Thomson v. Thomson

         Appeal from the Superior Court No. 1JU-06-00608 CI of the State of Alaska, First Judicial District, Juneau, William B. Carey, Judge.

          Appearances: Michael A. D. Stanley, Juneau, for Appellant.

          Paul H. Grant, Juneau, for Appellee.

          Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and Carney, Justices.

          OPINION

          CARNEY, Justice.

         I. INTRODUCTION

         In 2006 a divorcing couple agreed to divide the husband's retirement benefit based on its present value and implemented the division with a Qualified Domestic Relations Order (QDRO). In 2014, after the husband received an updated benefit projection that calculated the wife's share of the benefit using his salary at retirement instead of at divorce, he sought to modify the QDRO. He asked the court to require that her benefit be based upon the same salary data used in the 2006 calculation. The superior court denied the motion. Because the settlement did not contain clear language establishing the use of the earlier salary as required by Hartley v. Hartley, ^[1] we affirm.

         II. FACTS AND PROCEEDINGS

         A. The 2006 Divorce And Property Settlement

         David and Marjorie Thomson married in 1982 and permanently separated on December 31, 2004. Working with a mediator, they developed a property settlement agreement that was incorporated into their August 9, 2006 divorce decree. David retained the marital home, so the property settlement assigned about 53% of the net estate to Marjorie to help her establish adequate housing for the couple's minor children. They agreed that this division "fairly allocate[d] the economic effect of their divorce" as required by AS 25.24.160(a)(4).

         Among the assets divided were retirement accounts belonging to both, including their State of Alaska Public Employees' Retirement System (PERS) retirement accounts. David was still working for the State and had accrued a little more than 20 years of PERS service credit when the parties separated. The parties agreed on a value for David's PERS account based on its present value as calculated by a third party company. The company used David's most recent average earnings for 2003-2005 to calculate a projected benefit if he retired at the expected date of April 1, 2015. It then determined that the March 2006 present value of his benefits was $286, 882 and that the marital portion was $271, 316. That amount was based on the proportion of David's PERS service that occurred between their 1982 marriage and their separation on December 31, 2004.

         The parties allocated the agreed-upon value of David's PERS benefit along with the agreed values of their other assets between themselves in a chart of their marital assets. Once they reached what they considered a fair distribution of the entire estate in dollar terms, they calculated what percentage of David's PERS benefit was on Marjorie's side of the ledger.

         Based on these calculations, the property settlement agreement provided that Marjorie would receive 46.96% of "the marital portion of David's account" to be distributed via a QDRO. The settlement also provided that each party would "solely . . . retain other property acquired after their 31 December 2004 permanent separation. That property is agreed to be non-marital and neither party is making a claim to it." The QDRO submitted by the parties said, in relevant part, that "Marjorie W. Thomson, as the Alternate Payee, shall receive from the Plan, from the final monthly retirement benefit which otherwise would be payable to the Member, 46.96% of the total monthly benefit which is based on credited service accrued from August 7, 1982 to December 31, 2004." (Emphasis in original.) The court signed this QDRO along with the divorce decree and settlement on August 9, 2006.

         B. The Present Dispute Over The QDRO Distribution Amount

         In the fall of 2014 David obtained an updated projection of his PERS benefits from the state Division of Retirement and Benefits (DRB). The projection estimated his benefits as of a retirement date of May 1, 2015 and showed how those benefits would be affected by the QDRO. The benefits were calculated using David's average earnings for his final three years of employment, 2013-2015. Due to his significantly increased salary and about ten additional years of credited service, David's retirement benefit was projected at about 80% more than the 2006 projection.^[2] Under the QDRO Marjorie would receive "nearly double" what David had expected based on the earlier projection. When David questioned why the salary years from the 2006 projection were not used to calculate Marjorie's payment, DRB reportedly responded that he might need to amend the QDRO to do so.

         David then moved to amend the QDRO to have Marjorie's benefit calculated using the salary years from the 2006 projection. He argued that such an amendment would "conform [it] to the parties' property settlement and effectuate the agreed distribution of David's PERS benefit." He argued that the parties had relied upon the 2003-2005 salary data when they divided their assets. According to David, the settlement language and QDRO demonstrated that Marjorie's payment had to be calculated based on the 2006 figures "so that her share would be limited to the 'marital portion' of his account." He further argued that using the 2014 figures would allow her to benefit from non-marital property he had acquired after their divorce, contrary to their settlement agreement.

         Marjorie responded that Hartley v. Hartley barred David's interpretation of the settlement and his proposed amendment of the QDRO: "Absent clear language to the contrary in a property division agreement, a court should base the division of retirement benefits on the employee spouse's high-three salary years at the time of retirement."^[3]

         The superior court agreed with Marjorie and found the Hartley rationale "persuasive and controlling in this instance." It further stated that "no language in the QDRO or in the property agreement... requires a different conclusion" and denied the motion to amend. David moved for reconsideration, arguing that the court had overlooked evidence of the parties' intent and that its decision would result in Marjorie receiving more of the marital estate than the parties had agreed. The superior ...