Kimberly L. Eads, Appellant-Petitioner,
Robert J. Eads, Jr., Appellee-Respondent
from the Johnson Superior Court The Honorable Peter D.
Nugent, Judge Trial Court Cause No. 41D02-1110-DR-779
ATTORNEY FOR APPELLANT Jonathan R. Deenik Deenik Law, LLC
ATTORNEY FOR APPELLEE Janice Mandla Mattingly Janice Mandla
Mattingly, P.C. Carmel, Indiana
Vaidik, Chief Judge.
In October 2011, Kimberly L. Eads ("Wife") filed a
petition to dissolve her marriage to Robert J. Eads
("Husband"). Nearly six years later, in July 2017,
the trial court issued a decree dissolving the parties'
marriage. In the decree, the court used a coverture fraction
to determine that 77.2% of Husband's firefighters'
pension was earned during the marriage. The court then
ordered Husband, once he retires, to forward half of 77.2%,
or 38.6%, of his monthly pension payment to Wife each month
and then issue her a Form 1099-R (an IRS form for
distributions from pensions and retirement plans) so that
Wife pays the taxes on her share of his pension. In addition,
the court found that Wife, who receives social-security
disability payments for injuries she sustained in a car
accident, is entitled to rehabilitative maintenance and
ordered Husband to pay her $1000/month for twenty-four
months. Finally, the court ordered each party to pay their
own attorney's fees.
Both Husband and Wife now appeal. We conclude that the trial
court erred in calculating the coverture fraction because it
included pension rights that Husband earned after Wife filed
for divorce. We therefore remand this case with instructions
for the court to apply one of two methods-the
date-of-retirement approach or the date-of-divorce
approach-to determine the portion of Husband's pension
that was earned during the marriage. We also conclude that
the trial court erred in ordering Husband to issue Wife a
Form 1099-R each year and therefore order the court to
consider different options of making Wife responsible for the
taxes on her share of Husband's pension. Although we find
no abuse of the trial court's discretion in ordering each
party to pay their own attorney's fees, we find that the
record does not support an award of rehabilitative
maintenance. On remand, the court must determine whether Wife
is entitled to incapacity maintenance instead of
rehabilitative maintenance. We therefore affirm in part and
reverse and remand in part.
and Procedural History
Although the dissolution decree covers many topics, this
appeal concerns only a few of them. Accordingly, we set forth
the facts that are relevant to the issues the parties raise
Husband began working as a firefighter on February 7, 1994.
As a firefighter, Husband is a member of the 1977 Police
Officers' and Firefighters' Pension and Disability
Fund ("1977 Fund"), which is administered by the
Indiana Public Retirement System (INPRS). Appellant's
App. Vol. II p. 23 (Finding 37); see also Thatcher v.
City of Kokomo, 962 N.E.2d 1224, 1225 n.1 (Ind. 2012)
("The '1977 Fund' is a disability and pension
fund for police officers and firefighters established by
Indiana Code section 36-8-8-4 that is managed by
[INPRS]."). Members of the 1977 Fund become vested with
twenty years of service and are eligible for an unreduced
retirement benefit when they have twenty years of service,
are at least fifty-two years old, and have separated from
service. Appellant's App. Vol. II p. 23 (Finding 37);
see also Ex. 1. Unlike other pensions, the 1977 Fund
pension is not subject to a Qualified Domestic Relations
About three-and-a-half years after Husband began working as a
firefighter, on November 15, 1997, Husband and Wife married.
In 2000, Wife was involved in a car accident and sustained
back injuries. See Tr. Vol. II p. 9 (Wife testifying
that her back injuries prevent her from sitting, standing for
long periods of time, and concentrating and that her
medications make her sleepy). Wife, who worked as a finance
manager before the accident, has not worked since the
accident. Id. Wife was eventually awarded
social-security disability payments dating back to 2000. In
2002 and 2003, Husband was "medically retired" due
to an injury. Appellant's App. Vol. II p. 23 (Finding
39); Tr. Vol. III p. 177. Husband then returned to work.
On October 25, 2011-which was before Husband, then age
forty-five, became vested in his 1977 Fund pension-Wife filed
for divorce. In the petition, Wife requested spousal
maintenance. Tr. Vol. II pp. 95-97. After Wife filed for
divorce, Husband and Wife did not live together or commingle
assets. The divorce was pending for nearly six years. During
this time, Husband reached twenty years of service and thus
became vested in his pension.
The final hearing was held over the course of three days
between December 2016 and February 2017. Husband was still
working and thus continuing to accrue pension benefits. At
the hearing, substantial time was devoted to Husband's
1977 Fund pension, as it was one of the parties' two
major assets (the other being the marital residence). Wife
presented evidence from Dan Andrews, a Franklin College
business and accounting professor and a CPA. Specifically,
Andrews testified that Husband's monthly benefit amount
(calculated by INPRS as though Husband had separated from
service on October 4, 2016-the date of valuation-and would
apply for an unreduced retirement benefit when he turned
fifty-two in July 2018) would be $3254.86 and that the
present value of Husband's 1977 Fund pension was $1, 278,
133.26. See Tr. Vol. II pp. 200, 223; Ex. 2A.
Andrews, at Wife's request, then applied the coverture
fraction formula (discussed below), concluding that Husband
earned 61.52% of his pension during the marriage. Tr. Vol. II
pp. 201-02; Ex. 2A (although Andrews testified that the
coverture is 61.54%, his report provides that the coverture
is 61.52%). Both Husband and Wife asked the trial
court to order the other party to pay their attorney's
fees. Tr. Vol. II p. 111; Tr. Vol. III p. 49.
On July 5, 2017, the trial court issued a decree of
dissolution of marriage, which it amended in December
following the parties' motions to correct error. The
amended decree addresses Husband's 1977 Fund pension as
46. The Court finds that the period of time from the date of
[Husband's] employment (February 7, 1994) until the Date
of the Decree (July 5, 2017) to be a total period of 281
months. However, the parties were not married for the first
40 months of [Husband's] employment, and there was [a]
24-month period of time in 2002-3 in which [Husband] was not
working and contributing to his pension. Therefore, the
pension vesting period was 217 months. (281 months - 64
months). Thus, the percentage of the pension earned during
the marriage is 77.2% (217 divided by 281). [Wife] is
entitled to half of that amount, or 38.6%.
* * * * *
48. [Wife] presented evidence in the form of a valuation
report prepared by Dan Andrew[s] for [Husband's] 1977
Police and Firefighter pension. (Exhibit 2A). The Court
accepts . . . Andrew[s'] valuation and places a value of
$1, 278, 133.26 on said pension. However, only 77.2% of that
amount was earned during the marriage, or $986, 718.83.
Appellant's App. Vol. II p. 24. The court then divided
the $986, 718.83 equally, awarding Husband and Wife each
$493, 359.42. Id. at 27 (Finding 59). As to how Wife
would receive her share of Husband's pension, the court
62. Because the parties do not have sufficient assets to
divide the value of [Husband's] pension, the Court elects
to divide the monthly benefit instead.
63. [Husband's] pension benefit at age 52 is calculated
to be $3, 254.86 per month . . . . [Husband] could apply for
a reduced pension benefit January 1, 2017 in the amount of
$2, 894.22. (Exhibits 1, 2A, 2B, 2C).
64. Upon his retirement, [Husband] shall forward 38.6% . . .
of his monthly pension each month to [Wife], as a [QDRO] is
not possible with the Firefighter Pension. Because [Husband]
. . . cannot determine his income tax liability before his
earnings are calculated, [Husband] shall forward the pension
amount directly to [Wife] and, each year, issue her a Form
1099 for her share of the pension.
65.The Court chooses this method of distributing
[Husband's] pension due to the parties lacking sufficient
resources to otherwise allocate sufficient assets and the
inability of the pension to be divided by [QDRO].
Id. at 28.
As for Wife's request for spousal maintenance, the court
74. The Court finds that [Wife] is disabled and in need of
maintenance. [Wife] has been determined to be disabled by the
Social Security Administration and receives Social Security
Disability payments. [Wife] has been unable to work for
* * * * *
82. The Court GRANTS [Wife's] request for spousal
maintenance. The Court has reviewed I.C. 31-15-7-2 and the
trial exhibits and agrees that [Wife] is in need of spousal
maintenance. While [Wife] does currently receive disability
income, it is not sufficient to sustain her needs. Pursuant
to I.C. 31-15-7-2(3), the Court finds that [Husband] shall
pay to [Wife] the sum of $1, 000.00 or 16.2% ...