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Williams v. Crawford (02/08/2002) sp-5532
Williams v. Crawford (02/08/2002) sp-5532
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, e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
CAMILLE WILLIAMS, f/k/a )
Camille McVey, )Supreme Court No. S-9791
)
Petitioner, )Superior Court No. 3AN-91-5375 CI
)
v. ) O P I N I O N
)
JAMES CRAWFORD, as Personal )[No. 5532 - February 8, 2001]
Representative of the ESTATE )
OF WILLIAM R. McVEY, Deceased,)
CYNTHIA GILBERT, and RACHEL )
EVANS, )
)
Respondents. )
______________________________)
Petition for Review from the Superior Court of
the State of Alaska, Third Judicial District, Anchorage, Michael L.
Wolverton, Judge.
Appearances: Michael W. Flanigan, Walther &
Flanigan, Anchorage, and Steven D. Smith, Law
Offices of Steven Smith, Anchorage, for Petitioner. Ronald L.
Bliss, Bliss, Wilkens & Clayton, Anchorage, for Respondent James
Crawford.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Bryner, Justices. [Carpeneti,
Justice, not participating.]
EASTAUGH, Justice.
I. INTRODUCTION
This case is before us for the second time. In Williams
v. Crawford, we remanded with instructions that Camille Williams be
awarded "one-half of the value of the marital portion of [William
McVey's] civil service pension valued as of the date the parties
entered into the property settlement agreement, August 12, 1992."
[Fn. 1] On remand, the superior court awarded Camille one-half of
the marital share of the pension benefits that William, who died in
June 1995, had actually received. Because this award turned on
information the actual date of William's death not available
on August 12, 1992, when the parties entered into their agreement,
we vacate the award and remand for further proceedings.
II. FACTS AND PROCEEDINGS
Camille Williams and William McVey divorced in April
1992. Camille remarried shortly thereafter. [Fn. 2]
On August 12, 1992 Camille and William entered into a
property settlement agreement, which the superior court
incorporated into the divorce decree. [Fn. 3] Paragraph Seven of
the agreement stated:
[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.[ [Fn. 4]]
When William retired two years later, he discovered that
federal regulations made Camille ineligible for survivorship
benefits, because she had remarried before age fifty-five. [Fn. 5]
Both parties were unaware of this restriction when they entered
into the agreement in 1992. [Fn. 6] Camille therefore moved under
Alaska Civil Rule 60(b)(6) to be named the irrevocable beneficiary
of William's life insurance policies. [Fn. 7] The superior court
granted Camille's motion. [Fn. 8] Before complying with the
superior court's order, William unexpectedly died in June 1995.
[Fn. 9]
After a series of superior court proceedings, [Fn. 10]
Camille appealed to us. Because Camille's "eligibility for the
survivorship benefits was one of the fundamental assumptions
underlying the property division," we held that Camille was
entitled to Rule 60(b)(6) relief. [Fn. 11] We concluded 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.[ [Fn. 12]]
On remand, Camille argued that our remand instructions to
award Camille "one-half of the value of the marital portion of
William's civil service pension . . . valued as of . . . August 12,
1992" required the superior court to value William's pension based
only on information that was available as of that date. Thus,
Camille proposed that the superior court value William's pension by
multiplying William's life expectancy as of August 12, 1992 by the
expected annual pension benefit, and discounting to present value.
Multiplying the resulting figure by eighteen percent one-half of
the marital share of William's pension to calculate her share of
the pension, Camille's request was an award of $90,017, plus
prejudgment interest.
By contrast, the estate argued on remand that the
superior court should value William's pension by simply totaling
the pension benefits William received $58,567 before he died
in June 1995. [Fn. 13] Based on this calculation, the estate
valued Camille's share of the pension at $10,700.19.
The superior court agreed with the estate. Its July 18,
2000 order concluded:
Because this court understands that Camille is
entitled to equitable relief, and because the estate's method of
valuation is the one which results in a figure most closely
resembling the value of an asset that she knowingly bargained for
with the assistance of counsel, this court finds that equity
demands adoption of the estate's valuation method. This court
further finds that adoption of Camille's valuation method would be
profoundly and manifestly inequitable.
On July 19, 2000 the superior court denied Camille's
motion to vacate the attorney's fees and costs awards it had
entered against Camille before we issued our 1999 opinion.
On July 28, 2000 Camille filed a petition for review
asking us to review the superior court's July 2000 orders. The
estate did not oppose the petition. We granted Camille's petition
for review on September 28, 2000, and ordered briefing. [Fn. 14]
III. DISCUSSION
A. Standard of Review
"Upon remand of a case by this court it becomes the duty
of the lower court to obey the mandate and render judgment in
conformity." [Fn. 15] Whether a lower court on remand has
correctly applied our mandate is a question of law which we review
de novo. [Fn. 16]
B. William's Pension Was Erroneously Valued on Remand.
Camille argues that it was error to value William's
pension by considering information that was not available on August
12, 1992, the date we instructed the superior court to use in
valuing William's pension. Camille notes that on that date, it
would have been impossible to determine the amount of pension
benefits William would collect before his eventual death. Thus,
Camille argues that the superior court should have valued the
pension by multiplying William's life expectancy as of August 1992
by the expected annual pension benefit, adjusting that figure for
cost of living allowances, and discounting it to present value.
The estate responds that our remand instructions in
Williams required the superior court to award Camille the amount
she would have received if the court had divided William's pension
in August 1992. Citing McDougall v. Lumpkin, [Fn. 17] the estate
argues that "trial courts have discretion to distribute retirement
benefits to a non-employee spouse through either a qualified
domestic relations order (QDRO) or through a lump sum payout." [Fn.
18] The estate further argues that because there were insufficient
marital assets in 1992 to satisfy Camille's claim for a lump sum
payout the marital estate excluding William's pension was valued
at approximately $85,000 it would not have been an abuse of
discretion to distribute William's pension in August 1992 by
entering a QDRO. [Fn. 19] And although it concedes that " 'an
agreement for equitable division of retirement benefits earned
during marriage presumptively encompasses survivor benefits,' "
[Fn. 20] the estate notes that a QDRO could not have conferred
survivor benefits on Camille, because the federal regulations made
her ineligible for survivor benefits. The estate therefore
concludes that if the superior court had entered a QDRO in August
1992, Camille would have received one-half of the marital share of
any pension benefits that William received before his eventual
death in June 1995. Thus, the estate argues that it was not error
to award Camille one-half of the marital share of the pension
benefits William (and his estate) actually received.
Camille's interpretation of our remand instructions is
correct. We instructed the superior court to award Camille one-
half of the marital share of William's pension valued as of August
12, 1992, when the parties entered into their agreement. We have
previously referred to the value of a defined benefit pension [Fn.
21] as its actuarial value, determined by multiplying the
employee's life expectancy by the expected annual benefit, and
discounting it to present value. [Fn. 22] It is appropriate to
apply this same valuation method here. We specified August 12,
1992 as the date of valuation, because we intended to give effect
to the parties' agreement to divide the pension benefit as of that
date. We did not intend that the value of William's pension would
be calculated based on the actual date of his death, a date that
was, of course, unknown to the parties on August 12, 1992 when they
entered into their agreement.
We therefore conclude that it was error to rely on remand
on the actual date of William's death in valuing the pension.
Accordingly, we reverse and remand for further proceedings.
On remand, the superior court should determine the
actuarial value of William's pension on August 12, 1992 by
multiplying William's life expectancy on that date by the expected
annual pension benefit, and by discounting to present value. In
calculating that value and determining William's life expectancy as
of August 12, 1992, however, the superior court may consider
evidence relevant to the state of William's health to the extent it
bears on his life expectancy and to the extent it was known on
August 12, 1992. [Fn. 23]
The superior court concluded on remand that it would be
inequitable to ignore the amount actually paid on William's
pension, an amount dependent on the actual date of his death.
We disagree with that conclusion, for a number of
reasons. First, looking to William's actual state of health as of
August 12, 1992 will minimize the chance of overvaluing the
prospective pension benefit. And to the extent William's health
status reduces the value of his pension benefit, this approach
reduces any apprehension that Camille's ultimate share of the
benefit will be disproportionately large compared to the value of
the estate apart from the pension benefit. Likewise, to the extent
the superior court based its conclusion of inequity on the parties'
expectations as of August 12, 1992, William's health status is
particularly relevant.
Second, basing the award on the actual date of death
leads to inequity not recognized by the superior court. Its
conclusion of inequity turns in part on its finding that Camille
"knowingly bargained . . . with the assistance of counsel" for a
nearly equal division of the pension benefit. But to be
consistent, if the actual date of death can be taken into account
for one purpose, it must also be taken into account for equivalent
purposes. Per the superior court's analysis, the values of what
the parties respectively bargained for would have to be based on
the actual date of death. Knowledge in August 1992 that William
would die in 1995 would have made the survivor benefit bargained
for by Camille more valuable and would have diminished the value of
the benefit bargained for by William. Inconsistent use of the
prospective date of death contributed to the inequity perceived by
the superior court.
Finally, the superior court does not mention another
post-agreement circumstance that bears on the equity resulting from
our prior remand instruction. After the parties learned of
Camille's ineligibility for survivorship benefits, Superior Court
Judge Larry D. Card granted Camille post-judgment relief and
ordered William to make Camille the beneficiary of his life
insurance policies. William died before complying.
C. Denial of Camille's Motion to Vacate Awards of Fees and
Costs Was Error.
We also hold that it was an abuse of discretion to deny
Camille's post-remand motion to vacate the July 1997 awards of
attorney's fees and costs. Those awards were based on the March
1997 order that denied Rule 60(b)(6) relief to Camille. When we
reversed the March 1997 order in 1999 and remanded to determine the
value of the pension as of August 12, 1992, the July 1997 fees and
costs awards should have been vacated as a matter of course. [Fn.
24]
IV. CONCLUSION
For these reasons, we VACATE the July 18, 2000 decision
and order valuing William McVey's pension and the July 19, 2000
order denying Camille's motion to vacate the attorney's fees and
costs awards. We REMAND for further proceedings consistent with
this opinion.
FOOTNOTES
Footnote 1:
982 P.2d 250, 256 (Alaska 1999) (emphasis added).
Footnote 2:
See id. at 252.
Footnote 3:
See id.
Footnote 4:
Id.
Footnote 5:
Id.
Footnote 6:
Id.
Footnote 7:
Id.
Footnote 8:
Id.
Footnote 9:
Id.
Footnote 10:
The history of proceedings before Camille's first appeal is
fully set out in Williams, 982 P.2d at 252-53.
Footnote 11:
Id. at 256. We reversed "the superior court's conclusion that
Camille had waived her entitlement to relief under Rule 60(b)."
Id. at 255.
Footnote 12:
Id. at 256.
Footnote 13:
William actually received payments totaling only $41,412.20
during his lifetime. But under William's pension plan, a retiree's
estate is entitled to a lump sum death payment of "any amount by
which [the retiree's] contributions to the retirement fund, plus
any interest due, exceed the total amount of the annuity . . . paid
[to the retiree] and all other eligible survivors . . . ." Because
William's contributions to the retirement fund totaled $58,567, an
amount greater than the total amount of benefits William received,
the estate conceded that William's pension should be valued at
$58,567 to account for the lump sum death payment received by
William's estate.
Footnote 14:
Alaska R. App. P. 402. Although we accepted this case as a
petition for review, the superior court's July 18, 2000 order was
essentially a final judgment from which a direct appeal could have
been taken. AS 22.05.010; Alaska R. App. P. 202.
Footnote 15:
Davis v. Hallett, 630 P.2d 1, 2 (Alaska 1981) (quoting State
v. Salinas, 362 P.2d 298, 301 (Alaska 1961)).
Footnote 16:
See Bennett v. Bennett, 6 P.3d 724, 726 (Alaska 2000) (holding
that proper interpretation of court order is question of law).
Footnote 17:
11 P.3d 990 (Alaska 2000).
Footnote 18:
Id. at 996 (citing Nicholson v. Wolfe, 974 P.2d 417, 425-26
(Alaska 1999)).
Footnote 19:
See Nicholson, 974 P.2d at 425-26 (describing abuse of
discretion as relating to a QDRO: "Generally courts have approved
of lump sum payouts where there are 'marital assets sufficient to
satisfy the non-employee spouse's claim without undue hardship on
the employee spouse.' ") (quoting Laing v. Laing, 741 P.2d 649, 657
(Alaska 1987)).
Footnote 20:
McDougall, 11 P.3d at 996 (quoting Zito v. Zito, 969 P.2d
1144, 1148 (Alaska 1998)).
Footnote 21:
A defined benefit pension provides "systematically for the
payment of definitely determinable benefits to the employees over
a period of years, usually for life, after retirement. Retirement
benefits generally are measured by and based upon such factors as
years of service and compensation received by employees." Barth H.
Goldberg, Valuation of Divorce Assets sec. 9.2, at 232 (1984).
Footnote 22:
Foster v. Foster, 883 P.2d 397, 400 n.4 (Alaska 1994).
Footnote 23:
See, e.g., Boyd v. Boyd, 323 N.W.2d 553, 556 n.2 (Mich. App.
1982) ("[W]e do not foreclose the introduction of evidence tending
to show that a particular individual is likely to have a longer or
shorter life expectancy than is reflected by the statutory
mortality tables or, indeed, any mortality table used to determine
expected lifespan.").
Footnote 24:
Alaska R. Civ. P. 60(b)(5) (providing that "the court may
relieve a party . . . from a final judgment, order, or proceeding"
if "a prior judgment upon which it is based has been reversed or
otherwise vacated").
