August 20, 2019

Colorado Court of Appeals: “Retirement Plan” Has a Usual and Ordinary Meaning and Is Not Limited to Plans Possessing Attributes of ERISA-Qualified or Tax-Qualified Plans

The Colorado Court of Appeals issued its opinion in Dillabaugh v. Ellerton on June 23, 2011.

Post-Judgment Collection— Employee Retirement Income Security Act (ERISA)—Exemptions From Attachment or Garnishment of a Retirement Plan.

In this post-judgment collection proceeding, plaintiff Gary Dillabaugh appealed the trial court’s order determining that an obligation of Sefton Resources, Inc. (Sefton) to defendant John Ellerton, Sefton’s Chief Executive Officer, was exempt from attachment or garnishment as property or funds payable from a retirement plan. The judgment was affirmed.

Dillabaugh obtained a judgment against Ellerton and attempted to garnish Sefton’s obligation to him. Sefton responded that it owed Ellerton a “future retirement obligation” totaling $839,832. Ellerton argued this was exempt from garnishment or attachment under CRS §13-54-102(1)(s) because it arose from a retirement plan. The exemption issue was briefed and the court ruled without a hearing that Sefton’s obligation to Ellerton was exempt as property held in or payable from a retirement plan.

On appeal, Dillabaugh argued that the trial court erred because a retirement plan must share the attributes of an ERISA-qualified plan or a tax-qualified plan, and Sefton’s obligation did not. The Court of Appeals disagreed with the narrow interpretation of the exemption, noting that the meaning of “retirement plan” under CRS §13-54-102(1)(s) has not been addressed by Colorado appellate courts. The Court found that “retirement plan” has a usual and ordinary meaning discernible by a court and is not limited to plans that possess attributes of ERISA-qualified or tax-qualified plans. The Court also held that the record supports the trial court’s conclusion that Sefton’s obligation to Ellerton was properly held in or payable from a retirement plan.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on June 23, 2011, can be found here.

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