On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County.
Approved for Publication July 15, 1997.
Before Judges Dreier, Newman and Villanueva. The opinion of the court was delivered by Dreier, P.j.a.d.
The opinion of the court was delivered by: Dreier
The opinion of the court was delivered by
Defendant, Nan Long (Seavey), appeals from an order of the Family Part imposing a constructive trust on seventy percent of the widow's benefits she receives from the Police and Fireman's Retirement System (PFRS) as a result of the death of her late husband, Ralph Seavey. Plaintiff is the late husband's first wife, Mary Rose Seavey. In the property settlement agreement incorporated in the divorce judgment, plaintiff was given fifty percent of the husband's pension benefits, in effect as equitable distribution. *fn1 While the husband was alive, the payments were to be made to plaintiff, her estate or a beneficiary named in her will. See N.J.S.A. 43:16A-12.3 (governing the designation of beneficiaries for death benefits). The property settlement agreement then provided:
In the event that the Husband shall predecease the Wife, the Wife shall still be entitled to receive the spousal benefit portion of the Plan until her death. She shall further be entitled to receive any death benefits available through this Plan and the Husband shall make appropriate arrangements with his Pension Plan to effectuate that distribution.
The central issue in this case does not involve actual "death benefits," which were only insurance proceeds. These benefits, although eventually made payable by the husband to defendant, his second wife, were voluntarily paid over to plaintiff by defendant. The issue before us concerns the payment of the widow's pension, a separate pension defined under N.J.S.A. 43:16A-12.1. The trial Judge determined that under the circumstances of this case, where plaintiff's income had terminated by reason of her former husband's death, where she had a lengthy marriage to the decedent, and where she was now infirm and unable to work, the provisions of this will and fundamental fairness dictated the imposition of a constructive trust to effect a division of the widow's pension, with seventy percent to plaintiff and thirty percent to defendant, net of taxes.
While a court of equity is indeed empowered to achieve substantial Justice between the parties and to be innovative in effecting this result, there is an additional principle that "equity follows the law," although this maxim is not slavishly followed. "While it is true that in ordinary circumstances equity follows the law and will not divest rights that have been legally acquired, that doctrine must yield if extraordinary circumstances or 'countervailing equities' call for relief." Monmouth Lumber Co. v. Indemnity Ins. Co. of North America, 21 N.J. 439, 451, 122 A.2d 604 (1956) (quoting Camden Trust Co. v. Handle, 132 N.J. Eq. 97, 108, 26 A.2d 865 (E. & A. 1942)). Because contractual and property rights of the parties are not to be infringed upon without an appropriate basis in either law or equity, we must examine whether defendant's pension benefits were correctly taken from her by the trial Judge.
In this case, if decedent had not remarried at least two years before his death (later amended to one year), there would have been no widow's benefits payable to anyone. See N.J.S.A. 43:16A-1(24); 43:16A-12.1a. Indeed, if defendant remarries or dies, the benefits will cease. Ibid.
There is no provision in the definition of a "widow" for continuation of payments to a divorced wife to whom the PFRS member's own benefits had been paid prior to the decedent's death. N.J.S.A. 43:16A-1(24). *fn2 There is also no provision now in the law for a Qualified Domestic Relations Order (QDRO) under the PFRS that could have protected plaintiff's claim to a pension. Other pension or benefit systems provide for a spouse of many years who has been divorced. See, e.g., 42 U.S.C.A. § 402(b) (the survivors benefits section of the Social Security law). But our Legislature is free to eliminate such a benefit.
Thus the husband's remarriage and the passage of two years vested the widow's benefits solely in the new wife. These are her property by statute, and there were no other death benefits available for plaintiff other than the life insurance. Furthermore, no such benefits could have been expected for plaintiff under the terms of the property settlement agreement because such benefits would only arise after the husband's remarriage. The term "death benefits" in the property settlement agreement could not therefore have referred to the new widow's benefits created by statute for the benefit of a new wife. Moreover, the former wife was so advised by the Division of Pensions just after the 1985 divorce, and could have moved to reopen the equitable distribution settlement if this issue was material to her agreement. Instead, she waited over ten years to make this claim. Plaintiff thus had no reasonable expectation of payments after the former husband's death, except for the life insurance death benefit proceeds that she has received.
In effect, the trial Judge, out of concern for the disabled and obviously needy first wife, has imposed an obligation on the second wife to share her statutory widow's benefits and to support the first wife. The court has taken the property of defendant, who is not in any way a wrongdoer and does not possess any property for which the first wife, or even the decedent, could have made a claim. We know of no authority for the court to accomplish this end. ...