Dorn v. Int'l Bhd. Electrical Workers

• Decision Date: 18 May 2000
• Docket Number: No. 98-31046,98-31046
• Citation: 211 F.3d 938
• Parties: (5th Cir. 2000) JANICE BROWN DORN, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Etc., et al., Defendants, ELECTRICIANS PENSION TRUST FUND, Substituted Party for IBEW Local 995, Electricians Health, Welfare and Benefit Plans, Defendant-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 938

211 F.3d 938 (5th Cir. 2000)

JANICE BROWN DORN, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Etc., et al., Defendants, ELECTRICIANS PENSION TRUST FUND, Substituted Party for IBEW Local 995, Electricians Health, Welfare and Benefit Plans, Defendant-Appellee.

No. 98-31046

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

May 18, 2000

Appeal from the United States District Court for the Middle District of Louisiana

Before JONES, DUHE, and WIENER, Circuit Judges.

PER CURIAM:

Plaintiff-Appellant Janice Brown Dorn ("Janice") appeals the district court's grant of summary judgment in favor of the Defendant-Appellee Electricians Pension Trust Fund ("the Plan"), dismissing her claim, ostensibly pursuant to a Qualified Domestic Relations Order ("QDRO"), for continued payment of pension benefits following the death of her ex-husband, Jack Lee Dorn ("Jack"). Jack was a former participant and, at death, a retiree and pensioner under the Plan, which is governed by ERISA ¹. We affirm the district court's judgment dismissing Janice's claim.

I. BACKGROUND

A. Applicable Law: ERISA after the Retirement Equity Act of 1984 ("REA")²

1. REA Changes Pertinent to this Appeal

After ERISA had been on the books for approximately ten years, during which period the need for substantial modification had become apparent, Congress enacted REA. Two innovations wrought by REA that are particularly pertinent to this case are (1) changes in mandated retirement plan benefits in the form of a revised version of the "Qualified Joint and Survivor Annuity" ("QJ&SA") ³ and (2) creation of a new procedure ---- unique and exclusive to ERISA ---- for obtaining otherwise prohibited assignments or alienations of pension plan benefits in the event of, inter alia, divorce: the "Qualified Domestic Relations Order" ("QDRO"). ⁴ Familiarity with the applicable terms of art is important and helpful in understanding the instant appeal. After surveying the key terms, we shall examine briefly the nature of the benefits that most ERISA retirement plans like the Plan are required to provide as automatic survivor benefits with respect to the retiring participant ---- for our purposes today, Jack's QJ&SA----and some of the alternative elections available. We shall then consider in greater depth the exception to ERISA's spendthrift proscription of alienation that REA brought to the table by creation of the QDRO, a mechanism for recognizing, inter alia, the interest of the non-participant spouse in benefits under such plans. Finally, we shall analyze Janice's QDRO in light of the foregoing to determine whether it was correctly interpreted by the Plan's plan administrator and the district court.

2. Terminology

* Qualified Joint and Survivor Annuity

ERISA's QJ&SA is unlike the typical joint and survivor annuity available in the commercial market, which commonly guarantees payment of a stipulated or determinable amount to two persons ---- frequently spouses ---- while both are living and, after the death of either person, to whichever of the two survives. ERISA's QJ&SA is an annuity ----

(1) for the life of the participant[,] with a survivor annuity for the life of the spouse which is not less than 50% of (and is not greater than 100% of) the amount of the annuity which is payable during the joint lives to the participant and the spouse, and

(2) which is the actuarial equivalent of a single annuity for the life of the participant.⁵

Stated more simply, (1) the QJ&SA's annuity payments cease at the death of the participant spouse, regardless of whether his death occurs before or after the death of the non-participant spouse; and (2) if, but only if, the non-participant spouse survives the participant spouse does the survivor's annuity kick in.

* Annuity Starting Date "means the first day of the first period for which an amount is received as an annuity " ⁶ (whether by reason of retirement or disability).

* Earliest Retirement Age "means the earliest date on which, under the plan, the participant could elect to receive retirement benefits."⁷

* Domestic Relations Order "means any judgment, decree, or order (including approval of a property settlement agreement) which (I) relates to the provision of...marital property rights to a spouse [or] former spouse...of a participant, and (II) is made pursuant to a State domestic relations law (including a community property law)." ⁸

* Qualified Domestic Relations Order means a domestic relations order ----

(I) 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, and

(II) with respect to which subparagraphs (C) and (D) are met....⁹

Note that determination of whether a domestic relations order, which a state court renders, is "qualified" is made by the Plan Administrator, not by the court that granted the order.¹⁰

* Alternate Payee "means any spouse [or] former spouse...who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to" the participant. ¹¹ Note that "[a] person who is an alternate payee under a [QDRO] shall be considered for purposes of any provision of [ERISA] a beneficiary under the plan;" ¹² only the employee who is a member of the plan is a "participant."

3. Framework for Analysis

Employing the foregoing terms and paraphrasing the pertinent portions of the legislative history of REA ¹³ ---- those regarding the QJ&SA and the QDRO ---- establishes the appropriate framework within which this case should be analyzed. Since the enactment of REA, ERISA pension plans have been required to provide automatic survivor benefits, principally a QJ&SA, to participants who retire under such plans. As noted by the district court, a QJ&SA comprises two separate and distinct benefits: (1) An annuity for the life of the participant, and (2) a succeeding annuity for the life of the surviving spouse (if there is one) of not less than 50% of the participant annuity. ¹⁴

To implement the importation of the QDRO procedure for accommodating situations such as divorce, community property partition, and the like, REA expressly exempted from ERISA's otherwise preemptive proscription of alienation of plan benefits, a narrowly limited set of permissible assignments to a similarly limited set of transferees, denominated "alternate payee," such as a surviving spouse, of specified plan benefits that are payable with respect to the participant. ¹⁵ The QDRO is the REA-created mechanism employed to facilitate this REA-recognized, tightly circumscribed set of non-preempted assignments of benefits.

To be a QDRO, a domestic relations order must designate, inter alia, the spouse or former spouse as an alternate payee. A domestic relations order can only be "qualified" (and thus can only become a QDRO), however, if it creates or recognizes the existence of an alternate payee's right, or assigns to an alternate payee the right, to receive all or a portion of the benefits payable with respect to a participant under one of the expressly designated types of ERISA retirement plans, and meets the other requirements of the statute.

To be an alternate payee under a QDRO, the spouse or former spouse of a plan participant must be recognized in a state court's domestic relations order as having a right to receive all, or a portion of, the benefit or benefits under the plan with respect to the participant. Moreover, to be "qualified," a domestic relations order must clearly specify the nature and portion of the benefits to be received by the alternate payee. Even then, the order cannot be qualified if it requires the plan to provide any type or form of benefit not otherwise provided under the plan, or if it requires the plan to provide increased benefits. And, as noted in the foregoing definitions, determination whether a domestic relations order is qualified and thus a QDRO is the job of a plan administrator.¹⁶

B. Facts and Proceedings

Jack and Janice married in 1968. Neither prior to nor during their marriage did Jack and Janice elect out of Louisiana's legal regime ---- the community of acquets and gains ---- for matrimonial property in that State; rather, they remained under the community regime at all pertinent times. ¹⁷ Throughout the time that Jack and Janice were married to each other, he was a participant in the Plan, an ERISA employee pension benefit plan for union workers.

Jack and Janice divorced on April 25, 1991. At that time, Jack was still a participant in the Plan: His annuity starting date had not arrived; indeed, he did not become eligible for pension benefits under the Plan until March 1, 1993 and did not receive his first check until August of that year. On the day in 1991 when they divorced, Jack and Janice executed an agreement settling their community property. It stipulated that Jack assigned to Janice "her" interest in his benefits under the Plan. This settlement agreement likely met REA's definition of a "domestic relations order" but it clearly failed to specify details sufficient to be deemed a QDRO; and neither party contends that it was or should have been.

Later that year, on September 27, 1991, Jack married Geraldine T. Duck ("Geraldine"). Jack and Geraldine were still married to each other (and had been for more than a year) when he retired for plan purposes and when his annuity starting date arrived. And, they were still married to each other on May 31, 1997 when he died.

On January 22, 1993, however, after Jack had married Geraldine but while he was still working and still a participant in the Plan, Janice obtained a domestic relations order from a state court in Louisiana. That order is labeled "Qualified Domestic Relations Order for Electricians' Pension Plan IBEW 995." It purports to divide and assign...