Woodson v. Saldana

ADKINS, J. Evelyn Saldana Woodson, appellant, challenges a judgment resolving disputed property issues in her divorce from appellee Capt. Moses P. Saldana, Jr., USMC (Ret.), as well as an order holding her in civil contempt and awarding attorney’s fees. She raises six issues, which we have rephrased and reordered: 1 I. Did the trial court err in calculating the marital portion of Woodson’s military reserve retirement benefits?

II

Did the trial court err in awarding Crawford credits to Saldana?

III

Did the trial court abuse its discretion in awarding Saldana a share of Woodson’s civil service pension? ⁴⁸⁴ IV. Did the trial court err in failing to determine whether Saldana dissipated marital funds to provide vacations for his girlfriends? V. Did the circuit court err in finding Woodson in contempt of a court order prohibiting her from entering and removing property from the marital residence?

VI

Was the evidence sufficient to support the court’s award of attorney’s fees to Saldana in connection with the contempt proceedings? We find merit in Woodson’s first, second, third, and sixth assignments of error. In the divorce action, we shall vacate the order resolving disputed property issues and remand for reconsideration of the marital property issues arising from Woodson’s military reserve retirement benefits, Crawford credits, and Woodson’s civil service pension. We shall affirm the contempt finding, but vacate the attorney’s fee award in the contempt order, and remand for further proceedings on that matter.

FACTS AND LEGAL PROCEEDINGS Woodson and Saldana were married on August 6, 1983, separated on June 20, 2001, and divorced on March 25, 2003. The couple has two children, Moses P. Saldana, III and Sara Saldana, both of whom were still minors at the time of the divorce. Both Woodson and Saldana served in the military. Throughout the marriage, and until he retired effective October 31, 2004, Saldana was an active duty Marine Corps officer.

Following active duty that ended in 1982 before the marriage, Woodson was on reserve military duty. After the separation, she became a civil service employee at the Pentagon. The parties resolved custody, visitation, and some property issues consensually. During the litigation, the Circuit Court for St. Mary’s County found Woodson in contempt of an order requiring her to stay away from Saldana’s residence, which was the former marital home; the court ordered Woodson to ⁴⁸⁵ pay Saldana’s attorney’s fees in connection with that contempt order.

After trial on the reserved property issues, the court issued a June 29, 2004 opinion and order. Woodson noted this timely appeal of both the property disposition and contempt orders. We will set forth additional facts as they pertain to our discussion of the issues. DISCUSSION I. Military Reserve Retirement Benefits Woodson complains that the trial court did not correctly calculate the marital portion of her military reserve retirement benefits.

During her military reserve career, Woodson accrued a total of 4,257 “points” toward retirement benefits. These retirement points may be awarded for a reservist’s activities, and therefore do not necessarily accrue based solely on the length of active or reserve duty service. See 10 U.S.C.A. § 12731 et seq.; Marshal S. Willick, Military Reserve Retirement Benefits in Divorce: A Lawyer’s Guide to Valuation and Distribution 43-45 (ABA Section on Family Law); In re Marriage of Poppe, 97 Cal.App.3d 1 , 158 Cal.Rptr. 500, 502-03 (1979). Reservists must accrue at least 50 “retirement points” in a calendar year to have that year qualify toward retirement.

See 10 U.S.C.A. § 12732 (a)(2). In turn, reservists must accumulate 20 years of service, and must be at least 60, to be eligible for retirement pay. 2 See 10 U.S.C.A. § 12731 (a). Points are earned not only for days of service, but also for performing certain drills, completing certain education courses, and maintaining membership in certain military units. See 10 U.S.C.A. § 12732 et seq.

In this respect, the retirement points accrual system for military reservists reflects more than merely time served. One commentator has observed, for example: ⁴⁸⁶ A point is awarded for each day of active service, or for full-time service while performing annual active duty training or attending required training. A point is awarded for each drill performed adequately, or for each three hours of military correspondence or extension courses that are successfully completed. Fifteen points are awarded for membership in the reserve components or the army or air force without component.

There is an annual 60-point maximum for inactive-duty points, and a maximum of 365 points may be earned each year. Willick, supra, at 44. Because the court has jurisdiction over marital property that the parties have not divided by consensus, including retirement benefits earned during the marriage, it must calculate what portion, if any, of a military spouse’s retirement benefits is marital. See Bangs v. Bangs, 59 Md.App. 350, 367-68 , 475 A.2d 1214 (1984).

After determining that Woodson was married 235 months and employed as a reservist for 198 of those months, the trial court determined Saldana’s portion of her military retirement pay benefit using a “time formula” as follows: (198/234) = 42.3%.” 3 This “time formula”— dividing the length of the marriage by the length of the pensioned employment — is standard in calculating the marital portion of pension and retirement benefits. See Deering v. Deering, 292 Md. 115, 129-30 , 437 A.2d 883 (1981); Hoffman v. Hoffman, 93 Md.App. 704, 719 , 614 A.2d 988 (1992); Bangs, 59 Md.App. at 367-68 , 475 A.2d 1214 . Using a time formula, the court found that Saldana “is entitled to 42.3% of [Wood-son’s] United States Marine Corps retirement pay.” Woodson argues that the court should have used the retirement points she earned during the marriage as the variable in the formula, rather than the months of reserve duty she served during the marriage. To illustrate the financial significance of using such retirement points to calculate the marital ⁴⁸⁷ portion of her military reserve retirement benefits, Woodson cites the following example from an American Bar Association, Section on Family Law treatise on valuing and distributing military retirement benefits in a divorce: Major Bill Smith has five years of active duty and fifteen years of service in the U.S. Army Reserve.

He married when he left active duty. To compute the marital fraction according to points he acquired during active duty, we simply multiply five times 364 to get 1820 points. During his time in the reserves, he has acquired the maximum of 60 points a year (for weekend drill, “summer camp,” and membership), and this equals 900 points over fifteen years. Thus his total points at twenty years are 2720, of which 900 (or about 33 percent) are marital.

This means that 33 percent of his retirement pay (assuming retirement and date of separation both occur at year twenty) is marital. If his retired pay check at age sixty were $600, then the marital share would be $200.00 and his wife’s presumptive one-half share would be $100 per month. If we apply the marital fraction to his retirement pay using years instead of points, however, then with fifteen years of marital pension service and twenty total years of pension service, his pension is 15/20 (or 75 percent) marital. If his check were $600, then the marital portion would be $450 and the presumptive half to his wife would be $225 per month!

Willick, supra, at 46 n. 30. Woodson argues that the trial court’s use of a time formula resulted in a similarly inflated apportionment, increasing Saldana’s share of her retirement pay by 6.2%, 4 as shown in the following chart: ⁴⁸⁸ Months (per Bangs) Points (for reservists) Total earned 235 months 4257 retirement points Earned during marriage 198 months 3098 retirement points Formula used to calculate 198 -e 234 = 3098 4- 4257 = marital portion 84.6% 72.77% Saldana’s 'h share 42.3% 36.4% An interest in a military retirement pension is marital property to the extent it was earned during the marriage. See Deering, 292 Md. at 129-30 , 437 A.2d 883 . It is therefore subject to distribution under Md.Code (1984, 2004 Repl.Vol.), section 8-205 of the Family Law Article (FL). 5 ⁴⁸⁹ “[T]he court has broad discretion in evaluating pensions and retirement benefits, and in determining the manner in which those benefits are to be distributed.” Welsh v. Welsh, 135 Md.App. 29, 54 , 761 A.2d 949 (2000), cert, denied, 363 Md. 207 , 768 A.2d 55 (2001).

Nevertheless, in doing so, the court must consider the statutory factors enumerated in section 8-205(b). See Collins v. Collins, 144 Md.App. 395, 409 , 798 A.2d 1155 (2002). “While consideration of the factors is mandatory, the trial court need not ‘go through a detailed check list of the statutory factors, specifically referring to each, however beneficial such a procedure might be ... for purposes of appellate review.’ ” Doser v. Doser, 106 Md.App. 329, 351 , 664 A.2d 453 (1995)(quoting Grant v. Zich, 53 Md. App. 610, 618 , 456 A.2d 75 (1983))(other citation omitted). In this instance, however, we are lacking more than a “detailed check list of the statutory factors.” Despite the court’s statement at the outset of its opinion that “[a] detailed description of the court’s reasoning on the status and value of [this] property follows,” there simply is nothing in that opinion or the corresponding order to indicate that the trial court considered the statutory factors. Neither document refers to any of the factors in connection with the distribution of retirement benefits — or, for that matter, any other marital property.

Indeed, we do not even find a citation to FL section 8-205(b) in the court’s discussion of either applicable law or factual issues. This silence, when viewed in conjunction with the court’s statements that Saldana “is entitled to” half of the marital portion of Woodson’s retirement benefits, creates an intolerable possibility that the statutory factors were not considered because the court believed that it was required to make such an award. For that reason, we shall vacate the monetary award and remand for reconsideration of this and all other financial issues upon which the court premised that award. In ⁴⁹⁰ doing so, we are aware that the “points v. time” issue raised by Woodson in her motion for reconsideration and this appeal will recur.

Accordingly, we shall address that question for guidance purposes. In determining what portion of Woodson’s military reserve retirement benefit is marital property, the court must consider all relevant evidence, including, we think, evidence presented by Woodson that her retirement benefits are premised on retirement points that accrue on the basis of factors other than the length of her military reserve service. 6 Maryland appellate courts have not addressed whether the marital portion of retirement benefits earned by military reservists should be calculated on the basis of time rather than points. Other courts and commentators that have specifically considered this question have concluded that the marital portion of such benefits must be based on retirement points. See, e.g., Faulkner v. Goldfuss, 46 P.3d 993, 1003 (Alaska 2002)(“where the value of retirement benefits is not directly related to the length of employment — such as when retirement benefits will be determined by the number of points earned as a result of the nature and frequency of the service rendered — the coverture fraction should be modified so that the numerator becomes the number of points earned during the period of coverture, and the denominator becomes the total number of points earned”); Bloomer v. Bloomer, 927 SW.2d 118, 121 (Tex.Ct.App.1996)(“trial court should have characterized [reservist’s] military retirement benefits by comparing his points accrued while married to the total accrued points”); In re Marriage of Beckman, 800 P.2d 1376, 1379-80 (Colo.Ct.App.1990)(“ ‘Use of a simple years of service computation rather than recognition of the point system will, in some situations lead to inequitable conclusions.

The greatest potential for ⁴⁹¹ distortion of the marital share of the benefit occurs in situations, where the member of the military retirement system switches from regular component to reserve component service’ ”)(quoting W. Troyan, “Procedures for Evaluating Retirement Entitlements Under Non-ERISA, Retirement Systems for Marriage Dissolution Actions,” in 3 J.P. McCahey, ed., Valuation & Distribution of Marital Property § 46.34(1)(1990)); Poppe, 158 Cal.Rptr. at 503-04 (“the basis upon which apportionment was made, years of service during the marriage before separation compared to ‘qualifying’ years in service, bears no substantial rational relationship to the amount of the pension” because the amount of reservist’s retirement benefit was a function of the total points earned for various activities, rather than simply his length of service). We agree that, when a reservist’s retirement pay is not strictly a function of the length of military service, the appropriate formula is retirement points earned during the marriage divided by the total retirement points earned. The fractional equation used to determine the marital portion of military reserve retirement pay must use the same unit of measurement in both the numerator and the denominator. Because military reserve retirement pay is earned on the basis of points rather than time, both variables in the formula used to apportion that pay logically should also be points.

See Poppe, 158 Cal.Rptr. at 503-04 . On remand, the circuit court must consider the evidence that Woodson earned retirement points for activities other than days of military service. If Woodson did, as it appears from the limited record presented to us, the court must determine the marital portion of her retirement benefit by dividing the points she earned during the marriage by the total number of points she earned.

II

Crawford Credits The trial court awarded Saldana $15,756.18 in Crawford ⁴⁹² credits 7 for his payments of the mortgage, homeowner’s association dues, and home improvements on the marital home, from July 1, 2001 through sale of the residence on April 28, 2003. Woodson argues that the trial court erred in doing so “without consideration of equitable factors.” Specifically, she argues that the evidence showed that Saldana used marital funds to pay the mortgage and other expenses on the marital home. Comparing this case to Broseus v. Broseus, 82 Md. App. 183 , 570 A.2d 874 (1990), in which this Court approved the denial of Crawford credits to the payor spouse on the ground that his payments had been made from marital funds, Woodson asserts that “Saldana did not personally make the mortgage payments” on the marital home during the separation. Instead, such “payments and related expenses were made by the U.S. Government by means of a Basic Housing Allowance which Saldana received only because he was married and did not reside in military housing.” In addition, Saldana enjoyed the unaccounted-for benefit of living in the house and claiming the tax deduction.

Saldana asks us to affirm the award of Crawford credits because “the fact that money came from a housing allowance rather than a salary does not change the fact that it was compensation for services rendered that was, in turn, used to pay the mortgage, taxes, insurance, etc.” Moreover, after the December 2, 2002 consent order granting child custody to Woodson, his housing allowance rate was reduced to “Single without Dependents.” For the same reasons we discussed in Part I with respect to military retirement benefits, we also are persuaded by Woodson’s contention that the court did not consider equitable factors in awarding Saldana Crawford credits. The order states: ⁴⁹³ The spouse who, following separation, pays mortgage and other carrying charges that preserve the [marital] property is entitled to contribution credits prior to any division of proceeds from the sale of that property, even in the absence of an explicit agreement to this effect. Therefore, [Saldana] is entitled to credit for ... expenses he incurred in maintaining the house between the date of the parties’ separation and divorcef.] (Emphasis added.) An award of Crawford credits, however, is discretionary, so that it cannot be said that “the spouse who pays mortgage and other carrying charges that preserve the property is entitled to” receive such credits in all cases. See Keys v. Keys, 93 Md.App. 677, 681 , 614 A.2d 975 (1992); see also Kline v. Kline, 85 Md.App. 28, 48-49 , 581 A.2d 1300 (1990), (“the reason contribution is not mandatory between spouses at the time of divorce is that contribution is an equitable principle ... and the ability to grant a monetary award under the [Marital Property] Act enables the chancellor to achieve more complete equity than can be done through a Crawford contribution”), cert, denied, 322 Md. 240 , 587 A.2d 246 (1991).

Instead, the court must exercise its discretion to determine whether Crawford credits are warranted. Here, the opinion and order are both phrased in the “entitlement” terms. The trial court’s conclusion that Saldana “is entitled to [Crawford ] credit,” in light of its failure to discuss any of the specific equitable factors argued by Woodson, indicates that the court may have incorrectly believed that it was obligated to make such an award to Saldana. On remand, the court must determine whether and to what extent Crawford credits are warranted, in a manner that permits appellate review.

III

Civil Service Pension In October 2001, following her separation from Saldana, Woodson became employed in a federal job that qualifies for civil service pension benefits. She continued in that position ⁴⁹⁴ through the date of divorce, accruing a total of 17 months of civil service during the marriage. The trial court awarded Saldana one half of that marital property on an “if, as, and when basis,” because Woodson’s total number of months of civil service is unknown. See Pleasant v. Pleasant, 97 Md. App. 711 , 632 A.2d 202 (1993); Hoffman v. Hoffman, 93 Md.App. 704, 719 , 614 A.2d 988 (1992); Bangs v. Bangs, 59 Md.App. 350 , 475 A.2d 1214 (1984).

Woodson challenges that order, arguing that the trial court abused its discretion in awarding Saldana half of the civil service pension that she earned as a result of her return to work after the separation. In her view, the court failed to give the heavy weight due under FL section 8-205(b)(8) to [h]ow and when specific marital property or interest in pension, retirement, profit sharing or deferred compensation plan was acquired, including the effort expended by each party in accumulating the marital property or the interest.... (Emphasis added.) In Alston v. Alston, 331 Md. 496, 507 , 629 A.2d 70 (1993), the Court of Appeals held that the trial court erred in failing to give this factor “considerable weight” in distributing the value of a lotto ticket that the husband purchased after separation: Where one party, wholly through his or her own efforts, and without any direct or indirect contribution by the other, acquires a specific item of marital property after the parties have separated and after the marital family has, as a practical matter, ceased to