394 P.3d 604
Alaska2017Background
- David and Marjorie Thomson divorced in 2006 and incorporated a mediated property settlement into their decree.
- The parties valued David’s PERS retirement benefit at its 2006 present value using his 2003–2005 average earnings and agreed Marjorie would receive 46.96% of the "marital portion."
- The QDRO awarded Marjorie 46.96% of the monthly benefit "which is based on credited service accrued from August 7, 1982 to December 31, 2004." The QDRO was entered with the divorce decree.
- In 2014 David obtained an updated PERS projection using his high-three salary at retirement (2013–2015), which greatly increased the projected benefit and Marjorie’s monthly share.
- David moved to amend the QDRO to require calculation using the 2003–2005 salary years; Marjorie relied on Hartley, arguing absent clear language the court must use the employee’s high-three at retirement.
- The superior court denied amendment; the Supreme Court affirmed, holding the settlement lacked the clear language required to override Hartley.
Issues
| Issue | Plaintiff's Argument (David) | Defendant's Argument (Marjorie) | Held |
|---|---|---|---|
| Whether the QDRO/property settlement requires using David’s 2003–2005 salary to compute Marjorie’s share | Settlement language and the QDRO’s dates show parties relied on 2006 figures; using later salary would give Marjorie post-divorce (non-marital) gains | Under Hartley, absent clear contrary language a retirement division uses employee’s high-three at retirement; settlement lacks such clear language | Court held Hartley governs; settlement did not contain clear and unambiguous language to require using 2003–2005 salary, so high-three at retirement controls |
| Whether the phrase “marital portion” or listing of marriage/separation dates limits calculation to pre-separation salary | "Marital portion" and dates limit benefit to salary during marriage | "Marital portion" refers to the coverture fraction (service years during marriage), not salary years; QDRO language contemplates final benefit at retirement | Court held "marital portion" denotes the coverture fraction; dates identify service period numerator and do not restrict use of retirement salary years |
| Whether a clause excluding property acquired after separation prevents using post-separation salary in benefit calc | Clause excluding after-separation property means post-separation salary increases are non-marital and cannot be used | Clause applies to "other property" and does not alter treatment of marital portion of the pension; Hartley treats post-divorce increases as built on marital foundation | Court held exclusion clause does not supply clear language; increased value built on marital foundation remains marital under Hartley |
| Whether extrinsic intent evidence shows a contrary agreement | Parties relied on 2006 valuation when dividing assets; intent shows they meant to cap Marjorie’s share at 2006 projection | Hartley is controlling absent clear contractual language; no unambiguous contractual term supports David | Court declined to credit extrinsic intent to override textual ambiguity standard; no clear contractual language found |
Key Cases Cited
- Hartley v. Hartley, 205 P.3d 342 (Alaska 2009) (establishes that absent clear contrary language, retirement divisions use employee’s high-three salary at retirement under the marital-foundation theory)
- Zito v. Zito, 969 P.2d 1144 (Alaska 1998) (QDRO enforces rather than alters property-division agreements)
- Engstrom v. Engstrom, 350 P.3d 766 (Alaska 2015) (discusses use of coverture fraction to determine marital portion)
- Krushensky v. Farinas, 189 P.3d 1056 (Alaska 2008) (principle that contract interpretation is a question of law)