COURT OF APPEALS OF VIRGINIA
Present: Judges Frank, Petty and Senior Judge Bumgardner
Argued at Richmond, Virginia
ANNE G. SHROPSHIRE
OPINION BY
v. Record No. 3188-05-2 JUDGE ROBERT P. FRANK
JULY 25, 2006
VIRGINIA RETIREMENT SYSTEM
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Melvin R. Hughes, Jr., Judge
William F. Seymour, IV (Mark W. Barnard; Cherry, Seymour &
Hundley, P.C., on briefs), for appellant.
Brian J. Goodman, Assistant Attorney General (Robert F.
McDonnell, Attorney General, on brief), for appellee.
Anne G. Shropshire, appellant, appeals from a judgment of the trial court which affirmed
the decision of the Virginia Retirement System (VRS) denying survivor and/or other retirement
benefits upon the death of her husband, Jonah Thomas Shropshire, retiree. Appellant contends
that VRS, disregarding its own policies and procedures, violated the spousal notice provisions of
Code § 51.1-165.1 and that the trial court erred in finding appellant’s requested relief to be
speculative and unattainable. For the reasons stated, we affirm the decision of the trial court
denying appellant the survivor and retirement benefits she seeks.
BACKGROUND
The relevant facts are not in dispute.
Appellant and retiree married on August 18, 1964. Although the couple separated in
1990, neither party filed divorce proceedings, nor had the parties entered into a property
settlement agreement. Appellant and retiree remained married until retiree’s death on May 23,
2004.
Retiree began employment with the Commonwealth of Virginia in 1971. At that time,
retiree submitted to VRS a “Member Informational Report” in which he indicated that he was
married to appellant and designated appellant as the beneficiary of his retirement benefits in the
event of his death. The beneficiary designation allowed the individual selected by retiree to
receive the amount of contributions accumulated in the retiree’s retirement account upon
retiree’s death before or after the time of retirement. In 1992, while still actively employed with
the Commonwealth, retiree submitted a “Beneficiary Change Form” to VRS. On that form,
retiree changed the primary beneficiary of his accumulated retirement benefits to his adult son.
On November 21, 2000, retiree applied to VRS to receive his retirement benefits. Retiree
completed, under oath, an “Application for Service Retirement.” On that application, retiree
misrepresented his marital status as “Divorced.” When selecting a “Retirement Payment
Option,” retiree chose the “Basic Benefit,” which is a lifetime retirement benefit paid only to
retiree. This selection does not provide for any payments to designated beneficiaries or survivors
upon retiree’s death.1 Paragraph 21 of the application requires spousal acknowledgement, where
applicable, of the payment option selected by retiree.2 This section of retiree’s application was
blank.
1
Retiree had the ability, at the time of his retirement, to select a retirement option that
would have paid retirement benefits to his designated beneficiary after his death. Retiree chose
instead to receive the entirety of his retirement contributions during his lifetime, reserving
nothing for his survivors upon his death.
2
The statement of Paragraph 21, which is to be signed by the spouse, provides:
I have read and I understand the retirement payment options
available under VRS which are explained in the “Guidelines to
Retirement” and the VRS Handbook for Members. I am aware of
and understand the retirement payment option selected by my
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Appellant was not aware that retiree had applied for retirement benefits from VRS, that
retiree had misrepresented his marital status on his application, or that retiree had selected a
payment option that did not provide for survivor benefits.
Shortly after retiree’s death, appellant sought to claim survivor and/or any other benefits
from VRS. In response, VRS summarily denied her claim. Appellant appealed this denial to
VRS, which conducted a fact-finding proceeding before a hearing officer. Appellant argued that,
as a result of the failure to notify her of retiree’s selection of a payment option that provided no
survivor benefits, she was denied a portion of the retirement benefits to which she had marital
rights. Appellant contended that VRS, by failing to require retiree to provide proof of divorce or
proof of notice to appellant, failed to follow its own policies and procedures. The hearing officer
recommended the following action be taken by VRS:
The VRS had documentation in the file that [retiree] was married.
VRS policies and procedures required either spousal
acknowledgment or proof of divorce before the application could
be approved. Being such, [appellant’s] marital rights were not
protected as a direct result of the VRS failing to follow its policies
and procedures. Therefore, [retiree’s] application should be
reviewed as if [appellant] is entitled to a survivor benefit option.
VRS, in its final case decision dated July 8, 2005, rejected the recommendation of the
hearing officer and denied benefits to appellant. VRS noted that the statute requiring spousal
acknowledgement of a retiree’s selected retirement payment option, Code § 51.1-165.1,3 does
spouse. Further, I am aware that counseling regarding the payment
options is available.
3
Code § 51.1-165.1 provides:
Any application for retirement benefits . . . shall include a
statement, acknowledged pursuant to § 55-118.4 or § 55-118.6,
made by the spouse, if any, of the applicant, acknowledging (i) that
the spouse has read the provisions of payment options and (ii) the
selection of the basic benefit or any other benefit selected.
Payments to a retired member who fails to have executed properly
a statement of acknowledgment, and the provisions for obtaining
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not provide for spousal consent, but only spousal acknowledgement. VRS stated that, whether or
not such spousal acknowledgement is secured, “[t]he spouse cannot override the payment option
selected by the member.” In its decision, VRS stated:
In the situation that occurred in this matter, where the member
indicates on the retirement application that the marital status is
divorced, signs the statement that all information contained on the
application is true and no conflict exists which would cause a delay
in the processing of the retirement application and payment of
benefits, the existing policies and procedures (contrary to the
independent fact finder’s assertion) do not require the retirement
analyst processing the retirement application to review the VRS
record to verify the marital status. Specifically, in this matter, a
review of the VRS record supports the indicated marital status of
“divorced” in that [retiree’s] original beneficiary designation
named [appellant] (as spouse) in 1971. [Retiree] changed the
beneficiary designation in 1992 from his spouse to his son. This is
not inconsistent with a marital status of “divorced” and VRS relied
reasonably on the information contained in [retiree’s] service
retirement application.
Appellant appealed the VRS decision to the Circuit Court of the City of Richmond
pursuant to the Virginia Administrative Process Act (VAPA), Code § 2.2-4000, et seq.
Appellant argued that she had been prejudiced by the lack of notice, i.e., that had she been told
that retiree was not providing her with a survivor benefit, she would have pursued divorce or
separation proceedings to protect her marital interest in retiree’s retirement benefits. The trial
court affirmed the VRS decision,4 finding that a spouse has no interest in the retirement account
such statement, shall be governed by procedures adopted by the
Board.
4
The circuit court’s review of the agency’s action pursuant to the VAPA is
“equivalent to an appellate court’s role in an appeal from a trial
court.” “In this sense, the General Assembly has provided that a
circuit court acts as an appellate tribunal.”
Mattaponi Indian Tribe v. Dep’t of Envtl. Quality ex rel. State Water Control Bd., 43 Va. App.
690, 707, 601 S.E.2d 667, 676 (2004) (citations omitted), aff’d sub nom. Alliance to Save the
Mattaponi v. Commonwealth Dep’t of Envtl. Quality ex rel. State Water Control Bd., 270 Va.
423, 621 S.E.2d 78 (2005), cert. denied 2006 U.S. LEXIS 4540 (U.S. June 12, 2006).
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of the retiree except that which is allowed by the retiree. Accordingly, the trial court held that
appellant was not entitled to survivor benefits. The trial court also ruled that any remedy
available to appellant would be speculative, as it is uncertain how much of her husband’s
retirement account she would have received in an equitable distribution proceeding.
This appeal follows.
ANALYSIS
Appellant concedes on brief that a spouse cannot override the retiree’s selection of a
retirement payment option. However, appellant argues that, if she had been provided the notice
required by Code § 51.1-165.1, she would have “protect[ed] her marital interest in her husband’s
retirement account” before his death, namely by filing for divorce or by entering into a property
settlement agreement. Appellant contends that VRS is responsible for the lack of notice, as it did
not resolve the conflict between the marital status indicated on the initial “Member Informational
Report” and that indicated on the “Application for Service Retirement.” Appellant urges that
VRS should have required retiree to produce proof of divorce or spousal acknowledgement
before paying any benefits to retiree. Lastly, appellant maintains that, while the relief she seeks
may be speculative as no equitable distribution proceeding occurred to determine her marital
interest in the retirement account, any such speculation resulted solely from VRS’s failure to
notify appellant of retiree’s selected retirement payment option and that VRS should not be
entitled to benefit from this failure.
VRS argues that Code § 51.1-124.4(A)5 prevents appellant from attacking the assets of
VRS, as she is not a member of VRS or a beneficiary selected by retiree to receive benefits upon
5
Code § 51.1-124.4(A) provides in relevant part:
Retirement allowances and other benefits accrued or accruing to
any person under this title and the assets of the retirement systems
created under this title shall not be subject to execution,
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his death. As such, VRS maintains that appellant cannot recover for her claim against retiree’s
retirement benefits. We agree with VRS.
The issue presented by this appeal is one of law, namely the interpretation of applicable
statutes. As such, we review the agency decision de novo. Johnston-Willis, Ltd. v. Kenley, 6
Va. App. 231, 243-44, 369 S.E.2d 1, 8 (1988).
The sole issue involves a question of statutory interpretation. The
issue does not involve “the substantiality of the evidential support
for findings of fact,” which requires great deference because of the
specialized competence of the agency. Instead, when, as here, the
question involves a statutory interpretation issue, “little deference
is required to be accorded the agency decision” because the issue
falls outside the agency’s specialized competence. In sum, pure
statutory interpretation is the prerogative of the judiciary.
Sims Wholesale Co. v. Brown-Forman Corp., 251 Va. 398, 404, 468 S.E.2d 905, 908 (1996)
(citations omitted).
When examining the wording of statutes, this Court considers the plain meaning of a
word rather than an obscure or strained definition. See Rasmussen v. Commonwealth, 31
Va. App. 233, 238, 522 S.E.2d 401, 403 (1999). It is clear upon reading Code § 51.1-124.4(A)
attachment, garnishment, or any other process whatsoever, except
any process for a debt to any employer who has employed such
person, and except for administrative actions pursuant to Chapter
19 (§ 63.2-1900 et seq.) of Title 63.2 or any court process to
enforce a child or child and spousal support obligation, nor shall
any assignment thereof, other than a voluntary, irrevocable
assignment of group life insurance pursuant to § 51.1-510, be
enforceable in any court. However, retirement benefits and assets
created under this title which are deemed to be marital property
pursuant to Chapter 6 (§ 20-89.1 et seq.) of Title 20 may be
divided or transferred by the court by direct assignment to a spouse
or former spouse pursuant to § 20-107.3. The assets of the
retirement systems administered by the Board are trust funds and
shall be used solely for the benefit of members and beneficiaries
and to administer the retirement systems.
(Emphasis added).
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that the legislature intended VRS to hold its assets in the form of a public trust, for the sole
benefit of retirees and their designated beneficiaries. It is for this reason that the legislature has
shielded these funds from virtually all legal attacks, save those expressly exempted within the
statute. See Crawford v. Haddock, 270 Va. 524, 530, 621 S.E.2d 127, 130 (2005) (indicating
that the language of Code § 51.1-124.4 evinces an intent by the General Assembly to insulate
VRS assets from certain types of “legal process”). The Supreme Court of Virginia recently
reached the same conclusion when interpreting Code § 51.1-124.4 in Sexton v. Cornett, 271 Va.
251, 623 S.E.2d 898 (2006).
In Sexton, the Court considered whether a wife was entitled to her deceased husband’s
retirement benefits, where the husband had died intestate. The retiree and his wife had separated
and were in the midst of divorce proceedings at the time of his death. Id. at 254, 623 S.E.2d at
900. Initially, the retiree had designated his wife as the beneficiary of his retirement benefits.
Id. Two months before his death, the retiree designated his sister and her daughter as the sole
beneficiaries of his retirement benefits. Id. The retirement benefits, along with a state life
insurance policy that had the same beneficiary designation, made up the retiree’s entire estate.
Id. at 255, 623 S.E.2d at 900.
After retiree’s death, his wife filed a petition to determine her elective marital share of the
retirement benefits, arguing that they should be included as part of his augmented estate. Id.
The wife relied on a Virginia law that was enacted “to preclude one spouse from disinheriting the
other by transferring his property to third parties during his lifetime and thus depleting his
estate.” Id. The Supreme Court agreed that this estate law, when read in isolation, would clearly
make the retirement benefits subject to the wife’s claim. Id. However, the Court ruled that it
could not read the estate law in isolation, but had to consider the impact of Code § 51.1-124.4.
“[T]he General Assembly has, for many years, maintained a legislative policy of exempting
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VRS . . . retirement benefits, in the hands of their designated beneficiaries, from attack of any
kind.” Id. Accordingly, the Supreme Court denied the wife in Sexton any relief under the estate
laws.
Code § 51.1-124.4(A) does provide for two limited exceptions to the prohibition on legal
attacks as it pertains to a spouse’s right to retirement benefits and assets, namely (1) a court
process to enforce spousal support obligations or (2) a division or transfer of these assets that are
deemed to be marital property in an equitable distribution proceeding under Code § 20-107.3.
No such proceedings ever took place between appellant and retiree, as they remained legally
married at retiree’s death.
Appellant argues that, because it is “undisputed that the Shropshire retirement account
was marital property that would have been subject to equitable distribution in a divorce
proceeding,” her claim falls into the statutory exception noted above. Assuming that appellant is
correct, which is not apparent from the record, it is evident that the exception applies only to
those assets deemed to be marital property in an equitable distribution proceeding, not those
assets that would have been deemed marital property. It is clear that the statute contemplates
only those proceedings that have already occurred, not those that “may” occur in the future.6
Further, retiree selected the “Basic Benefits” payment option when applying for his
retirement benefits, which provides for payment only during retiree’s lifetime. Retiree reserved
6
To hold otherwise would allow appellant to force a determination of her share of any
marital property without the benefit of an equitable distribution proceeding. Any such
determination would be fraught with immeasurable uncertainty, as it would require consideration
of what a trial court “may have decided,” but without the benefit of having the interests of both
spouses represented.
Further, this determination would be inherently speculative, as Virginia law has no
presumption favoring equal division of marital property. See Papuchis v. Papuchis, 2 Va. App.
130, 132, 341 S.E.2d 829, 830-31 (1986) (affirming trial court award to one spouse of 45% of
certain marital property). Thus, a court could not award appellant with the relief she seeks. See
Dietz v. Dietz, 17 Va. App. 203, 215, 436 S.E.2d 463, 471 (1993) (“Damages which cannot be
established with reasonable certainty are speculative or conjectural and may not be recovered.”).
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nothing for his survivors or designated beneficiaries. Appellant, in requesting the payment of
survivor benefits from VRS despite retiree’s selection, seeks to collect on what she believes to be
her marital share from the monies held in trust for other state employees, not the monies held by
retiree or his estate. Appellant is not asking to share in any portion of her husband’s retirement
funds. Indeed, given retiree’s selection of payments only during his lifetime, there are no
“retirement funds” left after his death from which appellant could collect. Once retiree died, his
retirement account ceased to exist. Instead, appellant is asking to share in the funds belonging to
other state employees.7 It is this very legal attack that Code § 51.1-124.4(A) was designed to
prevent.
We need not address appellant’s argument that VRS violated its own policies by not
ensuring that appellant was informed of retiree’s selection of a payment option as required by
Code § 51.1-165.1. Assuming without deciding that VRS violated its policies, the plain
language of Code § 51.1-165.1 requires only acknowledgement by a spouse of a retiree’s benefit
selection. Spousal consent is not required. As appellant concedes on brief, a spouse is not
permitted to override a retiree’s benefit selection if the spouse disagrees with the retiree’s choice.
Nothing in that statute gives appellant a vested or an enforceable interest in retiree’s retirement
benefits. Thus, the most appellant was entitled to under Code § 51.1-165.1 was notice.
With this notice, appellant may have been able to file for divorce and to seek equitable
distribution of the retirement account before retiree’s death. However, any award made by a trial
court would have been granted from retiree’s account alone, not from the funds held in trust by
VRS for other state employees. Once retiree died, his retirement account ceased to exist. As we
concluded above, appellant is precluded from seeking the remedy she requests because this
7
Appellant conceded at oral argument that the claim was against the VRS funds held in
trust for state employees and their beneficiaries.
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would require the trial court to award appellant a portion of the funds held in trust for other state
employees. Code § 51.1-124.4(A) bars such action.
Thus, we hold that the prohibition set out by the legislature in Code § 51.1-124.4(A),
shielding VRS assets from legal process outside of the limited circumstances noted above,
controls in this case. Accordingly, appellant cannot recover against VRS, and the decision of the
trial court is affirmed.8
CONCLUSION
Appellant is barred by Code § 51.1-124.4(A) from subjecting the assets of VRS to legal
attack, as her claim does not fall under one of the exceptions provided by the statute. The
decision of the trial court upholding the VRS denial of survivor benefits to appellant is affirmed.9
Affirmed.
8
We do not address appellant’s argument that the trial court erred in ruling that the
damages were speculative because we find that appellant has no remedy under these
circumstances.
9
On brief, appellant requested an award of attorney’s fees pursuant to Code
§ 2.2-4030(A). Because such an award is available only to a prevailing party, appellant’s request
is denied.
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