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The Michigan Supreme Court Weighs in on How Courts Should Handle Proposed QDROs

Posted on Thursday, July 25, 2019

In Dorko v. Dorko (June 20, 2019, Docket No. 156557), the Michigan Supreme Court affirmed the Court of Appeal’s decision that the ten-year limitations period in MCL 600.5809(3) did not apply to a party’s request for entry of a proposed qualified domestic-relations order (QDRO) provided for in a judgment of divorce.

The parties, Plaintiff-Husband Richard W. Dorko and Defendant-Wife Shelby S. Dorko, were divorced in 2005. The court awarded Defendant-Wife half of the marital interest in Plaintiff-Husband’s retirement benefits and pension via a QDRO through his employment with General Motors.

When Plaintiff-Husband retired in 2014, he began collecting his full pension and retirement benefits. In 2015, just 8 days after the ten-year mark from the entry of the divorce judgement, Defendant-Wife submitted a proposed QDRO to the Trial Court. The Trial Court entered the order on August 19, 2015, after Plaintiff-Husband failed to respond. Defendant-Wife also submitted a proposed QDRO to the pension plan administrator, Fidelity, but Fidelity refused Defendant-Wife’s request after spotting deficiencies. When Defendant-Wife submitted an amended proposal Plaintiff-Husband moved the trial court to set aside the prior proposed QDRO arguing that QDROs were barred by the 10-year statute of limitations according to MCL 600.5809(3), which applied to the enforcement of non-contractual money obligations.

The trial court denied Plaintiff-Husband’s motion, entered the amended QDRO, and denied Plaintiff-Husband’s motion for stay. It reasoned that the 10-year period of limitations had not run, it had only begun once Plaintiff-Husband’s retirement benefits became due following his retirement in 2014, not upon the 2005 entry of divorce.

Two months later, after Fidelity approved the Defendant-Wife’s amended QDRO, Plaintiff-Husband filed an application for leave to appeal.

While Plaintiff-Husband’s application was pending, the Court of Appeals decided Joughin v. Joughin, 320 Mich App 17 (2017). “In Joughin, the majority held that ‘the act to obtain entry of a proposed QDRO [was] a ministerial task done in conjunction with the divorce judgement itself’ and [t]herefore, ‘because the entry of the proposed QDRO [was] not an enforcement of a noncontractual money obligation, the 10-year period of limitations provided in MCL 600.5809(3) [did] not apply, and the request to have the proposed QDRO entered by the trial court was not time-barred.’”

The Court of Appeals in Dorko (on leave granted) agreed, concluding in an unpublished per curium opinion (August 17, 2017, Docket No. 333880).

The limitations period in MCL 600.5809(3) did not apply to the party’s request for entry of a proposed QDRO since the request did not involve an action to enforce the non-contractual money obligation but rather, just to implement it. Therefore, “[a]sking a court to enter a proposed QDRO [was] not an ‘action’ that [could] be time-barred by a statute of limitations because the order [did] not depend on any underlying cause of action . . . [it] merely implement[ed] a provision of the divorce judgment.”

The Supreme Court affirmed the Court of Appeals’ holding that the limitations period in MCL 600.5809(3) did not apply to the entry of a proposed QDRO because it was simply a request to implement a provision of the divorce judgment but it disagreed with certain aspects of the Joughin Court’s reasoning.

While the Joughin majority had considered an entry of a proposed QDRO to be a ministerial task, the Supreme Court highlighted the distinction between the post-judgment order, which is a tool to implement a divorce judgment, and the proposed QDRO, which is an action to enforce the judgment already implemented.

The Supreme Court explained how determining the entry of a proposed QDRO should not be considered merely ministerial because such an entry was not so simple. The order did not merely reflect the terms of the judgement, it also had to meet the plan administrator’s requirements in order to be qualified. The task required the Court to exercise its discretion or judgement in order to ensure that the terms of the divorce judgement were properly advanced.

Because of this error in reasoning, the Supreme Court affirmed the judgement in part, vacated the judgment to the extent that its reasoning was based on the erroneous reasoning from Joughin, and remanded the case to the Kalamazoo Circuit Court.

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