# FILED
October 3, 199 6 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE WESTERN SECT ION A T JA CKSON
SUSAN KA

Y MA LIK, ) ) Plaintiff/Appellee, ) Shelby Chancery No. 21988-1 R.D. ) VS. ) A ppeal No. 02A 01-9604-CH- 00070 ) KAFA IT U. MALIK, ) ) Defendant/Appellant. )
APPEAL FROM THE CH ANCERY COU RT OF S HELBY COUN TY AT MEMPHIS, TEN NESSEE THE HONORABLE NEAL SMALL, C HANCELLOR

RUSSELL C . WINSTON Memphis, Tennessee Attorney for Appellant JAMES B. FISHER, JR. Memphis, Tennessee Attorney for Appellee

AF FIRMED

ALAN E. HIGHERS , J.

CONCUR: DAVID R. FA RMER, J. HOLLY K IRBY LIL LA RD, J.2

In this post-divorce proceeding, Kafait U. Malik (“husba nd”) appeals fr om the trial court’s judgment order ing him to cash out and/or borrow against his pension and retirement funds in order to satisfy the court’s pri or distri bution of marital property t o Susan K. Malik (“wife”).

In 1993, the Chancer

y Cou rt o f Shelby County entered a Final Decree of Divorce awarding a divorc e to both parties on grounds of i nappropriate mar ital conduct. The final decree awarded w ife $750.00 a month for 60 mont hs as reh abilitative alimony, 40 %, or $24,400.00, of the parties’ equity i n the marital r esidence, a nd 40% of the amounts contained in husband ’s retirement and pension acco unts.

Husband is a teacher

at the Unive rsity of Tennessee. As an employee of the State of Tennessee, husband par ticipates i n state pension a nd r etirement plans. As of December 1992, the values of his retirement and pension accounts were as follows: CREF Reti rement Account...

.............. .............$24 0,272.92 TIAA Retirement Account...........
.............. .........$87,106.47 Aetna tax-defer red annuity

.............. .............. ....$34,039.61 Holden Group tax-deferred an nuity.....

.............. $21,444.77

A Qualified Domest ic Relatio ns Order (Q DRO) was entered in accordance with the abo ve decree and f orwarded t o the administr ators of the state pension and reti rement plans. Upon receipt

of the QDRO, however, c ounse l for the Tennessee C onsolidated Retirement

System forwarded a letter to wife ex plaining t hat at least oneof the retirement accounts was not s ubject t o divisi on and award pursuant to T.C.A. § 26 -2-104, which provides: State pension mo neys, cert ain retirement plan funds or

assets, exempt.– (a) Al l mon eys received by a resi dent of the state, as pension from the state ofTenness ee, or any subdivis ion or mu nicip alit y ther eof , bef ore re ceip t, or wh il e in his hands or upon depos it in the bank, shall be exempt from execution, attachmentor garni shment other than an order for assignment

of support iss ued under § 36-5-501 whether such pensioner is the head of a family or not. T.C.A. § 26-2-104(a) (Supp. 1 995).3

Thereafter, in 1 994, wi fe fil ed a p etit ion to mo dify the final decree, arguing that the retirement

fund was subject to division and distribution as a m arital ass et. In the alternative, she argued t hat if the retire ment funds were ex empt from distribu tion pursuant to T.C.A. § 26-2-104(a) , husband should never theless be orde red to pay he r the val ue of 40% of those funds from another source. Wife also filed a motion to amend her petition to add the following parties as d efendants: the Tennessee State Treasurer, th e Tennessee Consolidated Retirement Sy stem, the Attorney

General of the Stat e of Tennessee, and Teachers Insurance and Ann uity Asso ciation-Col lege Retir ement Systems Eq uities Fund. The trial cour

t granted w ife’s motion to amend. These defendants moved to dismiss th e case against them d ue to lack of subj ect matter jurisdic tion on grounds t hat T.C.A. § 4-5- 244 provides that only the Davidson County Chancery Court can ent ertai n clai ms against state agencies th at challenge the legal validity of a statute. W ife subsequently took a voluntary

non-suit and di smissal as t o all defendants conne cted with the state.
Following a hearing on the matter, the trial judge held as fo llows: 2. The Court finds that any interpretati on of Tennessee Code Annotated Section 26-2-104 that would result in actua lly deprivingthe Plaintiff f rom receiv ing from Defendant an amount equal to 40% of the retire ment funds accumulated during the marr iage plus an a mount equal to a ctual ea rnings thereafter

would be unconscionable and against p ublic policy and that said statute should no t be interpreted in suc h a mann er because such an interpretat ion would render sa i d statute uncon stitut ional. In or der to accompli sh equity and justice and in order to carryout the Court’s previous award to Plai ntiff of 40% of all reti rement funds accumulated dur ing the marriage plus an amo unt equa l to the a ctual ea rnings of said funds thereafter, the C ourt orders the Defendant, Kafait U. Malik, to pay to thePlaintiff, Susan K. Malik, an amount equal to 40% of the amounts in a ll of the Defendant’s TIAA Retirement

Account, CRE F Retirement Ac cou nt, A etna TaxDeferred Annuity, H olden Group Tax -Deferred Annu ity and other retirement fundsaccu mulated during the parties’ marriage...

. 3. Defe ndan t, Kafa it U . Malik, i s hereby or dered to cash out entirelyas soon as possible the fun ds and money now in Defendant’s Aetna Tax-Deferred Annu ity and Defendant’s Holden Group Tax-D eferred Annuity and to turn o ver

to Plai ntiff, Susan Malik, b y mailingall of said funds t o her at torney’s office as soon as pos sible. Upon receipt of sai d funds by Plaint iff’s attorney, Defendant shall be given c redit for said payment. Defendant shall do all of the above as soon as possible and s hall not delay for any reas on.4 4. Defendant, Kaf ait U. Malik, is hereby ordered to bor row against and cash out tothe fullest extent poss ible as soon as possible the funds and money no w in Defenda nt’s T IAA Retirement

Account and C REF Re tirement Account , to the extentnecessaryto pa y the remain ing balance owed on the above-descr ibed judgment w hich is owed by Defendant to Plai ntiff as set forth above in this Or der. Defendant, Kafait U. Malik, shall pay said funds to Plainti ff, Susan K. Malik, as soon as possible w ithout delay by maili ng the speci fied am oun t to Plaintiff’s attor ney.... 5. The Court findsthat the above- described TIAA Retirement Accounthad a value of $87,106.47 as of December 15, 1992, the above-desc ribed CREF Reti rement Account had a value of $240,272.92 as of December 1 5, 1992, the above- described Holden Group Tax-D efer re d Annuity had a value of $21,444.7 7 as of De cemb er 8, 1992 , and the a bove -des cribe d Aet na T axDeferred Annuity had a value of $34, 039.61 as of December 21,1992....

Husband’s first contenti on on appeal is t hat wife, by adding thestate-relat ed party defendant s, was in effect, seeking a dec laratory judgment as to

th e constitutiona lity of certain statutes. Because she did not comply with the procedural requisi tes for maintaini ng such an action, husband asse rts, the trial court lacked jurisdiction to modif y the fin a l decree. This contention is wi thout merit. The pr esent case is clearly

not a suit for declaratory judgment. Fu rthermore, any and all defendants connected wit h the state of Tennessee were voluntarily dismissed from t he suit, and the t rial court ’ s f inal order is directed only

to husband.

Husband’s second contenti on on appeal is t hat the trial court erred i n ordering him to cash out the funds in his two annu ity accounts because the accoun ts are par t of h is Optional Retirement Pr ogram and as s uch, are ex empt from executi on or any ot h er process pursuant to T.C. A. §§ 36-5-501, 8 -36-111, and 26-2-104. Husband concedes that the pension funds are mar tial assets. However, husband points out , the funds are exempt from judicial process and th ere are no other assets from w hich to make a property divisi on. Wife responds that t he trial cour t’s judgment did notcontravene the statute becaus e the order was directed solely to husband, rather than to th e state or its agencies.

After researching applicable law, we find the ca se of Boyd v . Boyd , No. 02A01- 9210-CH-00294, 1993 W L 8379 (Tenn. App . Jan. 20, 1993), to be persu asive on this5

issue. In Boyd , the husband, a state employee, raised the same argument that husband raised in the case sub judice --that T.C.A. § 26-2-104(a) prohibited thecourt from awarding to the wife any of his state reti rement benefits. Id. at *2. The court noted that pursuan t to T.C.A. § 36-4-121, mar ital propert y includes

the value ofa vested pens ion or reti rement benefit. However, the court in Boyd als o recogniz ed that T.C.A. § 26-2-10 4(a) “clearly renders exempt from execution, atta chment or garni shme nt al l mon ey rec eived by a resid ent. ..as a pension from the St ate of Tenne ssee.” Id. at *2 . In re conc iling the t wo provisi ons, the court stated:

[W]e do not con s true the statute to mean that the cour t in a divorce action is pr

ohibited from makingan award t o the other spouse. T.C.A. Sec. 36- 4-121(b) (1)( B) does not exclude a state employee’s pe nsion plan from the definition of marital prop erty. Id. Acco rdin gly, the court in Boyd upheld the trial court’s judgment ord e ring husband to pay his retirement benefits to w ife within 15 days of his receipt of each retirement check

. Id.

We agree w ith both the analy sis and the conc lusion of the Boyd decision. Tennessee Code Annotated § 26- 2-104(a) prohib its the “execution, attachment , or garnishment”

of state pension funds. In t his case, however , the trial court ordered husband to cash out and/or borrow ag ainst such funds. Thus, the funds we re not subject to “executio n, attachment, or garnishment,” or any other

judicial process.

In accordance w ith the foregoi ng opinion, t he judgment of the tr ial court is affirmed. Costs on appeal are taxed ag ainst appellant

.

HIGHERS, J.6

CONCUR:

FARMER, J.

LILLARD, J.