Potts v. Potts ( 2018 )

2018 UT App 169THE UTAH COURT OF APPEALS
KATHLEEN O. POTTS,
Appellee,
v.
DUANE E. POTTS,
Appellant.
Opinion
No. 20170606-CA
Filed August 30, 2018
Second District Court, Ogden Department
The Honorable Scott M. Hadley
No. 900902738
David Pedrazas, Attorney for Appellant
Emilie A. Bean, Attorney for Appellee
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES KATE A. TOOMEY and DIANA HAGEN concurred.
MORTENSEN, Judge:
¶1 This case involves not the benefit of the doubt, but some
doubt as to the benefit. After separating in 1992, the court
entered a decree of divorce based in part on Duane 1 and
Kathleen’s stipulation. The decree awarded a portion of each
party’s retirement benefits to the other party. The decree
directed the parties to cooperate in obtaining qualified domestic
1. “As is our practice in cases where [multiple] parties share a
last name, we refer to the parties by their first name[s] with no
disrespect intended by the apparent informality.” Smith v. Smith,
2017 UT App 40, ¶ 2 n.1, 392 P.3d 985.
Potts v. Potts
relations orders (QDRO) 2 to effectuate the property distribution
of the retirement accounts. Kathleen filed the QDRO related to
her retirement account in 1995, but Duane waited until 2000 to
file his corresponding QDRO. As it turned out, just before Duane
filed, the Utah Retirement Systems’ rules regarding retirement
benefits changed, providing Duane with the advantage of new
distribution rules. In 2015, Kathleen filed a motion to amend her
1995 QDRO to reflect the updated rules. Duane objected, but the
district court granted the motion. Duane then filed a motion to
reconsider, which the court also denied. Duane appeals those
rulings. We affirm.
BACKGROUND
¶2 When the parties divorced in November 1992, they both
were employees of the State of Utah. Pursuant to the decree of
divorce, each party was awarded a Woodward share of the other’s
retirement benefits: 50% of the retirement benefits that accrued
during their marriage. See Woodward v. Woodward, 656 P.2d 431,
433 (Utah 1982) (holding that pension benefits accrued during
the marriage are marital property subject to equitable
distribution). The decree directed the parties to cooperate in
obtaining QDROs to effectuate the property distribution of the
retirement accounts.
¶3 In March 1995, Kathleen filed her proposed qualified
domestic relations order (1995 QDRO) for the court’s signature
and then submitted the signed order to Utah Retirement Systems
(URS). The 1995 QDRO ordered URS to divide Kathleen’s share
of Duane’s retirement based upon the rules in existence at that
2. A qualified domestic relations order instructs “the trustee of a
retirement plan and specifies how distributions should be made,
to whom, and when.” Bailey v. Bailey, 745 P.2d 830, 832 (Utah Ct.
App. 1987).
20170606-CA 2 2018 UT App 169Potts v. Potts
time. Those rules left Kathleen’s share of Duane’s retirement in
Duane’s shared-interest account. The 1995 QDRO also provided,
The [district court] retains jurisdiction to amend
this Order so that it will constitute a domestic
relations order under the plan even though all
other matters incidental to this action or
proceeding have been fully and finally adjudicated.
If URS determines at any time that changes in the
law, the administration of the plan, or any other
circumstances make it impossible to calculate the
portion of a distribution awarded to alternate
payee by this Order and so notifies the parties,
either or both parties shall immediately petition the
Court for reformation of the Order.
¶4 Sometime in 2000, 3 a URS rule revision occurred which,
according to Kathleen, “changed the manner of distribution to
more fully reflect Utah law on division of retirement property to
what is common[ly] referred to as a separate interest.” Under
these rules, Duane’s account would no longer be a
shared-interest account, but instead would be divided into two
separate accounts proportional to Kathleen’s marital interest.
Alteration of the 1995 QDRO would ultimately change the
potential payout to the parties, depending upon who
predeceases whom. If Kathleen were to predecease Duane under
these rules, Kathleen’s payout would no longer revert to Duane,
essentially divesting him of that benefit.
¶5 In September 2000, Duane filed his own qualified
domestic relations order (2000 QDRO). Because he filed after the
rule change, Duane received the benefit of the new, separate
account distribution rules. Duane’s 2000 QDRO had no effect on
Kathleen’s 1995 QDRO, which was still subject to the old rules.
3. Neither party cites any specific URS rule changes, but both
parties agree that a rule change did occur “in or about 2000.”
20170606-CA 3 2018 UT App 169Potts v. Potts
In December 2015, Kathleen filed a Motion for an Amended
Qualified Domestic Relations Order (Motion to Amend)
requesting alteration of the 1995 QDRO “on the ground that the
rules for Utah Retirement Systems [had] changed since the entry
of the [1995 QDRO].”
¶6 After lengthy objections from Duane, the district court
conducted a telephone conference in September 2016 and
thereafter granted Kathleen’s Motion to Amend, stating, “It
seems like the orders were meant to divide each of the [parties’]
retirements in the same way.” The court held that Kathleen
should “be granted the same benefits on the method of division
as Duane.” That same day, Duane filed a motion to reconsider,
but the district court denied the motion. Duane appeals.
ISSUES AND STANDARDS OF REVIEW
¶7 Duane appeals on three bases. First, he argues that the
district court lacked jurisdiction to amend the 1995 QDRO.
“Whether the district court has jurisdiction is a question of law
that we review for correctness, giving no deference to the lower
court.” State v. Norris, 2007 UT 6, ¶ 10, 152 P.3d 293.
¶8 Second, Duane contends that even if the district court had
jurisdiction to amend the 1995 QDRO, Utah Code section 68-3-3,
which governs the effect of retroactive code provisions, prevents
the court from doing so. See Utah Code Ann. § 68-3-3(LexisNexis 2016). “The [district] court’s interpretation of a
statute is a question of law that we review for correctness.” Cox
v. Cox, 2012 UT App 225, ¶ 10, 285 P.3d 791.
¶9 Third, Duane asserts that it was inequitable for the district
court to allow amendment of the 1995 QDRO. A district court’s
equitable orders are reviewed for abuse of discretion and should
be “accorded substantial deference,” with the court being given
“considerable latitude.” Kidd v. Kidd, 2014 UT App 26, ¶ 15, 321
P.3d 200 (cleaned up).
20170606-CA 4 2018 UT App 169Potts v. Potts
ANALYSIS
I. Jurisdiction
¶10 Duane contends that the district court “did not have the
jurisdiction and/or the ability to amend” the 1995 QDRO because
Kathleen failed to file a petition to modify, which, he alleges, is a
requirement to retain jurisdiction. Duane’s argument fails for
three reasons.
¶11 First, Kathleen did not seek modification of the decree
and therefore was not required to file a petition to modify, which
must be based on a change in circumstance. See Durfee v. Durfee,
796 P.2d 713, 716 (Utah Ct. App. 1990). While Duane is correct in
asserting that succeeding on a petition to modify a divorce
decree typically depends upon the moving party showing that a
substantial material change of circumstances has occurred since
the entry of the decree, Fish v. Fish, 2016 UT App 125, ¶ 17, 379
P.3d 882, that proposition has no bearing on this case. Here,
Kathleen seeks not to modify the decree, but only to alter the
1995 QDRO—an order collateral to the decree. In reality,
Kathleen’s motion sought to enforce the identical treatment of
the parties’ retirement accounts as expressly provided for in the
decree. Therefore, Duane’s contention that the district court
lacked jurisdiction due to Kathleen’s failure to file a petition to
modify is incorrect.
¶12 Second, jurisdiction regarding QDROs has been granted
to district courts by statute. Utah Code section 30-3-5(3) governs
the disposition of, among other things, property interests such as
retirement accounts. The provision states,
The [district] court has continuing jurisdiction to
make subsequent changes or new orders for the
custody of the children and their support,
maintenance, health, and dental care, and for
distribution of the property and obligations for
debts as is reasonable and necessary.
20170606-CA 5 2018 UT App 169Potts v. Potts
Utah Code Ann. § 30-3-5(3) (LexisNexis Supp. 2017). Pursuant to
the statute, the award of retirement funds—a property
distribution made by the court, see Woodward v. Woodward, 656
P.2d 431, 433 (Utah 1982)—is properly subject to the court’s
continuing jurisdiction, so long as the “subsequent changes or
new orders” are “reasonable and necessary,” Utah Code Ann.
§ 30-3-5(3); see also A.S. v. R.S., 2017 UT 77, ¶¶ 2, 4, 416 P.3d 465(maintaining that “the district court ha[s] continuing jurisdiction
over . . . divorce proceedings” and “is able to make changes . . .
to ensure the appropriate needs of the . . . parties are met”);
Johnson v. Johnson, 2014 UT 21, ¶ 31, 330 P.3d 704 (stating that
“[d]istrict courts are charged with making an equitable
distribution of marital property, including pension benefits”);
Murphy v. Moyle, 53 P. 1010, 1012 (Utah 1898) (“The court ha[s]
the right to enforce the former decrees . . . .”); Osborne v. Osborne,
2011 UT App 150, ¶ 4, 260 P.3d 202 (holding that a district
court’s enforcement of a decree of divorce, by way of entering a
QDRO, was correct); Bayles v. Bayles, 1999 UT App 128, ¶ 14, 981
P.2d 403 (explaining that “a court has continuing jurisdiction
over its decree in a divorce proceeding for the division of
property” (cleaned up)). Therefore, having determined that it
was reasonable and necessary to effectuate the terms of the
decree, the court had jurisdiction to amend the 1995 QDRO.
¶13 Third, Duane fails to recognize that divorce courts are
well established as courts of equity, see Dority v. Dority, 645 P.2d
56, 58 (Utah 1982), that retain jurisdiction over the parties and
subject matter for the purposes equity may demand, see Salt Lake
City v. Ohms, 881 P.2d 844, 849 (Utah 1994) (“Core judicial
powers include the authority to hear and determine justiciable
controversies as well as the authority to enforce any valid
judgment, decree or order.” (cleaned up)); Consolidated Wagon
& Machine Co. v. Kay, 21 P.2d 836, 840 (Utah 1933) (stating that
“when a court of equity has jurisdiction over a cause for any
purpose, it may retain the cause for all purposes, and proceed to
a final determination of all the matters at issue.”). The court in
this instance was exercising its equitable jurisdiction.
20170606-CA 6 2018 UT App 169Potts v. Potts
¶14 Utah courts have long held that district courts retain
jurisdiction to remedy scenarios exactly like the one presented in
this case. See Ohms, 881 P.2d at 849; see also Osborne, 2011 UT App
150, ¶ 4. Here, Kathleen sought the equitable powers of the
district court to allow application of the rule change to both
parties, and the court properly retained jurisdiction over the
parties and subject matter for the purpose of effectuating a fair
and equitable division of retirement. To hold otherwise would
allow unequal treatment of the parties, which is inconsistent
with the decree’s award of 50% of each party’s retirement
benefits to the other party.
¶15 For these reasons, Duane’s contention that the district
court lacked jurisdiction to amend the 1995 QDRO fails. 4
II. Retroactive Rule Changes
¶16 Duane next contends that amending the 1995 QDRO
amounts to a retroactive application of law, in violation of Utah
Code section 68-3-3, which states, “A provision of the Utah Code
is not retroactive, unless the provision is expressly declared to be
retroactive.” Utah Code Ann. § 68-3-3 (LexisNexis 2016).
However, amendment of the 1995 QDRO has no effect on the
application of the law, let alone a retroactive application.
¶17 District courts have the power to enforce a decree of
divorce by entering collateral orders—including orders
effectuating the allocation of retirement benefits. See Osborne v.
Osborne, 2011 UT App 150, ¶ 4, 260 P.3d 202 (determining that
the district court’s order granting the distribution of retirement
funds “merely enforced the [decree of divorce] under Utah Law,”
and that “[t]he district court therefore correctly enforced the
[decree of divorce] by entering the . . . [o]rder”). In Osborne, a
4. The parties agree that “neither Rule 59(e) nor 60(b) [of the
Utah Rules of Civil Procedure] applies [regarding] the
amendment of . . . [Kathleen’s] QDRO.”
20170606-CA 7 2018 UT App 169Potts v. Potts
respondent challenged the court’s order awarding his former
spouse a portion of his retirement, pursuant to a QDRO. Id. ¶ 1.
There, the court held that the QDRO at issue “merely effectuated
the allocation of . . . benefits to [ex-wife] by instructing the
Railroad Retirement Board to disburse the funds as the [decree
of divorce] allocated them.” Id. ¶ 4.
¶18 Similarly, in this case, amendment of the 1995 QDRO
merely effectuates the allocation of benefits to Kathleen by
instructing URS to disburse the funds as the decree allocated in
1992. The decree was established, with regard to each party’s
share of retirement, in 1992, pursuant to the Woodward formula.
See supra ¶ 2. The proposed amendment does not attempt to
change or retroactively apply new law because it does not
involve any statutes at all. Duane does not point to a single
statute being retroactively applied. The amendment to the 1995
QDRO simply enforces the already-existing decree—which
treats the parties identically—and asks the court to identically
apply the change in administrative rules to the retirement
accounts as well. Kathleen did not seek any alteration of
retirement benefits that may have accrued between the entry of
the original decree and present-day; she instead requested that
moving forward, the court grant her QDRO the same status as
Duane’s QDRO. Therefore, Duane’s argument that the district
court retroactively applied a change to the Utah Code fails.
III. Inequitable Amendment
¶19 Finally, Duane argues that it was inequitable for the court
to amend the 1995 QDRO because Duane “stands the chance of
losing more.” Under the new rules, if the amended order stands
and Kathleen predeceases Duane, he would suffer a
diminishment in benefits. But Kathleen asserts, “Equity
demands that both parties be under the same application of the
rules for division of their respective retirement accounts.” We do
not see the question as whether the equities of the parties’
positions should be re-evaluated. Instead, we view this collateral
order through the lens of enforcement, specifically enforcing the
20170606-CA 8 2018 UT App 169Potts v. Potts
equitable distribution of property established by the court many
years ago.
¶20 In a stipulated divorce, the point at which the court
weighs the equities is when it accepts the parties’ stipulation and
uses it as the basis for the decree. See Newmeyer v. Newmeyer, 745
P.2d 1276, 1278 (Utah 1987) (stating that in determining marital
property distribution, “[t]he overriding consideration is that the
ultimate division be equitable—that property be fairly divided
between the parties.”); Maxwell v. Maxwell, 796 P.2d 403, 406
(Utah Ct. App. 1990) (“While a property settlement agreement is
not binding upon a [district] court in a divorce action, such
agreement should be respected and given considerable weight in
the [district] court’s determination of an equitable division of
property.”).
¶21 Where there is no petition for modification of the decree
itself, the court does not bear the responsibility of re-weighing
the equities for the parties after they have assented to the decree;
the court’s responsibility is to enforce the provisions of the
decree as they exist. See Bayles v. Bayles, 1999 UT App 128, ¶ 15,
981 P.2d 403 (“Stipulations entered into in contemplation of a
divorce are conclusive and binding on the parties unless, upon
timely notice and for good cause shown, relief is granted
therefrom.” (cleaned up)). Here, by allowing amendment of the
1995 QDRO—a collateral order—to reflect the current rules and
apply them identically to the parties, the decree remained
unchanged. Accordingly, there is no need for the court to weigh
the equities once more. Therefore, the district court properly
enforced the decree by allowing the amendment.
CONCLUSION
¶22 The district court properly exercised jurisdiction over the
parties and the 1995 QDRO. The district court did not
retroactively apply any part of the Utah Code to the 2015 QDRO.
And finally, the district court did not need to reassess the equity
20170606-CA 9 2018 UT App 169Potts v. Potts
arguments of the parties in entering a collateral order enforcing
the original decree.
¶23 Affirmed.
20170606-CA 10 2018 UT App 169