When TN Wife Agreed to Specific Dollar Amount from 401(k), Subsequent Gains and Losses Were Excluded

Tennessee case summary on interpretation of settlement terms in divorce.

Angela Marie Heisig v. Andrew Carl Heisig

The use of a specific sum “unambiguously means subsequent market gains or losses have no relevance to Wife’s award.”

The husband and wife in this Hamilton County, Tennessee, case were divorced in 2018, and the trial court, Judge Kyle E. Hedrick, awarded the wife $130,000 from the husband’s 401(k).  The court directed the wife to prepare a Qualified Domestic Relations Order (QDRO) putting that provision into effect.

The wife’s attorney drafted the order, which specified that the wife was not entitled to earnings on the $130,000 subsequent to the date of divorce.  But a third draft of the order called for the wife to receive any gains (or losses) after the final decree.  The husband objected, and the parties asked the court to decide the issue.  The husband also submitted a proposed QDRO, which did not allow the wife gains or losses on the $130,000.  The trial court approved the husband’s proposed order.  The wife objected, and argued that she should receive interest and earnings on the amount from the date of the decree.

The trial court granted the motion in part, and granted the wife interest on the $130,000, but not the earnings.  After some further proceedings, the wife appealed to the Tennessee Court of Appeals.

The appeals court noted that this was a settlement agreement to be approved, and thus the case amounted to the interpretation of a contract.  It pointed out that the agreement was to provide a specific sum, namely the $130,000, with the husband to receive the “remaining balance.”  The appeals court held that this language was unambiguous, despite the fact that the account had increased in value.  It noted that the use of a specific sum “unambiguously means subsequent market gains or losses have no relevance to Wife’s award.”  It also noted that this was to the wife’s benefit, since she avoided the risk of loss, and she received the “comfort and security” of avoiding this risk.

For these reasons, the Court of Appeals affirmed the lower court’s judgment.  It also assessed the costs of appeal upon the wife.  The opinion of the Court of Appeals was authored by Judge John W. McClarty, and Judges Thomas R. Frierson, II, and Kristi M. Davis joined.

No. E2021-00925-COA-R3-CV (Tenn. Ct. App. Nov. 29, 2022).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Property Division in Tennessee Divorce and view our video Is Tennessee a 50 50 divorce state?