                                                                                  ACCEPTED
                                                                             06-14-00062-CV
                                                                   SIXTH COURT OF APPEALS
                                                                        TEXARKANA, TEXAS
                                                                         2/1/2015 6:53:54 PM
                                                                             DEBBIE AUTREY
                                                                                      CLERK

                      NO. 06-14-00062-CV

                                                             FILED IN
                                                      6th COURT OF APPEALS
                                                        TEXARKANA, TEXAS
                                                      2/4/2015 4:15:00 PM
                            IN THE                        DEBBIE AUTREY
                                                              Clerk
                   SIXTH COURT OF APPEALS
                    AT TEXARKANA, TEXAS




KRYSTA LYNNE GARDNER, INDEPENDENT EXECUTRIX OF THE ESTATE OF
                      LARRY RAY TINER
                               V.
                     PENNY HEDDIN TINER




                       APPEAL FROM THE
          402ND DISTRICT COURT OF WOOD COUNTY, TEXAS



                      APPELLEE’S BRIEF




                             Wm. Brandon Baade

                             522 N. Broadway
                             Tyler, Texas 75702
                             brandonbaadelaw@gmail.com
                             903-526-5867

                             Attorney for Appellant
                             Penny Heddin Tiner

                     Oral Argument Requested


                                1
                         IDENTITY OF PARTIES AND COUNSEL

Pursuant to Texas Rule of Appellate Procedure 38(a), the following is a list of all parties to the

trial court’s judgment and the names and addresses of all trial and appellate counsel:



Appellant                                            Appellant’s appellate counsel

Krysta Lynne Gardner                                 Lawrence Beason
                                                     416 North Pacific Street
                                                     Mineola, Texas 75773
                                                     SBOT# 01991000
                                                     Appellant’s trial counsel

                                                     Lawrence Beason
                                                     416 North Pacific Street
                                                     Mineola, Texas 75773
                                                     SBOT# 01991000



Appellee                                             Appellee’s appellate counsel

Penny Heddin Tiner                                   Wm. Brandon Baade
                                                     SBOT# 00793189
                                                     522 N. Broadway
                                                     Tyler, Texas 75702
                                                     903-526-5867
                                                     888-965-9551 (fax)

                                                     Appellee’s trial counsel

                                                     Wm. Brandon Baade
                                                     SBOT# 00793189
                                                     522 N. Broadway
                                                     Tyler, Texas 75702
                                                     903-526-5867
                                                     888-965-9551 (fax)




                                                 2
                                                      TABLE OF CONTENTS

Identity of Parties and Counsel ........................................................................................................2

Table of Contents .............................................................................................................................3

Index of Authorities .........................................................................................................................4

Statement of the Case.......................................................................................................................6

Statement on Oral Argument ...........................................................................................................6

Issues Presented ...............................................................................................................................6

Statement of Facts ............................................................................................................................6

Summary of the Argument...............................................................................................................7

Argument .........................................................................................................................................8

               Issue One: The trial court did not abuse its discretion in denying the
declaratory judgment request of Appellant to order the Texas Employee Retirement System to
change to the beneficiary of Larry Ray Tiner’s optional service retirement annuity from Penny
Heddin Tiner to Debbie Tiner.


Prayer .............................................................................................................................................13

Certificate of Service .....................................................................................................................13

Certificate of Compliance ..............................................................................................................14




                                                                          3
                                               INDEX OF AUTHORITIES

CASES

Bushell v. Dean, 803 S.W.2d 711, 712 (Tex. 1991) (op. on reh’g)………………………………9

RULES/STATUTES:

Tex. R. App. P. 331 (a)……………………………………………………………………………8

Tex. Fam. Code Ann. § 9.302 (West Supp. 2013)……………………………………………….10

Tex. Gov. Code §802.001 ..............................................................................................................11

26 U.S. Code §414(d) ..............................................................................................................11, 12




                                                                   4
                      NO. 06-14-00062-CV




                            IN THE
                   SIXTH COURT OF APPEALS
                    AT TEXARKANA, TEXAS




KRYSTA LYNNE GARDNER, INDEPENDENT EXECUTRIX OF THE ESTATE OF
                      LARRY RAY TINER
                              V.
                     PENNY HEDDIN TINER




                       APPEAL FROM THE
          402ND DISTRICT COURT OF WOOD COUNTY, TEXAS



                      APPELLEE’S BRIEF




                            Wm. Brandon Baade

                            522 N. Broadway
                            Tyler, Texas 75702
                            brandonbaadelaw@gmail.com
                            903-526-5867

                            Attorney for Appellant
                            Penny Heddin Tiner




                               5
                                  STATEMENT OF THE CASE

Nature of case:        This is an appeal from an order denying a declaratory judgment to change
                       the beneficiary under an Employee Retirement System of Texas employee
                       optional employee service annuity.

Judge/Court:           Judge Timothy Boswell, 402nd District Court of Wood County. (C.R. pg.
                       1).

Trial disposition:     The trial court denied the declaratory judgment of Appellant. (C.R. pg.
                       50-51).




                            STATEMENT ON ORAL ARGUMENT

       Appellant is requesting oral argument because it might assist the Court in considering the

factual and legal analysis of this case.


                                      ISSUES PRESENTED

ISSUE ONE: The trial court did not abuse its discretion in denying the declaratory judgment
request of Appellant to order the Texas Employee Retirement System to change to the
beneficiary of Larry Ray Tiner’s optional service retirement annuity from Penny Heddin Tiner to
Debbie Tiner.


                                    STATEMENT OF FACTS

       Penny Heddin Tiner was married to Larry Ray Tiner until September 6, 2006. (CR,

pp.23-29). During the marriage Larry Ray Tiner was employed by the Texas Department of

Transportation and a participant in the Employee Retirement System of Texas (hereinafter ERS).

Under the ERS Larry Ray Tiner had various employement benefits. Among those employment

benefits was an optional service retirement annuity. In April of 2000, during his marriage to

Penny Heddin Tiner, Larry Ray Tiner, consistent with ERS requirements, designated Penny


                                               6
Heddin Tiner has his beneficiary under the optional service retirement annuity. Subsequent to

this designation the marriage ended, and in the Final Decree of Divorce Larry Ray Tiner was

awarded “any and all retirement funds in his name alone.” (CR, p.28).

         Larry Ray Tiner then married Debbie Hughes Tiner on May 9, 2012. Larry Ray Tiner

changed the beneficiary of all of his ERS benefits except the beneficiary designation for the

optional service retirement annuity. Indeed, four years elapsed from the date of divorce from

Penny Heddin Tiner to the death of Larry Ray Tiner and he at no time took action of any kind to

request a change or to change the beneficiary of the optional service retirement annuity.

         The optional service retirement annuity offered by the ERS is a part of a public

retirement system and is excepted from the provisions of Section 9.302 of the Texas Family

Code. Therefore, Larry Ray Tiner’s designation of Penny Heddin Tiner was effective at his

death.



                             SUMMARY OF THE ARGUMENT

ISSUE ONE: The trial court did not abuse its discretion in denying the declaratory judgment
request of Appellant to order the Texas Employee Retirement System to change to the
beneficiary of Larry Ray Tiner’s optional service retirement annuity from Penny Heddin Tiner to
Debbie Tiner.


         The Employee’s Retirement System of Texas is a “public retirement system” under

Government Code Section 802.001 and that the designation by Larry Ray Tiner of Penny Heddin

Tiner as the beneficiary of his optional service retirement annuity was effective, notwithstanding

that the designation was made prior to their divorce.




                                                7
                                                  ARGUMENT

ISSUE ONE: The trial court did not abuse its discretion in denying the declaratory judgment
request of Appellant to order the Texas Employee Retirement System to change to the
beneficiary of Larry Ray Tiner’s optional service retirement annuity from Penny Heddin Tiner to
Debbie Tiner.


           Appellant states in the Summary of Argument section of her brief that the “[C]ourt has

before it a single issue to be resolved.” (Appellant Brief, p. 8) Appellant then frames that single

issue as Penny Heddin Tiner, Appellee, being “unjustly enriched by receiving retirement benefits

from ERS 1 that she had waived or relinquished.” (Id.) However, if you review the issue

presented in the context of the Appellant’s Original Petition for Declaratory Judgment there is no

claim of unjust enrichment before the Court. (CR., pp. 19-22). The Appellant’s Original

Petition for Declaratory Judgment only requested, in relevant part to this appeal, the court

declare that “1. …Penny Heddin has relinquished any and all rights to Larry Tiner’s optional

service retirement annuity. 2. A declaration that Debbie Hughes Tiner, as surviving spouse and

beneficiary under Larry Tiner’s Will, is entitled to Larry’s benefits as beneficiary under his

optional service annuity with ERS; 3. A declaration that ERS is ordered and directed to change

the beneficiary under his optional service retirement annuity with ERS.” (CR., p. 21).

           The record is devoid of any reference to an unjust enrichment claim and the claim was

not tried by consent. Appellee objects to this issue being raised on appeal and contends the issue

has framed in the Summary of Argument is not properly before the Court..

Undisputed Facts

           To preserve a complaint for appellate review, a party must have presented to the trial

court a timely request, objection, or motion that states the specific grounds for the desired ruling,

if they are not apparent from the context of the request, objection or motion. Tex. R. App. P. 331
1
    “ERS” used throughout this brief refers to the Employment Retirement System of Texas.

                                                         8
(a). If a party fails to do this, error is not preserved, and the complaint is waived. Bushell v.

Dean, 803 S.W.2d 711, 712 (Tex. 1991) (op. on reh’g). Appellee contends that Appellant

waived any request for unjust enrichment.    Interestingly, Appellant did not bring a motion for

enforcement or clarification of a divorce decree regarding any issue. Appellant chose to bring a

Declaratory Judgment action to ask the Court to declare the matters set forth above.

       There are several undisputed facts in this case that lay the factual foundation that frames

the issue. First, it is undisputed that Larry Ray Tiner participated in several retirement benefits

programs through his employment with the Texas Department of Transportation and

administered by the Employment Retirement System of Texas (ERS). Among these was an

employee life insurance policy, a 401(K) and an optional service retirement annuity. (CR.,

p.31,ll. 5-25). It is undisputed that in Apirl of 2000, Penny Heddin Tiner was designated as the

beneficiary of the optional service retirement annuity. (CR. Exh. 13).

       Penny Heddin Tiner were married and that they were divorced on September 6, 2006.

(CR., p. 23-29). It is undisputed that in the decree awarded Larry Ray Tiner “any and all

retirement funds in his name alone.” (CR., p. 24). It is undisputed that at the time of the divorce

that Larry Ray Tiner was retired from the Texas Department of Transportation in 2002. (RR.,p.

25.ll. 20-25).   Therefore, Larry Ray Tiner and Penny Heddin Tiner were married for

approximately four years beyond Larry Ray Tiner’s retirement and the vesting of all of his

retirement benefits.

       It is further undisputed that Larry Ray Tiner died testate on May 9, 2013. (RR. Exh. 14).

Mr. Tiner’s will is admitted into evidence and part of the Clerk’s Record, pages 30-33. Penny

Heddin Tiner was not designated as the beneficiary of the life insurance or the 401(k) of Larry

Ray Tiner upon his death. (RR. Pp. 31, ll.1-25). Importantly, the evidence is clear that Penny



                                                9
Heddin Tiner remained designated as the beneficiary under Larry Ray Tiner’s optional

employment service annuity from the time she was designated until the death of Larry Ray Tiner.

Indeed, in the four years between the divorce of Larry Ray Tiner from Penny Heddin Tiner, there

was never a request by Larry Ray Tiner of Penny Heddin Tiner or of the Court to order a change

of the beneficiary of the optional employment service annuity; no such evidence exist. (RR p.

24, ll.10-24). Additionally, the evidence shows that ERS was provided a copy of the death

certificate and has continued to pay to Penny Heddin Tiner, as the beneficiary of the optional

employment service annuity, consistent with the designation of Larry Ray Tiner. (RR. p. 26-27,

ll. 7-16; 17-21).

The Relevant Law and It’s Application to the Facts

         Section 9.302 sets forth the applicable law regarding the pre-decree designation of ex-

spouse as beneficiary in retirement benefits & other financial plans. Section 9.302(a) sets forth

the rule, inter alia, that if there is a “decree of divorce…rendered after a spouse, acting in the

capacity of an annuitant…, has designated the other spouse as a beneficiary…the designating

provision in the plan in favor of the former spouse is not effective unless:.”    The section then

gives three provisions that would permit the designation of the former spouse to remain

effective. Appellee concedes that she does not fall into any of the provisions of §9.302(a)(1),(2)

or(3).

However, §9.302(e) provides that “[T]his section does not apply to the disposition of a beneficial

interest in a retirement benefit or other financial plan of a public retirement system as defined by

Section 802.001,, Government Code.”         Therefore, the relevant question is; is the beneficial

interest that Penny Heddin Tiner received “in a retirement benefit or other financial plan of a




                                                10
public retirement system as defined by Section 802.001, Government Code?” If it falls under

this exception then the designation by Larry Ray Tiner of Penny Heddin Tiner is effective.

       Section 802.001(3) defines a “public retirement system” as a “continuing, organized

program of service retirement, disability retirement, or death benefits for officers or employees

of the state or a political subdivision, or of an agency or instrumentality of the state or a political

subdivision…” It follows in §802.001(3)(A),(B),(C),(D),(E),(F), and (G) with provision that are

exceptions to the definition of a “public retirement system” previously set forth.                The

Employment Retirement System of Texas does not fall within any provision that would make it

an exception to a “public retirement system” as defined in §802.001. Indeed, there is in evidence

in this case a determination letter from the Internal Revenue Service that makes a “favorable

determination on the plan identified,” which is the “Employees Retirement System of Texas.”

(CR. Exh. 13).        The “determination letter is based solely on your (the State of

Texas)(parenthetical added) assertion that the plan is entitled to be treated as a Government plan

under section 414(d) of the Internal Revenue Code.” (Id.).

       Therefore, the State of Texas has asked for and received a determination that the

Employees Retirement System of Texas is a governmental plan under section 414(d) of the

Internal Revenue Code. This would include the optional service retirement annuity under which

Larry Ray Tiner designated Penny Heddin Tiner has beneficiary. Looking further, Section

414(d) of the Internal Revenue Code states the following:

       “(d) Governmental plan
       For purposes of this part, the term “governmental plan” means a plan established and
       maintained for its employees by the Government of the United States, by the government
       of any State or political subdivision thereof, or by any agency or instrumentality of any of
       the foregoing. The term “governmental plan” also includes any plan to which the
       Railroad Retirement Act of 1935 or 1937 applies and which is financed by contributions
       required under that Act and any plan of an international organization which is exempt
       from taxation by reason of the International Organizations Immunities Act (59 Stat. 669).

                                                  11
       The term “governmental plan” includes a plan which is established and maintained by an
       Indian tribal government (as defined in section 7701 (a)(40)), a subdivision of an Indian
       tribal government (determined in accordance with section 7871 (d)), or an agency or
       instrumentality of either, and all of the participants of which are employees of such entity
       substantially all of whose services as such an employee are in the performance of
       essential governmental functions but not in the performance of commercial activities
       (whether or not an essential government function).”


       Clearly, the Texas Employment Retirement System of Texas is a “public retirement

system” as contemplated by §9.302(e) of the Texas Family Code. Therefore, the designation of

Penny Heddin Tiner as the beneficiary of Larry Ray Tiner’s optional service retirement annuity

is effective. Not only is the pre-decree designation effective under Texas law, but factually

Larry Tiner never took any action to change the beneficiary under law or the terms of his

participation in the plan. This is in contradistinction to his actions regarding his life insurance

and 401(k) proceeds. It is axiomatic that these benefits pass outside his estate under Texas law.

       Insightful of Larry Ray Tiner’s intentions, beyond his own self evident decisions during

his life, was that in his Last Will and Testament he left his homestead, subject to a life estate to

his current wife, to the grand-daughter of Penny Heddin Tiner, the appellee. (RR. p. 28-29, ll. 6-

9;10-22).   It seems unlikely, that Larry Ray Tiner had any other intention that to leave Penny

Heddin Tiner as his beneficiary under the optional service retirement annuity. Nevertheless, the

facts and the application of the law is clear that the Employees Retirement System of Texas is a

“public retirement system” as defined by Section 801.001 of the Government Code and the

divorce did not trigger an end to the designation that Larry Ray Tiner freely made and was free

to rely on under Texas law as still having force and effect.




                                                 12
                                              Prayer

       WHEREFORE, premises considered, Appellee, Penny Heddin Tiner, respectfully

requests that the judgment of the trial court be affirmed and judgment rendered, or for such other

and further relief to which Appellee may establish herself entitled.



                                                       Respectfully submitted,

                                                       Wm. Brandon Baade

                                                       By:
                                                             Wm. Brandon Baade
                                                             Texas Bar Number 00793189

                                                       522 N. Broadway
                                                       Tyler, Texas 75702
                                                       brandonbaadelaw@gmail.com
                                                       903-526-5867
                                                       888-965-9551
                                                       Attorney for Appellee
                                                       Penny Heddin Tiner




                                CERTIFICATE OF SERVICE

This is to certify that on February 1, 2015,, a true and correct copy of the above and foregoing
Appellee’s Brief has been forwarded by U.S. mail to all counsel of record listed below:

Attorney for Appellant
Lawrence Beason
416 North Pacific Street
Mineola, Texas 75773



                                                                Wm. Brandon Baade




                                                13
                           CERTIFICATE OF COMPLIANCE

Pursuant to Texas Rule of Appellate Procedure 9.4, the undersigned counsel certifies that,
exclusive of the exempted portions in Texas Rule of Appellate Procedure 9.4(i)(1), this brief
contains 3,958 words (less than 15,000), based upon the word count of the Word program used
to prepare the document.




                                                         Wm. Brandon Baade




                                             14
