Thursday, December 17, 2009
Court: Leave Accrued During Marriage Not Community Property
By STEVEN M. ELLIS, Staff Writer
The Fourth District Court of Appeal has rejected a woman’s claim to half of the 1,200 hours in annual leave that her husband accumulated during their marriage, which is now fungible for cash.
Div. Two held Tuesday in an unpublished opinion that Riverside County Sheriff’s Department Capt. David Nordstrom’s leave was not a community property asset because he could not have converted it at the time he separated from his wife.
David and Rebecca Nordstrom separated in July 2002 after 27 years of marriage, and tried unresolved property issues in 2007, including treatment of David Nordstrom’s accrued vacation and sick leave.
On the date of separation, he had accumulated over 560 hours of unused vacation and almost 2,500 hours of unused sick leave, but the hours were to be used solely to restore pay otherwise lost because of absence and could not be exchanged for cash.
However, the department changed Nordstrom’s time into 1,200 hours of annual leave, and allowed employees to convert up to 80 hours per year—or 160 with the approval of the employee’s agency or department head—into cash beginning in 2003.
Riverside Superior Court Judge Becky Dugan initially ordered the leave divided, but reversed after determining it was not of community value because it could not be converted to cash in 2002.
Pro Se Appeal
Representing himself on appeal, David Nordstrom pointed to the separation date to counter his ex-wife’s argument that leave earned before separation was community property because it was a vested deferred compensation right, and the court affirmed.
Citing the 1983 decision by this district’s Div. Four in In re Marriage of Lorenz, 146 Cal.App.3d 464, Presiding Justice Manuel A. Ramirez wrote that the key to characterizing benefits as community property was whether it was “acknowledged to have economical monetary value.”
“[Nordstrom’s] leave benefits had no economical monetary value on the date of separation because they could not be exchanged for cash. One could argue that it was possible to assign a reasonable estimated value to those benefits at that time, namely [Nordstrom’s] hourly wage. However, as the Lorenz court also discussed…‘[I]t is implicit in the scheme of community property laws that property have certain attributes—that it be susceptible of ownership in common, of transfer, and of survival’….On the date of separation, [Nordstrom] could not transfer his leave time for anything of monetary value. Thus…the leave time was not a community property asset.”
The justice rejected Rebecca Nordstrom’s contention that the Fourth District’s 1985 opinion in In re Marriage of Gonzalez 168 Cal.App.3d 1021 with respect to term life insurance policies compelled a contrary result. There, the court in dicta said that “Lorenz is simply incorrect in the assertion that assets such as term life insurance and accrued vacation time have no economic value, particularly if the test is the amenability of the asset to valuation.”
But Ramirez wrote:
“Our main disagreement with Gonzalez is that the test set forth in Lorenz is not whether an asset is amenable to approximate valuation. Even most intangible assets can be assigned an estimated hypothetical value. Rather, the test set forth in Lorenz is whether, as of the date of separation, an asset can actually be traded in for cash. The parties do not dispute that, as of the date of separation, [Nordstrom] could not in reality have traded in his 567.12 hours of vacation or 2483.04 hours of sick leave for money.”
Justices Art W. McKinster and Jeffrey King joined Ramirez in his opinion.
The case is In Re Marriage of Nordstrom, E046764.
Copyright 2009, Metropolitan News Company