July 10, 2009
JEANNE V. LEINS, PLAINTIFF-APPELLANT,
KENNETH J. LEINS, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-298-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 30, 2009
Before Judges Sapp-Peterson and Alvarez.
Plaintiff Jeanne V. Leins appeals from a June 20, 2008 order, which described the formula to be employed in a military clarifying order (MCO), the military version of a qualified domestic relations order (QDRO). For the following reasons, we reverse and remand.
Plaintiff and defendant, Kenneth J. Leins, married on February 6, 1982. At the time, defendant was not accruing credits towards a military pension resulting from his service as a member of the Army National Guard. According to representations made by his attorney when the divorce settlement was placed on the record, defendant believed that the start date for pension benefits fell in 1987 or 1989, years after the date of the marriage. The parties separated on October 31, 1997, and divorced on June 26, 2002. After serving at various times as an active duty and reserve member, defendant retired as a reservist on an extended tour of active duty in August 2006. The parties had anticipated that he would retire in reservist status, not as an active duty member.
The final judgment of divorce incorporated the parties' stipulation of settlement, which stated:
C. Retirement Plans
A Qualified Domestic Relations Order (QDRO) for allocation to the Wife of forty percent (40%) of the marital coverture portion of the Husband's military pension shall be prepared by Wife's attorney. The marital coverture period shall be calculated from the date of the parties' marriage on February 6, 1982 to the date of separation on October 31, 1997. The Husband shall retain survivorship rights and benefits.
This seemingly clear language has spawned several post-judgment motions as well as this appeal.
Plaintiff filed a motion to enforce litigant's rights on November 17, 2005, to enforce the pension provision of the judgment of divorce and obtained an order directing that an MCO be entered to effectuate the division of the pension. On April 20, 2006, an MCO was filed reciting the formula for distribution based on "reserve points," the methodology employed where credits accumulate towards a military pension when a retiree is not on active duty, as it was anticipated that defendant would retire as a reservist. At the time of his retirement, however, since defendant was on active duty, a different formula was required. The military therefore rejected the order.
Additional litigation followed. Another order issued on December 22, 2006, this time directing counsel to ascertain from the military the appropriate language and formula to convey to plaintiff 40% of the pension accrued during the coverture period, as called for by the divorce settlement, given defendant's retirement while on active duty. On August 3, 2007, as a result of yet another motion, the court determined that because defendant had retired while on active duty status, the pension should be calculated through a "years of service" formula.
Plaintiff concurred with the court's definition as set forth in that order. Thereafter, however, by order dated June 20, 2008, the Family Court judge restated his August 3, 2007 decision. He rejected the language that plaintiff proposed and, in fact, appeared to reverse his earlier ruling as to the appropriate language. He entered an order requiring the parties to calculate the pension using "credible service days," as opposed to "creditable years of service." He also found that plaintiff was entitled to 40% of defendant's years of service, fixing that time as only 1,401.2 days on the mistaken assumption that defendant had accumulated only 3,503 "credible service days" during the marital coverture period. That number was then to be divided by defendant's total years of credible service, twenty-two years, two months, and twenty-nine days.
The distinction between using "years of service" and "credible service days" as the formula's numerator resulted in plaintiff losing a significant share of the pension. In fact, she claims that the mathematical consequence of the formula employed by the Family Court judge was that her entitlement to defendant's pension was reduced from 40% of fifteen years to 40% of only 3.8 years.
Plaintiff asserts the following:
WHERE THE PARTIES NEGOTIATED THE COVERTURE FRACTION NUMERATOR OF 15 IN THEIR WRITTEN FINAL JUDGMENT OF DIVORCE; AND WHERE THE DFAS GUIDE PROVIDED THEIR FORMULA FOR THE DIVISION OF AN ACTIVE DUTY MILITARY PENSION, THE COURT ERRED IN REDUCING THE PLAINTIFF/APPELLANT'S COVERTURE SHARE FROM 15 YEARS TO 3.8 YEARS; AND ERRED IN CREATING A NEW TERM, "CREDIBLE DAYS OF SERVICE" NOT MENTIONED IN THE DFAS GUIDE FOR DIVIDING MILITARY PENSIONS, SUCH THAT PARAGRAPH NUMBER 1 IN THE JUNE 20, 2008 ORDER SHOULD BE VACATED AND REPLACED WITH THE DFAS FORMULA FOR DIVIDING ACTIVE DUTY MILITARY PENSIONS.
When the divorce settlement was placed on the record on June 10, 2002, defendant's counsel stated:
[the] pension is going to be divided with 60% his share; 40% the Plaintiff's share. The Plaintiff's share will be valued as of the coverture of the marriage, which is the date of the marriage, which may not coincide with the commencement date of the entitlement, but her coverture value, if it did happen anytime, would start at the date of the marriage to the date of the separation, which is October 31 of 1997 and the Plaintiff's counsel will prepare an order so that we might be able to effect that transfer.
Defendant's counsel also indicated that defendant had been serving in the military since 1982, but that his understanding was that the employment within the military that generated entitlement to the pension did not begin until approximately 1987 or 1989. As a result, counsel stated that defendant did not "believe he has a pension benefit from prior to that. He was active military, but he was part-time. But, if he does, certainly, you know, she would be entitled to share in that and he understands that."
It is clear that plaintiff's entitlement extends from the date of marriage to the date of separation or fifteen years. It is also clear that the entitlement is to 40% of the amount that defendant earned during the coverture period and nothing less. The formula to be used is not the reservist formula, which would have resulted in defendant receiving a lesser stipend than is actually paid, but the active duty formula, as described by the Defense Finance and Accounting Service (DFAS), application of which resulted in the amount which is actually paid.
For members retiring from active duty, the numerator is the time from marriage to separation while the member was performing creditable military service. As stated in the DFAS documents attached to plaintiff's brief, the numerator is expressed in terms of whole months and must be set forth in the court order. If the numerator is expressed in terms of years or days, DFAS will convert it to months and drop odd days or partial months. The denominator will be supplied by DFAS in terms of whole months of service creditable for retirement eligibility. This results in the formula to calculate the former spouse's award as a percentage of disposable retired pay. This is not the same mathematical formula, according to DFAS, as employed in the case of members retiring from reserve duty.
The correct formula, as set forth by DFAS, is actually the same formula described in Whitfield v. Whitfield, 222 N.J. Super. 36, 48 (App. Div. 1987). DFAS provided the parties with the denominator for the formula, which is not disputed. Nor is there any dispute that plaintiff is entitled to 40% of the coverture share as defined from the date of marriage to the date of separation.
Accordingly, we reverse and remand for entry of a new MCO that truly reflects the parties' agreement. Simply stated, the agreement was that plaintiff would collect 40% of the entitlement accumulated during the years of coverture. By employing the active duty formula, plaintiff receives the true amount of her entitlement. The language used to calculate plaintiff's share should be the same as was used to calculate defendant's pension; otherwise, she will not receive her true 40% coverture share.
Reversed and remanded.
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