QDRO Advisory Report (TM)

Virginia

Posted January 23, 2012

Nkopchieu v. Minlend, 2011 Va. App. LEXIS 401

Focus: Enforcement of Support Arrearage by QDRO

Comment: Appellate court permitted the entry of a QDRO to enforce a child support award. The court distinguished its opinion in Hoy, which previously prohibited the entry of a support-based QDRO.

Minlend Casenote (click here)
As appearing in the April, 2012 Virginia Lawyer

Posted September 27, 2010

Van Dam v. Gay, 2010 Va. LEXIS 228 (Va. S.Ct. 2010)

Focus: Legal Malpractice - Retirement Benefits

Comment: The Plan Administrator denied the former spouse a claim to survivor benefits as a result of a defective divorce decree drafted by her attorney. The Virginia Supreme Court dismissed the former spouse’s malpractice claim against her attorney since the statute of limitations had run. The Court relied on Virginia Code § 8.01-230 and held that the former spouse’s right of action accrued at the time of divorce, despite the fact that the former spouse did not become aware of the attorney’s alleged malpractice until after the limitation period had run.

This case highlights the importance of submitting a properly drafted QDRO concurrently with the divorce decree and immediately serving a certified copy of the Order upon the plan administrator.

Gay Casenote (click here)

Cusack v. Cusack, 2009 Va. App. Lexis 21

Focus: Valuation/Direct Payments

Comment: The appellate court held that retirement benefits should be valued “as of the date of the evidentiary hearing” pursuant to VA Code § 20-107.3(A). Therefore, payments from the husband’s, in pay status, military pension should commence at the date of the hearing and not before, as ordered by the trial court. To commence payments prior to the hearing date, a trial court should use a “dissipation of assets” analysis. The court also held that the husband may be ordered to make direct payments to the wife until the plan administrator accepts an appropriate court order.

New York

Posted February 21, 2012

Dagliolo v. Dagliolo, 2012 N.Y. App. Div Lexis 452

Focus: Settlement Agreements – QDROs

Comment: A domestic relations order may only assign benefits that the parties have agreed upon. The Appellate Court held that survivor benefits were properly assigned to the former spouse since the parties’ agreement used the term for the “life” of the parties.

Texas

Posted December 12, 2011

Hicks v. Hicks, 346 S.W.3d 281 (Tex. App.- Houston {245 Dist.} 2011)

Focus: Survivor Benefits

Comment: Appellate court quashed a Domestic Relations Order, submitted post-decree, which assigned the former spouse a survivor benefit. The parties’ divorce decree and settlement agreement failed to award the former spouse a survivor benefit in the participant’s military retired pay. Therefore, the order was inconsistent with the decree.

Practice Tip: File your QDRO or other assignment order concurrently with the divorce decree to avoid this outcome.

Ohio

Posted May 4, 2011

Blaine v. Blaine, 2011 Ohio 1654 (Ohio App. 2011)

Focus: Gains and Losses of 401k Plan

Comment: The court excluded gains and losses from the QDRO award since the decree awarded the former spouse a fixed percentage “as of” a specific date. The decree contained no words of limitation. The participant’s account decreased dramatically in value following his divorce; which the former spouse did not share in the loss. According to the court, the husband’s lack of foresight that his 401k may decline in value does not render the QDRO inconsistent with the decree.

Arizona

Posted June 15, 2010

Davies v. Beres, 2010 Ariz. App. LEXIS 91

Focus: Military Retired Pay

Comment: The Appellate Court examined the assignment of post-dissolution Temporary Disability Retired List benefits (“TDRL”), an issue of first impression in Arizona. The Appellate Court held that the benefits received from the former husband are not community property because such pay is expressly excluded from the definition of disposable retired pay and the benefit is temporary in nature.

Posted November, 2007

Boncoskey v. Boncoskey, 167 P.3d 705 (Ariz.App.Ct. 2007)

Focus: Survivor Benefits/Time-Rule

Comment: Appellate court vacated a Domestic Relations Order that awarded the former spouse a survivor benefit that included benefits that were the separate property of the husband. The Arizona State Retirement System (“ASRS”) only permits a participant to designate one contingent annuitant. Thus, the award to the former spouse of the entire survivor benefit would preclude the husband from providing an annuity for a subsequent wife. The Court also held that Johnson, not Koelsch controls in situations involving pension benefits that have not matured. See Johnson v. Johnson, 638 P.2d 705 (Ariz.S.Ct. 1981); Koelsch v. Koelsch, 713 P.2d 1234 (Ariz.S.Ct. 1986).

Posted May 14, 2007

Dressler v. Morrison, 130 P.3d 978 (Ariz.S.Ct. 2006)

Focus: Tenant in Common Remedy

Comment: The Court held that a separate civil action is required to establish co-tenant rights under 25-318 (B). A separate action prevents the action from being barred by res judicata principles. A separate civil action also does not “impair the finality of the dissolution decree.” Moreover, the holding supports the compelling policy interest favoring the finality of property settlement agreements.

Posted November 29, 2006

Lamparella v. Lamparella, 210 Ariz. 246 (App. 2005)

Comment: Court held that A.R.S. § 25-318 (B) is inapplicable when a dissolution decree effectuates an explicit property settlement that disposes of all of the parties’ community assets. A.R.S. § 25-318 (B) provides that property not disposed of in a dissolution decree is thereafter owned by the former spouses as tenants in common. Court also held that Arizona’s revocation by divorce statute A.R.S. § 14-2804 can not be avoided by spousal inaction.

Comment: Case involved a non-ERISA municipal police pension plan (not subject to a QDRO). The court reversed an award for alimony since the trial court failed to make an allocation between the retirement and disability portions of the pension. Only the retirement portion is subject to equitable distribution. Court also reversed the trial court for failing to make sufficient findings for an alimony award pursuant to FSS § 61.08(2).

Comment: Court held that the former spouse is entitled to DROP benefits when awarded an interest in the participant’s pension plan. Court certified the question to the Florida Supreme Court. See also Russell v. Russell, 922 So. 2d 1097 (4th DCA 2006)(affirming former wife’s interest in DROP).

Comment: Court vacated the entry of a QDRO since the former husband failed to receive a “notice of hearing” pursuant to Florida Rule of Civil Procedure 1.090; general notice of the hearing is insufficient. See also Butts v. Hegmann, 705 So. 2d 1007 (Fla. 4th DCA 1998) (holding that adequate notice is imperative when a QDRO is entered since it produces a final result).

Comment: Court held that a present value analysis of a defined benefit pension plan must be based on competent and substantial evidence, usually requiring expert testimony. Appellate court reversed the trial court for accepting a present value calculated by the former husband.

Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 129 S. Ct. 865 (2009)

Comment: The United States Supreme Court held that ERISA imposes a statutory fiduciary duty upon the plan administrator. The duty imposed by ERISA is the duty to act in accordance with plan procedures in determining who is entitled to beneficiary status under the plan. Moreover, a plan administrator is required under the rule to disregard a waiver of benefits if that waiver conflicts with plan procedures. The Court also concluded that a waiver is not rendered invalid by ERISA’s anti-alienation provision.

Comment: The vesting of survivor benefits in divorce is an issue of first impression for the 9th Circuit. The 9th Circuit held that survivor benefits irrevocably vest in the participant’s spouse at the annuity starting date and may not be reassigned to a subsequent spouse via QDRO. The Court also held that a state law constructive trust cannot be used to contravene the dictates of ERISA.

Comment: The 3rd Circuit permitted the entry of a nunc pro tunc QDRO following the death of the Participant. The Court held that the parties’ divorce settlement agreement created a separate interest in the plan for the former wife, prior to the former husband’s demise. The court distinguished its holding in Samaroo. See Samaroo v. Samaroo, 193 F.3d 185 (3rd Cir. 1999). The court also retained supplemental jurisdiction over the malpractice claim against the former wife’s divorce attorney.