Krushensky v. Farinas

189 P.3d 1056, 2008 Alas. LEXIS 118, 2008 WL 3166522
CourtAlaska Supreme Court
DecidedAugust 8, 2008
DocketS-12395, S-12416
StatusPublished
Cited by8 cases

This text of 189 P.3d 1056 (Krushensky v. Farinas) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Krushensky v. Farinas, 189 P.3d 1056, 2008 Alas. LEXIS 118, 2008 WL 3166522 (Ala. 2008).

Opinion

OPINION

EASTAUGH, Justice.

I. INTRODUCTION

In accordance with Kevin Krushensky and Christine Farinas's property settlement agreement and a memorializing final property order, qualified domestic relations orders (QDROs) were to be entered for Kevin's two retirement plans. The QDROs were to designate Christine "the surviving spouse to be awarded all pre-retirement death benefits . for at least a 55% annuity." But as ultimately entered, the QDROs also awarded Christine qualified pre-retirement survivor annuities (QPSAs). Kevin appeals the QPSA awards. Because the QDROs correctly used a separate interest approach to divide each retirement plan, Christine's interests were separate from Kevin's upon entry of the QDROs and would not be reduced if he died before retiring. Awarding the QPSAs to Christine therefore gave her more than what the parties agreed to and more than what the memorializing final property order required. We consequently vacate the bench order that approved including QPSAs in the QDROs, and remand. Kevin also appeals the denial of his request for a visitation credit. Because Kevin has waived any challenge to the superior court's ruling that his request was untimely, we affirm..

*1058 HI. FACTS AND PROCEEDINGS

Kevin Krushensky and Christine Farinas married in August 1998. They have one child, born in July 1999. In November 2004 Kevin filed for divorcee. Christine is a resident of Hawaii but she submitted to the jurisdiction of the Alaska court for all issues governing dissolution of the marriage, division of the marital property, and child support. In June 2005 the parties reached a settlement of all property and financial issues, including a division of Kevin's British Petroleum (BP) and ConocoPhillips defined benefit retirement accounts, and orally placed the settlement on record.

In September 2005 the superior court issued a final property order that was intended to memorialize the parties' settlement agreement. The final property order provides for entry of qualified domestic relations orders (QDROs):

8. A QDRO shall issue awarding Ms. Farinas-Krushensky 55% of Mr. Farinas, Krushensky's work{[-]related defined benefit pension(s) earned by Mr. Farinas, Krushensky from date of marriage through November 15, 2004. These are known as the BP Retirement Accumulation Plan, and the Retirement Income Plan of Phillips Petroleum. In each QDRO, Ms. Farinas-Krushensky shall be designated the surviving spouse to be awarded all pre-retirement death benefits, and she shall be designated the surviving spouse for at least a 55% annuity benefit in the event that Mr. Farinas-Krushensky dies before her. The cost of the survivor annuity benefits shall be shared equally between the parties. To the extent allowed by the retirement plan, she shall be allowed to begin receiving her benefits at the earliest allowable date. Ms. Farinas-Krushensky's attorney is responsible for drafting the QDRO orders.

(Emphasis added.) The final property order also states that "[the monthly child support shall not be reduced for any reason other than the medical premium."

Christine filed proposed QDROs for BP and ConocoPhillips in the superior court. Kevin's lawyer forwarded Christine's proposed QDROs to David Watson, a former employee of the State of Alaska's Division of Retirement and Benefits, who was deemed an expert in this case. Watson explained that the BP and ConocoPhillips plans had particular technical requirements that the proposed QDROs likely did not meet. Kevin filed a Limited Opposition to Christine's proposed QDROs, stating that he "does not oppose them but is skeptical about their prospects for plan approval." The superior court signed the QDROs for both plans and Christine promptly sent them to their respective plan administrators for approval.

In December 2005 BP's plan administrator rejected the signed BP QDRO as "not qualified" because the order-which failed to identify whether Christine was awarded a shared interest or a separate interest in the retirement account-was unclear regarding Christine's award.

Under a shared interest approach to dividing a retirement account, the parties' interests are intertwined and the alternate payee can receive benefits only when the plan participant chooses to retire and begins receiving benefits. 1 Under this approach the alternate payee's benefits terminate completely upon the plan participant's pre-retirement death. 2 But under a separate interest approach, the alternate payee's interest is severed from the plan participant's interest upon the plan administrator's acceptance of the plan, and the alternate payee may receive benefits when the plan participant reaches, or would have reached, the plan's earliest retirement age, regardless of whether the plan participant continues working after reaching retirement age or dies before reaching that age. 3

Marsha Dunham of ConocoPhillips also informed Christine's lawyer that the Conoco- *1059 Phillips QDRO would be rejected. Dunham likewise indicated confusion over whether the QDRO was to be a shared benefit award or a separate benefit award. ConocoPhillips formally rejected the QDRO in December 2005.

Christine filed amended proposed QDROs in March 2006. Her amended proposed BP QDRO contained language similar to the language of the final property order. Her amended proposed ConocoPhillips QDRO contained a survivorship provision in the form of a qualified pre-retirement surviving spouse annuity (QPSA). 4 According to Watson a QPSA is typically awarded when a retirement plan is divided under the shared interest approach; the QPSA protects the alternate payee in the event of the plan participant's pre-retirement death. A QPSA is an annuity payable to the alternate payee for her lifetime if the plan participant dies before reaching retirement age. 5

Kevin opposed the amended QDROs proposed by Christine, arguing that granting Christine both a separate interest and a QPSA would amount to "double-dipping": in the event of Kevin's pre-retirement death, the award would enable Christine to receive, in addition to her separate interest entitlement, a portion of Kevin's entitlement as the surviving beneficiary.

Kevin then filed proposed QDROs prepared by Watson. These QDROs contained no QPSAs. 6 Kevin also moved for attorney's fees incurred in reviewing and challenging Christine's amended proposed QDROs.

In June 2006 the superior court held a hearing on the retirement issue. Watson testified that Kevin's proposed QDROs accu *1060 rately fulfilled the final property order because QPSAs were not needed to protect Christine's separate interest in the event Kevin died before retirement. Watson also testified that Christine's amended proposed QDROs did not accurately reflect the final property order because the final property order did not state that pre-retirement benefits were to come out of Kevin's remaining separate interest.

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Cite This Page — Counsel Stack

Bluebook (online)
189 P.3d 1056, 2008 Alas. LEXIS 118, 2008 WL 3166522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krushensky-v-farinas-alaska-2008.