Patsy Lorean Johnson v. James Larry Johnson ( 1998 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
PATSY LOREAN JOHNSON, )
FILED
) December 3, 1998
Plaintiff/Appellee, ) Shelby Chancery No. D-13441-3
) Cecil Crowson, Jr.
v. ) Appellate C ourt Clerk
)
JAMES LARRY JOHNSON, ) Appeal No. 02A01-9703-CH-00069
)
Defendant/Appellant. )
APPEAL FROM THE CHANCERY COURT OF SHELBY COUNTY
AT MEMPHIS, TENNESSEE
THE HONORABLE D. J. ALISSANDRATOS, CHANCELLOR
For the Plaintiff/Appellee: For the Defendant/Appellant:
Charlie R. Ashford Lawrence W. White
Memphis, Tennessee Memphis, Tennessee
AFFIRMED
HOLLY KIRBY LILLARD, J.
CONCURS:
DAVID R. FARMER, J.
HEWITT P. TOMLIN, JR., SR.J.
OPINION
This is a divorce case. In the original divorce, years ago, the wife was awarded shares of
stock from the husband’s p ension fund. Subs equently, the pension fund was distributed to the
husband, with no monie s going to the wife. In this action, the trial court awarded the wife a
judgment for the value o f the stock at the time of the trial co urt’s order. The husband appeals. We
affirm.
Patsy Lorean Johnson (“Wife”) filed for divorce from James Larry Johnson (“Husband”) in
Shelby County, Tennessee, on October 8, 1985. During the litigation, Husband threatened that he
would quit his job and collect his pension before he would pay Wife alimony or agree to a division
of the marital assets. The trial court then entered an injunction prohibiting Husband’s employer from
distributing to Husband “any savings, pension or profit sharing funds, or other retirement funds,
pending furth er orders of this Court.” Th is injunctio n was nev er modified o r lifted.
The final decree of div orce was en tered on D ecember 1 9, 1986. The decree awarded Wife:
the exclu sive ow nershi p of a one half (½) interest in any and all pension fund s, profit
sharing accounts, savings or stock accounts held in the name of or for the use and
benefit of the defendant, James Larry Johns on, by his employer, Buckeye Cellulose
Com pany, any of its agents, fiduciaries or depositories and said interest shall be
vested and determined as of December 15, 1986.
Nothing was done at that time to transfer Wife’s interest to her. Husband continued to work for
Buckeye C ellulose after the divorce.
In May 1996 , Wife filed a petition to require Husban d to disclose his pensio n and profit
sharing funds. After a hearing, the trial court found that, in 1993, the pension funds had been
distributed to Husband with no funds going to Wife. The trial court’s findings may be summarized
as follows:
1. In the parties’ divorce decree dated December 19, 1986, Wife was awarded
one-half of Husband’s pension, savings and profit sharing accounts with his
empl oyer, B ucke ye Cell ulos e Com pany.
2. Husband’s employer, however, never transferred the funds into Wife’s name.
3. The entire pension fund was distributed to Husband on or about March 16,
1993.
4. Husband did not deliver to Wife her share of the funds.
5. At the time of the divorce, Wife was entitled to 533.802 shares of Proctor and
Gamble common stock and cash amounting to $2,557.87.
6. The shares have split two for one on October 20, 1989 and again on May 15,
1992.
7. At the time of distribution in 199 3, Wife was entitled to 2,135.208 shares of
Proctor & Gamble stock, and share value as of September 17, 1996 was $93.00 per
share.
8. Plaintiff is entitled to receive the sum of $198,574.34 for her shares, plus the
cash award of $2,557.87, for a total award of $201,132.21.
The trial court also found Husb and in contemp t, and ordered him incarcerated until he purged
himself of the contempt by payment of the judgment. Husband was later released from custody and
filed this appe al.
We review the trial court’s findings de novo, with a presumption of correctness of the trial
court’s findings of fact. See Tenn. R. App. P. 13(d). “Trial courts are entitled to broad discretion
in adjudicating the rights of parties in a divorce case. Decisions based upon this discretion are
entitled to great weight.” Cutsinger v. Cutsinger, 917 S.W.2d 238, 243 (Tenn. App. 1995) (citations
omitted). No transcript or statement of the evidence was filed in this case, so our review is confined
to the techn ical record.
Husband argues that the trial court erred in ordering him incarcerated for civil contempt un til
he paid Wife the sum o f $201,132.21, an am ount representing the presen t value o f the pension
account. Husband contends that the trial court should have instead awarded Wife $49,000, which
represents the value of Wife’s fifty-percent interest in the pension fund in 1986, when the divorce
decree was entered. On appeal, Husband does not challenge his incarceration, only the amount of
the mone y judgment ren dered agains t him.
At the time of the divorce, under the trial court’s orders, Wife was entitled to 533.802 shares
of Proctor and Gam ble commo n stock. The shares split two for one o n October 20, 19 89 and again
on May 15, 1992 to result in a total of 2,135.208 shares. Share value as of September 17, 1996 was
$93.00 per share, for a to tal cash valu e of $198,5 74.34.
Husband claims that the trial court should not have included in its valuation stock splits that
occurred twice during the ten years since the divo rce decree, alleging that this valuation is "arbitrary
and without a factual basis." The divorce decree states that Wife's interest "shall be vested and
determined as of December 19, 1986." Therefore, Husband claims that the trial court should not
have used present day dollars to determine the value of Wife's percentage. Husband alleges that the
divorce decree could not have granted the trial court jurisdiction to divide property acquired in the
future.
In dividing marital assets, one of two methods ma y be employed to value and distribute
pension benefits. In the first method, the trial court determines the present cash value of the pension
at the time of the dissolution of the marriage. The trial court then determines the value of the
percentage owed to the non-employee spouse and “awards the other spouse marital property of equal
value.” Kendrick v. Kendrick, 902 S.W.2d 918, 927 (Tenn. App. 1994). The second method, called
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the “retained jurisdiction” method, “requires the court to retain jurisdiction over the case and to defer
dividing the pension interest until the pension vests or matures.” Id.; see Cohen v. Cohen, 937
S.W.2d 823 (Ten n.
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1996). Under this method, th e trial court retain s jurisdiction to oversee th e payment of b enefits. See
Cohen, 937 S.W .2d at 831 .
In this case, the trial court’s 1986 permanent injunction stated that “no funds shall be
distributed to [Husband] from any savings, pension or profit sharing funds, or other retirement funds,
pending further orders of this Court.” In the 1986 final decree of divorce, the trial court awarded
Wife:
the exclusive ownership of a one half (½) interest in any and all pension funds, profit
sharing accounts, savings or stock accounts held in the name of or for the use and
benefit of the defendant, James Larry Johnson, by his employer, Buckeye Cellulose
Company, any of its agents, fiduciaries or depositories and said interest shall be
vested and determined as of December 15, 1986. And said interest shall be paid to
her at the earliest date allowable; that any of defendants [sic] interest in and to said
one-half (½) of said fund is devested out of defendant and vested in plaintiff and any
interest of the plaintiff in the balance is divested out of her and vested in the
defendant.
The final decree of divorce did not mention the earlier permanent injunction and made no further
provision to distribute Wife’s interest in the pension funds to her.
Therefore, the trial court’s final decree of divorce does not state expressly whether the
pension funds were valued by the present cash value method or the retained jurisdiction method.
Husband argues that, in the judgment that is the subject of this appeal, the trial court erred in the
valuation of the pension because Wife’s interest should have been limited to a portion o f the benefits
that Husban d earned d uring the marriage, and any accrual beyond that amount belonged to him.
However, in the 1986 decree, the trial court simply awarded Wife a fixed percentage of the shares
of stock in the pension fund, and left in place the permanent injunction prohibiting the distribution
of the pension fund to Husband. Therefore, it is clear that the trial court in its 1986 decree did not
value the pension fund under the “present value” method, because no shares of stock or equivalent
monies were distributed to Wife. Implicitly, by fixing Wife’s share of the pension fund and leaving
in place the injunction against its distribution, the trial court retained jurisdiction over the pension
fund to be distributed at a later date.
Husband argues that, by awarding Wife a judgment that gives her the benefit of stock splits
and increases in value after the final decree of divorce, the trial court erroneously awarded Wife a
division of property out of Husband’s future earnings or property acquired in the future. In support
of his contention, Husband cites Ettinger v. Ettinger, 637 P.2d 63 (Okla. 1981). In Ettinger, the
wife claimed a one-half interest in stock options that her former husband would receive from his
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employer some time in the future. The Ettinger court found that it was “with out authority to make
a division o f property out of . . . ‘future acquired property.’” Id. at 65. It stated that “[s]tock options
not in existence at the time of the entering of the divorce decree, and over which [Husband] had no
interest whatsoever, is simply not property acquired by [Wife] and [Husband] during coverture and
therefore is not subject to being divided by the court.” Id.
Therefore, in Ettinger, the wife sought division of stock options not yet earned by the
husband at the time of the divorce decree. In contrast, in this case, Wife received in the 1986 divorce
decree shares of stock that were in existence at the time o f the divorce. These shares increased in
number and in value as the result of economic factors outside the parties’ control. The increase in
value of Wife’s share in the pension was not contingent upon any action by Husband, suc h as his
continue d employm ent with tha t compan y.
The facts in this case are analogous to those in Bigbie v. Bigbie, 898 P.2d 1271 (Okla. 1995).
In Bigbie, the husband, an insurance agent, claimed that the trial court erred in considering future
commissions on renewals of insurance policies as marital assets and not as “future acquired
property.” Bigbie, 898 P.2d at 1272. The appellate court found that the anticipated renewal
commissions were properly designated as marital prop erty because “the husban d was entitled to
receive the income under a contractual agreement with the insurance company which also provided
for the husband’s heirs to receive the renewal comm issions in the event of his dea th and allowed the
husband to assign the commission s under certain circumstan ces.” Id. at 1273 (citin g Niroo v. Niroo,
545 A.2d 35 (Md. 1988)). As in Bigbie, in this case, Husband was entitled to receive the pension
under a contractual arrangement with h is employer esta blished at th e time of the div orce decree . See
also Pascale v. Pascale, 660 A.2d 485, 498 (N.J. 1995 ) (“[S]tock op tions awa rded after the m arriage
has terminated but obtained as a result of efforts expended during the marriage should b e subject to
equitable d istribution.” ).
It must be noted that post-m arriage appreci ation of a marit al asset is not m arital property. See
Fox v. Fox, 441 S.E.2d 613 , 616 (N.C. App. 19 94). Howev er, after the 1986 decree of divorce,
Wife’s share of the pension fund was no longer marital property; rather, it was Wife’s separate
prop erty. Husband seek s to retain the benefit of the stock splits and their increase in value, but after
the 1986 decree, those shares of stock no longer belonged to him.
Husband also asserts that Wife should be barred from pursuing her claim by the doctrine of
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laches. Husband contends that by failing to bring this action for over seven years, Wife lost her
rights to the funds. Husband points to no place in the record before this Court in which this issue
was raised before the trial court. It is well-settled that “[i]ssues not raised or complained of in the
trial court will not be considered on appeal.” Tops Ba r-B-Que , Inc. v. Stringer, 582 S.W.2d 756,
758 (Tenn. App. 1977); see Carl Clear Coal Corp. v. Huddleston, 850 S.W.2d 140, 143-44 (Tenn.
App. 19 92). Therefor e, the argumen t will not be co nsidered o n appeal.
Finally, Husband contends that the trial court erred in determining that he was in willfu l
contempt of a permanent injunction when the final decree of divorce did not mention the
continuation of the injunction. As noted above, we have no transcript or statement of evidence on
the proceedings below. The trial court's findings do not addres s Husb and's alle ged vio lation o f a
permanent injunction. The technical record does not reflect the basis for the finding of contempt.
The trial court’s order entered on September 20, 1996, states only that Husband:
knew of [Wife’s] interest in the pension, profit sharing and savings funds distributed
to him on March 16, 1993; that he has failed to produce records of transactions or to
account to [Wife] or the Court for the funds received and the Court finds [Husband]
in willful Civil Contempt of the prior Orders of the Court and that he should be
incarcerated until he has pu rged himself of said Civil Contem pt.
Without an app ellate record setting f orth the factual basis for the trial court’s ruling, “we must
assume that the record, had it been preserved, would have contained sufficient evidence to suppo rt
the trial court’s factual findings.” Sherrod v. W ix, 849 S.W.2d 7 80, 783 (Tenn. A pp. 1992).
Therefore, w e must find th is issue to be without m erit.
The decision of the trial court is affirmed. Costs are assessed against the Appellant, for
which execution may issue, if necessary.
HOLLY KIRBY LILLARD, J.
CONCUR:
DAVID R. FARMER, J.
HEWITT P. TOMLIN, JR., SR.J.
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