LORI A. ROBINETTE, ET AL.
Meredith, Kehoe, Hotten, JJ.
"The alphabet soup world of pension benefits has spawned a dizzying array of acronyms, like ERISA, QDRO, and QPSA, and a complex web of interrelated statutory provisions" that collide at the intersection of federal statutes with State domestic relations law. Hamilton v. Wash. State Plumbing and Pipefitting Indus. Pension Plan, 433 F.3d 1091 (9th Cir. 2006). In this case of first impression, we are asked to resolve contentions relating to the entry of a domestic relations order and the existence of an equitable remedy in the form of a constructive trust when a party to a divorce fails to obtain a qualified domestic relations order prior to the pre-retirement death of a former spouse, when that former spouse remarries and– prior to pre-retirement death– designates his or her surviving spouse as sole beneficiary of his/her pension.
Lori A. Robinette, appellant, appeals from the judgment of the Circuit Court for Frederick County granting summary judgment and awarding a constructive trust and partial pension benefits to her deceased husband's former spouse, Luan Hunsecker, appellee.
On appeal, appellant presents two questions for our review:
I. Did the circuit court err by entering an order for the alienation of pension benefits after the death of the plan participant?
II. Did the circuit court err by creating a constructive trust to alienate pension benefits after the death of the plan participant?
For the reasons outlined below, we answer both questions in the negative, and affirm the judgment of the circuit court.
FACTUAL AND PROCEDURAL HISTORY
The essential facts pertinent to this appeal are undisputed. On June 6, 1981, appellee, Luan Hunsecker ("Ms. Hunsecker"), was married to the decedent, Roger Robinette ("Mr. Robinette"). During their marriage, Mr. Robinette was employed by Montgomery County Public Schools ("MCPS") and a participant in its pension plan. After nearly seventeen years of marriage, Ms. Hunsecker and Mr. Robinette executed a voluntary separation agreement on April 16, 1998. Pursuant to that agreement, Ms. Hunsecker transferred and assigned all her rights, title, and interest in the marital home, with the proviso that the proceeds of any sale would be the "sole and exclusive property" of Mr. Robinette. In addition, Ms. Hunsecker further conveyed all her rights, title, and interest in a boat and trailer the couple owned, and she released and discharged any claims for pendente lite and indefinite alimony. Following their agreement, a judgment of divorce was entered by the Circuit Court for Frederick County, Maryland, providing that the terms of the voluntary separation agreement would be incorporated, but not merged, into the judgment of absolute divorce.
Most notably, paragraph eight of the separation agreement provided that the judgment of divorce, issued on August 3, 1998, would serve as a qualified domestic relations order ("QDRO") in the pension benefits and death ("surviving spouse") benefits provided to Mr. Robinette through his employ with MCSS. Specifically, the provision stated:
PENSION: [Mr. Robinette] is a participant in a pension plan through his employment with [MCPS]. The parties agree that [Ms. Hunsecker] shall be the alternate payee of the aforesaid pension and that the parties' judgment of divorce shall be a Qualified Domestic Relations Order as defined by the Retirement Equity Act of 1984, as from time to time amended. [Ms. Hunsecker's] equitable interest in [Mr. Robinette's] pension is hereby declared to be fifty percent (50%) of the "marital share" of said pension benefit, the marital share being that fraction of the benefit whose numerator shall be the number of months of the parties' marriage during which the benefits were accumulated, which number shall be determined as of the date of this Agreement, and whose denominator shall be the total number of months during which the benefits were accumulated prior to the time when payment of such benefits shall commence. [Ms. Hunsecker] shall receive fifty percent (50%) of the aforesaid marital share of any benefits made from the pension to [Mr. Robinette], including any death benefits if, as and when such payments are made.
(emphasis in original). This provision, however, was never enrolled in a QDRO.
After their divorce, Mr. Robinette continued working for MCSS. He remarried on June 25, 2000, to Lori A. Robinette ("Ms. Robinette"). Throughout their nine years of marriage, Mr. Robinette continued working for MCSS until his untimely death on October 2, 2009. Ms. Robinette was named as the personal representative of Mr. Robinette's small estate, which she administered without publication.
Upon learning of Mr. Robinette's passing, Ms. Hunsecker attempted to obtain a portion of the pension benefits from MCSS on May 12, 2010, pursuant to the separation agreement that she had entered eleven years earlier. Her efforts proved unsuccessful because MCSS had never received a QDRO to indicate Ms. Hunsecker as the partial beneficiary of Mr. Robinette's pension benefits. Mr. Robinette had named Ms. Robinette the beneficiary of record with MCSS on September 2, 2003. As a consequence, Ms. Hunsecker was denied any portion of the pension benefits, and she was apprised that Mr. Robinette's pension was being paid to Ms. Robinette.
Thereafter, Ms. Hunsecker instituted a cause of action in the Circuit Court for Frederick County, Maryland, against Ms. Robinette on January 20, 2011, seeking the establishment of a constructive trust on grounds of Ms. Robinette's unjust enrichment. The parties filed a joint stipulation of facts on October 14, 2011. On that same day, Ms. Hunsecker additionally moved for summary judgment, arguing that she had a superior equitable title to Mr. Robinette's pension.
Ms. Robinette responded in opposition on November 3, 2011, filing her own motion for summary judgment, arguing three points. First, Ms. Robinette attested that Ms. Hunsecker had failed to obtain a QDRO prior to Mr. Robinette's death, and, as a consequence was precluded from asserting any interest to Mr. Robinette's pension pursuant to Title I of ERISA. Second, she argued that Ms. Hunsecker's claim of unjust enrichment was inapplicable because the parties "have no privity whatsover, whether contractual or quasi-contractual." Third, Ms. Robinette argued that the creation of a constructive trust was an improper method of acquisition of Mr. Robinette's pension and that she maintained higher equitable call.
After hearing argument of counsel on November 17, 2011, and taking each parties' motions sub curia, the circuit court entered summary judgment in favor of Ms. Hunsecker on January 4, 2012, granting her a constructive trust in a portion of Mr. Robinette's pension and death benefits and further ordered the issuance of a posthumous QDRO, consistent with the separation agreement.
Ms. Robinnette subsequently noted her timely appeal to this Court.
STANDARD OF REVIEW
Md. Rule 2-501(f) provides that a trial court " shall enter [summary] judgment in favor or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." We review a trial court's grant or denial of summary judgment de novo by conducting our own independent review of the record and deciding the same legal issues as the trial court. Haas v. Lockheed Martin Corp., 396 Md. 469, 478–79 (2007). When, as in this case, there are no disputed facts related to the trial court's grant or denial of summary judgment, our only task is to determine whether the trial court's decision was legally correct. Id. at 479. See also Gonsalves v. Bingel, 194 Md.App. 695, 708 (2010).
(A) Did The Circuit Court Err By Entering a Domestic Relations Order for the Alienation of Pension Benefits After the Death of the Plan Participant?
Ms. Robinette first contends that the circuit court erred by entering a domestic relations order for the alienation of pension benefits that had already vested in the preretirement pension plan participant's designee upon the death of the pension plan's participant. In response, Ms. Hunsecker argues that "[t]he [c]ourt could . . . enter a QDRO since Mr. Robinette was a participant in the MCPS Retirement Plan, a governmental retirement plan that is exempt from the provisions of 'ERISA.'" We find Ms. Hunsecker's argument more persuasive.
In considering Ms. Robinette's first assignment of error, we preliminarily begin with an overview of the applicability–or, in this case, the inapplicability– of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (1999) ("ERISA"), to pension plans. See, e.g., Potts v. Potts, 142 Md.App. 448, 454–55 (2002). ERISA was first enacted in 1974 in order to remedy long-standing abuses and deficiencies in the private pension system. See generally H.R. Rep. No. 533, 93d Cong., 2d Sess., reprinted in, 1974 U.S. Code Cong. & Ad. News 4639. See also 29 U.S.C. § 1001 et seq. "These deficiencies included inadequate vesting provisions, insufficient assets to assure payment of future benefit obligations, and premature termination of under-funded benefit plans." Rose v. Long Island R.R. Pension Plan, 828 F.2d 910, 913 (2d Cir. 1987) (citations omitted). Thus, ERISA's purpose is to "to provide better protection for beneficiaries of employee pension and welfare benefit plans abounding in the private workplace." Roherbeck v. Roherbeck, 318 Md. 28, 30 (1989) (discussing the history and intent of ERISA) (emphasis added), quoted in Eller v. Bolton, 168 Md.App. 96, 106–107 (2006). See also Albert Feuer, WHO IS ENTITLED TO SURVIVOR BENEFITS FROM ERISA PLANS?, 40 J. Marshall L. Rev. 919, 923 (2007) ("ERISA was a response to the protests on behalf of many employees and their beneficiaries who had been deprived of anticipated pension and welfare benefits.").
ERISA is comprised of four titles. Title I of ERISA, 29 U.S.C., § 1001 et seq., contains various substantive and procedural requirements with which covered plans must comply. These include standards for vesting, funding and fiduciary responsibility as well as the survivorship provisions and anti-alienation provisions under which Ms. Robinette initially claimed as her sole right to Mr. Robinette's pension and death benefits. Title II of ERISA is codified in the Internal Revenue Code, 26 U.S.C. § 401 et seq., and contains requirements pertaining to the qualifications of pension plans for favorable tax treatment. Title III, 29 U.S.C. § 1201 et seq., establishes ERISA's administrative and enforcement provisions. Title IV, 29 U.S.C. § 1301 et seq., contains the Pension Benefit Guaranty Corporation ("PBG C"), guaranteeing the payments of benefits by plans which terminate with insufficient assets to pay those benefits to their participants and designees.
Under Title I, it is well settled that a core ERISA concern is the "ERISA command" that pension plans subject to ERISA's provisions make payments to the beneficiary who is "designated by a participant or by the terms of [the] plan." Engelhoff v. Egelhoff, 532 U.S. 141, 147 (2001); Morales v. Trans World Airlines Inc., 504 U.S. 374, 383 (1992). See Rohrbeck, 318 Md. at 30; Eller, 168 Md.App. at 106–07. In fact, ERISA § 205, 29 U.S.C. § 1055– the spousal survivor provision– mandates that pension benefit plans provide spouses with specified survivor benefits. See id. § 1055(b)(1)(A). Thus, such benefits and benefit designations must be part of all covered ERISA-governed pension plans. See id. See also Feuer, supra, 40 J. M ARSHALL L. R EV. at 655. In addition, Section 1055 provides two specific avenues through which surviving spouses may attain a portion of the participants' pension benefits. Id. §§ 1055(d) & (e). These two avenues depend on the status of the participant before the date on which the annuity begins. Id. § 1055(a).
Specifically, "in the case of a vested participant who does not die before the annuity starting date, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity[." Id. § 1055(a)(1). In the alternative, if "a vested participant . . . dies before the annuity starting date and . . . has a surviving spouse, a qualified preretirement survivor annuity shall be provided to the surviving spouse of such participant." Id. § 1055(a)(2).
To be sure, a participant's former spouse may be treated as a beneficiary under the plan and additionally regarded as a surviving spouse, eligible to receive surviving spouse benefits. See 29 U.S.C. § 1055(f)(2). Nonetheless, this designation can only occur when no conflict of law arises between a State's domestic relations law and ERISA's preemption clause or general anti-alienation provision. See 29 U.S.C. § 1144(a) (stating that ERISA "shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan"); 29 U.S.C. § 1056(d)(1) (providing that "[e]ach pension plan shall provide that benefit[s] under the plan may not be assigned or alienated."). To clarify the intersection of state domestic relations law with ERISA, and the potential conflict arising between these laws, Congress amended ERISA in 1984 through its enactment of the Retirement Equity Act (P.L. 98-397, 98 Stat. 1433) ("REA") to improve the delivery of
. . . retirement benefits and provide for greater equity under private pension plans for workers and their spouses and dependents by taking into account changes in work patterns, the status of marriage as an economic partnership, and the substantial contribution to that partnership of spouses who work both in and outside the home, and for other purposes.
Pub. L. No. 98-397; 98 Stat. 1426 (1984) (emphasis added). As a result, the REA provides the requisite clarification that state-court-ordered assignments of plan benefits to former spouses and dependents w ere permitted. Tr. Dr. Guild of America -Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 419 (9th Cir. 2000) (citing Senate Judiciary Committee, S. Rep. No. 98-575 at 1 (1984)) (other citations omitted); Rivers v. Central and South West Corp., 186 F.3d 681, 683 (5th Cir. 1999) (noting that the REA amended ERISA's marriage requirements to resolve contentions among the courts with regard to the application of the former surviving spouse provisions); Eller, 168
Md.App. at 107; Potts, 142 Md.App. at 708 (citations omitted). Nevertheless, REA's amendments to ERISA explicitly provide that the former spouse of the plan participant can only replace the participant's current spouse and be treated by the private pension plan as the surviving spouse pursuant to a QDRO. 29 U.S.C. § 1056(d)(3)(F). See Hopkins v. AT&T Global Information Solutions Co., 105 F.3d 153, 155 (1997).
A qualified domestic relations order, or QDRO, is a subset of domestic relations orders that recognize the right of an alternate payee to receive all or a portion of the benefits payable with respect to a pension plan's participant under the respective pension plan. Eller, 168 Md.App. At 107 (relying on 29 U.S.C. § 1056(d)(3)(B)(I)). Section 1056(d) of ERISA sets the parameters by which a domestic relations order ("DRO") would be deemed "qualified, " specifically providing:
(C) A domestic relations order meets the requirements of [a QDRO] only if such order clearly specifies–
(i) the name and last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order,
(ii) the amount or percentage of the participant's benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined.
(iii) the number of payments or period to which such order applies and
(iv) each plan to which such order applies.
Id. § 1056(d)(3)(C).
Section 1056(d)(3)(D) prohibits qualification of a domestic relations order that "require[s] a plan to provide any type or form of benefit . . . not otherwise provided under the plan, " "require[s] the plan to provide increased benefits (determined on the basis of actuarial value), " or "require[s] the payment of benefits to an alternate payee which [is] required to be paid to another alternate payee under another order previously determined to be a [QDRO]." 29 U.S.C. § 1056(d)(3)(D) et seq. Admittedly, Maryland has not previously addressed the meaning of this section within the context of an alternate payee seeking a participant's pre-retirement death benefits posthumously. But see Eller , 168 Md.App. at 132–33 (concluding that "[b]ecause a nunc pro tunc amendment of the QDRO relates back to the time prior to the [former spouse's] death . . . [the nunc pro tunc amendment of the QDRO] will not fail for naming [former spouse] as the alternate payee, even though she is now deceased[, ]" as a method to provide benefits to the former spouse's estate). Like Eller, however, we turn our attention to the United States Circuit Courts of Appeal to engage in a discussion of some key cases to determine the permissibility of posthumous QDROs. See, e.g., Eller, 168 Md.App. at 191.
The United States Circuit Court of Appeals for the Third Circuit first considered the permissibility of posthumously issued QDROs in Samaroo v. Samaroo, 193 F.3d 185 (3d Cir. 1999). There, Louise Robichaud-Samaroo (Ms. Robichaud) sought to obtain the pension benefits of her former and deceased husband, Winston Samaroo, relying on a property settlement agreement that had been incorporated into the parties divorce decree. Id. at 186–87. The agreement specifically provided:
(d) Pensions, Profit Sharing and Bell System Savings Plan.
Savings Plan– (1) Husband has a vested pension having a present value, if husband were to retire at this time, of $1, 358.59 per month. At the time of husband's retirement and receipt of his pension he ...