Title: Mary K. Sulzer v. Mary Susan Diedrich

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2003 WI 90 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
02-0036 
 
 
COMPLETE TITLE: 
 
 
Mary K. Sulzer,  
 
Plaintiff-Respondent-Cross-Appellant-
 
Petitioner, 
 
v. 
Mary Susan Diedrich,  
 
Defendant-Appellant-Cross-Respondent. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2002 WI App 278 
Reported at: 258 Wis. 2d 684, 654 N.W.2d 67 
(Ct. App. 2002 – Published) 
 
 
OPINION FILED: 
July 3, 2003   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
May 27, 2003   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Waukesha   
 
JUDGE: 
Donald J. Hassin   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
SYKES, J., dissents (opinion filed). 
WILCOX, J., joins dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
plaintiff-respondent-cross-appellant-petitioner 
there were briefs by C. Michael Hausman, Steven W. Jelenchick, 
and C. Michael Hausman & Associates, Ltd., Delafield, and oral 
argument by Steven W. Jelenchick and C. Michael Hausman. 
 
For the defendant-appellant-cross-respondent there was a 
brief by John K. Brendel and Brendel Law Offices, Brookfield, 
and oral argument by John K. Brendel. 
 
 
2003 WI 90 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  02-0036  
(L.C. No. 
96 CV 002586) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Mary K. Sulzer,  
 
          Plaintiff-Respondent-Cross- 
          Appellant-Petitioner, 
 
     v. 
 
Mary Susan Diedrich,  
 
          Defendant-Appellant-Cross- 
          Respondent. 
 
FILED 
 
JUL 3, 2003 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Modified and 
affirmed and, as modified, cause remanded.   
 
¶1 
ANN WALSH BRADLEY, J.   The petitioner, Mary Sulzer 
(Sulzer), seeks review of a published court of appeals decision 
that reversed an order of the circuit court.1  The circuit court 
order vacated its initial order imposing a constructive trust.  
Instead, it awarded Sulzer a money judgment in connection with 
the division of the retirement accounts of her former husband, 
                                                 
1 Sulzer v. Diedrich, 2002 WI App 278, 258 Wis. 2d 684, 654 
N.W.2d 67 (reversing an order of the circuit court for Waukesha 
County, Donald J. Hassin, Jr., Judge). 
No. 
02-0036   
 
2 
 
Fred Diedrich (Fred), which were to be divided equally at the 
time of their divorce in 1989.  Upon Fred's death, the accounts 
were subsequently converted to survivorship benefits with his 
second wife, the respondent Mary Diedrich (Diedrich), named as 
the beneficiary.  The court of appeals concluded that the 
circuit court erred when it vacated its initial order imposing a 
constructive trust on Sulzer's portion of these funds, and 
instead awarded a money judgment. 
¶2 
In analyzing the amount that should be subject to the 
constructive trust, the court of appeals determined that it 
should include the investment experience of Sulzer's portion of 
the accounts between the 1989 divorce and the date of Fred's 
death in 1995, but should not include the investment experience 
after Fred's death.2  Sulzer v. Diedrich, 2002 WI App 278, ¶2, 
258 Wis. 2d 684, 654 N.W.2d 67.  Sulzer agrees that a 
constructive trust should be imposed, but seeks review of the 
court of appeals' determination that the constructive trust 
should not include the investment experience of her portion of 
the retirement accounts after Fred's death. 
¶3 
While we agree that the imposition of a constructive 
trust is 
warranted 
in this 
case, 
we 
conclude 
that the 
constructive trust should include the investment experience on 
Sulzer's portion of the retirement accounts through the date of 
                                                 
2 We use the term "investment experience" to refer to the 
actual gains and losses on Sulzer's portion of the retirement 
accounts.  We note that the circuit court and the court of 
appeals variously referred to this concept as "earnings" and 
"interest and appreciation." 
No. 
02-0036   
 
3 
 
payment to Sulzer.  We therefore modify the decision of the 
court of appeals, affirm the decision as modified, and remand to 
the circuit court for further proceedings consistent with this 
opinion. 
 
¶4 
The retirement accounts at issue in this case are 
Fred's Wisconsin Retirement System (WRS) account and his 
deferred compensation account administered by the Copeland 
Companies (Copeland) at the time of the divorce.3  During Sulzer 
and Fred's divorce proceedings, the parties entered into an oral 
stipulation.  The following exchange took place regarding the 
pension benefits: 
ATTORNEY D'ANGELO: . . . In addition, the parties have 
agreed to divide equally all of the respondent's 
interests through the Wisconsin Retirement System with 
the value established as of today's date, and all of 
the respondent's interest in his deferred compensation 
program through the State of Wisconsin. 
THE COURT:  So, those two retirement plans or 
investment plans are going to be divided equally by a 
qualified domestic relation order. 
ATTORNEY D'ANGELO: On the deferred compensation but 
the State of Wisconsin uses a slightly different 
program for division, but that is the intent of it. 
. . . . 
                                                 
3 At the time of the divorce, Fred's deferred compensation 
plan was managed by the Copeland Companies.  Apparently, the 
company managing the plan has since changed.  However, for 
clarity, 
we 
refer 
to 
the 
account 
holding 
the 
deferred 
compensation benefits as the Copeland account, as did the 
circuit court and the court of appeals. 
No. 
02-0036   
 
4 
 
THE COURT: . . . We are going to use a qualified 
domestic relation order for the deferred compensation 
plan, and we are going to use another approach, which 
is going to end up with her owning half of his present 
value as of today in his retirement plan.  Okay.  Not 
exactly a domestic relation order, it's another kind 
of procedure used by the State whereby she ends up 
receiving half of it. . . .  
¶5 
In conformity with the oral stipulation, the judgment 
of divorce, entered on December 12, 1989, contained a "Property 
Division" section that provided: 
The parties will divide equally all of respondent's 
interest in the retirement, pension, profit sharing, 
or 
deferred 
compensation 
benefits 
through 
the 
Wisconsin Retirement System or the State of Wisconsin.  
The deferred compensation plan of the respondent is 
presently administered by the Copeland Companies and 
his 
retirement 
benefits 
are 
with 
the 
State 
of 
Wisconsin Retirement System.  It is the parties' 
intent to have these benefits divided as to their 
balance 
on 
the 
date 
of 
the 
divorce 
trial 
on 
September 6, 1989, by a Qualified Domestic Relations 
Order, or an order of the Court having a similar 
effect. 
¶6 
After the divorce, Sulzer obtained various circuit court orders in her efforts to 
cause the division of the retirement accounts as provided in the 1989 divorce judgment.  In 
August 1990, she obtained an Order for Division of Benefits directing the Wisconsin Department 
of Employee Trust Funds to issue Fred's benefit checks to the Clerk of Courts of Waukesha 
County for division of payments pursuant to the divorce judgment.  The Copeland plan 
administrators rejected this order. 
¶7 
A Domestic Relations Order was then entered in February 1993 as to the 
Copeland account, ordering Fred to, among other things, designate Sulzer as the beneficiary 
under the account as to the amount provided in the divorce judgment.  Fred failed to name Sulzer 
as the beneficiary as required by the order. 
No. 
02-0036   
 
5 
 
¶8 
In March 1995, an Order to Divide Wisconsin Retirement System Benefits was 
entered as to the WRS account.  The order, which was intended to be a Qualified Domestic 
Relations Order (QDRO), awarded Sulzer 50% of the value of the WRS account.  However, 
WRS considered the QDRO to be unenforceable because, at that time, the QDRO exception to 
the WRS restrictions did not apply to marriages terminated prior to April 28, 1990. 
¶9 
Fred married Diedrich on May 9, 1992.  Shortly 
thereafter, on May 22, 1992, he designated Diedrich as the 
beneficiary of the WRS and Copeland accounts. 
¶10 Fred died in February 1995.  Soon after his death, 
Sulzer requested her portion of the retirement accounts from WRS 
and Copeland, as provided in the divorce judgment.  Both 
requests were denied because Sulzer was not designated as the 
beneficiary on the accounts. 
¶11 In May 1998, the law was changed to permit the 
division of WRS retirement accounts in accordance with QDRO 
agreements reached pursuant to divorce judgments granted on and 
prior to April 27, 1990.  In response to the change in the law, 
Sulzer requested that WRS implement the QDRO.  WRS responded in 
February 1999, setting forth its reasons for refusing to honor 
the QDRO.  WRS stated that it would not honor the QDRO in this 
case because Fred died prior to the change in the law and his 
benefits had already been paid to Diedrich as the designated 
beneficiary. 
¶12 Sulzer commenced this action in December 1996, seeking 
a constructive trust against Diedrich, and any other appropriate 
just 
and 
equitable 
relief. 
 
After 
numerous 
delays, 
postponements, and adjournments, the circuit court imposed a 
No. 
02-0036   
 
6 
 
constructive trust on the retirement accounts in September 2000.  
At a hearing to determine Sulzer's monetary interest in the 
retirement accounts, the circuit court, for reasons not fully 
explained on the record, vacated the constructive trust and 
awarded Sulzer a monetary judgment in the amount of $169,482.  
This is the amount that was in Sulzer's portion of the 
retirement accounts as of the date of divorce together with the 
investment experience on that portion up to the date of the 
hearing, as calculated by Sulzer's expert. 
¶13 Diedrich appealed the circuit court's judgment and 
Sulzer cross-appealed.  The court of appeals concluded that the 
circuit court erred in vacating the constructive trust and 
awarding a money judgment.  Sulzer v. Diedrich, 2002 WI App 278, 
¶2, 258 Wis. 2d 684, 654 N.W.2d 67.  It determined that the 
circumstances warranted the imposition of a constructive trust.  
Id. 
¶14 The court also concluded that Sulzer was not entitled 
to appreciation after Fred's death because the funds had been 
converted from retirement benefits to survivorship benefits.  
Id., ¶17.  Further, noting that the action sounded in equity, it 
concluded that Sulzer was not entitled to interest because of 
her numerous requests for postponements and because Diedrich did 
not wrongfully retain the use of Sulzer's money.  Id., ¶18.  The 
court of appeals remanded the matter to the circuit court for 
imposition of the constructive trust.  Id., ¶19. 
II 
No. 
02-0036   
 
7 
 
¶15 In this case, we must determine whether the use of a 
constructive trust is warranted to give effect to terms 
contained in a divorce judgment.  If it is, we must then address 
the extent to which the investment experience of Sulzer's 
portion of the retirement accounts should be included in the 
constructive trust. 
¶16 The question of whether to impose a constructive trust 
sounds in equity.  Singer v. Jones, 173 Wis. 2d 191, 194, 496 
N.W.2d 156 (Ct. App. 1992).  We apply a two-tiered standard of 
review in this type of case.  Id.  As to the legal issues, such 
as the construction of the divorce judgment, we apply a de novo 
standard.  Id.  As to the ultimate decision whether to grant the 
equitable 
relief 
of 
a 
constructive 
trust, 
we 
apply 
a 
discretionary standard.  Id. 
¶17 Our application of the discretionary standard of 
review to the ultimate decision of whether to impose a 
constructive trust is complicated by the procedural history of 
this case.  Sulzer's complaint requested that the circuit court 
impose a constructive trust and the circuit court initially did 
so.  However, it later vacated the constructive trust and 
ordered a money judgment.  The court of appeals noted that the 
circuit court did not set forth on the record its reasoning for 
ordering the money judgment.  Sulzer, 258 Wis. 2d 684, ¶8.  It 
assumed that the circuit court did so on the grounds of unjust 
enrichment.  Id. 
¶18 The court of appeals then determined that one of the 
elements necessary to establish unjust enrichment, namely the 
No. 
02-0036   
 
8 
 
requirement that a benefit be conferred upon the defendant by 
the plaintiff, did not exist here.  Id., ¶11.  It therefore 
concluded that the elements of unjustment enrichment had not 
been met and thus, as a matter of law, a money judgment was 
erroneously granted.  Id.  Accordingly, it discussed and 
reaffirmed the court's intial order imposing a constructive 
trust. 
¶19 We first discuss the circumstances in which the 
imposition of a constructive trust is warranted and conclude 
that the court of appeals correctly affirmed the use of a 
constructive trust in this case.4  We then address the 
appropriate period during which the investment experience of 
Sulzer's portion of the retirement accounts should be included 
in the calculation and conclude that this period should extend 
from the date of the divorce until the date that the funds are 
paid to Sulzer. 
III 
                                                 
4  We address the constructive trust issue in this case even 
though Diedrich did not file a petition for cross-review 
requesting review of this issue.  As a general rule, "a party 
may not raise a new issue in this court that will require a 
modification of the decision of the court of appeals without 
filing a petition for review or cross review."  Ranes v. 
American Family Mut. Ins. Co., 219 Wis. 2d 49, 54 n.4, 580 
N.W.2d 197 (1998).  Here, the issue of whether the facts 
warranted the imposition of a constructive trust was not 
properly raised.  Nevertheless, we exercise our discretionary 
power to review this issue.  A petition for review of a court of 
appeals decision brings the entire record before us.  Univest 
Corp. v. General Split Corp., 148 Wis. 2d 29, 32, 435 N.W.2d 234 
(1989).  Once a case is before us, it is within our discretion 
to review any issue which the case presents.  See id. 
No. 
02-0036   
 
9 
 
¶20 A constructive trust is an equitable device used to 
prevent unjust enrichment which arises when a party receives a 
benefit the retention of which is unjust to another party.  
Wilharms v. Wilharms, 93 Wis. 2d 671, 678-79, 287 N.W.2d 779 
(1980).  However, unjust enrichment alone is not sufficient to 
warrant imposing a constructive trust.  Rather, a constructive 
trust will be imposed only when the party who received the 
property obtained it by specific means as enumerated in our case 
law, one of such means being the receipt of the property by 
mistake: 
A constructive trust will be imposed only in limited 
circumstances.  The legal title must be held by 
someone who in equity and good conscience should not 
be entitled to beneficial enjoyment.  Title must also 
have been obtained by means of actual or constructive 
fraud, duress, abuse of a confidential relationship, 
mistake, commission of a wrong, or by any form of 
unconscionable conduct. 
Id. (citations omitted). 
¶21 The court of appeals concluded that the facts of this 
case warranted the imposition of a constructive trust.  Sulzer, 
258 Wis. 2d 684, ¶15.  It noted that the intent of Sulzer and 
Fred was to divide the WRS and Copeland accounts equally.  Id.  
Further, it observed that Diedrich obtained title to these 
accounts only because Fred, whether by mistake or otherwise, 
incorrectly named Diedrich as the sole beneficiary on the 
accounts.  Id.  As a result, according to the court of appeals, 
a portion of the funds allocated to Sulzer in the divorce 
judgment were being wrongfully held by Diedrich, who in equity 
No. 
02-0036   
 
10 
 
and good conscience should not be entitled to their beneficial 
enjoyment.  Id. 
¶22 We agree with the court of appeals and the circuit 
court 
that 
the 
divorce 
judgment, 
both 
written 
and 
oral 
pronouncements, clearly expressed Sulzer's and Fred's intent to 
divide equally the retirement accounts as of the date of the 
divorce.  Id.  To allow Diedrich to retain the funds 
attributable to Sulzer's portion would thwart the intent of the 
parties and would be unjust to Sulzer. 
¶23 Diedrich argues that the imposition of a constructive 
trust against her is not appropriate.  She notes that there is 
nothing in the record to indicate that she did anything 
wrongful.  However, as observed in Wilharms, while wrongful 
conduct can serve as the basis for a constructive trust, it is 
not necessary that the person on whom a constructive trust is 
imposed have committed any wrongdoing.  Wilharms, 93 Wis. 2d at 
678-79; see also Singer, 173 Wis. 2d at 198 n.2.  A constructive 
trust may be warranted in circumstances in which a person 
obtains property as the result of a mistake, with that person 
not committing any wrong.  Wilharms, 93 Wis. 2d at 679-80. 
¶24 By mistake or 
otherwise, 
Fred incorrectly 
named 
Diedrich as the sole beneficiary.  In addition, at the time of 
their divorce, Sulzer and Fred were under a mistaken belief that 
Fred had the ability to convey one-half of the retirement 
accounts to Sulzer.  In Wilharms, we noted that mistake as a 
grounds for the imposition of a constructive trust "may also 
refer to a mistake arising when property is not conveyed which 
No. 
02-0036   
 
11 
 
the grantor intended to convey."  Wilharms, 93 Wis. 2d at 680 
n.2. 
¶25 At the time of the divorce proceedings, Sulzer and 
Fred were operating under the assumption that it would be 
possible to divide the retirement accounts equally.  The divorce 
judgment indicates that the parties intended that Fred assign 
one-half of each of his retirement accounts to Sulzer.  As it 
turned out, the then existing law did not permit Fred to make 
such an assignment.5  This mutual mistake in 1989 and the naming 
of Diedrich as the beneficiary of the accounts in 1992, together 
with 
the 
unjust 
enrichment 
that 
results 
from 
Diedrich's 
retention of Sulzer's portion of the accounts, are grounds for 
the imposition of a constructive trust. 
¶26 Diedrich questions whether a constructive trust can be 
imposed in this case because, at the time of the divorce 
judgment, the law did not permit Fred to assign the retirement 
accounts to Sulzer.  She maintains that since the use of a QDRO 
was illegal, Sulzer is entitled to nothing.  Additionally, she 
asserts that the imposition of a constructive trust in this case 
                                                 
 
5 
Wisconsin 
Stat. 
§ 40.08(1) 
(1987-1988) 
provided 
in 
relevant part: 
The benefits payable to, or other rights and interests 
of any member, beneficiary or distributee of any 
estate under any of the benefit plans administered by 
the department . . . shall not be assignable, either 
in law or equity, or be subject to execution, levy, 
attachment, garnishment or other legal process except 
as specifically provided in this section. 
No. 
02-0036   
 
12 
 
will encourage others to agree to provisions that are contrary 
to the law in case the law should some day be changed. 
¶27 The judgment of divorce did not specifically require a 
QDRO, but provided for a QDRO "or an order of the Court having a 
similar effect."  We need not speculate whether a legal 
mechanism existed at the time of the divorce that would have 
sufficiently ensured the division of the accounts to comply with 
the divorce judgment.  As the Lindsey case indicates, the 
circuit court had broad discretionary powers over the mechanism 
of the division of pensions in order to fulfill the intent of 
the parties to divide them equally.  Lindsey v. Lindsey, 140 
Wis. 2d 684, 686, 412 N.W.2d 132 (Ct. App. 1987). 
¶28 Here, there is no dispute as to the intent of the 
parties to divide the value of the pensions equally as of the 
time of the divorce.  That they were not able to identify a 
legal mechanism at the time was unfortunate, but this does not 
preclude the circuit court from now imposing a constructive 
trust to accomplish their intent.6 
                                                 
6 Currently, the type of division sought by Sulzer and Fred 
can be accomplished by a qualified domestic relations order 
(QDRO). If Fred were alive, the division of the accounts could 
be accomplished with a QDRO.  Wis. Stat. § 40.08(1m) (2001-2002) 
contains the rules pursuant to which a qualified domestic 
relations order issued on or after January 1, 1982 can be used 
to divide the accumulated rights and benefits of participants 
whose marriages have been terminated by a court on or after 
January 1, 1982.  However, because Fred is deceased and the 
accounts have been titled in Diedrich's name, a QDRO cannot be 
used to accomplish the division. 
No. 
02-0036   
 
13 
 
¶29 With respect to Diedrich's allegation that imposing a 
constructive trust in this case will somehow encourage others to 
agree to provisions that are contrary to law, there is no 
indication that any of the parties knowingly agreed to a 
provision that was not legally permissible.  If Sulzer had known 
that there was no legal mechanism to divide the benefits at 
issue and had intentionally defied the law, she would not be 
able to assert that her conduct was based on a mistake that 
could serve as grounds for imposing a constructive trust. 
¶30 In sum, we conclude that Diedrich's retention of funds 
that are attributable to Sulzer's portion of the retirement 
accounts would be unjust to Sulzer.  Further, the transfer of 
those funds to Diedrich resulted from a mutual mistake regarding 
the ability to divide the accounts at the time of the divorce 
and from Fred's naming of Diedrich as the beneficiary of all of 
the 
accounts, 
including 
Sulzer's 
portion. 
 
We 
therefore 
determine that the imposition of a constructive trust is 
warranted in this case. 
IV 
¶31 We turn now to a discussion of the appropriate period 
during which the investment experience of Sulzer's portion of 
the retirement accounts should be included in the calculation of 
the amount subject to the constructive trust.  The court of 
appeals determined that Sulzer is not entitled to the investment 
experience of her portion of the retirement accounts past the 
date of Fred's death.  Sulzer, 258 Wis. 2d 684, ¶17-18.  It 
concluded that, upon Fred's death, the funds at issue converted 
No. 
02-0036   
 
14 
 
from 
retirement 
and 
deferred 
compensation 
benefits 
to 
survivorship benefits.  Id., ¶17. 
¶32 Thus, according to the court of appeals, Sulzer is 
entitled only to the portion of the accounts that she would have 
received upon Fred's death.  Id., ¶17-18.  Diedrich goes further 
and argues that if Sulzer is entitled to anything, the amount 
should be frozen as of the date of the divorce. 
¶33 We disagree with both the court of appeals and 
Diedrich.  In this case, the constructive trust should include 
the investment experience of Sulzer's portion of the accounts up 
until the date of payment. 
¶34 To support her argument that the amount should be 
frozen as of the date of the divorce, Diedrich cites the oral 
stipulation in which the value to be divided was to be 
"established as of today's date."  She also cites the divorce 
judgment in which the accounts are to be "divided as to their 
balance on" September 6, 1989.  Diedrich argues that there would 
be no need to make specific reference to a balance on a specific 
date if the parties did not intend that to be a limitation. 
¶35 The oral stipulation and the divorce judgment do 
contain a limitation, but the limitation is not an elimination 
of Sulzer's entitlement to the investment experience of her 
portion after the date of the divorce.  Rather, the limitation 
provides that she is not entitled to any portion of any of 
Fred's contributions to the retirement accounts that are 
attributable to periods after the date of the divorce or the 
investment experience of such contributions. 
No. 
02-0036   
 
15 
 
¶36 The oral stipulation and the divorce judgment do not 
contain an express provision regarding the calculation of 
investment experience on Sulzer's portion of the accounts.  
Nevertheless, both the oral stipulation and the divorce decree 
reflect Fred's and Sulzer's intent to divide the retirement 
accounts equally.  However, it was not possible to immediately 
effect the division.  We conclude that, to accomplish the intent 
of the parties of dividing the retirement accounts equally as of 
the date of the divorce, Sulzer should be entitled to the 
investment experience on her portion of the accounts. 
¶37 This conclusion is consistent with our analysis in 
Washington v. Washington, 2000 WI 47, 234 Wis. 2d 689, 611 
N.W.2d 261.  In that case, we construed a divorce judgment 
dividing a pension fund to include investment experience.  The 
judgment, which involved a lump sum share of a pension not 
payable immediately, was silent on the issue of whether 
investment experience would be included and when and how payment 
would be made.  Id., ¶6.  We determined that this silence made 
the judgment ambiguous.  Id., ¶32.  We noted that the circuit 
court went to great lengths to ensure that the property was 
divided equally and that failure to consider allocation of 
investment experience on the pension could result in an unequal 
division of property.  Id., ¶28. 
¶38 The same justifications that exist for extending the 
investment experience beyond the date of the divorce also apply 
to extending the investment experience beyond Fred's death.  
There is no reason why the investment experience attributable to 
No. 
02-0036   
 
16 
 
Sulzer's portion after Fred's death should accrue to the benefit 
of Diedrich rather than Sulzer. 
¶39 In Washington, we noted that the failure to divide 
investment experience would give the husband approximately 
21 years of the investment experience on the lump sum awarded to 
both spouses.  Id.  We observed that a decision that gave the 
husband all of the investment experience on both shares appeared 
contrary to the circuit court's objective to divide the property 
equally and appeared unfair.  Id. 
¶40 Similar to Washington, the failure to include the 
investment experience up until payment to Sulzer appears 
contrary to the objective of the divorce judgment and the intent 
of the parties to divide the property equally.  Further, it 
appears unfair to Sulzer to allow Diedrich to retain seven years 
of investment experience on Sulzer's portion of the accounts.  
Diedrich is entitled to no more and no less than what Fred would 
have received. 
¶41 The court of appeals concluded that the funds at issue 
are no longer retirement benefits but were converted to 
survivorship benefits that were distributed upon Fred's death.  
Sulzer, 258 Wis. 2d 684, ¶17.  The fact is, however, that the 
funds remain in WRS and Copeland accounts and are traceable.  
This may be a different case if Diedrich had removed the funds 
after Fred's death, making tracing impossible. 
¶42 However, that is not the case here.  The funds remain 
in 
WRS 
and 
Copeland 
accounts 
and 
the 
actual 
investment 
experience can be easily traced.  We conclude therefore that the 
No. 
02-0036   
 
17 
 
constructive trust should include the investment experience of 
Sulzer's portion of the accounts through the date of payment to 
Sulzer. 
¶43 We remand this case to the circuit court for the 
appropriate calculations.7  On remand, the circuit court should 
order Diedrich to cause the payout of Sulzer's portion of the 
accounts, including the investment experience.  We note that a 
circuit court, in this type of case, has the discretionary 
authority to order an individual to select a specific retirement 
payout option to accomplish a division of retirement assets.  
Lindsey, 140 Wis. 2d at 686.  Similar to Lindsey, the circuit 
court in this case has the discretionary authority to order 
Diedrich to select the payout option of the WRS and Copeland 
accounts that will allow her to pay over Sulzer's portion of 
those accounts promptly and completely. 
¶44 In sum, we conclude that the circumstances of this 
case warrant the imposition of a constructive trust and that the 
                                                 
7 We note that the expert's calculations were made as of 
August 8, 2001, the date of the circuit court judgment.  Remand 
is appropriate not only to determine the investment experience 
between that date and the date of payment, but also to consider 
whether any changes in the law may have occurred since the date 
of the judgment that could affect the valuation. 
At oral argument, Diedrich asserted that calculations upon 
remand should take into consideration that Fred died before 
reaching age 50.  It is unclear from the record if the 
calculations need to be modified to reflect his age at the time 
of death.  In addition, both at oral argument and in her reply 
brief, Sulzer acknowledged that the amount paid to her should be 
reduced by the amount of the tax consequences to Diedrich that 
are directly attributable to the payout of Sulzer's portion. 
No. 
02-0036   
 
18 
 
constructive trust should include the investment experience on 
Sulzer's portion of the retirement accounts through the date of 
payment to Sulzer.  We therefore modify the decision of the 
court of appeals, affirm as modified, and remand to the circuit 
court for further proceedings consistent with this opinion. 
By the Court.—The decision of the court of appeals is 
modified and affirmed and, as modified, the cause is remanded. 
 
No.  02-0036.dss 
 
1 
 
¶45 DIANE S. SYKES, J.   (concurring in part, dissenting 
in part).  I agree with the majority's decision to impose a 
constructive trust in favor of Sulzer.  I disagree, however, 
with Part IV of the majority opinion to the extent that it 
authorizes the imposition of a constructive trust in an amount 
that includes the investment experience of the retirement 
accounts up to the date of payment.  I would affirm the court of 
appeals on all issues, including its determination that the 
constructive trust should include the investment experience of 
the retirement accounts only until the date of Fred Diedrich's 
death.   
 
¶46 As the majority notes, a constructive trust is an 
"equitable device created by law to prevent unjust enrichment."  
Wilharms v. Wilharms, 93 Wis. 2d 671, 678, 287 N.W.2d 779 
(1980); majority op., ¶20.  While the equities in this case 
fully support the imposition of a constructive trust against 
Mary Diedrich even though she is not at fault, her blamelessness 
should come into play in the discretionary determination of the 
extent to which investment experience on the retirement accounts 
is awarded.   
 
 ¶47 The mutual mistake that precipitates the need to 
impose a constructive trust in this case justifies an award that 
includes the investment experience on Sulzer's portion of the 
retirement accounts up to the date of Fred Diedrich's death; it 
does 
not 
justify 
forcing 
Mary 
Diedrich 
to 
disgorge 
the 
No.  02-0036.dss 
 
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investment experience on her survivorship interest in her 
deceased husband's retirement accounts.  Mary Diedrich played no 
role in the mistake which led to the unjust deprivation of 
Sulzer's portion of the retirement accounts.  The dispute here 
is between two essentially innocent parties, one who was a party 
to the original mistake and one who was not. 
 
¶48 The majority finds it significant that the funds 
remain in the WRS and Copeland accounts and are therefore 
traceable.  Majority op., ¶¶41-42.  Mary Diedrich should not be 
penalized for choosing to leave her survivorship benefits in the 
retirement accounts.  I would conclude, as did the court of 
appeals, that a constructive trust should be imposed in favor of 
Sulzer in an amount equal to one-half the value of the 
retirement accounts as of the date of divorce, plus investment 
experience up to the date of Fred Diedrich's death.  Sulzer is 
certainly equitably entitled to that amount of investment 
experience; an amount that encompasses the post-death investment 
experience 
is 
harder 
to 
equitably 
justify 
under 
the 
circumstances here.   
¶49 The constructive trust equities distinguish this case 
from Washington v. Washington, 2000 WI 47, 234 Wis. 2d 689, 611 
N.W.2d 261.  As the majority notes, Washington was a divorce 
case in which the husband and wife sought to divide the 
husband's pension.  Majority op., ¶39.  The dispute over the 
proper valuation of the pension fund was between the divorcing 
No.  02-0036.dss 
 
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parties, and the divorce judgment specified that the pension was 
to be divided equally between the parties.  Id.  Here, the 
dispute is no longer between the divorcing parties but between a 
first and second wife over a deceased husband's retirement 
accounts; the determination of the appropriate valuation of the 
constructive trust award turns on what is equitably required 
under the circumstances, not what is required to effectuate an 
equal property division in a divorce, as in Washington. 
¶50 Mary Diedrich is an innocent non-party to the mistake 
which justifies the imposition of the constructive trust in 
favor of Sulzer.  She has suffered the loss of her husband and a 
prolonged court battle over a legal mistake she had no part in.  
I would conclude that Sulzer is equitably entitled to a 
constructive trust in the amount of one-half the value of the 
retirement accounts as of the date of divorce, plus investment 
experience up to the date of Fred Diedrich's death.  I dissent 
from that part of the majority opinion which awards investment 
experience through the date of payment; in all other respects, I 
concur.        
¶51 I am authorized to state that Justice JON P. WILCOX 
joins this concurring and dissenting opinion.   
 
 
 
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