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In re Marriage of Hurd, 69 Wash.App. 38, 848 P.2d 185

Facts

Philip B. Hurd and Susan M. Hurd were married for 14 years and had two children. During their marriage, Mr. Hurd acquired various properties and financial interests, including a pension, vacation pay, and a deferred compensation plan. After their separation, Mr. Hurd's salary increased significantly, and he was eligible for retirement. The trial court awarded Ms. Hurd the family home and a portion of the community property, but Mr. Hurd contested the division, leading to the appeal.

Philip B. Hurd and Susan M. Hurd met and began dating in the spring of 1975. Shortly thereafter, they began living together and were married on October 31, 1975. At the time of their marriage, Mr. Hurd was 38 years of age and had been employed as a Seattle police officer for almost 14 years. Ms. Hurd was 27 years of age and was employed as either a waitress or a janitor.

Issue

Did the trial court err in its valuation and division of community property, including the husband's pension, vacation pay, deferred compensation, and inheritance?

Did the trial court err in its valuation and division of community property, including the husband's pension, vacation pay, deferred compensation, and inheritance?

Rule

The court must determine the nature and extent of the parties' community and separate property before making a property division, and vested or matured benefits must be allocated in a dissolution action.

Before making a property division, the trial court must determine the nature and extent of the parties' community and separate property. RCW 26.09.080; In re Marriage of DeHollander, 53 Wash.App. 695, 700, 770 P.2d 638 (1989). Earnings arising from services performed during marriage are community property. In re Marriage of Landry, 103 Wash.2d 807, 810, 699 P.2d 214 (1985). Deferred earnings not subject to forfeiture are 'vested'. Washington State Bar Ass'n, Community Property Deskbook, § 3.24 at 3–24 (2d ed.1989).

Analysis

The appellate court found that the trial court incorrectly calculated the present value of Mr. Hurd's pension by not considering his increased salary and assuming a future retirement date. It also failed to recognize the accrued vacation pay and deferred compensation as vested and matured benefits that should have been included in the property division. Additionally, the court noted that Mr. Hurd's inheritance should have been considered in the property division, as it impacted the economic circumstances of the parties at the time of dissolution.

We hold that the trial court erred in failing to consider Mr. Hurd's higher salary figure in calculating the community share of the present value of his monthly pension. We also hold that Mr. Hurd's pension should have been calculated assuming immediate retirement. We therefore reverse the property division and remand for a new trial.

Conclusion

The Court of Appeals reversed the trial court's decree and remanded for a new trial, instructing the trial court to properly value and allocate the community property.

The property judgment is reversed and remanded for a new trial.

Who won?

Susan M. Hurd prevailed in the appeal as the court found multiple errors in the trial court's property division, leading to a reversal and remand for a new trial.

Based on our conclusion that the trial court erred in determining the community share of the value of Mr. Hurd's pension, and in view of numerous other problems with the trial court's findings, we reverse the decree and remand for a new trial.

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