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Sanzo v. NYSA-ILA Pension Trust Fund

December 28, 2005

ANNE SANZO, PLAINTIFF,
v.
NYSA-ILA PENSION TRUST FUND DEFENDANT.



The opinion of the court was delivered by: Bassler, Senior District Judge

NOT FOR PUBLICATION

MEMORANDUM OPINION

Plaintiff, Anne Sanzo, seeks to recover pension benefits from the NYSA-ILA Pension Trust Fund ("PTF"), (An ERISA plan) following the death of her ex-husband. PTF denied Plaintiff's application for benefits on the grounds that an Amended Domestic Relations Order ("ADRO") entered in the Superior Court of New Jersey, Hudson County, Chancery Division, Family Part is not a Qualified Domestic Relations Order ("QDRO") entitling Plaintiff to survivorship benefits because it was received after the death of Plaintiff's ex-husband. Plaintiff filed this action in the Superior Court of New Jersey, Hudson County, and PTF removed the case to this Court. Plaintiff and PTF now submit cross-motions for summary judgment.

I. ISSUE

Whether the ADRO entered in the Superior Court of New Jersey constitutes a QDRO under the Employee Retirement Income Security Act (ERISA).

II. FACTUAL BACKGROUND

Defendant PTF is a joint labor-management trust fund and is a multiemployer employee benefit pension plan within the meaning of ERISA. Certification ("Cert.") of Charles Ward, at ¶ 2. Plaintiff was married to Dominick Sanzo from June 7, 1980 until September 22, 1997 when they divorced. Id. at ¶ 5; see also Ex. 1. The judgment of divorce filed on November 12, 1997 stated that Plaintiff would receive $232.56 per month "by way of a Qualified Domestic Relations Order." Id. at ¶ 5, Ex. 1, at 2. A QDRO--the original domestic relations order--was filed in Superior Court on November 20, 1997 providing that Plaintiff would receive "the sum of $232.48 per month from the monthly pension benefits due Dominick Sanzo (the participant), commencing when Dominick Sanzo (the participant) begins receiving his monthly pension benefits." Id. at ¶ 6, Ex. 2 at 2 (emphasis in original).

Mr. Sanzo worked for 43 years in the longshore industry in the Port and had a vested right under the defined benefit plan to receive monthly pension benefits from PTF in the amount of $2,000. Id. at ¶ 3. Although Mr. Sanzo was eligible to retire in August 1993, he continued to work in the industry and never filed an application for pension benefits with PTF. Id. at ¶ 4. Mr. Sanzo died on December 6, 1997, without ever having received or applied for his pension benefits from PTF. Id.

After Mr. Sanzo's death, Plaintiff sent PTF a letter on December 30, 1997 inquiring as to why she was not receiving pension benefits. Id. at ¶ 7, Ex. 3. PTF sent a response letter explaining that because Mr. Sanzo died before he began receiving his monthly pension benefits, Plaintiff was not entitled to receive any benefits. Id. at ¶ 7, Ex. 4. By letter dated July 6, 1998, Plaintiff submitted a copy of the ADRO, entered by the Superior Court of New Jersey, Hudson County on July 1, 1998, which ordered that Plaintiff is to be deemed the "alternate payee" and, as such, is to be treated as the "surviving spouse" of Mr. Sanzo for purposes of ERISA. Id. at ¶ 8, Ex. 5. The ADRO also directed the PTF to pay Plaintiff "a monthly sum equal to fifty (50%) per cent of the monthly pension benefits that the participant would have been entitled to receive in accordance with the Plan provision for 'Benefits Upon the Death of a Participant Before Benefit Commencement Date' from the Plan."*fn1

This Court has jurisdiction over this case pursuant to ERISA § 502, 29 U.S.C. § 1132. The Board of Trustees determined that the ADRO was invalid because it was entered after the participant's death, citing Ross v. Ross, 308 N.J. 132 (App. Div. 1998)

IV. DETERMINATION OF PLAINTIFF ENTITLEMENT TO BENEFITS

A. QDRO Requirements

Prior to 1984, ERISA prohibited the alienation or assignment of pension benefits. Samaroo v. Samaroo, 743 F.Supp. 309, 312 (D.N.J. 1990). After ERISA was enacted, however, courts were divided on whether the complete restriction on alienation of pension plans preempted state domestic relations laws, which permitted the assignment of plan benefits for the purpose of dividing marital property. Ross v. Ross, 308 N.J. Super. 132 (App. Div. 1998). Congress responded by enacting the Retirement Equity Act ("REA"), which created a limited exception to the ERISA preemption by allowing pension plan benefits to be divided pursuant to state law where a QDRO exists. Samaroo, 743 F.Supp at 312.

A QDRO must "create or recognize the existence of an alternate payee's right to, or assign to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under the plan. 29 U.S.C.A. § 1056(d)(3)(B). To be a valid QDRO, a Domestic relations order must satisfy the requirements of § 1056(d)(3)(c) and (D) of ...


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