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Consideration of Premarital Cohabitation in Determining Coverture Fraction
© 2003 National Legal Research Group, Inc.
INDIANA: Hendricks v. Hendricks, 784 N.E.2d 1024 (Ind. Ct. App. 2003).
Operating under an all-property division system, in which property acquired before the marriage is subject to division, the trial court properly included a period of premarital cohabitation in computing the coverture fraction for the husband's pension. The parties resided together for the "vast majority" of the period, although they did not reside together for the entire period. Where the trial court concluded that the wife was entitled to 15.5% of the pension, but its actual award gave the wife only 15.5% of the marital share of the pension, so that the final division of assets did not match the 56/44 division which the trial court claimed to be making, the trial court's division of property contradicted itself. The case was remanded with instructions to correct the error.
The parties, married for 10 years before they separated in 2000, had lived together for approximately 3 years prior to their marriage. The husband, who retired in 1997, had a pension valued at $253,977. The trial court used the "coverture fraction formula" to divide the pension between the parties. Under this methodology, the value of the pension is multiplied by a fraction, the numerator of which is the period of time during which the marriage existed (while the pension rights were accruing) and the denominator of which is the total period of time during which the pension accrued. The trial court found that the husband and wife were married for 6.4 years during the husband's employment and pension accrual and that they had lived together as an unmarried couple for 3.33 years prior to that, for a total of 9.73 years. As the husband had been employed for 31 years, the coverture ratio or marital portion of the husband's pension was found to be 31%. The court calculated the value of the marital portion to be $78,732 and awarded the wife one-half, or 15.5%. A total of 56% of the marital pot was awarded to the husband and 44% to the wife. The husband appealed, alleging that the trial court had inaccurately calculated the wife's share of the husband's pension benefits.
First, the husband asserted that the trial court abused its discretion when it included the 3.33 years that he lived with his wife prior to their marriage in the coverture ratio because the evidence was that he had only lived with her "on and off" during that period. The wife countered by arguing that they had lived together the "vast majority" of that period and that the husband had admitted that they had lived together "more on than off." The Indiana Court of Appeals first noted that the presumption that the trial court considered and complied with the applicable statutes in making its distribution of marital property was one of the strongest presumptions applicable to its consideration of the correctness of the division on appeal. Under Chestnut v. Chestnut, 499 N.E.2d 783 (Ind. Ct. App. 1986), it was recognized that a spouse's contributions during the parties' premarital cohabitation can be a basis for the distribution of assets under contractual and equitable principles. It was held that it would be against public policy to ignore a spouse's contribution during the period prior to marriage since the parties eventually married. The husband sought to distinguish Chestnut because in the present case he and his wife had only lived together on and off during that period. The appellate court, however, noted that the husband had failed to state how much of that time was "on" and how much was "off" and, further, that there was nothing in the record that provided that information. In light of the wife's testimony that they had lived together for the 3.3-year period, there was no abuse of discretion by the trial court when it included that period in calculating the coverture ratio.
The husband also argued that, unlike the case in Chestnut, there was little evidence as to how the parties shared income and expenses or how the wife contributed to the relationship during the cohabitation period. The wife, on the other hand, asserted that the record showed evidence that she worked part-time, paid rent on the house, and that she and the husband had started a business together. In light of this conflicting evidence, the husband's assertions were deemed merely an attempt to have the court of appeal reweigh the evidence.
Second, the husband contended that the trial court erred when it listed the parties' assets and liabilities. In calculating the marital split of the assets, that court concluded that the wife was entitled to 15.5% of the pension, which should have been $39,366. But, in setting out the dollar value of the pension award, the wife was given only $12,203. This error required the trial court to correct its award. Instead of awarding the wife 15.5% of the total pension, the court awarded the wife 15.5% of the marital portion. This created a substantially different distribution of the assets as far as dollar amounts when the trial court's division of 56% to the husband and 44% to the wife was considered. After adjusting upward the 15.5% of the pension awarded to the wife from $12,203 to $39,366, a difference of $27,162, the husband would receive assets totaling only $64,639, while the wife would receive $97,942. Such amounts would not comport with the 56/44 split in favor of the husband. The trial court was ordered to correct this error.
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