NFL Wives and Survivor Benefits

Garcia Tatupu v. Bert Bell/Peter Rozelle NFL Player Ret. Plan, 296 F. Supp. 3d 407 (D. Mass. 2017), aff’d, 747 F. App’x 873 (1st Cir. 2019)

(a) Facts: The husband, a former NFL football player, was divorced from his wife in Massachusetts in 1997. The decree incorporated a separation agreement, which provided:

At the time of Mosiula F. Tatupu’s retirement and decision to draw pension benefits as may be available to him by virtue of his employment with the National Football League from 1978 through and including 1991, Mosiula F. Tatupu, shall pay to Linnea Garcia-Tatupu one third (1/3) of the net benefit he receives from said pension benefit plan. Mosiula F. Tatupu shall have exclusive right to decide, if, when, and how he wishes to receive said benefits, having the sole right to choose what payment option he desires without regard to the desires and/or wishes of Linnea Garcia-Tatupu. Whatever payment option Mosiula F. Tatupu elects shall govern the time amount and manner of payments to Linnea Garcia-Tatupu. Mosiula F. Tatupu shall remit the payments due to Linnea Garcia Tatupu within two (2) business days of his receipt of any payments of benefits under said plan. Any and all benefits paid to Linnea Garcia-Tatupu by Mosiula F. Tatupu shall be deemed alimony payments. Said benefits shall continue to be payable to Linnea Garcia-Tatupu subsequent to the death of Mosiula F. Tatupu, if the plan so provides, and if she survives Mosiula F. Tatupu, Linnea Garcia-Tatupu specifically waives any rights to receive any alimony and/or pension benefits in excess of the amount provided herein. The parties agree to cooperate with any plan administrator in coordinating distribution of benefits so long as the distribution is consistent with the terms of this Agreement.

296 F. Supp. 3d at 409 (emphasis added). Thus, the wife received one-third of the husband’s pension benefits and expressly agreed that the benefit options chosen by the husband would determine the benefits paid to the wife.

No DRO was entered at the time of the divorce. The husband died in 2010; he had not remarried. At the time of his death, he had not elected to receive survivor benefits.

In 2012, the Massachusetts court issued a DRO, nunc pro tunc back to 1997, which awarded the wife “100% of the Player’s [Mosiula Tatupu’s] accrued benefit under the Retirement Plan, based on the Player’s Credited Seasons earned as of the date of this order and the terms of the Plan in effect as of the date of this order.” Id.

The plan refused to qualify the order on the ground that it awarded an alternate payee more benefits than the employee had earned. The wife sued the plan in federal court to question its refusal.

In a decision discussed in the 2017 version of this outline, the court refused to dismiss the action. Garcia Tatupu v. Bert Bell/Peter Rozelle NFL Player Ret. Plan, 249 F. Supp. 3d 570 (D. Mass. 2017).

(b) Issue: Did the 2012 Massachusetts DRO meet the requirements for qualification?

(c) Answer to Issue: No.

(d) Summary of Rationale (District Court): The language of the agreement clearly gave the wife a right to be paid only one-third of what the husband received. The agreement stated clearly, in multiple places, that the wife was not entitled to any benefits beyond one-third of the benefits that the husband elected and that he had no duty to consider her interests in making elections.

The husband selected benefits only during his lifetime; he did not elect survivor benefits. By awarding the wife benefits never elected by the husband, the DRO divided benefits not available under the plan:

Ms. Garcia-Tatupu . . . agreed to a “shared payment” approach with her ex husband. In other words, the Marital Separation Agreement provides that Ms. Garcia-Tatupu is entitled to share in any actual benefit payments made toCand as directed byCMosiula Tatupu. But it does not divide Mosiula Tatupu’s retirement benefit into separate portions, or otherwise purport to give Ms. Garcia-Tatupu an interest independent from Mosiula Tatupu’s interest in the Plan. By subsequently purporting to give Ms. Garcia-Tatupu survivorship rights, thus allowing her to assert a separate interest in the Plan, the state post mortem and nunc pro tunc domestic relations orders have the effect of altering rights under the Marital Separation Agreement and providing benefits that were not otherwise payable upon Mosiula Tatupu’s death. This is an increased benefit under 29 U.S.C. § 1056(d)(3)(D); therefore, the post mortem state domestic relations orders do not provide an enforceable Qualified Domestic Relations Order beyond the terms of the Marital Separation Agreement.

296 F. Supp. 3d at 416.

(e) Summary of Rationale (Circuit Court): “[T]he district court’s judgment should be affirmed essentially for the reasons articulated by the district court[.]” 747 F. App’x at 873.

[W]e do not opine upon the circumstances in which nunc pro tunc state court domestic relations orders entered after the death of a plan beneficiary may be treated as QDROs. We merely hold that, on the specific facts of this case –in particular, the language of the separation agreement and the status of Mr. Tatupu’s election and receipt of benefits at the time of his death –the domestic relations orders at issue may not be so treated.

Id.

Observations:

1. The 2012 DRO, and an earlier 2011 order on which it was based, both consisted of signatures of the judge on a form order on the stationary of wife’s counsel. There was a clear appearance that the state court did not fully consider the issues. No basis was stated for giving the wife additional benefits in 2012, benefits that she had not been given by the original decree and that she had expressly waived in the agreement. There is a strong appearance that the order violated state law.

2. Federal courts, in determining whether a DRO should be qualified, generally cannot revisit questions of state law. The federal court was therefore not permitted to revisit the state law question. The court expressly so held. But the weakness of the order under state law probably influenced the federal court’s reasoning.

3. The end result is perfectly reasonable on the facts reached, but it poses long-term questions. Suppose that the husband had promised in the order to provide survivor benefits and then refused to do so. The court’s reasoning leads one to the conclusion that any state court order giving the wife survivor benefits would be providing a benefit not available under the plan because the husband had never actually elected the benefit. But it surely matters that the benefit was actually available under the plan and that the husband wrongfully failed to elect it. The court’s broad reasoning is going to create a problem in situations where a state court’s order has a much stronger basis.

4. It is possible that the state court order might have had a stronger basis. For example, perhaps the agreement in which the wife so clearly waived benefits not elected by husband was signed by the wife under some form of duress. If such a fact pattern existed, however, the state court did the wife no favors by simply signing her draft order. The wife’s counsel likewise did her no favors by allowing the state court to do that. A written opinion from the state judge, setting forth the basis for the 2011 and 2012 orders, would have helped the wife immensely in federal court. Of course, it is also possible that there was no proper basis for the state court order.

5. The problem of hasty state court orders giving alternate payees excessive benefits under state law is difficult to address. The preferred remedy on the facts of Garcia-Tatupu would have been for a state court to reverse the 2012 DRO under state law. It is unclear why the husband’s estate did not appeal. The plan, of course, lacked standing to appeal in state court, but it was then able to avoid the order in federal court. Pressure arising from questionable state court orders is likely to encourage federal courts to construe ERISA in ways that create problems. The author would feel more comfortable with a system allowing pension plans a way to question DROs in state court under state law. Over the long term, such a system would remove pressures on federal judges to construe ERISA in problematic ways.

6. The First Circuit opinion carefully stresses that the result is limited to the facts. This is almost certainly wise. The highly questionable nature of the state court order in Garcia-Tutupu is a fact not likely to recur in future cases, and it had a very strong effect on the result.