Files v. Exxonmobil Pension Plan

Opinions of the United

2005 Decisions States Court of Appeals

for the Third Circuit

11-2-2005

Files v. Exxonmobil Pension

Precedential or Non-Precedential: Precedential

Docket No. 04-2390

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 04-2390

RITA M. FILES,

Appellant

v.

EXXONMOBIL PENSION PLAN;

ADMINISTRATOR-BENEFITS FOR

THE EXXONMOBIL PENSION PLAN;

JEANNETTE C. KELLINGTON;

GARCES & GRABLER, P.C.;

EDWARD J. NOWICKI;

ROBERT H. GOODWIN;

JOHN DOES, 1-5; JOHN DOES 6-10;

JANE DOES, 1-5; JANE DOES 6-10;

ABC, P.A., DEF PARTNERSHIP AND/OR XYZ, P.C.

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 02-cv-05374)

District Judge: Honorable Garrett E. Brown, Jr.

Argued May 11, 2005

Before: SLOVITER and FISHER, Circuit Judges,

and POLLAK,* District Judge.

(Filed November 2, 2005)

Richard D. Brown (Argued)

Green & Savits

35 Airport Road, Suite 350

Morristown, NJ 07960

Attorney for Appellant

Joseph T. Walsh, III (Argued)

McCusker, Anselmi, Rosen, Carvelli & Walsh

127 Main Street

Chatham, NJ 07928

Attorneys for Appellees

OPINION OF THE COURT

FISHER, Circuit Judge.

This case involves the pursuit of benefits from the

ExxonMobil Pension Plan (formerly known as the Annuity Plan)

(“Pension Plan”) by the ex-wife of a now-deceased Pension Plan

participant. The principal issue is whether either the Property

Settlement Agreement (“PSA”) entered by the Superior Court of New

*

The Honorable Louis H. Pollak, United States District Judge

for the Eastern District of Pennsylvania, sitting by designation.

2

Jersey, Chancery Division: Family Part, Ocean County (“New Jersey

Court”), prior to the ex-husband’s death, or an order nunc pro tunc

obtained from that same court subsequent to the ex-husband’s death,

constitutes a Qualified Domestic Relations Order (“QDRO”) pursuant

to the Employee Retirement Income Security Act of 1974 (“ERISA”),

as amended by the Retirement Equity Act of 1984 (“REA”), see 29

U.S.C. § 1056(d)(3). The District Court, in reliance on its broad

reading of our opinion in Samaroo v. Samaroo, 193 F.3d 185 (3d Cir.

1999), cert. denied, 529 U.S. 1062 (2000), granted the Pension Plan’s

motion for summary judgment, concluding that the order nunc pro

tunc could not create a right to survivorship benefits after the ex-

husband’s death. As to the PSA entered before the ex-husband’s

death, the District Court concluded that it did not meet the statutory

QDRO requirements and that any attempt to qualify that order as a

QDRO after his death to provide the ex-wife with survivorship

benefits was improper under Samaroo. Because we conclude that the

PSA constituted a QDRO pursuant to the process contemplated

within 29 U.S.C. § 1056(d)(3), providing the ex-wife with a separate

interest in the pension benefit prior to her ex-husband’s death, we will

reverse the District Court’s order and remand for further proceedings.

I. Facts

Rita Files (“Files”) married Ed Rutyna (“Rutyna”) in

November 1972. Rutyna worked for ExxonMobil from September

5, 1972 to April 7, 1993, and participated in two ERISA-governed

plans through ExxonMobil – the Pension Plan and a Savings Plan

(formerly known as the Exxon Thrift Plan) (“Savings Plan”).1 When

he left ExxonMobil in 1993, Rutyna had a fully-vested pension

entitlement. However, since he was under fifty years of age, he was

1

The Pension Plan and Savings Plan, although distinct benefit

plans, share the same administration.

3

not yet eligible to receive his pension; the earliest he would become

eligible would be September of 1996, on reaching fifty.

Nearly two years after Rutyna could begin receiving pension

benefits, Rutyna and Files agreed to the PSA, which was incorporated

into the Dual Judgment of Divorce entered by the New Jersey Court

on July 16, 1998. Paragraph 3.2 of the PSA, provided in relevant

part:

The Husband is the owner of an Exxon pension and

Exxon . . . [Savings] Account and a TOSCO pension.

Wife hereby waives, now and forever, any right, title

or claim on the Husband’s TOSCO pension funds.

The wife shall be entitled to one-half of the Exxon

pension and one-half of the Exxon . . . [Savings]

Account. The transfer shall be by QDRO [“qualified

domestic relations order”] as to the pension and by

transfer to an account designated by the wife as to the

. . . [Savings] Account.

After the PSA was entered by the New Jersey Court, Rutyna’s

divorce counsel, by letter dated August 16, 2000, advised the

ExxonMobil Benefits Administrative Office (“Benefits

Administrator”) of the divorce and requested a sample QDRO “in

order to distribute his Pension and . . . [Savings] fund in accordance

with the terms of the divorce.”2 The Benefits Administrator

2

Because of the importance of the statutory scheme to an

understanding of the parties’ respective positions regarding whether

the PSA meets the statutory requirements for a QDRO, we set forth

the relevant statutory provisions throughout our factual recitation.

ERISA’s anti-alienation provision states that “[e]ach pension plan

shall provide that benefits provided under the plan may not be

4

responded, by letter dated September 16, 2000, that Rutyna’s written

authorization was required for the release of information. By letter

dated September 18, 2000, Rutyna’s divorce counsel provided

Rutyna’s authorization for the release of information to distribute his

pension and savings accounts in accordance with the terms of the

PSA. The Benefits Administrator then provided, by letter dated

September 29, 2000, a Pension Plan estimate, a statement of account

for the Savings Plan as of September 27, 2000, a package of materials

explaining the Pension Plan’s QDRO policies and practices, and a

sample QDRO. An enclosed Q & A sheet entitled “Information

About Thrift and Annuity Plan Benefits as Part of the Divorce

Process” stated that –

assigned or alienated.” 29 U.S.C. § 1056(d)(1). The REA amended

that anti-alienation provision by setting forth a process to give effect

to divorce decrees and state-court orders that pertain to ERISA

regulated plans if the order is determined to be a QDRO. See Boggs

v. Boggs, 520 U.S. 833, 847 (1997); McGowan v. NJR Service Corp.,

423 F.3d 241, 249 (3d Cir. 2005); 29 U.S.C. § 1056(d)(3)(A).

“QDRO” is defined as a “domestic relations order . . . which creates

or recognizes the existence of an alternate payee’s right to, or assigns

to an alternate payee the right to, receive all or a portion of the

benefits payable with respect to a participant under a plan,” and

which meets certain statutory requirements, which are set forth in 29

U.S.C. § 1056(d)(3)(C)(i)-(iv). 29 U.S.C. § 1056(d)(3)(B)(i); see

infra at n.7. “[D]omestic relations order means any judgment, decree,

or order . . . which . . . relates to the provision of . . . marital property

rights . . . made pursuant to a State domestic relations law. . . .” 29

U.S.C. § 1056(d)(3)(B)(ii). An “alternate payee’ is “any spouse,

former spouse, child, or other dependent of a participant who is

recognized by a domestic relations order as having a right to receive

all, or a portion of, the benefits payable under a plan with respect to

such participant.” 29 U.S.C. § 1056(d)(3)(K).

5

Once Exxon’s Benefits Accounting or Benefits

Administration Office receives written notice of a

divorce (either pending or final), . . . [Savings] and . . .

[Pension] Plan benefits will generally be ‘blocked.’

If benefits are blocked, the participant may not receive

them until one of the documents noted below [e.g. a

divorce decree or a QDRO] is provided or 18 months

has passed from the time the participant could first

receive the benefits.3

3

This 18-month block is consistent with the process

contemplated by ERISA § 206(d)(3)(H)(i)-(v), 29 U.S.C.

§ 1056(d)(3)(H)(i)-(v), which provides:

(i) During any period in which the issue of whether a

domestic relations order is a qualified domestic

relations order is being determined (by the plan

administrator, by a court of competent jurisdiction, or

otherwise), the plan administrator shall separately

account for the amounts . . . which would have been

payable to the alternate payee during such period if

the order had been determined to be a qualified

domestic relations order.

(ii) If within the 18-month period described in clause

(v) the order ... is determined to be a . . . [QDRO], the

plan administrator shall pay the segregated amounts

(including any interest thereon) to the person or

persons entitled thereto.

(iii) If within the 18-month period described in clause

(v) -

(I) it is determined that the order is not

a . . . [QDRO], or

(II) the issue as to whether such order

6

Indeed, following receipt of the August 16, 2000 letter from Rutyna’s

divorce counsel, the administrator blocked Rutyna’s savings account.4

is a qualified domestic relations order

is not resolved,

then the plan administrator shall pay the segregated

amounts (including any interest thereon) to the person

or persons who would have been entitled to such

amounts if there had been no order.

(iv) Any determination that an order is a qualified

domestic relations order which is made after the close

of the 18-month period described in clause (v) shall be

applied prospectively only.

(v) For purposes of this subparagraph, the 18-month

period described in this clause is the 18-month period

beginning with the date on which the first payment

would be required to be made under the domestic

relations order.

4

When questioned as to whether that block also applied to the

pension account, Rodney Leis, testifying as the Pension Plan’s

designee pursuant to Rule 30(b)(6) of the Federal Rules of Civil

Procedure, confirmed that, consistent with ERISA, 29 U.S.C.

§ 1056(d)(3)(H)(i)-(v), a pension account generally would be blocked

for retirees once the Plan “knew that somebody’s in the process of

divorce.” As to terminees (which is what Rutyna was), Leis testified

“so the general question would we put a block on the pension plan,

if we know that there was an imminent retirement and they also had

the divorce, I certainly hope that our organization put a block on both

of them [the savings and the pension plans].” A. 183. He further

characterized this as “an administration procedure that we didn’t send

money to the wrong parties.” Id. Although Files contends that the

ExxonMobil Human Resources Department confirmed, in

7

But, Rutyna’s divorce counsel never provided the QDRO information

received from the Pension Plan to either Files or her counsel. When

Rutyna died on February 25, 2001 at age 54, no QDRO had been

submitted to the Pension Plan.

After Rutyna’s death, a letter exchange ensued between Files

and the Benefits Administrator setting forth their respective positions

regarding Files’s entitlement to benefits under each Plan pursuant to

the PSA. Three (3) days after Rutyna’s death, Files’s divorce counsel

notified Exxon’s legal department of the death, acknowledged that no

QDRO had been filed, and inquired whether the Pension Plan would

honor the PSA. Files herself also notified the Plans of Rutyna’s death

in her capacity as executrix of his estate. The Benefits Administrator

replied to Files by letter dated March 14, 2001, seeking a death

certificate and stating unequivocally that as to the Pension Plan “there

are no survivor benefits due and payable.”5 Files’s new counsel (also

correspondence to Rutyna’s divorce counsel dated August 29, 2000,

that a block was placed on both the savings and pension accounts, the

Pension Plan clarified in its correspondence of October 24, 2001 to

Files’s counsel that the block pertained only to the savings account.

Consequently, whether the block also pertained to the pension

account is subject to dispute.

5

From the outset, the Plan characterized the pension benefits

sought by Files as “survivor benefits,” which are explicitly provided

for within ERISA. See 29 U.S.C. § 1055. 29 U.S.C. § 1056(d)(3)(F)

provides that to the extent provided for in a QDRO, a former spouse

of a plan participant shall be treated as a surviving spouse for

purposes of § 1055 (providing for mandatory plan provisions

regarding joint and survivor annuity and pre-retirement survivor

annuity provisions). ERISA, however, does not insist that a state

court recognize a former spouse as an alternate payee to such an

8

her counsel in this appeal), then wrote to the Plans on March 31,

2001, requesting summary plan documents and asking that no

distribution be made until he could determine whether the PSA met

the QDRO requirements for each Plan. A week later, by letter dated

April 6, 2001, Files’s counsel wrote another letter, enclosing the PSA,

explaining Files’s position that the PSA was a QDRO as to both the

Savings and Pension Plans, and requesting distribution of benefits

pursuant to both Plans. But, that letter characterized the pension

benefit sought as a fifty percent “survivor benefit” under the Pension

Plan and requested forms to allow Files to “elect commencement of

her surviving spouse benefit.”6

The administrator of both the Savings and the Pension Plans,

by letter of July 18, 2001, denied Files’s claim for benefits pursuant

to the PSA, indicating within its determination that: (1) the PSA

interest in her spouse’s pension, but merely yields to the prerogative

of state law to do so. See Critchell v. Critchell, 746 A.2d 282, 286

(D.C. Cir. 2000). Nor does ERISA limit the plan benefits that may

be addressed within state court domestic relations orders to “survivor

benefits.” Accordingly, the Plan’s characterization of the benefits

Files seeks as “survivor benefits” does not control our determination

of whether the domestic relations orders in question constitute

QDROs.

6

We note that the imprecision in characterizing Files’s claim

for pension benefits as one for a “fifty percent survivorship benefit”

in light of the Plans March 14, 2001 correspondence stating that as to

the Pension Plan there were no “survivor benefits due and payable”

only served to confuse this already difficult record as to the benefit

that Files actually sought. That imprecision, however, was later

clarified by Files’s counsel when describing her claim as one for a

“separate interest” in fifty percent of Rutyna’s pension benefits.

9

would be treated as a QDRO for purposes of the Savings Plan (and

specifically that Files would get one-half of that account and, because

of the lack of a beneficiary designation, Rutyna’s children would get

the remainder); (2) the PSA would not be treated as a QDRO for

purposes of the Pension Plan; and (3) the absence of an award of

“survivor benefits to Alternate Payee” in the PSA, coupled with

Rutyna’s death before either Files or Rutyna commenced their receipt

of Pension Plan benefits, resulted in no benefits payable to Files as an

“Alternate Payee” because the PSA did not award her surviving

spouse benefits.7 That letter also stated that the Pension Plan would

7

The Pension Plan based its denial of QDRO status to the PSA

as regards the pension on the following statutory provisions. A

domestic relations order is a QDRO “only if such order clearly

specifies . . . (i) the name and last known mailing address . . . of the

participant and . . . of each alternate payee covered by the order,

(ii) the amount or percentage of the participant’s benefits to be paid

by the plan to each such alternate payee, or the manner in which such

amount or percentage is to be determined, (iii) the number of

payments or period to which such order applies, and (iv) each plan to

which such order applies,” (29 U.S.C. § 1056 (d)(3)(C)(i)-(iv)) and

“only if such order –

(i) does not require a plan to provide any type or form

of benefit, or any option, not otherwise provided

under the plan,

(ii) does not require a plan to provide increased

benefits (determined on the basis of actuarial value),

and

(iii) does not require the payment of benefits to an

alternate payee which are required to be paid to

another alternate payee under another order previously

determined to be a . . . [QDRO].”

10

not entertain a nunc pro tunc order with respect to the Pension Plan

survivor benefits as that would violate 29 U.S.C. § 1056(d)(3)(D) by

requiring the Pension Plan to pay increased benefits. The Pension

Plan’s position is premised on its determination that Rutyna’s pension

benefits lapsed upon his death in the absence of any designated

survivor annuity; consequently, any state court DRO providing for

payment of pension benefits to an alternate payee that was presented

to the Pension Plan subsequent to Rutyna’s death would, in the

Pension Plan’s opinion, result in the Pension Plan having to provide

increased benefits in violation of 29 U.S.C. § 1056(d)(3)(D)(ii).

By letter dated August 9, 2001, Files’s counsel appealed

administratively the Pension Plan’s denial of Files’s claim for pension

benefits pursuant to the PSA. In that letter, Files’s counsel stated that

it was his understanding, based on the block placed on the savings

account, that the Pension Plan was on notice of the divorce

proceedings prior to Rutyna’s death. He further explained that Files

was seeking to enforce an interest created by the PSA during

Rutyna’s lifetime, entitling her to fifty percent of Rutyna’s accrued

benefits, which was enforceable by Files in her own right regardless

of Rutyna’s death because that interest was not a surviving spouse

benefit. Files’s counsel also enclosed with that letter “a proposed

form of separate interest QDRO” and inquired whether it would

qualify as a QDRO for Pension Plan purposes upon its entry by the

New Jersey Court. The letter explained: “It should be evident from

the interest thereby created that Ms. Files[’s] benefit is neither a

survivor benefit nor a benefit that would increase the Plan’s cost . . .

[A]s structured the benefit would have been removed from Mr.

Rutyna’s interest effective as of the date of the...[PSA].”

29 U.S.C. § 1056(d)(3)(D)(i)-(iii).

11

The Pension Plan again denied Files’s claim for benefits

pursuant to the PSA on October 24, 2001. First, the Pension Plan

clarified that a block had been placed only on Rutyna’s savings

account, not on his pension account. Next, the Pension Plan quoted

extensively from its Summary Plan Description to support its denial

– “if a terminee [which is what Rutyna was8] dies before a vested

pension benefit payment begins and without a surviving spouse no

benefit is payable.” The Pension Plan concluded as follows:

We have reviewed the 1998 PSA and have determined

that it does not specifically state that Ms. Files shall

be considered a surviving spouse. Survivor benefits

are fixed as of the participant’s death and the

proposed DRO . . . would expand the liability of the

Plan. Your argument that a separate interest DRO

would have given Ms. Files survivor rights is well

taken but there is no assurance that a separate interest

DRO is what would have been agreed to by the

parties. Therefore, we cannot qualify the . . .

[proposed DRO] as a QDRO at this time as no

pension benefits are payable in accordance with . . .

the Plan.

Files’s counsel replied with yet another appeal dated December 17,

2001, again requesting pension benefits pursuant to the PSA. He

explained that a QDRO was entered within the eighteen month

segregation period following notice to the Plan of the divorce

proceedings. The letter continued that because Files was granted a

separate interest enforceable under state law effective upon entry of

8

The Summary Plan Description for the Pension Plan defines

“terminee” as a “person who separates from service without

becoming a retiree.”

12

the PSA, after entry of the QDRO, that interest must be paid to her

upon her request following Rutyna’s earliest retirement age under the

Pension Plan.

In light of the Pension Plan’s continued denial of Files’s claim

pursuant to the terms of the PSA, upon Files’s request, the New

Jersey Court entered a subsequent order dated February 7, 2002,

providing:

NOW, THEREFORE, the Court does hereby enter

this Order nunc pro tunc from the date of the . . .

[PSA], July 16, 1998, as and for a Qualified Domestic

Relations Order [QDRO] within the meaning of . . .

Section 206(d) of . . . [ERISA], for the express

purpose of enabling . . . [Files] to compel the . . .

[Pension Plan] to make payment to her of her property

entitlement under state law in accordance with the

Domestic Relations Order embodied in this Court’s

Dual Judgment of Divorce entered on July 16, 1998.

(hereinafter, “Order nunc pro tunc”). By letter dated February 28,

2002, a copy of this Order nunc pro tunc was forwarded to the

Pension Plan, which it forwarded to its consultants for review. On

May 30, 2002, the Pension Plan informed Files that, given the entry

of the Order nunc pro tunc, it was no longer considering whether the

PSA would qualify as a QDRO. By letter dated October 7, 2002, the

Pension Plan’s consultants denied Files’s claim for benefits pursuant

to the Order nunc pro tunc explaining:

[The Pension Plan] will not qualify an order

pertaining to the [Pension Plan] that is first submitted

to the Plan and entered by the Court after a

participant’s date of death. On the date of [Rutyna’s]

13

death, he was not married, and the Plan did not have

a QDRO on file pertaining to his benefit. Therefore

in accordance with the terms of the Plan, no further

benefit is payable to any party.

II. Procedural History

Files initiated this action by filing a four count complaint in

the United States District Court for the District of New Jersey. In

Count I, against the Pension Plan and its Administrator, she requested

benefits and alleged a breach of fiduciary duty claim related to the

Pension Plan’s failure and refusal to pay her benefits in accordance

with the PSA or the Order nunc pro tunc. In Counts II through IV,

she alleged legal malpractice against both her own and Rutyna’s

divorce counsel, alleging that counsel had failed to effectuate the

transfer of her interest in the Pension Plan benefits by (1) failing to

prepare the PSA in a form that would be enforced by the Pension

Plan; (2) failing to prepare a QDRO prior to Rutyna’s death in a form

that would be enforced by the Pension Plan; and (3) failing to obtain

the Pension Plan’s approval of either the PSA or another domestic

relations order as a QDRO prior to Rutyna’s death.

On cross-motions for summary judgment regarding Count I

of the Complaint, the District Court denied Files’s motion and

granted the Pension Plan’s.9 At the outset, the District Court

characterized Files’s position as not seeking a survivorship benefit

through her separate interest QDRO obtained by the Order nunc pro

9

Although the District Court continued to exercise

supplemental jurisdiction over the legal malpractice claims, a consent

judgment was entered later against Rutyna’s divorce counsel, and the

remaining counsel defendants were dismissed, with the District Court

retaining jurisdiction for enforcement of the consent judgment.

14

tunc, but instead as seeking to be paid the separate property interest

awarded to her by the terms of the PSA. The Pension Plan argued

that Files sought a property interest not provided for by law and was

not entitled to survivorship benefits pursuant to ERISA in light of her

counsel’s failure to file the QDRO with the Pension Plan prior to

Rutyna’s death. The District Court agreed with the Pension Plan.

The District Court first determined that despite Files’s

assertion, the PSA did not meet the requirements of a QDRO. In the

course of its reasoning, the District Court determined that Rutyna

could not assign or alienate his benefits except through a QDRO

pursuant to the REA, which amended ERISA’s anti-alienation

provision. 29 U.S.C. § 1056(d)(3)(A).10 Next, the District Court

determined that the PSA failed to meet the statutory requirements of

a QDRO as set forth in 29 U.S.C. § 1056(d)(3)(B)-(D). Specifically,

the District Court determined that the PSA failed to name Files as an

10

That provision provides:

(d) Assignment or alienation of plan benefits

(1) Each pension plan shall provide that benefits

provided under the plan may not be assigned or

alienated.

* * *

(3)(A) Paragraph (1) shall apply to the creation,

assignment, or recognition of a right to any benefit

payable with respect to a participant pursuant to a

domestic relations order, except that paragraph (1)

shall not apply if the order is determined to be a

qualified domestic relations order [QDRO]. Each

pension plan shall provide for the payment of benefits

in accordance with the applicable requirements of any

qualified domestic relations order.

15

“alternate payee” as required by § 1056(d)(3)(B)(i)(I); did not detail

the number of payments or pay period as required by

§ 1056(d)(3)(C)(iii); would require the Pension Plan to provide

increased benefits as prohibited by § 1056(d)(3)(D)(ii); and did not

designate Files as a surviving spouse as permitted by § 1056(d)(3)(F).

Relying on our decision in Samaroo, the District Court then

affirmed the Pension Plan’s refusal to honor the Order nunc pro tunc.

The District Court characterized our holding in Samaroo as “where

a PSA or divorce judgment does not create a survivorship right to

pension benefits, a QDRO entered after the death of the plan

participant also cannot do so,” and further explained that per our

Samaroo holding, the Order nunc pro tunc was not a QDRO because

it violated the prohibition against requiring the Pension Plan to

provide increased benefits “by providing for a survivorship interest

in benefits that had lapsed after the participant’s death.” Accordingly,

the District Court concluded that because it was undisputed that a

QDRO was never filed with the Pension Plan and that Rutyna’s

benefits lapsed upon his death, any attempt by Files to obtain a nunc

pro tunc amendment to the PSA must fail.

Second, the District Court rejected Files’s argument that the

Order nunc pro tunc was a “separate interest QDRO” which did not

create survivorship interests, but rather reaffirmed that the PSA had

granted Files a fifty percent property interest in Rutyna’s pension that

did not lapse upon his death.11 The District Court viewed Files’s

11

As explained more fully within, we understand Files to be

asserting that the PSA created her separate interest in Rutyna’s

pension at the time the PSA was entered and that the Order nunc pro

tunc merely was her attempt to “qualify” that PSA as a QDRO

acceptable to the Pension Plan as contemplated by 29 U.S.C.

§ 1056(d)(3).

16

arguments in this regard as an attempt to “do an end-run around the

law, which required a QDRO . . . .” The District Court held that the

Order nunc pro tunc “separate interest QDRO” could not be entered

after Rutyna’s death in light of our holding in Samaroo. Ultimately,

the District Court determined that “[r]egardless of whether [Files] is

claiming a survivorship right or not, the fact is that [she] is attempting

to create a right to pension benefits which had lapsed after her ex-

husband had passed and this right was not clearly provided for in a

QDRO prior to his death or in the PSA.”

Files initiated this timely appeal from the entry of summary

judgment in favor of the Pension Plan, over which we exercise de

novo review and apply the same standard as the District Court.

Samaroo, 193 F.3d at 189. In that regard, the District Court properly

applied a de novo standard of review regarding the Pension Plan’s

denial of Files’s claim for pension benefits. 29 U.S.C.

§ 1056(d)(3)(G)(i)(II) requires only that the Pension Plan

administrator make the initial determination of whether an order is a

QDRO. Id. (citing Firestone Tire and Rubber Co. v. Bruch, 489 U.S.

101, 115 (1989)). Whether either the PSA or the Order nunc pro tunc

qualify as a QDRO under federal law are questions of statutory

construction over which reviewing courts exercise de novo review.

Id.

III. Discussion

Files contends that the District Court erred in its application

of our holding in Samaroo. In Samaroo, we held, limited to the facts

before us in that case, that a nunc pro tunc state court order entered

after the death of a pension plan participant and which awarded

survivor benefits to the deceased participant’s ex-wife was not a

QDRO because an entitlement to survivor benefits under a pension

plan must be determined as of the date of the plan participant’s death.

17

Otherwise, given that the plan’s pension obligations to its participant

lapsed upon his death, a grant of survivor benefits nunc pro tunc

made posthumously would result in increased benefit obligations to

the plan. 193 F.3d at 190 and n.3. In contrast, Files asserts that her

entitlement to fifty percent of Rutyna’s Pension Plan benefits was

fully established upon the New Jersey Court’s adoption of the PSA

in its July 16, 1998 Order, prior to Rutyna’s death. Files does not

seek survivor benefits from the Pension Plan nor did she create a new

entitlement to pension benefits through the Order nunc pro tunc.

According to Files, she sought the Order nunc pro tunc in an effort to

meet the QDRO requirements in order to enforce her entitlement to

fifty percent of Rutyna’s pension as granted to her by the PSA.

Indeed, Files premises her arguments regarding the District Court’s

assertedly erroneous application of Samaroo upon the fact that, in

contrast to the facts in Samaroo, she possessed an entitlement

pursuant to the PSA to fifty percent of Rutyna’s pension prior to

Rutyna’s death.

The Pension Plan characterizes the issue here as whether Files

could receive a share of Rutyna’s pension under state law without

first meeting ERISA’s requirement that a QDRO, providing for a

survivorship benefit, be submitted to the Pension Plan prior to his

death. In an apparent attempt to place this case squarely within the

limited holding of Samaroo, the Pension Plan characterizes the

benefit sought by Files, through her submission to the Pension Plan

of the Order nunc pro tunc, as a survivorship benefit that was not

provided for in the PSA. If that were the case, as the Pension Plan

asserts, Samaroo would control. But, as set forth below, we conclude

that Files does not seek a survivorship benefit and that, therefore,

Samaroo is not controlling.

Because the holding in Samaroo was expressly limited to its

facts, our decision here is informed by a close review of those facts.

18

In Samaroo, the AT&T Management Pension Plan sought a

declaration that the ex-wife was not entitled to the pre-retirement

benefits of her ex-husband, who had died while still actively

employed by AT&T. In Samaroo, the divorce decree was silent as to

the pre-retirement survivor’s annuity, providing –

(d) Pensions, Profit Sharing and Bell System

Savings Plan

Savings Plan - - (1) Husband has a vested

pension having a present value, if husband

were to retire at this time, of $1,358.59 per

month. At the time of husband’s retirement

and receipt of his pension he agrees to pay to

wife one half of said monthly amount.

Id. at 187. When ex-husband died nearly three years later while still

actively working for AT&T, and before reaching the qualifying age

for pension payments, the pension benefit granted to the ex-wife and

expressly provided for in the divorce decree never came to fruition.

Although the AT&T Pension Plan expressly provided for a pre-

retirement survivor annuity for the surviving spouse of any Plan

participant who died after vesting but before retiring, there was no

annuity to be paid because there was no surviving spouse. Not

surprisingly, the AT&T Pension Plan denied the ex-wife’s claim for

the pre-retirement survivor annuity on the grounds that the DRO did

not mention her entitlement to such rights and there was no pre-

retirement survivor’s annuity payable. The ex-wife thereafter

obtained a nunc pro tunc amendment to the divorce decree to create

such an entitlement, providing her with “rights of survivorship to

50% of Husband’s vested pension benefits.”

19

On these facts, we held that the nunc pro tunc state court order

was not a QDRO and further determined that enforcing the amended

divorce decree would have resulted in an impermissible increase in

plan benefits in violation of ERISA, 29 U.S.C. § 1056(d)(3)(D). We

expressly limited our holding to the facts there before us, noting that

elevating the nunc pro tunc order to QDRO status essentially would

permit the participant to change the operative facts “after he has lost

the gamble [on his longevity and retirement elections]” and “would

wreak actuarial havoc on administration of the Plan.” Samaroo at

190 and n.3.12

12

We reached our conclusion in Samaroo based in part upon

concerns that permitting the ex-wife in that case to alter her benefits

after the death of the plan participant essentially altered the actuarial

computations relied upon by the plan given that the ex-husband died

before becoming eligible to elect pension benefits. In that regard, we

relied upon the reasoning set forth in Hopkins v. AT & T Global

Information Solutions Co., 105 F.3d 153, 156 (4th Cir. 1997), where

the United States Court of Appeals for the Fourth Circuit declined to

give QDRO status to a state order granting an ex-wife surviving

spouse benefits in order to collect past-due alimony from her ex-

husband’s pension. The Hopkins court recognized that defined

benefit plans are based on actuarial calculations that would be

rendered invalid if participants were allowed to change the operative

facts retroactively. The participant in Hopkins had retired and began

drawing on his pension in the form of a joint survivor annuity based

on the lives of himself and his second wife. It was after he had begun

drawing on this pension that his ex-wife obtained the state order

declaring that she be treated as the surviving spouse. The Fourth

Circuit held that the DRO was not a QDRO because the current

wife’s right to the survivor’s benefits had already vested upon the

plan participant’s retirement. Id. at 156-57. But, the key distinction

between Hopkins and Files’s claim is that in Hopkins, there was an

20

The operative distinction between the facts here versus

Samaroo is the type of benefit awarded to the ex-wives in the

property settlements within the respective divorce decrees. Although

the issue of whether the divorce decree itself met ERISA’s QDRO

requirements was not before us in Samaroo, we nevertheless noted

the problems with granting that decree QDRO status, and our

statements in that regard are instructive to our analysis of the instant

case. First, in Samaroo, we determined that the decree evidenced an

intention to divide only property rights existing at the time of the

divorce, not an intention to give the ex-wife an interest in post-

divorce earnings. Samaroo, 193 F.3d at 188 n.2. Second, we

concluded that the decree only gave the ex-wife an entitlement to

benefit payments when they were paid to the participant rather than

“conveying to her a portion of . . . [ex-husband’s] interest in the

Plan.” Id. In contrast, the PSA here conferred upon Files a fifty

percent interest in Rutyna’s pension; in other words “conveying to her

a portion of . . . [husband’s] interest in the Plan” not limited to

property rights existing as of the date of the divorce. See id. There

was no question that Files could have enforced her right to receive

that fifty percent interest on or after Rutyna’s fiftieth birthday (the

date the pension became payable), separate and apart from Rutyna’s

election regarding the remaining fifty percent. We conclude that Files

possessed a separate interest in fifty percent of Rutyna’s pension as

of the July 16, 1998 PSA.

attempt to divest benefits already vested in a subsequent spouse,

whereas here, there was no such vesting, and therefore, no such

disruption to actuarial planning. See also Singleton v. Singleton, 290

F. Supp. 2d 767 (W.D. Ky. 2003) (following Hopkins in preventing

first wife, who never put plan on notice of QDRO, from displacing

second wife as the surviving spouse as those benefits vested in second

wife upon husband’s retirement).

21

Armed with this conclusion, we now turn to the question of

whether Files undertook appropriate steps to enforce her interest in

Rutyna’s pension benefits in light of the Pension Plan’s contention

that Rutyna’s death, in the absence of a QDRO providing for

survivorship benefits, caused his pension to lapse. Nothing in ERISA

requires that the Pension Plan must have been notified of Files’s

interest in fifty percent of Rutyna’s pension prior to his death in order

for Files to engage in the process, contemplated by ERISA, of

“qualifying” the PSA as a QDRO to enforce her already-existing

property interest. See Trs. of Directors Guild of Am. Producer

Pension Benefits Plans v. Tise, 234 F.3d 415, 421, as amended upon

denial of reh’g, 255 F.3d 661 (9th Cir. 2000) (where child support

order was converted to a QDRO nunc pro tunc after the death of plan

participant, court reasoned there was nothing in ERISA requiring that

a QDRO must be finalized before benefits become payable). As was

recognized by the United States Court of Appeals for the Ninth

Circuit in Tise, the detailed QDRO requirements set forth in ERISA

are devoid of any requirement that a QDRO be in place before plan

benefits reach pay status under the plan. Id. at 421. Nor do the

QDRO provisions of ERISA suggest that the alternate payee has no

interest in plan benefits until she obtains a QDRO; rather, they merely

prevent enforcement of that already-existing interest until the QDRO

is obtained. Id. (citing In re Gendreau, 122 F.3d 815, 819 (9th Cir.

1997), cert. denied, 523 U.S. 1005 (9th Cir. 1997)). In Gendreau, the

Ninth Circuit considered whether the husband/plan participant could,

by filing for bankruptcy, prevent his ex-wife from obtaining a QDRO

giving effect to a divorce decree that awarded her fifty percent of his

pension. The court concluded that the ex-wife’s interest was created

upon entry of the state order, which thereby also limited the

husband’s interest. These respective interests in the plan were not

altered merely because the divorce decree did not meet the statutory

requirements for a QDRO. 122 F.3d at 819. What was required was

for the ex-wife to obtain a revised state court order that met the

22

QDRO requirements in order to enforce the property interest

conferred upon her by the divorce decree; the QDRO only related to

enforcement of an already defined interest. Id. The court further

recognized that it was precisely because obtaining a QDRO is a time-

consuming process that ERISA recognizes periods where the status

of a QDRO is at issue. Id. Similarly, we conclude that nothing in the

statutory language precluded Files from pursuing a QDRO after

Rutyna’s death to enforce her previously existing fifty percent interest

in Rutyna’s pension. Despite the Pension Plan’s argument that all

pension benefits lapsed upon Rutyna’s death because there was no

QDRO, Files’s pursuit of a QDRO posthumously comes within the

ambit of the “qualification” process contemplated within 29 U.S.C.

§ 1056(d) as she simply seeks to enforce an interest created prior to

Rutyna’s death.

Indeed, the statutory QDRO requirements expressly

contemplate a “qualification” process by which plans, once on notice

of a state court DRO, will determine whether a state court DRO is

sufficient to alter existing plan obligations. See 29 U.S.C.

§§ 1056(d)(3)(H)(i)-(v). This “qualification” process commences

with a plan’s notice of the DRO. The statute expressly states that

once a plan receives a DRO, within “a reasonable period,” the

administrator shall determine whether that order is a QDRO, see 29

U.S.C. § 1056(d)(3)(G)(i)(II), and that each plan shall establish

reasonable procedures to determine the qualified status of domestic

relations orders, see 29 U.S.C. §§ 1056(d)(3)(G)(ii)(I)-(III). Thus, the

statute contemplates and the plan establishes the “process” by which

a DRO is “qualified.” Essential to this “qualification” process is the

statutory requirement that the plan take steps to ensure the

preservation of benefits that are otherwise payable while the

determination of QDRO status is undertaken. See Tise, 234 F.3d at

421-22; 29 U.S.C. § 1056(d)(3)(H)(i) (“[d]uring any period in which

the issue of whether a domestic relations order is a . . . [QDRO] . . .

23

the plan administrator shall separately account for the amounts . . .

which would otherwise have been payable to the alternate payee

. . . .”). In that regard, during the first eighteen months after which

benefits become payable, the plan must segregate the benefits

potentially payable to the alternate payee. 29 U.S.C.

§ 1056(d)(3)(H)(v). Moreover, ERISA contemplates further state

court proceedings during the eighteen-month QDRO determination

period in which the alternate payee can cure defects in the original

DRO by obtaining modification to the original DRO in order to

enforce it as a QDRO. Tise, 234 F.3d at 422 (citing 29 U.S.C.

§ 1056(d)(3)(H)(ii) (“[i]f within the 18-month period . . . the order (or

modification thereof) is determined to be a . . . [QDRO] . . . .”)). It

is only after this eighteen-month period has expired that the putative

alternate payee loses the right to uphold payment of plan proceeds to

a designated beneficiary. Id. (citing 29 U.S.C. § 1056(d)(3)(H)). And

even then, if the DRO ultimately is “qualified” as a QDRO, the

obligations thereunder shall be applied prospectively. See 29 U.S.C.

§ 1056(d)(3)(H)(iv).

We now turn to when the “qualification” process was

triggered by notice to the Pension Plan of the PSA. Significantly, the

Pension Plan’s own policies and correspondence thwart its current

assertion that it lacked notice of the PSA prior to Rutyna’s death.

ExxonMobil’s own policy as communicated to plan participants (and

presumably those seeking QDROs) provided that a block is placed on

both the savings and pension accounts until a QDRO or other

documentation is received by the Plan. Specifically, the “Information

About Thrift and Annuity Plan Benefits as Part of the Divorce

Process” provided that “[o]nce Exxon’s Benefits Accounting or

Benefits Administration Office receives written notice of a divorce

(either pending or final), . . . [Savings] and . . . [Pension] Plan

benefits will generally be ‘blocked.’” Consistent with this policy and

the statutory mandate, the Savings Plan segregated Rutyna’s savings

24

account in response to the August 16, 2000 letter from Rutyna’s

divorce counsel notifying it of the divorce. The record as to the

segregation of the pension account, however, is not as clear.

According to Files, as early as August 29, 2000, the Pension Plan

indicated in correspondence to Rutyna’s divorce counsel that both

Rutyna’s savings and pension accounts had been “blocked.”13 The

Pension Plan, however, subsequently clarified that the “block”

pertained only to the savings account. But, consistent with Files’s

position, Mr. Leis testified that once on notice of a divorce, the

Pension Plan generally would segregate pension benefits to ensure

that the funds were paid to the proper recipient (see supra. n.4).

Against this backdrop, we conclude that it is disingenuous for the

Pension Plan to assert that lack of notice of the DRO caused Rutyna’s

pension benefits to lapse upon his death. We find persuasive the fact

that consistent with its own policies, at least one of the ExxonMobil

plans deemed the August 16, 2000 letter sufficient notice to require

segregation of plan assets.

Even if we look to April 6, 2001, the date of the

correspondence by which the Pension Plan was provided with an

actual copy of the PSA, this notice standing alone triggered the

“qualification” process for Files to enforce her rights under the PSA

despite the fact that it was provided after Rutyna’s death.14 Files’s

13

Notably, that August 29, 2000 correspondence is not in the

record; rather, it is referenced within correspondence which is before

us.

14

We reiterate that ERISA does not prescribe a time frame as

to when, in relation to the state court’s entry of a domestic relations

order, the plan must be presented with a copy of the domestic

relations order so-entered in order to trigger the QDRO process.

Rather, ERISA only provides that the “qualification” process is

25

counsel furthered the process by providing the Pension Plan with

copies of the proposed Order nunc pro tunc on August 9, 2001 and

the February 7, 2002 Order nunc pro tunc on February 28, 2002. The

Pension Plan’s response to its receipt of the Order nunc pro tunc

reveals that the Pension Plan still was “qualifying” the PSA as a

QDRO. Although the Pension Plan’s May 30, 2002 letter to Files’s

counsel indicated that it would not “continue the appeal to consider

the property settlement as a domestic relations order when the court

has entered a subsequent one which was submitted for consideration,”

the Order nunc pro tunc was Files’s attempt to “qualify” the PSA by

addressing the Pension Plan’s stated concerns to date regarding its

recognition of the PSA as a QDRO.

Ultimately, it matters not whether we deem the Pension Plan

on notice prior to Rutyna’s death given its policies and the benefit

segregation undertaken by the Savings Plan, or after Rutyna’s death,

when it received the PSA in April 2002. Regardless of notice, we

reach the same conclusion – that Files simply engaged the statutorily

contemplated process to “qualify” the PSA as a QDRO in order to

enforce pre-existing rights. Nothing in the statute, or in our

precedent, requires that a QDRO be in place prior to the death of a

plan participant when the QDRO that is ultimately obtained by

engaging the statutory process simply seeks to enforce a separate

interest in a pension benefit that existed before the death of the plan

participant. See Tise, 234 F.3d at 421; Patton v. Denver Post Corp.,

326 F.3d 1148, 1153-54 (10th Cir. 2003) (upholding a nunc pro tunc

DRO issued eleven years after a divorce decree pertaining to plan

benefits from a plan not known about at the time of the divorce, and

declining to infer that the plan must have been notified of the interest

prior to the death of the participant); Hogan v. Raytheon Co., 302

triggered by “notice” to the plan of the state court domestic relations

order.

26

F.3d 854, 857 (8th Cir. 2002) (permitting posthumous qualification

of a DRO because during husband-participant’s life, plan was

provided with a copy of divorce decree awarding ex-wife fifty percent

of husband-participant’s present retirement funds, and DRO obtained

subsequent to husband-participant’s death designating ex-wife as

alternate payee for purposes of survivorship benefits was done within

the eighteen month period permitted to secure a QDRO).

IV. Conclusion

Based on the foregoing, we will reverse the order of the

District Court and remand for further proceedings consistent with this

opinion.

27