March 10, 2010
PATRICK C. CULLY, PLAINTIFF-RESPONDENT,
KATHLEEN G. CULLY, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-50-94E.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 24, 2010
Before Judges Sabatino and Newman.
Defendant Kathleen G. Cully appeals from an order for DeAnne DeFuccio, Esq., to draft a Qualified Domestic Relations Order (QDRO) providing plaintiff Patrick C. Cully with a separate interest for defendant's pension with Citigroup Pension Plan (the plan), a defined benefit plan, and its denial of both parties' applications for counsel fees. We now affirm.
The factual background may be summarized as follows. A dual judgment of divorce for the parties was entered on December 12, 1995. This judgment was partially vacated on March 28, 1996, and the parties entered into a Property Settlement Agreement (PSA) on June 30, 1998, which was then incorporated into an amended judgment of divorce, on August 18, 1998.
The pertinent portion of the PSA reads:
7. Husband's Share of Wife's Pension from Citicorp.*fn1 The Husband will be entitled to receive the value of the Wife's pension from Citicorp. The Wife represents that she has not invaded, converted, encumbered or in any way diminished the value of said pension, nor will she in the future. She will provide evidence on a yearly basis that the pension remains untouched and unencumbered until she retires and begins to receive payments under the pension plan. The Husband will be entitled to one half of said pension and may elect such payment and terms as the pension plan permits. Each party will pay one-half of the fee of a qualified expert for preparing the related qualified domestic relations order. In the event that there are no options available that would permit early withdrawal, the Husband will receive one-half of each payment due to the Wife until his death.
Over the next seven years, plaintiff submitted at least one QDRO for defendant's approval and signature. Defendant drafted several QDROs for plaintiff's signature and approval, which plaintiff declined to approve.
On October 24, 2005, plaintiff filed a motion to effectuate his proposed QDRO, which had been approved by the plan administrator.
Defendant filed an answering certification of Judith A. Deer, Esq., on November 28, 2005, and herself, on January 4, 2006, seeking the entry of her proposed QDRO. The certifications focused on two provisions in plaintiff's QDRO:
(1) that plaintiff sought a separate interest in defendant's pension, instead of the shared interest that defendant and Ms. Deer interpreted the PSA to require, and (2) that the language of the survivorship benefits section was ambiguous. Defendant also sought reimbursement for half of her counsel fees from plaintiff, if the court were to find her responsible for plaintiff's counsel fees.
On January 12, 2006, the parties appeared before the now-retired Judge Richard C. Camp. Plaintiff's proposed QDRO used a separate interest approach, which would separate defendant's pension account into separate components, one for defendant as the participant and one for plaintiff as the alternate payee.
Defendant's proposed QDRO applied a shared interest approach, which would simply provide plaintiff with half of each payment that defendant would receive and a reversionary interest to defendant if she survived plaintiff.
The trial court initially was inclined to sign plaintiff's QDRO and award him attorneys' fees, but it then suggested that defendant could elect to have a QDRO expert, Ms. DeFuccio, review both parties' QDROs and decide which QDRO is acceptable. The parties would split the expert's fee, and the loser would reimburse the other party for counsel's fees. The parties adopted the trial court's suggestion and agreed to be bound by Ms. DeFuccio's determination.
On February 15, 2006, the plan approved a QDRO submitted by Ms. Deer on behalf of defendant. On March 11, 2005, it likewise approved a QDRO that was submitted on behalf of plaintiff.
On March 16, 2006, Ms. DeFuccio reported to the trial court with a letter analyzing the parties' QDROs and the PSA. Ms. DeFuccio found that the PSA was not "crystal clear" but that it was "clear" that under the PSA plaintiff "was to receive payments until his death." She stated that the parties intended for plaintiff to receive a separate interest under the QDRO because it would pay benefits for his lifetime. She also considered the language of the PSA that entitled plaintiff to "'an early withdrawal,' if it was available under the plan." Based on this language, Ms. DeFuccio found "it was the parties' intent that [plaintiff] would receive his full share with no reversion to [defendant]."
Ms. DeFuccio indicated that she had received the plan's approval for a QDRO drafted by plaintiff, and she presumed this QDRO was, in fact, the one plaintiff was proposing. Ms. DeFuccio noted that this QDRO, "though not well drafted, could be entered," conditioned by some issues requiring interpretation by the plan. Ms. DeFuccio stated that she would have reworded two provisions. First, she understood plaintiff was entitled to "a pure 50% share of the Plan as all of [Wife's] contributions were made during the marriage." Ms. DeFuccio would have omitted "as of August 10, 1998" in plaintiff's QDRO provision that provided plaintiff with "an amount equal to Fifty Percent (50%) of the Participant's accrued benefit as of August 10, 1998." Second, Ms. DeFuccio noted that the wording of plaintiff's QDRO provision regarding his survivor benefits was unclear. She wrote "Husband should receive survivor benefits in accordance with the marital portion as defined in paragraph 2a of the QDRO."
To protect the parties, Ms. DeFuccio suggested that the QDRO be revised, "providing Husband with a separate interest QDRO and survivor benefits in accordance with the marital portion with no reversion to [Wife]." Ms. DeFuccio offered to participate in preparing the QDRO.
The court entered an order on April 11, 2006. In its order, the court directed that Ms. DeFuccio draft "a new QDRO providing plaintiff with a separate interest QDRO for 50 percent of the entire Plan and with survivor benefits in accordance with the marital portion with no reversion to the Defendant," that both parties would share the costs of preparation for the new QDRO, that the new QDRO be submitted to the court no later than June 1, 2006, and that both parties' applications for counsel fees were denied. This appeal followed.
On appeal, defendant raises the following points for our consideration:
THE COURT ABUSED ITS DISCRETION AND ERRED, AND ACCEPTED THE COURT'S EXPERT REPORT (QDRO) CONTRARY TO BOTH PARTIES OBJECTION WITHOUT TESTIMONY OR OPPORTUNITY TO EXAMINE LANGUAGE OR INTENTIONS EXPRESSED IN THE PARTIES' SEPARATION AGREEMENT PRIOR TO ITS ENTRY.
THE COURT ERRED AND ABUSED ITS DISCRETION IN ENTERING AND ACCEPTING THE QDRO WITHOUT A PLENARY HEARING TO DETERMINE THE INTENTIONS OF THE PARTIES WHEN SIGNING THE PROPERTY SETTLEMENT AGREEMENT, AN EXAMINATION OF THE BASIS FOR THE EXPERT'S OPINION, AND AGAINST THE WISHES OF BOTH PARTIES.
THE COURT ERRED AND ABUSED ITS DISCRETION IN THAT THE LANGUAGE IN THE PARTIES PROPERTY SETTLEMENT AGREEMENT IS CLEAR THAT IT INDICATES A SHARED INTEREST QDRO NOT A SEPARATE INTEREST QDRO.
THE COURT ERRED AND ABUSED ITS DISCRETION IN NOT AFFORDING THE DEFENDANT [AN OPPORTUNITY] TO OBTAIN HER OWN EXPERT AS WELL AS IMPLICITLY DELEGATING THE COURT'S OWN OBLIGATION OF FACT FINDING.
THE COURT ERRED AND ABUSED ITS DISCRETION IN DENYING DEFENDANT'S COUNSEL FEE REQUEST AS IT FAILED TO ANALYZE AND APPLY THE STATUTE, COURT RULES, AND ESTABLISHED PRECEDENT.
THE COURT PROPERLY REINSTATED THE APPEAL.
We need not dwell on plaintiff's contention that the defendant's appeal was time-barred in response to defendant's Point VI that the appeal was properly reinstated by this court. We reject plaintiff's contentions that defendant's appeal was time-barred under Rule 2:4-4(a), that defendant's delay to reinstate her appeal was not a basis to extend this time, and therefore, the appeal should have been dismissed.
Rule 2:4-1(a) limits the time for filing an appeal to a final judgment to forty-five days from the judgment's entry. Defendant's initial appeal was timely filed in accordance with Rule 2:4-4(a). When defendant sought to reinstate her appeal by motion, eighty-six days had elapsed from the last date of correspondence between the parties. The record on appeal does not indicate that the parties engaged in any further communications.
Our courts encourage parties to settle, especially in matrimonial actions. See Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006); Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983). That defendant withdrew her second appeal in order to reach a settlement with plaintiff favors a relaxation of the rules. Although she held off in making this motion more than ten months after plaintiff first communicated that he was not interested in modifying the already-existing QDRO, and almost three months after receiving the final letter from plaintiff that indicated he did not intend to modify the QDRO, we do not consider this delay fatal to defendant having her appeal heard on its merits. Indeed, Rule 1:1-2(a) provides authority to dispense with a rule's adherence if "it would result in an injustice" to follow the rule. This is just such an instance where defendant attempted to settle the matter on appeal, but was unsuccessful. She should not be penalized by having attempted to resolve the matter amicably. The appeal was properly reinstated.
In Points I, II, IV, and V, defendant challenges the trial court's decision to accept Ms. DeFuccio's report without holding a plenary hearing or any other fact-finding proceeding to determine the intent of the parties' PSA, without permitting defendant to obtain her own expert to challenge Ms. DeFuccio's report; for "implicitly delegating the court's own obligation of fact finding;" and for declining to award her attorneys' fees.
At the motion hearing, the trial court stated that it was inclined to order defendant to sign plaintiff's QDRO. The trial court offered an alternative to defendant: the trial court would appoint an expert, whose decision the trial court would adopt. The trial court made it clear that defendant had the choice as to how this issue would be resolved. Defense counsel and the trial court then engaged in the following colloquy:
[DEFENDANT'S COUNSEL]: Let her decide for the Court and binding upon us whichever QDRO after she reviews all the papers should be signed.
Now whether she's going to sign and say he was absolutely right to begin with, in which case I think we should leave it open, but we have to -- she can come back to the Court, we'd have a good -- they'd have a good case for us not only to pay the counsel fees --
THE COURT: Right. Yeah.
[DEFENDANT'S COUNSEL]: -- but everything else. All right?
THE COURT: Yeah.
[DEFENDANT'S COUNSEL]: Or she's going to say, wow, you were right, it's a good thing you didn't sign this, in which case they'll pay for our fees and we'll come before this Court again.
THE COURT: Right. That's what I said.
[DEFENDANT'S COUNSEL]: Yeah. Or she can say a third thing. Both of you don't know what the hell you're talking about. It should be A, B[,] and C.
THE COURT: Or in this case each their own.
[DEFENDANT'S COUNSEL]: Right.
THE COURT: That's the third thing.
[DEFENDANT'S COUNSEL]: That's fine.
The parties and the trial court discussed contacting Ms. DeFuccio and informing her of this arrangement. This discussion included the following exchange:
[PLAINTIFF'S COUNSEL]: -- and -- and I will tell her what the judge wants to do, and --
THE COURT: And just -- and --
[DEFENDANT'S COUNSEL]: Let's agree, though, that whatever she says is binding.
THE COURT: It's binding, yeah.
[DEFENDANT'S COUNSEL]: Okay?
[PLAINTIFF'S COUNSEL]: I don't have a problem with that.
In a similar vein, "[t]he doctrine of judicial estoppel operates to 'bar a party to a legal proceeding from arguing a position inconsistent with one previously asserted.'" Cummings v. Bahr, 295 N.J. Super. 374, 385 (App. Div. 1996) (quoting N.M. v. J.G., 255 N.J. Super. 423, 429 (App. Div. 1992)); see Commercial Ins. Co. of Newark, v. Steiger, 395 N.J. Super. 109, 115 (App. Div. 2007). This court has recognized that the doctrine should be invoked when "a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, [s]he may not thereafter, simply because h[er] interests have changed, assume a contrary position, especially if it be to the prejudice to the party who has acquiesced in the position formerly taken by him." Newell v. Hudson, 376 N.J. Super. 29, 38 (App. Div. 2005) (quoting Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 558, 39 L.Ed. 578, 584 (1895)). This doctrine should be applied "when a party's inconsistent behavior will otherwise result in a miscarriage of justice." Steiger, supra, 395 N.J. Super. at 114-15 (quoting Ali v. Rutgers, 166 N.J. 280, 288 (2000)). The doctrine of judicial estoppel "protect[s] the integrity of the judicial process by not permitting a litigant to prevail on an issue and then to seek the reversal of that favorable ruling." McCurrie v. Town of Kearny, 174 N.J. 523, 534 (2002).
In a similar vein, "[t]he doctrine of invited error operates to bar a disappointed litigant from arguing on appeal that an adverse decision below was the product of error, when that party urged the lower court to adopt the proposition now alleged to be error." Brett v. Great Am. Recreation. Inc., 144 N.J. 479, 503 (1996). In other words, "[a] party who consents to, acquiesces in, or encourages an error cannot use that error as the basis for an objection on appeal." Spedick v. Murphy, 266 N.J. Super. 573, 593 (App. Div.), certif. denied, 134 N.J. 567 (1993); see also Brett, supra, 144 N.J. at 504 (explaining that the doctrine is "particularly applicable where a party attempts to present a different theory on which to decide the case than the one advocated below"). Fairness and the preservation of the integrity of the litigation process are the guiding principles for this doctrine. Brett, supra, 144 N.J. at 503.
Both judicial estoppel and invited error bar defendant from taking a position on appeal which differs from what she expressly agreed to before the trial court. She urges us to reverse the trial court, even though her counsel agreed that, "whatever [Ms. DeFuccio] says is binding." Our judicial process's integrity would be damaged if defendant received a second bite at the apple because she is disappointed that the process, which her counsel agreed to and advocated for, resulted in a decision unfavorable to her.
Both the doctrines of invited error and judicial estoppel bar this court from considering defendant's claims regarding the trial court's decision to accept Ms. DeFuccio's determination in this esoteric area of family law.
Furthermore, invited error precludes defendant from arguing that she should be awarded counsel fees. Her counsel acquiesced to the trial court's proposal that the party whose QDRO was not deemed acceptable by Ms. DeFuccio would be responsible for the other party's attorneys' fees. Defense counsel did not object or express any reservations as to this agreement. Even though the court did not award counsel fees to plaintiff, a determination which plaintiff has not appealed, the decision not to award counsel fees to the party whose QDRO was not accepted was agreed to by defendant.
It is clear that defendant's counsel agreed to be bound by Ms. DeFuccio's decision. It is evident from the record that defendant's counsel understood that Ms. DeFuccio might not necessarily agree with either party, as evidenced by the statement that "she can say a third thing. Both of you don't know what the hell you're talking about." Even after recognizing that Ms. DeFuccio may rule in favor of one party or otherwise, counsel suggested, "[l]et's agree, though that whatever she says is binding."
Moreover, even were we to adopt defendant's narrow interpretation that she only agreed to be bound by Ms. DeFuccio's decision to adopt one of the two QDROs, Ms. DeFuccio adopted the substance of plaintiff's QDRO. In her initial report, Ms. DeFuccio suggested cosmetic changes to plaintiff's QDRO for the sake of clarity. Ms. DeFuccio's report and subsequent drafts indicated she adopted the major provisions of plaintiff's QDRO: that there shall not be a reversion of plaintiff's interest to defendant and that the separate interest approach shall be utilized. Defendant's arguments that she did not agree to be bound by Ms. DeFuccio's decision or any QDRO drafted by Ms. DeFuccio is rejected.
Defendant contends that the trial court ignored the plain language of the PSA and that the PSA clearly supports the use of a shared interest QDRO. We disagree.
The language in the PSA providing that, "[t]he Husband will be entitled to one half of said pension and may elect such payment and terms as the pension plan permits" contemplates the use of the separate interest approach because that approach generally grants control of the terms and payment to plaintiff as an alternate payee.
The clause providing that "in the event that there are no options available that would permit early withdrawal, the Husband will receive one-half of each payment due to the Wife until his death" suggests that if plaintiff can not receive an early distribution from the fund, he is to receive half of defendant's share when she receives the distribution.
The parties agreed that the term "early withdrawal" refers to the early withdrawal of a lump sum, rather than just the early commencement of the benefit distribution. Apparently, the plan did not permit an early lump sum distribution to plaintiff. However, if an early lump sum distribution was unavailable, that did not preclude plaintiff from electing to select his own retirement date under the first sentence discussed. The sentences can be read in a consistent manner affording plaintiff the opportunity to receive an actuarially adjusted monthly benefit for his lifetime. We are satisfied that Ms. DeFuccio's reading of the PSA is supportive of her reasonable determination that a separate interest QDRO was the instrument to be employed by the parties.