MARRIAGE OF McMULLAN, 47433-2-I (Wash.App. 12-24-2001)

No. 47433-2-I.The Court of Appeals of Washington, Division One.
Filed: December 24, 2001. UNPUBLISHED OPINION

Appeal from Superior Court of King County, No. 98-3-07649-0, Hon. Glenna S. Hall, August 30, 2000, Judgment or order under review.

Counsel for Appellant(s), Pauline V. Smetka, Helsell Fetterman Martin Todd Hokanson, 1325 Fourth Ave, Ste 1500, P.O. Box 21846, Seattle, WA 98111-3846.

Counsel for Respondent(s), Peter E. Jorgensen, Attorney At Law, 705 Second Ave. Ste 1000, Seattle, WA 98104.

KENNEDY, J.

Jean McMullan seeks relief from an order granting William McMullan’s motion to clarify the parties’ dissolution decree and awarding William a money judgment. The dissolution decree allocated to William specific sums of money to be paid from specific community retirement and 401(k) plans that were funded with shares of publicly traded stock. Between the time of entry of the decree and entry of the Qualified Domestic Relations Orders (QDROs) the market value of the stock in the plans fell below the specific sums that had been awarded to William in the decree. The trial court ordered Jean to make up the shortfall, thereby modifying the decree, not clarifying it. Accordingly, we reverse.

FACTS
On the date that had been scheduled for the trial of Jean and William McMullan’s marital dissolution, the parties agreed to a settlement of all the issues and read their settlement into the record. On October 22, 1999, a judge of the King County Superior Court entered findings, conclusions and a decree dissolving the parties’ marriage and allocating their community and separate property in accord with their settlement of record. In order to equalize the division of community property, William was awarded the entirety of the community value of both Jean’s retirement plans through her employment as a flight attendant for Alaska Airlines, together with a $33,200 cash payment from Jean. Jean was awarded her post-separation contributions to one of the retirement plans.

In the agreed Findings of Fact and Conclusions of Law the retirement plans were treated as follows:

2.8 COMMUNITY PROPERTY The parties have the following real or personal community property:

Asset Gross Value. . . . Alaska Airlines, Inc., Retirement Plan for Flight Attendants $48,297

Alaska Airlines, Inc., Flight Attendant 401(k) Plan $ 87,752 . . . .
2.9 SEPARATE PROPERTY . . . .

The wife has the following real or personal separate property:

Asset Gross Value

. . . . Portion of Alaska Airlines, Inc., Flight Attendant 401(k) Plan $3,758 Clerk’s Papers at 42-43.

And in the Decree of Dissolution:
3.2 PROPERTY TO BE AWARDED TO THE HUSBAND.

The husband is awarded as his separate property, the following property

. . . .* The sum of $48,297.00 from the Alaska Airlines, Inc., Retirement Plan for Flight Attendants, by Qualified Domestic Relations Order; * The sum of $87,752.00 from the Alaska Airlines, Inc., Flight Attendant 401(k) Plan, by Qualified Domestic Relations Order;

. . . . * The sum of $33,200.00 payable by the wife within thirty (30) days of the date of this decree[.]

PROPERTY TO BE AWARDED TO THE WIFE.The wife is awarded as her separate property the following property . . . : . . . .

* The Alaska Airlines, Inc., Retirement Plan for Flight Attendants, except for the sum of $48,297.00 awarded to Husband in paragraph 3.2, above;

* The Alaska Airlines, Inc., Flight Attendant 401(k) Plan, except for the sum of $87,752.00 awarded to Husband in paragraph 3.2, above[.] Id. at 23-24. Jean timely paid the $33,200, refinancing her house to obtain the money.

Because Jean was the Participant in the retirement plans, QDROs were necessary to effectuate the transfer of the award to William as Alternate Payee. The QDROs were entered on December 10, 1999, and forwarded to the Plan Administrator. The Plan Administrator notified the parties, in December 1999, that due to market conditions, the value of the two retirement plans had dropped below the specific sums awarded to William.

In January 2000, the Plan Administrator proposed to construe the QDROs to require that William receive either the entire value of the assets of each plan (including the portion of the 401(k) that was Jean’s separate property) or the amount specified in the decree of dissolution, whichever was lower. The Plan Administrator gave the parties an opportunity to dispute this proposed construction, and neither party did so. The Plan Administrator proceeded to liquidate the stocks in each of the plans, and over a period of months paid the entire proceeds into William’s retirement account in three separate checks totaling $125,462.42. After the last check was received in April 2000, William asked Jean to pay him $10,586.58, the difference between the values stated in the decree and what he ultimately received from the plans. Jean declined to do so.

In July 2000, William filed a motion to clarify the decree, asking the court to enter judgment against Jean in the amount of $10,586.58. A court commissioner denied the motion, stating that “wife never agreed to guarantee amounts to be paid and the market affected the value of the property division.” Id. at 91. William sought revision, which was granted on August 30, 2000. The revision order stated: “Respondent’s motion for clarification of the parties’ decree is granted. Petitioner is ordered to pay to Respondent, within 30 days of this date, $10,586.58.” Id. at 106. Jean appeals, arguing that this order constituted an impermissible modification of an unambiguous dissolution decree.

DISCUSSION
When a dissolution decree is ambiguous, it is subject to court action to determine the rights and duties of the parties.[1] However, a trial court may not modify even its own decree “in the absence of conditions justifying the reopening of the judgment.”[2] Thus, an ambiguous dissolution decree may be clarified, but not modified, where the party seeking relief does not seek to reopen the original decree.[3] “A decree is modified when rights given to one party are extended beyond the scope originally intended, or reduced. A clarification, on the other hand, is merely a definition of rights already given, spelling them out more completely if necessary.”[4] William disavows that he ever sought to reopen the original decree. Instead, he asked the court to determine the rights and duties of the parties given that the decree awarded William specific amounts of money from the plans, and due to circumstances beyond the control of either party, the plans no longer contained sufficient value to pay him those specific amounts at the time of distribution. If the money judgment that the revision judge ordered Jean to pay was merely, as William argues, an effectuation of the intent of the original decree, then the clarification order was appropriate. However, if the order imposed new rights or limits on rights, it was an impermissible modification of the dissolution decree.[5] Thus we must determine the intent of the decree. “Where the language of a dissolution decree is properly subject to interpretation, the construction of the decree and any contract incorporated therein is a question of law.”[6]
“Normally the court is limited to examining the provisions of the decree to resolve issues concerning its intended effect.”[7] “If a decree is ambiguous, the reviewing court seeks to ascertain the intention of the court that entered it by using the general rules of construction applicable to statutes and contracts.”[8] The intention of the court must be determined by viewing all parts of the instrument and “the judgment must be read in its entirety and must be construed as a whole so as to give effect to every word and part, if possible.”[9] Here, the decree embodied the parties’ settlement, which contemplated an equal division of the community property. A reviewing court can neither add to the terms of a settlement agreement nor impose obligations that did not previously exist. “Nor can the court make a contract for the parties based upon general considerations of abstract justice.”[10] “A judgment by consent or stipulation of the parties is construed as a contract between them embodying the terms of the judgment. It excuses all prior errors and operates to end all controversy between the parties, within the scope of the judgment.”[11] .

We first determine whether the decree is ambiguous and thereby properly subject to interpretation. A patent ambiguity is one that is apparent upon the face of the document alone; a latent ambiguity is one that only becomes apparent when applying the document to the facts as they exist.[12]
We deal here with a latent ambiguity. William was allocated as his separate property “[t]he sum of $48,297.00 from the Alaska Airlines, Inc., Retirement Plan for Flight Attendants, by Qualified Domestic Relations Order” and “[t]he sum of $87,752.00 from the Alaska Airlines, Inc., Flight Attendant 401(k) Plan, by Qualified Domestic Relations Order[.]” Clerk’s Papers at 23-24 (emphasis added). Although the sums were specific, they were also to come from specific plans that were funded with publicly traded securities, the value of which may, and did, fluctuate with market conditions. A definite and final determination of each party’s property interests is reached by a “specific disposition of each asset which informs the parties of what is going to happen to the asset and upon what operative events, e.g., that a set sum or formula of money will be paid upon the sale of certain property.”[13] Here, the operative events were the entry of the QDROS, the Plan Administrator’s determinations that these domestic relations orders were “qualified,” and the liquidation of plan assets in order to pay cash into William’s retirement account — events that necessarily would require a period of time for completion. It is not necessary to set a fixed date for the happening of an operative event. However, “an award of a securities account is inherently ambiguous without a specific date.”[14] We conclude that the decree in this case is properly subject to interpretation because it is latently ambiguous. As admitted by William during oral argument for this appeal, and as confirmed by the valuations contained in the agreed findings, the intent of this decree was to equally divide the parties’ community property. Insofar as we can ascertain from the record, the decree accomplished that aim, as of its date of entry. Certainly, neither party learned that the value of the stock in the retirement plans had dropped until after the decree was entered, and William did not seek to reopen the decree so as to recalculate the value of the community estate as of the date of entry of the decree. Neither did he ask to reopen the decree to recalculate the value of the community estate as of the time the retirement proceeds were distributed to him. If he had sought such relief, and if it had been granted, Jean would have owed him only half the amount of the loss in value of the plans, not the entirety of the loss. Instead, William sought relief by means of a clarification order requiring Jean effectively to guarantee that post-decree market conditions would not operate to his detriment.

The court commissioner’s ruling was correct — the decree contains no such guarantee, implicit or otherwise. That William’s share of the retirement plans was stated in terms of dollars to be paid from those plans, rather than in terms of a formula based on the community interest in the plans, does not change the analysis. These were defined contribution plans, the value of which depends on the value of the assets held in the plans on any given day.[15] These plans were funded with publicly traded securities, the value of which is inherently volatile and based upon market conditions that are beyond the control of the parties. On revision, the trial court erroneously modified the parties’ decree by providing William with a guarantee that Jean would compensate him for any post-decree losses he might incur due to market fluctuations. The trial court’s order on revision effectively nullified the language that the payments come “from” the retirement plans rather than from Jean, and effectively amended the $33,200 cash award upward, to Jean’s detriment. “A court may not create a contract for the parties which they did not make themselves. It may neither impose obligations which never before existed, nor expunge lawful provisions agreed to and negotiated by the parties.”[16]

Accordingly, we reverse the revision order and remand for reinstatement of the commissioner’s ruling.

AGID and COX, concur.