Shorter v. Shorter

• Decision Date: 28 July 2006
• Docket Number: No. 75A04-0508-CV-491.,75A04-0508-CV-491.
• Parties: Rosanne B. SHORTER, Appellant-Respondent, v. Lester J. SHORTER, Appellee-Petitioner.
• Court: Indiana Appellate Court

851 N.E.2d 378

Rosanne B. SHORTER, Appellant-Respondent, v. Lester J. SHORTER, Appellee-Petitioner.

No. 75A04-0508-CV-491.

Court of Appeals of Indiana.

July 28, 2006.

George R. Livarchik, Livarchik & Farahmand, Chesteron, IN, Attorney for Appellant.

Donald W. Pagos, Michigan City, IN, Attorney for Appellee.

OPINION

FRIEDLANDER, Judge.

Rosanne B. Shorter and Lester Shorter were divorced via a summary dissolution decree, which incorporated a property settlement agreement (Settlement Agreement) reached by the parties. Thereafter, Lester filed a petition pertaining to the division of his pension¹ pursuant to the decree. Rosanne appeals the granting of Lester's petition, presenting the following restated issue for review: Did the trial court erroneously determine that Rosanne was not entitled to an increase in the pension fund that accrued after the valuation date, but before the QDRO creating her account became effective?

We reverse and remand with instructions.

The relevant facts are not in dispute. The Shorters divorced by summary dissolution decree, entered on March 10, 2003. In the decree, the court approved and incorporated the parties' Settlement Agreement. The only portion of the Settlement Agreement that would eventually come into dispute concerned Lester's pension. That provision of the Settlement Agreement stated:

That the wife is awarded one-half of the value in the husband's 401(k) and one-half of the value in the husband's pension plan as of this date and that the Court should enter a Qualified Domestic Relations Order (prepared by wife's attorney) to convey wife's interest in husband's pension and 401(k) plan. This Court retains jurisdiction to amend the Qualified Domestic Relations Order as may become necessary.

Id. at 9. Lester had signed the Settlement Agreement on February 24, 2003, and Rosanne signed it on March 7, 2003.

At approximately the time of the Shorters' divorce, Lester's employer, Bethlehem Steel, was going out of business. As a result, Pension Benefit Guaranty Corporation (PBGC) took over Bethlehem Steel's pension plan. Lester's pension was transferred to Fidelity Investments (Fidelity). During 2003, its value fluctuated due to market conditions. Between January 1 and March 31 of that year, it decreased in value by $3830.16, from $165,231.43 to $161,401.27. By June 30, 2003, the pension account had been transferred into a rollover IRA at Fidelity. By November 1, 2003, its value had increased to $188,713.77.

Because Bethlehem Steel was going out of business and the pension accounts were being transferred to different carriers, there was a delay in dividing Lester's 401(k) between the parties. On October 30, 2003, Lester sent the following letter to Fidelity:

Please accept this as my letter of instruction that you are to roll over from my Account ... into the account of my former wife, Rosanne Shorter, ... half of my Fidelity Account at the time the dissolution of marriage action was granted. This account total was in the amount of $161,401.27 and, therefore, please roll over into the account of my former wife one-half, or the sum of $80,700.64.

Id. at 4 (emphasis in original). On November 11, 2003, Rosanne's dissolution attorney sent the following letter to Fidelity:

Pursuant to your instruction in letter dated October 20, 2003, I am enclosing:

Letter of acceptance from the recipient IRA owner/Rosanne B. Shorter indicating agreement to the transfer instructions.

Letter of instruction from relinquishing IRA owner/Lester J. Shorter that includes the account number ... and the amount that needs to be transferred ($80,700.64).

Id. at 4-5. On November 24, 2003, Fidelity transferred $94,207.08 (not $80,700.64) into a new IRA in Rosanne's name.

On January 29, 2004, Rosanne's new attorney sent the following letter to Fidelity:

I am confirming that a problem has arisen as a result of transfers made by Fidelity Investments pursuant to the enclosed October 20, 2003 letter from Jen Bee of Fidelity and the enclosed November 11, 2003 letter from Rosanne Shorter's former attorney ....

Per the enclosed November 11, 2003 letter, the IRA owner, Lester J. Shorter, authorized the amount to be transferred to be the sum of $80,700.64. Also enclosed under that November 11, 2003 letter was certified copy of the Dissolution Decree that at page three, paragraph 11 awarded Wife one-half of Husband's 401(k) ... "as of this date". Please note page one of the Final Property Settlement Agreement shows the date of the Agreement to be the 7th day of March, 2003. This is consistent with the date of the notary on the last page (March 7, 2003), although the document was not, in fact, filed with the Court until March 10, 2003.

It appears that the amount that Mr. Shorter thought he was authorizing was one-half of the March 7, 2003 balance in the account (i.e., $80,700.64). Per November 25, 2003 telephone conversation from Wayne and then Dave of Fidelity, Rosanne learned that Fidelity had transferred the sum of $94,207.06 into her account. Please understand that Rosanne only seeks to have in her account, the amount that was awarded to her per the March 10, 2003 Divorce Decree/Final Settlement Agreement, consistent with Indiana law. Thus, the correct division should have been as follows:

1. Effective March 7, 2003, should divide Lester J. Shorter/Participant's account into two separate accounts:

a) The first account would be the account owned by Rosanne B. Shorter/Alternate payee (recipient) and would include one-half of the March 7, 2003 balance in Lester's account (taking a pro rata share from all investment options), together with any gain or loss thereon after March 7, 2003.

b) The second account would be the account owned by Lester J. Shorter/Participant and would consist of the rest and remainder of the March 7, 2003 balance in Lester's account, together with any gain or loss thereon after March 7, 2003.

It appears that Fidelity mistakenly divided Mr. Shorter's account on November 25, 2003 by simply dividing the November 25, 2003 balance in half. My client is requesting that Fidelity correct that error at this time. In order for that to be done, I need you to fax to me ... your calculations showing the division of Lester J. Shorter's Fidelity account as of March 7, 2003, into the two separate accounts described above, your letter should then provide either statements of account or calculations showing how Wife's one-half interest in the March 7, 2003 balance in the account, had gains and/or losses from March 7 2003 until the date Fidelity deposited $94,207.06 in her account.

Id. at 78-79. Fidelity responded on February 16, 2004 with charts indicating that if Rosanne's half of Lester's pension account been deposited into her own account on March 7, by November 24, 2003, that account would have accrued total gains of $12,512.41 and been worth $90,711.13. At that point, Rosanne notified Lester of her view that she was entitled to $90,711.13 from his pension account as of November 24, 2003, and that she would return the $3495.95 difference as overpayment. Lester rejected that position, claiming that she was entitled to only $80,700.64, i.e., one-half of the value of the account as of March 10, and not the interest earned thereon from March 7 until November 24 of 2003.

The parties reached an impasse, and on February 22, 2005, Lester filed a petition asking the court to clarify that Rosanne was entitled to $80,700.64, not $90,711.13. On July 26, 2005, the trial court granted Lester's petition, issuing the following order:

1) The Final Decree of Dissolution provides (in part) that the Property Settlement Agreement "is in complete discharge of the legal obligation of [sic] each of the parties owe to the other. ..."

2) The final Property Settlement referred to above provided (Paragraph 11) "that Wife is awarded one-half of the value in the Husband's 401(k) and one-half of the value in the Husband's pension plan as of this date ..." (Emphasis added).

3) The Final Property Settlement is dated 10 March 2003.

4) The account value of the 401(k) on 7 March 2003 is $78,192.72.

The Court concludes:

1) The provisions of the Final Decree and the Final Property Settlement are clear and unambiguous.

2) The law provides that parties to an investment plan will share the rewards and risks associated with the plan absent express language stating otherwise.

3) The parties expressly agreed in the Property Settlement that the Wife's interest was determined "as of this date" (10 Mar. 03). The expressed [sic] language of a determination is clear as to date and financial interest.

4) There is no necessity to interpret any ambiguity as there is none.

5) These parties voluntarily crafted their own settlement agreement which language is to be given its plain and ordinary meaning.

6) This Court recognizes and enforces the agreement of these parties according to the language of the instrument.

Id. at 27-28.

We begin our analysis by noting the parties disagree as to the appropriate standard of review. Lester contends that we should employ an abuse-of-discretion standard because the petition upon which this action is ultimately based, i.e., the February 25, 2005 petition to order the return of Fidelity's putative overpayment to Rosanne, should be treated as a motion for relief from judgment. Claiming that Rosanne has acquiesced in so designating the petition, Lester cites Beike v. Beike, 805 N.E.2d 1265 (Ind.Ct.App.2004) in support of his contention that the ruling on such a motion is reviewed for abuse of discretion. Rosanne, on the other hand, claims the matter should be reviewed de novo, as it involves construing the provisions of a written contract. We agree with Rosanne.

When dissolving a marriage, the parties are free to draft their own settlement agreement. White v. White, 819 N.E.2d 68 (Ind.Ct.App.2004). Such agreements are contractual in nature and become binding upon the parties when the...