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Potts v. Potts

Court of Appeals of Utah

August 30, 2018

Kathleen O. Potts, Appellee,
v.
Duane E. Potts, Appellant.

          Second District Court, Ogden Department The Honorable Scott M. Hadley No. 900902738

          David Pedrazas, Attorney for Appellant.

          Emilie A. Bean, Attorney for Appellee.

          Judge David N. Mortensen authored this Opinion, in which Judges Kate A. Toomey and Diana Hagen concurred.

          OPINION

          MORTENSEN, JUDGE.

         ¶1 This case involves not the benefit of the doubt, but some doubt as to the benefit. After separating in 1992, the court entered a decree of divorce based in part on Duane[1] and Kathleen's stipulation. The decree awarded a portion of each party's retirement benefits to the other party. The decree directed the parties to cooperate in obtaining qualified domestic relations orders (QDRO)[2] to effectuate the property distribution of the retirement accounts. Kathleen filed the QDRO related to her retirement account in 1995, but Duane waited until 2000 to file his corresponding QDRO. As it turned out, just before Duane filed, the Utah Retirement Systems' rules regarding retirement benefits changed, providing Duane with the advantage of new distribution rules. In 2015, Kathleen filed a motion to amend her 1995 QDRO to reflect the updated rules. Duane objected, but the district court granted the motion. Duane then filed a motion to reconsider, which the court also denied. Duane appeals those rulings. We affirm.

         BACKGROUND

         ¶2 When the parties divorced in November 1992, they both were employees of the State of Utah. Pursuant to the decree of divorce, each party was awarded a Woodward share of the other's retirement benefits: 50% of the retirement benefits that accrued during their marriage. See Woodward v. Woodward, 656 P.2d 431, 433 (Utah 1982) (holding that pension benefits accrued during the marriage are marital property subject to equitable distribution). The decree directed the parties to cooperate in obtaining QDROs to effectuate the property distribution of the retirement accounts.

         ¶3 In March 1995, Kathleen filed her proposed qualified domestic relations order (1995 QDRO) for the court's signature and then submitted the signed order to Utah Retirement Systems (URS). The 1995 QDRO ordered URS to divide Kathleen's share of Duane's retirement based upon the rules in existence at that time. Those rules left Kathleen's share of Duane's retirement in Duane's shared-interest account. The 1995 QDRO also provided,

The [district court] retains jurisdiction to amend this Order so that it will constitute a domestic relations order under the plan even though all other matters incidental to this action or proceeding have been fully and finally adjudicated. If URS determines at any time that changes in the law, the administration of the plan, or any other circumstances make it impossible to calculate the portion of a distribution awarded to alternate payee by this Order and so notifies the parties, either or both parties shall immediately petition the Court for reformation of the Order.

         ¶4 Sometime in 2000, [3] a URS rule revision occurred which, according to Kathleen, "changed the manner of distribution to more fully reflect Utah law on division of retirement property to what is common[ly] referred to as a separate interest." Under these rules, Duane's account would no longer be a shared-interest account, but instead would be divided into two separate accounts proportional to Kathleen's marital interest. Alteration of the 1995 QDRO would ultimately change the potential payout to the parties, depending upon who predeceases whom. If Kathleen were to predecease Duane under these rules, Kathleen's payout would no longer revert to Duane, essentially divesting him of that benefit.

         ¶5 In September 2000, Duane filed his own qualified domestic relations order (2000 QDRO). Because he filed after the rule change, Duane received the benefit of the new, separate account distribution rules. Duane's 2000 QDRO had no effect on Kathleen's 1995 QDRO, which was still subject to the old rules. In December 2015, Kathleen filed a Motion for an Amended Qualified Domestic Relations Order (Motion to Amend) requesting alteration of the 1995 QDRO "on the ground that the rules for Utah Retirement Systems [had] changed since the entry of the [1995 QDRO]."

         ¶6 After lengthy objections from Duane, the district court conducted a telephone conference in September 2016 and thereafter granted Kathleen's Motion to Amend, stating, "It seems like the orders were meant to divide each of the [parties'] retirements in the same way." The court held that Kathleen should "be granted the same benefits on the method of division as Duane." That same ...


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