Court Opinion

ID: 4399327
Source: CourtListenerOpinion
Date Created: 2019-05-22 15:45:00.87459+00
Date Added: 2024-06-11T14:52:20.628012
License: Public Domain

[Cite as Archer v. Dunton, 2019-Ohio-1971.]

STATE OF OHIO                    )                       IN THE COURT OF APPEALS
                                 )ss:                    NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                 )

DEBORAH JANE ARCHER                                      C.A. No.   29091

        Appellant

        v.                                               APPEAL FROM JUDGMENT
                                                         ENTERED IN THE
STEVEN DUNTON                                            COURT OF COMMON PLEAS
                                                         COUNTY OF SUMMIT, OHIO
        Appellee                                         CASE No.   DR-1992-09-2167

                                DECISION AND JOURNAL ENTRY

Dated: May 22, 2019

        CALLAHAN, Judge.

        {¶1}    Appellant, Deborah Archer, appeals an order of the Summit County Court of

Common Pleas, Domestic Relations Division. This Court reverses.

                                                  I.

        {¶2}    Deborah Archer and Steven Dunton divorced in 1993 after eighteen years of

marriage. Their divorce decree, which incorporated a separation agreement, provided that Ms.

Archer was entitled to one-half of Mr. Dunton’s pension through the Ohio Police and Fire

Pension Fund as of the date of divorce. It further provided that “[s]hould Ohio law be amended

so as to allow a Qualified Domestic Relations Order, or similar Order, on state-administered

pension plans, then said Order shall be filed on Husband’s pension plan.” The decree required

thirty days’ notice to Ms. Archer if Mr. Dunton elected to receive a lump sum instead of periodic

pension payments and determined both the present value of the pension and Ms. Archer’s one-

half share as of the date of divorce for that purpose.
                                                2

       {¶3}     In 2003, the trial court issued a Division of Property Order (“DOPO”) that set

forth the amount payable to Ms. Archer as alternate payee from Mr. Dunton’s monthly pension

benefit or, in the alternative, the amount that would be distributed to her if Mr. Dunton elected a

lump-sum distribution upon retirement.       Mr. Dunton, however, elected to participate in a

Deferred Retirement Option Plan (“DROP”) instead of receiving his pension benefits.1 As a

result of his decision, the monthly pension payments to which he would otherwise have been

entitled, derived from his pension contributions, were deposited into an interest-bearing account

instead of being paid to him, and he continued to work, with his future individual and employer

pension contributions deposited into the DROP account as well.

       {¶4}     In 2016, Mr. Dunton moved to set aside that DOPO under Civ.R. 60(B)(5). Ms.

Archer moved to modify the DOPO to reflect Mr. Dunton’s participation in DROP. The trial

court granted Mr. Dunton’s motion for relief from judgment, but did not address Ms. Archer’s

motion to modify. Ms. Archer appealed, and this Court determined that the trial court erred by

granting the motion for relief from judgment because Mr. Dunton had based his motion on

alleged mistakes by the trial court that cannot support relief under Civ.R. 60(B). Archer v.

Dunton, 9th Dist. Summit No. 28519, 2017-Ohio-8846, ¶ 11. This Court also noted that the trial

court had not yet considered Ms. Archer’s motion to modify the DOPO, which remained

pending. Id. at ¶ 18.

       {¶5}     On remand, the parties filed briefs addressing the scope of the trial court

proceedings on remand—a matter over which there was considerable dispute. Although his

motion for relief from judgment had been fully addressed by this Court, Mr. Dunton did not file

       1
           Neither DOPOs nor DROPs were available under Ohio law at the time of the parties’
divorce.
                                                3

a motion to modify the DOPO or seek further relief upon remand. On June 19, 2018, the trial

court issued an order concluding that the funds in Mr. Dunton’s DROP account were not marital

property and denying Ms. Archer’s motion to modify the DOPO on that basis. The trial court

also sua sponte determined that the DOPO was not consistent with the divorce decree and

permitted Mr. Dunton to submit an amended DOPO.             Ms. Archer appealed, and her two

assignments of error are rearranged for purposes of discussion.

                                               II.

                              ASSIGNMENT OF ERROR NO. 2

       THE TRIAL COURT ERRED BY DENYING MS. ARCHER’S MOTION TO
       MODIFY THE DIVISION OF PROPERTY ORDER.

       {¶6}     Ms. Archer’s second assignment of error argues that the trial court erred by

denying her motion to modify the 2003 DOPO to include the growth in her share of the marital

portion of Mr. Dunton’s pension during his participation in DROP. This Court agrees.

       {¶7}    In divorce cases, a trial court must designate marital and separate property and

divide the property equitably between spouses. R.C. 3105.171(B). “Marital property” includes

retirement benefits acquired by either spouse during the marriage. R.C. 3105.171(A)(3)(a)(i).

See also Hoyt v. Hoyt, 53 Ohio St.3d 177, 178-179 (1990). A qualified domestic relations order

(“QDRO”) “implements a trial court’s decision of how a pension is to be divided incident to

divorce or dissolution” by assigning to an alternate payee-spouse the right to receive benefits

payable to a private sector plan participant in conformance with federal law. Wilson v. Wilson,

116 Ohio St.3d 268, 2007-Ohio-6056, ¶ 6-7. Public sector pension plans, similarly, are subject

to division by a DOPO authorized by R.C. 3105.81 et seq. See also Ohio Adm. Code Chapter

742-21.   Without an express reservation of jurisdiction or consent of the parties, a trial court

cannot enter a DOPO that is inconsistent with the division of property set forth in the decree.
                                                4

Cameron v. Cameron, 10th Dist. Franklin No. 12AP-349, 2012-Ohio-6258, ¶ 13. “A DOPO is

inconsistent with a decree when it modifies the division of retirement benefits ordered in the

decree, and a DOPO modifies a division of retirement benefits when the DOPO varies from,

enlarges, or diminishes the awards the court ordered in the decree.” Id. citing Knapp v. Knapp,

4th Dist. Lawrence No. 05CA2, 2005–Ohio–7105, ¶ 40.

       {¶8}    Ms. Archer’s motion to modify the 2003 DOPO argued that she was entitled to

receive a percentage of Mr. Dunton’s DROP account “because[] the post-divorce DROP is

funded, in part, by marital property in the form of Ohio Police and Fire Pension Fund benefits

[Mr. Dunton] earned during the course of his marriage.” In other words, Ms. Archer’s position is

that because Mr. Dunton’s pension is a marital asset to the extent that it was earned during the

parties’ marriage, the growth in her share of the marital portion of the pension as a result of its

investment in Mr. Dunton’s DROP account is marital as well, and failure to include the DROP

account diminished the award ordered in the decree. This Court agrees.

       {¶9}    Three methods are generally used to divide the marital portion of a pension. See

generally Hoyt at 178-179. At one extreme, courts may determine the present cash value of the

nonparticipating spouse’s share and award the nonparticipating spouse that amount at the time of

the divorce by allocating other marital assets or structuring a cash payout. Id. at 182. Under this

method, also called the “frozen” method, the nonparticipating spouse does not share in the

growth of the retirement account as a whole or in the growth in her share over time as a result of

investment because the parties’ economic relationship has been fully severed as of the time of

the divorce. See Forman v. Forman, 3d Dist. Marion No. 9-06-63, 2007-Ohio-4938, ¶ 7.

       {¶10} At the other extreme, courts may reserve jurisdiction and determine the parties’

proportionate shares at the time of retirement using the traditional coverture fraction, which is
                                                 5

the ratio of the years employed by the participating spouse during the marriage to the total years

of employment. Thompson v. Thompson, 196 Ohio App.3d 764, 2011-Ohio-6286, ¶ 33 (10th

Dist.), citing Smith v. Smith, 182 Ohio App.3d 375, 2009-Ohio-2326, ¶ 95 (2d Dist.) and

Hasselback v. Hasselback, 10th Dist. Franklin No. 06AP–776, 2007-Ohio-762, ¶ 11. This

methodology allows the nonparticipating spouse’s share to increase in value not merely as a

result of investment, but as a result of the other spouse’s continued participation in the retirement

plan until maturity. Thompson at ¶ 34, 39-40. “Consequently, ‘with each passing year after the

divorce, the [nonmember spouse] is earning a smaller percentage of a larger pie.’” (Alterations

in original.) Id. at ¶ 34, quoting 2 Sowald & Morganstern, Domestic Relations Law, Section

30:29, at 657 (4th Ed.Rev.2009).

       {¶11} The frozen coverture method is a hybrid of the two. See Forman at ¶ 7. This

method of calculation “requires the court to determine the value of the pension account as if it

were frozen on the divorce date.” Cook v. Cook, 9th Dist. Summit No. 28575, 2017-Ohio-8848,

¶ 16, citing Cameron, 2012-Ohio-6258, at ¶ 17. When a court uses the frozen coverture method,

it calculates the present value of the retirement account at the time of the divorce based upon the

then-existing base compensation and years of service. Cook at ¶ 16. The nonparticipating

spouse ultimately receives smaller payments using this calculation because the nonparticipating

spouse does not share in postdivorce increases that accrue to the pension as a result of increases

in salary or years of service. See Harrington v. Ford, 10th Dist. Franklin No. 14AP-954, 2015-

Ohio-3571, ¶ 21 (“[U]nder the frozen coverture method, the value of the future monthly benefit

is frozen because it does not gain value from years served after the divorce or increases in

salaries after the divorce.”). Absent language in a divorce decree that provides for a present

value cash distribution at the time of the divorce or a deferred distribution, the frozen coverture
                                                 6

method “does not * * * involve a limit or cap on those payments in the amount of the frozen or

hypothetical value.” Cook at ¶ 17. In other words, it does not cap the nonparticipating spouse’s

benefits at a sum certain. Id. The nonparticipating spouse shares in the growth over time due to

investment of her share of the portion of the retirement fund that represents a marital asset.

       {¶12} The starting point for this Court’s analysis is the parties’ 1993 divorce decree,

which addressed Mr. Dunton’s pension as follows:

       11.0 The parties agree that the Wife is entitled to one-half of the Husband’s
       pension through the Police and Fire Pension Fund for the State of Ohio as of the
       date of the divorce. Should Ohio law be amended so as to allow a Qualified
       Domestic Relations Order, or similar Order, on state-administered pension plans,
       then said Order shall be filed on Husband’s pension plan.

       11.1 Wife shall be notified within thirty (30) days should Husband elect to obtain
       from his pension plan a cash distribution in lieu of pension benefits. The parties
       recognize that the present value of the pension plan is $58,618.27, and that Wife’s
       current one-half (1/2) interest in said pension is $29,309.14.

       11.2 The jurisdiction of the Summit County Court of Common Pleas, Domestic
       Relations Division, shall be preserved concerning all issues involving division of
       Husband’s pension.

The reference to the “present value” of the pension plan and Ms. Archer’s proportionate share

was not coupled with a corresponding allocation of other marital property or with a cash

distribution, so it did not fix Ms. Archer’s pecuniary interest in the pension at an amount certain

and sever the parties’ economic interests. Instead, by specifying that Ms. Archer was entitled to

one-half of Mr. Dunton’s pension “as of the date of the divorce,” the decree contemplated that

payments to Ms. Archer from Mr. Dunton’s pension would be calculated upon maturity using the

frozen coverture method. Accordingly, Ms. Archer’s share of the marital portion of the pension

remained part of the retirement account after the divorce. Because the coverture fraction had

been determined as of the date of divorce, she did not share in growth due to Mr. Dunton’s

increasing salary or years of service, but her share of the marital portion did experience
                                                7

investment growth over time. Mr. Dunton’s participation in DROP is one form of investment

growth that took place before he retired. When a member of the Police and Fire Pension Fund

elects to participate in DROP, the member ceases to accrue additional service credit, but forgoes

receipt of the monthly pension benefit that would otherwise be payable to the member upon

retirement. See R.C. 742.441. While the member continues to work, those monthly pension

payments—including amounts that might otherwise be paid to an alternate payee—are deposited

into a DROP account. See R.C. 742.443(A). The payroll contributions that are withdrawn from

the member’s current compensation are also deposited into the account, beginning with fifty

percent during the first three years of participation, seventy-five percent in years four through

six, and finally, one hundred percent in years seven and eight, should the member elect to

participate in DROP for the full timeframe permitted. Ohio Adm.Code 742-4-07(A). The

deposited funds earn interest quarterly at a variable rate not to exceed five percent. Ohio

Adm.Code 742-4-09(A). When the member’s active employment ends, the member is entitled to

a lump-sum payment of the balance in the DROP account or to periodic distributions as

permitted by the retirement plan. R.C. 742.444(B)(3). See also Ohio Police & Fire Pension

Fund, Members Guide to: Deferred Retirement Option Plan (DROP), https://www.op-

f.org/(S(lvpnet41ln5x0xtumffefvv0))/Files/MGdrop.pdf (accessed May 16, 2019).

       {¶13} Because a DROP account is funded, in part, by the total pension payment that

would otherwise be due to the member, a postdivorce DROP may be continually funded by both

marital property, in the form of benefits earned during the course of the marriage, and nonmarital

property, in the form of benefits earned before and after the marriage as well as current

contributions. See Meeker v. Skeels, 6th Dist. Lucas No. L-09-1190, 2010-Ohio-3525, ¶ 15.

Marital assets retain their character:
                                                 8

       “The monthly retirement benefits to be accumulated in the [member’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 [member] 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 * * * but for his election to participate in DROP.”

(Omission in original.) Id. at ¶ 17, quoting Killingsworth v. Killingsworth, 925 So.2d 977, 982

(Ala.App.2005). In other words, “[t]he character of those [retirement plan] benefits as marital

property does not change simply because they are deposited into a DROP account rather than

paid directly to [the member].” Meeker at ¶ 15. In a case in which the traditional coverture

fraction is applied, growth in the pension as a result of DROP investment before the coverture

fraction is applied to the marital share will be one factor that increases the size of the pie from

which the nonparticipating spouse’s benefit is determined. Compare Thompson, 196 Ohio

App.3d 764, 2011-Ohio-6286, at ¶ 33. See, e.g., Meeker at ¶ 21. Although that is not the

situation when the frozen coverture methodology has been applied at the time of the divorce, the

investment of the martial portion of retirement benefits in a DROP account still impacts the

nonparticipating spouse’s interest.

       {¶14} The divorce decree in this case awarded one-half of Mr. Dunton’s pension on the

date of the divorce to Ms. Archer. Had Mr. Dunton retired without participating in DROP, Ms.

Archer would have been entitled to receive monthly payments or a lump sum in an amount

determined with reference to the marital portion of Mr. Dunton’s pension at the time of his

retirement. Although Meeker involved application of the traditional coverture method, that

Court’s conclusions regarding the nature of Mr. Dunton’s contributions to DROP are applicable

in this case as well: the marital portion of his pension did not change in character upon his
                                                9

participation in DROP. Consequently, Ms. Archer is entitled to that portion of the DROP

account that is attributable to her share of Mr. Dunton’s benefits earned during the course of the

marriage, consistent with the divorce decree.       See id. at ¶ 21. Of course, the method of

calculating the amount that Ms. Archer is entitled to receive will not be based on the traditional

coverture method, as in Meeker. See id.

       {¶15} The trial court, therefore, erred by concluding that Ms. Archer was not entitled to

any portion of Mr. Dunton’s DROP distributions, and her second assignment of error is

sustained.

                              ASSIGNMENT OF ERROR NO. 1

       THE TRIAL COURT ERRED BY MODIFYING THE DOPO TO, IN EFFECT,
       OVERRULE THIS HONORABLE COURT’S DENIAL OF MR. DUNTON’S
       60(B) MOTION FOR RELIEF FROM JUDGMENT.

       {¶16} In her first assignment of error, Ms. Archer argues that the trial court erred by

permitting Mr. Dunton to submit a modified DOPO on the same grounds articulated in his

motion for relief from judgment. This Court agrees in part.

       {¶17} The doctrine of the law of the case limits the ability of a trial court to rule in a

way that is inconsistent with a decision of a reviewing court in the same case, and “the decision

of a reviewing court in a case remains the law of that case on the legal questions involved for all

subsequent proceedings in the case at both the trial and reviewing levels.” (Citations omitted.)

Nolan v. Nolan, 11 Ohio St.3d 1, 3 (1984). The doctrine also “limits the actions that a trial court

may take on remand to the scope of the reviewing court’s mandate and places a corresponding

limitation on the ability of an appellant to assert error in subsequent appeals.” Allen v. Bennett,

9th Dist. Summit No. 24124, 2008-Ohio-4554, ¶ 9, citing Neiswinter v. Nationwide Mut. Fire

Ins. Co., 9th Dist. Summit No. 23648, 2008–Ohio–37, ¶ 10.
                                                 10

       {¶18} Although this Court’s previous decision did not rule on the merits of Mr.

Dunton’s arguments in a manner that would have precluded him from seeking further relief

through a motion to modify the 2003 DOPO, we did conclude that relief under the motion that he

had already filed was not warranted because it failed to allege permissible grounds for relief

under Civ.R. 60(B)(5). Archer, 2017-Ohio-8846, at ¶ 11. As a result, there were no outstanding

issues in that motion for determination upon remand.

       {¶19} Because Mr. Dunton’s motion had been fully resolved, the only motion pending

in the trial court upon remand was Ms. Archer’s motion to modify the DOPO. See Archer at ¶

18. Mr. Dunton, however, did not avail himself of the opportunity to seek relief through a

motion to modify the DOPO upon remand. The parties did file simultaneous briefs addressing

the scope of the issues before the trial court on remand, but Mr. Dunton did not request relief by

means of a written motion, as required by Civ.R. 7(B)(1). Although that rule permits motions to

be made orally “during a hearing or a trial,” there is no indication in the appellate record that

such a motion was made in this case. Id.

       {¶20} Because this Court had previously determined that Mr. Dunton could not establish

that he was entitled to relief under Civ.R. 60(B), the trial court erred in effectively revisiting his

motion for relief from judgment upon remand.            Ms. Archer’s first assignment of error is

sustained solely on that basis.

                                                 III.

       {¶21} Ms. Archer’s first and second assignments of error are sustained. The judgment

of the Summit County Court of Common Pleas, Domestic Relations Division, is reversed. This

matter is remanded for proceedings consistent with this opinion.

                                                                                  Judgment reversed
                                                                                and cause remanded.
                                                11

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellee.

                                                     LYNNE S. CALLAHAN
                                                     FOR THE COURT

TEODOSIO, P. J.
CONCURS.

CARR, J.
DISSENTING.

       {¶22} I respectfully dissent from the judgment of the majority as I would overrule both

of Ms. Archer’s assignments of error.
                                                 12

       {¶23} With respect to Ms. Archer’s first assignment of error, I would conclude that the

trial court could have reasonably viewed Mr. Dunton’s arguments as a motion to modify the

DOPO. In the prior appeal, this Court noted that its resolution of Ms. Archer’s first assignment

of error, “put[] the entire matter back before the trial court[.]” Archer v. Dunton, 9th Dist.

Summit No. 28519, 2017-Ohio-8846, ¶ 18. Subsequent to the remand, from the parties’ filings,

it is clear that both sides believed there were problems with the DOPO, albeit for different

reasons. In addition, the decree is clear that the trial court retained jurisdiction to address issues

involving the division of Mr. Dunton’s pension. Giving the foregoing, I cannot say that the trial

court erred in determining it was appropriate to modify the DOPO.

       {¶24} As to Ms. Archer’s second assignment of error, I would conclude that Ms.

Archer’s motion to modify the DOPO to include funds from Mr. Archer’s participation in DROP

was properly overruled by the trial court. There is no dispute that the divorce decree employs a

frozen coverture method of calculation, as opposed to a traditional coverture method. “Under the

frozen coverture method * * * the trial court ‘freezes’ the pension benefits at the amount in the

account as of the divorce date. Sometimes called the ‘hypothetical’ approach, it calculates the

value of the participant spouse’s retirement account had he or she retired on the same day the

parties divorced, using the then-present base pay and years of service.” Cameron v. Cameron,

10th Dist. Franklin No. 12AP-349, 2012-Ohio-6258, ¶ 17. Notably, “[u]nder this approach, the

non-participant spouse receives no interest the account accrues after that date.” Id. Thus, “[t]he

relevant difference between the two methods, for present purposes, is their treatment of interest

the pension fund earns after the divorce date. The * * * frozen coverture[] method * * * awards

all post-divorce interest to the participant spouse. The * * * traditional coverture[] method

allows the non-participant spouse to share in the benefit of any post-divorce increase in the value
                                                 13

of his or her unmatured proportionate share attributable to the participant’s continued

participation in the retirement fund.” Id. at ¶ 19.

          {¶25} Accordingly, Ms. Archer’s award was determined at the time of the divorce. Mr.

Dunton did not enter the DROP program until 2006, long after the parties divorced. Ms. Archer

cannot demonstrate an entitlement to the DROP funds as the amount of her benefit was

determined at the time of the divorce and, because of that, the award does not include interest

earned subsequent to the divorce. See id. Ms. Archer is entitled only to that portion of marital

assets that was awarded to her. See Meeker v. Skeels, 6th Dist. Lucas No. L-09-1190, 2010-

Ohio-3525, ¶ 21. Thus, the fact that the DROP account may contain marital assets is not

determinative of whether Ms. Archer is entitled to any of those funds. This case is unlike

Meeker as Meeker involved an award under the traditional coverture method. See id. at ¶ 2; see

also Cameron at ¶ 38.        As the traditional coverture method involves allocating the non-

participant spouse post-divorce interest, “changes in benefit accrual that took place subsequent to

the divorce could impact that spouse’s total benefits.” Cameron at ¶ 38. Therefore, it makes

sense that, in those circumstances, “the non-participant spouse [is] entitled to a percentage of the

future DROP benefits to the extent they derived from retirement benefits earned during the

course of the marriage.” Id. The same cannot be said here where a frozen coverture method was

employed; Mr. Dunton’s participation in DROP did not change the amount that Ms. Archer was

entitled to under the decree. See id. at ¶ 37-38. Accordingly, Ms. Archer’s motion was properly

denied.

APPEARANCES:

JANE TIMONERE, Attorney at Law, for Appellant.

J. ANTHONY TERILLA, Attorney at Law, for Appellee.