By Carolyn J. Woodruff, North Carolina Family Law Specialist
Garcia-Tatupu v. Bert Bell/Peter Rozelle NFL Player Ret. Plan, No. CV 16-11131-DPW, F. Supp. 3d , 2017 WL 1398645 (D. Mass. Apr. 18, 2017)
Facts: The husband, a former NFL football player, was divorced from his wife in Massachusetts in 1997. No DRO was entered at the time. The husband died in 2010; he had not remarried. In 2012, the Massachusetts court issued a DRO, nunc pro tunc back to 1997.
The wife requested benefits from the plan under the DRO, the plan denied benefits, and the wife sued the plan. The plan filed a motion to dismiss.
Issue: Should the wife’s action be dismissed?
Answer to Issue: No.
Summary of Rationale: The plan argued essentially that retroactive effect cannot be given to a nunc pro tunc QDRO. Federal law on this point is split, but a solid majority of decisions hold that a QDRO can be entered after death. See Patton v. Denver Post Corp., 326 F.3d 1148, 1152 (10th Cir. 2003) (expressly agreeing with the dissent in Samaroo); Yale-New Haven Hosp. v. Nicholls, 788 F.3d 79, 85 (2d Cir. 2015), reh’g denied, 811 F.3d 541 (2d Cir. 2016). A closely related rule requires that the right to benefits be established before the employee’s death, but it allows a divorce decree to establish that right even without a QDRO. See Trs. of Directors Guild of Am.—Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 426 (9th Cir.), opinion amended on denial of reh’g, 255 F.3d 661 (9th Cir. 2000); In re Gendreau, 122 F.3d 815, 818 (9th Cir. 1997).
The leading contrary case is Samaroo v. Samaroo, 193 F.3d 185 (3d Cir. 1999), which rejected a nunc pro tunc QDRO, but Samaroo suggested that the holding was fact-limited, and a later case limited Samaroo further. Files v. ExxonMobil Pension Plan, 428 F.3d 478 (3d Cir. 2005). The Garcia-Tatupu court rejected any reading of Samaroo that would create an absolute rule against recognizing a nunc pro tunc DRO.
The text of the divorce decree was not before the court, and under the Ninth Circuit cases, the text of the divorce decree would matter. The court denied the motion to dismiss and scheduled a later hearing to review the matter again after the divorce decree was produced.
- Most circuits have adopted an approach to this issue much closer to Patton, Tise, and Garcia-Tatupu than to Samaroo and Richardson-Roy.
- If Richardson-Roy is any indication, Samaroo is not as limited within the Third Circuit as Garcia-Tatupu suggested that it is.
- This split in authority has existed for some years now, and it is quite ripe for resolution by the United States Supreme Court.
Practical Suggestion: Prudent litigants avoid this issue. Garcia-Tatupu arose only because the wife, who received a divorce decree in 1997, did not get a QDRO until 2012, two years after the husband died. This kind of delay is asking for trouble. If the wife had had a QDRO approved in a timely manner after the divorce, this case would never have arisen.
Mitchell v. NFL Player Annuity Program, No. 16 C 146, _ F. Supp. 3d, 2017 WL 2424218 (N.D. Ill. signed June 5, 2017)
Facts: The husband, a former NFL football player, was divorced from his wife. Some time later, the wife sought to attach certain employment benefits payable to the husband to enforce the court’s child support award. Her counsel submitted to the plan a proposed DRO, and asked the plan to preapprove it. The plan preapproved the language, but it carefully warned counsel that the order was not a even a DRO, much less a QDRO, until it was actually entered as an order in state court.
The wife never asked the state court to enter the order. Because no order was ever entered, benefits due under the plan were paid to the husband. Some time later, counsel for the wife issued citations to discover assets, alleging that the wife had an unrecovered judgment against the plan. The wife filed an action against the plan, alleging that it had improperly allowed the husband to withdraw funds. The plan subsequently removed the action to federal court.
Issue: Was the wife entitled to recover from the plan?
Answer to Issue: No.
Summary of Rationale: Funds cannot be paid out of any ERISA-regulated benefit plan except as authorized by the plan, ERISA, or a QDRO. The plan preapproved the language of a DRO, but it carefully warned the wife that the DRO would not be binding until it was actually entered by a judge. This point is entirely unremarkable; a qualified domestic relations order must first be an order, and it is not an order until a state court judge signs it. Without a QDRO, the wife had no right to recover anything.
- Again, the nonowning spouse was amazingly and astoundingly negligent, and again the nonowning spouse lost. To quote manager Casey Stengel’s lament about the 1962 New York Mets, who went 40-120: “Can’t anybody here play this game?”
- It is wise practice to have the plan preapprove the text of a DRO before the court signs it; it avoids having to return to the state court and ask for an amended DRO if the plan rejects the first one. (The plan is not required to preapprove orders, but many plans do.) Still, a preapproved draft DRO is obviously not an actual DRO; it has not yet been entered in state court. A DRO is not binding until the state court judge actually signs it.
- QDROs are most commonly used to enforce property division orders, but federal law allows them to be used to enforce either spousal or child support orders also. The DRO at issue in Mitchell was perfectly reasonable—if only the wife had remembered to ask the state court trial court judge to sign it.