Cooper v. Cooper

• Court: Arkansas Court of Appeals
• Writing for the Court: JOHN MAUZY PITTMAN
• Citation: Cooper v. Cooper, 2013 Ark. App. 748, 431 S.W.3d 349 (Ark. App. 2013)
• Decision Date: 18 December 2013
• Docket Number: No. CV–13–58.,CV–13–58.
• Parties: Larry COOPER, Appellant v. Annette COOPER, Appellee.

2013 Ark. App. 748

431 S.W.3d 349

Larry COOPER, Appellant

v.Annette COOPER, Appellee.

No. CV–13–58.

Court of Appeals of Arkansas.

Dec. 18, 2013.

Wallace, Martin, Duke & Russell, PLLC, Little Rock, by: Dale B. Duke, for appellant.

No response.

JOHN MAUZY PITTMAN, Judge.

In this divorce case, Larry Cooper appeals from the Pulaski County Circuit Court's entry of two qualified domestic relations orders (QDRO) dividing his railroad-retirementbenefits with his wife, appellee Annette Cooper. We affirm.

The parties were married in 1963 and separated in September 2011, when appellee filed for divorce. At the time of the divorce, the parties owned a marital home in Sherwood that was unencumbered and valued at $275,000. Appellee accepted appellant's offer at trial to buy her interest in the home for $130,000. The parties also owned three Scottrade accounts valued at $869,000. Before the temporary hearing, they had an account containing $135,000 and a $100,043 certificate of deposit at Regions Bank; both parties made withdrawals from Regions before trial. They also owned vehicles, a credit-union account, and life-insurance policies. During the marriage, appellant worked at Union Pacific Railroad and Missouri–Kansas–Texas Railroad. He retired before the divorce and began receiving retirement benefits from both (administered by Union Pacific and distributed in one payment each month).

The circuit court entered a divorce decree on May 30, 2012, granting appellee a divorce. It accepted the parties' agreement concerning the marital home; ordered the Scottrade accounts to be divided equally; ordered appellant to pay appellee $10,135.50 to equalize the parties' withdrawals from Regions Bank; awarded the $300 in the credit-union account to appellee (with appellant's consent); equalized the values of the vehicles it awarded to the parties by directing appellee to pay appellant $7,000; ruled that each party would retain ownership of his or her life-insurance policy; distributed the remaining items of personal property; and directed appellant to pay alimony to appellee in the amount of $1,000 per month for twelve months.

The circuit court addressed the retirement accounts as follows:

26. Retirement accounts. Both parties are retired. [Appellant] was an employee of Union Pacific Railroad and receives a pension from Union Pacific Railroad as well as one from the Missouri–Kansas–Texas Railroad.

27. The Court orders that the parties divide, pursuant to Hisquierdo v. Hisquierdo, 439 U.S. 573 [572], 99 S.Ct. 802 [59 L.Ed.2d 1] (1979), the Defendant's Tier 2 benefits. The [Appellant] worked at Union Pacific and Missouri–Kansas–Texas Railroad during the parties' marriage and these benefits should be divided between the parties based on the number of years worked at the railroad and the number years of marriage. It is the court's understanding that all of [appellant's] employment with the railroad occurred during the parties' marriage.

Appellee filed a motion for reconsideration or to amend the final decree on June 15, 2012. She asked the court to direct appellant to pay her for her share in the marital home and the Regions account within thirty days and to divide the Union Pacific pension equally and/or to increase alimony. ¹

The circuit court granted the motion for reconsideration on July 16, 2012. It directed appellant to pay appellee $140,135.50 within thirty days and stated that appellee had correctly pointed out that it had failed to divide appellant's Union Pacific pension. The court also stated: “The Court orders that this pension be divided equally between the parties and that any documents necessary to effectuate the division of this asset be prepared by [appellee's] attorney with cooperation from [appellant] and his attorney. In all other respects, the Divorce Decree shall be affirmed.”

On September 26, 2012, using the language provided by Union Pacific, the court entered two QDROs (for Union Pacific and for Missouri–Kansas–Texas) that stated that appellee was the “alternate payee.” It also provided that following the alternate payee's death, any payments that otherwise would be made to the alternate payee if the alternate payee had survived would be made to Tim Cooper (the parties' adult child). On October 5, 2012, appellant filed a motion for reconsideration of the QDROs, asserting that they were not qualified under the Employee Retirement Income Security Act (ERISA) because of the inclusion of a third party, Tim Cooper. He asserted that Tim was not an “alternate payee” within the statute's meaning.

Appellant filed a second motion for reconsideration of the QDRO on the Missouri–Kansas–Texas Railroad pension on October 12, 2012. He stated:

6. That no Court Order exist [sic] which Divides [appellant's] interest in the Missouri–Kansas–Texas Pension Plan to support entry of a Qualified Domestic Relations Order giving [appellee] any portion of those proceeds.

7. [Appellant] moves this Court to Reconsider the Qualified Domestic Relations Order issued in this case dividing an asset of [appellant's] which was not divided in the parties Decree or in it's [sic] Order for Reconsideration filed July 16, 2012.

8. That without a provision for its division, the Qualified Domestic Relations Order pertaining to the Missouri–Kansas–Texas Pension Plan should be withdrawn and vacated.

On November 5, 2012, the trial court denied appellant's motions for reconsideration, stating:

8. The Supreme Court case, Boggs v. Boggs, 520 U.S. 833 [117 S.Ct. 1754, 138 L.Ed.2d 45] (1997) [cited by appellant], is inapplicable to the matter at issue here. In Boggs, the Court was addressing whether or not benefits of a non-participant spouse could be passed by testamentary devise. There was no QDRO at issue in Boggs; therefore, the Court did not rule on the issue of an inclusion of a third-party as an alternate payee in a QDRO.

9. However, the Court in Boggs did discuss QDROs in dicta. In the opinion, the Court defines a QDRO as “a limited exception to the pension plan anti-alienation provision and allows courts to recognize a nonparticipant spouse's community property interest in pension plans under specific circumstances.” Id. at 839 . The Court also recognizes that QDROs “are exempt from both the pension plan anti-alienation provision ... and ERISA's general preemption clause.” Id. at 846 . This Court's reading of the Boggs opinion does not support the proposition that [appellee] would be unable to pass her interest in the pension plans to a third-party of her choosing.

10. [Appellant] also relies on a case decided by the state appellate court in California, In re Marriage of Shelstead, 66 Cal.App.4th 893 [78 Cal.Rptr.2d 365] (1998). While the court in Shelstead invalidated a devise to a third-party that was made in a QDRO, the court made the following statement: “We stress the narrowness of our decision. Our holding concerns only the order before us today. We do not decide ... that any testamentary devise contained in a QDRO is invalid.” Id. at 904–905 .

11. Most significantly, the decision in Shelstead is in no way binding on this Court, and the California court's interpretation of ERISA is not a primary source of law which must be followed by this Court.

In this order, the circuit court also denied appellant's second motion for reconsideration of the QDRO concerning the Missouri–Kansas–Texas Railroad. It rejected appellant's claim that it had not previously ordered the division of that pension, stating:

14. However, as stated above, the Decree, entered on May 30, 2012, specifically stated that [appellant] receives a pension from Union Pacific and from Missouri–Kansas–Texas and that those benefits were to be divided equally among the parties. While it is correct that the Missouri–Kansas–Texas Railroad pension is not specifically named in the Order of Reconsideration, filed on July 16, 2012, the Order of Reconsideration stated that, “[i]n all other respects, the Divorce Decree shall be affirmed.”

15. Further, it is the understanding of this Court that both pension plans were earned during the marriage and that [appellant] receives the payments from both pensions in a single payment. Based on these facts, it is unreasonable that the pensions would be divided differently.

16. Therefore, this Court has previously ordered the division of the Missouri–Kansas–Texas pension plan, and as such, the QDRO related to that plan was proper, and [appellant's] Motion is denied.

Appellant then pursued this appeal.

We review traditional equity cases on both factual and legal questions de novo on the record, but will not reverse a finding of fact by the trial court unless it is clearly erroneous. Allen v. Allen, 99 Ark.App. 292, 259 S.W.3d 480 (2007). We do not defer to the trial court's determinations of law. Id. When the issues on appeal do not involve factual questions but rather the application of a legal doctrine, we determine whether the appellee was entitled to judgment as a matter of law. Spears v. ReconTrust Co., N.A., 2013 Ark. App. 272, 2013 WL 1760516.

Appellant argues in his first point that Tim's designation as the recipient of appellee's benefits if she predeceases appellant prevents the QDROs from being in compliance with ERISA's requirements. ERISA is a comprehensive federal statutory scheme designed to protect the interests of employees and their beneficiaries in employee benefit plans. Boggs v. Boggs, 520 U.S. 833, 845, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997). It contains a preemption clause providing that its provisions preempt any state law relating to an employee-benefit plan. 29 U.S.C. § 1144(a) (2006). ERISA also contains an anti-alienation or spendthrift provision, stating, “Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated.” 29 U.S.C. § 1056(d)(1) (2006). Congress included the spendthrift provision to protect employees and their dependents from the participant's financial improvidence...