You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.

Robinette v. Hunsecker

Citations: 439 Md. 243; 96 A.3d 94; 2014 Md. LEXIS 421Docket: 90/13

Court: Court of Appeals of Maryland; July 18, 2014; Maryland; State Supreme Court

Original Court Document: View Document

EnglishEspañolSimplified EnglishEspañol Fácil
In Lori A. Robinette v. Luann Hunsecker, the court addressed a conflict arising from a property settlement agreement in a divorce that allocated the first wife a share of the husband's future pension and death benefits from a government retirement plan, which was exempt from ERISA. The agreement was not communicated to the retirement plan, and after the husband remarried, he designated his new wife as the beneficiary. Following his death, the first wife sought to claim a portion of the death benefits paid to the second wife. The Circuit Court for Frederick County determined it had the authority to impose a constructive trust on the benefits received by the second wife and ordered future benefits to be allocated between the two women. The Court of Special Appeals upheld this decision. The case underscores the authority of courts in Maryland to allocate marital property, including retirement interests, during divorce proceedings, as specified in the Maryland Family Law Article.

Allocation of retirement plan benefits during divorce must consider the Employee Retirement Income Security Act of 1974 (ERISA), which sets requirements to protect retirement plan participants and preempts conflicting state laws. ERISA restricts the transfer or alienation of pension benefits, complicating state court actions in divorce cases. However, the Retirement Equity Act of 1984 amended ERISA to allow for an alternate payee to receive benefits through a qualified domestic relations order (QDRO), provided the court order meets specific federal criteria. While ERISA applies broadly to most retirement plans, government-sponsored plans are exempt. Maryland courts have adopted similar orders for non-ERISA plans, leading to a broader interpretation of QDROs in divorce contexts. The excerpt details a case involving Luann Hunsecker and Roger Robinette, where their property settlement agreement designated Ex-Wife as the alternate payee for Husband’s pension benefits accrued during their marriage, qualifying the divorce judgment as a QDRO under ERISA.

Ex-Wife is entitled to fifty percent (50%) of the 'marital share' of Husband’s pension, calculated based on the duration of their marriage relative to the total months the benefits were accrued. Despite the Agreement suggesting that the divorce judgment would serve as a Qualified Domestic Relations Order (QDRO), neither party filed a QDRO. Following Husband's death, Wife, who was named as his beneficiary, received pension payments. Ex-Wife sought a portion of these benefits in accordance with the Agreement but was denied due to the absence of a QDRO specifying her as a beneficiary. Consequently, Ex-Wife filed a complaint alleging unjust enrichment against Wife, seeking an accounting of benefits and a constructive trust. The parties agreed on the essential facts and filed for summary judgment. The Circuit Court ruled in favor of Ex-Wife, stating it would be inequitable for Wife to retain the full benefits, as she effectively received Ex-Wife’s share. The court ordered Wife to account for the benefits received and established a constructive trust for Ex-Wife's portion.

The Circuit Court approved a posthumous Qualified Domestic Relations Order (QDRO) for future benefits, which was subsequently issued and filed with the retirement plan. The Ex-Wife is currently receiving her designated portion of the monthly benefits. The Wife appealed this decision to the Court of Special Appeals, which upheld the Circuit Court's ruling, affirming its authority to grant a posthumous QDRO and to impose a constructive trust on benefits already paid. The appellate court noted that exceptions exist to the rule barring unjust enrichment claims when a contract covers the issue, highlighting that the mutual intent expressed in the Agreement supported the imposition of a constructive trust. Although the Wife initially argued that the posthumous QDRO violated the Employee Retirement Income Security Act (ERISA), she later acknowledged that the Husband's pension plan is a government plan exempt from ERISA. The Court of Special Appeals discussed the applicability of ERISA but deemed it irrelevant since state law was not preempted in this case. The Wife subsequently filed for certiorari, which was granted to assess the validity of the Circuit Court's actions. The parties had agreed on no material facts and filed cross-motions for summary judgment; thus, the legal questions regarding the Circuit Court's authority and discretion in issuing the QDRO and imposing a constructive trust were reviewed without deference to the lower courts. Ultimately, the posthumous QDRO was validated under Maryland law, given that the retirement plan was not governed by ERISA.

Maryland law supports the trial court's authority to transfer benefits from a government retirement plan through a QDRO-type order, as indicated in Prince George’s County Police Pension Plan v. Burke. Under Maryland Code, a court can assign retirement benefits through a divorce decree or property settlement. The Wife does not dispute this interpretation but contends that an agreement requires federal law, specifically ERISA, to govern the allocation of Husband's retirement benefits. Although she acknowledges that the pension plan is not governed by ERISA, she argues that references to the Retirement Equity Act in their Agreement imply that ERISA should apply. This argument is deemed inconsistent and unmeritorious, as it contradicts other provisions in the Agreement stating that the divorce judgment constitutes a QDRO, which does not align with ERISA requirements. Consequently, her interpretation undermines her entitlement to a 50 percent equitable interest in the benefits, contrary to the intent expressed in the Severability clause of the Agreement. 

Additionally, the concept of a constructive trust is introduced as a judicial remedy to ensure that benefits are awarded to those who should rightfully receive them, even in cases of unenforceable agreements. Maryland courts have employed constructive trusts in various scenarios to enforce mutual understandings regarding property, including situations arising from separation agreements to prevent inequity.

In Starleper v. Hamilton, a separation agreement required the husband to maintain a life insurance policy for their son. Upon remarrying, he named his second wife as the primary beneficiary, violating the agreement. After his death, the second wife received the insurance proceeds, leading the first wife to seek a constructive trust on those funds, arguing unjust enrichment. The Circuit Court denied this, stating the second wife had committed no wrongdoing. However, the Court of Special Appeals vacated this decision, clarifying that a constructive trust can be imposed not only for wrongdoing but also to prevent unjust enrichment based on the circumstances. The appellate court cited other states' cases where constructive trusts were applied to enforce separation agreements regarding insurance and retirement benefits. It remanded the case for the trial court to reevaluate whether it would be inequitable for the second wife to keep the proceeds, considering the first wife and son's claims under the separation agreement.

In related cases from other jurisdictions, such as Fischbach v. Mercuri, courts have imposed constructive trusts on retirement benefits when a husband failed to designate a beneficiary, resulting in the second wife receiving benefits contrary to the separation agreement. The Ohio appellate court in Fischbach and others reinforced that such an outcome is inequitable and warranted equitable remedies like constructive trusts. Similar rulings have been made by the Wisconsin Supreme Court regarding retirement benefits distribution, emphasizing the importance of honoring separation agreements.

In Sulzer v. Diedrich, 664 N.W.2d 641 (Wis. 2003), a divorcing couple agreed to divide the husband’s retirement benefits, a stipulation incorporated into court orders. After the husband remarried and named his second wife as beneficiary, the first wife sought her share upon his death, but the retirement system refused to comply, citing Wisconsin law's lack of authorization for a Qualified Domestic Relations Order (QDRO) at that time. The Wisconsin Supreme Court ruled that a constructive trust was appropriate against the retirement benefits received by the second wife, emphasizing the original intent of the parties to equally divide the pension value. The court noted that the first wife had a mutual understanding of her 50% interest in the benefits, and the husband's designation of his second wife as beneficiary contradicted this agreement. The court concluded it was inequitable for the second wife to retain all benefits when the first wife had a legitimate claim. Therefore, the circuit court had the authority to impose a constructive trust and issue an order to allocate a portion of the death benefits to the first wife, affirming that the circuit court did not abuse its discretion in its actions. Costs were to be borne by the petitioner.