Seal v. Raw

• Decision Date: 04 November 1997
• Docket Number: No. WD,WD
• Citation: Seal v. Raw, 954 S.W.2d 681 (Mo. App. 1997)
• Parties: Deborah Jo SEAL, Respondent, v. Ronald Keith RAW, Appellant. 53777.
• Court: Missouri Court of Appeals

Page 681

954 S.W.2d 681

Deborah Jo SEAL, Respondent, v.Ronald Keith RAW, Appellant.

No. WD 53777.

Missouri Court of Appeals Western District.

Nov. 4, 1997.

David Holdsworth, Liberty, for Appellant.

William Shull, Jr., Liberty, for Respondent.

SPINDEN, Judge.

Ronald Keith Raw appeals the circuit court's judgment ordering the entry of a Qualified Domestic Relations Order (QDRO) eight years after the court entered its marriage dissolution decree.The QDRO affected payment of pension benefits to Raw's former wife, Deborah Jo Seal, pursuant to a property settlement contained in the parties' marriage dissolution decree.Raw contends that the circuit court did not have jurisdiction to enter the QDRO.We disagree and affirm the circuit court's judgment.

The circuit court dissolved Raw's and Seal's marriage on March 30, 1988.The couple agreed on distribution of their property, and the circuit court incorporated their agreement into its decree.The couple agreed that Seal would receive a share of Raw's "retirement/pension/annuity" plan from Raw's employer, Colgate Palmolive Company, and she had an option of receiving $600 a month or a sum set by a formula.Colgate Palmolive terminated Raw's employment in October 1993, but it continued giving him his regular salary through July 1994.He became eligible to receive benefits from the firm's pension plan in August 1994.

In April 1994, Seal asked the circuit court to enter a QDRO to protect her interest in the pension benefits.Raw signed the QDRO, and the circuit court entered it on May 2, 1994.On May 23, 1994, the pension plan's administrator told Seal that the QDRO was not qualified.On September 12, 1994, Raw asked the circuit court to set aside the QDRO's entry, and Raw and Seal stipulated to the circuit court's setting aside the QDRO on March 14, 1996.

In the meantime, Raw filed for bankruptcy on December 22, 1994, and asked the bankruptcy court to discharge the pension obligation to Seal.On May 2, 1995, the bankruptcy court ruled that the circuit court's dissolution decree established Seal's interest in the pension benefits and that Raw could not discharge the obligation because Seal had a "constructive trust" in the pension benefits and an equitable interest in a right to obtain a QDRO.On December 13, 1996, at Seal's request, the circuit court entered a new QDRO which has been accepted by the pension plan's administrator.

Raw appeals on three points.In all three, he challenges the circuit court's jurisdiction to enter the QDRO.

In his first point, Raw contends that because he and Seal agreed to a property settlement which addressed the division of pension benefits to Seal but did not provide for entry of a QDRO, the circuit court did not have jurisdiction to enter the QDRO.This is so, Raw claims, because § 452.325.2, RSMo 1994, mandates that an agreement concerning property settlement is binding on the court unless the court finds that the agreement is "unconscionable."Raw also contends that the agreement's language shows that he and Seal intended for the pension benefit to be paid to Seal through Raw--not directly by the pension plan.

Although § 452.325.2 does provide that an agreement concerning property settlement is binding on the court so long as it is not unconscionable, the General Assembly has added a qualifier to the statute.Section 452.325.5 also says, "Terms of the agreement set forth in the decree are enforceable by all remedies available for the enforcement of a judgment[.]"

Entry of a QDRO constitutes enforcement of a domestic relations order.A QDRO "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 participant plan[.]"29 U.S.C. § 1056(d)(3)(B)(i)(I)(Supp.1997).Congress has defined a domestic relations order as:

[A]ny judgment, decree, or order (including approval of a property settlement agreement) which--

(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and

(II) is made pursuant to a State domestic relations law (including a community property law).

29 U.S.C. § 1056(d)(3)(B)(ii)(Supp.1997).The circuit court's decree, therefore, was a domestic relations order.The circuit court's entry of the QDRO recognized and enforced Seal's rights created by the decree.The property settlement's not mentioning a QDRO did not preclude the circuit court's later use of a QDRO to enforce its decree.

We also disagree with Raw's contention that the decree's language indicated that Seal was to receive her share of the pension benefits directly from him.The decree said:

[Seal's] share of the sums payable [from the pension plan] shall be due to her immediately if, as and when same are paid from the said plan to [Raw], a survivor or other designee, and without regard to the binding effect of this Agreement upon [Raw's] employer, the said plan administrator or other person or entity other than [Raw].

Raw interprets this to mean that "if, as and when" benefits were actually paid by the plan to Raw, Seal would have to look to him for payment of her share.The circuit court could not, he argues, enter a QDRO.

The normal rules of contract construction govern the interpretation of property settlement agreements.A central tenet of contract construction is that "the court must consider the whole instrument and the natural and ordinary meaning of the language."Blackman v. Blackman, 767 S.W.2d 54, 59(Mo.App.1989).

The decree meant that Seal was to receive her portion of the pension benefits when Raw became eligible under the plan to receive them and that she was entitled to those benefits directly from Raw should the property settlement not be binding on the plan administrator to disburse those sums directly to her.This is supported by other language in the property settlement which says, "[Raw] hereby agrees to sign any and all documents on behalf of [Seal] with [Raw's] employer, Colgate Palmolive Company, to [e]nsure that [Seal] shall receive the benefits as set forth hereinabove."Raw and Seal obviously contemplated that Raw's employer would be involved in the distribution of the pension benefits.

Moreover, the common purpose for the phrase "if, as and when" in dissolution decrees has been to avoid the pitfalls in the contingent nature of pension vesting and of lump sum distributions.Kuchta v. Kuchta, 636 S.W.2d 663, 665-66(Mo. banc 1982).Enactment of the Retirement Equity Act of 1984 created an "alternative procedure," a QDRO, for dividing pension benefits.May v. May, 801 S.W.2d 728, 735(Mo.App.1990).

In May, a pensioner made the reverse of Raw's argument: Because the decree referred to a QDRO but did not state "if, as and when," the decree was unenforceable.Id.The court held that "the 'if, as and when' language ... is unnecessary when the benefits are to be paid pursuant to a QDRO[.]"Id. at 736.

In 29 U.S.C. § 1056(d)(3)(A), Congress authorized the creation of a QDRO to avoid the general prohibition against the assignment or alienation of pension benefits.When a domestic relations order is qualified pursuant to subsections (B), (C), (D), and (E) of the statute, a circuit court may use a QDRO to enforce a nonplan participant's right to "child support, alimony payments, or marital property rights" previously granted by "any judgment, decree, or order (including approval of a property settlement agreement)."29 U.S.C. § 1056(d)(3)(B)(ii)(Supp.1997).

We find no statutory mandate that a circuit court is restricted to dividing person benefits in a decree by one method or the other.Either method is sufficient, and neither is exclusionary.We, therefore, disagree with Raw's...