Thomson v. Thomson
2017 Alas. LEXIS 55, 394 P.3d 604, 2017 WL 2209882 (2017)
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Rule of Law:
Absent clear and unambiguous language to the contrary in a property division agreement, the division of retirement benefits must be based on the employee spouse's salary at the time of retirement, not their salary at the time of divorce.
Facts:
- David and Marjorie Thomson married in 1982 and separated on December 31, 2004.
- During their 2006 divorce, they mediated a property settlement agreement which was incorporated into their divorce decree.
- The agreement was based on a 2006 valuation of David's State of Alaska PERS retirement account, which used his 2003-2005 average earnings to project a future benefit.
- The agreement awarded Marjorie 46.96% of the 'marital portion of David's account,' defined by his credited service from August 1982 to December 2004, to be distributed via a Qualified Domestic Relations Order (QDRO).
- The agreement contained a clause stating that property acquired after the 2004 separation was non-marital and would be retained solely by the acquiring party.
- David continued to work for the State of Alaska after the divorce, earning a significantly higher salary.
- In 2014, David received an updated projection of his retirement benefits showing that Marjorie's share would be calculated using his higher, current salary (2013-2015), resulting in a payment nearly double what he anticipated based on the 2006 valuation.
Procedural Posture:
- In 2006, the superior court (trial court) entered a divorce decree incorporating David and Marjorie Thomson's property settlement agreement and a Qualified Domestic Relations Order (QDRO).
- In 2014, David Thomson filed a motion in the superior court to amend the QDRO.
- The superior court denied David's motion to amend.
- David then filed a motion for reconsideration, which the superior court also denied.
- David Thomson, as the appellant, appealed the superior court's decision to the Alaska Supreme Court, with Marjorie Thomson as the appellee.
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Issue:
Does a property settlement agreement that allocates a percentage of the 'marital portion' of a retirement account and defines the marital service period provide the clear language necessary under Hartley v. Hartley to require calculating the non-employee spouse's share based on the employee spouse's salary at the time of divorce rather than at retirement?
Opinions:
Majority - Carney, Justice.
No. The settlement agreement does not contain the clear and unambiguous language required by Hartley v. Hartley to deviate from the default rule of using the employee spouse's salary at retirement for benefit calculation. The court reasoned that the precedent set in Hartley establishes that post-divorce salary increases are considered to be built upon a 'marital foundation' and should be shared unless explicitly excluded. The phrases 'marital portion' and the specified dates of service only define the coverture fraction (the proportion of time the retirement benefit was earned during the marriage) and do not address the salary base for the calculation. Furthermore, the generic clause excluding 'other property' acquired after separation does not apply to the retirement benefit, which was a specific marital asset addressed separately in the agreement. Therefore, without explicit language freezing the salary basis at the time of divorce, the default rule of using the salary at retirement must apply.
Analysis:
This decision solidifies the high bar set by Hartley v. Hartley for deviating from the default method of calculating retirement benefit divisions. It clarifies that standard phrases like 'marital portion' are insufficient to freeze the salary basis for calculation at the time of divorce. The case serves as a critical guide for family law practitioners, emphasizing the need for explicit and unambiguous drafting in settlement agreements to reflect the parties' intent regarding retirement assets. By reinforcing the 'marital foundation theory,' the court promotes a predictable and equitable approach that recognizes the non-employee spouse's foundational contributions to the other's long-term career success and earning potential.
