The U.S. District Court for the Eastern District of Michigan concluded that a Domestic Relations Order Nunc Pro Tunc issued in 2014 is qualified because it is considered to date back to the 1993 divorce judgment for Ardella Patterson, who divorced from Chrysler Group employee Henry Patterson.
In so doing, the court rejected Chrysler’s objection that paying Ardella now would be an increase in benefits. The court found that since the order is considered to date back to 1993, then at the time the plan started paying the benefits to Henry in 1994, it was already required to pay some of them to Ardella instead. “Paying that share now is not an increase in benefits but instead a recognition that the money Henry Patterson received included both his share of the benefits and extra funds that the plan paid by mistake,” the court wrote in its opinion.
In addition, the court found the order would predate the “benefit commencement date,” and therefore could not violate the plan’s prohibition on a change in the form of benefits after the benefit commencement date.
The court granted summary judgment to Ardella and ordered that she be awarded the benefits provided to her under the terms of the 2014 Nunc Pro Tunc Order.NEXT: The case
According to the court opinion, the Wayne County Circuit Court entered a divorce judgment in September 1993, awarding Ardella half of her husband’s pension benefit accumulated during the marriage. Henry began receiving retirement benefits in April 1994. He died in November 2007.
Ardella twice submitted the divorce judgment to Chrysler in an attempt to claim the benefits it awarded her. In 1994, a plan representative advised Ardella or her counsel by phone that the judgment was not a qualified domestic relations order, and arranged for a sample qualified order to be mailed to Ardella’s counsel. She submitted the divorce judgment again in early 2008. On February 28, 2008, Benefit Express (an agent of the plan) sent her a letter denying her claim for benefits under the divorce judgment, stating that the judgment was not a qualified domestic relations order, that Henry had no remaining benefit to be assigned to Ardella, and that no further action would be taken.
Ardella unsuccessfully pursued benefits again in 2012. On February 28, 2014, the Wayne County Circuit Court entered an order titled “Qualified Domestic Relations Order Nunc Pro Tunc” stating that it “relates to the provision of marital property rights… as a result of” the 1993 divorce judgment. The order provides that Ardella is entitled to a portion of Henry’s plan benefits as an alternate payee.
On March 3, 2014, Ardella’s counsel sent a copy of the Nunc Pro Tunc Order to Chrysler with a demand for benefits. On June 24, 2014, Chrysler denied the claim because “due to the optional form of payment chosen by the participant at the time of the participant’s commencement, there is no survivor benefit.”
Ardella filed suit on February 12, 2015. The district court’s opinion is here.