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Agreement means what it says, COA rules

August 14, 2015

While the Indiana Court of Appeals conceded the severance agreement was “not a model of precision,” it disagreed with a trial court’s conclusion that the agreement contained a mistake.

When he retired shortly after his marriage, Wesley McDivitt signed a severance agreement that he would receive his pension benefits in the form of an annuity. The contract shows he selected “joint with 100% to survivor” annuity and he listed his wife, Sue McDivitt, as the beneficiary.

 The disposition of Wesley’s pension became the only point of dispute between the couple when they divorced more than 13 years after Wesley retired. Reviewing the agreement, the Tippecanoe Superior Court concluded the contract had wrongly listed Sue as the beneficiary which would have made her entitled to the benefits only after her ex-husband’s death. Instead, the trial court ruled Sue was a co-annuitant and ordered Wesley to pay half of all annuity payments to her.    

Wesley appealed, and in Wesley McDivitt v. Sue McDivitt, 79A02-1501-DR-29, the Court of Appeals reversed the ruling.

The unanimous panel did not agree with the finding that Sue was a co-annuitant. The judges noted on the severance agreement, she is listed as a beneficiary and the space where a co-annuitant could be identified is blank.

In addition, the checks under the annuity were made payable to Wesley alone and a letter from the plan administrator clearly stated Sue is the designated beneficiary who will receive benefits after Wesley’s death.

The Court of Appeals could not conclude that the McDivitts believed that Sue had acquired an ownership interest in annuity payments made to Wesley during his lifetime.   
 

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