent that marital property
should be valued at the time of the divorce decree, absent
compelling circumstances.59
¶ 29 At the other end of the spectrum is the marital foundation
approach, which acknowledges that postdivorce earnings are
separate property, but treats all postdivorce increases in pension
benefits as marital property.60 The marital foundation approach is
easy to apply, as a district court need only apply the time rule
formula to the employee spouse‘s monthly pension benefit at
retirement, with no need to ―parse out the ‗marital‘ portion of the
post-dissolution enhancement from the ‗separate‘ portion . . .
attributable solely to the efforts of the employee spouse.‖61
Furthermore, the marital foundation approach seeks to offset the
―risk of forfeiture, delay in receipt, and lack of control over the
timing of the receipt of benefits‖ suffered by the nonemployee
spouse by permitting the nonemployee spouse to share in
postdivorce enhancements to benefits.62
58 See Koelsch, 713 P.2d at 1239 (―Finally, it is established law
that while the fruits of labor expended during marriage are
community property, earnings after dissolution are separate
property.‖ (citation omitted)); In re Marriage of Heupel, 936 P.2d
561, 572 (Colo. 1997) (―[P]roperty acquired by a spouse after a
decree of legal separation is excepted from the definition of
marital property. . . .‖ (internal quotation marks omitted)).
59 Goggin v. Goggin, 2013 UT 16, ¶ 49, 299 P.3d 1079.
60See In re Marriage of Hunt, 909 P.2d at 534 (―Typically, there is
a commingling of effort undertaken during the marriage and after
the marriage which together enhance the value of the future
benefit. The employee spouse‘s ability to enhance the future
benefit after the marriage frequently builds on foundation work
and efforts undertaken during the marriage.‖).
61 Id. at 535.
62Id. at 537. Counsel for Mr. Johnson stated that the marital
foundation approach is the majority approach. However, a
review of the jurisdictions that have adopted the marital
foundation approach reveals that most jurisdictions will apply the
marital foundation approach when appropriate, but they
17
JOHNSON v. JOHNSON
Opinion of the Court
¶ 30 The bright line and marital foundation approaches can be
thought of as anchoring each end of a spectrum of approaches
available to district courts. Judge Davis, in dissenting from the
result adopted by the court of appeals, advocated an approach
between these two extremes.63 Judge Davis disagreed with both
the bright line approach and the marital foundation approach as
generally consider it only one of a handful of options available
when crafting an equitable remedy. See, e.g. McCarthy v.
McCarthy, 704 P.2d 1352, 1354 (Ariz. Ct. App. 1985) (―[I]t was not
error for the trial court here to adopt a different but fair method
based on the evidence of the value of the community interest in
the pension plan and dividing that amount in half.‖); Askins v.
Askins, 704 S.W.2d 632, 634 (Ark. 1986) (―The statute gives the
[trial court] broad discretion. It is not the intent of the statute or
this opinion to tie the [trial court] to any specific formula for
dividing prospective retirement benefits.‖); In re Marriage of
Adams, 134 Cal. Rptr. 298, 302 (Cal. Ct. App. 1976) (―As a general
rule, in selecting a method to effect distribution of the community
interest in retirement rights the court acts in the exercise of
judicial discretion and its determination respecting such will not
be interfered with on appeal unless an abuse of discretion is
shown. The criterion governing judicial action is reasonableness
under the circumstances. The method adopted may vary with the
facts in each case.‖ (internal quotation marks omitted)); Ranfone v.
Ranfone, 928 A.2d 575, 581 (Conn. App. Ct. 2007) (―[I]t is within
the trial court‘s discretion . . . to choose, on a case-by-case basis, . .
. [any] valuation method that it deems appropriate in accordance
with [the] law that might better address the needs and interests of
the parties. . . . The touchtone of valuation, as well as the ultimate
distribution of pension benefits, is the court‘s power to act
equitably.‖ (first, second, and sixth alterations in original)
(internal quotation marks omitted)); Cohen v. Cohen, 937 S.W.2d
823, 831–32 (Tenn. 1996) (―The choice of valuation method
remains within the sound discretion of the trial court to determine
after consideration of all relevant factors and circumstances.
While the parties are entitled to an equitable division of their
marital property, that division need not be mathematically
precise.‖).
63 Johnson, 2012 UT App 22, ¶¶ 37–38 (Davis, J. concurring in
part and dissenting in part).
18
Cite as: 2014 UT 21
Opinion of the Court
used in the context of this case.64 Judge Davis would have
awarded Ms. Zoric 20.8 percent of the monthly benefit
Mr. Johnson would have received had he remained at the E-5 pay
grade he attained during the parties‘ marriage.65 This would have
included normal cost of living increases, but not the increases
attributable to Mr. Johnson‘s promotion to the E-7 pay grade he
attained prior to retirement.66 Judge Davis reasoned that ―there is
no evidence of any specific contribution made by [Ms.] Zoric to
[Mr.] Johnson‘s earning capacity apart from the fact that she was
married to him while he was employed at the E-5 rank.‖67
Accordingly, Judge Davis found no reason to award Ms. Zoric the
benefit of ―all future improvements in [Mr. Johnson‘s] financial
situation merely by virtue of their having been married for some
period of time.‖68
¶ 31 Like Judge Davis, we believe that a context-specific
approach leads to the most equitable distribution of pension
benefits. District courts are charged with making an equitable
distribution of marital property, including pension benefits. 69 In
making such distribution, the presumptive value of marital
property is determined at the time of the divorce, absent
compelling circumstances.70 District courts should also consider a
variety of factors when making equitable distributions, including
whether the property was acquired during the marriage, the
source of the property, and the parties‘ respective financial
conditions.71 ―The appropriate distribution of property var[ies]
64 Id. ¶ 37.
65 Id. ¶ 38.
66 Id. ¶ 37.
67 Id. ¶ 37 n.2.
68 Id.
69 See UTAH CODE § 30-3-5(1) (allowing district courts to issue
―equitable orders relating to . . . property‖ in divorce decrees);
Woodward, 656 P.2d at 433 (holding that pension benefits accrued
during the marriage are marital property subject to equitable
distribution).
70 Goggin, 2013 UT 16, ¶ 49.
71 Id. ¶ 47.
19
JOHNSON v. JOHNSON
Opinion of the Court
from case to case, [but] [t]he overriding consideration is that the
ultimate division be equitable—that the property be fairly divided
between the parties, given their contribution during the marriage
and their circumstances at the time of the divorce.‖72 Thus, our
precedent has endorsed a context-specific approach that
recognizes the various ways marital property can be acquired and
then distributed equitably.
¶ 32 When determining the most equitable distribution of the
employee spouse‘s pension benefits, a district court should
consider the pension benefits much like it does other marital
property. That is, the district court should consider the extent to
which the property was acquired during the marriage and the
ultimate source of the property.73 In the context of pension
benefits, this will require the district court to consider how the
trajectory of the employee spouse‘s career intersected with the
marriage and the extent to which the marriage contributed to the
employee spouse‘s pay grade at retirement. For example, if the
parties were married only briefly early in the employee spouse‘s
career, it is highly unlikely that the nonemployee spouse
contributed significantly to the employee spouse‘s ultimate pay
grade at retirement. In such a scenario, there would be no reason
to award the nonemployee spouse the benefit of all of the
employee spouse‘s subsequent pay raises, whether they result
from promotions, renegotiations of union contracts, or job
changes.
¶ 33 On the other hand, if the parties are married for a
significant portion of the employee spouse‘s career, it is much
more likely that the nonemployee spouse‘s contributions
impacted the trajectory of the employee spouse‘s career in a way
the court should credit. This would be especially true in
circumstances in which the parties were married while the
employee spouse underwent specialized training or schooling
that would further his or her career. To the extent such training or
education led to increases in rank or pay grade, the court could
see fit to award the nonemployee spouse credit for the resulting
72Id. ¶ 48 (first and third alterations in original) (internal
quotation marks omitted).
73 Id. ¶ 47.
20
Cite as: 2014 UT 21
Opinion of the Court
increase in pension benefits.74 Even in this circumstance,
however, it does not stand to reason that the nonemployee spouse
would then be entitled to all subsequent increases. The district
court should, in its discretion, determine what contribution the
nonemployee spouse made to the subsequent increases, if any,
and award credit only for those fairly attributable to that
contribution.
¶ 34 Therefore, the district court is not bound by a specific
prescribed approach in determining the most equitable
distribution of pension benefits following the dissolution of a
marriage, but should evaluate all relevant factors and
circumstances in making such a determination.
¶ 35 Based on our review of the record in this case, we find
that it is insufficient to determine the extent to which
Mr. Johnson‘s career trajectory was impacted by his marriage to
Ms. Zoric.75 There is no question that Ms. Zoric‘s efforts during
the marriage helped Mr. Johnson attain the E-5 rank that he held
as the time of the parties‘ divorce. And had Mr. Johnson
remained at this rank and merely received his anticipated cost of
living increases, Ms. Zoric would have been entitled to share in
his monthly pension benefits as they were awarded. But,
Mr. Johnson did not remain at the E-5 rank. Mr. Johnson was
promoted from Staff Sergeant to Master Sergeant following his
divorce from Ms. Zoric, and consequently, his rank and pay were
elevated to E-7. The record is unclear as to the extent
74 Utah‘s property distribution statute directs courts to engage
in just such an analysis in the context of alimony. UTAH CODE
§ 30-3-5(8)(a)(vii) (―The court shall consider . . . whether the
recipient spouse directly contributed to any increase in the payor
spouse‘s skill by paying for education received by the payor
spouse or enabling the payor spouse to attend school during the
marriage.‖ (emphasis added)). Because pension benefits are often
predicated on the employee spouse‘s salary at retirement, the
court should consider the extent to which efforts of the
nonemployee spouse contributed to that salary.
75 Presumably because neither the district court nor the parties
were aware of any need to characterize Mr. Johnson‘s career
trajectory in this manner, there is nothing in the record that sheds
any light on the nature of Mr. Johnson‘s postdivorce promotion.
21
JOHNSON v. JOHNSON
Opinion of the Court
Mr. Johnson‘s postdivorce promotion and career trajectory can be
fairly attributed to Ms. Zoric‘s efforts during the marriage. As
such, we remand to the district court for further fact-finding with
the understanding that the district court is not limited to the
marital foundation approach when determining the amount of
monthly benefits to insert in to the time rule formula. Rather, the
district court is authorized to use any approach it deems
necessary to come to the most equitable outcome.
CONCLUSION
¶ 36 We affirm the decision of the court of appeals in part and
reverse and remand in part. Ms. Zoric is not foreclosed by the
statute of limitations from receiving ongoing payments from
Mr. Johnson‘s pension because each payment is subject to its own
statute of limitations. We decline to reach Mr. Johnson‘s laches
argument because it was inadequately briefed before the court of
appeals. Lastly, the trial court abused its discretion when it
erroneously concluded that it was bound by the marital
foundation approach to determine that Ms. Zoric‘s marital
fraction should be applied to Mr. Johnson‘s actual retirement
benefit, and as such, we reverse and remand to the district court
for further fact-finding regarding the equitable distribution of
marital property.
22