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Better Late Than Never…but Never Late Is Better; QDROs and Laches.

In re Beeghley, ___ Fed. App’x ___, 2018 WL 3060089 (3d Cir. 2018) (unpublished)


(a) Facts: The parties were divorced in Delaware in 1995.  The trial court divided the husband’s pension and ordered the wife to prepare a DRO.  No DRO was ever signed.

The husband remarried, and he and his new wife filed a Chapter 13 bankruptcy case in 1997.  The wife intervened, asserting various claims.  She was so litigious that an order was entered requiring court approval for future filings.  A final order was entered in 2001; the wife still had no DRO.


The wife also filed a simultaneous claim in federal district court, seeking relief related to the parties’ assets.  Her claim was dismissed as frivolous, and she was again barred from future filings without court approval. The wife appealed and obtained a reversal, but her claim was then dismissed in 2004 for lack of prosecution.  She still did not have a DRO.  She filed some proceeding in Pennsylvania state court in 2011 but failed to serve the husband with due process.


In 2014, the wife filed still another federal court action, arguing that it was the husband’s duty to obtain a DRO, which had still not been entered in state court. She sought damages for the husband’s breach of this duty and also sought to reopen the husband’s bankruptcy.  Her claim was denied based upon res judicata and laches by both the bankruptcy and district courts, and the wife appealed to the Third Circuit.


(b) Issue: Is the wife entitled to pursue her claim?


(c) Answer to Issue: No.


(d) Summary of Rationale: The wife is guilty of laches.


As recognized by the Bankruptcy Court, the elements of laches are lack of diligence and resulting prejudice. See E.E.O.C. v. Great Atl. & Pac. Tea Co., 735 F.2d 69, 80 (3d Cir. 1984). The Delaware Family Court’s order was issued over 20 years ago, and QDROs were not prepared as ordered. Ms. Beeghley asserted a claim to the retirement funds in the Beeghleys’ 1997 bankruptcy case and raised an issue on appeal as to its discharge. We remanded the matter to District Court in 2002 to address this issue, but the matter was dismissed for inactivity in 2004. Instead of resolving this question, close to ten years later Ms. Beeghley filed a motion in Pennsylvania state court renewing her claim to the retirement funds by seeking damages for Mr. Beeghley’s alleged failure to prepare the QDROs. Ms. Beeghley’s conduct reflects a lack of diligence, which she did not adequately explain at the hearing below.


The Bankruptcy Court also found that the Beeghley’s are prejudiced by the delay based on accounting issues that it concluded would be difficult, if not impossible, to resolve at this late date.


2018 WL 3060089, at *3.


Obvious Lesson: If the court awards you a share of your spouse’s retirement benefits, do not delay in obtaining and qualifying a DRO.  Especially do not delay for over 20 years.  Delay serves no valid purpose, and it creates a great risk that you will eventually receive nothing on your claim.




  1. It is unclear why the wife believed that it was the husband’s duty to prepare the DRO. The usual practice is that the DRO is prepared by the party seeking benefits, the alternate payee. The court can order otherwise, but there is no suggestion that the Delaware court did so.  The Tenth Circuit agreed that the lack of a DRO was fundamentally the wife’s fault.


  1. Even if the court is willing to order the employee to prepare the DRO, this is usually unwise. DROs drafted by the employee often fail to contain important procedural protections for the alternate payee, such as a provision preventing the penalization of early withdrawal of benefits, or a provision limiting selection of future benefit options that are adverse to the alternate payee (e.g., electing survivor benefits for a later spouse). The common practice that the alternate payee draft the DRO makes good sense.