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In re Cohen

Supreme Court of New Hampshire

March 29, 2019

IN THE MATTER OF MITCHELL COHEN AND MARIAN RICHARDS

          Argued: January 10, 2019

          9th Circuit Court-Merrimack Family Division

          Devine, Millimet & Branch, Professional Association, of Manchester (Joshua H. Bearce and Ronald J. Caron on the brief, and Mr. Caron orally), for the petitioner.

          Kazarosian Costello LLP, of Haverhill, Massachusetts (Janet E. Dutcher and Marsha V. Kazarosian on the brief, and Ms. Dutcher orally), for the respondent.

          DONOVAN, J.

         The respondent, Marian Richards, appeals an order of the Circuit Court (Introcaso, J.) approving a divorce decree recommended by the Judicial Referee (Love, Esq.). On appeal, the respondent argues that the trial court erred by: (1) improperly excluding certain estimated expenses claimed by the respondent in determining the alimony award; (2) classifying as income, rather than marital property, payments the petitioner, Mitchell Cohen, may receive pursuant to deferred compensation and severance agreements; and (3) improperly calculating the respondent's share of those payments, if the court properly classified them as income. We vacate and remand.

         The record supports the following undisputed facts. The parties met in 2004 and married in 2006. In 2015, they separated and the petitioner initiated divorce proceedings. The petitioner is a physician who has been employed by SJ Physician Services, Inc. (SJ) since 1994. The respondent was unemployed throughout most of the marriage but obtained employment approximately 18 months after the parties separated. At the time of the trial court's final divorce decree, the petitioner was 58 years old, and the respondent was 61 years old.

         In 1996, SJ and the petitioner entered into a "Deferred Compensation Agreement," by which the petitioner will receive a "retirement benefit" or, alternatively, a "death benefit," upon meeting certain conditions. Pursuant to this agreement, the petitioner became eligible to receive deferred compensation payments of $100, 000 a year, in the form of monthly payments, for a period of ten years upon reaching his 21st employment anniversary with SJ in 2015. However, these payments are conditioned upon the petitioner's continued employment by SJ until his age of retirement, which is defined as the first day of the month following the petitioner's 65th birthday. Alternatively, if the petitioner dies before he reaches retirement age, his named beneficiary will receive the 10-year payment of $100, 000 on a monthly basis or in a lump sum.

         Additionally, pursuant to a separate severance agreement with SJ, dated July 2013, if the petitioner's employment with SJ is terminated without cause prior to his retirement, SJ is obligated to pay him a scheduled, lump sum payment, based upon the petitioner's length of employment. If the petitioner dies within 90 days of the scheduled payment, the lump sum will be paid to the petitioner's named beneficiary.

         In the divorce proceeding, the parties agreed that an award of alimony was warranted but disagreed as to the amount and duration of the award. The parties' proposals also differed as to the disposition of the deferred compensation and severance payments. The respondent sought a 50% distribution of the amount of any deferred compensation or severance pay that accrued between the date of the marriage and the date the petitioner filed the divorce petition, in the event the petitioner receives either of these payments. See RSA 458:16-a, II (2018) (requiring marital property to be equitably divided between the parties in a divorce action). The petitioner, on the other hand, proposed that any payments he receives as deferred compensation or severance pay should be paid to the respondent as "[a]dditional [a]limony," calculated as 10% of the gross sum of the deferred compensation and severance pay that accrued during the parties' 9-year marriage.

         The trial court awarded the respondent alimony, payable until her attainment of full retirement age, but awarded less than she requested in her proposed divorce decree. In determining the alimony award, the trial court considered the respondent's age, the property awarded to her by the divorce decree as a future source of income, her available income from post-separation employment, and her expenses. The court did not consider certain unspecified expenses relating to the respondent's home, which the trial court characterized as "extraordinarily high" and "voluntarily" incurred, or "a portion of the expenses allocated for anticipated future uninsured health/dental care," which the trial court described as "speculative."

         With respect to its division of the marital property, the trial court awarded "slightly more of the assets" to the respondent, giving "greater weight . . . to the fact that the [respondent] is closer to retirement and has [fewer] opportunit[ies] to acquire more assets in the future." See RSA 458:16-a. Assets subject to this division included the value of retirement and tax-deferred accounts, such as 401(k) plans and IRA accounts, and death benefits available to the petitioner through his employment, including "death benefits related to deferred compensation and severance income." However, the trial court considered any payments the petitioner may receive from the retirement benefit under the deferred compensation agreement or the severance agreement as income rather than marital property, reasoning that "it would be fairer for these 'benefits' to be treated as income" given "the terms under which these plans may be implemented."

         Based upon this reasoning, the trial court awarded the respondent "Deferred Compensation Alimony" and "Severance Alimony," in addition to the base alimony award, should the petitioner receive payments under either agreement. The trial court adopted the petitioner's method of calculating the additional alimony, but ordered the petitioner to pay the respondent 17%, rather than 10%, of the gross sum of the deferred compensation and severance pay that accrued during the parties' marriage. The petitioner's obligation to pay this additional alimony, should he receive payments pursuant to either agreement, expires upon the death of either party or the respondent's remarriage.[1] Following the trial court's issuance of the final divorce decree, the respondent moved to reconsider. The trial court denied the motion, and this appeal followed.

         On appeal, the respondent raises three challenges to the trial court's divorce decree. First, she argues that the trial court erred when it excluded her household, medical, and dental expenses in its alimony calculation without setting forth any factual support for its ruling. Second, she argues that the trial court erred when it considered the payments the petitioner may receive under the deferred compensation and severance agreements as income rather than marital property subject to equitable distribution. See RSA 458:16-a. Finally, she argues that, even if the trial court correctly categorized the deferred compensation and severance payments as income, the trial court erred when it arbitrarily reduced her alimony award in light of those payments.

         In a divorce case, the trial court has broad discretion to determine and order alimony payments; its determination of alimony is based primarily on the parties' income and need. See In the Matter of Nassar & Nassar, 156 N.H. 769, 772-73, 777 (2008) (the primary purpose of alimony is rehabilitative); RSA 458:19-a (Supp. 2018). However, unlike alimony, the trial court has a statutory obligation to equitably apportion marital property, In the Matter of Hampers & Hampers, 154 N.H. 275, 286 (2006), which includes any property acquired up to the date of a decree of legal separation or divorce. See In the Matter of Heinrich & Heinrich, 164 N.H. 357, 362 (2012); RSA 458:16-a. Thus, the trial court must first determine, as a matter of law, what assets constitute marital property under RSA 458:16-a, I. See In the Matter of Goodlander & Tamposi, 161 N.H. 490, 495 (2011); RSA 458:16-a, I (setting forth types of assets that constitute marital property). Once the trial court determines the parties' marital property, it then exercises its discretion to equitably distribute those assets. See Goodlander, 161 N.H. at 495; RSA 458:16-a, II (standard for equitably dividing marital property). When a party requests alimony, the trial court may exercise its discretion by ordering an alimony award, considering, inter alia, the marital property awarded to each party and the parties' sources of income and need. See Nassar, 156 N.H. at 772-73; RSA 458:19-a.

         Accordingly, we first determine whether the trial court erred in classifying the deferred compensation and severance payments as income rather than marital property. We review de novo a trial court's determination of what assets constitute marital property under RSA 458:16-a, I. Goodlander, 161 N.H. at 495. Because marital property is defined by statute, resolution of this issue requires that we engage in statutory interpretation. In the Matter of Eckroate-Breagy & Breagy, 170 N.H. 247, 249 (2017). In matters of statutory interpretation, we are the final arbiter of the intent of the legislature as expressed in the words of the statute and considered as a whole. Id. We interpret legislative intent from the statute as written, and we will not consider what the legislature might have said or add words that the legislature did not include. Id. Moreover, we interpret statutes in the context of the overall statutory scheme and not in isolation. Id. at 250.

         Pursuant to RSA 458:16-a, I, "all tangible and intangible property and assets, real or personal, belonging to either or both parties, whether title to the property is held in the name of either or both parties" is subject to equitable distribution. Under RSA 458:16-a, I, intangible marital property "includes, but is not limited to, employment benefits, vested and non-vested pension or other retirement benefits, or savings plans." Based upon this broad statutory language, we have previously adopted the "mechanistic approach" to determine whether an item constitutes marital property. Heinrich, 164 N.H. at 360-61. Under this approach, property subject to equitable distribution includes any property acquired before the decree of legal separation or ...


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