Constructive trust in favor of first spouse imposed.

• Date: 30 October 2002

Byline: Deborah Fauver

A constructive trust, in favor of a first wife on surviving spouse benefits already paid to a second wife, was imposed by a unanimous panel of the Wisconsin Court of Appeals last week, reversing a circuit court money judgment in favor of the first wife.

The opinion details the law of constructive trusts and also highlights the importance of the 1998 Wisconsin statute allowing divorcing parties to execute Qualified Domestic Relations Orders (QDRO), which are backed by federal law, and which pension plan administrators must accept.

In the Oct. 23 decision, the first wife, Mary Sulzer, had obtained three court orders in the mid 1990s directing a division of her ex-husband's pension benefits, but the plans administering those benefits had refused to recognize the orders.

If the 1998 QDRO law been in effect, and had Sulzer been able to file a QDRO with the plan administrators, she would have been able to save some six years of legal wrangling over her share of the pension benefits, according to her attorney, Steven Jelenchick, an associate of Sulzer's lead counsel, C. Michael Hausman, of Delafield.

The court's willingness to impose a constructive trust is good news for Sulzer, and for other ex-spouses whose divorce decrees predate the 1998 law (which is retroactive to 1990), or who might have other types of claims that are rejected by plan administrators, according to Jelenchick.

Sulzer...