In Lewis v. Lewis, (Va. App., March 17, 2009), a property settlement agreement (“PSA”) had provided Wife one-half of Husband’s pension, but the parties were unable to agree on Qualified Domestic Relations Order (“QDRO”) language. After entry of the final decree, Husband unilaterally and surreptitiously converted his entire pension into a single life annuity payable only to him. After that, he retired and began receiving monthly annuity payments, none of which he shared with his ex-Wife.
The issue for the trial court was how to implement the PSA after Husband’s conduct had made it impossible for Wife to receive a 50% interest in his retirement.
The court awarded Wife cash value of the Husband’s pension on the parties’ date of separation plus passive interest until the date of the award, plus a $200,000.00 life insurance policy on Husband’s life payable by Husband.
The Court of Appeals ruled that the life insurance award was reversible error for two reasons: It violated the “manifest intent of the original order” which the trial court had no power to modify; and it ran afoul of Virginia Code § 20-107.3(G)(2), which expressly prohibits a court from requiring one spouse carry life insurance on the other.
The cash award and passive interest portions of the lower court judgment were affirmed.Interest was allowable because neither the PSA nor the final decree set a date for awarding Wife half of the marital share of Husband’s retirement; and Husband had deprived Wife of investment control over her portion of his pension following divorce.
This decision is a warning to counsel for pension awardees on the peril of delayed QDRO entry. In Lewis, the Wife lost the precise benefit of her bargain, and — in my opinion — Husband was not effectively sanctioned for his misconduct.