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Bock v. Bock

Supreme Court of West Virginia

June 8, 2017

Maria Michelle Bock, Respondent Below, Petitioner
John Robert Bock, Petitioner Below, Respondent

         Cabell County 15-D-20


         Petitioner Maria Michelle Bock (hereinafter "petitioner"), by counsel Amy M. Herrenkohl, appeals the June 28, 2016, order of the Circuit Court of Cabell County affirming the February 19, 2016, final order of the Family Court of Cabell County. In its February 29, 2016, final order, the family court: 1) declined to consider a student loan and certain wages associated with repayment of the student loan for purposes of equitable distribution; 2) divided a federal retirement account utilizing the deferred distribution method; and 3) awarded no alimony to petitioner. Respondent John Robert Bock by counsel, Jennifer Dickens Ransbottom, filed a summary response in support of both the family and circuit court orders.

         This Court has considered the parties' briefs, oral arguments, and the appendix record on appeal. Under the limited circumstances presented in this case, we find a memorandum decision affirming in part and reversing and remanding in part for further proceedings appropriate under Rule 21 of the West Virginia Rules of Appellate Procedure. As explained below, we affirm the family court's refusal to award alimony to petitioner. However, we find that the family court abused its discretion in refusing to properly divide the $13, 020.00 student loan and therefore reverse and remand for equitable distribution thereof. We further affirm in part the family court's use of the deferred distribution method with regard to the federal retirement account, but reverse and remand in part for its failure to comply fully with the requirements of Syllabus Point 6 of McGee v. McGee, 214 W.Va. 36, 585 S.E.2d 36 (2003).

         I. Factual and Procedural History

         The parties were married on September 3, 1993 and have one emancipated child; the parties separated on or about January 4, 2015. Both parties work for the Army Corps of Engineers. At the time of the final hearing, petitioner was earning approximately $72, 000.00 per year and respondent was earning approximately $130, 000.00 per year. The parties likewise had certain pension and retirement accounts through their work with the Army Corps of Engineers: a Thrift Savings Plan ("TSP") and a Federal Employee Retirement Savings Plan ("FERS"). The TSP is a defined contribution plan, whereas the FERS plan is a pension plan which pays out a monthly benefit upon retirement based on length of service and a "high-3" average salary.

         During the marriage, in 2012, petitioner entered into a deployment contract which required a one-year minimum deployment and two-year maximum deployment over a four-year period. Petitioner served fifteen months in Afghanistan as a result. In exchange for this deployment, petitioner became eligible to enter into a "Student Loan Repayment Service Agreement, " which would provide an additional $10, 000.00/year for the exclusive purpose of repaying student loans. The Service Agreement states that such payments are "considered as taxable wages and tax withholding will be made on a biweekly basis as appropriate." Petitioner entered into this Service Agreement for four consecutive years commencing in 2012. In anticipation of receipt of these funds, petitioner took out a Parents' Loan for Undergraduate Students ("PLUS") for the use of their emancipated son. Further, petitioner herself began taking classes in the fall of 2014, thereby incurring her own student loans.

         In its final order, [1] the family court granted the parties a divorce and distributed the parties' property and debts pursuant to an attached schedule. With respect to the PLUS loan, the family court found that the loan was received "as a benefit of [petitioner's] employment" in that petitioner was "eligible for a pass through amount from her employer" for purposes of repaying the loan. Accordingly, the family court declined to consider the loan and the amounts received from petitioner's employment for repayment for equitable distribution purposes. The family court further made the TSP and FERS subject to a qualified domestic relations order. Finally, the family court found that the parties were each in the prime of their careers for purposes of earnings, that petitioner had sufficient resources to meet her needs, and that any alleged inadequacy in petitioner's monthly income was a natural result of the separation of the household. Accordingly, the family court refused petitioner's request for alimony. The circuit court affirmed the family court's findings of fact and conclusions of law. This appeal followed.

         II. Standard of Review

         It is well-established that

[i]n reviewing challenges to findings made by a family [court judge] that also were adopted by a circuit court, a three-pronged standard of review is applied. Under these circumstances, a final equitable distribution order is reviewed under an abuse of discretion standard; the underlying factual findings are reviewed under a clearly erroneous standard; and questions of law and statutory interpretations are subject to a de novo review.

Syl. Pt. 1, Burnside v. Burnside, 194 W.Va. 263, 460 S.E.2d 264 (1995). With these standards in mind we proceed to the assignments of error presented.

         III. Discussion

         Petitioner raises three assignments of error: 1) that the family court erred in failing to include the student loan debt incurred for the parties' son in the equitable distribution of the parties' property and debts; 2) that the family court erred in failing to value the FERS pension to permit an offset; and 3) that the family court erred in refusing to award her alimony. We will examine each in turn.

         First, petitioner asserts that the family court erred by characterizing the $13, 020.00 PLUS loan obtained for the parties' son as a so-called "pass through" debt and failing to equitably distribute the debt between the parties. The family court found that because the debt was eligible for repayment with monies from petitioner's employer, neither the debt nor the amount received for repayment should be characterized as marital in nature for purpose of equitable distribution. Respondent argues in support of the family court's ostensible conclusion that by excluding both the debt and the repayment monies from equitable distribution, there is no net effect to either party. Respondent further suggests that by treating the PLUS loan and repayment monies in this manner, petitioner realizes the benefit of any funds payable under the Service Agreement which exceed the PLUS loan balance.

         Upon review, we find that the family court abused its discretion in failing to characterize the $13, 020.00 student loan as a marital debt and excluding this obligation from its equitable distribution of the parties' assets and liabilities. Both parties agree that the PLUS loan was obtained with their joint consent for purposes of providing financing for their son's education. Before this Court, respondent does not challenge the characterization of the student loan as a "marital debt."[2] Accordingly, we conclude that the PLUS loan is marital debt. See Oliver v. Oliver, 894 N.Y.S.2d 287 (N.Y.App. Div. 2010) (credit card debt incurred by wife to support children in college was marital obligation which should be divided equally, where both parties agreed to use wife's credit card to cover expenses); Kehoe v. Kehoe, 974 N.E.2d 1229 (Ohio Ct. App. 2012) (debts incurred during marriage to pay children's college expenses, with full consent of both parties, were marital debts); cf. Sellitti v. Sellitti, 192 W.Va. 546, 453 S.E.2d 380 (1994) (finding debt incurred by wife unbeknownst to husband for benefit of adult son non-marital debt). As a marital debt, therefore, the PLUS loan balance outstanding at the time of the parties' separation is properly included in the calculation of the equitable distribution of the parties' property and liabilities. Inasmuch as the family court failed to include this marital debt in its equitable distribution order, we find that it abused its discretion and therefore reverse and remand for equitable division of the $13, 020.00 PLUS loan.[3]

         Next, with respect to the FERS pension, petitioner argues that the family court erred in ordering the FERS plan to be divided by deferred distribution via a qualified domestic relations order ("QDRO") and maintains that to "disentangle" the parties an immediate offset is required. In that regard, petitioner further asserts that the family court's refusal to allow her to present an expert to testify regarding the present value of the FERS benefits was erroneous. Respondent maintains that reduction to present value is far too speculative to lend ...

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