Background
Tammy Lee Clementi named her then-husband, Kevin Watson, beneficiary of two Colorado Public Employees’ Retirement Association (PERA) accounts. The couple divorced in 2012, and their incorporated separation agreement allocated the accounts to Clementi. She removed Watson from one account but allegedly inadvertently left him listed on the other.
After Clementi died in 2023, PERA paid Watson about $400,000 from the account still listing him as beneficiary. Her estate sought return of the money, alleging unjust enrichment, conversion, and contempt of the divorce decree. The district court dismissed all claims under Rule 12(b)(5), reasoning in part that a 2022 PERA rule prevented Colorado’s divorce-based automatic-revocation statute from removing Watson as beneficiary.
The Court’s Holding
The Colorado Court of Appeals reversed and remanded. It held that PERA Rule 2.98 was not a “governing instrument” within the exception to section 15-11-804(2)(a)(i), because Clementi had not executed the rule before the divorce. Under the complaint’s allegations, the statute automatically revoked Watson’s beneficiary designation when the parties divorced in 2012.
The court further held that the 2022 PERA rule did not retroactively undo that revocation. At the pleading stage, the court could not rely on alleged enrollment paperwork or agreements outside the complaint to reach a different result. It also reinstated the remedial-contempt claim because willfulness is not an element required for remedial contempt. The court expressed no view on the ultimate merits of the claims.
Key Takeaways
- A divorced former spouse’s beneficiary designation may be automatically revoked by section 15-11-804(2)(a)(i).
- A later-enacted PERA rule did not retroactively restore a beneficiary interest allegedly revoked at divorce.
- Willfulness is not required to impose remedial contempt sanctions in Colorado.
Why It Matters
The decision underscores that Colorado’s automatic-revocation statute can affect retirement-account beneficiary designations after divorce, even where an institution’s records still list the former spouse. It also limits dismissal-stage reliance on materials outside the complaint.
For family-law and estate practitioners, the case highlights both the importance of updating beneficiary forms and the potential availability of estate claims when an ex-spouse receives benefits after a divorce.