David Lamm. v. Patricia Lamm ( 2019 )

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
David Lamm,
Petitioner FILED
March 29, 2019
vs) No. 17-1075 (Kanawha County 02-D-1861) released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
Patricia Lamm, OF WEST VIRGINIA
Respondent
MEMORANDUM DECISION
Respondent Patricia Lamm (“Ms. Lamm”) and Petitioner David Lamm (“Mr.
Lamm”) were divorced by final order entered by the family court in 2005 and affirmed by
the circuit court in 2007. This appeal concerns a “Savings and Investment Plan” (“savings
account”) and a retirement plan that were addressed in the family court’s 2005 final divorce
order. The final divorce order provided that the “parties shall divide equally [Mr. Lamm’s]
retirement plan with a stipulated value of $88,965.00.” Further, the final divorce order
awarded the savings account solely to Mr. Lamm. Approximately nine years after the
circuit court’s final order was entered, Ms. Lamm filed an amended qualified domestic
relations order (“QDRO”) with the family court, seeking a portion of Mr. Lamm’s savings
account. Protracted litigation followed in which Ms. Lamm submitted multiple QDROs to
the family court regarding the savings account and the retirement plan. On July 12, 2017,
the family court entered a QDRO that awarded Ms. Lamm 34.78% of Mr. Lamm’s
retirement plan. By order entered on October 17, 2017, the circuit court affirmed the family
court’s order.
In this appeal, Mr. Lamm, by counsel Charles R. Webb, argues that the circuit
court erred by affirming the family court’s 2017 order that awarded Ms. Lamm 34.78% of
the retirement plan. Ms. Lamm, by counsel C. Page Hamrick, urges this Court to affirm
the circuit court’s order. After review and for the reasons stated herein, we conclude that
the circuit court erred by affirming the family court’s order. We therefore reverse the
circuit court’s October 17, 2017, order, and remand this matter to the circuit court for
further proceedings consistent with this decision. This case satisfies the “limited
circumstances” requirement of Rule 21(d) of the West Virginia Rules of Appellate
Procedure for disposition by memorandum decision.
1
I. FACTUAL AND PROCEDURAL BACKGROUND
This appeal concerns a savings account and a retirement plan that Mr. Lamm
had through his employer.1 Both of these accounts were at issue during the parties’ initial
divorce proceedings before the family court. The parties were married in 1975. According
to the family court, their separation date was August 30, 2002. Both parties were
represented by counsel throughout the divorce proceedings, which culminated with the
family court entering a final divorce on January 4, 2005.
The family court’s January 4, 2005, final order addresses both the savings
account and the retirement plan. Regarding the savings account, the family court’s order
provides:
12. [T]he Court finds that the following personal
property is owned by the parties and concludes as a matter of
law as the following values: . . . (s) Savings and Investment
Plan $29,322.
14. This Court grants unto David W. Lamm, the
following personal items and liquid assets: . . . (g) savings
and investment plan (includes debt).
19. That prior to the separation of the parties, the parties
were possessed of a savings and investment plan of
approximately $77,122.00. [Mr. Lamm], who had exclusive
use and control of the savings and investment plan liquidated a
substantial portion of the plan in an effort to pay off loans for
a variety of automobiles, credit card accounts, home mortgage
and other debts and maintenance of the parties including taxes
on the liquidation of the same whereby Thirty Six Thousand
Three Hundred Fifty Eight Dollars ($36,358.00) in loans were
accrued.
20. That at the date of the separation of the parties there
was a savings and investment plan balance of Twenty Nine
Thousand Three Hundred Twenty Two Dollars ($29,322.00).
21. The Court finds that the expenditures by [Mr.
Lamm] prior to or about the time of separation of the parties
was prudent, reasonable and for marital purposes. There
1
Mr. Lamm was employed by Dupont. According to the appendix-record, Mr.
Lamm began working at Dupont in 1976. He retired on December 31, 2016.
2
should be no reimbursement of the monies expended back into
the savings and investment plan.
(Emphasis added.)
The family court’s final order also addressed the retirement plan:
12. [T]he Court finds that the following personal
property is owned by the parties and concludes as a matter of
law as the following values: . . . (u) [Mr. Lamm’s] retirement
[plan] $88,965.
27. The parties shall divide equally [Mr. Lamm’s]
retirement plan with a stipulated value of $88,965.00. Such
plan shall be divided by a Qualified Domestic Relations
Order which shall be prepared by [Ms. Lamm’s] counsel
with the cooperation of [Mr. Lamm] and his counsel.
(Emphasis added.)
Ms. Lamm appealed the family court’s final order to the circuit court, raising
a number of assignments of error including the family court’s ruling that she “was not
entitled to reimbursement of the monies expended” from the savings account.2 Ms. Lamm
did not challenge the family court’s ruling that the retirement plan would be split by the
parties, nor did she dispute the finding that it had a stipulated value of $88,965.00. By
order entered on March 28, 2007, the circuit court affirmed the family court’s order. The
circuit court specifically addressed the family court’s ruling regarding the savings account
and concluded that the family court’s ruling was not clearly erroneous nor an abuse of
discretion. The circuit court’s order denied Ms. Lamm’s appeal in “its entirety” and
provided that “[t]his matter is removed from the active docket of the Court.”
After the circuit court’s order was entered, counsel for Ms. Lamm prepared
two QDROs. The first QDRO, dated December 3, 2007, was for Mr. Lamm’s “Dupont
Savings and Investment Plan.” This QDRO named Ms. Lamm as the “alternate payee”
and stated that she was entitled to 50% of Mr. Lamm’s savings and investment plan as of
December 31, 2004. This QDRO was not signed by the family court judge, nor was it
entered. We note that the family court’s final order, which was affirmed by the circuit
court, did not award Ms. Lamm any portion of the savings account. Thus, it is unclear why
2
Ms. Lamm also challenged the family court’s 1) award of spousal support, 2)
award of the marital home to Mr. Lamm, 3) valuation of an account entitled “Ameri-
Reach,” and 4) valuation of certain stock options.
3
counsel for Ms. Lamm prepared a QDRO for an account that was awarded solely to Mr.
Lamm.
The second QDRO, also prepared by counsel for Ms. Lamm and dated
December 3, 2007, was for Mr. Lamm’s “Dupont Pension and Retirement Plan.” This
QDRO named Ms. Lamm as the “alternate payee” and stated that she was entitled to 50%
of Mr. Lamm’s retirement plan as of August 30, 2002. The family court entered the
“Dupont Pension and Retirement Plan” QDRO on February 15, 2008 (“2008 retirement
plan QDRO”). Following entry of the 2008 retirement plan QDRO, no activity occurred
in this case for approximately eight years.
In March 2016, counsel for Ms. Lamm submitted a new QDRO to the family
court seeking a portion of Mr. Lamm’s savings account. This QDRO, entitled “Amended
Qualified Domestic Relations Order (Dupont Savings and Investment Plan),” states that
Ms. Lamm, as the alternate payee, is awarded 50% of Mr. Lamm’s “accrued benefit” as of
August 30, 2002. The family court entered this QDRO on the same date it was submitted.
The family court did not hold a hearing on the QDRO prior to its entry. 3 There was no
explanation provided by the family court or by the language contained in the QDRO
explaining why it was granting relief—awarding Ms. Lamm a portion of the savings
account—that is inconsistent with the final divorce order entered by the family court in
2005 and affirmed by the circuit court in 2007.
On November 4, 2016, counsel for Ms. Lamm submitted an “Amended
QDRO (Dupont Pension and Retirement Plan, Title I)” to the family court. This QDRO
provides that Ms. Lamm is “awarded 50% of [Mr. Lamm’s] monthly benefit from the
Plan.” This QDRO removed the accrual language that was contained in the 2008 retirement
plan QDRO, which stated that Ms. Lamm was entitled to 50% of his retirement benefit “as
of August 30, 2002.” (Emphasis added.) This QDRO does not include any factual findings
explaining why Ms. Lamm is entitled to 50% of Mr. Lamm’s total retirement plan benefit.
The family court entered this amended QDRO on November 15, 2016.
Mr. Lamm retired on December 31, 2016. Because the November 2016
QDRO was entered and had been submitted to Mr. Lamm’s employer, Ms. Lamm began
receiving 50% of Mr. Lamm’s monthly retirement benefit in January 2017.4
3
Mr. Lamm was not given an opportunity to address this QDRO prior to its entry.
It is unclear why this opportunity was not afforded to Mr. Lamm.
4
This information comes from statements made by counsel during oral argument.
Counsel for both parties agreed that that Ms. Lamm has been receiving 50% of Mr. Lamm’s
monthly retirement benefit since January 2017.
4
Mr. Lamm filed a motion for emergency ex parte relief in the family court
on February 2, 2017. This motion states that “[Ms. Lamm] had no claim to and was
awarded no portion of [Mr. Lamm’s] Savings and Investment Plan.” Further, Mr. Lamm
argued that the amended 2016 retirement plan QDRO awarding Ms. Lamm 50% of the
total retirement plan was improper. Mr. Lamm’s motion asserts that “as a result of the
entry of the [amended 2016 retirement plan] QDRO prepared by [Ms. Lamm’s] counsel
and entered by this Court, the Plan is withholding fifty percent of [Mr. Lamm’s] monthly
benefit for payment to [Ms. Lamm].”
In response to Mr. Lamm’s motion, Ms. Lamm explained that she had
inquired with Mr. Lamm’s employer regarding his retirement account in March 2016 in
order “to obtain her interest in the retirement account.” Ms. Lamm alleged that “there were
no funds available in the plan to fulfill the obligations of the QDRO, and that the plan
account had been paid out in full in 2015. . . . A QDRO was entered to receive one-half of
[Mr. Lamm’s] Dupont Pension and Retirement Plan, Title I, since [Ms. Lamm] cannot get
what [Mr. Lamm] illegally removed from his retirement plan.”5 At the conclusion of Ms.
Lamm’s response motion, she appears to concede that she is only entitled to the relief
contained in the 2005 final divorce order entered by the family court, she stated:
“WHEREFORE, Respondent Patricia A. Lamm requests the emergency motion be denied
and that [Mr. Lamm] be ordered to pay over to [Ms. Lamm] the sum of $44,982.50 6 plus
interest thereon from the Final Order entered January 4, 2005, plus attorneys fees for this
proceeding.”
The family court held a hearing on March 6, 2017. The hearing focused on
the amount Ms. Lamm should be receiving from Mr. Lamm’s retirement plan. Counsel for
Mr. Lamm informed the court that Ms. Lamm had been receiving 50% of Mr. Lamm’s
total retirement benefit since January 2017. Ms. Lamm’s counsel conceded that she was
receiving 50% of Mr. Lamm’s total retirement plan benefit, and told the court “the problem
is, the [2005 final divorce] order . . . is written that she gets half of – half of $88,000 and
it’s – you know, so she’s, she’s getting half of $88,000, but, you know, she’s getting it in
a . . . different way than maybe she, you know, contemplated.” The hearing ended without
the family court making a ruling as to the amount Ms. Lamm should be receiving from Mr.
5
We are confused by Ms. Lamm’s assertion that the retirement “plan had been paid
out in full in 2015.” Based on the appendix-record, Mr. Lamm did not receive any of his
retirement benefit until January 2017. Since January 2017, Mr. Lamm (and Ms. Lamm)
have received a monthly retirement payment from this plan. Thus, the assertion that the
“plan account had been paid out in full in 2015” is unsupported by the record.
6
While Ms. Lamm requested the sum of $44,982.50, we note that half of the
stipulated value of the retirement plan ($88,965) is $44,482.50.
5
Lamm’s retirement plan. Also, the family court did not make any ruling regarding the
March 2016 savings account QDRO that it had previously entered.
On April 18, 2017, Ms. Lamm filed another proposed amended QDRO
regarding the retirement plan. This QDRO removed the language granting Ms. Lamm 50%
of the total retirement plan and replaced it with the following language: “The Alternate
Payee [Ms. Lamm] is awarded THIRTY-FOUR AND 78/100 PERCENT (34.78%) of [Mr.
Lamm’s] accrued benefit now payable to participant.” Mr. Lamm objected, arguing that
the April 2017 retirement plan QDRO
assigns an incorrect amount of accrued benefit to [Ms. Lamm].
[Mr. Lamm’s] accrued benefit increased yearly and the parties
were not married in the later years of his accrual, as such a
simplified percentage of [Mr. Lamm’s] total accrued benefit
based on [the] number of years married will not yield an
accurate award amount. [Ms. Lamm] should be awarded [Mr.
Lamm’s] accrued DUPONT PENSION AND RETIREMENT
PLAN benefit calculated considering the actual years in which
the parties were married.
The family court overruled Mr. Lamm’s objection to the April 2017
retirement plan QDRO and entered it on July 12, 2017. The family court’s order provides:
After receiving argument of counsel, the Court finds
that case law directs that where retirement benefits [are]
allocated using the deferred distribution method, post
separation enhancements should be allocated between the
parties calculated by multiplying the fixed percentage
retirement benefits by the coverture fraction (ratio of the
number of years of employment during marriage prior to the
separation of the parties to the total number of years
employed).
Mr. Lamm appealed the family court’s ruling to the circuit court.7 The circuit
court denied Mr. Lamm’s petition for appeal and affirmed the family court’s order. In so
ruling, the circuit court found “[i]t is apparent from the record that the [April 2017
retirement plan QDRO] was necessitated by [Mr. Lamm’s] failure to disclose the defined
7
Mr. Lamm also filed a motion for reconsideration with the family court. The
family court denied this motion.
6
benefit plan to which [Ms. Lamm] was entitled at the time of the parties’ divorce.”8 After
entry of the circuit court’s order, Mr. Lamm filed the present appeal.
II. STANDARD OF REVIEW
This Court has previously addressed our standard of review for an appeal of
a circuit court’s order affirming a family court’s order. In syllabus point 1 of Carr v.
Hancock, 216 W.Va. 474, 607 S.E.2d 803 (2004), we held:
In reviewing a final order entered by a circuit court
judge upon a review of, or upon a refusal to review, a final
order of a family court judge, we review the findings of fact
made by the family court judge under the clearly erroneous
standard, and the application of law to the facts under an abuse
of discretion standard. We review questions of law de novo.
With this standard in mind, we turn to the parties’ arguments.
III. ANALYSIS
We begin our analysis by highlighting the unusual procedural history of this
matter. In essence, the issue before us is simple—what portion of Mr. Lamm’s retirement
plan should be awarded to Ms. Lamm. However, since Ms. Lamm filed the March 2016
savings account QDRO, this case has become tangled and convoluted: multiple QDROs
and amended QDROs concerning both the savings account and retirement plan were
submitted to the family court. The family court held a number of hearings and after
entering a ruling, Mr. Lamm simultaneously filed a motion for reconsideration with the
8
We note that Ms. Lamm filed an amended QDRO, not a petition for a constructive
trust. Pursuant to W.Va. Code § 48-7-206(2) (2001):
(2) If any party deliberately or negligently fails to disclose
information which is required by this part 2 and in consequence
thereof any asset or assets with a fair market value of five
hundred dollars or more is omitted from the final distribution
of property, the party aggrieved by the nondisclosure may at
any time petition a court of competent jurisdiction to declare
the creation of a constructive trust as to all undisclosed assets,
for the benefit of the parties and their minor or dependent
children, if any, with the party in whose name the assets are
held declared the constructive trustee, such trust to include
such terms and conditions as the court may determine. The
court shall impose the trust upon a finding of a failure to
disclose such assets as required under this part 2.
7
family court and an appeal to the circuit court. In attempting to untangle the various
QDROs and arguments raised by the parties, we will individually address the savings
account and the retirement plan.
A. Savings Account
Nine years after the circuit court affirmed the final divorce order, Ms. Lamm
submitted the March 2016 savings account QDRO to the family court. This QDRO was
entered by the family court on the same day it was submitted. There was no hearing on this
QDRO and Mr. Lamm was not given an opportunity to object prior to its entry. Mr. Lamm
eventually objected to the March 2016 savings account QDRO in his February 2017 motion
for emergency ex parte relief. Mr. Lamm’s February 2017 motion also objected to the
entry of the November 2016 retirement plan QDRO. During the hearing on this motion,
the parties argued over what portion of Mr. Lamm’s accounts (savings or retirement) Ms.
Lamm was entitled to but did not specify which particular (savings or retirement) QDRO
they were referring to when discussing the issue. The family court did not rule on either
the March 2016 savings account QDRO or the November 2016 retirement plan QDRO at
the conclusion of this hearing.
While subsequent litigation between the parties continued regarding the
retirement plan, it does not appear that the family court ever issued a ruling addressing Mr.
Lamm’s objection to the March 2016 savings account QDRO.9 For clarity sake, we will
address the March 2016 savings account QDRO.
The 2005 final divorce order entered by the family court awarded the savings
account solely to Mr. Lamm. Ms. Lamm timely appealed this ruling to the circuit court.
By order entered on March 28, 2007, the circuit court affirmed the family court’s order,
specifically finding that the family court’s ruling regarding the savings account was not
clearly erroneous nor an abuse of discretion. Ms. Lamm did not appeal the circuit court’s
order.
Upon review, we find that this issue—whether Ms. Lamm was entitled to any
portion of the savings account—was ruled on during the initial divorce proceedings. The
family court’s final divorce order, which was affirmed by the circuit court, resolved the
issue. Ms. Lamm has not cited any authority or provided any reason why the final divorce
order should not control this issue. Thus, we conclude that Ms. Lamm is not entitled to
any portion of Mr. Lamm’s savings account.
9
On appeal, both parties discuss the March 2016 savings account QDRO, but
mainly focus on whether the amended April 2017 retirement plan QDRO that was entered
by the family court was proper.
8
B. Retirement Plan
Next, we address whether the circuit court erred by affirming the family
court’s order entering the April 2017 amended retirement plan QDRO that awarded Ms.
Lamm 34.78% of the retirement plan. The circuit court’s rationale for affirming the April
2017 retirement QDRO is as follows: “It is apparent from the record that the [April 2017
retirement QDRO] was necessitated by [Mr. Lamm’s] failure to disclose the defined benefit
plan to which [Ms. Lamm] was entitled at the time of the parties’ divorce.”
Upon review, we find that the circuit court’s ruling that Mr. Lamm failed to
disclose “the defined benefit plan” at the time of the parties’ divorce is clearly erroneous.
The retirement plan was disclosed and clearly addressed by the family court during the
initial divorce proceedings. Paragraph 27 of the family court’s 2005 final divorce order
provides:
The parties shall divide equally [Mr. Lamm’s] retirement plan
with a stipulated value of $88,965.00. Such plan shall be
divided by a Qualified Domestic Relations Order which shall
be prepared by [Ms. Lamm’s] counsel with the cooperation of
[Mr. Lamm] and his counsel.
Based on the foregoing, it is clear that the retirement plan was disclosed, its
value was stipulated by the parties, and a retirement plan QDRO was entered in 2008
following the circuit court’s 2007 order affirming the family court’s 2005 final divorce
order. We find no error with the family court’s 2005 final divorce order that assigned a
stipulated value to the retirement plan. As this Court has previously noted, there is no
single method a court must use when “distributing pension benefits at divorce because each
pension plan case presents a different set of problems.” Cross v. Cross, 178 W.Va. 563,
568, 363 S.E.2d 449, 454 (1987).10 Ms. Lamm did not appeal the family court’s 2005
10
See Syl. Pt. 5, Cross v. Cross, 178 W.Va. 563, 363 S.E.2d 449 (“When a court is
required to divide vested pension rights that have not yet matured as an incident to the
equitable distribution of marital property at divorce, the court should be guided in the
selection of a method of division by the desirability of disentangling parties from one
another as quickly and cleanly as possible. Consequently, a court should look to the
following methods of dividing pension rights in this descending order of preference unless
peculiar facts and circumstances dictate otherwise: (1) lump sum payment through a cash
settlement or off-set from other available marital assets; (2) payment over time of the
present value of the pension rights at the time of divorce to the non-working spouse; (3) a
court order requiring that the non-working spouse share in the benefits on a proportional
basis when and if they mature.”). See also syl. pt. 3, Roig v. Roig, 178 W.Va. 781, 364
S.E.2d 794 (1987) (“When the issue in a divorce proceeding is the equitable distribution
of marital property, both parties have the burden of presenting competent evidence to the
trial court concerning the value of such property.”).
9
ruling regarding the retirement plan to the circuit court. Thus, we conclude that both Mr.
Lamm and Ms. Lamm are entitled to the relief contained in the 2005 final divorce order:
“[t]he parties shall divide equally [Mr. Lamm’s] retirement plan with a stipulated value of
$88,965.00.” Therefore, we find that the circuit court erred by affirming the family court’s
entry of the April 2017 amended retirement plan QDRO.
We emphasize that our ruling—enforcing the 2005 final order directing the
parties to equally divide the stipulated value of the retirement plan—is the exact relief Ms.
Lamm requested in her February 2017 response to Mr. Lamm’s motion for emergency ex
parte relief: “Respondent Patricia A. Lamm requests the emergency motion be denied and
that [Mr. Lamm] be ordered to pay over to [Ms. Lamm] the sum of $44,982.5011 plus
interest thereon from the Final Order entered January 4, 2005[.]” Further, Ms. Lamm’s
subsequent April 2017 amended retirement plan QDRO, in which she requested 34.78% of
Mr. Lamm’s retirement plan benefit in perpetuity, was inconsistent with the relief she
sought before the family court in February 2017.12
In sum, we reverse the circuit court’s October 17, 2017, order which affirmed
the family court’s order entering the April 2017 amended retirement plan QDRO. We
remand this case to the circuit court for entry of an order remanding this matter to the
family court. Upon remand, the family court must enter an order directing that “[t]he parties
. . . divide equally [Mr. Lamm’s] retirement plan with a stipulated value of $88,965.00.”
Thus, Ms. Lamm is entitled to receive a total of $44,482.50 plus interest from the retirement
plan.13
11
See footnote 6.
12
While unnecessary for the resolution of this matter, we note that this Court has
previously found that judicial estoppel may be invoked when a party asserts inconsistent
positions in a case. In syllabus point 2 of West Virginia Department of Transportation,
Division of Highways v. Robertson, 217 W.Va. 497, 618 S.E.2d 506 (2005), this Court
held:
Judicial estoppel bars a party from re-litigating an issue
when: (1) the party assumed a position on the issue that is
clearly inconsistent with a position taken in a previous case, or
with a position taken earlier in the same case; (2) the positions
were taken in proceedings involving the same adverse party;
(3) the party taking the inconsistent positions received some
benefit from his/her original position; and (4) the original
position misled the adverse party so that allowing the estopped
party to change his/her position would injuriously affect the
adverse party and the integrity of the judicial process.
13
During oral argument, counsel for Mr. Lamm conceded that Ms. Lamm is entitled
to “compound legal interest” on her portion of the retirement plan. After the circuit court
10
Reversed and Remanded With Directions.
ISSUED: March 29, 2019
CONCURRED IN BY:
Chief Justice Elizabeth D. Walker
Justice Tim Armstead
Justice Evan H. Jenkins
DISSENTING AND WRITING SEPARATELY:
Justice Margaret L. Workman
Justice John A. Hutchison
HUTCHISON, J., dissenting, joined by WORKMAN, J.:
I respectfully dissent because this memorandum decision is contrary to law,
contrary to the final divorce order, and patently unfair to Ms. Lamm.
It is undisputed that Mr. Lamm’s defined benefits retirement plan
(“retirement plan”) was marital property subject to equitable distribution.14 The final
divorce order directed that “[t]he parties shall divide equally [Mr. Lamm’s] retirement
plan[,]” and that “[s]uch plan shall be divided by a Qualified Domestic Relations Order[.]”
Our law specifies that when the division of retirement benefits is deferred until the benefits
are mature, as has occurred in this case, then the amount each spouse will receive is
calculated by application of a coverture fraction:
remands this matter to the family court, the family court must hold a hearing to determine
the amount of interest Ms. Lamm is owed on the $44,482.50 award. Additionally, in
determining the total amount owed to Ms. Lamm, the family court must determine the
amount Ms. Lamm has received from the retirement plan since January 2017. During oral
argument, the parties agreed that Ms. Lamm has been receiving monthly payments from
the retirement plan since January 2017, and that she had received approximately $40,000
from the retirement plan as of January 2019.
14
In syllabus point four of Cross v. Cross, 178 W.Va. 563, 363 S.E.2d 449 (1987),
this Court held that pension plans are marital property available for equitable distribution.
The Court observed that, “[u]nquestionably, [a spouse’s] retirement account (or the right
to receive future benefits from that account) is marital property.” Id. at 567, 363 S.E.2d at
453 (parenthetical in original). Moreover, “any increase in the value of a marital asset,
whether that increase came from passive or active appreciation, should be considered
marital property.” Dababnah v. Dababnah, 207 W.Va. 585, 590, 534 S.E.2d 781, 786
(2000).
11
5. Where retirement benefits are allocated utilizing the
deferred distribution method, the non-employee spouse is
awarded a fixed percentage of retirement benefits to be
distributed when such benefits mature.
6. To achieve the final division of retirement benefits
when utilizing the deferred distribution method, post-
separation enhancements are allocated between the employee
spouse and the non-employee spouse. The amount of benefits
to which the non-employee spouse is entitled is calculated by
multiplying the fixed percentage of retirement benefits by the
coverture fraction.
7. The coverture fraction is the ratio of the number of
years of employment during the marriage prior to the
separation of the parties to the total number of years the
employee spouse has been employed under the pension plan
being addressed.
Syl. Pts. 5, 6 & 7, McGee v. McGee, 214 W.Va. 36, 585 S.E.2d 36 (2003).
Ultimately, in its July 12, 2017 Amended QDRO, the family court applied a
coverture fraction to award Ms. Lamm 34.78% of the accrued benefits payable upon Mr.
Lamm’s retirement.15 Pursuant to McGee, that is the correct outcome for this case. This
method would fairly award Ms. Lamm her share of the marital property based upon the
years of Mr. Lamm’s participation in the retirement plan during their marriage, and was
obviously contemplated by the directive in the final divorce order to “divide [the plan]
equally” by means of a QDRO upon dissolution of the marriage. This outcome is also
consistent with other cases where this Court required application of a coverture fraction.
See, e.g., Bock v. Bock, No. 16-0817, 2017 WL 2483352 at *3-4 (W.Va. June 8, 2017)
(memorandum decision) (reversing and remanding where family court used deferred
distribution method for division of defined benefits retirement plan but failed to determine
coverture fraction for proper division of plan assets).
Mr. Lamm argues that because the final divorce order also contained a
stipulated value for this plan, then the divorce order should be interpreted to award Ms.
Lamm a lump sum payment of one-half of that value, or $44,482.50. Although the majority
adopts that position, it is incorrect. First, a lump sum award was not even possible. This
15
During the family court’s last hearing on May 22, 2017, Ms. Lamm’s
counsel explained that the 34.78% coverture fraction was calculated using Mr. Lamm’s
length of service with his employer and the length of the parties’ marriage during that
service.
12
retirement plan is a defined benefits plan. A defined benefits plan pays a retired member a
monthly amount calculated using various actuarial factors such as percentage of
contributions, salary, and years of service. See Nesselroad v. Consol. Pub. Ret. Bd., 225
W.Va. 397, 400, 693 S.E.2d 471, 474 (2010). A QDRO cannot force a plan administrator
to make a lump sum payment contrary to the plan’s rules. See 26 U.S.C. § 414(p)(3)(A)
(“A domestic relations order meets the requirements of this paragraph only if such order .
. . does not require a plan to provide any type or form of benefit, or any option, not
otherwise provided under the plan.”).
Second, awarding only $44,482.50 is contrary to the final divorce order’s
requirement of dividing the plan equally. According to the representations of the lawyers
during oral argument, the parties have each received approximately $40,000 as fifty-
percent shares of this retirement plan just in the twenty-four months since Mr. Lamm
retired.16 Mr. Lamm will be receiving retirement payments for years to come, but even
though the bulk of this retirement plan is marital property acquired during their twenty-
seven-year marriage, Ms. Lamm will soon reach $44,482.50 and be cut off.
The majority cites Cross v. Cross for the proposition that “there is no single
method a court must use” to distribute pension benefits. See Cross v. Cross, 178 W.Va.
563, 568, 363 S.E.2d 449, 454 (1987). However, given the facts and the current procedural
posture of the case before us, that proposition is unavailing. Indeed, syllabus point five of
Cross sets forth methods for distributing pension benefits in a divorce, but only the
coverture fraction method is applicable here. Syllabus point five provides that
[w]hen a court is required to divide vested pension
rights that have not yet matured as an incident to the equitable
distribution of marital property at divorce, the court should be
guided in the selection of a method of division by the
desirability of disentangling parties from one another as
quickly and cleanly as possible. Consequently, a court should
look to the following methods of dividing pension rights in this
descending order of preference unless peculiar facts and
circumstances dictate otherwise: (1) lump sum payment
through a cash settlement or off-set from other available
marital assets; (2) payment over time of the present value of
the pension rights at the time of divorce to the non-working
spouse; (3) a court order requiring that the non-working spouse
share in the benefits on a proportional basis when and if they
mature.
16
See footnotes 5 and 13 in the majority’s discussion.
13
Id. at 564, 363 S.E.2d at 450. A reading of the entire final divorce order reveals that Ms.
Lamm’s marital share of this retirement plan was not offset by a cash payment or the receipt
of other assets. In the final divorce order, the family court carefully divided and allocated
the parties’ assets—including real property, automobiles, the savings account, even
Washington Redskins NFL season tickets—and reached a division that the family court
deemed equitable. It was only after all of the other assets were equitably allocated, that the
family court ordered the parties to divide this retirement plan. Furthermore, the family court
did not order Mr. Lamm to make any “payment[s] over time of the present value of the
pension rights,” and no such payments were made in the nearly fourteen years since the
final divorce order was entered. Ms. Lamm only began receiving a share of this marital
asset directly from the plan administrator after Mr. Lamm retired. In light of these facts,
only the third Cross option is a viable remedy for this dispute: requiring the parties to share
in the benefits on a proportional basis when the benefits mature. Pursuant to McGee, this
proportional award is accomplished by the use of a coverture fraction. See McGee, 214
W.Va. at 38, 585 S.E.2d at 38, syl. pts. 5-7.
Instead of relying on McGee, and without citing to anything other than a
concession by counsel during oral argument, the memorandum decision fashions a remedy
of awarding Ms. Lamm “compound legal interest” on $44,482.50. This award of interest
is apparently in recognition of the fact that Ms. Lamm always had a marital interest in this
property, but was denied the distribution of a lump sum award at the time of divorce.
However, the coverture fraction is designed to account for a delay in distributing pension
assets, while also “assur[ing] [that the employee spouse] maintains the fruits of his post-
divorce labor.” Id. at 44, 585 S.E.2d at 44 (citation omitted).
For all of these reasons, I would affirm the family court’s resolution of this
matter in the Amended QDRO entered on July 12, 2017. 17 Accordingly, I respectfully
dissent. I am authorized to state that Justice Workman joins this dissent.
17
Although I would affirm the family court’s ultimate decision, my reasons are
different from those set forth in the circuit court’s order. As recognized by the majority,
the circuit court’s order is based upon two clearly erroneous conclusions: that Ms. Lamm
was denied her share of the separate savings account because Mr. Lamm had emptied the
account, and that Mr. Lamm failed to disclose the retirement plan during the divorce
proceedings. Both conclusions are negated by the record and the parties’ final divorce
order.
14