Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Eric A. Aarseth, Judge. Superior Court No. 3AN-11-09866 CI
Justin Eschbacher and G.R. Eschbacher, Law Offices of G.R. Eschbacher, Anchorage, for Appellant.
Carl D. Cook, Law Office of Carl D. Cook, P.C., Anchorage, for Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, Bolger, Justices.
Conrad Brown and Tammy Wanner-Brown married in 1992. In 2011 Conrad filed for divorce. A trial was scheduled to resolve both child custody and property disputes. On the first day of trial, the parties filed an agreement resolving the custody issues. The trial proceeded regarding the division of property. A major issue involved Conrad's State of Alaska retirement medical benefits. For purposes of defining retirement benefits, the State has four "tiers." What tier an employee belongs to is dependent on the employee's start date. The main difference between the tiers is the age at which benefits may be received — Tier 1 employees can receive full retirement benefits, including medical benefits, at the age of 55 while Tier 2 employees must wait until the age of 60. Because a Tier 1 employee can begin receiving benefits five years earlier, the total value of this status is worth much more than the value of Tier 2 status.
Before his marriage, Conrad had briefly worked for the State at a time when all employees in his position were classified as Tier 1. Conrad cashed out his retirement benefits when he left the position after six months. After he married Tammy, he became re-employed with the State and completely re-earned his retirement benefits. Conrad was still classified by the State as Tier 1 because of his prior employment with the State. The present value of his medical benefits under a Tier 1 calculation was $248, 350 as of the date of trial.
The superior court decided Conrad was a Tier 2 employee for purposes of valuing and distributing marital assets because "[t]he Tier 1 eligibility was earned prior to the marriage" and "[t]he marital assets (i.e. time, risk, money) spent to allow the plaintiff to vest with the State of Alaska were no different for a Tier 1 than for a Tier 2." The court determined that Conrad's Tier 2 retirement benefits had a present value of $170, 879.39 and awarded these benefits to Conrad. The court awarded Tammy the couple's two rental properties and all of the marital debt, and ordered her to pay Conrad an equalization payment of $11, 590 within a year. The court also ordered Tammy to refinance the two rental properties within one year to remove Conrad's name from the titles and debt.
Tammy appeals, arguing that: (1) Conrad's retirement classification should have been Tier 1, not Tier 2; (2) the court miscalculated the value of the medical benefits even if they were Tier 2; (3) the court erred by not taking into consideration the cost of selling one of the properties even though the property division had the practical effect of requiring her to sell it; and (4) the court gave her an impossibly short time to refinance the loans on the rental properties. We hold that the superior court erred by valuing Conrad's retirement medical benefits as Tier 2 instead of Tier 1 and remand for the court to recalculate these benefits and reconsider its property division. Thus, we decline to reach Tammy's other points on appeal.
II. FACTS AND PROCEEDINGS
Conrad Brown and Tammy Wanner-Brown were married in September 1992. The couple had two children together, who are now ages 17 and 13. Tammy was employed for many years as a general manager at a Days Inn in Anchorage, and Conrad worked as a probation officer in Palmer. In 2010 Tammy's reported wages were $58, 500 and Conrad's reported wages were $47, 547.
Before Conrad and Tammy separated, they had accumulated a significant amount of debt. The family owned a home on which they owed $255, 287.66. They also owned two rental properties: a duplex on Duben Drive and a condominium on Reka Drive. The duplex was built for the couple by Tammy's father, and the condominium was inherited from Conrad's parents. Conrad and Tammy mortgaged both properties, and they owed $254, 378.77 on the duplex and $45, 377 on the condominium. In addition, the couple had $28, 149 in credit card debt. Conrad and Tammy also had a loan from Wells Fargo for $13, 188.66, which they used to buy a travel trailer, and a debt to J.C. Penney on which they owed $1, 142.22. They had car loans on both of their vehicles — $8, 303 on Tammy's Hyundai and $8, 270 on Conrad's Chevy. ...