Udall v. Udall, 52618

• Decision Date: 24 June 1980
• Docket Number: No. 52618,52618
• Citation: 613 P.2d 742
• Parties: Ellis UDALL, State of Oklahoma ex rel. State Treasurer, and Executive Director of the Oklahoma Public Retirement System, Appellants, v. Lynn P. UDALL, Appellee.
• Court: Oklahoma Supreme Court

Page 742

613 P.2d 742

1980 OK 99

Ellis UDALL, State of Oklahoma ex rel. State Treasurer, and Executive Director of the Oklahoma Public Retirement System, Appellants, v. Lynn P. UDALL, Appellee.

No. 52618.

Supreme Court of Oklahoma.

June 24, 1980.

Appeal from the District Court of Oklahoma County; Jim Gullett, Judge.

Appellants appeal from an order of the district court providing for execution upon funds held by the Oklahoma Public Employees Pension Fund which appellants assert are exempt pursuant to 74 O.S.1971 § 923.

REVERSED.

Jan Eric Cartwright, Atty. Gen. of Oklahoma and Stephen F. Shanbour, Asst. Atty. Gen., for appellants.

David M. Jordan, Moore, for appellee.

HODGES, Justice.

The sole question on appeal is whether the accumulated funds of a member of the Oklahoma Public Employees Retirement System can be executed upon to satisfy a non-delinquent alimony judgment when 74 O.S.1971 § 923 ¹ exempts retirement benefits from execution, garnishment, or attachment or any other process or claim.

Ellis Udall and Lynn P. Udall (wife-appellee) were married in June, 1976. He left her on August 27, 1977, and his whereabouts are still unknown. On August 30, 1977, Lynn Udall petitioned for divorce. During the Udall's marriage, the wife contributed over Eight Thousand Dollars from her own funds to reduce her husband's indebtedness.

Ellis Udall was employed by state agencies for approximately sixteen years. During the course of his employment, Udall contributed to the Oklahoma Employees Retirement System. Combining the contributions made by Udall and his employers, a total of $2,017.02 was paid into the fund. Ellis Udall has not exercised his option pursuant to 74 O.S.1971 § 917 to withdraw these funds on the termination of his employment.

The District Court of Oklahoma County entered an order for the payment of support money. The court further ordered that the monies held by the Public Employees Retirement Fund be paid to Lynn Udall. The State Treasurer and the Executive Director of the Oklahoma Public Employees Retirement System appeared and asserted that pursuant to 74 O.S.1971 § 923, the vested retirement benefit rights of Ellis Udall were not subject to execution, garnishment or attachment. The court, in reliance on 12 O.S.1971 § 1276, ordered payment of the funds. ² Execution of the final order was stayed pursuant to 12 O.S.1971 § 974 pending this appeal.

The appellants contend that the court indulged in weighing the relative merits of legislation, rather than applying the statute as it was clearly written, when it attempted to engraft an exception to the statute where none existed. The wife argues that the pension fund was established to enable employees to accumulate deferred income for themselves ³ and their dependents and pursuant to 12 O.S.1971 § 1276, ⁴ the trial court had absolute authority to order execution on the retirement fund. The wife insists that 74 O.S.1971 § 923 is limited by its language to cases pertaining to the collection of taxes or to protect a person who has actually exercised his/her statutory options relating to any monies held for his/her benefit by the Public Employees Retirement Fund.

I

Although this is a case of first impression in this jurisdiction, the question has been considered in several other states. ⁵ The majority view is even where the exemption provision contained in pension statutes is absolute on its face, the exemption is inapplicable to a claim for alimony or child support. The rationale for the majority position is that the purpose and policy of the exemption laws is to secure to an unfortunate debtor the means to support himself and his family; and to keep them from being reduced to absolute destitution, thereby becoming public charges. Under this theory, accumulated funds due and owing from a State Public Employee Retirement System to a member may be reached to satisfy alimony or child support payments as a matter of public policy.

The minority view is to the contrary. Courts advocating the minority view have held that as a matter of statutory construction: 1) Courts are not authorized in the construction of a statute to create exemptions not specifically made; 2) In construing a statute the court must ascertain what is contained therein, but may not insert what has been omitted, or omit what has been inserted; and 3) Where there is no ambiguity in the language used in the statute, the power to construe does not exist.

Kansas and California each have exemption statutes similar to, Oklahoma. Kansas adopted the so-called majority view in Mahone v. Mahone, 213 Kan. 346, 517 P.2d 131 (1973) ; California opted for the minority rule in Ogle v. Heim, 69 Cal.Rptr. 579, 442 P.2d 659 (1968) and Ex parte Smallbone, 16 Cal.2d 532, 534, 106 P.2d 873, 875 (1940). We are persuaded by the reasoning of the California Supreme Court, and by the dissent by Justice Fromme in Mahone.

This reasoning is in accord with our decisions in Holeman v. Holeman, 459 P.2d 611, 614 (Okl.1969); Baker v. Baker, 546 P.2d 1325, 1326 (Okl.1976); and Umber v. Umber, 591 P.2d 299, 302 (Okl.1979). This Court in Holeman determined that if a retirement fund is divided at the time of the divorce as jointly owned property, this would, in effect, destroy the husband's future livelihood and means of complying with an alimony or support award. In Baker, we held that a husband's military pension could not be treated as property acquired during coverture subject to division between the parties, although it could be considered in determining the amount of alimony for support. In Umber, we recognized that social security benefits were the separate property of the husband which could not be evaluated in determination of property settlement.

The California cases also noted pension administrators have a substantial and abiding interest in maintaining the integrity of retirement funds to assure security against profligacy and misfortune. Exemptions are not the only armor designed to protect the funds. To protect the employers' and participants' interests, the pension rights are made unassignable (except as specifically provided) to restrict voluntary and involuntary alienation and to operate as a defense against creditors. The California Court held in Ogle and Smallbone that there was no exception in the exemption laws which would authorize the satisfaction of an alimony judgment from the exempt pension fund, and that it was not within the province of the courts to read an exception into the law where none existed. It determined that, although a spouse cannot be forced to satisfy his support obligation from exempt pension monies, a recalcitrant spouse can be held in contempt where these funds evidence an ability to pay.

II

In ascertaining legislative intent, the language...