Davis v. Davis

120 Cal. App. 4th 1007, 16 Cal. Rptr. 3d 220
CourtCalifornia Court of Appeal
DecidedJuly 22, 2004
DocketNo. B169206
StatusPublished
Cited by16 cases

This text of 120 Cal. App. 4th 1007 (Davis v. Davis) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. Davis, 120 Cal. App. 4th 1007, 16 Cal. Rptr. 3d 220 (Cal. Ct. App. 2004).

Opinion

[1010]*1010Opinion

CURRY, J,

INTRODUCTION

This matter arises after a judgment of marital dissolution was entered as to the marriage of Brian and Victoria Davis. Victoria appeals from a domestic relations order entered after Brian brought an order to show cause with regard to the effect of a postdissolution enhancement of his retirement benefits on his obligation to pay spousal support. Based on the nature of the retirement benefits at issue and the language of the judgment of dissolution, which incorporated the terms of the parties’ marital settlement agreement, the trial court ruled that Brian’s spousal support obligation effectively terminated at the time he began participating in the enhanced retirement program. As we will explain, based on our independent interpretation of the relevant case law and the language of the judgment of dissolution, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Judgment of Marital Dissolution

The parties were married on September 4, 1966. Brian filed a petition for marital dissolution on January 9, 2001. Victoria filed a response on January 18, 2001. On March 8, 2001, the parties filed a stipulation agreeing that Brian would pay Victoria $1,480 per month as spousal support, pending further order of the court. Brian’s employer was the Los Angeles City Police Department; accordingly, the Los Angeles City Fire and Police Pension Plan was joined as an Employee Benefit Plan claimant to the action for marital dissolution on December 28, 2001.

The parties reached a marital settlement agreement, which was incorporated into the judgment of marital dissolution entered February 6, 2002. Therein, the parties agreed their date of marital separation was February 14, 2000.

Brian began employment with the Los Angeles Police Department (LAPD) on April 21, 1969. Victoria has been employed by Albertson’s since November 1986. As part of their marital settlement agreement, they agreed that each would keep as their separate property all of their respective earnings after the date of separation. They agreed that Victoria could keep as her separate property the pension benefits she had earned during the marriage.

Victoria wished to keep the community property residence in Newport Beach; the home contains a rental unit, which would provide supplemental [1011]*1011income. This supplemental income was taken into account in determining the spousal support order and property division. To equalize the property division, the parties agreed that Victoria would be awarded a reduced share of Brian’s pension, 25 percent rather than 50 percent. In paragraph 1(A), spousal support was set at $1,480 per month “commencing September 1, 2001, and continuing thereafter until the death of either party, the remarriage of [Victoria], or the date [Victoria] receives the first payment that reflects her 25% interest in [Brian’s] pension, and the gross amount of that payment exceeds $1,480.00 per month, whichever shall first occur, at which time spousal support shall terminate forever.” In paragraph 1(C), the judgment further provided: “Neither the amount nor the duration of spousal support is modifiable under any circumstances, and/or for any reason, and the Court is without jurisdiction to modify the amount or duration of spousal support. In the event [Brian] pays spousal support to [Victoria] for a month in which [Victoria] receives her 25% interest in [Brian’s] pension and the gross amount she receives exceeds $1,480.00, [Victoria] shall immediately reimburse the spousal support she received for that month to [Brian].” As to Brian’s pension plan, the judgment provided in paragraph 4(A): “[Brian’s] pension plan, Los Angeles City Fire And Police Pension System Plan (L.A. City Safety XVIII Plan), shall be divided by a Qualified Domestic Relations Order prepared by attorney Nancy Bunn or other qualified preparer agreed to by both parties. The Plan, which is fully vested, shall be divided 75% to [Brian] and 25% to [Victoria], to equalize the division of community assets.”1

2. Subsequent Changes in Brian’s Retirement Benefits

Shortly after the parties executed the stipulated agreement at the end of 2001, Brian’s retirement options changed. At that time, Brian had been with the LAPD for over 30 years and had reached the maximum retirement available under his then-current retirement tier, tier 2 (i.e., 70 percent of his final salary). On January 1, 2002, the City of Los Angeles Department of Fire and Police Pensions Board (the Pension Board) offered eligible members the option of transferring from their current tier to tier 5, under which contributions to the pension plan could continue until a member reached 33 years of services, rather than ceasing at 30 years. Tier 5 allowed a member to retire at 90 percent of his salary upon reaching 33 years of service. Brian elected this option, with the effect that it would increase both his and Victoria’s monthly payments from his pension once he retired. Brian reached “maximum benefit retirement date,” or 33 years of service, on April 21, 2002.

On May 1, 2002, the Pension Board made available a second retirement option, the “Deferred Retirement Option Plan” (the DROP), for which Brian was also eligible. The DROP was intended to offer an incentive to officers [1012]*1012who were eligible to retire to continue working for the LAPD, as it was having difficulty recruiting new officers and retaining veteran officers. Under the DROP, eligible officers could “retire” and commence drawing their pensions while continuing to work and earning a salary for up to an additional five years. Rather than actually receiving monthly pension payments, however, a DROP account was created which would be credited monthly in the amount of the member’s pension payment.

According to materials distributed to members of the pension plan, the “DROP account is set up like a savings account within the Pension Plan. Every month while [the officer is] in DROP, [his] entire monthly service pension amount is deposited into [his] DROP account.” Members would retire at the same percentage of their salary whether they chose the conventional retirement option or the DROP option. The pension payment credited monthly to the DROP account would receive annual cost of living increases and earn interest at the rate of 5 percent per year. Members could participate in the DROP for a maximum of five years, but could leave service sooner.2

Upon discontinuing participation in the DROP and terminating employment with the LAPD, the member would begin to receive monthly pension payments based upon years of service and salary at the time of entering the DROP, plus cost of living increases received while in the DROP. At that time, members could receive the DROP funds in a lump sum, or could elect to roll the funds over into a tax-deferred account.

Under the DROP, members “are considered ‘retired’ for purposes of pension calculations only.” Participants can no longer qualify a new spouse for survivor benefits, even though they continue to work for the LAPD. No further service credit is earned during the DROP participation period. Participants in the DROP have the same rights, privileges, and benefits as with active employment. “DROP account funds are not eligible for distribution until after actual retirement/termination as a sworn member of the Fire or Police Department.”

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Cite This Page — Counsel Stack

Bluebook (online)
120 Cal. App. 4th 1007, 16 Cal. Rptr. 3d 220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-davis-calctapp-2004.