Austin v. Austin

Back to Opinions page

MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2000 ME 61
Docket:	And-99-352
Submitted
  on Briefs:	February 25, 2000
Decided:	April 7, 2000

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, and DANA, JJ.

STEPHEN B. AUSTIN

v.

VALERIE A. AUSTIN

RUDMAN, J.

	[¶1]  Valerie A. Austin appeals from an order entered in the Superior
Court (Androscoggin County, Studstrup, J.) partially denying her motion for
enforcement of a divorce judgment.  Valerie contends (1) that the court
erred by permitting her former husband, Stephen B. Austin, to distribute to
her the cash value of certain mutual funds instead of distributing shares of
those funds to her; and, (2) that the court erred by not granting her post-
judgment interest.  We disagree that she was entitled to a distribution in
kind, but vacate the judgment and remand for a determination of the value
of the account on the date of the distribution of Valerie's share to her.

I.  FACTS

	[¶2]  The Superior Court (Androscoggin County, Marden, J.) granted
Stephen and Valerie a divorce on September 3, 1998.  As part of the divorce
decree, the court divided Stephen's 401(k) pension account equally
between the two parties.  The pertinent portion of the divorce judgment
read: "The plaintiff's 401K pension account is agreed to have a balance of
$341,642.  One-half of that account is awarded to the defendant.  Defendant
is to prepare a Qualified Domestic Relations Order [QDRO] for that purpose." 
The QDRO was needed to divide the 401(k) into two separate pension
accounts with equal cash value: one for Valerie and one for Stephen.{1}  At the
time of the divorce judgment, the 401(k) account was invested in stock,
mutual funds, and money market funds.  Approximately one month after the
entry of the divorce judgment, without consulting or notifying Valerie,
Stephen changed the investments held in his 401(k) account by selling the
mutual funds and reinvesting the proceeds in money market funds.
	[¶3]  Subsequent to Stephen's sale of the mutual funds, those funds
appreciated in value.  Valerie's financial planner testified that those equities
gained approximately $18,487 in value during the five-month period
following their sale.  When Valerie submitted a proposed QDRO to Stephen's
401(k) fund administrator several months after the divorce judgment, she
learned of the sale of the mutual funds and that her draft QDRO could not be
used.  Seeking, inter alia, her share of the 401(k) account and of the growth
in value of the funds sold without her permission, Valerie brought a motion
for enforcement of the divorce judgment.  The Superior Court
(Androscoggin County, Studstrup, J.) found that the 401(k) account was
worth $348,950 on the effective date of the divorce judgment, and held that
Valerie was entitled to one-half of that amount, or $174,475.  The court did
not award Valerie the increase in the value of the account between the date
of the divorce and the date of the distribution, nor did the court award post-
judgment interest on the delayed disbursement of Valerie's half of the
401(k) account.  After the court denied her motion to reconsider the 401(k)
account distribution, Valerie filed this instant appeal.

II.  DIVISION OF THE 401(k) ACCOUNT

	[¶4]  While courts do not have authority to alter or amend divorce
judgments, "there is no question that the court has the inherent and
continuing authority to construe and clarify its judgment when that
judgment is ambiguous."  MacDonald v. MacDonald, 582 A.2d 976, 977 (Me.
1990); accord Greenwood v. Greenwood, 2000 ME 37, ¶¶ 9-10, ___ A.2d
___.  When faced with ambiguous prior orders, it is incumbent on a later
court to reasonably interpret those previous orders.  See Raymond v.
Raymond, 480 A.2d 718, 721-22 (Me. 1984).  We employ a two-part,
objective test when reviewing a trial court's order that attempts to clarify a
divorce decree: 

(1) [W]hether the court's prior judgment was sufficiently
ambiguous as a matter of law; and (2) whether the court's
construction of its prior judgment is consistent with its
language read as a whole and is objectively supported by the
record.

MacDonald, 582 A.2d at 977 (citations omitted); see also Fitzgerald v.
Gamester, 1999 ME 92, ¶ 10, 732 A.2d 273, 276 (applying this two-part
objective test); Murphy v. Murphy, 1997 ME 103, ¶ 8, 694 A.2d 932, 934
(same).  When a divorce judgment does not expressly determine a particular
issue, the judgment will be construed by considering the intent of the
divorce court.  See In re Reider, 177 B.R. 412, 418-19 (Bankr. Me. 1994)
(applying Maine law); Elliot v. Elliot, 431 A.2d 55, 57 (Me. 1981).
	[¶5]  The MacDonald test initially asks whether the divorce
judgment was sufficiently ambiguous as a matter of law to require subsequent
clarification.  See MacDonald, 582 A.2d at 977.  In this case, the divorce
judgment was not ambiguous.  The relevant portion of the divorce decree
read: "The plaintiff's 401K pension account is agreed to have a balance of
$341,642.  One-half of that account is awarded to the defendant.  Defendant
is to prepare a Qualified Domestic Relations Order for that purpose." 
Reading the preceding statement in context of the entire divorce judgment,
it remains clear the divorce court sought to award Valerie one-half of the
account, not one-half of the value of the account as of any particular date.
	[¶6]  The Superior Court agreed and found the following:

Although the divorce court recited the balance in the account
as of the date of the hearing, the award was not one-half of
that balance but one-half of the account.

The Court then substituted a new order for the unambiguous order of the
divorce court:

Given the vagaries of the stock market, this court concludes
that the value of the account to be distributed should have
been determined as of the date of the divorce and the
defendant should have received one-half of this amount.

	[¶7]  It is clear that the original decree sought to award to Valerie
one-half of the 401(k) account.  The court, however, erred in fixing the date
of valuation as the date of the decree, rather than the date of the actual
division of the asset.  Gains or losses in the account's value subsequent to the
divorce belong to the parties in proportion to their share in the fund. 
Although Stephen had investment authority pursuant to the provisions of the
trust establishing the account, he was not entitled to any more than his
share of the fund's growth.  As of the date of the decree, Valerie was entitled
to one-half of the account.  The court's order deprives her of her share of
the fund's growth subsequent to the date of the decree.  We therefore
remand to the Superior Court in order that it may (1) establish the value of
the account as of the date of distribution; and (2) award to Valerie her share
of that fund and the income on any undistributed portion of the fund to the
date of its final distribution to her.

III.  POST-JUDGMENT INTEREST

	[¶8]  A grant of post-judgment interest is based solely on statutory
law.  See Allen v. Allen, 629 A.2d 1228, 1230 (Me. 1993); Ginn v. Penobscot
Co., 342 A.2d 270, 276 (Me. 1975).  The controlling statute for post-
judgment interest is 14 M.R.S.A. § 1602-A (Supp. 1999).{2}  We review the
trial court's construction of the post-judgment interest statute for errors of
law.  Cf. Osgood v. Osgood, 1997 ME 192, ¶ 7, 698 A.2d 1071, 1073
(referring to the prejudgment interest statute).  Because statutory
construction is a matter of law, we review decisions regarding the meaning
of a statute de novo.  See Estate of Jacobs, 1998 ME 233, ¶ 4, 719 A.2d 523,
524.  "We look first to the plain meaning of the statutory language as a
means of effecting the legislative intent. . . .  We will not construe statutory
language to effect absurd, illogical, or inconsistent results."  Coker v. City of
Lewiston, 1998 ME 93 ¶ 7, 710 A.2d 909, 910 (citations omitted); accord
Osgood, ¶ 7, 698 A.2d at 1074.
	[¶9]  Section 1602-A permits the levying of post-judgment interest
on the nonprevailing party "from and after the date of entry on an order of
judgment."  14 M.R.S.A. § 1602-A.  It also allows the nonprevailing party,
upon a showing of good cause, to petition the trial court to fully or partially
waive post-judgment interest.  See id.  In his response to Valerie's motion
for reconsideration, Stephen asked the court not to "penalize" him for
Valerie's delay in permitting the division of the 401(k) account.  Stephen's
written argument to the trial court implicitly asks the court to waive post-
judgment interest for good cause-Valerie's several month delay in
preparing a QDRO to divide the 401(k) account.  Valerie argues that
Stephen's argument about her delaying tactics is not a petition to waive
interest as required by statute.{3}
	[¶10]  We find that Stephen's request that he not be penalized for
Valerie's dilatory conduct clearly encompasses a petition to waive interest
for good cause, as permitted by section 1602-A.  Although not the textbook
example of how to lucidly word a petition to waive post-judgment interest,
Stephen's argument notified both the court and the opposing party of his
intention to avoid being taxed interest.  The trial court's determination that
this argument served as an appropriate waiver petition comports with the
statutory language of section 1602-A; therefore, the court did not err as a
matter of law.  See Coker, ¶ 7, 710 A.2d at 910.  The trial court then
declined to charge Stephen post-judgment interest in response to his
petition.  Section 1602-A grants the trial court discretion to waive some or
all of the post-judgment interest upon presentation of a petition and on a
showing of good cause.  See Sawyer v. Walker, 572 A.2d 498, 500 (Me.
1990).  The decision to waive interest here did not exceed the bounds of
the court's discretion.  The court's denial of interest was not plainly and
unmistakably unjust considering Valerie's significant delay in submitting a
proposed QDRO to the plan administrator.  See Harris v. PT Petro Corp., 650
A.2d 1346, 1348 (Me. 1994); Beattie v. Beattie, 650 A.2d 950, 951 (Me.
1994).

	The entry is:
Judgment vacated.  Remanded to the Superior Court for
a determination of the value of the 401(k) account as of
the date of the distribution of the account and to award
one-half of that amount to the defendant with her aliquot
share of any income thereon subsequent to distribution.
Attorney for plaintiff:

Robert A. Laskoff, Esq.
Laskoff & Associates
P O Box 7206
Lewiston, ME 04243-7206

Attorney for defendant:

Coleman G. Coyne Jr., Esq.
Murphy and Coyne
P O Box 1312
Lewiston, ME 04243-1312

FOOTNOTES******************************** {1} . The division of the 401(k) account required the use of a QDRO because of the restrictions placed on pensions by the Internal Revenue Code and Employee Retirement Income Security Act of 1974 (ERISA). See 29 U.S.C. § 1056(d) (1999). Without a QDRO, pension benefits may not be divided and distributed to a person other than the employee to which they originally accrued. See id. {2} . The post-judgment interest statute reads, in full: § 1602-A. Interest after judgment From and after the date of entry on an order of judgment, including the period of the pendency of an appeal, interest shall be allowed at a rate: 1. Actions; District Court jurisdictional limit. For actions in which the damages claimed or awarded do not exceed the jurisdictional limit of the District Court set forth in Title 4, section 152, of 15% per year; and 2. Other action. For other actions, equal to the coupon issue yield equivalent, as determined by the United States Secretary of the Treasury, of the average accepted auction price for the last auction of 52-week United States Treasury bills settled immediately prior to the date from which the interest is calculated, plus 7%. If the prevailing party at any time requests and obtains a continuance for a period in excess of 30 days, interest shall be suspended for the duration of the continuance. On petition of the nonprevailing party and on a showing of good cause, the trial court may order that interest awarded by this section shall be fully or partially waived. 14 M.R.S.A. § 1602-A (Supp. 1999) (emphasis added). {3} . Stephen's argument in his written response to Valerie's request for post-judgment interest on her share of the 401(k) account states: In addition, the Plaintiff [Stephen] should not be the one penalized for the Defendant's delay in this case. . . . In order to avoid this type of tactic by the Defendant[,] the Court in its Order of April 8, 1999[,] has chose an amount to be transferred and had the Court wished interest to be paid on that amount [it] would have so ordered. It is the Plaintiff's position that by not ordering interest, the Court had taken in to consideration the Defendant's tactics in this matter and has chosen not to penalize the Plaintiff for the Defendant's past and present actions.