QDROs for Enforcement Purposes

As matrimonial practitioners, we are often confronted with the problem of enforcing either pendente lite or post-judgment awards of support, equitable distribution and counsel fees. Perhaps one of the most overlooked enforcement tools is the Qualified Domestic Relations Order (QDRO). While QDROs are used routinely to distribute all kinds of qualified deferred compensation benefits, they are also available for enforcement purposes.

In fact, some of the limitations that apply to other enforcement remedies do not apply to QDROs. For example, before a party may be held in civil contempt in the Supreme Court, the moving party must first establish that less drastic alternative civil remedies (DRL '' 243 and 244 and CPLR 5241 and 5242) have been exhausted or that the resort to such remedies would be ineffectual under the circumstances. While a QDRO for enforcement purposes is certainly a drastic remedy — particularly because it may trigger adverse tax consequences — there is nothing in the case law that requires the moving party first to seek enforcement through traditional means.

Another example is the limitation on the use of income-deduction orders and income executions for support enforcement (CPLR 5241 and 5242). These enforcement remedies are limited to “support” orders and may not be used to enforce equitable distribution awards or counsel fees in connection with such awards. No such limitation may exist with respect to QDROs.

The use of QDROs for enforcement purposes is basically a creature of case law. There is no direct provision in the DRL for the use of QDROs for enforcement purposes. Likewise, there is no direct provision for enforcement by QDROs contained in Article 52 of the CPLR.

Pre-Divorce Support and Counsel Fee Awards

Both New York law and federal law (known as ERISA) authorize the courts in New York to equitably distribute a spouse's retirement funds or accounts as part of a judgment in a matrimonial action. D.R.L. ' 236(B)(2); 26 USC ' 1056(d). See, e.g., Peterson v. Goldberg, 180 A.D.2d 260 (2d Dept. 1992) (noting that marriage is an economic partnership); see Kahn v. Kahn, 801 F.Supp. 1237, 1245 (S.D.N.Y. 1992), aff'd, 2 F.3d 403 (2d Cir. 1993) (noting that New York did not allow equitable distribution of pension plans prior to the 1980 revisions to the Domestic Relations Law). The legal mechanism for such a distribution is a QDRO. 26 U.S.C. 414(p); 26 U.S.C. ' 1056(d)(3)(B)(i). The items that Congress contemplated to be distributed from an ERISA retirement account when it authorized state courts to issue QDROs include the following:

“the term “domestic relations order” means any judgment, decree, or order (including approval of a property settlement agreement) which:

(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and

(II) is made pursuant to a State domestic relations law (including a community property law). 29 U.S.C.S. ' 1056(d)(3)(B)(ii) (emphases added).

It is well settled that a QDRO may be used in pre-judgment proceedings to enforce pendente lite payment of child support and maintenance arrears. See York v. York, 300 A.D.2d 475, 751 N.Y.S.2d 417 (2d Dept. 2002) (holding that although a QDRO cannot require a plan to provide any type or form of benefit, or any option not otherwise provided under the plan, the court may indeed impose a pre-divorce qualified domestic relations order to enforce support and maintenance obligations.) In York, the wife was entitled to a transfer of funds in the husband's IRA account to satisfy her judgment for support arrears.

In Keegan v. Keegan, 204 A.D.2d 606, 607-08, 612 N.Y.S.2d 187 (2d Dept. 1994), the court held that QDROs may be used to effectuate income executions and income deduction orders for support enforcement under CPLR 5241 and 5242. And, in Renner v. Blatte, 170 Misc.2d 579, 650 N.Y.S.2d 943 (Sup. Ct. N.Y. 1996), the court found that a QDRO directing the husband's profit sharing plan to transfer a rollover IRA to the wife was warranted to satisfy the husband's support arrears, third-party payment arrears, counsel fee arrears relating to child support and maintenance, counsel fees awarded in connection with the application for the QDRO and even income taxes that the wife would have to pay upon withdrawal of plan funds. “While this court is not aware of any cases that have either imposed or refused to impose pre-divorce QDROs,” the judge wrote in Renner, “the statutory language quoted above clearly provides that a 'spouse,' as well as a 'former spouse,' may be the beneficiary of a QDRO. Furthermore, while the imposition of a pre-divorce judgment QDRO may trigger negative tax implications, this is no reason to allow a spouse with a pension or profit-sharing plan to escape his or her obligations, or to allow a spouse without such financial security to starve or be rendered homeless.”

Post-Judgment Support and Counsel Fees

There is also authority for the imposition of a qualified domestic relations order to enforce post-judgment support arrears and related counsel fees. In Bumstead v. Raisbeck, 230 A.D.2d 759, 759-60, 646 N.Y.S.2d 368 (2d Dept. 1996), the Second Department affirmed an order imposing a QDRO directing the husband's pension administrator to pay to the wife 65% of his gross monthly pension benefits until a prior judgment for support arrears was satisfied.

Likewise, in Adler v. Adler, 224 A.D.2d 282, 638 N.Y.S.2d 29 (1st Dept. 1996), the First Department held that a QDRO of the former husband's profit sharing and retirement plan was proper to aid in the enforcement of money judgments for attorney fees in attempts to compel compliance with child support obligations contained in a Stipulation of Settlement incorporated but not merged into the divorce judgment.

The same is true in other jurisdictions as well. See Hogle v. Hogle, 732 N.E.2d 1278, 1281-83 (Ct. App. Ind. 2000), citing In re Marriage of Bruns, 535 N.W.2d 157, 162 (Ct. App. Iowa 1995); Stinner v. Stinner, 520 Pa. 374, 554 A.2d 45, 47-48 (Pa. 1989); and Baird v. Baird, 843 S.W.2d 388, 391-92 (Ct. App. Mo. 1992).

Post-Judgment Equitable Distribution Awards and Counsel Fees After Trial

There is a paucity of authority in New York specifically authorizing the use of a QDRO to enforce a post-judgment equitable distribution award and counsel fees. In the recent case of Singer v. Singer, NYLJ, 12/30/03, p. 21, col.3 (Sup. Ct. Nassau Co.), the court, in commenting on the importance of simultaneous and immediate compliance with court orders in matrimonial litigation, observed that such compliance may be had ” … even as to awards of equitable distribution through a Qualified Domestic Relations Order.”

The case of Seal v. Raw, 954 S.W.2d 681 (Ct. App. Mo. 1997), from Missouri, is instructive. There, the parties were divorced in 1988. Years after the divorce, the husband declared bankruptcy in an effort to avoid paying the judgment from his pension plan. The bankruptcy court ruled that a constructive trust was created in favor of the wife that could not be discharged in bankruptcy. Id. at 682. The court further found that the wife had “an equitable interest in the right to obtain a QDRO.” Id. The Seal court also ruled that the QDRO could be issued even years after the initial divorce decree.

One New York court has also authorized the entry of an enforcement QDRO after many years following a divorce judgment. See Duhamel v. Duhamel, 194 Misc.2d 100, 753 N.Y.S.2d 673 (Sup. Ct. Monroe 2001), holding that an action to compel the entry of a QDRO is governed by the 6-year statute of limitations that runs from the date the retiree reaches pay status in retirement benefits, and not the entry date of the judgment of divorce.

The plain reading of the federal statutes and case law reveals three items of import relating to the enforcement of a post-judgment equitable distribution award and counsel fees. First, a “former spouse” is automatically an “alternate payee,” and is clearly in the class contemplated by the statute's general protection. 29 USCS ' 1056(d)(3)(K); see Renner v. Blatte, 170 Misc.2d 579, 582 (Sup. Ct. N.Y. 1996); see also Anonymous v. Anonymous, 27 Empl. Benefits Cas. (BNA) 1293, 2001 U.S. Dist. LEXIS 20928 at *2-*3 (S.D.N.Y. 2001).

Second, federal law authorizes QDROs to grant spouses “the right to 'receive all or a portion of the benefits.” Davenport v. Davenport, 146 F.Supp.2d 770, 777 (M.D. N.C. 2001).

Third, the QDROs statutory scheme specifically contemplates post-judgment “marital property rights,” “including a community property law” such as equitable distribution, and leaves the adjudication of those issues to the state courts and legislatures. See Torres v. Torres, 100 Haw. 397, 416 (Haw. 2002) (“The resolution of competing claims involving such matters as alimony, child support, and property (including pension interests) accrued during a marriage is entirely within the province of state domestic relations law.”) (and cases cited there); Seal v. Raw, 954 S.W.2d 681 (Ct. App. Mo. 1997).

New York's enforcement of awards of attorneys' fees through QDROs provides further evidence to support post-judgment enforcement of equitable distribution awards through this same mechanism. New York courts have allowed attorney fees to be collected through QDROs. See Adler v. Adler, 224 A.D.2d 282, 282-83 (1st Dept. 1996); (Renner v. Blatte, 170 Misc.2d 579, 583-84 (Sup. Ct. N.Y. 1996). The Adler court specifically cited to DRL '' 237 and 238 — attorney fees and expense provisions – to support its conclusion that QDROs may be issued for attorney fees expended to enforce post-judgment support and maintenance actions in New York.

Of note, DRL ' 237 contains a provision for attorney fees where a spouse willfully refuses to pay a “distributive award.” DRL ' 237(c).

It therefore follows that if a court may issue a QDRO to enforce collection of attorney fees expended on equitable distribution issues, it may also enforce the underlying equitable distribution award itself by the same mechanism.

It must be stressed here that it is the courts in the several states, and not the federal courts, that have the ultimate authority to determine whether and to what extent each state's domestic relations and other laws support a QDRO in a particular instance. Anonymous v. Anonymous 27 Empl. Benefits Cas (BNA) 1293, 2001 U.S. Dist. LEXIS 20928 at *2-*3 (S.D.N.Y. 2001) (noting that New York State courts are the preferable venue to determine QDROs because, the judge wrote, “a New York State justice is far more knowledgeable than [I]” in understanding New York's domestic relations law).

We must await further case law developments, but there is no reason why the practitioner should be reticent about making application for a QDRO to enforce post-judgment equitable distribution and counsel fee awards. The statutory and case law to support such action is out there.

As matrimonial practitioners, we are often confronted with the problem of enforcing either pendente lite or post-judgment awards of support, equitable distribution and counsel fees. Perhaps one of the most overlooked enforcement tools is the Qualified Domestic Relations Order (QDRO). While QDROs are used routinely to distribute all kinds of qualified deferred compensation benefits, they are also available for enforcement purposes.

In fact, some of the limitations that apply to other enforcement remedies do not apply to QDROs. For example, before a party may be held in civil contempt in the Supreme Court, the moving party must first establish that less drastic alternative civil remedies (DRL '' 243 and 244 and CPLR 5241 and 5242) have been exhausted or that the resort to such remedies would be ineffectual under the circumstances. While a QDRO for enforcement purposes is certainly a drastic remedy — particularly because it may trigger adverse tax consequences — there is nothing in the case law that requires the moving party first to seek enforcement through traditional means.

Another example is the limitation on the use of income-deduction orders and income executions for support enforcement (CPLR 5241 and 5242). These enforcement remedies are limited to “support” orders and may not be used to enforce equitable distribution awards or counsel fees in connection with such awards. No such limitation may exist with respect to QDROs.

The use of QDROs for enforcement purposes is basically a creature of case law. There is no direct provision in the DRL for the use of QDROs for enforcement purposes. Likewise, there is no direct provision for enforcement by QDROs contained in Article 52 of the CPLR.

Pre-Divorce Support and Counsel Fee Awards

Both New York law and federal law (known as ERISA) authorize the courts in New York to equitably distribute a spouse's retirement funds or accounts as part of a judgment in a matrimonial action. D.R.L. ' 236(B)(2); 26 USC ' 1056(d). See, e.g., Peterson v. Goldberg , 180 A.D.2d 260 (2d Dept. 1992) (noting that marriage is an economic partnership); see Kahn v. Kahn , 801 F.Supp. 1237, 1245 (S.D.N.Y. 1992), aff'd, 2 F.3d 403 (2d Cir. 1993) (noting that New York did not allow equitable distribution of pension plans prior to the 1980 revisions to the Domestic Relations Law). The legal mechanism for such a distribution is a QDRO. 26 U.S.C. 414(p); 26 U.S.C. ' 1056(d)(3)(B)(i). The items that Congress contemplated to be distributed from an ERISA retirement account when it authorized state courts to issue QDROs include the following:

“the term “domestic relations order” means any judgment, decree, or order (including approval of a property settlement agreement) which:

(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and

(II) is made pursuant to a State domestic relations law (including a community property law). 29 U.S.C.S. ' 1056(d)(3)(B)(ii) (emphases added).

It is well settled that a QDRO may be used in pre-judgment proceedings to enforce pendente lite payment of child support and maintenance arrears. See York v. York , 300 A.D.2d 475, 751 N.Y.S.2d 417 (2d Dept. 2002) (holding that although a QDRO cannot require a plan to provide any type or form of benefit, or any option not otherwise provided under the plan, the court may indeed impose a pre-divorce qualified domestic relations order to enforce support and maintenance obligations.) In York, the wife was entitled to a transfer of funds in the husband's IRA account to satisfy her judgment for support arrears.

In Keegan v. Keegan , 204 A.D.2d 606, 607-08, 612 N.Y.S.2d 187 (2d Dept. 1994), the court held that QDROs may be used to effectuate income executions and income deduction orders for support enforcement under CPLR 5241 and 5242. And, in Renner v. Blatte , 170 Misc.2d 579, 650 N.Y.S.2d 943 (Sup. Ct. N.Y. 1996), the court found that a QDRO directing the husband's profit sharing plan to transfer a rollover IRA to the wife was warranted to satisfy the husband's support arrears, third-party payment arrears, counsel fee arrears relating to child support and maintenance, counsel fees awarded in connection with the application for the QDRO and even income taxes that the wife would have to pay upon withdrawal of plan funds. “While this court is not aware of any cases that have either imposed or refused to impose pre-divorce QDROs,” the judge wrote in Renner, “the statutory language quoted above clearly provides that a 'spouse,' as well as a 'former spouse,' may be the beneficiary of a QDRO. Furthermore, while the imposition of a pre-divorce judgment QDRO may trigger negative tax implications, this is no reason to allow a spouse with a pension or profit-sharing plan to escape his or her obligations, or to allow a spouse without such financial security to starve or be rendered homeless.”

Post-Judgment Support and Counsel Fees

There is also authority for the imposition of a qualified domestic relations order to enforce post-judgment support arrears and related counsel fees. In Bumstead v. Raisbeck, 230 A.D.2d 759, 759-60, 646 N.Y.S.2d 368 (2d Dept. 1996), the Second Department affirmed an order imposing a QDRO directing the husband's pension administrator to pay to the wife 65% of his gross monthly pension benefits until a prior judgment for support arrears was satisfied.

Likewise, in Adler v. Adler , 224 A.D.2d 282, 638 N.Y.S.2d 29 (1st Dept. 1996), the First Department held that a QDRO of the former husband's profit sharing and retirement plan was proper to aid in the enforcement of money judgments for attorney fees in attempts to compel compliance with child support obligations contained in a Stipulation of Settlement incorporated but not merged into the divorce judgment.

The same is true in other jurisdictions as well. See Hogle v. Hogle , 732 N.E.2d 1278, 1281-83 (Ct. App. Ind. 2000), citing In re Marriage of Bruns , 535 N.W.2d 157, 162 (Ct. App. Iowa 1995); Stinner v. Stinner , 520 Pa. 374, 554 A.2d 45, 47-48 (Pa. 1989); and Baird v. Baird , 843 S.W.2d 388, 391-92 (Ct. App. Mo. 1992).

Post-Judgment Equitable Distribution Awards and Counsel Fees After Trial

There is a paucity of authority in New York specifically authorizing the use of a QDRO to enforce a post-judgment equitable distribution award and counsel fees. In the recent case of Singer v. Singer, NYLJ, 12/30/03, p. 21, col.3 (Sup. Ct. Nassau Co.), the court, in commenting on the importance of simultaneous and immediate compliance with court orders in matrimonial litigation, observed that such compliance may be had ” … even as to awards of equitable distribution through a Qualified Domestic Relations Order.”

The case of Seal v. Raw , 954 S.W.2d 681 (Ct. App. Mo. 1997), from Missouri, is instructive. There, the parties were divorced in 1988. Years after the divorce, the husband declared bankruptcy in an effort to avoid paying the judgment from his pension plan. The bankruptcy court ruled that a constructive trust was created in favor of the wife that could not be discharged in bankruptcy. Id. at 682. The court further found that the wife had “an equitable interest in the right to obtain a QDRO.” Id. The Seal court also ruled that the QDRO could be issued even years after the initial divorce decree.

One New York court has also authorized the entry of an enforcement QDRO after many years following a divorce judgment. See Duhamel v. Duhamel , 194 Misc.2d 100, 753 N.Y.S.2d 673 (Sup. Ct. Monroe 2001), holding that an action to compel the entry of a QDRO is governed by the 6-year statute of limitations that runs from the date the retiree reaches pay status in retirement benefits, and not the entry date of the judgment of divorce.

The plain reading of the federal statutes and case law reveals three items of import relating to the enforcement of a post-judgment equitable distribution award and counsel fees. First, a “former spouse” is automatically an “alternate payee,” and is clearly in the class contemplated by the statute's general protection. 29 USCS ' 1056(d)(3)(K); see Renner v. Blatte , 170 Misc.2d 579, 582 (Sup. Ct. N.Y. 1996); see also Anonymous v. Anonymous, 27 Empl. Benefits Cas. (BNA) 1293, 2001 U.S. Dist. LEXIS 20928 at *2-*3 (S.D.N.Y. 2001).

Second, federal law authorizes QDROs to grant spouses “the right to 'receive all or a portion of the benefits.” Davenport v. Davenport , 146 F.Supp.2d 770, 777 (M.D. N.C. 2001).

Third, the QDROs statutory scheme specifically contemplates post-judgment “marital property rights,” “including a community property law” such as equitable distribution, and leaves the adjudication of those issues to the state courts and legislatures. See Torres v. Torres , 100 Haw. 397, 416 (Haw. 2002) (“The resolution of competing claims involving such matters as alimony, child support, and property (including pension interests) accrued during a marriage is entirely within the province of state domestic relations law.”) (and cases cited there); Seal v. Raw , 954 S.W.2d 681 (Ct. App. Mo. 1997).

New York's enforcement of awards of attorneys' fees through QDROs provides further evidence to support post-judgment enforcement of equitable distribution awards through this same mechanism. New York courts have allowed attorney fees to be collected through QDROs. See Adler v. Adler , 224 A.D.2d 282, 282-83 (1st Dept. 1996); ( Renner v. Blatte , 170 Misc.2d 579, 583-84 (Sup. Ct. N.Y. 1996). The Adler court specifically cited to DRL '' 237 and 238 — attorney fees and expense provisions – to support its conclusion that QDROs may be issued for attorney fees expended to enforce post-judgment support and maintenance actions in New York.

Of note, DRL ' 237 contains a provision for attorney fees where a spouse willfully refuses to pay a “distributive award.” DRL ' 237(c).

It therefore follows that if a court may issue a QDRO to enforce collection of attorney fees expended on equitable distribution issues, it may also enforce the underlying equitable distribution award itself by the same mechanism.

It must be stressed here that it is the courts in the several states, and not the federal courts, that have the ultimate authority to determine whether and to what extent each state's domestic relations and other laws support a QDRO in a particular instance. Anonymous v. Anonymous 27 Empl. Benefits Cas (BNA) 1293, 2001 U.S. Dist. LEXIS 20928 at *2-*3 (S.D.N.Y. 2001) (noting that New York State courts are the preferable venue to determine QDROs because, the judge wrote, “a New York State justice is far more knowledgeable than [I]” in understanding New York's domestic relations law).

We must await further case law developments, but there is no reason why the practitioner should be reticent about making application for a QDRO to enforce post-judgment equitable distribution and counsel fee awards. The statutory and case law to support such action is out there.