Conteh v. Conteh

ELDRIDGE, J. The General Assembly, by Ch. 794 of the Acts of 1978, authorized a court, in granting a divorce or an annulment, to (1) “determine which property is marital property,” (2) “determine the value of all marital property,” and (3) “grant a monetary award as an adjustment of the equities and rights of the parties concerning marital property.” Ch. 794 expressly stated that “marital property is all property, however titled, acquired by either or both spouses during their marriage.” Ill Laws of Maryland 1978 at 2306, 2308. These provisions are presently codified as Maryland Code (1984, 2004 Repl. Vol.), §§ 8-201 through 8-205 of the Family Law Article. Section 8-201(e)(l) of the Family Law Article currently provides that “ ‘Marital property’ means the property, however titled, acquired by one or both parties during the marriage.” 1 This Court in Deering v. Deering, 292 Md. 115 , 437 A.2d 883 (1981), held that all types of pension rights acquired during the marriage constitute marital property.

Almost, three years later, in Lookingbill v. Lookingbill, 301 Md. 283, 284, 289 , 483 A.2d 1, 4 (1984), the Court held that Deering applied to pension benefits based on “a work-related injury” under a disability plan, and that such benefits are “marital property subject to equitable distribution.” ⁴³⁸ In the case at bar, the trial judge decided that the appellee’s pension benefits under a disability retirement plan, acquired during his marriage to the appellant, did not constitute marital property. The appellee, in asking that this Court affirm the trial judge’s decision, acknowledges that Lookingbill v. Lookingbill, supra, is directly on point and that the trial judge’s decision is contrary to Lookingbill . Nonetheless, the appellee argues that Lookingbill should be overruled. For the reasons hereafter set forth, we decline to overrule Lookingbill , and we shall reverse the trial court’s judgment.

I. The relevant facts are as follows. Mary and Ansu Conteh were married in October 1981, and they separated in January 2000. In May 2000, Mrs. Conteh filed, in the Circuit Court for Montgomery County, a complaint for pendente lite custody, support and related relief. After the parties remained separate for one year, Mrs. Conteh filed an amended complaint for absolute divorce, requesting, among other things, that the trial court determine, value, and distribute the “marital property” owned by the parties.

Specifically, Mrs. Conteh requested that she be granted a monetary award and that an interest in Mr. Conteh’s pension plan be transferred to her. A hearing was held before a Family Division Master in the Circuit Court for Montgomery County. At that hearing, Mrs. Conteh requested the entry of a Qualified Domestic Relations Order for the purpose of dividing Mr. Conteh’s service-connected disability retirement benefits. Mr. Conteh had been receiving those benefits from Montgomery County since 1998, because of a work-related injury which he suffered during the course of his employment with Montgomery County’s Department of Liquor Control.

At the time of the hearing, Mr. Conteh was receiving $1,847.15 per month from Montgomery County. Mr. Conteh argued that the retirement benefits were not marital property but should be treated as a worker’s compensation award because the benefits could be directly ⁴³⁹ traced to the injury which he suffered while working for Montgomery County. The Master heard testimony and received other evidence on the matter. Most notably, Nicholas Hillman, a benefits specialist employed by the Department of Human Resources for the Montgomery County Government, testified that Mr. Conteh’s retirement benefits are permanent benefits, for which he is not subject to periodic medical reviews.

Mr. Hillman stated that benefits under the service-connected disability retirement plan are not worker’s compensation benefits, and that Mr. Conteh never applied for worker’s compensation benefits. He further testified that the only restriction placed on Mr. Conteh’s retirement benefits is that Montgomery County has the right to make a dollar for dollar reduction in the benefits if Mr. Conteh earns outside income in excess of the maximum salary that he received while employed by Montgomery County. Moreover, Mr. Hillman testified that, in his experience, Qualified Domestic Relations Orders were commonplace for this type of benefits. At the conclusion of the hearing, the Master recommended that Mrs. Conteh be granted an absolute divorce on the grounds of voluntary separation for a period of more than one year.

The Master also distinguished the benefits which Mr. Conteh received through his service-connected disability plan from worker’s compensation benefits. He explained as follows: “Let’s look at the purpose of workman’s compensation. Workman’s compensation is a state mandated benefit that employers must provide which selves in lieu of and precludes the common law right of an employee to sue an employer for an injury suffered on the job. “In other words, it actually replaces tort action. As we know, from the Unkle case and others, ... that a personal injury case is treated differently than retirement.

This retirement, this service connected disability, is no workman’s compensation. There is no specific compensation for the nature of the injury itself. ⁴⁴⁰ “This is part of the compensation package that a party receives when they enter this employment. Like any other retirement package, which in this case said, you can either retire on the basis that you have served a number of years and now you want to retire, or you can retire sooner if you suffer a permanent disability. “This is a marital asset that is for the benefit of the family unit.” Consequently, the Master recommended that Mrs. Conteh be awarded an amount equal to 50 percent of the service-connected disability pension benefits received by Mr. Conteh from Montgomery County. He further recommended that a Qualified Domestic Relations Order or other court order be issued to effectuate that recommendation, and that Mr. Conteh pay the sum of $819.00 per month until such order takes effect.

Mr. Conteh filed exceptions to the Master’s recommendations on three issues, and a hearing was held on the matter before the Circuit Court. At the conclusion of the hearing, the judge overruled two of the exceptions relating to issues which are not raised on this appeal. The trial judge took the third issue, whether Mr. Conteh’s disability retirement benefits are marital property, under advisement. The judge later ruled that Mr. Conteh’s retirement benefits are not “marital property,” granting the appellee’s exception on this issue.

In so ruling, the trial judge purported to distinguish the present case from Lookingbill v. Lookingbill, supra, 301 Md. 283 , 483 A.2d 1 , on the following ground: “Well, this case distinguishes the case at bar from Looking-bill by virtue of the fact that neither spouse in any marriage relationship, either envisions or plans to go out and break his or her back or injure any other part of their body as a contribution to the marital unit, and that is what distinguishes this case from the cases cited by counsel in support of the disability payments being marital.” The trial court subsequently entered a final judgment granting an absolute divorce and deciding other matters. Mrs. Conteh appealed to the Court of Special Appeals, and this ⁴⁴¹ Court issued a writ of certiorari before argument in the Court of Special Appeals. Conteh v. Conteh, 379 Md. 98 , 839 A.2d 741 (2004). Mrs. Conteh argues that Mr. Conteh’s service-connected disability retirement benefits are marital property under §§ 8-201(e) and 8-203 of the Family Law Article, and that she is entitled to an equitable distribution under § 8-205 of the Family Law Article.

Mr. Conteh, as earlier mentioned, argues that the trial judge correctly found that his service-connected disability retirement benefits do not constitute marital property, and that this Court’s holding in the LookingbiU case should be overruled. Mr. Conteh maintains that LookingbiU represents a “mechanistic approach” for determining what is marital property, and that this Court, instead, should utilize a so-called “analytical approach,” which, he asserts, focuses on “the spouses’ ‘contribution’ and ‘effort’ in the acquisition of the” benefits and on the “purpose” for which the benefits are received. (Appellee’s brief at 9). Mr. Conteh contends that, because Mrs. Conteh “did not expend any effort in the acquisition of the employment related benefit[s]” and because the “purpose” of the service-connected disability retirement benefits was to compensate Mr. Conteh for an injury, the benefits should not be treated as marital property.

(Id. at 22, 25).

II

Preliminarily, there is no basis for distinguishing the present case from LookingbiU v. LookingbiU. The ground upon which the trial judge below purported to distinguish the two cases has no validity. In LookingbiU, as in the case at bar, the husband was an employee of a county government who, during the marriage, suffered “a work-related injury, that is, an injury occurring during the actual performance of the employee’s duties,” Lookingbill, 301 Md. at 284 , 483 A.2d at 1 . Consequently, in the language of the trial judge in this case, the parties in LookingbiU, like the parties in the case at bar, did not “either ⁴⁴² envision [ ] or plan[ ] to go out and ... injure any ... part of their body as a contribution to the marital unit....” In Lookingbill , as here, the local government disability retirement plan provided for benefits “regardless of age or length of service,” 301 Md. at 284 , 483 A.2d at 1 .

Also in Lookingbill , as in this case, the working spouses contributed to the plans with money that could have otherwise been utilized by both spouses in each of the marital units. As recognized by both sides before this Court, Lookingbill is directly on point. An affirmance of the Circuit Court in this case would clearly require that we overrule Lookingbill . It would also require that we significantly narrow the holding in Deering v. Deering, supra, 292 Md. 115 , 437 A.2d 883 .

III

When first enacted in 1978, and for an eight-year period thereafter, the Maryland marital property statute did not expressly state whether pension rights, acquired during the marriage, constituted marital property. The issue first arose in Deering, 292 Md. 115 , 437 A.2d 883 , decided in 1981. In that case, two former wives appealed the trial court’s determination that the pension rights acquired by their husbands during the marriages were not marital property. This Court held in Deering that rights to retirement benefits, acquired during marriage, are marital property, and as such, are subject to equitable distribution.

In so holding, this Court pointed out that every other state which had decided this issue had held retirement benefits to be marital property. The Deering Court, in a comprehensive opinion by Judge J. Dudley Digges, explained, 292 Md. at 122-123 , 437 A.2d at 887 , that “pension benefits have become an increasingly important part of an employee’s compensation package which he or she brings to a marriage unit. Moreover, in a situation where economic circumstances prevent a husband and wife from saving or investing a portion of the wage earner’s income, the pension right swells in importance as retirement or vesting approaches, and may well represent the most ⁴⁴³ valuable asset accumulated by either of the marriage partners. “Accordingly, those states, which, like Maryland, confer authority on courts considering divorce matters to make some form of distribution of joint and separate property upon termination of a marriage, with near unanimity, subject retirement benefits in general to division between the former spouses.” After reviewing numerous opinions by courts in other states, the Deering opinion continued ( 292 Md. at 124-125 , 437 A.2d at 888 ): “This compendium of representative cases essentially views pension benefits as an economic resource acquired with the fruits of the wage earner spouse’s labors which would otherwise have been utilized by the parties during the marriage to purchase other deferred income assets. We agree with the analysis used by our sister states, for there is no reason to exclude one form of deferred income asset from the marital estate while including others.

Both the nonemployed spouse and his or her wage earning marital partner have the same retirement goals and expectancies regarding the pension benefits as they would if they provided for their later years by using wage income to purchase other investments.” The Court in Deering also relied upon “the sweeping language of’ Maryland’s marital property statute, under which “ ‘marital property5 is defined as ‘all property, however titled, acquired by either or both spouses during the marriage.’ ” (Deering, 292 Md. at 125 , 437 A.2d at 889 , emphasis in original). Judge Digges pointed out that the “term property” is “ ‘of wide and rather comprehensive signification,’” ibid., quoting Diffendall v. Diffendall, 239 Md. 32, 36 , 209 A.2d 914, 915 (1965). ⁴⁴⁴ The Deering opinion next discussed the “wide variety of retirement plans,” that “the rights which beneficiaries possess depend on many factors,” that some rights are vested or not vested, matured or unmatured, that some plans are contributory whereas others are noncontributory, and that some benefits depend upon contingencies. Deering, 292 Md. at 125-128 , 437 A.2d at 889-890 . The Court pointed out that courts in some states distinguish between different types of plans in determining whether the pension rights constitute marital property, whereas courts in other states have held that all types of plans involve “a contractual right,” and thus would be marital property if the right was acquired during marriage.

The Court in Deering expressly agreed with the latter group of cases, 292 Md. at 128 , 437 A.2d at 890 . As previously mentioned, about three years after Deering , this Court in Lookingbill v. Lookingbill, supra, 301 Md. 283 , 483 A.2d 1 , held that benefits for a work-related injury under a disability retirement plan were marital property. In that case, Judge Marvin Smith for the Court extensively reviewed the Deering opinion and the statute, pointed to the “sweeping” statutory definition of marital property, and emphasized that, under the holding in Deering , all types of pension plans fall within the definition of marital property. The Court in Lookingbill explained ( 301 Md. at 289 , 483 A.2d at 4 ): “We declared in Deering that the fact that a pension right may be contingent upon the happening of certain events does not degrade that right to an expectancy; the law has long recognized that a contingent future interest is property.

We agreed with the statement of the court in In re Marriage of Brown, 15 Cal.3d 838, 848 , 126 Cal.Rptr. 633, 639 , 544 P.2d 561, 567 (1976) (en banc) that such contingencies should not be taken into account by the trial court when determining whether the retirement plan is properly includable in the marital estate. Deering, 292 Md. at 128 , 437 A.2d 883 .” The Lookingbill opinion concluded ( 301 Md. at 289 , 483 A.2d at 4 ): ⁴⁴⁵ “There are many types of retirement plans under which the rights the beneficiaries possess often differ, depending on a wide variety of factors. Deering , following the dominant trend of the law, rejected such distinctions in making the threshold determination of whether a retirement plan is marital property. 292 Md. at 126-127 , 437 A.2d 883 . Consideration of any contingent nature of such rights is postponed until a valuation of the marital property is made.

Id. Pension payments are actually partial consideration for past employment whether the maturity of the pension is contingent upon age and service or upon disability. Thus, a disability plan, like a service plan, is property and, within the meaning of the Act, constitutes marital property