{ "id": 8525536, "name": "WAYNE ROBIN JOHNSON, Plaintiff v. SANDRA E. JOHNSON, Defendant", "name_abbreviation": "Johnson v. Johnson", "decision_date": "1994-12-20", "docket_number": "No. 9410DC227", "first_page": "410", "last_page": "415", "citations": [ { "type": "official", "cite": "117 N.C. App. 410" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "94 ALR3d 176", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "583 N.E.2d 908", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1991, "opinion_index": 0 }, { "cite": "562 N.Y.S.2d 875", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1990, "pin_cites": [ { "page": "877" } ], "opinion_index": 0 }, { "cite": "759 P.2d 1224", "category": "reporters:state_regional", "reporter": "P.2d", "weight": 4, "year": 1988, "pin_cites": [ { "page": "1228" }, { "page": "1229" } ], "opinion_index": 0 }, { "cite": "409 S.E.2d 897", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "900" } ], "opinion_index": 0 }, { "cite": "330 N.C. 143", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2509699 ], "year": 1991, "pin_cites": [ { "page": "147" } ], "opinion_index": 0, "case_paths": [ "/nc/330/0143-01" ] }, { "cite": "374 S.E.2d 644", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "646" } ], "opinion_index": 0 }, { "cite": "92 N.C. App. 413", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527087 ], "year": 1988, "pin_cites": [ { "page": "417" } ], "opinion_index": 0, "case_paths": [ "/nc-app/92/0413-01" ] }, { "cite": "346 S.E.2d 430", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1986, "pin_cites": [ { "page": "435" }, { "page": "454" }, { "page": "440" }, { "page": "437-38" }, { "page": "436" } ], "opinion_index": 0 }, { "cite": "317 N.C. 437", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4772767 ], "year": 1986, "pin_cites": [ { "page": "446-47" } ], "opinion_index": 0, "case_paths": [ "/nc/317/0437-01" ] } ], "analysis": { "cardinality": 553, "char_count": 12741, "ocr_confidence": 0.726, "pagerank": { "raw": 1.1174484976101713e-07, "percentile": 0.5725963173914773 }, "sha256": "cbf14374ddfb54a4c064f9f2e8366d42bc81e8b11c2fdf25c24f6e816e96ef5c", "simhash": "1:8dbf516a758ff6fd", "word_count": 1922 }, "last_updated": "2023-07-14T20:31:41.091249+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge ORR concurs.", "Judge McCRODDEN concurred prior to 15 December 1994." ], "parties": [ "WAYNE ROBIN JOHNSON, Plaintiff v. SANDRA E. JOHNSON, Defendant" ], "opinions": [ { "text": "EAGLES, Judge.\nDefendant argues on appeal that the \u201cdisability retirement benefits\u201d retained their classification as marital property even though disability rather than age caused plaintiff\u2019s retirement. G.S. 50-20(b)(1) classifies vested \u201cpension, retirement, and other deferred compensation rights\u201d as marital property. Whether \u201cdisability retirement benefits\u201d fall within the definition of marital property is an issue of first impression in North Carolina. We have carefully considered defendant\u2019s contentions but are not persuaded and accordingly, we affirm.\nDifferent jurisdictions have adopted different methods for determining whether to label property as marital or separate. Our Supreme Court has adopted an analytic approach for classifying personal injury awards. Under the analytic approach, the key to determining whether benefits are separate property rather than marital property is to ask what plaintiff\u2019s benefits were intended to replace. Johnson v. Johnson, 317 N.C. 437, 446-47, 346 S.E.2d 430, 435 (1986). In Johnson, our Supreme Court found that a lump sum personal injury award could be classified as partially marital and partially separate property. Id. at 454, 346 S.E.2d at 440. There the court stated that courts which use the analytic approach \u201cconsistently hold that the portion of [a personal injury] award representing compensation for non-economic loss \u2014 i.e., personal suffering and disability \u2014 is the separate property of the injured spouse; the portion of an award representing compensation for economic loss . . . during the marriage ... is marital property.\u201d Id. at 437-38, 346 S.E.2d at 436. While damages paid to a spouse for personal injuries are not precisely the same as \u201cdisability retirement benefits\u201d paid to a spouse, the two situations are in some respects analogous. Accordingly, the issue here, employing the analytic method, is whether the benefits that plaintiff received were truly disability benefits or were retirement benefits (compensation for economic loss).\nHere, the trial court\u2019s pertinent findings of fact are:\n[T]he local Governmental Employee\u2019s Retirement system under which the Plaintiff is covered is such that if. . . [p]laintiff obtains gainful employment, and earns on a monthly basis a sum greater than the difference between the amount . . . [p]laintiff was earning at the time of his retirement and the amount which . . . [p]laintiff is receiving in disability retirement, then ... [p]laintiff\u2019s monthly disability award will be reduced dollar for dollar for each dollar earned by . . . [p]laintiff over and above the difference between his income while employed and his disability payment. . . . [I]f . . . [p]laintiff were to become gainfully employed earning the same amount he was earning at the time he was placed on disability; then [he] would only receive the amount which he had contributed to his plan. . . . [S]hould . . . [p]laintiff recover from his disability and resume employment from a participating local governmental agency, then . . . [p]laintiff would receive no further disability benefits until such time as his normal retirement.\nBy employing the analytic method, the trial court found that the amount of plaintiffs \u201cdisability retirement benefits\u201d above $97.75 per month was clearly attributable to his physical disability because it was intended to reimburse plaintiff for his loss of earning capacity due to his disability. Accordingly, the trial court found that this amount was plaintiffs separate property.\nOn appeal, our review is limited to whether there was any competent evidence to support the trial court\u2019s findings. Taylor v. Taylor, 92 N.C. App. 413, 417, 374 S.E.2d 644, 646 (1988). If there was competent evidence to support the findings, they are conclusive on appeal \u201ceven though the evidence might sustain findings to the contrary.\u201d Matter Of Estate Of Trogdon, 330 N.C. 143, 147, 409 S.E.2d 897, 900 (1991). Here, plaintiff presented evidence at the equitable distribution hearing that if plaintiff recovered from his disability and resumed employment with the City of Raleigh or a participating member in the Retirement System, plaintiff would no longer receive any \u201cdisability retirement benefits.\u201d Plaintiff would simply resume his contributions to the retirement fund like all other employees and would receive retirement benefits when he retired due to age or number of years of service.\nThere also was evidence that once an employee\u2019s right to retirement benefits vests (plaintiff\u2019s right to retirement benefits here vested after five years of service) and the employee retires, the employee \u201ccan earn any amount and it [will not] affect [the employee\u2019s] retirement benefits],\u201d However, under the Local Governmental Employees Retirement System, plaintiff would stop receiving \u201cdisability retirement benefits\u201d if plaintiff\u2019s disability ended. All of this evidence supports the conclusion that the \u201cdisability retirement benefits\u201d are not true retirement benefits.\nThe better practice would have been for the trial court to specifically state that the monthly disability benefits received by plaintiff were due to his medical disability and were to replace his loss of earning capacity. Here, the trial court stated that the \u201cdisability retirement benefits\u201d were \u201cto replace [plaintiff\u2019s] loss of future income\u201d due to Ms disability. However, it is clear from all of the trial court\u2019s findings of fact that it found that the \u201cdisability retirement benefits\u201d were to replace plaintiff\u2019s loss of earning capacity. Accordingly, we hold that the evidence presented at trial was sufficient to support the trial court\u2019s conclusion that plaintiff\u2019s \u201cdisability retirement benefits\u201d above $97.75 per month are his separate property.\nCases from other jurisdictions are divided as to how disability benefits should be allocated. \u201cSome states have held that they are similar in nature to personal injury awards and should be categorized under the same rules.\u201d Lawrence J. Golden, Equitable Distribution of Property, \u00a7 6.11 n. 123 (1983 & Brett R. Turner, Supp. 1993). Other states perceive the benefits as replacing lost earnings and as marital property. J. Thomas Oldham, Divorce, Separation And The Distribution Of Property, \u00a7 8.03[1] (1994). We agree with the states finding that disability benefits which truly compensate for disability are separate property.\nFor example, in In re Marriage of Anglin, 759 P.2d 1224 (Wash. Ct. App. 1988), the court found that the husband\u2019s benefits were \u201csubject to review, and [could] be terminated if a medical examination determine[d] that the employee [was] no longer disabled.\u201d Anglin, 759 P.2d at 1228. From this evidence, the court found that the benefits were truly disability benefits rather than retirement benefits because the award was based solely on his disability. Id. at 1229. Accordingly, the court held that the disability benefits were the husband\u2019s separate property. Id. In Dolan v. Dolan, 562 N.Y.S.2d 875, 877 (1990), aff\u2019d, 583 N.E.2d 908 (N.Y. 1991), a New York court analyzed payments designated as disability benefits and determined that a portion of the benefits awarded the husband was for length of service and was not truly disability compensation. However, the court also held that the portion of the disability benefits that actually compensated the husband for his physical disabilities was the husband\u2019s separate property. Id. Similarly, the trial court here recognized that a portion of the \u201cdisability retirement benefits\u201d was based upon plaintiff\u2019s contribution to the state retirement fund and was not plaintiff\u2019s separate property. Like the cases above, the trial court here determined that the remainder of the benefits was plaintiff\u2019s separate property.\nPublic policy also supports our holding that benefits which are truly \u201cdisability\u201d benefits should be the separate property of the disabled spouse. When a spouse contributes a portion of his monthly salary to a retirement fund, both spouses actually contribute marital labor to this fund. If the spouse retires early and begins receiving retirement benefits, it follows that if the spouses divorce, the non-retired spouse still is entitled to a portion of those retirement benefits because that spouse contributed to their acquisition. Here, no marital labor contributed to plaintiff\u2019s acquisition of the \u201cdisability retirement benefits.\u201d Plaintiff did not contribute money specifically to a disability fund. Disability benefits are personal to the spouse who receives them and are that person\u2019s separate property.\nWhen a party receives disability benefits after divorce arising from a disability that occurred during the marriage,\nit would be wise for courts to choose an analysis that will allow the award to go the spouse with the greatest need for the benefits. Courts generally should characterize such benefits as the separate property of the disabled spouse. The disabled spouse normally will have higher living expenses post-divorce than the other spouse, and frequently will not be able to earn a significant income.\nJ. Thomas Oldham, Divorce, Separation And The Distribution Of Property, \u00a7 8.03[2][e] (1994). This reasoning applies equally well where the disabled spouse begins receiving the.benefits during the marriage.\nAffirmed.\nJudge ORR concurs.\nJudge McCRODDEN concurred prior to 15 December 1994.", "type": "majority", "author": "EAGLES, Judge." } ], "attorneys": [ "Gary S. Lawrence and John H. McWilliam, for plaintiff-appellee Wayne Robin Johnson.", "Meredith J. McGill, for defendant-appellant Sandra E. Johnson." ], "corrections": "", "head_matter": "WAYNE ROBIN JOHNSON, Plaintiff v. SANDRA E. JOHNSON, Defendant\nNo. 9410DC227\n(Filed 20 December 1994)\nDivorce and Separation \u00a7 129 (NCI4th)\u2014 equitable distribution \u2014 disability retirement benefits \u2014 separate property\nEvidence in an equitable distribution action was sufficient to support the trial court\u2019s conclusion that plaintiff\u2019s \u201cdisability retirement benefits\u201d above $97.75 per month which he began to receive during the course of the marriage were his separate property, since the benefits would cease if plaintiff recovered from his disability and they were thus intended to reimburse plaintiff for his loss of earning capacity due to his disability.\nAm Jur 2d, Divorce and Separation \u00a7\u00a7 905 et seq.\nPension or retirement benefits as subject to award or division by court in settlement of property rights between spouses. 94 ALR3d 176.\nAppeal by defendant from order entered 3 September 1993 by Judge Joyce A. Hamilton in Wake County District Court. Heard in the Court of Appeals 20 October 1994.\nPlaintiff and defendant married in November 1974 and separated after almost twelve years of marriage on 15 June 1986. They were divorced 14 October 1987. On 1 September 1971, plaintiff began working for the City of Raleigh as a firefighter. He became a member of the Local Governmental Employees Retirement System and began to make regular contributions to the employees\u2019 retirement fund as required by G.S. 128-27. Plaintiff continued to work as a firefighter until September 1983 when he took full disability retirement because of glaucoma. At that time, plaintiff began receiving monthly \u201cdisability retirement benefits.\u201d\nAfter plaintiff and defendant separated, a dispute arose as to whether the \u201cdisability retirement benefits\u201d should be classified as marital or separate property for equitable distribution purposes. The trial court noted in its equitable distribution order that the issue concerning the proper characterization of disability benefits was one of first impression in North Carolina. The court then adopted an analytic approach to characterizing the property and made the following findings:\nThat the portion of the monthly disability benefits received by [plaintiff] which represent his contributions during the period of his employment while married to [defendant] represents marital property.... That the portion of monthly disability benefits which [plaintiff] receives which represents contributions made by him during his employment but prior to the date of the marriage, and all interest thereon, is separate property. . . . That the increased monthly disability benefits received by [plaintiff] which is due to his medical disability is deemed by this Court to replace his loss of future income, and is therefore [plaintiffs] separate property.\u201d\nFrom the evidence presented, the trial court determined that the portion of the monthly benefits that represented the accumulated contribution that plaintiff had made to his retirement fund before he took full disability retirement was $97.75 per month. The trial court then stated that the present value of the marital portion of plaintiffs disability benefits was $9,830.00 and that defendant was entitled to one-half of this portion.\nDefendant appeals.\nGary S. Lawrence and John H. McWilliam, for plaintiff-appellee Wayne Robin Johnson.\nMeredith J. McGill, for defendant-appellant Sandra E. Johnson." }, "file_name": "0410-01", "first_page_order": 442, "last_page_order": 447 }