[00:00:01] Speaker 02: Good morning, Your Honors. [00:00:01] Speaker 02: Robert Rosati for the appellant, Marilyn Velois. [00:00:05] Speaker 02: I'd like to reserve three minutes for rebuttal. [00:00:07] Speaker 03: Very well. [00:00:08] Speaker 02: As Your Honors undoubtedly know, this is a very simple one issue case, whether a legal separation agreement is a quadro. [00:00:15] Speaker 02: The district court held that the legal separation agreement was a quadro, even though it makes no reference whatsoever to any plan, and no way to identify a plan, and even though it specified that the [00:00:29] Speaker 02: husband would maintain life insurance in the amount of $800,000, and the policy in question, the plan that they claim applies, only provides benefits of $493,000. [00:00:39] Speaker 02: This, of course, decision is clearly wrong. [00:00:42] Speaker 02: It doesn't comply with the law, and it misconstrues and misapplies the plain facts of the case. [00:00:48] Speaker 02: It's not the job of the court to render optional the mandatory statutory requirements of the quadro. [00:00:56] Speaker 02: as the Supreme Court has stated, effectively a checklist. [00:01:00] Speaker 02: And one of the requirements is you have to clearly specify the plan to which the benefit applies. [00:01:07] Speaker 03: But the standard in our court is substantially complies, correct? [00:01:10] Speaker 02: Yes. [00:01:10] Speaker 02: This court has held standard of substantial compliance. [00:01:13] Speaker 02: And in so stating, it has held that the language of the DRO has to, in substance, identify the plan and meet the other requirements of the quadro. [00:01:27] Speaker 02: And I appreciate in substance allows some level of leeway, but it doesn't allow nothing. [00:01:33] Speaker 02: The reality in this case is that the language of the DRO, the law legal separation agreement simply states that the husband shall maintain and carry [00:01:43] Speaker 02: a policy of insurance in the amount of $100,000, naming the son as the beneficiary. [00:01:48] Speaker 02: It says nothing about an ERISA plan. [00:01:51] Speaker 02: It says nothing about an employer-provided benefit. [00:01:53] Speaker 02: It says nothing that you could use to apply to an ERISA plan or to any plan. [00:01:58] Speaker 02: It doesn't have inclusive language such as, as is or all, as courts in other circuits have held, is sufficient to clearly identify a plan. [00:02:08] Speaker 02: It simply says, [00:02:10] Speaker 02: You have to maintain life insurance. [00:02:12] Speaker 02: Now, as I note in my opening brief, there are half a dozen district court decisions around the country have held quite specifically that that language, and in some of the cases, the language is virtually identical to the language we have here. [00:02:26] Speaker 02: That language is insufficient. [00:02:28] Speaker 02: Those district courts are correct. [00:02:30] Speaker 02: In order to rule in this case that the language of the [00:02:35] Speaker 02: DRO is a quadro, you have to find some reference to a plan in that language, and there simply isn't any there. [00:02:43] Speaker 02: The other issue, of course. [00:02:44] Speaker 01: Well, before you move on, counsel, there's a reference to a plan, and the record is in disputed that there's only one life insurance plan. [00:02:52] Speaker 01: So why isn't that sufficient for implication to name that plan? [00:02:57] Speaker 01: That seemed to be the district court's reasoning. [00:03:00] Speaker 02: The logic of the district court is logically fallacious, just because there is no reference to a plan. [00:03:06] Speaker 02: There's a reference to a policy. [00:03:08] Speaker 02: in the DRO. [00:03:09] Speaker 02: Just because it's a reference to a policy doesn't mean it refers to this policy. [00:03:12] Speaker 02: The language of the statute is quite specific. [00:03:15] Speaker 02: You have to refer by, at least in substance, to a plan. [00:03:20] Speaker 02: The fact that you're referring to maintain a policy doesn't say whether you're maintaining an individual policy, a group policy, the actual language of the LSA. [00:03:29] Speaker 01: The DRO, as I understand it, was entered [00:03:33] Speaker 01: before the decenant started his employment at Micron, is that right? [00:03:38] Speaker 01: Long before. [00:03:39] Speaker 01: So you're not suggesting that they needed to have somehow anticipated that he was going to work there. [00:03:45] Speaker 01: No. [00:03:45] Speaker 01: What's the statute? [00:03:47] Speaker 01: So what would have been language that would have been clear enough in your mind then? [00:03:51] Speaker 02: The language, it could have been, Mrs. Kowalski had several options. [00:03:57] Speaker 02: One option was to draft a language so that it applied to any group or individual policy that Mark got. [00:04:05] Speaker 02: And so each and every in all, you include that kind of language and you apply it to [00:04:11] Speaker 02: employee benefit plans or to individual policies. [00:04:14] Speaker 01: But what if the parties did not want to say all? [00:04:16] Speaker 01: I mean, that's a different sort of implication. [00:04:19] Speaker 01: So are you saying that someone can't get the protections under this exemption unless they mention in the DRO that it has to apply to all policies? [00:04:31] Speaker 02: No. [00:04:32] Speaker 02: I'm saying that the ideal situation is you name the plan. [00:04:36] Speaker 02: If you don't name the plan, the second ideal situation is you identify the policies and plans to which it applies broadly. [00:04:44] Speaker 02: The third ideal situation, which was clearly, and that was available to Ms. [00:04:47] Speaker 02: Kowalski, the third available. [00:04:49] Speaker 01: And that doesn't happen here with the APOL? [00:04:51] Speaker 01: Why isn't it referring to something broadly? [00:04:55] Speaker 01: You're saying broadly with all. [00:04:57] Speaker 01: All or every. [00:04:59] Speaker 02: It doesn't, you have to refer, referring to a policy is not referring to a plan. [00:05:04] Speaker 02: referring to a policy is referring to an insurance policy. [00:05:07] Speaker 02: If you look at the exact language used in the LSA, it says he can't encumber it. [00:05:13] Speaker 02: He's talking about an individual policy. [00:05:14] Speaker 01: And I would agree with you if he had multiple policies and it was unclear to a plan administrator [00:05:21] Speaker 01: which one you might apply, but if there's only one, why doesn't that make this a different situation? [00:05:28] Speaker 02: Because your logic is that because later on there was a policy, this language must refer to that policy, and that's not what the language says. [00:05:37] Speaker 02: It plainly misconstrues the language. [00:05:41] Speaker 02: The statutory language requires a reference to a plan. [00:05:45] Speaker 02: A plan is an employer-provided benefit. [00:05:48] Speaker 02: By definition, that's what the statute says. [00:05:51] Speaker 02: So the reference must be to some plan. [00:05:54] Speaker 02: It's not sufficient to say this policy. [00:05:57] Speaker 02: There may have been a policy in 2010, I don't know. [00:06:00] Speaker 02: There certainly were employee benefits because if you read the full text of the legal separation agreement, Mark was required to provide medical benefits for his son through his employment. [00:06:11] Speaker 02: I don't know whether there was then some sort of employer-provided benefits. [00:06:15] Speaker 02: But the issue is, can you stretch language that says nothing about a plan and nothing about employer-provided benefits and nothing about all-encompassing to include a policy that was obtained a decade later? [00:06:30] Speaker 02: And again, you asked the question, what could Mrs. Kowalski have done? [00:06:32] Speaker 02: She had various options under the statute. [00:06:36] Speaker 02: The statute says, even if the DRO is not a quadra, you can go back to court and modify it. [00:06:42] Speaker 02: She could have gone to court [00:06:44] Speaker 02: whenever she wished and modified with the court's permission, what effectively happened here is that the district court modified the DRO. [00:06:52] Speaker 02: And there's nothing in the statute that permits a district court to modify a state judgment. [00:06:58] Speaker 01: Is there anything in the record that suggests she knew who the named beneficiary was on the policy? [00:07:03] Speaker 01: No. [00:07:06] Speaker 01: You're saying she could have gone and got in order to modify, but wouldn't she have had to have known that the name beneficiary was not consistent with what he actually agreed to do earlier? [00:07:18] Speaker 02: She could have modified at any time in the 10 years to say, this obligation applies to any insurance policy, employee benefit plan that he obtains in any employment. [00:07:29] Speaker 02: She could have done that well before he was employed by Micron. [00:07:32] Speaker 02: She didn't do it. [00:07:34] Speaker 02: So what the district court said is, because something happened afterwards, it necessarily refers to this plan. [00:07:41] Speaker 02: But that's a logical fallacy. [00:07:44] Speaker 02: There's no tie-in between this plan. [00:07:48] Speaker 02: And the analysis is followed, as I said, in half a dozen district court cases. [00:07:52] Speaker 03: Right. [00:07:52] Speaker 03: I'm just trying to understand this. [00:07:53] Speaker 03: So your critique of the pro se drafted document is it said, policy not plan. [00:08:01] Speaker 03: Right. [00:08:01] Speaker 03: And the case you think turns on that? [00:08:04] Speaker 02: In part, the reality is that the language of the statute is not optional. [00:08:11] Speaker 02: As this court has held, the language of the statute is mandatory. [00:08:14] Speaker 02: In substance, you have to identify a plan, which is an employee benefit plan, that to which the [00:08:23] Speaker 02: benefit applies. [00:08:25] Speaker 02: Does this language do that? [00:08:27] Speaker 02: There's no way you can parse this language to refer to the policy that ultimately was obtained by Mark Kowalski a decade after the fact. [00:08:36] Speaker 03: So in your mind then, if the micron policy had actually named the minor child, it still would not qualify? [00:08:44] Speaker 03: No, because again, let's say the Micron policy actually referred to the child rather than your client. [00:08:50] Speaker 03: Then it would. [00:08:52] Speaker 03: But again, the language in the contract would be the same. [00:08:55] Speaker 03: It would be, you said the issue here is it didn't specify a plan. [00:08:59] Speaker 03: Right. [00:08:59] Speaker 03: It still wouldn't specify a plan. [00:09:00] Speaker 03: It just happened to have a different person as the beneficiary. [00:09:03] Speaker 03: So if you have to specify a plan in 2010, why would it matter who's actually named in the eventual policy under your view of the case? [00:09:14] Speaker 02: for this to be a quadro, you have to identify a plan. [00:09:19] Speaker 02: Otherwise, you're not complying with the statutory plan. [00:09:21] Speaker 03: That's what I'm saying. [00:09:22] Speaker 03: So at the end of the day, if the insurance policy in this case, through Micron, did not name your client, but actually named the minor child, [00:09:31] Speaker 03: Assume those are the facts of the case. [00:09:33] Speaker 02: In other words, if Mark designated his son as the beneficiary? [00:09:35] Speaker 03: Correct. [00:09:36] Speaker 02: Then we wouldn't be here. [00:09:37] Speaker 03: No, but would it be a quadro under your view of the case? [00:09:40] Speaker 03: It wouldn't matter. [00:09:41] Speaker 03: No, but that's not my question, whether it matters. [00:09:44] Speaker 03: My question is that your understanding of what a quadro is, it would not be. [00:09:48] Speaker 02: Because it doesn't identify the plan or have any basis. [00:09:51] Speaker 03: OK, so even if we all know that this was what they intended to give it to the kid, under your view, it still wouldn't substantially comply. [00:09:58] Speaker 02: Correct. [00:10:00] Speaker 02: as the Supreme Court has said, and the purpose of the Quadro Statute is not to talk about the intent of the parties. [00:10:07] Speaker 02: It's to talk about the language of the documents they write. [00:10:10] Speaker 02: If you want to read into the intent of the parties, then you're missing the point of the whole Quadro Statute. [00:10:15] Speaker 02: Congress didn't say all DROs are enforceable. [00:10:17] Speaker 02: Could have. [00:10:18] Speaker 02: Congress says as to [00:10:23] Speaker 02: insurance, it's safe from preemption. [00:10:25] Speaker 02: Congress could have said that all domestic relations orders are safe from preemption. [00:10:28] Speaker 02: It didn't do that. [00:10:29] Speaker 02: It said, in order to be safe from preemption, you have to meet four qualifications and not meet three others. [00:10:35] Speaker 02: They didn't meet the qualification. [00:10:37] Speaker 02: There is no way you can parse this language to have this referred to a plan. [00:10:42] Speaker 02: And the other point is, obviously, the policy itself [00:10:47] Speaker 02: The LSA itself specifies that there'd be $800,000 in benefits. [00:10:51] Speaker 02: The micron plan only provides $493,000 in benefits. [00:10:55] Speaker 02: You can't convert $800,000 into $493,000. [00:10:58] Speaker 02: You can't say, well, she agrees to accept less. [00:11:01] Speaker 02: The statute says you look at the language of the DRO. [00:11:04] Speaker 02: You identify what the language says and you construe it. [00:11:07] Speaker 02: The language of the DRO is quite clear, $800,000. [00:11:09] Speaker 01: Well, the statute says that whether the DRO does not require the plan to provide increased benefits, as I understand it, the LSA can't force Hartford to pay more than the coverage that was entered into. [00:11:23] Speaker 01: So how does the LSA here require Hartford to pay more than the $400,000? [00:11:30] Speaker 02: It requires $800,000. [00:11:32] Speaker 01: If you enforce [00:11:35] Speaker 02: the LSA. [00:11:37] Speaker 01: So someone could sue Hartford under the LSA and say you owe Hartford has to pay $800,000 to determine whether or not the LSA is a quadro. [00:11:46] Speaker 02: You have to ask. [00:11:47] Speaker 01: But again, the statute says whether the DRO does not require the plan to provide increased benefits. [00:11:54] Speaker 01: There's nothing that requires the plan doesn't require Hartford to pay more under under its terms, does it? [00:12:04] Speaker 01: The plan does. [00:12:05] Speaker 01: It requires $800,000 benefit, explicitly. [00:12:08] Speaker 02: Which is an obligation on MARC. [00:12:10] Speaker 02: It's an obligation. [00:12:11] Speaker 02: If you construe it as applying to the plan, it's an obligation on the plan. [00:12:15] Speaker 02: In other words, if you enforce the LSA, you have an obligation to pay $100,000. [00:12:19] Speaker 02: You're not enforcing the LSA. [00:12:21] Speaker 02: You're modifying it. [00:12:22] Speaker 02: You're allowing the district court [00:12:24] Speaker 02: to do what district courts aren't allowed to do, modify the agreement of the parties. [00:12:28] Speaker 02: The plain agreement of the parties is $800,000, not $493,000. [00:12:32] Speaker 03: So in your view, if the policy actually purchased was $799,000, then it's a loser. [00:12:39] Speaker 03: Has to be $800,000 on the dot. [00:12:41] Speaker 02: Correct. [00:12:41] Speaker 02: That's what the parties agree to. [00:12:44] Speaker 02: We don't modify agreements. [00:12:45] Speaker 02: I mean, courts are not supposed to modify agreements. [00:12:48] Speaker 03: But even though the standard in the Ninth Circuit is substantial compliance, you think that $799,000 would not be substantially compliant? [00:12:54] Speaker 03: Not substantial compliance, because it's more. [00:12:56] Speaker 03: So what would be substantial compliance? [00:12:58] Speaker 03: Can you give us an example of what would be substantial compliance? [00:13:01] Speaker 03: Sure. [00:13:01] Speaker 03: For numbers? [00:13:03] Speaker 03: Yeah. [00:13:03] Speaker 03: I mean, how do you... [00:13:05] Speaker 03: How do you make a point that a different number, a bigger number, is substantial compliance? [00:13:09] Speaker 03: Well, I'm just saying, like, it's like a 99.95% hit rate, or not quite that high, but close to it. [00:13:16] Speaker 03: But that would not be substantial compliance. [00:13:19] Speaker 03: So it was $799,999.99. [00:13:21] Speaker 03: That would not be substantial. [00:13:23] Speaker 02: No. [00:13:23] Speaker 03: Because it's a different number. [00:13:25] Speaker 03: It's a higher number. [00:13:27] Speaker 03: I understand. [00:13:28] Speaker 03: And I want to make sure you have time for rebuttal. [00:13:30] Speaker 03: But if the standard ninth circuit is substantial compliance, help me understand what that means. [00:13:34] Speaker 03: It's not perfect compliance. [00:13:35] Speaker 02: In substance, are you saying that $800,000 is in substance, $493,000? [00:13:40] Speaker 02: It is not. [00:13:42] Speaker 03: You could say 493,000 is a subset of $800,000, and it certainly covers it. [00:13:48] Speaker 03: So why wouldn't that be substantial compliance? [00:13:49] Speaker 02: That's putting the statute backwards. [00:13:51] Speaker 02: The issue under the statute is, does the document, does the domestic relations order require the plan to pay more than it's otherwise obligated to pay? [00:14:03] Speaker 02: And it does if you apply the DRO. [00:14:06] Speaker 02: If you say, we can modify it, we can let the district court ignore it, we can rewrite it, [00:14:12] Speaker 02: in the guise of interpretation, then of course, you can say anything you want. [00:14:16] Speaker 02: But the point of courts and the point of judges is to enforce the agreements of the parties and to enforce the law, not to manipulate. [00:14:25] Speaker 01: And so you think, and so just to go back to my earlier question, you think that this agreement between the two ex-spouses can be enforced against Hartford? [00:14:32] Speaker 01: Someone can go and sue Hartford and force Hartford Life to pay out $800,000 based on an agreement between these two individuals? [00:14:40] Speaker 02: No, because it's not a quadro. [00:14:41] Speaker 02: If it were a quadro, they could enforce it. [00:14:45] Speaker 00: You're saying that if there was a holding that this was a quadro, then Hartford would be obligated to pay 800,000. [00:14:52] Speaker 02: Right. [00:14:52] Speaker 02: If this were a quadro, then you'd have to enforce it as written, not as not written. [00:14:57] Speaker 02: It's not a quadro. [00:14:58] Speaker 02: That's why Hartford doesn't have to honor it. [00:15:03] Speaker 03: I'll give you two minutes for a bottle. [00:15:05] Speaker 03: Thank you. [00:15:13] Speaker 04: Good morning, your honor. [00:15:14] Speaker 04: Peter Sessions on behalf of the appellees, Haileigh Kowalski and Act Against Guardian for her son, E.K. [00:15:21] Speaker 04: Obviously, we're talking today about whether a domestic relations order is a quadruple or not, and I think it's important in [00:15:28] Speaker 04: when engaging in that inquiry to take a step back and look at the statute, the purpose of the statute, why it exists. [00:15:36] Speaker 04: You know, we all know about ERISA. [00:15:38] Speaker 04: We know it has expansive preemption over state law. [00:15:42] Speaker 04: And in many ways, that's a good thing because it makes it uniform for plan administrators. [00:15:47] Speaker 04: But what Congress determined with the Retirement Equity Act in creating these quarters is sometimes that's a bad thing. [00:15:55] Speaker 04: And what, in a nutshell, what Congress decided is that the decisions of separating couples governed by state law should be elevated above the federal rules governing plans. [00:16:06] Speaker 04: So what Congress essentially did was flip the structure and said, no, federal rules and beneficiary designations made under these federal rules are not going to be honored when we have valid state court orders that say something else. [00:16:19] Speaker 04: And so why did Congress do this? [00:16:21] Speaker 04: And it's very clear. [00:16:22] Speaker 04: This court has addressed this issue numerous times, most prominently in the Oblamis versus Roper case, where this court said, it's clear why Congress did this. [00:16:31] Speaker 04: We're concerned with the inequities that are suffered historically by women and children in divorce who are often economic victims. [00:16:40] Speaker 04: And so we've determined that we're going to create these quadros because these are necessary to protect their interests. [00:16:47] Speaker 04: And so that's the backdrop here. [00:16:50] Speaker 04: And that's why this court has adopted this substantial compliance approach to this statute. [00:16:57] Speaker 04: This court has said- Well, Mr. Sessions, let's get into the meat of this. [00:17:02] Speaker 01: Council's point is that the LSA here says, A, insurance policy, as opposed to all or something where, from the language of the LSA, it would encompass what's being contemplated here. [00:17:17] Speaker 01: Why is that wrong? [00:17:20] Speaker 01: Is there something defective about the fact that he just mentioned a policy and that's not sufficient enough to identify this particular policy? [00:17:28] Speaker 04: Well, in this case, I think that's a distinction without a difference. [00:17:33] Speaker 04: And the district court addressed this issue. [00:17:36] Speaker 04: in its order and said, you know, if the facts were different, you know, this might go the other way. [00:17:41] Speaker 04: This would be a lot trickier. [00:17:43] Speaker 04: But in this case, it's not tricky. [00:17:45] Speaker 04: You know, the separation agreement talks about a policy of life insurance, and here that's what we have. [00:17:49] Speaker 04: We have a policy of life insurance. [00:17:51] Speaker 04: It's the policy ensuring Micron's group plan. [00:17:56] Speaker 04: So I know Appellant makes a big deal out of the fact that [00:17:59] Speaker 04: The provision in this agreement doesn't say any or all life insurance, but under the facts of this case, it's effectively the same thing because there's only one policy. [00:18:09] Speaker 01: Let me ask this. [00:18:10] Speaker 01: There have been other circuit court decisions that have also applied substantial compliance. [00:18:15] Speaker 01: Have any of those cases involved a DRO that had similar language like a policy or a rather than any or all? [00:18:24] Speaker 04: Yeah, well, that's one of the problems with these cases, which is every separation agreement is different and has slightly different language. [00:18:33] Speaker 04: So I'm not aware of any case that's exactly like this one, that uses this exact same language. [00:18:38] Speaker 04: But if you were to ask me, what's the case that aligns most closely with this one, I would point the court to the Festini-Steel case, the 10th Circuit case. [00:18:49] Speaker 04: In that case, [00:18:51] Speaker 04: Let me pull up the language. [00:18:53] Speaker 04: In that case, the language was, the parties agree to the following terms relating to all life insurance counts. [00:18:59] Speaker 04: Husband will carry life insurance on wife as beneficiary until daughter is 18 years of age. [00:19:06] Speaker 04: So really, the only difference between this provision and the provision in our case is the word all. [00:19:11] Speaker 04: And for the reason I just mentioned, that's a distinction without a difference because there's only one policy here. [00:19:16] Speaker 04: So it is all insurance. [00:19:18] Speaker 04: Let me ask this. [00:19:21] Speaker 01: Part of the basis for this exemption is to make it easier on planned administrators to know what to do. [00:19:29] Speaker 01: Would a planned administrator be able to know from looking at the LSA that this policy should be paid out to the minor son? [00:19:39] Speaker 01: Is it okay for us to infer that the administrator would know that this happens to be the only policy that Mark took out? [00:19:47] Speaker 04: And the answer is yes, this is clear enough. [00:19:52] Speaker 04: Because the statute is something of a balancing act, right? [00:19:56] Speaker 04: Congress is saying on one hand, yes, we want to protect spouses and children who are often the victims of divorce, but at the same time, [00:20:04] Speaker 04: We are, and the Sixth Circuit talks about this in one of their cases, we're trying to shoehorn this idea into ERISA, which is typically strict about everything. [00:20:13] Speaker 04: So there's kind of a mismatch there between trying to effectuate parties' intents, but also make sure that they follow the rules. [00:20:21] Speaker 04: And in this case, you know, I think it's pretty clear that Hartford, when it gets this order, should know what to do. [00:20:30] Speaker 00: How would the plan administrator know that this was the only life insurance policy that it could be referring to? [00:20:39] Speaker 04: Well, we know that now. [00:20:41] Speaker 04: So there's no impediment to effecting it that way. [00:20:45] Speaker 04: I don't know, and I don't know if it's in the record, whether Hartford knew about whether there was other life insurance. [00:20:51] Speaker 04: But because there is no other life insurance, therefore the phrase a policy of life insurance in the separation agreement can only be referring to this insurance. [00:21:03] Speaker 03: Because I take it you could have a situation where someone could have multiple policies with Hartford. [00:21:08] Speaker 03: And in that situation, it would seem odd that there would be multiple policies, and yet none of them would pay out, because we can't figure out which is, if it's hard for policy A or hard for policy B, and since the LSA didn't say which one it is, they're out of luck. [00:21:22] Speaker 04: And district court talked about this too, and I think the district court is right. [00:21:25] Speaker 04: If this case were different, it could get messy really quickly. [00:21:29] Speaker 04: And fortunately, we're not in that situation. [00:21:31] Speaker 04: I would like to think that in that scenario that the parties would work something out. [00:21:39] Speaker 03: We always appreciate that, but yes. [00:21:42] Speaker 04: This is one of the problems with the substantial compliance test. [00:21:47] Speaker 04: In the law we have this constant battle between bright line rules. [00:21:50] Speaker 04: and, you know, fuzzier tests. [00:21:52] Speaker 04: And this court has said, and I think correctly, in this situation, we're going to have a fuzzy test. [00:21:57] Speaker 04: And the reason we have that is for two reasons. [00:22:00] Speaker 04: One, we're trying to effectuate Congress' intent in protecting these people. [00:22:05] Speaker 04: And also, this court has recognized the practicalities of divorce, which is when people get divorced, they're not legal sophisticates. [00:22:12] Speaker 04: Very often, they don't even have lawyers. [00:22:13] Speaker 04: The Kowalskis, in this case, didn't have lawyers. [00:22:16] Speaker 04: We can't expect them to know whatever this is or what quadros are. [00:22:20] Speaker 04: So what this court has said is, look, if we understand what you're trying to do and the language you use in your separation agreement is close enough, then that's good enough. [00:22:30] Speaker 04: We're not going to make you dot every I and cross every T. If we know what you're trying to do and it's pretty clear, then we're going to enforce it. [00:22:39] Speaker 01: What about counsel's argument about saying policy instead of plan or making some more direct reference to an employer-type plan? [00:22:49] Speaker 04: Well, I mean, the case law is pretty clear on this. [00:22:51] Speaker 04: And Appellate, I think, concedes this in the briefing that you don't have to specifically name a plan for it to be enforced. [00:23:03] Speaker 04: The agreement doesn't have to say the Micron life insurance plan. [00:23:06] Speaker 04: It doesn't even have to say the employee's life insurance benefits, which is like the next level of abstraction up. [00:23:16] Speaker 04: And that's really what the Fistini Steel case, if you look at the language in the Fistini Steel case, that was upheld by the 10th Circuit. [00:23:21] Speaker 00: That's looking at the record here, too. [00:23:23] Speaker 00: We have a plan, though, that administers a policy. [00:23:26] Speaker 00: So I'm not sure that the use of the word policy instead of plan is completely persuasive to me. [00:23:35] Speaker 04: Well, I mean, the way it's set up is there is an employee benefit plan that Micron has set up. [00:23:41] Speaker 04: And that plan, because they're not life insurance experts, they contracted out to Hartford. [00:23:46] Speaker 04: And so Hartford insures the plan with a policy. [00:23:48] Speaker 04: So there is a policy of insurance here. [00:23:52] Speaker 00: And that's the one that's at issue, the policy. [00:23:56] Speaker 04: Right. [00:24:00] Speaker 04: As I said earlier, you know, we cannot expect people like the Koskis to understand how benefit plans are set up and administered and insured. [00:24:09] Speaker 04: It's very clear what they were trying to do. [00:24:11] Speaker 04: They were trying to protect their son by making sure that life insurance was available to them. [00:24:15] Speaker 04: And whether that's through an employee benefit plan or through an individual life insurance policy was clearly not important to them. [00:24:25] Speaker 04: So the fact that the benefit in this case comes from an employee benefit plan as opposed to an insurance policy, I don't think should make any difference in how we interpret what they were trying to do. [00:24:37] Speaker 01: And what is your reaction to Council's argument about the second argument about whether the plan requires, whether the DRO requires the plan to provide increased benefits? [00:24:48] Speaker 01: Sure. [00:24:49] Speaker 01: Is it resolvable on substantial compliance grounds or that the LSA doesn't require Hartford to pay out more or something else? [00:25:00] Speaker 04: What the statute says is it's not acquired if it requires the plan to pay out more. [00:25:04] Speaker 04: And if the court looks at this statutory provision, it's clearly designed, it's clearly pointed at pension plans. [00:25:13] Speaker 04: It's clearly designed to avoid a scenario by which benefit plans are somehow forced to shoulder higher burdens through actuarial mischief and how pension benefits are calculated, because pension benefits are complicated. [00:25:26] Speaker 04: They're paid out over time. [00:25:27] Speaker 04: Sometimes the amounts change. [00:25:29] Speaker 04: They're built, they're built in actuarial assumptions. [00:25:31] Speaker 04: In fact, the statute uses the word actuarial, which makes it clear that it's aimed at pension issues. [00:25:37] Speaker 04: And so, you know, and that's simply not what we have here. [00:25:41] Speaker 04: This is not a pension case. [00:25:43] Speaker 04: This is not a case where people are, where anyone is trying to make Cartford the micron plan pay more than [00:25:49] Speaker 04: the amount that's available under the plan. [00:25:52] Speaker 04: Everyone agrees what the amount is at issue. [00:25:54] Speaker 04: No one's contending that the micron plan is liable for more than that. [00:25:59] Speaker 04: And the fact that the numbers don't line up is not controlling. [00:26:04] Speaker 04: In a perfect world, would Mr. Kowalski have gotten [00:26:07] Speaker 04: $800,000 of coverage for his son so that it lined up neatly with what's in the legal separation agreement. [00:26:14] Speaker 04: Sure. [00:26:15] Speaker 04: But he didn't do that. [00:26:17] Speaker 04: And it's not even clear that he was able to do that through the Micron plan. [00:26:20] Speaker 04: You know, typically insurance [00:26:23] Speaker 04: Employee life insurance benefits are based on whatever the person is making as part of their salary. [00:26:29] Speaker 04: So you probably couldn't even get $800,000. [00:26:33] Speaker 04: But that doesn't mean that the separation agreement is somehow forcing the plan to pay more. [00:26:39] Speaker 04: No one's saying that the plan should be doing that. [00:26:44] Speaker 04: And it's funny, when I was preparing for this argument, the example that I came up with was the exact one that you just came up with. [00:26:50] Speaker 04: What if he was able to get $799,000 worth of insurance? [00:26:54] Speaker 04: Under Pellin's argument, because $799 is not $800, therefore the son gets zero. [00:27:01] Speaker 04: And that can't be the right result. [00:27:03] Speaker 04: There's no authority. [00:27:04] Speaker 04: I'm aware of no justification, no case law for enforcing it in this way, especially under a provision of ERISA that is specifically designed to protect children [00:27:16] Speaker 04: so that they get the benefits that they're entitled to. [00:27:18] Speaker 04: The statute's not meant to be, it's not meant to set up a series of traps for the unwary. [00:27:24] Speaker 04: It's, you know, the whole point of the substantial compliance doctrine is to try to effectuate what people are trying to do in a way that's consistent with ERISA. [00:27:36] Speaker 00: I mean, it seems to me there's a little bit of a conflation between the requirement that the DRO identify the plan [00:27:43] Speaker 00: by the amount and it must not require the plan to pay more than to provide increased benefits. [00:27:52] Speaker 00: So I think what you're saying is the 800,000 was close enough in terms of an identifier under the substantial compliance rule, but it doesn't actually spell out that the plan has to pay $800,000. [00:28:07] Speaker 04: Right, well, these are separate provisions of the Quadro Statute. [00:28:10] Speaker 04: The one provision says it has to clearly specify the plan. [00:28:14] Speaker 04: And this other provision says it can't force the plan to pay more. [00:28:21] Speaker 04: And so what we're saying is that both of those things are met here. [00:28:24] Speaker 04: They've done enough to clearly specify where this benefit should come from. [00:28:29] Speaker 04: And at the same time, they're saying how much they'd like the son to get. [00:28:33] Speaker 04: But at the same time, they're not saying that the plan has to pay that. [00:28:36] Speaker 03: Well, Hartford's deposited the money, and they're out of the case. [00:28:40] Speaker 03: That's right. [00:28:40] Speaker 03: So I'm not sure I totally follow how they would have to pay more unless this court were to order them to pay. [00:28:45] Speaker 04: That's right. [00:28:46] Speaker 04: And that's what the district court said in its order. [00:28:48] Speaker 04: The district court said, look, no one's disputing what the amount of issue is here, and Hartford's gone. [00:28:55] Speaker 03: And she disclaimed more than seeking more than $493,000, correct? [00:28:59] Speaker 04: Yes. [00:29:01] Speaker 04: She specifically filed a declaration that said, I'm not seeking more than that. [00:29:06] Speaker 04: unless the court has further questions, I think. [00:29:10] Speaker 03: All right, thank you. [00:29:10] Speaker 04: All right, thank you. [00:29:11] Speaker 03: Two minutes. [00:29:19] Speaker 02: Obviously, the court's concerned about substantial compliance and insubstance. [00:29:23] Speaker 02: As this court held in Hamilton, in which the order required the husband to designate children, but didn't require any action by the plan, in the Hamilton case, the court said, this court said, that wasn't the quadro. [00:29:36] Speaker 02: We have exactly the same facts here. [00:29:38] Speaker 02: There is no obligation by any plan to do anything. [00:29:41] Speaker 02: So where the court articulated the insubstance standard in Tyson and Hamilton, it actually applied to the facts that we have in front of us. [00:29:51] Speaker 02: There is nothing here that ties this benefit or this policy obligation to a plan. [00:29:57] Speaker 02: It's simply make believe. [00:29:59] Speaker 02: Now, if courts want to make believe that facts are there and construe statutes as if they don't exist, and that's what the Ninth Circuit said very specifically in its insubstance analysis. [00:30:10] Speaker 02: That's what this court said. [00:30:11] Speaker 02: It said, look, these are not optional requirements. [00:30:14] Speaker 02: If you're going to make the identification of a plan optional, you're going to create terrible [00:30:19] Speaker 02: precedent for other courts. [00:30:21] Speaker 02: You're going to find people arguing everything, no matter what it says, is sufficient to constitute a quadro, and it isn't. [00:30:28] Speaker 02: The statute is a policy standard. [00:30:30] Speaker 02: It says we're going to protect wives and children. [00:30:33] Speaker 02: But it also says we have rules. [00:30:35] Speaker 02: The rules are clear cut. [00:30:37] Speaker 02: And one of the rules is clearly identify the plan. [00:30:40] Speaker 02: This LSA does not do so. [00:30:43] Speaker 02: The other issue is you're talking about, well, nobody's requiring Hartford to pay more. [00:30:47] Speaker 02: The issue on evaluating whether or not this is a quadro is whether, if you enforce it, it would require paying more. [00:30:55] Speaker 02: Just because one party said, well, I'll modify it. [00:30:59] Speaker 02: What effectively you did, or what effectively the district court did was allow one party to modify an agreement. [00:31:05] Speaker 02: We don't enforce agreements like that. [00:31:07] Speaker 02: The case law is clear. [00:31:09] Speaker 02: that a DRO is an agreement between parties. [00:31:12] Speaker 02: Do we say, okay, we're gonna change it and allow a federal court to change a family law order? [00:31:17] Speaker 02: If you approve this, then you will be allowing federal courts to change state court orders at will. [00:31:24] Speaker 02: That's wrong, it's bad policy. [00:31:27] Speaker 02: This decision is wrong and it should be reversed and my time is up. [00:31:30] Speaker 03: All right, thank you, counsel. [00:31:31] Speaker 03: Thank you both for your briefing and argument, very helpful. [00:31:34] Speaker 03: And this interesting case, this matter is submitted.