Seventh Annual Family Law Institute - May 2nd

I’m honored to be presenting “I’m with —> DOPO” ©, a fun-filled exposé of Ohio’s oft-misunderstood and code-mandated Division of Property Order (DOPO). The CLE is May 2nd, for the Seventh Annual Family Law Institute at the Ohio State Bar Association in Columbus. If you haven’t signed up for the Institute, it’s not too late! You can also join us via webcast by registering here, or download the full brochure of courses here, and I’ve even included a link to download the supplemental materials for my presentation further below.

But only attendees will get the awesome shirt you’re getting a sneak peak of here…

Thank you to the folks at OSBA who put this amazing event together, and to the legal community that makes speaking at these events such a privilege. See you May 2nd!

Click to Download Supplemental MATERIALS

Because wearing a shirt with an O.R.C. inside joke on it isn’t nerdy at all.

Because wearing a shirt with an O.R.C. inside joke on it isn’t nerdy at all.

Hammertime - Part Four: Ohio Case Law Updates

What's round on the end and high in the middle? QDROs, that's what.

What's round on the end and high in the middle? QDROs, that's what.

We've almost made it all the way through my four-part 'Hammertime' blog series! I don't know about you, but I'm getting pretty exhausted with all this QDRO news, so here's that .gif of MC Hammer dancing again.  Let us all look to its perpetual motion, and effortless, unending dance, as a source of strength, and a testament to the boundless nature of human endurance...  And endurance you'll need, because we've now entered the final installment of my 'Hammertime' blog series, highlighting some of the most recent and important decisions coming out of Ohio.

Cook v. Cook, 9th Dist. Summit No. DR-2003-08-3121, 2017-Ohio-8848
Trial Court has Broad Discretion to Determine Marital Property Interests in a Pension

Dated: December 6, 2017
Affirming

This is a great case for a refresher course on your favorite thing, coverture!  In this case, the decree stated, in part, that Husband’s OPERS pension (payable at Husband’s retirement as a stream of future monthly benefits over his lifetime) should be equally divided by DOPO (Division of Property Order), and that, for purposes of making the division, the marital period was from the date of marriage to the date of trial.  The subsequent DOPO, entered by the trial court and signed by both parties, awarded Wife a percentage of a fraction of Husband’s benefits (50% of the coverture fraction, i.e., number of years of marriage overlapping with OPERS participation, divided by total years of service credit).   The DOPO did not indicate a limit to the number of monthly payments Wife should receive.  Ten years later, Husband claimed that the DOPO should terminate because Wife had, by the time of his motion, received half of the marital portion of his OPERS pension (based on what appeared to be a present day cash valuation he obtained for the term of marriage).  Husband further claimed that if the DOPO was not terminated, the trial court would otherwise run afoul of improperly modifying the decree by way of the DOPO. 

The crux of Husband’s argument was premised on his notion that the decree provided for a fixed value assignment of the marital portion of the OPERS account to Wife, and that this ascertainable amount had been paid.  The trial court disagreed with Husband’s interpretation of the decree, and determined instead that a specific value had not been established by the terms of the decree, and therefore, that there had likewise been no improper modification of the decree by way of the DOPO. 

This opened the door to the Court of Appeals’ full review of the trial court’s excellent analysis distinguishing the methods that a trial court might employ to determine an equitable division of a pension based on either: a fixed present cash value (for an immediate distribution offset with property other than the pension itself); a frozen coverture method (to divide the pension itself at retirement, with a formula and value that are fixed as of date of divorce); or a traditional coverture method (to divide the pension itself at retirement, with a formula that is based on the value as of the date of retirement - the method employed by the DOPO).  The differences between the three methods, and what circumstances warrant utilization of one over another could be the basis of a white paper; so suffice it to say for this post, at least, that Ohio courts typically utilize the traditional coverture method, as espoused under Hoyt v. Hoyt.   But if you ever get confused, Cook provides an excellent primer.

Berger v. Berger, 11th Dist. Geauga No. 2017-G-0108, No. 2017-Ohio-9329
Trial Court has Broad Discretion to Secure an Awarded Property Interest

Dated: December 29, 2017
Modified and Affirmed as Modified

Although this case is concerned more with the adequacy of the security ordered by the trial court to preserve a spouse’s awarded marital property interest ($1.9 million, which was to be paid over a 12 year period), it is hinged on the proposition that a trial court has broad discretion in fashioning its equitable division of marital property.  To the extent a trial court deems necessary, as in this case, this may include the discretion to order Husband’s maintenance of a life insurance policy for Wife’s benefit to protect her property interest until fully transferred. The take home here: particularly when assigning an interest in a retirement asset that cannot be immediately realized by the assignee spouse, such as with many non-qualified ‘executive’ plans and certain government and church plans exempt from ERISA (which do not accept QDROs or other state court property division orders), precaution must be taken to ensure the transferee spouse’s property interest is secured.  This may be by a term-life policy, or some kind of beneficial interest in the asset itself, such as with a preretirement or postretirement survivor annuity, when available under the plan terms.

Okoye v. Okoye, 9th Dist. Summit No. 2013-09-2546, 2018-Ohio-74
Trial Court has Broad Discretion to Determine Marital Property Interests in a 401(k)

Dated: January 10, 2018
Affirmed

Husband argued that a marital 401(k) account should not be considered marital property subject to division to the extent a portion of it – he claimed – was pledged to re-pay a marital debt, including a loan expended for purposes of medical treatment and the adoption of the couple’s children.  The trial court did not find Husband’s evidence of the debt (his unrebutted oral testimony) to be credible, and instead found Husband had dissipated funds from the account without Wife’s knowledge.  The trial court thus determined the entire account to be marital, and subject to equitable division.  The Court of Appeals, in affirming, reminds us that: “Only in the exceptional case, where the evidence presented weighs heavily in favor of the party seeking reversal, will the appellate court reverse.”  The Court was unimpressed by the fact that the testimony was unrebutted, noting, “The mere fact that testimony is uncontroverted does not necessarily require [a court] to accept the evidence if [it] found that the testimony was not credible.”

Fitzgerald v. Fitzgerald, 8th Dist. Cuyahoga No. DR-14-352039, 2018-Ohio-387
A QDRO that Improperly Modifies the Decree is Voidable for Error and Subject to Appeal

Released and Journalized: February 1, 2018
Reversed and Remanded

The parties in this case agreed that the QDROs entered by the trial court deviated from the terms of their settlement agreement.  The parties disagreed, however, as to whether this made the QDROs "void" for lack of subject matter jurisdiction (meaning the QDROs were not final appealable judgments, but could be vacated or set aside under the inherent powers of the trial court), or "voidable" for error only, and subject only to appeal for review of the error concerned.  The Court traversed a riddled landscape of prior case law within the 2nd and 8th Districts – including review of the dangers inherent in “jurisdictionalizing” error – and determined that the QDROs, which were agreed to be non-compliant with the settlement terms, were not void for lack of jurisdiction, but rather, voidable for error, and appealable.  Since the appeals were timely filed, the Court vacated the QDROs, and remanded to the trial court for further review in light of the parties’ agreement.  

As an aside, noting the potential consequence of its decision, in that often a plan administrator may reject a QDRO long after the time for an appeal has expired, the Court opined that when there was no issue regarding the conformity of a QDRO to settlement terms, but rather an issue arises because a plan administrator subsequently refuses the terms of the QDRO, a Rule 60(B) motion is the appropriate venue for reconsideration. 

_________________________________________________________________________________________________________________________

In closing out 'Hammertime' - I can't resist hammering it home with this final gem.  The takeaway?  Sometimes when you have a hammer, it really is a nail!  Thanks to Maury White, Esq. for sharing this from a past IACP workshop.

Hammertime Installments:

Additional Links of Interest for Diehard QDRO Fans:

Hammertime - Part Two: Sixth Circuit Weighs In On QDROs

Sun Life Assurance Co. v. Jackson, No. 17-3120 (6th Cir. 2017)
United States Court of Appeals for the Sixth Circuit:  Decree Deemed to be a QDRO

Decided and filed: December 13, 2017
Affirming

What could be inside?

What could be inside?

It isn’t often LeBron James comes up in a QDRO case, trust me.  But that is exactly what you will see when you sit down to read this important case coming out of the 6th Circuit.  In outlining its standard of what is and is not 'clearly specified' (as defined under the 'REACT' amendments to ERISA, 1984), the Court observed:

"...of a sports fan asked this question:  Who is the greatest basketball player of all time: Michael Jordan or LeBron James?  He might respond “LeBron James,” which clearly specifies the answer.  Or he might respond “Number 23,” which does not clearly specify the answer.  But if he responded “Number 23 of the Cleveland Cavaliers,” no one would be confused.  The sports fan did not state “LeBron James.”  But he did specify him."

This case touches upon several circuit-specific themes, including preemption of state law, and the validity of posthumous orders.  In this case, a divorce decree itself was deemed to be a QDRO, establishing the divorced couple's child as the legal beneficiary of Husband’s employer-sponsored life insurance policy.  This, despite Husband’s failure to change his designation to name the child in compliance with the decree (Husband had instead left intact, through the time of his death, his pre-decree designation of his uncle).  The Court found that the proceeds must be paid to the parties’ daughter, pursuant to the terms of the decree-deemed-QDRO, and not to Husband’s designated beneficiary on file with the insurance company (naming his uncle).  To reach this result, the Court went through the QDRO requirements under ERISA in detail, and found, under § 1056(d)(3), that the terms of the decree “clearly specified” each of ERISA’s requisites.

That's it for this installment of my four-part 'Hammertime' blog series, but keep checking back for my Kentucky and Ohio case law updates, which will follow quite closely after this posting.  And who knows? Maybe I'll work in a few more hammer jokes, while I'm at it. A certain Peter, Paul and Mary song, perhaps?

Hammertime Installments:

Cincinnati Bar Association - Domestic Relations Institute CLE (April 17, 2015)

I had a wonderful time this past Friday speaking about QDROs at the Cincinnati Bar Association's Annual Domestic Relations Institute CLE, presented by the all-star Domestic Relations Court Committee.  Thank you to all the attendees for such a warm reception (and for staying awake).  

QDROs + Captive Audience = Delighted Eileen

DOPOs & QDROs Keeping You Up at Night? - Advice on Getting it Right

DOPOs & QDROs Keeping You Up at Night? - Advice on Getting it Right

SHOW ME THE MONEY: UPDATE TO MY BLOG POSTS DATED JUNE 12, JULY 1 & AUGUST 21, 2014

Fraley v. Maxey, NO. 2013-CA-001447-MR (Ky. App. 2014)
In Allocating the Marital Portions of 401(k) Accounts, the Non-Participant Spouse is Only Entitled to 1/2 of the Marital Contributions and Appreciation Thereon

Rendered: November 21, 2014
Not To Be Published
Opinion Affirming

Add another notch to my QDRO lipstick case. If you click on “TRACING” on the tag-cloud to the right of this post, you’ll see this is my fourth blog post highlighting this well-settled area of law:  traceable gains on pre-martial contributions are non-marital when the increase does not result from the efforts of either party. (See my blog posts dated June 12, 2014; July 1, 2014, and August 21, 2014).

In jurisdictions such as Kentucky and Ohio, tracing is utilized as an evidentiary vehicle to value and prove the passive increase of pre-marital contributions in a 401(k)-type plan during the period of marriage. [For citations to applicable Kentucky and Ohio statutory and case law, see my blog post dated August 21, 2014.]

Tracing allows one to make an accurate determination of the growth (or loss) on both the marital and non-marital contributions in the account by calculating the rate of return experienced on the account during the marriage. Take the following example from one of my own consulting cases (the story you are about to hear is true; only the names have been changed to protect the innocent), wherein I traced the passive growth of a pre-marital account balance over the span of a ten-year marriage:

The balance in Steven’s 401(k) on his date of marriage was $173,364. At the time of the divorce, the account had grown by $251,266 to $424,630. However, of this $251,266 increase, it was determined that only $144,290 was divisible due to contributions made during the marriage, and passive market growth thereon. Therefore, Steven retained $280,339, in addition to half of the divisible $144,290. 

Without competent evidence, a court may have instead found the full $424,630 divisible – netting $212,315 to each spouse. However, after my tracing of the marital contributions and growth thereon during the marriage, Steven ended up with $352,485, and his spouse with $72,145.  Wow!

What is interesting and notable about Fraley (even after multiple exhilarating blog posts on the subject), is that – unlike Steven’s marriage – the parties were only together three years. The trial court in Fraley initially found that Wife’s Fidelity and TIAA-CREF accounts had increased in value during the three-year marriage in the amount of $72,564.00. Thus, the trial court determined Husband’s share was ½ of that, or $36,282.00. 

However, Wife subsequently filed a motion to alter, amend, or vacate the trial court’s findings of fact. Wife’s motion pointed to competent evidence within the record that traced her pre-marital contributions and passive growth thereon during the marriage, proving the marital portion was only $3,127.00. In response, the trial court amended its findings, concluding that Wife met her burden, and that Husband was only entitled to $1,563.55 (½ of $3,127.00), instead of $36,282.00. Wow! The Court of Appeals, citing to KRS § 403.190(2)(e), affirmed, summarizing:

In allocating the marital and nonmarital portions, we agree with the family court that [Husband] was only entitled to one-half of the total marital contributions and any appreciation in value of the marital portion during the marriage. The nonmarital contributions and any increase in value of those contributions not attributable to the efforts of the parties during the marriage were correctly assigned to [Wife].

Today’s lesson? Don’t make the mistake of thinking a short-term marriage isn’t worth the effort to examine. 

The law holds no secret at this point as to the evidentiary burden itself. What may still be somewhat elusive is understanding how tracing works and identifying the most preferred (and court-approved) methods of tracing. At risk of self-aggrandizing my QDRO Blog (with an admitted readership consisting of only close family and a few other gluttons), I refer you to my previously mentioned three related posts. These posts thoroughly explore relevant state law in Kentucky and Ohio, evidentiary considerations, how-to’s, and even some tips for trial motions.

QDRO PRIMER FOR OHIO FAMILY LAW PRACTITIONERS

Saks v. Riga, 8th Dist. Cuyahoga No. 101091, 2014-Ohio-4930
Lions (Expert Witnesses), Tigers (Coverture), and Bears (Deferred Distribution), Oh My!

Released and Journalized: November 6, 2014
Judgment Affirmed in Part, Reversed in Part, and Remanded

Today’s feature case is just plain good ole’ domestic relations law fun. It hits on several pinnacle issues related to QDROs (or in this case rather, a Court Order Acceptable for Processing (COAP), which divides Federal Employees Retirement System (FERS) pensions). In fact, the issues are so well canvased that this Opinion makes a wonderful primer – or refresher course – for domestic relations attorneys practicing in Ohio.

For starters, both parties in this case were/are attorneys. So that may help explain the need for a 34 page Opinion. After trial, the magistrate divided the parties’ marital property, and ordered Husband to pay monthly child and spousal support and one-half of Wife’s attorney fees. Both parties filed objections to the magistrate’s decision; the trial court overruled all of the objections and adopted the magistrate’s decision except for a few limited modifications. Husband appealed, raising eleven assignments of error. Wife cross-appealed, raising one assignment of error.

I have broken down the relevant issues in Saks v. Riga in an index-like format below, for future quick reference. But I strongly encourage every attorney reading this blog (or just the two, thanks DP and GA) to read this Opinion in full. You know, with all your spare time.

Read More

KY & OH: “EQUITABLE” IS ALWAYS FAIR, BUT NOT ALWAYS EQUAL

Pitman v. Pitman, NO. 2013-CA-000249-MR (Ky. App. 2014)
The Trial Court Has Discretion to Award the Entirety of a Marital Retirement Account to One Party

Rendered:  October 24, 2014
Not To Be Published
Opinion Affirming

Another case where it doesn’t matter whether you are a practitioner in Kentucky or Ohio. The law is essentially the same on this point: Kentucky and Ohio law provide for an equitable division of marital property upon dissolution of a marriage. The word "equitable" means "fair," which does not always equate with an equal division of property. (Say that ten times fast.)

Division is not always 50/50

Division is not always 50/50

While Ohio Revised Code (ORC) § 3105.171 does state that a division shall be equal, it allows the court to order an unequal division if "an equal division of marital property would be inequitable." The statute contains various factors for the court to consider in deciding whether to award an unequal division of marital property.

Kentucky Revised Statute (KRS) § 403.190 has similar effect. Although the statute does not expressly reference an ‘equal division’ of marital assets, as does the ORC, it does require the court to divide marital property in “just proportions” with consideration of “all relevant factors” (including a list of four specific factors). It is well settled that, pursuant to KRS § 403.190, an unequal award of marital retirement benefits is proper if needed to make the overall division of marital property in “just proportions”. See Pitman at page 4, citing Snodgrass v. Snodgrass, 297 S.W.3d 878, 888 (Ky. App. 2009); Smith v. Smith, 235 S.W.3d 1, 17 (Ky. App. 2006); Overstreet v. Overstreet, 144 S.W.3d 834, 839 (Ky. App. 2003). 

In Pitman, the facts are more interesting than the outcome, in that the above-holding is not breaking news. Husband and Wife lived apart much of their marriage, with Wife ultimately raising their son in Kentucky. Wife had a successful business designing “Fabulous Hats” and selling them at various events, including the Kentucky Derby (she was eventually successful enough to have a brick and mortar establishment). During big hat events (pun intended), Husband would come to Kentucky and care for their son while Wife tended to her business. Wife did not disclose her business assets, but during a single event she earned as much as $100K in gross income. 

During the pendency of the divorce, Husband offered that Wife keep her business and in exchange Husband would keep his retirement account, estimated at $25K (both were marital property). Wife did not agree, arguing she contributed to Husband’s ability to earn a living by caring for their son.

After considering the relevant factors set forth in KRS 403.190(1), particularly (1)(a), the trial court awarded Wife’s business to her and Husband’s retirement account to him.  Wife appealed, wanting half of Husband’s account. The Court of Appeals affirmed, finding the trial court did not abuse its discretion.

As I said, nothing newsworthy here, just a reminder that you have license to be creative (pun intended) when negotiating the division of marital assets.  It isn’t necessary that marital assets just get divided down the middle. However, when on the defensive, it may not hurt to remind your client that the trial court can divide the marital piggy any way it deems equitable in light of the parties’ circumstances.

QDROS ARE AN ATTORNEY’S BEST FRIEND: TAX ISSUES & DIVIDING EMPLOYEE RETIREMENT BENEFITS WHEN THERE IS NO QDRO

Kelly v. Kelly, NO. 2012-CA-001081-MR (Ky. App. 2014)
When There is No QDRO, Income Tax Liabilities and Reporting Obligations Must Be Negotiated, Allocated and Structured Between the Parties

Rendered: August 29, 2014
Not To Be Published
Opinion Reversing

To: Domestic Relations Attorneys on BOTH Sides of the River
Re: I’m Sorry, and You’re Welcome

Let me start by saying, if you hate QDROs, I wager that this post will help you see QDROs through a more affectionate lens….

To that end, qualified ERISA-based plans should be your preference when assigning retirement benefits to a former spouse. In fact, a red flag should go up whenever you encounter a plan that is not governed under ERISA. Importantly, non-ERISA plans are subject to their own set of rules that may limit or even prohibit the assignment of benefits to a former spouse. 

For attorneys in Ohio and Kentucky, there are certain retirement plans out there you should be on the lookout for that are “non-ERISA” and/or “non-qualified”.  THESE PLANS MAY NOT BE ABLE TO BE DIVIDED VIA QDRO OR SIMILAR COURT ORDER. For instance, if your client (or his/her spouse, or former spouse) has a retirement plan with the City of Cincinnati, listen up. City of Cincinnati pension benefits cannot be divided by QDRO. The same may be true if one of the parties is an executive with Procter & Gamble, or General Electric, to name only  a very few local employers with supplemental executive retirement plans. 

You are thinking, “What’s the big deal Eileen?” That is because you are ahead of the bell curve. You are one of the lucky who discovered pre-decree that you could not divide the pension via QDRO. You were able to instead negotiate an alternative equitable distribution of the pension; perhaps an offset with the parties’ much coveted rare, mint condition first edition Princess Diana Beanie Baby collection. You saved yourself and your client a lot of time, money, and heartache by not simply having the parties sign off on a property agreement “splitting the pension via QDRO”, only later to find out post-decree that the pension could not be divided via QDRO. I bet you were a ‘hand-raiser’ in law school too. As for the rest of us...

Read More

UPDATE TO MY BLOG POSTS DATED JULY 20 & JULY 29, 2014: THE REST OF THE STORY

Complaint by the Medina County Bar Association to the Board of Commissioners on Grievances and Discipline of the Supreme Court of Ohio

Filed: September 4, 2014

What Happens ‘Behind the Scenes’ When a QDRO is Not Timely Administered?

If you’ve read this blog before, you know I try my best to avoid dropping the “M-bomb” whenever possible. However, occasionally, there is just no getting around it. 

[ENTER STAGE LEFT]  The attorney in this disciplinary case allegedly failed to file a QDRO attendant to a 1995 divorce action.  I share this case on the heels of two of my recent posts, wherein the courts in both Kentucky and Ohio were forced to deal with the aftermath of a party attempting to enter a QDRO 20 years after the decree of dissolution was entered. 

We all know what can happen in twenty years. Just ask my graying hair, thinning lips, and ever-increasing waistline (my wit only gets sharper with age, as you can plainly see). What happens is that we experience ‘life changes’ (no, don’t worry, that’s not where I’m going with this one)... Loss of employment, divorce, remarriage, divorce again, remarriage, financial crises, retirement, and death (taxes go in there somewhere too). Particularly in today’s climate where retirement assets are often a couple’s greatest (or only) marital asset, the negative consequences in failing to timely enter a QDRO can be significant, even life-altering, for the non-employee spouse.   

But what happens to the attorney who represents the client of a forgotten QDRO? Harkening back to another of my blog posts from the past, I think I’ll let someone else much more privy drop the M-Bomb:

[I]n response to the rising number of QDRO-related claims, it seems appropriate that this quarter’s Lawyers Mutual Insurance Company of Kentucky (LMICK) newsletter, The Risk Manager, spotlights “Avoiding Legal Malpractice and Bar Complaints in Family Law Cases”. The front page article, authored by Ms. Baxter, highlights the predominance of QDRO claims in Kentucky, and identifies two specific areas of attorney error in the preparation of a QDRO, including: (1) the failure of the QDRO to include the proper language, and (2) the failure to process the QDRO correctly. In presenting a solution, LMICK suggests that practitioners who anticipate a potential claim in this area should, among other things, retain a company or individual who specializes in the preparation of QDROS.

In its Complaint before the Board of Commissioners on Grievances and Discipline, The Medina County Bar Association asserted that an attorney’s failure to ensure a QDRO was filed with the court and submitted to the retirement plan (after nearly twenty years) was violative of the professional code of conduct, specifically alleging that “such neglect caused irreparable harm to the grievant” and was “prejudicial to the administration of justice”. 

As you’ll see, I’ve redacted the names on the Complaint. That is because there’s no picking on this particular attorney for his failure to timely administer a QDRO. Rather, this is a recently exposed pandemic in the divorce world, as revealed by reiteration of my blog post above and my more recent blog posts dated July 20 and July 29, 2014. So what happens to the attorney that represents the client of a forgotten QDRO? The Medina County Bar Association alleged that an attorney’s failure to timely secure a QDRO in the course of representation is chargeable as professional misconduct, and requested disciplinary measures be taken by the Supreme Court of Ohio. 

As Paul Harvey would say (many more than twenty years ago)... And now you know the rest of the story.

UPDATE TO MY BLOG POSTS DATED JUNE 12 & JULY 1, 2014: SHOW ME THE MONEY

Deboer v. Deboer, NO. 2012-CA-000464-MR AND NO. 2012-CA-000514-MR (Ky. App. 2014)
Traceable 401(k) Gains On Pre-Martial Contributions Remain Non-Marital When the Increase Does Not Result From the Efforts of Either Party

Rendered: August 22, 2014
Not To Be Published
Opinion Affirming

I’ve written several recent blog posts providing ample citation to cases in both Kentucky and Ohio reciting the law concerning the evidentiary burden of proving non-marital amounts in retirement accounts.  Deboer raises the issue once again, with Wife claiming that the trial court erred in calculating Husband’s non-marital interest in his 401(k) by including a net increase in the value of his premarital contributions realized over the course of the marriage.

We know the question that is raised anytime passive growth accrues on pre-marital contributions made to a 401(k)-type plan during the marriage.  Who gets the money?  The answer has been made clear through the litany of repetitious cases presented to the Courts of Appeals in both Kentucky and Ohio.  When passive growth on pre-martial contributions occurs during the period of marriage, if it is traceable in such a manner that the party claiming the non-marital interest can meet their evidentiary burden, that party takes home the proverbial money bag.

This is a well-settled area of law that can’t seem to be set out to pasture:  traceable gains on pre-martial contributions are non-marital when the increase does not result from the efforts of either party.  As in Deboer, this includes when market forces - rather than efforts of the parties - generate the increase in value.

The trial court in Deboer did just as the Kentucky Court of Appeals has previously avowed – over and over again.  The trial court granted Husband an additional non-marital portion of his 401(k) that represented the gains attributable to his pre-marital contributions realized over the course of the marriage, but which did not result from any effort by Husband.  Why?  As the Court of Appeals found in affirming, there was ample evidence within the record tracing the growth upon the pre-marital funds.

***      ***      ***

For an in-depth analysis of the issues relating to tracing and proving the evidentiary burden in both Kentucky and Ohio, see my blog post dated June 12, 2014.  For a practical tip to help ‘short-cut’ writing the supporting brief on this issue in Kentucky, see my blog post dated July 1, 2014.  

UPDATE TO MY BLOG POST DATED JULY 20, 2014: ANTICIPATION IS KEEPING ME WAITING... (BUT NOT ANYMORE IN OHIO)

Klik v. Moyer, 8th Dist. Cuyahoga No. 100576, 2014-Ohio-5994
Wife Denied Relief from 1993 Divorce Decree for Failure to Take Timely Action to Seek QDRO

Released and Journalized: July 24, 2014
Opinion Affirming

In Opinions decided less than a week apart, both the Kentucky and Ohio Courts of Appeals have had the pleasure of dealing with “delayed-QDRO-aftermath” (you know, when the attempted entering of a QDRO is delayed nearly 20 years from the date of decree).  My previous blog post dated July 20, 2014 took a look at a recent Kentucky Court of Appeals case and whether a pensioner spouse might defeat the entry of a QDRO more than 15 years post-decree based on a statute of limitations defense.  However, because the appeal in that case was filed prematurely (Husband filed his appeal at the discovery stage, when the trial court permitted Wife discovery regarding the pension), the Kentucky Court of Appeals determined the issue was not yet ripe, and that Husband should come back and see the Court if/once the QDRO was finally entered by the trial court.  So we wait in anticipation in Kentucky.

                 

On the other side of the river, Ohio’s most recent QDRO-related Court of Appeals Opinion will not keep us waiting.  And so what is today’s lesson from the 8th District of Ohio?  Wait for it... DON’T WAIT!  That’s the lesson.  DON’T WAIT!  Read on.  DON’T WAIT!

The Klick Court was faced with the task of determining whether the trial court abused its discretion in denying Wife relief from the 1993 divorce decree, after she waited 18 years before taking any action to seek a QDRO to effectuate her award of an interest in Husband’s pension.  In short, Wife and Husband entered into a settlement agreement, incorporated into the final decree, which specifically awarded Wife an interest in Husband’s “LTV Steel Pension.”  No other pension was mentioned, although as you might have guessed, Husband owned two separate and distinct pensions.  The settlement agreement further indicated that a QDRO would “be prepared by agreement of the parties and incorporated into this final decree”.  Which, as you also may have guessed by now, never happened.

Years went by, and in 2009 Wife found out Husband had retired and begun commencement of his retirement benefits.  In 2011, Wife filed several of motions with the trial court seeking relief from the 1993 decree awarding her an interest in only the LTV Steel Pension plan.  The premise behind Wife's motions was that it was presumed between the parties (and ostensibly the trial court) that the LTV Steel Pension was used interchangeably and collectively to encompass both Husband’s pension plans, and therefore, she was entitled to the marital portions of both. However, as the Appeals Court observed, since the 1993 decree expressly referenced the LTV Steel Pension, the only way to award Wife an interest in any other pension was to grant her relief from the 1993 divorce decree.

Wife argued that relief from the 1993 decree was unnecessary, as it was not a final order since it did not consider all assets.  The Court of Appeals quickly dispensed with Wife’s argument citing – among other things – ye olde bar exam favorite “invited error doctrine” (i.e., that a party is not entitled to take advantage of an error that she herself invited or induced).  The Appeals Court determined that even if the trial court erred by omitting any reference to Husband’s other pension in the final decree, Wife induced that error by submitting the settlement agreement to the trial court as the final resolution of the parties’ dispute. 

Wife argued alternatively that her Rule 60 motion was timely filed and should be granted, as she had just learned of Husband’s retirement in 2009.  The Court of Appeals didn’t agree that 2009 was the date to start the clock.  Instead the Court found it started somewhere closer in time to the 1993 decree:

Had [Wife] timely prepared the QDRO as required by the terms of the final decree and her settlement agreement, her belief of a mistake in designating the correct pension would have surfaced, however untenable that argument is in light of the fact that [Wife] agreed to accept the LTV Steel [Pension] in the settlement agreement. As a rule, 18 years of conscious inaction does not constitute a reasonable time within which to file a motion for relief from a final judgment.

If my two most recent blog posts are not reason enough to heed the lesson (DON’T WAIT!), then stick around, the clock is still ticking.  I’m guessing there will be no shortage of these cases on both sides of the river in the near future – where an attempt to enter a QDRO is delayed until the employee commences benefits, and then suddenly everyone wakes up from inertia.  The question is how many ways will the non-employee spouse be thwarted from obtaining his/her rightful (and likely most substantial) marital property interest?  The count is on.