Contributing Author: Kristine Custodio Suero, Advanced Certified Paralegal

A recent published opinion from California's Fourth District Court of Appeal has opened the door to using Qualified Domestic Relations Orders (QDROs) to satisfy breach of fiduciary duty awards—even when the QDROs assign 100% of a party's ERISA-governed retirement benefits, including amounts earned after the marriage. The case, In re Marriage of DeBenedetti & Ensburg, No. D082801, 2024 WL 1470780 (Cal. Ct. App. Apr. 5, 2024), may soon become a touchstone for attorneys navigating postjudgment enforcement of marital property rights.

Below are key insights and potential implications especially as the case may proceed to the California Supreme Court.

Case Summary

• Christina DeBenedetti filed for divorce from Morgan Ensburg in 2017.
• After a detailed trial, the family court found Morgan breached his fiduciary duty under California Family Code § 1101 and awarded Christina over $2 million.
• To enforce the award, Christina filed postjudgment motions seeking QDROs assigning Morgan's remaining ERISA retirement accounts to her.
• The trial court granted QDROs that assigned 100% of benefits under all four of Morgan's retirement plans, including amounts not earned during the marriage.
• Morgan appealed the orders, raising several ERISA and state law challenges.

Court of Appeal Holding

The Fourth District Court of Appeal affirmed the trial court's ruling, holding:

• QDROs were valid under ERISA, as they related to a “marital property right” stemming from the fiduciary breach and were enforceable under Family Code § 1101(g).
• ERISA's anti-alienation rule does not bar the use of QDROs in this context; Congress intended to permit such assignments in domestic relations matters, even if they deplete retirement accounts.
• State law objections were rejected—the court found no impermissible redivision of property and determined that any conflicting California statutes were preempted by ERISA.

Emerging Controversy: Assigning Post-Marriage Benefits

A significant issue potentially ripe for California Supreme Court review is the scope of the QDROs:

• The QDROs assigned 100% of the benefits in Morgan's ERISA plans to Christina, even though only a portion of those benefits were earned during the marriage.
• On appeal, Morgan contended that this assignment improperly granted Christina an interest in separate property—i.e., benefits accrued after the marriage ended—which is contrary to California's community property laws.
• Although the appellate court upheld the assignment as a valid enforcement tool for the fiduciary duty judgment, this raises a fundamental question about the boundaries of QDRO enforcement under California law and federal preemption.

Path to Further Review: California Supreme Court Petition

• Morgan may file a petition for review to the California Supreme Court.
• The central issue could be: Does a QDRO that assigns 100% of ERISA-governed retirement plan benefits—regardless of whether those benefits were earned during the marriage—constitute an impermissible postjudgment redivision of property or an overreach under ERISA?
• A successful review could provide clarity on whether post-marriage retirement earnings can be reassigned via QDRO to satisfy a community property breach.

Key Takeaways for Legal Practitioners

• ERISA QDRO flexibility extends to fiduciary duty enforcement, even when the entire retirement account is reassigned.
• California Family Code § 1101(g) creates a marital property right sufficient to support QDROs under federal law.
• Attorneys should scrutinize the scope of retirement benefits assigned under QDROs, especially when benefits extend beyond the marital period.
• Potential Supreme Court review may clarify how far QDROs can reach in postjudgment enforcement involving separate property.

Conclusion: A Developing Area of Law

The DeBenedetti & Ensburg decision marks an important precedent in how courts balance state marital property rights with federal ERISA protections. Whether the California Supreme Court will weigh in remains to be seen, but the case highlights the growing tension between equitable enforcement remedies and property characterization under community property law. The DeBenedetti ruling offers powerful tools to spouses seeking enforcement of community property rights but may also signal judicial overreach into separate property interests. A petition for review to the California Supreme Court could provide much-needed guidance on how far postjudgment QDROs may extend—particularly when the retirement benefits at issue extend beyond the duration of the marriage.

Attorneys navigating complex divorce or fiduciary duty disputes involving retirement assets should monitor this case closely and consult experienced ERISA counsel when preparing or contesting QDROs and to avoid missteps and preserve appellate options.

Schechter Benefits Law Group LLP are trusted advisors in ERISA, QDROs and QDRO Litigation.

*Nothing stated herein is to be construed as legal or tax advice and shall not form any attorney-client relationship. Each individual situation is unique. Please contact us and speak with one of our attorneys regarding your individual situation.