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Settenbrino v. Schwartz


October 24, 2007


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, Docket No. FM-16-306-04.

Per curiam.


Argued October 10, 2007

Before Judges Fuentes and Chambers.

Plaintiff, Susan D. Settenbrino, appeals from the order of October 4, 2006, denying her application to compel her former husband defendant, Jeffrey Schwartz, to pay to her additional monies from defendant's 401(k) plan. At the time the parties were divorced, the marital portion of this asset was valued at $65,000. The court indicated that it would divide the asset equally between the parties, so that plaintiff's share at that time was $32,500. By the time plaintiff's share of the 401(k) was distributed to her, the value of this asset had declined significantly due to market fluctuations, so that she received only $18,724.61. She maintains that she is entitled to the balance of the $32,500. Plaintiff's last application to the trial court for the additional monies from this 401(k) plan was denied. We affirm.

The parties were divorced in New York State. The trial judge there entered a comprehensive twenty-three page written decision dated August 22, 2000. With respect to the equitable distribution of defendant's 401(k) retirement plan, the trial judge found that the value of the marital portion of the account before taxes was $65,000. He divided this asset equally between the parties, so that plaintiff's share was $32,500. The Judgment of Divorce, dated December 5, 2000, provided for distribution of defendant's 401(k) retirement plan as follows:

ORDERED AND ADJUDGED, that the plaintiff shall receive the sum of $32,500 as her equitable share of defendant's 401(k) retirement plan, the transfer of the same to be accomplished by a Qualified Domestic Relations Order.

The companion Qualified Domestic Relations Order ("QDRO "), also entered on December 5, 2000, provided in Paragraph 3:

The Alternate Payee is awarded an amount equal to $32,500.00 of the Accrued Benefit and the Plan is ordered to pay to the Alternate Payee such amount (and earning attributable to such amount from August 22, 2000 until the date of distribution) to the Alternate Payee in a lump sum cash payment on the earliest possible date permitted under the Plan. It has been ORDERED AND ADJUDGED that the defendant's 401(k) plan is valued as of March 21, 2000 to be $237,000.00 of this sum, $65,000 is determined to be marital property and plaintiff is to receive a 50% distributive award of the marital portion of the defendant's 401(k) to wit: the sum of $32,500.00 to be distributed by way of a separate QDRO, which shall direct deposit plaintiff's share into an IRA or 401(k) as designated by plaintiff to the plan administrator of the defendant's 401(k), so as to avoid any tax consequence to either party being occasioned by such transfer. [emphasis added]

The underlined language makes clear that plaintiff was to receive fifty percent of this marital asset. The QDRO specifically defined "Accrued Benefit" as "the sum of the Participant's Account balances under the Plan as of August 22, 2000" (the date of the trial judge's decision).

The monies were not transferred to plaintiff by defendant's plan administrator, Guardian Life Insurance Company of America ("Guardian") until April 1, 2001. Due to a downturn in the value of this asset, the sum transferred to plaintiff was only $18,724.61. The transfer document plaintiff received from Guardian indicates that from April 1, 2001, (the date of the transfer) until April 2, 2001, (the date of the statement), a period of a single day, the sum of $423.24 was lost in this investment, indicating that the investment was in rapid decline at that time.

In 2003, plaintiff filed a motion in New Jersey, where she resides, seeking, among other relief, to compel the transfer of the balance of the $32,500 into her account. The first motion resulted in an order issued by Judge Graziano on October 21, 2003, providing in paragraph 10:

Correcting the distribution of defendant's QDRO to reflect the court's Judgment of Divorce and the QDRO Order itself, which states that Plaintiff is to receive a "lump sum cash payment" of "$32,500 to be distributed by way of a separate QDRO."

In response to this order, Guardian wrote to plaintiff on December 15, 2003, explaining that the QDRO awarded her "an amount equal to $32,500 of the Accrued Benefit" and that accrued benefit was defined as "the sum of the Participant's Account Balances under the Plan as of August 22, 2000." Guardian explained:

The Plan Administrator withdrew an amount equal to $32,500 of the Participant's account balances as of August 22, 2000. Due to fluctuations in the unit values of the account, the actual dollar amount was less on the transfer date than on August 22, 2000. However, the Order specifically states that you were to receive an amount equal to that value as of August 22, 2000.

Guardian indicated that it had distributed the funds in accordance with the terms of the QDRO and that the new order did not appear to change the distribution. No further funds were transferred to plaintiff from defendant's 401(k).

In 2005, plaintiff made a further application to the New Jersey Superior Court to compel payment of the additional monies. On July 22, 2005, Judge Michael Diamond ordered:

The Guardian Life Insurance is hereby ordered to provide a total lump sum amount which represents her rightful portion of $32,500.00 into the QDRO account of Susan D. Settenbrino of Jeffrey Schwartz's 401(k) and or Guardian Employees Incentive Savings Plan (FISP) nunc pro tunc to April 12, 2000.

However, it is not clear from the record that Guardian was ever noticed on this motion. In apparent response to receipt of this order, Guardian advised plaintiff by letter dated September 16, 2005, that the amount had been transferred as calculated pursuant to the original order.

In 2006, plaintiff moved yet again against the defendant to compel payment of the balance due on the $32,500. That motion was denied on October 4, 2006 by Judge Rothstadt, relying on the letter from Guardian that the transfer was complete. This appeal followed.

Plaintiff contends that under the Judgment of Divorce and QDRO she was entitled to the full sum of $32,500 from defendant's 401(k) and that she received only a partial payment. She maintains that Judge Graziano's order of October 21, 2003, and Judge Diamond's order of July 22, 2005, directed that she receive this full sum, and that those orders may not be overturned by another trial judge. Without citing any case law or articulating this legal theory, she appears to be arguing that the orders of Judges Graziano and Diamond are the law of the case, and that Judge Rothstadt may not effectively overturn those orders by denying her relief.

The law of the case doctrine is "a guide for judicial economy based on the sound policy that 'when an issue is once litigated and decided during the course of a . . . case, that decision should be the end of the matter.'" Feldman v. Lederle Labs., 125 N.J. 117, 132 (1991). However, this is not an "absolute rule," but rather a "discretionary guideline." Gonzalez v. Ideal Tile Imp. Co., 371 N.J. Super. 349, 355-56 (App. Div. 2004), certif. denied, 182 N.J. 427 (2005). The sound policy in deferring to earlier rulings must be balanced against other considerations. Id. at 356. "[T]he law of the case doctrine does not obligate a judge to slavishly follow an erroneous or uncertain interlocutory ruling." Ibid.

As a result, while Judge Rothstadt had an obligation to give those earlier orders consideration and deference, he was not bound by them. We further note that neither of those earlier orders directed defendant to do anything with respect to the QDRO payment, nor is it entirely clear that they do more than restate the defendant's obligation under the QDRO. In the motion before Judge Rothstadt that led to this appeal, plaintiff very specifically sought to compel defendant and Guardian to place additional funds into plaintiff's account or, in the alternative, to enter a judgment in the amount of $14,500 against defendant.

After carefully reviewing the record and considering the argument of the parties, we are satisfied that Judge Rothstadt's decision is correct. The intent of the language in the judgment of divorce and QDRO is clear. The New York judge in his written opinion of August 22, 2000, awarded plaintiff half of the marital portion of defendant's 401(k) plan with Guardian. Her share was calculated to be valued at $32,500 at that time. The QDRO also stated that she was to receive fifty percent of this marital asset. The fact that defendant's 401(k) fell in value due to market fluctuations prior to the actual transfer to plaintiff is unfortunate. As a result of that decrease in value, her funds also decreased. However, if she were to receive the full sum of $32,500 as she demands, then she would be receiving more than fifty percent of this marital asset. That result would be contrary to the decision made by the New York judge who provided that this property be divided equally between the parties. Accordingly, we are satisfied that the funds plaintiff received are consistent with the intent of the Judgment of Divorce and QDRO, and that plaintiff is not entitled to any further funds from this asset.



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