Linda L. VACCARO, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT, Respondent.
No. 00-3274
United States Court of Appeals, Federal Circuit
Aug. 17, 2001.
262 F.3d 1280
Mark L. Josephs, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for respondent. With him on the brief were David M. Cohen, Director; and Donald E. Kinner, Assistant Director. Of counsel on the brief was Earl A. Sanders, Attorney, Office of General Counsel, Office of Personnel Management, of Washington, DC.
Before MICHEL, SCHALL, and DYK, Circuit Judges.
SCHALL, Circuit Judge.
Linda L. Vaccaro petitions for review of the final decision of the Merit Systems Protection Board (“Board“) that affirmed the denial by the Office of Personnel Man-
BACKGROUND
I.
Pursuant to thе provisions of the Civil Service Retirement Spouse Equity Act of 1984,
(1) Subject to paragraphs (2) through (5) of this subsection, a former spouse of a deceased employee [or] annuitant2 is entitled to a survivor annuity under this subsection, if and to the extent expressly provided for ... in the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.
* * *
(4) For purposes of this subchapter, a modification in a decree, order, [or] agreement referred to in paragraph (1) of this subsection shall not be effective—
(A) if such modification is made after the retirement or death of the employee ... and
(B) to the extent that such modification involves an annuity under this subsection.
II.
The pertinent facts can be briefly stated: The Vaccaros married in 1974. In 1981, Mr. Vaccaro retired from his employment with the United States Postal Service. In his application for retirement, he elected to receive a reduced monthly annuity payment so that his spouse would be entitled to a survivor annuity. Mr. Vaccaro received reduced annuity payments from the date of his retirement until his divorce fifteen years later.
Ms. Vaccaro filed fоr divorce in 1996. On August 9, 1996, the Superior Court of the State of California, County of Del Norte, entered a judgment of dissolution of the Vaccaros’ marriage. The judgment stated that the parties were “ordered to comply with the terms and provisions of attachment ‘3.g.‘” Attachment “3.g.” was a marital property agreement. The agreement listed the community property of Mr. and Mrs. Vaccaro on the date of their separation. Among the items of property listed was “Community interest in husband‘s postal retirement.”3 The agreement then proceeded to divide the community property. Mr. Vaccaro‘s civil service retirement was addressed as follows:
Division of community interest in the Federal Employee‘s Civil Service Pension is deferred so long as Respondent pays to Petitioner as and for spousal support the sum of not less than Three
Hundred ($300) Dollars per month. The court retains jurisdiction over this asset to insure [Ms. Vaccaro] receives her share of the community interest in the retirement.
Mr. Vaccaro died on March 7, 1997. On March 25, 1997, upon Ms. Vaccaro‘s motion, the California court awarded Ms. Vaccaro a former spouse survivor annuity. The order stated in pertinent part: “Having reserved jurisdiction over Respondent‘s Federal Employee Civil Service Pension, the court hereby awards to Petitioner all benefits as surviving spouse of Angelo Vaccaro.”
On March 26, 1997, Ms. Vaccaro filed with OPM an application for a survivor annuity based upon the March 25, 1997 order of the California court. In a reconsideration decision dated August 21, 1998, OPM denied the application. After citing
Your divorce decree did not award you a former spouse survivor annuity nor did it direct Mr. Vaccaro to elect to provide you a former spouse survivor annuity. The court order dated March 25, 1997, is not qualifying for awarding you a former spouse survivor annuity since it was issued after the first court order that divided marital property between you and Mr. Vaccaro. It was also issued after his death. Thus, you are not eligible for a former spouse survivor annuity as the former spouse of Mr. Vaccaro.
Ms. Vaccaro appealed to the Board. In an initial decision dated December 15, 1998, the administrative judge to whom the appeal was assigned ruled that OPM‘s reconsideration decision was in accordance with
DISCUSSION
I.
Our scope of review in an appeal from a decision of the Board is limited. Specifically, we must affirm the Board‘s decision unless we find it to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; obtained without procedures required by law, rule, or regulation having been followed; or unsupported by substantial evidence.
Ms. Vaccaro raises two arguments on appeal. First, she contends that the March 25, 1997 order of the California court that awarded her a survivor annuity should be given effect under
II.
As noted above, under the CSRSEA, a former spouse of a deceased annuitant is entitled to a survivor annuity “if and to the extent expressly provided for ... in the tеrms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.”
a modification in a decree, order, [or] agreement ... referred to in [5 U.S.C. § 8341(h)(1)] shall not be effective if such modification is made after the retirement or death of the employee ... and to the extent that such modification involves an annuity under this subsection.
It is clear that the 1996 divorce decree did not award Ms. Vaccaro a survivor annuity. It also is clear that the 1997 order of the California court was entered after Mr. Vaccaro‘s death and involved an annuity under
In addressing the question before us, we do not write upon an entirely clean slate. In Newman v. Love, 962 F.2d 1008, 1010 (Fed.Cir.1992), we addressed the provisions of the CSRSEA that are at issue in this case. Love involved two separate petitioners, each with two court orders, one order that dissolved the marriage and the other that divided the marital property. The two initial divorce decrees in Love expressly provided that all matters relating to рroperty division were excluded from the decrees and were reserved by the state courts for future consideration and judicial disposition in bifurcated proceedings. Id. In subsequent divorce proceedings, the former husbands in Love sought to provide post-divorce financial protection for their former spouses in the form of survivor annuities. Id. When the surviving spouses sought to implement the survivor annuities memorialized in the state court orders, OPM denied the applications. Id. The case came to us as an appeal by OPM from the decision of the Board reversing OPM‘s reconsideration decisions and directing OPM to award the two surviving spouses the survivor annuities for which they had applied.
We framed the issue before us in Love as “whether a decree of divorce which dissolves a marriage, but does nothing with respect to property, is modified for purposes of § 8341(h)(4) by a subsequent court order which for the first time addresses the issue of property division and settlement.” Love, 962 F.2d at 1011. Looking to the dictionary, we stated that the plain meaning of the word “modification” is “a change or alteration or limitation.” Id. Armed with that definition, we concluded that the bifurcated orders in Love, which were the initial orders dividing the marital property, did not “alter or limit the terms or effect of the previously entered decrees of divorce, which dissolved the marriage[s].” Id. The reason was that the bifurcated orders did not “change, alter or limit anything.” Accordingly, we held that OPM‘s reconsideration decisions denying implementation of the bifurcated orders that awarded survivor annuities were contrary to
We had occasion to consider the same provisions of the CSRSEA again in Hokanson v. Office of Personnel Management, 122 F.3d 1043 (Fed.Cir.1997). In Hokanson, the final judgment and decree of divorce, which was issued in the State of Idaho and which divided the marital property, issued on September 19, 1990. 122 F.3d at 1044. The 1990 decree included the following awards:
As her portion of said civil service retirement benefits, [Mrs. Hokanson] shall be paid the sum of $556 per month.... The balance of [the] civil service retirement benefits shall be paid to [Mr. Hokanson].
Id. at 1044-45. The 1990 divorce decree was supplemented by an amended judgment on April 5, 1991.
Mr. Hokanson died on September 26, 1994, before retiring from federal service. Consequently, Ms. Hokanson never received any payments from the expected retirement annuity. Id. After OPM denied her request for a former spouse survivor annuity on the ground that the divorce decree did not expressly provide for such an annuity, as required by
On appeal, we affirmed the Board‘s decision. We pointed out that
Turning to Ms. Hokanson‘s divorce decree, we noted that the decree did not provide Ms. Hokanson with a “former spouse annuity” or “death benefits,” or designate her as the “beneficiary” of any such benefits. Id. at 1046. We reasoned that, “as Mr. Hokanson was to receive the bаlance of the annuity,” it was “clear that the decree did nothing more than divide his retirement annuity.” Id. We continued: “That annuity, including Ms. Hokanson‘s share, would cease upon his death. Such an award is insufficient to provide Ms. Hokanson with a survivor annuity.” Id. In our decision, we rejected Ms. Hokanson‘s argument that any deficiencies in the 1991 decree were rectified in the Idaho court‘s 1996 “clarification order.” In so doing, we concluded that the 1996 order could have no effect as far as awarding Ms. Hokanson a survivor annuity was concerned. We stated: “Because the 1991 amended divorce decree divided the marital assets, including the retirement benefits, the 1996 order is properly considered a ‘modification’ of that decree and is therefоre ineffective for purposes of awarding Ms. Hokanson a former spouse survivor annuity under
When, as was the case in Love, a divorce decree provides that matters relating to property division are reserved for future consideration and judicial disposition, the divorce proceedings are bifurcated. In such a case, when the subsequent proceedings divide marital property, including civil service retirement annuity benefits, and provide for a survivor annuity in the manner required by
In this case, the 1996 decree did not meet the requirements of
The 1997 order changed the 1996 decree. It did so because it added a survivor annuity to a decree that (i) divided various specified items of marital property; (ii) provided for a monthly payment of a portion of Mr. Vaccaro‘s retirement annuity; (iii) deferred division of the retirement annuity and retained jurisdiction over it in order to ensure that Mr. Vaccaro kept up his monthly payments to Ms. Vaccaro; and (iv) made no mention of a survivor annuity. The 1997 order was ineffective as a matter of law under
III.
We turn now to Ms. Vaccaro‘s second argument on appeal. Within two years after the date of their divorce, Mr. Vaccaro could have elected to have Ms. Vaccaro receive a survivor annuity as his former spouse. See
The Vaccaros were divorced in August of 1996. In October of that year, OPM sent Mr. Vaccaro a notice stating that,
On appeal, Ms. Vaccaro contends that the administrative judge‘s finding that there was insufficient evidence that Mr. Vaccaro intended to provide a survivor annuity for her is not supported by substantial evidence. She argues that, while her hearing testimony may indicate that she believed that SF-2808 could be used to elect the survivor bеnefit, it does not indicate that Mr. Vaccaro understood that the form could be used for the election. However, the administrative judge‘s interpretation of Ms. Vaccaro‘s testimony is reasonable in that her testimony indicated that she and Mr. Vaccaro understood that Mr. Vaccaro had to affirmatively act in order to preserve her right to survivor benefits.9
In fact, the Vaccaros’ daughter stated that in his last days, Mr. Vaccaro indicated that he wanted to “put [Ms. Vaccaro] back on his survival benefit [sic] to make sure my mother was taken care of.” (Lintner Aff. at 1). In addition, the Vaccaros’ son stated that his father “intended to place my mom back on his survival benefits however time wouldn‘t allow it.” (Vaccaro Aff. at 1). While both stаtements indicate that Mr. Vaccaro may have intended for his wife to receive a survivor annuity, the statements also indicate that he understood that affirmative action on his part was required in order to accomplish that result. However, Mr. Vaccaro never acted upon that knowledge, even though he did take steps to place Ms. Vaccaro‘s name on his checking and savings accounts. Additionally, no medical evidence in the record substantiates Ms. Vaccaro‘s claim that Mr. Vaccaro was too ill to make the intended election. In fact, as noted, Carl Potter, the Vaccaro‘s neighbor, testified that Mr. Vaccaro was lucid and rational at the time of his death. Substantial evidence thus suрports the decision of the administrative judge.
CONCLUSION
For the foregoing reasons, the final decision of the Board sustaining OPM‘s denial of Ms. Vaccaro‘s application for a survivor annuity is AFFIRMED.
No costs.
DYK, Circuit Judge, dissenting.
I respectfully dissent. The majority opinion holds that state court divorce decrees, if they dispose of any marital property, cannot effectively reserve for future decision the disposition of federal survivor annuities. This approach is inconsistent with this court‘s decision in Newman v. Love, 962 F.2d 1008 (Fed.Cir.1992), with the language and purpose of the survivor annuity statute (
In Love, the Office of Personnel and Management appealed two Board decisions concerning Ms. Love and Ms. Penn, and this court consolidated the cases for appeal. Love, 962 F.2d at 1009. In the case involving Ms. Love, an еarlier state court order had dissolved her marriage to a federal retiree without making any disposition of survivor annuities. Id. at 1010. The divorce decree specifically “ordered that all matters relating to property division and alimony are hereby reserved by the court for future consideration and decision.” Two subsequent state court orders, entered on the same date, approved a property settlement between the parties and provided for a survivor annuity upon the death of Mr. Love, respectively. Id. at 1010. In the case involving Ms. Penn, the initial court order dissolving the divorce “retired this matter [i.e., the divorce] ... except for the entry of such future orders as may be necessary concerning equitablе distribution.” The state court later entered an order dividing the parties’ marital property and awarding a survivor annuity to Ms. Penn. We held that the subsequent state court orders in both cases awarding a survivor annuity to the former spouses were effective pursuant to
Here, as in Love, the initial court order made no disposition of the survivor annuity, but instead reserved resolution of the issue for the future. Thus this case is
Nothing in Hokanson v. Office of Personnel Management, 122 F.3d 1043 (Fed.Cir.1997), relied on extensively in the majority opinion, purported to change the decision in Love, nor could it do so. In Hokanson, the initial state court order precluded any award of a survivor annuity. Id. at 1044. The initial court order awarded Ms. Hokanson, “as her portion of said civil service retirement benefits, ... the sum of $556 per month.” Id. at 1044-45 (emphasis added). It also stated that “[t]he balance of [the] civil service retirement benefits shаll be paid to [Mr. Hokanson].” Id. at 1045 (first brackets added; second and third brackets in original). The initial order made no reservation of the survivor annuity issue. We held that a subsequent order awarding Ms. Hokanson a survivor annuity was a “modification” because the provision of a survivor annuity was inconsistent with the express terms of the initial order. Id. at 1048. This case is governed by Love, not Hokanson.
The decision today is also directly contrary to the language of the survivor annuity statute. Section 8341 provides that OPM must honor a state court order awarding a survivor annuity to a former spouse, except in one limited circumstance—where the order is a “modification” of a disposition of the survivor annuity in an earlier order. The statute provides in pertinent part that:
(h)(1) Subject to paragraphs (2) through (5) of this subsеction, a former spouse of a deceased employee ... is entitled to a survivor annuity ... if and to the extent expressly provided for ... in the terms of any decree of divorce or annulment or any court order or court-approved property settlement incident to such decree.
...
(4) For purposes of this subchapter, a modification in a decree, order, agreement, or election referred to in paragraph (1) of this subsection shall not be effective—
(A) if such modification is made after the retirement or death of the employee or Member concerned, and
(B) to the extent that such modification involves an annuity under this subsection.
The most troubling aspect of today‘s decision is that it forces state divorce courts to vary their approach to the disposition of marital property when federal survivor annuities are involved. As the Chairman noted in his dissеnt at the Board, Vaccaro v. Office of Personnel Management, 85 M.S.P.R. 329, 332 (2000) (Chairman Erdreich, dissenting), it will of-
Nothing in the purpose of the statute or its legislative history requires such an intrusion. The overriding purpose of the statute was to protect former spouses. Priоr to enactment of the Civil Service Retirement Spouse Equity Act of 1984,
The committee report indicates that the purpose of denying effect to a “modification” was to resolve any conflict between successive state court orders disposing of property by directing OPM to always honor the earliest dated order. H.R.Rep. No. 98-1054, at 15, reprinted in 1984 U.S.C.C.A.N. at 5545 (“In the event that more than one court order is filed with OPM and there is a conflict between the court orders, OPM will honor the earliest dated court order.“). Thus, Congress made it unnecessary for OPM to choose between conflicting court orders disposing of the annuity. If there was a conflict betwеen the court orders’ disposition of annuity rights, the disposition in the earlier dated order always controlled. OPM faces no “choice of awards” problem where, as here, the first order made no disposition of survivor annuity. The committee report makes crystal clear that this is the rule. For example, the committee report discusses a later state court order in the context of “establishing or otherwise modifying that former spouse‘s rights to survivor benefits.” H.R.Rep. No. 98-1054, at 14, reprinted in 1984 U.S.C.C.A.N. at 5545 (emphases added).
The committee further made clear that when there was no conflict between two court orders, i.e., when the later order awarding a survivor annuity could be honored by OPM without negating any disposition of the survivor annuity in the eаrlier order, then, under
Thus, instead of implementing the overriding Congressional purpose—to protect former spouses—the majority fastens on a subsidiary purpose—the choice of awards problem—to deny the annuity here, even though the subsidiary purpose is not even implicated.
The majority decision is also inconsistent with the Supreme Court‘s established law concerning federal preemption of state law. Under today‘s decision, any reservation of the disposition of survivor annuities in a state court order denies the state court the power to award survivor annuities in a future decree. The effect of the federal statute is to preempt state law governing the division of marital property. Particularly in areas of historic state concern, such as the disposition of marital property in divorce proceedings, federal preemption of state law requires a showing of clear congressional intent to preempt. See, e.g., Egelhoff v. Egelhoff, 532 U.S. 141, 121 S.Ct. 1322, 1330, 149 L.Ed.2d 264 (2001) (discussing the presumption against preemption of state family law); Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979) (“State family and family-property law must do ‘major damage’ to ‘clear and substantial’ federal interests before the Supremacy Clause will demand that state law be overridden.“) (quoting United States v. Yazell, 382 U.S. 341, 352, 86 S.Ct. 500, 15 L.Ed.2d 404 (1966)). Such a clear congressional intent is entirely lacking here.
Because the 1997 court order here was not a modification of any previous court order with respect to the survivor annuity, and the majority‘s holding to the contrary is inconsistent with our decision in Love, with the language and purpose of the survivor annuity statute, and with federal preemption decisions, I respectfully dissent.1
Notes
(e)(1) For purposes of awarding, increasing, reducing, or eliminating a former spouse survivor annuity, or explaining interpreting, or clarifying a court order that awards, increases reduces or eliminates a former spouse annuity, the court order must be:
(i) Issued on a day prior to the date of retirement or date of death of the employee; or
(ii) The first order dividing the marital property of the retiree and the former spouse.
* * *
(4)(i) In paragraph (e)(1)(ii) of this section, the “first order dividing the marital property of the retiree and the former spouse” means—
(A) The original written order that first ends the marriage if the court divides any marital property (or approves a property settlement agreement that divides any marital property) ...; or (B) The original written order issued after the marriage has been terminated in which the court first divides any marital property (or first approves a property agreement that divides any marital property) if no marital property has been divided prior to that order.
(ii) The first order dividing marital property does not include—
(A) Any court order that amends, explains, clarifies, or interprets the original written order regardless of the effective date ... or
(B) Any court order issued under reserved jurisdiction.
For purposes of the regulations, the term “employee retirement benefits” means “employee‘s ... annuities and refunds of retirement contributions but does not include survivor annuities.”
[W]e did discuss survivor‘s benefits because he said to me, “Hon,” he said, “I didn‘t change that. I didn‘t request it. They said OPM sent me a letter stating because of our marital status they had changed it and sent me more money in my check,” and he said, “Because of that, I had to do it because OPM told me because of the status in our marriage that it had to be changed.” And he said, “But once I come home, we‘ll remarry and I‘ll take care of that,” which he already did change the bank books. I‘ve