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Below is a cache of http://www.kentuckylaw.com/pdfs/cases_holman.pdf. It's a snapshot of the page taken as our search engine crawled the Web.
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. RENDERED: JUNE 13, 2002 TO BE PUBLISHED 1999-SC-0525-DG JAMES LEE HOLMAN APPELLANT RENDERED: JUNE 13, 2002 TO BE PUBLISHED 1999-SC-0525-DG JAMES LEE HOLMAN APPELLANT ON APPEAL FROM THE COURT OF APPEALS V. 97-CA-000736-MR FAYETTE CIRCUIT COURT NO. 95-CI-2775
SUE RODES HOLMAN APPELLEE OPINION OF THE COURT BY JUSTICE KELLER REVERSING AND REMANDING I. ISSUE This appeal presents an issue of first impression in Kentucky. After thirteen (13) years of service as a firefighter, but before his pension vested, Appellant became totally and permanently occupationally disabled. Appellant retired and began receiving monthly disability retirement benefits. When his marriage to the Appellee was dissolved several years later, the trial court classified Appellant's future entitlement to disability retirement benefits as marital property and awarded Appellee a portion of those benefits. Were Appellant's disability retirement benefits properly classified as marital property? We hold that disability retirement benefits are properly classified as marital or nonmarital property according to the character of the property they replace. Accordingly, Appellant's future, post-dissolution disability retirement benefits, which replace his future nonmarital earnings as a firefighter, constitute Appellant's separate nonmarital property.
II. BACKGROUND The material facts regarding Appellant's pension were stipulated to by the parties and are therefore undisputed. In 1974, the Appellant went to work as a firefighter with the Lexington-Fayette Urban County Government (LFUCG). The parties married seven (7) years later in 1981. Six (6) years later, in 1987, Appellant retired from his firefighter position due to total and permanent occupational disability 1 and began receiving monthly benefit payments that will continue throughout his lifetime so long as his disability continues. 2 The parties' marriage was dissolved in 1997. At the time of his marriage, Appellant had contributed $6,859.00 towards his pension with LFUCG, and he contributed an additional $11,206.40 during his marriage for a total contribution of $18,065.40. At the time of his retirement, his pension had not vested 3 because he had not "completed at least twenty (20) years of total service." 4 1-KRS 67A.360(16) ("`Total disability' shall mean a disability which substantially precludes a person from performing with reasonable regularity the substantial and
material parts of any gainful work or occupation in the service of the department that he
would be competent to perform were it not for the fact that the impairment is founded
upon conditions which render it reasonably certain that it will continue indefinitely(.]"
(emphasis added)). - 2-KRS 67A.462(1) ("Any member whose medical examination reveals that he is no longer totally and permanently disabled within the meaning of KRS 67A.360(16)
shall be disqualified from further receipt of disability benefits."). 3-See Grace Ganz Blumberg, "Marital Property Treatment of Pensions, Disability Pay, Workers' Compensation, and Other Wage Substitutes: An Insurance, or
Replacement," 33 UCLA L. Rev. 1250, 1259 (1986) (hereinafter "Blumberg") ("A
pension vests when an employee completes the period of employment required to
secure an indefeasible entitlement to a pension payable upon retirement. Once the
pension vests, the employee may leave his job for any reason and still receive benefits
when he eventually retires.") Until the employee fulfills the time period requirement, the
pension is classified as "nonvested." Id. at 1260; L. Graham & J. Keller, 15 Kentucky
Practice, Domestic Relations Law (2"d ed.)
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. RENDERED: JUNE 13, 2002 TO BE PUBLISHED 1999-SC-0525-DG JAMES LEE HOLMAN APPELLANT RENDERED: JUNE 13, 2002 TO BE PUBLISHED 1999-SC-0525-DG JAMES LEE HOLMAN APPELLANT ON APPEAL FROM THE COURT OF APPEALS V. 97-CA-000736-MR FAYETTE CIRCUIT COURT NO. 95-CI-2775
SUE RODES HOLMAN APPELLEE OPINION OF THE COURT BY JUSTICE KELLER REVERSING AND REMANDING I. ISSUE This appeal presents an issue of first impression in Kentucky. After thirteen (13) years of service as a firefighter, but before his pension vested, Appellant became totally and permanently occupationally disabled. Appellant retired and began receiving monthly disability retirement benefits. When his marriage to the Appellee was dissolved several years later, the trial court classified Appellant's future entitlement to disability retirement benefits as marital property and awarded Appellee a portion of those benefits. Were Appellant's disability retirement benefits properly classified as marital property? We hold that disability retirement benefits are properly classified as marital or nonmarital property according to the character of the property they replace. Accordingly, Appellant's future, post-dissolution disability retirement benefits, which replace his future nonmarital earnings as a firefighter, constitute Appellant's separate nonmarital property.
II. BACKGROUND The material facts regarding Appellant's pension were stipulated to by the parties and are therefore undisputed. In 1974, the Appellant went to work as a firefighter with the Lexington-Fayette Urban County Government (LFUCG). The parties married seven (7) years later in 1981. Six (6) years later, in 1987, Appellant retired from his firefighter position due to total and permanent occupational disability 1 and began receiving monthly benefit payments that will continue throughout his lifetime so long as his disability continues. 2 The parties' marriage was dissolved in 1997. At the time of his marriage, Appellant had contributed $6,859.00 towards his pension with LFUCG, and he contributed an additional $11,206.40 during his marriage for a total contribution of $18,065.40. At the time of his retirement, his pension had not vested 3 because he had not "completed at least twenty (20) years of total service." 4 1-KRS 67A.360(16) ("`Total disability' shall mean a disability which substantially precludes a person from performing with reasonable regularity the substantial and
material parts of any gainful work or occupation in the service of the department that he
would be competent to perform were it not for the fact that the impairment is founded
upon conditions which render it reasonably certain that it will continue indefinitely(.]"
(emphasis added)). - 2-KRS 67A.462(1) ("Any member whose medical examination reveals that he is no longer totally and permanently disabled within the meaning of KRS 67A.360(16)
shall be disqualified from further receipt of disability benefits."). 3-See Grace Ganz Blumberg, "Marital Property Treatment of Pensions, Disability Pay, Workers' Compensation, and Other Wage Substitutes: An Insurance, or
Replacement," 33 UCLA L. Rev. 1250, 1259 (1986) (hereinafter "Blumberg") ("A
pension vests when an employee completes the period of employment required to
secure an indefeasible entitlement to a pension payable upon retirement. Once the
pension vests, the employee may leave his job for any reason and still receive benefits
when he eventually retires.") Until the employee fulfills the time period requirement, the
pension is classified as "nonvested." Id. at 1260; L. Graham & J. Keller, 15 Kentucky
Practice, Domestic Relations Law (2"d ed.)
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