Dorko v. Dorko
| Decision Date | 20 June 2019 |
| Docket Number | Docket No. 156557 |
| Citation | 504 Mich. 68,934 N.W.2d 644 |
| Parties | Richard William DORKO, Plaintiff-Appellant, v. Sherry Sue DORKO, Defendant-Appellee. |
| Court | Michigan Supreme Court |
Schroder Law (by Jeffrey M. Schroder) for plaintiff.
Butler, Toweson & Payseno, PLLC (by George T. Perrett ) for defendant.
Saraphoena B. Koffron, Amicus Curiae for the Family Law Section of the State Bar of Michigan.
BEFORE THE ENTIRE BENCH
In this case, we consider whether the 10-year period of limitations in MCL 600.5809(3) applies to a party’s request to enter a qualified domestic-relations order (QDRO)1 when a judgment of divorce awards an interest in a spouse’s retirement benefits. The Court of Appeals concluded that it was bound by Joughin v. Joughin , 320 Mich. App. 380, 906 N.W.2d 829 (2017), which held that MCL 600.5809(3) does not apply to a party’s request to enter a proposed QDRO, and that defendant-wife was therefore not time-barred from submitting a proposed QDRO for entry. We agree with Joughin ’s holding that MCL 600.5809(3) does not apply to a request to enter a proposed QDRO, and thus affirm the result reached by the Court of Appeals in this case, but we write to clarify the reasons this holding is correct.
The parties divorced on August 3, 2005, following a 28-year marriage. The judgment of divorce awarded defendant-wife half of the marital interest in plaintiff-husband’s pension and retirement benefits via a QDRO. The judgment stated:
Qualified Domestic Relations Order: Defendant is awarded ½ of the marital interest of Plaintiff’s retirement plan via QDRO through employment with General Motors. She shall share in any early retirement subsidy under the Plan in proportion to her award. She shall be entitled to csot-of-living [sic] and other post-retirement increases in proportion to her award. She shall be allowed to elect to receive benefits under the Plan as soon as the Plan permits. To the extent necessary to protect her interest in the event of Plaintiff’s death, she shall be designated surviving spouse.
Plaintiff retired in 2014 and began collecting his full pension and retirement benefits. Ten years and eight days after entry of the divorce judgment, defendant submitted a proposed QDRO to the trial court. Receiving no response and no objection, the trial court entered the order on August 19, 2015. Defendant then submitted the proposed QDRO to the pension plan administrator, Fidelity. On January 4, 2016, however, Fidelity refused to qualify the proposed QDRO because of deficiencies in the draft language. Defendant corrected the identified deficiencies and submitted an amended proposed QDRO to the trial court on January 8, 2016. Plaintiff objected and, after retaining an attorney, moved to set aside the first proposed QDRO and to deny the amended QDRO. In his motion, plaintiff argued that entry of any QDRO was barred by the 10-year period of limitations in MCL 600.5809(3), which applies to the enforcement of noncontractual money obligations. The trial court denied plaintiff’s motion and entered the amended proposed QDRO on June 27, 2016. It also denied plaintiff’s motion for a stay. Ruling from the bench, the trial court concluded that the 10-year period of limitations in MCL 600.5809(3) began to run only once plaintiff’s retirement benefits became due following his retirement, not upon entry of the divorce judgment in 2005. Defendant submitted the amended proposed QDRO to Fidelity, and by letter of August 12, 2016, Fidelity approved the amended QDRO.
Plaintiff filed an application for leave to appeal in the Court of Appeals, which the Court granted. At the time, another case involving the application of MCL 600.5809(3) to the entry of a proposed QDRO, Joughin , 320 Mich. App. 380, 906 N.W.2d 829, was also pending before the Court of Appeals. The Court of Appeals decided Joughin on July 11, 2017, in a split, published decision. In Joughin , the majority held that "the act to obtain entry of a proposed QDRO is a ministerial task done in conjunction with the divorce judgment itself."
Id. at 388, 906 N.W.2d 829. Therefore, "because the entry of the proposed QDRO is not an enforcement of a noncontractual money obligation, the 10-year period of limitations provided in MCL 600.5809(3) does not apply, and [the] request to have the proposed QDRO entered by the trial court was not time-barred." Id. at 389, 906 N.W.2d 829.2 Relying on Joughin , the panel in the instant case held that "defendant’s submissions of the proposed QDROs were merely ministerial tasks attendant to the judgment of divorce, which are not time-barred by MCL 600.5809(3)." Dorko v. Dorko , unpublished per curiam opinion of the Court of Appeals, issued August 17, 2017 (Docket No. 333880), 2017 WL 3567558, p. 2.
Plaintiff applied for leave to appeal in this Court, and we ordered argument on the application, asking the parties to address whether plaintiff waived any statute-of-limitations defense, whether Joughin was correctly decided, and when, if MCL 600.5809(3) applies, a claim accrues for retirement benefits awarded by a judgment of divorce.
Retirement plans must comply with the federal Employee Retirement Income Security Act (ERISA) of 1974, 29 USC 1001 et seq. , which precluded pension plan participants from assigning or alienating their benefits under plans that were subject to the act. Roth v. Roth , 201 Mich. App. 563, 567, 506 N.W.2d 900 (1993), citing 29 USC 1056(d)(1) and 26 USC 401(a)(13). ERISA also contained a preemption provision, designed to establish the regulation of pension plans as an exclusively federal concern. Roth , 201 Mich. App. at 567, 506 N.W.2d 900 ; 29 USC 1144 ; Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 46, 107 S. Ct. 1549, 95 L. Ed. 2d 39 (1987). In 1984, however, Congress enacted the Retirement Equity Act, which provided an exception to the restriction on assigning or alienating one’s benefits by allowing QDROs. A QDRO " ‘creates or recognizes the existence of an alternative 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 the plan ....’ " Moore v. Moore , 266 Mich. App. 96, 100 n. 5, 700 N.W.2d 414 (2005), quoting 29 USC 1056(d)(3)(B)(i)(I). QDROs are thus exempt from ERISA’s preemption provisions and may be used to distribute funds to a payee who is not a named beneficiary under a retirement plan. 29 USC 1144(b)(7) ; 26 USC 401(a)(13)(B). Accordingly, when a judgment of divorce awards an interest in a retirement plan under ERISA to an alternate payee spouse, entry of a proposed QDRO is a necessary prerequisite to effectuate the distribution of benefits pursuant to that interest. The question we are faced with here is whether the 10-year limitations period in MCL 600.5809(3) applies to a party’s request to enter a proposed QDRO. We review de novo questions involving the interpretation and application of a statute of limitations. See Oade v. Jackson Nat'l Life Ins. Co. , 465 Mich. 244, 250, 632 N.W.2d 126 (2001).3
MCL 600.5809 sets forth the period of limitations governing the enforcement of judgments and provides, in pertinent part, the following:
In Joughin , 320 Mich. App. at 389, 906 N.W.2d 829, the majority held that MCL 600.5809(3) does not apply to a party’s request for entry of a proposed QDRO because such a request does not involve an action to enforce a noncontractual money obligation. We agree. A party’s request for entry of a proposed QDRO does not involve a distinct legal "claim." Only claims can be barred by a statute of limitations. A claim accrues "at the time the wrong upon which the claim is based was done regardless of the time when damage results." MCL 600.5827. But the right to seek a postjudgment order does not arise from a wrong; instead, that right arises out of the divorce judgment itself. Asking a court to enter a proposed QDRO is therefore not an "action" that can be time-barred by a statute of limitations because the order does not depend on any underlying cause of action.4 Rather, such a request merely implements a provision of the divorce judgment.
There is an important distinction between a postjudgment order that implements a term of a divorce judgment and an action to enforce that judgment. Entry of postjudgment orders is governed by the court rules, involves no new case or controversy, and is adversarial only to the extent that the parties dispute whether the order appropriately implements the judgment. Here, defendant’s right to entry of the proposed QDRO had already been adjudicated. Accordingly, although plaintiff could object to the form or content of defendant’s proposed QDRO, he did not have any right to challenge the entry of the proposed QDRO itself.5
Defendant’s procedural right to entry of the proposed QDRO was indisputably established by the judgment of divorce.
We must differentiate between defendant’s procedural entitlement to entry of a proposed QDRO and her substantive right to receive 50% of plaintiff’s retirement benefits. When a party breaches a substantive obligation arising out of a legal judgment, that breach gives rise to an independent cause of action. The harmed party then...
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