IN RE MARRIAGE OF BLAKE, 21518-1-III (Wash.App. 7-15-2003)

No. 21518-1-IIIThe Court of Appeals of Washington, Division Three. Panel Two.
Filed: July 15, 2003. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION

Appeal from Superior Court of Benton County Docket No: 84-3-00218-3 Judgment or order under review Date filed: 09/27/2002

Counsel for Appellant(s), Robert Graham Schultz, Attorney at Law, 2415 W Falls Ave, Kennewick, WA 99336-3068.

Counsel for Respondent(s), Sharon Marie Brown, Attorney at Law, P.O. Box 4056, Pasco, WA 99302-4056.

Patricia Joan Chvatal, Attorney at Law, P.O. Box 966, Richland, WA 99352-0966.

Edward F. Jr Shea, Kuffel Hultgrenn Klashke Shea LLP, 1915 Sun Willows Blvd, P.O. Box 2368, Pasco, WA 99302-2368.

SCHULTHEIS, J.

Fern Blake and her ex-husband John Blake disputed the percentage of John’s retirement benefits that should have been awarded to Fern pursuant to their dissolution decree when John retired. In a prior appeal to this court, we held that Fern was entitled to a percentage of John’s entire pension as received, and remanded with directions to the trial court to apply the formula contained in the decree. The trial court on remand allowed John’s then-current wife, Nicole Blake, to intervene, and allowed John to present evidence that Fern was not entitled to any contributions attributable to `extra duty’ pay he had accumulated after their separation. Clerk’s Papers (CP) at 210. The court applied the decree formula to a reduced total of John’s retirement benefits.

On this second appeal, Fern contends the trial court ignored the clear directive of this court to apply the decree formula to the entire pension as received. She also assigns error to the trial court’s consideration of additional evidence on remand and to the intervention by Nicole. We agree and reverse and remand.

Facts
The Blakes were married in 1968 and separated in February 1984. John was a public school teacher with a pension that began accruing soon after their marriage. When the parties separated, the pension had a value of $20,871.

Although the parties agreed on the division of property, custody of their daughter, and child support, they could not agree on the community value of John’s pension and its distribution. In the final decree — executed by John, the petitioner — the court disposed of the pension as follows:

That the pension plan as of February 1, 1984, is community property . . .; and that the respondent shall receive a sum of money as her one-half interest in the pension plan at the time that the pension plan is distributed in monthly retirement benefits to petitioner or at a time that he receives a lump sum payment from said pension plan. That respondent shall receive a sum as described by the following formula: The total amount received from a lump sum; or the monthly payment amount of the pension divided by the total months of service that petitioner has placed in his entire service with his employer (which would be the total amount of service at the time of retirement) times 186 (186 months of marriage) divided by two. This will equal the amount of money to be received by respondent either on a monthly or lump sum basis. That any contributions or accumulations obtained on or after February 1, 1984, to said pension plan [are] the separate property of petitioner.
That, as the parties are not aware if the Washington State Teachers’ Retirement System will allow a distribution of one-half of the plan as it existed at the date of separation at the time of retirement, Benton County Superior Court of the State of Washington will have continuing jurisdiction over the retirement plan and will be able to reserve the right to review this distribution. That the spirit of the settlement indicates that respondent would receive one-half of the pension from the date of marriage until the date of separation and petitioner would receive one-half of the pension from the date of the marriage until the date of separation, with all increases in said pension to be considered solely the property of petitioner.

CP at 234-35.

John retired on July 1, 1998 and withdrew $108,060, representing his accumulated retirement contributions and interest. Besides that lump sum, he also began receiving a gross monthly benefit of $2,721. Fern requested her share of the pension pursuant to the decree. In response, John offered to apply the distribution formula to the value of the pension at the time of separation rather than to the value of the pension as received. His computation was as follows: $20,871 divided by 360 months’ service times 186 months of marriage divided by 2 equals $5,392. Due to the 30 percent penalty he incurred for withdrawal, John offered Fern a total of $3,774 for her one-half interest in a pension valued at $20,871 in 1984. She declined the offer.

In September 1998, Fern moved for an order to enforce the pension distribution. The trial court found that the dissolution decree was ambiguous as to Fern’s share of the pension. Ignoring the formula set out in the decree, the court awarded Fern one-half of the value of the pension at the time of separation (one-half of $20,871, or $10,436). The court also awarded her reasonable attorney fees. She appealed.

In an unpublished opinion filed March 8, 2001, this court reversed. Citing the terms of the decree, we concluded that `[t]he decree unambiguously awards Fern a percentage of John’s pension as received, a percentage that represents one-half of the number of months that the pension was considered community property, divided by the total months that the pension accrued.’ CP at 239. We found support for this holding in both the decree and Washington law. First, we noted that if the dissolution court intended to award Fern only one-half of the pension as it was valued at the time of separation, that computation could have been made and awarded directly in the decree. Instead, the dissolution court approved inclusion of a formula in the decree that provided Fern a shrinking percentage of John’s accruing pension each year that he continued to work. Second, we recognized that Washington courts encourage parties to apportion pension rights on a percentage, as-received basis. In re Marriage of Bulicek, 59 Wn. App. 630, 638, 800 P.2d 394 (1990). This way, the ex-spouse’s one-half interest in the community portion of a pension will include the interest accrued on that amount as well as a percentage of the pension attributed to the working spouse’s anticipated increases in pay. Id. at 638-39. Application of a formula like the one used in the Blake dissolution to the pension as received `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.’ Id. at 638.

This court remanded to the trial court `for entry of an order awarding Fern her share of John’s retirement benefits pursuant to the clear terms of the decree.’ CP at 241. To calculate Fern’s share, we ordered the trial court to apply the decree formula to both the lump sum and the gross monthly benefits John had received and would continue to receive. We also awarded Fern reasonable attorney fees. John’s motion for reconsideration was denied and the appeal was mandated in August 2001.

The hearing on the modification of the trial court’s order was set for mid-December 2001. On October 19, Fern filed a memorandum setting forth her calculations for the amounts due to her from John’s benefits. Applying the formula set out in the decree, she concluded that John owed her $27,915 for her share of the lump sum received in July 1998, and $697 per month from John’s monthly pension payments. With interest, she calculated that John owed her $40,805 for the lump sum payment and $34,432 for the past monthly payments. To facilitate payment of these past due amounts, Fern requested that the trial court order John to pay her 75 percent of his monthly pension benefits until the debt was extinguished.

One week later, on October 25, 2001, John filed for Chapter 13 bankruptcy and the pension distribution proceedings were automatically stayed. On December 7, the stay was lifted to allow the trial court to apply the decree formula and divide the retirement benefits. In the order lifting the stay, the bankruptcy court held that Fern’s share of the pension became her property in 1986 — when the decree was entered — and became her separate property at that time. Unfortunately, continued the bankruptcy court, some of those funds were distributed to John and dissipated before he filed the bankruptcy petition. To the extent that Fern could prove that he still held those funds, her share of the distributed funds was not the property of the bankruptcy estate and she could recover. To the extent that John had dissipated those funds, however, Fern was only an unsecured creditor whose claim would have to be satisfied in the bankruptcy proceedings. The bankruptcy court assumed the trial court would apply the decree formula as ordered by the appellate decision, would liquidate Fern’s claim arising from the dissipation of funds, and would enter an order ensuring that her portion of the future monthly pension benefits would be distributed directly to her by the teachers’ retirement system. To that end, the automatic stay was lifted to allow the trial court to proceed.

The bankruptcy court explained to Fern’s counsel that the trial court could not order John to make monthly payments that would include not only her ongoing share of the pension but also payments to satisfy past obligations. Fern’s counsel continued to request the inclusion of past due arrearages in future payments, however, until the bankruptcy court clarified in June 2002 that any amounts payable to Fern pre-bankruptcy could not be included in her future pension payments. Once these past-due amounts were liquidated by the trial court, Fern would have to submit her claim for them to the bankruptcy court. At this point, Fern dropped her request for 75 percent of John’s future pension benefits.

Meanwhile, in December 2001, John filed an affidavit with the superior court stating that Fern was not entitled to the portion of his pension attributable to `extra duty’ work. This extra duty included all school related work outside of John’s base teaching job. In materials filed in July 2002, John showed that from 1983 until he retired he received additional income for serving at different times as instrumental music director, vocal music director, activities director, sixth period monitor, and athletic director.

On June 25, 2002, John’s then-current wife, Nicole, moved for an order allowing her to intervene. Nicole had filed for dissolution of their marriage in March 2002, after over 15 years of marriage. She claimed an interest in the action due to her community property interest in John’s pension benefit. Over Fern’s objection, the trial court allowed Nicole to intervene.

The trial court entered a letter opinion on July 10, 2002. Using the formula set out in the decree, the court determined that Fern was entitled to 25.83 percent of the retirement benefits. Rather than apply that percentage to the total amount of the lump sum and benefits received by John, however, the trial court found that Fern was entitled to a percentage of only the base salary plus extra duty engaged in during the marriage. According to the court, `Mr. Blake’s extra duty and voluntary additional work undertaken after the divorce do not appear to be the type of benefits which should be shared by Fern Blake.’ CP at 24.

Accordingly, the trial court found that John’s base salary was $45,143 and the extra duty during marriage was $3,342, for a total of $48,485. John’s actual annual compensation at the time of retirement was an average of $69,270. Fern’s share of the retirement benefits adjusted to the salary of $48,485 was $626 per month (rather than the $697 per month computed by Fern). Citing the penalty for withdrawing a lump sum, the court reduced Fern’s portion further to $479 per month. With interest, the amounts due to Fern for the monthly pension benefits were computed as $26,398 pre-bankruptcy and $5,598 bankruptcy to judgment. The trial court also awarded Fern 50 percent of the lump sum balance as it existed at the time of separation. With interest, the total due to Fern for her share of the lump sum was $34,834.

Judgment was entered against John for these amounts, along with attorney fees awarded to Fern, and an order for Fern to receive $479 monthly from John’s future retirement benefits. Finding that John had deposited a portion of the lump sum into a $15,000 life insurance account, the court also ordered him to transfer those funds to Fern in partial satisfaction of the judgment. Fern timely appealed to this court. Procedural Issues

Before addressing the substantive issues on appeal, we first determine the proper procedure for review. Fern moves this court for withdrawal of the mandate pursuant to RAP 12.9(a) to determine whether the trial court complied with the appellate decision. Recall of the mandate is not necessary if a party initiates a separate review of the lower court decision entered after the mandate was issued. RAP 12.9(a). Because Fern initiated a separate appeal of the trial court’s decision on remand, recall of the mandate is not necessary. Further, she filed a timely notice of appeal. Accordingly, we deny Fern’s motion for recall of the mandate and address her appeal of the trial court’s decision after the mandate was issued.

Additionally, we find no merit in John’s contentions that Fern fails to properly set out her assignments of error on appeal and failed to object to the challenged affidavits during the remand proceedings. In compliance with RAP 10.3, Fern assigned error in her brief to enumerated paragraphs in the trial court’s findings of fact, and analyzed the issues relating to those assignments of error. The record shows that she filed arguments against the trial court’s consideration of additional evidence on remand. Compliance with the Previous Appellate Decision

In the first appeal of the pension distribution, this court held that the clear terms of the dissolution decree required the trial court to apply the formula for calculating Fern’s share to the entire pension as received by John. On remand, the same trial judge took additional evidence on a new issue raised by John, allowed a new party to intervene, applied the decree formula to a reduced value of the monthly pension benefits, and applied the decree formula to the lump sum as it was valued at the time of separation rather than at the time it was received. All of these actions violated the law of the case doctrine and RAP 12.2.

Relevant to these facts, the law of the case doctrine provides that appellate court determinations are binding on any further proceedings in the trial court on remand of the same case. Lutheran Day Care v. Snohomish County, 119 Wn.2d 91, 113, 829 P.2d 746 (1992). `The courts apply the doctrine in order `to avoid indefinite relitigation of the same issue, to obtain consistent results in the same litigation, to afford one opportunity for argument and decision of the matter at issue, and to assure the obedience of lower courts to the decisions of appellate courts.” State v. Harrison, 148 Wn.2d 550, 562, 61 P.3d 1104 (2003) (quoting 5 Am. Jur.2d Appellate Review sec. 605 (2d ed. 1995)). Once an appellate court mandates a decision, it becomes binding on the parties `and governs all subsequent proceedings in the action in any court.’ RAP 12.2; State v. Strauss, 93 Wn. App. 691, 697, 969 P.2d 529 (1999). When the appellate court issues a directive that leaves no discretion to the superior court, the superior court is compelled to strictly comply. Harp v. Am. Sur. Co. of N.Y., 50 Wn.2d 365, 368, 311 P.2d 988 (1957). In other words, the trial court is not authorized to consider any issue except those for which the case was remanded. Calistro v. Spokane Valley Irrig. Dist. No. 10, 78 Wn.2d 234, 237 n. 3, 472 P.2d 539 (1970).

In the first appeal to this court, Fern argued that the decree unambiguously divided the pension by application of a formula to the actual pension received by John. We agreed and ordered the superior court to apply the decree formula to the pension as received — both the lump sum and monthly payments. At no time during the first trial, the first appeal, or in his motion for reconsideration did John argue that the pension as received included additional contributions in the form of extra duty pay that was his separate property under the terms of the decree. If raised at the first trial or even on appeal by way of a RAP 9.11 motion,[1] the issue of extra duty pay could have been addressed as it related to the language in the dissolution decree that provided `[t]hat any contributions or accumulations obtained on or after February 1, 1984, to said pension plan [are] the separate property of petitioner.’ CP at 235. The issue was not raised, however, and the trial court had no authority to consider it on remand. Harrison, 148 Wn.2d at 562 (the courts provide one opportunity for argument and decision under the law of the case doctrine). Consequently, the trial court also had no authority to consider the affidavits of John and Ms. Chvatal on the issue of base pay and extra duty pay.

Besides reducing Fern’s share of the monthly pension payments by removing contributions attributable to extra duty pay, the trial court on remand also applied the decree formula to the lump sum payment as valued at the time of separation. This court expressly held that the formula was to be applied to the lump sum payment as received by John in July 1998. Further, John’s pension was already reduced by the penalty for withdrawal — there is no basis for reducing Fern’s share of the monthly benefits due to this penalty.

To summarize, the trial court violated the law of the case doctrine and RAP 12.2 by ignoring the clear directive of this court to apply the decree formula to the entire lump sum and monthly payments received by John on July 1998 and afterward. The doctrine is designed to prevent just such relitigation of issues and additional bites of the same apple on remand. See Harrison, 148 Wn.2d at 562. Fern is entitled to 25.83 percent of both the lump sum received by John and of his monthly pension benefits, with interest from the date each payment became due (the date of withdrawal for the lump sum, and each month that Fern did not receive her portion of the monthly payments). See Kiewit-Grice v. State, 77 Wn. App. 867, 872, 895 P.2d 6 (1995) (prejudgment interest on liquidated damages). The trial court properly deducted the $15,000 transferred to Fern from John’s life insurance account from the total still owed to her from the lump sum.

Intervention by Current Wife
The trial court also erred in allowing Nicole to intervene. Under CR 24(a), a person is permitted to intervene as of right after establishing (1) a timely application for admission, (2) an interest in the subject of the action, (3) evidence that the disposition will impair the applicant’s ability to protect that interest, and (4) evidence that the interest will not be adequately protected by the existing parties. Aguirre v. ATT Wireless Services, 109 Wn. App. 80, 86-87, 33 P.3d 1110 (2001), review denied, 146 Wn.2d 1017 (2002).

In an action on division of property in a marital dissolution, the only interested parties are the spouses. Arneson v. Arneson, 38 Wn.2d 99, 101, 227 P.2d 1016 (1951). The sole issue before the trial court on remand was calculation of Fern’s share of John’s pension benefits under the terms of the decree as ordered by this court. Nicole admitted that her interest in this case arose when Fern sought recovery of the amount owed to Fern by means of an order to pay Fern 75 percent of John’s monthly pension benefits until the debt was extinguished. When Fern withdrew her `75 percent’ request before the hearing, Nicole had no interest left to protect.

Because she cannot establish the interest prong, we need look no further. Aguirre, 109 Wn. App. at 87.

Attorney Fees
As she did in the first appeal, Fern requests attorney fees incurred in this appeal, citing RCW 26.09.140 and RAP 18.1. This court awarded her fees and costs in maintaining the first appeal. Exercising the discretion vested in us by RCW 26.09.140 (the appellate court may order a party to pay for the costs of maintaining the appeal), we award her fees and costs for maintaining the current action under chapter 26.09 RCW.

Reversed and remanded to a new trial judge for compliance with the decision of this court. Fees and costs awarded to Fern pursuant to RCW 26.09.140.

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

KATO and BROWN, JJ., concur.

BROWN, C.J., (concurring).

I agree this matter should be reversed because the trial court misapplied our previous opinion in which we determined the correct formula for dividing Mr. Blake’s pension with Fern Blake, a formula that is the law of this case. I write separately because I do not agree the trial court intentionally ignored a previous clear directive of this court. Further, nor do I agree this matter needs to be resolved before a new judge on remand. On remand following the first appeal the parties argued for new and different relief, making arguments that would not have been considered frivolous had they been offered to the trial court before the first appeal. And, while the trial court mistakenly allowed participation by Nicole Blake, these circumstances do not naturally lead to a conclusion that the trial court ignored our previous opinion. Rather, the circumstances indicate the trial court was misled into granting relief varying from our previous opinion. Accordingly, I concur in the result.