Case Name: Larry John PULLO, Former Husband, Appellant/Cross-Appellee, v. Sharon Denise PULLO, Former Wife, Appellee/Cross-Appellant
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 2006-04-13
Citations: 926 So. 2d 448
Docket Number: No. 1D04-2155
Parties: Larry John PULLO, Former Husband, Appellant/Cross-Appellee, v. Sharon Denise PULLO, Former Wife, Appellee/Cross-Appellant.
Judges: ALLEN, WEBSTER, DAVIS, BENTON, PADOVANO, LEWIS, POLSTON, HAWKES, and THOMAS, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 926
Pages: 448–457

Head Matter:
Larry John PULLO, Former Husband, Appellant/Cross-Appellee, v. Sharon Denise PULLO, Former Wife, Appellee/Cross-Appellant.
No. 1D04-2155.
District Court of Appeal of Florida, First District.
April 13, 2006.
Lyman T. Fletcher, Jacksonville, and Jeffrey A. Conner, of Fletcher & Conner, Jacksonville, for appellani/cross-appellee.
Natalie A. Tuttle, of Natalie Nice, P.A., Jacksonville, for appellee/cross-appellant.

Opinion:
BROWNING, J.
Larry Pullo, the former husband, challenges an order of the trial court determining that the former wife, Sharon Pullo, was entitled to a portion of the former husband's Deferred Retirement Option Program (DROP) account and modifying the parties' 1995 dissolution judgment by converting the former wife's rehabilitative alimony to permanent alimony. The former wife argues on cross-appeal that she is entitled to interest and cost-of-living adjustments (COLAs) as to her portion of the amounts deposited into the DROP fund. We affirm the trial court's conversion of the rehabilitative alimony to permanent alimony; affirm the trial court's distribution of the DROP account to the parties; and reverse on the cross-appeal. We discuss only the DROP distribution and the cross-appeal.
A final judgment dissolving the parties' 25-year marriage and distributing their property was entered in 1995. The final judgment, in part, distributed the former husband's fully vested employer-based pension plan with the City of Jacksonville as follows:
17. The Wife shall receive 33% of the Husband's City of Jacksonville Pension/retirement benefit. The monthly value of this account as of December, 1994 was $3,614.80. Therefore the Wife shall receive $1,192.88 per month upon the Husband's retirement from the City of Jacksonville (Fire and Rescue). The Husband shall notify the Wife in advance of his retirement plans and advise her of the time this benefit will be paid. Said payments shall be made directly to the Wife.
After the dissolution, the former husband continued to work for the City of Jacksonville and accrued further service credits in the defined-benefit pension plan. Subsequently, the City created a DROP which the former husband joined in January 2000. Pursuant to his participation in the DROP, the former husband was required to cease working for the City in January 2005.
At the hearing on the former wife's enforcement/modification petition the trial court received into evidence section 121.209 of the Jacksonville Municipal Code setting forth the terms and conditions of the Jacksonville Police and Fire Pension Fund DROP Plan. The ordinance begins with the following preamble:
In general, and subject to the provisions of this section, the Deferred Retirement Option Program, hereinafter- referred to as the DROP, is a program under which an eligible Member of the Plan, may elect to participate, deferring receipt of normal retirement benefits while continuing employment with the City of Jacksonville without loss of any other employee benefits. Upon an eligible Member's election to participate in the DROP, the amount of credited service and final average salary becomes frozen for purposes of determining pension benefits. Additional service beyond the date of entry into the DROP shall no longer accrue any additional benefits under the Pension Fund. The deferred monthly retirement benefits under the DROP shall accrue in the Fund on behalf of the participant, plus interest compounded monthly, as provided in paragraph (c)(1), for the specified period of the DROP participation, as provided in paragraph (b)(1). Upon termination of employment, the participant shall receive the total DROP benefits, as provided in Section 121.209(c), and begin to receive the previously determined normal retirement benefits.
(Emphasis added.) Subsection (b)(5) of the DROP ordinance states:
The DROP participant shall be a retiree under the Pension Plan for calculation of increased pension benefits, unless otherwise prescribed herein, but not for the purposes of employment with the City of Jacksonville, and the availability of employee benefits and programs related thereto.
(Emphasis added.) Subsection (b)(6) of this ordinance states that, once made, an election to participate in the City's DROP "is irrevocable."
The former wife claims she is entitled to her pro-rata share of the DROP fund, COLAs, and interest on her share in the DROP fund pursuant to the terms of the final judgment. The former husband claims she is barred from any entitlement to the DROP funds. The trial court agreed in part with both parties, because the former husband had, in effect, retired when he entered DROP and was deferring only the receipt of the retirement funds that otherwise would be received by him and the former wife. Therefore, the former wife was entitled to her pro-rata share of such benefits, but the trial court denied COLAs and interest benefits on the amount of DROP funds awarded to the former wife. We agree with the former wife's position on both the original appeal and her cross-appeal.
ANALYSIS
A former spouse's entitlement to an interest in a DROP fund and to interest, and to COLAs on such funds, has been addressed by our sister court, the Fourth District Court of Appeal, in similar cases to this appeal. See Russell v. Russell, 922 So.2d 1097 (Fla. 4th DCA 2006); Ganzel v. Ganzel, 770 So.2d 304 (Fla. 4th DCA 2000); Swanson v. Swanson, 869 So.2d 735 (Fla. 4th DCA 2004). We agree with these precedents and adopt their rationale as applicable here.
In Ganzel, that court concluded that a former wife was entitled to a pro-rata share of the former husband's post dissolution participation in a DROP fund, and stated:
Once the judgment of dissolution, which incorporated the settlement agreement, was entered, marital property rights no longer existed and only individual property rights remained. See, e.g., DeSantis v. DeSantis, 714 So.2d 637 (Fla. 4th DCA 1998). Therefore, once the judgment of dissolution was entered, $782.79 of the Former Husband's retirement benefits payable each month became the Former Wife's property. See, e.g., Joyce v. Joyce, 563 So.2d 1126, 1127 (Fla. 1st DCA 1990) (stating that "pure property settlement agreements are nonmodifiable absent consent of the parties").
In this case, each party's interest in the Florida Retirement benefits are [sic] being paid into a fund and earning interest. Pursuant to the judgment of dissolution, the $782.79 is the Former Wife's individual property to which the Former Husband has no claim.
Ganzel, 770 So.2d at 306.
By adopting and applying such rationale, we conclude that the former wife received an undivided individual property right in the former husband's retirement account that, under the dissolution judgment, entitles her to a pro-rata share of his DROP fund (that portion of the DROP fund the former wife would have received but for the former husband's deferring retirement benefits to the DROP fund). Accordingly, we affirm the trial court's determination on this issue.
Addressing the former wife's cross-appeal, we conclude that she is entitled to interest and COLAs on her accrued benefits in the former husband's DROP account. See Swanson, 869 So.2d at 738 ("Furthermore, as is obvious, 45% of the value of the former husband's pension benefits as of January 17, 1990 belongs to the former wife. Therefore, the interest and cost of living adjustments which were applied to the former wife's share, despite being in the former husband's DROP account, should also belong to the former wife."). Thus, we reverse the trial court's determination to the contrary and grant the relief requested by the former wife on cross-appeal.
Moreover, after careful review of our learned colleagues' dissent, we remain unpersuaded that the foregoing rationale should be abandoned for their rationale. We continue to disagree that Boyett controls this appeal, and that the dissent's analysis is not in conflict with Ganzel and Sivanson, which is predicated on the Gan-zel rationale.
In Boyett the court addressed the time a retirement plan is to be valued rather than ownership of a retirement plan as here. Here, no valuation issue is presented; only the question of DROP'S ownership is germane to this appeal's determination. The parties recognize DROP'S value, but vehemently disagree over the quantum of the parties' ownership; accordingly, like our sister court in Ganzel and Swanson, we conclude Boyett is not controlling. Moreover, the fact that former husband gave up his right to accrue additional future benefits in order to enter DROP does not change their equation. It is clear that former husband entered DROP because the program provides an economic benefit for him, even under Ganzel, and he seeks here only to further increase that benefit by acquiring former wife's vested retirement benefits deferred in DROP, as compared to non-DROP participation. We find no basis in equity or property law to allow such a conversion of former wife's deferred retirement benefits.
Nor can we agree with the dissent's allegation that:
The issue in Ganzel was not whether the former wife in that case was entitled to a portion of the former husband's post-dissolution DROP fund pursuant to the terms of the parties' dissolution judgment; the former husband in that case agreed that the funds deposited into his DROP account were retirement benefits subject to the distribution scheme set forth in the parties' dissolution judgment.
Wolf, J., dissenting opinion at page 17. The parties in Ganzel never stipulated to the former wife's having an interest in DROP. The opinion states:
The Former Husband concedes that the funds deposited into DROP are retirement benefits — benefits that would have been paid each month to the Former Husband and Former Wife had the Former Husband not elected to participate in DROP and had instead simply retired.
Ganzel, 770 So.2d at 306 (emphasis added). It is clear that this concession covers only what is elementary to all plans: payments into DROP are merely deferred retirement benefits from which, but for DROP participation, each former spouse would receive his or her pro-rata share immediately. Accordingly, the concession only established for the court what is well-known.
Finally, we disagree with the dissent that the primary issue in Ganzel was alimony. The court itself stated that the Ganzel litigation was precipitated by a letter from the Florida Division of Retirement informing the former husband that his former wife, under the terms of the QDRO, would be receiving her pro-rata share of the former husband's DROP benefits, just as the trial court determined here. We conclude from this language that contrary to the dissent, the central issue in Ganzel was the parties' interest in the DROP account, and the alimony issue was only obliquely involved based on the former wife's need for alimony as impacted by receipt of her retirement benefits, including those in DROP.
CERTIFICATION
Because of the numerous participants in DROP accounts similarly situated to these parties, we certify the following question to be one of great public importance:
IS A SPOUSE WHO IS AWARDED A PORTION OF THE OTHER SPOUSE'S PENSION AT THE TIME OF DISSOLUTION ENTITLED TO SHARE IN A DROP ACCOUNT CREATED, INCLUDING INTEREST AND COLAS, SOMETIME AFTER THE DISSOLUTION HAS BECOME FINAL?
DISPOSITION
We AFFIRM on the original appeal, REVERSE on the cross-appeal, and RE MAND for proceedings consistent with this opinion.
ALLEN, WEBSTER, DAVIS, BENTON, PADOVANO, LEWIS, POLSTON, HAWKES, and THOMAS, JJ., concur.
KAHN, C.J., concurring in part and dissenting in part with opinion.
WOLF, J., concurring in part and dissenting in part with opinion, and ERVIN, BARFIELD, and VAN NORTWICK, JJ., concur.