In re Geronimo

• Decision Date: 05 March 2020
• Docket Number: No. 1 CA-CV 18-0640 FC,1 CA-CV 18-0640 FC
• Citation: 248 Ariz. 451,461 P.3d 471
• Parties: In re the Marriage of: Jeanne Y. DELINTT, nka: Jeanne Beltran Geronimo, Petitioner/Appellant, v. Daniel D. DELINTT, Respondent/Appellee.
• Court: Arizona Court of Appeals

248 Ariz. 451

461 P.3d 471

In re the Marriage of: Jeanne Y. DELINTT, nka: Jeanne Beltran Geronimo, Petitioner/Appellant,

v.Daniel D. DELINTT, Respondent/Appellee.

No. 1 CA-CV 18-0640 FC

Court of Appeals of Arizona, Division 1.

FILED March 5, 2020

Janet H. Metcalf, PC, Yuma, By Janet H. Metcalf, Counsel for Petitioner/Appellant

S. Alan Cook, PC, Phoenix, By S. Alan Cook, Sharon L. Ottenberg, Counsel for Respondent/Appellee

Judge James B. Morse Jr. delivered the opinion of the Court, in which Presiding Judge Kenton D. Jones and Judge Diane M. Johnsen joined.

MORSE, Judge:

¶1 Jeanne Beltran Geronimo ("Wife") appeals from the denial of her petition to require Daniel D. DeLintt ("Husband") to pay her community interest in his federal retirement benefits as of the date he became eligible to retire. We hold that Wife did not waive the right to request an order for direct payment because the decree of dissolution deferred resolution of that issue. Therefore, we vacate the order and remand to the superior court for further proceedings consistent with this decision.

FACTS AND PROCEDURAL BACKGROUND

¶2 During their marriage, Husband worked for the United States Border Patrol. As a federal employee, Husband participates in the Federal Employee Retirement System ("FERS"). 5 U.S.C. §§ 8401 - 8479. When they divorced in 2010, Husband still worked for the Border Patrol and was not yet eligible to retire.

¶3 The parties agreed to equally divide the community interest in Husband's FERS benefits. Consistent with this agreement, the divorce decree provided that:

The petitioner and respondent shall equally divide the community interest in the FERS defined retirement benefit plan of the respondent ... [T]he parties shall equally divide the fee of Brian Daum to prepare any necessary domestic relations orders or Federal Retirement Orders to divide the [Thrift Savings Plan] and FERS plans consistent with this decree. The Court reserves jurisdiction to resolve any disputes regarding the division of these retirement plans.

¶4 In December 2017, Wife petitioned to enforce this provision in the decree, alleging that Husband was eligible to retire. Wife asked the court to order Husband to pay Wife her share of the retirement benefits directly if he chose to continue working, as authorized in Koelsch v. Koelsch, 148 Ariz. 176, 185, 713 P.2d 1234, 1243 (1986). The reimbursement payments owed by an employee spouse who chooses to continue working after becoming eligible to retire are known as Koelsch payments.

¶5 Husband moved to dismiss the petition, arguing that Wife waived any claim for Koelsch payments because she did not request them at the time of the divorce and did not appeal the decree. Husband also argued that federal law precludes Koelsch payments for FERS benefits. Wife responded that she did not waive this claim because the decree reserved jurisdiction to determine future payments. The superior court denied the motion to dismiss and ordered the parties to address how Boncoskey v. Boncoskey, 216 Ariz. 448, 167 P.3d 705 (App. 2007), affected Wife’s right to Koelsch payments.

¶6 The parties stipulated that Husband was eligible to retire when Wife filed her petition, but he continued to work and intends to work until 2021, when he turns 57. The superior court concluded that Wife was not entitled to Koelsch payments because the decree did not order such payments and Husband’s FERS benefits had not matured. The court further concluded that ordering Koelsch payments now, without an agreement or prior order, would constitute an improper post-decree modification. The court signed an order, as later amended, directing that Wife receive her share of the FERS benefits only when Husband actually retires. Wife filed a timely notice of appeal, and we have jurisdiction under A.R.S. § 12-2101(A)(2).

DISCUSSION

¶7 This case presents a question of law which we review de novo . See Danielson v. Evans, 201 Ariz. 401, 406, ¶ 13, 36 P.3d 749, 754 (App. 2001).

I. Wife Did Not Waive the Right to Seek Payments from Husband Because the Decree Reserved Jurisdiction to Consider Future Issues Relating to the Division of the Retirement Benefits.

¶8 The superior court concluded that Koelsch would not have applied when the parties divorced because Husband's FERS benefits had not matured, citing Boncoskey, 216 Ariz. 448, 167 P.3d 705. The court also found that ordering such payments now, where the decree did not expressly provide for them, would constitute an improper retroactive modification of the decree. See A.R.S. § 25-327(A) ("The provisions as to property disposition may not be revoked or modified, unless the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state."). Husband argues the superior court was correct because Koelsch predated the decree and Wife should have known to ask that the decree provide for Koelsch payments.

¶9 The decree is silent as to the timing and terms of how Wife was to receive her share of Husband's retirement benefits. The parties expressly deferred resolution of those issues, and, by reserving jurisdiction, the court accepted the parties’ decision to do so. Unlike the situation in Boncosky, Wife waited until Husband was eligible to retire to ask the court to order Koelsch payments. See Boncoskey, 216 Ariz. at 449-50, 453, ¶¶ 3, 6-7, 23, 167 P.3d 705, 706–07 (holding divorce decree improperly attempted to determine Koelsch payments fourteen years before the employee spouse was eligible to retire).

¶10 We also find no waiver because, unlike the non-employee spouse in Quijada v. Quijada, 246 Ariz. 217, 219, ¶ 1, 437 P.3d 876, 878 (App. 2019), Wife did not "agree[ ] that the community-property portion of retirement benefits will be paid upon distribution to the employee-spouse [.]" (Emphasis added). In Quijada , the non-employee spouse filed a post-decree petition seeking Koelsch payments after the employee spouse chose to work past his retirement date. Quijada, 246 Ariz. at 219, ¶ 4, 437 P.3d at 878. The court found the non-employee spouse waived the right to seek Koelsch payments because, in the divorce decree, which was entered by consent, she agreed to receive her share of the benefits when they were distributed to the employee spouse. Quijada, 246 Ariz. at 221, ¶ 10, 437 P.3d at 880. In contrast, the decree here contained no specific payment terms and expressly reserved jurisdiction over future disputes as to the division of retirement benefits. Accordingly, the superior court erred in concluding that Wife waived the right to request Koelsch payments.

II. Husband’s FERS Benefits May Be Considered for Purposes of Koelsch Payments.

¶11 Alternatively, Husband argues that we should affirm the superior court's order because federal law regulating FERS benefits precludes the direct payments authorized in Koelsch . Drawing an analogy to the military retirement benefits addressed in Barron v. Barron, 246 Ariz. 449, 440 P.3d 1136 (2019), Husband reasons that FERS benefits are not mature because he is not entitled to payments until he separates from service. Wife contends that Barron is limited to military retirement benefits which are subject to different restrictions. The superior court did not reach this issue because it found the decree did not provide for Koelsch payments. We address it here because it is a question of law that will arise on remand. Buckholtz v. Buckholtz , 246 Ariz. 126, 131, ¶ 17, 435 P.3d 1032, 1037 (App. 2019) (addressing issues or arguments that "may occur" on remand).

¶12 In Koelsch , 148 Ariz. at 180, 713 P.2d at 1238, the Arizona Supreme Court addressed "how and when a non-employee spouse's community interest in an employee's matured retirement plan is to be paid when the employee wants to continue working, thus delaying the receipt of retirement benefits." The court defined a "matured pension as an ‘unconditional right[ ] to immediate payment.’ " Id. at 178 n.2, 148 Ariz. at 1236 n.2. If the employee spouse chooses to continue working after his or her retirement rights have matured, "he or she would be liable to reimburse the non-employee spouse for the property interest in the monthly pension benefit[.]" Id. at 185. The court held that trial courts retain discretion "under very limited circumstances" to defer "all or part of the monthly payment owed to the non-employee spouse[ ]" as long as the deferred payments were repaid with interest and secured by a lien or by an insurance policy naming the non-employee spouse as a beneficiary. Id.

¶13 In Barron, the Arizona Supreme Court created an exception to Koelsch , holding that federal law applicable to military retirement pay ("MRP") did not allow Koelsch reimbursement payments. Barron , 246 Ariz. at 451-52, ¶¶ 14-18, 440 P.3d 1136. Specifically, Barron recognized that, although MRP is community property, state courts may divide it only "to the extent permitted by federal law." Id. at 450, ¶ 10.

¶14 To that end, Barron explained that the Uniformed Services Former Spouses Protection Act ("USFSPA"), 10 U.S.C. § 1408, granted state courts " ‘precise and limited’ authority ... ‘to treat disposable retired pay as community property.’ " Barron, 246 Ariz. at 450, ¶ 7, 440 P.3d 1136 (quoting Mansell v. Mansell , 490 U.S. 581, 589, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989) ). According to 10 U.S.C. § 1408(a)(4)(A), "disposable retired pay" is the monthly pay to which the member is "entitled." Barron, 246 Ariz. at 451, ¶ 14, 440 P.3d 1136. The court pointed out that the legislative history of this statute provides that a member is "entitled" to disposable retired pay only when he or she has "applied and been approved for military retirement benefits." Id. at ¶ 15. And the regulation states "it is not enough that the member could, if the member so desired, retire .... [r]ather, the member must have actually retired from the uniformed service ...." Id. (quoting S. Rep. No. 97-502, at 17 (1982)). The distinction was important because, as...