http://opinions.kycourts.net/coa/2019-CA-000011.pdf

The parties were divorced in 1998, with the decree of dissolution of marriage requiring Husband to execute a Qualified Domestic Relations Order (“QDRO”) within 30 days of the date of entry of the decree. Husband did not execute the QDRO, of which Wife did not become aware until 20 years later, when she hired an attorney to look into execution of the QDRO. After determining that the QDRO was not executed, Wife’s attorney moved for entry of a QDRO. Husband objected, arguing that a QDRO could not be executed outside the statutory period of 15 years. Family Court denied Wife’s motion, because the attempted execution fell outside the statutory period. Wife appealed.

Wife argued that Husband was unjustly enriched by his failure to execute the QDRO. The Court of Appeals held that the doctrine of equitable estoppel precludes Husband from invoking the fifteen-year statute of limitations to bar Wife’s right to a portion of Husband’s pension, which she was awarded in the decree. One spouse should not be permitted to retain retirement benefits awarded to the other spouse. When Husband failed to execute the QDRO, he was unjustly enriched. To remedy the unjust enrichment, the doctrine of equitable estoppel operates as a bar to inequitable application of the statute of limitations. Equitable estoppel requires some act or conduct to mislead or deceive the other party and prevent her from instituting suit while she may do so, except when a party is silent where the law imposes a duty to speak or disclose. Husband’s failure to execute the QDRO was akin to silence when the law imposes a duty, such that Husband is estopped from arguing the statute of limitations defense.

Husband argued that the laches doctrine works to stop Wife from claiming any right to the pension. The Court of Appeals held that laches is no impediment to Wife’s assertion of the right to her share of the pension, because there was no unreasonable delay where Wife had no reason to inquire into Husband’s execution of the QDRO until such time as payment from the pension could be anticipated, and because there was no possible prejudice.

Digested by Nathan R. Hardymon

The post Husband Equitably Estopped from Asserting Statute of Limitations Defense to Preclude Wife from Belatedly Filing QDRO to Obtain Share of Pension – Published Opinion from Ky. Court of Appeals appeared first on Goldberg Simpson - Family Law Group.

Circuit Court referred disputed issue in a dissolution action, including division of marital assets, to Domestic Relations Commissioner (“DRC”). DRC issued a report finding Husband qualified for military retirement benefits, which the parties stipulated were partially marital. Circuit Court adopted DRC’s report and issued a limited decree of dissolution, which did not provide for division of Husband’s retirement plan. Eleven years later, Wife moved to restore the matter to Circuit Court’s active docket to address the retirement benefits. Circuit Court found the retirement benefits to be subject to division and referred the matter to DRC for drafting a qualified domestic relations order (“QDRO”). The QDRO provided a valuation date for when the QDRO was completed.

Wife moved to alter, amend, or vacate, arguing that the valuation date should be the date of the dissolution, thirteen years earlier. Husband argued that Wife was estopped from claiming the earlier valuation date due to her long delay in seeking division of the plan. Circuit Court entered an amended QDRO providing a valuation date as of the date of dissolution. Husband appealed, arguing Wife should be estopped from relying on the date of the dissolution decree as the valuation date due to her long delay in seeking a formal order dividing the retirement benefits.

The Court of Appeals held that Wife was not estopped and that Circuit Court did not err by directing the retirement be valued as of the date of decree of dissolution. It listed the elements of equitable estoppel as “(1) [c]onduct, including acts, language and silence, amounting to a representation or concealment of material facts; (2) the estopped party is aware of these facts; (3) these facts are unknown to the other party; (4) the estopped party must act with the intention or expectation his conduct will be acted upon; and (5) the other party in fact relied on this conduct to his detriment[,]” citing Hinshaw v. Hinshaw, 237 S.W.3d 170 (Ky. 2007). It then reasoned that Husband did not meet the elements, because he did not argue (1) that he relied on Wife’s silence to conclude she was no longer making a claim to the retirement benefits; (2) that he was unfairly prejudiced by the delay, such as making withdrawals from the benefits in reliance on the lack of an order of division; or (3) that Wife will obtain a greater benefit than she would be entitled if the court had entered the QDRO earlier.

Digested by Nathan R. Hardymon

The post Spouse Was Not Equitably Estopped from Relying on Date of Dissolution Decree as Valuation Date for Retirement Benefit – Published Opinion from Kentucky Court of Appeals appeared first on Goldberg Simpson - Family Law Group.

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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The Court of Appeals previously ruled in this case (Priest v. Priest, No. 2014-CA-000148-MR) holding Wife’s share of Husband’s military retirement “should be calculated based upon the DFSA, Section IV(c) as outlined in Poe v. Poe. 711 S.W.2d 849, 850 (Ky. App. 1986). The family court divided the military retirement benefit utilizing the hypothetical award formula set out in DFSA IV(c) pursuant to Poe. Wife again appealed arguing the family court incorrectly applied the DFSA formula.

The Court of Appeals only finds one error in the family court’s calculation, the cost of living adjustment, and reverses the family court “on this one calculation” and remands “for a correction to the court’s final award.” Interestingly, the Court of Appeals implores the Supreme Court to revisit the law as to military retirement stating “Given the final result of the current law upon the division of the marital assets of a retired veteran’s ex-spouse, we do not find the current application of Poe to be consistent with divorce law in Kentucky and implore the Kentucky Supreme Court to review the holding in Poe.”

Digested by Elizabeth M. Howell

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Husband and Wife moved to Kentucky shortly after Husband began receiving disability and retirement benefits from his Connecticut employer. Several years later, Wife filed a divorce action in Kentucky. Under Kentucky law, Husband’s disability benefits are non-marital, while under Connecticut law they may be marital. The trial court found that Kentucky law applied, as Kentucky was the domicile of both parties at the time of dissolution. The Court of Appeals reversed applying the most significant relationship test to the disability benefits and finding that Connecticut law should be used because that state had the most significant relationship to the benefits.

The Supreme Court granted discretionary review and reversed the Court of Appeals holding the most significant relationship test has not been adopted by Kentucky in domestic relations cases, only tort and contract cases. In a dissolution proceeding, “the classification and division of property is governed by the law of the forum,” in this case Kentucky. The Supreme Court agrees with the Court of Appeals that there are open questions of fact regarding the nature of the benefits, and remands the case to the trial court to address these outstanding issues.

Justice Venters, Chief Justice Minton, and Justice Noble concur in result only arguing the most significant relationships test should apply.

Digested by Elizabeth M. Howell

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In a previous related case, the Supreme Court held that Husband’s Kentucky teacher’s retirement account was considered marital property under KRS 403.190(1). Shown v. Shown, 233 S.W.3d 718 (Ky. 2007). Subsequently, the trial court divided the marital portion of husband’s retirement without consideration of the complex financial calculations used to make the distribution. In fact, the court took no proof on the issue and granted wife 50% of the marital portion of the account. Husband appealed arguing it was inequitable for the trial court to divide his teacher’s retirement account without considering its unique characteristics, primarily the fact that his teacher’s retirement is a substitution for social security. The Appellate Court agreed, reversing and remanding the matter to the trial court so that it can exercise its KRS 403.190 discretion and take expert testimony to “compute the present value of a Social Security benefit that Robert would have received had he contributed to Social Security. That value should be deducted from the present value of Robert’s teachers’ retirement, prior to division of the parties’ pension plans.”

Digested by Elizabeth M. Howell

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Husband died many years after his divorce, but despite his remarriage, he had not removed his former wife as the beneficiary of his IRA. In the parties’ marital settlement agreement they had agreed to make “no claim upon any interest owned by the other, now or in the future” of their Individual Retirement Accounts.

The court looks to the holdings made in Ping, Hughes and Napier and extends their precedent to the retirement account context. The Supreme Court holds a divorce alone does not give rise to a presumption an ex-spouse is removed as a beneficiary of a retirement account; however, parties have the power to divest an interest of a beneficiary by agreement. The agreement must be clear and unambiguous and a general waiver is not enough. In this case, the parties clearly and unambiguously agreed to assign the exclusive ownership of the IRA to husband. Therefore, the former wife has no beneficiary interest in the IRA.

Digested by Elizabeth M. Howell

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In a KY divorce, the trial court erred in applying KY law to characterize CN state disability retirement benefits as nonmarital property. Instead, the Restatement (Second) of Conflict of Laws “most significant relationship”  test should be applied and CN law is more appropriate.

The post Published Family Law Opinion from Ky Court of Appeals Today: Choice of Law to Determine Whether State Disability Retirement Benefits are Marital Property appeared first on Goldberg Simpson - Family Law Group.

In divorce proceedings, husband had a civil pension. The marital portion was divided equally between the parties using the deferred distribution method. Husband argued that the award should not include the cost-of-living adjustments (COLAs) he received after the divorce. The Circuit Court concluded wife was entitled to the COLAs corresponding to her share of the pension. The Appellate Court affirmed the Circuit Court’s conclusion holding the  wife’s portion of the marital retirement should include the COLAs, as they are not earnings attributable to the husband’s post-decree efforts.

The post Award of cost of living adjustments to civil pension affirmed by Ky Court of Appeals in published opinion January 16, 2015 appeared first on Goldberg Simpson - Family Law Group.