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HERRON v. JONHSON

July 16, 1998

MERINDA HERRON, APPELLANT,
V.
HENRY CLIFFORD JOHNSON, APPELLEE.



APPEAL FROM THE SUPERIOR COURT, JOHN H. SUDA, J. [714 A2d Page 784]

Before Terry, Schwelb, and Farrell, Associate Judges.

The opinion of the court was delivered by: Farrell, Associate Judge:

Must the trial court, exercising its duty in a divorce action to distribute the marital property "in a manner that is equitable, just and reasonable," D.C.Code § 16-910(b) (1997), distribute pension rights even though one spouse has entirely dissipated the pension funds? We answer that question yes. We therefore vacate the judgment of the trial court insofar as it refused to distribute the pension rights at issue, and remand for further proceedings consistent with this opinion.

I.

Merinda Herron and Henry Clifford Johnson were married in 1977 and had three children together. Herron is a pediatrician; Johnson, though not employed at the time of the divorce, was an insurance salesman and manager from 1977 to 1994. As part of his compensation, he received a pension from his employer.

The parties separated in August 1995, and in November 1995 Herron filed for divorce. Johnson did not contest the divorce and did not appear at the evidentiary hearing in September 1996. Herron testified and presented supporting documentation that Johnson had begun withdrawing his pension piecemeal in 1987 and received a final lump sum distribution of some $85,000 in September 1993. *fn1 Based on additional testimony by Herron, the trial court found that the withdrawal had been without Herron's knowledge and consent. The court also found that the pension funds were accumulated during the marriage, hence were marital property, and that Johnson had withdrawn the funds for his own personal use. The court nevertheless refused to distribute the pension rights because, by the time of divorce, the pension funds no longer existed: they were, the court concluded, "not a piece of marital property that is available for distribution at this time."

II.

D.C.Code § 16-910(b), in relevant part, provides that upon the entry of a final decree of divorce, the court

shall . . . distribute all . . . property accumulated during the marriage . . . in a manner that is equitable, just and reasonable, after considering all relevant factors including, but not limited to: . . . each party's contribution to the . . . dissipation or depreciation in value of the assets subject to distribution. [Emphasis added.]

While the trial court has "broad discretion" in achieving a fair division of marital property under this section, it "must consider all factors relevant to the case before it." Negretti v. Negretti, 621 A.2d 388, 389 (D.C. 1993). Pension rights, to the extent acquired during the marriage, are property subject to distribution under § 16-910(b). Sanders v. Sanders, 602 A.2d 663, 669 (D.C. 1992); Barbour v. Barbour, 464 A.2d 915, 919 (D.C. 1983).

Section 16-910 (b) expressly requires the court, in effecting distribution, to consider "dissipation . . . in value" of the property by a party to the divorce. The issue before us [714 A2d Page 785]

is whether that obligation extends to property which no longer exists at the time of dissolution because it has been wholly dissipated. The answer is not difficult. It surely would not further the aim of an "equitable, just and reasonable" distribution to exempt a complete dissipation of property from the statute's reach but not a partial one. If the statute required distributable property to be owned by the spouses at the time marital litigation commences, see, e.g., Panhorst v. Panhorst, 301 S.C. 100, 390 S.E.2d 376 (Ct. App. 1990) (applying statute so requiring), the trial court's decision here would be sound, though the result arguably inequitable. But § 16-910(b) refers only to property "accumulated during the marriage," and given that language, we are under no constraint to reward a spouse who completely dissipates marital property prior to the start of divorce proceedings.

Once before, this court has recognized the statutory importance of dissipation as a factor in arriving at an equitable division of property. In Cox v. Cox, 639 A.2d 97 (D.C. 1994), we held "demonstrably relevant" proffered testimony about assets ostensibly owned by a third person "but which arguably contained funds transferred by the husband in order to deplete the marital estate and to reduce the wife's share." Id. at 99. Underscoring § 16-910(b)'s reference to dissipation, we stated that "[a] spouse may not circumvent the equitable distribution of the marital estate by concealing marital assets or by manipulating title to them." Id. Maryland courts, similarly, have held that "it would clearly be against the Legislature's stated public policy to permit one spouse to squander marital property and render it impossible to make an equitable award of property." Sharp v. Sharp, 58 Md. App. 386, 473 A.2d 499, 505 (1984) (citing Berish v. Berish, 69 Ohio St.2d 318, 432 N.E.2d 183, 185 (1982)). Thus, in Maryland,

where a chancellor finds that property was intentionally dissipated in order to avoid inclusion of that property towards consideration of a monetary award, such intentional dissipation is not more than a fraud on marital rights, and the chancellor should consider the dissipated property as extant marital property . . . to be valued with the other existing marital property. This principle would apply even where the dissipated property ...


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