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2004  WI  App  94
COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.:                                                               03-1140
Complete Title of Case:
IN RE THE MARRIAGE OF:
JUDITH C. DUTCHIN,
PETITIONER-RESPONDENT-
CROSS-APPELLANT,
V.
WINSTON L. DUTCHIN,
RESPONDENT-APPELLANT-
CROSS-RESPONDENT.
Opinion Filed:                                                          April 20, 2004
                                                                        Submitted on Briefs:     March 2, 2004
Oral Argument:                                                          ----
JUDGES:                                                                 Wedemeyer, P.J., Schudson and Curley, JJ.
Concurred:                                                              ----
Dissented:                                                              ----
Appellant
ATTORNEYS:                                                              On behalf of the respondent-appellant-cross-respondent, the cause was
submitted on the briefs of Amy L. Shapiro of Perry, Shapiro, Quindel,
Saks, Charlton, Sumara & Lerner, S.C., Milwaukee.
Respondent
ATTORNEYS:                                                              On behalf of the petitioner-respondent-cross-appellant, the cause was
                                                                        submitted on the briefs of Helen M. Ludwig of Poulos, Sengstock &
Budny, S.C., West Allis.




2004  WI  App  94
COURT OF APPEALS
NOTICE
DECISION
DATED AND FILED                                                                 This opinion is subject to further editing.   If
published, the official version will appear in
the bound volume of the Official Reports.
April 20, 2004
A party may file with the Supreme Court a
                                                                                Cornelia G. Clark                                  petition to review an adverse decision by the
                                                                                Clerk of Court of Appeals                          Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                                   and RULE 809.62.
                                                                                                                                   Cir. Ct. No.   01FA004940
Appeal No.                                                                      03-1140
STATE OF WISCONSIN                                                                                                                 IN COURT OF APPEALS
IN RE THE MARRIAGE OF :
JUDITH C. DUTCHIN,
PETITIONER-RESPONDENT-
CROSS-APPELLANT,
V.
WINSTON L. DUTCHIN,
RESPONDENT-APPELLANT-
CROSS-RESPONDENT.
APPEAL and CROSS-APPEAL from a judgment and an order of
the circuit court for Milwaukee County:   MICHAEL J. DWYER, Judge.  Affirmed.
Before Wedemeyer, P.J., Schudson and Curley, JJ.




No.   03-1140
¶1                                                                                           WEDEMEYER, P.J.    Winston L. Dutchin appeals from a judgment
of divorce.   He also appeals from an order denying his motion for reconsideration.
Winston  argues  that  the  trial  court  erred  when  it  failed  to  include  Judith  C.
Dutchin’s  survivorship  pension  benefit  as  an  asset  for  the  purposes  of  equal
property division.   Judith cross-appeals from the same judgment challenging the
trial court’s determination that Winston’s pension retirement benefits would be
treated as income rather than property.   Because the trial court did not erroneously
exercise its discretion in addressing the survivorship pension benefit, we affirm the
appeal on this issue.    Because the trial court did not erroneously exercise its
discretion in treating the pension retirement benefits as income instead of an asset
subject to property division, we also affirm on the cross-appeal.
BACKGROUND
¶2                                                                                           On May 1, 1971, Judith and Winston married.   Following a trial on
November 4,  2002, they were granted a judgment of divorce.   At the trial, the
primary disputed issue was how to divide Winston’s pension, which was the most
substantial asset of the marriage, valued at approximately $412,000.
¶3                                                                                           At the time of the divorce, Winston’s monthly earnings amounted to
$3451,  which  consisted  of  a  monthly pension  payment  and  a  monthly social
security  disability  payment.    Winston,  age  sixty,  was  unable  to  work  due  to
physical and mental disabilities.   Judith, age fifty-four, was still employed as a
teacher, earning $2833.34 monthly.
¶4                                                                                           At the divorce trial, Winston insisted that because the pension was in
“pay status,” the trial court should treat it as an income stream rather than as
property to be divided.   Judith’s position was that the pension should be treated as
property to be divided equally between the parties.   However, she was not firm in
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No.   03-1140
that position and was willing to accept whatever decision the trial court found
reasonable.
¶5                                                                                         The trial court found that if the pension was treated as an asset and
divided equally, Judith would have a higher monthly income than Winston, which
would result in a maintenance award being paid from Judith to Winston.    In
essence, such a determination would result in a circular and complicated flow of
money.    Therefore,  the  trial  court  found  that  the  most  logical  and  practical
approach would be to treat the pension benefit as a stream of income rather than as
an  asset.    In  order  to  equalize  incomes,  Winston  would  pay  Judith  monthly
maintenance of $425 until she turned sixty-five.
¶6                                                                                         The  next  question  during  the  trial  involved  how  to  handle  the
survivorship benefit of Winston’s pension, which had an approximate value of
$52,000.   When Winston elected to start receiving pension benefits, he decided to
accept lower monthly payments initially so that Judith would be entitled to a
survivor pension benefit.   If Winston died before Judith, she would receive 75% of
his monthly pension benefit.   If Judith predeceased Winston, she would receive
nothing.   Initially, Winston conceded that because the survivor pension benefit
was contingent upon the pension itself, the survivor benefit could not be treated as
an asset because the pension itself was not treated as an asset.  His attorney stated:
It  seems  to  me  that,  since  it’s  a  product,  a  derivative
product of the pension, primary pension of Mr. Dutchin, as
much as I hate to admit it, I think that it is not therefore an
asset to be divided between the parties.   It is factored out by
the fact that it is a compliment  [sic] of the income, and
from the pension, and factored in as the -- as part of the
maintenance.
Judith agreed.  Her attorney responded:
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No.   03-1140
Judge, if you decide to agree with Mr. Dutchin and
not [divide equally the pension] and essentially not count
the  pension  in  the  property  division,  I  don’t  believe  it
would be equitable to count the survivorship as part of the
property division either because, again, it’s a stream of the
income,  and  you’re  treating  the  pension  as  a  stream  of
income,  then  survivorship  ought  to  be  treated  the  same
way.
Winston’s counsel then waffled on his original position:
Just one second, Your Honor.   I am cognizant that
certainly the survivorship is a separate interest and has a
separate  value.    Based  on  all  of  the  uncertainties  that
actuarials pick the numbers for and plug in their present-
day valuations, I guess I would be remiss if I didn’t at least
suggest to the Court that  … all pensions and all partial
pensions are assets.
It makes sense  -- I am thinking outloud, I guess.
Does it make sense to take Mr. Dutchin’s, if you follow our
suggestion and treat it as income as opposed to an asset in
the estate, does it make sense to then treat Mrs. Dutchin’s
survivorship differently?   And I guess certainly you could
argue  that,  yes,  because  it’s  not  going  to  factor  into
maintenance until the uncertainty of Mr. Dutchin’s death,
so until that occurs she’s got an asset with a present-day
value.
¶7                                                                  With respect to the treatment of the survivorship benefit, the trial
court reasoned:
Now, as to the decision, my own question, thorny
question, that is what do I do with Mrs. Dutchin’s residual
from the pension if I have not treated the pension as an
asset for Mr. Dutchin.    You know, this is one of those
things that the parties could agree on, and if Mr. Dutchin
felt so strongly about the injustice of him not getting credit
for that survivorship benefit, he could work something else
out.     Because  it  is  Mr.  Dutchin’s  position  about  the
treatment of the pension that raises the issue, and because
it’s  avoidable,  and  because  Mrs.  Dutchin’s  interests,
contingent it may or may not ever be realized by her, and
because I am not treating the pension in any way, which is
valued at $412,000 on Mr. Dutchin’s asset column, I deem
it to be a fair unequal division of estate, if you will, to
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No.   03-1140
allow  Miss  [sic]  Dutchin  to  keep  that  residual  interest
without further compensation, if you will.
And, in fact, I want to make two findings.   I think
one is that it’s actually, since the pension isn’t property,
this residual benefit is likewise not property.
….
Is likewise not property for purposes of property
division.   Even if it were property for purposes of property
division,  in  that  event  I  think  an  unequal  division,  by
awarding   that   to   Miss   Dutchin,   is   fair   under   the
circumstances for the reasons that I’ve stated.
¶8                                                                                        A judgment of divorce was entered.   Subsequently, Winston filed a
motion  for  reconsideration  on  the  trial  court’s  finding  with  respect  to  the
survivorship benefit.   He argued that the survivorship benefit should have been
treated as an asset, subject to equal property division.   The trial court denied the
motion.   Winston now appeals, and Judith cross-appeals.
DISCUSSION
A.  Appeal.
¶9                                                                                        Winston  claims  the  trial  court  should  have  considered  the
survivorship  pension  benefit  as  an  asset  and  should  have  divided  the  benefit
equally.   This court rejects Winston’s claims.
¶10    The trial court’s decision on division of property in a divorce case is
a discretionary determination.   Preiss v. Preiss, 2000 WI App 185, ¶10, 238 Wis.
2d 368, 617 N.W.2d 514.   We will uphold that exercise of discretion as long as the
trial court considered  the  pertinent facts,  applied the  correct law,  and used  a
rational process to reach a reasonable determination.   See Johnson v. Johnson,
157 Wis. 2d 490, 497, 460 N.W.2d 166 (Ct. App. 1990).
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No.   03-1140
¶11    Winston’s first complaint is that the trial court erred by refusing to
treat the survivorship pension benefit as an asset.   The record belies his contention.
Although the trial court’s comments during trial were not entirely clear on this
point,  its  reconsideration  hearing  comments  clarified  that  it  had  treated  the
survivorship pension benefit as an asset:
Clearly,                                                                                  [the  survivorship  pension  benefit]  is  an
asset.   And make no mistake about it, my -- the wording
that I used when I made the decision, I actually used the
word that it’s not property, which implies that I didn’t think
it was an asset, and I hereby reject any such implication.
This is an asset that has value.   The context that I raised it
in  at  the  time  of  the  decision  was,  is  it  property  for
purposes of the property division or is it not property for
purposes of property division, and that’s really the bottom
line question.
¶12    Thus,  the  trial  court  clearly  rejected  Winston’s  argument  that  it
failed to adhere to case law requiring pension benefits to be addressed during
property division divorce hearings.   See Steinke v. Steinke, 126 Wis. 2d 372, 379-
80, 376 N.W.2d 839 (1985), modified, 127 Wis. 2d 444, 379 N.W.2d 853 (1986)
(generally,  pension  plans  have  been  treated  as  an  asset  subject  to  property
division); Herdt v. Herdt, 152 Wis. 2d 17, 21-22, 447 N.W.2d 66 (Ct. App. 1989)
(although pension plans must be considered as part of the marital estate, the trial
court has the discretion to make an unequal property division for good reason).
¶13    At the reconsideration hearing, the trial court clearly considered the
survivorship pension benefit to be an asset, but determined that it would be unfair
to divide this asset equally.   The trial court found the unequal distribution to be
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No.   03-1140
appropriate based primarily on two statutory factors, WIS. STAT. § 767.255(3)(j)
and (m) (2001-02):1
I  think  all  of  the  circumstances  in  this  case  warrant  a
deviation from a mathematical 50/50 division of the estate.
By  not  debiting                                                                         [Judith]  cash  money  for  this
contingent interest, you ask me to cite you the factors.   The
factors  are                                                                              (j),  this  is  of                 767.255(2),  other  economic
circumstances of each party including the pension benefits,
which talk about this.
I also make reference to the cases.   I can’t cite you
the name of them, but the courts, both trial and appellate,
have struggled mightily with these pensions, and there is
plenty of case law that says one of the hardest jobs for a
trial  court  is  to  figure  out  how  fairly  to  handle  these
pension benefits.
And given all the circumstances, I think that the
ruling, the order that I made, is fair given the complexity of
the pension and the circumstances of the parties.
¶14    Under  the  circumstances  of  this  case,  one  cannot                            look                               at                             the
survivorship pension benefit in isolation.   Rather, this issue was, in large part,
dependent upon the treatment of the pension itself.   Winston was insistent that the
$412,000 pension not be treated as an asset for the purpose of property division,
but rather, be considered as an income stream for setting maintenance.   Judith was
mildly opposed to Winston’s preference, but willing to accept whatever the trial
court found to be reasonable.
¶15    The trial court specifically addressed this issue before making its
determination.    It addressed all of the factors in WIS. STAT.  § 767.255(3) and
discussed options available for resolution of this matter.   It was left with a couple
of choices.   The first option was to return the $52,000 survivorship pension benefit
1  All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise
noted.
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No.   03-1140
to the pension value itself and divide the pension equally as an asset.   In this way,
Winston would receive a monthly pension benefit based on his half of the pension
and Judith would receive a monthly pension benefit based on her half of the
pension.   Electing this option, however, would be complicated and result in Judith
earning  a  substantially greater  monthly income  than  Winston,  which,  in turn,
would require a maintenance order for Judith to pay Winston.    The trial court
concluded that going this route would result in a  “circular flow of funds” and
pointed out that appellate courts have granted trial courts discretion to avoid such
a result.   See, e.g., Herdt, 152 Wis. 2d at 22.
¶16    The second option was to treat the $412,000 pension as an income
stream,  as  requested  by  Winston,  and  not  significantly  opposed  by  Judith.
Electing this option would prevent any unnecessary circular flow of money and
essentially satisfy the requests and needs of both parties.   In choosing this option,
however, the trial court found that the survivorship pension benefit should not be
divided 50/50 because it was a derivative benefit from the pension itself.   In other
words, Winston could not have it both ways—if the pension was not going to be
divided 50/50, then the survivorship benefit should not be divided 50/50 either.
The trial court reasoned that granting Winston’s request to treat the pension as
income would result in some uncertainty for Judith.   First, the survivorship benefit
might never inure to Judith, should she predecease Winston.   Second, the current
maintenance  schedule  might  change  in  the  future,  resulting  in  a  reduction  of
maintenance to Judith.   In addition, the trial court found that some costs associated
with  the  survivorship  benefit  had  already  been  incurred  during  the  marriage.
Thus, treating the $412,000 pension as an income stream instead of dividing it as
an asset was more favorable to Winston than to Judith.
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No.   03-1140
¶17    As a result, the trial court found that the most equitable result would
be not to divide Judith’s survivorship benefit 50/50.   We cannot conclude, based
on these circumstances, that the trial court’s decision constituted an erroneous
exercise of discretion.   Trial courts are presented with an infinite range of factual
situations  in  addressing  the  complicated  decision  of  dividing  property  and
determining maintenance.   Cook v. Cook, 208 Wis. 2d 166, 180, 560 N.W.2d 246
(1997).    This  is  particularly  true  when  the  case  involves  pension  plans  and
retirement benefits.   As a result, Wisconsin provides our divorce courts with broad
discretion in attempting to fashion the most equitable and fair result.                   “‘[T]he
ultimate test of a  …  [divorce] decree is not how well any one issue has been
resolved,  but  instead  whether  all  the  economic  components  work  together  to
provide adequately for the needs of all members of the now-fragmented family.’”
Id. at 183 (citation and footnote omitted).   The trial court here entered a decree
based not only on the required statutory factors and case law, but also on the
requests of the parties to reach a fair and equitable result.   Thus, the trial court’s
decision on this issue is affirmed.
B.  Cross-appeal.
¶18    In her cross-appeal, Judith contends that the trial court erroneously
exercised its discretion when it treated the $412,000 pension as an income stream
for  maintenance  purposes,  instead  of  treating  it  as  an  asset  subject  to        50/50
property division.
¶19    The standard of review on this issue is the same as stated above.   We
will not overturn the trial court’s determination unless it erroneously exercised its
discretion.   Judith argues the trial court relied on an erroneous view of the law
when  it  found  that  the  pension  could  be  treated  as  income  for  maintenance
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No.   03-1140
purposes instead of an asset for property division.   We conclude that the trial court
did not erroneously exercise its discretion.
¶20    Although the case law in this state clearly states the general rule that
retirement plans earned during the marriage through one spouse’s employment
must be considered in the property division at the time of divorce, see Steinke, 126
Wis. 2d at 379-80, the rule is not inflexible, see Herdt, 152 Wis.  2d at 21-22.
Rather, trial courts are afforded the discretion necessary to render equitable and
fair results.   Here, the trial court clearly considered the pension in determining the
property division.   It addressed whether “in effect [the court should] go retroactive
to Mr. Dutchin’s retirement and do a qualified domestic relations order” to divide
the pension equally between the parties.   The trial court found, however, by doing
that,  the  situation  would  become  much  more  complicated  and  result  in  an
unnecessary circular flow of money.   The trial court found that the fairest result
would be to treat the pension as income and enter a maintenance order for Winston
to pay Judith $425 per month until she turns sixty-five.
¶21    The trial court clearly set forth its rationale at the divorce trial:
So then we get down to the question of the pension
plan and what to do with it.   At the heart of the argument is
the Steinke case ….   And the Steinke case stands for the
proposition  that  a  pension  must  be  considered  in  the
property division in a divorce.   I’ve read the case, I think I
understand it.
[Winston’s counsel] contends, based upon the Cook
Decision, 1997, that the bright line rule of the Steinke case,
which seems to say that no matter what the status of a
pension is, you have to treat it as property.   The Cook Case
… softens that to some extent.   One thing is clear about the
Steinke Case, and it’s certainly true in this case, and that is
that  pensions  have  to  be  taken  into  consideration  and
thought  about  very long and  hard  before  deciding what
should happen in a divorce case.
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No.   03-1140
Now, I do observe, and I think it’s a fact that in this
case,  because  the  pension  is  divisible  by  the  qualified
domestic relations order, we could in effect go retroactive
to Mr. Dutchin’s retirement and do a qualified domestic
relations order even today.
….
In many cases where a person is in pay status in a pension,
it  is  no  longer  possible  to  enter  a  qualified  domestic
relations order, and in that case, what  [Judith’s counsel]
proposes, is impossible.   And I conclude from that … that
the logic of your argument fails because you seem to be
arguing, based upon Steinke, that I have to do it this way
because it’s a pension and it must be treated as property.
Those  pensions,  for  instance,  any City pension,  City of
Milwaukee  pension,  not  divisible  by  qualified  domestic
relations order, I couldn’t do it, we would have to treat it
some other way.   And the fairest way in that case would be
to treat it as income.   So I reject the conclusion that as a
matter of law I must treat it as property.
Then the question is … what’s the fairest way to do
this.
¶22                                                                                      The trial court then addressed both scenarios—either dividing   the
pension as an asset 50/50 or treating it as an income stream.   It found that the
former would result in a complicated and unnecessary circular flow of money, and
that the latter would make more sense by keeping the divorce decree simple.   The
trial  court’s  decision  reflects  its  conscientious  and  deliberate  process  of
ascertaining the most equitable resolution under the facts presented in this case.
Based  on  the  foregoing,  we  cannot  conclude  that  the  trial  court  erroneously
exercised its discretion in this case.
By the Court.—Judgment and order affirmed.
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