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In re Marriage of Sauter

Court of Appeals of Oregon

September 6, 2018

In the Matter of the Marriage of Jill SAUTER, Petitioner-Respondent, and Robert SAUTER, Respondent-Appellant.

          Argued and submitted August 17, 2017

          Deschutes County Circuit Court 15DS0300; Walter Randolph Miller, Jr., Judge.

          Frederick Schroeder argued the cause and fled the brief for appellant.

          No appearance for respondent.

          Before DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi, Judge.

         Case Summary: Husband appeals a judgment dissolving the parties' marriage and challenges the trial court's division of the marital property. In his first assignment of error, husband argues that the trial court abused its discretion by failing to follow the correct methodology in determining a just and proper division under ORS 107.105. Held: The trial court abused its discretion when it divided the parties' marital property because the record does not prefect that the court conducted the required analysis under ORS 107.105.

         [293 Or.App. 749] DEHOOG, P. J.

         Husband appeals a judgment dissolving the parties' marriage and challenges, in three assignments of error, the trial court's division of the marital property. Husband argues that the court abused its discretion (1) by failing to follow the correct methodology in determining a just and proper division, (2) by not awarding husband the entire premarital portion of his Civil Service Retirement System (CSRS) benefits as his separate property, and (3) by excluding from its calculation of the equalizing judgment the anticipated pay-out value of the CSRS survivor's benefit awarded to wife. Addressing only the first assignment of error, we agree with husband that the record does not reflect that the trial court conducted the required analysis under ORS 107.105 in dividing the parties' property, and that the court therefore abused its discretion. Although we recognize that trial courts have broad discretion to determine what constitutes a just and proper division of the marital property in each case, a court must follow the correct methodology when exercising that discretion. Because, in this case, the record does not reflect that the court followed the correct methodology, we reverse and remand.[1]

         Husband requests de novo review. We decline to exercise our discretion to review de novo because husband has not demonstrated that this is an "exceptional case" warranting such review. See ORS 19.415(3); ORAP 5.40(8)(c). Accordingly, we recount the facts "consistently with the trial court's express and implied findings, supplemented with uncontroverted information from the record." Tilson and Tilson, 260 Or.App. 427, 428, 317 P.3d 391 (2013) (internal quotation marks omitted). In this case, the facts relevant on appeal are undisputed.

         Husband and wife married in October 1978. Before the marriage, husband served in the military for 36 months and worked for the federal government as a civilian for an additional 29 months. After the parties married, husband "bought back" his accrued military retirement benefits so as [293 Or.App. 750] to include that time toward the calculation of his eventual CSRS benefits. During the marriage, husband continued working for the federal government, accumulating an additional 319 months toward his CSRS benefits before retiring in 2004. At the time of the trial court's decision, husband's CSRS annuity was in "pay-out" status. Throughout most of the marriage, wife worked as a stay-at-home mother. Because, for much of that time, husband's work situation only permitted him to return home on the weekends, wife's duties included single-handedly caring for the parties' child with autism and managing the cattle and irrigation systems on the family's ranch. When he retired, husband elected to receive a survivor's benefit, naming wife as the beneficiary. As a result, wife was ensured a lifelong annuity should husband predecease her, but, given that contingency, she was not guaranteed to realize any income from that benefit.

         Wife filed for divorce in April 2015. The parties generally agreed regarding the value and division of most of their assets and debts. They disputed, however, the proper division of the premarital portion of husband's CSRS benefits and the appropriate way to account for the expected value of wife's survivor benefit in the overall property distribution. As to the division of the CSRS benefits, husband argued that he was entitled not only to the benefits accrued during his premarital work as a civilian, but also to the amount associated with his military service, because it too was a premarital asset. Wife responded that, by "buying back" his military time, husband had at least converted the retirement benefits associated with that time into a marital asset; wife further argued that, to the extent that husband had not converted those benefits into a marital asset, it was nonetheless just and proper under the circumstances for the court to award wife one-half of the premarital portion. As to the survivor annuity, husband argued that the overall property division should attribute to wife the full expected pay-out value of the annuity, which the parties' shared expert estimated would amount to more than $455, 000 over wife's expected lifetime. Wife disagreed, arguing, despite the expert's reliance on actuarial tables, that her realization of any annuity remained speculative, rendering it just [293 Or.App. 751] and proper to disregard or substantially discount any corresponding value in calculating an appropriate award.

         After trial, the court took the matter under advisement to consider the parties' contentions. In the written ruling that followed, however, the court did not acknowledge the parties' dispute, nor did it expressly address their arguments. Instead, the court's letter opinion simply stated that "[t]he following distribution is just and proper," followed by an itemized list of assets and the party to whom each item was awarded. The court's determination included a "50/50" split of the CSRS annuity and maintained the survivor benefit in place, with each party responsible for one-half of the monthly premium for the survivor benefit. Beyond stating that its distribution of the marital property was "just and proper," the court did not identify any of the steps it had taken or any matters it had considered in reaching that decision. The court subsequently incorporated its letter ruling into a general judgment, which husband appeals.

         On appeal, husband raises three assignments of error, all directed to the trial court's determination of the just and proper division of the marital property. In his first assignment, husband argues that the court erred by failing to follow the prescribed methodology in making that determination. Specifically, husband takes issue with the court's failure to demonstrate that it applied the correct analysis. In his second assignment of error, husband argues that the trial court erred in failing to award him, as a premarital asset, the portion of his CSRS retirement benefits associated with his military service. And, in his third assignment of error, husband argues that the court erred in ignoring or excluding from its calculation of the overall property distribution the expected value of the survivor's benefit that it awarded to wife. Wife does not appear on appeal. We address only the issue raised by the first assignment of error- whether the record demonstrates that the court followed the correct methodology in exercising its discretion. Because the record does not reflect what methodology the trial court followed, much less that it followed the correct methodology, we must conclude that the court abused its discretion and, consequently, we reverse.

         [293 Or.App. 752] We review for abuse of discretion the trial court's determination that a particular allocation of marital property is just and proper. Generally, there is a range of reasonableness for a division of property, and this court will not modify a trial court's award falling within that range. Brown and Brown,259 Or.App. 618, 627, 315 P.3d 422 (2013), rev den,355 Or. 142 (2014). However, to earn the measure of deference to which discretionary decisions are entitled on appeal, "a trial court's property award must reflect the exercise of discretion under the correct methodology[.]" Olson and Olson,218 Or.App. 1, 16, 178 P.3d 272 (2008). Stated differently, when a trial court makes a discretionary decision, "the record must reflect a proper exercise of that ...


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