Barnes v. Shoemaker

• Decision Date: 21 December 1993
• Docket Number: No. 14896,14896
• Citation: 1993 NMCA 160,868 P.2d 1284,117 N.M. 59
• Parties: Charles BARNES, Petitioner-Appellant/Cross-Appellee, v. Gail SHOEMAKER, Respondent-Appellee/Cross-Appellant.
• Court: Court of Appeals of New Mexico

Page 1284

868 P.2d 1284

117 N.M. 59

Charles BARNES, Petitioner-Appellant/Cross-Appellee, v. Gail SHOEMAKER, Respondent-Appellee/Cross-Appellant.

No. 14896.

Court of Appeals of New Mexico.

Dec. 21, 1993.

Certiorari Denied Feb. 4, 1994.

[117 N.M. 60] William A. L'Esperance and Marcella M. Neville, Albuquerque, for petitioner-appellant/cross-appellee.

Sanford H. Siegel, Atkinson & Kelsey, P.A., Albuquerque, for respondent-appellee/cross-appellant.

OPINION

HARTZ, Judge.

The decree dissolving the marriage of Husband and Wife ordered Husband to make monthly payments of $600 to Wife beginning when he reached age 55. These periodic payments represented her community share of his retirement benefits. As we construe the decree, the district court did not retain jurisdiction to modify the monthly-payment award. More than a decade later Husband sought a modification of the decree as to future payments on the ground that "it is no longer equitable that the judgment should have prospective application." SCRA 1986, 1-060(B)(5) (Repl.1992). We hold that when, as here, the sole ground urged for the modification is that the original award was based on an erroneous projection of the value of the retirement benefits, such a modification is improper unless the reason for the error in the projection is a circumstance that the party seeking relief had no opportunity to foresee or control. We therefore reverse the district court order modifying the original decree.

I. BACKGROUND

We decide this appeal on our summary calendar. We accept as true the uncontested representations of fact in the docketing statements filed by the parties. See State v. Calanche, 91 N.M. 390, 392, 574 P.2d 1018, 1020 (Ct.App.1978). Husband and Wife were married in Michigan in 1956. In 1967 they moved to Albuquerque so that Husband could accept a position with Sandia National Laboratories (Sandia). Husband filed for divorce in 1980. After a one-day trial in which the only witnesses were Husband, Wife, and an economist who provided expert testimony on the value of Husband's Sandia retirement plan, the district court entered a final decree on April 28, 1981. The decree valued and divided the Sandia retirement benefits, the couple's residence, and other community assets. It also determined child support and awarded alimony to Wife. Neither party filed any post-trial motions or appealed the decree. The references in the decree to the Sandia retirement plan are as follows:

6. [Husband] shall take as his sole and separate property the following:

....

G. His accrued retirement benefits at Sandia Laboratories, subject to [Wife's] community property interest in said benefits as set forth in Paragraphs 12 and 13 below.

....

12. [Wife] shall take as her sole and separate property her one-half interest in [Husband's] accrued retirement benefits in the following manner: Upon attainment of age fifty-five (55) by [Husband], [Husband] shall begin paying [Wife] $600.00 per month, the first such payment due and owing to [Wife] August 1, 1992, and $600.00 the first of each and every month thereafter until the death of [Husband]. These payments shall be paid to [Wife] whether or not [Husband] retires at age fifty-five (55), and whether or not [Husband] continues employment with Sandia Laboratories.

13. The Court reserves jurisdiction to enforce payment by [Husband] to [Wife] of [Wife's] present one-half community property interest in [Husband's] accrued retirement benefits.

....

18. Additionally, [Husband] shall maintain life insurance coverage on his life, in at least the amount of $45,000.00, until the death of [Wife], naming [Wife] as beneficiary, to ensure receipt by [Wife] of her present one-half community interest in [Husband's] retirement benefits.

After the divorce Husband continued to work at Sandia for another four years and four months, when he left to take a job in California. Husband then filed suit to terminate the alimony awarded to Wife in the original decree. After negotiations between the parties, a stipulated order entered in April 1987 terminated alimony. The retirement plan was not addressed in the pleadings in that suit.

This appeal arises from Husband's "Petition To Equitably Divide Retirement And Relief From Judgment Or Order Pursuant to Rule 1-060.B. (5)," filed on July 10, 1992. Husband alleged that in the original action the parties had attempted to project what Husband's monthly retirement benefit would be upon early retirement at age 55 and that insufficient information led to an inaccurate projection that Husband's benefit would be $1200 per month. Husband further alleged that he had been informed that he was not eligible for early retirement benefits at age 55 and that when he could begin drawing his pension at age 65 (in August 2002) his monthly allotment would be $806.49. He concluded that "it would no longer be equitable that the Final Decree of Divorce have prospective application based on the facts and circumstances surrounding the value and commencement date of [Husband's] retirement and pursuant to Rule 1-060B. (5), the Court should enter its Order relieving [Husband] of his obligation to pay [Wife] the sum of $600 per month as her 1/2 of his Sandia Labs retirement." Husband sought to delay the monthly payments until August 2002 and to reduce them to somewhat less than half of $806.49. In the alternative, he sought a Qualified Domestic Relations Order awarding Wife her community property interest in his retirement fund. See Ruggles v. Ruggles, 116 N.M. 52, 55 n. 3, 860 P.2d 182, 185 n. 3 (1993) (describing Qualified Domestic Relations Orders).

Among the district court's findings were the following:

12. When Husband resigned from Sandia Laboratories in August, 1985, he did so voluntarily and with knowledge that his resignation 19 months before his 20th employment anniversary would result in the elimination of the option to receive retirement benefits at age 55. Husband's testimony suggested an attitude of disdain toward the benefits. He testified that he responded to a colleague who counseled him about the negative impact of resigning 19 months early:

"I've never believed in retirement benefits. They are golden handcuffs ... I've never paid much attention to retirement benefits, and I've been repulsed by those who did."

13. Husband did not discuss his plans to change employment or the impact a change would have on the retirement benefits with Wife.

14. In August, 1985, Husband withdrew $11,456.53 from the Sandia Laboratory Retirement plan which was made up of $6,409.57, contributions made before the plan became a non-contributory plan, and $5,046.96 in interest accrued on the contributions. Husband did not discuss this withdrawal with Wife nor did he share the money with her. The money was community property.

15. In 1987, Sandia Laboratories sent Husband a waiver form which addressed survivor benefit options and gave notice that unless Husband made an affirmative decision about survivor benefits, an option would be selected for him by Sandia Laboratories and the pension would be reduced by the cost of survivor benefits. Husband did not discuss this information with Wife, and he did not affirmatively respond to Sandia Laboratories.

16. Husband did not provide Wife with information as to what survivor benefits options were available or what the costs were. It appears Husband selected a survivor benefit option by default, by failing to respond to the notice.

17. The Sandia Laboratory Retirement plan provides that if early retirement (age 55) is elected, the monthly benefit is reduced to 35% of the monthly benefit available at age 65.

18. The parties were married 25 years during which [W]ife worked as a waitress in the early years and later as primary parent to the parties' three children. She held a high school diploma and obtained an LPN at TVI in 1973. Husband during the marriage obtained a B.S., M.S. and Ph.D. in engineering. That is, while Husband may hold retirement benefits in low regard, the importance of the benefits to [W]ife is great.

19. Husband's testimony and other evidence as to the monthly retirement benefits that might have been available had he:

a) worked a full 20 years before resigning, or

b) worked to age 55 before resigning, or

c) worked to age 65 before retiring

were unreliable

(i) because the projected annual salary increases he used were not in line with his actual annual salary increases either at Sandia Laboratories or at his subsequent places of employment, and

(ii) because of the unknown impact of the $11,456.53 he withdrew in 1985, and the survivor benefit option he made in 1987.

20. It appears that if Husband had continued to be employed at Sandia Laboratory until 2002 when he reached age 65, Wife's share, which then would have been 23.3%, would have been $600 monthly, or perhaps more. However, because of the 65% discount assessed against the benefits for early retirement it would have been impossible for Wife's share to be $600 monthly at Husband's age 55 no matter how meticulously he might have managed the retirement benefit asset with an eye toward maximizing Wife's interest in it.

The district court entered the following conclusions of law:

B. Husband had a fiduciary duty to manage the retirement benefit asset in a manner that advanced Wife's best interests.

C. Husband breached that fiduciary duty, and his breach diminished the value of the retirement benefit asset.

D. Husband alone should suffer the diminished value of the retirement benefit asset, and Wife's options should be restored to her as though Husband has not breached his fiduciary duty.

E. Husband had the burden of proof to show that it would be inequitable that the 1981 final decree should have prospective application. He met that burden of proof, but he failed to show how the consequences of his breach of fiduciary duty could be remedied.

F. It is appropriate to set aside the portion of the 1981 Final...