La. Emp. Retirement Systems v. Mcwilliams

• Decision Date: 09 June 2006
• Docket Number: No. 2005 CA 0938.,2005 CA 0938.
• Parties: LOUISIANA STATE EMPLOYEES' RETIREMENT SYSTEM (LASERS) v. Jane McWILLIAMS, Joelle McWilliams, and Dianne (McWilliams) Sanders.
• Court: Court of Appeal of Louisiana — District of US

938 So.2d 782

LOUISIANA STATE EMPLOYEES' RETIREMENT SYSTEM (LASERS) v. Jane McWILLIAMS, Joelle McWilliams, and Dianne (McWilliams) Sanders.

No. 2005 CA 0938.

Court of Appeal of Louisiana, First Circuit.

June 9, 2006.

Rehearing Denied August 1, 2006.

Lila Tritico Hogan, Hammond, Counsel for Substitute Defendant/Appellant Richard Sanders, Substitute Party for Dianne (McWilliams) Sanders.

Jonathan R. Schmidt, Hammond, Counsel for Defendant/Appellee Jane McWilliams.

Joelle McWilliams, Baton Rouge, Defendant/Appellee In Proper Person.

Before: CARTER, C.J., DOWNING, and GAIDRY, JJ.

GAIDRY, J.

The issue in this case is the distinction between survivor and retirement benefits paid under the Louisiana State Employees' Retirement System. For the following reasons, we reverse.

FACTS AND PROCEDURAL HISTORY

Joel and Dianne McWilliams were married on April 26, 1969. On January 10, 1972, Joel began employment with the State of Louisiana. The McWilliams's community property regime terminated on June 15, 1987, and the parties were divorced on October 12, 1987. A December 15, 1989 judgment of the 21st Judicial District Court recognized Dianne's interest in Joel's Louisiana State Employees' Retirement System (LASERS) plan, and stated that her "interest ... shall be calculated as follows when and if he retires, terminates employment, or dies." On September 15, 1987, Joel completed a LASERS "Change of Beneficiary" form, naming his two daughters, Jodee and Joelle, as beneficiaries. Both Joel and Dianne eventually remarried. Joel completed another "Change of Beneficiary" form on June 18, 1997, naming his new wife, Jane McWilliams, as his beneficiary, and his daughters Jodee and Joelle as contingent beneficiaries. On August 25, 1998, a second judgment was rendered by the 21st Judicial District Court which amended the 1989 judgment to provide that the portion of Joel's retirement/pension attributable to creditable service during the community was 217 months, 20 days.¹ Joel died on May 24, 2003. At the time of his death, Joel was still employed by the State. After his death, Dianne, Jane, and Joelle each filed a claim for benefits with LASERS, and LASERS invoked a concursus proceeding.

After taking the matter under advisement, Judge Wilson Fields ruled that the Sims formula did not apply to the survivors' benefits and that survivors' benefits were owed only to the surviving spouse and minor child under La. R.S. 11:471. Judge Fields stated that he would not consider the judgments of the 21st Judicial District Court recognizing Dianne's interest in Joel's LASERS plan if and when he "retires, terminates employment, or dies" in ruling on Dianne's interest in the survivors' benefits. Judge Fields stated that "the court feels that it is not the proper court to interpret ... the 21st J.D.C. ruling. ... Either the 21st J.D.C. needs to revisit their ruling or take it up on appeal if one side or the other does not feel that that was an appropriate ruling."

Dianne² appealed this judgment, alleging that the trial court erred in distinguishing survivors' benefits from retirement benefits, refusing to give effect to the judgments of the 21st Judicial District Court recognizing Dianne's interest in Joel's plan when he dies, and in the alternative, refusing to award Dianne one-half of the community contributions made during her marriage to Joel. Jane McWilliams answered Dianne's appeal, seeking damages for a frivolous appeal.

DISCUSSION

Categorization of Survivor's Benefits

The primary issue in this case is whether the survivors' benefits to be paid by LASERS are an asset of the community that existed between Joel and Dianne McWilliams, such that Dianne would be entitled to a Sims portion of those benefits. Unless the legislature specifically provides otherwise, any benefit payable by a retirement plan, to the extent attributable to the community, is an asset of the community. Vicknair v. Firefighters' Pension and Relief Fund of New Orleans, 05-0467 (La.App. 4 Cir. 6/15/05), 907 So.2d 787, 789. Since the survivors' benefits at issue in this case are payable by a retirement plan and would therefore be considered an asset of the community, we must determine if the legislature has provided to the contrary.

Survivors' benefits payable under LASERS are governed by La. R.S. 11:471. The statute lists three categories of individuals who may qualify to receive survivors' benefits: surviving minor children, surviving handicapped children, and surviving spouses.³ The statute then sets forth a method of calculating survivors' benefits for each category of recipient. Individuals who qualify as survivors under the statute must furnish proof yearly or at such other times as the board of trustees may deem necessary that they are still legally entitled to survivors' benefits. La. R.S. 11:474.

A LASERS member is guaranteed, at a minimum, the return of his accumulated contributions, either in the form of a monthly benefit or a lump-sum refund. If a member dies with no qualified surviving spouse, surviving minor children, or surviving handicapped children, his accumulated contributions are refunded in a lump sum payment to his named beneficiary or his estate. La. R.S. 11:476. If he leaves qualified survivors, but survivors' benefits cease (for example, because the survivors are no longer qualified under the statute) before the total monthly benefits paid equal the total accumulated contributions of the member, LASERS will refund to the member's named beneficiaries or the beneficiaries' estates...