In RE the Marriage of Kathryn June Morris and Dennis Eugene Morris Upon the Petition of Kathryn June Morris

IN THE SUPREME COURT OF IOWA
No. 11–0118
Filed February 17, 2012
IN RE THE MARRIAGE OF KATHRYN JUNE MORRIS
AND DENNIS EUGENE MORRIS
Upon the Petition of
KATHRYN JUNE MORRIS,
Appellant,
And Concerning
DENNIS EUGENE MORRIS,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Clarke County,
Sherman W. Phipps, Judge.
Kathryn Morris appeals the denial of her request for an order
requiring Dennis Morris to designate her as the beneficiary of a military
retirement survivor benefits plan. DECISION OF COURT OF APPEALS
VACATED; DISTRICT COURT RULINGS REVERSED; AND CASE
REMANDED.
Anjela A. Shutts of Whitfield & Eddy, P.L.C., Des Moines, and
Diana L. Miller of Whitfield & Eddy, P.L.C., Mount Pleasant, for
appellant.
John D. Hartung of Hartung & Schroeder, Des Moines, for
appellee.
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WATERMAN, Justice.
This case should serve as a vivid reminder to attorneys practicing
matrimonial law to specifically address survivor rights when dividing
retirement benefits. The fighting issue here is whether the award of “half
of the . . . Marine Corps Retirement” in the parties’ stipulated decree of
dissolution entitles the nonmilitary spouse to no more than fifty percent
of the monthly retirement pay while the retiree lives, without survivor
benefits. Trial counsel for Kathryn June Morris (Kathy), the petitioner,
and for Dennis Eugene Morris, the respondent, did not expressly address
the survivorship rights in their stipulation adopted by the district court
in the 2003 decree ending this twenty-three-year marriage. In 2010, new
counsel for each party disagreed whether the 2003 decree obligated
Dennis to designate Kathy for survivor benefits. Kathy would not receive
monthly retirement payments upon Dennis’s death without survivor
benefits. Kathy filed an application for a hearing to decide the issue.
Dennis resisted. The district court denied her relief, and the court of
appeals affirmed. On further review, we conclude the district court and
court of appeals erred and oversimplified the matter by characterizing
the issue solely as a request for modification of the 2003 decree. Rather,
this dispute should be treated as a request to interpret the 2003 decree.
Accordingly, we vacate the decision of the court of appeals and reverse
the 2010 rulings of the trial court. We remand the case for the district
court to determine its intent as to survivorship rights when it entered the
decree in 2003.
I. Background Facts and Proceedings.
Kathy and Dennis were married in the winter of 1980 in
Cedar Rapids, Iowa; the bride was age twenty and groom age twenty-two.
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They had three daughters while Dennis served in the Marine Corps all
but one or two years of their twenty-three-year marriage. Nearly all of
Dennis’s Marine Corps retirement benefits accrued during their
marriage. Dennis had the right to participate in the military’s survivor
benefit plan (SBP) pursuant to 10 U.S.C. §§ 1447–1455 (2006). 1 The SBP
plan, for a premium, provides monthly payments to the designated
survivor after the death of the military retiree. However, during their
marriage, the parties decided to forego the SBP benefit because electing
that benefit would have reduced Dennis’s monthly retirement benefit
payment. Instead, Dennis purchased a $350,000 life insurance policy on
his life with Kathy designated as the beneficiary. Dennis retired from the
Marine Corps late in the parties’ marriage.
Kathy filed for divorce in April 2003. That September, the parties
signed a ten-page “Stipulation and Agreement” on the terms for ending
their marriage. They agreed to joint legal custody of their minor children,
with Kathy to have physical care and Dennis to have specified visitation.
Dennis agreed to pay specified alimony for five years and child support to
the age of eighteen or through high school. Under the heading
“DIVISION OF PROPERTY AND DEBTS,” the stipulation in great detail
1Through the Uniformed Services Former Spouses’ Protection Act (USFSPA),
Congress recognized the right of state courts to distribute military retirement pay to a
former spouse and provided a method of enforcing these orders through the
Department of Defense if the former spouse is awarded a portion of a member’s military
retirement pay as property in his or her final divorce decree. 10 U.S.C. § 1408(a), (f)(8).
As part of its effort to protect former spouses of military personnel, Congress also
created the survivor benefit plan. See 10 U.S.C. §§ 1447–1455. The legislative history
of this statute “reveals that Congress intended to provide state courts with the option of
ordering military service members to participate in the [SBP] and to designate a former
spouse as beneficiary as part of a divorce agreement.” Matthews v. Matthews, 647 A.2d
812, 814 (Md. 1994) (citation and internal quotation marks omitted). Under 10 U.S.C.
section 1450(f)(4), state courts have the authority “to compel service members to elect
. . . certain persons as beneficiaries of their SBP’s.” Id.
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awarded each party particular vehicles, farmland, farm products, farm
equipment, and other farm-related assets and liabilities. The stipulation
further provided:
8. PENSIONS AND TRUSTS: Each party shall receive
half of the Respondent’s Marine Corps Retirement and any
Trans. World Airlines pension received in the future. The
Petitioner is awarded $31,500 cash in lieu of any interest she
has in the Respondent’s United Airlines Directed Account
Plan, with the Respondent awarded any remainder. The
Respondent is awarded his United Airlines Defined Pension
Benefits, while the Petitioner is awarded all proceeds from
her interest in the T.A. Cross Trust. The Respondent and
Petitioner will split equally any funds in IRA accounts owned
by either party.
9. STOCKS, BONDS, MUTUAL FUNDS, LIFE
INSURANCE: The Petitioner is awarded control over the
children’s mutual funds. The Petitioner and Respondent are
awarded equal amounts of the remaining brokerage
accounts, bonds (except savings bonds), stocks and mutual
funds, which shall be divided immediately upon entry of the
decree in such manner as to minimize any tax consequence.
Savings Bonds shall be awarded to the parties in whose
name the bond is currently in. The Parties are awarded the
life insurance policies in the party’s name. [Dennis] shall
immediately procure life insurance until age 60 in the amount
of $350,000, and each party shall pay half of the monthly
premium for $350,000 in coverage, with [Kathy] designated as
the primary Recipient and the Parties [sic] current children
secondary beneficiaries.
(Emphasis added.)
The final term of the stipulation states, “This agreement is the
entire agreement between the parties and cancels all prior agreements,
whether written or oral or implied.” The trial counsel for each party
signed the stipulation under the handwritten phrase, “Approved as to
Form Only.”
The stipulation was filed at 2 p.m. on September 18, 2003, with
notarized verifications signed by each party. At 2:37 p.m. the same day,
the District Court for Clarke County entered a three-page decree of
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dissolution that was also signed as “Approved by” Kathy and Dennis and
signed as “Approved as to form only” by their respective lawyers. The
decree stated the parties’ stipulation “has been presented to this Court
for its approval, is hereby approved, and the terms, agreements,
undertakings and conditions of such Stipulation and Agreement are
hereby incorporated in this Decree.” The decree expressly entered
judgment on “all the terms of the Stipulation.” The decree included a
finding and conclusion that “[t]he division of marital assets and liabilities
and spousal support provisions contained in the parties’ Stipulation and
Agreement are fair and equitable.” Kathy was then age forty-four and
Dennis age forty-six.
The parties are now age fifty-two and fifty-four, respectively.
Dennis has remarried. Dennis will begin receiving monthly retirement
benefits from his Marine Corps pension when he reaches age sixty in
May 2017. Kathy will receive half of those monthly payments. However,
unless Dennis affirmatively designates Kathy as the survivor under the
SBP, the retirement payments to each of them will end upon his death.
Federal law permits Dennis to designate a survivor when he reaches age
sixty. 10 U.S.C. § 1448(a)(1); id. § 12731. If Dennis does designate
Kathy as the survivor, his monthly retirement pay would be lowered by
approximately 6.5% to cover the premium for the survivor benefits. Id.
§ 1452(a)(1). Kathy has agreed to pay the difference in what Dennis
would receive. Under federal law, however, Dennis could designate his
new wife as the survivor, which would lower the monthly benefits he is to
share with Kathy during his remaining life starting at age sixty. Id.
§ 1448(a). Under that scenario, his designated second wife would get the
monthly survivor benefits, even though Kathy effectively pays half the
premium.
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In March 2010, Kathy filed an application for an order setting
hearing, which stated in its entirety:
1. On September 18, 2003, this Court entered a
Decree of Dissolution of Marriage (hereinafter “Decree”),
which approved the Stipulation and Agreement between the
parties.
2. Pursuant to the parties’ dissolution decree, “Each
party shall receive half of Dennis’s Marine Corps
Retirement.”
3. Kathy has applied for and received verification on
August 18, 2008 that she will receive one-half of the retired
pay pursuant to the Uniformed Services Former Spouses’
Protection Act.
4. However, Dennis failed to designate Kathy as the
surviving spouse to his military pension. Therefore, upon
Dennis’s death, Kathy will no longer receive any retirement
benefits.
5. Due to the length of the parties’ marriage (23 years)
and the fact that Dennis’s entire military pension was
accumulated during the parties’ marriage, it is equitable for
Dennis to be required to designate Kathy as the surviving
spouse and/or maintain life insurance to insure Kathy
receives the retirement following Dennis’s death.
6. A hearing should be set on this Application.
WHEREFORE, Petitioner Kathryn J. Morris prays this
Court grant her Application for an Order Setting Hearing.
Petitioner prays for any other and further relief as the Court
deems just and equitable in the premises.
This application was filed by Kathy’s current appellate counsel, who had
not represented her in 2003. Dennis also retained new counsel (his
current appellate counsel) to file a resistance.
The district court, after an unreported, nonevidentiary hearing,
entered a two-page ruling denying Kathy’s application, stating:
The Petitioner in her Application for an Order Setting
Hearing (Application), and in her counsel’s argument
thereon, requests the court to order the Respondent to
designate Petitioner as surviving spouse to his military
pension. She argues that she is not asking the court to
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modify the original Decree of Dissolution (Decree) by making
such request but, rather, asking the court to exercise its
equitable power to enter an order effectuating a provision of
the Decree as contemplated by the parties at the time of
stipulating to the provisions of the Decree. The provision
she has reference to is paragraph 8, “Pensions and Trust,”
on page 5 of the Stipulation and Agreement (Stipulation)
signed by the parties on September 17, 2003. Said
paragraph is a subparagraph under the heading “Division of
Property and Debts” (see page 2 thereof).
Subparagraph 12 on page 6 of the Stipulation
specifically addresses spousal support as a separate issue.
It is clear that the provision of the Decree and the
Stipulation addressing the interest of the Respondent and
the Petitioner in Respondent’s Marine Corps retirement is a
part of the property division and therefore not subject to
modification. (See Iowa Code sec. 598.21(7)).
On June 28, Kathy filed a motion pursuant to Iowa Rule of Civil
Procedure 1.904(2) to enlarge or amend the district court’s findings of
fact and conclusions of law. This motion was denied in a ruling filed
December 21, stating in pertinent part:
In this Motion the Petitioner specifically asks the court to
“. . . vacate or modify . . .” (p. 5(1) of the Petitioner’s Motion)
certain provisions of the Stipulation and Agreement adopted
by the September 18, 2003, Decree, even though the
Petitioner has not filed a Petition to Modify. The court has
no jurisdiction in this proceeding to modify the Decree or the
underlying Stipulation and Agreement entered into by the
parties.
In the alternative, the Petitioner asks the court, once
again, to exercise its equitable powers to require the parties
to abide by the intent of the parties as set forth in what it
describes as the unambiguous provisions of the Stipulation
and Agreement of the parties re Respondent’s Marine Corps
pension benefits, which provisions were adopted at the
request of the parties, without further clarification, by the
September 18, 2003, Decree. It is most likely that if the
provisions of the Stipulation and Agreement were clearly
unambiguous and required Respondent to do certain acts
which he has failed or refused to perform that the Petitioner
could have and would have filed an application for rule to
show cause. The Petitioner has not done so.
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The court declines the opportunity to enlarge or
amend its findings of fact and conclusions of law previously
entered except to find that the issue which the Petitioner has
asked the court to rule on herein is not ripe for ruling in that
it asks the court to speculate as to what the facts might be
at some future unspecified date. The court cannot do so on
the record herein.
Kathy’s timely appeal was transferred to the court of appeals and
decided by that court on July 27, 2011. The court of appeals correctly
observed that “a district court retains jurisdiction after a final order to
enforce the judgment, but ‘does not have the authority to revisit and
decide differently the issues concluded by that judgment.’ ” (Quoting
Franzen v. Deere & Co., 409 N.W.2d 672, 674 (Iowa 1987)). The court of
appeals affirmed the 2010 rulings that denied Kathy relief. The
unanimous three-judge panel of that appellate court concluded:
We cannot construe [Kathy’s] argument as seeking an
enforcement of a judgment already in place, particularly
where (1) the parties chose not to participate in the SBP
during their marriage, and (2) the SBP remains an option to
Dennis.
We granted Kathy’s application for further review.
II. Scope of Review.
We review this marital dissolution appeal de novo. In re Marriage
of Brown, 776 N.W.2d 644, 647 (Iowa 2009) (reviewing de novo whether
district court properly interpreted dissolution decree); see also In re
Marriage of Veit, 797 N.W.2d 562, 564 (Iowa 2011) (applying de novo
review in determining whether QDRO fulfilled terms of dissolution
decree); In re Marriage of Pals, 714 N.W.2d 644, 646 (Iowa 2006) (“ ‘A
proceeding to modify or implement a marriage dissolution decree
subsequent to its entry is triable in equity and reviewed de novo on
appeal.’ ” (quoting In re Marriage of Mullen-Funderburk, 696 N.W.2d 607,
609 (Iowa 2005))). The parties agree our review is de novo.
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III. Analysis.
We are asked to decide whether the district court and court of
appeals erred in denying Kathy the relief she sought—an order
compelling Dennis to designate her as the survivor for his Marine Corps
retirement benefits. “A stipulation and settlement in a dissolution
proceeding is a contract between the parties.” In re Marriage of Jones,
653 N.W.2d 589, 593 (Iowa 2002). The parties’ stipulation, however,
is not binding on the court, as the court has the
responsibility to determine “ ‘whether the provisions upon
which the parties have agreed constitute an appropriate and
legally approved method of disposing of the contested
issues.’ ” Accordingly, if the stipulation is unfair or contrary
to law, the court has the authority to reject the stipulation.
Id. at 593–94 (quoting In re Marriage of Ask, 551 N.W.2d 643, 646 (Iowa
1996)). Consequently, once the court enters a decree adopting the
stipulation, “[t]he decree, not the stipulation, determines what rights the
parties have.” Id. at 594 (citing Bowman v. Bennett, 250 N.W.2d 47, 50
(Iowa 1977)). “Therefore, in ascertaining the rights of the parties after
final judgment, it is the intent of the district court that is relevant, not
the intent of the parties.” Id. 2
Both the district court and the court of appeals rejected Kathy’s
request for relief because they treated it as an attempt to modify the
decree’s division of property. We agree that a property division generally
is not modifiable. Iowa Code § 598.21(7) (2011). Nevertheless, the
district court retains authority to interpret and enforce its prior decree.
2For that reason, we have concluded the intent of the parties and their counsel
is irrelevant without a showing their intent was shared with the judge entering the
decree that adopted their stipulation. Bowman, 250 N.W.2d at 51; see also Prochelo v.
Prochelo, 346 N.W.2d 527, 529 (Iowa 1984) (“We note parenthetically that it was
inappropriate to consider evidence of the parties’ private intentions regarding their
stipulation.”).
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See In re Marriage of Brown, 776 N.W.2d at 650. The district court and
court of appeals short-circuited the matter by characterizing Kathy’s
claim as a “modification.” See Sieren v. Bauman, 436 N.W.2d 43, 45
(Iowa 1989) (noting that a party’s contention that a judge improperly
modified a decree “is simply another way of saying that he believes the
judge erred in the interpretation he placed on that decree”).
Resolution of Kathy’s appeal turns on the disputed issue of
whether she is entitled to survivor benefits under the 2003 decree. That
begs the question whether survivorship rights were included in that
decree’s award to her of “half . . . the Marine Corps Retirement.” The
stipulated decree is ambiguous. If the district court intended the award
of “half the Marine Corps Retirement” to include survivorship rights,
Kathy is not seeking to impermissibly modify the dissolution decree as
Dennis contends. See In re Marriage of Brown, 776 N.W.2d at 648 (“ ‘We
. . . expressly recognize the ability of a party otherwise entitled to a
QDRO to obtain one as an aid to enforcing a previously entered
judgment.’ ” (quoting Rohrbeck v. Rohrbeck, 566 A.2d 767, 774 (Md.
1989))). We lack a ruling by the district court in this case determining its
intent in 2003 as to survivor benefits.
The parties’ 2003 stipulated decree divided extensive property
holdings accumulated over their twenty-three-year marriage and
provided for specified alimony, child support, and visitation. Negotiation
of stipulated decrees of dissolution involves give and take. The
provisions of the decree presumably are interrelated. We know from the
record that during their marriage the parties chose to purchase a
$350,000 life insurance policy to pay Kathy that amount upon Dennis’s
death, in lieu of his designation of her as the survivor under his Marine
Corps retirement SBP. And, we know that in their stipulated decree, the
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parties agreed Dennis would maintain the $350,000 life insurance policy
until he reached age sixty—the age Dennis’s Marine Corps retirement
would begin monthly payments. Their stipulated decree cryptically
awards Kathy “half . . . of the Marine Corps Retirement.” What we do not
know is whether the district court intended the award of half his Marine
Corps retirement to include survivor benefits or, instead, simply an equal
division of the monthly payments he would receive during his remaining
life. There was no trial or evidentiary hearing in 2003, nor is any
extrinsic evidence offered to interpret this ambiguous decree.
Other courts in this situation have adopted a default rule by
holding that a decree dividing retirement benefits includes survivorship
benefits. See, e.g., Zito v. Zito, 969 P.2d 1144, 1147–48 (Alaska 1998); In
re Smith, 56 Cal. Rptr. 3d 341, 349 (Ct. App. 2007); In re Marriage of
Payne, 897 P.2d 888, 889 (Colo. App. 1995); Conaway v. Conaway, 899
S.W.2d 574, 576 (Mo. Ct. App. 1995); Harris v. Harris, 621 N.W.2d 491,
498 (Neb. 2001). Several of these courts have allowed postdissolution
orders compelling the retiree to designate his former spouse as the
survivor to effectuate the division of retirement benefits in the original
decree. Zito, 969 P.2d at 1147–48; In re Smith, 56 Cal. Rptr. 3d at 349.
Other courts, however, have refused to allow postdissolution orders
awarding a former spouse survivorship rights when the decree does not
expressly contemplate the survivorship benefit. See, e.g., Potts v. Potts,
790 A.2d 703, 714–15 (Md. Ct. Spec. App. 2002); Williams v. Williams, 37
So. 3d 1196, 1202 (Miss. Ct. App. 2009), aff’d, 37 So. 3d 1171 (Miss.
2010); Stiel v. Stiel, 348 S.W.3d 879, 891–92 (Tenn. Ct. App. 2011).
Kathy invites us to presume the original decree includes the
survivorship benefits as part of her award of “half . . . the Marine Corps
Retirement.” Kathy notes her receipt of monthly retirement payments
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that begin in 2017 (when Dennis reaches age sixty) will end upon his
death unless he designates her as the survivor. Because Kathy offers to
pay the premium (the reduction in the monthly payments upon her
designation as survivor), Dennis would see no reduction in his own
monthly retirement payments. Under Kathy’s interpretation, Dennis
cannot designate his current spouse as the survivor. Should he do so,
he would unilaterally lower the retirement benefits to be paid to Kathy
while he remained alive and, of course, divert the survivor benefits to his
current spouse upon his death.
Regrettably, the parties’ trial counsel failed to specifically address
survivorship rights in the 2003 stipulated decree. We decline to
speculate whether the parties might have negotiated a different division
of property, for example, in exchange for Dennis’s express agreement to
designate Kathy as the survivor and, thereby, forfeit his right to
designate his current spouse. In our view, the better alternative at this
juncture is to remand this action to the district court to determine the
court’s intent as to survivor benefits in the 2003 decree.
IV. Appellate Attorney Fees.
Dennis requested an award of attorney fees incurred in this
appeal. The court of appeals awarded him $750 in appellate attorney
fees. We vacate that award. Following the hearing on remand, the
district court shall determine whether to award attorney fees to either
party and, if so, the amount to be awarded for fees incurred in this
appeal and in the postappeal district court proceedings.
V. Conclusion.
We vacate the decision of the court of appeals and reverse the 2010
rulings of the district court. We remand this case to district court for
further proceedings to interpret the 2003 decree by determining the
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court’s intent at that time as to the Marine Corps retirement survivorship
benefits. We assess the costs of this appeal equally to each party.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT RULINGS REVERSED; AND CASE REMANDED.