Holloman v. Holloman

For the Court:

Joan Williams Holloman appeals to this Court from an adverse decision of the Oktib-beha County Chancery Court where she had sought a one-half interest in Ronald B. Hollo-man’s Savings and Investment Plan maintained through his employer. The chancellor was asked to interpret two clauses of the property settlement agreement, the modification of the final decree of divorce and the entry of a Qualified Domestic Relations Order, and additionally to determine whether Ronald was in contempt for failure to provide income and retirement fund information.

The chancellor held that the issue was the “interpretation of a contract, not determination of marital assets or equities between the parties.” He found that the “parties had full knowledge at the time of the preparation and entry of their separation agreement and are bound by the clear reading thereof,” thus Joan’s request was denied. Aggrieved, Joan appeals and assigns as error the following:

THE TRIAL COURT ERRED BY NOT HOLDING RONALD HOLLOMAN IN CONTEMPT FOR REFUSING TO EXECUTE A FURTHER QUALIFIED DOMESTIC RELATIONS ORDER TO COVER ALL OF HIS RETIREMENT BENEFITS, INCLUDING THE SAVINGS AND INVESTMENT PLAN, AS CONTEMPLATED BY THE SETTLEMENT AGREEMENT.

(1) THE HUSBAND’S EMPLOYER’S SAVINGS AND INVESTMENT PLAN WAS A RETIREMENT BENEFIT CONTEMPLATED BY PARAGRAPH VI.D. OF THE PROPERTY SETTLEMENT AGREEMENT.

(2) ALTERNATIVELY, THE HUSBAND’S EMPLOYER’S SAVINGS AND INVESTMENT PLAN WAS A RETIREMENT FUND “OF ANY DESCRIPTION” AS CONTEMPLATED BY PARAGRAPH VI.1E. OF THE PROPERTY SETTLEMENT AGREEMENT.

(3) THE PARTIES’ INTENT IN THE EXECUTION OF THE SETTLEMENT AGREEMENT WAS TO INSURE THE WIFE’S CONTINUED ALIMONY SUPPORT UPON THE HUSBAND’S RETIREMENT.

THE FACTS

Ronald B. Holloman and Joan Williams Holloman were granted a divorce on the grounds of irreconcilable differences, ending a second marriage to each other on May 8, 1989. Both parties were represented by separate counsel throughout the proceedings. The Holloman’s settlement agreement was approved and accepted by the chancellor and incorporated into the divorce decree.

Pursuant to the terms of the agreement, Ronald agreed to pay Joan one half of his monthly retirement benefits that he would accrue prior to retirement. Ronald had two separate retirement plans with his employer, Union Camp Corporation. One known as the Union Camp Corporation Retirement Plan for Salaried Employees and the other as a Savings and Investment Plan.

After the divorce decree was entered, Joan inquired of Ronald what accounts were involved concerning his retirement funds. Ronald only advised her of his employer’s Retirement Income Plan. The Hollomans had a Qualified Domestic Relations Order (QDRO) entered naming Joan as the payee under that Retirement Income Plan.

Subsequent to the entry of that order, Joan discovered that the Retirement Income Plan did not contain the total assets that Ronald had accumulated toward retirement. Ronald had another account, a 401-K account called a Savings and Investment Plan. Joan contended that this account was governed by the settlement agreement. Ronald refused to comply with Joan’s request. Joan filed a motion to cite Ronald for contempt, and thereafter amended, to have the 401-K incorporated into a revised QDRO in conformity with the settlement agreement.

The chancellor determined that the parties contracted themselves to an acceptable termination of their marriage and fair distribution of their marital assets. He treated the agreement as a contract, noted that contracts are construed against the preparer, and since Joan’s attorney had prepared the document, any knowledge of marital assets attributed to her was imputed to her attorney. He found that the separation agreement “failed to show the specificity required to modify the Final Decree of Divorce and the Qualified Domestic Relations Order.” He also determined that Ronald was current in his payment of support and had supplied adequate financial information to Joan. He therefore, denied her relief on her request that Ronald be held in contempt. Following denial of all relief and Joan’s timely Motion For New Trial, which was overruled, this appeal followed.

STANDARD OF REVIEW

This Court will not disturb the chancellor’s opinion when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong, clearly erroneous or an erroneous legal standard was applied. Mount v. Mount, 624 So.2d 1001, 1004 (Miss.1993); Bowers Window and Door Co., Inc. v. Dearman, 549 So.2d 1309 (Miss.1989)(citing Bullard v. Morris, 547 So.2d 789, 791 (Miss.1989)); Gibson v. Manuel, 534 So.2d 199, 204 (Miss.1988); Johnson v. Hinds County, 524 So.2d 947, 956 (Miss.1988); Bell v. City of Bay St. Louis, 467 So.2d 657, 661 (Miss.1985); Culbreath v. Johnson, 427 So.2d 705, 707-708 (Miss.1983).

DISCUSSION OF LAW

The crux of this case is the interpretation of two paragraphs found in the separation agreement. The text of paragraph VI(l)(d) of the agreement provides that:

The husband will pay unto his Wife, or will provide, that his employer or retirement benefits program administrator will pay unto said Wife, one-half (1/2) of his monthly retirement benefits that have accrued as of the date of this agreement and will hereafter accrue until retirement, upon the retirement of the Husband from Union Camp Corporation, his employer, or any successor employer, said one-half (1/2) of retirement payment to be made monthly and to continue until his wife remarries, or dies, whichever occurs first. The Husband further agrees to continue to contribute to his retirement fund with his employer at the same level he has contributed for the past twelve (12) months prior to the execution of this agreement. The Husband also agrees to furnish documentation to the Wife of his annual statement of earnings with said retirement account of Union Camp Corporation, or successor employer, and hereby further authorizes his employer and/or his employer’s retirement fund to give access to the Wife of any and all information concerning said retirement fund account and to execute any documents necessary to properly vest the Wife’s interest in said retirement fund....

The text of paragraph VI(l)(e) of the agreement provides:

The Husband will also pay to the Wife one-half (1/2) of any and all retirement funds of any description, as they become available at retirement, to include individual retirement accounts (I.R.A.). Husband agrees to furnish Wife documentation concerning any of these accounts....

Joan argues that Ronald failed to provide information concerning the Savings and Investment Plan, a 401-K account, and that the paragraphs above cover such an account. She maintains Ronald is required to convey to her one-half interest in this account at retirement.

The Holloman’s intent in the execution of the property settlement agreement was to insure Joan’s continuous alimony upon Ronald’s retirement. From a complete reading of the settlement agreement, it would be difficult not to say that the intentions of the parties was to provide for permanent support and maintenance for Joan, whether Ronald was employed or retired. This Court, in Cherry v. Anthony, Gibbs, Sage, 501 So.2d 416, 419 (Miss.1987), stated, “It has long been the law in Mississippi that in construing particular provisions in a contract, a court will look to the document as a whole.” Id. Here, the Hollomans have expressed their clear intent from a fair reading of the settlement agreement as a whole. Examination of the two paragraphs in question and the specific words utilized therein, clearly show the intent to be that Joan receive one-half of Ronald’s retirement benefits, whether in one account or more, and regardless of the name attached to the account. This Court, in Newell v. Hinton, 556 So.2d 1037 (Miss.1990), citing Roberts v. Roberts, 381 So.2d 1333, 1335 (Miss.1980), stated:

Intent of the parties is crucial in contract interpretation. Of course, it must be understood that the words employed in a contract are “by far the best resource for ascertaining intent and assigning meaning with fairness and accuracy.”

Newell, 556 So.2d at 1042.

According to paragraph VI. 1. d. of the property settlement agreement, Ronald’s employer’s savings and investment plan constituted a retirement benefit. By any stretch of the imagination, the plan was a retirement fund of which Ronald had promised to pay “one half of any and all retirement funds of any description, as they become available at retirement .... ” as contemplated by paragraph VI. 1. e. This Court finds that this one phrase, “of any description” alone is broad enough and sufficient to include the retirement 401-K savings plan. The chancellor erred in not finding that the Savings and Investment Plan was a retirement fund under this phrase from paragraph Vl.l.e. of the property settlement agreement.

Joan attempted within two months of the divorce to establish her rights to Ronald’s retirements accounts. She was advised that a Qualified Domestic Relations Order (QDRO) was necessary. Ronald only advised her of Union Camp Corporation, his employer’s, retirement income plan. The QDRO was accordingly prepared, submitted to the lower court and executed on May 8, 1992.

Subsequent to the entry of the court’s order, Joan discovered the plan did not contain all of Ronald’s total assets accumulated toward retirement during the marriage. In fact, only $16,000 was contained in the retirement plan about which Ronald had actually told Joan. However, unbeknownst to Joan, Ronald also had a 401-K account called a Savings and Investment Plan. This account had a value of $209,000 at the end of 1993. The settlement agreement clearly covered this plan. Ronald’s withholding of this vital information was in direct contradiction of the agreement. Joan’s attempt to have a revised QDRO order entered incorporating the 401-K plan in conformity with the settlement agreement was opposed by Ronald. The chancellor found that Joan’s request for modification failed “for want of specificity” and denied her requested relief.

The chancellor found that the disputed retirement fund was not referred to by that name by the administering company, but rather, the company referred to it as a savings and investment plan. Such reliance upon the mere “name of the account” is obviously misplaced. This Court must look to the document as a whole, examining the nature of the account, its purpose and use, as being more important as a determining factor of whether the account actually is a retirement account. Ronald’s employer’s description of the plan clearly indicated that the purpose of the plan was “to encourage investment for retirement.” Additionally, Joan’s expert witness, Eddie Powell, an attorney with a master’s degree in taxation, testified that the savings plan was a retirement account under federal law. He testified that there are two types of employee benefits, welfare and pension. Pension benefits concern payments that an employee accrues and receives at retirement. He further testified that there are two basic types of plans, benefit plans and defined contribution plans, the former funded solely by the employer and the latter including employee contributions.

ERISA explains what kind of plan the savings and investment plan is under federal law. A defined contribution plan is a pension plan which provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant’s account, any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s account. Powell testified that Ronald’s savings and investment plan was a defined contribution plan as defined by ERISA. Ronald offered no proof regarding specifics of what a retirement account consists. The chancellor was thus required to rely on Joan’s sole expert testimony.

Union Camp Corporation’s own literature in explaining the Savings and Investment Plan, stated, “The government permits before tax savings to encourage you to put money aside for retirement.” Retirement was listed as the first reason for taking a payout of the benefits.

Ronald even answered in discovery that he used the savings plan to “defer income for retirement purposes,” though admittedly he claimed it was not his sole purpose. The admission by Ronald that he used the savings and investment plan for retirement purposes destroys his entire argument that such a plan is not a retirement plan. Ronald’s admission alone warrants the reversal of this case, because it established that he did have a retirement purpose in the plan.

Ronald’s Savings and Investment Plan was a retirement account by any definition of the term, including Ronald’s own definition. The lack of the specific name of that account within the settlement agreement is of no consequence. The language of paragraph VI. l.d. was clear that this account was contributing Ronald’s earnings for deferment until retirement. When this Court considers all of this evidence, there can be no question that reversal is required. We hold that the chancellor erred in ruling that Joan’s claim failed for lack of specificity in the settlement agreement.

This Court has recognized systematic contributions for a self-employed ERISA plan as a “retirement plan” enabling the chancellor to determine division of property. Draper v. Draper, 627 So.2d 302 (Miss.1993). Even the collective dissenting opinions of Justice McRae and Banks, joined by this writer, referring to the equitable split of marital assets, identified the Keogh plan of Dr. Draper as “retirement” income. A Keogh plan is a pension plan governed by ERISA. (1974) ERISA Op. Letter No. 74-1; see also 60A Am.Jur.2d Pensions and Retirement § 75 at 112. Parker v. Parker, 641 So.2d 1133,1139 (Miss.1994), is a case in which this court affirmed an award by the chancellor to Brenda Parker of 30 percent of David Parker’s vested interest in his employer’s profit sharing plan. In Parker, David Parker’s “savings” or “investment” was only available to him upon his termination of services, retirement, or death. Id. at 1138. This court recognized that Brenda’s interest in such styled “savings” or “investment” plan vested when (1) a chancellor has determined that an equitable division of the marital assets requires awarding some portion of one spouse’s pension or profit sharing plan to the other spouse and (2) a QDRO is entered and accepted as qualified. Id. at 1139.

In the case sub judice, the chancellor determined that an equitable division of the marital assets required awarding half of the retirement account that contained the $16,-000. Equitable division of assets has been addressed by this Court in Ferguson v. Ferguson, 639 So.2d 921 (1994). The chancellor’s allowance of a one-half interest in only the $16,000 account, and disallowance of a one-half interest in the $209,000 Savings and Investment Plan is certainly far from equitable and definitely not in keeping with the intent of the parties or the language of the settlement agreement. The parties then entered into a QDRO separation agreement which specified that the husband would pay the wife one-half of any and all retirement funds and that the husband would furnish information concerning these accounts. The husband agreed to this contract to pay her one-half of his retirement accounts, though he almost successfully concealed one such account under a semantic disguise, and that account just happened to contain the vast majority of Ronald’s retirement funds.

Joan argues that Ronald’s savings and investment plan was a retirement account by any definition of the term. This Court agrees with Joan, the savings and investment plan most definitely is a retirement account, as contemplated by the terms of the Hollo-man’s settlement agreement. Equitable division of Ronald’s retirement funds requires that the proceeds of both accounts be considered per the Holloman’s agreement. This Court holds that the Union Camp Savings and Investment Plan is a retirement fund as contemplated by the agreement.

We therefore reverse, render, and remand this case with directions for the chancellor to enter the appropriate order to enforce the terms of the two paragraphs of settlement agreement upholding Joan’s entitlement to one-half of Ronald’s retirement benefits under both accounts, thus allowing for a more equitably division of the assets of the retirement accounts as agreed to by the parties.

REVERSED, RENDERED, AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION.

PRATHER and SULLIVAN, P.JJ., PITTMAN, BANKS and MILLS, JJ., concur.

DAN LEE, C.J., dissents with separate written opinion joined by McRAE and JAMES L. ROBERTS, JJ.