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Bunalski v. Bunalski

June 18, 2010


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1235-01.

Per curiam.


Argued May 5, 2010

Before Judges Stern, J. N. Harris, and Newman.

This appeal involves a matrimonial dispute concerning 1) equitable distribution of a police officer's future benefits in a Police and Firemen's Retirement System (PFRS) pension, 2) court-ordered life insurance put in place to protect the non- pensioner spouse's equitable distribution in the PFRS pension, and 3) reallocation of counsel fees incurred during the parties' post-judgment journey through the Family Part. We affirm the order for equitable distribution and counsel fees, but reverse the order directing defendant to fund life insurance for plaintiff's benefit.


On January 4, 1982, defendant began employment with the Irvington Police Department (the Department) as a police officer. Almost six full years later, on December 1, 1987, defendant was voluntarily placed on ordinary disability retirement and started receiving ordinary disability retirement pension benefits from the PFRS in the amount of approximately $900 per month.*fn1 As of that date, defendant was deemed to have accrued seventy months of PFRS pension service credits.

On August 18, 1989, when plaintiff and defendant were married, defendant was still receiving these ordinary disability retirement pension benefits.

On September 1, 1991--after his disability had subsided and subsequently ended--defendant regained employment with the Department as a police officer and was duly re-enrolled in the PFRS. In 1993, defendant purchased twenty-five months of PFRS pension service credits at a total cost of $7,485.

In January 1996, defendant underwent hip replacement surgery but was still capable to serve as a police officer. The Department at that time assigned defendant to an inside desk position in its 9-1-1 center. After later receiving a promotion to the rank of sergeant, defendant was assigned to outside road duty. This substantial change in task prompted defendant to complain to his superiors that such activity was against his doctor's orders. A series of grievances did not result in a change to defendant's road assignment.

In early 1999, the Department informed defendant that it did not have any permanent positions of a sedentary nature. He was advised to apply for another ordinary disability retirement pension. When defendant refused to take this advice, the Department initiated an involuntary application procedure, requesting that the PFRS Board of Trustees (the Board) authorize the placement of defendant on ordinary disability retirement.

Effective July 1, 1999, the Board placed defendant on ordinary disability retirement, thereby terminating defendant's employment as a police officer against his wishes. As of that date, defendant was deemed to have accrued a total of 189 months of PFRS pension service credits, including the twenty-five months previously acquired in 1993.

On December 9, 1999, as a result of this adverse employment action initiated by the Department, defendant commenced a Law Against Discrimination (LAD)*fn2 lawsuit in state court against the Department and the municipality of Irvington (Irvington) for wrongful termination and failure to accommodate his disability. Defendant sought reinstatement, along with compensatory and punitive damages. He believed that if successful, he would also be able to recover PFRS pension service credits from July 1, 1999 up until the time of his hoped-for reinstatement.

On October 26, 2001, the Law Division granted summary judgment in favor of Irvington and the Department. Subsequent appeals proved fruitless in achieving defendant's desired result. In 2006, the litigation was finally terminated after all appeals had been exhausted, leaving defendant still without a police officer's position. Bunalski v. City of Irvington, 188 N.J. 357 (2006). See also Bunalski v. Twp. of Irvington, 180 N.J. 161 (2004) (dismissing the municipality's petition for certification as having been improvidently granted, holding that it was inappropriate to consider substantive issues relating to plaintiff's LAD claims in light of significant procedural questions not raised in, nor considered by, the lower court such as the preclusive effect of a final administrative determination).

Meanwhile, on December 5, 2000, plaintiff had filed a complaint for divorce against defendant. On November 29, 2001, the parties executed a Property Settlement and Separation Agreement (PSSA), which was intended to resolve all of their differences. Two months later, on January 31, 2002, the Family Part entered a Dual Final Judgment of Divorce, which reflected that the PSSA*fn3 "is hereby made a part of this Judgment, but shall not merge therewith." The Family Part judge modified the language of the proposed judgment that was submitted to him, which resulted in the following provision appearing in the final judgment:

The Court recognizes that pending the outcome of Defendant/Husband's lawsuit in the matter of John Bunalski v. City of Irvington, et al, Docket No. ESX-l-12416-99, there may be an issue of equitable distribution if the lawsuit is resolved in Defendant/Husband's favor. The outcome of this lawsuit will not change the present equitable distribution, but will only pertain to the lawsuit.

The PSSA also directly addressed defendant's LAD lawsuit, observing that just one month earlier "the Honorable Jared D. Honigfeld granted the Township of Irvington's Motion for Summary Judgment on October 26, 2001." The PSSA further provided:

In the event that Husband shall at any time in the future receive a settlement or jury award as a result of said employment-litigation, then the parties do agree that the issues involving equitable distribution be reopened, and subject to litigation in the Family Court. At any such time, any conversion of Husband's pension from pay-status to future benefit shall require an evaluation of the coverture portion of Husband's pension for equitable distribution purposes, and Wife hereby retains her right to an equitable share of Husband's pension.

Wife waives any & all rights, title & interest to Husband's pension should the lawsuit not be successful & should Husband's pension benefits remain status quo. [Emphasis in original.]

Because defendant's 1999 termination of employment resulted in his receipt of an ordinary disability retirement allowance, defendant retained the statutory opportunity--separate from the LAD litigation--to attempt to demonstrate to the Board that "the disability which existed at the time he was retired has vanished or has materially diminished." N.J.S.A. 43:16A-8(2); see also N.J.A.C. 4A:4-7.12. Defendant, then still under the age of fifty-five years, submitted to the Board new medical documentation and underwent a new independent medical examination by a new independent medical examiner. Finally, on August 14, 2007, the Board determined that defendant was no longer totally and permanently disabled to prevent him from the performance of his duties as a police officer. Defendant was reinstated to his position as a police officer in the Department pursuant to N.J.S.A. 43:16A-8(2), and was again re-enrolled in the PFRS effective on October 1, 2007. He did not obtain any retroactive PFRS pension service credits for the period between July 1, 1999 and October 1, 2007, during which his employment had been terminated.

Almost one year later, on September 11, 2008, plaintiff filed a pro se motion in aid of litigant's rights in the Family Part to compel defendant to sell his interest in the marital home to her pursuant to a post-judgment order that had been entered by the Family Part two years earlier.*fn4 On September 29, 2008, defendant --with whom the parties' daughter resided--filed a cross-motion seeking a stay of the 2006 order to allow him and his daughter to move into and reside in the marital home until the daughter graduated from high school in 2010.

Plaintiff, now represented by counsel, filed a response to the cross-motion, in which she raised the issue of her right to equitable distribution of defendant's future PFRS pension benefits. The Family Part first ordered defendant to sell his interest in the marital home to plaintiff. The net proceeds of the transaction were to be held in escrow pending the outcome of the dispute regarding equitable distribution of defendant's PFRS pension. Additionally, the court ordered at that time the sum of $2,500 to be re-allocated from defendant to plaintiff for counsel fees, explaining that "Mr. Bunalski's motion filing exhibits a lack of [g]ood [f]aith."

Although plaintiff was aware as early as October 2007 of defendant's return to the Irvington police force, she did not apply to the Family Part for equitable distribution relief until after defendant sought to reside in the marital home. Additionally, plaintiff was under the misimpression that defendant's reinstatement to the police force was a result of the LAD litigation. In her response to defendant's cross-motion, plaintiff mistakenly averred that "[t]here obviously have been proceeds, as Defendant has admitted that he was successful in his litigation to restore him as a police officer in the Town of Irvington." She also sought "full discovery ...

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