Spouse would be unjustly enriched if allowed to keep retirement benefits before entry of QDRO – published opinion from Ky. Court of Appeals

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Baker v. Baker

 

Parties divorced in 1996, entering into a settlement agreement, which was incorporated into the decree of dissolution of marriage. Husband owned a Railroad Retirement Plan (“the Plan”) from his employment at CSX Transportation. A provision of the settlement agreement provided for Wife receiving half of the Plan from the date of the parties’ marriage until the entry of the decree of dissolution of marriage. Furthermore, both parties “agree[d] that in the event any document, legal instrument, or other writing [was] necessary to effect the terms and provisions of [the settlement] agreement, each party [would] produce, execute, and/or sign such document in order to effect the intent and purpose of [the settlement] agreement.”

 

Twenty years later, Wife filed a motion for the trial court to enter a qualified domestic relations order (“QDRO”), stating Husband had begun drawing his retirement within the last year. The trial court found the plan to be marital property and entered a QDRO allowing Wife to begin receiving her portion of the benefits as of August of 2017.

 

Wife then filed a motion for a judgment for two years of benefits from husband under the Plan. Husband did not tell Wife when he retired, despite Wife’s inquiry, and the Railroad Retirement Plan Administrator could only divide the Plan as of the date of the QDRO. Once Wife learned of Husband’s retirement, she began taking steps to receive the benefits she was due under the plan.

 

The Court of Appeals held that both parties had a duty to produce or sign any documents needed to effect the terms of the settlement agreement, and Wife fulfilled her duty by filing the QDRO and asking Husband about his retirement plans. However, Husband failed to fulfill his duty—informing Wife of his retirement—which caused Wife to lose two years of benefits she should have been receiving. The Court then applied the doctrine of unjust enrichment, holding that allowing Husband to retain two years of his benefits, a portion of which should have been paid to Wife had he informed her, would unjustly enrich Husband.

 

Digested by Nathan R. Hardymon

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