In re the Marriage of: Patricia Elaine Radziwill v. Michael Radziwill ( 2015 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0160
In re the Marriage of:
Patricia Elaine Radziwill, petitioner,
Appellant,
vs.
Michael Radziwill,
Respondent.
Filed November 9, 2015
Reversed and remanded
Reilly, Judge
Washington County District Court
File No. 82-F6-94-005869
John R. Kempe, Family First Law Office, Eagan, Minnesota (for appellant)
Christopher D. Johnson, Rebecca A. Chaffee, Best & Flanagan LLP, Minneapolis,
Minnesota (for respondent)
Considered and decided by Reilly, Presiding Judge; Schellhas, Judge; and
Stoneburner, Judge.*
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
REILLY, Judge
Appellant argues that the district court erred in the division of respondent’s
pension benefits pursuant to their stipulated judgment and decree. Because we determine
that the plain language of the judgment and decree required the use of the Janssen
formula and the district court misapplied the Janssen formula, we reverse and remand.
FACTS
Appellant Patricia Radziwill and respondent Michael Radziwill were married from
November 6, 1989, to November 21, 1995, when the marriage was dissolved pursuant to
a stipulated judgment and decree. Respondent began work at Berwald Roofing four
months prior to the marriage and continued to work there throughout the marriage and
until at least 2010. As part of his employment he earned retirement benefits. At the time
of dissolution, respondent disclosed that he had a Roofer’s Local No. 96 Annuity Plan.
Sometime after April 1997, appellant became aware that respondent also had an interest
in a National Roofing Industry Pension Plan (National Pension Plan). The National
Pension Plan was not disclosed at the time of dissolution. The judgment and decree
contains the following provision at paragraph XX:
Pension and Retirement Accounts. The Petitioner is awarded
fifty percent (50%) of the Respondent’s retirement benefits as
of the date of the Judgment and Decree of dissolution. A
separate Qualified Domestic Relations Order shall be
appended to the Judgment and Decree of Dissolution by
which Petitioner shall have a separate ownership interest
together with the separate responsibility of subsequent tax
liability attributable to her receipt of future benefits.
2
In allocating the Respondent’s retirement benefits, the court
shall utilize the formula provided in Janssen vs. Janssen, (331
N.W.2d 752) (Minn. 1983), where the numerator is the length
of the parties’ marriage (months/years) and the denominator
is the number of months/years that the Respondent has earned
Retirement benefits, for a percentage allocation of the marital
interest at fifty percent (50%).
(Emphasis added.)
Respondent continued to accumulate retirement benefits through at least 2010. On
April 20, 2012, the parties filed a Qualified Domestic Relations Order (QDRO)
pertaining to the division of the Roofers Local No. 96 Annuity Plan. Despite numerous
attempts, they could not come to an agreement regarding the division of the National
Pension Plan. Appellant ultimately filed a “motion to enforce decree and issuance of
domestic relations order” for the National Pension Plan with the district court. In its
findings on the motion, the district court summarized the parties’ arguments:
5. Petitioner argues that the Judgment and Decree clearly
shows that the parties intended to have the Court utilize the
reserved jurisdiction method of dividing Respondent’s
pension benefits, under which the Court divides the pension
benefit when it is received, and to apply the time formula
provided in Janssen. When using the Janssen formula the
numerator is the number of months/years as measured by the
date of the parties’ marriage to the date of the Judgment and
Decree and the denominator is the total period of time in
which Respondent chose to continue accumulating retirement
benefits.
6. Respondent in turn argues that Petitioner’s 50% marital
interest is to be determined on the value of the pension as of
the date of the Judgment and Decree (November 21, 1995).
When using the Janssen formula the numerator is the 72
months that Respondent was employed out of the 76 months
that Respondent acquired pension benefits before the
valuation date, the denominator would then be the value of
3
the pension at the date of the Judgment and Decree or 327.73.
Respondent further stated that if the valuation date was
2009/2010 the denominator would then be 3,966.93.1
The district court agreed with respondent, concluding “that the QDRO for the
pension plan should be valued at the time of the date of the dissolution.” In dividing the
National Pension Plan, the district court stated that the “plain language of the Judgment
and Decree provides that the date of valuation is the date of the Judgment and Decree.”
The district court ordered respondent to “prepare the Qualified Domestic Relations Order
. . . consistent with [the] Order.”
Appellant then filed a motion for amended findings, seeking findings including a
correction of the finding that “the plain language of the judgment and decree provides
that the date of valuation is the date of judgment and decree” and a finding that “the court
shall utilize the formula provided in Janssen v. Janssen, 331 N.W.2d 752 (Minn. 1983).”
The district court denied appellant’s motion. Between the filing of the motion for
amended findings, and the denial of that motion, respondent submitted a proposed
QDRO, and it was adopted and filed by the district court. The QDRO contained the
following provision:
This Order assigns to Alternate Payee an amount equal to the
actuarial equivalent of Fifty Percent (50%) of the Marital
Portion of the Participant’s Accrued Benefit under the Plan as
of the Participant’s benefit commencement date, or the
Alternate Payee’s benefit commencement date, if earlier.
1
This finding appears contrary to what appellant actually argued before the district court.
Although the denominator was disputed, defendant consistently argued it should be 76
months. The number 3,966.93 refers to the monthly value of the pension as of 2010.
4
The Marital Portion shall be determined by multiplying the
value of the benefit as of November 21, 1995 by 94.73% (that
is, 72/76, with the numerator the number of months of the
Participant’s credited service in the Plan earned during the
marriage (from November 6, 1989 to November 21, 1995),
and the denominator the total number of months the
Participant’s credited service in the Plan from the date of
Participant’s initial contribution to the Plan through
November 21, 1995).
Appellant then filed an appeal with this court challenging the order issuing the
QDRO, the adoption of the QDRO, and the order denying the motion for amended
findings.
DECISION
The judgment and decree
The parties’ marriage dissolved pursuant to a stipulated judgment and decree,
which is treated as a binding contract. Shirk v. Shirk, 561 N.W.2d 519, 521 (Minn.
1997). The judgment and decree addresses the division of respondent’s retirement
benefits, and the plain language states the court “shall utilize the formula provided in
Janssen vs. Janssen.” Where, as it is here, “the language employed by the parties is plain
and unambiguous there is no room for construction.”2 Starr v. Starr, 312 Minn. 561 562-
63, 251 N.W.2d 341, 342 (1977). The Janssen formula must be properly applied to the
division of respondent’s National Pension Plan retirement benefits in order to give effect
to the parties’ stipulated judgment and decree. The Janssen formula is well established in
our caselaw. See McGowan v. McGowan, 532 N.W.2d 258, 260 (Minn. App. 1995);
2
Although both parties have advocated for the Janssen formula throughout the
proceedings, they disagree on how it should be applied.
5
Hortis v. Hortis, 367 N.W.2d 633, 636 (Minn. App. 1985); Kottke v. Kottke, 353 N.W.2d
633, 637 (Minn. App. 1984), review denied (Minn. Dec. 20, 1984). It is used when
retirement benefits “contain contingencies on the actual payment of pension benefits.”
Janssen, 331 N.W.2d at 756. It allows for future benefits to be apportioned “only if and
when they are paid” using a method to allocate the marital interest of the benefits. Id. It
provides:
[t]he marital interest in each payment will be a fraction of that
payment, the numerator of the fraction being the number of
years (or months) of marriage during which benefits were
being accumulated, the denominator being the total number of
years (or months) during which benefits were accumulated
prior to when paid.
Id. Both parties, especially appellant, spend large portions of their brief arguing what
number of months should be used as the denominator when applying the Janssen
formula. In her reply brief, appellant finally articulated the “gravaman” of this appeal. It
is that under a proper application of the Janssen formula “the allocated portion awarded
would not be frozen and instead investment gains or losses [in the National Pension Plan]
would be credited.” The QDRO adopted by the district court did not properly apply the
Janssen formula, and thus denied appellant any investment gains (or losses) that should
have been credited against her interest in the National Pension Plan.
To properly apply the Janssen formula four numbers are necessary: a numerator, a
denominator, the monthly value of the benefits if and when they are paid, and the
percentage of the marital interest to which the spouse is entitled. The fraction is
multiplied by the monthly value to determine how much of the monthly payment is the
6
marital interest. The percentage allocated to each party is determined by the parties at the
time of dissolution.
Numerator
The parties agree that the numerator is 72 months.
Denominator
The parties disagree about the denominator. Appellant argues that the
denominator should be the total number of years or months during which benefits were
accumulated prior to when paid, or the total number of months respondent worked. The
record before this court is unclear as to exactly what that number is, but it appears
respondent continued to accumulate benefits through at least 2010. Assuming that, under
appellant’s calculation the denominator would be at least 252 months. On the other hand,
respondent argues that the denominator should be 76 months, or the number of years or
months during which benefits were accumulated up to the date of the dissolution.
Appellant’s determination of the denominator is correct because it uses Janssen’s
language of “the total number of years (or months) during which benefits were
accumulated prior to when paid” and is consistent with our caselaw. Janssen, 331
N.W.2d at 756; see also McGowan, 532 N.W.2d at 260; Hortis, 367 N.W.2d at 636;
Kottke, 353 N.W.2d at 637. Respondent’s application of the Janssen formula is incorrect
because it adds an additional qualifier into the formula that is not recognized by our
caselaw.
7
Date of Valuation
The Janssen formula provides for a date of valuation. Under the Janssen formula
the “future benefits” are apportioned “only if and when they are paid.” Janssen, 331
N.W.2d at 756. Thus, the date of valuation is the date that the retirement benefits begin
to be collected.
In its attempt to divide the National Pension Plan pursuant to the judgment and
decree the district court erred by finding the “[t]he plain language of the Judgment and
Decree provides that the date of valuation is the date of the Judgment and Decree.” It is
unclear what the district court was referencing when it made this finding; however, it is
clear that there is no reference in the judgment and decree to the “date of valuation.”
This finding by the district court is clearly erroneous. See Goldman v. Greenwood, 748
N.W.2d 279, 284 (Minn. 2008) (“Findings of fact are clearly erroneous where an
appellate court is left with the definite and firm conviction that a mistake has been
made.”). Further, the judgment and decree need not contain a valuation date because it
directs the court to utilize the Janssen formula.
Percentage of Marital Interest
Per the judgment and decree, appellant is entitled to 50% of the marital interest of
respondent’s retirement benefits.
8
Application of the Janssen Formula to this Case
To properly apply the Janssen formula to this case the numerator is the number of
years (or months) the parties were married where respondent was earning benefits. 3 The
denominator in this case is the total number of years (or months) during which
respondent worked and accumulated retirement benefits prior to when paid. 4 This
fraction is to be multiplied by the monthly value of the National Pension Plan at the time
it is paid.5 Using this equation, the resulting number represents the marital interest in the
monthly payment from the National Pension Plan.6 Per the judgment and decree,
appellant is entitled to 50% of the marital interest of the National Pension Plan.7
Issuance of the QDRO
The district court adopted respondent’s proposed QDRO in its entirety. The
QDRO misapplied the Janssen formula. As discussed above, the judgment and decree
required use of the Janssen formula. The district court erred by issuing a QDRO that is
inconsistent with the judgment and decree. A QDRO must be consistent with the terms
of the judgment and decree in order to maintain the parties’ substantive rights. Potter v.
Potter, 471 N.W.2d 113, 114 (Minn. App. 1991); see generally Nelson v. Nelson, 83 P.3d
3
The record before this court indicates that respondent earned benefits while the parties
were married from November 6, 1989, to November 21, 1995, which is approximately 72
months or six years.
4
The record before this court indicates that respondent accumulated benefits from
sometime in July 1989 to, at least, sometime in 2010, which is approximately 252 months
or 21 years.
5
According to respondent, this number as of 2010 was $3,966.93.
6
Based on the calculation using approximate numbers the monthly payment is $1,133.41.
7
Based on the calculation using approximate numbers appellant’s marital interest in the
monthly payment of the National Pension Plan is $566.70.
9
889, 893 (Okla. Civ. App. 2003) (observing that a QDRO is “the vehicle by which a
spouse enforces and collects retirement benefits awarded in a divorce” and that although
property division in dissolution generally is final, district court retains “jurisdiction” to
conform QDRO “to the terms of the underlying divorce decree as long as no
impermissible modification of the property division of the decree is effected” (quotation
omitted)). The parties entered into a dissolution agreement where they agreed on the
division of respondent’s retirement benefits using the Janssen formula.8 It was clear
error for the district court to issue a QDRO that did not properly apply the Janssen
formula.
We reverse the district court’s order and remand for the issuance of a QDRO that
reflects the judgment and decree and properly applies the Janssen formula in a manner
that is not inconsistent with this opinion.
Reversed and remanded.
8
Respondent cites Neubauer v. Neubauer for the proposition that the district court had
the authority to determine a fair and equitable division of the pension plan because the
National Pension Plan was not expressly included in the judgment and decree and was,
therefore, omitted property. 433 N.W.2d 456, 461 n.1 (Minn. App. 1988), review denied
(Minn. Mar. 17, 1989). The record before this court is insufficient to provide a basis that
the district court treated the National Pension Plan as omitted property. The record
before this court indicates that the district court applied the parties’ stipulated judgment
and decree to divide respondent’s retirement benefits including the National Pension
Plan.
10