September 17, 2009
ALBERT BRANCA, PLAINTIFF-APPELLANT,
FRANCES ANN BRANCA, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-725-90.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 30, 2009
Before Judges R. B. Coleman, Sabatino and Simonelli.
Plaintiff Albert Branca appeals from an order and judgment of the Family Part, filed April 16, 2008,*fn1 awarding defendant Frances Ann Branca $30,657.48, "representing the amount due her as Alternate Payee of plaintiff's pension from the date of the receipt of his retirement check to and including October 1, 2006[.]" Based on our review of the record, the arguments of the parties and applicable law, we affirm.
The Brancas were married on August 29, 1970. One child was born of the marriage. On December 4, 1990, Judge Birger M. Sween entered a Dual Judgment of Divorce, dissolving the marriage and incorporating the parties' Inter-spousal Agreement dated October 22, 1990. Paragraph 50 of the Inter-spousal Agreement made specific reference to plaintiff's pension benefits from his employer, Public Service Electric and Gas Company (PSE&G). Pursuant to that Agreement, it was agreed that defendant was to receive fifty percent of the husband's pension, and that the court would enter a Qualified Domestic Relations Order (QDRO). The parties further agreed that the attorney for the husband (plaintiff) was to prepare the QDRO in accordance with the husband's employer's requirements. The Inter-spousal Agreement also provided that "[s]hould that Order, for any reason, not qualify as a QDRO, the parties agree to execute and consent to the form and entry of any additional order which may be necessary to constitute the said Order as a QDRO under the Retirement Equity Act of 1984, or as the same may be amended."
Despite the agreements and the efforts of the parties and their attorneys, the QDRO was not filed with the court until August 11, 2006. In the meantime, each party faults the other for the delay. To provide an adequate perspective, we recount in substantial detail the communications between the parties with respect to the efforts to file a proper QDRO.
Having noted that no QDRO had been filed, defendant's attorney wrote a letter to plaintiff's attorney on July 13, 1998, requesting prompt submission of a QDRO pursuant to the parties' Dual Judgment of Divorce. Thereafter, on October 13 and 28, 1998 and on July 6 and August 23, 1999, defendant's attorney wrote additional letters requesting compliance with the QDRO provision, to no avail. In a letter dated October 6, 1999, defendant's attorney advised plaintiff's attorney that she had learned during a conversation with Michael Freda, Plan Administrator of PSE&G, that a proposed QDRO submitted by plaintiff did not meet PSE&G's requirements. Expressing her client's fear that plaintiff might leave PSE&G, foreclosing defendant from her entitlement to fifty percent of the pension benefit, defendant's attorney requested that the QDRO be modified immediately and resubmitted to PSE&G.
Later, on January 7 and March 21, 2000, defendant's attorney wrote additional letters to plaintiff's attorney to inquire about the status of the QDRO, whereupon plaintiff's attorney, by letter dated April 13, 2000, submitted to defendant copies of a QDRO, which had been accepted by PSE&G. Defendant did not respond to that submission until June 16, 2000. Defendant's attorney then advised PSE&G and counsel for plaintiff that the QDRO misstated defendant's street address and did not accurately reflect her right to her share regardless of whether she predeceased the commencement of payment.
By letter dated June 22, 2000, Freda informed the parties he could not change the text of an order or draft an order once it had been accepted. He therefore suggested that the attorneys for the interested parties decide on the contents and submit a new draft order for his review. He added that the Plan would take no further action in the meantime. Although defendant's attorney wrote immediately to plaintiff's attorney regarding Freda's letter, nothing substantive was done until defendant applied to the court, upon notice to plaintiff, for an order for specific enforcement of the Dual Judgment of Divorce.
On April 27, 2001, Judge Harold C. Hollenbeck ordered plaintiff's attorney to correct the QDRO and "to attend to hav[e] [the] same entered within thirty (30) days of the within Order." The judge awarded interest on defendant's share at six percent per year from October 1990 until the QDRO was entered. Plaintiff submitted a copy of the QDRO for defendant's review and submission to PSE&G for approval on June 1, 2001.
On November 2, 2001, defendant's attorney informed plaintiff's attorney that defendant had approved the QDRO and requested that plaintiff submit it to the court for entry. Eventually, on December 31, 2001, counsel for plaintiff sent four copies of the QDRO to defendant's attorney for review and execution, asking that the form of QDRO be executed and returned for submission to the court for filing. Defendant claims she never received the QDRO at that time.
Notably, on November 11, 2002, plaintiff's attorney wrote to defendant's attorney alleging he had sent four prior letters on the subject. That letter, which we quote in full, purported to put defendant on notice that any penalties or expenses associated with the finalization of the QDRO would be borne by defendant:
With regard to the above captioned matter, I am writing what is the fifth and final communication to you to encourage you to resolve the outstanding issue of the Qualified Domestic Relation Order which will provide to your client, Frances Branca, her share of Mr. Branca's pension with PSE&G. The last two communications were dated June 1, 2001 and December 31, 2001. The December 31, 2001 communication forwarded four copies of the QDRO and requested your and Ms.
Branca's execution so that they could be forwarded to the Court for filing. Please be advised that if, in fact, this matter is not resolved, any penalties or expenses associated with the finalization of this matter will be solely borne by Ms. Branca.
Mr. Branca has incurred hundreds of dollars trying to turn over to Ms. Branca what is rightfully hers, and I have advised him that there is no further action that can be taken on his behalf in this regard to obtain Ms. Branca's compliance, absent unnecessary litigation.
Although the record does not disclose exactly what communications the parties exchanged between the date of that November 11, 2002 letter from plaintiff's attorney and the date of plaintiff's actual retirement in June 2004, plaintiff asserts in his certification in response to a motion filed by defendant that when his attorney did not receive a response to the November 11, 2002 letter, that he "continued with [his] life and thought that the QDRO issue was resolved." He added:
When I submitted my retirement papers to PSE&G as required by the company, I reminded them (PSE&G) that there was an outstanding QDRO, which Defendant never signed. At that time, PSE&G informed me that since Defendant had not signed the QDRO and neither she nor her attorney had taken any action for over eighteen (18) months since the divorce, that they would be processing my retirement papers. I began receiving my retirement benefits in or around July 2004 or August 2004, which is the normal course for a retired employee. Again, the Court should note that [my attorney] did not receive a response to [the] November 11, 2002 letter from Defendant's counsel.
We note on December 3, 2003, defendant personally wrote to the trial court complaining that, as of that date, plaintiff had not prepared a proper QDRO. We note further, however, that that letter does not reveal whether a copy was sent to plaintiff or his attorney, and the appendices do not reveal whether defendant filed any formal application with the court at that time.
As indicated above, in June 2004, plaintiff retired from PSE&G, and he began receiving one-hundred percent of his pension benefits, approximately $3,200 per month. He did not communicate with defendant to inform her that he had retired, and he took no steps to set aside any of those benefits for defendant.
On or about May 30, 2006, defendant, acting pro se, filed a post-judgment motion returnable June 23, 2006, to compel plaintiff to correct the previously circulated QDRO and to submit it to PSE&G after review by defendant. On July 28, 2006, the Family Part judge ordered plaintiff's attorney to provide a signed original of the QDRO to defendant within seven days of the court's order. The judge further ordered defendant to sign the QDRO upon receipt and submit it to the court. A compliant QDRO was prepared and signed by the parties. It was signed by the judge and filed with the court on August 11, 2006.
Subsequently, according to defendant, PSE&G acknowledged receipt of the QDRO and, in due course, determined that defendant was eligible to receive $1,094.91 per month commencing on November 1, 2006. Because PSE&G also advised that the QDRO was incorrect and unacceptable as prepared, defendant filed another post-judgment motion to compel plaintiff to correct the QDRO so as to satisfy the parties' Inter-spousal Agreement and Judgment of Divorce, PSE&G's requirements and the requirements of a QDRO as defined by the Internal Revenue Service Code and the Employment Retirement Income Security Act of 1974, 29 U.S.C.A. § 1001 to 1461. Defendant further requested that plaintiff be "responsible for the difference in the amount of monthly payments that [defendant] would have received if the QDRO had been filed in a timely manner[.]"
On February 16, 2007, a different Family Part judge entered an order directing plaintiff to prepare and submit a proper QDRO to PSE&G. Such a proper QDRO was executed and submitted to PSE&G, and in January 2008, defendant received a retroactive payment from PSE&G of $1,094.91 per month, as of November 1, 2006.
Thereafter, in March 2008, defendant moved to compel plaintiff to disclose the exact date of his first retirement check and to compel him to pay her retroactively $1,094.91 per month from the date of his first retirement check. Oral arguments on that motion were heard on April 11, 2008, after which relief was granted in favor of defendant. It is that relief that plaintiff challenges in this appeal. Plaintiff did not dispute that defendant was entitled to a share of his pension. He does contend, however, that he should not have to pay defendant retroactively.
The ruling of the Family Part judge was straightforward: "Plaintiff received 100% of the pension benefits knowing that the Defendant had an interest in the benefits. The Plaintiff made no effort to advise the defendant that he retired or that he received benefits. Instead, he remained silent." Under such circumstances, the court concluded that, even in the absence of a QDRO, plaintiff had an equitable obligation to either pay defendant or to set aside approximately fifty percent of his pension benefits until the matter was resolved by the court. The court reasoned that plaintiff knew he was not entitled to one-hundred percent of the pension funds pursuant to the parties' "contract that was reduced to a court order via the judgment of divorce[.]" The court recognized that the calculation was not as simple as dividing the pension checks by two, but it found that plaintiff knew approximately half of that money did not belong to him.
The court observed that defendant had gone to court at least "two or three times to get orders from the Court so that this QDRO would be executed." The court explained that the QDRO is merely a mechanism through which the pension company could pay defendant directly. Thus, the fact that a QDRO had not been executed at the time plaintiff began receiving his benefits did not excuse him from his obligation under the Judgment of Divorce nor under his contractual commitment.
Accordingly, the Family Part judge entered an order directing plaintiff to pay defendant $30,657.48, "representing the amount due to her as Alternate Payee of plaintiff's pension from the date of the receipt of his retirement check to and including October 1, 2006 within 30 days of the date of this Order." Although plaintiff had certified that he spent the monies he had received as retirement benefits and that he had only $700 in savings, he "did not submit a Case Information Statement to confirm the foregoing." Thus, the court concluded that it "ha[d] no basis to provide consideration to the plaintiff that he cannot promptly pay the amount due."
On appeal, plaintiff raises two issues for our consideration. First, he contends that the trial court erred because it failed to make any findings of facts or conclusions of law regarding plaintiff's laches defense. That defense arises out of defendant's failure to execute timely the Qualified Domestic Relations Order prepared by plaintiff's attorney. Second, plaintiff contends that the factual findings and legal conclusions made by the court are not supported by the evidence presented. We reject both contentions.
As to plaintiff's first contention, the court noted the multiple attempts by defendant to obtain compliance with court orders concerning the execution and implementation of the QDRO. The doctrine of laches "is invoked to deny a party enforcement of a known right when the party engages in an inexcusable and unexplainable delay in exercising that right to the prejudice of the other party." Knorr v. Smeal, 178 N.J. 169, 180-81 (2003). "Laches may only be enforced when the delaying party had sufficient opportunity to assert the right in the proper forum and the prejudiced party acted in good faith believing that the right had been abandoned." Id. at 181. "The core equitable concern in applying laches is whether a party has been harmed by the delay." Ibid.
Here, the court specifically expressed its concern over plaintiff's lack of candor and good faith, commenting that plaintiff made no effort to advise defendant of his retirement or that he had begun to receive benefits. Instead, plaintiff remained silent, knowing that defendant had an interest in the pension benefits and that she had sought to perfect that right, however ineffectively, for more than a decade. Plaintiff's declared assumption that defendant had abandoned her interest is unrealistic and unbelievable. Indeed, he stated in his subsequent certification that he reminded PSE&G that there was an outstanding QDRO, which defendant had never signed. That reminder belies his assertion that he thought the QDRO issue had been resolved. While PSE&G may not have owed a duty to defendant so long as the QDRO had not been properly filed, the same cannot be said of plaintiff. See, e.g., Ross v. Ross, 308 N.J. Super. 132, 152-55 (App. Div. 1998) (recognizing that a property settlement agreement (PSA) can create rights in an alternate payee and can satisfy the requirements of a QDRO).
It is well established in New Jersey that the "portion of a pension legally or beneficially acquired by either party during marital coverture is subject to equitable distribution." Claffey v. Claffey, 360 N.J. Super. 240, 255 (App. Div. 2003) (citing Kikkert v. Kikkert, 88 N.J. 4, 5 (1981)). "The Employment Retirement Income Security Act (ERISA), 29 U.S.C.A. § 1001 to 1461, adopted in 1974, was passed to establish uniform national standards for employee pension plans." Risoldi v. Risoldi, 320 N.J. Super. 524, 533 (App. Div.), certif. denied, 161 N.J. 335 (1999) (citing 29 U.S.C.A. § 1001(a)). Under ERISA, as originally enacted, "pension plan administrators and trustees of ERISA pension plans were not permitted to comply with state-court orders equitably dividing pension plans among divorcing spouses." Id. at 532. However, in 1984, the Retirement Equity Act, Pub. L. 98-397, was enacted to create a statutory exemption to the anti-alienation provisions of the Internal Revenue Service (IRS) and ERISA and to require pension plan administrators to honor a "QDRO issued by a court pursuant to state law[.]" Ibid. (citing 29 U.S.C.A. § 1056(d)(3)(A) and (B)).
Essentially, "these changes permitted a direct distribution to the non-pensioner spouse of a QDRO-designated share of the pensioner's ERISA retirement benefit." Ibid. In other words, a QDRO "directs the pension plan administrator to distribute, in accordance with the coverture fraction*fn2, a portion of the periodic pension benefit to the non-pensioner spouse." Claffey, supra, 360 N.J. Super. at 258.
It is also well established that matrimonial agreements are basically contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). "As a general rule, courts should enforce contracts as the parties intended." Id. at 266 (internal citations omitted). Where the terms of a contract are unambiguous, "the court must enforce it as written." County of Morris v. Fauver, 153 N.J. 80, 103 (1998) (citation omitted). In the case at bar, plaintiff undertook a contractual obligation to share with defendant approximately fifty percent of the pension benefits he acquired while the parties were married. As the trial court noted, such obligation "was enforceable by the Court as a court order once the judgment of divorce incorporated the property settlement agreement." Accordingly, the court logically concluded that "[t]he QDRO is just a mechanism so that the pension company can cut two checks[,]" and pay defendant directly.
Plaintiff claims defendant's claim is barred by laches. Notably, equitable doctrines such as laches "cannot validly be used to sponsor an inequitable result." Linek v. Korbeil, 333 N.J. Super. 464, 475 (App. Div.), certif. denied, 165 N.J. 676 (2000). In Linek, an appellate panel affirmed the lower court's order awarding to the alternate payee pension benefits accruing for three years, beginning from the month of the defendant's early retirement. Id. at 467, 471, 475. In that case, the pension administrator failed to make initial payments under a mistaken belief that the plaintiff was not entitled to pension benefits until the defendant reached the age of sixty-five years old. Id. at 467.
In the case at bar, the trial court made sufficient findings that (1) the parties entered into a PSA which clearly provides that defendant was to receive approximately fifty percent of plaintiff's pension upon retirement; (2) the PSA was incorporated into the Judgment of Divorce; (3) plaintiff received one-hundred percent of his benefits, "knowing that the Defendant had an interest in the benefits" and "made no effort to advise the Defendant that he retired or that he received benefits"; and (4) "[p]laintiff's lack of candor and good faith are of concern." More significant to plaintiff's assertion of laches as a defense, the court found that "Defendant acted promptly to assert her rights[,]" upon suspecting that plaintiff had, in fact, retired. Finally, the court appropriately concluded that plaintiff had a contractual obligation toward defendant to pay the proper share that was independent from the existence of a QDRO.
With such findings and conclusions in mind, we reject plaintiff's contention that the lower court failed to make sufficient findings of fact and conclusions of law as to his laches defense or that the lower court's factual findings and legal conclusions are not supported by the evidence presented. Indeed, there are no genuine issues as to these findings and conclusions. Hence, although an appellate court owes no deference to the trial court's interpretation of the law and the legal consequences that flow from established facts, Manalapan Realty v. Twp. Comm., 140 N.J. 366, 378 (1995), we agree with the trial court's determinations. In other words, we are satisfied that the facts and inferences, viewed most favorably to plaintiff, do not demonstrate the existence of a dispute whose resolution in his favor would entitle him to judgment. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
Finally, plaintiff asserts that "the evidence shows that [he] took all the necessary steps to finalize the QDRO." Such contention is not well demonstrated by the record. Instead, his attorney threatened that penalties and expenses would be shifted to defendant and plaintiff unilaterally "continued [his] life and thought that the QDRO issue was resolved." Most critically, plaintiff demonstrated no prejudice as a result of any delays on defendant's part. Accordingly, we affirm the Family Part's determination that plaintiff had an equitable and a contractual obligation to give defendant her due share of his pension benefits, independent of the existence of a QDRO.