Alice Beason v. C.A.Beason

Citation: Not availableDocket: E2002-01425-COA-R3-CV

Court: Court of Appeals of Tennessee; March 30, 2003; Tennessee; State Appellate Court

Original Court Document: View Document

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Alice Kaye Beason and C.A. Beason's case involves the equitable distribution of Tier II railroad retirement benefits following their divorces. In their first divorce in 1989, Alice made no claims for C.A.'s Tier II benefits and received none. After remarrying in 1992 and divorcing again in 1996, a Qualified Domestic Relations Order (QDRO) awarded Alice 100% of the Tier II benefits accrued during the second marriage. Upon C.A.'s disability, Alice began receiving these benefits, prompting C.A. to file a motion under Tenn. R. Civ. P. 60.02(5) for relief from the 1996 judgment. This motion was granted, resulting in a QDRO that limited Alice's benefits to those accrued during the second marriage. Alice then sought relief from the 1989 judgment to claim benefits accrued during their first marriage, which was denied. The appellate court affirmed both the trial court's decisions: granting C.A. relief from the second divorce judgment and denying Alice's request for relief from the first. The case also discusses the federal Railroad Retirement Act, which governs retirement benefits for railroad employees, noting that Tier I benefits remain non-divisible in divorce, while Tier II benefits may be distributed due to a 1983 amendment.

The appeals center on the equitable distribution of Husband’s Tier II pension benefits, with both parties agreeing that Tier I benefits are non-distributable under federal law. Husband began his employment with the Railroad on June 10, 1971, shortly before marrying Wife. After over 16 years of marriage, Husband filed for divorce on April 27, 1988. The couple ultimately divorced based on irreconcilable differences, with a Final Judgment entered on November 21, 1989, which included a Marital Dissolution Agreement (MDA) outlining marital property distribution and child custody, but did not address Tier II pension benefits. Wife later admitted she did not claim rights to these benefits due to a misunderstanding of the Railroad's pension plan.

The couple remarried on June 22, 1992, but Wife filed for divorce again after about 2½ years, citing Husband’s inappropriate conduct. The divorce trial on August 19, 1996, resulted in Chancellor Cate finding that Wife was entitled to any rights permitted by law concerning Husband’s railroad retirement/pension. The Final Decree of Divorce was entered on September 3, 1996, confirming these findings. Following the decree, disputes arose regarding property transfers, leading to an Agreed Order on July 6, 1999, which mandated a qualified domestic relations order (QDRO) to secure Wife’s interest in Husband’s Tier II benefits.

On June 7, 2000, Wife’s attorney submitted a proposed QDRO that asserted Wife's entitlement to 100% of Husband's Tier II monthly benefits, totaling $732.24 if he had retired at the end of 1998. Husband contested this claim, believing he was not obligated to grant Wife 100% of the benefits and instructed his attorney not to sign the QDRO. A hearing on the matter was scheduled for August 18, 2000, before Chancellor Fansler, who had succeeded Chancellor Cate.

Husband and Wife had two marriages, with the second being of short duration. Husband's attorney communicated with Wife's attorney regarding the value of Husband's retirement plan at the time of their second marriage. Wife's attorney clarified that retirement benefits are determined at retirement and emphasized that the estimated benefit amount provided was for informational purposes only. He indicated that if no contradictory information was received from Husband, he would proceed to submit the Qualified Domestic Relations Order (QDRO) to the court without Husband's signature. Although Husband refused to sign the QDRO, his attorney had no objections to it. Consequently, Chancellor Fansler signed the QDRO on July 5, 2000, even though a hearing was still pending.

Following the entry of the QDRO, Husband raised concerns about the "100%" language in it, believing it would limit Wife's benefits until he reached retirement age. In January 2001, Husband became disabled and began receiving his pension, which included all Tier I and Tier II benefits. Despite the QDRO not specifically limiting Wife's entitlement to the period of their marriage, Husband initially thought it would. In July 2001, Husband was informed of an error by the Retirement Board, revealing that Wife would receive all of his Tier II benefits.

Although the couple had been divorced for over four years by August 19, 1996, the Retirement Board began sending Wife the full $803 monthly benefit, which encompassed benefits accrued during the first marriage, the two years and seven months of divorce, the second marriage, and the period after the second divorce until his disability. The record reveals that the value of Husband's Tier II benefits was $732.24 per month as of December 31, 1998, and increased to $803 by the time of his disability.

Husband, having obtained new legal counsel, filed a Motion to Set Aside or Modify the Qualified Domestic Relations Order (QDRO) originally entered on July 5, 2000, under Tenn. R. Civ. P. 60.02(5) on October 26, 2001. A hearing took place on April 23, 2002, where Chancellor Fansler questioned why there was no appeal regarding the QDRO and the ambiguity of the "100%" language at the time of its entry. After hearing testimonies from Husband and his former attorney, Chancellor Fansler granted the motion, setting aside the QDRO, and issued a 16-page Memorandum Opinion outlining several key findings: 

1. The Marital Dissolution Agreement (MDA) from the first divorce did not grant Wife any Tier II benefits, leaving each party with their respective pension rights.
2. The lower courts did not address whether the 1983 amendment to the Railroad Retirement Act was retroactive, which could affect the equitable distribution of Husband’s Tier II benefits.
3. In the second divorce in August 1996, Wife was awarded rights to Husband’s pension as permitted by law, while Husband retained his pension subject to those rights.
4. Chancellor Cate divided marital property and equitably distributed the pension.
5. Chancellor Cate could not distribute post-divorce acquired assets.
6. Property from the first divorce, once classified as separate property, did not revert to marital property upon remarriage.
7. Wife's pension claim was restricted to the increase in the pension's value during the second marriage.

Chancellor Fansler noted the difficulty in obtaining relief under Rule 60.02(5) and that dissatisfaction with a prior ruling does not suffice for relief. He concluded that the original QDRO erroneously awarded Wife pension benefits to which she was not legally entitled, thus providing grounds for relief. He determined that there was no agreement from Husband to the erroneous QDRO and that there was no obligation for him to relinquish his pension without compensation. Despite concerns over the timing of the motion, Chancellor Fansler found that Husband had met his burden of proof for relief and set aside the QDRO, granting Wife 100% of the pension benefits accrued during the second marriage, amounting to $191.08 per month. A new QDRO was issued reflecting this decision. Wife appealed, arguing that the court erred in granting Husband relief under Rule 60.02(5) and sought reinstatement of the original QDRO's terms.

On May 6, 2002, shortly after Chancellor Fansler's Memorandum Opinion, Wife filed a Rule 60 motion with Chancellor Bell to set aside or modify the Final Judgment from her first divorce, dated November 21, 1989. She sought an equitable distribution of Husband's Tier II benefits accrued during their marriage, arguing that her entitlement to relief mirrored Husband's granted relief under Rule 60.02(5) in his second divorce. Chancellor Bell denied her motion, prompting Wife to appeal. The appeals were consolidated, raising two main issues: whether Chancellor Fansler erred in granting Husband relief in the second divorce and whether Chancellor Bell erred in denying Wife relief in the first divorce.

The appellate review of a trial court's decision under Rule 60.02 follows an abuse of discretion standard. A ruling will be upheld if reasonable minds might disagree on its propriety, and abuse occurs only if an incorrect legal standard is applied or if the decision is illogical, causing injustice. Appellate courts generally defer to trial court decisions, presuming correctness and evaluating evidence favorably toward the decision. Relevant to this case, Tennessee Rule of Civil Procedure 60.02 outlines circumstances under which a court may relieve a party from a final judgment, including mistakes, fraud, void judgments, and other justifying reasons, with a requirement that motions be made within a reasonable time, and within one year for certain reasons.

Chancellor Fansler correctly interpreted Rule 60.02, emphasizing that it is not a remedy for mere dissatisfaction with a court decision. He noted that Husband bore the burden of proof to demonstrate entitlement to relief, and despite the rule's broad language, its application is narrow and demanding, particularly under subsection (5). Concerns arose for Chancellor Fansler regarding Husband's long-term employment with the railroad and the distribution of Tier II benefits to Wife, some of which she may not have been legally entitled to. He required evidence and testimony from both parties to assess Husband's claim under the stringent standards of Rule 60.02(5). Although not explicitly stated, it was implied that Husband provided sufficient justification for relief and that his motion was timely filed. Chancellor Fansler's thorough reasoning led to the conclusion that he did not abuse his discretion in granting relief.

In contrast, Chancellor Bell denied Wife's motion for relief under the same rule, which was filed 12 years post-judgment. Although she did not provide specific reasons for her denial, the court found no misapplication of the legal standard, illogical reasoning, or injustice in her decision. The delay in filing was deemed unreasonable, affirming that Chancellor Bell did not abuse her discretion. The judgments of both trial courts were affirmed, and the cases were remanded for any necessary further proceedings, with costs assessed against the appellant, Alice Kaye Beason.