Gary Michael Lusso v. Muriel Elaine Lusso Quiggle

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA
IN COURT OF APPEALS
A14-0393

Gary Michael Lusso, petitioner,
Respondent,

vs.

Muriel Elaine Lusso Quiggle,
Appellant.

Filed January 12, 2015
Affirmed
Halbrooks, Judge
Dissenting, Minge, Judge

Hennepin County District Court
File No. 27-FA-12-7949

Victoria Elsmore, Nathan T. Griffin, St. Paul, Minnesota (for respondent)

Jerome M. Rudawski, Ryan W. Wallace, Rudawski Law Office, PA, Roseville,
Minnesota (for appellant)

Considered and decided by Halbrooks, Presiding Judge; Connolly, Judge; and

Minge, Judge.


Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
 UNPUBLISHED OPINION

HALBROOKS, Judge

Appellant-wife Muriel Lusso Quiggle challenges the district court’s determination

that she has no marital interest in respondent-husband Gary Lusso’s federal civil

employee pension. We affirm.

FACTS

Quiggle and Lusso were married in April 1973. In November 1973, Lusso joined

the United States Air Force. Lusso remained on active duty throughout the duration of

the parties’ marriage. In 1989, Lusso filed for divorce in Indiana. The divorce was

finalized in October 1989, and the relevant portion of the stipulated decree stated:

The parties acknowledge that for fifteen years of the parties’
marriage, Petitioner has been on active duty with the United
States Air Force and has been accumulating retirement
benefits which will be payable to him should he retire from
active military service after 20 years. Accordingly, should
Petitioner become eligible for a military pension benefit as
the result of his service with the United States Air Force,
37 1/2 percent of any such monthly pension benefit shall be
and hereby is awarded to Respondent.

Lusso left the Air Force following the divorce, prior to achieving the 20 years of service

necessary to qualify for a military pension.

After a period of unemployment, Lusso eventually secured a non-military position

with the federal Veteran’s Administration and was later allowed to participate in a

Federal Employee Retirement System pension plan after working at the VA for five

years. Lusso was required to pay $9,700 to “buy in” to the plan, which he did. Lusso

also received credit for his time in the military under the civil pension plan.

2
 In December 2012, Quiggle moved to amend the Indiana divorce decree and to re-

open the judgment and decree, on the ground that she has a marital interest in Lusso’s

civil pension. In September 2013, the district court issued its order, concluding that

Quiggle is not entitled to any portion of Lusso’s civil pension. The district court

determined that the plain language of the decree only entitled Quiggle to an interest in

Lusso’s “United States Air Force pension,” which he never received because he did not

complete 20 years of service in the Air Force. Quiggle requested reconsideration of the

order. In December, the district court issued its amended order, again denying Quiggle

any interest in Lusso’s civil pension. Quiggle now appeals.

DECISION

Quiggle argues that she is entitled to a portion of Lusso’s civil pension benefit,

because it is “merely an extension of his military pension benefit, which had a significant

marital component.” The divorce decree recognized Quiggle’s marital interest in a

possible military pension, stipulating that “should [Lusso] become eligible for a military

pension benefit as the result of his service with the United States Air Force, 37 1/2

percent of any such monthly pension benefit shall be and hereby is awarded to

[Quiggle].” According to Quiggle, because Lusso’s civil pension credits him for his

service in the Air Force, he is now receiving his Air Force pension, albeit in a different

form and under a different name.

The language of the parties’ binding divorce decree controls the outcome of this

case. Stipulated dissolution judgments are treated as binding contracts. Shirk v. Shirk,

561 N.W.2d 519, 521 (Minn. 1997). “The general rule for the construction of contracts

3
. . . is that where the language employed by the parties is plain and unambiguous there is

no room for construction.” Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342

(1977). Language is ambiguous if it is reasonably subject to more than one

interpretation. Halverson v. Halverson, 381 N.W.2d 69, 71 (Minn. App. 1986). If a

judgment is ambiguous, a district court may construe or clarify it. Stieler v. Stieler, 244

Minn. 312, 319, 70 N.W.2d 127, 131 (1955). Whether a dissolution judgment is

ambiguous is a legal question. Tarlan v. Sorensen, 702 N.W.2d 915, 919 (Minn. App.

2005).

Under the plain language of the decree, Quiggle is only entitled to an interest in a

“military pension benefit” resulting from Lusso’s service in the Air Force. While Lusso’s

civil pension credits him for his military-service time, it is clearly not a military pension.

And the decree specifically states that Lusso’s accumulated retirement benefits from the

Air Force would only be payable “should he retire from active military service after 20

years.” Lusso did not serve 20 years in the Air Force, and he never received a military

pension. The decree’s specific reference to the terms of Lusso’s Air Force pension,

which would only vest after 20 years of service, demonstrates that the potential Air Force

pension was the only retirement benefit contemplated in the decree. The decree makes

no reference to other pensions, civil or military, or the prospect that Lusso might

subsequently roll his service time into another pension if he left the Air Force before

completing 20 years of service.

As the dissent notes, Quiggle’s argument has some equitable appeal. But Quiggle

cannot identify any controlling Minnesota law that permits us to disregard the

4
unambiguous language of the decree in order to apply equitable principles that might

entitle her to a portion of Lusso’s civil pension. The dissent posits that the implied

covenant of good faith and fair dealing is applicable to this context, but we are not aware

of that principle ever being expressly applied to a divorce decree in Minnesota. And

whether or not there may be ill will between the parties, Quiggle does not argue on

appeal that Lusso acted in bad faith to unfairly deprive her of the benefit of their

agreement.

Moreover, this is not a situation where we have made a discretionary decision to

construe the parties’ decree narrowly. Rather, we are applying the plain language of the

decree as stipulated by the parties. We decline Quiggle’s invitation to substitute this

court’s judgment for that of the parties when the dissolution decree was fashioned. It is

not uncommon for parties to make agreements that look less attractive in hindsight. But

that cannot serve as a basis to ignore the plain language of the stipulation.

Because the plain language of the decree limits Quiggle’s marital-property interest

to Lusso’s anticipated Air Force pension, which never vested, the district court acted

within its discretion in its determination that Quiggle is not entitled to a portion of

Lusso’s civil pension.

Affirmed.

5
MINGE, Judge (dissenting)

I respectfully dissent. The record in this proceeding is sparse. The parties were

married in 1973. They had four children. At the time of their divorce in 1989, respondent

Gary Lusso (“husband”) was an officer/pilot in the United States Air Force. Appellant

Muriel Lusso Quiggle (“wife”) was a homemaker. The parties moved often with

husband’s Air Force career.

The majority opinion sets forth the portion of the decree of dissolution addressing

the division of husband’s “military pension benefit as the result of his [military] service.”

In 1991, two years shy of 20 years of service in the military, husband resigned his

commission, apparently forfeiting the entire pension benefit, including wife’s portion.

However, because husband ultimately found employment with the federal government in

another capacity, he was able to roll his 18 years of service in the military into the

duration of his civilian employment (five years), becoming eligible for a federal-pension

benefit based on 23 years of federal employment. This civilian program is known as the

Federal Employee Retirement System (FERS). The only requirements that husband faced

were to have at least five years of FERS-covered civilian employment and to buy into the

FERS system by paying approximately $9,700. The issue on appeal is whether wife is

entitled to any of the FERS pension.

I conclude that wife is entitled to a portion of the FERS pension benefit because of

the convergence of several considerations. The first consideration is the phraseology of

the decree. The language may appear simple and direct: wife gets a defined portion of a

D-1
military-pension benefit. It is tempting to say, “no military pension, nothing for wife.”

However, the situation before us becomes more difficult when one recognizes that critical

words in the decree include: “benefit,” “result,” and “service.” The America Heritage

Dictionary (5th ed. 2011) defines “benefit” as follows:

1a. Something that promotes or enhances well-being; an
advantage . . . b. Help; aid: The field trip was of great benefit
to the students. 2a. A payment made by a government agency
or insurance company to qualifying persons in time of need
. . . b. A form of compensation, such as paid vacation time,
subsidized health insurance, or a pension . . . 3. A public
entertainment, performance, or social event held to raise
funds for a person or cause. 4. Archaic A kindly deed.

The first meaning of the term “benefit” refers to the “advantage” of an asset. The second

meaning refers to a pension; a monetized benefit. The terms “result” and “service” in the

decree clearly reference husband’s time in the Air Force.

Next we must consider how the addition of the adjective phrase “military pension”

affects the meaning of “benefit” and “service.” At the time of the dissolution, it appears

that the parties were focused on the actual pension checks that husband would receive

from the Defense Department. This lines up with the second dictionary meaning of

“benefit.” But circumstances change. When, as here, a member of the Armed Forces

leaves the service before having enough years to become eligible for the Defense

Department veteran’s pension, the only military-related pension “benefit” is the value of

the years in enhancing husband’s FERS retirement pay. The “result of . . . service” phrase

in the decree is consistent with viewing the decree as encompassing any value resulting

D-2
from husband’s time spent in the Air Force.1 At a minimum, the language becomes

ambiguous.

Second, follow the “benefit.” Here, we are dealing with a variation of the familiar

roll-over process. Whenever a transformation of benefits is at issue, the courts should

carefully look at the entire transaction. In this case, 18 years of military service was

rolled into the FERS plan to establish the 23 years of service for calculating benefits.

Third, at the time of the divorce, husband’s potential pension benefit was the

principal marital asset subject to division or allocation in the marriage dissolution. See

Janssen v. Janssen, 331 N.W.2d 752, 756 (Minn. 1983) (holding that unvested,

unmatured pension benefit is martial property); Deliduka v. Deliduka, 347 N.W.2d 52,

54-55 (Minn. App. 1984) (dividing an unvested pension benefit), review denied (Minn.

July 26, 1984); cf. Leatherman, 833 P.2d at 107-08 (including as benefit for wife,

husband’s civilian FERS pension partially based on military-pension benefit years that

were included in FERS even though husband left military without serving enough years

to qualify for the military pension).

The dissolution decree recognizes that wife should have half of the military-

pension benefit that accrued prior to the parties’ separation. This asset should not slip into

1
It is noteworthy and persuasive that the Idaho Supreme Court, when confronted with a
similar issue, ruled that years of service toward a lapsed military pension that husband
was able to roll into a postal pension were community property. Leatherman v.
Leatherman, 833 P.2d 105, 107-08 (Idaho 1992). The result was that wife received half
of the value that these years added to husband’s civilian postal pension. The court
reached this conclusion because it considered the phrase “military retirement benefits” as
including years of service, not just a monetary benefit. Id.
D-3
the limbo of unreachable, unaddressed assets.2 This is especially true when this

dimension of the military-pension benefit turns out to be the dominant determinant of the

FERS pension benefit.

Fourth, the paragraph in the decree of dissolution addressing the military-pension

benefit is couched in terms that assume husband will serve out his 20 years in the Air

Force. He is an officer. He is a pilot. At the time of the divorce, there was no reason for

wife or the court to expect that a healthy service person would walk away from a

generous lifetime pension by refusing to re-up after 16 years. Here, the decree of

dissolution does not recognize the possibility that its simple allocation of the pension

might become unworkable. Such an eventuality apparently was beyond the

comprehension or expectation of the parties or the court. Indeed, there are many ways

that the wife’s dissolution-decree allocation could be wide of the mark. Husband could

serve longer than 20 years in the Air Force or resign due to sudden wealth.

Fifth, there is an assumption of good faith. The record reflects a deep bitterness

between the parties. Can husband simply jettison the pension with no consequence? As

the majority points out, this is a stipulated decree of dissolution and treated as a contract

for legal purposes. But, as Justice Alito has written for the U.S. Supreme Court,

“Minnesota law holds that the implied covenant [of good faith and fair dealing] applies to

2
I note that this court has recognized that the benefit of a husband’s pension, which was
not allocated in a decree of dissolution, may become a factor in increasing the wife’s
maintenance or possibly divided as omitted property. Neubauer v. Neubauer, 433
N.W.2d 456, 461-62 (Minn. App. 1988), review denied (Minn. Mar. 17, 1989).
D-4
‘every contract,’ with the notable exception of employment contracts.” Nw., Inc. v.

Ginsberg, 134 S. Ct. 1422, 1432 (2014) (citation omitted).

Here, husband is arguing for a narrow construction of the decree of dissolution.

Absent a perfect fit: “wife loses.” This approach avoids the roll-over reality. It results in

the major marital asset slipping between the cracks. It promotes sharp practices and

gamesmanship. In this approach, husband receives full value of his military pension and

wipes out wife’s share. I submit that such a reading of the situation is incompatible with

good faith and fair dealing. Cf. Leatherman, 833 P.2d at 107-08 (concluding that the

former wife is entitled to the benefit of the years of service in the military).

In sum, I conclude that the dissolution decree is ambiguous and should be

interpreted to grant wife the benefit of half of a portion of the roll-over years of military

service that built up husband’s FERS pension.3 I would reverse and remand, instructing

the district court to determine that portion of the ultimate FERS pension attributable to

the 15 marital years of husband’s military service and awarding half of that portion to

wife subject to husband’s recovery of his $9,700 contribution to FERS.

3
The calculation of the allocation is complicated. The parties were married 16 years, but
separated prior to the dissolution. As a result, only 15 years of the military-pension
benefit was earned while they had a marital home and are considered marital. These 15
years would be 75% of the 20 years of service needed to vest the military pension.
Wife’s half would be 37 1/2%. Husband stayed in the military 18 years enhancing his
pension benefit opportunity by two years after the dissolution. However, I would remand
for the district court to make the allocation determination after a hearing.
D-5