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COA finds miscalculation in divorce pension division

November 16, 2018

A seven-year-old divorce case is returning to the trial court after the Indiana Court of Appeals found the division of the husband’s pension and the monthly rehabilitative maintenance needed to be recalculated.

After almost 14 years of marriage, Kimberly Eads filed for divorce from her then-husband, Robert Eads. The dissolution of marriage included a division of the husband’s 1977 Fund pension from his work as a firefighter and monthly spousal maintenance for Kimberly, who was disabled after a car accident.

The Johnson Superior Court relied on an analysis by a Franklin College business and accounting professor of the husband’s pension to determine how to divide the retirement fund. According to that analysis, the value of the pension was $1,278,133.26, but only 77.2 percent of that, or $986,718.83, was earned during the marriage. The trial court then awarded 38.6 percent of the value, or $493,359.42, equally to the husband and wife.

Before the Court of Appeals, the husband challenged the trial court’s division of his pension. He argued the percentage should be lower than 77.2 percent because the pension rights he eared after his wife filed for divorce were improperly included.

The unanimous appellate panel agreed in Kimberly L. Eads v. Robert J. Eads, Jr., 18A-DR-249.

The trial court based its calculations on the time from the husband’s employment as a firefighter, Feb. 7, 1994, to the date of the divorce decree, which was 281 months. However, the Court of Appeals found the creditable time should be calculated form the husband’s hire date to the date the pension was valued, which was Oct. 4, 2016. That is a total of 271 months.

In a footnote, the appellate court stated the October 2016 date was used because that is when the pension was valued. If the fund had been valued on the date the wife had filed for divorce, that date presumably would have been used.

The Court of Appeals remanded the issue back to the trial court to recalculate the division of the pension.

Also, the appellate court remanded the issue of the spousal maintenance award with instructions that the trial court determine whether the wife is entitled to incapacity maintenance.

Kimberly Eads argued to the Court of Appeals that the trial court erred in awarding her “rehabilitative” maintenance instead of “incapacity” maintenance. The trial court found the wife was disabled and entitled to rehabilitative maintenance.

However, the trial court’s findings did not address the requirements for rehabilitative maintenance and the wife conceded that there is no evidence of record which would support a finding of rehabilitative maintenance. Further adding to the confusion, the trial court found husband did not have the financial means to meet all the obligations the court has burdened him with and pay the spousal maintenance award.

As part of the remand, the Court of Appeals instructed the trial court to take into consideration the husband’s ability to pay. And, if the court awards the wife incapacity maintenance, it should last for the period of incapacity, subject to further order of the court.  

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