This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
In re the Marriage of: Otho C. Buxton, III,
Constance B. Buxton,
Filed August 15, 2006
Grant County District Court
File No. F8-89-225
Robert V. Dalager, Fluegel, Helseth, McLaughlin, Anderson & Brutlag, Chartered, 215 Atlantic Avenue, P.O. Box 527, Morris, MN 56267 (for respondent)
Michael A. Feist, First National Bank Building, 332 Minnesota Street, Suite W-1610, St. Paul, MN 55101 (for appellant)
Mike Hatch, Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101; Office of Attorney General
Appellant Constance B. Buxton challenges the district court’s order concluding that she is not entitled to one-half the value of respondent Otho C. Buxton III’s accumulated pension contributions as of the date of the petition for dissolution of the parties’ marriage, plus interest, and that she is not entitled to spousal maintenance beyond Otho’s life. We affirm.
This case concerns the treatment of retirement benefits that vested during the 28-year marriage of Constance B. Buxton and Otho Buxton III. The marriage was dissolved by judgment and decree in 1990. At the time of dissolution, Otho was a vested member of the Public Employees Retirement Association of Minnesota (PERA). Paragraph 27 of the dissolution decree’s findings of fact addresses the PERA account:
[Otho’s] accumulated PERA salary
deductions, with interest, as of [the date of the petition for dissolution],
were [approximately $81,000]. Because
the actual retirement benefits . . . are uncertain until retirement, the Court
reserves jurisdiction to divide the marital portion of [Otho’s] PERA benefits
upon his retirement. The benefits shall
be divided in the following manner: [
By paragraph 11 of the order’s
conclusions of law, the district court “reserves jurisdiction to divide the
marital portion of [Otho’s] PERA benefits upon his retirement.” The dissolution decree awarded Constance
$1,200 in monthly permanent maintenance, adding that “[s]uch payments shall
terminate only upon the death or the remarriage of [
About five months later, Otho married Judith Buxton in April 1991.
and Otho both appealed the district court’s order, which this court affirmed in
its entirety. Buxton v. Buxton, No. C3-91-148, 1991 WL 166045 at *2 (Minn. App.
Sept. 3, 1991). In the decision, we
October 1991, a PERA administrator informed
Constance’s counsel prepared a draft Stipulation for Amended Judgment and mailed it to Otho’s counsel with a letter stating, “My client [Constance] is now willing to waive her right to ask for any survivor annuity benefits pursuant to the PERA plan, but we will insist that the PERA formula be adopted and instituted by the Court immediately so that [Constance’s] interest in such plan is protected.”
In April 1992, the district court adopted the stipulation and issued an amended judgment, which characterized the parties’ agreement regarding the survivor benefits:
[Otho] has now agreed to execute the previous proposed Stipulation for Amended Judgment concerning implementation of the pension plan distribution formula as adopted and approved by the Court in paragraph 27 of the Findings of Fact and paragraph 11 of the Conclusions of Law of the original Judgment. The parties have agreed to make one modification indicating that survivor benefits are not required as a part of implementation of the pension plan distribution formula.
(Emphasis added). The stipulation also defined the parties’ limited rights and duties regarding Otho’s PERA benefits:
If [Otho], his beneficiaries, or a surviving spouse submit a valid application for any benefit under the pension plan as administered by the [PERA], including but not limited to retirement, death or disability benefits, the payments shall be divided by use of [the formula described in the original decree].
. . . .
. . . .
Assignment. A sum equal to the amount determined as
[Constance’s] benefit shall be assigned irrevocably to, and for the sole
benefit of, [
January 2002, Otho was diagnosed with an inoperable brain tumor and advised
that he should expect to live only six to twelve months. He applied for disability benefits under his
PERA account and moved the district court for an order terminating or reducing
his spousal maintenance obligation. PERA
March 2002, Constance moved the district court for an order (1) amending the
provisions of the original dissolution decree so as to name her as the joint
survivor annuitant of Otho’s PERA benefit, (2) requiring Otho or his agents to
change Otho’s PERA benefits election so as to name her the joint survivor
annuitant of Otho’s PERA account, or (3) imposing a constructive trust, for her
benefit, on Otho’s current and future PERA payments, accounts, and benefits. In an affidavit submitted with the motion,
[I] cannot now explain why in 1992 the original judgment and decree was amended by providing that the division of the pension was not to be construed to provide me the joint and survivor annuity benefits nor to require [Otho] to elect a joint and survivor annuity benefit for my benefit.
district court denied
died on June 30, 2002. A probate action
followed in district court. Constance
and Judith Buxton presented competing claims to the proceeds of Otho’s $50,000
life-insurance policy. The matter was
litigated in federal district court and
In February 2005,
a July 2005 order, the district court denied
The court acknowledged that there is “language in the 1992 Stipulation for Amended Judgment seemingly awarding Constance Buxton a specific dollar amount in addition to the fixed percentage of all payments,” but it determined that despite this ambiguity, the original and amended decrees did not award Constance the “present cash value” of Otho’s pension but “reserve[d] jurisdiction over the division of the pension until [Otho’s] retirement.” The court then explained the limits on its authority:
Due to Otho Buxton’s death prior to retirement, there were no retirement benefits to divide. Constance Buxton correctly states that she is not getting her share out of the marital estate. Unfortunately, the only property the Court reserved jurisdiction to divide were the retirement benefits. The Court cannot award Constance Buxton other property in lieu of the retirement benefits.
The court also
held that “[t]he spousal maintenance obligation of Otho Buxton was extinguished
upon his death with the exception of the life insurance proceeds which have
been disbursed to Constance Buxton.” In
Constance contends that because the district court reserved jurisdiction in the original decree to equitably divide the marital portion of Otho’s PERA benefits upon his retirement, and because the intended division “fail[ed]” when Otho died before retirement, equity now requires that she collect from Otho’s estate—either by means of a cash award or a constructive trust—an amount equal to one-half the cash value of Otho’s marital pension contributions plus interest. Because the district court correctly determined finality in the parties’ property-division judgment, we reject this argument.
The district court considered the original decree and denied
We begin by
framing our review of the district court’s division of pension-plan
benefits. Public-pension-plan benefits
and rights acquired during marriage are marital property. Minn. Stat. § 518.54, subd. 5
(2004). “District courts have broad
discretion over the division of marital property and appellate courts will not
alter a district court’s property division absent a clear abuse of discretion
or an erroneous application of the law.”
Sirek v. Sirek, 693 N.W.2d
896, 898 (
We also note that we afford significant deference to the district
court’s interpretation of the judgment and decree. “A [district] court’s construction of its own
decree is given great weight on appeal.”
Johnson v. Johnson, 627 N.W.2d
359, 363 (
We see no error in
the district court’s interpretation here.
In interpreting the original decree, the district court specifically
observed that the original judgment divided Otho’s pension under the “reserved
jurisdiction” method of pension distribution, and not under the fixed sum or
“present cash value” method. The parties
do not dispute this finding. Under the
“present cash value method,” the district court “award[s] the employee spouse
the pension and assign[s] the non-employee spouse assets of a value equal to a
portion of the present value of the benefits.”
DuBois v. DuBois, 335 N.W.2d
503, 505 (
The advantage of reserving jurisdiction over the pension rights and effecting a division of the actual monetary benefits if and when they accrue is that this approach allocates equally between the parties the risk that the pension benefits may never be paid and enables the court to better determine the actual proportion of the benefits that were derived from the marriage.
DuBois, 335 N.W.2d at 505. As was true here, cases in which the district
court reserves jurisdiction over the pension rights typically involve “the
designation of future benefits as a fixed percentage of the pension
payments.” McGowan v. McGowan, 532 N.W.2d 258, 260 (
The district court relied on Minnesota Statutes § 518.64, subdivision 2(e) (2004), and refused to modify Constance’s original property award from an interest in a fixed percentage of future benefits to an interest in the cash value of Otho’s pension contributions at the time of dissolution. Section 518.64, subdivision 2(e), provides that “all divisions of real and personal property . . . shall be final, and may be revoked or modified only where the court finds the existence of conditions that justify reopening a judgment under the laws of this State.” See also Ulrich v. Ulrich, 400 N.W.2d 213, 218 (Minn. App. 1987) (“[P]roperty divisions are final and not subject to modification except where they are the result of mistake or fraud.”).
There are exceptions to this rule that property divisions in
dissolution judgments are final. “[W]here the terms of a judgment are ambiguous
or indefinite, upon a party’s motion, the court that ordered the judgment may
clarify or interpret it.” Hanson v. Hanson, 379 N.W.2d 230, 232 (
In addition to
clarification, a district court may modify the original decree when
modification “does not affect the essential provisions of the original judgment
on the substantive rights of either party.”
McGowan, 532 N.W.2d at
260. In McGowan, the original judgment “awarded [wife] one half of the
anticipated marital portion of [husband’s] pension, stated as a fixed monthly
sum to be paid when [husband] reached age 65,” his presumed age of
affirmed, ruling that the modification did no more than effectuate the original
decree’s intent “to equitably divide the marital share of the pension equally
between the parties.”
Relying on McGowan,
[n]othing precludes the [district] court from later dividing a pension pursuant to the ‘present value’ method where assets exist to satisfy the division and the interest in specific property fails. Neither party receives more or less than that to which he or she is entitled pursuant to the original judgment and decree.
She also claims that the judgment
granted her “property rights” in the pension, and that “if the pension were
divided pursuant to the ‘present value’ method the property right awarded [her]
is one half of the [approximately $81,000] accumulated salary deductions made
during [the parties’] marriage.”
First, although it is indisputable that the district court
originally reserved jurisdiction to equitably divide the pension benefits,
those benefits were never distributed to either party. Under the original judgment, Otho and
Constance were entitled to equal shares of the distributed retirement benefits.
As the district court observed, “[d]ue to Otho Buxton’s death prior to
retirement, there were no retirement benefits to divide.” Because neither Otho nor his estate received
any retirement benefits, equity did not compel the district court to award
Second, contrary to her argument, the relief Constance is requesting (the receipt of a lump-sum award of her portion of the pension’s cash value in lieu of a portion of the retirement benefits contemplated in the decree) would require a prohibited modification of the original judgment’s essential provisions. The original judgment reserved jurisdiction to ensure that the parties would share Otho’s distributed marital retirement benefits equally. That reservation of jurisdiction is neither a current assignment of actual property rights nor a guarantee that the benefits in question will ever be distributed. See DuBois, 335 N.W.2d at 505 (observing that an advantage of the “reserved jurisdiction” method of pension division is that it only divides “the actual monetary benefits if and when they accrue [and] allocates equally between the parties the risk that the pension benefits may never be paid”) (emphases added). The court did not originally award the pension pursuant to a “present cash value” approach.
And because the reservation of jurisdiction to distribute Otho’s
retirement benefits was not an actual distribution of those benefits (which
never accrued), the modification
Third, even were Constance entitled to modification of the original judgment and division of the pension according to the “present value” method, she provides no basis for her estimate of the pension’s “present value,” which she asserts is the sum of Otho’s marital pension contributions, plus interest. “‘[P]resent value’ is a term of art with a specific meaning.” Johnson, 627 N.W.2d at 362. The supreme court has defined the term:
Present value is the sum which a person would take now in return for giving up the right to receive an unknown number of monthly checks in the future. The present value is discounted by various actuarial calculations to reflect contingencies affecting the eventual payout, including discounts for mortality, inflation, interest, probability of vesting and probability of continued employment.
DuBois, 335 N.W.2d at 506. There is no indication in the record that
either party ever presented actuarial or other evidence concerning the correct
calculation of the pension’s present value.
acknowledge the appeal of
We hold that the modification requested by Constance would substantively, and radically, affect the parties’ rights as provided in the decree and is therefore prohibited by Minnesota Statutes § 518.64, subdivision 2(e).
[A]n expression such as “so long as obligee shall live” does not, without more, expressly provide for maintenance after the obligor’s death. In order for a decree to expressly provide for maintenance subsequent to obligor’s death, the decree must provide funding for the maintenance such as an insurance policy or a lien on property.
v. Witt, 350 N.W.2d 380, 382 (
The decree here does not impose on Otho a post-death obligation