COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Fitzpatrick, Judge Lemons and
Senior Judge Duff
Argued at Alexandria, Virginia
R. KEITH HASTIE
OPINION BY
v. Record No. 0958-98-4 CHIEF JUDGE JOHANNA L. FITZPATRICK
JUNE 1, 1999
ELLEN D. HASTIE
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Thomas S. Kenny, Judge
David D. Masterman (Condo & Masterman, P.C.,
on briefs), for appellant.
Richard J. Colten (Surovell, Jackson,
Colten & Dugan, P.C., on brief), for
appellee.
R. Keith Hastie (husband) appeals the entry of a qualified
domestic relations order (QDRO), pursuant to Code
§ 20-107.3(K)(4), which he alleges materially increased the
amount to be paid from his pension to Ellen D. Hastie (wife).
Husband contends on appeal that the QDRO effected a substantive
change to the divorce decree and, under Rule 1:1, the trial
court did not have the authority to modify the decree. For the
reasons that follow, we reverse and remand the case to the trial
court for entry of a proper QDRO in accordance with the
provisions of Code § 20-107.3(K)(4).
I.
A final decree of divorce entered on February 28, 1988 set
forth a payment scheme by which husband would pay wife a portion
of the marital share of husband's military retirement pension.
The language of the divorce decree provided the following:
[Wife] be and she hereby is awarded and
allocated forty percent (40%) of the marital
portion of the [husband's] retirement
pension, said marital portion being sixty
point one percent (60.1%) of the total
pension, payable monthly as received, to-
wit, an award to the [wife] of One Hundred
Two Thousand Four Hundred Ninety-six Dollars
and Forty cents ($102,496.40), payable in
the amount of $575.04 each month until paid
in full; . . . .
(Emphasis added). The fixed sum of $102,496.40 constituted
wife's share as determined by the trial court, or 40% of
$256,216, the then present value of the marital portion of
the pension.
Beginning in February 1987, husband paid directly to
wife her share of the pension as ordered by the trial court.
The parties dispute whether husband's payments to wife,
which increased over the years, reflected an intentional
overpayment by husband to reduce the fixed sum award or a
cost-of-living increase. Husband alleged that his payments
from February 1987 through March 1996 consisted of the
court-ordered $575.04 per month plus any additional amounts
he chose to pay in order to retire the debt sooner. Wife
alleged that husband's payments increased over the years to
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reflect the 40% of the marital share of his monthly
installments, which included normal cost-of-living
increases.
In March 1996, wife submitted the divorce decree to the
Defense Finance and Accounting Service (DFAS), which
administers the military retirement program. She sought and
began receiving direct payment from DFAS of her share of
husband's retired pay in the amount of $575.04 per month.
In December 1996, husband moved the trial court for the
entry of an order pursuant to Code § 20-107.3(K)(4) to
conform its terms to the express intent of the final decree
to allow wife to receive a total of $102,496.40 and no more.
Consequently, wife also moved the trial court for a
"clarifying order" specifying her entitlement to the decreed
percentage of husband's pension without a cap.
At the hearing on this matter, husband contended the
pension award to wife in the original decree was the fixed
sum of $102,496.40, payable to her at the rate of $575.04
per month until that fixed sum was paid in full, as stated
in the order. Husband sought to have the trial court
specify the remaining unpaid balance of wife's share, taking
into account payments made in the total amount of $85,774.24
as of the date of hearing. Wife argued that the divorce
decree awarded her 40% of the marital share of husband's
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pension, payable monthly so long as he continued to receive
military retired pay.
In its letter opinion, the trial court concluded that
the divorce decree awarded wife 40% of the marital share of
husband's military pension, as opposed to the fixed sum of
$102,496.40. The trial court wrote:
Therefore, the inclusion of the present
value of the retirement pension in the Final
Decree of Divorce was not a statement of
[wife's] award. Instead, the Final Decree
made an award of the percentage of the
pension without regard to the present value.
The Final Decree of Divorce awarded [wife] a
40% share of [husband's] retirement pension,
as long as [husband] receives payments. Any
reference to present value is mere
surplusage and without effect.
Accordingly, the trial court entered the following clarifying
order:
2. The order of the Court with regard to
the division of retired pay contained in the
Final Decree awards to the [wife] forty
percent (40%) of the marital share of
[husband's] retired pay, said marital
portion being sixty point one percent
(60.1%) of [husband's] total retired pay,
payable to [wife] at the rate of forty
percent (40%) of the marital share of each
monthly installment of retired pay from and
after February 1, 1987, for as long as the
[husband] receives payments of retired pay
or until [wife's] earlier death.
At wife's request, the clarifying order also contained the
necessary provisions to establish a QDRO and enable wife to
receive her allocable share of the retired pay by direct payment
from DFAS.
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II.
On appeal, husband contends the original divorce decree was
a final, non-appealed order. Additionally, husband argues that
the trial court erroneously modified the divorce decree under
Code § 20-107.3(K)(4) by making a "significant and material
modification" to the terms of the original order. We agree.
It is well settled that equitable distribution orders
become final within twenty-one days of entry. See Rule 1:1; see
also Fahey v. Fahey, 24 Va. App. 254, 256, 481 S.E.2d 496, 497
(1997) (en banc). Thereafter, the court's power to modify such
orders is governed by Code § 20-107.3(K)(4), which provides:
The court shall have the continuing
authority and jurisdiction to make any
additional orders necessary to effectuate
and enforce any order entered pursuant to
this section, including the authority to:
* * * * * * *
Modify any order . . . intended to
affect or divide any pension, profit-sharing
or deferred compensation plan or retirement
benefits pursuant to . . . federal laws,
only for the purpose of establishing or
maintaining the order as a qualified
domestic relations order or to revise or
conform its terms so as to effectuate the
expressed intent of the order.
(Emphasis added); see also Fahey, 24 Va. App. at 257, 481 S.E.2d
at 497. The QDRO may not "modify a final divorce decree simply
to adjust its terms in light of the parties' changed
circumstances" but must be "consistent with the substantive
provisions of the original decree." Caudle v. Caudle, 18 Va.
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App. 795, 798, 447 S.E.2d 247, 249 (1994); see also Fahey, 24
Va. App. at 256-57, 481 S.E.2d at 497.
In the instant case, it is uncontested that wife did not
request an amendment or clarification of the divorce decree
within twenty-one days of its entry and did not appeal to this
Court the trial court's decision regarding the provision of
husband's pension. 1 Accordingly, any clarification or
modification of the divorce decree must be "consistent with the
substantive provisions of the original decree." Caudle, 18 Va.
App. at 798, 447 S.E.2d at 249.
We have previously held that orders that alter critical
terms of the contract, such as timing or amount of payments,
exceed the authority granted under Code § 20-107.3(K)(4). See,
e.g., Fahey, 24 Va. App. at 256, 481 S.E.2d at 497 (holding that
the division of the actual value of a Keogh account rather than
the agreed value was a substantive change); Decker v. Decker, 22
Va. App. 486, 495, 471 S.E.2d 775, 779 (1996) (holding that
reduction in spousal support by amount of mortgage payments on
recipient spouse's house was a substantive change).
In the instant case, the clear language and intent of the
original divorce decree was to allot wife 40% of the present
value of husband's pension on February 28, 1988, a valuation
1
The decree was appealed on March 8, 1988 on grounds
irrelevant to this case, at which time the decision of the trial
court was affirmed.
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method commonly used prior to this Court's holding in Zipf v.
Zipf, 8 Va. App. 387, 382 S.E.2d 263 (1989). The specific,
unambiguous language of the final decree determines this issue.
Wife was awarded 40% of the 60.1% marital portion of husband's
pension, "to-wit, . . . $102,496.40, payable in the amount of
$575.04 each month until paid in full; . . . ." Read in its
entirety, "to-wit" links explicitly the payment to the set
amount of $102,496.40 until it is "paid in full."
The trial court modified both the terms of payment and the
amount of total payments to be made by husband by imposing an
open-ended obligation on husband. More specifically, the QDRO
modified the monthly payment from "$575.04 per month" to "forty
percent (40%) of the marital share of each monthly installment
of retired pay" received by husband. The QDRO also modified the
total amount to be paid, effectively changing the requirement
that husband pay $102,496.40, payable in monthly installments,
"until paid in full." The trial court ordered husband to pay
"as long as the [he] receives payments of retired pay or until
[wife's] earlier death." Guided by the dictates of Code
§ 20-107.3(K)(4), we find the trial court lacked authority to
order these changes that substantively modified the original
divorce decree.
Nevertheless, wife contends that such a conclusion is
contrary to the rule annunciated in Zipf, where we rejected
limitation of a pension award, payable in the future, to a
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"present value calculation" because it denied the benefit of
"future earnings and adjustments that are attributable to the
. . . deferred share" and its "future appreciation." Id. at
397, 382 S.E.2d at 268-69. As we subsequently explained in
Primm v. Primm, 12 Va. App. 1036, 407 S.E.2d 45 (1991), "[i]t is
only fair that both parties share in the increased value of the
pension." Id. at 1038, 407 S.E.2d at 47.
While Zipf established the rule that a trial court may not
limit a pension award, payable in the future, to a present value
calculation, that decision came after the original divorce
decree in the instant case had been entered and become final.
In 1988, wife could have appealed the divorce decree on the
pension issue and alleged that the trial court erred in awarding
a fixed sum based upon the present value of the pension.
However, because wife did not appeal the trial court's divorce
decree as it related to that issue, the decree became a final
order and the law of this case not subject to later
modifications. See Norris v. Mitchell, 255 Va. 235, 240, 495
S.E.2d 809, 812 (1998); Solomond v. Ball, 22 Va. App. 385, 390,
470 S.E.2d 157, 159 (1996).
While the trial court's original method of division later
disfavored wife because husband's retirement account increased
in value, the trial court was nonetheless without authority to
substantively modify the divorce decree. See Code
§ 20-107.3(K)(4); Fahey, 24 Va. App. at 257, 481 S.E.2d at 497;
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Caudle, 18 Va. App. at 798, 447 S.E.2d at 249. Accordingly, we
reverse and remand the case to the trial court for entry of a
proper QDRO in accordance with the provisions of Code
§ 20-107.3(K)(4).
Reversed and remanded.
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