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Williams v. Crawford (6/18/99) sp-5135
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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
CAMILLE (McVEY) WILLIAMS, )
) Supreme Court No. S-8030
Appellant, )
) Superior Court No.
v. ) 3AN-91-5375 CI
)
JAMES M. CRAWFORD, Personal ) O P I N I O N
Representative of the estate )
of WILLIAM R. McVEY, deceased,) [No. 5135 - June 18, 1999]
)
Appellee, )
)
and )
)
CYNTHIA GILBERT and RACHEL )
EVANS, )
)
Intervenors/Appellees. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Michael Wolverton, Judge.
Appearances: Steven D. Smith, Law Offices of
Steven D. Smith, P.C., Anchorage, for Appellant. Ronald L. Bliss,
Bliss & Wilkens, LLC, Anchorage, for Intervenors-Appellees Cynthia
Gilbert and Rachel Evans.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, and Bryner, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
Camille McVey requested enforcement of a property
settlement agreement provision which obliged her ex-husband to name
her as the recipient of his civil service pension's survivorship
benefits. Because federal regulations render her ineligible for
those benefits, we affirm the superior court's decision not to
enforce the provision. But because both parties were unaware of
the federal regulations when they entered into their agreement, we
conclude that equity demands modification of their agreement under
Civil Rule 60(b)(6).
II. FACTS AND PROCEEDINGS
After ten years of marriage, William McVey filed for
divorce from his wife, Camille McVey (now Williams). William and
Camille bifurcated the divorce proceedings, enabling the court to
enter a decree of divorce while reserving the property and debt
division issues for later resolution. Camille remarried after
entry of the divorce decree.
William and Camille then agreed to divide their property,
splitting the marital estate almost in half. The superior court
incorporated the parties' property settlement agreement into the
divorce decree. Central to this appeal is Paragraph Seven of the
agreement:
[William] shall be granted all payments under
his Civil Service pension during his lifetime. [Camille] shall be
granted survivorship benefits upon [William]'s death equal to one-
third the maximum survivorship benefits that may be elected, which
means that [Camille] shall receive survivorship benefits at
[William]'s death of at least $6,912 per year, or $576 per month.
[William] shall elect survivor benefits and shall be responsible
for any required premiums or cost to insure [Camille]'s
survivorship benefits. This Court shall retain jurisdiction as
necessary to enforce these provisions.
When William retired two years later, he discovered that
federal regulations made Camille ineligible for the survivorship
benefits because she had remarried before age fifty-five. Both
parties were unaware of this restriction when they entered into the
agreement.
Informed of her ineligibility, Camille moved under Alaska
Civil Rule 60(b)(6) to be named the irrevocable beneficiary of
William's life insurance policies, the combined value of which
totaled $194,000. The superior court granted Camille's motion over
William's opposition.
Before complying with the superior court order, William
unexpectedly died. William's estate, represented by James
Crawford, his testamentary executor, moved in the superior court
for relief from the order under Alaska Civil Rules 60(b)(2), (5),
and (6). The estate argued that Camille, as beneficiary of
William's life insurance policies, would receive significantly more
money ($194,000 in life insurance) than she would have received had
she been eligible for William's survivorship benefits (either
$62,528 or $78,126). William's surviving children, Cynthia Gilbert
and Rachel Evans, intervened as interested parties. We refer to
the estate and the children collectively as "the estate."
At a hearing on the matter, the superior court agreed
with the estate and granted its motion for relief. The court
concluded that "the most equitable result is to determine the
present value of the [survivorship benefits] . . . on the date that
the Property Settlement Agreement was entered into . . . ." It
valued the benefits at $5,594 plus interest, relying on expert
testimony proffered by the estate at the hearing. The court also
vacated its prior order naming Camille the irrevocable beneficiary
of William's life insurance policies.
Camille moved for a new hearing. The superior court
granted Camille's motion and vacated its valuation of Camille's
interest because it had not notified the parties that it would make
such a valuation at the hearing.
At the rehearing, Camille alleged that Paragraph Seven
contained a bargained-for promise by William to provide her with a
guaranteed monthly annuity of at least $576. Accordingly she asked
the superior court to "enforce"the Property Settlement Agreement
by awarding her the benefit of her bargain: the cost of purchasing
an equivalent annuity on the market at the date of trial.
The superior court rejected Camille's argument; it
determined that Camille had "bargained for and received a marital
asset known as the Former Spouse Survivor Annuity, an elective
benefit of [William's] civil service retirement plan." The court
concluded that it lacked jurisdiction to "enforce"the agreement.
It also declined to modify the agreement and provide Camille
alternative relief under the provisions of Alaska Civil Rule 60(b)
because the parties had asked the court not to do so.
Camille appeals. [Fn. 1]
III. DISCUSSION
A. The Superior Court Correctly Determined that It Lacked
Jurisdiction to Grant Camille Relief.
A court, pursuant to its inherent power to enforce its
decrees, may grant equitable relief to ensure that parties to a
property division agreement receive the benefit of their bargain.
[Fn. 2] Therefore, we must decide what the parties bargained for
and whether that bargain can be enforced.
1. Standard of review
We apply basic contract interpretation principles to the
interpretation of a property division agreement incorporated into
a divorce decree. [Fn. 3] We determine de novo whether the
requested relief constitutes enforcement of a property settlement
agreement or whether it actually adds terms to the agreement. [Fn.
4]
2. Paragraph Seven is an unenforceable agreement to
grant Camille survivorship benefits.
Camille argues that the parties agreed to provide her
with a guaranteed annuity and to leave William free to choose the
means of providing that annuity. She insists that the court can
enforce that agreement by ordering the estate to pay her a lump sum
equal to the present value of the payments she should have received
upon William's death. The estate disagrees; it alleges that
Paragraph Seven simply granted Camille survivorship benefits as a
means of dividing William's civil service pension.
When interpreting contracts, we give effect to the
parties' reasonable expectations. [Fn. 5] Those expectations are
discerned from the language of the disputed provisions, other
provisions, and relevant extrinsic evidence, with guidance from
case law interpreting similar provisions. [Fn. 6] We depart from
the plain language of the contract only if the contract language is
ambiguous. [Fn. 7] "A contract is ambiguous only if, taken as a
whole, it is reasonably subject to differing interpretations."[Fn.
8] For instance, in Wahl v. Wahl, [Fn. 9] we departed from the
plain language of the property settlement agreement because the
parties' use of the term "retirement"did not clarify whether the
ex-wife was entitled to retirement benefits earned by her ex-
husband after the marriage. [Fn. 10]
But unlike the provision in Wahl, Paragraph Seven does
not require interpretation to give it meaning. The term
"survivorship benefits"is a term of art that has specific meaning
in the context of a civil service pension. It is not a term
subject to a variety of meanings, nor is it generally employed to
imply a guaranteed annuity.
Although the parties included specific dollar amounts in
Paragraph Seven, the amounts only describe the grant of
survivorship benefits; they are not what was granted. It appears
that the parties added the specific dollar amounts because the
civil service pension program offers pensioners several different
options which result in varying levels of survivorship benefits.
A letter and testimony by Camille's attorney cited by Camille
support this conclusion.
In addition, Camille's interpretation is inconsistent
with the divorce proceeding. Pensions earned during marriage are
marital property subject to division upon divorce. [Fn. 11] Thus,
it is logical to conclude that Paragraph Seven was only an attempt
to divide William's civil service pension, a marital asset.
Furthermore, Camille has not provided any explanation as to why she
would have received a guaranteed annuity. When she entered into
the property settlement agreement she was not dependent upon
William for support such that she might need financial protection
if he should predecease her. She had already remarried and had her
own business.
We conclude that Paragraph Seven is an agreement to elect
survivorship benefits for Camille as a means of dividing William's
civil service pension. Because Camille remarried before age fifty-
five, federal regulations render enforcement of the agreement
impossible. Therefore, we affirm the superior court's conclusion
that it lacked jurisdiction to award Camille the relief she
requested. Because the agreement as it stands cannot be
interpreted in Camille's favor, the agreement must be modified if
Camille is to be granted relief.
B. Camille Is Entitled to Relief under Alaska Civil Rule
60(b)(6).
1. Standard of review
We review a superior court decision to grant or deny
relief under Rule 60(b) for an abuse of discretion. [Fn. 12]
Under this standard, we will reverse an order only if we are left
with a definite and firm conviction based on the whole record that
the trial judge has made a mistake. [Fn. 13]
2. Waiver of Alaska Civil Rule 60(b) relief
Although Camille's Rule 60(b)(6) motion for relief
initiated these post-divorce proceedings, the estate and the
superior court interpreted her arguments during the second hearing
as a rejection of such relief. For this reason, the court did not
grant her Rule 60(b) relief even though it found that the facts
entitled her to such relief.
We employ a demanding standard for finding that parties
have waived their rights to relief. We do so because the Alaska
Rules of Civil Procedure require that courts grant parties the
relief to which they are entitled, irrespective of the theory of
their pleadings, and to prevent a court from depriving parties of
their rights because they have mistaken the nature of the remedies
available to them. [Fn. 14]
Based on our review of the record, we conclude that
Camille waived her right to Rule 60(b) relief only contingently in
hopes of securing a remedy that she believed could only be granted
through enforcement. We cannot conclude that she intended to
reject Rule 60(b) relief if that was the only basis for relief.
We note that granting Camille relief under Rule 60(b) is
not prejudicial or unfair to the estate. Camille's original motion
for Rule 60(b) relief which initiated these post-divorce
proceedings fairly notified the estate that she might be eligible
for such relief. At each stage of these proceedings the estate has
argued Camille's entitlement to Rule 60(b)(6) relief. Finally,
Camille, not the court, initiated the request for relief. Camille
should not be denied relief on the theory she failed to assert a
proper basis for her claim. [Fn. 15]
Therefore, we reverse the superior court's conclusion
that Camille waived her entitlement to relief under Rule 60(b).
3. Alaska Civil Rule 60(b)(1)
The estate alleges that Camille's mistaken belief that
her rights under Paragraph Seven had value could justify relief
only under Rule 60(b)(1), i.e., as a "mistake"or "neglect."[Fn.
16] We disagree.
Alaska case law does not clearly pinpoint which claims
for relief are properly cognizable under Rule 60(b)(1). [Fn. 17]
However, it appears that when a party is seeking relief due to the
movant's mistake or neglect the claim falls under Rule 60(b)(1);
but when the parties are mutually mistaken the claim falls under
Rule 60(b)(6). [Fn. 18]
The superior court concluded that Camille based her claim
for relief on a mutual misunderstanding by the parties, and
rejected the estate's assertion that Camille's claim for relief was
properly cognizable under Rule 60(b)(1). We agree. Throughout the
post-divorce proceedings the parties have consistently asserted
that they were both unaware of Camille's actual ineligibility for
the survivorship benefits. There is no contrary evidence in the
record.
4. Alaska Civil Rule 60(b)(6)
Although it concluded that she waived relief under Rule
60(b)(6), the superior court determined that Camille's claim met
the standards for relief under that rule. Relief is granted under
clause six in "extraordinary circumstances."[Fn. 19] We have
enunciated four factors constituting extraordinary circumstances
justifying relief under Rule 60(b)(6) from a property division:
(1) the fundamental, underlying assumption of
the dissolution agreement ha[s] been destroyed; (2) the parties'
property division was poorly thought out; (3) the property division
was reached without the benefit of counsel; and (4) the [asset in
controversy] was the parties' principal asset. [Fn. 20]
We have never held that all of these factors must be present to
grant relief under Rule 60(b)(6). [Fn. 21] Rather, we view them
"as instantiations of the equitable factors required to overcome
the principle that, at some point, 'litigation [must] be brought to
an end.'"[Fn. 22]
Camille's claim for relief met the standards for relief
under Rule 60(b)(6), because her eligibility for the survivorship
benefits was one of the fundamental assumptions underlying the
property division. We therefore hold that Camille is entitled to
relief under Rule 60(b)(6).
C. Equity Demands that Camille Receive Half of the Value of
the Marital Portion of William's Civil Service Pension.
Because we hold that the parties agreed to divide
William's civil service pension we conclude that Camille should
receive one-half of the value of the marital portion of William's
civil service pension -- valued as of the date the parties entered
into the property settlement agreement, August 12, 1992. This is
the most equitable result given the particular facts of this case.
We remand this valuation question to the superior court for
determination.
D. It Was Premature to Rule on Camille's Claim to the
Proceeds of William's Life Insurance Policies.
As part of its order, the superior court held that
"[Camille] is entitled to no part of any life insurance proceeds
which may have been received by Intervenors Cynthia Gilbert and
Rachel Evans, as a result of the death of [William]." Camille
objects to this holding as premature. She asserts that if this
court awards a substantial judgment against William's estate and
the estate is unable to satisfy the judgment, then she may have a
claim to the insurance proceeds. Moreover, Camille notes that her
entitlement to the proceeds is the subject of a separate lawsuit
before a different judge.
Although it seems unlikely that Camille will be able to
reach the proceeds for satisfaction of this award, we cannot rule
out the possibility that Camille may have a legal claim to a
portion of the proceeds. The record is devoid of any evidence or
argument regarding the life insurance policies. Therefore, we
conclude that it was premature to rule on this issue and we vacate
this ruling.
IV. CONCLUSION
We AFFIRM the superior court's holding that it lacks
jurisdiction to enforce the property settlement agreement. But we
REVERSE the denial of Rule 60(b)(6) relief to Camille and REMAND
for proceedings consistent with this opinion. We VACATE the order
regarding Camille's claim to the insurance proceeds.
FOOTNOTES
Footnote 1:
The children, Cynthia Gilbert and Rachel Evans, were the only
parties to submit briefs as appellees.
Footnote 2:
See Zito v. Zito, 969 P.2d 1144 (Alaska 1998); Wahl v. Wahl,
945 P.2d 1229 (Alaska 1997).
Footnote 3:
See Zito, 969 P.2d at 1147 n.4; Keffer v. Keffer, 852 P.2d
394, 397 (Alaska 1993).
Footnote 4:
See Horchover v. Field, 964 P.2d 1278, 1281 (Alaska 1998).
Footnote 5:
See Keffer, 852 P.2d at 397 (citing Jensen v. Ramras, 792 P.2d
668, 670 (Alaska 1990)).
Footnote 6:
See id.
Footnote 7:
See id. at 397 ("If contract language is unambiguous, the
meaning of the contract is decided as a matter of law.").
Footnote 8:
Id. (quoting State v. Fairbanks North Star Borough Sch. Dist.,
621 P.2d 1329, 1331 n.4 (Alaska 1981)).
Footnote 9:
945 P.2d 1229 (Alaska 1997).
Footnote 10:
See id. at 1230-31 (agreement provided 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.").
Footnote 11:
See AS 25.24.160(a)(4).
Footnote 12:
See Hartland v. Hartland, 777 P.2d 636, 645 (Alaska 1989);
Schofield v. Schofield, 777 P.2d 197, 202 (Alaska 1989); Allen v.
Allen, 645 P.2d 774, 776-77 (Alaska 1982).
Footnote 13:
See Alaska Placer Co. v. Lee, 502 P.2d 128, 132 (Alaska
1992).
Footnote 14:
See Alaska R. Civ. P. 8(f) (requiring a court to construe all
pleadings so as to do substantial justice); Alaska R. Civ. P. 54(c)
(requiring that every final judgment, except by default, grant the
relief to which the party in whose favor it is rendered is entitled
even if the party has not demanded such relief in his or her
pleading). See also Griffith v. Taylor, 937 P.2d 297, 307 (Alaska
1997) (reaffirming that pleadings should be liberally construed to
ensure that plaintiff is granted relief to which he or she is
entitled); Jackson v. Nangle, 677 P.2d 242, 254 (Alaska 1984)
(holding that plaintiffs should not be denied damages because they
relied on the wrong theory of recovery throughout the suit);
Mitchell v. Land, 355 P.2d 682, 687 (Alaska 1960) (remanding case
for redetermination where superior court denied relief to party
whose complaint mistakenly requested wrong relief).
Footnote 15:
Cf. Clauson v. Clauson, 831 P.2d 1257, 1259 (Alaska 1992)
(granting ex-wife's motion to modify a property division agreement
incorporated into a divorce decree under Rule 60(b)(6) even though
the ex-wife did not cite a statute or a rule of civil procedure
authorizing the superior court to amend the decree).
Footnote 16:
Alaska Civil Rule 60(b)(1) relieves a party from a final
judgment for "mistake, inadvertence, surprise or excusable
neglect." In O'Link v. O'Link, 632 P.2d 225, 229 (Alaska 1981),
we explained that clause six of Rule 60(b) and the first five
clauses of Rule 60(b) are mutually exclusive. Although clause six
is a "catch-all"provision, relief under clause six is not
available unless the other clauses are inapplicable. See id. The
fact that relief under one of the first five clauses is time-barred
does not render it allowable under clause six. See also Hartland,
777 P.2d at 645.
Footnote 17:
See Dickerson v. Williams, 956 P.2d 458, 465 (Alaska 1998)
(stating that our decisions, "like those of [our] federal
counterparts, have neither expressly distinguished the separate
grounds for relief under Rule 60(b)(1) nor set forth tests for
them").
Footnote 18:
See e.g., Schofield v. Schofield, 777 P.2d 197 (Alaska 1989)
(modifying provisions of divorce decree regarding award of marital
home to ex-husband under Rule 60(b)(6) where parties' assumption
that ex-husband would care for and raise children proved wrong);
Foster v. Foster, 684 P.2d 869 (Alaska 1984) (modifying provisions
of divorce decree regarding division of marital home under Rule
60(b)(6) where divorced parties' assumption that they could
continue to co-own the marital home and live as a family unit
proved unworkable).
Footnote 19:
Clauson, 831 P.2d at 1260-61 .
Footnote 20:
Lowe v. Lowe, 817 P.2d 453, 458-59 (Alaska 1991).
Footnote 21:
See Clauson, 831 P.2d at 1260-61.
Footnote 22:
Id. at 1261 (quoting Lowe, 817 P.2d at 459).
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