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Maintenance Seized From Retirement Account in Texas Enforcement Lawsuit

In Dalton v. Dalton, a Texas ex-husband appealed from post-divorce enforcement orders. The couple was divorced in 2011, with a decree giving full faith and credit to an order of separate maintenance that determined child support, custody, property division, and other aspects of the divorce. The husband was required to pay his former wife support maintenance (alimony) of $1,309,014.00, paid in increments on a monthly basis.

Afterward, the wife tried to get the ex-husband to comply. The court had rendered a wage withholding order for child support and spousal support, and the wife had asked for enforcement. She’d also petitioned for a qualified domestic relations order for the full amount of spousal support. The parties negotiated. In 2015, the court granted the QDRO petition and denied the husband’s motion to terminate the wage withholding order. He was found in contempt, and a QDRO assigned to the wife a portion of his retirement benefits to cover what he owed her in alimony.

The husband appealed the First Amended QDRO, arguing that the initial orders didn’t allow these retirement benefits to be paid to his ex-wife and that since what was at issue was contractual alimony, it couldn’t be satisfied by his retirement benefits. The appellate court explained that Texas Family Code Section 9.101 allows a lower court that renders a divorce decree to have continuing exclusive jurisdiction to render an enforceable QDRO. Therefore, the lower court was able to render the QDRO.

The husband argued that the QDRO altered the divorce decree’s terms and that the amount awarded was not supported by the evidence. The appellate court explained that an order enforcing a divorce decree couldn’t amend or modify a division of property made during a divorce under Texas Family Code section 9.007. The goal of a QDRO is to create a right in a different payee or to assign the right to receive all of the benefits that could be paid to the retiree under a retirement plan.

In this case, the order of separate maintenance was issued in Oklahoma, while the divorce decree was issued in Texas. The Texas divorce decree incorporated the terms of the order of separate maintenance into its own terms. The QDRO used the relevant federal law to enforce the Texas lower court’s divorce decree. The QDRO wasn’t a modification by imposing payment dates and a source of payment, nor did it alter the property division. It simply assigned the ex-wife a right of distribution to satisfy the alimony obligation. The appellate court also found that the QDRO included mistakes, including the amount of the arrearage, and it modified the QDRO to award the correct sum of $155,802.06.

The husband argued that it was improper to seize his retirement assets under Texas Property Code Section 42.0021. The appellate court explained that alimony agreements incorporated into the divorce decree are treated as contracts. Under Texas Property Code Section 42.0021, someone’s assets in retirement accounts and pension plans are exempt to some degree from being seized or reassigned in order to satisfy a debt. However, ERISA provides an exception for a domestic relations order.

The appellate court explained that the Texas divorce decree related to providing alimony and incorporated Oklahoma’s domestic relationship law, and therefore it met the definition of domestic relations order under ERISA. For this and other reasons, the appellate court affirmed the QDRO with a modification of the amount to be seized from the husband’s retirement account.

If you are considering the enforcement of a maintenance order, contact the Texas attorneys at the McClure Law Group at 214.692.8200.

More Blog Posts:

Johnny Depp, Amber Heard, and a Discussion on Family Violence Protective Orders and Temporary Restraining Orders in Texas, June 9, 2016

Divorce and Taxes – What to do if your ex-spouse botched your joint tax return, May 31, 2016

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