Mille Lacs County District Court File No. F5-02-0746.
The death of the former spouse of a pension-plan participant that occurs after entry of a dissolution judgment stating that the former spouse shall receive an interest in the participant's pension pursuant to a qualified domestic relations order, but before the qualified domestic relations order is issued, does not preclude entry of the qualified domestic relations order.
The opinion of the court was delivered by: Wright, Judge
Affirmed in part, reversed in part, and remanded
Considered and decided by Dietzen, Presiding Judge; Wright, Judge; and Worke, Judge.
During the marriage of Richard and Loydene May, Loydene May accrued retirement benefits. Although her retirement benefits did not include a 401(k) account, the stipulated judgment dissolving the marriage awarded Richard May half of Loydene May's "401k," pursuant to a qualified domestic relations order (QDRO). Shortly after the dissolution, Richard May remarried. Less than a year after the dissolution, when Richard May died, a QDRO had not been drafted. His surviving spouse, Kathryn May, was appointed personal representative of Richard May's estate and asserted an interest in Loydene May's retirement benefits on behalf of the estate. When Loydene May opposed this assertion, Kathryn May, as personal representative, was substituted for Richard May in the dissolution proceeding. After a hearing before the district court judge who had presided over the dissolution proceedings, the district court (1) identified the pension in which the parties had intended Richard May to receive an interest in the dissolution judgment and (2) ordered Loydene May to cooperate in drafting a QDRO that would award Kathryn May, personally, the interest that was to have been awarded to Richard May. We affirm in part, reverse in part, and remand.
Richard and Loydene May married in 1978 and had four sons. During the marriage, both Richard and Loydene May worked; and Loydene May accrued retirement benefits from her employment with the United States Postal Service. Richard and Loydene May separated in October 2000, and the February 2003 stipulated judgment dissolving the marriage awarded Richard May "one-half of the value of [Loydene May's] 401k pursuant to a [QDRO]." The retirement benefits that Loydene May accrued as a postal worker, however, did not include a 401(k) account.
In March 2003, Loydene May's attorney sent a proposed QDRO to the administrator of the retirement plan and sent a copy to Richard May's attorney. In April, the plan administrator rejected the proposed QDRO and referred Loydene May's attorney to reference materials that might help in drafting an acceptable QDRO. In May, Loydene May's attorney sent Richard May's attorney a copy of the plan administrator's April letter rejecting the proposed QDRO and asked Richard May's attorney to draft the QDRO. In June, however, Loydene May's attorney sent a proposed QDRO to the district court, with a copy to Richard May's attorney. Richard May's attorney wrote the district court shortly thereafter, stating that he had been asked by Loydene May's attorney to draft the QDRO and that he was almost finished doing so.
In August 2003, Richard May married Kathryn May. When, in September, a QDRO was not completed, both attorneys agreed that, because it was advisable to have someone with expertise draft the QDRO, they would recommend this course of action to their clients. Richard May agreed to have an expert draft the QDRO. Loydene May did not.
Richard May died intestate in January 2004. Kathryn May was appointed personal representative of Richard May's estate and asserted an interest in Loydene May's retirement benefits. In August 2004, the dissolution court issued a stipulated order that substituted Kathryn May, as personal representative, for Richard May in the dissolution proceeding. The stipulated order also stated that, if Loydene May, as she had threatened, commenced a separate action to reopen the dissolution judgment for fraud on the court by Richard May, the dissolution proceeding and the proceeding to reopen the dissolution judgment would be consolidated.
In December 2004, Kathryn May, as personal representative, moved the district court, in the dissolution proceeding, to amend the dissolution judgment to correctly identify the retirement account in which the dissolution judgment had awarded Richard May an interest and to compel Loydene May to cooperate in drafting "an appropriate [QDRO] with respect to the one-half value of [Loydene May's] appropriate retirement account awarded to [Richard May] pursuant to [the dissolution judgment]." Loydene May opposed this motion, arguing that the dissolution judgment was final and could not be modified to add or substitute a payee of Loydene May's retirement account. Because Richard May had not designated a substitute payee before he died, she argued, the terms of the pension caused his interest to lapse.
At a hearing on the motion, neither party disputed that the dissolution judgment awarded Richard May half of Loydene May's Federal Employees Retirement System (FERS) pension. As a result, the district court identified the retirement account in question as Loydene May's "USPS/FERS Pension Plan" and ordered Loydene May to cooperate in drafting a QDRO that would ...