IN RE: the MARRIAGE OF Peggy DAVIS n/k/a Peggy Wylde (1997)

Respondent William Davis appeals the trial court's determination that petitioner Peggy Wylde was entitled to a portion of his disability benefits under the terms of the parties' dissolution judgment.   We hold that the judgment did not give Peggy any rights to William's disability benefits.

FACTS

When Peggy and William were divorced in 1985, the court entered an agreed judgment for dissolution of marriage which incorporated a settlement agreement.   The settlement agreement provided in part:

“14.  That PEGGY DAVIS is awarded a present fractional interest in WILLIAM DAVIS' Retirement Benefit Plan(s) * * *.   Further,

a) The retirement benefit plan(s) referred to herein is the SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS PENSION FUND * * *.

 *   *   *   *   *   *

c) The plan herein shall pay benefits to PEGGY DAVIS if, as and when WILLIAM DAVIS RECEIVES benefits from said plan, regardless of the form or frequency of said payments.

d) The plan shall pay benefits to PEGGY DAVIS in accordance with the following formula:

Plan benefit multiplied by 1/212 and the product thereof multiplied by a fraction, the numerator of which is 107 and the denominator of which is the number of months during which any contributions were made to the Participant's account (commonly known as the “Hunt” formula).”

In 1992, William developed a vision impairment and was unable to continue working at his job as a truck driver.   Accordingly, he began receiving disability payments pursuant to the Suburban Teamsters of Northern Illinois Pension Fund (pension plan).   Thereafter, Peggy sought the entry of a qualified domestic relations order (QDRO) which would require the pension plan to pay her 33.46% of William's disability benefits.   The trial court entered the QDRO over William's objections, and William appeals.

ANALYSIS

The primary issue on appeal is whether Peggy is entitled to a portion of William's disability benefits under the dissolution judgment.   Our resolution of this issue requires an interpretation of the parties' dissolution judgment.

 The same rules that apply to construing contracts apply to interpreting divorce decrees.  In re Marriage of Kekstadt, 85 Ill.App.3d 952, 41 Ill.Dec. 248, 407 N.E.2d 746 (1980).   The main objective when construing a marital settlement agreement is to give effect to the purpose and intent of the parties at the time they entered into the agreement.  In re Marriage of Belk, 239 Ill.App.3d 806, 178 Ill.Dec. 647, 605 N.E.2d 86 (1992).   Where the language of the judgment is clear and its meaning is unambiguous, courts must give effect to that language.  In re Marriage of Mateja, 183 Ill.App.3d 759, 132 Ill.Dec. 666, 540 N.E.2d 406 (1989).   However, if the judgment is ambiguous, the court must ascertain the intent of the parties by examining the facts and circumstances surrounding the formation of the agreement.  In re Marriage of Olsen, 229 Ill.App.3d 107, 171 Ill.Dec. 39, 593 N.E.2d 859 (1992).   A judgment is ambiguous if it is reasonably susceptible to more than one meaning.  In re Marriage of Druss, 226 Ill.App.3d 470, 168 Ill.Dec. 474, 589 N.E.2d 874 (1992).   Because the interpretation of a contract is a question of law, a reviewing court may interpret the contract independently of the trial court's judgment.  In re Marriage of Kolb, 99 Ill.App.3d 895, 55 Ill.Dec. 128, 425 N.E.2d 1301 (1981).

 The judgment at issue in the case at bar grants Peggy the right to receive a fraction of William's retirement benefits.   However, William's pension plan provides disability benefits as well as retirement benefits, and the judgment does not identify which benefits Peggy is entitled to receive.   It is thus reasonable to interpret the judgment as granting Peggy the right to receive a portion of any benefits William receives under the pension plan.   However, it is also reasonable to interpret the judgment as limiting Peggy's interest in the pension plan to normal, age-related retirement benefits.   Accordingly, the judgment is ambiguous, and we must examine the facts and circumstances surrounding the formation of the parties' marital settlement agreement to determine the parties' intent.

The settlement agreement refers to William's retirement plan, but it makes no reference to disability benefits.   The absence of any reference to disability or disability benefits suggests that the parties did not contemplate such benefits at the time they entered the agreement.

Moreover, under William's pension plan, the normal retirement age is 60.   When a union member becomes disabled, he is entitled to receive 75% of the retirement benefits he would have received if he had worked until age 60.   Then, when he turns 60, he will receive the same retirement benefits he would have received upon age-related retirement.   Thus, if William had not become disabled, he would have continued to receive his earned income until his retirement at age 60 and Peggy would not receive any benefits under the pension plan until William retired.   However, due to William's disability, he is now unable to earn any income and must survive on the reduced income provided from his disability benefits.

To accept Peggy's interpretation of the agreement, we must find that the parties intended that if William suffered a disabling injury or illness and had to take a devastating reduction in his means of support then Peggy would enjoy a concomitant windfall.   If we accept William's proposed interpretation, Peggy will receive the same benefits she would have received if William had continued working until age 60, while William will receive disability benefits as a substitute for his earned income.   Because Peggy's proposed interpretation of the agreement leads to an unfair and unreasonable result, we cannot conclude that the parties intended that she receive a portion of William's disability benefits.   See Camp v. Hollis, 332 Ill.App. 60, 74 N.E.2d 31 (1947) (where contract is susceptible of two constructions, interpretation which makes a rational and probable agreement is favored).

Our conclusion is bolstered by In re Marriage of Belk, 239 Ill.App.3d 806, 178 Ill.Dec. 647, 605 N.E.2d 86 (1992).   When faced with an almost identical fact pattern, the Belk court concluded that a wife was not entitled to share in her husband's disability benefits.  Belk, 239 Ill.App.3d at 812, 178 Ill.Dec. at 651-52, 605 N.E.2d at 90-91.   In that case, the judgment provided that the wife would receive a portion of the husband's pension.  Belk, 239 Ill.App.3d at 807, 178 Ill.Dec. at 648, 605 N.E.2d at 87.   As in the case at bar, the husband's pension plan provided for disability benefits, but the judgment did not refer to these benefits.  Belk, 239 Ill.App.3d at 807, 178 Ill.Dec. at 648, 605 N.E.2d at 87.   The court held that the absence of any reference to disability benefits in the parties settlement agreement was persuasive that such benefits were not contemplated by the parties.  Belk, 239 Ill.App.3d at 809-10, 178 Ill.Dec. at 649-50, 605 N.E.2d at 88-89.   In addition, the court held that it was unreasonable to conclude that the parties intended to grant the wife a portion of the husband's reduced income after he became disabled when she would not have received any benefits if her husband had continued working.  Belk, 239 Ill.App.3d at 810-11, 178 Ill.Dec. at 650, 605 N.E.2d at 89.   Because we find the Belk case persuasive, we similarly hold that Peggy is entitled to receive a fractional share of William's retirement benefits only when he begins to receive his normal, age-related retirement benefits.   Accordingly, we reverse the judgment of the trial court and remand for the entry of an order modifying the QDRO to conform to our holding.

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The next issue is whether the trial court erred by determining the percentage of William's disability benefits to which Peggy was entitled.   Because we have held that Peggy is not entitled to any share of William's disability benefits, the method used by the trial court to calculate those benefits is not relevant at this point in time.   However, because Peggy will be entitled to a portion of William's age-related retirement benefits when he reaches the normal retirement age, this issue will arise again.   Therefore, for purposes of judicial economy, we will address this issue.

The judgment provided that Peggy would receive a portion of William's pension benefits based on a formula.   Under the formula, Peggy was entitled to 50% of a fraction of William's pension benefits;  the numerator of the fraction was the number of months William had been a member of the union during the marriage and the denominator was the total number of months during which any contributions were made to William's account.

The parties agree that William's pension plan calculates benefits based on benefit credits rather than months of service.   They also agree that the numerator of the applicable formula is 9.1.   However, they disagree over whether the trial court applied the appropriate denominator.   Peggy argues that the trial court properly found that the denominator was 13.6 because this number represents the number of years that contributions were made to the pension plan on behalf of William.   However, William points out that when a participant becomes disabled prior to age 60, the pension plan awards disability and age-related retirement benefits based on the number of years the participant would have worked if he had remained employed until age 60.   In other words, although the contributions made on behalf of William were discontinued when he became disabled, he nevertheless received benefit credits for the contributions he would have made if he had remained working until he was age 60.   Because the pension plan gave him an additional 14.4 benefit credits, William claims that the denominator of the formula should have been 28 instead of 13.6.

By including the formula in the settlement agreement, the parties obviously intended to preserve Peggy's marital interest in the pension without giving her credit for William's post-dissolution contributions.   Thus, as William's retirement benefits increased due to his contributions, the percentage of benefits to which Peggy was entitled should have decreased.   Because the amount of William's disability benefits was based on 28 accrued benefit credits, the denominator of the formula should have been 28.   Accordingly, we hold that for purposes of determining the amount of age-related retirement benefits to which Peggy is entitled, the denominator of the formula set out in the judgment must include any additional benefit credits awarded to William which form the basis for determining the amount of his benefits.

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For the foregoing reasons, the judgment of the circuit court of Will County is reversed and remanded.

Reversed and remanded.

Justice BRESLIN delivered the opinion of the court: