Lead Opinion
OPINION ON REHEARING
Appellant, Brenda Joyce Gainous (“Brenda”), has moved for rehearing of the Court’s August 24, 2006 judgment. Appel-lee, Thomas Earl Gainous (“Thomas”), has filed a response to Brenda’s motion. After due consideration, we grant Brenda’s motion for rehearing and withdraw our opinion and judgment dated August 24, 2006. We issue this opinion and judgment in their place.
Brenda appeals from the judgment denying her motion for enforcement or, alternatively, motion for clarification of the 1995 divorce decree between herself and her former husband, Thomas. We determine (1) whether some of Brenda’s challenges were collateral attacks, which could be raised after the trial court’s plenary power had expired, on a post-divorce qualified domestic relations order (“QDRO”) and (2) whether the divorce decree awarded Brenda half of Thomas’s benefits under the Houston Firemen’s Relief and Retirement Fund (“the Fund”).
Background
Brenda and Thomas were married on April 14, 1973. On June 19, 1978, Thomas began working for the Houston Fire Department. He then began participating in the Fund, which was a defined-benefit plan. The couple was divorced, by consent decree, on October 9, 1995, before Thomas was eligible to retire from the fire department. The decree provided, in pertinent part, that each party was awarded “[o]ne-haIf (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” Neither party appealed the divorce decree, and no post-judgment motion challenging the decree appears in the record.
On January 25, 1996, the trial court entered a QDRO to effectuate the decree’s division of the Fund’s benefits. The record does not reveal who sought the QDRO, but it does show that Brenda sent the QDRO to the Fund. The QDRO provided, in pertinent part, as follows:
4. Plan Information. On the 9th day of October, 1995, [Thomas] had 16 years 11 months and 19 days of service under the Plan, [Thomas’s] total contributions as of such date are $37,967.47. [Thomas’s] average monthly salary (as defined in the Plan) as of such date is $3,163.79.
5.Benefit Award. The Court hereby awards to [Brenda] 50% of each payment otherwise payable to [Thomas] from the Plan after the date specified in Paragraph 4, but only with respect to the portion of such payment that is based on [Thomas’s] accrued benefit as of such date (taking into account only contributions as of such date). If the payment to [Thomas] is a refund of contributions, the benefit calculated as of the date specified in Paragraph 4 shall be adjusted on a proportionate basis for any earnings attributable to such benefit under the terms of the Plan from such date to the date of distribution. This Paragraph does not award [Brenda] any interest in any monthly amounts credited to any DROP [deferred retirement option plan] account established for [Thomas] under the terms of the Plan. This award applies to each type of benefit distribution under the Plan (including a service, deferred, or disability retirement pension, and a withdrawal of contributions) other than a distribution from any DROP account established on behalf of [Thomas]. The provisions of this Paragraph 5 shall be construed to fix the amount (but not the type) of [Thomas’s] benefit that is subject to division and payment to [Brenda] as of the date set forth in Paragraph 4, and shall be determined under the terms of the Act [Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l) (Vernon Supp.2006) ] in effect on such date. The award to [Brenda] herein shall not be increased by [Thomas’s] additional contributions, service accruals, or salary increases occurring after the date set forth in Paragraph 4.
6. DROP Account. Notwithstanding any other provision of this Order, [Brenda] shall not share in any portion of the contributions to or distributions from a DROP account established under the Plan on behalf of [Thomas].
7. Cost of Living Adjustments. The amount payable to [Brenda] under Paragraph 5 shall not be increased by any cost of living adjustments made to [Thomas’s] benefit after the date set forth in Paragraph 4.
8. Time and Manner of Payment. The Plan shall make payments to [Brenda] of the amount specified in Paragraph 5, if, as, and when payments are made to [Thomas]....
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11. Limitations. This Order and the award to [Brenda] herein is expressly made subject to the following provisions:
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g. This Order shall not be interpreted to award [Brenda] any future benefit increases that are provided or required by the Legislature.
h. In the event that after the date of this Order, the amount of any benefit otherwise payable to [Thomas] is reduced by law, the portion of benefits payable to [Brenda] shall be reduced by a proportionate amount.
(Emphasis added.) Neither party appealed the QDRO, and no post-judgment motion challenging the QDRO appears in the record.
On June 19, 1998, upon 20 years of service with the fire department, Thomas became eligible to retire. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 4(a) (Vernon Supp.2006). Rather than retire, however,
In approximately August 2003, Thomas retired. Shortly before then, on June 25, 2003, Brenda filed a motion for enforcement or for clarification of the divorce decree and later amended that motion. Among other things, Brenda argued that (1) the QDRO “reduced and materially altered” the division of the Fund benefits by excluding her from sharing in any portion of the DROP payments; (2) “a conflict” thus existed “between the provisions of the [divorce] decree and the QDRO,” so that the divorce decree’s award to her of a portion of the Fund’s retirement benefits “may not be specific enough to be enforceable by contempt” and should be “clarified”; and (3) she was also entitled to receive a portion of four other Fund benefits, which were not technically Thomas’s service-pension distributions, but which Thomas would receive at retirement from the Fund as part of his overall benefit. In all, Brenda sought an order clarifying that she was to receive not only her portion of the service-pension benefit that Thomas received (to which Thomas has never disputed that Brenda is entitled), but also a portion of the following Fund benefits, the dispute over which forms the basis of this appeal:
• the DROP funds, including a two percent increase in benefits accrued for each year of Thomas’s DROP participation, but excluding bi-weekly contributions that Thomas continued to make to the DROP account while working during DROP participation;4
• an annual three percent cost-of-living adjustment (“COLA”), applied to her portion of Thomas’s service-pension benefits and DROP account balance;
• a one-time, lump-sum payment of $5,000 that Thomas would receive upon retirement;5
• a $150 monthly supplemental payment, which Thomas would begin receiving upon retirement;6 and
• an annual supplemental payment benefit, also called the “13th-benefit payment,” which was intended to help pensioners of low income, and whichThomas could begin receiving upon retirement. 7
Thomas responded below that (1) res judicata and estoppel barred Brenda’s claim to the DROP funds and the COLAs because the 1996 QDRO, which she had not appealed, expressly precluded her receiving any of these benefits; (2) Government Code chapter 804 precluded her receiving a portion of the DROP funds;
In January 2004, after having held an evidentiary hearing, the trial court denied Brenda’s motion to enforce or to clarify and rendered a take-nothing judgment against her. At the time of the hearing, Brenda was receiving approximately $500 per month from the Fund, while Thomas was receiving approximately $2,000. Brenda filed a motion seeking a new trial, reconsideration, or reformation. The trial court denied the motion. The trial court did not enter fact findings or legal conclusions.
Standard of Review
We review the trial court’s ruling on a post-divorce motion for enforcement or clarification of a divorce decree under an abuse-of-discretion standard. See In re Marriage of McDonald,
The DROP Funds
Under issues one, two, and three, Brenda challenges the trial court’s denial of her motion to enforce or to clarify the divorce decree to the extent that that ruling denied her any portion of Thomas’s DROP funds.
A. The Terms of the DROP
The Fund’s summary plan description, like the statute on which the plan was based, provided that DROP participation, which was available to firefighters with 20 or more years of participation, would allow them “to accumulate, for up to ten (10) years, a separate sum of money toward retirement while still working as an active employee” and described that sum as a “cash amount for retirement to be paid in addition to your [the employee’s] monthly
When you enroll [in the DROP], you ‘lock in’ your service and benefit levels as of the date your participation in the DROP takes effect.... While you work, the Fund credits the value of your monthly retirement benefit (based on your service as of the date you entered the DROP) into a notional DROP account. ... As long as you participate, the value of the retirement benefit calculated for you upon entry into the DROP and your employee contribution amounts are credited to your account each month, and your account earns interest.
See id. § 5(b), (c).
The statute and plan also provided that, upon the firefighter’s actual retirement, the DROP account balances could be distributed in a lump sum, and the plan provided, alternatively, that the DROP sums could be left in the DROP account to accrue interest, less an administrative fee. See id. § 5(a), (e) (Vernon Supp.2006). Pursuant to both the statute and the plan, the firefighter’s monthly benefit at retirement would be increased two percent for every year of DROP participation, to be applied to the original service-pension benefit upon actual retirement, but not to be added to the DROP account. See id. § 5(a). In addition, the statute provided that
A member who has made a DROP election is not classified as retired, eligible to be paid, or eligible to accrue or to receive any benefit that is accrued or received by a member who has terminated active service ... unless the member who has made the DROP election has terminated active service.
Id. § 5(o) (Vernon Supp.2006).
B. The QDRO’s Provisions Concerning the DROP
The QDRO expressly precluded any portion of the DROP funds’ being paid to Brenda. Like the QDRO, the Fund’s policies and procedures provided that DROP “[c]ontributions (both monthly benefit payments and member contributions) to the member’s DROP account [would] not be affected by a QDRO applicable to the member.”
C. Brenda’s Collateral Attack
The QDRO, which was entered after the trial court’s plenary power over the divorce decree had expired, clearly precluded Brenda’s receiving any portion of the DROP funds. A QDRO is a final, appealable order. See, e.g., Reiss v. Reiss,
1. Brenda’s Arguments
Brenda recognizes these potential obstacles, but contends that she may nonetheless challenge the QDRO because hers is a collateral attack, which is not barred by res judicata or estoppel. Brenda reasons as follows: (1) the divorce decree awarded her a contingent interest in Thomas’s service-pension benefits, which included the DROP funds as a matter of law; (2) the QDRO conflicted with the divorce decree by impermissibly restricting the division of Thomas’s service-pension benefits by excluding the DROP funds from that property division; (3) the Family Code prohibits post-divorce orders that amend, modify, alter, or change the divorce decree’s property division; and (4) the QDRO is void for impermissibly having done so.
2. The Law of Collateral Attack
A collateral attack does not attempt to secure the rendition of a single, correct judgment in place of a former one, but, instead, seeks to avoid the effect of a judgment through a proceeding brought for some other purpose. Armentor v. Kern,
“ ‘Subject-matter jurisdiction may not be conferred by consent, waiver, or estoppel at any stage of a proceeding.’ ” Saudi,
3. The Validity of the QDRO’s DROP Provisions
If Brenda is correct that the QDRO is void to the extent that it barred her from sharing in a portion of the DROP funds, then she may challenge those QDRO provisions even at this late time and despite having relied on the QDRO previously. Otherwise, her challenge fails because of res judicata and estoppel. Therefore, we examine whether the QDRO’s challenged provisions are void.
a. The Trial Court’s Jurisdiction to Clarify and to Enforce the Divorce Decree
A court that rendered a divorce decree generally retains continuing subject-matter jurisdiction to clarify and to enforce the decree’s property division. Tex. Fam. Code Ann. §§ 9.002, 9.008 (Vernon 1998). Specifically, the court has continuing jurisdiction to “render further orders to enforce the division of property made in the decree of divorce ... to assist in the implementation of or to clarify the prior order.” Id. § 9.006(a) (Vernon 1998). Likewise, “[o]n a finding ... that the original form of the division of property is not specific enough to be enforceable by contempt,” the court has continuing jurisdiction to “render a clarifying order setting forth specific terms to enforce compliance with an original division of property.” Id. § 9.008(b) (Vernon 1998).
However, there are limitations on the enforcement and clarification powers of the court that rendered the divorce decree. For example, “[t]he court may specify more precisely the manner of effecting the property division previously made if the substantive division of property is not altered or changed.” Id. § 9.006(b) (Vernon 1998) (emphasis added). More specifically, the Family Code provides:
(a) A court may not amend, modify, alter, or change the division of property made or approved in the decree of divorce or annulment. An order to enforce the division is limited to an order to assist in the implementation of or to clarify the prior order and may not alter or change the substantive division of property.
(b) An order under this section that amends, modifies, alters or changes the actual, substantive division of property made or approved in a final decree of divorce or annulment is beyond the power of the divorce court and is unenforceable.
Id. § 9.007(a)-(b) (Vernon 1998) (emphasis added); see Shanks v. Treadway,
Thus, the court that rendered the divorce decree (or any other final order dividing property) also retains continuing, exclusive jurisdiction to render an enforceable QDRO (or similar order) “permitting payment of pension, retirement plan, or other employee benefits divisible ... to an alternate payee or other lawful payee.” Tex. Fam.Code Ann. § 9.101(a) (Vernon 1998). A party may petition the court for a QDRO in two circumstances: (1) the court has not previously issued a QDRO or similar order permitting payment of benefits from a pension, retirement, or other employee-benefits plan or (2) the plan ad
A QDRO is a species of post-divorce enforcement or clarification order. See Shanks,
The threshold issue is, thus, whether the trial court is without subject-matter jurisdiction to enter a postrdivorce order that violates Family Code section 9.007 by amending, modifying, altering, or changing the divorce decree’s property division because, if the court lacks subject-matter jurisdiction to enter such an order, then that order is void. See Saudi
Section 9.007(b) provides that orders amending, modifying, altering, or changing the divorce decree’s property division are “beyond the power of the divorce court,” and the section itself is entitled “Limitation on Power of Court to Enforce.” Tex. Fam.Code Ann. § 9.007(b) (emphasis added). Similarly, when describing section 9.007’s limitation on post-divorce enforcement and clarification, case law employs terms like “power,” “jurisdiction,” and “authority.”
b. The Divorce Decree’s Division of Thomas’s Retirement Benefits in the Fund, Including DROP Funds
For the above reasons, we must next determine whether the QDRO’s DROP provisions violated Family Code section 9.007 by conflicting with the divorce decree’s division of Thomas’s retirement-related benefits in the Fund. That is, we must determine whether the divorce decree’s division of these benefits included DROP funds, so that the QDRO impermis-sibly precluded Brenda from receiving them at any time. If these provisions of the QDRO and the divorce decree conflict, then the QDRO’s DROP provisions are void and unenforceable; Brenda may maintain a collateral attack to challenge them; Brenda is entitled to the portion of these monies awarded her in the divorce decree; and the trial court could enter a clarifying order so providing. In contrast, if these provisions of the QDRO and divorce decree do not conflict, then the QDRO’s DROP provisions are valid; Brenda’s collateral attack against them will fail; Brenda is not entitled to any portion of the DROP funds; and the trial court did not abuse its discretion in denying her motion to enforce or to clarify for that reason.
“When interpreting a divorce decree, courts apply the general rules regarding construction of judgments.” Shanks,
The divorce decree awarded Brenda “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” Nothing in the plain language of the divorce decree excluded benefits such as DROP funds from the division of Thomas’s retirement-related benefits in the Fund. Moreover, the decree provides that Brenda receive half of the “Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS,” not
In fact, this language is broad enough to award Brenda half of all of Thomas’s benefits in the Fund, not just those that could be considered community property. The Texas Supreme Court has generally adopted the following formula for determining a non-employee spouse’s community-property award of the employee spouse’s defined-benefit plan when the latter began plan participation during marriage, but retired after divorce: 50% x [ (number of months married and in plan) -h (number of months in plan at time of retirement) ] x (monthly benefit that employee would have received at divorce date, whether then eligible to retire or not). See Berry v. Berry,
We disagree with Thomas that the phrase “standing in the name of THOMAS E. GAINOUS” can be construed to mean “on the day of divorce” and thus may be read to preclude the DROP funds from Brenda’s award simply because Thomas was not then eligible to elect to receive them, i.e., he did not then have 20 years of service. Even if contingent benefits’ un-vested status during marriage could somehow be equated with their non-existence during marriage,
We further disagree with Thomas that the absence in the divorce decree of language such as “if, as, and when received by Thomas” indicated that the decree was intended to divide only those Fund benefits existing on the divorce date. The Shanks court recently concluded that phrases like that quoted immediately above are not terms of art evidencing an intent to value a pension plan at the time of receipt, rather than at the time of divorce; instead, they merely reflect the
We hold that the divorce decree unambiguously included the DROP funds in its award to Brenda of “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” Because the QDRO precluded Brenda from receiving any portion of Thomas’s DROP funds at any time, the QDRO impermissibly altered the decree’s property division and was void to the extent that it did so. See Tex. Fam.Code Ann. § 9.007(b). Because the QDRO’s provision excluding the DROP funds from Brenda’s award was void, Brenda could properly challenge it by collateral attack, and res judicata and estoppel did not bar her challenge.
D. Disposition
For these reasons, we hold that the trial court abused its discretion by misconstruing the divorce decree as not having divided Thomas’s DROP funds and, therefore, that the court also abused its discretion by denying Brenda’s motion to enforce or to clarify to the extent that she sought a portion of Thomas’s DROP funds. We sustain issues one through three to the extent that they challenge the trial court’s refusal to enter an order enforcing or clarifying the divorce decree’s award to her of a portion of Thomas’s DROP funds.
The COLAs
Also under issues one, two, and three, Brenda challenges the trial court’s denial of her motion to enforce or to clarify to the extent that that ruling denied COLA increases to her portion of Thomas’s service-pension benefits and of his DROP account balance.
Article 6243e.2(l) does not expressly mention COLAs, but Brenda’s expert explained that COLAs were “non-statutory” benefits that the Fund had discretion to adopt under authority generally allowing increases to the Fund’s benefits under certain circumstances. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 10 (Vernon Supp. 2006) (entitled “Nonstatutory benefit increases”). The Fund’s summary plan description contained the following provisions concerning COLAs:
Upon reaching eligibility, benefits (including survivor benefits) from the plan will be adjusted each year by a 3% Cost of Living Adjustment, or COLA. This adjustment will be added to your monthly benefit:
• Starting with the October after you ... retired if you were 48 years of age at the date of retirement.
• On your 48th birthday....
If you are eligible for [COLAs] that are made during your participation in the DROP, your monthly pension benefit (being made to your DROP account) will be adjusted by the value of the COLA.
The 1996 QDRO expressly precluded the application of COLAs to Brenda’s portion of Thomas’s service-pension benefits (and of Thomas’s DROP benefits, as well, because the 1996 QDRO excluded DROP funds altogether): “The amount payable to [Brenda] under Paragraph 5 shall not be increased by any cost of living adjustments made to [Thomas’s service-pension or DROP] benefits] after the date [of divorce].”
Brenda again raises a collateral attack, arguing that the QDRO’s COLA provision is void because the divorce de
As noted above regarding the DROP, nothing in the plain language of the divorce decree excluded benefits like COLAs from the division of Thomas’s retirement-related benefits in the Fund. And as we recognized above, the decree provided that Brenda receive half of the “Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS,” not simply half of Thomas’s service-pension benefits. Finally, for the reasons set out above, we also reject Thomas’s arguments that the decree’s phrase “standing in the name of THOMAS E. GAINOUS” can be equated with “on the day of divorce” or that the lack of language like “if, as, and when received” limited the portion or value of Brenda’s award to the date of divorce. We thus hold that the divorce decree’s language is broad enough to include COLAs to her portion of Thomas’s service-pension benefits and DROP account under the Fund, regardless of whether the COLAs can be considered community or separate property.
We thus hold that the divorce decree unambiguously included COLAs to Thomas’s service-pension benefits and DROP funds under the Fund in its award to Brenda of “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAI-NOUS.” Because the QDRO excluded COLAs from being applied to any award of Thomas’s service-pension and DROP benefits that Brenda would receive at any time, the QDRO impermissibly altered the decree’s property division and was void to the extent that it did so. See Tex. Fam.Code Ann. § 9.007(b). Because the QDRO’s provision excluding these COLAs from Brenda’s award was void, Brenda could properly challenge it by collateral attack, and res judicata and estoppel did not bar her challenge.
For these reasons, we hold that the trial court abused its discretion by misconstruing the divorce decree as not having divided Thomas’s COLAs on a portion of Thomas’s service-pension and DROP benefits and, therefore, that the court also abused its discretion by denying Brenda’s motion to enforce or to clarify to the extent that she sought COLAs on a portion of those benefits. We thus sustain issues one through three to the extent that they challenge the trial court’s refusal to enter an order enforcing or clarifying the divorce decree’s award to her of COLAs on a portion of those benefits.
The Remaining Benefits
Finally under issues one, two, and three, Brenda challenges the trial court’s denial
A. The Divorce Decree’s Language
As with the other benefits discussed herein, the divorce decree’s award of “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAI-NOUS” does not expressly exclude these benefits from the property division; awards Brenda a half interest in “the ... Fund,” rather than in simply Thomas’s service-pension benefits; and cannot be read to restrict Brenda’s interest to that existing on the date of divorce. Accordingly, whether these benefits were community or separate property, the divorce decree gave half of them to Brenda.
B. Disposition
We hold that the trial court abused its discretion by misconstruing the divorce decree as not having divided Thomas’s onetime $5,000 lump-sum payment, the $150 monthly supplemental payment, and the 13th-benefit payment and, thus that the court also abused its discretion by denying Brenda’s motion to enforce or to clarify to the extent that she sought a portion of these three benefits. We thus sustain issues one through three to the extent that they challenge the trial court’s refusal to enter an order enforcing or clarifying the divorce decree’s award to her of these three remaining benefits.
Government Code Section 804.003(g)(7)
Under issue four, Brenda argues that the trial court’s judgment, to the extent that it concerns the DROP funds and COLAs, cannot be supported by an implied legal conclusion that Government Code section 804.003(g)(7) precluded the award of any of these funds to her. See Tex. Gov’t Code Ann. § 804.003(g)(7) (Vernon 2004).
Section 804.003(g)(7) provides that a public retirement system “may reject a domestic relations order as a [QDRO] unless the order ... does not purport to award any future benefit increases that are provided or required by the legislature ” Tex. Gov’t Code Ann. § 804.003(g)(7) (Vernon 2004). The Fund’s policies and procedures provided that DROP contributions would not be affected by a QDRO. The 1996 QDRO provided, “This Order shall not be interpreted to award [Brenda] any future benefit in
Thomas argued below that section 804.003(g)(7) allowed the Fund to prevent Brenda from obtaining any QDRO at any time awarding her a portion of the DROP funds or a portion of COLAs on his service-pension benefits and DROP funds. In support, Thomas reasoned that, because the DROP account did not exist until after the divorce, that account was allegedly his separate property; thus, Thomas concluded, the account was also a “future benefit increase[ ] ... provided or required by the legislature,” and the Fund (and thus the trial court) could properly reject any QDRO purporting to make such an award — such as the one that Brenda sought by her 2003 motion to enforce or to clarify. He argued below that section 804.003(g)(7) precluded post-divorce COLAs for the same reasons.
By its plain terms, section 804.003(g)(7) has nothing to do with whether a trial court may apportion future contingent retirement benefits like these in a divorce decree or whether these types of contingent benefits are community or separate property. A more reasonable interpretation of section 804.003(g)(7) than Thomas’s is that section 804.003(g)(7) allows a public retirement system to reject a QDRO that awards this type of benefit increase when, at the time that the QDRO is obtained, that benefit increase has not yet matured or accrued. Once Thomas retired in approximately August 2003, the Fund could no longer reject, under section 804.003(g)(7), a QDRO concerning Thomas’s DROP funds and any COLA increases to Brenda’s portion of Thomas’s service-pension benefits and DROP account balance.
To read section 804.003(g)(7) as Thomas does potentially allows a public retirement system to refuse to qualify a domestic relations order that validly apportions matured retirement benefits that an unap-pealed divorce decree awarded to the non-employee spouse-properly or improperly. We do not deem the Legislature to have intended such an absurd result. See Tex. Gov’t Code Ann. §§ 311.021(3) (Vernon 2005) (“In enacting a statute, it is presumed that: ... (3) a just and reasonable result is intended.... ”); 311.023(4), (5) (Vernon 2005) (“In construing a statute, ... a court may consider among other matters the: ... (4) common law ..., including laws on the same or similar subjects; [and] (5) consequences of a particular construction.... ”).
We sustain issue four.
Conclusion
We reverse the judgment and remand the cause for the trial court for further proceedings consistent with this opinion.
Justice KEYES, concurring.
Justice HANKS, concurring in the judgment.
Notes
. The Houston Firemen’s Relief and Retirement Fund is now known as the Houston Firefighter’s Relief and Retirement Fund. Williams v. Houston Firemen’s Relief & Ret. Fund,
. The “service-pension benefit” was the basic monthly pension benefit, in which a firefighter vested after 20 years of active service, that was calculated pursuant to, among other things, a formula based on years of service and average salary. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 4(a)-(b) (Vernon Supp. 2006).
. Brenda’s expert calculated that Brenda’s interest in the DROP funds was $34,682.86 as of the same date.
. The Fund plan, as required by applicable statute, provided that firefighters who participated in the DROP would still make bi-weekly pension contributions. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 5(b) (Vernon Supp. 2006); see also id. § 13(c) (Vernon Supp. 2006). Recognizing that these bi-weekly pension contributions were Thomas's separate property, Brenda advised the trial court that she was not seeking a portion of them.
. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 10B (Vernon Supp.2006).
. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 4(d) (Vernon Supp.2006).
. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), § 10A (Vernon Supp.2006).
. See Tex. Gov’t Code Ann. § 804.003(g)(7) (Vernon 2004).
. See id.
. Brenda's expert explained that DROPs existed to allow certain federal tax benefits while an employee who is eligible for retirement continued to work.
. However, the Policies and Procedures also provided that "[pjursuant to a QDRO, if an Alternate Payee is specifically awarded a dollar amount or a percentage of the member’s DROP account, such amount or percentage will be distributed ... in accordance with the member’s election.”
. Brenda also argues that the QDRO’s DROP provisions are void because "there is no evidence” that whoever petitioned for the QDRO obtained service by citation on the other party. See Tex. Fam.Code Ann. § 9.102(c) (Vernon 1998). However, we must presume that the QDRO was valid (that is, that service of citation occurred), and the burden was on Brenda to show otherwise. See Stewart v. USA Custom Paint & Body Shop, Inc.,
. See Shanks v. Treadway,
. Thomas views the DROP funds as his separate property because (1) the DROP account did not begin until after the divorce and (2) retirement benefits that are attributable to post-divorce employment are separate property. That is, Thomas views the DROP funds as wholly new benefits that sprang into existence when he became eligible to retire. In contrast, Brenda views the DROP funds as community property because (1) eligibility to participate in the DROP is based upon years of service, most of which occurred during the marriage, and (2) the monies paid into Thomas’s DROP account (with the exception of Thomas’s contributions during DROP participation) were merely deferred retirement benefits being held for him, and allowed to accrue interest, until he retired. That is, Brenda views the DROP funds not as wholly new benefits that sprang into existence when Thomas became eligible to retire, but, to-stead, as deferred service-pension benefits (plus interest and COLAs) that Thomas merely allowed the Fund to keep until he left this employment.
The Fourteenth Court of Appeals, in a well-reasoned opinion adopting the position that Brenda takes here, has concluded that DROP funds paid as a benefit under a defined-benefit plan are community property, subject to just and right division to the extent that they were earned during marriage, with the exception of the employee spouse’s post-divorce contributions. See Stavinoha v. Stavinoha,
. We recognize that, in addition to using the decretal language cited above, the trial court recited elsewhere in the Gainouses’ divorce decree that it was dividing the "estate of the parties,” i.e., the community-property estate. However, as indicated in the parenthetical above, the Reiss court construed a very similar decree to divide half of all retirement-plan benefits when the decree’s decretal language purported to divide all of that asset, despite the decree’s also having recited that the court was dividing “community property” and that the disputed retirement-plan benefits were part of that community property. See Reiss v. Reiss,
Justice Hanks, in his concurring opinion, indicates that he joins only the judgment of the Court because he disagrees with Reiss. However, whether we disagree with Reiss is irrelevant: it is binding precedent that cannot be distinguished from this case.
. But see Cearley v. Cearley,
. As it did with DROP funds, the Stavinoha court held that COLAs were contingent community property subject to division for the reason that they were granted upon eligibility to retire, which was governed by years of service (some of which occurred during the community's existence), and were not increases due to continued employment. Stavinoha,
. Article 6243e.2(l) provided that each of these three benefits would be paid to a firefighter who retired. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l), §§ 4(d), 10A, 10B (Vernon Supp.2006). A firefighter was not eligible for retirement until he had at least 20 years of participation in the Fund. Id. § 4(a). For this reason, the Stavinoha court held that such benefits are community property-to the extent that the employee's years towards retirement were earned during the marriage-subject to division. See Stavinoha,
. Thomas’s response to Brenda’s motion to enforce or to clarify asserted section 804.003(g)(7) against only her request for a portion of his DROP funds and COLAs. He did not argue that that section precluded the entry of a QDRO awarding the three other contested benefits. The issue of whether section 804.003(g)(7) and the Fund’s policies precluded a QDRO awarding Brenda a portion of the three remaining benefits does not appear to have been litigated below, and the issue thus does not appear to have been a basis for the court’s judgment, which did not recite the bases on which it was rendered. To the extent that the trial court could be construed as nonetheless having implicitly ruled on section 804.003(g)(7)'s effect on Brenda's request for a QDRO concerning the three remaining benefits, however, Brenda's challenge concerning that implicit ruling under section 804.003(g)(7) would be controlled by our discussion here.
Concurrence Opinion
concurring.
I withdraw my dissenting opinion issued August 24, 2006 and substitute this concurring opinion in its stead. I join the opinion of the panel on rehearing. I write separately to express my reasons for concluding that the divorce decree awarded Brenda a vested interest in one-half of the total amount of Thomas’s future contingent interest in the Houston Firemen’s Relief and Retirement Fund (“the Fund”).
Clarification of the 1995 Divorce Decree
The Gainouses’ divorce decree, entered in 1995, provided that, as part of “a just and right division of the parties’ marital estate”:
[BRENDA] is awarded the following as [her] sole and separate property, and [THOMAS] is hereby divested of all right, title, interest, and claim in and to such property:
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5. One-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.
The trial court orally rendered judgment construing the divorce decree as awarding Brenda one-half of Thomas’s interest in the Fund “as of the date of divorce.”
Brenda contends that the plain language of the 1995 divorce decree awarded to her at the time of the divorce, as her separate property, a present one-half interest in the future contingent retirement benefits standing in Thomas’s name in the Fund, to become effective at the time of Thomas’s retirement, apportioned to the years of marriage during which those future benefits were accruing, including her portion of (1) Thomas’s Deferred Retirement Option Plan (“DROP”) funds, (2) Cost-of-Living-Adjustment (“COLA”) benefits earned during the marriage, (3) a one-time $5,000 lump-sum payment made at Thomas’s retirement, (4) a $150 supplemental payment, and (5) an annual supplemental payment benefit called the “13th-benefit payment.”
Thomas contends that the disputed benefits were properly denied by the 1996 Qualified Domestic Relations Order (“QDRO”) because the decree awarded Brenda only one-half of the retirement benefits present in the Fund as of the date of the divorce. He argues that his DROP account, COLAs, 13th-benefit payments, supplemental payment, and lump-sum payment all constitute future contingent benefits that were not part of the community estate divisible on the date of the divorce because not even a contingent, unvested entitlement to those specific benefits existed until after the divorce; thus, he argues, they constitute his separate property under the terms of the decree and are not divisible.
The task for this Court, therefore, is to determine, as a matter of law, (1) whether Brenda’s half of Thomas’s interest in the retirement plan, awarded to her at the
Terms of the Gainouses’ 1995 Divorce Decree
“When interpreting a divorce decree, courts apply the general rules regarding construction of judgments.” Shanks v. Treadway,
The literal language of the divorce decree in this case awards Brenda as her separate property, as of the date of divorce, a present vested interest in “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” As of the date of divorce, there were no accrued and matured retirement benefits standing in Thomas’s name in the Fund. Nor does anything in the language of the divorce decree limit Brenda’s award of Thomas’s future contingent retirement benefits to one-half of the type of retirement benefits available to firefighters who retired in 1995 or to the value of those particular assets as of 1995. Therefore, Brenda was necessarily awarded a future contingent interest in the total amount of Thomas’s retirement benefits when they vested and became available for distribution as his portion of the Fund, ie., at his retirement. This conclusion is supported by well-established Texas law.
Treatment of Future Contingent Retirement Benefits Under Texas Law
Neither Texas statutory law nor common law either expressly or implicitly prohibits trial courts from awarding in a divorce decree future contingent benefits earned during the marriage. To the contrary, under established Texas law, unac-crued and unmatured retirement benefits earned wholly or partially during marriage “constitute a contingent interest in property and a community asset subject to consideration along with other property in the division of the estate of the parties under [the predecessor to section 7.001] of the Family Code.” Cearley v. Cearley,
In Cearley, the divorce decree awarded the former wife a fractional interest in the former husband’s future military retirement benefits if and when he received
The supreme court has never overruled Cearley or determined that future contingent benefits cannot be awarded at the time of divorce. To the contrary: Cearley is still good law. Subsequently, however, in Taggart, the supreme court was faced with the problem of a divorce decree that divided community property, but failed to divide future contingent retirement benefits that had accrued during the life of the community. Taggart,
In Berry v. Berry,
Since developing the Taggart/Berry formula for judicially apportioning future contingent retirement benefits not divided in a divorce decree, the supreme court has twice considered whether to apply the Taggart/Berry formula in interpreting a divorce decree that is not silent as to the division of future contingent retirement benefits, but expressly apportions those benefits in terms inconsistent with the
In both Shanks and Reiss, rather than impute to the divorce decree the Tag-gart/Berry formula for apportioning future contingent retirement benefits, the supreme court interpreted the decree according to its literal terms — even though, in both cases, the divorce decree awarded to the non-employee spouse an unqualified interest in future contingent retirement benefits and, thereby, necessarily awarded that spouse a portion of the employee spouse’s post-divorce benefit increases that were properly construed as separate property. See Reiss,
The court opined in Shanks:
The fact that the plan’s value may have increased since the divorce does not affect the decree’s plain language, which simply cannot reasonably be construed to award [the non-employee spouse] an interest only in the plan benefits that had accrued on the date of divorce. Whether intentional or not, the court that entered the decree failed to limit the community interest pursuant to the Taggart apportionment fraction and instead clearly gave [the non-employee spouse] a twenty-five percent interest in the total amount (whatever that might be) to be paid to [the employee spouse] under the plan.
Id. Similarly, in Reiss, the supreme court acknowledged that by awarding the wife half of her husband’s total retirement benefits “if and when” he retired, the trial court had mistakenly classified all of the former retirement benefits as community property, rather than as part separate property and part community property, and had thus mistakenly awarded the former wife a portion of her former husband’s separate property.
Conclusion
Accordingly, I join in the panel’s opinion and conclusion that, under its literal language, the divorce decree awarded Brenda at the time of the divorce a future contingent interest in “[o]ne-half (1/2) of the [total amount of the] Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS” at the time of his retirement, including a one-half interest in the DROP funds; the COLAs; the one-time, lump-sum payment of $5,000; the $150 monthly supplemental payment; and the 13th-benefit payment.
. Each of these benefits was provided, like Thomas’s entire interest in the Fund, pursuant to article 6243e.2(l) of the Texas Revised Civil Statutes, governing firefighters' benefits. See Tex.Rev.Civ. Stat. Ann. art. 6243e.2(l) (Vernon Supp.2006).
. Thomas pointed out that section 804.003(g)(7) of the Government Code expressly provides that a public retirement system may reject a QDRO that purports to award "future benefit increases that are provided or required by the Legislature." Tex. Gov’t Code Ann. § 804.003(g)(7) (Vernon 2004). As our opinion explains, however, section 804.003(g)(7) applies to QDROs — not to divorce decrees. See id. There is no such limitation on divorce decrees.
. The Shanks decree awarded the wife "a 'pro-rata interest’ ... of any and all sums received or paid to” the husband from his pension plan. Shanks v. Treadway,
Concurrence Opinion
concurring.
I withdraw my concurring opinion issued August 24, 2006 and substitute this opinion in its stead.
I join the judgment only, and I write separately and respectfully to express my disagreement with the Texas Supreme Court’s opinion in Reiss v. Reiss,
The majority opinion in Reiss would require us to conclude that the Gainouses’ divorce decree awards one-half of Thomas’s separate property to Brenda — something that, as a matter of law, she could not have received in the divorce decree. See Reiss,
It is well established that, when construing a divorce decree, we read the decree as a whole. Constance v. Constance,
In this case, the majority opinion in Reiss instructs us to focus on only one sentence of the decree, which states that Brenda is to receive “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” See Reiss,
9. Division of Marital Estate
The Court finds that the following is a just and right division of the parties’ marital estate, having due regard for the rights of each party and the child of the marriage.
IT IS ORDERED AND DECREED that the estate of the parties is divided as follows:
Petitioner is awarded the following as Petitioner’s sole and separate property, and Respondent is divested of all right, title, interest and claim in and to such property:
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6. One-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.
(Emphasis added.) The case before us is factually distinguishable from Shanks v. Treadway,
Here, the language of the decree provides that Brenda is entitled to receive “[o]ne-half (1/2) of the Houston Firemen’s Relief and Retirement Fund standing in the name of THOMAS E. GAINOUS.” Nevertheless, when construed in the context of the entire decree, it is unreasonable to conclude that this language awards Brenda an interest in the entirety of Thomas’s retirement benefits, including that portion representing his separate property. The decree’s structure and plain language, from beginning to end, evidence an intent to divide only the couple’s community property. This construction is also consistent with Texas law at the time of the Gainouses’ divorce. See Eggemeyer v. Eggemeyer,
The decree, when read in its entirety, unambiguously awards Brenda one-half of only the community portion of Thomas’s retirement benefits. Accordingly, I concur only with the judgment.