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Fischer v. Fischer

Court of Appeals of Indiana

January 19, 2017

George S. Fischer, Appellant-Petitioner,
v.
Jennifer M. Fischer, Appellee-Respondent.

         Appeal from the Lake Superior Court The Honorable Cheryl Williamson, Senior Judge The Honorable Elizabeth Tavitas, Judge The Honorable Thomas Hallett, Magistrate Trial Court Cause No. 45D03-1410-DR-741

          Attorney for Appellant Edward J. Calderaro Sachs & Hess, P.C. St. John, Indiana.

          Attorneys for Appellee Brian R. Gates Mark J. Phillipoff Jones Obenchain, LLP South Bend, Indiana.

          Robb, Judge.

         Case Summary and Issue

         [¶1] Jennifer Fischer filed for dissolution of her marriage to George Fischer on October 30, 2014. The trial court held a final hearing on August 27, 2015, and issued an order dissolving the marriage on November 23, 2015. George appeals the dissolution decree, raising two issues for our review, which we consolidate and restate as one: whether the trial court abused its discretion in dividing the value of certain stock options as part of the marital estate. Concluding the value of the stock options at issue are not properly included in the marital estate, we reverse and remand.

         Facts and Procedural History

         [¶2] George and Jennifer were married in 1998. Although they have one child, born in 2003, this appeal only involves a property division issue. Jennifer filed a petition for dissolution of marriage in October 2014, and the trial court held a final hearing in August 2015. George testified that since May of 2011, he has worked for E*Trade, where he earns a base salary plus discretionary bonuses and stock options. In trying to establish George's income for child support purposes based upon George's August 7, 2015 earnings statement from his employer, Jennifer's counsel stated,

[George is] telling us he believes he will receive no further stock options, no further bonuses for the year, he's not sure about holiday pay. In order to figure out what his total gross is going to be for the year 2015, . . . I took his base pay, uh, of [$11, 538.46] per pay period times twenty six pays, comes out to exactly [$299, 999.96]. . . . I've added to that the bonus that he received this year, which is $325, 000.00. I've added the holiday pay of [$7, 788.47] to that, and I've added the, the stock options that he received of $149, 739.62.

         Transcript, Vol. II at 35-36. When asked if he had reason to contest that as his projected 2015 income, George conceded he did not, "[p]rovided I work through the end of the year." Id. at 36-37.[1]

         [¶3] With regard to the stock options referenced in counsel's remarks above, the evidence establishes George has a stock options account which includes both vested stock options that could be sold by him immediately and unvested stock options "where the sale date has not hit yet." Id. at 13. Sometime in 2015, stock options previously granted to him as part of his compensation reached their "sale date" and vested in the amount of $149, 739.62.[2] Taxes owed for the vested stock options were paid by the company selling a portion of the now- vested stock options to cover the tax.[3] Under questioning from Jennifer's counsel, George explained:

A The hundred and forty nine thousand on [the August 2015 earnings statement] at the stock option option [sic] line . . . was the amount that was vested for the year 2015.
Q Okay, from a prior award? Not from stocks that you received options on through the year 2015 . . . from stocks that you received the options on in one or more prior years.
A Or it could have been in the same year. Yes, it, it's previously granted stock, some of which hasn't vested yet and some of which is. . . . It did this year.
Q So, these are stocks that had vested, yet they were acquired during the marriage, that you're paying taxes on this year? . . .
A That I - I've paid taxes on this year? Correct. . . . But, I dispute the terminology, but these are ves - at that time of vesting, I am taxed and that's what you see [on the earnings statement]. . . . They weren't acquired, they were granted by my firm. Typically based on performance.
Q Okay, if you want to use the term granted, I'm not gonna dispute that, but they became available through your employer, whether you want to say grant or acquire, during the marriage, correct?
A Yes.

Id. at 80-81.

         [¶4] On cross-examination by his own counsel, George elaborated:

Q [A]s part of your compensation, you receive a - there's a stock option to that, correct?
A Yes.
Q And how does that ...

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