In re Larimore

• Decision Date: 06 November 2015
• Docket Number: No. 112,422.,112,422.
• Citation: 362 P.3d 843,52 Kan.App.2d 31
• Parties: In the Matter of the Marriage of David E. LARIMORE, Appellee, and Janice M. LARIMORE, Appellant.
• Court: Kansas Court of Appeals

52 Kan.App.2d 31

362 P.3d 843

In the Matter of the Marriage of David E. LARIMORE, Appellee, and Janice M. LARIMORE, Appellant.

No. 112,422.

Court of Appeals of Kansas.

Nov. 6, 2015.

Review Denied Feb. 17, 2017.

Jeff Dewey, of Dewey & Lund, LLP, of Wichita, for appellant.

Stephen M. Turley, of Cleary, Wagle & West, of Wichita, for appellee.

Before PIERRON, P.J., BUSER and POWELL, JJ.

BUSER, J.

Janice M. Larimore (Janice) challenges the district court's refusal in 2014 to compel her former husband, David E. Larimore (David), to cooperate in the preparation and execution of a qualified domestic relations order (QDRO). The QDRO was necessary to execute on the division of David's retirement accounts provided in the parties' divorce decree filed almost 12 years earlier in 2002. Janice contends the district court erred when it found the judgment had become absolutely extinguished and unenforceable because she failed to execute on the judgment within 7 years of the entry of the divorce decree. Finding no error, we affirm the district court's order.

FACTUAL AND PROCEDURAL BACKGROUND

David and Janice divorced after 21 years of marriage. According to the Journal Entry of Judgment and Decree of Divorce filed on October 8, 2002, the parties, with the assistance of counsel, executed a settlement agreement which defined their respective marital rights and obligations and provided for the care, custody, and support of their minor child. After the district court found the parties' agreement was fair, just, and equitable, it incorporated the property settlement agreement into the final divorce decree. See In re Estate of McLeish, 49 Kan.App.2d 246, 255, 307 P.3d 221 (2013), rev. denied 299 Kan. 1269 (2014).

In keeping with the settlement agreement, the divorce decree ordered the division of the parties' retirement accounts. In particular, David received the entirety of his "Cessna retirement account." But the parties opted to divide their respective retirement accounts at the Boeing Company (retirement accounts)—where both spouses were employed at the time of the divorce—by awarding each spouse 60% of their own retirement accounts and 40% of the other spouse's retirement accounts. It is undisputed, however, that neither Janice nor David submitted a QDRO, the approved method for dividing retirement accounts governed by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 (2012) et seq., between the parties involved in a divorce proceeding. See In re Marriage of Behnke & Ingram, No. 112,233, ––– Kan.App.2d ––––, 2015 WL 1311014, at *1 (Kan.App.2015) (unpublished opinion).

Almost 12 years later, on March 26, 2014, David filed a motion in the Sedgwick County District Court seeking "an order declaring the division of the parties' retirement accounts set forth in the [divorce] [d]ecree to be a void and unenforceable judgment." Based on K.S.A.2014 Supp. 60–2403 and Bank IV Wichita v. Plein, 250 Kan. 701, 830 P.2d 29 (1992), David contended the division of the parties' retirement accounts had been extinguished because no execution was made and a renewal affidavit was never filed. Additionally, David asserted the equitable doctrines of laches and estoppel prohibited Janice from executing on this judgment because not only had she delayed execution for an unreasonable amount of time, she had "[taken] action and made statements wherein she indicated that she no longer wished to receive [his] retirement benefits" and he had relied upon her inaction to his detriment.

In response, Janice filed a "Motion to Compel the Preparation and Execution of Qualified Domestic Relations Orders" and a "Motion to Stay Payments from Retirement Plans" on April 8, 2014. According to Janice, the divorce decree transferred ownership of a portion of David's retirement accounts to her and "[o]nce property[, other than cash judgments] is divided in a[d]ecree, it stands forever divided, and that division does not erode by virtue of dormancy." Janice further asserted that David had breached the parties' settlement agreement by seeking to void the division of their retirement accounts.

Alternatively, Janice contended that while K.S.A.2014 Supp. 60–2403 renders judgments dormant if a collection, garnishment, or renewal affidavit is not sought within a prescribed time, "[i]n the case of divided retirement plans, no such collection efforts may be had until the terms of the plan are met." As a result, because David was not yet receiving retirement benefits, Janice claimed the dormancy period had not started running because "[g]arnishment and/or execution [were] not available." Janice also argued that dormancy periods on the division of retirement accounts do not commence until the plan has entered pay status because federal law "puts no time limits on the filing of QDROs." She acknowledged, however, that in order to effectuate the division of David's retirement accounts, a QDRO was required to be filed; thus, she requested an order compelling David "to provide information, documentation and to otherwise cooperate in the preparation and execution of [a QDRO]."

On July 16, 2014, the district court held an evidentiary hearing to consider the parties' motions. Both Janice and David testified. David testified that within 1 month after the finalization of the divorce, Janice told him she did not desire to pursue a division of the retirement accounts. David testified that Janice told him, "[S]he [wasn't] going to go after my [retirement accounts], if I [didn't] go after hers." David testified that he "took [Janice] at her word," and based his financial decisions upon the belief that he would be entitled to collect all of his retirement accounts. With this understanding, he did not file a QDRO to collect his share of Janice's retirement accounts.

Janice, on the other hand, denied making any statements to David about waiving her right to enforce the division of the retirement accounts. On the contrary, Janice claimed she had planned her financial affairs expecting that she would receive 40% of David's retirement accounts. Janice testified that although she was aware that David could have made an early withdrawal from his 401k plan, she never took any actions to protect her portion of his retirement accounts because she assumed further action was unnecessary to give effect to the divorce decree. According to Janice, while nothing prevented her from filing a QDRO, she never did because she "thought everything was in place," and she was unaware a QDRO needed to be filed until she started "looking into [her] retirement."

The district court took the matter under advisement and issued a detailed memorandum decision on July 28, 2014. David's motion to declare the division of the retirement accounts void was granted, and Janice's motion to compel the execution of a QDRO was denied.

In the decision, the district court explained that a settlement agreement incorporated into a divorce decree has the characteristics of a judgment, and under K.S.A.2014 Supp. 60–2403, a judgment becomes dormant 5 years after its entry if the benefiting party fails to execute upon it within this timeframe. Once a judgment is dormant, a party may seek to revive it by filing a renewal affidavit within 2 years, but if no such affidavit is filed, " ‘it shall be the duty of the judge to release the judgment of record when requested to do so.’ " The district judge found that David had not deceived Janice into failing to file a timely QDRO or "otherwise timely seek to enforce the judgment."

According to the district court, neither party nor the court had been able to locate any published Kansas caselaw which established that a division of retirement accounts in a divorce case should be treated differently from any other judgment subject to dormancy and extinguishment. The district court cited, however, In re Marriage of Smith, No. 105,365, ––– Kan.App.2d ––––, 2012 WL 1649835 (Kan.App.2012) (unpublished opinion), as persuasive authority for the conclusion that no "exception for QDROs exists to the application of either dormancy or extinguishment." Consequently, because Janice and David failed to execute upon the judgment by filing a QDRO or obtaining a renewal affidavit before October 8, 2009 (7 years after the entry of the divorce decree), the district judge found the judgment had been extinguished and effectively ceased to exist.

Janice timely appeals.

INTRODUCTION

On appeal, Janice contends the district court erred on three grounds when it found her failure to file a QDRO or a renewal affidavit within 7 years of the filing of the divorce decree caused the judgment dividing the parties' retirement accounts to become absolutely extinguished and unenforceable. First, Janice contends ERISA preempts state dormancy statutes. Second, Janice asserts that judgments dividing retirement accounts in divorce proceedings are not subject to dormancy because unlike a monetary judgment, court-ordered transfers of property, i.e., real estate, personal property, or retirement accounts, merely involve a transfer of ownership which are not amenable to execution or garnishment. Finally, Janice argues that if the division of retirement accounts in a divorce decree qualifies as a judgment subject to dormancy, the dormancy period has not commenced in this case because the judgment has not yet become collectible.

In essence, Janice's appeal presents two questions: Is a district court's division of retirement accounts in a divorce decree subject to dormancy and extinguishment, and, if so, does the tolling provision of the dormancy statute, K.S.A.2014 Supp. 2403(c), delay the running of the dormancy period until the retirement accounts become payable? Resolution of these questions involves the interpretation of both Kansas statutes and federal law. See K.S.A.2014 Supp. 60–2403 and ERISA. Our court exercises unlimited review over statutory interpretation. Cady v. Schroll, 298 Kan. 731, 734, 317 P.3d 90 (2014).

We...