Jay Salkini v. Iman Salkini

Case No. 225 September Term, 2018 Opinion by J. Meredith

DIVORCE

– MARITAL PROPERTY

– DIVISION OF RETIREMENT BENEFITS. In a case in which the circuit court determined that husband’s retirement account was marital property that should be divided equally as of the date of divorce, the court did not abuse its discretion in entering a qualified domestic relations order (QDRO) that provided that the amount to be transferred to the wife would be 50% of the balance in the plan on the date of divorce adjusted for investment earnings or losses on wife’s share from the date of divorce to the date of transfer of wife’s interest into a separate account.Circuit Court for Howard County

Case No. 13

- C

- 15

- 102131
REPORTED
IN THE COURT OF SPECIAL APPEALS

OF MARYLAND
No. 225 September Term, 201 8

JAY SALKINI

v.
IMAN SALKINI

Fader, C.J., Meredith, Raker, Irma S. (Senior Judge, Specially Assigned),

JJ. *

Opinion by Meredith, J.

Filed : November 21, 2019

* Judge Andrea Leahy did not participate in the Court’s decision to designate this opinion f or publication pursuant to Md. Rule 8

- 605.1.In 2016, Jay Salkini (“Husband”), appellant, and Iman Salkini (“Wife”), ap pellee,

were divorced by order of the Circuit Court for Howard County

. This appeal is limited to the question of whether the investment earnings that accrued in Husband’s 401(k)

account subsequent to the date of divorce should have been divided between Husband
and Wife pursuant to a Qualified Domestic Relations Order (“QDRO”), or whether all
investment earnings in that account after the da te of the divorce should be considered Husband’s sole property. The Circuit Court for Howard County, which had ruled in the judgment of divorce that Husband’s 401(k) account “ shall be divided equall y between the parties as of the date of divorce, ” entered a QDRO which ordered that (a) the total value
of the account as of the date of the amended judgment of divorce should be divided 50% to Wife and 50% to Husband, and (b) any investment earnings on Wife’s share through the date of segregation of her interest pursuant to the QDRO should be added to her share
in the account at the time of segregation

. Husband presents the following issue on appeal: Whether the trial court abused its discretion when it entered a Qualified Domestic Relations Order pertaining to A ppellant’s 401(k) savings plan that provided for adjustment due to investment experience, when such relief was not granted in the trial court’s original or amended judgment. For the reasons set forth herein, we shall affirm the judgment of the Circuit Co urt for Howard County.
FACTS AND PROCEDURAL HISTORY
After a five

- day hearing on Wife’s complaint for absolute divorce , the court issued
a memorandum opinion making certain findings , including “which property is marital, and the value” of that property . U n de r “Marital Property , ” the court listed Husband’s2

401(k) account as “Tecore Nationwide 401(k) ( [titled in] Husband’s name). Marital. Value $513,000.” Under the heading of “Distribution of Property and Monetary Award,”
the court ordered that the Husband’ s 401(k) be “divided equally , ” stating :

Tecore Nationwide 401(k) shall be divided equally between the parties by way of a qualifying court order. Wife shall arrange fo r the necessary court order. On January 29, 2016, Wife filed a Motion to Revise Judg ment of Absolute
Divorce

— for reasons unrelated to the issues in the current appeal

— in order to clarify that
the monetary award w as not alimony. Husband opposed the motion. By order entered February 23, 2016, the court entered an Amended Judgment of Absolu te Divorce, which clarified that the monetary award “is not alimony,” and includ ed the following paragraphs relative to Husband’s 401(k) account (unchanged from the previously entered judgment of divorce) :

ORDERED, ADJUDGED, AND DECREED, that, the Defenda nt’s Tecore Nationwide 401(k) account shall be divided equally between the parties as of the date of divorce. Plaintiff shall promptly shall [sic] submit to the Court a qualified domestic relations order as defined in the Retirement Equity Act of 1984, as from time to time amended, if one is necessary, to divide the Defendant’s Tecore Nationwide 401(k) account; and it is further ORDERED, ADJUDGED, AND DECREED, that the Court retains jurisdiction to amend this Judgment and/or the aforesaid qualified domes tic relations order for the purpose of maintaining its qualifications as a qualified domestic relations order under the Retirement Equity Act of 1984, or any other subsequent legislation . . . . On March 22, 2016, Wife filed a notice of appeal

. In that appeal, Wife raised
issues (unrelated to the division of the 401(k)) regarding the monetary award. Our unreported opinion was filed o n April 5, 2017

. See Salkini v. Salkini , No. 92, September3

Term, 2016, 2017 WL 1248024 (2017). We held that “the trial co urt’s failure to explain the inequitable distribution of marital property” required a remand in order for the court

to “ consider the factors enumerated in [Maryland Code (1984, 2012 Repl. Vol.), Family Law Article (“FL”), § 8

- 205(b)] and provide its reason ing for distributing the marital
estate in the manner it decides .” On June 23, 2017, the Circuit Court for Howard County
filed a memorandum intended to comply with our decision in that appeal. During the pendency of Wife’s appeal, Husband had sent her an e
- mail on July 5, 2016, stating: Iman, You need to open an IRA account with your bank, so I can transfer 50% of the Nationwide 401K to this new account. The account had a balance of $439,734.08 on 1/20/2016. Your portion is $219,867.04. I pray to All ah that you save this money for your retirement and don’t spend it on legal fees.
J. On January 3, 2 018, Wife filed a Motion to Enter Qualified Domestic Relations
Ord er , in which Wife asserted that her counsel had prepared and forwarded to Husband’s

co unsel a proposed QDRO, but the parties were at an impasse . The motion stated: 3. That since forwarding [the QDRO] to [Husband ’s counsel ], [Wife ’s counsel ] has made multiple attempts to obtain the signature of [Husband] including emails, letters and phone calls. That despite repeated demands, [Husband] refuses to sign the attached QDRO. The attached QDRO is in compliance with the Amended Judgment of Divorce entered on February 23, 2016.
4. That [Husband] is the sole owner of Tecore, Inc. and controls dis tributions from the retirement plan.4

5. That given [Husband’s] refusal to cooperate in executing the QDRO, [Wife] is in need of the Court’s execution of the proposed QDRO without [Husband’s] signature. Paragraph 3 of Wife’s proposed QDRO was worded as follows:
3. AMOUNT OF ALTERNATE PAYEE’S BENEFITS. (a) The Alternate Payee’s [ i.e ., Wife’s] interest in the Plan shall be 50% (fifty percent) of the Participant’s Total Vested Account Balance in the Plan, valued as of February 23, 2016 (“Valuation Date”). The Alternate Payee interest shall be adjusted for investment earnings or losses on her share from the valuation date to the date of segregation of Alternate Payee’s interest in a separate account. In the event that there is an outstanding loan balance a s of the Valuation Date, the outstanding loan balance shall be included for purposes of calculating the account balance to be divided. (Emphasis added in second sentence .)
Husband filed a response in which he opposed Wife’s motion. He denied that
Wife’s proposed QDRO “is in conformance with the applicable Judgment of Divorce.” Husband’s opposition asserted: “ The QDRO currently submitted by [Wife] seeks distributions to her that both post

- date the Judgment of Absolute Divorce and are in
excess of her enti tlement. ” Husband submitted his own proposed QDRO which limited
the amount to be transferred to Wife to 50% of the account balance on the date the circuit court had announced that it was granting a judgment of divorce, with no share of any
investment earn ing s that had accumulated in the account during the two years that had elapsed since the date of divorce. That is , Husband’s proposed alternative language for the QDRO stated : “ The Alternate Payee’s [Wife’s] interest in the Plan shall be 50% (fifty percent ) of the Participant’s Total Vested Account Balance in the Plan, valued as of January 19, 2016 (“Valuation Date”). ”5

On January 30, 2018, the court grant ed Wife’s motion and entered a QDRO which provided for Wife to receive 50% of the investment earnings that had accru ed since the entry of the amended judgment of divorce. The QDRO entered by the court included the valuation language proposed by Wife, namely: The Alternate Payee’s [ i.e ., Wife’s] interest in the Plan shall be 50% (fifty percent) of the Parti cipant’s Total Vested Account Balance in the Plan, valued as of February 23, 2016 (“Valuation Date”). The Alternate Payee interest shall be adjusted for investment earnings or losses on her share from the valuation date to the date of segregation of Alter nate Payee’s interest in a separate account. On February 9, 2018, Husband file d a motion to reconsider. After the court
denied Husband’s motion to reconsider, Husband noted this appeal. 1
STANDARD OF REVIEW After considering t he factors set forth in FL § 8

- 205(b), a court may transfer

ow nership of an interest in a retirement plan “ from one party to either or both parties. ” FL § 8

- 205(a)(2 )(i). In Woodson v. Saldana , 165 Md. 480, 489 (2005), w e described the

“ broad discretion ” afforded courts when maki ng this determination:

“[T]he court has broad discretion in evaluating pensions and retirement benefits, and in determining the manner in which those benefits

1 On August 15, 2 018, Husband filed a separate notice of appeal in which he indicated he was raising the issue of “[w]hether the trial [c]ourt improperly entered an Order on July 18, 2018 (dated July 16, 2018) granting Appellee a monetary award 13 months after issuing a Me morandum in response to a prior Court of Special Appeals decision in this case.” But Husband presented argument in his brief on only one issue, namely , the division of investment earnings in the 401(k) account. Maryland Rule 8

- 504(a)(6) requires that an ap pellant include in the brief “[a]rgument in support of the party’s position on each issue.” Therefore, any issue as to whether the July 18, 2018 order was improperly entered is no t before us. Anne Arundel Cnty. v . Harwood Civic Ass’n , 442 Md. 595 (2015); Blue v. Arrington , 221 Md. App. 308 (2015).6

are to be distributed.” Welsh v. Welsh, 135 Md. Ap p. 29, 54, 761 A.2d 949 (2000), cert. denied, 363 Md. 207, 768 A.2d 55 (2001). Accordingly, w e review the court’s ruling in this case for abuse of discretion.
DISCUSSION Husband focuses on language that was included in both the initial judgment of divorce and the amended judgment of divorce relativ e to Husband’s 401(k) account. In both of those judgments, the circuit court “ORDERED, ADJUDGED, AND DECREED, that [Husband’s] Tecore Nationwide 401(k) account shall be divided equally between the parties as of the date of divorce .” (Emphasis added.) He u rges us to construe this language to mean that, on the date of divorce, Wife’s share became fixed at 50% of the valuation of the account on that date, and any investment earnings in the account after that date were Husband’s sole property.
W e interpret t he plain language in the amended judgment of divorce to mean that the corpus of Husband’s 401(k) account as of the date of the judgment of divorce is to be divided equally, and a QDRO will be entered to authorize the transfer to Wife. It does not
follow fr om that language that any earnings that accrued in the account attributable to a delay in making the transfer of Wife’s share would become Husband’s sole property. The QDRO entered by the court rationally provided that Wife’s 50% interest in the account

“ s hall be adjusted for investment earnings or losses on her share from the valuation date to the date of segregation of Alternate Payee’s interest in a separate account.” (Emphasis added.) When an alternate payee’s share is expressed as a fraction or a perce ntage, the earnings in the account between the date of divorce and the date of segregation of the7

alternate payee’s interest into a separate account would be derived from both parties ’
interest s , not the original benefi ci ary’s interest alone. And, a s a mat ter of equity, it was clearly the intent of the circuit court to divide this marital property equally between the

spouses. In reaching this conclusion, we recognize that, under different circumstances, this
Court held in Allred v. Allred , ___ Md. App. ___ , No. 672, September Term, 2018 (2019)

— a case filed or intended to be filed simultaneously herewith

— that, in a case in
which the alternate payee ’s share was expressed as a specific sum rather than a percentage, and the parties’ marital settlement agreement provided that the alternate payee was to share in the account’s investment experie nce “until the date of divorce,” the circuit court erred in entering a QDRO that provided for the alternate payee to share in
the account’s investment experience subsequent t o the date of divorce. Both of these cases illustrate the importance of careful drafting and the advisability of addressing this issue explicitly in separation agreements and judgments of divorce if the marital property includes any investment accounts.
W e conclude that the QDRO entered by the circuit court in this case is consistent with the result we approved in Rivera v. Zysk , 136 Md. App. 607 (2001). In Rivera , the parties entered into a separation agreement , later merged into a judgment of divorce,
wh ich provided for the wife to receive 50% of the husband’s Northrup Grumman 401(k)
retirement account. The separation agreement was silent regarding allocation of gains or
losses i n the account. (This fact is gleaned from our review of the briefs filed in R ivera , which are available on Westlaw.) T he husband refused to sign the wife’s proposed8

QDRO providing for the wife to receive 50% of the earnings the account had experienced
from the date of the divorce to the date of distribution to her pursuant to the QDRO , but the court executed the wife’s proposed QDRO

. The husband appealed to this Court, and we affirmed, explaining :

We perc eive no error in the chancellor’ s granting appellee the earnings experience generated by the Northrup Grumman 401k. The agreemen t signed by the parties gave appellee [the wife] 50% of the account valued at $234,000. At the time of distribution, nearly one year later, the account had appreciated to approximately $300,000. Appellant [the husband] argues that appellee was entitled to 50% of the value of the account as of the date of the agreement and all subsequent earnings remained with appellant. The chancellor concluded that the agreement was not ambiguous and awarded appellee 50% of the increased value. The decision was eminently f air.
Rivera , 136 Md. App. at 620 (emphasis added). Here, w e conclude , as we did in Rivera , that the circuit court did not abuse its
discretion in entering a QDRO that provided for the division of the Tecore Nationwide 401(k) “equally between the parties” and included the gains or losses that had accrued on Wife’s 50% share from the date of the div orce to the date of segregation of Wife’s
interest

. JUDGMENT OF THE CIRCUIT COURT FOR HOWARD COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.