Note: We are crunching Supreme Court of Wisconsin decisions down to size. The rule for this is that no justice gets more than 10 paragraphs as written in the actual decision. The "upshot" and "background" sections do not count as part of the 10 paragraphs because of their summary and very necessary nature. We've also removed citations from the opinion for ease of reading, but have linked to important cases cited or information about them. Italics indicate WJI insertions except for case names, which also are italicized.
The case: Kathy Schwab v. Paul Schwab
Majority: Justice Rebecca F. Dallet (12 pages), joined by Justices Ann Walsh Bradley, Jill J. Karofsky, and Patience D. Roggensack.
Dissent: Justice Annette K. Ziegler (11 pages), joined by Justices Rebecca Grassl Bradley and Brian Hagedorn.
Dissent: Grassl Bradley (8 pages)
Kathy Siech and Paul Schwab divorced in 1992. As part of the divorce judgment, the circuit court incorporated their marital settlement agreement, in which Paul promised to pay Kathy half of his pension "when and if" that benefit first became available to him. But when Paul first received his pension nearly 21 years later, he refused to pay Kathy her share. Kathy sought to judicially enforce their agreement via a contempt order, to which Paul responded that her action was barred by a 20-year statute of repose (meaning that it was too late legally for her to come after the money).
Kathy started contempt proceedings and won in Milwaukee County Circuit Court, but the Court of Appeals reversed that decision and Kathy appealed to the Supremes.
Accordingly, §893.40 does not bar Kathy's action because it was impossible for Paul to perform on his promise – and therefore for Kathy to enforce that promise – until after the statutory period of repose had run. We therefore reverse the court of appeals' decision and reinstate the circuit court's order.
In February 1992, the circuit court granted Kathy and Paul, then both 39 years old, a divorce judgment. The judgment incorporated Kathy and Paul's marital settlement agreement, which detailed how they would divide their marital property and stated that the circuit court would retain "continuing jurisdiction . . . to make orders enforcing" that division. Under one provision, Paul agreed to provide Kathy half his Air National Guard pension "when and if" it became available to him.
Paul's pension first became available to him in February 2013 when he turned 60 years old, roughly 21 years after the divorce judgment was entered. Although he received regular pension disbursements, Paul never paid Kathy her share. In 2017, Kathy requested both her share of past payments and that Paul sign a military retired pay order per so that her share of Paul's future disbursements would be sent directly to her. Paul refused to pay her or to sign the pay order.
Kathy then initiated contempt proceedings. Paul argued that Kathy's contempt action was untimely under Wis. Stat. §893.40. That provision, a statute of repose, bars any "action upon a judgment or decree of a court" brought more than "20 years after the judgment . . . is entered."
Paul reasoned that because the 1992 judgment was entered more than 20 years earlier, Kathy's contempt action was barred by statute....
The circuit court ordered Paul to pay Kathy her share of pension payments and to sign the military retired pay order within 30 days or it would find him in contempt of court....
The court of appeals reversed, determining that §893.40 barred Kathy's contempt action....
We resolved a similar question in Johnson v. Masters. There, we held that §893.40 did not bar an action to enforce a divorce judgment's pension division brought more than 20 years after the judgment was entered, because it was impossible to comply with the judgment for the first nine years. Johnson and Masters' divorce judgment, entered in 1989, required that Johnson be awarded half of Masters' pension and that a "QDRO [qualified domestic relations order] shall be submitted to secure these rights." The parties could not immediately submit the required
order, however, because from the time of their divorce until the law was amended in 1998, Wisconsin law prohibited the assignment of state pension benefits via a QRDO. Upon learning
in 2010 that Masters had retired a year earlier, Johnson filed a QDRO. When Masters refused to sign the required authorization, Johnson filed a post-judgment motion requesting that Masters release his pension information. Masters argued that Johnson's motion, filed 21 years after entry of the divorce judgment, was untimely under §893.40. The circuit court agreed.
We reversed the circuit court's order, determining that §893.40 did not bar Johnson's motion because then-existing law made it impossible for the parties to execute the required QDRO for the first nine years after the divorce judgment. Johnson turned on our duty to interpret statutes to avoid "unreasonable results" and to "constru[e] each in a manner that serves its purpose...." We further recognized that this court elsewhere accommodates ongoing obligations in family law judgments that extend beyond 20 years....(Wis. Stat. §767.01 authorizes courts to do "all acts and things necessary and proper" in family law actions "to carry their orders and judgments into execution").
Those same principles apply here. At the time Kathy and Paul's divorce judgment was entered in 1992, Paul's pension benefits would not be available to him until he turned 60 years old in February 2013, 21 years later....Because the divorce judgment required Paul to divide his pension only "when and if" the pension became "available" to him, that division was impossible prior to February 2013. The "when and if" condition also made it impossible for Kathy to judicially enforce the agreement during those first 21 years because that action would not be ripe until Paul's pension became available. It would be unreasonable to interpret §893.40 as barring enforcement now of a marital property division that was impossible to enforce during the 20 years prior.
That result would also be unreasonable because it would render Paul's promised pension division illusory and deny Kathy the benefit she bargained for in the marital settlement agreement. When Paul promised to pay Kathy half his pension, the earliest he could do so was one year after the statute of repose would have run. Under Paul's reading of §893.40, then, he made no real promise to pay Kathy half his pension. Rather, at Paul's sole "will and discretion," he could pay Kathy her share or not and be free of liability either way under the statute of repose. Such a "promise" is illusory.
An illusory promise in a martial settlement agreement disturbs the balance of mutual obligations. Paul's promise to pay Kathy half his pension's value "when" it became available to
him was critical to the rest of their agreement. Had Kathy known that Paul's "promise" was
illusory and unenforceable, she likely would have negotiated for a different distribution of the other marital assets....
At its core, a statute of repose seeks to ameliorate the possibility that parties and courts will
be stuck "litigating claims in which the truth may be obfuscated by death or disappearance of key witnesses, loss of evidence, and faded memories."
None of those concerns exists here....Therefore, barring Kathy's enforcement action under §893.40 would not advance the statute's purpose.
Finally, we are unpersuaded by Paul's argument that, because Kathy submitted no military retired pay order to divide Paul's pension, she slept on her rights and the statue of repose
bars her enforcement action. To begin with, the existence of other non-judicial remedies provides no insight into how we should interpret a statute concerned with judicial actions.
Wisconsin Stat. §893.40 addresses only an "action upon a judgment . . . of a court," a judicial remedy; it mentions nothing about the availability of administrative or self-help remedies. Moreover, nowhere does Kathy and Paul's agreement require either party to submit a military retired pay order....To the extent Paul desired that administrative convenience, he was equally
responsible for filing the pay order, especially considering that he had better access to the relevant information regarding his service. Regardless, the agreement reserved for Paul the
flexibility to fulfill his obligation in other ways, including by simply writing Kathy a check after he received each disbursement. Thus, whether the parties submitted a military retired pay order is irrelevant to interpreting a statute of repose or applying it to their agreement.
Barring Kathy's enforcement action under Wis. Stat. §893.40 would produce an unreasonable result that would not advance the statute's purpose.
Today, the majority sheds its judicial robes and takes its seat in the legislature. When we interpret the plain language of Wis. Stat. §893.40, it is clear that Kathy Schwab's contempt action is barred. Instead of following the plain language of the statute, the majority calls into question every statute of repose by placing its policy choices above the plain text of the statute. However, our role in the judiciary is to interpret the law, not create it.
To ensure Kathy and Paul fulfilled the terms of the Agreement, the Agreement stated that "[e]ach party recognizes that the terms of this [Marital Settlement Agreement] will require each to cooperate in signing further documents to make the terms a reality and each party agrees to cooperate in signing such documents." Consequently, both Kathy and Paul were aware that they may have to sign further documents to effectuate their rights under the Agreement.
Kathy's contempt action is barred by Wis. Stat. §893.40 because the legislature has made no exception to the time bar in the statute that applies to Kathy's contempt action....
Wisconsin Stat. §893.40 provides that "action upon a judgment or decree of a court of record of any state or of the United States shall be commenced within 20 years after the judgment or decree is entered or be barred."...
Statutes of repose inherently create unfair situations. As we have previously explained, "[c]ourts may shudder at the unfairness visited by statutes of repose." However, despite the unfairness created, "statutes of repose inherently are policy considerations better left to the legislative branch of government."...
Thus, when the circuit court entered the judgment of divorce on March 17, 1992, the 20-year time clock began to run. Kathy did not file her contempt action by March 17, 2012. Rather, she
filed her contempt action in November 2017. Moreover, Kathy's action is neither an action on a deficiency judgment in a mortgage foreclosure nor an action relating to child or family support (both legislatively exempted from the 20-yeartime limit); it is for contempt for failing to comply with a property division in a Marital Settlement Agreement. Consequently, Kathy's action is barred under the plain language of the statute and no exception applies.....
Federal law permitted Paul to assign Kathy her interest in his Air National Guard pension, and Kathy could have secured that assignment. During the 20 years following their divorce, Kathy could have sought a military pay order pursuant to federal law, and served a copy of her divorce decree on the appropriate agent of the Secretary of Defense. If Paul refused to sign the military pay order, Kathy then could have filed a contempt motion pursuant to the provision of the Agreement that provides that "each party agrees to cooperate in signing such documents." After receiving the military pay order, Kathy would have received the portion of Paul's Air National Guard pension that she was given as part of the Agreement.
Because Kathy did not face a legal barrier to the assignment of her interest, Johnson is inapplicable to Kathy.
The majority sheds its judicial robes and takes its seat in the legislature. When we interpret the plain language of Wis. Stat. §893.40, it is clear that Kathy Schwab's contempt action is barred. Instead of following the plain language of the statute, the majority calls into question every statute of repose, placing its policy choices above the plain text of the statute. However, our role in the judiciary is to interpret the law, not create it. I would not engage in judicial activism or legislating from the bench as the majority does in this case.
I join Chief Justice Annette Ziegler's dissent in full. I write separately because the majority does not appreciate the distinction between a contract and a court judgment....
MSAs are bargained-for agreements between two parties, and courts must uphold them, absent any violations of public policy....
While the statute of repose extinguished Kathy Siech's action on the divorce judgment, she could have timely brought a breach of contract claim based on the MSA....
Unlike the statute of repose in Wis. Stat. § 893.40, the statute of limitation time period in Wis. Stat. § 893.43 (governing time limits for filing actions over contracts) begins to run when the claim accrues....
It is undisputed that Schwab's military benefits vested in 2013 and Siech's claim accrued upon Schwab's failure to pay her that year; accordingly, Siech had until 2019 to bring a breach of contract claim against Schwab for violating the MSA, at which time the statute of limitations would have expired. The existence of this alternative avenue by which Siech could have compelled Schwab to comply with their agreement belies the majority's assertion that it was "impossible" for Siech to enforce the MSA....
(Dallet's majority opinion acknowledges in a footnote that Kathy Siech could have enforced the marital settlement agreement through a breach of contract action.)
Siech never brought a breach of contract claim, and relied solely on a contempt action to enforce the divorce judgment in order to compel Schwab to fulfill his pension payment obligations to her under the MSA. We cannot convert her contempt action into one for breach of contract and must apply the law to the action she actually filed. As Chief Justice Ziegler's dissent explains more fully, the action Siech chose to bring is barred by the statute of repose. Avoiding a result it deems "inequitable and unreasonable," the majority designs an outcome that may comport with its conceptions of fairness but it does not comport with the law.
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