CourtListener opinion 4355161

Evidence quotes

Clean opinion text

2018 IL App (1st) 172135

 SIXTH DIVISION
 DECEMBER 28, 2018

No. 1-17-2135

ISOBEL A. HEBERT, Executor of the Estate of ) Appeal from the
P. Kevin Cunningham, ) Circuit Court of
 ) Cook County.
 Plaintiff-Appellee, )
v. ) No. 14 P 3107
 )
BETTY CUNNINGHAM, ) Honorable
 ) Pamela M. Meyerson,
 Defendant-Appellant. ) Judge Presiding.

 JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion.
 Presiding Justice Delort and Justice Connors concurred in the judgment, with opinion.

 OPINION

¶1 Isobel A. Hebert (executor), as executor of the estate of P. Kevin Cunningham (the

decedent), filed a complaint in the circuit court of Cook County against defendant-appellant

Betty Cunningham (Betty), seeking a declaratory judgment regarding funds from the decedent's

401(k) retirement account. Following cross-motions for summary judgment, the trial court

entered judgment in favor of the executor and against Betty. For the following reasons, we affirm

the judgment of the circuit court of Cook County.

¶2 BACKGROUND

¶3 The decedent and Betty were married in 1981. During and after the marriage, the

decedent was employed by Loparex LLC (Loparex). The decedent participated in the Loparex

401(k) Plan and had an account under that plan (the 401(k) account). On a "Designation of

Beneficiary Form," executed in November 1998, the decedent indicated that he was married to
 1-17-2135

Betty and named her as the primary beneficiary to the 401(k) account. Fidelity Management

Trust Company (FMTC) was the designated trustee of the 401(k) plan.

¶4 In November 2003, the decedent and Betty's marriage was dissolved, pursuant to a

judgment for dissolution of marriage entered by the circuit court of Cook County. That judgment

incorporated a marital settlement agreement dated November 12, 2003 (the divorce decree)

signed by the decedent and Betty. The divorce decree recites that Betty was represented by an

attorney, but that the decedent had "chosen to represent himself" in the divorce.

¶5 Paragraph 5 of the divorce decree provided:

 "The parties agree that they have interests in several different

 retirement assets. The parties agree that each party shall retain sole

 ownership of their separate retirement assets, free and clear from

 any claim by the other party, as follows: The Wife [Betty] shall

 retain sole ownership of her IRA at Invesco and her 401(k) account

 ****. The Husband [the decedent] shall retain sole ownership of

 his IRA at Invesco and his 401(k) account at Fidelity. Each party

 warrants and represents that neither he nor she has any other

 interest in any other pension, IRA, 401(k) ESOP, or other

 retirement plan, except as may be specified above."

¶6 The divorce decree subsequently stated that:

 "Except as otherwise provided herein, each of the parties hereto

 does hereby forever relinquish, release, waive, and quitclaim to the

 other party hereto all property rights and claims which he or she

 now has or may hereafter have, as husband, wife, widow, widower

 2

 1-17-2135

 or otherwise, or by reason of the marital relations now existing

 between the parties hereto or by virtue of any present or future law

 of any state or of the United States of America or any other

 country, in or to or against the property of the other party or his or

 her estate, whether now owned or hereafter acquired by such other

 party. Each of the parties hereto further covenants and agrees for

 himself and herself and his or her heirs, executors, administrators

 and assigns, that he or she will never at any time hereafter sue the

 other party or his or her heirs, executors, administrators and

 assigns, for the purpose of enforcing any of the rights relinquished

 under this paragraph."

¶7 The decedent died in March 2014. The decedent never executed a document changing the

designation of Betty as the beneficiary to the 401(k) account.

¶8 At the time of his death, the decedent had a "Last Will and Testament" dated December

1, 2013 (the will). In July 2014, the probate division of the circuit court of Cook County admitted

the will to probate and appointed the executor.

¶9 In August 2014, the executor informed Fidelity Brokerage Service LLC that the 401(k)

account should pass to the decedent's estate (the estate), rather than to Betty. Loparex, as the

401(k) plan administrator, and FMTC, as trustee for the 401(k) account, determined that the

estate was the proper beneficiary of the 401(k) account and caused the transfer of the 401(k)

funds to a separate account for the benefit of the estate.

¶ 10 On October 16, 2014, Betty filed a complaint for declaratory judgment as a supplemental

proceeding in the decedent's probate case, alleging that she was the rightful beneficiary and was

 3

 1-17-2135

entitled to receive the funds from the 401(k) account. Loparex, as plan administrator,

subsequently removed Betty's declaratory judgment action to the United States District Court for

the Northern District of Illinois (the federal court). Loparex also filed an interpleader

counterclaim in the federal court with respect to the 401(k) account. The executor filed an

answer and counterclaim in the interpleader action, alleging that the estate was the proper

beneficiary of the 401(k) plan under the federal Employee Retirement Income Security Act of

1974 (ERISA), 29 U.S.C. § 1001 et seq. In addition, the executor also asserted state law claims

against Betty, alleging breach of the divorce decree and seeking the imposition of a constructive

trust for the benefit of the estate. The funds from the 401(k) account were deposited with the

clerk of the federal court, subject to further order of that court.

¶ 11 The executor and Betty filed cross-motions for summary judgment in the federal action.

The executor argued that, under ERISA, the divorce decree constituted a "qualified domestic

relations order" (QDRO) 1, such that the estate, rather than Betty, was the proper beneficiary of

the proceeds of the 401(k) account. Alternatively, the executor argued that, even if the divorce

decree was not a QDRO under ERISA, Betty could only receive the funds in the 401(k) account

as a constructive trustee for the benefit of the estate. Betty's cross-motion argued that the divorce

decree did not satisfy the requirements of a QDRO under ERISA, such that she remained the

proper beneficiary of the 401(k) account, and that there was no basis to impose a constructive

trust in favor of the estate.

 1
 Under section 1056 (d) of the ERISA statute, benefits under a pension plan may not be assigned
or alienated by a domestic relations order unless "the order is determined to be a qualified domestic
relations order." 29 U.S.C. § 1056(d)(1), (3)(A). Section 1056(d)(3) sets forth the requirements for
"qualified domestic relations order," including that it must "create[] or recognize the existence of an
alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the
benefits payable with respect to a participant under a plan." 29 U.S.C. § 1056 (d)(3)(B)(i)(I).

 4

 1-17-2135

¶ 12 On November 1, 2016, the federal court entered an order in which it agreed that Betty

was the rightful beneficiary under ERISA, but specifically declined to address the executor's

claim for relief under state law. Cunningham v. Hebert, No. 9292, 2016 WL 6442180 (N.D. Ill.

Nov. 1, 2016). The first portion of the federal court's order discussed "Who the Rightful

Beneficiary of the 401(k) Plan is Under ERISA." The federal court recognized that under

ERISA, benefits may only be assigned or alienated through a QDRO, and that, "[t]o qualify as a

QDRO, a divorce decree must *** ‘create[] or recognize[] the existence of an alternate payee's

right to *** receive all or a portion of the benefits payable" under a plan. U.S.C. § 1056(d)(1),

(3)(B)(i)(I).

¶ 13 The federal court rejected the executor's contention that the decedent could qualify as an

"alternate payee," finding that the decedent was not within the statutory definition of that term.

See 29 U.S.C. § 1056(d)(3)(k) (defining "alternate payee" to mean "any spouse, former spouse,

child, or other dependent of a participant who is recognized by a domestic relations order as

having a right to receive all, or a portion of, the benefits payable under a plan with respect to

such participant"). Because the divorce decree did not designate an "alternate payee," the federal

court concluded that it did not constitute a QDRO for purposes of the ERISA statute.

¶ 14 In turn, the federal court concluded that the decedent's original designation naming Betty

as the beneficiary of the 401(k) account, was unaffected by the divorce decree. The federal court

also cited the United States Supreme Court's holding in Kennedy v. Plan Administrator for

DuPont Savings and Investment Plan, 555 U.S. 285 (2009), for the proposition that a waiver

contained in a non-QDRO divorce decree should be disregarded, if it conflicts with the

beneficiary designation set forth in ERISA plan documents. The federal court noted that "here, as

in Kennedy, the divorce decree is inconsistent" with the form designating Betty as the

 5

 1-17-2135

beneficiary of the 401(k). In turn, the federal court ruled that, under ERISA, "the funds from the

401(k) account should have been distributed to Betty."

¶ 15 Significant for purposes of this appeal, the federal court proceeded to note the executor's

alternative contention that, even if Betty was the proper beneficiary under ERISA, she "may only

hold the proceeds as constructive trustee for the benefit of the estate because claiming the 401(k)

fund is a violation of the divorce decree ***." The federal court noted that the United States

Supreme Court's decision in Kennedy "left open the question whether a common law waiver has

any effect on what should happen after the funds are distributed to the designated beneficiary."

The federal court recognized that the issue had since been "resolved in this circuit by N.L.R.B. v.

HH3 Trucking, Inc., 755 F.3d 468, 470-71 (7th Cir. 2014), holding that plan benefits, once paid

to the beneficiary, are subject to legal process such as attachment or garnishment."

¶ 16 The federal court proceeded to conclude that it would be more appropriate for the circuit

court of Cook County to determine whether, as a matter of state law, Betty was entitled to retain

the funds: "Although this court may assume supplemental jurisdiction of the Executor's request

for imposition of a constructive trust, whether Betty has violated a decree entered in the Circuit

Court of Cook County and if so what the consequence should be is not something this court

should decide." Therefore, having decided the federal ERISA question, the federal court

dismissed the executor's claim for breach of the divorce decree "without prejudice to refiling in

the Circuit Court of Cook County."

¶ 17 As suggested by the federal court's order, on November 15, 2016, the executor filed a

"Complaint in Supplemental Proceedings for Declaratory Judgment and Other Relief" in the

circuit court of Cook County (circuit court). The complaint contained two counts: a count for

declaratory judgment (count 1) and a count for breach of the divorce decree (count 2). Both

 6

 1-17-2135

counts were premised on allegations that, under the divorce decree, Betty's beneficial interest in

the 401(k) account was "assigned, relinquished, waived, released, quitclaimed and/or

disclaimed" to the decedent's estate, that the estate "retained sole ownership, property rights and

interest in the 401(k) Funds," and that Betty was "estopped from claiming any beneficial interest

in the 401(k) funds."

¶ 18 Count 1 alleged that, to prevent Betty's unjust enrichment, she could "only act as

constructive trustee" for the benefit of the estate. Count 1 thus sought an order "declaring and

imposing a constructive trust on the 401(k) funds" and ordering Betty to transfer the funds to the

estate. Count 2 pleaded that any transfer of the 401(k) funds to Betty, or her use of the funds,

would constitute a breach of the divorce decree. Count 2 sought a judgment against Betty "in the

amount of the 401(k) funds" and, like count 1, also sought an order declaring a constructive trust,

and directing Betty to turn over the 401(k) funds to the estate.

¶ 19 On January 19, 2017, the circuit court entered an order prohibiting disbursement of the

401(k) funds pending its determination of the parties' rights. On January 31, 2017, the parties

filed a Joint and Stipulated Statement of Undisputed Material Facts and Documents. The

executor and Betty subsequently filed cross-motions for summary judgment.

¶ 20 The executor's motion for summary judgment argued that the decedent's and Betty's

"intentions as to their respective retirement assets are unequivocal and self-evident in the

Divorce Decree." The executor asserted that the divorce decree was a binding contract, in which

Betty "relinquished, released and waived" any interest in the 401(k) account. Alternatively, the

executor argued that entry of the divorce decree "automatically revoked" Betty's status as the

beneficiary of the 401(k) account, by operation of the Illinois Trusts and Dissolutions of

 7

 1-17-2135

Marriage Act (TDMA) 2. Thus, the executor argued that Betty could not retain the 401(k) funds

"other than [as] constructive trustee for the benefit of the Estate."

¶ 21 Betty's motion for summary judgment first argued that count 1 of the executor's

complaint was barred by the doctrine of res judicata, because the federal court had already

"ruled that Betty *** was entitled to the 401(k) proceeds." Betty additionally urged that

summary judgment in her favor was mandated by ERISA and the United States Supreme Court's

decision in Engelhoff v. Engelhoff, 532 U.S. 141 (2001) (holding that ERISA pre-empted a

Washington statute providing that a divorce automatically revoked a prior designation of a

spouse as the beneficiary). Betty asserted that, under Engelhoff, she was entitled to summary

judgment because she was the last named beneficiary to the 401(k) account.

¶ 22 With respect to count 2 of the executor's complaint, Betty's motion argued that the

divorce decree could not waive her interest in the 401(k) plan under ERISA, citing Kennedy v.

Plan Administrator for DuPont Savings & Investment Plan, 555 U.S. 285 (2009). Betty

otherwise argued that the language of the divorce decree was insufficient to waive her interest in

the 401(k), as the divorce decree contained only "generic waivers," but neither she or the

decedent "specifically waive[d] their interest in specific assets or agree[d] to terminate their

interests as a beneficiary." Betty's motion otherwise claimed that it was evident that the decedent

intended for Betty "to remain as the rightful beneficiary," because he did not change the

 2
 The TDMA provides, in relevant part: "Unless the governing instrument or the
judgment of judicial termination of marriage expressly provides otherwise, judicial termination
of the marriage of the settlor of a trust revokes every provision which is revocable by the settlor
pertaining to the settlor's former spouse in a trust instrument or amendment thereto executed by
the settlor before the entry of the judgment of judicial termination of the settlor's marriage, and
any such trust shall be administered and construed as if the settlor's former spouse had died upon
entry of the judgment of judicial termination of the settlor's marriage." 760 ILCS 35/1(a) (West
2016).
 8

 1-17-2135

beneficiary designation for the 401(k) after the divorce. Betty and the executor subsequently

filed responses to each other's cross-motions for summary judgment, as well as reply briefs.

¶ 23 On July 25, 2017, the circuit court entered an order in which it granted the executor's

motion for summary judgment and denied Betty's motion. The court first rejected Betty's claim

that res judicata barred count 1 of the executor's complaint. The circuit court recognized that the

federal court had decided only "the ERISA issue," but that the federal court "specifically

declined to assume supplemental jurisdiction over the state claims, including the Executor's

counterclaim for a declaratory judgment." Thus, the circuit court found there had been "no final

judgment on the merits of the declaratory action," and so res judicata did not apply.

¶ 24 Next, the circuit court agreed with the executor's contention that the TDMA

automatically revoked Betty's beneficial interest. The court found that the "401(k) plan

documents *** make clear that the 401(k) in this case is a trust" that was governed by the

TDMA. The court concluded that, under section 35/1 of the TDMA (760 ILCS 35/1 (West

2016)) Betty's interest in the 401(k) "was automatically extinguished upon entry of the Divorce

Decree."

¶ 25 As an independent basis for ruling in favor of the executor, the circuit court additionally

found that, "even if Betty's interest had not been automatically extinguished under the TDMA,

her interest was extinguished by the clear and specific terms of the Divorce Decree." The court

reasoned:

 "[t]he Divorce Decree clearly expressed Betty's intent to waive

 any interest in the Loparex 401(k). Both Betty and [the decedent]

 held separate retirement accounts during their marriage. The

 Divorce Decree specifically listed each account and provided that

 9

 1-17-2135

 each party would keep his or her own accounts. As part of this

 provision, the Divorce Decree listed [the decedent's] interest in

 ‘his 401(k) account at Fidelity,' specifically provided that [the

 decedent] shall ‘retain sole ownership' of his separate retirement

 assets ‘free and clear of any claim' by Betty, and contained waiver

 and release language. Therefore, Betty's interest in the Loparex

 401(k) was extinguished upon entry of the Divorce Decree."

¶ 26 On these grounds, the circuit court found that "Betty's interest in the Loparex 401(k) was

extinguished," imposed a constructive trust on the 401(k) funds, and ordered Betty to turn the

funds over to the executor. The circuit court specified that this determination was a final and

appealable order.

¶ 27 On August 23, 2017, Betty filed a timely notice of appeal. Accordingly, we have

jurisdiction. Ill. S. Ct. R. 303(a) (eff. July 1, 2017).

¶ 28 ANALYSIS

¶ 29 On appeal, Betty asserts three lines of argument challenging the circuit court's grant of

summary judgment to the executor. First, she contends that count 1 of the executor's complaint

was barred by operation of res judicata. Second, she claims that the court erred in finding that

the TDMA operated to extinguish her interest in the 401(k) account. Third, she disputes the

circuit court's independent conclusion that her interest in the 401(k) account was waived or

otherwise extinguished by the terms of the divorce decree.

¶ 30 We first reject Betty's claim that res judicata barred the executor's request for a

declaratory judgment in count 1. Betty explicitly limits her res judicata argument to count 1; she

does not suggest that count 2 was barred, as she recognizes that the federal court's order

 10 

 1-17-2135

specified that the executor could assert a claim for breach of the divorce decree in state court.

Betty states that res judicata applies to count 1 because "the claims asserted in the previous

declaratory judgment action [in federal court] and the current Declaratory Judgment Action arise

from a single group of operative facts." She urges that, since the federal court "denied [the

executor's] request for declaratory relief," the executor could not make a similar claim for

declaratory relief in the circuit court.

¶ 31 "The doctrine of res judicata provides that a final judgment on the merits rendered by a

court of competent jurisdiction bars any subsequent action between the same parties or their

privies on the same cause of action. [Citation.] Res judicata bars not only what was actually

decided in the first action but also whatever could have been decided. [Citation.] Three

requirements must be satisfied for res judicata to apply: (1) a final judgment on the merits has

been rendered by a court of competent jurisdiction; (2) an identity of cause of action exists; and

(3) the parties or their privies are identical in both actions. [Citation.]" Hudson v. City of

Chicago, 228 Ill. 2d 462, 467 (2008).

¶ 32 Illinois courts have held that, when a federal court declines to exercise supplemental

jurisdiction over state-law claims, res judicata will not apply to bar subsequent litigation of a

state-law claim in state court. Novak v. St. Rita High School, 197 Ill. 2d 381, 393-94 (2001)

("[b]y declining jurisdiction over the plaintiff's pendent state claim *** the district court in effect

reserved plaintiff's right to pursue the matter in state court."); Schandelmeier-Bartels v. Chicago

Park District, 2015 IL App (1st) 133356, ¶¶ 28-31 (federal court's decision not to exercise

supplemental jurisdiction over state-law claim did not implicate res judicata).

¶ 33 In this case, the federal court decided a single issue of federal law to conclude that, under

ERISA, Betty was entitled to distribution of the 401(k) account by the plan administrator.

 11 

 1-17-2135

However, the federal court expressly declined to decide the executor's claim that, as a matter of

state law, it was unjust for Betty to retain the 401(k) funds after their initial distribution. Indeed,

the federal court expressly indicated that the executor could re-file an action in the circuit court

of Cook County to pursue the 401(k) funds under state law. Accordingly, we do not find that the

federal court's order was a "final judgment on the merits" that could support application of res

judicata. 3

¶ 34 Having rejected her res judicata argument, we turn to address Betty's challenges to the

circuit court's independent conclusions that (1) pursuant to the TDMA, her interest in the 401(k)

was extinguished upon her divorce, and that (2) in any event, Betty waived her interest in the

401(k) under the explicit terms of the divorce decree. Significantly, the circuit court indicated

that these were independent, alternative grounds for granting summary judgment to the executor.

At oral argument, Betty's counsel conceded that, regardless of the propriety of the trial court's

holding regarding the TDMA, we may affirm the trial court, if we agree that the divorce decree

constituted an explicit waiver of her interest in the 401(k) account.

¶ 35 With respect to the trial court's holding regarding the TDMA, Betty's sole argument in

her opening appellate brief is that "ERISA supercedes and pre-empts" the TDMA, relying on

Engelhoff v. Engelhoff, 532 U.S. 141 (2001). The executor's brief responds that (1) Betty has

"waived" her TDMA argument and (2) in any event, the trial court properly held that the TDMA

operated to extinguish her interest in the 401(k). The executor contends that Illinois courts have

previously applied the TDMA to retirement accounts, relying primarily upon In re Estate of

 3
 Moreover, we note that both counts of the executor's complaint requested the same
relief, including imposition of a constructive trust and an order directing Betty to turn over the
401(k) funds to the decedent's estate. Thus, even if we were to agree with Betty that count 1 was
somehow barred by res judicata, it would not preclude the trial court from granting the same
relief under count 2.

 12 

 1-17-2135

Davis, 225 Ill. App. 3d 998 (1992). That decision held that a decedent's pre-dissolution

designation of his wife as the beneficiary of his individual retirement account (IRA) was revoked

pursuant to the TDMA upon the judicial termination of the marriage. Id. at 1004. Davis further

held that, as the decedent "must be charged with the knowledge that the IRA trust agreement was

to be construed in accordance with Illinois law," his failure to redesignate his former spouse as

beneficiary after the divorce "must be viewed as an intent not to renew that beneficiary

designation." (Emphasis in original.) Id. at 1005. In her reply brief and at oral argument, Betty

disputed the applicability of Davis' holding regarding an IRA, to the 401(k) account at issue in

this case.

¶ 36 However, we determine that we need not decide the applicability of the TDMA to resolve

this appeal. First, we note that Betty did not raise her preemption argument in the circuit court.

Although the executor's motion cited the TDMA as a basis for granting summary judgment in its

favor, Betty's responding arguments in the circuit court never claimed that the TDMA was

preempted by ERISA. Rather, her circuit court responses only argued that the TDMA did not

apply because the "401(k) proceeds were not held in trust."

¶ 37 "Generally, arguments not raised before the circuit court are forfeited and cannot be

raised for the first time on appeal. [Citation.]" Mabry v. Boler, 2012 IL App (1st) 111464, ¶ 15.

"This court may deem any arguments not raised in the trial court as waived or forfeit[ed] on

appeal." Sheth v. SAB Tool Supply Co., 2013 IL App (1st) 110156, ¶ 59. We conclude that

Betty's preemption argument regarding the TDMA is forfeited. 4

 4
 In light of our conclusion that Betty's preemption argument is forfeited, we need not reach the
executor's contentions that the preemption argument is otherwise barred by the doctrines of law of the
case and collateral estoppel.

 13 

 1-17-2135

¶ 38 Further, we need not decide whether the TDMA applies to the 401(k) account at issue in

this case. This is because the circuit court additionally determined that—wholly apart from

operation of the TDMA—the terms of the divorce decree waived Betty's interest in the 401(k).

As set forth below, we agree with the circuit court's conclusion on that issue, which

independently supports its judgment in favor of the executor.

¶ 39 In challenging the circuit court's conclusion that her interest in the 401(k) account was

extinguished by the waiver language of the divorce decree, Betty first suggests that the issue is

governed by the United States Supreme Court's decision in Kennedy, 555 U.S. 285 (2009). Betty

also cites three decisions from our court, each of which is at least 27 years old, to argue that the

divorce decree did not extinguish her interest in the 401(k). See Leahy v. Leahy-Schuett, 211 Ill.

App. 3d 394 (1991); Williams v. Gatling, 186 Ill. App. 3d 21 (1989); O'Toole v. Central

Laborers' Pension & Welfare Funds, 12 Ill. App. 3d 995 (1973). Betty otherwise claims "there is

no provision in the [divorce decree] that terminates [her] beneficial interest in any of decedent's

assets." Betty recognizes that "[a]n expectancy interest may be terminated by a divorce decree"

if there is a "clear expression of the spouse's surrender of that interest," yet she claims that, in

this case, she "did not waive or surrender her interest in the 401k proceeds." For the following

reasons, we reject her arguments and find that the divorce decree's explicit waiver terminated her

interest in the decedent's 401(k) account.

¶ 40 First, we find that Betty's reliance on Kennedy is misplaced. Kennedy held that, to

comply with ERISA, a plan administrator must abide by the plan documents and distribute

pension benefits to the former spouse who is named as the decedent's beneficiary, even when the

former spouse "purported to waive her entitlement by a federal common law waiver embodied in

a divorce decree that was not a QDRO." Kennedy, 555 U.S. at 288. In that case, the United States

 14 

 1-17-2135

Supreme Court held that the "plan administrator did its statutory ERISA duty by paying the

benefits to [decedent's former spouse] in conformity with the plan documents," notwithstanding

the divorce decree. Id. at 299-300.

¶ 41 However, Kennedy expressly did not determine whether a named beneficiary is

necessarily entitled to retain the proceeds after their initial distribution by an ERISA plan

administrator, or if another party may still assert a claim to the proceeds on other grounds.

Indeed, in a footnote, the United States Supreme Court declined to "express any view as to

whether the Estate could have brought an action in state or federal court against [decedent's

former spouse] to obtain the benefits after they were distributed." Id. at 299 n. 10. Similarly, in

this case, the federal court's order recognized that: "Kennedy left open the question whether a

common law waiver has any effect on what should happen after the funds are distributed to the

designated beneficiary."

¶ 42 Accordingly, in this case, the federal court applied Kennedy when it determined that

Betty was the rightful beneficiary pursuant to ERISA. However, also consistent with Kennedy,

the federal court declined to address whether Betty was entitled to retain the 401(k) funds

pursuant to the divorce decree, and explicitly permitted the executor to pursue its state law

claims in the circuit court of Cook County. Thus, Kennedy did not preclude the executor from

claiming a breach of the divorce decree to seek recovery of the 401(k) funds for the estate.

¶ 43 Having rejected Betty's reliance on Kennedy, we turn to her contention that the divorce

decree did not contain a "clear expression" of her intent to waive any interest in the 401(k)

account. This issue is essentially one of contractual interpretation. "It is well settled that the rules

of contract construction are applicable to the interpretation of a marital settlement agreement and

that a court's primary objective is to give effect to the intent of the parties. [Citation.] Where the

 15 

 1-17-2135

language of the agreement is clear and its meaning is unambiguous, intent must be determined 

solely from the agreement's language and courts must give that language such effect.

[Citation.]" In re Marriage of Farrell and Howe, 2017 IL App (1st) 170611, ¶ 12. "This court

reviews a circuit court's interpretation of a marital settlement agreement de novo." Id.

¶ 44 Our court has articulated a two-part inquiry to assess the enforceability of a divorce

decree provision that purports to waive an expectancy interest in an asset:

 "A dissolution agreement may extinguish a divorced spouse's

 expectancy interest *** if the agreement includes a clear

 expression of the spouse's waiver of that interest. [Citations.] To

 determine the effect of a waiver, two factors must be considered:

 (1) whether the asset in dispute was specifically listed as a marital

 asset and awarded to a spouse; and (2) whether the waiver

 provision contained in the settlement agreement specifically states

 that the parties are waiving any expectancy or beneficial interest in

 that asset. [Citations.] This court's review of the interpretation of a

 waiver provision included in a contractual agreement is de novo."

 In re Marriage of Velasquez, 295 Ill. App. 3d 350, 353 (1998).

¶ 45 Although the assets at issue in Velasquez (a land trust and insurance proceeds) were

different in nature from the 401(k) account in this case, we find that that two-factor inquiry

outlined in that decision is applicable. The first part of that inquiry is clearly satisfied here, as the

401(k) account was explicitly awarded to the decedent. The divorce decree specified that "each

party shall retain sole ownership of their separate retirement assets free and clear from any claim

 16 

 1-17-2135

by the other party," including that decedent "shall retain sole ownership of his *** 401(k)

account at Fidelity."

¶ 46 We next consider the second part of the inquiry—whether the divorce decree

"specifically states that the parties are waiving any expectancy or beneficial interest" in the

disputed asset. Velasquez, 295 Ill. App. 3d at 353. We recognize that the waiver language in the

divorce decree does not contain the exact terms "expectancy" or "beneficial." Nevertheless, as

our primary concern is to discern the parties' intent, we find that the divorce decree's waiver

provision is unambiguously broad and prospective, encompassing all future as well as present

property rights: "[E]ach of the parties hereto does hereby forever relinquish, release, waive, and

quitclaim to the other party all property rights and claims which he or she now has or may

hereafter have *** in or to or against the property of the other party or his or her estate, whether

now owned or hereafter acquired by such other party." (Emphasis added.)

¶ 47 Notably, we enforced similarly broad waiver language in Robson v. Electrical

Contractors Ass'n Local 134 IBEW Joint Pension Trust of Chicago, 312 Ill. App. 3d 374 (1999),

a dispute regarding a decedent's pension trust for which the decedent's ex-wife (Nancy) was

named the beneficiary during the marriage. Id. at 376. Upon the divorce, Nancy's counsel

prepared a marital dissolution judgment stating that the marital portion of the pension would be

divided equally between the former spouses. Id. The dissolution judgment included a provision

that specified:

 " ‘ Each of the parties' rights and claims with regard to dower,

 homestead and all other property rights and claims which they may

 have or hereafter have, as husband, wife, widower, widow, or

 otherwise, by reason of the marital relationship *** in and to, or

 17 

 1-17-2135

 against the property of the other or his or her estate, whether now

 owned or hereafter acquired by such other party is terminated.' "

 Id. at 377.

The dissolution judgment further called for entry of a "Qualified Domestic Relations Order

(QDRO)" that "establishe[d] Nancy's one-half interest in the marital portion" of the pension. Id.

Following the decedent's death, Nancy filed a complaint seeking a declaration that she was the

owner of all the pension benefits. The trial court granted summary judgment in Nancy's favor,

finding that the dissolution judgment and QDRO "had not effectuated ‘a sufficiently clear

surrender of' " decedent's death benefits. Id. at 379.

¶ 48 On appeal, our court reversed, finding that Nancy was "not entitled to any survivorship

rights in the 50% of [decedent]'s pension benefits held in trust for him." Id. at 381. We noted

that the dissolution judgment specified an equal division of the marital portion of the pension,

such that the decedent became the owner of 50% of the pension trust benefits. Id. at 382. We also

stated that: "in straightforward, express terms, the dissolution judgment terminated ‘all property

rights and claims which [decedent and Nancy] may have or hereafter have *** in or to or against

the property of the other or his or her estate ***.'" Id. (noting that the "waiver provision,

although not specifically mentioning the pension trust, does specifically reference the property

owned by each party." (Emphasis in original)). After further noting that the terms should be

"construed most strictly against the wife" because they were drafted by her counsel, we

concluded that there was "a specific termination of Nancy's rights and claims, survivorship or

otherwise, in the remaining one-half portion of [decedent's] pension trust." Id. at 382-83.

¶ 49 In her reply brief and at oral argument, Betty noted factual differences between Robson

and the instant case, namely: (1) a QDRO was entered in Robson, whereas the federal court in

 18 

 1-17-2135

this case determined that the divorce decree was not a QDRO, and (2) the disputed asset at issue

in Robson was not a 401(k) account. However, we conclude that those factual distinctions do not

bear upon the relevant issues of the construction and enforceability of the waiver provision. In

that regard, we find Robson to be instructive. 5

¶ 50 Similar to Robson, the divorce decree in this case stated, in clear and unequivocal terms,

that Betty and the decedent "forever relinquish[ed], release[d], waive[d], and quitclaim[ed] ***

all property rights and claims which he or she now has or may hereafter have *** in or to or

against the property of the other party or his or her estate, whether now owned or hereafter

acquired by such other party." We find that this broad waiver language unequivocally

encompassed all property rights of any nature, including the beneficial property interest in the

401(k) at issue in this case. Indeed, it is hard to imagine how the waiver could have been worded

more broadly.

¶ 51 At oral argument, Betty's counsel was asked to explain her position that the divorce

decree's language was insufficiently specific to waive the property interest at issue in this case.

That is, counsel was asked to articulate what other wording could have been included to

encompass the beneficial interest in the 401(k) account at issue. Betty's counsel suggested that

the divorce decree should have additionally specified that the former spouses waived their

"beneficial interests" in each other's property, had they intended to waive such property rights.

¶ 52 We reject Betty's suggestion that more specific language was necessary in order for the

divorce decree's waiver to apply to her interest in the 401(k) account. Such language would be

superfluous, given the undeniably broad waiver language already contained in the divorce
 5
 The three additional decisions cited by Betty to dispute the efficacy of the divorce
decree waiver predate both Velasquez and Robson, and we find them to be non-controlling. See
Williams v. Gatling, 186 Ill. App. 3d 21 (1989); Leahy v. Leahy-Schuett, 211 Ill. App. 3d 394
(1991); O'Toole v. Central Laborers' Pension & Welfare Funds, 12 Ill. App. 3d 995 (1973).

 19 

 1-17-2135

decree. The divorce decree waived "all property rights and claims which [Betty and the

decedent] now ha[ve] or may hereafter have." (Emphasis added.) These terms are indisputably

broad on their face, and we are bound to accord them their plain meaning. The use of the term

"all," especially combined with the prospective phrase "may hereafter have," undoubtedly

encompasses all types of property rights that may come into existence; this necessarily includes

beneficial or expectancy property interests.

¶ 53 In light of this overwhelmingly broad language, we reject Betty's suggestion that the

divorce decree was insufficiently specific to waive beneficial interests. Rather, we find that the

divorce decree unambiguously expressed the parties' intent to waive all present and future

interests in each others' property, including Betty's interest in the decedent's 401(k) account. 6

Moreover, this conclusion is entirely consistent with the divorce decree's earlier statements that

the decedent and Betty "shall retain sole ownership of their separate retirement assets, free and

clear from any claim by the other party" and that the decedent "shall retain sole ownership" of

the 401(k) account.

¶ 54 Based on the clear and explicit waiver language of the divorce decree, we agree with the

trial court that it terminated Betty's interest in the 401(k) account proceeds, independent of

ERISA or the TDMA. Upon that sole contractual basis, we affirm the judgment of the circuit

court of Cook County. We reiterate that our holding is narrow and limited, as discussed. We

need not, and we do not, decide the additional questions regarding application of the TDMA and

ERISA that were briefed and argued. We simply hold that, under the explicit language of the
 6
 Although we find that the waiver is explicit on its face, we also note that, similar to
Robson, the divorce decree in this case reflects that it was drafted by Betty's counsel, whereas
the decedent was unrepresented. Thus, its terms are construed strictly against Betty. Robson, 312
Ill. App. 3d at 383 ("when a dissolution judgment is drafted by the wife's counsel and the
husband is unrepresented, as here, the terms of the dissolution judgment are to be construed most
strictly against the wife.").

 20 

 1-17-2135

divorce decree, Betty waived her interest in the 401(k) account. On this basis, we agree with the

trial court that the executor was entitled to summary judgment, and that Betty's cross-motion

was properly denied. For the foregoing reasons, we affirm the judgment of the circuit court of

Cook County.

¶ 55 Affirmed.

 21