Torres v. Torres

• Decision Date: 17 December 2002
• Docket Number: No. 23089.,23089.
• Citation: 60 P.3d 798,100 Haw. 397
• Parties: Margot C. TORRES, Plaintiff-Appellee, v. Alfred TORRES, Jr., Defendant, and Louan Torres, Successor-In-Interest/Party-In-Interest-Appellant.
• Court: Hawaii Supreme Court

60 P.3d 798

100 Haw. 397

Margot C. TORRES, Plaintiff-Appellee, v. Alfred TORRES, Jr., Defendant, and Louan Torres, Successor-In-Interest/Party-In-Interest-Appellant.

No. 23089.

Supreme Court of Hawai`i.

December 17, 2002.

As Amended January 6, 2003.

Michael F. McCarthy, Honolulu, on the briefs, for survivor-in-interest/party-in-interest-appellant, Louan Torres.

Blake T. Okimoto, Honolulu, on the briefs, for plaintiff-appellee, Margot C. Torres.

Ashley K. Ikeda Honolulu, and Lori K. Aquino (of Van Bourg, Weinberg, Roger & Rosenfeld), on the briefs, for amicus curiae Board of Trustees of the Pension Trust for Operating Engineers.

MOON, C.J., LEVINSON, and NAKAYAMA, JJ.; ACOBA, J., dissenting, with whom RAMIL, J., joins.

Opinion of the Court by MOON, C.J.

Successor-in-interest/party-in-interest-appellant Louan B. Torres (Louan), the surviving spouse of Alfred Torres, Jr. (Alfred), appeals from the Family Court of the First Circuit's: (1) November 17, 1999 order granting the motion of plaintiff-appellee Margot C. Torres (Margot), Alfred's ex-spouse, for entry of an amended "qualified domestic relations order"; and (2) December 17, 1999 order denying Louan's motion for reconsideration of the grant of Margot's motion. The family court's orders effectively amended Margot and Alfred's 1989 divorce decree [hereinafter, Decree or initial Decree] after Alfred's death and awarded survivorship benefits from Alfred's pension to Margot. On appeal, Louan contends that the family court erred because: (1) neither Louan nor Alfred's estate were parties to the instant action, which was brought by Margot; (2) the language of the Decree and Hawai`i Revised Statutes (HRS) § 580-56 (1993) did not permit the family court to exercise jurisdiction over the rights to survivor benefits associated with Alfred's pension; (3) the court's finding concerning the date that Margot received notice from Alfred's pension fund that she was not entitled to retirement benefits based on the Decree as it was then written was clearly erroneous; (4) the court's orders interfered with Louan's rights to pension benefits insofar as, under the Employee Retirement Income Security Act of 1974 (ERISA), Pub.L. No. 93-406, 88 Stat. 832, as amended by the Retirement Equity Act of 1984(REA), Pub.L. No. 98-397, 98 Stat. 1426 (codified at 29 U.S.C. § 1001 et. seq.), such rights vested in Louan at either Alfred's retirement or death; and (5) the court's orders further interfered with Louan's rights to certain "segregated amounts" of the pension benefits pursuant to ERISA, as amended by the REA. Margot disagrees and also contends that this court does not have jurisdiction over Louan's appeal because the appeal is untimely. Finally, amicus curia The Board of Trustees of the Pension Trust Fund for Operating Engineers (the Fund), the trustees of Alfred's pension, submits that the family court's orders do not violate federal law. For the reasons discussed herein, we affirm the family court's orders.

I. INTRODUCTION

Because this case involves aspects of pension benefits that are governed by federal law, a preliminary review of some aspects of this law may facilitate an understanding of the background facts. ERISA, as amended by the REA [hereinafter, collectively, ERISA, unless it is clear from the context that pre-REA aspects of ERISA are discussed], is designed to ensure the proper administration of employee benefit and pension plans. See Boggs v. Boggs, 520 U.S. 833, 839, 117 S.Ct. 1754, 138 L.Ed.2d 45, reh'g denied, 521 U.S. 1138, 118 S.Ct. 9, 138 L.Ed.2d 1043 (1997). In initially enacting ERISA, Congress explained that:

[T]he growth in size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; . . . the continued well-being and security of millions of employees and their dependents are directly affected by these plans; . . . they are affected with a national public interest; . . . [and] they have become an important factor affecting the stability of employment and the successful development of industrial relations . . . .

29 U.S.C. § 1001(a).¹ ERISA is an intricate and comprehensive regulatory scheme. See Boggs, 520 U.S. at 841, 117 S.Ct. 1754. All employee benefit plans must conform to various reporting, disclosure, and fiduciary requirements, see generally 29 U.S.C. §§ 1021, 1031, and 1101 to 1114. In addition to the foregoing requirements, pension plans must also comply with various participation, vesting, and funding requirements. See generally 29 U.S.C §§ 1051 to 1086; Boggs, 520 U.S. at 841, 117 S.Ct. 1754.

The principal object of ERISA is to protect

the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.

29 U.S.C. § 1001(b); see also Boggs, 520 U.S. at 845, 117 S.Ct. 1754. ERISA imposes a general duty upon plan fiduciaries to act "solely in the interest of the participants and beneficiaries . . . for the exclusive purpose of. . . providing benefits to participants and their beneficiaries . . . ." 29 U.S.C. § 1104(a)(1)(A)(i).

A typical form of retirement benefit is a "qualified joint and survivor annuity" (QJ & SA) that, under ERISA, each pension plan is required to offer to its participants. See 29 U.S.C. § 1055(a)(1).² A QJ & SA guarantees payment of a stipulated amount to two persons—typically the retired participant and his or her spouse—while both are alive. See 29 U.S.C. § 1055(d);³see also Dorn v. International Brotherhood of Electrical Workers, 211 F.3d 938, 941 (5th Cir.2000). If the participant dies first, the surviving spouse is guaranteed, for the remainder of his or her life, payments equal to at least fifty percent of the amount received while the participant was alive. 29 U.S.C. § 1055(d). Should the participant die after working long enough to qualify for benefits but before retiring, the surviving spouse is also guaranteed lifetime payments; this benefit is referred to as a qualified preretirement survivor annuity (QPRSA). See 29 U.S.C. §§ 1055(a)(2) and 1055(e).⁴ Both forms of benefits—the QJ & SA and the QPRSA—are referred to collectively throughout this memorandum as "surviving spouse benefits" or "survivor benefits."

To accomplish its ends, ERISA contains a broad anti-alienation, or "spendthrift" provision, 29 U.S.C. § 1056(d)(1), (discussed infra), that prohibits pension plans from assigning benefits to individuals other than the designated participant or current surviving spouse. Moreover, ERISA also contains a broad preemption provision that supersedes contradictory state laws, 29 U.S.C. § 1144(a) (discussed infra), including, in some respects, domestic relations law. Prior to the enactment of the REA, courts apparently disagreed as to whether this preemption provision, in combination with the spendthrift provision, barred state courts from issuing orders in domestic relations proceedings that could affect pension benefits governed by ERISA. See Trustees of the Directors Guild of America-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 419 (9th Cir. 2000) [hereinafter, Directors Guild]. As a result, a participant's ex-spouse was at risk, in some circumstances, of being "frozen out" of any retirement benefits earned by the participant attributable to employment that took place during the course of the marriage. If the participant remarried and subsequently died, the surviving spouse—rather than the ex-spouse—may have been entitled to the benefits payable under either a QJ & SA or a QPRSA, regardless of the equities of the situation. See 29 U.S.C. §§ 1055(d) and 1055(e).

Responding to the confusion on this point, and "taking into account changes in work patterns, the status of marriage as an economic partnership, and the substantial contribution to that partnership of spouses who work both in and outside the home," Congress amended ERISA in 1984 [by passing the REA] specifically to provide for state-court-ordered assignments of plan benefits to former spouses and dependents.

Directors Guild,234 F.3d at 419 (quoting Senate Judiciary Committee, S.Rep. No. 98-575 at 1 (1984)). The REA created an exception to ERISA's general anti-alienation provision by permitting pension benefits to be disbursed to a former spouse who presents a "qualified domestic relations order" (QDRO) to a pension plan administrator. 29 U.S.C. § 1056(d)(3); see also Directors Guild,234 F.3d at 419-20.

QDROs are a subset of "domestic relations orders" ("DROs"); DROs are any orders relating "to the provision of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a plan participant . . . made pursuant to a State domestic relations law." 29 U.S.C. § 1056(d)(3)(ii). A DRO is a QDRO if it "creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or part of the benefits payable with respect to a participant under a[n ERISA] plan[.]" 29 U.S.C. § 1056(d)(3)(B).

Directors Guild, 234 F.3d at 420 (footnote omitted). An alternate payee is "any spouse, former spouse, child, or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant." 29 U.S.C. § 1056(d)(3)(K). Once a QDRO is obtained, ERISA requires that the "alternate payee," rather than the current spouse, be treated as if he or she were the current spouse "[t]o the extent provided in" the QDRO. 29 U.S.C. § 1056(d)(3)(F).

In order to qualify as a QDRO, a DRO must contain a requisite degree of specificity and meet certain substantive...