BROWNE v. BROWNE, 25980-0-II (Wash.App. 6-15-2001)

No. 25980-0-II.The Court of Appeals of Washington, Division Two.
Filed: June 15, 2001. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION.

Appeal from Superior Court of Clark County, No. 85-3-00441-5, Hon. James D. Ladley, April 19, 2000, Judgment or order under review.

Counsel for Appellant(s), Cinnamon Stephens, Harrell Desper Connell Roesch Pllc, 1325 4th Ave #600, Seattle, WA 98101-2509.

Counsel for Respondent(s), James Browne (Appearing Pro Se), 9602 N.E. 81st Ct., Vancouver, WA 98662.

CARROLL C. BRIDGEWATER, J.

Elizabeth Browne (Elizabeth) appeals an order granting James W. Browne’s (James) motion to amend a Qualified Domestic Relations Order (QDRO),[1] which the trial court entered after entering the decree of the Brownes’ marriage dissolution. The trial court found that an incorrect number entered in the formula used to calculate Elizabeth’s share of James’s pension constituted an `extraordinary circumstance’ that justified re-opening the judgment under CR 60(b)(11). We affirm.

Elizabeth and James married in 1962 and separated on September 28, 1984. The Brownes prepared the final decree of dissolution themselves, without the aid of counsel. Clark County Superior Court entered the final decree on February 24, 1986.

The final decree, however, did not address the distribution of James’s pension plan (Retirement Plan) from United Airlines (United), where he worked for 14.67 years of the marriage until the date of the Brownes’ separation. In February 1989, Elizabeth petitioned the trial court to reopen the dissolution in order to distribute the retirement benefits earned by the marital community.

Elizabeth’s attorney in 1990, Kenneth Weber, retained Scott Rasmussen, a pension actuary, to assist in drafting the QDRO. Rasmussen, however, did not draft the final QDRO. The trial court approved the QDRO Weber presented.

The trial court entered the QDRO on July 13, 1990. The preamble stated that: `As of September 28, 1984, [James] has Accrued Benefits of approximately $432.67/month payable at age 65. . . . It is the intention of the trial court that a distribution be made of the benefits.’ Clerk’s Papers (CP) at 45. The 1990 QDRO identified Elizabeth as the `Alternate Payee (Payee)’ and James as the `Participant,’ and it included the following formula (`coverture fraction’) to calculate Elizabeth’s monthly share of the Retirement Plan:

Total Years/Months of Plan Participation to September 28, 1984 (14.67 years) Participant’s Total ____________________ x 50% x Monthly Benefit Total Years/Months of at Retirement Plan Participation under this Retirement Plan (16.41 years)

CP 45-46.

United approved the 1990 QDRO as meeting the criteria set forth in § 206(d)(3) of the Employment Retirement Income Security Act (ERISA).[2]
Elizabeth’s attorney, Weber, notified James by letter of United’s approval. Elizabeth began receiving monthly benefits under the QDRO on September 1, 1996. James’s accrued monthly benefit at this date was $2,207.65. Elizabeth could draw benefits when James was eligible to draw, not when he actually began to draw. Application of the formula from the 1990 QDRO resulted in an offset to James’s pension plan of $986.78/month.[3] United does not notify participants when alternate payees commence their benefits under retirement plans. Thus, James would only know how much Elizabeth received when he drew his pension and saw that the amount was deducted. United only notifies participants of a QDRO offset when the participant requests an estimate of his pension or when the participant retires.

On July 6, 1999, James moved to amend the 1990 QDRO under CR 60(b)(11). James alleged that the QDRO formula should have used the total monthly benefit accrued as of the date of their separation, not the total monthly benefits accrued as of the date he reached age 55. James claimed he did not discover the error until May 13, 1999, when he applied for the pay-off of his benefits. At that time, James received a revised benefit calculation data sheet from United that showed the divorce settlement offset of $986.78/month.

On March 23, 2000, the trial court held a hearing to determine whether James could reopen the case under CR 60(b)(11). The trial court ruled that the QDRO formula contained an error in the denominator of the coverture fraction. The trial court ordered the parties to recalculate the QDRO denominator to reflect James’s total years of service.

On April 19, 2000, the trial court entered the amended QDRO. The amended QDRO changed the formula’s denominator from 16.41 years to 26.67, the total number of years of plan participation when James reached age 55. Specifically, the amended QDRO directs United’s Plan Administrator to change the denominator in the divisor from 16.41 years to `Total Years/Months of Plan Participation when Participant reached 55 years And Alternate Payee started drawing benefits on August 31, 1996.’ CP at 141. As the order explains, this assigns to Elizabeth an amount equal to the actuarial equivalent of 50 percent of the marital portion of James’s accrued benefit in the pension plan.

Elizabeth claims the trial court erred in granting James’s motion to vacate the QDRO under CR 60(b)(11) because: (1) there were no extraordinary circumstances justifying reopening the judgment; (2) the motion was not timely; and (3) a trial court may not amend a QDRO that complies with ERISA’s statutory requirements.

I. CR 60(b)(11) Standard (a) Extraordinary Circumstances
We review the trial court’s ruling on a motion to vacate under CR 60(b)(11) for an abuse of discretion. In re Marriage of Shoemaker, 128 Wn.2d 116, 120-21, 904 P.2d 1150 (1995). This court will not overturn a decision under CR 60(b) unless it plainly appears that the trial court exercised its discretion on untenable grounds or for untenable reasons. Knies v. Knies, 96 Wn. App. 243, 248, 979 P.2d 482 (1999). CR 60(b)(11), which permits a court to vacate a judgment for `[a]ny other reason justifying relief,’ is available only for `extraordinary circumstances not covered by any other section of the rule.’ In re Marriage of Thurston, 92 Wn. App. 494, 499, 963 P.2d 947 (1998), review denied, 137 Wn.2d 1023 (1999) (finding that the nonoccurrence of a material condition required to affect the property division provisions of a dissolution decree was an extraordinary circumstance (quoting State v. Keller, 32 Wn. App. 135, 140, 647 P.2d 35 (1982))), review denied, 137 Wn.2d 1023 (1999). And the circumstances must relate to irregularities extraneous to the action of the trial court. In re Marriage of Tang, 57 Wn. App. 648, 655-56, 789 P.2d 118 (1990); In re Marriage of Flannagan, 42 Wn. App. 214, 221, 709 P.2d 1247 (1985), review denied, 105 Wn.2d 1005 (1986).

Courts are reluctant to revisit property distributions. Flannagan, 42 Wn. App. at 219. But a property distribution may be modified if the trial court finds conditions that justify reopening the judgment. RCW 26.09.170(1); Flannagan, 42 Wn. App. at 215. Moreover, it is not an abuse of discretion to modify a dissolution decree where the modification has the effect of a clarification by effectuating the intent of the parties and the trial court as embodied in the decree. In re Marriage of Jennings, 138 Wn.2d 612, 627, 980 P.2d 1248 (1999) (affirming modification of decree where modifying husband’s pension was recategorized post-decree as a disability benefit and only retirement benefits were subject to division in a dissolution); see also Knies, 96 Wn. App. at 250 (allowing modification of property settlement where former husband’s job-related disability status allowed him to circumvent the property settlement agreement and eliminated possibility that former wife would obtain her one-half interest in his pension). A clarification `is merely a definition of the rights which have already been given and those rights may be completely spelled out if necessary.’ Rivard v. Rivard, 75 Wn.2d 415, 418, 451 P.2d 677 (1969); In re Marriage of Thompson, 97 Wn. App. 873, 878, 988 P.2d 499 (1999).

Here, the trial court did not modify the parties’ rights under the QDRO. Instead, the trial court merely ordered the parties to correct an incorrect number within the coverture fraction. Similar to Jennings, the trial court’s action was essentially a means of enforcing the agreed-upon terms of the original decree, which is more akin to a clarification than a modification. The trial court correctly determined that the `16.41′ used in the denominator of the formula was incorrect. `16.41′ did not represent the total years of James’s participation in the Retirement Plan when Elizabeth began receiving benefits. The language of the formula correctly describes the mathematical means to determine Elizabeth’s share (one-half) of the amount of James’s pension that accrued during the marriage. In 1990, the parties inserted an incorrect figure in the denominator. If the figure that was to be multiplied by the fractions composed of the years and months of plan participation and the 50 percent was the `total monthly benefit at retirement,’ then the denominator of the years and months of plan participation needed to reflect the total number of years and months of plan participation as well, not just those representing James’ participation until separation. That figure was unknown when the QDRO was entered on July 13, 1990, but was only known when James retired. It was incorrect to use the number 16.41 (years) in the denominator.

The trial court did not correct a mistake of law,[4] as Elizabeth asserts; it merely ordered the parties to correct a factual mistake within a well-recognized distribution formula. When there is insufficient evidence to determine the present value of a pension plan, the trial court may use a percentage formula to award the spouse benefits on an `as received’ basis. In re Marriage of Bulicek, 59 Wn. App. 630, 639, 800 P.2d 394 (1990); In re Marriage of Pea, 17 Wn. App. 728, 731, 566 P.2d 212 (1977). This method of disposition `avoids difficult valuation problems, shares the risks inherent in deferred receipt of the income, and provides a source of income to both spouses at a time when there will likely be greater need for it.’ Bulicek, 59 Wn. App. at 638. Here, the language of the formula describes the identical percentage formula applied in cases awarding a community share of a former spouse’s pension.[5] See e.g., Bulicek, 59 Wn. App. at 632; Pea, 17 Wn. App. at 731. The Bulicek formula results in an award to the former spouse of one-half of the community (or marital) share of the pension. Using the trial judge’s example, if a couple divorced after a 15-year marriage and the husband worked 30, the formula awards the wife one-half [50 percent] of one-half of the pension.[6] Here, however, the incorrect figure in the 1990 QDRO did not represent James’s total years of service, resulting in a substantial increase in the amount Elizabeth received and corresponding decrease in the amount James received.

Rasmussen, Elizabeth’s own expert at the time of the 1990 QDRO, confirmed this mistake in his 1999 deposition. Rasmussen did not draft the 1990 QDRO, although Weber’s correspondence indicated that the parties intended a 50 percent distribution of the community share. The purpose of the coverture formula is to determine what portion of the total pension is attributable to the marriage, and then award the divorced spouse one-half (50 percent) of that amount. When asked if the 1990 QDRO formula was consistent with an intent to award Elizabeth half of the marital portion of the pension, Rasmussen explained that the formula was incorrect. Rasmussen specifically testified: `The coverture fraction on page 2 [of the QDRO] does not provide a marital portion based on what is described as the numerator and denominator, and the benefit that it would ultimately be multiplied by.’ CP at 125.

Rasmussen further stated that the formula in the 1990 QDRO is not the formula he would have used had he prepared the final QDRO because it generally is not the practice to put a final number in the denominator. Rasmussen also stated that the 1990 formula should have used James’s total years of participation as the denominator to correctly divide the marital portion of James’s pension. In sum, using the `16.41′ figure instead of James’s total years of plan participation provided a greater benefit to Elizabeth than awarding her half of the actual marital portion.[7] Clearly, the number used in the denominator of the coverture fraction did not represent James’s total years of plan participation, and its use caused an award to Elizabeth of more than one-half of the marital portion of James’s pension. Moreover, the evidence also demonstrates that in 1990 the parties clearly intended that Elizabeth receive one-half of only the marital portion of James’s pension, not one-half of his entire pension. James’s affidavit in support of his CR 60(b)(11) motion states that in 1990 `my attorney convinced me to concede on the pension and offer [Elizabeth] one-half (1/2) of the pension benefits that I earned from the date of marriage to the date of the separation, a period of 14.67 years.’ CP at 52. Elizabeth also stated in her 1990 declaration that she was seeking an equitable distribution of the pension as of the day of entry of the decree. Furthermore, the preamble of the 1990 QDRO stated that the amount of monthly pension benefits accrued as of the date of the parties’ separation was the amount to be divided.

In sum, the language describing the fraction in the QDRO formula was correct. If the denominator, titled `Months/Years of Total Plan Participation under this Retirement Plan,’ had been correctly described, the formula would have awarded Elizabeth one-half (50 percent) of the marital portion of the pension. The trial court did not alter Elizabeth’s rights under the QDRO; it merely corrected the figure by explaining that the proper number of years/months should be equal to James’s total years/months of participation under the retirement plan. The trial court did not modify the parties’ rights; it merely ordered that the parties correct a mathematical error. The trial court did not abuse its discretion when it recognized the incorrect figure in the denominator, kept the 1990 formula, and explained the proper calculation of the denominator. We find that extraordinary circumstances existed, and the trial court did not abuse its discretion in modifying the QDRO under CR 60(b)(11).

(b) Timeliness
Elizabeth also asserts that the trial court should have denied James’s CR 60(b)(11) motion because he filed it nearly nine years after entry of the 1990 QDRO. When James brought the motion, he was nearly eight years past the deadline for a direct appeal.[8]

A party must bring a CR 60(b)(11) motion within a `reasonable time.’[9]
What constitutes a reasonable time depends on the facts of the case. Thurston, 92 Wn. App. at 500; see also State ex rel. Campbell v. Cook, 86 Wn. App. 761, 766, 938 P.2d 345, review denied, 133 Wn.2d 1019
(1997). The mere passage of time between the entry of the judgment and the motion to set it aside is not controlling; the event triggering the motion may arise well after entry of the judgment that the moving party seeks to vacate. E.g., Knies, 96 Wn. App. at 247 (6-year delay); Thurston, 92 Wn. App. at 501 (19-month delay). Failure to act within a reasonable time under Civil Rule 60 has been equated to laches, and relevant considerations in determining timeliness include: (1) whether the delay prejudices the nonmoving party; and (2) whether the moving party has a good reason for failing to act sooner. Thurston, 92 Wn. App. at 500; In re Marriage of Maddix, 41 Wn. App. 248, 252, 703 P.2d 1062 (1985) (although a 20-month delay, CR 60 motion was timely where no prejudice was shown). Here, James cites an inability to detect the alleged error until 1999 as the reason for the nine-year delay. James states that he did not learn Elizabeth had elected to receive her share of the pension benefits until May 13, 1999, when he received a revised benefit calculation schedule. CP 115. United does not notify its plan participants when an alternate payee commences her benefits under the Retirement Plan. United first notifies the plan participant of the QDRO offset when the participant retires or when the participant requests an estimate of his pension. Moreover, James filed the CR 60(b)(11) within two months of discovering the error.

Additionally, although James was initially represented by counsel when he first opposed the 1990 QDRO, he appeared pro se at the hearing to enter the order. The trial court stated that the error in the pension formula was a sophisticated mistake, not easy for James to catch. Therefore, it was reasonable for the trial court to assume that James did not know of the erroneously increased benefit to Elizabeth until he investigated his pension benefits at his retirement.

Moreover, Elizabeth has not demonstrated how she was prejudiced by James’s delay in recognizing the error. Although Elizabeth alleges that the trial court should have accepted evidence about the parties’ relative financial circumstances in order to assess prejudice to her, she cites no law to support this proposition. Moreover, James did not request that Elizabeth pay back the overpayments, nor did the trial court order her to do so. Elizabeth does not have a right to receive future overpayments simply because she erroneously received them in the past. There is no unfair prejudice to Elizabeth.

The trial court did not abuse its discretion when it concluded that the mistake was not readily discoverable and the nine-year delay was reasonable.

II. ERISA
Elizabeth next maintains that the trial court committed an error of law by finding that the QDRO contained an error when it fell within the statutory requirements of ERISA.[10] Simply because ERISA requires that a QDRO specify the amount or percentage of the participant’s benefits to be paid by the plan to an alternate payee[11] does not make any such formula contained in a QDRO automatically correct. Although the 1990 QDRO met ERISA’s requirements as to form and information contained within it, it does not mean that it could not be reopened under extraordinary circumstances to correct a mistake of fact in the formula. Elizabeth cites no law to the contrary.

The trial court did not impose any additional or alternative requirements on ERISA. There is no preemption issue here. ERISA does not prevent the trial court’s correction to the coverture formula.

III. Attorney Fees
Elizabeth requests that this court award her attorney fees under RCW 29.09.140. We decline to award attorney fees to either party.

Affirmed.

A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.

WE CONCUR: MORGAN, P.J., HOUGHTON, J.