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Wahl v. Wahl (10/16/97), 945 P 2d 1229
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Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
JERROLD JAMES WAHL, )
) Supreme Court No. S-7399
Appellant, )
) Superior Court No.
v. ) 1JU-80-
1626 CI
)
ILENE ELOISE WAHL, ) O P I N I O N
)
Appellee. ) [No. 4895 - October 16, 1997]
)
______________________________)
Appeal from the Superior Court of the State
of Alaska, First Judicial District, Juneau,
Walter L. Carpeneti, Judge.
Appearances: Anthony M. Sholty, Faulkner,
Banfield, Doogan & Holmes, Juneau, for
Appellant. Lisa Moritz Kirsch, Baxter,
Bruce, Brand & Douglas, Juneau, for Appellee.
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
FABE, Justice.
I. INTRODUCTION
Jerrold Wahl challenges the superior court's decision
that an agreement he signed in connection with his divorce from
Ilene Wahl entitles Ilene to one-third of his retirement
benefits. Jerrold also appeals the superior court's order that
directs the administrator of his retirement plan to create a
"survivor annuity"for Ilene to ensure that Ilene will receive
her share of Jerrold's retirement benefits should Jerrold
predecease her. Finally, Jerrold appeals the superior court's
decision authorizing the parties' children to receive Ilene's
share of the retirement benefits if she predeceases Jerrold. We
affirm.
II. FACTS AND PROCEEDINGS
Ilene and Jerrold Wahl were married in 1962 and were
divorced on January 13, 1981. During their marriage, the parties
had three children, all of whom are now adults. The divorce
decree expressly incorporated the parties' January 5, 1981
"Property Settlement and Custody Agreement"(Divorce Agreement).
Paragraph seven of the Divorce Agreement provides that "[t]he
husband agrees to pay to the wife 33-1/3 percent of his
retirement with the Federal government beginning on the first
month in which he obtains retirement and continuing each month
thereafter."
Jerrold retired from his position with the United
States government on September 3, 1993. On February 14, 1994,
Ilene wrote the United States Office of Personnel Management
(OPM) requesting that OPM send her one-third of Jerrold's
retirement pay pursuant to the terms of the divorce decree.1 OPM
denied that request, stating that it could not pay her any
portion of Jerrold's retirement benefits because the Divorce
Agreement "does not direct the [OPM] to pay the former spouse."
On July 10, 1995, Ilene filed with the superior court a
"Motion to Enforce Divorce Decree." In her supporting
memorandum, she argued that "[t]he parties intended for Ilene to
take one third of Jerrold's retirement account based on his
balance when he retired." In a footnote, she explained that
[t]he parties arrived at a one third, two
thirds split in favor of Jerrold based on the
estimate that Jerrold had completed 2/3 of
his working career at the time of the divorce
and Ilene was entitled to 1/2 of whatever he
earned at the date of divorce, or 1/3 of the
balance at the end of his career.
Therefore, she moved the superior court to enter a Qualified
Domestic Relations Order (QDRO) to "enforce the agreement
incorporated in the 1981 divorce decree."
Superior Court Judge Walter L. Carpeneti granted
Ilene's motion. He also signed an "Order Acceptable for
Processing Dividing Civil Service Retired Pay," which Ilene's
attorney prepared. That order (1) provided that Ilene "is
entitled to thirty-three and one third percent (33-1/3%) of
[Jerrold's] self only annuity less the cost of the survivor
annuity under the Civil Service Retirement System,"(2) directed
OPM to pay Ilene her share of Jerrold's annuity directly, (3)
provided for a "former spouse annuity"for Ilene should Jerrold
predecease her, and (4) directed OPM to pay Ilene's share to the
children of the marriage should she predecease Jerrold.
Jerrold unsuccessfully moved for reconsideration before
appealing to this court. On appeal, Jerrold argues that the
superior court erred in interpreting the Divorce Agreement to
give Ilene one-third of his entire retirement annuity because
that annuity includes benefits that he earned after the parties'
divorce. He also argues that the superior court erred in "giving
Ilene a 'survivor annuity'"and in directing OPM to pay to the
parties' children Ilene's share of Jerrold's annuity should she
predecease him.
III. DISCUSSION
A. The Superior Court Did Not Err in Concluding that the
Divorce Agreement Entitled Ilene to One-third of
Jerrold's Entire Retirement Annuity.
The first issue raised by Jerrold is whether the
superior court erred in concluding that the Divorce Agreement
entitles Ilene to one-third of his entire annuity.2 Paragraph
seven of the Divorce Agreement provides that Jerrold will pay
Ilene "33-1/3 percent of his retirement with the Federal
government." Jerrold asserts that it is significant that the
agreement does not specifically refer to the retirement benefits
that he earned before and after the divorce. He argues that
without such an express reference to his post-divorce benefits,
paragraph seven of the Divorce Agreement entitles Ilene to only
one-third of the retirement benefits that he earned during the
marriage.
To the extent that a party earns retirement benefits
during marriage, the benefits are marital assets and are subject
to equitable division. See Rice v. Rice, 757 P.2d 60, 61 (Alaska
1988). Accordingly, each spouse is presumptively entitled to an
equal share of the retirement benefits earned during the
marriage. See Gabaig v. Gabaig, 717 P.2d 835, 842 (Alaska 1986).
Ilene contends that the Divorce Agreement allocates to her an
interest in Jerrold's annuity that is equal to the amount to
which she is presumptively entitled under cases such as Rice and
Gabaig. Specifically, she asserts that the parties agreed that
she would receive one-third of the entire annuity "based on the
estimate that Jerrold had completed 2/3 of his working career at
the time of the divorce and Ilene was entitled to 1/2 of whatever
he earned at the date of divorce, or 1/3 of the balance at the
end of his career."
We conclude that the trial court did not err in
adopting Ilene's interpretation of the Divorce Agreement. The
plain language of the contract refers to Jerrold's "retirement,"
without limiting that term to retirement benefits earned during
the marriage. This suggests that Ilene is entitled to one-third
of Jerrold's entire retirement.
Extrinsic evidence also supports this interpretation of
the Divorce Agreement. At the time of the divorce, Ilene's
counsel drafted a proposed settlement agreement, which included a
paragraph seven that is identical to paragraph seven of the
Divorce Agreement. Jerrold's then-attorney reviewed the proposal
and prepared written comments. The comments relating to
paragraph seven informed Jerrold:
You should carefully consider whether you
want to agree to pay her a third of your
pension (paragraph 7). As we discussed,
whether you receive a pension, and if so its
amount, depends on substantial payments that
you will make for many years after the
divorce. Also, her pension proposal does not
bear any relation to what her support need
may be. The most she is entitled to is part
of the present value of your pension, if it
ever vests. Your decision on the pension
proposal should be influenced by her
receptiveness to your proposals on the other
points.
These comments demonstrate that Jerrold's attorney believed that
paragraph seven would entitle Ilene to a portion of the benefits
from the "substantial payments"Jerrold would make "after the
divorce" toward his retirement. They also indicate that
Jerrold's attorney recognized that the term "retirement" in
paragraph seven referred to an amount that was larger than the
present value of the retirement benefits that Jerrold had
accumulated at the time of the divorce. Therefore, we conclude
that the plain language of the Divorce Agreement and the letter
from Jerrold's then-attorney support the superior court's
finding.3
B. The Superior Court Did Not Err in Awarding Ilene a
Survivor Annuity.
The superior court's order provides Ilene with survivor
benefits:
Former Spouse [Ilene] shall be entitled to a
survivor annuity. Under section 8341(h)(1)
of title 5, United States Code, Former Spouse
is awarded a former spouse annuity under the
Civil Service Retirement System. The amount
of the former spouse annuity will be equal to
thirty-three and one third percent (33-1/3%)
of the Employee's self only employee annuity.
Jerrold argues that the superior court erred in awarding Ilene a
survivor annuity because the Divorce Agreement does not mention
survivor annuities. We conclude that the superior court did not
err. The superior court has inherent power, and also the duty,
to enforce its decrees. See Johnson v. Johnson, 544 P.2d 65, 72
(Alaska 1975). We have noted that it would be "inconceivable"
for a superior court to have the power to divide property between
parties "yet not have the power to make the division effective."
Id.
In this case, the Divorce Agreement entitled Ilene to
one-third of Jerrold's entire retirement annuity. See Part
III.A, supra. It was within the superior court's inherent power
to award Ilene a survivor annuity. Such an award was appropriate
to ensure that Ilene would receive the full benefit of her
property interest should Jerrold predecease her. We decline to
disturb the superior court's decision.4
C. The Superior Court Did Not Err in Providing that the
Parties' Children Would Receive Ilene's Share of
Jerrold's Retirement Benefits if She Predeceased
Jerrold.
The superior court's order also contained a "Death of
Former Spouse"paragraph that provided: "If [Ilene] predeceases
[Jerrold], her share shall be paid to the children of the
marriage." Jerrold asserts that the superior court erred in
including this paragraph in its order because the Divorce
Agreement "did not direct Ilene's share of Jerrold's retirement
benefits to the parties' children in the event she predeceased
Jerrold."5 We conclude that the superior court did not err.
As discussed in Part III.B, supra, the superior court
has the inherent power, as well as the duty, to enforce its
decrees. Johnson v. Johnson, 544 P.2d 65, 72 (Alaska 1975). The
original decree awarded Ilene an unqualified property interest in
Jerrold's pension; it did not restrict Ilene's ability to
transfer her interest to her children should she predecease
Jerrold. The superior court's August 18, 1995 order protected
Ilene's ability to devise her share of the pension to her
children. This was within the superior court's inherent power
and did not constitute reversible error.6
IV. CONCLUSION
Based upon the language of the Divorce Agreement as
clarified by relevant extrinsic evidence, we conclude that the
superior court did not err in determining that the Divorce
Agreement entitles Ilene to one-third of Jerrold's entire
pension. We also conclude that the superior court acted within
its inherent power to enforce its decrees when it awarded Ilene a
survivor annuity and authorized the parties' children to receive
Ilene's share of the pension should she predecease Jerrold. We
therefore AFFIRM.
_______________________________
1 The reason for Ilene's delay in writing OPM appears to
be that Jerrold misled Ilene into believing that he had not
retired. The record indicates that Jerrold moved to Tennessee
and, in October 1993, wrote a letter to Ilene about his child
support obligation. In that letter, he stated: "I believe after
the date of transfer the monthly amount will drop to $562.50 from
the $750."Ilene asserts that this letter led her to believe that
Jerrold continued to work for the United States government in
Tennessee. Jerrold appears to concede this point. In an
affidavit, he stated: "Ilene is correct that I wrote to her that
I had 'transferred.' 'Transfer' is the technically correct term
in the federal service for my move from Alaska to Tennessee and
to retired status. In any event, I agree I should have
explicitly said that I was retiring."
2 "Interpretation of a contract is a question of law for
which the reviewing court uses independent judgment." Alaska
Energy Auth. v. Fairmont Ins. Co., 845 P.2d 420, 421 (Alaska
1993).
3 Jerrold contends that two other pieces of extrinsic
evidence demonstrate that his interpretation of the Divorce
Agreement is correct. First, he refers to a memorandum allegedly
written by Ilene's attorney that provides:
There still exists the need to compute the
value of the Federal Civil Service retirement
of Mr. Wahl and that may well be the item
that successfully negotiates a property
settlement in this matter.
Second, Jerrold refers to a draft settlement agreement
that contains a handwritten note "for 17 years as of the date of
this action"next to paragraph seven and a marginal note "OK."
We conclude that the meaning of this extrinsic evidence
is ambiguous. We have held that when extrinsic evidence suggests
conflicting inferences that bear on the interpretation of the
words of a contract, our inquiry is limited to determining
whether the trier of fact's choice of inferences is supported by
substantial evidence. See Alyeska Pipeline Serv. Co. v.
O'Kelley, 645 P.2d 767, 771 n.2 (Alaska 1982). As discussed
above, substantial evidence supports the superior court's finding
that Jerrold agreed to give Ilene one-third of his entire
annuity.
4 Jerrold argues that the language in the court's order
purporting to award Ilene a survivor annuity is "ineffective to
give any survivor benefits to Ilene"because it violates 5 U.S.C.
8341(h). That statute and its accompanying regulations govern
when OPM may pay survivor annuity benefits. See 5 U.S.C.
8341(h)(1); 5 C.F.R. 838.806. The superior court determined
that Ilene is entitled to one-third of Jerrold's entire
retirement annuity. Because it is within the superior court's
inherent power to ensure that she receives the full benefit of
her property interest, we need not consider the application of 5
U.S.C. 8341(h)(1) or its accompanying regulations to conclude
that the superior court did not err in awarding Ilene a survivor
annuity.
5 In his opening brief, Jerrold also claimed that 5
U.S.C. 8341(h)(3)(B) prohibited the "Death of Former Spouse"
provision. However, in his reply brief he conceded that this
statute "does not preclude payment to the retiree's children
after the former spouse's death."
6 Jerrold also asserts that the "Death of Former Spouse"
language violates 5 C.F.R. 838.1012. This regulation governs
when OPM will pay a deceased former spouse's share of an
employee's retirement benefits to the former spouse's children.
See 5 C.F.R. 838.1012. As discussed in footnote 4, supra,
because it is within the superior court's inherent power to
ensure that Ilene receives the full benefit of her property
interest, we need not consider the application of 5 C.F.R.
838.1012 to conclude that the superior court did not err in
including the "Death of Former Spouse"language in its order.
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