Norma Rita Overby, petitioner, Appellant, vs. Duane Leland Overby, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-174

 

In re the Matter of:
Norma Rita Overby, petitioner,
Appellant,
 
vs.
 
Duane Leland Overby,
Respondent.

 

Filed September 14, 2004

Affirmed

Wright, Judge

 

Olmsted County District Court

File No. F8791574

 

David W. VanDerHeyden, VanDerHeyden and Ruffalo, P.A., 302 Elton Hills Drive Northwest, Suite 300, P.O. Box 6535, Rochester, MN  55903-6535 (for appellant)

 

Kristine L. Dicke, Ryan & Grinde, Ltd., 407 14th Street Northwest, P.O. Box 6667, Rochester, MN  55903-6667 (for respondent)

 

            Considered and decided by Wright, Presiding Judge; Randall, Judge; and Kalitowski, Judge.

U N P U B L I S H E D   O P I N I O N

WRIGHT, Judge

 

            In her dissolution action, appellant brought a postdecree motion to clarify and enforce provisions of the dissolution judgment and decree affecting division of respondent's pension income.  Appellant challenges the district court's denial of the motion, arguing that respondent improperly reduced his pension income by electing a survivorship annuity rather than a single-life annuity.  Both parties also challenge the district court's denial of attorney fees.  We affirm.

FACTS

 

            The marriage of appellant Norma Overby and respondent Duane Overby was dissolved in July 1980.  Following a trial, the district court issued a judgment and decree ordering respondent to pay appellant "one half of his pension income from IBM" and "one half of [his] retirement income from the United States Navy."  The judgment and decree made no contingency for a reduction in respondent's pension income should he receive a survivorship annuity instead of a single-life annuity.

            Respondent remarried in the 1980s.  When he began receiving pension benefits from IBM in 1992 and the Navy in 1993, he received a surviving-spouse annuity.[1]  As a result, his monthly pension income was less than he would have received for a single-life annuity.

            Claiming that respondent had significantly underpaid her share from his pension benefits, appellant brought a motion to enforce the decree.  Appellant contended that her share of pension income should be based on a single-life annuity rather than the reduced amount respondent receives for a surviving-spouse annuity.  The district court held that respondent was allowed to elect a surviving-spouse benefit and that he properly paid half of his remaining pension income.  The district court also denied the parties' motions for attorney fees.  This appeal followed.

D E C I S I O N

 

I.

A district court ordinarily may not modify the property division in a divorce decree.  Minn. Stat. § 518.64, subd. 2(e) (2002) (barring postdecree modification affecting equitable division of marital property absent specified circumstances justifying reopening a judgment).  But the district court has discretion to clarify the terms of the decree, as long as the parties' substantive rights are not changed.  Potter v. Potter, 471 N.W.2d 113, 114 (Minn. App. 1991).  We accord great deference to the district court's interpretation of its own decree.[2]  Johnson v. Johnson, 627 N.W.2d 359, 363 (Minn. App. 2001), review denied (Minn. Aug. 15, 2001).  We extend this deference to successor judges of the district court who act on the decree.  Id.; Mikoda v. Mikoda, 413 N.W.2d 238, 241-42 (Minn. App. 1987), review denied (Minn. Dec. 22, 1987).

            Appellant argues that, because the parties' divorce decree awarded her half of respondent's pension income, her share must be calculated according to respondent's maximized income under a single-life annuity.  We addressed this issue in Johnson, where the decree provided that an ex-wife receive a share of her ex-husband's income from his federal civil-service pension.  627 N.W.2d at 361.  As here, the decree made no contingency for the reduction of the ex-husband's pension income under a survivorship annuity.  See id. 

The Johnson court noted that, under federal regulations, the decree was required to state the form of annuity from which the ex-wife's share would be calculated.  Id. at 364.  Because the ex-wife had not acted in accordance with the regulations, we concluded that the district court was not required to construe the decree narrowly to supply the same relief.  Id.   Holding that the ex-wife's share of pension income need not be explicitly calculated from a single-life annuity, we affirmed the interpretation of the district court.  Id.

            The primary point of distinction between the facts in Johnson and those here is the source of the pension income.  Johnson involves a federal civil-service pension, whereas the pensions at issue here are from the military and the private sector.  Because Johnson relies in part on an analysis of federal regulations, we proceed with a brief analysis of the federal law applicable here.

            Respondent's IBM pension is controlled by the Employee Retirement Income Security Act (ERISA).  See 29 U.S.C. § 1003(a) (2001).  For such pensions, the recipient ordinarily receives a survivorship benefit.  29 U.S.C. § 1055(a) (2001); see also Hagwood v. Nelson, 282 F.3d 285, 290 (4th Cir. 2002).  If the recipient is married, the survivorship beneficiary is the recipient's spouse, unless the recipient affirmatively waives the survivorship benefit with the spouse's consent.  29 U.S.C. § 1055(a), (c) (2001); see also Prater v. Aftra Health Fund, 23 F. Supp. 2d 505, 508-09 (D.N.J. 1998). 

To assure that one's share of an ERISA pension is calculated according to a single-life annuity, rather than a survivorship annuity, a former spouse may obtain a qualified domestic relations order (QDRO).  29 U.S.C. § 1056(d)(3)(A) (2001).[3]  This remedy is available up to 18 months after the recipient begins receiving pension payments.  29 U.S.C. § 1056(d)(3)(H); cf. Hogan v. Raytheon Co., 302 F.3d 854, 857 (8th Cir. 2002) (holding that, where ex-spouse began receiving annuity payments and died shortly thereafter, 18-month period tolled from start of payments).

When respondent began receiving pension income in the early 1990s, appellant took no action to obtain a QDRO.  As in Johnson, the district court was not required to construe the divorce decree narrowly to supply the same relief.  In light of the deference owed to the district court, it was not error to calculate appellant's share of pension income from the existing survivorship annuity.

Notwithstanding this analysis, appellant contends that, when respondent elected a survivorship annuity, he improperly frustrated the divorce decree's equitable division of marital property.  A few foreign authorities support this position, requiring a former spouse's share of pension income to be based on a single-life annuity.  See, e.g., Potts v. Potts, 790 A.2d 703, 719-20 (Md. Ct. Spec. App. 2002); English v. English, 879 P.2d 802, 807 (N.M. Ct. App. 1994); Ferriera v. Ferriera, 490 N.Y.S.2d 389, 391 (N.Y. App. Div. 1985).  But under ERISA, a survivorship annuity is presumed and cannot be waived without the consent of the recipient's spouse.  29 U.S.C. § 1055(a), (c).  Because appellant's actions here do not constitute an election, appellant's argument here is also unavailing. 

Respondent's Navy pension is controlled in relevant part by the Uniformed Services Former Spouses' Protection Act (USFSPA).  10 U.S.C. § 1408 (2001).  This provision ordinarily limits state courts' subject matter jurisdiction over a recipient's "disposable retired pay," disallowing court orders that direct the military to disburse more than half of military pension income to a divorced spouse.  10 U.S.C. § 1408(e); Mansell v. Mansell, 490 U.S. 581, 587-88, 109 S. Ct. 2023, 2028-29 (1989).  Disposable retired pay does not include reductions for "an election under chapter 73 of this title to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order."  10 U.S.C. § 1408(a)(4)(D).  In the case of a married recipient, chapter 73 allows election of a single-life annuity with the consent of the recipient's spouse, whereas a recipient who remarries must affirmatively elect a survivorship annuity.  10 U.S.C. § 1448(a)(3)(A) (2001), (6)(A); Flynn v. United States, 46 Fed. Cl. 414, 418-19 (2000).

            It may be inferred that, for the Navy pension, respondent elected a surviving-spouse annuity in accordance with chapter 73.  Under the USFSPA, if this election resulted in a reduction of his pension income, then it is excluded from his disposable retired pay.  Thus, the district court arguably lacked jurisdiction to require disbursement of more than half of this amount.

            Citing Deliduka v. Deliduka, appellant counters that state courts have discretion to award more than half of a recipient's disposable retired pay.  347 N.W.2d 52, 55-56 (Minn. App. 1984).  We held that the USFSPA limited state courts' jurisdiction over the military but not over the pension recipient.  Id. at 55.  Thus, state courts could not order the military to disburse more than half of the pension income directly to a former spouse; but for any award beyond half, state courts could directly order the recipient to pay the difference.  Id.

            The rule of Deliduka was called into question by the United States Supreme Court's decision in Mansell.  490 U.S. 581, 109 S. Ct. 2023.  The Mansell court emphasized that state courts cannot evade the jurisdictional limits of the USFSPA to restore a divorced spouse's share of pension income.  Id. at 587-88, 109 S. Ct. at 2028-29.  But subsequent cases, including our recent decision in Gatfield v. Gatfield, 682 N.W.2d 632 (Minn. App. 2004), have narrowly construed this result.  Gatfield involved a military pension recipient who, in a stipulated provision of the dissolution decree, agreed to waive his right to elect a military benefit that would reduce his pension income.  Id. at 634-35.  We concluded that, without violating Mansell, the decree may be interpreted in a manner that equitably enforces this stipulated waivereven if the recipient's total obligation is more than half of his disposable retirement pay.  Id. at 636 (citing Krapf v. Krapf, 786 N.E.2d 318, 326 (Mass. 2003)).

            Here, the decree does not include a stipulation of the parties.  Nor does the decree address respondent's right to elect reduced military pension income.  Indeed, there is no legal or factual basis to conclude that respondent affirmatively waived this right.  Unlike Gatfield, the equitable enforcement of a bargained-for interest is not at stake. 

In light of these facts, the district court had no legal or equitable basis to award more than half of the pension income that respondent had elected under a survivorship annuity.  Accordingly, the district court did not err in denying appellant a greater share of respondent's pension income based on the amount respondent could have derived from an election of a single-life annuity.

II.

            Both parties contend that the district court erred by failing to award them attorney fees.  We review a district court's denial of attorney fees for a clear abuse of discretion.  Kitchar v. Kitchar, 553 N.W.2d 97, 104 (Minn. App. 1996), review denied (Minn. Oct. 29, 1996).

            Two theories for recovery of attorney fees in dissolution proceedings are available under Minn. Stat. § 518.14, subd. 1 (2002).  Geske v. Marcolina, 624 N.W.2d 813, 816 (Minn. App. 2001).  Fees are available under a need-based theory if (1) a party makes a good-faith assertion of its rights in the proceeding, (2) the party lacks the means to pay for the representation, and (3) the adverse party has the means to pay this cost.  Id. at 816-17. 

            Appellant claims monthly income of $1,700 and monthly expenses of $2,200; respondent claims monthly income of $2,600 and monthly expenses of $3,600.  Because the record indicates that both parties have ordinary expenses in excess of income, neither party has the means to pay attorney fees for the other party.  Thus, denial of need-based attorney fees was well within the district court's sound discretion.

Fees are available under a conduct-based theory if the district court finds that a party "unreasonably contributes to the length or expense of the proceeding."  Minn. Stat. § 518.14, subd. 1.  Neither party alleges specific actions that unreasonably contributed to the expense of litigation.  Because the parties had colorable arguments and otherwise participated equally in the litigation, conduct-based attorney fees are unwarranted.  See Kitchar,553 N.W.2d at 104.

            Affirmed.

[1]  Respondent has since survived his new spouse.  The record does not disclose the precise date of her death.  Respondent has designated the parties' disabled daughter, currently in appellant's care, as the new beneficiary of his survivorship annuities.

[2]  Respondent argues in part that, in determining the meaning of the divorce decree, the parties' intentions at the time are relevant.  Because the final decree does not reflect any agreement or stipulation by the parties, this factor is inapposite.  See Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342 (1977).

[3]  Qualified domestic relations orders were not available until the passage of the Retirement Equity Act, a few years after the parties' dissolution.  Pub. L. No. 98-397 (1984).