Summary
In Self v. Self, 290 So. 3d 431, 451 n.19 (Ala. Civ. App. 2019), this court recognized that "[a]n unpaid property settlement incorporated into a divorce judgment may accrue interest so long as it is unpaid and the judgment fixes the amount owed."
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2171024
05-10-2019
David Michael SELF v. Sharon Kay SELF
Wendy Ghee Draper, Anniston, for appellant. Elma Rose Walton, Anniston, for appellee.
Wendy Ghee Draper, Anniston, for appellant.
Elma Rose Walton, Anniston, for appellee.
EDWARDS, Judge. David Michael Self ("the former husband") appeals from a May 18, 2018, judgment entered by the Calhoun Circuit Court ("the trial court") granting a petition filed by Sharon Kay Self ("the former wife") regarding her entitlement to a portion of the former husband's retirement benefit under the Teachers' Retirement System of Alabama ("the teacher-retirement benefit"), including a portion of the teacher-retirement benefit that was paid into an account pursuant to the Deferred Retirement Option Plan ("the DROP") described in Ala. Code 1975, § 16-25-150 et seq.
Facts and Procedural History
The former husband was employed at Jacksonville State University, where he began working in November 1984 and continued working until he retired on January 31, 2016. After almost 32 years of marriage, the former husband and the former wife were divorced pursuant to a divorce judgment entered by the trial court on July 27, 2001 ("the divorce judgment"). The divorce judgment incorporated a settlement agreement between the parties ("the settlement agreement") that included the following provisions regarding the former husband's payment of periodic alimony to the former wife and the division of the former husband's retirement benefits:
"6. The [former] [h]usband shall pay the [former] [w]ife the sum of $350.00 per month in periodic alimony beginning August 1, 2001, and on the first of each month thereafter until such time as the [former] [w]ife remarries, dies or begins receiving the [former] [h]usband's Social Security benefits. In the event the [former] [h]usband files a petition in the bankruptcy court, the amount of his obligation for periodic alimony to the [former] [w]ife shall increase to $450.00 per month. At such time as the [former] [w]ife begins receiving a check each month on the [former] [h]usband's teacher retirement, the [former] [h]usband's obligation to pay periodic alimony to the [former] [w]ife shall decrease to $115.00 per month....
"....
"12. The [former] [w]ife is to receive one-half (½) of the [former] [h]usband's teacher retirement after deduction of taxes, one-half (½) of the TIAA-CREF account, and thirty-five percent (35%) of the [former] [h]usband's Social Security benefits. The [former] [h]usband will be permitted to claim at least one deduction or more; however, no excessive taxes will be withheld. The [former] [w]ife shall be named the non-revocable beneficiary of said named retirement accounts. In the event the [former] [h]usband elects to remarry, the [former] [w]ife ... shall receive seventy-five percent (75%) of his teacher retirement and his then current wife shall receive no more than twenty-five (25%) of his retirement upon his death before retirement. The [former] [h]usband shall be required to elect teacher retirement with a survivor beneficiary."
When the divorce judgment was entered, Ala. Code 1975, § 30-2-51, provided, in pertinent part:
"(b) The judge, at his or her discretion, may include in the estate of either spouse the present value of any future or current retirement benefits, that a spouse may have a vested interest in or may be receiving on the date the action for divorce is filed, provided that the following conditions are met:
"(1) The parties have been married for a period of 10 years during which the retirement was being accumulated.
"(2) The court shall not include in the estate the value of any retirement benefits acquired prior to the marriage including any interest or appreciation of the benefits.
"(3) The total amount of the retirement benefits payable to the non-covered spouse shall not exceed 50 percent of the retirement benefits that may be considered by the court.
"(c) If the court finds in its discretion that any of the covered spouse's retirement benefits should be distributed to the non-covered spouse, the amount is not payable to the non-covered spouse until the covered spouse begins to receive his or her retirement benefits or reaches the age of 65 years, unless both parties agree to a lump sum settlement of the non-covered spouse's benefits payable in one or more installments."
Section 30-2-51 has been subsequently amended by Act No. 2017-162, Ala. Acts 2017.
We recognize that paragraph 12 the settlement agreement did not entirely comply with Alabama law for various reasons. For example, see Wheeler v. Wheeler, 831 So. 2d 629, 635 (Ala. Civ. App. 2002) (provision requiring the husband "to designate the wife as beneficiary of his retirement benefits after his death" violated former "§ 30-2-51, because it [was] not based on ‘present value’ and it could potentially operate to award the noncovered spouse an amount in excess of 50% of the husband's retirement benefits"); see also Brattmiller v. Brattmiller, 975 So. 2d 359, 363 (Ala. Civ. App. 2007) ("award to the wife of a portion of the husband's retirement benefits was erroneous because the wife did not introduce any evidence establishing the present value of the husband's retirement benefits"). However, the parties' divorce judgment was based on the settlement agreement, and the parties could waive the restrictions regarding the division and distribution of retirement benefits described in former § 30-2-51 and our precedents. Cf. Ex parte Smallwood, 811 So. 2d 537 (Ala. 2001) (federal-law limit on awarding military-retirement benefits did not prohibit enforcement of the parties' agreement entitling the wife to all of the husband's military-retirement pay); Jackson v. Nelson, 686 So. 2d 338, 339 (Ala. Civ. App. 1996) ("[I]t has long been recognized that parties may agree between themselves to pay support beyond a child's minority, and that such agreements are enforceable."); and Epperson v. Epperson, 437 So. 2d 571, 573 (Ala. Civ. App. 1983) (holding that a party cannot complain that the periodic-alimony award was in excess of that permitted by law when the divorce judgment was based on an agreement between the parties).
In 2009, after the former husband was eligible to retire, he elected to remain employed at Jacksonville State University and to participate in the DROP. It is undisputed that the DROP did not exist when the divorce judgment was entered. See Act No. 2002-23, Ala. Acts 2002 (creating the DROP). The former husband participated in the DROP from September 1, 2009, through July 31, 2014, after which he remained employed at Jacksonville State University until January 2016, when he retired. During the former husband's participation in the DROP, monthly payments of the teacher-retirement benefit were paid into a DROP account ("the DROP account"), where they accumulated and earned interest until the former husband retired. See discussion, infra. Based on an election made by the former husband, on March 31, 2016, the funds in the DROP account, which totaled $140,846.86 -- including monthly payments of the teacher-retirement benefit, additional contributions made by the former husband during his participation in the DROP, and interest earned on those monthly payments and additional contributions -- were rolled over into the RSA-1 Deferred Compensation Plan, a tax-deferred plan managed by the Retirement Systems of Alabama. It was undisputed that the former husband had not informed the former wife of his participation in the DROP and that the former wife has received none of the teacher-retirement benefit that was deposited into the DROP account.
The record includes a statement from the Retirement Systems of Alabama that states that the former husband began participating in the DROP beginning on August 1, 2009. However, the former husband testified that he began participating in the DROP on September 1, 2009, and the trial court made a finding consistent with the former husband's testimony.
The former husband could have elected to receive the funds in the DROP account as a lump-sum distribution rather than rolling those funds over into a tax-deferred plan.
On April 12, 2016, the former wife filed a petition in the trial court, alleging that the former husband had failed to pay her her share of the teacher-retirement benefit as required by the divorce judgment. The former wife requested that the trial court enter an order finding the former husband in civil contempt and criminal contempt, awarding the former wife a judgment against the former husband "for all the unpaid portions of the [former wife's] one-half share of the teacher[-]retirement [benefit]," and awarding her attorney's fees and costs. The former wife subsequently amended her petition to add claims seeking a purported periodic-alimony arrearage and seeking unpaid portions of the former wife's share of the former husband's Social Security benefits.
The former husband filed an answer to the former wife's petition, as amended. The former husband admitted that the former wife was entitled "to receive one-half of the ... teacher retirement [benefit] after deduction of taxes," but, he added, that award should be based on "the value of [the teacher-retirement benefit] at the time of the divorce." Also, the former husband alleged that his periodic-alimony obligation had terminated when the former wife began receiving a portion of his monthly Social Security benefits in January 2016 and that the former wife's portion of his Social Security benefits should be based on the value of that benefit at the time of the entry of the divorce judgment.
On October 18, 2017, the trial court held an ore tenus proceeding on the former wife's petition. Testimony at trial focused on the periodic-alimony adjustments described in paragraph 6 of the settlement agreement, whether the former wife's entitlement to her portion of the teacher-retirement benefit under paragraph 12 of the settlement agreement had been triggered by the former husband's participation in the DROP, and the date for determining the value of the wife's portion of the teacher-retirement benefit. At the close of the proceeding, the trial court requested posttrial briefs addressing, among other things, whether the teacher-retirement-benefit provisions in paragraph 12 of the settlement agreement were a property settlement.
The former husband and the former wife filed posttrial briefs. In their posttrial briefs, the parties agreed that paragraph 12 of the settlement agreement was a property settlement. However, the former wife contended that she was entitled to one-half of the teacher-retirement benefit based on the present value of that benefit; the former husband contended that the amount of the teacher-retirement-benefit award to the former wife should be valued as of the "time of the divorce." The former husband also contended that, to the extent the settlement agreement was ambiguous as to the value of the teacher-retirement benefit to be used, it should be construed against the former wife because the settlement agreement had been drafted by the former wife's counsel.
See former husband's posttrial brief filed on December 7, 2017 ("Paragraph 12 is consistent with ‘alimony in gross’ or a property settlement."); former wife's posttrial brief filed on December 11, 2017 ("While it is unclear under the law, it is the [former wife's] position that she intended to contract for a property settlement (as she testified), and thus, the [former wife] argues that the award of a portion of the teacher[-]retirement [benefit] in this matter is, in fact, a property settlement/alimony in gross."). The issue whether the teacher-retirement-benefit award to the former wife might properly be characterized as an award of alimony in gross is not before us.
On December 12, 2017, the trial court entered an order making certain findings of fact and conclusions of law but noting that the court was unable to calculate the exact amount of the teacher-retirement benefit that the former husband must pay to the former wife. The December 2017 order required the parties to hire a mutually agreed upon accountant to assist with the teacher-retirement-benefit calculation or to submit names of accountants (from which the trial court could choose) to assist with the teacher-retirement-benefit calculation. The December 2017 order set the case for a hearing to be held on January 29, 2018, to review the accountant's calculation.
On December 21, 2017, the parties filed a notice with the trial court identifying Tim Wilson, a certified public accountant, as the accountant to assist with the teacher-retirement-benefit calculation. Thereafter, the parties filed a joint motion to continue the hearing scheduled for January 29, 2018. The trial court then scheduled a conference with the attorneys to be held on March 22, 2018.
On March 22, 2018, after the scheduled conference, the trial court entered an order amending the December 2017 order. The March 2018 order again noted that the trial court was unable to calculate the amount of the teacher-retirement benefit that the former husband must pay to the former wife. Likewise, the March 2018 order retained the provision for an accountant to assist with the teacher-retirement-benefit calculation. The March 2018 order set a review conference to be held on April 6, 2018.
The record does not disclose why Tim Wilson did not perform the calculation.
On April 6, 2018, a few hours before the scheduled conference, the former husband filed a submission that purportedly reflected the periodic-alimony payments he had made to the former wife and his calculations regarding the amount of the teacher-retirement benefit to which the former wife was entitled. Based on the former husband's calculation, he owed the former wife $344.46 as of March 2018 and she was entitled to $322.62 per month of the teacher-retirement benefit (one-half of $847.54 less purported deductions for taxes and health insurance) and $369.60 per month of his Social Security benefits on a going-forward basis.
On April 6, 2018, the trial court entered a second amended order regarding the former wife's petition. The April 2018 order, which noted that the former husband had filed for bankruptcy after the divorce judgment was entered, states, in pertinent part:
"[T]hree issues were addressed that had not previously been argued with the Court;
"Issue One: When does [periodic] alimony terminate?
"Paragraph Six of the [settlement] agreement states that alimony terminates at such time as the [former] [w]ife remarries, dies or begins receiving the [former] [h]usband's Social Security benefits. The [former] [w]ife began receiving the [former] [h]usband's Social Security benefits in January of 2016. Therefore the Court finds that the [former] [h]usband's alimony obligation to the [former] [w]ife terminated in January of 2016.
"Issue Two: How much alimony is owed by the Husband once he entered the DROP program?
"Paragraph Six of the parties' agreement states: At such time as the [former] [w]ife begins receiving a check each month on the [former] [h]usband's teacher retirement, the [former] [h]usband's obligation to pay periodic alimony to the [former] [w]ife shall decrease to $115.00 per month.
"The [former] [h]usband entered into the DROP program in September of 2009; however, the [former] [h]usband did not begin paying a check to the [former] [w]ife each month on his teacher retirement until January 2016. The [former] [h]usband argues that his alimony reduced to $115.00 when he entered into the DROP program. The [former] [w]ife argues that his alimony did not reduce to $115.00 until he began paying a retirement check to her each month.
"Based on the strict language of the parties' agreement, the Court finds that the [former] [h]usband's alimony obligation in the amount of $450.00 per month continued until the [former] [w]ife began receiving a check each month on the ... teacher[-]retirement [benefit] in January of 2016.
"Issue Three: The parties' [settlement] agreement stated that [the former] [h]usband was entitled to deduct taxes and at least one deduction from the amount the [former] [w]ife is eligible to receive from [the teacher-retirement benefit] each month. The question posed is since no taxes nor deductions were made from the amount deposited into the ... DROP account, is the [former] [h]usband entitled to deduct taxes and insurance from the amount the [former] [w]ife is eligible to receive?
"Paragraph Twelve reads: ‘The [former] [w]ife is to receive one half (½) of the [former] [h]usband's teacher retirement after deduction of taxes, one half the TIAA-CREF account, and thirty-five (35%) of the [former] [h]usband's Social Security benefits. The [former] [h]usband will be permitted to claim at least one deduction or more; however, no excessive taxes will be withheld.’
"The ... DROP account is tax deferred so no taxes were withheld from the funds deposited into the ... DROP account. The deduction for medical insurance was paid from the [former] [h]usband's ongoing employment and not from the funds deposited into [the] DROP account. Based upon a strict reading of the ... [settlement] agreement the Court finds that [the former] [h]usband is entitled to deduct taxes (even though said taxes are deferred) from the funds deposited into [the] DROP [account,] but he is not entitled to deduct the medical insurance premium from said funds since said premium was paid from his employment income as opposed to [the teacher-retirement benefit]."
The April 2018 order noted that the settlement agreement "was prepared by the [former wife's] attorney with input from the [former husband's] attorney." The April 2018 order continued:
The record would support findings that the former husband was represented by counsel during the divorce proceedings, that the former husband's divorce counsel had submitted the settlement agreement to the trial court along with the former wife's divorce counsel, and that the former husband's divorce counsel "sign[ed] off" on the settlement agreement. As noted above, the former husband contended that any ambiguity in the settlement agreement should be construed against the former wife because the former wife's divorce counsel drafted the agreement. He also makes that argument on appeal. However, the rule of contra proferentem, i.e., that an ambiguity should be construed against the drafter, is a rule of last resort when addressing an ambiguity, see Homes of Legend, Inc. v. McCollough, 776 So. 2d 741, 746 (Ala. 2000), and that rule may be employed only if the proffered construction is reasonable in light of all the provisions of the contract and the object to be accomplished by the contract. See Penn Mut. Life Ins. Co. v. Fiquett, 229 Ala. 203, 207, 155 So. 702, 706 (1934). Also, "[w]here the doubtful terms employed are the common language of both parties, the rule is without application." Denson v. Caddell, 201 Ala. 194, 196, 77 So. 720, 722 (1917) ; see also G.F.A. Peanut Ass'n v. W.F. Covington Planter Co., 238 Ala. 562, 566, 192 So. 502, 506 (1939). See also Birmingham Motor Co. v. Norwood Transp. Co., 16 Ala. App. 572, 574, 80 So. 146, 148 (1918) (stating that the rule of contra proferentem applies "where doubt exists as to the construction of an instrument prepared by one party thereto upon the faith of which the other has incurred an obligation").
"5. The parties stipulated to the admittance of several documents [at the October 2017 hearing]:
"a. [The former husband's exhibit] 1 is a document from Social Security showing the [former husband] would earn from Social Security at age 62 $1,106 per month had he stopped working in 2002.
"b. [The former husband's exhibit] 2 is a document from The Retirement Systems of Alabama which showed that the [former husband] would have earned $847.54 had he retired in 2001 with a partial survivor beneficiary election.
"6. The parties further stipulated that the [former husband] was enrolled in the DROP program from September 2009 through July 2014 and $1,770.00 [per month] was deposited into the ... DROP account from September 2009 through July 2014.[ ]
"7. Upon retirement the funds in the ... DROP account were rolled into a retirement fund for tax purposes.
"8. The [former husband] paid the [former wife] the sum of $450.00 per month in alimony from the time of the divorce through January of 2016. The [former husband] did not pay the [former wife] any sums from retirement during said time.
"9. The [former husband] began paying the [former wife] the sum of $890.00 per month effective January 2016. The [former husband] continued to pay the [former wife] the sum of $890.00 per month through November of 2016. The [former husband] paid nothing to the [former wife] in December of 2016 and effective January 2017 the [former husband] began paying the [former wife] the sum of $500.00 per month. Said $500.00 monthly payment has continued each month through the trial of this action.
"10. The only deductions the [former husband] currently takes from [the teacher-]retirement [benefit] are income taxes and health insurance."
As of September 2009, the former husband's vested teacher-retirement benefit was $1,770 per month. As noted above, the former husband also made additional contributions to the DROP account. The former wife conceded that she was not entitled to any portion of those additional contributions.
The April 2018 order states that the former husband was entitled to deduct health-insurance premiums from the teacher-retirement benefit paid to the former wife if those premiums were paid from that benefit. Also, the April 2018 order states that the value of the teacher-retirement benefit to which the former wife was entitled was the value of that benefit as it "existed at the time of the divorce." However, the April 2018 order further provided that the former wife was entitled to receive her portion of the teacher-retirement benefit that had been deposited in the DROP account beginning in September 2009. The trial court summarized its conclusions as follows:
"18. The Court therefore finds that the [former wife] is entitled to receive $450.00 per month [as periodic alimony] through August 2009.
"19. Effective September 2009 the [former wife] is entitled to receive:
"a. $450.00 per month in [periodic] alimony and
"b. One half of $847.54 ( [the former husband's] exhibit 2) after deduction of taxes.
"20. Effective January of 2016 when the [former husband] stopped working and began receiving Social Security benefits the [former wife] is entitled to receive:
"a. One half of $847.54 ( [the former husband's] exhibit 2) after deduction of taxes and insurance (if paid from the retirement at this time), and
"b. $387.10 which is 35% of the [former husband's] Social Security benefits as set forth in [the former husband's] exhibit 1."
The April 2018 order again noted that the trial court was unable to calculate the amount of the teacher-retirement-benefit arrearage that the former husband must pay to the former wife, and the order retained the provision for an accountant to assist with the teacher-retirement-benefit calculation. The April 2018 order set the case for a final hearing to be held on May 17, 2018.
At the May 17, 2018, hearing, the trial court stated that it had indicated at the April 2018 conference that it "would accept the stipulation as to a calculation of figures should the parties so elect as opposed to presenting an accountant to testify regarding the figures." The former wife then proposed the introduction of two exhibits reflecting her calculations regarding the former husband's purported arrearage, plus postjudgment interest. The former wife's proffered exhibits used, as a starting point for the teacher-retirement-benefit calculation, the stipulated amount of the former husband's teacher-retirement benefit discussed in the April 2018 order, namely $847.54. Also, the former wife's proffered exhibit 1 -- a spreadsheet reflecting monthly payment, arrearage, and interest tallies from September 2009 through April 2018 -- reflects that the former husband had paid the former wife $450 per month as periodic alimony from September 2009 until he retired in January 2016; the spreadsheet reflects that no payments were made from or credited to the teacher-retirement benefit for that period. Also, the arrearage calculation included adjustments for the varying payments made by the former husband after January 2016, as described in paragraph 9 of the April 2018 order. According to the former wife's proffered exhibit 2, which summarizes and explains the basis for her calculations in proffered exhibit 1, the former husband owed her $33,178.32 as arrearage for her share of the teacher-retirement benefit and $15,548.00 for postjudgment interest on that arrearage.
The former wife's calculations accounted for the change in interest rate on judgments from 12 percent per annum to 7.5 percent per annum, effective September 1, 2011. See Ala. Code 1975, § 8-8-10.
Counsel for the former husband objected to the introduction into evidence of the former wife's proffered exhibits: "[The former husband's] objection to the [former wife's] spreadsheet, [exhibit] 1, Your Honor, is that it does not take into account the moneys that [the former husband] did pay from the time he went into the DROP ... in September '09 up until the time that he actually started receiving retirement money in February of 2016. There's no offset ...." The trial court then asked the former husband's counsel whether he wanted the former wife's counsel to testify regarding the calculations presented on the former wife's proffered exhibits, and the following colloquy occurred:
"[FORMER HUSBAND'S COUNSEL]: Wouldn't that be kind of unusual, an attorney being a witness?
"[FORMER WIFE'S COUNSEL]: Judge, we would proffer that the numbers in there are certainly from what has been presented and to be calculated by interest and categories and very well laid out.
"[FORMER HUSBAND'S COUNSEL]: And I don't doubt [the former wife's counsel's] thoroughness in doing it. Our objection to it is, it's –- really, the legal argument we discussed in chambers, which I'll represent wasn't on the record, that -- my objection is: He's not given credit --
"THE COURT: Let me stop you. I'm going to give you an opportunity to do that.
"Regarding the documents that are marked as [the former wife's] Exhibit 1 and ... Exhibit 2, which is the key that explains how [the former wife's] Exhibit 1 is calculated, I understand you disagree regarding the method of calculation and the fact that there is not a credit that is given, but do you object to the document being introduced into evidence regarding the defendant's side of how they calculated this figure?
"[FORMER HUSBAND'S COUNSEL]: No."
The trial court then admitted the proffered exhibits into evidence, after which the former wife's counsel stated:
"Judge, we would just say that those calculations are based on the testimony and evidence that was given and then subsequent court orders from Your Honor that came out and gave us additional direction on that.
"And so other than that, and again, not to belabor the point that we've had two pretrial conferences about it, but it is our position again, had [the former husband] complied with the agreement and when he began to receive retirement, that he had been paying, that he then started paying [the former wife], she would have been receiving the retirement and would not have been due the alimony, but he did not do that per the terms of the order, and that's why we offset the credit."
The following colloquy then occurred regarding the former husband's objection to the method of calculation reflected on the former wife's exhibit 1:
"[FORMER HUSBAND'S COUNSEL]: My response to that is, Your Honor, obviously, the parties didn't understand. Whether they should or should not have, [the former husband], it's undisputed, did continue to pay $450 under the [settlement] agreement. Although he should have been paying some form of retirement as of September 2009, and that his alimony obligation would have reduced to $115.[ ] [The
Although this statement, read in isolation, might be construed as a concession by the former husband, the record elsewhere makes clear that the former husband opposed the conclusion that the former wife was entitled to a portion of the teacher-retirement-benefit payments deposited into the DROP account beginning in September 2009. The former husband's alternative argument was that, if the trial court concluded the former wife was entitled to a portion of such payments beginning in September 2009, his periodic-alimony obligation was due to be reduced to $115 per month at that time, and he should be given a credit against the amount of teacher-retirement benefit owed based on the difference between the $450 in periodic-alimony he actually paid to the former wife and the $115 amount he would have been due to pay.
former wife's] Exhibit 1 today does not give him credit for the months he did pay. Notwithstanding the fact that the court order -- the [settlement] agreement says, once she begins to receive his retirement, alimony drops to $115. If the Court adopts the amount of money, the $48-plus thousand, the judgment they want against him with the interest and all that, they give him no credit for the $335 that should have been given towards what he owed her out of the retirement benefits.
"And basically, if the Court entered such an order today in that amount is retroactively allowing her to double dip when she has been compensated. If [the former husband] had been -- the alimony should be applied or should be given credit for the $335 towards the retirement amount, and then the difference between the $335 and whatever she was due under the retirement monies she should have received, that's the number that should have been used.
"And if the Court is inclined to -- I think the Court has the equitable power to look beyond the four corners of the document, and in this case, based on the parties' behaviors, and give him some credit towards that; otherwise, I think she's being unjustly enriched.
"THE COURT: So that I am clear on your argument and the record is clear on your argument, [the former wife's] Exhibit No. 1 indicates alimony was due -- and I'm going back to September of 2009. Alimony due of $450, retirement due of $406.27 [one-half of $847.54 less an adjustment for taxes], for a total of $856.27.
"It then gives credit for a payment of $450 to come up with an arrearage of $406.27.
"Your argument is not that they don't give him the credit for the $450, but your argument is that the alimony due should be $115; is that correct?
"[FORMER HUSBAND'S COUNSEL]: Correct.
"THE COURT: All right. And, [former wife's counsel], so that I'm understanding you, your argument is: The agreement states at such time as the wife begins receiving a check each month on the husband's teacher retirement, the husband's obligation to pay periodic alimony to the wife shall decrease to $115 per month, that he did not pay the teacher[-]retirement [benefit] until now?
"[FORMER WIFE'S COUNSEL]: That's correct.
"THE COURT: So your argument is that the alimony should not be reduced from $450 to $115 until he -- and I say ‘now,’ not now, but when he actually retired, not through the DROP program but through the Retirement System itself?
"[FORMER WIFE'S COUNSEL]: That's correct."
The former husband's counsel later added:
"Judge, I'd also point out, and I think the Court would acknowledge, that the [settlement] agreement entered into by these people through counsel was incredibly poorly written, and caused an enormous amount of time and expense on both sides because of a document that was poorly drafted and did not
identify specifically amounts that were due.
"We spent a lot of time trying to figure out what the retirement amount -- that was the thought I had.
"With regards to Exhibit 1, we would object to the amount that -- or we dispute what their calculation is as to his take and her percentage or the amount that she was due at the time of the DROP program in 2009 regarding her percentage of his retirement.
"That was the other thing I wanted to be clear on the record about. I'm not sure that that number is accurate. We dispute that finding, if the Court is inclined to adopt it.
"But in regards to finding him in contempt. Your Honor, I don't know how you could find him in contempt when he had two -- well, relatively competent attorneys submit an order to the Court without identifying the [former wife's] -- what she should be -- the amount she should have received as of 2001. That was a threshold issue....
"So I don't know how you could find him in contempt. Really it seems to me more to the effect that, look, these are the numbers that should've been in place back in 2001 when that agreement was signed or whenever it was signed, and because it was poorly written and had, what would appear, to be contradictory statements in it has caused [the former husband] and the [former wife] and [the former wife's] attorneys, who are very competent, to spend a bunch of time and the Court's time trying to sort this mess out...."
At the hearing on the former husband's postjudgment motion, the former husband's counsel added:
"I think the Court understood this [settlement] agreement was poorly drafted, wickedly poorly drafted, had apparently two competent attorneys sign off on it to the detriment of both these [two] poor people.
"....
"... It's not his fault that her lawyer, who drafted it, and his lawyer, who looked at it, said, yeah, go ahead and sign it. It's, ludicrous. I mean, we've had multiple pre-trial conferences off the record to talk about that. It's just, like, we're shaking our head, why. It's made a major legal mess for both these people."
On May 18, 2018, the trial court entered a final judgment. Regarding the former husband's periodic-alimony obligation, the May 2018 judgment states:
"1. Paragraph Six of the parties' agreement states as follows: ‘.... At such time as the [former] [w]ife begins receiving a check each month on the ... teacher retirement [benefit], the [former] [h]usband's obligation to pay periodic alimony to the [former] [w]ife shall decrease to $115.00 per month....’
"2. In September of 2009 the [former husband] entered into the DROP.... The DROP ... is not a separate retirement program; rather, it is an option made available to certain state employees whose benefits have in fact already vested and who are eligible for immediate retirement. Ala. Code 1975, § 36-27-170(a),[ ] which created DROP, provides that ‘the purpose of [the] DROP is to allow, contractually, in lieu of immediate withdrawal from service and receipt of a retirement allowance,
The trial court's reference to Ala. Code 1975, § 36-27-170(a), is incorrect. The teacher-retirement benefit was from the Teachers' Retirement System of Alabama, which is governed by Ala. Code 1975, § 16-25-1 et seq., rather than the State Employees' Retirement System of Alabama, which is governed by Ala. Code 1975, § 36-27-1 et seq. For purposes of the DROP, the substantial equivalent of § 36-27-170 is § 16-25-150, the pertinent provision for the Teachers' Retirement System of Alabama.
continued employment for a specific period of time, coupled with the deferral of receipt of a retirement allowance ...’ [The] DROP benefits are not different in character from retirement benefits paid directly to a retired employee. Killingsworth vs. Killingsworth, 925 So. 2d 977 (Ala. Civ. App. 2005).
"3. Notwithstanding the fact that the [former wife] was entitled to receive her portion of the ... [teacher-]retirement [benefit] upon the [former husband's] entry into the DROP ..., the [former wife] did not begin receiving a check each month on the teacher[-]retirement [benefit]. Therefore the [former husband's] alimony obligation to the [former wife] did not reduce to $115.00 per month."
Regarding the former wife's entitlement to a portion of the teacher-retirement benefit, the May 2018 judgment quotes paragraph 12 of the settlement agreement and then states that "the date of division [for purposes of valuing the teacher-retirement benefit and Social Security benefits to which the former wife was entitled] is the date the complaint for divorce was filed with the Court." The May 2018 judgment further states:
"7. On December 12, 2017, the trial court directed the parties, by and through their attorneys, to agree upon or have the court order an accountant to tally up the sums due to the [former wife] based upon the findings of the Court. The Court placed this case on the administrative docket and conducted several pretrial conferences with the attorneys to inquire as to their efforts to calculate the amount due.
"8. At the May 17, 2018, trial, the [former wife] presented the Court with her calculation of the amounts due. While the [former husband] opposed the calculation offered by the [former wife,] the [former husband's] opposition was to the findings of the Court and not to the mathematical correctness of the [former wife's] calculation.
"[9]. Based upon the calculation submitted to the Court as well as the specific findings made in the prior Orders of the Court, the Court finds that the [former wife] is entitled to a Judgment in the amount of $33,178.32 for arrearages due through April 2018 and a Judgment in the amount of $15,548.00 for interest on said arrearages through April 2018."
The May 2018 judgment states that the arrearage amount is "for retirement and [periodic-]alimony arrearages" and that the interest is awarded on those "arrearages." As noted above, however, based on the exhibits submitted by the former wife at the May 2018 hearing, no periodic-alimony arrearage existed. The amounts stated by the trial court ($33,178.32 for arrearage ... and ... $15,548.00 for interest) are supported by the calculations in the former wife's exhibits introduced into evidence at the May 2018 hearing.
The May 2018 judgment further required the former husband to
"continue to pay the [former wife] fifty percent of his retirement as the same existed at the time the parties' filed for divorce less reasonable taxes and the deduction for his health insurance premium, said sum currently being $ 340.27 per month....
"The [former wife] shall continue to receive 35% of [the former husband's] Social Security in compliance with the prior agreement of the parties. Said sum is currently calculated at $387.10 per month."
The issue whether Social Security benefits may be awarded as part of a property division is not before us. See Gentry v. Gentry, 327 Ark. 266, 269–70, 938 S.W.2d 231, 233 (1997) ; Boulter v. Boulter, 113 Nev. 74, 78–79, 930 P.2d 112, 114–15 (1997) ; In re Marriage of Swan, 301 Or. 167, 176, 720 P.2d 747, 752 (1986) ; and Olson v. Olson, 445 N.W.2d 1, 11 (N.D. 1989). See generally 2 Brett R. Turner, Equitable Distribution of Property § 6:17 (4th ed. 2019) (noting that the majority of courts have held that Social Security benefits may not be treated as marital property).
The May 2018 judgment denied the former wife's motion to hold the former husband in contempt and denied all other requested relief.
On June 16, 2018, the former husband filed a postjudgment motion. The trial court heard oral arguments regarding the postjudgment motion. On July 6, 2018, the trial court entered an order denying that motion. On August 14, 2018, the former husband filed his notice of appeal to this court.
Standard of Review
" ‘[W]hen a trial court hears ore tenus testimony, its findings on disputed facts are presumed correct and its judgment based on those findings will not be reversed unless the judgment is palpably erroneous or manifestly unjust.’ Philpot v. State, 843 So. 2d 122, 125 (Ala. 2002). ‘ "The presumption of correctness, however, is rebuttable and may be overcome where there is insufficient evidence presented to the trial court to sustain its judgment." ’ Waltman v. Rowell, 913 So. 2d 1083, 1086 (Ala. 2005) (quoting Dennis v. Dobbs, 474 So. 2d 77, 79 (Ala. 1985) ). ‘Additionally, the ore tenus rule does not extend to cloak with a presumption of correctness a trial judge's conclusions of law or the incorrect application of law to the facts.’ Id."
Fadalla v. Fadalla, 929 So. 2d 429, 433 (Ala. 2005).
Analysis
On appeal, the former husband makes several arguments directed at two issues regarding the May 2018 judgment enforcing the divorce judgment. Those issues are (1) whether the trial court erred by concluding that the former wife was entitled to begin receiving her share of the teacher-retirement benefit beginning in September 2009, when the former husband entered the DROP, and, (2) assuming the trial court correctly determined that issue, whether the trial court erred by determining that the former husband was not entitled to a credit of $335 per month (based on his payment of $450 per month as periodic-alimony during his participation in the DROP) against the portion of the teacher-retirement benefit that was payable to the former wife. As to the latter issue, the former husband contends that, if the former wife was entitled to teacher-retirement-benefit payments during his participation in the DROP, his periodic-alimony obligation should have been reduced to $115 per month for that same period.
Before addressing the former husband's arguments, we first must address a fundamental misunderstanding that is reflected in the underlying proceedings regarding the nature of the DROP and the teacher-retirement benefit that was used to partially fund the DROP account at issue. The teacher-retirement benefit was part of a defined-benefit pension plan pursuant to which a "teacher" contributes a percentage of his or her "earnable compensation" to the Teachers' Retirement System of Alabama each pay period; upon retirement, the teacher then receives a "retirement allowance," the amount of which depends upon the teacher's number of years of "creditable service" and his or her "average final compensation." See Ala. Code 1975, § 16-25-1 (defining the foregoing terms for the chapter of the Code governing the Teachers' Retirement System of Alabama). The "retirement allowance" is defined as "[t]he sum of the ‘annuity’ and the ‘pension,’ " Ala. Code 1975, § 16-25-1(21), and the retirement allowance is paid on a monthly basis during the life of the retiree, and, depending on the teacher's retirement election, perhaps the life of the retiree's beneficiary as well. See Ala. Code 1975, § 16-25-14 (discussing payment of the retirement allowance upon retirement under the Teacher's Retirement System of Alabama); see also Ala. Code 1975, § 16-25-1(19) (defining "annuity" as "[p]ayments for life derived from the ‘accumulated contributions’ of a member"); Ala. Code 1975, § 16-25-1(20) (defining "pension" as "[p]ayments for life derived from money provided by the employer"). The trial court's determination that the former wife's share of the teacher-retirement benefit was to be valued as of the date the complaint for divorce was filed is uncontested on appeal, as is the value of the former husband's vested teacher-retirement benefit of $847.54 per month as of that date. Also, as noted above, the parties agreed that the provisions regarding the teacher-retirement benefit discussed in paragraph 12 of the settlement agreement were a nonmodifiable division of property or an award of alimony in gross.
The plurality opinion in Sockwell v. Sockwell, 822 So. 2d 1219 (Ala. Civ. App. 2001), concluded that Ala. Code 1975, § 16-25-23(a), prohibited a trial court from ordering the husband "to liquidate his retirement account in order to satisfy the debts of the marriage." 822 So. 2d at 1225 ; see also Ala. Code 1975, § 16-25-23(a) ("[T]he right of a person to ... the pension, annuity or retirement allowance itself; any optional benefit or any other right accrued or accruing to any person under the provisions of this chapter; and the monies in the various funds created by this chapter are hereby exempt from any state or municipal tax and exempt from levy and sale, garnishment, attachment or any other process whatsoever, and shall be unassignable except as in this chapter specifically otherwise provided."). In Sockwell, the husband noted
"that under the terms of his account with the Teachers' Retirement System ... and under Alabama statutes, [his retirement] account is not to be liquidated except upon his retirement from the profession or upon his death, and that if he prematurely liquidates it he would be entitled to receive only five-tenths of the accumulated interest in the account. Thus, he argues that the trial court's judgment, in essence, requires him to quit his job in order to satisfy the property division."
822 So. 2d at 1225.
In Kleinatland v. Kleinatland, 218 So. 3d 1204 (Ala. Civ. App. 2016), this court referenced the Sockwell decision in addressing the application of Ala. Code 1975, § 36-27-28, which is the mirror provision to § 16-25-23 for the Employees' Retirement System of Alabama. In Kleinatland, the judgment "requir[ed] the husband to pay the wife ‘an amount equal to one-half of the amount in his [Retirement Systems of Alabama] account as of the date of [the parties'] separation.’ " 218 So. 3d at 1205. The husband in Kleinatland challenged that provision on appeal, and this court upheld the judgment, noting that "this court cannot assume that the trial court, by awarding the wife alimony in gross, was indirectly ordering the husband to liquidate his retirement account." 218 So. 3d at 1206. We further stated: "When a component of the parties' marital property cannot be actually divided, a trial court can order the spouse in whose name the property is vested to pay the other spouse the value of the latter's equitable share of that marital property as alimony in gross," where otherwise proper. 218 So. 3d at 1206.
The former husband contends that this case presents an issue of first impression: "[W]hether entry into the DROP program is ‘retirement’ for purposes of an entitlement to the [former] wife when the [former] husband was not vested in the DROP program at the time of divorce." (Former husband's brief at 10.) The former husband's framing of the issue, however, masks a basic, erroneous assumption. As this court stated in Killingsworth v. Killingsworth, 925 So. 2d 977 (Ala. Civ. App. 2005), the "DROP is not a separate retirement program," and an election to participate in the "DROP ... [does] not change the character of the ... retirement benefits and [does] not result in a new postdivorce asset ...." Id. at 982. Instead, the DROP is a contractual arrangement that allows a teacher to merely defer his or her actual receipt of the retirement allowance while the teacher continues to work; during that time, the retirement allowance is itself paid into an account for the benefit of the teacher. As stated in Ala. Code 1975, § 16-25-150(a),
"there exists as a part of this retirement system an optional account known as the Deferred Retirement Option Plan, which may be cited as ‘DROP.’ The purpose of DROP is to allow, contractually, in lieu of immediate withdrawal from service and receipt of a retirement allowance, continued employment for a specific period of time, coupled with the deferral of receipt of a retirement allowance until the end of the period of participation ...."
During the teacher's participation in the DROP, the teacher's retirement allowance, i.e., "[t]he sum of the ‘annuity’ and the ‘pension’ " that would be due to the teacher at that time if he or she retired, Ala. Code 1975, § 16-25-1(21), is paid each month into the teacher's DROP account rather than being paid directly to the teacher. As stated in Ala. Code 1975, § 16-25-150(g) :
"The monthly retirement allowance that would have been payable, had the [teacher] elected to withdraw from service and receive a retirement allowance, shall be paid into a DROP account that reflects the credits attributed to the [teacher] in DROP. However, the monies shall remain a part of the regular retirement fund until disbursed to the participating [teacher] in accordance with this section."
(Emphasis added.)
Pursuant to Ala. Code 1975, § 16-25-151(c),
"[a]t the end of the specified period for DROP:
"(1) Payments into the DROP account made on behalf of the [teacher] shall cease.
"(2) Payment from the DROP account shall not be made to the [teacher] until he or she withdraws from service, nor shall the monthly retirement allowance being paid into the DROP account during the period of participation be payable to the [teacher] until he or she withdraws from service pursuant to Section 16-25-14[, Ala. Code 1975 ].
"(3) If the [teacher] does not withdraw from service after the period specified for participation in DROP, he or she shall resume active contributing membership in the system for the purpose of earning creditable service...."
(Emphasis added.) Upon retirement, the teacher
"[w]ho fulfilled his or her contractual obligation pursuant to DROP shall receive a lump-sum payment from his or her DROP account equal to the payments made to that account on his or her behalf plus interest. Further, the [teacher] shall receive his or her accumulated contribution made during participation in DROP, together with interest for the period of DROP participation as provided in subdivision (1) of subsection (g) of Section 16-25-14. In lieu of a lump-sum payment from the DROP account, to the extent eligible under applicable tax laws, the [teacher's] total accrued benefit may be ‘rolled over’ directly to the custodian
of an eligible retirement plan. The [teacher] shall also begin receiving his or her monthly benefit which had been paid directly into the DROP account during his or her participation in DROP."
Ala. Code 1975, § 16-25-151(a)(1) (emphasis added).
As the foregoing statutory provisions make clear, by participating in the DROP the former husband contractually began accumulating the teacher-retirement benefit, i.e., his retirement allowance, in the DROP account before he retired; each monthly payment of the retirement allowance included the equitable share of the teacher-retirement benefit that was to be paid to the former wife. The former husband merely deferred his actual receipt of those teacher-retirement-benefit payments until he retired. Upon the former husband's retirement, he elected how the teacher-retirement-benefit payments that constituted part of the funds in the DROP account would be distributed. Although he was entitled to receive a lump-sum payment from the DROP account, he instead elected to roll over the funds in the account into the RSA-1 Deferred Compensation Plan. In other words, by participating in the DROP, the former husband converted a portion of the teacher-retirement benefit from a stream of monthly retirement-allowance payments to be made directly to him upon retirement to a stream of monthly retirement-allowance payments that were made to the DROP account and that he could, upon retirement, elect to receive as a lump-sum distribution or to roll over into a tax-deferred account. By participating in the DROP, the former husband did not change the nature of his teacher-retirement benefit, he changed only the distribution method that would be used, upon his retirement, to pay out the portion of that benefit that he had elected to divert into the DROP account before his retirement.
The foregoing understanding of the statutory framework governing the DROP is fully consistent with what this court stated in Killingsworth, which involved a consideration of the mirror statutes for the retirement plan for state employees, Ala. Code 1975, § 36-27-170 and § 36-27-171. As we stated in Killingsworth:
"The monthly retirement benefits to be accumulated in the husband's DROP account are the benefits that had already accrued during his employment with the state before the filing of the divorce action, and they are not different in character from retirement benefits paid directly to a retired employee. An employee merely continues to earn his or her regular salary while his or her retirement benefits accumulate in a DROP account. Accordingly, at the conclusion of the required term of service, the husband will receive, on a deferred basis, the retirement benefits that he earned during the course of his marriage, and that he could have begun receiving in January 2004 but for his election to participate in DROP."
The former husband attempts to distinguish the present case from Killingsworth, arguing that, unlike in Killingsworth, the DROP did not exist, and he would not have been eligible to participate in it had it existed, when he filed his complaint for divorce. Those distinctions, however, are irrelevant to the nature of the DROP and the teacher-retirement benefit that was used to fund the DROP account. The fact remains that the equitable share of the teacher-retirement benefit that had been awarded to the former wife in the divorce judgment was a part of each retirement-allowance payment made into the DROP account. Thus, contrary to the former husband's argument, the issue is not whether the former husband was vested in the DROP when the divorce complaint was filed. The issue is when and how the wife's share of the accumulated, vested teacher-retirement benefit that was deposited into the DROP account was to be distributed to her under paragraph 12 of the settlement agreement. As to that issue, the DROP merely provided the former husband with a new option for the accumulation and distribution of the teacher-retirement benefit, an option that did not exist when the parties entered into the settlement agreement. Whether and how the new option, if elected, would affect the distribution of the former wife's equitable share of the teacher-retirement benefit was not expressly addressed in the settlement agreement, which brings us to the issue of ambiguity.
The former husband argues that the former wife purportedly "conceded that she is not entitled to any post-divorce accumulation of [the teacher-]retirement [benefit] or Social Security benefits," and that "she should not be entitled to benefit from the [former] [h]usband's participation in the DROP ..., which vested post-divorce." (Former husband's brief at 22.) The former wife conceded only that she was not entitled to teacher-retirement benefits attributable to the former husband's postdivorce earnings, a position that is consistent with what this court said in Killingsworth: "[C]ontributions ... derived from the husband's salary, ... earned after the filing of the divorce action ..., do not constitute vested benefits subject to division under § 30-2-51." 925 So. 2d at 982. The former wife did not concede that she was not entitled to the share of the teacher-retirement benefit that had been awarded to her in the divorce judgment, but then diverted into the DROP account until the former husband retired. Further, the trial court did not award the former wife any of the former husband's postdivorce earnings because the trial court limited the amount of the teacher-retirement benefit to be paid to the former wife to the monthly payments she would have been entitled to receive based on the value of the former husband's vested teacher-retirement benefit at the time of the complaint for divorce was filed.
The former husband spends a good portion of his brief arguing that paragraph 12 of the settlement agreement is not ambiguous and that the trial court erred by receiving parol evidence regarding the parties' intent. We find the former husband's argument to be somewhat disingenuous, particularly in light of the extensive discussion in the trial court about the parties' inability to determine the meaning of the settlement agreement. See discussion, supra. We also note that the former husband's argument regarding ambiguity essentially consists in general negative assertions, and it is questionable whether the argument is adequately made. See Rule 28(a)(10), Ala. R. App. P.; Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994) ("[I]t is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."). That failure, however, is perhaps because such a discussion would not favor the former husband's position. This court has stated that when
At the October 2018 hearing, the following colloquy occurred:
"[FORMER HUSBAND'S COUNSEL]: Your Honor, one other thing before we get started. It's my position that we have a fully integrated -- this is -- it might save us some time in testimony without objections.
"When you have a fully [integrated], contract or writing, which I think the Court acknowledges, the settlement agreement was that evidence of parol -- quote, evidence, when talked about what was meant, is typically inadmissible.
"THE COURT: Unless you have some type of ambiguity.
"[FORMER HUSBAND'S COUNSEL]: Right. And it is our position that there's --
"[FORMER WIFE'S COUNSEL]: We have tremendous ambiguity, in our opinion.
"[FORMER HUSBAND'S COUNSEL]: If that were the case, would you allow parol evidence or him to testify about the meaning, then I'd ask the Court to consider the caselaw that says that any ambiguity is charged to the drafter.
"THE COURT: So noted.
"[FORMER HUSBAND'S COUNSEL]: If they want to say, hey, it's ambiguous, our position is, fine, you want -- we will have that testimony, and it will be charged to the trier of the fact."
See note 6, supra.
"a property settlement's provisions directing and governing the property's sale are ambiguous, then a judgment clarifying such matters is not a modification of the agreement. Mayhan v. Mayhan, 395 So. 2d 1022 (Ala. Civ. App. 1981).
"The court's order pointed out the ambiguity of the settlement agreement when it stated the need for clarification on the issues of how, when, by whom, or in what manner the house should be sold."
Lloyd v. Lloyd, 508 So. 2d 276, 278 (Ala. Civ. App. 1987) (second emphasis added); see also Ex parte Bonds, 581 So. 2d 484, 487 (Ala. 1991) (concluding that the parties' settlement agreement was ambiguous because the "provisions do not express the terms by which James is to be reimbursed, nor do they explain under what circumstances either party may claim that the sale of the house failed to provide sufficient funds for reimbursement"); Smith v. Smith, 892 So. 2d 384, 386 (Ala. Civ. App. 2003) ; and Grayson v. Grayson, 628 So. 2d 918, 919 (Ala. Civ. App. 1993) ("[T]he original divorce judgment ordered that the husband ‘pay and be responsible’ for certain debts without specifying the manner in which those debts were to be paid. When the trial court subsequently entered a judgment against the husband for an amount equal to the unpaid credit card debts, it ‘did no more than enforce the original judgment, as it was empowered to do.’ Filer v. Filer, 502 So. 2d 698, 701 (Ala. 1987)."). Nevertheless, we agree, in part, with the former husband that the pertinent language used in paragraph 12 is not ambiguous. Paragraph 12 of the settlement agreement clearly and unequivocally states that "[t]he [former] [w]ife is to receive one-half ... of the [former] [h]usband's teacher retirement after deduction of taxes." That language contains no restriction on the wife's entitlement to her equitable share of the teacher-retirement benefit; she was entitled to her one-half of the teacher-retirement benefit, after the deduction of pertinent taxes, regardless of how the teacher-retirement benefit was distributed to the former husband.
The problem at issue also might be framed as a problem of an omitted term. See Ruggles v. Ruggles, 116 N.M. 52, 69-70, 860 P.2d 182, 199-200 (1993) (remanding for the trial court to consider parol evidence regarding the distribution of retirement benefits when the agreement did not address the issue); see also Quinn v. Quinn, 225 N.J. 34, 46–47, 137 A.3d 423, 430 (2016) ("[R]esort to traditional tenets of contract interpretation may be appropriate ... when there is a missing term that is essential to implementation of a matrimonial agreement. [Pacifico v. Pacifico, 190 N.J. 258,] 266, 920 A.2d 73 [ (2007) ]. Then, the court may supply the missing term. Ibid. (citing Restatement (Second) of Contracts § 204 (1981) ). Application of this rule was appropriate, for example, when the judgment of divorce did not address the valuation date of the marital home when it was not sold on the date identified in the agreement."); and Pacifico v. Pacifico, 190 N.J. 258, 266, 920 A.2d 73, 78 (2007) (stating that Restatement (Second) of Contracts § 204 (1981) "and its commentary reveal [that] it is intended to be applied in cases in which the parties failed to agree regarding an issue, generally because they did not anticipate that it would arise or merely overlooked it"). See generally Restatement (Second) of Contracts § 204 (1981) ("When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court."); Id. at comment e (discussing parol evidence in the context of an omitted term).
Likewise, regarding an issue not addressed by paragraph 12, but which the trial court was required to decide in order to enforce that paragraph, namely, how the teacher-retirement benefit that was deposited into the DROP account was to be treated, we agree with the former husband that the trial court erred by concluding that the former husband began receiving the teacher-retirement benefit when he entered the DROP in September 2009. The former husband did not receive the teacher-retirement benefit for purposes of paragraph 12 until he retired and exercised control over the distribution of the DROP account. Indeed, as a matter of the law governing the DROP and under the undisputed facts, the former husband could not have received the teacher-retirement benefit that was deposited into the DROP account until he actually retired. At that time, however, the former husband had unrestricted control over the distribution of the teacher-retirement benefit that was deposited into the DROP account, including the former wife's equitable share of that benefit. Instead of paying to the former wife her equitable share of the teacher-retirement benefit, after payment of taxes, the former husband elected to roll over her equitable share of the funds in the DROP account into an RSA-1 Deferred Compensation Plan.
Based on the foregoing, we reject the former husband's argument regarding the former wife's entitlement to her equitable share of the teacher-retirement benefit that was paid into the DROP account, although we agree with the former husband that she was not entitled to actually receive her share of those payments beginning in September 2009. Rather, she was entitled to receive those accumulated payments when the former husband retired. We therefore affirm the May 2018 judgment insofar as it awards the former wife $33,178.32 for her share of the teacher-retirement benefit that was unpaid as of May 2018. See, e.g., Liberty Nat'l Life Ins. Co. v. University of Alabama Health Servs. Found., P.C., 881 So. 2d 1013, 1020 (Ala. 2003) (explaining that an appellate court may "affirm the trial court on any valid legal ground presented by the record, regardless of whether that ground was considered, or even if it was rejected, by the trial court"). In so doing, we reject the former husband's argument that the trial court erred by allegedly not considering his records and calculations as to the amount he owed the former wife and by accepting the former wife's calculations. He cites no part of the record in support of this argument, and he cites no legal authority in support of this argument. See Rule 28(a)(10), Ala. R. App. P. Further, substantial evidence supported the trial court's determination, which was based on exhibits submitted by the former wife and testimony from the October 2017 hearing, and the former husband makes no attempt to address the specifics of the calculations submitted by the former wife or what parts of those calculations might be in error. Id.
We pretermit any discussion of the former husband's remaining arguments on the teacher-retirement-benefit issue as being without merit. And, we note that the former husband made no specific argument to the trial court, and he makes no argument on appeal, that the award of postjudgment interest was improper in this case. Accordingly, although the award of postjudgment interest clearly would be different under the proper rationale for the judgment discussed above, we must nevertheless affirm the $15,548 interest award made by the trial court because the former husband has made no argument addressing the issue of postjudgment interest and the award on which such interest is based is due to be affirmed. See Rule 28(a)(10) and Dykes, supra.
For example, the former husband makes an argument based on the language of former § 30-2-51(c). See note 1, supra. However, the former husband made no argument based on the language of former § 30-2-51(c) in the trial court, and it is well settled that
"[t]he appellate courts will not consider a challenge to an order or a judgment of a trial court asserted for the first time on appeal. Landers v. O'Neal Steel, Inc., 564 So. 2d 925, 926 (Ala. 1990) (‘This Court will not review an issue raised for the first time on appeal.’); and Pate v. State, 601 So. 2d 210, 213 (Ala. Crim. App. 1992) (‘An issue raised for the first time on appeal is not subject to review because it has not been properly preserved and presented.’)."
Porter v. Colonial Life & Accident Ins. Co., 828 So. 2d 907, 908 (Ala. 2002). Thus, the application of former § 30-2-51(c) cannot be considered as a basis for reversing the May 2018 judgment.
An unpaid property settlement incorporated into a divorce judgment may accrue interest so long as it is unpaid and the judgment fixes the amount owed. See, e.g., Morgan v. Morgan, 445 So. 2d 297, 299 (Ala. Civ. App. 1983) (interest on unpaid installments fixed by judgment); see also Ala. Code 1975, § 8-8-10 (providing for interest on a judgment). In the present case, however, the divorce judgment did not fix the amount of the teacher-retirement benefit owed by the former husband to the former wife. See Alabama Dep't of Conservation & Nat. Res. v. Exxon Mobil Corp., 11 So. 3d 194, 203 (Ala. 2008) ("Section 8–8–10 applies only when the judgment is one for the payment of money, i.e., a ‘money judgment.’ ... On December 5, 2003, the trial court entered an order directing Exxon to pay future royalties ‘according to the plain, unambiguous language of the leases as reflected in the jury's verdict.’ This judgment did not constitute a money judgment for purposes of § 8–8–10. It did not adjudicate or fix an amount of future royalties owed the State by Exxon."); and Elmore Cty. Comm'n v. Ragona, 561 So. 2d 1092, 1093 (Ala. 1990) ("Section 8–8–10 authorizes the payment of post-judgment interest as compensation for the loss of use of money as a result of the nonpayment of a liquidated sum for which liability has already been determined.").
Likewise, the former wife made no argument to the trial court that she was entitled to the interest that had accrued on her equitable share of the teacher-retirement benefit that had been deposited into the DROP account beginning in September 2009. Although the accrual-of-interest issue presents an interesting question, i.e., whether the former husband could use the former wife's equitable share of the teacher-retirement-benefit payments deposited into the DROP account for his own profit pending retirement, we do not address the issue.
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Turning to the second issue raised on appeal by the former husband, namely, whether the trial court, in essence, should have retroactively reduced his periodic-alimony obligation to $115 per month based on that court's conclusion that the former husband began receiving teacher-retirement-benefit payments when he entered the DROP in September 2009, that argument is without merit in light of the foregoing analysis. Paragraph 6 of the settlement agreement is clear and unequivocal, as the trial court concluded. The former husband's periodic-alimony obligation was not to be reduced to $115 per month until the former wife actually "receiv[ed] a check each month on the [former] [h]usband's teacher retirement." That did not occur before January 2016, and, under the correct understanding of the pertinent law discussed above, such a reduction was not due to occur until the former husband retired and the former wife began receiving payments of the teacher-retirement benefit. Thus, no credit was due to the former husband against his periodic-alimony obligation.
The former husband also argues that the trial court's failure to apply an offset allowed the wife to "double dip." However, not surprisingly, paragraph 6 contemplated a periodic-alimony adjustment based on the former wife's actual receipt of monthly payments from the teacher-retirement benefit (a defined-benefit plan) that was in effect when the divorce judgment was entered; those monthly payments began after the former husband retired. Paragraph 6 did not contemplate the effect of a distribution option (the DROP) for the teacher-retirement benefit that was not available when the divorce judgment was entered. In any event, the former wife did not receive, and was not entitled to receive, "a check each month" for her equitable share of the teacher-retirement benefit that was accumulated during the former husband's participation in the DROP. Also, allowing the former wife to share the advantages of the new distribution method for the teacher-retirement benefit provided by the DROP, while simultaneously enforcing the plain language of paragraph 6 of the settlement agreement, is not a punishment of the former husband or allowing the former wife to "double dip." Instead, it is merely recognizing that, to the extent the DROP provided the unanticipated advantage of allowing the accumulation and deferral of receipt of the teacher-retirement benefit, the former wife was equally entitled to that advantage regarding her equitable share of the teacher-retirement benefit. Until she began receiving that benefit, however, the former husband's periodic-alimony obligation was not due to be reduced, and no credit or offset was required under the facts before us.
Based on the foregoing, the May 2018 judgment is due to be affirmed.
AFFIRMED.
Thompson, P.J., and Moore, Donaldson, and Hanson, JJ., concur.