2012 VT 57


Breslin v. Synnott (2011-336)
 
2012 VT 57
 
[Filed 20-Jul-2012]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press.
 
 

2012 VT 57 

 

No. 2011-336

 

Maura E. Breslin


Supreme Court


 


 


 


On Appeal from


     v.


Superior Court, Chittenden
  Unit,


 


Family Division


 


 


James Synnott III


March Term, 2012


 


 


 


 


Matthew
  I. Katz, J.


 

Catherine E. Clark of Clark, Werner & Flynn, P.C.,
Burlington, for Plaintiff-Appellant.
 
Julie A. Frame, Robert W. Katims and Emily Bayer-Pacht of
Hoff Curtis, Burlington, for
  Defendant-Appellee.
 
 
PRESENT:   Reiber, C.J., Dooley, Skoglund and
Burgess, JJ., and Johnson, J. (Ret.), 
           
         Specially Assigned
 
 
¶ 1.            
REIBER, C.J.   Wife appeals from a superior court,
family division order requiring her to sign a waiver to correct a previously
filed Qualified Domestic Relations Order (QDRO), which erroneously gave her
survivorship benefits in her former husband’s pension.  We affirm. 
¶ 2.            
The underlying facts are not in dispute.  Wife and husband were
married in 1976, legally separated in 2001, and divorced in 2003.  The
divorce order, fully incorporating the terms of the separation agreement,
awarded wife “one half of the pension, as of the date of separation and the
[husband] is awarded the remainder.”  A QDRO signed by wife’s attorney was
filed in 2009 to implement the terms of the order.  The QDRO mistakenly
awarded wife survivorship benefits in husband’s pension, contrary to the
divorce order which merely provided wife with one-half of the pension, with
remainder to husband.  The family division approved the QDRO, and the plan
administrator implemented it, which resulted in payments being made to
wife.  Husband did not object to the submission of the 2009 QDRO, and did
not appeal its approval.
¶ 3.            
In 2010, wife and husband jointly filed a new QDRO, which omitted the
erroneous section regarding survivorship benefits.  The family division
approved the QDRO.  In January 2011, the plan administrator rejected the
QDRO because payments had already begun under the 2009 QDRO.  The plan
administrator noted that wife could fix this problem by “waiv[ing] away her
right” to the survivorship benefits.  Husband’s attorney contacted wife’s
attorney numerous times between January and March, inquiring as to her position
on the waiver issue.  Having not heard anything, husband filed a motion to
enforce in March 2011.  
¶ 4.            
The court held a chambers conference in August 2011, and issued an entry
order the same month concluding that wife is not entitled to the survivorship
benefits.  The court found that the divorce order merely granted wife “a
defined, independent right to one half the pension,” while husband was granted
his own separate pension rights.  The court ordered wife to execute the
waiver to restore to husband and his family the sole right to any survivorship
benefits.  Wife appeals.
¶ 5.            
On appeal, wife contends that: (1) claim preclusion prevents altering
the 2009 QDRO; (2) the court lacked jurisdiction to enter its order because
husband had not filed a motion to modify; and (3) the court improperly failed
to hold a hearing.[1] 
Husband argues that the QDRO is not a court order, but merely a tool to
implement the divorce order, and here the waiver is required to implement the
final order.  
¶ 6.            
Normally, a property disposition that includes the division of
retirement benefits proceeds in two steps.  First, the family division
enters a substantive order which equitably divides and assigns the parties’
property.  See 15 V.S.A. § 751.  Second,
in order for the division of retirement benefits to be implemented, a QDRO is
entered as a court order directing the plan administrator to make certain
specified payments to the ex-spouse.  See 2 B. Turner, Equitable Division
of Property § 6:20, at 113 (3d ed. 2005).
¶ 7.            
A QDRO is defined in relevant part by the Employee Retirement Income
Security Act (ERISA) as a domestic relations order “which creates or recognizes
the existence of an alternate payee’s right to, or assigns to an alternate
payee the right to, receive all or a portion of the benefits payable with
respect to a participant under a plan.”  29 U.S.C.
§ 1056(d)(3)(B)(i)(I).  In order for the QDRO to be qualified—for the
Q to be added to the DRO—certain requirements must be met.  See id.
§ 1056(d)(3)(C)-(D).  Once the plan administrator qualifies the QDRO,
payments are made in accordance with the requirements contained in the
QDRO.  Id. § 1056(d)(3)(A).  It is from this statutory
scheme and general description of QDRO practice that we draw the conclusion
that a QDRO is characterized properly as a procedural device that enforces an
underlying substantive order.  See Kremenitzer v. Kremenitzer, 838
A.2d 1026, 1028 (Conn. App. Ct. 2004) (explaining that a QDRO is vehicle for
enforcing court judgment); see also Turner, § 6:20 at 113-14 (noting
“strong general rule” that QDRO is not substantive order, but rather “procedural
device[] for enforcing the terms of the underlying substantive order”). 
Accordingly, the QDROs in this instance were entered to effectuate the property
disposition made in the underlying separation agreement and divorce order,
though the 2009 QDRO was drafted incorrectly.[2]
¶ 8.            
Wife contends that the family division erred in ordering her to sign the
waiver because the 2009 QDRO is entitled to preclusive effect and should
continue in pay status for that reason.  We review questions of law—here,
the claim preclusion issue—de novo.  In re Town Highway No. 20,
2012 VT 17, ¶ 62, ___ Vt. ___, ___ A.3d ___.  In general, claim
preclusion “bars the litigation of a claim or defense
if there exists a final judgment in former litigation in which the parties,
subject matter and causes of action are identical
or substantially identical.”  Iannarone v. Limoggio, 2011 VT 91,
¶ 14, ___ Vt. ___, 30 A.3d 655 (quotation omitted).  Claim preclusion
is found where “(1) a previous final judgment on the merits exists, (2) the
case was between the same parties or parties in privity, and (3) the claim has
been or could have been fully litigated in the prior proceeding.”  Id.
¶ 15 (quotation omitted).  
¶ 9.            
The doctrine of claim preclusion is ill-suited for these particular
facts.  As wife points out, the principle of finality generally prohibits modification
of the property division, “absent circumstances, such as fraud or coercion,
that would warrant relief from a judgment generally.”  Youngbluth v.
Youngbluth, 2010 VT 40, ¶ 10, 188 Vt. 53, 6 A.3d 677 (quotation
omitted).  Here, however, the 2009 QDRO did just that by giving wife
survivorship benefits that were not provided for in the separation agreement
and final divorce order.  Wife’s argument falls on its own sword since the
2009 QDRO for which she is advocating undisputedly conflicted with, and in
essence attempted to modify, the divorce order.  Because the 2009 QDRO
purported to modify the underlying property division, it is invalid and not
entitled to preclusive effect.  See McCoy v. Feinman, 785 N.E.2d
714, 721 (N.Y. 2002) (noting that “a court errs in granting a domestic
relations order encompassing rights not provided in the underlying stipulation,
or a QDRO more expansive than an underlying written
separation agreement” (citation omitted)); Bagley v. Bagley,
2009-Ohio-688, 908 N.E.2d 469, ¶ 27 (Ct. App.) (holding that QDRO that
conflicts with property division is void); Shanks v. Treadway,
110 S.W.3d 444, 449 (Tex. 2003) (holding that because modification of property
division is prohibited, “the trial court had no authority to enter an order
altering or modifying the original disposition of property”); see also Turner,
§ 6:20 at 123 n.31 (“In cases of outright
conflict . . . the DRO should give way, for it is only an
enforcement device and not the primary substantive division of the benefits at
issue.”).  
¶ 10.        
Wife also contends that the court’s order, requiring her to waive the
survivorship benefits derived from the 2009 QDRO, was beyond the court’s
jurisdiction.  She contends that “the pension rights are a part of the
property settlement,” and that requiring waiver of the benefits would result in
a modification of the underlying property division.  We review this
question of law de novo.  See In re Town Highway No. 20, 2012 VT
17, ¶ 62.  As the trial court noted, wife was not entitled to
the claimed survivorship benefits under the property division, and the benefits
did not become a “part of” the property division by virtue of a mistake in
drafting the 2009 QDRO.  Thus, the order requiring wife to waive the
erroneously awarded survivorship benefits is necessary to enforce the correct
terms of the divorce decree, and the court had jurisdiction to issue it. 
See State v. Kornell, 169 Vt. 637, 638, 741
A.2d 290, 291 (1999) (mem.) (holding that courts have ancillary
jurisdiction to enforce their orders); see also In re Marriage of Allen,
798 N.E.2d 135, 137-38 (Ill. App. Ct. 2003) (noting that court has indefinite
jurisdiction to enforce underlying order, and thus had jurisdiction to correct
prior QDRO to conform to divorce judgment).[3]  Furthermore, although it is true
that the family division is without power to modify the property division
absent grounds under Rule 60(b),  Youngbluth, 2010 VT 40,
¶ 10, a supplementary order enforcing the
property division portion of a divorce order is not considered a modification
of the property division.  Sumner v. Sumner, 2004 VT 45, ¶ 13,
176 Vt. 452, 852 A.2d 611.  The order
requiring a waiver, which would allow the 2010 QDRO to take effect, by design
enforces the property division, and does not modify it.  To the extent
wife argues that the court did not have the power to modify the 2009 QDRO, as
opposed to the underlying property division, this argument has no merit, as we
have concluded that the 2009 QDRO is invalid.
¶ 11.        
Wife’s final argument is that the court should have held a hearing
before rendering its order.  The cases cited by wife are inapposite
insofar as they relate principally to modification of substantive divorce
orders or involve disputes of fact.  See Manosh v. Manosh, 160 Vt.
634, 635, 648 A.2d 833, 836 (1993) (mem.) (holding that plaintiff was entitled
to a hearing where facts were disputed in motion to reopen divorce order under
Rule 60(b)); Klein v. Klein, 153 Vt. 551, 556, 572 A.2d 900, 903-04
(1990) (holding that a hearing was required to establish retroactive child
support payment order); Hood v. Hood, 146 Vt. 195, 198, 499 A.2d 772,
775 (1985) (holding that a hearing was required where district court modified
order relating to child support and visitation under Rule 60(b)).  In this
case, the court did not abuse its discretion in declining to hold a
hearing.  The court was not presented with a motion to modify the
underlying divorce order, but only a motion to enforce it, and there were no
disputes of fact identified by the parties. 
Affirmed.
 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Chief
  Justice

 
 





[1] 
Wife also argues that the 2010 QDRO is unenforceable because it was obtained
under duress and because there was no consideration to modify the 2009
QDRO.  Neither wife’s May 12, 2011 response to husband’s motion to
enforce, nor her August 2, 2011 supplemental memorandum specifically raised
theories of duress or lack of consideration.  Thus, we do not consider the
issues because they were not sufficiently preserved.  See Bull v.
Pinkham Eng’g Assocs., 170 Vt. 450, 459, 752 A.2d 26, 33 (2000)
(“Contentions not raised or fairly presented to the trial court are not preserved for appeal.”).


[2]  It is important to note that the
interpretation of the divorce order, which incorporated the separation
agreement, is not at issue.  It appears undisputed that the 2009 QDRO did
not properly implement the correct terms of the divorce order and gave wife
survivorship benefits which were not otherwise available to her under the
property division.  Thus, we need not determine, as between the divorce
order and the 2009 QDRO, which reflects the parties’ intent.


[3] 
Wife argued at oral argument that if the court required her to sign the waiver,
it would be invalid because it would not be voluntary.  See, e.g., Sharkey
v. Ultramar Energy Ltd., 70 F.3d 226, 231 (2d Cir. 1995) (holding that
waiver of pension benefits under ERISA is subject to closer scrutiny than other
waivers, and requires a knowing and voluntary waiver of the right to
benefits).  Without passing on this standard for waiver of pension
benefits under ERISA, we find no application here because the divorce order did
not give wife the claimed survivorship benefits, and therefore she had no right
to the benefits in the first place.



