Howard v. Howard

Citation490 S.W.3d 179
Decision Date31 March 2016
Docket NumberNO. 01–14–00761–CV,01–14–00761–CV
PartiesWinnie Howard, Appellant v. Stephen Howard, Appellee
CourtCourt of Appeals of Texas

Ronique Bastine Robinson, Bastine and Associates, Stafford, TX, for Appellant.

Kim K. Ogg, R. Scott Poerschke, Chris Ainsworth, The OGG Law Firm, PLLC, Houston, TX, for Appellee.

Panel consists of Justices Keyes, Bland, and Massengale.

OPINION

Jane Bland

, Justice

In this appeal from a qualified domestic relations order (QDRO), we determine the appropriate method for allocation of retirement benefits pursuant to the parties' agreed divorce decree. In particular, we determine whether a divorce decree that ordered that one spouse receive one-half of any vested retirement benefits that related to the months of employee service during the marriage was limited to one-half of the employee's payroll contributions to the plan. The trial court found the decree to be so limited and ordered that Stephen Howard pay Winnie Howard one-half of the employee payroll contributions that Stephen Howard made toward his employment-related retirement plan during the months of their marriage.

Winnie Howard challenges this interpretation of the parties' divorce decree, contending that the trial court erred in limiting her allocation to one-half of payroll contributions during the marriage instead of one-half of the vested retirement benefits relating to the months of Stephen's employment during the marriage. We agree, and hold that the divorce decree awarded to Winnie one-half of the vested benefits that accrued during the months of the marriage rather than one-half of the employee payroll contributions made during the months of the marriage. We therefore reverse and remand.

BACKGROUND

The Howards married on November 23, 1979 and were divorced on November 28, 1988; thus, they were married for approximately nine years. About six months after the couple married, Stephen began working for the Houston Police Department. He continued working for HPD after the divorce. The QDRO enforces the community property division within the Howards' 1988 divorce decree, which provided that Winnie Howard was entitled to “one-half of all sums related to any vested retirement or pension plan of Stephen Howard existing by reason of his employment during the marriage.” We set forth the divorce decree, the benefit plan, and the trial court's findings in connection with both.

A. The 1988 Divorce Decree

The property division section of the Howards' 1988 divorce decree provides, in pertinent part:

DIVISION OF PROPERTY

The Court finds that [Winnie] and [Stephen] have entered into an agreement for the division of their estate.... It is ordered ... that the estate of the parties is divided as follows:
...
[Winnie] is awarded the following as her sole and separate property, and [Stephen] is divested of all right, title, and claim in and to such property:
...
3. One half of any and all sums related to any vested profit sharing plan, retirement plan, pension plan, employee stock option plan, employee savings plan or accrued unpaid bonuses, or other benefit programs existing by reason of [Stephen]'s employment during the marriage.
B. Stephen's Retirement Benefits

Beginning with his date of employment, Stephen participated in the Houston Police Officer's Pension System (“HPOPS”). During the marriage, Stephen worked for HPD for eight and a half years and had made employee payroll contributions of $20,765 into HPOPS.

At the time of the Howards' divorce, the HPOPS benefits in existence included:

• A retirement benefit, for which officers with 10 years of service or more with HPD may be eligible. This benefit allows an officer to elect a return of contributions or a benefit payable at age 60 of 2.75% of the final average pay of each year of credited pension service.
• A service retirement benefit, which is available to an officer who has earned 20 years of pension service.

In the years after the Howards' 1988 divorce, HPOPS added two benefits:

• the Deferred Retirement Option Program [DROP] benefit: This benefit, first offered in 1995, provides an officer who has served with the HPD for 20 years with the option to defer retirement; if retirement is deferred after 20 years of employment, then eligible retirement benefits pay into another account while the officer continues working, which builds into a lump sum available when the officer actually retires.
and
• A lump sum retirement bonus: In 1998, HPOPS added a $5,000 lump sum payment for retiring officers who had 20 years of service.

An HPD employee who leaves employment before becoming vested in the HPOPS plans is entitled to a refund of the employee payroll contributions paid into the plan but is not entitled to any retirement benefits.

In June 2001, HPOPS amended its plan to allow officers who had accrued years of service while in other City of Houston employment to add that service time for purposes of benefit eligibility. Before his employment with HPD, Stephen had worked for the Houston Fire Department for two years and three months, beginning on February 25, 1978 and continuing until his employment with HPD; thus, he worked for HFD for about six months during the marriage and a year and nine months prior to the marriage. This option added the two years and three months of service credit that he had earned as a Houston firefighter to Stephen's years of HPD service for vesting purposes.

In 1998, based on his accumulated 20 years of service credit, Stephen was eligible to retire from the HPD. He elected not to retire and participated in the DROP program. His “DROP entry date” for purposes of accruing DROP benefits was December 12, 1998.

C. The Trial Court's Findings

After hearing evidence in a bench trial, the trial court entered the QDRO interpreting the divorce decree and awarding benefits. The trial court found:

The decree plainly provides that [Winnie] was awarded one-half [or 50%] of any and all sums related to any vested retirement/pension plan of [Stephen] existing by reason of [Stephen]'s employment during the marriage.

The trial court further found that on November 28, 1988—the date of the divorce—Stephen

had a vested retirement/pension benefit of $20,765.00 with HPOPS and had 8 years and 6 months of credited pension service. [Stephen] had no other vested retirement/pension benefit with HPOPS on [the date of the divorce], [Stephen] was not entitled to interest on his vested retirement/pension benefit on [the date of the divorce....
$20,765.00 reflects the total vested retirement/pension benefits available to [Stephen] on the date of divorce.

Based on these findings, the trial court ordered:

[Winnie] shall as of the date of this order have the right to be paid the 50% of 20,765 or TEN THOUSAND THREE HUNDRED EIGHTY–TWO DOLLARS AND FIFTY CENTS ($10,382.50) of [Stephen]'s retirement/pension benefit with HPOPS.

Winnie appeals the trial court's order, contending that the trial court erred in its interpretation of the divorce decree because the benefit of eight years and six months of credited pension service was not a refund of the employee contribution but instead was a pro-rata share of the retirement benefits accrued. Stephen responds that the trial court correctly awarded a lump sum return of one-half of the contributions that he made during the marriage, because he had not vested in the HPOPS retirement plan as of the date of the divorce.

DISCUSSION

The parties' dispute centers on the provision in the 1988 divorce decree granting [o]ne half of any and all sums related to any vested profit sharing plan, retirement plan, pension plan, employee stock option plan, employee savings plan or accrued unpaid bonuses, or other benefit programs existing by reason of [Stephen]'s employment during the marriage. We must decide whether—as Stephen contends and the trial court found—the divorce decree awarded retirement benefits for plans that already had “vested” as of the date the Howards' divorce in 1988, or whether, as Winnie contends, it awarded Winnie an interest in vested retirement benefits that came due and payable to the beneficiary in the years after the marriage that “exist[ed] by reason of” Stephen's employment during the marriage.

I. Division of Retirement Benefits

A. Standard of Review

We review a trial court's ruling on a post-divorce motion for enforcement or clarification for an abuse of discretion. DeGroot v. DeGroot, 369 S.W.3d 918, 921–22 (Tex.App.–Dallas 2012, no pet.)

; Gainous v. Gainous, 219 S.W.3d 97, 103 (Tex.App.–Houston [1st Dist.] 2006, pet. denied)

. A trial court abuses its discretion only if it reaches a decision so arbitrary and unreasonable that it amounts to a clear and prejudicial error of law or if it clearly fails to correctly analyze or apply the law. Intercont'l

Terminals Co., LLC v. Vopak N. Am., Inc., 354 S.W.3d 887, 892 (Tex.App.–Houston [1st Dist.] 2011, no pet.) (citing In re Olshan Found. Repair Co., LLC, 328 S.W.3d 883, 888 (Tex.2010) ); see also

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.1985).

B. Relevant Marital Property Law
1. Interpretation of property division provisions

In this case, the parties have virtually no dispute concerning the circumstances of their divorce or the facts relating to Stephen's employment during and after their marriage; rather, they contest the meaning of the agreed divorce provision dividing Stephen's HPOPS retirement benefits. An agreed property division incorporated into a final divorce decree is treated as a contract and is controlled by the rules of construction applicable to ordinary contracts. Allen v. Allen, 717 S.W.2d 311, 313 (Tex.1986)

; Beshears v. Beshears, 423 S.W.3d 493, 500 (Tex.App.–Dallas 2014, no pet.) ; McCoy v. Rogers, 240 S.W.3d 267, 275–76 (Tex.App.–Houston [1st Dist.] 2007, pet. denied). Our primary concern in interpreting a contract is to ascertain the parties' intent. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323,...

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