Kathaleen Moriarty King v. Hal David King ( 2017 )

01/31/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
December 14, 2016 Session
KATHALEEN MORIARTY KING v. HAL DAVID KING
Appeal from the Chancery Court for Knox County
No. 126512-2 Clarence E. Pridemore, Jr., Chancellor
No. E2016-01451-COA-R3-CV
This appeal involves a 1997 divorce judgment that awarded the wife a percentage of the
husband’s federal retirement annuity. The parties entered into a settlement agreement,
later incorporated into a judgment, which provided that the wife would receive one-half
of the marital portion of the husband’s retirement. The 1997 judgment contained no
provisions regarding salary adjustments or cost-of-living adjustments applicable to the
retirement annuity. In 2008, the husband’s attorney filed and the trial court entered a
“Court Order Acceptable for Processing,” which provided for the wife’s fractional share
of the husband’s retirement annuity but made no mention of salary adjustments
applicable thereto. This order did provide, however, that the wife would be entitled to
cost-of-living adjustments. Following his retirement in 2015, the husband filed a motion
in 2016 seeking relief from the trial court’s prior final orders pursuant to Tennessee Rule
of Civil Procedure 60. The trial court granted the motion, determining that the relief
sought merely “clarified” but did not modify the earlier orders. The wife has appealed.
We conclude that the trial court impermissibly granted relief to the husband pursuant to
Rule 60.01, which had the effect of modifying the parties’ settlement agreement and the
court’s prior orders. We therefore vacate the trial court’s order granting Rule 60 relief.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Vacated; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.
Mark R. Orr, Knoxville, Tennessee, for the appellant, Kathaleen Moriarty King.
John A. Lucas, Knoxville, Tennessee, for the appellee, Hal David King.
OPINION
I. Factual and Procedural Background
This appeal involves issues regarding the interpretation and enforcement of a
divorce judgment entered in 1997. Kathaleen Moriarty King (“Wife”) and Hal David
King (“Husband”) were divorced in Knox County Chancery Court on October 17, 1997,
after approximately seventeen years of marriage. Both prior to and during the marriage,
Husband was a federal employee with the Department of Housing and Urban
Development. Husband had maintained his federal employment for 252 months at the
time of the divorce, with 216 months of Husband’s federal employment occurring during
the marriage.
At the time of the divorce, the parties reached a settlement agreement that was
announced in open court and later incorporated into their final judgment of divorce. As
part of that agreement, the final judgment provided in pertinent part:
[Wife] shall be entitled to participate in [Husband’s] retirement program
with Civil Service Retirement System which he is entitled to as a federal
employee. [Wife] shall be awarded one-half (1/2) of 18/21st of the amount
he has accrued as of the 4th day of August 1997. This amount would be
available to her at any time the Civil Service Retirement System allows or
at his retirement and there shall be a separate Court Order affecting
retirement benefits which shall be prepared and submitted to the Court in
the immediate future.
The final judgment did not contain any other provisions regarding Husband’s federal
retirement annuity and did not specifically address salary or cost-of-living adjustments
applicable to same.
In 2008, Husband’s attorney filed a “Court Order Acceptable for Processing,”
which the trial court entered on August 26, 2008. This order provided that it was “for the
specific purpose of entering an order dividing the Defendant’s Civil Service Retirement
System retirement interests in a manner consistent with the Final Judgment for Divorce
and the Office of Personnel Management regulations.” In relevant portion, the 2008
order states:
1. The court has considered the requirements and standard terminology
provided in part 838 of Title 5, Code of Federal Regulations.1 The
1
5 C.F.R. § 838.622 will be fully discussed in a later section of this opinion.
2
terminology used in the provisions of this order that concern benefits under
the Civil Service Retirement System Retirement are governed by the
standard conventions established in that part.
***
4. Employee is eligible for retirement benefits under the Civil Service
Retirement System based on employment with the United States
Government. Former Spouse is entitled to a share of Employee’s gross
monthly annuity under the Civil Service Retirement System to be computed
as follows: Former Spouse shall be awarded one-half (1/2) of
eighteen/twentifirsts (18/21) of the amount Employee had accrued as of the
4th day of August 1997. When COLA’s are applied to Employee’s
retirement benefits, the same COLA applies to Former Spouse’s share. The
United States Office of Personnel Management is directed to pay Former
Spouse’s share directly to Former Spouse.
***
8. Commencement Date and Form of Payment to Former Spouse:
Former Spouse shall be entitled to receive monthly benefits under CSRS as
of the earliest date on which the Employee commences benefits under
CSRS.
9. Continued Qualified Status of Order: It is the intention of the parties
that this Order continue to qualify as an Order under 5 CFR Pt. 838, as it
may be amended from time to time.
Husband retired from his employment in July 2015. On June 10, 2016, Husband
filed a motion pursuant to Tennessee Rules of Civil Procedure 60.01 and 60.02(5), asking
the trial court to amend the 1997 divorce judgment by adding verbiage that would
exclude the application of any post-1997 cost-of-living or salary adjustments to Wife’s
share of his federal retirement annuity. Husband asserted in the motion that upon his
retirement, he initially received documentation from the federal Office of Personnel
Management (“OPM”), which stated that he would receive monthly benefits of $3,402
and Wife would receive monthly benefits of $1,042. According to Husband’s motion,
Husband received a subsequent notice in May 2016, stating that the benefits had been
recalculated such that Wife’s monthly benefit would increase to $2,355 and Husband’s
monthly benefit would be decreased to $2,052. As Husband asserts in his concomitantly
filed memorandum of law, the recalculation was caused by the lack of specific language
in the final decree that instructed OPM not to include cost-of-living or salary adjustments
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following the date of the divorce decree. See 5 C.F.R. § 838.622.
Wife filed a response to Husband’s motion, wherein she asserted that the
respective language of the 1997 decree and 2008 order was clear and unambiguous. Wife
also argued that “the language being proposed by [Husband] was not included in the
Final Judgment because it was not the intent or understanding of the parties or the Court
at that time.” Wife thus opposed Husband’s request for relief.
Husband subsequently filed a supplemental memorandum wherein he
acknowledged that the 2008 order explicitly provided that Wife would receive cost-of-
living adjustments on her share of Husband’s federal retirement annuity. Husband
therefore modified the relief sought in his motion by stating that Wife should receive
post-retirement cost-of-living adjustments but not salary adjustments occurring after
August 4, 1997.
The trial court held a hearing on July 7, 2016, during which the court considered
oral argument regarding this issue. The court announced its ruling from the bench,
granting Husband’s motion for relief pursuant to Tennessee Rule of Civil Procedure
60.01 and finding that such relief was consistent with the terms of the earlier orders. The
court entered a written order the same day, modifying both the final judgment and the
2008 order to provide that salary adjustments occurring after August 4, 1997, would not
be applied to Wife’s share of Husband’s retirement benefits. The July 7, 2016 order also
provided that cost-of-living adjustments occurring between August 4, 1997, and the date
of Husband’s retirement would not be applied to Wife’s share. The court ordered that
Wife would still receive, however, any cost-of-living adjustments occurring after
Husband’s retirement date.
Wife made an offer of proof during the July 7, 2016 hearing, after the chancellor
had ruled and left the bench. Wife testified that at the time of the parties’ divorce
settlement, she and Husband and their respective counsel had no discussion regarding the
exclusion of salary or cost-of-living adjustments occurring subsequent to the date of the
divorce judgment. Wife timely appealed.
II. Issues Presented
Wife presents the following issues for our review, which we have restated slightly:
1. Whether the trial court erred by granting Husband’s Rule 60.01
motion, thereby modifying the 1997 divorce judgment and 2008
order to provide that Wife would not receive any salary or cost-of-
living adjustments occurring after the date of the 1997 judgment.
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2. Whether the trial court erred by granting Husband’s Rule 60.01
motion without the presentation of any evidence.
III. Standard of Review
A trial court’s decision to grant a Tennessee Rule of Civil Procedure 60.01 motion
to correct a clerical error in a judgment is reviewed under an abuse of discretion standard.
See Jackman v. Jackman, 373 S.W.3d 535, 541 (Tenn. Ct. App. 2011). Under the abuse
of discretion standard, a trial court’s ruling “‘will be upheld so long as reasonable minds
can disagree as to the propriety of the decision made.’” See Eldridge v. Eldridge, 42
S.W.3d 82, 85 (Tenn. 2001) (quoting State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000);
State v. Gilliland, 22 S.W.3d 266, 273 (Tenn. 2000)). A trial court abuses its discretion
only when it “‘applie[s] an incorrect legal standard, or reache[s] a decision which is
against logic or reasoning or that cause[s] an injustice to the party complaining.’” See
Eldridge, 42 S.W.3d at 85 (quoting State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999)).
The abuse of discretion standard does not permit the appellate court to substitute its
judgment for that of the trial court. See Eldridge, 42 S.W.3d at 85.
IV. Terms of Prior Orders and Propriety of Rule 60.01 Relief
The trial court granted relief to Husband pursuant to Tennessee Rule of Civil
Procedure 60.01, which states in pertinent part:
Clerical mistakes in judgments, orders or other parts of the record, and
errors therein arising from oversight or omissions, may be corrected by the
court at any time on its own initiative or on motion of any party and after
such notice, if any, as the court orders.
The chancellor noted in his ruling from the bench that Husband’s proposed order granting
Rule 60.01 relief was merely clarifying the court’s prior orders, was consistent with the
prior orders, and was “not changing anything.” Wife asserts that the trial court abused its
discretion in granting relief pursuant to Rule 60.01 because such relief had the effect of
modifying the parties’ property settlement agreement by divesting her of her interest in
the cost-of-living and salary adjustments applicable to her share of Husband’s retirement
benefits as awarded by the parties’ divorce decree.
This Court has explained that “once a property settlement agreement is adopted by
the court as part of the divorce decree, the settlement is not subject to modification.” See
Joyner v. Pers. Fin. Corp., No. W2005-02202-COA-R3-CV, 2006 WL 1521204, at *2
(Tenn. Ct. App. June 5, 2006) (citing Towner v. Towner, 858 S.W.2d 888, 893 (Tenn.
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1993)). This Court further elucidated:
“A property settlement agreement between a husband and wife is ‘within
the category of contracts and is to be looked upon and enforced as an
agreement, and is to be construed as other contracts as respects its
interpretation, its meaning and effect.’” Bruce v. Bruce, 801 S.W.2d 102,
105 (Tenn. Ct. App. 1990) (quoting Matthews v. Matthews, 24 Tenn. App.
580, 593, 148 S.W.2d 3, 11-12 (1940)). The cardinal rule for interpretation
of contracts is to ascertain the intention of the parties from the contract as a
whole and to give effect to that intention consistent with legal principles.
Winfree v. Educators Credit Union, 900 S.W.2d 285, 289 (Tenn. Ct. App.
1995); Rainey v. Stansell, 836 S.W.2d 117, 118 (Tenn. Ct. App. 1992). In
construing contracts, the words expressing the parties’ intentions should be
given their usual, natural, and ordinary meaning. Taylor v. White Stores,
Inc., 707 S.W.2d 514, 516 (Tenn. Ct. App. 1985). In the absence of fraud
or mistake, a contract must be interpreted and enforced as written, even
though it contains terms which may seem harsh or unjust. Heyer-Jordan &
Assoc. v. Jordan, 801 S.W.2d 814, 821 (Tenn. Ct. App. 1990).
Id. See also Johnson v. Johnson, 37 S.W.3d 892, 895 (Tenn. 2001) (holding that a
divorce decree’s apportionment of marital property is not subject to modification).
Although Husband acknowledges that the division of property contained in the
divorce judgment is not modifiable, he argues that it is Wife who is trying to “modify”
the judgment because the parties’ intent was to divide only the retirement benefits that
had accrued as of August 4, 1997. Husband states that due to the inclusion of this date in
the decree, the only reasonable conclusion would be that post-1997 cost-of-living and
salary adjustments should not be applied to Wife’s share. Therefore, according to
Husband, he merely sought to enforce the parties’ agreement by having the decree
corrected pursuant to Rule 60.01.
Wife argues that the provisions of 5 C.F.R. § 838.622 control in this situation and
that because the divorce decree did not specify otherwise, she is entitled to cost-of-living
and salary adjustments occurring prior to Husband’s retirement. 5 C.F.R. § 838.622
(2008) provides in pertinent part:
(b)(1) Unless the court order directly and unequivocally orders otherwise, a
court order that awards a former spouse a portion of an employee annuity
either on a percentage basis or by use of a fraction or formula provides that
the former spouse’s share of the employee annuity will be adjusted to
maintain the same percentage or fraction whenever the employee annuity
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changes as a result of—
(i) Salary adjustments occurring after the date of the decree and before the
employee retires; and
(ii) Cost-of-living adjustments occurring after the date of the decree and
after the date of the employee’s retirement.
(2) A court order that awards a former spouse a specific dollar amount from
the employee annuity prevents the former spouse from benefiting from
salary and cost-of-living adjustments after the date of the decree, unless the
court expressly orders their inclusion.
(c)(1)(i) Except as provided in paragraph (b) of this section, a court order
that contains a general instruction to calculate the former spouse’s share
effective at the time of divorce or separation entitles the former spouse to
the benefit of salary adjustments occurring after the specified date to the
same extent as the employee.
(ii) To prevent the application of salary adjustments after the date of the
divorce or separation, the court order must either state the exact dollar
amount of the award to the former spouse or specifically instruct OPM not
to apply salary adjustments after the specified date in computing the former
spouse’s share of the employee annuity.
(2)(i) Except as provided in paragraph (b) of this section, a court order that
requires OPM to compute a benefit as of a specified date before the
employee’s retirement, and specifically instructs OPM not to apply salary
adjustments after the specified date in computing the former spouse’s share
of an employee annuity provides that the former spouse is entitled to the
application of cost-of-living adjustments after the date of the employee’s
retirement in the manner described in § 838.241.
(ii) To award cost-of-living adjustments between a specified date and the
employee’s retirement, the court order must specifically instruct OPM to
adjust the former spouse’s share of the employee annuity by any cost-of-
living adjustments occurring between the specified date and the date of the
employee’s retirement.
(iii) To prevent the application of cost-of-living adjustments that occur after
the employee annuity begins to accrue to the former spouse’s share of the
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employee annuity, the decree must either state the exact dollar amount of
the award to the former spouse or specifically instruct OPM not to apply
cost-of-living adjustments occurring after the date of the employee’s
retirement.
Pursuant to the above directives, Wife would be entitled to have her share of Husband’s
federal retirement annuity adjusted for salary adjustments and cost-of-living adjustments
because (1) her share was awarded as a percentage/fractional portion rather than a
specific dollar amount and (2) neither the 1997 judgment nor the 2008 order specifically
directed otherwise. See 5 C.F.R. § 838.622(b).
Husband asserts that the regulatory provisions detailed above “purport[] to
override” the plain language of the 1997 judgment and the 2008 order and that, “as a
matter of law and of federal-state court comity, a federal agency cannot refuse to follow a
state court order, absent some overriding principle such as federal preemption,
unconstitutionality, or the like.” A further examination of the pronouncements contained
within the applicable federal regulations illustrates the fallacy of Husband’s argument.
5 C.F.R. § 838.101 (2008), entitled “Purpose and scope,” clarifies as follows:
(a)(1) This part regulates the Office of Personnel Management’s handling
of court orders affecting the Civil Service Retirement System (CSRS) or
the Federal Employees Retirement System (FERS), both of which are
administered by the Office of Personnel Management (OPM). Generally,
OPM must comply with court orders, decrees, or court-approved property
settlement agreements in connection with divorces, annulments of
marriage, or legal separations of employees, Members, or retirees that
award a portion of the former employee’s or Member’s retirement benefits
or a survivor annuity to a former spouse.
(2) In executing court orders under this part, OPM must honor the clear
instructions of the court. Instructions must be specific and unambiguous.
OPM will not supply missing provisions, interpret ambiguous language, or
clarify the court’s intent by researching individual State laws. In carrying
out the court’s instructions, OPM performs purely ministerial actions in
accordance with these regulations. Disagreement between the parties
concerning the validity or the provisions of any court order must be
resolved by the court.
(b) This part prescribes—
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(1) The requirements that a court order must meet to be acceptable for
processing under this part;
(2) The procedures that a former spouse or child abuse creditor must follow
when applying for benefits based on a court order under sections 8341(h),
8345(j), 8445 or 8467 of title 5, United States Code;
(3) The procedures that OPM will follow in honoring court orders and in
making payments to the former spouse or child abuse creditor; and
(4) The effect of certain words and phrases commonly used in court orders
affecting retirement benefits.
(Emphasis added.)
In addition, 5 C.F.R. § 838.122 (2008) explains that state courts are responsible for
“[i]ssuing clear, specific, and express instructions consistent with the statutory provisions
authorizing OPM to provide benefits to former spouses or child abuse creditors and the
requirements of this part for awarding such benefits.” State courts are also responsible
for “[u]sing the terminology defined in this part only when it intends to use the meaning
given to that terminology by this part.” See 5 C.F.R. § 838.122(c). Furthermore, 5
C.F.R. § 838.201 (2008) explains: “Subpart F of this part [which contains § 838.622]
contains definitions that OPM uses to determine the effect on employee annuity of a court
order acceptable for processing.”
Subpart F begins with 5 C.F.R. § 838.601 (2008), entitled “Terminology Used in
Court Orders Affecting Employee Annuities or Refunds of Employee Contributions,”
which provides in pertinent part:
(a) This subpart regulates the meaning of terms necessary to award benefits
in a court order directed at an employee annuity or a refund of employee
contributions. OPM applies the meanings to determine whether a court
order directed at an employee annuity or a refund of employee
contributions is a court order acceptable for processing and to establish the
amount of the former spouse’s share of an employee annuity or a refund of
employee contributions.
(b)(1) This subpart establishes a uniform meaning to be used for terms and
phrases frequently used in awarding a former spouse a portion of an
employee annuity or a refund of employee contributions.
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(2) This subpart informs the legal community about the definitions to apply
terms used in drafting court orders so that the resulting court orders contain
the proper language to accomplish the aims of the court.
(Emphasis added.) The quoted regulatory provisions were the same in 1997, when the
original divorce decree was entered, and in 2008 when the “Court Order Acceptable for
Processing” was entered.
Based on these regulatory provisions, we conclude that the federal government has
not attempted to “override” the terms of state court orders entered pursuant to divorce, as
Husband asserts, but instead the federal government has specified the construction that
will be applied to the terms contained in such orders. We note that both parties herein
were represented by counsel at the time of the 1997 judgment. Counsel and the parties
are presumed to have known the effect of these regulatory provisions when drafting and
agreeing to the parties’ settlement and judgment. See, e.g., Roberts v. Bailey, 470 S.W.3d
32, 41 n.7 (Tenn. 2015) (“Knowledge of the law is presumed.”). We also note that the
2008 order, which effectuated the terms of the 1997 judgment, specifically referred to
“part 838 of Title 5, Code of Federal Regulations,” confirming that “terminology used in
the provisions of this order that concern benefits under the Civil Service Retirement
System Retirement are governed by the standard conventions established in that part.”
Ergo, based on the terms of the 2008 order, as explained by the provisions of 5
C.F.R. §838.622, Wife’s share of Husband’s federal retirement annuity should properly
be adjusted for salary adjustments and cost-of-living adjustments. Because the trial
court’s order granting Rule 60.01 relief purported to remove these adjustments from
Wife’s share, it impermissibly modified the parties’ 1997 settlement agreement and the
resulting divorce judgment. As our Supreme Court has explained: “Rule 60.01 is
designed to afford relief in cases in which the judgment or order, either standing alone or
when viewed in connection with other portions of the record, shows facial errors arising
from oversight or omission.” Jerkins v. McKinney, 533 S.W.2d 275, 280 (Tenn. 1976)
(emphasis added). By way of example, such relief has been allowed when the
defendant’s name was listed incorrectly on a final judgment; to interpret a provision in a
parenting plan order that was ambiguous on its face; and when the order inadvertently
granted a nonsuit regarding all claims, rather than the one type of claim intended to be
nonsuited. See Continental Cas. Co. v. Smith, 720 S.W.2d 48, 49 (Tenn. 1986); Battleson
v. Battleson, 223 S.W.3d 278, 288 (Tenn. Ct. App. 2006); SecurAmerica Business Credit
v. Schledwitz, No. W2009-02571-COA-R3-CV, 2011 WL 3808232, at *9 (Tenn. Ct. App.
Aug. 26, 2011). No such facial error has been demonstrated in this case with regard to
either the 1997 judgment or the 2008 order.
Husband argues that the trial court properly granted him relief based upon the
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Texas Court of Appeals decision in Cox v. Carter, 145 S.W.3d 361, 366 (Tex. Ct. App.
2004). We note, however, that decisions from other states may be persuasive authority
but are not binding on this Court. See Ottinger v. Stooksbury, 206 S.W.3d 73, 79 (Tenn.
Ct. App. 2006). Having determined that the trial court impermissibly granted relief to
Husband pursuant to Tennessee Rule of Civil Procedure 60.01, we vacate the court’s July
7, 2016 order. By virtue of this ruling, Wife’s additional issue is pretermitted as moot.
V. Post-Judgment Facts
Husband filed a motion pursuant to Tennessee Rule of Appellate Procedure 14,
asking this Court to consider post-judgment facts regarding the construction applied by
OPM to the trial court’s July 7, 2016 order and the dollar amount of Wife’s monthly
benefit following entry of that order. We determine that these facts do not affect the
position of the parties or the subject matter of the action; therefore, we deny
consideration of these post-judgment facts. See Tenn. R. App. P. 14(a). See, e.g., Town
of Dandridge v. Patterson, 827 S.W.2d 797, 802 (Tenn. Ct. App. 1991).
VI. Conclusion
For the foregoing reasons, we vacate the trial court’s July 7, 2016 order granting
relief to Husband pursuant to Tennessee Rule of Civil Procedure 60.01. We remand this
matter to the trial court for collection of costs incurred below. Costs on appeal are taxed
to the appellee, Hal David King.
_________________________________
THOMAS R. FRIERSON, II, JUDGE
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